What the Hell Is Happening To Cryptocurrency Valuations? (techcrunch.com) 258
The investment category of cryptocurrencies hit a new milestone this week, one that would have been unfathomable just a couple of years ago: $100 billion in combined market capitalization. The break above the 12-digit threshold is largely attributable to bitcoin, which is by far the largest digital currency in the still-nascent category, and which has been on a tear lately. From a TechCrunch article: There is one rational explanation that, if true, would totally justify this rapid increase in price across some of the major cryptocurrencies. And that is, maybe these currencies are actually worth these high prices, and maybe even worth many times more than that at which they are currently trading. But the problem is we have no way to figure out their value. Cryptocurrencies aren't public companies with earnings and expenses and EPS. For example, we can look at Apple's financials and determine its book value -- what the company's assets would be worth if hypothetically liquidated today. Of course, stocks trade at a premium to this, because people are enthusiastic that Apple will continue to perform well and this book value will continue to rise. But we can't do this with cryptocurrencies. We could guess -- and compare it to things like the total money or gold supply in the U.S. For example, if you're someone who thinks of cryptocurrencies as a store of value, the total estimated value of all gold in the world is more than $8 trillion dollars... meaning if bitcoin would ever replace or supplant gold, its current value is pennies on the dollar.
tulpenmanie (Score:3, Informative)
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Is this like were you can auction off a $20 for more than $20?
The way that works is the two highest bidders have to pay, but only the highest bidder gets the money. People will bid up to the value of $20 because why not it's free money. But the 2nd place bidder will keep driving up the price in an attempt to lose less money.
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The way that works is the two highest bidders have to pay, but only the highest bidder gets the money. People will bid up to the value of $20 because why not it's free money.
I'm not convinced that it would get bid up to $20. What idiot would enter an auction where the second place bidder still pays but gets nothing in return? Does this situation exist in some context? If you're the only bidder, fine, wager a buck. Otherwise, the only way to win is not to play.
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Sort of like these sites... Pay for each bid... everybody loses, as even the winner will often end up paying more than product value.
https://usatoday30.usatoday.co... [usatoday.com]
Re:tulpenmanie (Score:5, Informative)
I *GUARANTEE* you the bidding will get to AND surpass $20. It's happened every time I've ever seen the auction experiment happen. Follow along...
Bidder A: Sure, why not? I'll bid $1.
Bidder B: (Thinking: So, I can bid $2 and profit $18?) I'll bid $2.
Bidder C: (Thinking: So, I can bid $3 and profit $17?) I'll bid $3.
Bidder D: (Thinking: Duh! I'll take $16 profit!) I'll bid $4.
Bidder B: (Thinking: There's still $15 profit to be had.) I'll bid $5.
[Bidder A drops out because they're getting a bit confused about everything]
Bidder D: (Thinking: $14 profit, baby!) $I'll bid $6.
Bidder C: $7
Bidder D: $8
Bidder B: $9
Bidder C: $10
Bidder D: $11
[Bidder B now realizes that the auctioneer is going to make $21 for a $20 bill because both Bidders C and D have to pay up. Bidder B drops out.]
Bidder C: (Thinking: At least I'll still profit $8.) $12
Bidder D: (Thinking: At least I'll still profit $7) $13
Bidder C: $14
Bidder D: $15
Bidder C: (Thinking: I don't really care about $4 profit, but I don't want to pay $14 for nothing) $16
Bidder D: (Thinking: I don't really care about $3 profit, but I don't want to pay $15 for nothing) $17
Bidder C: $18
Bidder D: $19
Bidder C: (Thinking: I don't want to pay $20 for a $20 bill, but I DEFINITELY don't want to pay $18 for nothing. Fine. We'll just end this whole thing and everything's even) $20
Bidder D: (Thinking: Dammit! Now I'm screwed! He's getting $20 for $20 and I'm getting shafted with nothing, but I still have to pay $19! Screw it! I'll take a $1 loss instead of a $19 loss!) $21
Bidder C: (Thinking: WTF?!?! He just bid $1 more than what he's getting in return and now I'm stuck paying $20 for nothing?! No way! I'll take a $2 loss instead of a $20 loss!) $22
Bidder D: (Thinking: $3 loss is better than $21 loss) $23
Bidder C: (Thinking: $4 loss is better than $22 loss) $24
[etc., etc., etc.]
It's not unheard of for the bidding to surpass $100 ($80 loss is better than a $98 loss!) before the experiment is ended due to the point having been made many bids earlier.
