Quote from: dinofelis on February 05, 2018, 10:15:38 AM

Quote from: bbc.reporter on February 03, 2018, 02:46:47 AM

I reckon you are making up the term same fool, I had to do a google search but I found nothing about it hehehe.

I'm defining it. I have the right to define a notion in an argument, right ? The notion of same fool is like the notion of greater fool, except that the coefficient of foolishness in same-fool systems has an expectation value of near 1, while the expectation value of the coefficient of foolishness is a large number in greater-fool systems. (and I suppose that you won't be able to find "coefficient of foolishness" either).

The point is that you can have a finite set of fools, and they can maintain indefinitely a system of same-fool belief ; however a finite set of fools can never sustain a greater-fool system: they run out of greater fools at a given moment.

Here, the definition of coefficient of foolishness A in such kind of games is the following:

"an entity is willing to buy the asset at price X, on the condition of expecting to find buyers at A.X."

I have the right to define notions. I thought it was obvious, and it didn't need explanation.

If we have a finite set of entities, the above game can be played only successfully for a long time if the expectation value of A over that set is near 1. That's what I call a "same fool" system. For instance, I know that a $100 bill is intrinsically worth nothing. I can at best light my stove with it, physically, I cannot eat it, it is not beautiful. So this quite useless piece of paper isn't worth anything intrinsically. Wanting to work a few hours to obtain such a piece of paper is foolishness. Except that I'm willing to do so, because I believe that I will find another fool, accepting it against similar value. And the very next day, that fool (who also accepted a piece of paper he can do nothing with) will find a third fool that ALSO is EQUALLY foolish. And in the end, that third fool will propose that bill to me for a few hours of work, and lo and behold, I am again as foolish as he is to accept to do work for a silly piece of paper. That game can continue indefinitely, because each time each of us is satisfied in our expectations.

However, if there's an asset X within a finite set of people, of which the people only want to acquire it for price X, if on average, they expect to sell it for 100 X to another player (bitcoin and co must be of that kind), then you end up ALWAYS having a large portion of the players totally frustrated in their expectations.

In as much an asset can continue to go around with people expecting more or less the SAME value when they sell it, than when they buy it, an asset cannot continue to go around with people expecting more or less a much higher value when they sell it, than when they buy it. This always ends up frustrating a large majority of the players, unless the set of players is infinite.

You can classify speculative assets (that is, assets which are intrinsically worthless, such as a piece of paper that is a $100 dollar bill) in two sets: the set of assets where most of its users are in the "same fool" game ; and the set of assets where most of its users are in the "greater fool" game. Crypto users are in the last kind.

By far most crypto buyers are ONLY buying crypto, because they want to sell their crypto for MUCH more than they acquired it. There is only a very, very small fraction of crypto buyers that are NOT buying crypto with the idea of selling it higher. So the average A in this game is much higher than 1. I don't know how much it is, but ask yourself: if someone buys bitcoin at $10 000, do you really think that his motivation is to sell that coin at about $10 000, 5 years from now and that was the real motivation ?

And 5 years from now will you be doing the same amount of work for that $100.00 (piece of paper you can do nothing with) ?

You can not compare your example above, to someone buying BTC and wanting to sell it higher in 5 years time.

In fact, I would expect to be able to pay someone less BTC to mow my lawns in five years from now.