A better example of recent history is how TSLA raised a bunch of money through stocks to build the Gigafactory. $5 Billion USD was raised through a combination of debt (aka: old-school banks) + Stock offerings, and now there's a working factory in Nevada churning out batteries and cars.
What does buying BTC do aside from increase the price? When you give USD to a BTC holder, all you did was reward that person for mining.
I think we can confidently say that all of the servers that were given to Google ended up creating something more than a a simple data-center. Google, as an entity, has more value than the sum of all of the servers that it runs.
Can the same be said about BTC mining equipment and BTC? No. Because at the end of the day, the value of BTC doesn't "grow" if you pump it full of USD. We already know the secret of blockchain.
Google's value grew in the 90s because buying more servers in the 90s allowed it to search more web-sites and build a better search algorithm. Putting $1000 into Google Servers made MORE than $1000 of gains later (as services like Google, GMail, Youtube, etc. etc. were all made on top of those servers).
In contrast, investing money into BTC doesn't actually do anything. There's no company that actually benefits, aside from bigger-and-bigger mining centers. The innovation is dead: the BTC community has become too bulky and politicized to accept even minor changes (like Segwitx2).
Besides, Segwitx2 doesn't need us to pump money into BTC miners for it to work or innovate. If BTC crashes tomorrow, the lightning network will STILL be developed and no harm will come to the innovators in the community.
Ethereum, golem, decentraland, storj, ICONOMI,steemit, Basic Attention Token
funded buy bitcoin.
Tell me. If all the money in BTC markets dried up tomorrow, would the cryptocurrency innovation stop?
I argue that innovation would continue, even if BTC crashes to $5 tomorrow. Because cryptocurrencies, as they are currently implemented, don't require money for people to improve them. The entire concept of "equity" and "market cap" is completely, and utterly devoid of meaning in this space.
If you buy up Google or TSLA stock, those companies have more money to actually make factories, data-centers, or buy computers. This happens through a mechanism called stock offerings. Ex: https://www.cnbc.com/2016/05/20/tesla-raises-146b-in-stock-s...
If you buy up BTC, the innovators do NOT get money. Only the miners do. Its way better to just Paypal the money directly to BTC foundation or directly to Etherium developers if you actually care about "funding" those projects.
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As it stands right now, the Winklevoss Twins are getting more BTC money than the BTC core developers. The "investment" scheme of the BTC world is broken. BTC "market cap" does NOT benefit the devs.
https://cointelegraph.com/news/winklevoss-twins-become-first...
The value is in the network. Not the code. Should devs get paid? yes.
why should a dev get any premium over any other early adopter that contributed value to a network?
In my opinion the work(dev, qa, docs etc) of a network should be put out for bid with a minimal as possible funded by trx fees.
Bitcoin already served it's purpose to get money into the crypto ecosystem.
Stock can be worthless, but the resulting company can still provide a useful service and job to many.
Still, high stock prices provide a benefit to the company. Everyone knows TSLA's stock is overpriced, but that's basically a good thing for TSLA.
BTC is the opposite. At $20,000 per BTC, it was impossible to transact BTC for less than $30 per transaction. The network grew less and less valuable as the price of BTC goes up (and as BTC Transaction Fees are typically paid in... BTC... higher USD/BTC means higher transaction fees).
A high-stock price is beneficial to the company. A high BTC price is detrimental to the BTC community.
BTC will survive this crash. Cryptocurrencies will survive. AND they will become more useful when the prices drops down to something reasonable (Watch as transaction fees are dropping with these lower prices). It sure sucks for the "investors" who were suckered into believing otherwise. But seriously, there's very little value in attracting "dumb money" investors who would have lost their money in the next dumb penny-stock herd-mentality scheme anyway.
Google wasn’t even founded until 1998, and didn’t IPO until 2004. It wasn’t part of the dot-com bubble. Amazon would have been a better example (1994, IPOed in 1997).
Otherwise, good post.
But, of course, the internet bubble allowed all the fiber to be laid that formed the backbone of the internet & that gave rise to the great internet companies.
I'm long cryptocurrencies and I believe the technology is going to persist. It would be nice though to be able to do it without a whole bunch of people losing their life savings in a bubble, but perhaps that's wishful thinking.