Skip to main content

Posts

Showing posts with the label counterparty

Just my thoughts #0834

There are two primary approaches to creating something: bottom-up design and top-down design . Top-down design is often seen in architecture. People do not build bricks randomly; instead, they follow the design drawings created by the architect. This method executes a plan that has already been established. When asked why something is built in a certain way, the answer is usually that the blueprint dictates its design. Conversely, bottom-up design does not start with a fixed goal, but rather involves setting and implementing small, actionable rules. For example, termite nests follow this approach. Small termites have a simple rule: to pile up soil. They do this without knowing the reason, but over time, the finished structure is remarkable and sophisticated. The appearance of the Sagrada Familia church , designed by Antoni Gaudí and still under construction, closely resembles a termite nest, differing only in size. Setting goals and planning is one way to create, but actual achievem...

Just my thoughts #0576

Unless you are self-sufficient, you must trade your products for those of others to survive. An exchange economy was established for the efficient survival of humanity. Economic activity leads to wealth accumulation , so for wealth to exist, there must be a counterparty . This means you cannot thrive on your own. However, having many counterparties also means that some of them could compete with your business. Exchange becomes straightforward only through the establishment of a price, which acts as an indicator of competition . Trading at a high price could generate significant wealth, but competition can hinder success. In other words, I survive because of others, while my survival is also threatened by them. Business inherently involves competition. This is why any business plan must include a strategy that considers competition. - Joseph’s “just my thoughts”

Just my thoughts #0459

All added values must be expressed in terms of ‘Price’ to create a ‘transaction’, and only when a transaction is concluded is the added value realized. Even if you possess added value but no transactions occur, the value cannot be realized in a self-transaction; it merely exists as intrinsic value. Wealth is formed only when the added value is realized and accumulated, making a ‘transaction’ essential. This implies that the formation of wealth requires a “party to deal with (counterparty).” This is known as a ‘customer’; some of them purchase your value, while others may be your competitors or disruptors who could diminish your added value or hinder its realization. Therefore, it is crucial to understand precisely what kind of person or company is acquiring your value-added. Not all deals are beneficial to you. If you cannot make this judgment, you are merely doing what is often termed “something good” for others, rather than for yourself. - Joseph’s “just my thoughts”