Major fall in BTC price (16th Jan)

[tecate]

Certainly if someone accused me of making a circular argument I would take it as a put down. Satoshi resigns herself to accepting that the only hay to achieve that Holy Grail of "value" is to use a circular argument.

I disagree with your rationale and I disagree with the notion that Satoshi has engaged in Circular Reasoning. The exchange occurred on bitcointalk - a discussion board not dissimilar in structure to this one. It was an open, public discussion. "Worries", "resigns", "scepticism", admission of btc having a 'fatal flaw', "circular reasoning" - these are all items that you have decided to interpret. There is no bona fide evidence that this is Satoshi's thinking.

(BTW the bold was in the original Wiki and was not inserted to promote my Worldview.)

That may be from whereever you sourced it. However, in the original posting on bitcointalk it is NOT bolded.

 

[Duke of Marmalade]

I disagree with your rationale and I disagree with the notion that Satoshi has engaged in Circular Reasoning. The exchange occurred on bitcointalk - a discussion board not dissimilar in structure to this one. It was an open, public discussion. "Worries", "resigns", "scepticism", admission of btc having a 'fatal flaw', "circular reasoning" - these are all items that you have decided to interpret. There is no bona fide evidence that this is Satoshi's thinking.

Ok let's agree to disagree on our read of the Japanese mind.

 

[Brendan Burgess]

We are going through a period of price discovery for a technology that is still being developed and where there is no precedent for pricing of same. Once again, you don't seem to be taking into consideration that you are making judgements on a technology that is as yet not fully developed/matured. I have an open mind (and I'm open to the possibility that Brendan may be right on the money) as regards where that pricing will end up - that's the answer to your question. Nobody will be able to provide you with an answer on this that you will be satisfied with (aside from the one you wish to believe)....you'll just have to wait and see how it all pans out.

I don't get this at all and I am struggling to find a comparison.

Maybe the blockchain technology? Let's say someone had the patent for this. They could charge users a fee for using it. No one could use it without paying a fee. I might argue "this will never amount to much" and your better technological insight might argue "this is as important as the internet and it will have huge revenues and profits in years to come." I would conclude that it was not worth very much - but you conclude that it's worth owning a part of this company and you pay $10,000 a share. You might be right and I might be wrong.

I can't do that with Bitcoin. There is no income stream - there is not even a potential income stream. The only reason you are willing to pay $11,000 for it is because you think that someone else will pay more for it in the future.

At least with tulips, you could plant the tulip and maybe produce more tulips from the one bulb and sell them on to people who love the crazy pattern.

But with Bitcoin, there is nothing at all. Which is why it's got no financial value at all.


Brendan

 

[jman0war]

Isn't that the same with Gold?
It has limited real world uses and none of those use cases couldn't be supplanted by another material.
Owning gold generates no income stream.

 

[noproblem]

Isn't that the same with Gold?
It has limited real world uses and none of those use cases couldn't be supplanted by another material.
Owning gold generates no income stream.

You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income. Oh, don't ever forget, women love it and don't ever forget that coz if you do your income stream could diminish very quickly.

 

[Negotiator]

You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income.

The uses that you refer to accounts for about 12% of gold production.....not exactly what I would call income producing!

What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?

 

[jman0war]

You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income.

The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.

 

[noproblem]

The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.

Give an ingot of it to some friends and see will they agree. You'll become very popular and the presents metallurgy won't be of any concern to them.

 

[noproblem]

The uses that you refer to accounts for about 12% of gold production.....not exactly what I would call income producing!

What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?

Yes, i'd like to have it. Wouldn't you?

 

[jman0war]

Give an ingot of it to some friends and see will they agree. You'll become very popular and the presents metallurgy won't be of any concern to them.

Give them a bitcoin and they will also agree and you'll be popular.

 

[noproblem]

By all means, but most people would look in

 

[jman0war]

noproblem, its as though you are rationalizing the high price of Gold, because people are prepared to pay that much for it.
Which is essentially the same thing Brendan says about the bitcoin price, although he makes the argument that this makes bitcoin have no financial value.

 

[Brendan Burgess]

What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?

This has been dealt with in other threads.

Buyers of art get enjoyment/challenge/status from owning it. In some cases, galleries buy them to attract money spending visitors.

You might consider a Basquiat to be worthless and I would agree with you. But there are enough people and institutions who see something in it that we don't.

Bitcoin offers none of these. Just as my shares in Ryanair offers me no enjoyment other than a stream of earnings.

Brendan

 

[jman0war]

This has been dealt with in other threads.
Buyers of art get enjoyment/challenge/status from owning it. In some cases, galleries buy them to attract money spending visitors.

