Another Bitcoin site bites the dust
Posted by richrobinson 11 years, 5 months ago to The Gulch: General
I actually started looking into bitcoin as an investment about a month ago. It looked like a viable option. Now I wonder...what next
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Lagavulin 10yr is about $25 (750ml) here in Cambodia.
Certainly not because they're economists. I don't think there's an economist in the whole bunch.
Wealth is the sum of value. Value is determined by the traders desires for goods.
When one trader brings a good to a trade, and a second trader brings their own goods, each must value the goods of the other more than their own goods otherwise the trade will not occur (why would I trade something that I own for something that is less valuable to me?). Thus each party must place a higher value on the items of the other than on the items that they themselves own.
So prior to the transaction each party has goods of let us say a value of 1. Total wealth of 2. After the trade each party feels that they got 1.1 value in exchange for their 1 that they traded. 2 x 1.1 = 2.2, wealth has increased.
Notice that I did not use money here at all.
Basic Austrian economics.
http://en.wikipedia.org/wiki/Comparative...
opportunity costs and efficiency-there would be no need to trade otherwise
Present an economics problem here and I'll give you the answer. I gave you one, but will repeat it here: How can wealth increase when the two parties that bring something to a trade have not changed the physical properties of what they have traded?
How can wealth increase if the goods that two people bring to a trade do not physically change?
There is utility in the food. It is only valuable if I choose to trade it for something else.
Shells, beads, heck, even colored washers (from my personal experience) have been used as "money." The key to an enduring money is that it be rather stabile in quantity, only increasing in relative proportion to the economic activity in which it circulates. Even fiat money can have this characteristic (such as Bitcoin) so long as it is maintained. The problem with the dollar is that this has been violated, and violated aggressively as of late.
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