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Bitcoin Bubble Makes Dot-Com Look Rational

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Re: Bitcoin Bubble Makes Dot-Com Look Rational

#81

Post by dmichulke »

csomar wrote: post #65
dmichulke wrote: post #26

Earlier quoted context omitted.

> 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.

You are deflecting to a problem of definition ;)

Yes, you have the same amount but no it doesn't purchase as much as it did one year ago. Units of accounting only make sense within a context of other units of account.

A dollar by itself is just a piece of paper if you cannot buy an amount of wheat, water or square meters with it.

And by that measure the dollar is losing value vs a bitcoin.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#82

Post by drcode »

f_allwein wrote: post #9

Old saying: "What's common in every bubble is the belief that this time, it will be different." -> if you invest in cryptocurrencies, make sure not to invest more than you can comfortably lose (probably a few percent of your overall funds).

Oh, but the naysayers in the media who have predicted bitcoin's collapse every month for years and have been wrong every time are of course given a free pass and are allowed to say "this time it's different" once again.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#83

Post by scotty79 »

leereeves wrote: post #70
scotty79 wrote: post #63

Earlier quoted context omitted.

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.

Gold only requires worldwide network of traders and physically secure holding places and general sense of security so it can change hands.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#84

Post by muzani »

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.

Not sure about everyone else, but I use it for international transactions. It saves me on the conversion rates and whatever banking issues.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#85

Post by csomar »

dmichulke wrote: post #81
csomar wrote: post #65

Earlier quoted context omitted.

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.

You are deflecting to a problem of definition ;) Yes, you have the same amount but no it doesn't purchase as much as it did one year ago. Units of accounting only make sense within a context of other units of account. A dollar by itself is just a piece of paper if you cannot buy an amount of wheat, water or square meters with it. And by that measure the dollar is losing value vs a bitcoin.

So? You just repeated what I said. My original comment was debunking the Bloomberg article.

When you hold 1 Stock, at the end of the year you get a dividend. You divide the dividend by the stock to get the P/E ratio.

That's not the same with USD or BTC. Its value fluctuates but it generates no income on its own.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#86

Post by andy_ppp »

AznHisoka wrote: post #67
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?

I thought because E is reinvested in a high growth company (Amazon in this case) your potential E is actually multiplied by that reinvestment.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#87

Post by leereeves »

scotty79 wrote: post #83
leereeves wrote: post #70

Earlier quoted context omitted.

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

Gold only requires worldwide network of traders and physically secure holding places and general sense of security so it can change hands.

All that's required to to exchange gold is one person that has gold and another person who wants gold and has something the first wants to trade for it.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#88

Post by alex_young »

criddell wrote: post #33
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?

I wonder how the environmental impact of mining gold compares to mining bitcoin?

Both are pretty bad.

Gold mining is mostly strip mining tons of ore, spraying it with cyanide, collecting the runoff, and refining that. Then you pack up and leave before someone makes you clean up.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#89

Post by cup-of-tea »

Ultimately this will come down to what value Bitcoin really has to society.

An investment is when you work to receive something you don't want, but that you think other people will want in the future so that you can exchange it for things you do want. If you work for money then you do investment. By working for money you are betting that when you need food at the end of the week the shopkeeper will take your money.

Investing in other things is no different. You make a bet that people in the future will want to trade the thing you buy for things that you want at that point. For example, you could buy a small amount of gold every month and when you are ready to retire buy an annuity with the gold. That's if anyone actually wants the gold in 30 year's time. If they don't then you'll have to eat the gold.

People often say that cash is a bad investment, but actually it's really great as long as you plan to spend it soon. What they mean is it's not a good long term investment, of course. But cash stays valuable because unlike other things you can exchange it for things you want almost immediately. Bitcoin is now not like cash because of the high transaction fees. So it now competes with things like gold. So you have to ask yourself: what do you think will still be valuable in 10, 20, 30 years time? Gold? Bitcoin? If Bitcoin isn't a yes for enough people, then it's a bubble.

Re: Bitcoin Bubble Makes Dot-Com Look Rational

#90

Post by 0bsidian »

Nursie wrote: post #50
0bsidian wrote: post #44

Earlier quoted context omitted.

>Anyone can fork the codebase, or even the blockchain, or one of the many other blockchains out there. There is absolutely nothing provable about BTC as a store of wealth. Let's rewrite the above as follows: >Anyone can copy Facebook's model, or even its code, or one of the many other social networks out there. There is absolutely nothing provable about facebook as a good social network.

>> >Anyone can copy Facebook's model, or even its code, or one of the many other social networks out there. There is absolutely nothing provable about facebook as a good social network. That's a false analogy. You can rewrite it that way if you like, but it doesn't actually show anything. The OP claimed that "one can provable show it’s a good store of wealth." That's more akin to saying that facebook will provably co…

I see what you mean, let me take back my previous comment, which was typed hastily.

I actually agree with you on the most part, you really can't prove that Bitcoin is a good store of wealth.

I am making an educated guess that a cryptographically secure way to transfer value for very cheap is probably here to stay, but it's far from provable.

In fact, if it were provable, it would become a very crowded trade and the returns would drop to zero immediately. The fact that it's unknown allows for potential greater returns (and greater losses if people who agree with me are wrong).

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