Bitcoin

[Bruddah IZ]

I'm asking for an explanation as to why it would represent real monetary value.

Why does "00000000839a8e6886ab5951d76f411475428afc90947ee320161bbf18eb6048" represent $1.9M.

because the buyer traded real $USD for bitcoins that he can trade for goods and services in the future. The supply of bitcoins have not been increased in the last 10 years although many have tried. Demand without increased supply, increases the value of the bitcoin

What is the incentive to purchase that group of letters and numbers when they won't get you anything except some potential future value that by the looks of it is a 21st century ponzi scheme.

So you start by asking "why it would represent real monetary value" then you ask "What is the incentive to purchase that group of letters and numbers when they won't get you anything except some potential future value that by the looks of it is a 21st century ponzi scheme", apparently not like the ponzi scheme known as Quantitative Easing.

The entire bitcoin blockchain can fit within a disk drive that you can buy for fifty bucks on Amazon and that disk drive -- to me -- is more valuable because the disk drive is an actual physical asset. Why is that blockchain worth billions?

Circle

People spent millions of dollars on Farmville assets on Facebook that are now worth zero because the game is now gone. Why will Bitcoin be any different?

Tell me how they are the same?

Please, make it make sense. Bonus points if you can avoid the words "fiat" or "gold".

Only you can make it make sense for YOU. It's called a free market sir.

 

[notintheface]

Tell me how they are the same?

They're both made up assets. They aren't real in any form.

You could seriously replace the word "bitcoin" in your post with "beanie baby" and it wouldn't change your point at all. That's what they are -- fake computer beanie babies. Stripe started accepting bitcoins for its merchants and then stopped because it turns out that using bitcoins to buy things doesn't really work. You can't use bitcoins at Amazon, or at Trader Joes, or really anywhere except to buy other fake groups of letters and numbers. (Maybe you can use it to buy heroin on the dark web? Who knows)

My point is this-- when you talk about "the supply hasn't changed" that's because your bitcoin miners who are by and large located in China haven't decided to change the supply. The moment that they do, you will be completely fucked and will have no physical assets at all that represent real monetary value. You could launch your own competing blockchain within five minutes. Anyone can, it's effectively commoditized. There's zero competitive edge for bitcoin. If you're going to go the complete and utter speculation route why on earth would you choose bitcoin over gold. It's like saying going to the roulette wheel is a good investment because it's "due" to hit. If you say "here's $1M to play with, avoid the inflation that's coming" I go out and buy myself three houses in Austin and start renting them out to generate cash flow, I sure don't buy half of "00000000839a8e6886ab5951d76f411475428afc90947ee320161bbf18eb6048".

 

[nextgenathletics]

They're both made up assets. They aren't real in any form.

You could seriously replace the word "bitcoin" in your post with "beanie baby" and it wouldn't change your point at all. That's what they are -- fake computer beanie babies. Stripe started accepting bitcoins for its merchants and then stopped because it turns out that using bitcoins to buy things doesn't really work. You can't use bitcoins at Amazon, or at Trader Joes, or really anywhere except to buy other fake groups of letters and numbers. (Maybe you can use it to buy heroin on the dark web? Who knows)

My point is this-- when you talk about "the supply hasn't changed" that's because your bitcoin miners who are by and large located in China haven't decided to change the supply. The moment that they do, you will be completely fucked and will have no physical assets at all that represent real monetary value. You could launch your own competing blockchain within five minutes. Anyone can, it's effectively commoditized. There's zero competitive edge for bitcoin. If you're going to go the complete and utter speculation route why on earth would you choose bitcoin over gold. It's like saying going to the roulette wheel is a good investment because it's "due" to hit. If you say "here's $1M to play with, avoid the inflation that's coming" I go out and buy myself three houses in Austin and start renting them out to generate cash flow, I sure don't buy half of "00000000839a8e6886ab5951d76f411475428afc90947ee320161bbf18eb6048".

