📅 Original date posted:2022-05-04
📝 Original message:Good morning e,
> Good evening ZmnSCPxj,
>
> For the sake of simplicity, I'll use the terms lender (Landlord), borrower (Lessor), interest (X), principal (Y), period (N) and maturity (height after N).
>
> The lender in your scenario "provides use" of the principal, and is paid interest in exchange. This is of course the nature of lending, as a period without one's capital incurs an opportunity cost that must be offset (by interest).
>
> The borrower's "use" of the principal is what is being overlooked. To generate income from capital one must produce something and sell it. Production requires both capital and time. Borrowing the principle for the period allows the borrower to produce goods, sell them, and return the "profit" as interest to the lender. Use implies that the borrower is spending the principle - trading it with others. Eventually any number of others end up holding the principle. At maturity, the coin is returned to the lender (by covenant). At that point, all people the borrower traded with are bag holders. Knowledge of this scam results in an imputed net present zero value for the borrowed principal.
But in this scheme, the principal is not being used as money, but as a billboard for an advertisement.
Thus, the bitcoins are not being used as money due to the use of the fidelity bond to back a "you can totally trust me I am not a bot!!" assertion.
This is not the same as your scenario --- the funds are never transferred, instead, a different use of the locked funds is invented.
As a better analogy: I am borrowing a piece of gold, smelting it down to make a nice shiny advertisement "I am totally not a bot!!", then at the end of the lease period, re-smelting it back and returning to you the same gold piece (with the exact same atoms constituting it), plus an interest from my business, which gained customers because of the shiny gold advertisement claiming "I am totally not a bot!!".
That you use the same piece of gold for money does not preclude me using the gold for something else of economic value, like making a nice shiny advertisement, so I think your analysis fails there.
Otherwise, your analysis is on point, but analyses something else entirely.
Regards,
ZmnSCPxj
ZmnSCPxj [ARCHIVE] /
npub1g5…3ms3l
2023-06-07 23:08:47
in reply to nevent1q…mshf
Author Public Key
npub1g5zswf6y48f7fy90jf3tlcuwdmjn8znhzaa4vkmtxaeskca8hpss23ms3lPublished at
2023-06-07 23:08:47Event JSON
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"content": "📅 Original date posted:2022-05-04\n📝 Original message:Good morning e,\n\n\u003e Good evening ZmnSCPxj,\n\u003e\n\u003e For the sake of simplicity, I'll use the terms lender (Landlord), borrower (Lessor), interest (X), principal (Y), period (N) and maturity (height after N).\n\u003e\n\u003e The lender in your scenario \"provides use\" of the principal, and is paid interest in exchange. This is of course the nature of lending, as a period without one's capital incurs an opportunity cost that must be offset (by interest).\n\u003e\n\u003e The borrower's \"use\" of the principal is what is being overlooked. To generate income from capital one must produce something and sell it. Production requires both capital and time. Borrowing the principle for the period allows the borrower to produce goods, sell them, and return the \"profit\" as interest to the lender. Use implies that the borrower is spending the principle - trading it with others. Eventually any number of others end up holding the principle. At maturity, the coin is returned to the lender (by covenant). At that point, all people the borrower traded with are bag holders. Knowledge of this scam results in an imputed net present zero value for the borrowed principal.\n\nBut in this scheme, the principal is not being used as money, but as a billboard for an advertisement.\nThus, the bitcoins are not being used as money due to the use of the fidelity bond to back a \"you can totally trust me I am not a bot!!\" assertion.\nThis is not the same as your scenario --- the funds are never transferred, instead, a different use of the locked funds is invented.\n\nAs a better analogy: I am borrowing a piece of gold, smelting it down to make a nice shiny advertisement \"I am totally not a bot!!\", then at the end of the lease period, re-smelting it back and returning to you the same gold piece (with the exact same atoms constituting it), plus an interest from my business, which gained customers because of the shiny gold advertisement claiming \"I am totally not a bot!!\".\n\nThat you use the same piece of gold for money does not preclude me using the gold for something else of economic value, like making a nice shiny advertisement, so I think your analysis fails there.\nOtherwise, your analysis is on point, but analyses something else entirely.\n\nRegards,\nZmnSCPxj",
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