Looking at the operating cost of Bitcoin mining (hardware, maintenance, electricity), which is crucial for its network security, I tend to believe it only continues to work, if money enters the game continually.
It looks more like a kind of pyramid scheme than an investment.
But until it fails, people will have the chance to make money with it and tell about it, drawing in new ‘investors’.
it only continues to work, if money enters the game continually.
If i invest in a company, they take that money and at least theoretically make something other people want and turn your money into more money. Periodically all the investors vote on whether they put that money back into the business and try to make MORE money or to split it up and give everyone some cash (dividends). The thought of that potential dividend payout makes people excited and makes the value of having access to that payout go up, and so people that no longer want to wait can sell their shares, making money and leave the system. In this way everyone can win, and everyone can continue with the same belief in the stocks future. the customer get something in exchange for their money, the company gets to grow, the cashing out investor gets money and the new investor gets an opportunity for eventually dividends or to cash out themselves.
Bitcoin doesn’t work like this, there are no dividends at the end of day. OC got 8k from people who believed the market would go up. If both parties agreed with bitcoins trajectory then a transaction would not take place. In this case OC lost and the other investors won, but if OC and everyone like him had known bitcoin would go up then paradoxically bitcoins value would go down since no one could realize its value. Bitcoin will always yoyo forever siphoning money from those with less market knowledge to those with more market knowledge (or ability to manipulate it) until there aren’t enough people in it anymore. They aren’t making money, just moving it around.
Bitcoin will always yoyo forever siphoning money from those with less market knowledge to those with more market knowledge (or ability to manipulate it) until there aren’t enough people in it anymore. They aren’t making money, just moving it around.
I agree with that assessment.
Bitcoin is just another tool to move money from uneducated people with fomo to those who hold the strings.
Technically it’s obsolete, but I’m glad it paved the ground for some innovative approaches to transfer value anonymously or very fast and with cheap transaction fees or even no fees at all.
Looking at the operating cost of Bitcoin mining (hardware, maintenance, electricity), which is crucial for its network security, I tend to believe it only continues to work, if money enters the game continually.
It looks more like a kind of pyramid scheme than an investment.
But until it fails, people will have the chance to make money with it and tell about it, drawing in new ‘investors’.
If i invest in a company, they take that money and at least theoretically make something other people want and turn your money into more money. Periodically all the investors vote on whether they put that money back into the business and try to make MORE money or to split it up and give everyone some cash (dividends). The thought of that potential dividend payout makes people excited and makes the value of having access to that payout go up, and so people that no longer want to wait can sell their shares, making money and leave the system. In this way everyone can win, and everyone can continue with the same belief in the stocks future. the customer get something in exchange for their money, the company gets to grow, the cashing out investor gets money and the new investor gets an opportunity for eventually dividends or to cash out themselves.
Bitcoin doesn’t work like this, there are no dividends at the end of day. OC got 8k from people who believed the market would go up. If both parties agreed with bitcoins trajectory then a transaction would not take place. In this case OC lost and the other investors won, but if OC and everyone like him had known bitcoin would go up then paradoxically bitcoins value would go down since no one could realize its value. Bitcoin will always yoyo forever siphoning money from those with less market knowledge to those with more market knowledge (or ability to manipulate it) until there aren’t enough people in it anymore. They aren’t making money, just moving it around.
I agree with that assessment.
Bitcoin is just another tool to move money from uneducated people with fomo to those who hold the strings.
Technically it’s obsolete, but I’m glad it paved the ground for some innovative approaches to transfer value anonymously or very fast and with cheap transaction fees or even no fees at all.