Quote from: HunterMinerCrafter on November 01, 2014, 08:20:49 PM

Quote from: mishax1 on November 01, 2014, 07:37:01 PM

There is no reason of investing using btc, it's just like selling btc to dollars to invest in a start up, and that there's a good chance that if the btc goes up you probably won't get your btc back.
If you buy with 350$ now and the btc goes to 1000$ your 350$ will still be worth 350$, it's actually a waste of btc.

By this reasoning alone, if you believe that the btc price will go up then you should never do anything with a bitcoin except hoard. While I often see this reasoning I don't think it is sound. I won't step into the holy war and debate this, it is already a well beaten dead horse.

In any case, why is the denomination relevant at all? Any argument that you could make for a bitcoin you could also make for any asset, like a dollar or an apple or a share of Apple. If I invest my apples in zencoin and apples go up I probably wont get my apples back. I give $350 worth of apples for some zencoin and then those apples become worth $1000 I'll still only have $350 worth of zencoin. By this logic I should never invest any asset in zencoin if I believe that asset will increase in value, because I might be right and the value of that other asset "might" go up.

Of course this is flawed reasoning. One really needs to account for potential movement of *both* assets in *both* directions. One needs to consider not just if apples are going to go up or down, but by what percentage they are going to go up or down relative to the percentage that zencoin will go up or down.

The specific underlying assets are not of actual concern, nor their particular spot prices, only their relative appreciation/depreciation while held. If I think that there will be more new interest opened in zencoin over some time span than will be opened into bitcoin, relative to their market caps, then it is rational to exchange my bitcoin (some or all) for zencoin over that time period, and then to incrementally re-balance between the two as that new interest enters the market and the price gaps relative to market caps closes. This is pretty basic economic theory. If "done correctly" one ends up with a larger valued pile of both bitcoin and zencoin than they had of bitcoin originally. Of course this is simplified, a real investment house will also have to consider things like the "market sensitivity" or how much their own entry to and exit from both markets will skew the curves.

(I think that if Ohad meets his goals then this will probably be the case over at least a 6 to 12month timeframe, btw!! Yah, I'm that optimistic about this project - if he does what he intends I firmly believe that new adoption of the technology will (briefly) outpace new adoption of bitcoin. No joke. If this thing works or even just "works" there will almost certainly be a mad rush of both publishers and providers. I don't see people flocking away from AWS or anything (the projects cover different use cases and concerns) but I do see this having the potential of very quickly becoming a dominant technology in the space.)

Someone might be tempted to say "but this is an IPO so it is different from general investment of an open asset" but the fact is that the only real difference is that there is no prior historical trade. Otherwise the market "functions the same" at the moment of the IPO and forward.

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So, if an investor believes that zennet is a better investment than btc then he would invest his *dollars* in zennet.

If an investor believes that asset X is a better investment than asset Y he will trade asset Y for asset X proportional to how much better they believe it to be, possibly adjusted relative to some risk profile. (Note this says nothing of asset Z. In your example X=zennet, Y=btc, Z=usd. You can't cross-relate value comparisons like that unless you start talking about arbitrage. If you do want to talk about three or more assets then you are looking at hedging between the three *relative* interests, but the premise remains more or less the same from there.)

If they are smart, they will also write out put/call contract pairs to bracket return above a risk free rate to within some acceptable bound of probability. This is slightly less basic economic theory, but still pretty much "first principles."

All of this is rather off topic discussion, though. It is not any concern specific to zennet, and is something that is well covered elsewhere. This isn't an appropriate thread for discussing general economics or investment strategy, IMO.

99% of the crypto projects (invested with bitcoin) are not traded with dollars nor related to any real world service that is being valued with dollars. that is why I gave the Storj example, so in most cases where I invest in bitcoins I don't need to worry that I lose my bitcoin if it goes up (true that I don't lost my dollar, but I might lose the bitcoin)

If you spend your bitcoins on storj or zencoin then probably the only way you'll end up getting more bitcoins is if bitcoin itself crashes.

Apples or shmapples, nothing changes the fact that spending bitcoins buying dollars is not the way to go for a bitcoin believer.