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Bubble, Bubble, Fraud and Trouble

nytimes.com

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Re: Bubble, Bubble, Fraud and Trouble

#51

Post by vubuntu »

ThomPete wrote: post #16

> Bitcoin, by contrast, has no intrinsic value at all. The idea of intrinsic value should die. It's fundamentally a complete misunderstanding of what value is based on. FIAT currency and Bitcoin have value as long as people believe it has value. Value isn't some objective criteria it's a highly subjective one, what one considers valuable another might not. depending on what we are talking about, you can then add some…

Goods have intrinsic value...currencies don't. They are just trusted (and backed by a public trusted entity, usually government, but need not be) stores to 'hold' transferred 'value' that lubricates an otherwise raw barter exchange economy.

Raw barter economy: I provide service to someone in exchange for food/clothes

Currency lubricated economy: I provide service to someone. They give me 'token(s)' equivalent to value of my service. I use the token(s) to buy what I want from someone else.

The token(s) need to be trustable, not-easily-duplicatable, should be equal to the total sum of values of all services + goods that exist in the society/economy. The token(s) needn't have any intrinsic value themselves other than the properties mentioned (probably more than the listed ones, but I listed basic ones)

Re: Bubble, Bubble, Fraud and Trouble

#52

Post by JKCalhoun »

charlesdm wrote: post #43
JKCalhoun wrote: post #25

Earlier quoted context omitted.

> If people use Bitcoin and believe it has value, it _gives_ it value and credibility Unless what is driving up the price is speculation. I mean, do most of these new-to-bitcoin users actually "use" Bitcoin? Purchase with it? Or are they holding, waiting to dump?

The same can be said about diamonds and art, however. The only difference here is that it's a digital vs a physical asset.

You're right, but I don't think we've seen either of those skyrocket like Bitcoin. If one or the other was up 5800% perhaps we might call it a bubble....

Re: Bubble, Bubble, Fraud and Trouble

#53

Post by JKCalhoun »

Maybe I heard it on "Marketplace" recently — but the gist of it was (and I think it was focusing on young South Koreans) people were buying Bitcoin because all other options for getting rich quick seemed out of reach.

It was a sobering portrayal of Bitcoin as little better than a desperate lottery or roulette spin for a generation that feels left behind by the growing financial inequity (inequality).

Re: Bubble, Bubble, Fraud and Trouble

#54

Post by andirk »

acdha wrote: post #33
sf_rob wrote: post #22

Some of the worse points of this article: 1) "Bitcoin turns out to be a clunky, slow, costly means of payment". This is missing the phrase "right now". There is nothing inherent/unfixable in Bitcoin or competing cryptocurrencies that make them bad for payments in a technical sense (maybe in a exchange rate risk sense but that's not the claim being made). Yes Scaling, Speed, Security, and UX are issues, no those aren'…

> This is missing the phrase "right now". There is nothing inherent/unfixable in Bitcoin or competing cryptocurrencies that make them bad for payments in a technical sense It’s been a decade and Bitcoin has never delivered on that promise despite heavy marketing pushes and huge amounts of capital. At some point it’s not reasonable to give the benefit of the doubt until something ships.

With less traffic on the network circa a year ago and before, it was plenty fast and cheap. I think it's in need of an upgrade so it can make bitcoin great again.

Re: Bubble, Bubble, Fraud and Trouble

#55

Post by ThomPete »

vubuntu wrote: post #51
ThomPete wrote: post #16

> Bitcoin, by contrast, has no intrinsic value at all. The idea of intrinsic value should die. It's fundamentally a complete misunderstanding of what value is based on. FIAT currency and Bitcoin have value as long as people believe it has value. Value isn't some objective criteria it's a highly subjective one, what one considers valuable another might not. depending on what we are talking about, you can then add some…

Goods have intrinsic value...currencies don't. They are just trusted (and backed by a public trusted entity, usually government, but need not be) stores to 'hold' transferred 'value' that lubricates an otherwise raw barter exchange economy. Raw barter economy: I provide service to someone in exchange for food/clothes Currency lubricated economy: I provide service to someone. They give me 'token(s)' equivalent to valu…

Bitcoin is not a currency its a store if value. The currentb intrincis value is the curent value of the bitcoin.

Re: Bubble, Bubble, Fraud and Trouble

#56

Post by dragonwriter »

bonestamp2 wrote: post #48
dragonwriter wrote: post #41

Earlier quoted context omitted.