The context is in how people think about risk, loss, and similar factors. Consider an RFP process for a $1-million project with a major, multi-national corporation (MMC) with billions of dollars in market cap. Winning the contract for the project would be a MAJOR windfall for the winning company (WC) on the assumption that a successful project might lead to more work. But, to win the contract, the bidding companies (BC) are going to have to travel to MMC headquarters several times over the course of the next several months on their own dime. They'll also need to create prototypes and other proof-of-concept materials on their own dime. Let's say that over the first month or so of the RFP process that most BC are eliminated and only two BC remain. We'll call them BC1 and BC2.
Now that things are getting real, BC1 checks in with the group leading the RFP bid and finds out they've spent approximately $100k so far on the bid process. That's okay because their estimates suggest the project will cost $750k to complete successfully ($850k total; $150k profit). BC2 checks in with their group and finds they've also spent approximately $100k and they also estimate the project will cost $750k to complete successfully ($850k; $150k profit). BC1 and BC2 are aware that they are the last remaining companies bidding for the contract and that each very likely has similar expenses and estimated project costs.
BC1 decides to up the game a bit and tells the RFP group to setup a special one-on-one meeting with BC1 CEO and the head of the project for MMC. They want further refined prototypes and a WORKING proof-of-concept. They estimate the additional meeting/work will cost $25k, but that still has them at $125k of profit. Meanwhile, BC2 catches wind of the special meeting and works up their own special meeting. Estimated $25k expenses, but that still has them at $125k profit as well. If both companies stopped at this point, one would win
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Whats the Beanie Baby market looking like these days...?
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Was also thinking "tulip mania." But hey, maybe it's a new virtual collectible good. Various trading cards, CS gun skins, and EVE ships don't have any inherent value either.
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" Cryptocurrencies are not just a fancy collectible, they perform valuable services in the real world."
Can you eat that cryptocurrency? Can you melt that cryptocurrency down and make a useful tool out of it? Can that cryptocurrency be utilized to transmit or generate energy?
No? It's just a fucking ledger, you say? Well, then.
Ransomware (Score:4, Interesting)
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Bitcoin's growth is a combination of countries seeing it as legal tender (e.g. Japan, India), more companies accepting it in exchange for goods, and being the intermediary currency between FIAT and other cryptocurrencies. The other cryptocurrencies are design to improve bitcoin, or specialize in a specific industry.
Industries like banking that have been running on the same slow, antiquated system for decades. There is no reason in this day and age, for money to take days to transfer. The smart ones know the
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I would think that most of that trade volume is being processed at Silk Road like illegal goods trading sites, or by currency manipulators pulling various pump and dump and money laundering schemes on the currency trading sites.
Sure, there are a handful of legit sites taking Bitcoin thanks to sites like BitPay who instantly convert them to traditional currency. That said, don't kid yourself into thinking that those transactions make up the majority of Bitcoin transactions. It's still the Wild West out there
What's happening (Score:5, Insightful)
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Yes, this.
It's pretty much a Ponzi scheme.
Re:What's happening (Score:5, Insightful)
I have no problem saying that cryptocurrency is a bubble and that there's a huge amount of speculation over hype driving up prices.
What we're seeing is definitely not a Ponzi scheme, which is its own, very special -- and very different, form of fraud.
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You should probably stop now because you have no idea what you're writing about.
Re:What's happening (Score:5, Informative)
It becomes a Ponzi scheme when one or a small group of people benefit from the wealth, and the value of current bitcoins is driven by a constant flow of new buyers.
Actually, it becomes a Ponzi scheme [wikipedia.org] when the investments of new buyers are used to pay the returns on the investments of the earlier buyers.
Since cryptocurrencies do actually pay any returns, they can never actually be a Ponzi scheme. Though you could, in theory, run a Ponzi scheme that uses cryptocurrencies... You could also try to argue that the entire marketplace for cryptocurrencies is a Ponzi scheme, but it doesn't fit the definition very well. The central problem is that new investments aren't actually paying the returns (profits) of earlier investors, instead the new investments are buying the inherently worthless numbers that the earlier investors own, which is generally considered a bubble.
And to answer the submission's question, the proper value for a cryptocurrency is however much the collection of people who want to buy them are willing to pay for them. They have no inherent value. They're the opposite of gold-backed currency, they're demand-backed currency. If next week everyone decided that cryptocurrencies were a fad, they'd all be worthless. It's not likely to be that extreme, but buyer beware.
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Rule of acquisition #10: Greed is eternal.
