Imagine if you had the option of buying a piece of gold or a piece of land with good irrigation and good soil. You can plant vegetables on the land and sell those vegetables for other people to eat. Therefor your investment is generating profit and "cashflow". Gold on the other hand just sits there, and you may want to keep it in a safe at a bank and the bank will charge you a fee for storage making it negative cashflow.
The price of gold or land or BTC can go UP or Down, but that depends on market demand of that asset. The nice thing about owning the farm is that even if the value of land goes down you can still sell your vegetables or eat them to stay alive.
Your gold analogy might actually help me make my point. When the California gold rush was happening people went nuts trying to mine for it. Eventually the mining slowed, presumably because the cost to mine it started to exceed the value of it. Bitcoin claims to be this way (you may have known this; I had to look it up), stating that mining will halt at 21 million Bitcoins. But didn't Bitcoin already fork in the past? And won't there always be a new cryptocurrency to fall in love with? Unlike gold, when Bitcoin mining wanes someone can just invent "gold plus" with a few keystrokes and then here we go again. The feedback loop may not be confined to a single cryptocurrency but I still don't understand how it will ever end.
> Imagine if you had the option of buying a piece of gold or a piece of land with good irrigation and good soil.
Why imagine? Both of these things can be purchased in the real world. And yet we see that some people purchase farmland, and others purchase bars of gold. Why is that?
Turns out, people called economists have been pondering such questions for hundreds of years and have developed quite sophisticated and nuanced theories about how humans create, assign, and transact value.
Anyways, thanks for the lesson on “cashflow” but you might want to pick up an economics textbook, you might learn something.
The price of gold or land or BTC can go UP or Down, but that depends on market demand of that asset. The nice thing about owning the farm is that even if the value of land goes down you can still sell your vegetables or eat them to stay alive.