Let's say hypothetically that I asked someone to buy a coin on eBay, and hold it for a year. The goal of that exercise would be to pick the coin that appreciates in value the most over that year.
So given those parameters, which coin would someone pick, and why? See, that's a form of arbitrage, because you're buying something on eBay and selling it back on eBay.
The idea that "some poor third party sap" is paying more is not correct, because the second buyer of the coin is presumably paying MARKET VALUE for the coin, and presumably can sell it again at market value (no loss), and can possibly even wait some time for the coin to appreciate again.
In a free market people exchange goods for however much money they value the goods at. The prices (price = what people value something at) of some of those items are in constant flux, thus there become opportunities for arbitrage. People in the financial community already know this, although they don't apply those principles to eBay.
No single person is a sap, people just a) Value (assign price to) things differently and b) Have different abilities to pay, i.e., Bill Gates could pay a whole lot more for something than say, someone living in a third-world country...
So given those parameters, which coin would someone pick, and why? See, that's a form of arbitrage, because you're buying something on eBay and selling it back on eBay.
The idea that "some poor third party sap" is paying more is not correct, because the second buyer of the coin is presumably paying MARKET VALUE for the coin, and presumably can sell it again at market value (no loss), and can possibly even wait some time for the coin to appreciate again.
In a free market people exchange goods for however much money they value the goods at. The prices (price = what people value something at) of some of those items are in constant flux, thus there become opportunities for arbitrage. People in the financial community already know this, although they don't apply those principles to eBay.
No single person is a sap, people just a) Value (assign price to) things differently and b) Have different abilities to pay, i.e., Bill Gates could pay a whole lot more for something than say, someone living in a third-world country...