Stop Ransomware (Score:2, Insightful)
Stop ransomware and you kill Bitcoin.
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May 13 had the lowest bitcoin trading volume in the last 30 days @ around 75k BTC traded.
So, the total number of payments for wannacry equals approximately
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Stop ransomware and you kill Bitcoin.
Bullshit!
Ransomware payments are only a tiny fraction of the drive behind the increasing demand/value of crypto-currencies.
The true drivers are the impending collapse of the US Dollar combined with the world dropping it as the primary trade currency, and the global trend towards governments taking ever more control of people's money through "cashless" systems and fears of Greece-style "haircuts" where government simply confiscates some percentage from individual accounts when the government is in financial
Speculation (Score:5, Insightful)
There is one rational explanation that, if true, would totally justify this rapid increase in price across some of the major cryptocurrencies. And that is, maybe these currencies are actually worth these high prices, and maybe even worth many times more than that at which they are currently trading
Or more likely its a speculative bubble and like the stock price of Tesla it has far outpaced the current underlying fundamentals. They are basing this on valuations of derivative instruments relating to (mostly) bitcoin. Like a stock there is no cause and effect link between the market price and the actual value of the underlying asset. All it takes to get an absurd "valuation" is one party purchasing an interest in a fund or company dealing in bitcoin for a large amount of money. If I buy 10% of your company for $1 million dollars I am de-facto saying I think your company is worth $10 million. But the problem with that is that there is a winner's curse [wikipedia.org] effect at work. Just because one person overpays doesn't mean everyone else agrees.
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This is an important thing to highlight. There is the actual money changing hands, and then the extrapolation of that to a presumed total value. Said total value is fictional, and would obviously happen if suddenly 99% of people said they wanted to get rid of their bitcoin today.
Of course, this applies to all sorts of 'wealth' such as stocks. Even with traditional currency, the economy will come to ignore money sitting somewhere not moving.
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Or more likely its a speculative bubble and like the stock price of Tesla it has far outpaced the current underlying fundamentals.
This. Markets (or rather, the people acting within them) act according to the idea of "can I make money on this" rather than "does this actually make sense".
There's still money to be made in trading stocks & commodities that are overvalued, and there are investors who see it at money on the table, so they go for it.
Bitcoin valuation (Score:5, Informative)
Bitcoin is skyrocketing mainly because it's one of the only safe ways for kleptocrats to move their money out of China. For those that don't know, China has exceptionally strict wealth export laws so the paper billionaires there need a way to move their money out and into other markets.
Take a look at a chart of BTC vs Yuan and you'll see an almost perfect inverse relationship.
Re:Bitcoin valuation (Score:5, Informative)
Not just China but I see this being used by anyone wanting to move money across borders.
They recently had a story on how Trump was going to start taxing money going to Mexico, I can send money right now to anyone in the world sans any tax.
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But not sans a transfer fee and waiting days for the transfer to clear if you didn't pick a high enough number.
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I've never had a payment take more than an hour.
https://bitcoinfees.21.co/ [21.co]
You're looking at fees of ~$2, which is cheaper than any other method I know of. Walmart charges $4.50 up to $50 and $9 after that.
Okay.... (Score:4, Insightful)
maybe these currencies are actually worth these high prices
Hahahahahaha
I have nothing useful to say. Just had to point out that it's not every day that see such absolute BS.
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Think about this: money buys what can be made. Making things takes time. Technology makes it take less time. Labor.
You work for 10 hours, you make $10/hr, the thing you make has to cost at least $100 or you don't get paid. Next guy works for 10 hours, makes $20/hr. You have to work 10 hours to buy something he worked on for 5; he only has to work 5 to buy something you worked on for 10.
Trading labor.
You can produce gold. Excessive amounts of labor can generate enough energy to do it by nuclear
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Name them and the 'things of value' along with the blockchain.info link. Bitcoin makes it easy to verify you're telling the truth, proceed.
How ? I could point to a random blockchain entry, and say that it was used to purchase a car. How would you verify ?
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Very few of my transfers have public data attached to them, and most of them use unique addresses. There's nothing for you to verify.
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well, i already acquired some humble bundles with bitcoins... i also got some subscriptions using then... does this count?!
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The block chain does not know for what product you have spent a bitcoin.
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Can't what? (Score:2)
I thought the blockchain was public. I'm not particularly knowledgeable of the process specifics or the computing power necessary for it, but if "valuation vs actual worth" is so important, I'm sure someone could simply set up a shop that tracks the amounts, type, frequency of transactions, among other stats of the currency simply by polling the blockchain and other publicly available records.
