The "coins" don't have a value. Think of them as a transaction identifier and you will be fine
Doesn't help for holding on to them but yeah.
Bitcoins/Litecoins/Virtual Currencies
- Thread starter Tripamang
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That's actually not a bad way to look at it. Bitcoin is like gold in that it's not a monetary instrument. It's an asset. It can't ever be a currency in a current form because it lacks the basic necessities of currency. The exchange of bitcoins for goods, services, or financial assets is a barter transaction.
The problem is that nearly anything can be used for barter. Some things are bad at it and some things are good. Bitcoin isn't a bad means of barter and certainly has upsides, but the big thing is getting the people you want to trade with to agree that your asset, who's primary function is a store of socially agreed upon wealth, is actually socially agreed upon. Gold got that pretty well on lockdown, but bitcoin is new on the block, has systemic flaws, and can be easily replaced by another more efficient cryptocurrency.
What bitcoin does really fucking well is function as a speculative bubble. It has a perfectly inelastic supply with an extremely elastic demand. That's an environment ripe for making and losing shit tons of dough.
I would also like to say that I find bitcoiners use of the word "fiat" really annoying. In that the USD is obviously fiat by the definition of "issued by the government", but fiat is used also solely with second definition "no intrinsic value". The instrisic value of the dollar is effectively 0 because we don't have a lot of use for a small square of cloth paper with some scribbling on it, just like the intrinsic value of some bits in computer memory signifying the existence of those bits isn't worth anything in and of itself.
The problem is that nearly anything can be used for barter. Some things are bad at it and some things are good. Bitcoin isn't a bad means of barter and certainly has upsides, but the big thing is getting the people you want to trade with to agree that your asset, who's primary function is a store of socially agreed upon wealth, is actually socially agreed upon. Gold got that pretty well on lockdown, but bitcoin is new on the block, has systemic flaws, and can be easily replaced by another more efficient cryptocurrency.
What bitcoin does really fucking well is function as a speculative bubble. It has a perfectly inelastic supply with an extremely elastic demand. That's an environment ripe for making and losing shit tons of dough.
I would also like to say that I find bitcoiners use of the word "fiat" really annoying. In that the USD is obviously fiat by the definition of "issued by the government", but fiat is used also solely with second definition "no intrinsic value". The instrisic value of the dollar is effectively 0 because we don't have a lot of use for a small square of cloth paper with some scribbling on it, just like the intrinsic value of some bits in computer memory signifying the existence of those bits isn't worth anything in and of itself.
Tuco
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Haha thanks. I was worried about that. Usually when I put money into a new bank I always try to deposit and then withdraw a reasonably large amount (several thousand) before I put more money in.
As for BTC being valuable, it just seems like a function of whether it can be used as a currency. There's nothing out there I know of that I want to buy that I can use BTC to purchase, so it has very little intrinsic value to me.
It certainly isn't a currency because it doesn't an issuer i.e. someone who guarantees the exchange of currency for good, services, or financial instruments, which is pretty fucking important for currency. Also, that isn't intrinsic value. Intrisic value is what it's actually worth absent of the support structure around it. In USD it's the value of a piece of cloth paper with some writing on it. In the case of BTC it's the value of the information signifying you have BTC, absent any system of exchange.
I am mostly talking about bitcoin as the store of a wallet yes. Trying to put a value on 1 bitcoin.
I think the 'transfer system' of bitcoin has value. My guess, given other current electronic transfer systems that aren't as efficient would be somewhere between $5 and $20 billion. But the problem with bitcoin the transfer system, is that it doesn't have a monopoly. It's open source and someone with better funding, better marketing and an actual better currency (more stable price, with an intrinsic value) will certainly come along and take bitcoins place. For a small fee...
Gold became a currency because it had value as a commodity. It still does.
Fiat currencies have value (maybe not ideal, but they still have value), because governments say they do and have the power to back that up. Governments have guns, laws and jails that do a pretty good job at saying 'fuck you, this is a currency'. Unless of course they get a bit stupid and print way too much or fuck their currency up completely. We see a lot of bitcoin fans having a crack at fiat currencies saying they have no value. I think they're not ideal too, but the one thing they are missing is that governments have a shit ton of power and that is the intrinsic value of a fiat currency. Bitcoin fans aren't seeing this.
"When people buy to hold an asset based solely on its market price, that's a speculative bubble."
I think that comment sound close. Perahps I'd change it to, 'that's speculation' isntead. Just think about it. An asset is something that should generate a return on investment, not just capital gains. Say rent, or business earnings. I think when buying an asset, it would be a good idea to take it's earnings power into consideration.
When one buys an asset with the sole reason being because they think they think the price will increase, they are no longer investing, they are speculating. And we all know speculating is hard for professionals and markets are pretty efficient. When amateurs and the public try, they really don't have much chance.
