Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin exchange rate reached $100 USD per BTC

bitcoincharts.com

Post reply on HN
Print view View original

511–520 of 600 posts

Re: Bitcoin exchange rate reached $100 USD per BTC

#511

Post by brc »

tatsuke95 wrote: post #487
fragsworth wrote: post #358

Earlier quoted context omitted.

> To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. I hear this argument a lot, but no nation that we know of has ever collapsed because of deflation, right? We've never (recently) been in a period of significant deflation, so how can we be so certain of its effects? > deflation makes it more profitable to do nothing than to invest. Investment won't ever stop,…

> "I hear this argument a lot, but no nation that we know of has ever collapsed because of deflation, right?" And which have collapsed from inflation? None, directly. Hyperinflation (and deflation) is an effect of an economy collapsing. Not a cause. From Wiki: "Hyperinflation is often associated with wars, their aftermath, sociopolitical upheavals, or other crises that make it difficult for the government to tax the…

A curious retelling of history.

The Weimar Republic intentionally inflated their currency to reduce the WW1 reparations payments, which got out of control and reduced the value of the Mark to nothing.

Inflationary policies collapsed the tax base due to destroying the ability of the economy to function normally, not the other way around.

This is easily shown by the fact that as soon as the Weimar Republic re-introduced an asset-backed stable currency, the economic problems improved greatly, though there were deflationary periods after that caused by the massive economic upheaval.

Re: Bitcoin exchange rate reached $100 USD per BTC

#512

Post by dragontamer »

aneth4 wrote: post #472
dragontamer wrote: post #350

Earlier quoted context omitted.

I just noticed something: your links are "lying with statistics". Everyone knows that if you want to "prove" that Gold is a good investment, just start your graphs at 1970s. After all, Gold reached a glorious bubble of inflation-adjusted $2200+ / ounce in 1970s, and has fallen since then. (yes, even with today's inflated prices, Gold is no where near its inflation-adjusted high). Lets take a more reasonable graph of…

I am saying gold is better than commodities. I'm saying gold is not a "piss poor" investment, as it holds its buying power quite well. That is the function of a conservative investment.

The S&P 500 (which you can easily buy with Vanguard Mutual Funds or SPY ETFs) has approximately the same volatility index as Gold right now.

http://finance.yahoo.com/q?s=^VIX http://finance.yahoo.com/q?s=^GVZ

VIX for the S&P 500 is 13.58, while Gold VIX is 13.13. Stocks are both holding their buying power as well as Gold, and still offering better returns right now.

Gold's "stability" is a myth. It is no more stable than any other investment. Bonds offer a conservative, stable investment platform. Gold does not.

Re: Bitcoin exchange rate reached $100 USD per BTC

#513

Post by aandon »

JumpCrisscross wrote: post #451

Monetary economists have a measure called velocity , which is "the average frequency with which a unit of money is spent on new goods and services produced domestically in a specific period of time. Velocity has to do with the amount of economic activity associated with a given money supply." [1] It can be thought of as the "rate of turnover in the money supply" [2]. It is a good indicator of the "health" of a curren…

Thanks for bringing the concept of velocity to attention. I'd been looking for a metric just like this to compare Bitcoin to other currencies. It would be interesting now to compare the market cap of Bitcoin to currencies with similar velocity values. However, I think it would be really important to get a velocity value for Bitcoin only including transactions for goods and services, not including trading transactions with other currencies. Bitcoin's high velocity value could (and I suspect it does) just mean there is a lot of speculative trading going on and still very few real transactions in Bitcoin.

Re: Bitcoin exchange rate reached $100 USD per BTC

#514

Post by etherael »

vannevar wrote: post #462
jamoes wrote: post #293

Earlier quoted context omitted.

From 2003 to 2013, the price of AAPL rose from $11/share to over $400/share. Rapid price increase doesn't always mean "bubble". Sometimes innovative things are created.

Apple is a company that created a lot of real value during that period. Bitcoin is a currency that claims to offer some marginal advantages over other currency, but certainly not enough to justify the rocket ride. The biggest advantage that Bitcoin is offering these days is that it will be worth 50% more next month than it is today. That's a hard advantage for speculators to ignore, but it is ultimately an unsustaina…

Yeah, apple is obviously so much more valuable than bitcoin because having computers in prettier cases or phones with prettier user interfaces is incalculably more valuable than access to a provably fair and reliable financial system not captive to the global banking cartels or their crony governments.