And then, with the simple motto of supply and demand, one could estimate the worth at a very trusty rate, maybe even
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The blockchain only contains the transfer of bitcoin, it doesn't tell you what the countervalue of the transaction was.
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I was going to make a similar reply.
Bitcoin is a fiat currency, based entirely on the trust relationship and the limited amount of bitcoin available. The only true worth it has is as a method of exchange between people. Seeing financial statements and assets makes no sense with regard to valuing a bitcoin. It is strictly "what can I get in exchange for it", nothing more.
Folks speculating in bitcoin can cause temporary bubbles and other market distortions. But as the market for bitcoins (or other crypto
Interesting (Score:4, Interesting)
That said, i'm still gonna wait for a crash in bitcoin value this year, and then buy some as a purely speculative bet
Re:Interesting (Score:4, Insightful)
You can make as many cryptocurrencies as you wish,
The value of cryptocurrency comes from the network effect. Sure you can take the Bitcoin code, and create a new blockchain, and change the name, but if nobody wants to use your coin, it's not worth anything. In order to gain value over existing coins it must offer some new distinguishing features that people actually care about.
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Right, but the point is that when all the bitcoins have been mined, there will be a large number of individuals who wish to speculate in and mine the next cryptocurrency. Obviously with Bitcoin, the fact that it (seemed) to have any intrinsic value at first was because people were mining it, not because it was useful for actually purchasing things (since no one accepted it). If a large enough number of people jump onto a new crpytocurrency bandwagon (which seems likely as the early adoption payback is incre
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If a large enough number of people jump onto a new crpytocurrency bandwagon (which seems likely as the early adoption payback is incredibly high), then voila - you have your network effect.
I don't think you can make a large network based only on early adopters.
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What might happen if a big player got involved. Or multiple big players? What if Ebay (Paypal), Amazon, Google and Apple teamed up to create a new cryptocurrency designed entirely as a means of final purchase? You could do a transaction end-to-end with their currency, hypothetically. Because of their massive reach, you could start paying in stores and restaurants around the world immediately. Let's say the only transaction fees w
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What might happen if a big player got involved. Or multiple big players? What if Ebay (Paypal), Amazon, Google and Apple teamed up to create a new cryptocurrency designed entirely as a means of final purchase?
Why would they not simply use the existing Bitcoin ? There's no advantage for them to use an unproven alternative with zero market share. And even if this new coin had an advantage for them, this would most likely translate into a disadvantage for other users.
Let's say the only transaction fees were when you moved from their digital currency to national currencies and back
That's only possible if the transactions were processed centrally by these big players, which would be a good example of such a disadvantage for users.
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Valid points.
But only for certain users. Most people would be content with Apple branded currency if it meant they could go to any store and purchase goods with their phone, saving the 2% that would have gone to the credit card company. Given enough market penetration, the only people worrying about such things would be the same people who are using bitcoin now.
Except depending on how they set it up, it could be plausible that the privacy and anonymity features of bitcoin were replicated or even improved
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The value of cryptocurrency comes from the network effect. Sure you can take the Bitcoin code, and create a new blockchain, and change the name, but if nobody wants to use your coin, it's not worth anything. In order to gain value over existing coins it must offer some new distinguishing features that people actually care about.
These "cryptocurrencies" are very open to manipulation, for a few of course. So similar to starting a new MLM, if you can "pay your way in" (make it perceived as having potential real value) so to speak, it could be very profitable for those few with more control. If done correctly you could effectively tank the established player pretty quickly. Word to the wise, realize your actual worth (don't invest $100,000 and strive to walk out with billions... go for the lower risk) and get out before someone els
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If Peter Schiff really knew what he was talking about, he'd be making money by investing, not by telling others how to do it.
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"As an 'expert' he doesn't seem particularly knowledgeable."
That's because Peter Shiff isn't an economist, he's a stockbroker.
Tale of two currencies. (Score:2)
Lets assume for a moment, that you have two currencies, ByteCoin and FOLLAR (Fiat Dollar).
Lets further assume, that both are at some sort of equilibrium at some point, where ByteCoin and Follar are trade one for one.
The Follar, is controlled by a private bank, under the control of a Government, the ByteCoin is controlled by the worker units put in to process transactions.
The Follar has all sorts of currency controls used to spy on and control the citizens of the Country, where the ByteCoin has non of those
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Since both are fiat currencies, the one with least restrictions will become the preferred currency.
