/biz/ - Business & Finance

>>10584732
Sure, I understand. Think of it like this: “A rising tide lifts all boats.” The pie isn’t finite. New wealth is created with the passage of time as people create new things and build upon existing structures; they become more VALUABLE because their longevity is a function of their utility. Netflix is valuable because it can provide an efficient service after perfecting business processes for 10 years and learning from mistakes and spending time and money to get good at it (and there’s no destruction like wars. The broken window fallacy can illustrate this but that’s for another time).

So let’s say I spend $100 on LINK and the price rises $.05 because that was the cheapest price. The VALUE of link increased because the perceived value is greater with more people buying than selling (yes there’s always a buyer and seller, but if more people want to buy a product than is being offered the price climbs due to scarcity). Now after I buy there’s the same amount of buyers and sellers and the price remains constant for another two weeks. After those two weeks when I get paid again from my employer with the new wealth I created by working for them, I then invest another $100 in Link. Let’s say that because there are very few sellers the next lowest price is $.10 higher. We got a different price rise but invested the same amount of money, because the price (VALUE) of link is tied to the supply and demand curve which is tied to its real or perceived value. So an additional $.05 of wealth was created out of thin air because the perceived value of Link drove demand up while supply remained constant. An increase in demand with a constant supply will move the price up. With link however, supply will also decrease concurrently with an increase in demand as link gets tied up in nodes, thus bringing about the exponential rise in the price during the singularity.