Yeah, buying commodities IS speculation. Speculation isn't necessarily a bubble though.
People buying commodities as a hedge for inflation have reasons why they are doing it. They buy gold because they think dollars will lose value though inflation, and they think gold will retain it's value better. It's not really a revenue generating asset, it's a bet that it stores the value of ones wealth better than dollars. Speculation sure. But underneath gold and commodities still have their value as a commodity and if things flip too out of line, commodity produces up their production.
I think the 'transfer system' of bitcoin has value. My guess, given other current electronic transfer systems that aren't as efficient would be somewhere between $5 and $20 billion. But the problem with bitcoin the transfer system, is that it doesn't have a monopoly. It's open source and someone with better funding, better marketing and an actual better currency (more stable price, with an intrinsic value) will certainly come along and take bitcoins place. For a small fee...
Gold became a currency because it had value as a commodity. It still does.
Fiat currencies have value (maybe not ideal, but they still have value), because governments say they do and have the power to back that up. Governments have guns, laws and jails that do a pretty good job at saying 'fuck you, this is a currency'. Unless of course they get a bit stupid and print way too much or fuck their currency up completely. We see a lot of bitcoin fans having a crack at fiat currencies saying they have no value. I think they're not ideal too, but the one thing they are missing is that governments have a shit ton of power and that is the intrinsic value of a fiat currency. Bitcoin fans aren't seeing this.
"When people buy to hold an asset based solely on its market price, that's a speculative bubble."
I think that comment sound close. Perahps I'd change it to, 'that's speculation' isntead. Just think about it. An asset is something that should generate a return on investment, not just capital gains. Say rent, or business earnings. I think when buying an asset, it would be a good idea to take it's earnings power into consideration.
When one buys an asset with the sole reason being because they think they think the price will increase, they are no longer investing, they are speculating. And we all know speculating is hard for professionals and markets are pretty efficient. When amateurs and the public try, they really don't have much chance.
Yeah, buying commodities IS speculation. Speculation isn't necessarily a bubble though.
People buying commodities as a hedge for inflation have reasons why they are doing it. They buy gold because they think dollars will lose value though inflation, and they think gold will retain it's value better. It's not really a revenue generating asset, it's a bet that it stores the value of ones wealth better than dollars. Speculation sure. But underneath gold and commodities still have their value as a commodity and if things flip too out of line, commodity produces up their production.
I would also note that coinbase does appear suspiciously ponzi like to me. I've no proof, but my gut is they are paying out based on new entrants to the market. So caveat emptor &c.
So goddamn annoying. They have to mention it at every possible moment also.
"This is because China doesn't want to use their Renimbi (their fiat currency) for BTC"
"Does anyone want to trade bitcoins for euros (the fiat currency)?"
Shit like that ALL the time. We get it. You read the word fiat and now use it any time you want to look like an off the grid asshat.
Eidal
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I think people use fiat as just a placeholder for whatever local currency the person desires. Its not like anything would be lost in translation if you replace fiat with USD; people would know what I mean... but given the international characteristic of a cryptocurrency, it just makes sense to use a generalized term for all local currencies.
edit: if you're perceiving a thinly veiled slight against all gov-backed currency, then yea... that's definitely prevalent in the anarchocapitalist demographic of cryptocurrency enthusiasts. Whatever.
edit: if you're perceiving a thinly veiled slight against all gov-backed currency, then yea... that's definitely prevalent in the anarchocapitalist demographic of cryptocurrency enthusiasts. Whatever.
Tuco
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Just bought 0.1 BTC off coinbase at 534.20 USD per coin using coinbase. Obviously it's not enough to be a significant investment but I wanted to be part of the fun.
Thanks for telling me about it. I tried using mtgox.com before I saw your message and the upload on my driver's license failed! coinbase also had an instant verification of my bank account. I've never seen that before but you have to send them your bank account login credentials.
Anyway within 15 minutes I was verified enough to instantly buy BTC.
Falstaff
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Overstock.com to begin accepting bitcoin as payment in 2014
http://www.businessinsider.com/overs...t-year-2013-12
http://www.businessinsider.com/overs...t-year-2013-12
Ravishing
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Hah, I just did the same thing, but for a lil higher price, couple days ago it was in the 400s but I was only just trying to figure out which site to use. Found coinbase due to this thread and set it all up. Just purchased .1 at ~690sh. I wouldn't mind buying more if it goes lower but probably won't purchase anymore if it keeps going up. It's such a volatile market from what Ive witnessed.
Elerion
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That's not going to happen before BTC can reliably be exchanged for USD on a large scale. The company clearly states they will not carry BTC on their balance sheet, but immediately convert to USD. As far as I understand, that's not currently viable.
I still wouldn't invest a single penny in cryptocurrency as anything other than a hobby. The downside risk is 100%.
Falstaff
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Big Phoenix
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Izo
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