I am not a crypto enthusiast by any means, but Bitcoin is not a tangible asset, and the more you try to think of it that way the more you will run in circles. Bitcoin is a trade asset based purely on anointed value in conjunction with the nature digital data being non-duplicatable.

Another way to think of it is, imagine each U.S dollar being almost impossible to counterfeit, impossible to replicate, and impossible to over inflate. That in itself is the the value of bitcoin.

If you think of it as a tangible asset, you will continue to scratch your head.

 

[Bruddah IZ]

They're both made up assets. They aren't real in any form.

Sounds like the $USD.

My point is this-- when you talk about "the supply hasn't changed" that's because your bitcoin miners who are by and large located in China haven't decided to change the supply.

They don't know how to change the supply.

The moment that they do, you will be completely fucked and will have no physical assets at all that represent real monetary value.

Risk management will keep that from happening

You could launch your own competing blockchain within five minutes.

Or maybe another 10 years?

Anyone can, it's effectively commoditized.

No they can't. That's why they haven't. The system is open source, thus operating on its own.

There's zero competitive edge for bitcoin. If you're going to go the complete and utter speculation route why on earth would you choose bitcoin over gold.

The competitive edge for bitcoin is that no one is in charge of it. No Central Bank, no central government. Where did I say I would choose gold over bitcoin? Is there a law against owning both for their perceived competitive advantages? Which they both have.

It's like saying going to the roulette wheel is a good investment because it's "due" to hit. If you say "here's $1M to play with, avoid the inflation that's coming" I go out and buy myself three houses in Austin and start renting them out to generate cash flow, I sure don't buy half of "00000000839a8e6886ab5951d76f411475428afc90947ee320161bbf18eb6048".

I like how you give unrealistic and inflated scenarios as if people are going to switch 100% to bitcoin anytime soon. They didn't 10 years ago, they're not going to today, but another 10 years from now you may see more stability and more trading. BUT, the same number of bitcoins. Hell we issued Silver Certificates for 86 years before we switched to Reserve Notes!! A promise to pay albeit not representative of anything more than a promise that they would increase the supply of reserve notes. Too bad they didn't have beenie babies back then eh?

 

[WestOfFive]

because the buyer traded real $USD for bitcoins that he can trade for goods and services in the future. The supply of bitcoins have not been increased in the last 10 years although many have tried. Demand without increased supply, increases the value of the bitcoin

So you start by asking "why it would represent real monetary value" then you ask "What is the incentive to purchase that group of letters and numbers when they won't get you anything except some potential future value that by the looks of it is a 21st century ponzi scheme", apparently not like the ponzi scheme known as Quantitative Easing.

Circle

Tell me how they are the same?

Only you can make it make sense for YOU. It's called a free market sir.

Charlie Shrem:

Being among the youngest millionaires from Bitcoin, Charlie Shrem started his way as a co-owner of Evr, a popular gastropub in Manhattan. By the way, this place was among the first to accept Bitcoin payments. Initially, Shrem purchased Bitcoins for $3–4. Eventually, he bought a few thousand more when it reached $20. Later on, he organized Bitinstant- a physical store where people could buy Bitcoins. At the moment, Bitinstant serves as an exchange platform.

 

[whatithink]

"Can afford" is the key word here. Yes, I agree, real estate is my favorite investment method overall if you have the capital.

What makes Bitcoin unique is that each unit is coded with specific digital data that theoretically makes each bitcoin non-duplicable which protects it against inflation and makes it more akin to gold. That being said, to me, that's as far as its inherit value is. It has anointed value over practical value. A stock on the other hand can pay a dividend, and you can look into a company's balance sheet to strategize your stock investment. There is more transparency with stocks than crypto.

Like I mentioned earlier, I prefer stocks because I like my investment to have something tangible behind it, like a business or service, or even better yet real estate as I have even more options with it and even more control (I can rent, sub-lease, flip, customize, or just live) along with the tax benefits property ownership brings if you live on the property.

