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Will Bitcoin Make a Good Investment?

beth.technology

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Re: Will Bitcoin Make a Good Investment?

#31

Post by gerikson »

comboy wrote: post #19
2bitencryption wrote: post #4

Once thing I've noticed about Bitcoin is that there are many "alt-coins" that seem to deliver better on Bitcoin's promises from a technical perspective, but those coins are forever stuck in Bitcoin's shadow because BTC has that first-mover advantage. And as a currency, the first-mover advantage is HUGE, because who wants to convert their investments from a hugely popular coin to one that could disappear tomorrow? So…

Sidechains allow you to migrate to a completely different system without losing the storage of value property.

Are there any live sidechains in production? I thought the team behind them moved on to the Lightning Network.

Re: Will Bitcoin Make a Good Investment?

#32

Post by srib »

juanbyrge wrote: post #26

Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.

In the conventional way, you are right.

However, there is a system that is evolving to generate returns for your open lightning network channels. They do generate small amount of returns. [0]

[0] https://medium.com/@timevalueofbtc/the-lightning-network-ref...

Re: Will Bitcoin Make a Good Investment?

#34

Post by Toine »

sedeki wrote: post #14
jamisteven wrote: post #6

Short answer: hell no. What gives currency value is how often people use said currency to purchase goods, nobody uses Bitcoin, not to the extent of any real currencies anyways.

Bitcoin is not modeled to be a currency (= stability in prices denominated in it), it is modeled to be a commodity (= gold).

Bitcoin is not a commodity. Commodities have a real word purpose. Gold has inherent value by its uses. That's why you pay a damn fortune to acquire it. What real world use has Bitcoin ? None.

Re: Will Bitcoin Make a Good Investment?

#35

Post by Udik »

Pinckney wrote: post #21
sedeki wrote: post #5

Earlier quoted context omitted.

What exactly does it mean when people say that a currency is backed by a government? ”Backed” to me implies, e.g., redeemable for gold which is clearly not the case for the US dollar. Is it that the government issue bonds denominated in that currency? But that has nothing to do with the money supply per se...? Please explain.

The US government accepts payment for taxes in USD. Even if an American wants nothing to do with USD, and conducts all their exchanges through bartering, they will need to acquire some at some point in order to make tax payments. The value of USD can't fall to 0 as long as the federal government retains the ability to impose taxes.

That sounds like a strange argument. Nobody can pay their taxes in gold, still gold has a value, right? And on the other hand, the value of the USD can fall to practically zero, as it happened to many other currencies before, despite the governments of the respective countries imposing taxes in those currencies.

Bitcoins are, of course, nothing. But it's a nothing that is pretty guaranteed to stay, to be in rigidly limited supply, and that is easily exchangeable. People give it a value that depends on their expectations of other people's willingness to buy them. Would you buy 10 bitcoins from me at $1000 each? I bet you would without hesitation. We're talking of giving a $1k value to something that is useless and completely immaterial, yet you just know it's an excellent deal.

Re: Will Bitcoin Make a Good Investment?

#36

Post by wickoff »

2bitencryption wrote: post #4

Once thing I've noticed about Bitcoin is that there are many "alt-coins" that seem to deliver better on Bitcoin's promises from a technical perspective, but those coins are forever stuck in Bitcoin's shadow because BTC has that first-mover advantage. And as a currency, the first-mover advantage is HUGE, because who wants to convert their investments from a hugely popular coin to one that could disappear tomorrow? So…

You've accidentally stumbled upon the Bitcoin's true strength in your own answer.

> unless the group governing it decides to 'fix' those flaws, but there's another issue, I don't want you messing with how my money works...

That's exactly the reason why arguably technically superior projects are worth less - they are constantly messing with how their money works.

The community around Bitcoin, it's so called "immune system" is incredibly conservative. All they care about is stability and security. Every new feature is being introduced as an opt-in soft fork. It can take around 3 years of rigorous testing and discussion to go from a BIP to a protocol upgrade. Yes, other projects may be technologically superior, but it doesn't matter because they are funny money and Bitcoin's rigor and resistance to change make it hard money.

Re: Will Bitcoin Make a Good Investment?

#37

Post by dawhizkid »

juanbyrge wrote: post #26

Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.

This is a very blanket statement.

Not all stocks have dividends. Most don't.

Some bonds have negative yields.

Some consider a store of value to be an investment (like, as you mentioned, gold or silver). Unlike gold or silver, though, there's a hard limit to the number of bitcoin that will ever be mined. It's not inconceivable that in the not too distant future we'll mine gold/silver/other precious metals from space, and prices will plummet.

Bitcoin can certainly provide dividends, not necessarily in the traditional sense, via future hard forks. Anyone who has held bitcoin in the last 2 years or so have already received equivalent amount of Bitcoin Cash and Bitcoin SV. Those chains can, in turn, hard fork, and assuming you have held you'd receive equivalent amounts of those forks, and so on.

Re: Will Bitcoin Make a Good Investment?

#38

Post by Udik »

Toine wrote: post #30
Udik wrote: post #24

Earlier quoted context omitted.

> Gold has practical, useful applications. Yes. But they don't remotely justify its value, which has been established long before its technological applications.

They do, gold is rare and useful, supply and demand, that's all.

Bitcoin is rare too, and has supply and demand too, so what?

Re: Will Bitcoin Make a Good Investment?

#39

Post by liquidise »

juanbyrge wrote: post #26

Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.

This strikes me as a somewhat semantic argument. Many stocks don't pay dividends. Flipping houses would also fall outside of your definition of investing. Buying gold has also been a relatively safe "investment" strategy as well, speculation or not.

Every form of investment is, at its core, speculation on some level. If i pour my savings into Apple and they tank, the dividends would pale in comparison to my losses.

Re: Will Bitcoin Make a Good Investment?

#40

Post by braythwayt »

juanbyrge wrote: post #26

Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.

People use the terms "invest" and "speculate" interchangeably, or they try to suggest that an "investment" has a lower risk than a "speculation," but your disambiguation is the correct one and it is vital to understand the difference between:

1. Putting money into something that generates a return of some kind, and which may also be sold to someone else, and;

2. Putting money into something where the only return you get is from selling it to someone else for more money.

Both practices can even involve the same kind of entity: If you buy a condominium and live in it, it is an investment. Your use of the property as a home is a return. If you rent it out, it is more obviously an investment.

Whereas, if you buy an empty plot of land and do not use it or rent it out as a parking lot/whatever, you are speculating in real estate.

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