Does it increase risk 100-1000 times?

Ok lets say your business was in "pet rocks".  Now, there's a demand for them from an active but relatively small community (like Bitcoin) that believe these rocks are worth their weight in gold.  So you run to your bank and withdraw everything you can, hell you might even ask the banker for a loan.  You tell him it's for some home remodeling and because he's known you since grade school you get the loan.  With money in hand you run to the rock market and spend everything you got on certified "Pet Rocks". 

You get your business off the ground while paying off the loan but in the back of your mind you can't shake the thought of "What happens if people find out these are just rocks or if the rock market is overtaken by nano pets?".  You take the risk and keep building your business by reinvesting your profits back into buying more rocks.

You wake up one morning, roll over and look at your phone to see the current price of "pet rocks" to be worthless.  With a ill feeling creeping over your body you start to think about how many rocks you have in the warehouse and how much money you've actually creamed off the top.

Why didn't I just borrow the rocks from the rock community and pay them a portion of my profits?  That way if something was to happen, I made good money doing it and my long time friend (the banker) still likes me.

I don't know about you but that's what risk management means to me.

That's the beauty of what makes people different, you don't have to understand.  I do

He he... see I knew this was coming but figured it would be from Vladimir.  I personally believe in Bitcoin and do hold a few of them but like I've said in the past, this is a small market and no one really knows where it's headed.  So until I do, this is my model for managing risk while being able to focus on my next move.

My point is very simple. When some company pays "investors" 10% per week when capital could be obtained otherwise at 2-50% per annum, no matter whether it is listed on NASDAQ or GLBSE or elsewhere, there are only two possibilities:

1. The issuer is acting irrationally.
2. The issuer is offloading to "investors" some enormous risks. As such these are not really "investors", but simply gamblers. And they should be really not so much concerned about return on capital as about return of capital.

Does the guy paying for Corn or Pork Bellies believe they will be successful? He hopes so, but is aware Soy Beans might displace the Corn. So he doesn't put the bank on Corn and mitigates risks.

guys in all your risk management discussions corn vs beans you completely miss the point of 2-3 orders of magnitude higher cost of capital on one as compared to another. It all would be nice an dandy if we were talking about 2-3 times differences, but not 2-3 orders of magnitude.

No, I'm not risking a lot of money.  It's Bitcoin!  My lenders know the risks of the market crashing and I hope you do to.

Is Bitcoin fundamental for the continuity of your business? Or it's just a weird way you found to raise capital?