Shares of Apple stock are a deflationary asset; the number of units continues to decrease over time.
Fungible shares of corporate ownership have been somewhat monetized over the past decade, as actual US gov currency (bank deposits and T-bills) fail to yield above CPI inflation.
Fungible shares of corporate ownership have been somewhat monetized over the past decade, as actual US gov currency (bank deposits and T-bills) fail to yield above CPI inflation.
In other words, investors ask themselves, "would I rather hold dollars that are currently increasing by 12% per year in quantity and yield sub-0.50%, or hold $AAPL shares, for which there is less each year and also yield about 0.50%?"
Apple shares peaked at ~26M, now at ~16M.
Apple shares peaked at ~26M, now at ~16M.
In exchange for this decision, $AAPL shareholders take on more volatility, and tie themselves to the success or failure of 150,000 employees to make good products.
It's like investing in the currency of a small country, with close ties to the US and China.
Network effect.
It's like investing in the currency of a small country, with close ties to the US and China.
Network effect.
My concern, in the long run, is that a variety of policies and challenges will eventually cause $AAPL price to flatline.
At the end of the day, it's participating in a highly competitive industry, and its monopoly-like effects are fragile.
But that's best saved for another day.
At the end of the day, it's participating in a highly competitive industry, and its monopoly-like effects are fragile.
But that's best saved for another day.
Ethereum proponents describe their currency as "ultra sound" as a marketing term because it now has low inflation, and possibly deflation. Lower even than #bitcoin, at least on the surface.
https://twitter.com/odin_free/status/1487451407456391172
However, sound money doesn't refer to the *decision* to deflate a currency.
It refers to the *inability* to inflate a currency.
For example, over a century despite occasional 10x increases in the price of gold, we *can't* make more than 2% of it per year.
Chart via @NYDIG_BTC
It refers to the *inability* to inflate a currency.
For example, over a century despite occasional 10x increases in the price of gold, we *can't* make more than 2% of it per year.
Chart via @NYDIG_BTC
That's why, for thousands of years, gold was money. We literally don't know how to acquire it at a faster rate.
Only brief exceptions exist, where we discovered a new continent and harvested easy deposits from that (and/or killed/conquered existing harvesters for theirs).
Only brief exceptions exist, where we discovered a new continent and harvested easy deposits from that (and/or killed/conquered existing harvesters for theirs).
If we judge managed fiat/corporate currencies based on their human-decided inflation/deflation rate, Ethereum is something like #100 in line for deflationary currencies.
You're talking about +/- 1% per year?
I'm like, "Son, get 100th in line behind Apple at -5%"
You're talking about +/- 1% per year?
I'm like, "Son, get 100th in line behind Apple at -5%"
In other words, assets that compete for artificial scarcity have to compete against hundreds of companies w/ revenue that do share buybacks, including big ones like $AAPL with $2T+ market cap.
Realistically, securities only compete on the quality of their network/product.
Realistically, securities only compete on the quality of their network/product.
Ethereans, before you get mad at me or call me biased, I have a longform article outlining my view on smart contract blockchains.
I analyze them seriously, as securities. I analyze stocks, commodities, digital assets, bonds, etc.
lynalden.com/proof-of-stake/
I analyze them seriously, as securities. I analyze stocks, commodities, digital assets, bonds, etc.
lynalden.com/proof-of-stake/
https://twitter.com/LynAldenContact/status/1352426817370648577
Ethereum's focus on being "ultrasound" literally makes me less bullish, not more bullish, despite the fact that Ethereum is the only crypto network effect that rivals Bitcoin.
IMO: Focus on being the best smart contract blockchain, or you'll likely fail. You're not "ultrasound".
IMO: Focus on being the best smart contract blockchain, or you'll likely fail. You're not "ultrasound".
Bitcoin, because it's actually decentralized, has no ability to *decide* to increase or decrease its distribution of coins. There's no "Bitcoin Foundation".
It's a commodity.
The hard cap is 21M. If people change the rules and hard fork, they create a separate currency.
It's a commodity.
The hard cap is 21M. If people change the rules and hard fork, they create a separate currency.
For gold, we have no ability to increase its inflation rate even when we want to. Maybe ocean floor or asteroid mining eventually, but who knows.
For BTC, it's capped at 21M. Maybe quantum or similar existential threat in the future could rally the community behind a hard fork.
For BTC, it's capped at 21M. Maybe quantum or similar existential threat in the future could rally the community behind a hard fork.
There's a reason that bitcoiners have the most aggressive dollar-cost-averaging community.
They correctly identify work and true scarcity, and understand it. It's hard to rival that force and utility of something that *can't* be increased in supply.
They correctly identify work and true scarcity, and understand it. It's hard to rival that force and utility of something that *can't* be increased in supply.
In summary, there's a difference between artificial/centralized scarcity and *true* scarcity that exists apart from human decisions.
It's similar to the difference between money/property and equity securities.
As an equity investor, I like securities. They're just not gold/BTC.
It's similar to the difference between money/property and equity securities.
As an equity investor, I like securities. They're just not gold/BTC.
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