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Bitcoin Bubble Makes Dot-Com Look Rational

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Re: Bitcoin Bubble Makes Dot-Com Look Rational

#51

Post by lucozade »

DINKDINK wrote: post #17

Was the collapse of the German Deutsche Mark, the Zimbabwean Dollar, the Venezuelan Bollivar a bubble too? Good money drives bad money out, so I’d argue that no, Bitcoin’s price is not a bubble. Clearly there’s no price that bitcoin holders will sell at so they’re clearly exiting the USD ecosystem. I think the logical fallacy that’s occuring right now with critics of bitcoin’s price rise is that all bubbles has drama…

> Was the collapse of the German Deutsche Mark...

I think you may have this backwards. Your example currencies all tanked against USD. BTC is appreciating, heavily, against USD.

> so they’re clearly exiting the USD ecosystem

Sorry, are you suggesting that there's currently a run on USD? Because I'm pretty sure there isn't.

What you have here is pretty standard speculation in the price of BTC. I don't think you can read a lot more into it.

> Because bitcoin is measurable scarcity one can provable show it’s a good store of wealth

One can't, provably, do anything of the sort. It might prove to be a good store of wealth but neither its scarcity nor its current price gymnastics are indicators one way or the other.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#52

Post by lemondrops »

tobyhinloopen wrote: post #13
linards wrote: post #8

Earlier quoted context omitted.

how do you know?

How do I know what? That it will crash and burn? Because it is a useless resource. It is only worth something because other people say it is worth something, and unlike paper money it is not backed by anything significant. It is a bubble of hot air, ready to pop at any time. It might continue rising for years or decades. But it is not usable as a real currency, so it will always remain a useless waste of resources. T…

>> It is only worth something because other people say it is worth something

That is actually the very definition of most currencies currently in use [1]. Money is actually just a promise that someone will provide you goods or services in exchange for it sometime in the future, it has no intrinsic worth. Also, paper money isn't tied to anything [2] either, let alone the "digital" money we have in the banks.

[1] https://en.wikipedia.org/wiki/Fiat_money [2] https://en.wikipedia.org/wiki/Nixon_shock

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#53

Post by Tepix »

jpatokal wrote: post #22

Attempting price/earnings analysis here is not sensible, because bitcoin is not a stock: simply owning some doesn't earn you any "dividends" (mining rewards). A better parallel is gold, which is a store of value that produces nothing of value for its owners, but is valuable because the supply is limited and there's a collective belief that this shiny metal is worth much more than its practical uses. Bitcoin is going…

For the Casper update of Ethereum with proof of stake, this may turn into a useful metric. You can use your ETH to participate in the PoS lottery and thus earn ETH (a kind of dividend).

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#54

Post by beaconstudios »

charlesdm wrote: post #38

I don't get this. The dot-com bubble ran up to $6.7tn in market cap, in 2000, before crashing down to $1.7tn. The crypto space, which seems to be shaping into an entirely new asset class, has a $300bn valuation. That's less than the value of Facebook. The only reason why people are shouting bubble is because people were able to get in from the start, when these coins were 10 cents on the dollar. But when Facebook IPO…

also the fact that 99% of bitcoin's value is tied up in financial speculation rather than real world use cases, and the remaining 1% is drug dealing.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#56

Post by alex_young »

linards wrote: post #8
tobyhinloopen wrote: post #6

The idea is great, but in reality these stupid crypto coins are practically useless and wasting HUGE amounts of resources. Bitcoin is said to be consuming as much power a some countries, and still rising fast, while the amount of transactions is comically low compared to the power consumption. Bitcoin in its current state can never be a thing to actually buy something with. I don't see any other long-term use for bit…

how do you know?

The burden of proof is on the side saying "this time is different", the four most dangerous words in investing.

Of course we will have to wait and see yet again, because "the market can remain irrational longer than you can remain solvent."

Same song different drummer.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#57

Post by Tepix »

singold wrote: post #30

AFAICT transaction fees aren't the reason someone "invests" or buys bitcoin, if you buy bitcoin you don't get a fraction of those fees. If you want that you should invest in mining, so I think the initial part of the analysis is flawled. The second part looks like nothing to say, backed by a lot of non sensical numbers, but I'm not a native english speaker and also generally don't read nor like economic "analysis", s…

The high transaction fees and long transaction delays are turning into a reason why people are starting to question bitcoin.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#59

Post by Nursie »

0bsidian wrote: post #18

The idea that you can value bitcoin via P/E, utilizing mining fees as the "E" is incorrect. It's akin to valuing gold through P/E, by utilising the cost of extraction as the "E". This is obviously wrong because holding gold doesn't entitle the bearer to a portion of those mining costs, same with Bitcoin. The reality is that gold cannot be objectively valued because it doesn't have an objective value (beyond its indus…

You remember that there were other social networks before facebook dominated everything, right? Network effect now is no guarantor of the future.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#60

Post by Tepix »

pmorici wrote: post #31

Here is a chart of transaction volume on several of the major crypto currencies... https://bitinfocharts.com/comparison/transactions-btc-eth-bc... Anyone see a trend...

Yup. Bitcoin transactions have stagnated for the last year or so.

https://bitinfocharts.com/comparison/transactions-btc-eth-bc...

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