ESOCommunity

Many people are busy saying it's a bubble, waiting for the potential crash so they finally can appear smart and say "I told you so!"
Until then they keep saying "It WILL come!"

It is usually said by people, who haven't done the slightest research on the very topic they talk about.

Gendarme wrote:Yeah I don't see it being long overdue either. It is on a relatively rapid long term rise. Even if it drops by 50% tomorrow it would probably quickly catch up again with the increasing acceptance of Bitcoin. I don't think there's much risk in holding Bitcoin in the long term, although we may want to cash out in a few months if something bad happens (e.g. financial depression) in which case there may be some problems. But probably not even then as situations like that are precisely what Bitcoin was created for.

I am a believer in national currency, however. I don't think cryptocurrency is ideal, but it's probably a good alternative to what we have at the moment.

Financial depression is great for the bitcoin though.

Come on @Snuden that's just rude.
Mostly it's about whether or not one believes crypto currency has a bright future, which I don't. Maybe extensive research would change my mind, but at the same time there are plenty of very informed people calling this a bubble too nor am I doing it to appear smart, rather it is my uninformed but genuine opinion that crypto currency is vastly overhyped.
Did you say these same things when people were calling the housing market a bubble in 2007?

Goodspeed wrote:people were calling the housing market a bubble in 2007?

Tfw it repeats itself 10 years later and no one learned a thing.

It was not meant to be rude, I just like to call a spade for a spade.
You are of course right to state your opinion, but in all honesty, it comes off as hot air since you openly admit to be "clueless"
I wisely kept my mouth shut, when the housing bubble was discussed as I was clueless.

I have since then watch a few docs about it and in my humble opinion the cryptocurrency situation is a total different kettle of tea.

Snuden wrote:It was not meant to be rude, I just like to call a spade for a spade.
You are of course right to state your opinion, but in all honesty, it comes off as hot air since you openly admit to be "clueless"

It is hot air. That doesn't mean I'm doing it just so I can say I told you so. I'm stating my opinion because this is exactly the thread to do that. Uninformed or no I still like to state it so that it is scrutinized and I can improve it. Of course, you're free to ignore it.

I have since then watch a few docs about it and in my humble opinion the cryptocurrency situation is a total different kettle of tea.

Indeed it's very different. My point is did you make the same wrong assumptions about people saying the housing market was a bubble?

Goodspeed wrote:

Snuden wrote:It was not meant to be rude, I just like to call a spade for a spade.
You are of course right to state your opinion, but in all honesty, it comes off as hot air since you openly admit to be "clueless"

It is hot air. That doesn't mean I'm doing it just so I can say I told you so. I'm stating my opinion because this is exactly the thread to do that. Uninformed or no I still like to state it so that it is scrutinized and I can improve it. Of course, you're free to ignore it.

I have since then watch a few docs about it and in my humble opinion the cryptocurrency situation is a total different kettle of tea.

Indeed it's very different. My point is did you make the same wrong assumptions about people saying the housing market was a bubble?

Ah... I honestly don't remember, it wouldnt surprise me if I did though

Jerom wrote:The bitcoin still seems like something that gets its value from the trust of people in it and the idea that it will be worth a lot. A dollar will always at least buy you a banana in the USA, a banana can always be eaten, but I'm still missing the intrinsic value that the bitcoin has. It's honestly been generating money out of nothing, which is something I fail to understand (as a physicist I'm wondering, is there a law of conservation of money? XD) so I'm intuitively inclined to believe somewhere along the road people will lose a lot of money.

it doesnt have intrinsic value. neither has gold. it will either function as gold, where it has value because we believe it has, or it will work as a currency, where it also has value because we believe it has, but it also has a direct function, for example to buy bananas. it's also not generating money out of nowhere, the money comes from traditional currencies. it's impossible for everyone who has btc now to sell it all at around the same time for this price. you can sell 1 btc to someone and it may seem like you made money out of nothing, but another person basically gave you that money. and they do so because they believe someone else is going to give them more money for it later, or perhaps even more distant in the future, a lot of things (aka it will become a currency). if the whole thing would collapse today, the people who bought yesterday will be the ones who get fkd. by figure of speech.

Gold does have intrinsic value. First of all, it's a tangible asset, whereas bitcoin is virtual. Heck, even fiat currency has more value, because it's only emitted inasmuch as it's covered by goods and services in the forecast GDP.

Secondly, gold has very useful chemical properties, which makes it useful in electronics. It doesn't corrode like other metals. It has high density. It's a very good conductor. And so on and so forth.

