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> However you'll be worse off, because your share of the total wealth is now smaller So you're worse off because your share of the wealth is smaller... if only

> However you'll be worse off, because your share of the total wealth is now smaller So you're worse off because your share of the wealth is smaller... if only we had a way to describe that. Perhaps you could say that you're less wealthy and by burning your money, you've destroyed your capital? Look, I get what you're trying to say. The value of each currency unit is roughly the total amount of economic value divided by the number of units of currency. So the sum of the value of all the currency units doesn't change as you add to or subtract from the money supply. The piece you're missing, though, is that the VCs didn't create the money they invested in BlockFi. The money came from investors and partners. So in a very real sense the capital of those investors and partners was destroyed.

lottin 4y ago
Destroying money doesn't destroy capital. It doesn't matter who created it. Money is not capital. You're mistaking a claim on a good for the good itself. These are completely different things.
- halpmeh 4y ago
  Again, you're using a totally non-standard definition of capital. Google "capital definition" > wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. So yes, if you redefine the word capital to fit whatever you like, then sure, I agree with you.
  - lottin 4y ago
    I'm not redefining anything. I'm an economist, and I know the terminology of economics well. Capital can refer to two things, either 'capital' (or 'real capital') or 'financial capital'. The definition that you've posted matches (more less) the definition of financial capital. But, either way, this is not complicated. The fact remains that destroying money doesn't destroy wealth. Mistaking money for real wealth is a common mistake.
    - halpmeh 4y ago
      Ok, so I think we’re in the same page: there is a definition of capital that includes money but is for some reason not applicable to this conversation because you’re an economist and know better. And if you burn your money in your bank account, then you’re less wealthy but that cannot be referred to as destroying [your] wealth or capital.
      - somewhereoutth 4y ago
        To help out a little - money is only a signalling protocol for resource allocation. Nothing more. Burning the money in your bank account does not destroy any resources anywhere. It does, however, rather screw with being able to get some of those resources allocated to you.
        halpmeh 4y ago
        So now we're redefining "resource?" Resource. Noun. a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. Even if the commonly accepted definition of "resource" didn't explicitly state that money is a resource, the ability to acquire resources is itself a resource.
        lottin 4y ago
        No, it isn't. Let's say I take a piece of paper and write: "I will give the bearer of this piece of paper my car." Do I have created a new car? No. The piece of paper is still a piece of paper, and there aren't any more cars in the economy than there were before. And likewise, if I proceed to destroy the piece of paper no cars will be destroyed in the process.
        halpmeh 4y ago
        Have you created value by writing on the piece of paper? No. But if the entire world agrees that your piece of paper has value, then you would lose wealth by giving away the piece of paper and the person you gave it to would gain wealth by receiving it. When we talked about burning money you said: "[burning your money], however, rather screw with being able to get some of those resources allocated to you." If you burn your "car IOU", does that screw with your ability to have resources allocated to you? No it doesn't. So you can see that your car IOU is not an appropriate analogy to money.

lottin 4y ago

Destroying money doesn't destroy capital. It doesn't matter who created it. Money is not capital. You're mistaking a claim on a good for the good itself. These are completely different things.

halpmeh 4y ago
Again, you're using a totally non-standard definition of capital. Google "capital definition" > wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. So yes, if you redefine the word capital to fit whatever you like, then sure, I agree with you.
- lottin 4y ago
  I'm not redefining anything. I'm an economist, and I know the terminology of economics well. Capital can refer to two things, either 'capital' (or 'real capital') or 'financial capital'. The definition that you've posted matches (more less) the definition of financial capital. But, either way, this is not complicated. The fact remains that destroying money doesn't destroy wealth. Mistaking money for real wealth is a common mistake.
  - halpmeh 4y ago
    Ok, so I think we’re in the same page: there is a definition of capital that includes money but is for some reason not applicable to this conversation because you’re an economist and know better. And if you burn your money in your bank account, then you’re less wealthy but that cannot be referred to as destroying [your] wealth or capital.
    - somewhereoutth 4y ago
      To help out a little - money is only a signalling protocol for resource allocation. Nothing more. Burning the money in your bank account does not destroy any resources anywhere. It does, however, rather screw with being able to get some of those resources allocated to you.
      - halpmeh 4y ago
        So now we're redefining "resource?" Resource. Noun. a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. Even if the commonly accepted definition of "resource" didn't explicitly state that money is a resource, the ability to acquire resources is itself a resource.
        lottin 4y ago
        No, it isn't. Let's say I take a piece of paper and write: "I will give the bearer of this piece of paper my car." Do I have created a new car? No. The piece of paper is still a piece of paper, and there aren't any more cars in the economy than there were before. And likewise, if I proceed to destroy the piece of paper no cars will be destroyed in the process.
        halpmeh 4y ago
        Have you created value by writing on the piece of paper? No. But if the entire world agrees that your piece of paper has value, then you would lose wealth by giving away the piece of paper and the person you gave it to would gain wealth by receiving it. When we talked about burning money you said: "[burning your money], however, rather screw with being able to get some of those resources allocated to you." If you burn your "car IOU", does that screw with your ability to have resources allocated to you? No it doesn't. So you can see that your car IOU is not an appropriate analogy to money.