Merged Bitcoin - Part 3

[ponderingturtle]

Kinda like gold. It's not really a business.

Yes and gold has many many uses as a commodity, of course no one would base a currency off of its fluctuating value though. The electronics industry will always demand gold and so even if people stopped valuing it because it is shiny it would still be quite valuable.

 

[ChrisBFRPKY]

...that happens to have several economic and industrial uses, and is an actual physical object.

As a store of value, which it shares with BTC, Gold is a terrible way of doing this. Imagine moving 100 million in Gold overseas as a payment for goods and services. Yikes! The same task performed with Bitcoin takes a few clicks of the mouse and there's no waiting months for your payment to arrive.

I do like Gold plated connectors though, can't do that with Bitcoin. Though there are physical Bitcoin. It's a coin with a code to a "paper wallet" that stores one Bitcoin. I expect they're still available.

Yes and gold has many many uses as a commodity, of course no one would base a currency off of its fluctuating value though. The electronics industry will always demand gold and so even if people stopped valuing it because it is shiny it would still be quite valuable.

People buy and sell Gold with fiat on a daily basis. The price goes up and down. Like Bitcoin, perhaps not as extreme, but like BTC nonetheless.

Gold is pretty to look at. I like it. As above, I like my electrical connectors to be plated in Gold too. I admit one can't do that with Bitcoin. Though if you have a lot of wealth stored in Gold, it's kinda heavy to move around and I have a bad back.

 

[Belz...]

As a store of value, which it shares with BTC, Gold is a terrible way of doing this. Imagine moving 100 million in Gold overseas as a payment for goods and services. Yikes!

Moving 100 million in cash is similarily annoying and heavy.

As I said, gold has intrinsic value, and is a physical thing that will exist regardless of what happens in your economy following the inevitable EMP attack.

Gold will always be in demand.

 

[psionl0]

When owning bitcoin pays dividends then it will be comparable to stocks.

They may operate differently but you can always compare them mathematically.

The NPV of a stock/bond/commodity is its purchase price plus the NPV of all of its future earnings. Just as you can have a bond with a zero coupon rate, you can have a stock with a zero dividend rate.

 

[ponderingturtle]

As a store of value, which it shares with BTC, Gold is a terrible way of doing this. Imagine moving 100 million in Gold overseas as a payment for goods and services. Yikes! The same task performed with Bitcoin takes a few clicks of the mouse and there's no waiting months for your payment to arrive.

Of course that is why we have a banking system to make such transactions easier than shipping large pallets of cash across the world. The only benefit that bitcoin has is the ability to do this with out complying with the law, so useful to people planning on fleeing the country to get their assets out of the country with out banks getting involved and raising questions.

Though are there enough people fleeing justice, laundering money and so forth to really sustain the utility of bitcoin?

People buy and sell Gold with fiat on a daily basis. The price goes up and down. Like Bitcoin, perhaps not as extreme, but like BTC nonetheless.

Like all commodities. Though unlike real comodities there is a general floor to the price because there is fundamental demand for things like gold, copper or what have you.

Gold is pretty to look at. I like it. As above, I like my electrical connectors to be plated in Gold too. I admit one can't do that with Bitcoin. Though if you have a lot of wealth stored in Gold, it's kinda heavy to move around and I have a bad back.

Easy to do with the banking system though. I mean if you are hedging money in gold, why pay the excess price for receiving it in bullion?

 

[lomiller]

...that happens to have several economic and industrial uses, and is an actual physical object.

Gold also has decorative uses, and in some places it has cultural importance.

 

[lomiller]

As a store of value, which it shares with BTC, Gold is a terrible way of doing this. Imagine moving 100 million in Gold overseas as a payment for goods and services.

Current monetary systems handle ~$19 trillion worth of global trade smoothly and efficiently without the economic disruption that would be caused by the rapid chanced in the price of crypto.

 

[lomiller]

They may operate differently but you can always compare them mathematically.

The NPV of a stock/bond/commodity is its purchase price plus the NPV of all of its future earnings. Just as you can have a bond with a zero coupon rate, you can have a stock with a zero dividend rate.

Net present value calculations are not dependant on dividends.

Zero coupon bonds are not designed to trade at their face value. Even at first issue they are sold for less than their face vale. This can happen because the secondary bond market values bonds based on discount rate. This doesn't have much in common with why a company that pays no dividend can still have a net present value.

 

[ponderingturtle]

Current monetary systems handle ~$19 trillion worth of global trade smoothly and efficiently without the economic disruption that would be caused by the rapid chanced in the price of crypto.

