Sure, that's a way to increase your net worth in real terms, but it onlyOn Mon, Aug 10, 2015 at 08:14:08PM +0100, Hector Chu wrote:
> On 10 August 2015 at 19:50, Anthony Towns via bitcoin-dev <
> bitcoin-dev@lists.linuxfoundation.org> wrote:
> > ...but I think at present the time value of bitcoin is effectively zero
> Since bitcoin is liquid you forget that one can just sell off his bitcoin
> for fiat and hold that for interest. The time value is thus given by the
> yield curve of interest rates.
works if your interest rate on your fiat account is greater than the
price rise in bitcoin over the same term. If you pull out a BTC today at
$300, put it in a bank account earning 3% interest for a year and then
buy $309 worth of bitcoin when the price has risen to $400 per BTC,
and only get 0.7725 of a bitcoin, that's not a winning proposition.
I'd call that earning a -22.75% rate (in bitcoin terms), while a 0%
rate would just be ending up with as many bitcoin after a year as you
started with. Note that in USD (and real) terms, in this scenario 77%
of a bitcoin is actually worth more after a year than 1 bitcoin is now.
You might get a positive rate of return on bitcoin invested today by
running an exchange or a gambling service of some sort; but I think
mostly, people are just sitting on their coins hoping they appreciate. If
so, (in my terminology at least) they're earning 0%, denominated in
bitcoin, and have a time-value of bitcoin of zero.
Cheers,
aj