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Comment by gitfan86 | Hacker News Reader

This is what people don't seem to understand about BitCoin. It is cashflow negative, Money has to keep coming in to keep the price up due to paying miners. It is totally fine if you think BTC is better than the USD or Gold for whatever reason. But Bitcoin is still cashflow negative. You have to keep pumping money into it to keep up its value. Where is that money going to come from? Is it coming from Tether? Is it coming from people looking to make quick money? And when BTC hits 1M/coin, then what? You still need more money coming in to keep it above 1M.

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Bitcoin has a use case for money laundering, tax evasion, evading China's exchange controls, and drugs. That market turned out to be larger than expected.

This is the only correct answer.

Interesting it’s like meta money laundering. It allows regular folks to make money off the illegal economy.

In some ways this was the extra profits banks made off illegal activities but that was largely held within the bank, not available to normies.

Is it regular folks, though? I imagine it's mostly big whales who are probably also doing shady stuff, too. We're talking about people doing money laundering, so financially savvy.

Few outside people get rich off the mafia.

My random lawyer is buying crypto. So they get to have their value increase as all the shenanigans goes on.

Now that Monero exists, not really.

The only coin that's actually stable, because it's the only one that has any actual purpose.

Yeah speculation would ruin the black market.

Gold has a usecase for jewelry, manufacturing electronics, dentistry and glassmaking. Yet not even the sum of these applications can justify its market cap of $11.73T, so the difference must come from speculation. I suspect the same is true for Bitcoin.

The difference is that gold has useful applications which act as a floor for pricing and moderate fluctuations. Gold bugs can still lose their shirts speculating but a normal buyer knows the value will never be zero.

Bitcoin is in contrast a pure fiat currency with very weak backing. Nobody has a need for it which can’t be satisfied at least as well by alternatives and it requires a very expensive always-on network to perform transactions. The floor is zero and liquidity is a very real concern.

>Nobody has a need for it which can’t be satisfied at least as well by alternatives

Have you ever tried to send more than $5k, $10k or $20k before? You basically can't with your bank without having to go through a bunch of hurdles or time delays. I can easily do that with bitcoin.

Legit, real need for it that can't be satisfied with alternatives.

In addition the bank is often closed on weekends, and doesn't service you into the night. My bank site "shuts down" at night. Sorry, but my ability to use my money isn't limiting by your waking hours.

I have, actually, and it wasn't hard. It did require a out-of-band confirmation which I considered a good thing since I rarely make transactions that large and never in a case which can't wait until the next business day.

That is, of course, the flip side of that convenience: if you ever make a mistake with your Bitcoin wallet, it's gone with no recourse. Good luck!

I did, without any issues nor delays.

I also dont know what bank you have but I can operate it any day through my app.

And your ability to use your "money" is still limited to having access to some wallet application, internet connection, your keys and chain fees.

Yup, I pay 0 to wire money, but I have fees for blockchains.

I can and I have. I needed to fill out a PDF (digitally) and ask the recipient for their IBAN etc., but they're both magically long strings so that's equivalent to needing someone's wallet address.

After that it was a matter of uploading the form and getting confirmation in a couple days, which I'm gladly willing to accept for peace of mind when it comes to large transfers.

> In addition the bank is often closed on weekends, and doesn't service you into the night. My bank site "shuts down" at night. Sorry, but my ability to use my money isn't limiting by your waking hours.

Odd, banking apps are open 24/7 here and if it's an in-bank transfer it's instantaneous.

And how do I send money to pay a bill with pre-existing systems?

Pay a third party like Venmo, Square, etc a fee, or use my banks (also horribly designed and bad UX system) to send the money slower than watching paint dry. I'd rather pay the Bitcoin Miners that fee than a third party or even by bank.

> And how do I send money to pay a bill with pre-existing systems? > > Pay a third party like Venmo, Square, etc a fee, or use my banks (also horribly designed and bad UX system) to send the money slower than watching paint dry. I'd rather pay the Bitcoin Miners that fee than a third party or even by bank.

