If Bitcoin was worth $1 each in 2011, why are they worth $12,000 each now?

jman0war

Registered User
Messages
267
Oh but no it isn't.

It isn't a medium of exchange.
It isn't a store of value.
It isn't a unit of account.
How so?
People transact with bitcoins - MoE
People store their wealth in bitcoin - SoV
not sure about unit of account as yet. (it is on cryto exchanges, prices denoted in BTC)
 

fpalb

Registered User
Messages
190
We'll have to agree to disagree on that. I've laid out my case for it in previous posts already.
 

Sarenco

Registered User
Messages
7,005
Surely Bitcoin is a medium of exchange Duke, no? I mean there is no legal obligation on anybody to accept payment for anything in Bitcoin (unlike legal tender) but that hardly means it isn't a medium of exchange.

Is it a useful store of value? Well advocates presumably hope/expect that it will become widely accepted as a useful store of value in the future but I think most would accept that it's not there yet.

Interestingly, the IRS considers crypto currencies to constitute property - not a currency - for tax purposes.
 

Duke of Marmalade

Registered User
Messages
3,468
Surely Bitcoin is a medium of exchange Duke, no? I mean there is no legal obligation on anybody to accept payment for anything in Bitcoin (unlike legal tender) but that hardly means it isn't a medium of exchange.

Is it a useful store of value? Well advocates presumably hope/expect that it will become widely accepted as a useful store of value in the future but I think most would accept that it's not there yet.

Interestingly, the IRS considers crypto currencies to constitute property - not a currency - for tax purposes.
Sarenco, my estimate is that 99.9% of BTC transactions are either speculative or perceived hedges against Armageddon. So ok .1% are for purposes of medium of exchange. Nobody actually needs or wants it to enact an exchange for goods. To me that means that in effect it is not acting as a medium of exchange. Please don't get like Water and Black tea expecting 100% precision in all statements.
 
Last edited:

jman0war

Registered User
Messages
267
Sarenco, my estimate is that 99.9% of BTC transactions are either speculative or perceived hedges against Armageddon. So ok .1% are for purposes of medium of exchange. Nobody actually needs or wants it to enact an exchange for goods. To me that means that in effect it is not acting as a medium of exchange. Please don't get like Water and Black tea expecting 100% precision in all statements.
I don't know, but I doubt very much your numbers.
Argentines are currently fleeing their Peso and buying USD, Gold and Bitcoin.
Same in Venezuela and Zimbabwe and there's a growing interest in Iran.

There's some girls in Afghanistan that are depending on bitcoin.
http://digitalcitizenfund.org/
Since 2014 a non-profit has been standing up internet/digital learning schools for girls.
They write blogs i guess and get paid in bitcoin.
Bitcoin is good because girls have full control, they can't open bank accounts in Afghanistan, not without a male relative.
It's dangerous to have cash and often the cash they have gets taken from them by family.
https://news.bitcoin.com/afghan-entrepreneur-empowers-women-through-bitcoin-in-afghanistan/
 

TheBigShort

Registered User
Messages
2,789
Excellent stuff jman0war. It's activities and events like that that inspire confidence in Bitcoin having value. Gets away from all noise of the detractors whose only interest in Bitcoin is mostly to hope it crashes and burns so they can say "I told you so".
 

joe sod

Registered User
Messages
1,512
I don't know, but I doubt very much your numbers.
Argentines are currently fleeing their Peso and buying USD, Gold and Bitcoin.
Same in Venezuela and Zimbabwe and there's a growing interest in Iran.

There's some girls in Afghanistan that are depending on bitcoin.
http://digitalcitizenfund.org/
Since 2014 a non-profit has been standing up internet/digital learning schools for girls.
They write blogs i guess and get paid in bitcoin.
Bitcoin is good because girls have full control, they can't open bank accounts in Afghanistan, not without a male relative.
It's dangerous to have cash and often the cash they have gets taken from them by family.
https://news.bitcoin.com/afghan-entrepreneur-empowers-women-through-bitcoin-in-afghanistan/

so thats a big aspect to bitcoin investing now ,its virtue , if their are poor women in afghanistan depending on it, then it must be a good thing and it must be a legitimate investment seems to be the logic. The dollar is bad, gold is bad but bitcoin is good , therefore im also a good guy because I invest in something that women in afghanistan depend on. I think that is also a big part of the attraction and why certain people like to associate themselves with bitcoin.
 

Duke of Marmalade

Registered User
Messages
3,468
I know I'm starting to get repetitive so apologies to those that have heard it all before.

In this very complex world we all have to trust experts in those fields we are not expert ourselves.

We trust doctors and statisticians when they say smoking increases mortality.
We trust pilots to get us from A to B by what a priori are most implausible means - rushing tons of metal into the air!
We trust professionals of all sorts.
We even trust our Central Banks to manage the value of our currency.

