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Bitcoin Surges Past $7,000 to Extend Record Rally

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Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#311

Post by indubitable »

slg wrote: post #226
tudorconstantin wrote: post #201

Earlier quoted context omitted.

Bitcoin's value is given by the trust people put in it. Just like with the fiat currencies as a matter of fact, because I don't know of any of them to be backed by anything else than trust. Of course, the US dollar has the whole US economy and the biggest army in the world as its plus, but it also has its minuses: the US treasury can and does print as many as it wants, in the detriment of ALL USD holders. Bitcoin's p…

>Bitcoin's value is given by the trust people put in it. Just like with the fiat currencies as a matter of fact Except fiat currencies also have that fiat behind them that gives them value. If you want to do business with the US government, you do it in USD. If you are one of the millions employed by the US government, you are paid in USD. If you manipulate USD, you have to answer to the US government. Those things a…

The nation backing of fiat also is its downfall. Look at our monetary base [1] for an example. The US adjusted monetary base in in 1984 was about $183 billion. In the 24 years to 2008 it increased at a roughly linear rate to $874 billion. Just from 2008 to 2015 it increased to more than $4 trillion.

The Fed themselves wrote an article [2] expressing some concern about the "nontraditional monetary policy" that instigated this sharp change in the monetary base. In their closing words, "Recent increases in the monetary base are far greater than any previously in American history (even adjusted for the size of the economy), surely a "noble experiment" in policymaking. Will these policies be successful without accelerating inflation? The epitaph to this curious case of monetary base expansion is yet to be written."

And really I think that final line quite succinctly sums up the state of modern economics. We've entered into an age of currency growing, inflation chasing, debt drive economics. And it's been working great for the briefest glimpse of time that we've been carrying out this experiment. Does that mean we've finally 'solved' economics, or does an epitaph that looks back somewhat less fondly on our decisions await? I don't know, but I do think the inherent stability of the fundamentals of bitcoin (e.g. - everything except the exchange rate) and the lack of trust it requires makes it a nice balance to our fiat experiments.

[1] - https://fred.stlouisfed.org/series/BASE

[2] - https://www.stlouisfed.org/Publications/Regional-Economist/J...

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#312

Post by cgb223 »

nikcub wrote: post #155
joefourier wrote: post #31

Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more tha…

> boasting much faster and cheaper transactions and real anonymity Cost me over $4 to send Monero transactions last month. Cost me about $3 to send a Bitcoin transaction this morning. The average and median transaction fees between the two networks have been pretty close for a while I like Monero but it has some way to go - it needs a light client, multisig completed, and hasn't really had to confront any scaling iss…

> Cost me over $4 to send Monero transactions last month. Cost me about $3 to send a Bitcoin transaction this morning. The average and median transaction fees between the two networks have been pretty close for a while

I might be wrong, but isnt the fee based on how much of the currency that you're sending?

Like, how much were you sending for each currency? If the amounts werent similar, the fees might not be accurate for similar amounts

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#313

Post by rensgspzn »

nikolay wrote: post #277
nikcub wrote: post #155

Earlier quoted context omitted.

> boasting much faster and cheaper transactions and real anonymity Cost me over $4 to send Monero transactions last month. Cost me about $3 to send a Bitcoin transaction this morning. The average and median transaction fees between the two networks have been pretty close for a while I like Monero but it has some way to go - it needs a light client, multisig completed, and hasn't really had to confront any scaling iss…

I see hundreds of my friends sending money free with Venmo each month. I know nobody having any slightest interest in Bitcoin or the likes. Once in a while, somebody would ask me if it makes sense for them to invest some cash into Bitcoin as they've heard about some crazy growth, but when I explain to them some, they all decide it's too risky, and those who are the anarchist type stick to gold.

> but when I explain to them some, they all decide it's too risky,

This isn't much of a surprise after looking at some of your prior comments regarding Bitcoin. A few gems:

> Yeah, imagine using Netscape in 2017 and not Chrome - that's pretty much how I look at Bitcoin.

> Thanks, but no thanks! I'd keep as far away from this stinking pile as possible!

> Mere mortals do not have Bitcoin and are not interested in it - at all.

> everything you can say about Bitcoin, you can say about land as well - it's scarce, but unlike Bitcoin, it has a real utility.

> the conspiracy theory that CIA/NSA created Bitcoin to catch crooks now makes more sense than ever.

> I don't believe in Bitcoin, which is majorly driven by low-class Chinese speculators and exchanges!

patio11 is that you in there?

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#314

Post by matthewmarkus »

mrb wrote: post #288
njarboe wrote: post #266

Earlier quoted context omitted.

Investment used to mean putting up capital to create or own something that, with some work, would return a stream of income. Farmland produces food with the work of farming. A factory produces goods with lots of people working. A mine produces iron or copper with lots of machines and effort. With the financialization of the economy, lots of people are increasing their "wealth" by speculation and skimming a percentage…

By your definition, this still leaves FX trading as a "pyramid scheme". Trading fiat for fiat doesn't "put up capital to create something".

