Bitcoin

[cAPSLOCK]

Though I have opinions quite at odds with many of your points, those are great posts and I appreciate the time you've taken in those. about to hit the sack, but might try to formulate some thoughts tomorrow

 

[devildavid]

No, I never agreed with that. I asked what doesn't have an arbitrary value? in relation to your examples and implicitly in your frame of thought.

I still contend that values are set by markets ultimately. I don't even understand what you mean by arbitrary in this context. Values can change. And two of the same thing can be sold between two different people in two different places for two different prices. But that's variance, not arbitrariy-ness. But let's zoom out just a little. Gas prices in an area of a city will tend to coalesce around a certain average. Because if one station is selling it much higher than its neighbor, then they won't have many customers. That's a good example of a market setting the value via unplanned (hopefully) coordination.

I never made this argument either, I don't think. I have said that I believe some people think that a floor value comes from the energy put in. And I have said there is a correlation between how much it costs to produce a bitcoin and how much it's worth to the members of its market. But it's not immediate nor is it tracking 100% at any time. But I do not pretend that it's some direct correlation. It's a relationship.

I am not sure I ever called Fiat currency an investment either, and I mostly agree with you here. The US dollar, for example, is very special. It is the legal tender of the United States.

And more than that, but also because of that, it is the worldwide unit of account. The United States has done an extraordinary job in achieving the advantage that much of the world prices their goods in the US dollar.

This is patently false. I can buy things with it. I can go down the road right now and have lunch at Steak and Shake and pay for it with my phone strictly in Bitcoin. Now, it is not the official currency of the United States. That's for sure. Nor is it a world reserve currency. Nor is it used very much as a currency at the moment.

Particularly in the United States, it doesn't make sense to use Bitcoin as a currency.


I have never claimed that Bitcoin is currently a "replacement currency" ( Also noting you used a significant adjective here that you didn't use a couple sentences up.)

I have also made the point several times that it is currently being used mostly as a store of value or, as you say, an investment.

I don't tend to think in black and white. And many of the arguments being made seem to me to be sort of polarized arguments. Bitcoin is a currency or Bitcoin isn't a currency for example.

In most places, it's definitely not much of a currency. Kooky Bitcoiners use it to transact and do things, but there are other pockets of the world and also some places online that are definitely using it as a currency.

If everything has an arbitrary value it means that markets assign arbitrary values. Markets are the source of what values are assigned to things. Without markets, there is no way to assign a value to something.

Bitcoin is not a currency anywhere on earth. It isn’t a matter of debate, but of fact.

You are never paying for things with bitcoin. You are paying for things with whatever currency is accepted at the establishment. Using your phone doesn’t mean that you spend bitcoins. You spend currency. In the end, bitcoin is valued in currency, and currency is what you spend.

The meaning of the word arbitrary is self evident. All markets assign arbitrary values to all things exchanged in those markets. Nothing comes to a market with inherent value due to the amount of work it took to produce it. Nothing coming to market has an inherent value that the market must recognize. The market assigns values based on whatever that market decides. That is always going to be arbitrary.

 

[devildavid]

Prices are not "arbitrary", they're the the result of voluntary exchange between buyers and sellers. That's not arbitrary, it's based on preferences, scarcity, and opportunity costs.

You just described the arbitrary nature of prices perfectly. Being voluntary doesn’t change that. Preferences, scarcity and opportunity costs are some of the factors that contribute to the arbitrary nature of market values.

 

[Revelation]

If everything has an arbitrary value it means that markets assign arbitrary values. Markets are the source of what values are assigned to things. Without markets, there is no way to assign a value to something.

Bitcoin is not a currency anywhere on earth. It isn’t a matter of debate, but of fact.

You are never paying for things with bitcoin. You are paying for things with whatever currency is accepted at the establishment. Using your phone doesn’t mean that you spend bitcoins. You spend currency. In the end, bitcoin is valued in currency, and currency is what you spend.

The meaning of the word arbitrary is self evident. All markets assign arbitrary values to all things exchanged in those markets. Nothing comes to a market with inherent value due to the amount of work it took to produce it. Nothing coming to market has an inherent value that the market must recognize. The market assigns values based on whatever that market decides. That is always going to be arbitrary.

good advice.

bitcoin is just the dry run for the CBDC and blockchain the Oligarchs will spring on you when neo Dark Maga technocracy goes full bloom after WW three.

so i don't think they will allow it much room, or it could merge into something.

people just pump and dump the stuff in my experience.



keep digging.