When it comes to bitcoin I should have known to trust computer technicians as to its technological attributes. However, I have enjoyed delving into that mysterious box but it was as unnecessary as studying aeronautics before taking my next passenger flight.

As to the value of bitcoin as money, I have a modicum of economic expertise by my own profession, but lest I have a closed mind I prefer to trust to the wisdom of mainstream commentators and Nobel laureates. And their view is almost unanimous.

Let's put it another way. If the economists were telling me this was the way forward for money I would have to go along with that even though a priori I would be as skeptical as I would be that Bernoulli's Law can make tons of metal defy Newton's Law (of gravity). Computer folk telling me it is the future for money doesn't do it for me at all.

Now and again experts differ in their own field like on climate change. It is then left to us laymen to make a judgement call.
 
Last edited:

TheBigShort

Registered User
Messages
2,789
I prefer to trust to the wisdom of mainstream commentators and Nobel laureates. And their view is almost unanimous.

That is a broad sweeping assumption

In this part of the world have embraced a debt-based, consumption driven society. The wealth creation in this period is the greatest levels ever generated. The scientific advances are arguably been the greatest ever generated.
The debt created in this period, is also the greatest levels of debt ever generated. The pollution and environmental damage is also at the greatest level ever created.
The system, in its insatiable appetite to engineer 'economic growth', defined by such measures as inadequate as GDP, it is creating the most unstable - climate, political, social, financial environment ever seen.

Instability induces conflict. Conflict will be paid for using my fiat currency, like it was to save the financial sector.

I now have an option, at least for now, to store some wealth in digital, electronic form, outside the influence of that system.
 

jman0war

Registered User
Messages
267
Let's put it another way. If the economists were telling me this was the way forward for money I would have to go along with that even though a priori I would be as skeptical as I would be that Bernoulli's Law can make tons of metal defy Newton's Law (of gravity). Computer folk telling me it is the future for money doesn't do it for me at all.

Now and again experts differ in their own field like on climate change. It is then left to us laymen to make a judgement call.
Why are governments looking to copy Bitcoin?
 

Duke of Marmalade

Registered User
Messages
3,468
Why are governments looking to copy Bitcoin?
Copying bitcoin is a completely different thing from using it. If it is Venezuala you are referring to, I believe they are going to back the currency with real assets such as oil. What they are saying here is "look we're using the blockchain technology, that guarantees you that we can't increase the money supply".

I am sure economists do not deny that there are uses for blockchain technology in giving confidence to a national currency which would otherwise lack it. What they don't accept is that entries on a ledger without any backing get value as money simply because they are secure, transferable, limited in supply and de-centralised.
 

fpalb

Registered User
Messages
190
Copying bitcoin is a completely different thing from using it. If it is Venezuala you are referring to, I believe they are going to back the currency with real assets such as oil. What they are saying here is "look we're using the blockchain technology, that guarantees you that we can't increase the money supply".
Whatever new digital currency Venezuala releases (if they even do) I bet it won't be a crytpocurrency, it won't be permission-less or transparent or decentralised. If they wanted to make a currency that wasn't garbage they'd just stop wrecking the one they already have. If they do make something new it'll probably be digital only making it even more centralised than one that is a mix of digital and physical notes and coins. Digital fiat is going to give corrupt and bad governments way more control over money than they've ever had in history, and we'll see the effects of it in the basket case countries.
 

jman0war

Registered User
Messages
267
I don't know Duke of Marmalade, that just doesn't sound right.
If others are recognizing the technology of bitcoin and copying it, that suggests that bitcoin has some sort of value.
 

Duke of Marmalade

Registered User
Messages
3,468
Credit Card technology, Debit Card technology, online bank transfers; these are all valuable technologies and its developers and providers no doubt make good money. But none of these things convey any value on the bank account entries that they transfer.

Similarly Blockchain technology may have some value* but that does not mean the entries on a Blockchain ledger have any value.

* “use” is probably a better term since being open source they hardly have any value
 

jman0war

Registered User
Messages
267
Duke i believe the crux of this are competing theories of value.
I am subscribing to the Subjective theory of value, while i think you might be subscribing to the Instrinsic theory of value.

An intrinsic theory of value (also called theory of objective value) is a theory of value in economics which holds that the value of an object, good or service, is intrinsic, meaning that it can be estimated using objective measures. Most such theories look to the process of producing an item, and the costs involved in that process, as a measure of the item's intrinsic value.
 

cremeegg

Registered User
Messages
3,673
That is a broad sweeping assumption

In this part of the world ...The pollution and environmental damage is also at the greatest level ever created.

This is simply untrue.

Air quality in the cities and water quality in the rivers of England are incomparably better than they were 100 years ago.
 
Top