On: BlockFi files for bankruptcy as FTX fallout spread...

[Dylan16807]

> But that also necessarily means that each unit of currency does in fact have value.

I don't dispute that. But the value of each unit can be complicated.

> So if you invest it in scams, you can call that destroying wealth.

Colloquially I might say that, but the wealth isn't actually destroyed, it went to the scammers.

[halpmeh → Dylan16807]

I think there was an implication that the wealth belonged to the investors in BlockFi. Their wealth was destroyed in a very real way.

[Dylan16807 → halpmeh]

"Wealth" is getting a double use here, to mean both "the fact that they are wealthy" and "the assets they have that make them wealthy".

The fact was destroyed. The assets were not destroyed; they went to other people.

Capital doesn't have a double meaning like that. Capital is the latter. Capital was not destroyed here.

[halpmeh → Dylan16807]

Capital can mean money. It was mentioned elsewhere in this thread, but Google "capital definition"

> wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.

There is even a bank called "Capital One." Originally, Capital One's only product was credit cards, i.e. providing monetary loans. It feels like this entire thread has been arguing about what people "feel" capital should be. In the case of BlockFi, capital has very much been destroyed. Company equity going to 0 is the ultimate capital destruction.

[Dylan16807 → halpmeh]

I feel like you didn't follow my argument though.

The status was destroyed, the assets were not destroyed.

Take my last post and replace the word "capital" with "money", and I would say that version is just as true.

You can destroy money, but that's a totally different topic. The money that was invested in this exchange didn't get destroyed. It went to other people.

Remember that the original post wasn't talking about 'wealth'. You can't come in and say "capital=money=wealth, and investor wealth was destroyed, therefore investor capital was destroyed". That's like saying "nothing is better than happiness, and a sandwich is better than nothing, so a sandwich is better than happiness". The meaning of "nothing" changes halfway through, like the meaning of "wealth" changes halfway through.

Whether "capital" includes or excludes "money" is a distraction that doesn't really matter.

[lottin → Dylan16807]

It matters, because if you aren't careful you'll jump to the wrong conclusion (such as thinking that capital was destroyed, when in fact no capital was destroyed at all). Resources can be bought with money. Someone who has money can be thought of having resources. However convenient this simplification may be, it's not true that money is itself a resource. And this is especially important to bear in mind when we're assessing the amount of resources in the economy (in order to figure out if any resources were in fact destroyed). Counting money as a resource is an accounting error known as double counting, which occurs when the same thing is counted twice.