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Will Bitcoin Make a Good Investment?

beth.technology

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Re: Will Bitcoin Make a Good Investment?

#91

Post by pmiller2 »

icebraining wrote: post #83
mdorazio wrote: post #61

Earlier quoted context omitted.

In addition to the other responses here, the US government (through FDIC) guarantees that you won't lose your money in a bank account if something bad happens to the bank. That's a lot more important than most people give credit for.

That gives value to the banks , not to the currency. I could create my own currency and give you the exact same guarantees as the FDIC (since I can always print more), yet that wouldn't give it value, because all you get is more units of the same thing. If you disagree, I have some $IBs to sell you, and an insured account to store them!

No, it doesn’t give value to the banks. Banks only have value because you can use them to store and borrow money which has value. Your theoretical bank has no value because your theoretical currency does not, either. FDIC insurance reinforces the value that banks (and the currency one can access through them) already have.

Re: Will Bitcoin Make a Good Investment?

#92

Post by mdemare »

braythwayt wrote: post #44
liquidise wrote: post #39

Earlier quoted context omitted.

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.

Stocks that don't pay dividends are absolutely speculations. Flipping houses is absolutely speculating in real estate if you neither occupy them nor rent them out during the time you own them. Not all forms of investment are speculations at some level. If I own a landscaping business and invest in a truck, I can drive it until it goes to the junkyard. I generate a return that hopefully offsets the depreciation, and I…

Berkshire Hathaway does not pay a dividend - is it therefore speculation? Surely not - its valuation is based on it’s earnings.

Re: Will Bitcoin Make a Good Investment?

#93

Post by sedeki »

pmiller2 wrote: post #88
sedeki wrote: post #80

Earlier quoted context omitted.

The Zimbabwe government forced everyone to use their currency (Zimbabwe dollar, up until 2008 iirc, pretty sure they still have problems today...). Of course forcing everyone to use this currency created artificial demand for it. However, I don't see why adding "artificial demand" is an argument against bitcoin. EDIT: But sure, if government-backed means they force people to accept the currency, then it will have val…

Having value isn’t a selling point? You’re digging yourself into a hole here.

I was referring to government force.

"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."

https://news.ycombinator.com/newsguidelines.html

Re: Will Bitcoin Make a Good Investment?

#94

Post by mopsi »

pmiller2 wrote: post #82
mopsi wrote: post #71

Earlier quoted context omitted.

Industrial demand is only half the story. The value of gold also lies within the fact that unlike fiat currency, it cannot be created out of thin air. Global stockpiles of gold are well known, annual production is small and predictable. This means that if you sell a car for gold, you can expect that gold to be worth the value of a car a year or two from now. Fiat money does not offer such assurance, it can lose most…

Industrial demand isn’t the entire source of gold’s value, that’s true. I was more referring to it’s usefuln being the source of its value 2700 years ago when people started making coins out of it. I would argue that, beyond industrial demand and use in jewelry, the thing driving the price is primarily speculation. > ...if you sell a car for gold, you can expect that gold to be worth the value of a car a year or two…

> What you’re saying is that the car to gold ratio should be constant if your understanding is correct, right?

No. I am aware that the value of gold fluctuates, but it is safer than many national currencies, stocks of failing companies or overvalued real-estate. The amount of gold in the world is known and stable and there's no way to massively "print" gold to crash its value. This stable supply is mimicked by algorithms built into cryptocurrencies. As long as there is demand for a something, and there is limited supply of it, it will be worth >0. Cryptocurrencies satisfy both requirements: they are limited in supply and have demand because of their usefulness (fast & cheap transactions).

> Re:your criticism of fiat money, I would accept that if I lived in Venezuela, Zimbabwe, or Turkey. But, I’m talking about specifically the USD and other established currencies such as GBP and EUR. There is literally no danger that the US, UK, or EU is going to experience hyperinflation short of near total governmental collapse.

No need for hypotheticals. The government of Cyprus confiscated 47.5% of all holdings above 100 000 EUR in 2013 during its banking crisis. https://eu.usatoday.com/story/money/business/2013/07/29/bank... Cyprus is full member of the EU and Eurozone, so these risks are not limited to corrupt and failing third-world countries.

> Oh, and if you think BTC can’t be confiscated, I have news for you:

Most cryptocurrencies cannot be confiscated by network nodes like traditional banking institutions can freeze or rewrite payments and accounts (see Cyprus above). Only the one who has private keys controls the assets. This is a major feature.

Re: Will Bitcoin Make a Good Investment?

