Bitcoin Asset Solve Store Of Value

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After digesting the piece entitled, “How Bitcoin Solves the Store of Value Problem” by @Mind/Matter published in Bitcoin Magazine on August 1, 2021, I found myself unsatiated. Although in firm agreement with the central premise of the piece, namely that bitcoin performs the store of value role better than any other major asset, more could be said about the relative flaws of other assets — many of them fatal — in comparison to bitcoin. In the following series of articles, I will elucidate the relative unattractiveness of (i) equities, (ii) fixed income securities, (iii) commodities and (iv) venture capital. My writing and perspective is informed by my upbringing as a common man (blue collar worker, pleb), which is consequential because the common man is crying out for a store of value to preserve their labor at a time when the financial establishment has turned its back. Bitcoin addresses this need far better than any existing alternative and is the only asset that does not represent a wealth transfer from the common man to pre-existing financial elites.

Equities

The trading of corporate equity or common stock has dramatically increased in popularity since the imposition of government lockdowns. With the advent of no-commission online brokerages, stock trading is more accessible to the common man than ever before. Despite their popularity, misconceptions abound about what a “stonk” actually represents. Socrates said that the beginning of wisdom starts by calling things what they truly are, and so I’ll attempt to define a stock. The most unsophisticated apes among us view a stock as the “digital representation of a business.” They’re a few capitalized letters on a screen, with the general understanding that if a business experiences a favorable event or the expectation of one, the letters on their screen will increase in value and vice-versa. There is a mid-wit heuristic that characterizes equities as “fractional ownership shares of the post-tax cash flows of a business,” a definition that is admittedly more accurate but potentially more ruinous. As amusing as it is to invoke our inner Warren Buffet, we lack his 12-figure float and, more importantly, ignore all of the ways post-tax cash flows can be manipulated or misallocated, leaving shareholders with zilch.



Source link Bitcoin Magazine

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