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China Bans Financial Companies From Bitcoin Transactions

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Re: China Bans Financial Companies From Bitcoin Transactions

#141

Post by repsilat »

w0utert wrote: post #37
molf wrote: post #29

Earlier quoted context omitted.

Intrinsic value (in the context of finance) usually refers to the value of something when not used as investment or money. Gold has intrinsic value because you can use it for jewellery and electronics. A bitcoin has no intrinsic value because you only have it to get something else in return later. Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical mo…

>> Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote. USD/EUR/JPY currency (either physical as bank notes and coins, or electronic) has intrinsic value because it is almost universally accepted, taxable, and backed by debt that (at least in theory) will have to be repaid at some point in time. B…

The value of money is grounded by the fact that you have to pay your taxes in it or you go to jail. This doesn't determine the absolute value or prices, but it stabilises them. This stability is the inductive step that allows the "base case" value derived from the gold standard to filter through to the present (minus inflationary effects).

Re: China Bans Financial Companies From Bitcoin Transactions

#142

Post by MichaelGG »

yapcguy wrote: post #118
steven2012 wrote: post #100

Earlier quoted context omitted.

This sounds like when the dotcom bubble burst, and the so-called experts were saying "No, this is a GOOD thing! All your favorite stocks are on sale!" The thing that propelled BTC from 200 to 1200 was the news that BTC was gaining popularity in China. If this news turns negative, then what is keeping the price high? Then again, given BTC has been so strongly bought up, if it gets bought up here, then it just means it…

Time to sell Bitcoin. Merill Lynch just said buy Bitcoin, setting a target of 1300 (I hate the way Wall Street pulls these numbers out of thin air, but they are on the sell-side). This is the same Merill Lynch who collapsed their own company with dodgy investments and had to be passed off to Bank of America, another company laden full of dodgy assets and dodgy accounting. If these guys say "buy", isn't it time to run…

By taking the inverse of anything they say, you're implying that they have perfect prediction power (even if it's inverted).

If you don't trust their predictions at all, then you should treat anything they say the same you would a random number generator.

Re: China Bans Financial Companies From Bitcoin Transactions

#143

Post by SkyMarshal »

ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

>Things have value because other people want them. That's it. People want bitcoin, then it has value.

No, things have intrinsic value for an underlying reason. People don't just want random stuff out of the blue, there's always a reason. Look at it from first principles:

Gold: Rare, soft, lustrous metal that interacts with our genetic programming in some strange, emergent way that creates a strong desire for it most humans' psyche. No rational reason, a reason nonetheless - people covet it, and as a result of that demand plus sparse supply, it has become a status symbol throughout most of human history and across all cultures that had access to it (Western, Mid Eastern, Far Eastern, South American). Also, better conductor than copper for some industrial uses.

Money: Utility + Fiat. It's much easier to store your wealth in coins, bills, or bits in a bank computer than in cows, lumber, corn, or iron. Also much easier to transact exact amounts than in cows, lumber, corn, iron. And, doesn't die, rot, or go bad over time (inflation jokes notwithstanding). That convenience is desired, hence has value, which drives demand for it. There are also some things that only money can buy, or pay for - taxes, oil, etc. Everyone is required to have money for such things, hence demand for money is increased.

Bitcoin: Solved the problem of trust in unregulated, no-central-authority, P2P transactions, eliminating the middle man, enabling people to save money on direct transactions while sufficiently mitigating the fear of fraud that would otherwise sink the whole endeavor (and has in past attempts). That utility = value = demand.

Things that have value and demand, have it for a reason. It's not just b/c people randomly decide it does.

That Greenspan can't see this merely suggests he hasn't spent much time trying to grok bitcoin. Didn't read the source code, didn't install it and play with it to learn how it works, doesn't read any discussion of it at bitcointalk or the btc blogs or anything. He's applying old world thinking to a new world of cryptocurrency, and hasn't adjusted yet.

Re: China Bans Financial Companies From Bitcoin Transactions

#144

Post by fragsworth »

pitnips wrote: post #129
alttab wrote: post #128

Earlier quoted context omitted.

Trading physical goods for virtual commodities? No thank you. The pudding of bitcoin was the promise of a new currency.

Since it's decentralized, it doesn't need banks to prosper. That's the beauty of bitcoin. It can function as a currency while still being seen as a commodity in the eyes of the law.

Yes - it doesn't need banks. I think there is lots of confusion as to how this system works. As long as it's legal to own and exchange bitcoins, everyone can be their own financial institution.

Re: China Bans Financial Companies From Bitcoin Transactions

#145

Post by alttab »

fragsworth wrote: post #144
pitnips wrote: post #129

Earlier quoted context omitted.

Since it's decentralized, it doesn't need banks to prosper. That's the beauty of bitcoin. It can function as a currency while still being seen as a commodity in the eyes of the law.

Yes - it doesn't need banks. I think there is lots of confusion as to how this system works. As long as it's legal to own and exchange bitcoins, everyone can be their own financial institution.

I think I cant understand what a world run on bitcoin would look like without a global war.

Re: China Bans Financial Companies From Bitcoin Transactions

#146

Post by XorNot »

aryastark wrote: post #134
XorNot wrote: post #113

Earlier quoted context omitted.

Bitcoin isn't portable (you can't carry it, try using it without the internet). All regular currencies are fungible and its super-questionable that BTC is divisible (the network can't handle more then what, a million transactions per second? What's the use of a currency that splits into microscopic sizes if you can't make lots of micropayments with it).

This must be red herring day on HN. USD may be the most ubiquitous currency on the planet. However, go visit a country like Japan. Once you're out of reach of any currency exchange, you won't have much luck using your USD. Ironically, you'll have better luck using a Visa/Mastercard (which, btw, are not used anywhere other than perhaps ATMs). Those credit cards require a network to be used. I've been to Internet cafes…

Once your out of the reach of any currency exchange, you won't be able to use Bitcoin either, what's your point?

The difference is, all national currencies have an offline only form which is good anywhere within that nation. Bitcoin does not.

Re: China Bans Financial Companies From Bitcoin Transactions

#147

Post by user24 »

steveklabnik wrote: post #126
user24 wrote: post #124

Earlier quoted context omitted.

What do you think would happen to the XAU/CNY rate if China announced that gold was no longer accepted in banks?

... which is why they wouldn't do that, because it would be catastrophic.

so in other words, XBT behaved exactly as you expected XAU would in the same situation, yet somehow to you that reflects badly on XBT but not on XAU.

Re: China Bans Financial Companies From Bitcoin Transactions

#148

Post by steveklabnik »

user24 wrote: post #147
steveklabnik wrote: post #126

Earlier quoted context omitted.

... which is why they wouldn't do that, because it would be catastrophic.

so in other words, XBT behaved exactly as you expected XAU would in the same situation, yet somehow to you that reflects badly on XBT but not on XAU.

No my point is that the Chinese government can control things so that this never happens. BTC cannot.
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