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Bitcoin's Golden Future

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Re: Bitcoin's Golden Future

#141

Post by vasilipupkin »

sbenitoj wrote: post #139
vasilipupkin wrote: post #134

Earlier quoted context omitted.

Look, cars that have specific features cost more than cars that don't have those features. That's objective. Stocks of companies that are very profitable, like google are more expensive than stocks of companies that are not. That's objective. Right ?

Correct, but it's people's perception of value that ultimately drives the current stock price. Take Amazon as an example, in 2016 its net income was $2.4 billion, yet it currently trades at a total market capitalization (the value of all outstanding shares) of $471 billion (or approximately 196x its net income) [0] Compare that to Ford Motor Company, in 2016 its net income was $4.6 billion, yet it currently trades at…

they perceive it because Amazon is growing faster than Ford, which is an objective metric. Not because they simply completely subjectively decided that amazon is more promising - there are quantifiable OBJECTIVE metrics that this is the case

Re: Bitcoin's Golden Future

#142

Post by vasilipupkin »

sbenitoj wrote: post #140
vasilipupkin wrote: post #133

Earlier quoted context omitted.

So if value is purely subjective, then surely some people would be willing to pay 100k for a Honda vs Tesla? Why doesn't Honda try to sell cars for 100k? Why isn't a cup of coffee at Starbucks 20 bucks ? If it's pure subjectivity, then surely that would work

Well, all prices are still determined by the intersection of supply and demand. I'm not saying that the objective features are IRRELEVANT to a consumer's purchase decision, obviously they're not, but ultimately each person values what they're buying differently than the next person. I'll run with your coffee example: Let's say someone currently values a cup of Starbucks at $6 / cup and Starbucks is selling it for $4…

"but ultimately each person values what they're buying differently than the next person"

that is true, but irrelevant. On average, overall value is highly correlated to objective metrics. so, this is why this conversation started. Price, including price of bitcoin, is not simply some subjective thing - it must be tied to some objective indicators. For example, price of coffee at Starbucks cannot be too far above what it costs to make coffee at home. It will be higher, since you are paying for convenience. But there is only so much that makes sense to pay for convenience and people won't pay more than that.

Re: Bitcoin's Golden Future

#143

Post by sbenitoj »

vasilipupkin wrote: post #141
sbenitoj wrote: post #139

Earlier quoted context omitted.

Correct, but it's people's perception of value that ultimately drives the current stock price. Take Amazon as an example, in 2016 its net income was $2.4 billion, yet it currently trades at a total market capitalization (the value of all outstanding shares) of $471 billion (or approximately 196x its net income) [0] Compare that to Ford Motor Company, in 2016 its net income was $4.6 billion, yet it currently trades at…

they perceive it because Amazon is growing faster than Ford, which is an objective metric. Not because they simply completely subjectively decided that amazon is more promising - there are quantifiable OBJECTIVE metrics that this is the case

You're saying Amazon is growing faster than Ford, but they're not growing faster in terms of profitability (even if people perceive that Amazon will be more profitable in the future). Yes Amazon revenue is growing faster than Ford revenue, but is that the metric that matters most?

Maybe, maybe not, it's subjective, only individuals can decide for themselves.

Re: Bitcoin's Golden Future

#144

Post by sbenitoj »

vasilipupkin wrote: post #142
sbenitoj wrote: post #140

Earlier quoted context omitted.

Well, all prices are still determined by the intersection of supply and demand. I'm not saying that the objective features are IRRELEVANT to a consumer's purchase decision, obviously they're not, but ultimately each person values what they're buying differently than the next person. I'll run with your coffee example: Let's say someone currently values a cup of Starbucks at $6 / cup and Starbucks is selling it for $4…

"but ultimately each person values what they're buying differently than the next person" that is true, but irrelevant. On average, overall value is highly correlated to objective metrics. so, this is why this conversation started. Price, including price of bitcoin, is not simply some subjective thing - it must be tied to some objective indicators. For example, price of coffee at Starbucks cannot be too far above what…

This was your original comment in this thread:

"There is such a thing as objective value. Stocks have objective value because they pay dividends. Real estate in warm climates has objective value because it's pleasant to be in a warm place in winter. BMW costs more than a honda civic because it is objectively a better driving experience."

You were claiming that value is determined by the objective features/metrics, now you're saying that "overall value is highly correlated to objective metrics" -- which one is it?

First you say it's objective, now you're saying it's just highly correlated? Those aren't the same things -- if objective metrics were all that mattered, value would be 100% tied to the objective metrics/features, but it's not.

If objective metrics were all that mattered, you could ALWAYS create something bigger, faster, or stronger and have it sell for more than the next best item on the market -- but that's not how it works. There are NUMEROUS example of products which were "objectively" better but failed because people did not perceive their value to be high enough worth purchasing.

Re: Bitcoin's Golden Future

#145

Post by vasilipupkin »

sbenitoj wrote: post #143
vasilipupkin wrote: post #141

Earlier quoted context omitted.

they perceive it because Amazon is growing faster than Ford, which is an objective metric. Not because they simply completely subjectively decided that amazon is more promising - there are quantifiable OBJECTIVE metrics that this is the case

You're saying Amazon is growing faster than Ford, but they're not growing faster in terms of profitability (even if people perceive that Amazon will be more profitable in the future). Yes Amazon revenue is growing faster than Ford revenue, but is that the metric that matters most? Maybe, maybe not, it's subjective, only individuals can decide for themselves.

you are confusing uncertain and subjective. Yes, it's uncertain what will happen in the future, but Amazon is more of a growth company than Ford and that is not subjective.

Re: Bitcoin's Golden Future

#146

Post by vasilipupkin »

sbenitoj wrote: post #144
vasilipupkin wrote: post #142

Earlier quoted context omitted.

"but ultimately each person values what they're buying differently than the next person" that is true, but irrelevant. On average, overall value is highly correlated to objective metrics. so, this is why this conversation started. Price, including price of bitcoin, is not simply some subjective thing - it must be tied to some objective indicators. For example, price of coffee at Starbucks cannot be too far above what…

This was your original comment in this thread: "There is such a thing as objective value. Stocks have objective value because they pay dividends. Real estate in warm climates has objective value because it's pleasant to be in a warm place in winter. BMW costs more than a honda civic because it is objectively a better driving experience." You were claiming that value is determined by the objective features/metrics, no…

You were claiming that value is determined by the objective features/metrics, now you're saying that "overall value is highly correlated to objective metrics" -- which one is it?

it's both. You observe this high correlation, because objective metrics determine value. They do not account for 100% of it 100% of the time, only on average.

I keep using the term "on average", I think you keep missing its significance.

Re: Bitcoin's Golden Future

#147

Post by acdha »

ericb wrote: post #137
acdha wrote: post #124

Earlier quoted context omitted.

How many of them are active? How many hold non-trivial balances? Most importantly, how many sales would legal merchants lose if those users jumped ship or lost interest? Again, my point is simply that there's little holding anyone who hasn't made a huge investment specifically in Bitcoin. If you have $10 equivalent sitting in an account and CitiCoin™ launches next week with attractive terms and mainstream merchant ac…

The backing and even the existence of the United States is also simply a matter of group consensus. It is turtles all the way down, my friend. We're just debating whose delusions are bigger and better.

Do you actually believe that false equivalence? It's like saying your two-person startup is basically the same as IBM because they're both companies.
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