I am still wondering why he is trying to smuggle $100 million out of the country without using the banking system.

 

[psionl0]

Net present value calculations are not dependant on dividends.

Zero coupon bonds are not designed to trade at their face value. Even at first issue they are sold for less than their face vale. This can happen because the secondary bond market values bonds based on discount rate. This doesn't have much in common with why a company that pays no dividend can still have a net present value.

 

[ChrisBFRPKY]

Of course that is why we have a banking system to make such transactions easier than shipping large pallets of cash across the world. The only benefit that bitcoin has is the ability to do this with out complying with the law, so useful to people planning on fleeing the country to get their assets out of the country with out banks getting involved and raising questions.

Though are there enough people fleeing justice, laundering money and so forth to really sustain the utility of bitcoin?




Like all commodities. Though unlike real comodities there is a general floor to the price because there is fundamental demand for things like gold, copper or what have you.



Easy to do with the banking system though. I mean if you are hedging money in gold, why pay the excess price for receiving it in bullion?

Yes, and those banking systems are now using stable coins (cryptocurrency) to do this better. We agree! That wasn't so difficult.

 

[Samson]

You have no idea what panic selling is... skimming TA-course hawking websites is no substitute for an actual basic understanding of market dynamics.

I have watched markets for 40 years.
I see a parade of art in chart patterns, I started the TA thread and proved the non random nature of price action.
Edwards and McGee would describe stock movents as armies advancing and retreating.
West of Wall Street, Remniscences of a stock trader are two fascinating treatises, then there are the turtles.
There is much fascination as fear and greed are reported.
I love watching the price of bitcoin change.

 

[lomiller]

Thanks for demonstrating that you have no idea how the secondary bond market works or how net present value formulas are used to establish the value of a company.

 

[trustbutverify]

I have watched markets for 40 years.
I see a parade of art in chart patterns, I started the TA thread and proved the non random nature of price action.
Edwards and McGee would describe stock movents as armies advancing and retreating.
West of Wall Street, Remniscences of a stock trader are two fascinating treatises, then there are the turtles.
There is much fascination as fear and greed are reported.
I love watching the price of bitcoin change.

And you still don't understand them?

Fear is one thing, panic another. But I'm always willing to learn from a financial markets expert like yourself... what, specifically, makes this latest selloff a "panic" as opposed to non-panic setbacks? Or are they all panics?

 

[psionl0]

Thanks for demonstrating that you I have no idea how the secondary bond market works or how net present value formulas are used to establish the value of a company.

ftfy.

Factoring annuities into a NPV is a simple formula which you can find in any economic text book. Maybe you should do some reading instead of making up your own facts.

 

[Tippit]

NPV can work on assets without cash flows, it just makes less sense to use. Every asset theoretically has a terminal cash flow that will be realized on some day in the future that you decide to sell. You can discount that number back to the present using whatever rate you think is appropriate.

It's also worth noting that non-dividend paying stocks can still be valued using DCF (a more precise model than NPV) because they still have free cash flows, and forecasted free cash flows.

 

[lomiller]

ftfy.

Factoring annuities into a NPV is a simple formula which you can find in any economic text book. Maybe you should do some reading instead of making up your own facts.

You had no idea what I was talking about when I referenced net present value yesterday. If you are going to use things I introduced you to, you should at least attempt to apply them correctly. If you calculate the net present value of dividends only ignores the value of retained earnings so the result doesn't reflect the value of a company.

ftfy.

Maybe you should do some reading instead of making up your own facts.

Project much?

 

[Tippit]

You had no idea what I was talking about when I referenced net present value yesterday. If you are going to use things I introduced you to, you should at least attempt to apply them correctly. If you calculate the net present value of dividends only ignores the value of retained earnings so the result doesn't reflect the value of a company.

There is a Dividend Discount Model (DDM) which uses the same principle as NPV, but unless you substitute earnings (or better yet, free cash flows), it's subject to the limitation above.

 

[psionl0]

If you are going to use things I introduced you to ....

 

[lomiller]

There is a Dividend Discount Model (DDM) which uses the same principle as NPV, but unless you substitute earnings (or better yet, free cash flows), it's subject to the limitation above.

More or less what I referenced 2 days ago in post 1197. Net Present value of future earnings is the underlying principle of value investing. In practice you can't take earnings at face value, nor can you assume retained earnings will be invested wisely, etc. To accurately value a company you need a deeper dive and wouldn't use any particular model verbatim.

For the purposes of the point I was making in post 1197 it's sufficient that number exists. It doesn't matter that only a handful of people have the resources and access to do it properly.