> Since the supply is known, one has to estimate the demand to estimate its price. Is there any other asset we can make this statement about? That supply is 100% known and cannot change in future?
Maybe Helium?
What I Think of Bitcoin
21–30 of 209 posts
Re: What I Think of Bitcoin
#22> Since the supply is known, one has to estimate the demand to estimate its price. Is there any other asset we can make this statement about? That supply is 100% known and cannot change in future?
I'm not sure, besides all the other cryptocurrencies that have the same property.
Re: What I Think of Bitcoin
#23> Since the supply is known, one has to estimate the demand to estimate its price. Is there any other asset we can make this statement about? That supply is 100% known and cannot change in future?
It’s not 100%. If >= 50% of the network is in agreement we can make more bitcoins, right? The limit is set in code. But that code can be altered.
Let me know if I’m wrong
Re: What I Think of Bitcoin
#24This post should be mostly discounted because Ray doesn't really seem to be aware of the true risk of the Tether scam, the biggest component of and risk to Bitcoin's value.
For those not aware, Tether is a "stable coin" that issues tokens that supposedly represent dollars and can be used as a medium of exchange. However, it's widely suspected that Tether is unbacked and printing fake dollars and even Tether itself has admitted that at least 26% of their tokens have no backing [1]. Tether has never been audited so we have no clue how much of it is actually backed and how much of it is fake.
This is extremely problematic because Tether is currently printing around $500 million per day and is a source of a significant amount of buy pressure in the market. Tether is used on almost every exchange and is the vast majority of Bitcoin buy orders so Tether can be used to artificially pump the price of Bitcoin quite effectively.
Ray points out Tether as a risk to Bitcoin's value, but I don't think he does an adequate job explaining the risk. Tether isn't a small component of the Bitcoin ecosystem. It's at the heart of Bitcoin with it being the primary currency used to buy Bitcoin with at most exchanges. Most of the buy volume is with Tether and that $500 million per day is huge.
Regardless of what one thinks about the value of Bitcoin, it's irrational to invest while $500 million of fake dollars are being pumped in every day. Once that artificial $500 million buy pressure is removed, the market will face an existential risk. Who knows what the real price of Bitcoin would be without all that fake money?
https://davidgerard.co.uk/blockchain/2021/02/03/tether-print... is a good article for additional context on Tether.
1. https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7...
Re: What I Think of Bitcoin
#25> Since the supply is known, one has to estimate the demand to estimate its price. Is there any other asset we can make this statement about? That supply is 100% known and cannot change in future?
The supply isn't really known. As of this older 2020 article [0], something like half of the total number of (future) Bitcoins haven't moved in at least a year. I've seen figures like 2/3 from later in 2020. Some fraction of those probably represent lost keys, and hence will never move again absent a consensus change. Another fraction represent people who are just sitting on the coins waiting for a chance to sell. But we don't know what the fractions are! These are big uncertainties.
[0] https://www.coindesk.com/10m-bitcoins-havent-moved-in-more-t...
Re: What I Think of Bitcoin
#26Here Ray Dalio says he views Bitcoin as a gold-like asset. This is the first time I have felt that Bitcoin has some value: as a commodity that wealthy people put their wealth into when they have nothing better to do with it. People are not buying gold because they ever plan to use the gold.
I agree, there was a nice article in the economist about this concept (bitcoin as a store of value) [0]. More specialized than gold, investors have realized that bitcoin acts as a great hedge on uncertainty. When the market is uncertain to it's future (initial lockdowns for example) bitcoin goes up. It also goes up for less direct reasons (at least that I'm aware of). This makes it a less than ideal traditional store…
Another way of saying "gold-like asset" or "store of value" is that Bitcoin codifies wealth inequality in an algorithm with a rigidity similar to physical assets, creating mathematical obstacles to block democratic attempts at redistribution away from an elite class of early adopters. Thus "protecting wealth" from the rest of humanity.
However profitable, useful, or entertaining one might find that as a fringe commodity, it's an atrocious basis for an economic system that would ultimately lead to depression, then war, just as money tied to the gold standard did a hundred years ago.
Money was detached from the gold standard almost everywhere in the world for excellent reasons. Recreating money with properties similar to gold would be a step backwards.
Re: What I Think of Bitcoin
#27> Since the supply is known, one has to estimate the demand to estimate its price. Is there any other asset we can make this statement about? That supply is 100% known and cannot change in future?
It’s not 100%. If >= 50% of the network is in agreement we can make more bitcoins, right? The limit is set in code. But that code can be altered. Let me know if I’m wrong
Technically yes it is possible. Very, very unlikely though.
Re: What I Think of Bitcoin
#28I offer no commentary on the actual content, but this is a truly horrible piece of writing - almost every sentence is clunky, poorly phrased, ungrammatical, or repetitive. I guess you don't need to be able to write decent prose to make $18B!
I wasn't originally planning on reading the article itself, but I had to skim it as a result of your comment just to see how bad it was for myself.
In fact, I saw none of your suggested horribleness. Okay, I immediately don't like its rhetoric (the first paragraph basically implies the only reason not to like Bitcoin is sour grapes), but that's not bad writing. The only bad habit I see is the tendency to put a comma-separated clause one or two words into the sentence instead of at the beginning, e.g.: "That, like creating the existing credit-based monetary system, is of course a type of alchemy," but even that isn't a particularly frequent occurrence.
Re: What I Think of Bitcoin
#29Earlier quoted context omitted.
It’s not 100%. If >= 50% of the network is in agreement we can make more bitcoins, right? The limit is set in code. But that code can be altered. Let me know if I’m wrong
Technically yes it is possible. Very, very unlikely though.
But who knows what we'll all be thinking when 2140 arrives?
Re: What I Think of Bitcoin
#30This post should be mostly discounted because Ray doesn't really seem to be aware of the true risk of the Tether scam, the biggest component of and risk to Bitcoin's value. For those not aware, Tether is a "stable coin" that issues tokens that supposedly represent dollars and can be used as a medium of exchange. However, it's widely suspected that Tether is unbacked and printing fake dollars and even Tether itself ha…
Ray isn't the only one, the market is pricing in zero risk of tether collapsing. It trades at no discount to real dollars, anybody with a Coinbase account could convert pretty high volumes of tether to real dollars.
I really have no idea why, it seems sketchy.