I don't get the hedge against inflation premise. Bitcoin is hugely volatile and prices can fluctuate widely. Its dropped 15% this week alone.

To me, its a purely speculative "something", which, as you say, has anointed value driven by speculators. It provides no practical value to anything, anywhere and could go to zero tomorrow if someone hacked the code - no code is bullet proof, the opposite in fact. I guarantee someone is trying right now, and the higher the value, the more people will try.

 

[nextgenathletics]

I don't get the hedge against inflation premise. Bitcoin is hugely volatile and prices can fluctuate widely. Its dropped 15% this week alone.

To me, its a purely speculative "something", which, as you say, has anointed value driven by speculators. It provides no practical value to anything, anywhere and could go to zero tomorrow if someone hacked the code - no code is bullet proof, the opposite in fact. I guarantee someone is trying right now, and the higher the value, the more people will try.

lol I never thought I'd be the defender of crypto. Very ironic. I'll continue taking the devil's advocate role here though.

All your points are valid, but on a purely logistical level, attempting to "crack code" as you put it, on that scale for duplication is sufficiently more vigorous than doing so with the U.S Dollar for example, which currently justifies bitcoin as a hedge against inflation. The sheer amount of technological prowess, resources and skill needed for doing so is simply a barrier that the dollar doesn't have. That being said, theoretically there is no such thing as a perfectly invulnerable form of currency.

Bitcoin, and crypto overall is currently extremely volatile because it hasn't yet been fully adopted into the retirement accounts of the world, the roths, 401ks, 403bs etc. this is showing signs of change as massive institutional funds are beginning to include heavy positions of bitcoin into their portfolios and it is likely only a matter of time before the big boy banks begin to do the same. The DOW announced at the end of last year they are gong to begin including a cryptocurrency indexes on the NYSE.

Crypto is still largely a traders realm and until it becomes an investors realm, it will be volatile. Bitcoin is the closest to breaking this barrier.

With all that said, it is still massively speculative, which is why I currently do not have any stake in crypto currently. Two of my best friends are heavy crypto investors so I have some insight into it, but I want to see how this current crypto bull market plays out before I consider moving capital in.

 

[Bruddah IZ]

I don't get the hedge against inflation premise. Bitcoin is hugely volatile and prices can fluctuate widely. Its dropped 15% this week alone.

The market loves volatility. That's where the fire sales are at! Just ask the boys at the CBOE. I think it's something like 70 trillion in options just craving some volatility.

 

[WestOfFive]

lol I never thought I'd be the defender of crypto. Very ironic. I'll continue taking the devil's advocate role here though.

All your points are valid, but on a purely logistical level, attempting to "crack code" as you put it, on that scale for duplication is sufficiently more vigorous than doing so with the U.S Dollar for example, which currently justifies bitcoin as a hedge against inflation. The sheer amount of technological prowess, resources and skill needed for doing so is simply a barrier that the dollar doesn't have. That being said, theoretically there is no such thing as a perfectly invulnerable form of currency.

Bitcoin, and crypto overall is currently extremely volatile because it hasn't yet been fully adopted into the retirement accounts of the world, the roths, 401ks, 403bs etc. this is showing signs of change as massive institutional funds are beginning to include heavy positions of bitcoin into their portfolios and it is likely only a matter of time before the big boy banks begin to do the same. The DOW announced at the end of last year they are gong to begin including a cryptocurrency indexes on the NYSE.

Crypto is still largely a traders realm and until it becomes an investors realm, it will be volatile. Bitcoin is the closest to breaking this barrier.

With all that said, it is still massively speculative, which is why I currently do not have any stake in crypto currently. Two of my best friends are heavy crypto investors so I have some insight into it, but I want to see how this current crypto bull market plays out before I consider moving capital in.

