Bitcoin is the only asset to solve the problem of preserving value!

After comprehending the article titled “How Bitcoin Solves the Problem of Preserving Value” By Mind/Matter, published in . magazine Bitcoin On the first of August 2021I found myself dissatisfied.

Despite consistent agreement with the central hypothesis, which is that Bitcoin Performs the role of custodian of value better than any other major asset, and more can be said about the relative disadvantages of other assets, many of which are catastrophic, compared to Bitcoin.

In the following series of paragraphs, I will explain the relative unattractiveness of stocks, fixed income securities, commodities, and venture capital.

My writing and my perspective are inspired by my upbringing as a layman (blue-collar worker), which is important because the average person strives to preserve value and thus keep their business, at a time when the financial institution has fallen behind.

while satisfy Bitcoin This need is far better than any existing alternative, and is the only asset that does not represent the transfer of wealth from the common man to pre-existing financial elites.

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Property rights

The popularity of trading corporate stocks or common stocks has increased dramatically since the government shutdown was imposed. With the advent of commission-free online brokerage, stock trading has become more accessible to the average person than ever before.

Despite its popularity, misconceptions abound about what it represents "Stonks" (It is a deliberate misspelling of stocks meaning a share of the company's value that can be bought, sold, or traded as an investment.) In fact, Socrates said that the beginning of wisdom begins with calling things for what they really are, so I will try to define arrows.

The most sophisticated among us view stocks as “Digital representation of business”. They are just a few capital letters on the screen, with the general understanding that if a company experiences a positive event or anticipation of an event, the value of the letters on its screen will increase and vice versa.

There is also an intermediate indicative method, which distinguishes stocks as “Partial ownership interest of the company’s after-tax cash flows”, which is a more accurate definition, but it can be more destructive.

As much as it is fun to call Warren Buffet (American Entrepreneur and Investor) Our internal, we lack the float consisting of 12 Number, and most importantly, we ignore all the ways in which post-tax cash flow can be manipulated or misallocated, leaving shareholders in limbo.

My definition of stocks is simpler, and it captures some risks that are easily forgotten by other definitions. Whereas, common stock is a residual ownership claim on a business, because every venture consists of a hierarchy of claims.

The simplified version of the value scale could also be:

Bank lenders are at the top and are entitled to interest on their loans, as well as the right to repossess and sell certain assets. Thinking machines or intellectual property).

Unsecured bond holders who are entitled to interest and, in the event of liquidation, rank second in the ranking.

Stockholders who have a claim only to any value, if any. In many cases, the excess value is actually negative, and blue-collar workers are misled into paying their hard-earned money, after tax, at a certain long-term loss.

Let us take, for example, an unusual project, with debts amounting to 10 billions of dollars, and a market capitalization of 3 billions of dollars and 100 million dollars in cash. Now suppose the debt is trading at 50 cents on the dollar. Where the value of the entire project 7.9 Billion dollar (50% of $10 billion plus $3 billion minus $100 million).

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Here bondholders owe 10 Billions of dollars, yet the company has 100 Only $1 million in cash and a total value of 7.9 Billion dollar. In the event that the company is unable to refinance on favorable terms, it is possible that the bonds will not be paid in full, and the value of the stock is negative at 2.1 A billion dollars at most.

So what do you get when you combine a negative value of the shares, and the prices of the shares that are restricted to a minimum (Stock quotes on your screen can't trade for less than $0)? If you're thinking about volatility, you'd be right. That's where newsletters and scams come in YouTube, speaking characters on Twitter In an effort to generate cash out, they craft tales about an impending infusion.

Their stories are simple and consist of potential short squeeze, medium bounce hopes or last minute bailout funding. And they sell while at the same time explaining that “This is only the first stage.”. Without debt accumulation, this situation would be impossible, and as an ordinary shareholder, you willingly accept minimal rights to influence the actions of the company.

If your CFO decides to issue more debt to chase a massive project, while diluting the value of your equity, there isn't much you can do.