.

 

[cAPSLOCK]

If everything has an arbitrary value it means that markets assign arbitrary values. Markets are the source of what values are assigned to things. Without markets, there is no way to assign a value to something.

Actually, I'm beginning to realize that our entire conversation on this topic has been around some things that are really more semantics than anything else. As @Econ4every1 said elsewhere, we're just talking past each other.

I was hung up on saying markets determine value. You were hung up on the distinction between arbitrary value and either intrinsic value or monetary premium, which actually I believe are two different things. That's probably where our disagreement is, and I don't see us coming to any accord on that.

Bitcoin is not a currency anywhere on earth. It isn’t a matter of debate, but of fact.

I think here we're getting down to how we define "currency". I am thinking that you are defining it as something that is sanctioned by the state. Otherwise, I don't see how you can claim that Bitcoin is not a currency. It certainly is not used in many places as a currency. But there are several real-life Bitcoin circular economies where people use it as a primary form of transactional money, particularly in Africa, certain places in El Salvador, and all over the internet, in particular the nascent social media platform nostr.

You are never paying for things with bitcoin. You are paying for things with whatever currency is accepted at the establishment. Using your phone doesn’t mean that you spend bitcoins. You spend currency. In the end, bitcoin is valued in currency, and currency is what you spend.

Yes, I do think you must be equating currency with legal tender?

There are vendors that take Bitcoin and do not convert it to dollars and exchange it for goods. Most of these vendors in developed nations are going to either be Bitcoin-related companies, or cottage businesses that are using Bitcoin when they sell the things they make or do.

And there are thriving circular bitcoin economies in some third world places where they do not have a strong currency nor access to banking. There are multiple Bitcoin economies in Africa, for example.

The meaning of the word arbitrary is self evident. All markets assign arbitrary values to all things exchanged in those markets. Nothing comes to a market with inherent value due to the amount of work it took to produce it. Nothing coming to market has an inherent value that the market must recognize. The market assigns values based on whatever that market decides. That is always going to be arbitrary.

If you like keeping score, then just take the win on this one because I am not really interested in dithering down into what is arbitrary or not. As I said earlier, I think we were just talking past each other on this.

And when it comes to economic theory on where a product or service derives its value, that's far too philosophical for me to really care about this beautiful afternoon. ( Not that I don't find it interesting, I just don't understand why I'm arguing about it here.)

 

[devildavid]

Actually, I'm beginning to realize that our entire conversation on this topic has been around some things that are really more semantics than anything else. As @Econ4every1 said elsewhere, we're just talking past each other.

I was hung up on saying markets determine value. You were hung up on the distinction between arbitrary value and either intrinsic value or monetary premium, which actually I believe are two different things. That's probably where our disagreement is, and I don't see us coming to any accord on that.

I think here we're getting down to how we define "currency". I am thinking that you are defining it as something that is sanctioned by the state. Otherwise, I don't see how you can claim that Bitcoin is not a currency. It certainly is not used in many places as a currency. But there are several real-life Bitcoin circular economies where people use it as a primary form of transactional money, particularly in Africa, certain places in El Salvador, and all over the internet, in particular the nascent social media platform nostr.

Yes, I do think you must be equating currency with legal tender?

There are vendors that take Bitcoin and do not convert it to dollars and exchange it for goods. Most of these vendors in developed nations are going to either be Bitcoin-related companies, or cottage businesses that are using Bitcoin when they sell the things they make or do.

And there are thriving circular bitcoin economies in some third world places where they do not have a strong currency nor access to banking. There are multiple Bitcoin economies in Africa, for example.

If you like keeping score, then just take the win on this one because I am not really interested in dithering down into what is arbitrary or not. As I said earlier, I think we were just talking past each other on this.

And when it comes to economic theory on where a product or service derives its value, that's far too philosophical for me to really care about this beautiful afternoon. ( Not that I don't find it interesting, I just don't understand why I'm arguing about it here.)

Because you are the one who presented what he said was evidence that bitcoin has inherent value due to some work being done to create it. And that this value is somehow more legitimate than mere fiat currency, even though bitcoin is ultimately valued by the measure of fiat currency.

