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Bitcoin Surges Past $400

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Re: Bitcoin Surges Past $400

#241

Post by mrb »

berns wrote: post #238
mrb wrote: post #236

Earlier quoted context omitted.

A currency has value because it is accepted, no matter who accepts it (sovereign state or merchants, doesn't matter).

It is accepted because it is needed. Everybody needs it to pay taxes, other than that it has no value.

No, plenty of things have value even though you can't use them to pay taxes. The kiwi fruit has value. Why? Because people want them, yet kiwis are not strictly speaking NEEDED.

Again, what gives value to things is that people want them, no matter what the reason.

Re: Bitcoin Surges Past $400

#242

Post by chrisbennet »

Synaesthesia wrote: post #208
chrisbennet wrote: post #205

Bitcoin seems more like a speculative commodity than a currency. As long as Bitcoin is experiencing such instability, how can it be useful as a currency?

It's been stable for a long time before this jump, and over much of its history. Yeah it is disruptive! It's very easy to use as a currency since it's the only way you can send value instantly around the globe with almost no cost and without any regulatory issues.

Ok, that makes more sense. Thanks.

Re: Bitcoin Surges Past $400

#243

Post by berns »

mrb wrote: post #241
berns wrote: post #238

Earlier quoted context omitted.

It is accepted because it is needed. Everybody needs it to pay taxes, other than that it has no value.

No, plenty of things have value even though you can't use them to pay taxes. The kiwi fruit has value. Why? Because people want them, yet kiwis are not strictly speaking NEEDED. Again, what gives value to things is that people want them, no matter what the reason.

We were talking about fiat currency.

Re: Bitcoin Surges Past $400

#244

Post by ojr »

Dylan16807 wrote: post #151
ojr wrote: post #22

Earlier quoted context omitted.

tulips that can be transfer digitally anywhere in the world at a low fee...

If you wanted to sell a tulip ownership certificate this century it would also be digitally anywhere in the world at a low fee...

Low just like Western Union and Moneygram got it ;)

Re: Bitcoin Surges Past $400

#245

Post by vectorpush »

aianus wrote: post #237
vectorpush wrote: post #231

Earlier quoted context omitted.

Nothing you said conflicts with my post. Your situation is extremely unusual and pretty much defines "high risk" from a fraud prevention perspective. For 99% of the population this is a non-issue.

My point is that with Bitcoin I can opt-out of the overpriced fraud protection racket that is my credit card. This allows transactions to take place that could not take place otherwise. It's a feature, not a bug. If you think my situation is too crazy, then consider someone who wants to buy a $15,000 Rolex or gold bar online or place a $5,000 bet on a football game starting in 3 minutes. There are many applications f…

> My point is that with Bitcoin I can opt-out of the overpriced fraud protection racket that is my credit card.

And right there is the crux of your disconnect from the general population. The vast majority of people don't view fraud protection as a racket; it doesn't cost them anything as far as they are aware and the benefits are pretty clear, especially compared with bitcoin where permanent loss of funds because of hackers or arbitrary technical problems is a real risk.

> then consider someone who wants to buy a $15,000 Rolex or gold bar online or place a $5,000 bet on a football game starting in 3 minutes.

Ummm, those all sound like pretty unusual use-cases that the general population has no use for. I never said bitcoin was useless so you can stop proselytizing, all I said was that credit cards are clearly much safer than bitcoin if you define safe to mean "protects my money from being lost or stolen".

Re: Bitcoin Surges Past $400

#246

Post by mrb »

berns wrote: post #243
mrb wrote: post #241

Earlier quoted context omitted.

No, plenty of things have value even though you can't use them to pay taxes. The kiwi fruit has value. Why? Because people want them, yet kiwis are not strictly speaking NEEDED. Again, what gives value to things is that people want them, no matter what the reason.

We were talking about fiat currency.

But there is no difference between kiwi fruits or fiat currencies: people wanting them is what gives them value.

In the case of bitcoins, people want them not to pay taxes, but because cryptocurrencies offer benefits that only them can provide, so people see value in that.

Re: Bitcoin Surges Past $400

#247

Post by dllthomas »

mrb wrote: post #246
berns wrote: post #243

Earlier quoted context omitted.

We were talking about fiat currency.

But there is no difference between kiwi fruits or fiat currencies: people wanting them is what gives them value. In the case of bitcoins, people want them not to pay taxes, but because cryptocurrencies offer benefits that only them can provide, so people see value in that.

A difference in the case of any currency, fiat or otherwise, is that a huge part of the reason people want them is an expectation that others will want them tomorrow.

Re: Bitcoin Surges Past $400

#248

Post by bduerst »

Atheros wrote: post #240
bduerst wrote: post #140

Earlier quoted context omitted.

There's a lot of pump and dumps [1] with bitcoin and other cryptocurrencies. [1] https://www.cryptocoinsnews.com/wp-content/uploads/2014/07/P...

There is no evidence of a pump currently happening. This is not a pump and dump.

Right - they asked about Bitcoin in general which is rife with pump and dumps.

The bubble right now is mostly a response to the MMM buzz.

Re: Bitcoin Surges Past $400

#249

Post by gwern »

dperfect wrote: post #226
gwern wrote: post #222

Earlier quoted context omitted.

> and a price "boosted only by the float" is no different from a price boosted by anything else But the float is much smaller than the total volume of the fraud. If MMM is doing $10b of fraud a year, then it's not boosting Bitcoin's marketcap by $10b as one might naively guess ('$10b fraud drives Bitcoin price growth!' scream the headlines), it's boosting the price by much much less, by just the float (which could be…

I don't think anyone claimed that there was 1:1 relationship between the volume of this (or any other) fraud and a change in bitcoin's market cap. As far as bitcoin is concerned, the particular details of the fraud are entirely irrelevant.

I don't think anyone was as exactly specific as that, but in reading discussions of MMM's possible contribution, the description was almost universally (on Reddit and HN) comparing, explicitly or implicitly, the previous MMM's total volume to the Bitcoin market cap, showing that pretty much everyone seems to have been intuitively confusing stocks with flows - the unspoken argument seems to be 'the old MMM's total was about as large Bitcoin's market cap is now; the new MMM is also quite large and may be a large fraction of Bitcoin's market cap; therefore, the recent near-doubling of Bitcoin's market cap may be mostly or all due to new MMM's large total'.

Re: Bitcoin Surges Past $400

#250

Post by berns »

mrb wrote: post #246
berns wrote: post #243

Earlier quoted context omitted.

We were talking about fiat currency.

But there is no difference between kiwi fruits or fiat currencies: people wanting them is what gives them value. In the case of bitcoins, people want them not to pay taxes, but because cryptocurrencies offer benefits that only them can provide, so people see value in that.

Fiat currency is just a number. Who would want a number? It's taxes that create demand. The problem with the supposed usefulness of bitcoins is that the interesting part is the technology, but the numbers are irrelevant. You can make a transaction for 1 bitcoin just the same that you can make it for 0.0001 bitcoin. Now matter how you dice it, ultimately the number has no real value.
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