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Bitcoin Bubble Makes Dot-Com Look Rational

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Re: Bitcoin Bubble Makes Dot-Com Look Rational

#61

Post by charlesdm »

beaconstudios wrote: post #54
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.

Gold has close to no use cases (80%+ is store of wealth) and seems to be doing fine at an $8tn global market cap.

Of the potential 21m Bitcoin in existence, 4m are assumed to have been permanently lose. 16m have been mined. That leaves 1m coins left to be acquired in the future.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#62

Post by davidmurdoch »

y04nn wrote: post #21

People should not see cryptocrruencies as a stock market, you should not expect any ROI, it's not a placement. Cryptocrruencies (for me) are meant to be used, exchanged, a good metric to value a cryptocrruencie should be the 'cash flow (? exchange of money per unit of time)'. Bitcoin is actually inefficient with its high transaction fees.

Transaction fees are about $5-7 USD right now, which for transactions over $200 makes it cheaper than using a credit card, and definitely cheaper than a wire.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#63

Post by scotty79 »

leereeves wrote: post #35
charlesdm wrote: post #24

Earlier quoted context omitted.

It's (looking like it's turning out to become) digital gold. When is the last time you bought a family dinner with gold?

Maybe it's digital gold. Maybe when the price stops rising no one feels any desire to buy it anymore and people are left holding worthless numbers.

Like people holding gold in the period when gold does not appreciate are left holding worthless chunks of metal?

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#64

Post by Twisell »

benbou09 wrote: post #34
tobyhinloopen wrote: post #13

Earlier quoted context omitted.

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…

What do you mean by 'anything significant'? Paper money is not backed by anything material. Rather, it is backed by institutions (central banks, governments, banks) and individuals using them. To me, that's pretty much the same as cryptocurrencies.

Not exactly, if your country economy collapse you still live in your country and are onboard with your fellow citizen to start anew.

If bitcoin collapse you are totally on you own while your neighbors that never invested in bitcoin remain totally unharmed by this virtual event.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#65

Post by csomar »

dmichulke wrote: post #26
csomar wrote: post #12

> Take dot-com stocks, which were the biggest bubble of the past few decades, and likely the largest in stock market history. At the height of the dot-com stock bubble, the technology-heavy Nasdaq stock index had a price-to-earnings ratio of 175. In the past year, bitcoins have generated transaction fees of nearly $219 million. And at $9,600 a piece, the total value of all bitcoins -- their market cap -- now tops $15…

> What kind of logic is that? Holding bitcoin doesn't give you any earnings. Well, holding USD gives you inflation (i.e., negative interest). Holding BTC doesn't (assuming the 21 mn are already priced in).

Eh, nope. That's not how it works.

Holding 1 USD will give you 1 USD after 1 year.

Holding 1 Bitcoin will give you 1 Bitcoin after 1 year.

You are confusing the unit you are holding with the value "vs" another unit. That depends on the market and the external factors (like inflation, interest rates, etc...)

But holding 1 Unit will always give you 1 Unit of whatever you are holding.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#66

Post by scotty79 »

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…

> Because it is a useless resource. It is only worth something because other people say it is worth something

So, like art?

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#67

Post by AznHisoka »

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…

How about the "E" in non dividend stocks? How does owning 1% of Amazon entitle me to 1% of their earnings?

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#68

Post by 0bsidian »

Nursie wrote: post #59
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.

I don't think I claimed that anything is a "guarantor of the future".

I am simply pointing out that networks are valued with reference to their size, not on whether their code base is unique.

Bitcoin and Facebook are two examples of this principle.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#70

Post by leereeves »

scotty79 wrote: post #63
leereeves wrote: post #35

Earlier quoted context omitted.

Maybe it's digital gold. Maybe when the price stops rising no one feels any desire to buy it anymore and people are left holding worthless numbers.

Like people holding gold in the period when gold does not appreciate are left holding worthless chunks of metal?

Gold doesn't require a worldwide network of specialized computers to continue operating so it will continue to be useful.
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