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Bitcoin's Golden Future

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Re: Bitcoin's Golden Future

#131

Post by prostoalex »

hamilyon2 wrote: post #72
delegate wrote: post #6

Bitcoin and other crypto require a well functioning internet infrastructure, otherwise it's just data on a hard-drive. Disconnect a country from the Internet (or filter the traffic) and you're forking the chain. Spend on both networks by buying other (unfiltered) crypto. There are states (even large ISPs) that can do that. Also, the first thing to go in case of global conflict is the global Internet. Countries will t…

Fork wold decrease number of miners working on the main chain. Thus destroy some value, and bitcoin price may be more volatile in days of fork. But no more than that. I cannot imagine any exchange/buyer accepting transactions from anything but the longest chain, and existence of the longest chain cannot be kept secret in modern world.

Ethereum Classic and Bitcoin Cash are still traded on exchanges.

Re: Bitcoin's Golden Future

#132

Post by prostoalex »

murph37 wrote: post #8
vocatus_gate wrote: post #2

The big mystery to me is whether Bitcoin is the Myspace or Facebook of digital currency. Only time will tell.

This is a large concern for me. If cryptocurrencies begin to attract more users and widespread adoption, what is preventing a new coin that corrects Bitcoin's inefficiencies from ultimately gaining more users and superseding it? I would love to know your guy's thoughts.

You need to bootstrap the infrastructure by convincing miners to join your cause. A well-heeled entity could just offer fiat money (which miners apparently still like), a less well-heeled entity could somehow differentiate at the mining level, e.g. by designing proof-of-work algorithms that would work on home GPUs or CPUs (and thus be accessible to billions of home PC users) which is what Litecoin and some others attempted to address.

The deflationary aspect of Bitcoin will probably get in the way at some point - hypothetically, if you owned BTC and USD today, why would you ever spend a BTC? Spending even costs you money (in transaction fees), while saving doesn't. It's the system that rewards hoarding.

Re: Bitcoin's Golden Future

#133

Post by vasilipupkin »

sbenitoj wrote: post #125
vasilipupkin wrote: post #117

Earlier quoted context omitted.

yes, but a faster car with all other features being equal gives you objectively more features. There is a reason BMW costs more than a Honda civic. Right? Or else, if there is no reason whatsoever, Honda should be able to advertise in a clever manner and sell that Honda civic for the same price as a BMW 7 series or a Tesla. I mean if it's all subjective, right? But we can all agree that no matter what a Honda civic w…

I'll give you the benefit of the doubt that you're not just trolling and you're actually trying to understand whether value is objective or subjective. Assuming you are, read the following link and let me know if you still think value is objective, and if so what parts specifically do you disagree with: https://wiki.mises.org/wiki/Subjective_theory_of_value

So if value is purely subjective, then surely some people would be willing to pay 100k for a Honda vs Tesla? Why doesn't Honda try to sell cars for 100k? Why isn't a cup of coffee at Starbucks 20 bucks ? If it's pure subjectivity, then surely that would work

Re: Bitcoin's Golden Future

#134

Post by vasilipupkin »

hossbeast wrote: post #123
vasilipupkin wrote: post #120

Earlier quoted context omitted.

Some people - yes. Some people prefer all sorts of things. Some people may prefer jumping off a bridge. That's irrelevant. On average, people will prefer an objectively better thing to an objectively worse thing and pay more for it

You've just used the term "objective" to describe what the term "objective" means. Surely you see the problem?

Look, cars that have specific features cost more than cars that don't have those features. That's objective. Stocks of companies that are very profitable, like google are more expensive than stocks of companies that are not. That's objective. Right ?

Re: Bitcoin's Golden Future

#135

Post by vasilipupkin »

ktta wrote: post #126
vasilipupkin wrote: post #108

Earlier quoted context omitted.

ehhhh, no. Stocks do not only have value when SEC deems that it can have value. That is completely incorrect. SEC simply regulates equity issuance, it doesn't set the price of each stock. BMW costs more than honda because it is objectively a better car. By objectively identifiable metrics. Yes, it's true there are some people who love cold climates. But in the US people are moving from cold climates to warmer climate…

> SEC ... doesn't set the price of each stock No it doesn't, but SEC has the power to allow the stock to get traded in the first place. So the value is subject to SEC's presence. If there is no SEC, there is no 'stock' for you to get dividends from. > BMW costs more than honda because it is objectively a better car. By objectively identifiable metrics. You discount the people do don't give care about the objective me…

Not correct. The price of the stock times shares outstanding is its value. Where does this value come from? Why are Apple and google doing so well? It's not, by your logic, because they are great companies - that would be an objective metric, no? Existence of the SEC doesn't make stock values subjective. Any argument here that starts with "some people" - is irrelevant. Everything we are discussing is about on average, statistically. On average, a beachfront condo in Miami will cost more than an equivalent condo in Iowa. Why? Because it's on the beach and people, on average, value that more than being somewhere in Iowa

Re: Bitcoin's Golden Future

#136

Post by vasilipupkin »

sbenitoj wrote: post #96
vasilipupkin wrote: post #58

Earlier quoted context omitted.

that's not quite the case. There is such a thing as objective value. Stocks have objective value because they pay dividends. Real estate in warm climates has objective value because it's pleasant to be in a warm place in winter. BMW costs more than a honda civic because it is objectively a better driving experience. Etc. Etc. So, no, it's not true that there is no objective value

Price is what people pay, value is what they get, and it's completely subjective. The only reason people pay more for a BMW than a Honda is because they perceive they're getting more value with a BMW than with a Honda. There is no such thing as an "objectively better driving experience" -- all value is derived from perception, and perception is individual.

