Return-Path: Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id EAC097AD for ; Mon, 10 Aug 2015 19:54:23 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-la0-f49.google.com (mail-la0-f49.google.com [209.85.215.49]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 2244C31 for ; Mon, 10 Aug 2015 19:54:23 +0000 (UTC) Received: by lalv9 with SMTP id v9so16858222lal.0 for ; Mon, 10 Aug 2015 12:54:21 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20120113; h=mime-version:in-reply-to:references:from:date:message-id:subject:to :cc:content-type; bh=I/+iiopo9cfZAX+CltCKLwwHSnsFxYLD4VDnsqXoSK0=; b=uH4tQObirgAoNnnJ5n4PAGhi0fGuuqysxdZDnaSlpuCnytBnlylm3INCcu3TflD+q6 NW6GxFUQaiyAPlc9aYpsNwStDx6XtWr4szdj6QikkQmJY7gi/Fw21Lr20qqk+OJ0a/bD aJqlcyZdHJCgqmkN+xTMXR3gPl86/DxYzJm9XffX267PyMMBsnEE2lAFfd8aZfDDeRDr 3tAHJXll6C2q92ukM/1g6+b6r1Yrehi/HABe1vAxD7zSQPz5Lxx9FlaQLknah89nbsUi 2uQjeN0dq8e45VkF9hRAYmpGf9v/5F8YKoXiKJyZCvzs+E3J2zu2lOTfcF0F4RXW0ltv BhlQ== X-Received: by 10.152.36.226 with SMTP id t2mr21918215laj.6.1439236461437; Mon, 10 Aug 2015 12:54:21 -0700 (PDT) MIME-Version: 1.0 Received: by 10.25.22.25 with HTTP; Mon, 10 Aug 2015 12:54:01 -0700 (PDT) In-Reply-To: <20150810192620.GA12450@navy> References: <55C7D234.1040306@bitmarkets.net> <20150810185031.GA31610@navy> <20150810192620.GA12450@navy> From: Hector Chu Date: Mon, 10 Aug 2015 20:54:01 +0100 Message-ID: To: Anthony Towns Content-Type: multipart/alternative; boundary=089e0158b5e6082d16051cfa5a24 X-Spam-Status: No, score=-2.7 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID,DKIM_VALID_AU,FREEMAIL_FROM,HTML_MESSAGE,RCVD_IN_DNSWL_LOW autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org Cc: Bitcoin Dev Subject: Re: [bitcoin-dev] Off-chain transactions and miner fees X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Development Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Mon, 10 Aug 2015 19:54:24 -0000 --089e0158b5e6082d16051cfa5a24 Content-Type: text/plain; charset=UTF-8 Nonsense. Hoping that the bitcoin price will rise is called speculation. Hub operators won't want to do that, since prices can go down as well as up. The money markets and government bond yield curve prices risk-free rates of return, a guaranteed rise in value. These rates are always positive. On 10 August 2015 at 20:26, Anthony Towns wrote: > On Mon, Aug 10, 2015 at 08:14:08PM +0100, Hector Chu wrote: > > On 10 August 2015 at 19:50, Anthony Towns via bitcoin-dev < > > bitcoin-dev@lists.linuxfoundation.org> wrote: > > > ...but I think at present the time value of bitcoin is effectively zero > > Since bitcoin is liquid you forget that one can just sell off his bitcoin > > for fiat and hold that for interest. The time value is thus given by the > > yield curve of interest rates. > > Sure, that's a way to increase your net worth in real terms, but it only > works if your interest rate on your fiat account is greater than the > price rise in bitcoin over the same term. If you pull out a BTC today at > $300, put it in a bank account earning 3% interest for a year and then > buy $309 worth of bitcoin when the price has risen to $400 per BTC, > and only get 0.7725 of a bitcoin, that's not a winning proposition. > I'd call that earning a -22.75% rate (in bitcoin terms), while a 0% > rate would just be ending up with as many bitcoin after a year as you > started with. Note that in USD (and real) terms, in this scenario 77% > of a bitcoin is actually worth more after a year than 1 bitcoin is now. > > You might get a positive rate of return on bitcoin invested today by > running an exchange or a gambling service of some sort; but I think > mostly, people are just sitting on their coins hoping they appreciate. If > so, (in my terminology at least) they're earning 0%, denominated in > bitcoin, and have a time-value of bitcoin of zero. > > Cheers, > aj > > --089e0158b5e6082d16051cfa5a24 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable
Nonsense. Hoping that the bitcoin price will rise is calle= d speculation. Hub operators won't want to do that, since prices can go= down as well as up. The money markets and=C2=A0government bond=C2=A0yield = curve prices risk-free rates of return, a guaranteed=C2=A0rise in value. Th= ese rates are always positive.

On 10 August 2015 at 20:26, Anthony Towns <aj@erisian.c= om.au> wrote:
On Mon, Aug 10, 2015 at 08:14:08PM +0100, Hector= Chu wrote:
> On 10 August 2015 at 19:50, Anthony Towns via bitcoin-dev <
> bitcoin-dev@l= ists.linuxfoundation.org> wrote:
> > ...but I think at present the time value of bitcoin is effectivel= y zero
> Since bitcoin is liquid you forget that one can just sell off his bitc= oin
> for fiat and hold that for interest. The time value is thus given by t= he
> yield curve of interest rates.

Sure, that's a way to increase your net worth in real terms= , but it only
works if your interest rate on your fiat account is greater than the
price rise in bitcoin over the same term. If you pull out a BTC today at $300, put it in a bank account earning 3% interest for a year and then
buy $309 worth of bitcoin when the price has risen to $400 per BTC,
and only get 0.7725 of a bitcoin, that's not a winning proposition.
I'd call that earning a -22.75% rate (in bitcoin terms), while a 0%
rate would just be ending up with as many bitcoin after a year as you
started with. Note that in USD (and real) terms, in this scenario 77%
of a bitcoin is actually worth more after a year than 1 bitcoin is now.

You might get a positive rate of return on bitcoin invested today by
running an exchange or a gambling service of some sort; but I think
mostly, people are just sitting on their coins hoping they appreciate. If so, (in my terminology at least) they're earning 0%, denominated in
bitcoin, and have a time-value of bitcoin of zero.

Cheers,
aj


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