why are crypto currencies different from a pyramid scheme?
there is no growth, only inflation
sure it's tradable, unlike the old "aeroplane model" that relies on non-exchangable places in a hierarchy, but it's fiat currency and so doesn't have a base price, and it's not backed by anyone.
basically it's being traded on the presumption either that it will inflate infinitely, or that each individual thinks they will be able to sell off first
won't there just be a mass sell-off sooner or later when people get spooked; causing the value to drop to zero; at which point it will become untradable without causing a hyper de-flation cycle
I'm new to ecconomics and I just can't fathom why anyone thinks it's a good idea
forgive me if my terminology is a bit patchy
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>>1189954 (OP)
Sell off already happened for bitcoin and it will happen again. These things happen in waves.
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>>1189954 (OP)
> im new to economics
k.
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>>1189962
sure the price can rise and fall
but the key seems to me that there is never any gain in the market
none at all
nada
no material (like gold) or productive (like a factory) value
so it's not an investment, it's a gamble
for every dollar one person makes, another person looses
the price is just a reflection of how many people don't realise they have lost (or will loose) yet
the way I see it as a layman, resource currency (like gold coins) is stable because it has an intrinsic value; preventing a crash to zero value
I think it's fundimental to the viability of a currency, because crypto's can't preclude the possibility of a crash to zero value they are venurable to it
I'm not sure how to explain it well, if bitcoins became worth a thowsandth of a cent; someone would probably still be prepared to buy them, and on that basis people probably wouldn't just throw the sand away
therefore it would still be tradable even through price crashes
but if the bitcoin reaches 0 for any reason, people would be unable to exchange it for anythign but other bitcoin, also worth nothing.
even if you bought all the bitcoin, every single one; total value would stay at 0
people would just forget about the bitcoin they had, and there would be "dead currency" that was valid and affected market prices, but wasn't tradable
>tl:rd
I think if it bitcoin hit zero value it would be untradable, and could never recover value
and since that is an understandable possibility known to traders, and since it's entirely soluble (I think?), the liklyhood of it happening is quite high
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who says dollars are worth something? who says gold is worth more than dirt? why do diamonds hold value even though people know they aren't that rare?
because people know what people are willing to exchange for these things therefore they have a value.
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>>1189954 (OP)
>>1189994
Nah bro. It ain't like that
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>>1190003
I thought about that, while it's true that the possibility exists theoretically for all fiat currency and non-usefull resources, there are factors that offset it
1. barter is illegal, this effectively guarantees trade-ability for national currency, while hard to enforce on a large scale it can be enforced easily on an individual
2. national fiat currency is tied to that nations economy because it's not all soluble, though I don't fully understand why this gives nationally issued fiat currency a practical base price (I think it's to do with market estimations of value combined with the guarentee that sell-offs have some kind of practical limit)
3. convention dictates people trade with national currency, so a shock on the level of currency devaluation would be delayed reaching the marketplace eg. people lack real-time valuation of money
bitcoin fails all these because everyone can trade in something else if bitcoin prices are unfavorable, nobody important accepts or demands payment in bitcoin only
it's not tied to any economy, nobody has much credibility invested in backing it
unlike the US dollar for instance, I see the real potential that it will crash and everyone stop trading with it, forget about it, small holdings of bitcoins will simply be forgotten about, the whole thing will end in tears
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>>1190041
If bitcoin was going to crash it would of crashed by now. It's been around for 7 years.
Thousands of altcoins have been and 99% of them get dumped because they're worthless. ETH was recently hyped as bitcoin 2.0 and people realized it was worthless and it's being dumped hard now
I have a lot of bitcoins and I've watched the price rise and fall over the years. Ive never sold and never will unless I need the money. Lots of people like me
Nothing will overtake bitcoin, it will always have value.
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>>1190206
>Thousands of altcoins have been and 99% of them get dumped because they're worthless.
>If bitcoin was going to crash it would of crashed by now. It's been around for 7 years.
do you not get what I've been saying
the only way bitcoin has avoided crashing is because more and more people buy into it
the same will happen to it as has happened to every other cypto in the marketplace eventually
there is only one path it can go down, how long it takes to get there doesn't alter that
it's just a gambling game that's all about how long you can hold the hand grenade
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