671–680 of 684 posts
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> People like Bitcoin's provable global ledger and this is where the value lies. What real world value has this brought?
The ability for the Chinese rich to get money out of their country. For one.
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It is exactly what you described and my explanation focuses on a specific scenario to make it very clear why your reasoning is flawed. You can't just assert that it's possible to sell a stock in the future for the same price that you bought it for and that will magically come true, you have to observe what actually happens in reality and whether reality is consistent with your beliefs. To better familiarize yourself…
Please provide an example of a stock that has a price that behaves the way you’ve described. That paper is talking specifically about ex-dividend dates, not long term behavior.
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So unless you burn cash in a fire or counterfeit money, the only entity that can create and destroy money is the Federal Reserve. Everyone else can only create "value". So I can combine two widgets together to make a third widget and sell it for less than you could do it. That's "value" in a nutshell. So on an exchange balance sheet (stockmarket, coinbase, etc), dollars aren't created or destroyed, just transferred f…
> So unless you burn cash in a fire or counterfeit money, the only entity that can create and destroy money is the Federal Reserve. I think this is generally false as a premise depending on your definition of “money”. If your definition of money is equivalent to US dollars then I guess this could be interpreted as correct, but other countries have “money” that isn’t issued by the Federal Reserve (the Federal Reserve…
Banks, exchanges (BTC or stock), and markets in the US all use dollars. So dollars it is.
"Value" can be represented by "money", but also by widgets, hay bales, labor, corporate stock, etc. AMD stock has "value" but is not "money".
> I don’t understand why you’re comparing the “value” of a stock or bitcoin with the “amount” of dollars
Dollars are transferred, but never created (unless you're the Fed). You "make money" by creating, or holding something of value and selling it. But you are not actually printing dollars -- really you're exchanging dollars for value.
Money doesn't have to be dollars it could be the North Korean Won, the Iraqi Dinar, Russian Rubles, etc, but it helps to have a stable currency to measure value. You could, yes, pay in Gold if you so desired.
> “Burning energy” is not removing value, it’s providing value by means of strengthening a proof of work blockchain. Whether that’s worth something to you is irrelevant to it being valuable to others.
That's where the disagreement is, right? I'll get to this in a minute.
> Bitcoin is not unlimited.
Today it is limited. It may change in the future. But more to the point, the original 21 million BTC came from thin air in the first place. There's only an "artificial" limitation in that people agree there will only be 21 million, and not a physical limitation.
People can't just code more coal or copper out of thin air.
So now the question is, how do you measure value?
> Even if you subjectively don’t believe Bitcoin is worth the value that’s spent to maintain its infrastructure, other people do and that’s reflected in the current economy.
Therein lies the problem.
All for-profit corporations want cash inflows that are greater than cash outflows. Corporations create things of value that other people or corporations want.
Profits must be objective, not subjective. "Value" can be subjective, sure, but profits must be objective.
So where do we find objective value in BTC? What about BTC drives economic efficiency?
Visa provides a bunch of services to merchants and customers. Yes they take a percentage of the transaction, but corporations realize the fee has value, since they don't have to do billing, fraud management in the VISA system, reconciliation, dealing with multiple banks, bad checks, etc etc etc. Those things have a direct measurable impact to a business, because they're cash outflows.
When we look at BTC we see money exchanging hands for BTC plus some money going to miners.
But what's more interesting is when money doesn't exchange hands, but when BTC is just transferred (like a gift). In that value must be extracted out of BTC in order to confirm the transaction because this needs to be converted to dollars to pay the electric bills.
Today most corporations that supported BTC have shut off BTC as a means of payment. The barriers of entry are high, and pricing BTC to the value of your goods and services is a hard issue since BTC fluctuates. That makes BTC hard to trust.
> but that energy just happens to be the price needed to pay for a decentralized proof of work blockchain.
No argument there, but I fail to see what huge advantage it has for businesses and the economy over Visa, say. The economic advantage for criminals OTOH is easy to see -- it just has to be less expensive than traditional money laundering.
But if crime is like 1% of all BTC use, and using it to pay for services is like 4% (numbers are pulled out of my ass to make the point) of BTC, then 95% of the perceived value of BTC right now is for speculation. E.g. Elon Musk isn't buying $1bn dollars worth of goods on BTC or Dogecoin.
The only way to make money on BTC then would be to create more demand for BTC. And that's certainly what it looks like from my viewpoint.
But in the end, if it's only purpose is speculation, well then we're burning a lot of real world resources for it -- hence "burning value".
> Stocks have an external source of revenue, namely the profit that the company makes by selling its products and services to customers Hahaha somebody let GameStop, Tesla, and Virgin Galactic know about this rule.
About two weeks ago a coworker came into my office and told me he bought a cheap motherboard so he could mine bitcoin with his graphics card. Is it theoretically still possible to make a profit with that kind of hardware nowadays? Please someone just tell me. I have no interest to do research into this. I just feel sadness for the crypto-bros.
AFAICT yes, but you mine ether or some other coin and either get paid in Bitcoin by a pool like ‘Nicehash’ or exchange it yourself. The others have become a proxy for Bitcoin.
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Please provide an example of a stock that has a price that behaves the way you’ve described. That paper is talking specifically about ex-dividend dates, not long term behavior.
Every stock publicly listed across all stock exchanges across the world. If you want one as a reference, you may use IBM which is listed on NYSE: https://finance.yahoo.com/quote/IBM?p=IBM
In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself . Ponzi schemers profit from lying to you where your money goes. With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make p…
> They do not pretend making your money work for you by some magical scheme. No. They instead take your money, buy coal, and burn it. Nothing is left. As you say, Ponzi schemers take money for themselves and keep it. Most of what Madoff stole was recovered, for instance. Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. So there’s nothing left to recover…
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You asked for any possible way. 1. Tether defaults. 2. People panic and sell at whatever price they can get. Let's say Bitcoin drops to $10k. 3. All miners that don't make a profit at $10k shut down. 4. With most miner's shut down, block times go from 10 minutes to 1 hour. 5. The fees to transact Bitcoin go up exponentially as people rush to get out. 10 Bitcoin to make it into a block, sure! 6. The price drops furthe…
at step 8, node operators and client devs would recognize that there is a crisis and there would be a hard fork if the stakes are high enough, code is not law, even in btc land
I have no idea how that would end up, how quickly they could organize, and what would happen in the mean time.