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founderling

I beg to differ.

Alice wants to send $1 to Bob via Bitcoin.

Alice needs some Bitcoin to do so.

Hoddler sells some Bitcoin to Alice for $1.01

Alice sends that to Bob.

Now Bob wants to change it to $.

Hoddler buys back for $1

Hoddler has a return on his investment.

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You left out transaction fees. Factor that in, and transferring directly via USD is simpler, more secure (if not technically, then via insurance), and probably cheaper.

That's irrelevant to the question of whether it's an investment or not. Bad investments are still investments.

That’s correct. I was refuting the idea that BTC has any advantages over USD in this scenario.

Since nobody claimed it did, you're attacking a strawman.

Pay attention, because you’ll miss it if you don’t up your game, apparently. “Hodler” doesn’t make money here. She loses. Losing $0 is superior to losing $X for any X > 0.

Hodler will obviously only make the trade when the spread is larger than the transaction costs. The question is why would Alice and Bob be willing to pay, but the reality is that some are. Whether it be by pure foolishness or because your theory is simply incomplete.

Well, if it’s pure foolishness, there’s a name for the way that Hodler makes money: a Ponzi scheme. Where is my theory incomplete?

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