I agree with this but there are several other things that come into play. How easy it is to use? What are the transaction costs? How easy is it to track?
Credit cards are very easy to use but also very easy to track and have a high transaction cost. Credit cards companies managed to trick people into ignoring the transaction cost by giving the buyers kickbacks for using their cards. Bitcoin currently has high transaction costs and isn't able to be settled in real time. I see these are significant hurdl
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You can pay to have priority processing. There are places that do that.
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Get Ready for the Crash (Score:3, Insightful)
Unbelievably high values for something that doesn't actually have any intrinsic value are generally followed by crashes.
This is obviously a conspiracy theory, and I have no evidence, but the shady origin of Bitcoin (nobody really knows who Satoshi Nakamoto is) could mean that it was engineered by a national actor to crash national economies. It is, after all, a caricature of fiat currency.
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I just figured it was developed by someone (or multiple someones) who realized it if it took off he/she would be on the ground floor and able to make a lot of money.
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All the gold in the world has a combined value of $8 trillion, and it doesn't have anywhere near this intrinsic value. Why does it not crash ?
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Gold has use in the Real world, like in the computer you are using , and in jewelry, signs , plumbing fixtures.
Sure, but the amount that is mined every year exceeds the real world usage, and the rest keeps stockpiling up. Most of the gold in the world is in that stockpile, never been used for anything since it came out of the ground. Most gold jewelry is also a form of storage. In times of need, people expect to be able to pawn their gold jewelry.
What the heck (Score:2)
Venezuela? (Score:2)
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It does not matter how much a currency is traded for versus e.g. USD.
As long as you are mainly trading inside of your own country the outside value is close to irrelevant.
For goodness sake, don't ask any experts! (Score:2)
Is there any reason why, when posing a question about currency, you would not ask ANY macroeconomists?
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New scrutiny of Offshore Accounts / Panama Papers (Score:2)
The only solution left to hide your assets is the First International Bank of Blockchain.
Lots of cash pouring in, with an inherently deflating asset, the price has to climb.
I'm going with bubble (Score:3)
1) Prices keep going up even though intelligent people (Slashdotters, for example) can't see any real justification for it.
2) People who don't know anything about the subject come to the conclusion that it will last forever and can't ever lose money.
3) People believe it can't ever go down and start investing in it as a retirement strategy.
4) Stupid people start getting into it. No offense, but when your waitress decides that cryptocurrency is going to be her ticket to becoming wealthy, it's time to get out of it.
5) People start finding high risk ways to put money they don't have into it because they believe that as the price will only go up, they'll soon turn enough profits to pay back the high risk loans they got. Examples would be buying stock on margin and subprime home loans.
6) Big money banks/investment firms in the USA find new ways to invest in it that nobody understands.
Classic bubble. (Score:2)
Just look at the growth curve. This has nothing to do with value; intrinsic or perceived. Bitcoin merely has this value because investors are piling in - and because Japan recently recognised it as a currency.
But it isn't.
It is not backed by any thing or government
and like all bubbles the time to get OUT is when all the household investors start buying it. People who have never heard of cryptocurrencies until they read an article in the popular media and then "invest", they never make any money. They ten
nonsense (Score:2)
The market may feel the BTC algorithm is tested (Score:2)
Early in the development of BItcoin or any other cryptocurrency, there was the fear that some exploitable cranny in the mining algorithm could be used to inflate the money supply beyond what the exponentially-more-difficult algorithm was supposed to allow, or that the encryption would be broken. There seems to be a feeling today that BTC has been around long enough now that no such vulnerabilities will appear.
The weakest part of Bitcoin currently seems to be the exchanges. Having another major exchange poof
am I the dullest knife in the drawer? (Score:2)
Am I the dullest knife in the drawer?
Because, seriously, I can't tell the difference between these two arguments.
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Bitcoin will be the new pets.com or webvan!
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You're close.
Bitcoin could be the next HTTP.
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Yeah but you can use gold for things, even post-apocalypse
While technically true, the very post-apocalypse utility of gold does not explain its current valuation. Based on that logic, you'd expect stainless steel to have a higher value than gold, because it's more useful. Same with paper in paper money. A $100 bill has the same paper as a $20 bill, so this does not help explain the value either.
Bitcoin is even more ephemeral than my electronic dollars at the bank
Your electronic dollars at the bank are just ones and zeroes, just like bitcoin. The only real difference is the central vs distributed transaction model.
