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

Duke of Marmalade

Registered User
Messages
3,416
I am trying to picture who has €1M in bitcoin and sleeps easy at nights. I can think of 4 categories.

1) Nerves of steel (elac)
2) Blind faith (ant dee)
3) Squoodles of other assets, BTC is a hobby (fpalb)
4) Somewhat challenged in the common sense department (The B/S)
 
B

BreadKettle

Guest
Hi BK

I gather that in the past Bitcoin was used for buying coffee and pizzas.

I understand that the transaction costs now mean that this is no longer feasible.

If I am happy paying €1 for something, I would be very reluctant to pay €0.0000555 for it a few years' later.

Of if I pay €3 for a cup of coffee in January, I would be reluctant to pay whatever 3 divided by 18,000 is a few months' later.

Brendan

The transaction fee issue I agree is definitely a valid concern, it has shot up recently as the network has become congested. Like most new technology it will have it's teething problems. This is due to be addressed by the incoming lightning network upgrade. Alternatively you could just look at Bitcoin Cash.

The second point I don't really get at all. What is the issue there?
 

landlord

Registered User
Messages
954
I am trying to picture who has €1M in bitcoin and sleeps easy at nights. I can think of 4 categories.

1) Nerves of steel (elac)
2) Blind faith (ant dee)
3) Squoodles of other assets, BTC is a hobby (fpalb)
4) Somewhat challenged in the common sense department (The B/S)

I wonder in years to come if we might be saying the same for those sitting on 1M in FIAT currency...... B/S back me up here.
 

Fella

Registered User
Messages
524
I wonder in years to come if we might be saying the same for those sitting on 1M in FIAT currency...... B/S back me up here.

I'm struggling to see how Bitcoin or any crypto can replace money. Say I have 1million in the FIAT currency I don't understand this talk of it devaluing (granted I'm not the most educated ! ) but how does my money devalue? Can someone explain it to me ? So for example Bitcoin keeps rising and shops only start taking Bitcoin or maybe they take Bitcoin and normal FIAT?

So I go to Tesco and want to buy a weeks shopping and it's in Bitcoin now so my normal 1million has devalued to say 100k (i'm probably ok to buy some shopping and convert my 1million to Bitcoin) so I do a very expensive shop and i'm running out of money fairly quick as I go to buy petrol next . But lets take someone on social welfare are they going to be paid in Bitcoin? if not they are not going to get much for there money and everyone else that didn't start off as a millionaire in FIAT is not going to able to buy much at all. How can they borrow to buy ? are there Bitcoin banks? what if you don't pay the bank back ? This would need to be adopted surely by each Government before its any way at all practical.

For me saying FIAT currency will collapse makes no sense , I understand currencies devaluing against each other but one falls and one rises. I don't see a mainstream place for crypto currencies unless its recognised by governments and central banks to me it looks worthless.

I'm not closed minded on it though , if someone could explain how it will work and how people can Borrow Bitcoin to buy on credit like with normal FIAT then I'm interested.

Thanks
 

ant dee

Registered User
Messages
279
I'm struggling to see how Bitcoin or any crypto can replace money. Say I have 1million in the FIAT currency I don't understand this talk of it devaluing (granted I'm not the most educated ! ) but how does my money devalue? Can someone explain it to me ?
Hi, Fella
This is a 30 minute video that sort of explains money printing.
https://www.youtube.com/watch?v=iFDe5kUUyT0&list=PLE88E9ICdipidHkTehs1VbFzgwrq1jkUJ&index=4

Of course Mike Maloney is a precious metals dealer, his views are very biased so take all that with quite a bit of salt.
The important thing is take from this is to understand why money just sitting in a bank account is devaluating. One of the main reasons we all invest.
 

landlord

Registered User
Messages
954
Hi, Fella
This is a 30 minute video that sort of explains money printing.
https://www.youtube.com/watch?v=iFDe5kUUyT0&list=PLE88E9ICdipidHkTehs1VbFzgwrq1jkUJ&index=4

Of course Mike Maloney is a precious metals dealer, his views are very biased so take all that with quite a bit of salt.
The important thing is take from this is to understand why money just sitting in a bank account is devaluating. One of the main reasons we all invest.