Don't forget giving them cash or a check, or a credit card, as billions of people do every day. Fees are a fair point but that's purely a cost and timeliness question: Bitcoin historically has been slower and more expensive but it certainly could be useful as a competitor to horrible companies like Paypal if it can keep the costs down and transaction times low, not to mention scaling the system by 7+ orders of magnitude.

The catch, of course, is that this is not the path to world domination which features prominently in the sales pitch. That caps the maximum value at the percentage Visa, Paypal, etc. charge and if Bitcoin ever matured into serious competition, the credit card companies have plenty of margin to cut.

Apps here (Israel) -- local Venmo alternatives & banking apps -- are as smooth as Bitcoin apps if not more. In addition, all local Venmo alternatives have 0 fees and 0 signup cost (they're all operated by banks due to financial regulations but have 100% interoperability with any bank & credit card).

It must be safe to do tax evasion, money laundering, and drugs with a system that is transparent and traceable till the beginning of its existence.

But it's infinitely pseudonymous, and can be easily piped into more obscure systems.

It’s safe to launder money through banks too. And people do.

Isn't the same true of gold?

The gold supply is inflating at about the same rate as bitcoin right now, but has enough incoming cash flows to keep the priced propped up enough to maintain a $10 trillion market cap. Obviously some of that incoming cash flow is for actually generative industrial use cases, but it's a minority, https://www.statista.com/statistics/299609/gold-demand-by-in.... The lion's share of incoming money flow is for jewelry, long term savings/investment, and central bank holdings, and you could argue that most of the jewelry use case only exists because it's a good store of value, since we can easily make jewelry that looks as pretty for much cheaper than the real thing.

So, since most of the cashflows into gold are just people holding long term with the expectation that there will still be people wanting to buy it for investment purposes in the future, and this scheme has worked incredibly well for 5000 years, why couldn't the same be true of bitcoin?

Bitcoin is unlikely to have a 5,000 year lifespan because unlike gold it can be obsoleted.

It’s likely after some number of years, most people will have lost their Bitcoins and there won’t be many left in circulation.

I think that would be a very amusing outcome. the rate of accidents can't be held at 0 so the supply of Bitcoin can only decrease in the long term.

However, is there any reason the network couldn't decide to, say, subdivide Satoshis even further to allow the remaining supply to become more tradeable? If the changes are slow enough over time it doesn't seem like there's a limit to how far that could go.

Gold has already been obsoleted by fiat money because it's too expensive and slow to transact with in the modern world.

Bitcoin won't necessarily have the same problem, because it's an information protocol. Protocols can be updated and improved. Even if the main chain ossifies and can't be improved, bitcoin tokens are already being moved to alternative blockchains (sidechains) via 2 way pegs.

!remindme 100 years

You need to pay the miners just to be able to transact with Bitcoin. Gold on the contrary, you can just hand it over to someone else.

It's way more expensive to store and transport gold than bitcoin, although it depends on the amount. You also have to price in the protection provided by local authorities that protect your property, in addition to your own security measures.

You need men with guns to move gold between banks, which themselves are protected by men with guns.

How is that different at all from fiat currencies? Every electronic transaction you make, like credit card or money transfers, has fees. Central banks have to keep pumping money into the economy so we can have the same nominal amount of cash in the system(albeit with lower value, because inflation).

So, my question is, is fiat currency cashflow positive? How?

No money doesn't have positive cashflow, that is why it is a stupid investment.

We devalue currency by 2% per year so people have an incentive to work = keep pumping. That work creates goods and services in the process.

The problem with Bitcoin is that if it goes up in value the additional time spent mining is ultimately a waste of time.

I live brazil and earn in BRL. In the USD/BRL pair, the dollar price keeps increasing when you look at the historical data. Does that mean that holding USD is enough and investing these dollars to make more dollars is ultimately a waste of time?

I use ACH and Venmo all the time for no fees. Do you mean the tiny electricity fee that they pay on my behalf of maybe $0.01? Sure seems like a great deal compared to the multiple dollars (sometimes over $50) charged by Bitcoin and friends

You aren't talking about the intrinsic value of Bitcoin. You are talking about it's value relative to USD. These are completely different things.

