I hate to break it to you, but investment in cryptocurrency is by design a zero sum game. No value is created here, so any profit anyone makes is paid by somebody else who loses that money.
This also means that, eventually, value of bitcoin, as well as any other cryptocurrency will inevitably fall to zero.
Some people will leave with gains, others with losses. Personally I find it ethically questionable to partake in this. So I don’t. YMMV.
Still making some pretty nifty cars, but what’s that got to do with cryptocurrencies?
How’s fiat working for you?
From wikipedia:
Fiat money (from Latin: fiat , “let it be done” ) is a type of currency that is not backed by any commodity such as gold or silver, and typically declared by a decree from the government to be legal tender. Throughout history, fiat money was sometimes issued by local banks and other institutions. In modern times, fiat money is generally established by government regulation.
Fiat money generally does not have intrinsic value and does not have use value. It has value only because the individuals who use it as a unit of account – or, in the case of currency, a medium of exchange – agree on its value.[1] They trust that it will be accepted by merchants and other people.
So… why is this not applicable to bitcoin? It has no intrinsic value, and does not have use value. It requires exchanges to agree on its value. The users of it use the value trusting that merchants will take it… it’s not backed by any commodity (no, computers quickly doing sudoku isn’t a commodity) …
So whenever people say “How’s fiat?” as if crypto is not… I sit there wondering:
The money in my wallet is still worth the same as it was last week (give or take a few fractions of a penny)… how’s your wallet doing?
Bubbles burst. Who could have known?
Looks like it’s time to find a greater fool.
The CPI for 2022 in the US is 8%. So the dollar is down 8% in purchasing power.
Bitcoin is down 35% YTD. But that’s for a dollar exchange- so it’s actually down that 35% plus the 8% that the dollar is down in actual purchasing power.
The guy is like Stephen Harper 2.0, but without the good features.
Assuming you can find someone to give you dollars for Bitcoin at the nominal rate.
I was lead to believe that’s there’s always a greater fool.
Also, the quiet-part-loud here is that Bitcoin’s value is never expressed in terms of any sort of raw purchasing power – it’s always expressed in terms of dollar value. This strongly suggests that BTC’s primary (perhaps only) utility is as an investment vehicle. Since it’s not tied to anything of any remotely intrinsic value (unlike government-backed fiats like the dollar, which are at least guaranteed to pay debts to the government in question), when the greatest fool is finally found then the game is up.
He was Harper’s attack dog, on the wrong side of every issue. You’d be hard pressed to find a good feature between them.
Hey now, “fiat” current may not be backed by gold or silver, but in a real sense it’s backed by the entire economy of the country that issues it. Crypto, on the other hand, is backed by… er… um… give me a minute…
Now and then…
I’ve been partial to this song.
After doing my research, I think I finally understand blockchain…
So does the fact that they literally have a holiday to celebrate the terrible idea of using Bitcoin as a currency:
Strewth.
And a purely speculative one at that, since unlike stocks or bonds or real estate you don’t get any kind of a cash flow from your investment; and unlike commodities, bitcoins can’t actually be used for anything; and unlike currency, it’s illiquid and horrifyingly volatile, making it useless as either a medium of exchange or store of value.
Bitcoin “investing” consists purely of expecting the Line Go Up, and then unloading your BTCs on a greater fool, who expects the Line Go Up Some More before they can dump the BTCs on an even greater fool, ad infinitum.