I have to say those videos from Mike Maloney are extremely well made.
There are a series of them...start with the first one. I would imagine anyone invested in precious metals has watched those videos.
 

Fella

Registered User
Messages
524
This post will be deleted if not edited immediately lads I only watched the first 15 mins of that video , I am very open minded but that is a lot of bull if it was true then inflation would be huge.
This is tin foil hat stuff , its very hard to good impartial videos on stuff nowadays i'll have a look elsewhere cause them videos are a joke.
Thanks for links though.

Brought to you buy goldsilver dot com , come on lads , we all probably came to this forum for the same reason to ask for money advice and savings. I have made a lot of money in my life and I never learned any secrets from youtube. Do your own research into everything nearly everything online someone else is trying to make money off of you.
Nobody showed me how to make money gambling I thought myself , nobody is going to tell you if Bitcoin is a good investment or not you have to figure that out for yourself , but I'm going to tell you for free them videos are a waste of time.

Bitcoin may be useful i'll have to figure this one out myself also , there is so little good impartial information about anything online its ridiculous. If the people watching these videos and believe them also believe in Bitcoin it doesn't bode welll for Bitcoin .
 
Last edited:

TheBigShort

Registered User
Messages
2,789
Fella,
My tuppence worth is that bitcoin is not going to replace fiat anytime soon. Its possible it has the potential to do that, but not in short to medium term.
Instead it will, it is, acting as a store of value. Why is it doing this?

Well, ant dee, has linked Mike Maloneys video and I would recommend they as viewing too. I would also recommend the previously mentioned economist Jim Rickards. Both put forward compelling and convincing arguements for gold. But neither are convinced of bitcoin.

I had good fortune to engage Mr Rickards on an online forum once and posed the question "what advice for the working poor? Access to gold is hardly feasible?" Mr Rickards somewhat fudged his answer, without any specific response to the point I raised.
The point being, that Rickards and Maloney, whilst convincing in their advice to invest in precious metals are not talking to people who are struggling to stand still. They are talking to people who already have skin in the game, people with wealth in property, stocks, bonds, art, antiques etc...etc.... They advise, that those people should keep a store of gold to protect themselves from on-coming economic turbelence, due to currency instability from QE, market manipulation and widespread fraud.

David McWiiams has an interesting piece in IT yesterday focusing on how much productivity has grown in Ireland, but wage increases, in comparison, are stagnant. Its not just an Irish issue, but an issue across Western economies, resulting in political turbelence such as minority governments, Trump, Brexit etc...

So if, economic turbelence is on the cards, via fiat devalutions, as Rickards, Maloney and others forecast (I think their arguements are compelling). And if you are a wage earner with little to no access to other funds, how can you protect yourself, and what you value, in the event of economic instability, or the next recession which may threaten your job?
Can you save your cash deposit? Whats the interest rate? Can you invest in stocks? Perhaps, but with fees etc and in general value of stocks will fall as recession looms. Can you invest in gold? Not practical.
Or can you embrace the onset of the digital age and invest in cryptocurrency, built on blockchain technology, that is easily accessible and disposed of? Well, yes you can.
 

TheBigShort

Registered User
Messages
2,789
This post will be deleted if not edited immediately lads I only watched the first 15 mins of that video , I am very open minded but that is a lot of bull if it was true then inflation would be huge.

You need to get past the Hollywood type production and wait for the substantive issues to be dealt with in detail.