Yes, but price that people are willing to pay is highly correlated to the value they get. And they tend to pay more for things that have some objectively better properties. Which is why tesla model s can sell for more than Honda Civic.

Re: Bitcoin's Golden Future

#137

Post by ericb »

acdha wrote: post #124
ericb wrote: post #121

Earlier quoted context omitted.

Coinbase has 10 million users, most of whom are there for bitcoin.

How many of them are active? How many hold non-trivial balances? Most importantly, how many sales would legal merchants lose if those users jumped ship or lost interest? Again, my point is simply that there's little holding anyone who hasn't made a huge investment specifically in Bitcoin. If you have $10 equivalent sitting in an account and CitiCoin™ launches next week with attractive terms and mainstream merchant ac…

The backing and even the existence of the United States is also simply a matter of group consensus. It is turtles all the way down, my friend. We're just debating whose delusions are bigger and better.

Re: Bitcoin's Golden Future

#138

Post by elevensies »

prostoalex wrote: post #129
elevensies wrote: post #64

Earlier quoted context omitted.

This is something I've been wondering about. Maybe someone with more bitcoin expertise could answer. Is there more mining capacity inside China than outside China? If so, and the Chinese government used their well-known firewall against Bitcoin for a matter of days to weeks, would Chinese miners have the longer chain? And thus the chain? I guess what I'm wondering is if the government of China has the ability to DOS…

The attack you're describing is analogous to 50%+1 attack. The chain will fork, and after Bitcoin + Bitcoin Cash and Ethereum Classic + Ethereum it's reasonable to assume both versions will co-exist to some degree.

Yeah, I think that is the right way to think about it. I had always considered that in terms of mining power, not in term s of network control, but it is effectively the same incentives and consequences, just with different players.

Re: Bitcoin's Golden Future

#139

Post by sbenitoj »

vasilipupkin wrote: post #134
hossbeast wrote: post #123

Earlier quoted context omitted.

You've just used the term "objective" to describe what the term "objective" means. Surely you see the problem?

Look, cars that have specific features cost more than cars that don't have those features. That's objective. Stocks of companies that are very profitable, like google are more expensive than stocks of companies that are not. That's objective. Right ?

Correct, but it's people's perception of value that ultimately drives the current stock price.

Take Amazon as an example, in 2016 its net income was $2.4 billion, yet it currently trades at a total market capitalization (the value of all outstanding shares) of $471 billion (or approximately 196x its net income) [0]

Compare that to Ford Motor Company, in 2016 its net income was $4.6 billion, yet it currently trades at a total market capitalization of $45 billion (or approximately 10x its net income) [1]

So Ford was actually MORE profitable than Amazon in 2017, but it's market capitalization is only 10% of Amazon.

So what's driving the differences? People's perception of value. People perceive that Amazon will be more profitable than Ford Motor Company in the future, even though objectively Ford is more profitable than Amazon right now.

[0] Amazon Financials - https://finance.google.com/finance?q=NASDAQ%3AAMZN&fstype=ii...

[1] Ford Financials - https://finance.google.com/finance?q=NYSE%3AF&fstype=ii&ei=z...

Re: Bitcoin's Golden Future

#140

Post by sbenitoj »

vasilipupkin wrote: post #133
sbenitoj wrote: post #125

Earlier quoted context omitted.

I'll give you the benefit of the doubt that you're not just trolling and you're actually trying to understand whether value is objective or subjective. Assuming you are, read the following link and let me know if you still think value is objective, and if so what parts specifically do you disagree with: https://wiki.mises.org/wiki/Subjective_theory_of_value

So if value is purely subjective, then surely some people would be willing to pay 100k for a Honda vs Tesla? Why doesn't Honda try to sell cars for 100k? Why isn't a cup of coffee at Starbucks 20 bucks ? If it's pure subjectivity, then surely that would work

Well, all prices are still determined by the intersection of supply and demand.

I'm not saying that the objective features are IRRELEVANT to a consumer's purchase decision, obviously they're not, but ultimately each person values what they're buying differently than the next person.

I'll run with your coffee example:

Let's say someone currently values a cup of Starbucks at $6 / cup and Starbucks is selling it for $4 / cup. If Starbucks raises their prices above $6 / cup (to $20 like you say), that person would no longer purchase Starbucks coffee unless their values change. But there's a good chance that SOME people (a small minority no doubt, but probably not zero people) currently value Starbucks at more than $20 / cup, those people would continue to buy coffee from Starbucks unless their values change.

As prices for Starbucks coffee increase and exceed the amount that individuals value it, those people will begin to explore alternatives on the market to determine if there is another comparable good that meets their needs at a price less than they value it.

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