There's three scenarios when people put money into something and then pull out winners and losers. Positive sum, Negative sum and Zero sum.
There’s a zero sum game. That means that everybody puts money into a pile, some win more of it, some win less of it, but if you add it all up, there was no money made or lost as a full group.
Example of zero sum game: six of you guys put in a dollar, whoever rolls their number gets all six dollars the rest lose a dollar. Even though some people won, and some people lost, it all adds up to a wash of 0$ total gained by the group.
A positive SUM game is something where everybody puts in a dollar, some people win some money, some people lose some money, but the pile grows and the total pot that’s divided among the winners is larger than the money initially put in. Think of something like owning a business with somebody, maybe you each put in 100 K, it makes profit that you split and at the end of it, you can sell it.
A negative sum game is something that there is still winners and losers in, but if you add up all the losers and all the winners, the pile of money at the end is small smaller. Playing at a casino is an example of this. Some people may win big, but if you add up all the winning and losing, somehow the house always wins a percentage.
Crypto is a negative sum game. For every single person that makes a profit, someone has to lose money. If it ended there, it would be a zero sum game. But bitcoin mining takes a ton of infrastructure and energy. That’s the loss that makes it a negative SUM game.
In general, you want to be rolling dice in a positive SUM game. I put all my money in the stock market. I might lose money some years and might win money some years but we know that there’s a positive expected return over the long haul. Bitcoin produces wallets of value. This is why we expect it to go up.
Fundamentally, bitcoin will increase in value over the next 5 years
byu/HenFruitEater inBitcoin
Posted by HenFruitEater
11 Comments
Also because fiat currency functions via expansion/inflation
Otherwise the fiat system would fail and that is the old guards worst nightmare
Why 5 years specifically?
bitcoin in long run is monetary inflation hedge + extra adoption bonus if it is the same as gold, the market capitalization should catch up
If you can convince enough people that Bitcoin will go up, Bitcoin will go up.
Is this true? What is your evidence for this statement?
BTC increases in supply at roughly a 1% annual rate…so if demand/adoption increases at say 2% or more annual rate, right there is the supply/demand imbalance, that should cause the price to rise over the years. Not only that, said rise will cause a positive feedback loop, so demand may rise at not 2% annually, but maybe close to 5% or more annually…now we have a rocket ship.
The post is so confused it hurts
This mixes up trading with the asset itself.
Short term trading can look zero or negative sum because of fees, miners, bad timing etc. Fair enough.
But zoom out. Bitcoin as a network is closer to positive sum. It turns energy into a global, censorship resistant monetary network people actually use. That utility is the value.
Energy used is not money destroyed. It is the cost of security. Banks, Visa, gold mining, data centres all burn energy too and no one calls those negative sum by default.
If Bitcoin had no real value, price would trend to zero over time. It hasn’t. Most losses come from people trading badly, not because the system needs losers.
You gotta read up buddy
Listen to Jeff booth every night before you fall asleep instead of what you’re doing
fundamentally, my ex should be still with me giving head every morning. yet, here i am…