RE: Blockchain Technology Potential (Series 1) – A Review of a Recent PAYPAL CryptoCurrency Patent Filing and What It Means for the Future of the Technology
I am an outspoken activist (with signs) on the streets of Googleville (Mountain View, CA) which is also Yahoo's home. I'd had the account for more than 10 years but the account hadn't had any activity in years. Yet they said the closure was fraud related. We need to get rid of these centralized powers that are able to arbitrarily shut us down.
I was trained as a monetary economist. The U.S. had decentralized money in the late 1800's. It was bad. Crypto will be worse. Crypto is here to stay, but none of the current implementations will survive. This opinion is based upon the Sharpe-Lintner capital asset model.
What people don't understand is that network effects are zero for capital assets. A capital asset becomes worthless as soon as the smart money figures out that it cannot sustain itself on the Sharp-Lintner beta efficiency frontier. Bitcoin will likely be the first to collapse. Not hard science. Just slightly informed opinion.
I find this viewpoint quite interesting. Especially regarding network effects for capital assets. Whether in the transient or in absolute might require slightly different consideration. (Absolute end state as in ... as soon as they figure out so and so... like you alluded to). I will look up the reference to Sharp-Lintner. Thanks for sharing this.
The message of the Sharpe-Lintner Capital Asset Pricing Model is that the expected yield on a capital asset will be an increasing function of "beta", which is a measure of risk that indicates how correlated the asset's value is to changes in the value of the "market portfolio". The key point is that asset holders don't care about any of the benefits and characteristics of the asset as something useful. They only care about expected return, and how much of that they require depends upon risk. The implication here is Bitcoin is likely to be rendered obsolete by advances in technology that enable crypto suppliers to give holders higher expected return and/or lower risk. Once such an asset emerges, BitCoin's value will collapse to zero. All of this is just an expression of the instincts of an economist trained decades ago on this precise topic. I did my dissertation on exactly this issue. My dissertation was never published, but I am probably one of only 100 or fewer economists who understand the math for this problem. (It involves an "overlapping generations model", and the analysis involves the study of a first order nonlinear difference equation. Under general conditions, all but one path is ruled out. The study of such models gives the economist an understanding of what determines capital asset values. The Sharpe-Lintner model was popularized by Eugene Fama at the University of Chicago in the early 1970's. It is associated with the emergence of the "efficient markets hypothesis".
There are also political considerations. The emergence of crypto threatens vital interests of the status quo territorial governments. Those governments have the power and the motive to defend themselves. Private person enthusiasts, OTOH, have no motive to organize and defend this empowering technology, and will not begin to do so until it is too late.
I am an outspoken activist (with signs) on the streets of Googleville (Mountain View, CA) which is also Yahoo's home. I'd had the account for more than 10 years but the account hadn't had any activity in years. Yet they said the closure was fraud related. We need to get rid of these centralized powers that are able to arbitrarily shut us down.
Oh! Sorry. Decentralization is the way forward to any monetary system whether storage, exchange, formation, etc.
I was trained as a monetary economist. The U.S. had decentralized money in the late 1800's. It was bad. Crypto will be worse. Crypto is here to stay, but none of the current implementations will survive. This opinion is based upon the Sharpe-Lintner capital asset model.
OK. Though here we are talking about global decentralization. Not only one country.
What people don't understand is that network effects are zero for capital assets. A capital asset becomes worthless as soon as the smart money figures out that it cannot sustain itself on the Sharp-Lintner beta efficiency frontier. Bitcoin will likely be the first to collapse. Not hard science. Just slightly informed opinion.
I find this viewpoint quite interesting. Especially regarding network effects for capital assets. Whether in the transient or in absolute might require slightly different consideration. (Absolute end state as in ... as soon as they figure out so and so... like you alluded to). I will look up the reference to Sharp-Lintner. Thanks for sharing this.
The message of the Sharpe-Lintner Capital Asset Pricing Model is that the expected yield on a capital asset will be an increasing function of "beta", which is a measure of risk that indicates how correlated the asset's value is to changes in the value of the "market portfolio". The key point is that asset holders don't care about any of the benefits and characteristics of the asset as something useful. They only care about expected return, and how much of that they require depends upon risk. The implication here is Bitcoin is likely to be rendered obsolete by advances in technology that enable crypto suppliers to give holders higher expected return and/or lower risk. Once such an asset emerges, BitCoin's value will collapse to zero. All of this is just an expression of the instincts of an economist trained decades ago on this precise topic. I did my dissertation on exactly this issue. My dissertation was never published, but I am probably one of only 100 or fewer economists who understand the math for this problem. (It involves an "overlapping generations model", and the analysis involves the study of a first order nonlinear difference equation. Under general conditions, all but one path is ruled out. The study of such models gives the economist an understanding of what determines capital asset values. The Sharpe-Lintner model was popularized by Eugene Fama at the University of Chicago in the early 1970's. It is associated with the emergence of the "efficient markets hypothesis".
There are also political considerations. The emergence of crypto threatens vital interests of the status quo territorial governments. Those governments have the power and the motive to defend themselves. Private person enthusiasts, OTOH, have no motive to organize and defend this empowering technology, and will not begin to do so until it is too late.
So they put your account on hold till when Jesus comes back on a wooden bicycle.