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0 pointscjg3y ago0 comments

Is it zero sum though? Finance in general isn't - it allows people to invest and manage risk.

If I bought a bitcoin at $100 and sold it at $1,000 - who lost money trading with me? The person I bought it from because they could have kept it and made the money I made? No - they were happy to realise their own returns. The person I sold it to? Assuming they still have it, they hold something valued substantially above $1,000 and are quite happy.

The only way for this to be zero sum is if bitcoin has zero value. But bitcoin has at least some utility so now the market is just arguing over how much - and that value changes as bitcoin becomes more accepted / useful.

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cuteboy193y ago

Cash flow analysis allows us to sidestep thinking about utility and price by drawing a circle around Bitcoin and calculating cash in minus cash out. The only cash in is new investors and the cash out is miners+old investors selling.

The only way the current crop of investors can make money is by getting even more newer investors (ie greater fools). Eventually such a scheme will fail because of the same reason that ponzi schemes fail.

Compare this to something like apple which has an additional cash in (ie the company's profits). So the apple investors can make money without needing more investors.

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0 pointscjg3y ago0 comments

Is it zero sum though? Finance in general isn't - it allows people to invest and manage risk.

0 comments

cuteboy193y ago

Compare this to something like apple which has an additional cash in (ie the company's profits). So the apple investors can make money without needing more investors.

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