so, what happens if the price levels out and the unit of exchange is used for the exchange of goods and services? who has lost? I'm geniunely curious.
The negativity surrounding bitcoin is only relevant if it declines in price. What happens if it sits still, for example
OK, in my parable, after the two swindlers leave, those who remain have less than they had invested. Each invested 50 or 100 dollars, the scoundrels have taken out 150 net. But the losers think that they have more than they invested, because they own a highly "valuable asset" -- their place in the circle. Let's say that they believe that their place is now worth 300 dollars.
A new "customer" comes in and wishes to buy a place in the line. He pays 300 dollars to one of the original investors, who walks out with that money. That first "customer" then immediately sells his place in the line to a second "customer" and walks out with 300 dollars.
So the "old investor" made a fat profit (invested 100, walked out with 300) and the "first customer" got in and out with no net profit or loss. Where did the profit of the old investor come from?
Why don't people play this circle game in real life, if it makes everybody rich?
You cannot be serious. Your logic can be applied to any assets. Most houses in US/Canada are really worth 40-50K, but they sell for 500-800K. Is land in the city really worth the money people are willing to pay.
Of course not. It is a dead land. You cannot grow any food on it,, cannot drill for oil or dig for some other resources. The water underneath it is polluted. So why people pay so much? Because they want it.
So yes, real-estate (a limited resource) is being bought by a "circle/line" of people. The last one to own it holds the "bag".
It is always a net zero game. Someone's profit it someone else loss (realized or unrealized). Don't get me started on other "financial instruments" like stocks, bonds, mutual funds etc. Same thing.