That's not true Brendan.
People enjoy holding bitcoin as it's limited in supply.
It's owning a piece of a very interesting open source project that is disrupting traditional banking and government regulation.

Just wait until the next economic cyclic crash and we'll probably see another, larger mass migration into the crypto space.

 

[joe sod]

The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.

when they came up with bitcoin they went out of their way to link it with gold, the PR for bitcoin is basically a solid gold coin, they didn't use a US dollar or euro but a gold coin. So obviously the inventor of bitcoin saw something very valuable in the image of gold.

 

[jman0war]

when they came up with bitcoin they went out of their way to link it with gold, the PR for bitcoin is basically a solid gold coin, they didn't use a US dollar or euro but a gold coin. So obviously the inventor of bitcoin saw something very valuable in the image of gold.

Yes you are right about gold.
Many bitcoiners are also into gold.

They just see that bitcoin is better than gold.

Infact, here is the blog of the person that I personally believe is the most likely one to be Satoshi Nakamoto.
http://unenumerated.blogspot.com/
He writes a lot about gold and money in the historical context.

 

[TheBigShort]

You might consider a Basquiat to be worthless and I would agree with you. But there are enough people and institutions who see something in it that we don't.

And that basically sums it up with Bitcoin. There are enough people who see something in it that you don't.

For me, I see it as an opportunity to store money outside of the monetary system. Private money if you will. Now that cash is in decline and online transactions are increasing (in Sweden 'no cash signs' are emerging) then all of my money is under the control of central authorities.
This would be fine if you could 100% trust these authorities, but considering the bank bailouts, pension raids, money printing, economic policies, continuing fraud and manipulation, having an option outside the monetary system to store some money is a great idea.

The Bitcoin blockchain has at max, space for 21m full units. To buy a full unit today it will cost near $11,000. That is because more and more people are availing of the option to store money outside the system. For sure, it is volatile and risky, but all that does is limit the amount you are willing to purchase. In fact, the volatility can act as a deterrent to spending sums that you are not prepared to lose, or will adversely impact your standard of living if price crashes.

If economies prosper, productivity increases, wealth is distributed and trust returns to the banking economy, Bitcoin price will crash.

But as long as mistrust prevails, phoney QE programs are applied, pension raids occurring, bank charges, bank manipulation, bailouts, write downs for developers but not mortgage holders, write downs for vulture funds but not home owners, bogus selling practices, money laundering, criminal activity, outlandish bonuses, little to zero accountability, etc...etc..
As long as US and major economies of the world continue to drive up debt and devalue their currencies then the option for the ordinary joe to put money outside that system will prevail.

It's a brilliant idea, not without its flaws, problems and risks. But clearly people see something in it that you don't and in turn place value on it.

 

[Negotiator]

This has been dealt with in other threads.

Buyers of art get enjoyment/challenge/status from owning it. In some cases, galleries buy them to attract money spending visitors.

You might consider a Basquiat to be worthless and I would agree with you. But there are enough people and institutions who see something in it that we don't.

Bitcoin offers none of these. Just as my shares in Ryanair offers me no enjoyment other than a stream of earnings.

Brendan

I'm sure every BTC holders gets great enjoyment/status/challenge our of holding their crypto just the same as art.......granted the price is higher than what they bought it at! haha

I get your point about money spending visitors but that's gotta be just a fraction of all art collections in circulation. I no longer hold any Ryanair shares but I used to get great satisfaction out of holding them when I took my seat and saw a full plane.....you should book more Ryanair flights Brendan, you'll be a much happier shareholder for it!

 

[TheBigShort]

I'm sure every BTC holders gets great enjoyment/status/challenge our of holding their crypto just the same as art...

Its a good point. People value things in so many different ways. Limiting 'value' to some book accounting exercise is flawed.
An art painting costing $450m is not the result of any business plan, calculated returns on rent or anything like that. It is in part of admiration of the piece of work and its historical significance. It is, in part to somebody having more money than they know or care what to do with it. We can know this because its price went from $200m to $450m in the space of 20mins.
My guess is that the art market is in a bubble, that it will burst at some point, and that price tags being bandied about for vintage Ferraris and Da Vincis are based on alot of hot air.
That said, they are worth something, no doubt. But I suspect the purchasers are speculating that someone else will pay more at a later point, or they are simply storing their wealth outside the monetary system.

 

[jman0war]

I had started collecting some vintage bicycles a few years ago, with the plan on restoring them to sell them on.
I didn't get around to restoring most of them in fairness, but sold each bike, one at a time.

In each case i was able to sell the bike for more money than i acquired it for.
I originally presumed i would have to commit labour, time and money on restoration; but i didn't, and it worked out nonetheless.

Does this mean i operated a ponzi?