> For example, the US Dollar is valuable not because that's the only accepted currency for paying taxes but because it's the only currency that nearly every retailer in the country accepts. The former is a significant part of the reason for the latter. > There's a big difference between bitcoin use in general and bitcoin use on the dark web. There's clearly a difference, but if a large share of the non-speculative tr…

> The former is a significant part of the reason for the latter. Obviously there's a feedback loop where people are paid in a currency and then people have that currency so retailers accept that currency and then they pay their employees with that currency, etc. But I don't think anyone has recently sat down to think about which currency they're going to use on a daily basis and selected that currency because it's th…

> That central bank issues that currency because they want to control the economy (as Krugman mentions).

No, they issue it because that's what the government charters them to do. They enact particular monetary policy to control the economy, which only works because the currency is dominant in trade, which it is because the government systematically favors it (it's true that taxation isn't the whole story here, though, there's also legal tender status, the government issuing public benefits in the currency, minimum wage laws and other laws that are keyed off official currency and which are much harder to comply with if you use some other currency that floats against it, etc., etc., etc.)

Re: Bubble, Bubble, Fraud and Trouble

#57

Post by ThomPete »

prostoalex wrote: post #34
ThomPete wrote: post #16

> Bitcoin, by contrast, has no intrinsic value at all. The idea of intrinsic value should die. It's fundamentally a complete misunderstanding of what value is based on. FIAT currency and Bitcoin have value as long as people believe it has value. Value isn't some objective criteria it's a highly subjective one, what one considers valuable another might not. depending on what we are talking about, you can then add some…

This argument did not exist with BTC at two- and three-digit price levels. Instead BTC was advertised as useful for (a) microtransactions on the Web, such as paying Web publishers or e-mail recipients (21.co second business model), (b) buying a drink at the trendy neighborhood coffee shop that accepted BTC, (c) transacting with strangers on sites like Silk Road, (d) buying stuff from Newegg, Overstock and ever-expand…

Gold wasn't originally a store of value nor used in technology. The world is filled with companies that started as one thing and ended up completely different.

In reality, it's not an argument, there isn't some supreme court of judges sitting there valuing the intent vs. the outcome.

You are creating your own arbitrary rules for judging BTC. That's fine but it's not an argument.

Re: Bubble, Bubble, Fraud and Trouble

#58

Post by ThomPete »

philipwhiuk wrote: post #36
sf_rob wrote: post #22

Some of the worse points of this article: 1) "Bitcoin turns out to be a clunky, slow, costly means of payment". This is missing the phrase "right now". There is nothing inherent/unfixable in Bitcoin or competing cryptocurrencies that make them bad for payments in a technical sense (maybe in a exchange rate risk sense but that's not the claim being made). Yes Scaling, Speed, Security, and UX are issues, no those aren'…

Having to verify 'n' times is a core part of why Bitcoin is time consuming to process transactions and also why it's hard to fix. It's not also sufficient for a technology to say 'maybe something awesome will be invented to make this useful' in order for us to consider the base tech useful. Maybe in the future we will discover a fantastic use for mud that allows us to travel faster than the speed of light. Until then…

It's not useless at all. It serves as a store of value, that's all it needs. It doesn't need to be a currency.

Re: Bubble, Bubble, Fraud and Trouble

#59

Post by ThomPete »

cableshaft wrote: post #23
ThomPete wrote: post #16

> Bitcoin, by contrast, has no intrinsic value at all. The idea of intrinsic value should die. It's fundamentally a complete misunderstanding of what value is based on. FIAT currency and Bitcoin have value as long as people believe it has value. Value isn't some objective criteria it's a highly subjective one, what one considers valuable another might not. depending on what we are talking about, you can then add some…

I think the world should just start using board games as a currency. They have a lot of value to me, and I'd be rich under this new paradigm. Also, some of those board games are really hard to get ahold of, and they last a really long time (I own games that are 60+ years old, much older than most dollars in circulation last). BTW, I agree with you. I'm just trying to convince the masses that this is a good idea.

I am sure some of your boardgames have increased in value simply for being old.

Re: Bubble, Bubble, Fraud and Trouble

#60

Post by charlesdm »

JKCalhoun wrote: post #52
charlesdm wrote: post #43

Earlier quoted context omitted.

The same can be said about diamonds and art, however. The only difference here is that it's a digital vs a physical asset.

You're right, but I don't think we've seen either of those skyrocket like Bitcoin. If one or the other was up 5800% perhaps we might call it a bubble....

I beg to differ: http://www.dw.com/en/salvator-mundi-da-vinci-painting-that-s...

Quantitative easing has inflated asset prices across the board.

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