From another forum, but this sums up what I’d understand crypto’s as.
50 people have marbles. They all believe their marbles are worth a poo poo ton of money so they hold them. On a daily basis about one person exchanges a marble for some amount of money with a guy who just outbid a smarter guy.
On day 1 a marble goes for $1000
Day 2 $2000
Day 3 $3000, etc.
On day 1,000, everyone holding a marble has purchased their marble from one of the original marble holders. Marbles are currently $1,000,000. Everyone’s a millionaire. “Market Cap” 50M
Guy 1 bought his marble for $1k, sells his marble. He makes $999k pure profit. Buyer spent 999k
Guy 2 bought his for $20k, tries to sell his marble but there aren’t many buyers so he settles on $750, walks away with $730k so he’s pretty happy.
Guy 3 bought his marble for $720k and is extremely nervous so he tries to dump his marble. There aren’t any buyers. He manages to get someone to bite for the fantastic bargain of $372k. He loses just a lot of money.
There are now 50 people holding an egalitarian distribution of theoretically $18,600,000, “Market Cap.” They all thought they were millionaires but marbles actually are only good for putting up your butthole and no one’s interested in that recently for some reason. Not for $372k anyway. After a month of decreasing volume the price drops to 35¢ and 42 people lose a poo poo ton of money. They gave away let’s say $14,000,000 to people who all believed in marbles.
The 42 people sigh and put their marbles up their buttholes. It feels like home.
You can’t put bitcoins up your butthole.
Hopefully none of you have taken out a mortgage or $,$$$ loans doing this.