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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#461

Post by chii »

encoderer wrote: post #248
sliverstorm wrote: post #157

Earlier quoted context omitted.

I'd like to point out that this is the same for just about every country.

Not really. The USD benefits greatly from being the global reserve currency.

Yes. THis is true because the Fed reserve can print more USD, and an overseas oil vendor would actually sell the goods in exchange for the said USD. However, you noticed that the Fed reserve hasn't actually produced any actual value/productivity - they merely printed some pieces of paper.

There for, the US gov't (or more correctly, the Fed reserve) can print their way out of debt that they owe to third parties, until those third parties all wise up. But then you got 11 air craft carriers paroling the world, untold number of submarines and missiles, massive air force etc, and if the US gets a whiff that you are no longer denominating your goods (e.g., oil) in USD, you might find yourself being called the axis of evil.

Re: Bitcoin falls from $266

#462

Post by chii »

khuey wrote: post #262
tomkarlo wrote: post #153

Earlier quoted context omitted.

Yes, but the implications of not consenting are grossly different. If folks don't consent to taxes and USD, they're essentially giving up on things like Social Security, the value of their homes (both in terms of security and transaction value), the value of their income, etc. ... all kinds of secondary effects. If they give up on Bitcoin, they might lose the value of their holdings (which could be zero) but they don…

No, if you don't consent to taxes you get put in a cage. If you don't consent to bitcoin you don't get caught up in a speculative bubble.

if an individual don't consent to paying taxes, they get put in a cage. But if an entire population don't consent to paying taxes, something else is going on.

Re: Bitcoin falls from $266

#463

Post by kokey »

lucb1e wrote: post #451
kokey wrote: post #442

Earlier quoted context omitted.

What I find funny about most of the comments on here and everywhere else is that many of it reminds me of the investment bulletin boards and forums I've been frequenting over the years. There is always a lot of people talking the price up (since they are invested in it), and when there is a dip it is a 'buying opportunity' (so that others can buy and help the value of their holdings) What to me the most striking is t…

> What to me the most striking is the firm belief that demand will keep on growing, just like people believed property prices will keep on going up since the population is growing and land is finite. Sure, but demand spikes can still price these things too high. I don't think anyone really expected it to go up in one straight line all the way to the value that it should have during mainstream usage.

Sure, but I don't think everyone takes into account that the price could collapse down to $20 or below and could take, say, over 5 years or more to get above $300 with a lot of volatility along the way.

Re: Bitcoin falls from $266

#464

Post by chii »

andrewtbham wrote: post #159
tptacek wrote: post #21

Don't worry! It won't ever fall below its intrinsic value!

The value of gold, and bitcoins is that their scarcity and inflation serve as an accurate proxy for the real economy of goods and services.

neither gold nor bitcoins are inflationary. In fact, both are deflationary.

Re: Bitcoin falls from $266

#465

Post by akrymski »

I'm afraid bitcoin will always be too volatile to be used as a currency because it's not backed by anything, and can't be inflated/deflated. The government actually serves a useful function by controlling money in circulation, even though it's not backed by gold anymore, at least it's stable (as long as inflation rates are maintained) which allows it to be used as currency. Sure everyone complains that USD is being printed, but at least that gets people spending - using the currency, instead of hoarding/saving which is what's happening with BTC. At current levels of volatility, merchants will abandon the currency.

Perhaps there's a some theoretical solution out there, whereby the inflation rate of BTC is a function of volatility ... ?

Re: Bitcoin falls from $266

#466

Post by chii »

Helianthus wrote: post #77
songzme wrote: post #31

To everyone claiming that bitcoin isn't a currency, no shit! Currency doesn't happen overnight, it's a process to get there. Just like anything revolutionary, it takes time before anyone knows what it will be come. By the time (with a very big IF) bitcoin becomes a viable currency, it's price won't be $200 anymore. It'll be at least a few thousand per coin and people will be transacting in micro bitcoins. What bitcoi…

I have a personal reason to hate it: it thinks it's revolutionary when it's actually just... money. It solves no problems because it carries greed with it.

greed, when directed with proper force, is how progress is made.

unchecked greed, of course, is when progress happens unevenly for society.

Re: Bitcoin falls from $266

#467

Post by chii »

mathattack wrote: post #454
codeulike wrote: post #307

Earlier quoted context omitted.

Because a currency is basically a _convention_ within a _community_. Bitcoin has a _community_, whereas an arbitrarily cryptocurrency launched next week probably wont have, unless a lot of groundwork is done first.

Right, but it can be done so perpetual scarcity is a fallacy, no?

no - if you started your own 'bitcoin' chainblock, the existing bitcoin chainblock shouldn't (as far as i understand it) be interoperable. That is, its like printing your own currency - no one else will reckonize it, unless you somehow own vast amounts of resources, and is willing to exchange that with the new bitcoin.

Re: Bitcoin falls from $266

#468

Post by thatthatis »

apw wrote: post #449
thatthatis wrote: post #224

Earlier quoted context omitted.

There is literally no fundamental value to bitcoins. Spikes and crashes are absolutely to be expected in such a situation.

That's not quite true is it? A distributed cryptographically-guaranteed ledger has fundamental value, no?

Its an interesting thought. What's the upper bound on what a ledger could be worth?

That said, the value of the ledger derives almost entirely from the value of the items transacted in the ledger. Therefore, I'd say that the ledger value is derivative of the market value and thus doesn't itself convey an intrinsic value to the coins.

Re: Bitcoin falls from $266

#469

Post by thatthatis »

tvladeck wrote: post #357
drcross wrote: post #345

Earlier quoted context omitted.

same as the dollar and euro then. They are not backed by anything except the status quo.

not 100% true. you have to pay taxes in dollars. the currency is backed by the value of not going to jail.

I've seen a lot of good arguments on the value/worthlessness of fiat currency, but I'd never seen fiat currency defended as having the value of not going to jail. That's an amusing and on its face compelling argument.

Re: Bitcoin falls from $266

#470

Post by thatthatis »

derefr wrote: post #443
jonnathanson wrote: post #340

Earlier quoted context omitted.

In the long run, yes, there could be a bright future for BTC. In the short run, there are several big challenges, liquidity being a huge one. When it comes to BTC, the activities of speculators/hoarders, and the activities of free exchange and commerce, have shown themselves to be in direct opposition so far. The "store of value" and the "medium of exchange" are not mutually exclusive, of course, but for the time bei…

> It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. Where is gold on that spectrum? As far as I can tell, Bitcoin seems to have all the properties of gold (except that it's easier to transport.) I'm pretty sure that gold is not considered to be a "currency" in any sense in the modern era; it's traded as a commodity, like oil. But people stil…

The gold analogy is apt, but I think diamonds are a more apt analogy. Diamonds capture the "value is what people are willing to pay" aspect better than gold does.
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