Bitcoin has intrinsic value outside of the fiat system. It can be used entirely independent of fiat. Whether that will become common is another matter, but the value of Bitcoin does not have to depend solely on it's value relative to USD.

As long as miners can't pay the power company with their mining rewards, bitcoin can't exist outside the fiat system. The mining reward denominated in the currency the miner has to pay their electricity bill in MUST be higher than the electricity cost to mine the reward, otherwise the miners go bankrupt.

From my understanding that's not exactly how Bitcoin mining works. It scales based on the amount of miners. So if the situation is as you described (value relative to USD tanks - which I find very unlikely due to inflationary nature of fiat) people would stop mining which would decrease the difficulty of mining causing it to use less electricity.

There are however miners using nearly free sources of electricity such as flared gas wells, solar, etc... If Tesla accepts Bitcoin/Doge for solar panels then you may have a system independent of fiat.

I'm just saying it's possible, not that I think it will necessarily happen. Like I mentioned I think BTC's value relative to USD will increase over time due to fiat's inflationary nature (Fed is targeting 2-3% inflation).

> people would stop mining which would decrease the difficulty of mining causing it to use less electricity.

This is true, but then you have a bunch of costly mining ASICs sitting idle. The bitcoin network does not pay miners out of the goodness of its heart but because it needs a very high hash rate to defend against double spend attacks. Guess what those unused ASICs might be very effective at? A prolonged fall in mining power caused by a falling BTC price is a death sentence for bitcoin as it would lead to massive attacks by opportunists renting hashing power to double spend their coins. You can already see this in many smaller coins.

> nearly free sources of electricity such as flared gas wells, solar, etc

Those may be cheaper than regular power, but they are not free. Taking solar as an example, you need to invest capital to buy the solar panels and they have a finite lifespan. Cost divided by lifespan gives you the running cost in $/year. Similar things are true for flared gas wells; you still need to capture the energy somehow and generators are not free.

> If Tesla accepts Bitcoin/Doge for solar panels then you may have a system independent of fiat.

This just moves the problem by one degree of separation. Unless Tesla can buy solar panels for bitcoin, they will need to sell crypto for fiat to buy their inputs. This goes all the way down the supply chain down to the real-world miners who dig up the ores for the solar panels and even they will need to pay their taxes, which you cannot do in bitcoin.

> I think BTC's value relative to USD will increase over time due to fiat's inflationary nature (Fed is targeting 2-3% inflation).

Perhaps. I suppose that this will depend on how much the maintenance costs in electricity and miner ASIC replacement costs as a percentage of total bitcoin market cap per year. If these costs are higher than 2-3% per year, bitcoin will see a net outflow of fiat as running costs and can only rise in price if new users continuously flow in (and of course, only ~7 billion potential users exist).

Also, it might be interesting to read up on why central banks universally target a low but nonzero inflation. There is a ton of established theory about why this is desirable and none of it is based on "let's screw taxpayers". Throwing that away will basically guarantee that crypto will never be very useful to pay your bills with.

That's a really interesting scenario. But I'd imagine if double-spends became a persistent threat, they'd just hard fork to a slightly different hashing algorithm. That would brick all the pre-existing ASICs.

In the 2018 bear market, BTC lost 82% of its market value peak-to-trough. Double spend attacks by dark ASICs didn't become a factor then. So most likely you'd have to see BTC fall by 95% or more before this became a threat.

>>> This goes all the way down the supply chain down to the real-world miners who dig up the ores for the solar panels and even they will need to pay their taxes, which you cannot do in bitcoin.

Unless more countries follow El Salvador's example, and accept cryptocurrencies as legal tender. If El Salvador hadn't banned metals mining in 2017, you could the guys digging up ores with BTC today.

Capital-intensive industrial-scale miners might go bankrupt, but the origin of Bitcoin (starting from the whitepaper) imagined an ecosystem powered by effectively spare CPU cycles, where the marginal cost of electricity wasn't a big factor.

