03:15 Apr 20, 2018 |
English language (monolingual) [PRO] Bus/Financial - Economics / Bitcoin | |||||||
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| Selected response from: Terry Richards France Local time: 19:29 | ||||||
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SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
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5 +4 | there is not an unlimited supply of fools |
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Summary of reference entries provided | |||
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this is why "geometrically" |
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Possibly a deliberate reference to Malthus |
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there is not an unlimited supply of fools Explanation: The point he is trying to make is that there is a limited supply of fools, especially fools with money! At some point, somebody has to be the last fool in the chain who can't find a bigger fool to pay an inflated price for the asset and they are stuck with it. An asset you can't sell is worth nothing, no matter how much you paid for it. This entire phenomenon is called a "bubble" because the price of an asset gets inflated beyond its ability to sustain that price and then bursts like a bubble, leaving almost nothing behind. -------------------------------------------------- Note added at 3 hrs (2018-04-20 07:03:57 GMT) -------------------------------------------------- Yes, efflorescence means abundance. What he is saying is that, because of the "greater fool" effect, the perceived value of the bitcoin has become disconnected from its "real" value so there is no real way to assess what that real value is. If there is no way to assess a real value then the value simply becomes whatever somebody is willing to pay for it and that can change from moment to moment. Anybody's guess of the current value is as good as anybody else's as the value depends on the supply of fools which is very large but not infinite (even if it seems that way some days!). |
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Notes to answerer
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