Bitcoin’s incredible run has overshadowed gold to close out the year, but that should take nothing away from the old guard’s performance in 2020. Investors rushed to gold, as the COVID-19 pandemic sowed massive uncertainty over the course of this year. The yellow metal managed to rise above $2,000/ounce in the summer. It has since retreated but still sits at a respectable $1,880/ounce the last time I looked.

 

[TheVirginian]

Sounds like the $USD.

U.S. requires that the USD be accepted and taxes are owed in USD. That is what makes it valuable. I can't figure out bitcoin for the life of me. Its only value is that people want to pay money for it. It is useful for paying for certain things on grey and black market, but again only because somebody else will pay for it. It seems like a pure bubble.

It can also be crushed instantly once the U.S. decides it is a threat.

 

[notintheface]

Sounds like the $USD.

Come on, you don't really believe this. What currency do you get paid in? What currency do you pay your mortgage in? What currency do you buy your food in? I am going to go out on a limb and say that it isn't digital beanie babies.

No they can't. That's why they haven't. The system is open source, thus operating on its own.

You're misconstruing the network itself with the people using the network. There are tons of open source projects that wind up failing due to bad actors.

Check this out:

Cambridge Blockchain Network Sustainability Index: Mining Map: Visualisation

The Cambridge Blockchain Network Sustainability Index (CBNSI) is created and maintained by the Cambridge Digital Assets Programme (CDAP) Team at the Cambridge Centre for Alternative Finance, an independent research institute based at Cambridge Judge Business School, University of Cambridge.

cbeci.org

Scroll down and see where your miners are located. Uh, that 65% is a little bit over the 51% required to control the network. You're basically advocating for digital yuan, you know that, right? The moment the CCP decides to act, you do know your bitcoins will be beholden to them, right?

But again, let's do a thought exercise:

I like how you give unrealistic and inflated scenarios as if people are going to switch 100% to beanie babies anytime soon. They didn't 10 years ago, they're not going to today, but another 10 years from now you may see more stability and more trading. BUT, the same number of beanie babies.

 

[Bruddah IZ]

U.S. requires that the USD be accepted and taxes are owed in USD. That is what makes it valuable. I can't figure out bitcoin for the life of me. Its only value is that people want to pay money for it. It is useful for paying for certain things on grey and black market, but again only because somebody else will pay for it. It seems like a pure bubble.

It can also be crushed instantly once the U.S. decides it is a threat.

On the contrary. An increase in the money supply is in effect a tax and a "bubble blower" which makes the USD less valuable than it has ever been. The aforementioned fact is why bitcoin exist. The number of bitcoins are not increasing and therefore not blowing bubbles. Hence the volatility as it responds to the market.

 

[notintheface]

If you think of it as a tangible asset, you will continue to scratch your head.

This is as effective an argument that you can give to never, ever invest any money in bitcoin beyond pure throwaway cash. An intangible asset whose volatility is multiples higher than the market, not pegged to anything except the apparent electricity usage of smaller nation-states, and almost entirely under control by entities who are operating in mainland China. Sign me right up!

 

[notintheface]

Crypto is still largely a traders realm and until it becomes an investors realm, it will be volatile. Bitcoin is the closest to breaking this barrier.

What are you investing in???

This is what I am begging anyone to explain. There's no "there" there. With a stock you have PE ratios, bonds have yields, options have strikes, but ffs if you could tell me what the fundamentals of Bitcoin are that don't include "bigger sucker".

 

[Bruddah IZ]

Come on, you don't really believe this. What currency do you get paid in? What currency do you pay your mortgage in? What currency do you buy your food in? I am going to go out on a limb and say that it isn't digital beanie babies.



You're misconstruing the network itself with the people using the network. There are tons of open source projects that wind up failing due to bad actors.

Check this out:

Cambridge Blockchain Network Sustainability Index: Mining Map: Visualisation

The Cambridge Blockchain Network Sustainability Index (CBNSI) is created and maintained by the Cambridge Digital Assets Programme (CDAP) Team at the Cambridge Centre for Alternative Finance, an independent research institute based at Cambridge Judge Business School, University of Cambridge.

cbeci.org

Scroll down and see where your miners are located. Uh, that 65% is a little bit over the 51% required to control the network. You're basically advocating for digital yuan, you know that, right? The moment the CCP decides to act, you do know your bitcoins will be beholden to them, right?

