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The Fair Price of a Bitcoin is Zero

neweconomicperspectives.org

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Re: The Fair Price of a Bitcoin is Zero

#41

Post by VexXtreme »

fragsworth wrote: post #12
colinbartlett wrote: post #2

I'm so tired of every Tom, Dick, and Harry throwing his hat in the ring to declare Bitcoin worthless. Can't we just agree that this is a new thing nobody quite understands and stop making prognostications about it's value or lack thereof? Let those of us who are interested in furthering the Bitcoin economy do so unencumbered by pundits.

These posts are entirely the result of authors who didn't buy bitcoins when they were cheap. They want it to fail, and try to find any flaws in it that they can, because if it succeeds then they'll really feel like shit because they missed out. There is extreme bias in the news community (on both sides) because of their investment (or lack thereof)... And possibly a certain amount of attempted market manipulation as…

> These posts are entirely the result of authors who didn't buy bitcoins when they were cheap. They want it to fail, and try to find any flaws in it that they can, because if it succeeds then they'll really feel like shit because they missed out.

I see it every day. One of my coworkers used to be into Bitcoin and owned a fair number and then decided to donate them away when they were still a few dollars a pop. These days he can't stop making predictions about how Bitcoin is going to fail and how it's all a bubble and ponzi.

It's unbelievable how some people are unable to deal with their cognitive biases.

Re: The Fair Price of a Bitcoin is Zero

#42

Post by [deleted] »

colinbartlett wrote: post #2

I'm so tired of every Tom, Dick, and Harry throwing his hat in the ring to declare Bitcoin worthless. Can't we just agree that this is a new thing nobody quite understands and stop making prognostications about it's value or lack thereof? Let those of us who are interested in furthering the Bitcoin economy do so unencumbered by pundits.

[deleted]

Re: The Fair Price of a Bitcoin is Zero

#43

Post by javert »

We do understand it bitcoin.

You can think of bitcoin as "backed" by speculators. It has a market price, because speculators will give you other currencies for it. That is what makes it useful for value transfer (trade).

And the more it is demanded for trade, the more liquid it will be, leading to less volatility and less risk for speculators.

Whether the price holds up in the long run or crashes to near-zero is impossible to predict. But it is now safe to say that it could go either way. It depends on the choices of people and governments.

Bitcoin has already proven (or very close) that digital currency that is purely a financial asset (not demanded for jewelry, industrial use, or taxes) is viable.

I don't see how bitcoin not meeting certain a priori definitions that were created before digital currency was even a possibility, are relevant. It seems likely to me that the blogger is either confused about abstract ideas relate to reality, or is dishonest.

Re: The Fair Price of a Bitcoin is Zero

#44

Post by jacob019 »

Rimpinths wrote: post #37
jacob019 wrote: post #21

Seems all currency is a ponzi scheme. Even gold is valuable only due to scarcity and peoples desire to have it. It's been currency for thousands of years and only recently has it been used in industry. That said, I keep expecting this bitcoin bubble to burst and it keeps going up. Could it stabilize as a true global currency, I doubt it, but maybe.

Gold become desirable because it is an ideal metal to use for jewelry. That came first and its use as a currency came second. In that sense, it has been used in industry longer that it has been a currency.

Excellent point, I wouldn't however use USD, EUR, or RMB for jewelry. The point remains that BTC has no less intrinsic value than any fiat currency. As soon as we promise each other work in exchange for something that thing gains value. In a sense BTC is more like gold than dollars because it is mined into circulation, rather than being conjured into existence by a central bank.

Re: The Fair Price of a Bitcoin is Zero

#45

Post by tzs »

altoz wrote: post #25

> They should be easy to create (bitcoins are) BUT ALSO easy to destroy if demand declines; You can provably destroy bitcoins by sending them to an address with no private key (this is provable). Believe it or not, this is actually useful for stuff like http://www.proofofexistence.com/ Hence the premise of this article, even if you take the underlying economic theory at face-value, is flawed.

How do you prove that an address has no private key?

Re: The Fair Price of a Bitcoin is Zero

#46

Post by foobarqux »

colinbartlett wrote: post #2

I'm so tired of every Tom, Dick, and Harry throwing his hat in the ring to declare Bitcoin worthless. Can't we just agree that this is a new thing nobody quite understands and stop making prognostications about it's value or lack thereof? Let those of us who are interested in furthering the Bitcoin economy do so unencumbered by pundits.

I'm tired of every Tom, Dick and Harry taking that Bitcoins are worth $BIGDOLLARS as self evident and the idea of having to provide justification is repulsive.

Re: The Fair Price of a Bitcoin is Zero

#47

Post by ericb »

Rimpinths wrote: post #37
jacob019 wrote: post #21

Seems all currency is a ponzi scheme. Even gold is valuable only due to scarcity and peoples desire to have it. It's been currency for thousands of years and only recently has it been used in industry. That said, I keep expecting this bitcoin bubble to burst and it keeps going up. Could it stabilize as a true global currency, I doubt it, but maybe.

Gold become desirable because it is an ideal metal to use for jewelry. That came first and its use as a currency came second. In that sense, it has been used in industry longer that it has been a currency.

Isn't that argument just turtles all the way down, though? If people stopped wanting jewelry, gold would not be desirable.

Re: The Fair Price of a Bitcoin is Zero

#48

Post by bitcoin-truth »

maaku wrote: post #34
voyou wrote: post #22

Earlier quoted context omitted.

"These posts are entirely the result of authors who didn't buy bitcoins when they were cheap." That's nonsense. The post is a result of applying a particular economic theory of how money works to something that is apparently trying to be a form of money. This theory of money might be wrong in general, or it might for some reason not apply to bitcoin specifically. But to dismiss it simply as "bias" is willed stupidity…

Furthermore, theories in economics are descriptive. One should not expect with certainty an innovative currency to succeed or fail based on how well it matches a particular theory. When we are in new territory, we should expect a few surprises.

Scientific theories are falsifiable: they make testable predictions.

Austrian Economic theory comes closest to this ideal.

Re: The Fair Price of a Bitcoin is Zero

#49

Post by bitcoin-truth »

VexXtreme wrote: post #41
fragsworth wrote: post #12

Earlier quoted context omitted.

These posts are entirely the result of authors who didn't buy bitcoins when they were cheap. They want it to fail, and try to find any flaws in it that they can, because if it succeeds then they'll really feel like shit because they missed out. There is extreme bias in the news community (on both sides) because of their investment (or lack thereof)... And possibly a certain amount of attempted market manipulation as…

> These posts are entirely the result of authors who didn't buy bitcoins when they were cheap. They want it to fail, and try to find any flaws in it that they can, because if it succeeds then they'll really feel like shit because they missed out. I see it every day. One of my coworkers used to be into Bitcoin and owned a fair number and then decided to donate them away when they were still a few dollars a pop. These…

This is how they deal with their cognitive dissonance.

http://www.amazon.com/Mistakes-Were-Made-But-Not/dp/01560339...

Re: The Fair Price of a Bitcoin is Zero

#50

Post by bitcoin-truth »

hackerboos wrote: post #16
fragsworth wrote: post #12

Earlier quoted context omitted.

These posts are entirely the result of authors who didn't buy bitcoins when they were cheap. They want it to fail, and try to find any flaws in it that they can, because if it succeeds then they'll really feel like shit because they missed out. There is extreme bias in the news community (on both sides) because of their investment (or lack thereof)... And possibly a certain amount of attempted market manipulation as…

There's only been one rational post on Bitcoin in the last fortnight: http://blog.samaltman.com/thoughts-on-bitcoin

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