There are no bitcoin economies and bitcoin is still something valued through the use of the value of a currency. Bitcoin is not a measure of value anywhere on earth.

And this is not simply a matter of semantics.

 

[cAPSLOCK]

A few days ago I almost came here to predict that we were about to see a rise in bitcoin (and other hard assets), but I chose against it just to avoid the amount of flack I take whenever I post. Lol.

But I will add this. It's not over yet unless something significant happens on a fundamental level sometime very soon. We should see hard assets continue to run.

 

[Econ4every1]

I almost came here to predict that we were about to see a rise in bitcoin

I think Bitcoin is just one of the many methods of hedging against the dollar. If the Fed lowers rates, it's almost certain the dollars value will fall as people leave US bonds to search for higher returns. Tariffs will ensure there are fewer dollars in the foreign sector and as a result less of a need to convert them to bonds.

So, gold, BTC and other dollar hedges are going to do well...Wait, did I just read that gold is about to hit $4k/oz???

 

[cAPSLOCK]

So, gold, BTC and other dollar hedges are going to do well...Wait, did I just read that gold is about to hit $4k/oz???

Yes... I think so. Three thoughts on this.

First... I am concerned with this data:


1. The value of our (claimed) gold reserves are not even 20% of foreign held US treasuries. And we have seen tops in the past when we get to peaks on this chart. So I think there is a LOT of room for gold to continue to run in SPITE of this ATH status today. Though i would not be surprised to see cooling along the way we are nowhere near the top of gold in my humble opinion. I do not want to even say what I think we could see gold go to as you would likely laugh.

2. I think at this point we are seeing BTC shift from being seen as a "risky technical thing" that correlates with tech markets to the new, possibly more risky, digital cousin to gold in the USD debasement play* that I believe is upon us. So this shift IS happening. Just watch CNBC. They are not snickering anymore when they talk about it like they used to. They might talk about gold as the old, established trade... and they are right! And this makes it the most safe play as well. BUT. The upside is in the upstart, IMHO.

3. Historically bitcoin has lagged behind other risk-off/hard assets. Specifically compared to gold here is what we see...
-Market forces drive the price of gold up.
-Gold overheats and stalls. Perhaps even cools. (YOU ARE HERE)
-BTC (after a delay) follows the original gold move, and then our performs it.

Because of this, I think the bull in BTC is only getting started. And since I think XAU has legs still... I think it could be easy to underestimate what BTC could do.

* and here are the other things I see... We are watching the FIAT experiment enter a new era. Some may even say it's demise. But I am not convinced of the latter. But I think we are OVERDUE for further debasement**. And I also see some interesting ways to the US to find new buyers for treasuries. "Stable Coins" are one possible BIG one, and also the US CBDC in a trojan horse (this is another LONG post lol). This will muddy the waters further re: BTC vs "Crypto" sadly.

**The US MUST finance it's debt. There are no two ways about it. And we have exactly one way to do it. (The rest of the world wishes it was this lucky):

The US issues more debt. Period. And more debt means more debt... and more USD debasement. And on and on... Hard assets will continue to scream upwards as long as we keep increasing the USD monetary pool.

I am a lunatic. I have very poor mental health. I am not stable at all. So the last thing I am doing here is recommending people to do anything with their money.

But I will continue to keep my hard earned value in the asset that has the best mathematical ability to make my children wealthy. I don't honestly care about myself. Nor do I NEED to be right.

But I am betting it all that I am.

 

[hecatmoggie]

I almost bought a bitcoin at $75,000

 

[aociswundumho]

I almost bought a bitcoin at $75,000

Apologies if you already know this, but you don't have to buy an entire bitcoin. Each one can be divided into 100 million satoshis. Most exchanges will let you start with as little as $10. It's accessible to virtually everyone.

 

[hecatmoggie]

Apologies if you already know this, but you don't have to buy an entire bitcoin. Each one can be divided into 100 million satoshis. Most exchanges will let you start with as little as $10. It's accessible to virtually everyone.

I swing for the fence with my personal finances - rarely base hitting anything

I poured into a stock that's done well ... but not the return I'd have gotten on TSLA, LUMN, SLI or a bitcoin

 

[Sooner or Later]

I bought into IBIT ETF at 27.53 a year ago last February .

Currently at 69.13