But again, let's do a thought exercise:

Let's. You know what else China owns a lot of beside bitcoin?

 

[Bruddah IZ]

This is as effective an argument that you can give to never, ever invest any money in bitcoin beyond pure throwaway cash. An intangible asset whose volatility is multiples higher than the market, not pegged to anything except the apparent electricity usage of smaller nation-states, and almost entirely under control by entities who are operating in mainland China. Sign me right up!

What are you talking about? Volatility conveys important information to investors. Especially at the CBOE. Increasing the USD money supply that is pegged to nothing is just faith in the future of the dollars ability to be traded.

 

[Bruddah IZ]

What are you investing in???

This is what I am begging anyone to explain. There's no "there" there. With a stock you have PE ratios, bonds have yields, options have strikes, but ffs if you could tell me what the fundamentals of Bitcoin are that don't include "bigger sucker".

Big suckers that don't see how monetized the countries national debt is? Your faith in the dollar goes against those facts. China owns over a trillion in U.S. Bonds that are worth shit. Is it any wonder that cryptos are popular in China when they see that the U.S. is printing the value right out of their U.S. Bond positions?

 

[Bruddah IZ]

Oh yeah, and when the economy crashes again, the Dodd-Frank Act says that there will be no taxpayer bailouts. The Fed will simply step in and convert Chinese owned U.S. Bonds to equities in the defunct banks that sold the Bonds. Pretty sweet deal being forced to own stocks in a bank that is a part of the monetary system that relies on a currency that isn't pegged to anything eh?

 

[notintheface]

I'm still not seeing any reasonable explanation, I'm sorry. There's a whole lot of hand waving but honestly no good reason that a piece of data that's 4MB -- a smaller size than a photo that you take with your phone -- should magically be worth almost $2M. When I go to a mortgage broker and ask them "will you take 25 bitcoin for this house" and I don't get laughed out of the room, maybe you will have a point but I would have thought that after 12 years that would have happened by now.

 

[whatithink]

All your points are valid, but on a purely logistical level, attempting to "crack code" as you put it, on that scale for duplication is sufficiently more vigorous than doing so with the U.S Dollar for example, which currently justifies bitcoin as a hedge against inflation. The sheer amount of technological prowess, resources and skill needed for doing so is simply a barrier that the dollar doesn't have. That being said, theoretically there is no such thing as a perfectly invulnerable form of currency.

But it is just code at the end of the day. All code has flaws. This one demonstrates the whole 21M limit, which is the most fundamental piece that I can see, i.e. if no scarcity then what's the point, may not be what its made out to be.

Someone didn't just happen upon this, they were looking. Fortunately a "good actor" found it.

In September 2018, an anonymous party discovered and reported an invalid-block denial-of-server vulnerability to developers of Bitcoin Core, Bitcoin ABC and Bitcoin Unlimited. Further analysis by bitcoin developers showed the issue could also allow the creation of blocks violating the 21 million coin limit and CVE-2018-17144 was assigned and the issue resolved.

 

[Bruddah IZ]

I'm still not seeing any reasonable explanation, I'm sorry. There's a whole lot of hand waving but honestly no good reason that a piece of data that's 4MB -- a smaller size than a photo that you take with your phone -- should magically be worth almost $2M. When I go to a mortgage broker and ask them "will you take 25 bitcoin for this house" and I don't get laughed out of the room, maybe you will have a point but I would have thought that after 12 years that would have happened by now.

Lol! Your Mortgage broker doesn't typically laugh at you when you're in the room. He waits until you leave. You think you're paying 2.25% interest when your amortization schedule says you're paying 49%. Kinda the same way you think of bitcoin.