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It can all go to zero

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Re: It can all go to zero

#331

Post by twblalock »

adamnemecek wrote: post #294
twblalock wrote: post #290

Earlier quoted context omitted.

> I meant google as a company. I'm not sure what difference this makes. As you can see here, Google has billions of assets, of which $19.7 billion are buildings.

Which is only a fraction of google and no one buys google for their real estate.

That's beside the point. The stock won't go to zero because it represents a share of ownership in a company that has billions of dollars more in assets than in liabilities. Real estate is just one of the many assets.

Edit: I thought I posted a link to Google's balance sheet in my parent comment, but apparently I left it out: https://www.marketwatch.com/investing/stock/goog/financials/...

Re: It can all go to zero

#332

Post by danhak »

raiyu wrote: post #330
walrus1066 wrote: post #291

Earlier quoted context omitted.

I don't think the value of an asset is derived purely from scarcity, or the effort required to make it. What if the asset itself has no use? If I spend 1000 hours making a really bad doesn't, it'll have a value of zero, even though it's unique and a lot of work was put into it. I haven't created value, I've destroyed it, I.e. All that time and nothing to show for it.

I'm not asserting that scarcity or effort alone create value, but without those two components you won't have value. So not everything that is limited is valuable, however everything that is valuable is limited. Just imagine if someone figured out how to engineer gold out of thin air, the value of gold would drop instantly.

> I'm not asserting that scarcity or effort alone create value, but without those two components you won't have value.

That's literally exactly what you asserted:

> The opposite of this is where Bitcoin derived it's value. First there is a fixed number of Bitcoin, so you can't simply make more past a point. Secondly, the effort required to mine Bitcoin increases over time.

Re: It can all go to zero

#333

Post by chrisco255 »

overhang wrote: post #286
chrisco255 wrote: post #253

Earlier quoted context omitted.

We don't know for sure, we only know that banks are not lending against crypto, for obvious reasons. What folks are putting on their credit cards, etc, well that is impossible to really track, but shouldn't be any different than retail sales, etc.

You've obviously left out the people who have taken seconds on their houses, home equity lines, student loans, payday loans, and all the other forms of debt that could finance a purchase. And credit card debt alone could easily explain all the value in all the cryptocurrencies combined.

So, I've heard like 3 accounts of people taking out seconds on their houses. I don't think this is a widespread practice. Do you know how many trillions of dollars were loaned out during the real estate boom? Unless you have data to back up your claims that most of the money in crypto is leveraged on the back of all these lines of credit you quoted, I think that's dubious to say.

At any rate, the value of cryptocurrency market isn't a reflection of the amount of money that has been poured into it. The market cap is a product of the last price paid on any given exchange times the circulating supply of currency. So a $500B market cap might be the result of less than $50B worth of cash infusion, so long as the last person who bought in paid $13K for a Bitcoin.

Re: It can all go to zero

#335

Post by rpedela »

adamnemecek wrote: post #264
tbabb wrote: post #261

Earlier quoted context omitted.

It absolutely boggles my mind that so many people in this thread cannot conceive of a run on crypto. I assume they probably don't even know what a "run" is . And it boggles my mind that their only conception of failure is some kind of catastrophe or monumental event, like nuclear war, or quantum computing breaking cryptography. LITERALLY ALL THAT NEEDS TO HAPPEN IS THAT PEOPLE SUDDENLY WANT IT LESS . Excuse my caps.…

Ok, who's doing this run? There are too many people at this point. There ins't a single entity that is currently capable of controlling all markets at all time. Or like predictably. It's funny, in this thread you dont really see much crypto optimism despite this meme being around for some time now. > What is being traded is like MMORPG game money or game items. There's definitely that aspect to crypto but its naive t…

The fact that there are "too many people" is why a run is possible [1]. If enough people start believing Bitcoin is going to lose value, there will be a run/crash. Ironically threads like this one, news of Bitcoin regulation, etc are helping to make those "too many people" worried.

https://en.wikipedia.org/wiki/Bank_run

Re: It can all go to zero

#336

Post by [deleted] »

davidiach wrote: post #266
tbabb wrote: post #261

Earlier quoted context omitted.

It absolutely boggles my mind that so many people in this thread cannot conceive of a run on crypto. I assume they probably don't even know what a "run" is . And it boggles my mind that their only conception of failure is some kind of catastrophe or monumental event, like nuclear war, or quantum computing breaking cryptography. LITERALLY ALL THAT NEEDS TO HAPPEN IS THAT PEOPLE SUDDENLY WANT IT LESS . Excuse my caps.…

That's like saying the price of the Mona Lisa can go to zero just because people suddenly want it less. Things like that don't just suddenly happen for no reason.

[deleted]

Re: It can all go to zero

#337

Post by rpedela »

cableshaft wrote: post #259
overhang wrote: post #65

Earlier quoted context omitted.

Were you around a few years back to see real estate values drop from $300K to $25K? I saw that. And we are talking about a physical property. $25K is not zero, but it would be hard to distinguish the effective difference if you're leveraged $250K. So, as with any investment, if you're spending monopoly money on cryptocurrencies, scoff away. But if your retirement depends on it...

You still have a house to live in, no matter what it's worth. I've never thought you should see a house as an investment, and 2008 proved that. I don't have monopoly money in crypto, in fact I just cashed enough out to put a downpayment on a house just yesterday (fortuitous timing), but I understand how volatile the market is and I only invest what I can afford to lose. Honestly if crypto did lose 95% of it's value o…

> You still have a house to live in, no matter what it's worth.

Maybe. If you actually own the house, sure. But many people had a mortgage, lost their jobs, and they couldn't afford the mortgage any longer. Additionally you can borrow against the value of your house. But since that house was practically worthless, they couldn't borrow to get through the job loss.

Re: It can all go to zero

#338

Post by hndamien »

hndamien wrote: post #322
Joeri wrote: post #289

Earlier quoted context omitted.

Drugs have a purpose beyond trade, cryptocurrency doesn’t. Make it illegal to sell, and there’s no reason to buy it.

Make alcohol illegal to sell and there's no reason to buy it. Got it!

I see, my mistake. You are suggesting that trade outside of the purview of Governments has no utility. It must be a wonderful place where you live.

Re: It can all go to zero

#339

Post by koonsolo »

rsuelzer wrote: post #147

I see Dogecoin is no longer at it's 2 billion dollar market cap. When my dad asked me if I thought BitCoin was in a bubble, I told him that the fact that a parody coin had a market capitalization of two billion dollars seemed to indicate that something was off.

While on one hand I agree with you, on the other hand, remember the million dollar web page? In the end it was worth a million dollars.

So who's to say a parody coin isn't worth that much? It certainly caught everyone's attention.

But yeah, it is questionable, and a serious indicator there is a lot of "me too" money in the cryptocurrency space.

Re: It can all go to zero

#340

Post by kybernetikos »

inyourtenement wrote: post #125
kybernetikos wrote: post #57

Earlier quoted context omitted.

You're right. Bitcoin was a significant and interesting technological step even if it ultimately fails in other ways. As long as we have a civilisation there will always be someone prepared to run a miner and own some for historical interest. Maybe 0 isn't right for bitcoin but it is possible for it to go incredibly low and there are altcoins for which there isn't even any historical interest....

> As long as we have a civilisation That is a crazy claim.

I agree, but I don't retract it.

People still occasionally perform music from 2000 odd years ago, which I would consider to belong to a different civilization to our own.

https://en.wikipedia.org/wiki/Seikilos_epitaph

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