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Merged Bitcoin - Part 3

psionl0 said:
Bitcoin has been around for 12 years now and still commands a high price so I am calling BS on this.
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A price driven only by supply & demand without any attachment to any intrinsic value.

The same can be said for diamonds, but at least they're sparkly and have some industrial purposes.
 
Mycroft said:
A price driven only by supply & demand without any attachment to any intrinsic value.

The same can be said for diamonds, but at least they're sparkly and have some industrial purposes.
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Bitcoin has purpose too, as a mean to transfer money. It's not much, surely, but it's not entirely useless.
 
psionl0 said:
The price of everything is driven by supply and demand. There is no such thing as "intrinsic" value.
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Of course there is. Haven't we already had this argument?

Intrinsic value is value belonging to something by it's very nature. Diamonds are very sparkly, and that's part if their value. Gold is also pretty, but it also has industrial uses and uses in electronics. Wheat is valuable in that we eat a lot of it.

An item with intrinsic value has a built in demand. There will always be a demand for wheat, rice and corn, because these are staples to our diet.

Bitcoin? Not so much. We don't need it for anything, unless you want to buy child porn off the darkweb. There really isn't anything you can do with it that you can't do with a different and more stable currency.
 
Mycroft said:
Of course there is. Haven't we already had this argument?

Intrinsic value is value belonging to something by it's very nature. Diamonds are very sparkly, and that's part if their value. Gold is also pretty, but it also has industrial uses and uses in electronics. Wheat is valuable in that we eat a lot of it.

An item with intrinsic value has a built in demand. There will always be a demand for wheat, rice and corn, because these are staples to our diet.

Bitcoin? Not so much. We don't need it for anything, unless you want to buy child porn off the darkweb. There really isn't anything you can do with it that you can't do with a different and more stable currency.
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I don't know if I have discussed "intrinsic" demand with you specifically but I have pointed out many times that there is no such thing as "intrinsic value".

You are confusing utility with economic value. Something doesn't need to have a utility for a demand to exist. Used stamps have no utility but some types have a very high price just because of their rarity. Misprinted stamps should have even less utility but can be even pricier.

Even something that is essential for survival (and therefore, has an automatic built in demand) may not have any speculative value because of the supply side of the equation. That is why water is usually priced in cents/kiloliter and air comes free of charge.

The fact remains that bitcoin has been around for 12 years and shows no signs of going away. This is in spite of the almost daily predictions that it will fail "any moment now" during those 12 years. You might argue that people are stupid to waste so much money and energy in it but it doesn't change the reality.
 
psionl0 said:
I don't know if I have discussed "intrinsic" demand with you specifically but I have pointed out many times that there is no such thing as "intrinsic value".
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Of course there is such thing as intrinsic value.

psionl0 said:
You are confusing utility with economic value. Something doesn't need to have a utility for a demand to exist. Used stamps have no utility but some types have a very high price just because of their rarity. Misprinted stamps should have even less utility but can be even pricier.
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Sure. Add Pogs, Beanie Babies, tulips and thousands of other things to the list too. Demand can be driven by other things than intrinsic value, but that doesn't mean intrinsic value doesn't exist.

psionl0 said:
Even something that is essential for survival (and therefore, has an automatic built in demand) may not have any speculative value because of the supply side of the equation. That is why water is usually priced in cents/kiloliter and air comes free of charge.
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Right. Intrinsic value doesn't necessarily translate to speculative value. Things with great intrinsic value, things that are necessary to survival, may still be inexpensive and easily obtained. At least we hope so, right?

As an example, a farmer might not be able to make a living producing food even though it has a high intrinsic value, if the supply of food is too great for him to be able to sell for more than his production costs. At the same time, another person who produces various forms of crushed rock, the type of stuff people decorate their flower beds and driveways with, might prosper economically even though their product is purely decorative with very little intrinsic value.

But introduce some sort of upheaval to the economy, it could be war, disaster, political instability of some sort, and things change rapidly. People lose interest in the purely decorative and devote their limited resources to getting the necessary. Suddenly the one producing decorative rock can't find enough buyers to make a living but the farmer prospers because the demand for food soars.

psionl0 said:
The fact remains that bitcoin has been around for 12 years and shows no signs of going away. This is in spite of the almost daily predictions that it will fail "any moment now" during those 12 years. You might argue that people are stupid to waste so much money and energy in it but it doesn't change the reality.
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Blah, blah, blah. This is your mantra, but here and now is relevant in discussing intrinsic value.
 
Mycroft said:
Of course there is such thing as intrinsic value.
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Of course not! you are merely redefining "intrinsic value". There is no such thing in economics. There is only "price".

Mycroft said:
Demand can be driven by other things than intrinsic value, but that doesn't mean intrinsic value doesn't exist.
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Demand (as well as supply) can depend on many factors but regardless, supply and demand are the only things that affect the price of something. There is no "intrinsic" price.

Mycroft said:
But introduce some sort of upheaval to the economy, it could be war, disaster, political instability of some sort, and things change rapidly
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That proves my point. Price can change rapidly with changing conditions because "intrinsic value" doesn't exist.