The beauty of the design lies in the balance of the incentives -- if electricity is too expensive, then sure miners will drop out, which lowers the hashrate and thus the security of the ecosystem, but remember that if electricity is expensive for honest miners than it will also be expensive for attackers. And if somehow there is an asymmetry where attackers have access to cheaper electricity than other honest miners, well it's likely in their economic interest to simply become miners themselves rather than attackers...

Bitcoin can easily exist at a minimal survival level that is effectively outside the fiat system for all practical intents and purposes, by leeching off free or near-zero cost electricity (I mean, nobody cares about the electricity bill for "folding@home"). In that kind of mode, it may not have industrial scale and you might not want to transact trillions of fiat-dollars worth of value through it, but it can easily exist.

I can't pay my hydro bills with shares of a private company either or japanese yen either, it doesn't mean those things have no intrinsic value.

The difference is that you can pay someone with JPY and that's the whole transaction. When you pay someone in BTC, you also have to pay the power company with something. The system is an inherently leaky bucket.

> When you pay someone in BTC, you also have to pay the power company with something. The system is an inherently leaky bucket.

The same holds for, say, transactions in US dollars. Here, you also pay your bank or your credit card company.

That's not a fundamental property of fiat money. There is no fee for exchanging cash.

The "fee" for fiat is inflation. Your money is regularly losing value even if you do not transact it. Not to mention cash transactions as you describe are on the decline and do not represent the majority of transactions that happen in the U.S.

I'm not saying this is a bad thing by any means, in some ways it is a good thing. Just stating that it exists.

Does cash just grow on trees? No, it is printed by a government that employs thousands of agents who have to make sure that no one is counterfeiting those bills. The fact that I can hand someone a $20 and walk away with my bag of groceries is the tip of a massive iceberg of regulatory and enforcement mechanisms.

no one said that. you're paying in some fiat, right?

> Bitcoin has intrinsic value outside of the fiat system.

Not really, because even though the number of Bitcoins is limited, the number of cryptocurrencies is not. In any application that uses Bitcoin, you can substitute Litecoin, Dogecoin, or most other altcoins/shitcoins in existence, and there would be zero difference.

In fact, Bitcoin's only advantage over those coins is extrinsic--it has more longevity, better brand recognition, and a lot of large players interested in making it seem (relatively) legitimate.

Contrast this to when people talk about gold having an intrinsic value, as you can't just replace gold with silver or copper when e.g. manufacturing electronics.

> even though the number of Bitcoins is limited, the number of cryptocurrencies is not.

There will only ever be a single dominant SHA-2 PoW cryptocurrency, because mining power can be expended on only a single chain. Doesn’t matter how many new genesis blocks are minted, this is a natural monopoly and Bitcoin clearly is the monopolist.

Bitcoin being the "dominant" cryptocurrency doesn't seem to change any of the parent commenters points, right? Those regarding intrinsic vs extrinsic value?

Bitcoin itself does not because its low transaction speed makes it unusable for real world applications. Second, why use something in a financial transaction whose value can fluctuate 10-20% a day? That's not a stable currency.

So for all intents and purposes, Bitcoin is an unstable investment product.

Money doesn't have an intrinsic value. Money is just an accounting system, it is a balance sheet. People used physical gold as tokens or entries in that balance sheet.

Ultimately you are depending on another human who is actually doing work. This is why the credit theory of money is so appealing.

Money has value indirectly because someone obligated himself to give you value equal to the money created. When you add up debts and credits then you end up with nothing because money is just an agreement and not a commodity.

I don't think it is a meaningful distinction. Money itself might not have value, but the miners and nodes are providing value by ensuring the integrity and security of the blockchain.

But more to the point, when I said "intrinsic value" I meant value relative to goods/services. Where as when I used "extrinsic value" I meant relative to other "money" such as fiat. Maybe it was a poor choice of words.

> This is what people don't seem to understand about BitCoin. It is cashflow negative, Money has to keep coming in

Pretty sure a sizable portion of Bitcoin holders understand and know that. They don't hold Bitcoin as a form of bespoke investment to be exchanged for money at some point in the future. They hold it because they believe it is sound and incorruptible money.