#95

Post by xorcist »

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…

Bitcoin has two things going for it:

The inflation is fair, in the sense that it is well known. It is also fair in the sense that nobody decides who gets the newly minted coins, everyone has an equal chance.

There is no creator still around. Nobody can dictate any changes to the rules. Sure, development is still ongoing, but if a change does not have close to unanimous consensus it's not going in. There seems to be a general understanding that unless this is so the community would be splintered which not make for a working economy and everyone would lose. Game theory holds this system in place.

(There have been a few coins which mostly shares Bitcoin's history, but so far the market seems to treat them as separate projects in their own right and valued separately, which so far seems to validate that theory.)

Not many other projects have managed to replicate the above (although some come close), so talking in terms of first mover advantage is selling the project a bit short.

Re: Will Bitcoin Make a Good Investment?

#96

Post by willmadden »

icebraining wrote: post #75
willmadden wrote: post #63

Earlier quoted context omitted.

This is inaccurate. Bitcoin could handle many, many more transactions per second than it currently does with less risk and technical complexity than has been introduced since we hit the blocksize limit in 2017. There's a lot of money making sure it does not get bigger. Instead it's being rate limited with high fees and limited throughput to force transactions onto "layer 2" systems that allow 3rd party companies (iro…

How does that make the previous post inaccurate?

Calling the development team "incredibly conservative" isn't accurate. The idea of Bitcoin is peer to peer electronic cash directly between two counterparties. The current roadmap doesn't focus on that as a priority and instead focuses on intermediaries for scaling. That isn't "incredibly conservative", it's a different system of priorities entirely, that have little to do with technical risk or original vision of Bitcoin.

Re: Will Bitcoin Make a Good Investment?

#97

Post by pmiller2 »

ziddoap wrote: post #67

Seeing so many comments (some here, but in general everywhere) still trying to argue and convince people that BTC has no value and you might as well burn your money. BTC has been around for a decade, how many more decades does it need to be around before people will admit that hey, maybe, for some reason, this has some sort of value ? People still arguing that BTC has no use .. 10 years of usage, adoption, and rising…

Ok, what can I buy with BTC vs what can I buy with USD? BTC is useless in comparison.

What exactly do people mean when they say they expect to make money on BTC? Do they mean they’ll get more BTC, or that they can sell it for USD or some other currency? Why do you think that is?

Re: Will Bitcoin Make a Good Investment?

#98

Post by ziddoap »

pmiller2 wrote: post #97
ziddoap wrote: post #67

Seeing so many comments (some here, but in general everywhere) still trying to argue and convince people that BTC has no value and you might as well burn your money. BTC has been around for a decade, how many more decades does it need to be around before people will admit that hey, maybe, for some reason, this has some sort of value ? People still arguing that BTC has no use .. 10 years of usage, adoption, and rising…

Ok, what can I buy with BTC vs what can I buy with USD? BTC is useless in comparison. What exactly do people mean when they say they expect to make money on BTC? Do they mean they’ll get more BTC, or that they can sell it for USD or some other currency? Why do you think that is?

I don't remember saying anything you can buy with USD you can buy with BTC. I never even hinted that BTC was a replacement for USD in any sense.

I don't know about everyone else, but here's what I mean when I say you can make money on BTC: Buy low, sell high.

Re: Will Bitcoin Make a Good Investment?

#99

Post by Udik »

pmiller2 wrote: post #46
Udik wrote: post #35

Earlier quoted context omitted.

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…

Gold has value because it’s useful, among other things. That base level of value is why people started making coins out of it in the first place. It’s properties as a physical metal make it easy to store, transport, and protect, all of which are good properties to have as a currency.

You didn't answer my question. Things have a value because people value them. Nothing has an "intrinsic" value, not bitcoins, not gold, not dollars, not food. I am not a bitcoin fanboy, but I find strange that many seem unable to grasp the fact that most of the value of anything lies in the willingness of other people to give us something in exchange for it, not in the good itself.

Re: Will Bitcoin Make a Good Investment?

#100

Post by pmiller2 »

ziddoap wrote: post #98
pmiller2 wrote: post #97

Earlier quoted context omitted.

Ok, what can I buy with BTC vs what can I buy with USD? BTC is useless in comparison. What exactly do people mean when they say they expect to make money on BTC? Do they mean they’ll get more BTC, or that they can sell it for USD or some other currency? Why do you think that is?

I don't remember saying anything you can buy with USD you can buy with BTC. I never even hinted that BTC was a replacement for USD in any sense. I don't know about everyone else, but here's what I mean when I say you can make money on BTC: Buy low, sell high.

You said people were arguing BTC had no use. I’m asking what I can use it for?

And, when you say buy low, sell high, low and high relative to what?

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