In FX trading people are putting up capital to create exchange ratios, which is information. Right now people are putting up capital to determine how much coin issued by a central bank with a "deflationary" bias written in code and run and administered by a collective (i.e., Bitcoin) is worth vis-à-vis USD. Something is most definitely being created.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#315

Post by tinco »

noitsnot wrote: post #214
tinco wrote: post #108

Earlier quoted context omitted.

Gold, art and wine all have a utility value that's way below their "store of value" value. Bitcoin is just a more convenient store with an equally insignificant utility value. Whether Bitcoin can persist while offering so little value I don't know, just saying these valuations are not unheard of in the asset world. Just look at what people pay for mediocre Van Gogh paintings I wouldn't hang in my toilet..

I'm so tired of people trying to validate and prop up cryptocurrency with horrible comments and logic. Hanging a mediocre Van Gogh above your toilet? Unbelievable.

Where would you hang this one?

https://d32dm0rphc51dk.cloudfront.net/ujCq3y5qVUrIyPCG-M_v3w...

Don't get me wrong, he has a lot of pretty paintings too. Definitely some I'd pay upwards of $500 for to hang in my living room.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#316

Post by ktta »

nikcub wrote: post #155
joefourier wrote: post #31

Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more tha…

> boasting much faster and cheaper transactions and real anonymity Cost me over $4 to send Monero transactions last month. Cost me about $3 to send a Bitcoin transaction this morning. The average and median transaction fees between the two networks have been pretty close for a while I like Monero but it has some way to go - it needs a light client, multisig completed, and hasn't really had to confront any scaling iss…

>Cost me over $4 to send Monero transactions last month

Correct me if I'm wrong, but why couldn't you just decrease the fees you used? Monero has an adaptive blocksize, and transactions won't really get dropped if you used very low fees (unless you are very unlucky)

The mining dynamics are very different than Bitcoin in a way that it adjusts the blocksize to keep TX costs low. This isn't scalable but looks like they are working on it. (Search for 'hyc' on reddit and monero forums). I still haven't completely understood all of it, but here's[1] an explanation.

[1]:https://monero.stackexchange.com/a/4567

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#317

Post by googletazer »

joefourier wrote: post #31

Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more tha…

>but it has little uses outside of being worth a lot of money.

Absolutely, yet being a store of wealth is a use case in itself. Technically bitcoin is eclipsed by Ethereum (capability wise) and Monero (privacy wise)

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#318

Post by baddox »

slg wrote: post #226
tudorconstantin wrote: post #201

Earlier quoted context omitted.

Bitcoin's value is given by the trust people put in it. Just like with the fiat currencies as a matter of fact, because I don't know of any of them to be backed by anything else than trust. Of course, the US dollar has the whole US economy and the biggest army in the world as its plus, but it also has its minuses: the US treasury can and does print as many as it wants, in the detriment of ALL USD holders. Bitcoin's p…

>Bitcoin's value is given by the trust people put in it. Just like with the fiat currencies as a matter of fact Except fiat currencies also have that fiat behind them that gives them value. If you want to do business with the US government, you do it in USD. If you are one of the millions employed by the US government, you are paid in USD. If you manipulate USD, you have to answer to the US government. Those things a…

I think it’s a bit of a stretch to attribute much of USD’s value to business deals with the US government. That must be a tiny effect. I’d say most of the value comes from the fact that US workers have to pay taxes in USD even if they earned income in some other currency or asset.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#319

Post by whiskyant »

dleslie wrote: post #257
swalsh wrote: post #254

Earlier quoted context omitted.

I keep thinking about investing again, but I have a rule about investments. If I can't come up with a reasonable story to explain why supply and demand are the way they are. I don't invest. I can explain the supply side part... but the demand here baffles me. The best explanation I can come up with is "this thing is rising in price like a rocket, maybe I'll make some money" That's not a good reason to invest in my op…

At this point, the demand for bitcoin is driven primarily by its value; anyone acquiring it with the intent to use it in transactions is being foolish. Almost certainly they would be better off holding the BTC and processing the transaction with another currency.

Why would that matter?

If you buy something with $100 instead of buying it with bitcoin, that's $100 less you could've put into bitcoin. Or thinking about it another way, if you spend bitcoin and feel like you have less than you'd like to hold, you can simply buy more.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#320

Post by baddox »

tudorconstantin wrote: post #232
slg wrote: post #226

Earlier quoted context omitted.

>Bitcoin's value is given by the trust people put in it. Just like with the fiat currencies as a matter of fact Except fiat currencies also have that fiat behind them that gives them value. If you want to do business with the US government, you do it in USD. If you are one of the millions employed by the US government, you are paid in USD. If you manipulate USD, you have to answer to the US government. Those things a…

It might not be just the trust in value. BTC started at less than 1$ in value. The trust built over the last almost 9 years. It might be trust that you can't double spend BTCs, trust in the issuing algorithm, trust that you can only lose your bitcoins if you do something stupid with your wallet, etc. Of course, we can't compare right now bitcoin's ecosystem with the ecosystem of the fiat currency, but who knows what…

I think that’s what is meant by “trust in value.” The “real” value of Bitcoin is as a trustworthy ledger.
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