This place is really starting to depress me.

Re: Bitcoin exchange rate reached $100 USD per BTC

#515

Post by dragontamer »

brc wrote: post #474
dragontamer wrote: post #268

Earlier quoted context omitted.

Gold is a piss poor investment. Owning Real Estate (and making money off of it) entails taking care of it. People taking care of their land (so that it can appreciate in value) is a good thing. The typical Real Estate "investor" adds a ton of value to their home, not just through maintenance, but also additions (ie: a new deck). This maintenance is true value added to the economy. True value that wouldn't have been a…

>Gold is a piss poor investment This is a foolish statement no matter what the subject: >dotcom stocks are a piss-poor investment >railroads area piss-poor investment >Apple is a piss-poor investment All of these are true and false at some point. You can't make blanket statements like that. There are times when Gold as a store of value makes more sense than a central-bank inflated currency. There are times when the o…

"What is certainly true is that Gold is a very good long-term store of value, and the prices of Gold relative to other things, such as a loaf of bread, a barrel of oil, a parcel of land are quite stable over a long period of time."

Wanna take a bet on that?

http://www.macrotrends.org/1340/gold-vs-the-cpi-historical-c...

Gold is out there, sometimes swinging by 1,700% over a decade... while the CPI doesn't change any more than ~100% / decade.

Dollars (and investments measured in dollars: ie Inflation-protected Bonds like TIPS) retain their value better than Gold, while providing a more stable platform. A 10-year note at even 2% offers you 21% growth over 10 years... much better than the long "valleys" that Gold investments suffered across the last century. (And with historic rates sometimes hitting 14.56%, it was possible for 10-year notes to hit 370% growth over 10 years).

Gold doesn't grow in value in the long term. And as shown in Gold Volatility Index, Gold is also a very unstable investment historically.

In fact, Gold's volatility today is the same as the S&P 500 Index.

http://finance.yahoo.com/q?s=^VIX http://finance.yahoo.com/q?s=^GVZ

So it is just as volatile as stocks... while offering poor gains historically. Neither the conservative nor aggressive investor would want this kind of investment. That makes gold a "piss poor" investment in my books.

Re: Bitcoin exchange rate reached $100 USD per BTC

#516

Post by smsm42 »

jamoes wrote: post #397
smsm42 wrote: post #341

Earlier quoted context omitted.

There's nothing that happened with BTC between when it cost $14 and now. Comparing it to the shares of Apple that created a whole new consumer industry and substantially changed the information interactions of the whole humankind betrays deep misunderstanding of the question at hand. Bitcoins did not suddenly turned into new way of living, did not produce hundreds of amazingly useful things and did not change how man…

Bitcoin technology allows something that has never before been possible in human history: Two individuals, that never meet in person, can trade with each other without placing any trust in a third party. The implications of this are far-reaching, and will fundamentally shape how governments and businesses operate.

So far I see absolutely zero effects of these fundamental changes. In fact, even finding a way to get bitcoins - without trusting one of those "exchanges" that constantly are getting hacked - looks non-trivial at best, and looks next to impossible to do it anonymously. As for using it for some common activity except selling/buying controlled substances and such - forget about it. When I am able to pay with Bitcoins on Amazon - then we'd be talking.

Re: Bitcoin exchange rate reached $100 USD per BTC

#517

Post by vijayboyapati »

As Moldbug wrote: "In any economy, there exists no less than one commodity or security of inelastic volume which is overvalued due to reservation demand. Ie: one scarce good which is money." Bitcoin's increasing price is a sign that it's further along in its passage to monetization. Gold, too, experiences the same phenomena of being "overvalued". I.e., being far above the price warranted by its use value. In the same way gold is also partially monetized (in particular it has large reservation demand from central banks)