Also, just because the official figures say inflation is low, doesnt mean that is the case.
We had 26% gdp growth last year, and the economy is continuing to surge ahead. If inflation was low, our (wage) incomes should have a lot more purchasing power and interest on savings would be rising. Instead, assets are rising fast to all-time highs once again. Putting access to important things like, housing, out of reach for so many, unless of course, they take on huge debt.
 

landlord

Registered User
Messages
954
Well, ant dee, has linked Mike Maloneys video and I would recommend they as viewing too. I would also recommend the previously mentioned economist Jim Rickards. Both put forward compelling and convincing arguements for gold. But neither are convinced of bitcoin.

This is not true. Mike Maloney has a substantial crypto holding that he has discussed in many of his recent videos.
Although he has recently sold some to purchase precious metals.
 

Firefly

Registered User
Messages
3,298
But lets take someone on social welfare are they going to be paid in Bitcoin?

That's a very interesting question!

I would ask a related question those who are fans of Bitcoin, would they be happy to be paid some of their salary next year in Bitcoins based on today's Bitcoin vs Euro price?

i.e. Would someone earning 90k Euro be happy instead to receive circa 3 Bitcoins as salary next year?

Firefly.
 
Last edited:

Firefly

Registered User
Messages
3,298
Purse acts as the escrow, and takes a small cut too.

The site has been running for a few years now, at this point you must be asking, who the hell is using this? why would people effectively pay such a premium for bitcoin with amazon credit. How many people even have a need for this kind of service? Well I was really curious too, so I dug into it.

Thanks for the post (genuinely) and I agree this does seem like a legitimate use of Bitcoin. I have to ask you however, did you not find it a bit strange to have to "dig into" the question of the uses for Bitcoin? And if so, how on earth does the price explosion seem justified? The use you have outlined may be legitimate (as opposed to most other Bitcoin transactions I would guess), but it's still kinda niche isn't it?

I guess the other reason why the price has gone so high, is the "store of value" argument. But again, what's behind this? Why has gold not risen too, or are wise & conservative holders in gold dumping their assets for Bitcoin?
 

Brendan Burgess

Founder
Messages
45,244
i.e. Would someone earning 90k Euro be happy instead to receive circa 3 Bitcoins as salary next year?

I don't think that anyone would want next year's salary paid in Bitcoin. But is that really an indictment of Bitcoin?

I might agree to have my salary paid in sterling. But if sterling crashes, I would want my salary in euro or I would want an increase in the sterling payment.
 

Firefly

Registered User
Messages
3,298
I don't think that anyone would want next year's salary paid in Bitcoin. But is that really an indictment of Bitcoin?

It's not a knock / indictment of Bitcoin..more the current value of Bitcoin I am getting at. If those who are championing Bitcoin were so confident in it, I presume getting next year's salary based on today's Bitcoin price would be very attractive, afterall some think the value next year will be a lot higher than today. More than double in fact. For that someone on 90k this could mean a pay packet of 200k next year!
 

cremeegg

Registered User
Messages
3,609
David McWiiams has an interesting piece in IT yesterday focusing on how much productivity has grown in Ireland, but wage increases, in comparison, are stagnant.

So if, economic turbelence is on the cards, ... And if you are a wage earner with little to no access to other funds, how can you protect yourself, and what you value, in the event of economic instability, or the next recession which may threaten your job?
Can you save your cash deposit? Whats the interest rate? Can you invest in stocks? Perhaps, but with fees etc and in general value of stocks will fall as recession looms. Can you invest in gold? Not practical.
Or can you embrace the onset of the digital age and invest in cryptocurrency, built on blockchain technology, that is easily accessible and disposed of? Well, yes you can.

I think that you raise some very pertinent questions here.

Wages are not keeping pace with productivity. The return to capital is increasing at the expense of the return to labour. This is likely to continue even speed up with automation and AI becoming more widespread.

I think the developers of bitcoin are exploiting this fear to sell tat to the naive.

That does not of course answer your question. Perhaps you should start a new thread. I know the answer which has worked for me over 25 years.
 
Top