And as long as they (not any additional people!) continue to believe that, it will hold value.

It is to be seen if they are right or wrong, but they know how cash flow works.

Is this Peter Pan? If you just believe in the power of BTC it will never go down in value?

I don't think Bitcoin is doing particularly well as a currency, but can you name one currency that will not go down in value if people stop believing in it?

that's a strawman of the parent comment's argument. and yes, if enough people believe something, it takes on real significance. e.g. enough people believe in the full faith and credit of the US Gov that backs their printed paper with numbers on it, so it takes on real significance.

Yes. The key realization is all forms of wealth preservation are the same. We value things because other people value them (once we have our basic needs met).

I must admit I don't understand why it is "cashflow negative". I'm not invested in any crypto, but I have thought about it, and my casual thoughts have come to the opposite conclusion. The higher the price of a cryptocurrency, the greater the interest in mining and investing. It seems like a positive feedback loop to me. Why is it not?

Where’s the value added coming from though, and how far are you from there? If crypto enables someone to dodge taxes, sell drugs, or wire remittances with less overhead, that’s a potential value add [arguably, with externalities]. For how many of such activities do we need byzantine consensus, i.e. can they stay competitive in the long term with solutions built on tradfi & SQL? How much of these gains can be captured from sidelines by, essentially, exchange rate traders? Positive feedback loops without a sustainable value proposition will pop sooner or later.

For Proof-of-Work coins, the miners need significant amounts of electricity. Electricity is not free, so maintaining the network costs a significant amount of money. This money is "reimbursed" to them through mining rewards, but since electricity companies typically can't be paid in cryptocurrencies the miners will need to sell (a part of) their mining reward to pay the power bill. This means that there is always a money outflow proportional to the hashrate, which somehow has to be made up from money inflows from users.

A cryptocurrency without users putting in "new" money will slowly bleed out through electricity costs. This will become even more "fun" in the future as all coins will eventually be mined and the ginormous electricity bill will need to be paid through transaction fees alone. This is one of the main reasons Proof-of-Stake is getting so much research btw, since it should use way less electricity.

(The above is true for most currencies btw, even dollars and euros bleed out money because they have to pay mints and central bankers. The difference with those is that there will always be demand for (say) dollars because US citizens MUST pay their taxes in dollars. If they don't, a number of measures up to and including prison can be taken against them. Bitcoin has no such backstop since nobody ever NEEDS a bitcoin to pay off someone. Ransomware is a rare exception)

Is ransomware that rare an occurrence? I could see ransomware being the taxes of web3.

If ransomware ever becomes big enough to rival the cumulative tax bill of a nation state, you can bet that combating it would get a lot more priority. Spec ops teams raiding office buildings in foreign nations type priority.

Countries are very protective of their cash flows.

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.

Yes, I agree, this can go on forever. "DeFi", "web3", and then something else

> 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.

You may want to look up how often these "quite sophisticated and nuanced theories" are accurate.

https://www.economist.com/economic-and-financial-indicators/...

This negates the idea that bitcoin or it's ilk could replace USD.

Crypto technologies are interesting to me because of their great potential for good (defi) and bad (dystopian black mirror gold farms, dyson sphere fueling crpto mine, etc).

Someone building a Dyson Sphere just to power a crypto mining rig is an awesome concept for a short story or sci-fi RPG adventure (such as Traveller).

This is addressed in the original white paper. In a world where BTC is valued at 1M USD/coin you’d also expect a decent amount of day to day usage. Miners could still make decent profits based on transaction fees just from confirming blocks even once the Coinbase rewards stop. I’m not saying that’s currently the case, but that is the design. Also if miners are making a profit off let’s say $40k/coin and the price goes down to 30, yet there’s still a profit for some miners, how exactly does that become unsustainable?

Miners could make a profit at $1/coin. The issue is that profit comes from somewhere. And that somewhere is new money being put into BTC. Hence, BTC is negative cashflow.