Whereas all shareholders rely on management teams, about which they know very little, without appreciating how different their incentives can be. As CEOs of companies realize, their careers are similar to those of futures NFL wide or partners Goldman Sachs, two to three years to do something or be replaced. How do these incentives align with holders of limited time preferred stock, who are considering increases in their amount 10 Years?

While CEOs know they will be well compensated if their risky maneuvers appear to have worked in the short term, they will be long gone when the consequences of their actions become apparent. The shareholders, too, suffer the consequences.

The range of value-destroying behaviors that management teams can engage in is virtually limitless: implementing a merger by overpaying for a target, expanding into new markets or risky product areas, hiring costly consultants, or paying exorbitant management bonuses. And the possibilities go on endlessly.

But what happens when relatively short periods of bad incentives add up in the long run? Where the returns of ten years look like schemes Altcoin .

has achieved Deutsche Bank, which was once one of the most famous financial institutions in the world, has a negative return over 10 nearly years 60%. And General Electric The industrial powerhouse responsible for US electricity, the production of most MRI machines used in hospitals, and the manufacture of the jet engines we fly, also has a negative long-term. 10 years by 15%, and these returns are worse when inflation, which is taken into account.

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Bitcoin solves the problem

remove Bitcoin Agency problem associated with storing value. The ability to store value without having to face the risk of destructive management of value is an addressable market, totaling several trillion dollars in itself.

Most of my shareholders have wanted General Electric storing long-term value, but if they understand the dynamics of the steam boiler power generation market, the nuances of the oilfield services sector or the complex cross-company structure General Electric, they probably have a better solution.

As the stock market's structural failures may force savers to become experts at headlines while trying to store value. Simply put, it works Bitcoin to fix this problem.

The ability of an asset to perform the function of preserving value is also derived from certainty. As previously defined, inventory is a residual claim that can be subdivided infinitely. Also, the marginal cost of issuing shares is close to zero and the supply is very elastic.

If the financial manager feels that his company's stock is overpriced, he will either convert this premium into cash by issuing new shares in cash, or use those shares to buy assets that the company may or may not need. New talent is enticed by stock-based compensation, while new companies can be acquired through stock trades.

Stock prices usually fall with these announcements, because existing shareholders now own a smaller percentage of the company. The only certainty you have as a contributor is that your well-being is last, and that the rules of the game will constantly change. Selling through time is impossible with an ever-changing set of rules.

When buying a coin Bitcoin For one, the owner has confidence in owning twenty-one million cash nets for the indefinite future, a level of certainty that can never be replicated by any stock.

In addition, shares can only be held in accounts key For retail brokerage firms, such as Robinhood When you buy a share of Apple On Robinhood Your name is not added to the stock certificate. You are merely the beneficial owner of an account Robinhood with shares "In the name of the street", which is owned by Robinhood.

Also, brokerage firms that look like Robinhood Sometimes, by loaning out the shares in your account to short sellers for a fee that is often cash. Typically, account holders do not receive any share of these fees. You may not transfer your shares to anyone else, sell them outside of trading hours, or use them as security.

To refer to this arrangement as "Property" Extends the definition of the term. And I forgot to mention, that when the virtual share was purchased from Apple, she did Robinhood Auction your order to the Highest Frequency Trader.

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With these facts, a disaster can be justified Game stop, where it serves as a metaphor for the broader stock market. Our leaders will fight for your right to pay high fees to donors, but be careful to remember where you stand. while progress Bitcoin The concept of extreme self-ownership, where the rules are consistent for all network participants, this system has already proven its worth.

In conclusion, with the dollar slowly but surely collapsing, stocks have become a de facto store of value, even though they are unsuitable for the role. Most stocks are dispersants and their purpose is explicit, to enrich everyone in the value chain except you.

By speculating on the movements of stock prices, you are engaged in a game of expected negative value, with huge ways to lose more than gain. Without a great knowledge of the niche or the company, you are wasting both capital and time, both of which are in common at the same time.