Re: Bitcoin Doesnt Exist, Or How Satoshi Nakamoto Tells Lies To People
It seems you didn't get what the liabilities actually mean in financial assets. The absence of new investors is the best way to explain this. So, you have a stock and no new investor is willing to buy it from you. Does that mean you are left with nothing? No, because the company has the liability towards you and that liability is called equity. Equity is paid to you either as dividend or buyback and liquidation value. In bonds, it is the bond issuer who has the liability towards you and that liability is called principal. In fiat, borrowers and banks have the liability. Borrowers must use quantities that you hold to pay off the debt, which is why, they are forced to exchange their goods, services and labor with you. The banks must liquidate the loans with issued quantities, which is why in the case of borrowers default, banks have the liability to exchange foreclosed property of borrowers for your quantity. After all, deposits are explicitly stated in the balance sheets of the banks as liabilities.
Again, exchanges have the liability for you when you buy bitcoins from it. Exchanges are required to hold at least enough bitcoins in their systems to stay solvent, for their users to be able to withdraw (It's common sense, although there is yet to be legislation anywhere that enforces this). The ability to withdraw the bitcoins is how the liability is paid back to you.
It is worth noting that there is no concept of claims, liabilities, or reserves outside exchanges, at software and hardware wallets. This is what makes it a successful decentralized currency in the first place, because outside the exchanges there is no company or bond issuer or bank that can become insolvent and alter the value of a bitcoin.
Outside exchanges, bitcoin is not connected to any other currency's exchange rate.
Inside exchanges, it's connected to whatever exchange's currency rates it has.
Also inside the exchanges, the bitcoins inside exchange cold storage/hot wallets aren't connected to any exchange rate, because it only in the exchange software that connects to the bitcoins (however it represents them in its software) these rates. The exchange software is the one that enforces these rates, by sending or receiving the appropriate amount of cash from its bank & payment processor when a bitcoin withdrawal or deposit happens, respectively.
It also happens to be the way stock, bond and forex exchange software works as well. Even these assets can have different prices on different exchanges and it happens all the time.
So you want a real comparison to company equity and bond principal and not exchanges, OK. But it will be an apples to oranges comparison because bitcoin is not a stock or bond.
You probably know that in bitcoin we have miners who extract a block reward that becomes increasingly smaller every 4 years. So the total supply of bitcoin that has currently been mined can be used as a statistic by which to calculate the bitcoin price. It cannot determine the price by itself. Just like equity, principal and how much your bank loaned you can't determine those prices as well (in the last case it would be the price of the debt should you want to sell it to a third party).
Beyond all this discussion, it becomes either academic or moot or pointless as most of us don't have time to explain anything else to you. If it's being talked about, that's something, not nothing.
Finally, I got enough talking points to write my opinion piece. Now I can spend my time doing more productive things