Profit comes when their operating costs are less than the take home from any transaction fees and Coinbase rewards they’ve collected in the same period. It’s not a direct function of liquidity entering the system. It’s true that rising prices from new cash flow means more profit for miners, but that doesn’t imply the opposite. The price could stay constant for the next 100 years and miners that have found a way to remain profitable within that price point would be fine.

If the price stays constant for 100 years where is the money coming from to pay for those NVIDIA cards that the miners are using?

Miners have real expenses: electricity, depreciation, etc. Miners also generarte revenue, $45 million per day is a reasonable estimate [1]. This revenue is extracted from the Bitcoin system through both transaction fees and inflation (creating new Bitcoins), but these are sold in portion to pay real expenses, with presumably some profit.

We can estimate 300k transactions per day, which implies about $150 revenue per transaction. Miner revenue is your cost: it is what they extract from the Bitcoin system.

One Bitcoin transaction costs on the order of $150. It's really expensive.

1: https://www.blockchain.com/charts/miners-revenue

Help me here. All databases are negative cashflow. They only 'cost', don't generate 'revenue' by themselves. This is true of ACH mechanism to transfer funds from one bank account to another. Does that make USD negative cashflow? Does the cost of maintaining this ACH system affect the price of USD v/s GBP?

The value provided by a database such as BTC is that it provides a record of 'who owns what at what point of time in history'. I can argue separately about why the 'immutability' of this database itself is a value created by Bitcoin, for which holders can be willing to pay premium for.

Miners earn profit if Operating Costs > $ value of (Transaction Fees + BTC mined). Over a long enough timeline, Fees + BTC mined will ~~ operating costs of the rig. If not, more miners will continue to see economic opportunity, and keep joining the miner pool till that equation is balanced.

The other source of BTC value going up need not be more demand for it, let's say over next 12 months. The ~6% inflation could show up there too.

What am I missing?

The energy waste is designed to go up as each individual Bitcoin goes up in value.

is the day to day usage of bitcoin currently increasing in proportion to coin price? it seems entirely possible that the price could get very high solely as a speculative investment. in which case, you would still need additional investment money coming in

> In a world where BTC is valued at 1M USD/coin you’d also expect a decent amount of day to day usage.

Citation needed.

(I don’t see why this should be true at all. If anything I’d intuitively think the opposite: If gold were $1MM/oz I don’t think people would be using it to buy groceries… Unless you’re directly talking about hyperinflation where $1MM isn’t worth a loaf of bread any more.)

Just about every project is cashflow negative. Most projects start Worthing $0 and rises to another number later on

> Money has to keep coming in to keep the price up due to paying miners

This is incoherent. It's hard to refute this because it's not even on the right page.

Demand for Bitcoin comes from demand for money (to transact, to store wealth, etc.).

It sounds like you're trying to model it using some idea of how equity pricing works - is that accurate?

All assets ( BTC, Stocks, Gold ) are priced on supply and demand. If demand goes down for BTC the price will go down.

It doesn't matter if the fed prints money or not BTC needs a constant infusion of new investment to keep the price up. Unlike a company with positive cash flow who could buyback shares and never get any new investors and still keep the price up.

> If demand goes down for BTC the price will go down.

Indeed. What may be missing from your model is that demand for BTC comes not just from people buying it, but from people holding it.

> BTC needs a constant infusion of new investment to keep the price up.

No it doesn't. Why do you say this? Where the market clears has essentially nothing to do with "new investment".

Stop and think about what you are saying. If everyone in the world stopped buying TVs and instead held onto their current TVs the demand for TVs would go to zero. What would the market price of TVs be when there is zero demand?

How do you think BTC miners pay for the graphics cards and electricity? NVIDIA doesn't take BTC as a form of payment. So money is constantly leaving the BTC network to pay for electricity and graphics cards. The only way that happens is if money is also coming into the BTC network

Every sale is also a purchase. The market price of something is precisely the equilibrium price at which inflows and outflow are matched. Think hard about this.

Holding isn't demand. Holding just reduces supply.

Miners need to sell BTC to cover their operating costs, so there's constant sell pressure. To maintain the same price, you need equivalent buy pressure. Hence the need for "a constant infusion of new investment".

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