Re: This is an actual story (Score:3)
Why are proponents of gold standard also proponents of Bitcoin? You can't get any more fiat than Bitcoin. Nothing at all backs it up, even less than government promise backing up real money.
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The *theory* is that there is some hard upper limit that cannot be manipulated on a whim by humans in control, one by physical reality and one by math.
In practice, it's not so clean, and contrary to how preppers feel, in general the economy is much better now than it was in the gold standard days.
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I fail to see how cryptocurrency is immune to manipulation. From what I see the crazy swings in value indicate it is far far worse.
But I have never accused preppers of being intelligent.
Two reasons (Score:4, Insightful)
First is that gold bugs hate inflation. They see it as the ultimate evil. They like deflation. Well gold can lead to deflation, and likely would in the long run due to its limited supply, but bitcoin is guaranteed to have deflation given its design. So they like it because if it is used it would guarantee deflation.
The second is something you might have guessed from the first, it is because they don't know shit about money. They don't really have an understanding of what makes money what it is, or what makes a given currency good or bad. They see big amounts = good, big gains = good. Since both gold and bitcoin have been on a run as of late, that makes them good.
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I don't hate inflation. Inflation is good, as long as it's moderate. I hate out-of-control inflation.
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Well then you don't like bitcoin because it has built in deflation. You should in general like fiat currency as it has moderate inflation overall. Gold had alternating periods of large inflation and deflation.
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Of course gold is volatile, in terms of relative value to everyday goods, both up and down. The largest Fiat currencies tend to be stable realitve to everyday goods.
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Of course gold is volatile, in terms of relative value to everyday goods, both up and down. The largest Fiat currencies tend to be stable realitve to everyday goods.
Wrong.
Just the opposite is true: Everything else, including fiat currencies, are volatile relative to goods/services, whereas gold and silver are not.
A 1-Oz US $20 gold coin would, in it's day, buy a fine suit or pay for a lavish dinner at a 5-star restaurant. That same 1-Oz of gold today, valued at around $1200, would purchase an Armani suit or an evening out and a dinner for two at a five-star restaurant.
Two silver US dimes (10-cent pieces) would buy a gallon of gasoline many years ago. Today the value of
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The suit or 5-star restaurant arguments are devious because these are both items available at a wide variety of price points. A "fine" suit could be defined as a Men's Warehouse basic suit that is at least all wool (~$300), or it could be defined as the finest bespoke Saville Row suit ($10k+). "Armani Suit" is a ridiculous measure of value because Armani actually makes suits at a fairly wide range of price points with several sub brands. A "5-star restaurant" could be defined as a basic entree and appetizer
Store of Value (Score:2)
Which is exactly what distinguishes gold from BitCoin, which is not a stable store of value. It may be one in the future, but this kind of volatility does not bode well.
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Bitcoin is in the process of price discovery, and it started from zero, so it natural that it's volatile.
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It's approaching levels of volatility that would make it viable as a currency, yes. It's still at 4-5% as compared to other currencies with fluctuate under 1.5%, and at least currently there doesn't seem to be any reason to believe that the volatility would spike. But the original comparison was with gold, which as a store of value has held up pretty well for recorded human history. At the moment it's a poor comparison. I think BitCoin has the potential to establish itself as a universal currency, for sure.
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Gold went from less than $400 in 2000 to over $1800 in 2012. That's quite volatile too. Between 1970 and 1980 it was even worse. Overall it's holding it's value pretty well, but only when you average it out over a few decades.
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You keep agreeing with me in ways that suggest that you meant to disagree.
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It's basically "hey guys, let's all of the sudden agree that this currency I made up and hold a lot of is a viable one!"
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Bitcoin is backed by the value of billions of encrypted files. Hard to estimate that value, but that's what it is worth.
It's worth 0, it's not hard at all to estimate that value.
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It's worth 0, it's not hard at all to estimate that value.
How much would you pay right now for 1 Bitcoin, if you weren't allowed to sell it until this day next year ?
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15mBTC = 0.015 BTC (1,500,000 satoshis) ~ USD$41.
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The first people in to a pyramid scheme usually do well. It's everybody else...
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Re: (Score:2)
This (high fees) is definitely a problem at the current time. It is the result of a huge, polarized fight between two major factions of the Bitcoin community. It is a political fight that may well be what kills Bitcoin.
But.
If Bitcoin can survive this (and when it does, the technical reasons for the current high fees will go away) it will have proved that it can survive through a major crisis over protocol changes. If it proves that, it will have proved itself literally unkillable.