Topic: The vast majority of Bitcoin-based investments aren't good enough. (Read 1076 times)
September 21, 2012, 03:41:10 PM
They aren't good enough to profit by selling to a global economy, true. But it's important to realize that the Bitcoin economy is larger than just the investments denominated in Bitcoins, and the mere existence of Bitcoin enables this larger economy to profit from investments that do not, nominally, keep up with the rate of growth of Bitcoin itself.
September 21, 2012, 12:08:43 PM
Bitcoin is going up faster than normal deflationary currency as imagined by the deflation enthusiasts, isn't it?
Basically we are still in the price-discovery phase, we should be way up over $100 per probably since last last year but the constant cries of "oh I got hacked", "oops I lost everyone's money" and so on have been taking their toll.
Even with all that slowing the process down though it is hard to keep up. I added tables expressed in bitcoins to my data at http://galaxies.mygamesonline.org/digitalisassets.html so I could check my feeling that most things were not keeping up with bitcoins, and it looks like I was right.
Essentially right now bitcoin is itself an investment. Once its value has been discovered and stabilised, when we are beyond the initial huge ramp-up of getting it into general circulation, will be time enough to consider it just another deflationary currency. For now I think its best to think of holding bitcoins as an investment in the initial ramping up of the concept.
-MarkM-
Basically we are still in the price-discovery phase, we should be way up over $100 per probably since last last year but the constant cries of "oh I got hacked", "oops I lost everyone's money" and so on have been taking their toll.
Even with all that slowing the process down though it is hard to keep up. I added tables expressed in bitcoins to my data at http://galaxies.mygamesonline.org/digitalisassets.html so I could check my feeling that most things were not keeping up with bitcoins, and it looks like I was right.
Essentially right now bitcoin is itself an investment. Once its value has been discovered and stabilised, when we are beyond the initial huge ramp-up of getting it into general circulation, will be time enough to consider it just another deflationary currency. For now I think its best to think of holding bitcoins as an investment in the initial ramping up of the concept.
-MarkM-
September 21, 2012, 12:07:09 PM
Bitcoin is not a deflationary currency. But, other than that, I agree with the sentiment of your post.
A non-inflationary currency will encourage investments which are indeed "hardier" because, at the margin, those which are less resiliant/profitable won't attract investment because the opportunity cost of investment is higher. And this is a very good thing.
A non-inflationary currency will encourage investments which are indeed "hardier" because, at the margin, those which are less resiliant/profitable won't attract investment because the opportunity cost of investment is higher. And this is a very good thing.
At the very least, it will eventually stop being inflationary.
September 21, 2012, 12:05:08 PM
Bitcoin is not a deflationary currency. But, other than that, I agree with the sentiment of your post.
A non-inflationary currency will encourage investments which are indeed "hardier" because, at the margin, those which are less resiliant/profitable won't attract investment because the opportunity cost of investment is higher. And this is a very good thing.
A non-inflationary currency will encourage investments which are indeed "hardier" because, at the margin, those which are less resiliant/profitable won't attract investment because the opportunity cost of investment is higher. And this is a very good thing.
September 21, 2012, 11:56:29 AM
The beauty of a market with a sound currency is that businesses have to keep up with wealth stored in the main-accepted currency. If they don't, they fail because it would be more profitable to just hold money. People say this is a bad thing and people should be forced to invest in business, even with the given risk of investing in poorly-managed operations.
The fact of the matter is that it is clear an economy based on sound currency is going to encourage more efficient, hardier businesses as opposed to one where money cannot be saved and invested when the time is right. In essence, allowing people to suffer a huge loss in opportunity cost just gives people more incentive to invest better, spend better and overall live better. Consequences are more potent. Money is held accountable. Losses hurt more.
Why would a system of where waste and destruction can be taken with easy, make society any stronger e.g. an inflationary economy? How can more businesses failing left-and-right, buildings left vacant and people left bankrupt build anything except move things around in a zero-sum game?
Why shouldn't economies based on a deflating currency be the way of the future? Is it bad that people have to work smarter (or harder) to keep up with the pace of society and thre growth of the currency? Again, should the destruction and decline of an inflationary-economy be accepted?
The fact of the matter is that it is clear an economy based on sound currency is going to encourage more efficient, hardier businesses as opposed to one where money cannot be saved and invested when the time is right. In essence, allowing people to suffer a huge loss in opportunity cost just gives people more incentive to invest better, spend better and overall live better. Consequences are more potent. Money is held accountable. Losses hurt more.
Why would a system of where waste and destruction can be taken with easy, make society any stronger e.g. an inflationary economy? How can more businesses failing left-and-right, buildings left vacant and people left bankrupt build anything except move things around in a zero-sum game?
Why shouldn't economies based on a deflating currency be the way of the future? Is it bad that people have to work smarter (or harder) to keep up with the pace of society and thre growth of the currency? Again, should the destruction and decline of an inflationary-economy be accepted?
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