Fundamental value of Bitcoin
- Thread starter JackRab
- Start date
The opposite of what? No cryptocurrency has reached a size large enough to compare with other government issued currencies, yet, in order to make that statement. So what are you talking about?OK kids, I am tired of educating you, time will show you there is nothing new under the Sun.
In reality, exactly the opposite happened...
I created this thread to try and get to an understanding of the fundamental value of Bitcoin...
Just because there are cynics, me included, doesn't mean I'm anti-Bitcoin... maybe cynic is the wrong word, critic is better. But as with anything I'd like to value something before I buy. Just because it's more expensive than yesterday doesn't mean it's a good buy... only it was batter to buy yesterday than today...
Milton Friedman doesn't have anything to do with this thread... why would him saying there will be something like E-Cash mean anything about the fundamental value of it?
ByeBye
I wouldn't say miners are bureaucrats... but the way I understand it, is that miners are necessary to keep it going... otherwise the blockchain and transactions will stop being checked/confirmed. And if it's too expensive to mine, they are forced economically to stop mining. Then transactions are cluttered and not cleared... grinding it all to a halt. Everyone will panic and try to sell holdings... which will be difficult since the network is basically running at 10%.
So their incentive is to keep the price of a coin up... and going up... otherwise at one point in time they will stop mining since the costs will outweigh the proceeds. Didn't that happen in Bitcoin Cash a few days ago? Mining got difficult due to some setting in the program, and it wasn't worth mining it and a bunch of miners stopped.
So in effect, since miners are making the biggest financial investment in hardware and running costs... they are all in it together. They are competing, but also they rely on each other to keep it going.
That's another way for governments to disrupt, stop the mining.. or tax them or whatever. But that will be a bit difficult since most are in the Far East. Mongolia etc?
Anyway... here's another interesting article about the fundamentals...
https://www.coindesk.com/bitcoin-traders-know-fundamental-analysis/
I've said it more than one time and this is the last time I'll say it. The value of bitcoin is people's willingness to use it, just as any other currency in this world. That is why what Milton Friedman said is the most important thing about the subject and it's fundamental value. That was the fundamental value of the dollar a few decades ago and to an extent, today too. You might think that the dollar was so widely used because it is issued by the US government and that that is it's fundamental value. But it is not, the reason is simply that the dollar was the currency used in the US, a country that, because of very little government in it's beginnings became the richest country in history, that provides reasonable stability, widespread acceptance and increases people's willingness to use it. That richness is the key factor that made even after 1975, when the dollar was not "officialy" related to gold(it hadn't been in pratice much sooner because the US government flooded the world with dollars), the dollar still be the "world currency".
This is something that, as the US government grew and fucked up the country, made the dollar slowly less attractive, but not totally, yet. And this contributes to the value of cryptocurrencies, because it gradually makes them more attractive for people to use it.
In a way, you could even say that bitcoin's biggest value is the growth of the U.S. Government and that they are directly proporcional.
But hey, you believe whatever you want to believe.
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I think you have just proven the opposite of your point. Yes, there has to be the will of the people to use it, but where does this will come from?I've said it more than one time and this is the last time I'll say it. The value of bitcoin is people's will of using it, just as any other currency in this world. That is why what Milton Friedman said is the most important thing about the subject and it's fundamental value. That was the fundamental value of the dollar a few decades ago and to an extent, today too. You might think that the dollar was so widely used because it is issued by the US government and that that is it's fundamental value. But it is not, the reason is simply that the dollar was the currency used in the US, a country that, because of very little government in it's beginnings became the richest country in history. That richness is the key factor that made even after 1975, when the dollar was not "officialy" related to gold(it hadn't been in pratice much sooner because the US government flooded the world with dollars), the dollar still be the "world currency".
This is something that, as the US government grew and fucked up the country, madr the dollar slowly less attractive, but not totally, yet. And this contributes to the value of cryptocurrencies, because it gradually makes them more attractive for people to use it.