Mycroft said:
Blah, blah, blah. This is your mantra, but here and now is relevant in discussing intrinsic value.
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Of course! The only mantra that should be repeated ad infinitum is "bitcoin is a bad investment" and no discussion thereof should be permitted. :rolleyes:
 
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psionl0 said:
Of course not! you are merely redefining "intrinsic value". There is no such thing in economics. There is only "price".
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The highlighted portion is where you moved the goalposts.

Even so, I think Warren Buffett would disagree with your assertion as his strategy of "value investing" depends on defining an intrinsic value independent of the supply/demand driven share price. That's how one looks for undervalued investments.

psionl0 said:
Demand (as well as supply) can depend on many factors but regardless, supply and demand are the only things that affect the price of something. There is no "intrinsic" price.
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Nor did I ever claim there is such thing as an "intrinsic price".

psionl0 said:
That proves my point. Price can change rapidly with changing conditions because "intrinsic value" doesn't exist.
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Except that they change because intrinsic value does exist.

Consider Maslow's hierarchy of needs. Things at the bottom of that pyramid, those that meed physiological needs, are things with a greater intrinsic value.

psionl0 said:
Of course! The only mantra that should be repeated ad infinitum is "bitcoin is a bad investment" and no discussion thereof should be permitted. :rolleyes:
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Something you hear only in your own mind.
 
psionl0 said:
This is not the thread for such a discussion but I think it is unfair to label people who borrow money from banks "parasitical recipients". There are plenty of legitimate reasons to borrow money (eg to build up a business).
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Banks under the fractional reserve system have the unique ability to create counterfeit credit ex nihilo. The banks are parasitical, and so is anyone who benefits from their credit. The only legitimate form of credit, in my opinion, is pre-existing savings. Not every borrower deserves a loan, or a loan at manipulated low interest rates.
 
Tippit said:
Banks under the fractional reserve system have the unique ability to create counterfeit credit ex nihilo. The banks are parasitical, and so is anyone who benefits from their credit. The only legitimate form of credit, in my opinion, is pre-existing savings. Not every borrower deserves a loan, or a loan at manipulated low interest rates.
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Notice how I didn't say EVERY borrower?

That the banking system needs fixing is unquestionable but not the subject for a bitcoin thread.
 
A straight forward technical appraisal of this entity that currently is valued at 3 Caterpillar Dow 30 companies that move mountains is this correction will run and run.
 
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psionl0 said:
How could I disagree with a post that trippy? I have no idea what you are saying.
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I'm not sure, but I think he's saying that bitcoin is overvalued because its market cap is in excess of 3x Caterpillar, an enterprise that produces things. In actuality, bitcoin is worth more than 3x Caterpillar as of 2/21/20, bitcoin is $303.1B, and Caterpillar is $75.68B ($227.04). This is also a fundamental, not a technical analysis.

I still maintain that the biggest value of bitcoin is the ability for people to expatriate their wealth quickly and privately. For instance, Chinese fleeing nCov can move millions out of China and evade capital controls. They can't do this with gold, or virtually any other way. This alone is worth something.
 
Tippit said:
I'm not sure, but I think he's saying that bitcoin is overvalued because its market cap is in excess of 3x Caterpillar, an enterprise that produces things. In actuality, bitcoin is worth more than 3x Caterpillar as of 2/21/20, bitcoin is $303.1B, and Caterpillar is $75.68B ($227.04). This is also a fundamental, not a technical analysis.

I still maintain that the biggest value of bitcoin is the ability for people to expatriate their wealth quickly and privately. For instance, Chinese fleeing nCov can move millions out of China and evade capital controls. They can't do this with gold, or virtually any other way. This alone is worth something.
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But can they ? They for sure can mine BTC. And they can move BTC. But can they buy BTC for Chinese yuan ?
Even I can't really buy BTC untracked, unless I send cash in envelope.
 
Dr.Sid said:
But can they ? They for sure can mine BTC. And they can move BTC. But can they buy BTC for Chinese yuan ?
Even I can't really buy BTC untracked, unless I send cash in envelope.
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As far as I know, the PBOC has banned cryptocurrency and ICOs in China. But there is probably a black market for it, even if there is no equivalent of localbitcoins.com. I can't really attest to how easy or practical it is to buy BTC in China, but I assume that there is enough supply to meet the demand, even if it carries some risk. If the countervailing risk is that you can't expatriate with funds and stand a good chance of contracting nCov, I'm pretty sure that millions of Chinese would be willing to take the risk of buying black market bitcoin.
 
Tippit said:
As far as I know, the PBOC has banned cryptocurrency and ICOs in China. But there is probably a black market for it, even if there is no equivalent of localbitcoins.com. I can't really attest to how easy or practical it is to buy BTC in China, but I assume that there is enough supply to meet the demand, even if it carries some risk. If the countervailing risk is that you can't expatriate with funds and stand a good chance of contracting nCov, I'm pretty sure that millions of Chinese would be willing to take the risk of buying black market bitcoin.
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True. :thumbsup:
 
A curious thing

The price of bitcoin has been falling rapidly in line with the rest of the stock market. It is now down to 7800 from over 10000 a couple of weeks ago.

The fact that the price of bitcoin falls by as much as 30% in the space of a couple of weeks is hardly newsworthy of course. What is interesting is that people are no longer seeking refuge in bitcoin during times of economic uncertainty. It no longer picks up when the rest of the market is down.

Lest Samson is tempted to crow, I should point out that no amount of TA would have predicted 2019-NCOV.
 
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