Buying bitcoin is essentially a bet on the probability it will be monetized. This probability will wax and wane in the minds of the population participating in the bitcoin market, who in turn will be influenced by media perceptions, the actions of the state etc. So the price will no doubt be quite volatile. But the increase in price, based on an increase in reservation demand, is self-reinforcing. It increases the desire of merchants to accept bitcoin in payment (since there are now a greater pool of holders who have greater savings looking for an outlet to spend those savings). And as new merchants begin accepting bitcoin in payment, the reservation demand increases. These two causalities are linked together and reinforce each other. At some point they become entrenched enough that the whole thing "lifts off", so to speak, and the commodity becomes money. Interestingly, the same thing happens with gold, except that one of the two causalities is short-circuited by the state: the reservation demand for gold does not spur merchants to accept gold in payment, because that is made illegal by the state. Thankfully bitcoin is so well engineered that the problem of the state banning use in transactions is essentially moot (no offense "Chuck" Schumer).

Re: Bitcoin exchange rate reached $100 USD per BTC

#518

Post by cmccabe »

dragontamer wrote: post #515
brc wrote: post #474

Earlier quoted context omitted.

>Gold is a piss poor investment This is a foolish statement no matter what the subject: >dotcom stocks are a piss-poor investment >railroads area piss-poor investment >Apple is a piss-poor investment All of these are true and false at some point. You can't make blanket statements like that. There are times when Gold as a store of value makes more sense than a central-bank inflated currency. There are times when the o…

"What is certainly true is that Gold is a very good long-term store of value, and the prices of Gold relative to other things, such as a loaf of bread, a barrel of oil, a parcel of land are quite stable over a long period of time." Wanna take a bet on that? http://www.macrotrends.org/1340/gold-vs-the-cpi-historical-c... Gold is out there, sometimes swinging by 1,700% over a decade... while the CPI doesn't change any…

Pretty much every big economy is trying to inflate away its debts. The Bank of England recently revised their inflation target upwards. Now Japan's central bank is talking about doing the same thing. As far as the US goes: I've got two words for you: quantitative easing.

Meanwhile, most consumer price indices don't include the things which increase in price the most, like fuel and food. So the inflation numbers you're seeing are already artificially low.

In this kind of environment, it seems pretty likely that gold has further to climb.

Also, most stocks these days don't give dividends, which makes them pretty much equivalent to gold from an investor's perspective. Greater fool and all that.

Investing in just one thing is dumb, of course. But not investing in commodities and gold at all seems equally dumb.

Re: Bitcoin exchange rate reached $100 USD per BTC

#519

Post by [deleted] »

dragontamer wrote: post #515
brc wrote: post #474

Earlier quoted context omitted.

>Gold is a piss poor investment This is a foolish statement no matter what the subject: >dotcom stocks are a piss-poor investment >railroads area piss-poor investment >Apple is a piss-poor investment All of these are true and false at some point. You can't make blanket statements like that. There are times when Gold as a store of value makes more sense than a central-bank inflated currency. There are times when the o…

"What is certainly true is that Gold is a very good long-term store of value, and the prices of Gold relative to other things, such as a loaf of bread, a barrel of oil, a parcel of land are quite stable over a long period of time." Wanna take a bet on that? http://www.macrotrends.org/1340/gold-vs-the-cpi-historical-c... Gold is out there, sometimes swinging by 1,700% over a decade... while the CPI doesn't change any…

[deleted]

Re: Bitcoin exchange rate reached $100 USD per BTC

#520

Post by andyhmltn »

etherael wrote: post #514
vannevar wrote: post #462

Earlier quoted context omitted.

Apple is a company that created a lot of real value during that period. Bitcoin is a currency that claims to offer some marginal advantages over other currency, but certainly not enough to justify the rocket ride. The biggest advantage that Bitcoin is offering these days is that it will be worth 50% more next month than it is today. That's a hard advantage for speculators to ignore, but it is ultimately an unsustaina…

Yeah, apple is obviously so much more valuable than bitcoin because having computers in prettier cases or phones with prettier user interfaces is incalculably more valuable than access to a provably fair and reliable financial system not captive to the global banking cartels or their crony governments. This place is really starting to depress me.

Are you seriously trying to say Bitcoin has more value than a multi-billion dollar consumer company? Lol.
Post reply on HN