In a way, you could even say that bitcoin's biggest value is the growth of the U.S. Government and that they are inversely proporcional.
But hey, you believe whatever you want to believe.
You mention that the US dollar caught on not because of the government but because its what was being used. Ummm... and why was it being used? Because the government issued it. If any joe blow issued their own currency, how far would that go?
The gold factor is an interesting point. I'm not an expert on the history of the US dollar, but it may very well be that the gold backing is exactly what gave people trust. First, the government issued it, which is huge, but then you had the gold backing, and people liked the shinny metal.
With bitcoin, you don't have the government support, which is a big problem, nor do you have something tangible, like gold, backing it.
If it so happens that bitcoin rises to such prominence that you can use it along side the US dollar, and the US dollar is actually having to compete, the world is in utter chaos. The government would have lost power, and your personal safety would be in jeopardy because the police nor military would be protecting your interests. And really, at this point, as others have noted, your access to bitcoin might not be possible. The internet only works because of cooperation between all the different countries and governments. The minute the internet goes down, so does your bitcoin. And how do governments have control? By making sure their financial and monetary systems are under their control.
You can say it as many times as you like... doesn't make it correct mate...
Everything is relative. That means it's connected... me swapping USD for BTC will be based on numbers and logic. Same goes for me swapping USD for any stock, or other currency... it should be based on a fundamentally sound decision, not just because everyone is doing it.
That's the difference between gambling and making an educated decision. That's the way I trade... and that's the way I stay out of trouble...
If you're standing on a bridge, and 5 people jump... do you jump as well? Or do you think.. hmm, lets see.. .how deep is the fall? How deep would the water be? How big am I compared to the others in case I go deeper in the water? Can I fXXing swim? Do the others have a bungee-rope?
As I said, you believe whatever you people want to believe. That is the reason you people are fucking up your own country, ignoring reality and not seeing precisely that this mentality is fucking yourselves. That is the reason I made it clear up there that the dollar's value was the US, DESPITE, NOT BECAUSE of the government. That is the fundamental issue and why commies don't get the idea. The belief in government power and its competence, just keeps people blind and going further down the hole. Governments have no place in issuing currency anymore and the rise of cryptocurrencies are a proof of that. And in the end, if it's going to happen, like uber, no matter how many commies and "nay-sayers" step in the way, it is going to happen. Time will tell.
Hahahhaha... you think Uber can operate where ever it wants to? All it takes is one law and the whole thing is finished. Clearly they are right now providing services that are useful, both to customers who need a ride but need something better than public transportation, and also the drivers who need to make extra cash. In a way, this helps the government because they don't have to upgrade public transport and don't have to pay people to sit at home. But the minute the government decides that Uber has to go, it can be over in a day. Heck, Apple could also kill Uber because it is after all just a stupid app. Imagine if Apple started their own Uber and all of a sudden blocked people from downloading the Uber app. What will Uber do then?As I said, you believe whatever you people want to believe. That is the reason you people are fucking up your own country, ignoring reality and not seeing precisely that this mentality is fucking yourselves. That is the reason I made it clear up there that the dollar's value was the US, DESPITE, NOT BECAUSE of the government. That is the fundamental issue and why commies don't get the idea. The belief in government power and its competence, just keeps people blind and going further down the hole. Governments have no place in issuing currency anymore and the rise of cryptocurrencies are a proof of that. And in the end, if it's going to happen, like uber, no matter how many commies and "nay-sayers" step in the way, it is going to happen. Time will tell.
Governments are the only people who can, and should, issue currency. Look at the mess in Europe with the Euro. Each country doesn't have autonomy over their cash. The poor countries have to use expensive Euros so they aren't competitive, and the rich countries have to keep shoveling money to poor countries to plug up the holes. If you take the ability of a country to issue currency and everything that comes with that, you actually begin to erase borders. If the US loses the ability to print their own currency, you might as well dissolve the military and all the rules of law that are pertinent to the US and watch the country fall apart.
So you actually have it wrong. If the governments can't issue their own currency, the country implodes.