Last, but not least, it's one of the metals that reflects light the best, which made it so valuable in the past as a component of royal jewellery, because kings and queens in the past were considered as sacred as the sun, so wearing gold made them literally wear light. That's why gold is considered a precious metal even today. And it's been traditionally used in coinage for millennia. Mining gold is actually not that cheap or easy, which is why the quantity of gold cannot increase too fast for it to get devalued.

Not just gold, but any metal that is not too abundant (like nickel), is more valuable than a currency that is not even a paper currency. It's basically like a security that is not backed by any asset, except mass beliefs.

I dont know much about this virtual currency. But from where Im standing, a currency that has grown in value like a rocket, usually consist of a bubble. The same thing could be said about the stockmarkeds right now. Why?
Well, there are nothing to gain by putting your money in the bank, cos the interest rates are just way below inflation, so you basically lose value that way. So more and more ppl are looking for other ways to invest their savings. They put it in stockmarkeds, cos they have risen alot the last few years. This way>the stocks go even more up >more ppl think its a good idea > more ppl buy stocks > the stock goes up in value............ and on and on it goes, constituting a bigger and bigger bubble --------- until it burst. This is how I view bitcoins aswell. I would not invest MY money into something that risky anyway. But, for those who do, good luck, and dont stay to long

Dolan wrote:Gold does have intrinsic value. First of all, it's a tangible asset, whereas bitcoin is virtual. Heck, even fiat currency has more value, because it's only emitted inasmuch as it's covered by goods and services in the forecast GDP.

Secondly, gold has very useful chemical properties, which makes it useful in electronics. It doesn't corrode like other metals. It has high density. It's a very good conductor. And so on and so forth.

Last, but not least, it's one of the metals that reflects light the best, which made it so valuable in the past as a component of royal jewellery, because kings and queens in the past were considered as sacred as the sun, so wearing gold made them literally wear light. That's why gold is considered a precious metal even today. And it's been traditionally used in coinage for millennia. Mining gold is actually not that cheap or easy, which is why the quantity of gold cannot increase too fast for it to get devalued.

Not just gold, but any metal that is not too abundant (like nickel), is more valuable than a currency that is not even a paper currency. It's basically like a security that is not backed by any asset, except mass beliefs.

In the way that intrinsic value is commonly understood, gold has no such value, or atleast very little. Unless you argue aestethic value. Gold as an asset is about usefulness. This is indeed what gives gold value, but its not intrinsic. Its extrinsic as the value is derived from the idea and function we attach to it.

Indeed gold as a chemical tool does make it valuable. But not to the extent it is valued today.

Basically any (modern) currency works only because mass belief. Since the end of gold standard, no currency is backed by assets 1-1. So you might as well get rid of that idea all together. And even the value of gold is based more on a mass belief, rather than the intrinsic qualities it does have. Just like the value of paintings

People have been saying that it's a bubble about to pop since iT was worth $1.

It's too risky! Yeah. You're right. People should just stay in place and do nothing at all, letting opportunities pass them bu. Maybe spend more time just watching and reading about people with more courage and initiative. Then maybe they could post online about how those successful people are way too risk-taking... And then years down the road after merely existing in life, they could look back and realize that they never really lived at all. And all because they simply didn't want to "take risks."

Kids these days.

[spoiler=.][/spoiler]

lejend wrote:People have been saying that it's a bubble about to pop since iT was worth $1.

It's too risky! Yeah. You're right. People should just stay in place and do nothing at all, letting opportunities pass them bu. Maybe spend more time just watching and reading about people with more courage and initiative. Then maybe they could post online about how those successful people are way too risk-taking... And then years down the road after merely existing in life, they could look back and realize that they never really lived at all. And all because they simply didn't want to "take risks."

Kids these days.

[spoiler=.][/spoiler]

hmm?

lejend wrote:People have been saying that it's a bubble about to pop since iT was worth $1.

It's too risky! Yeah. You're right. People should just stay in place and do nothing at all, letting opportunities pass them bu. Maybe spend more time just watching and reading about people with more courage and initiative. Then maybe they could post online about how those successful people are way too risk-taking... And then years down the road after merely existing in life, they could look back and realize that they never really lived at all. And all because they simply didn't want to "take risks."

Kids these days.

[spoiler=.][/spoiler]

Please tell us about your risk and initiative! You preach a lot, but where are your miracles?

umeu wrote:In the way that intrinsic value is commonly understood, gold has no such value, or atleast very little. Unless you argue aestethic value. Gold as an asset is about usefulness. This is indeed what gives gold value, but its not intrinsic. Its extrinsic as the value is derived from the idea and function we attach to it.

Indeed gold as a chemical tool does make it valuable. But not to the extent it is valued today.

Does it really matter whether the value ascribed to it is intrinsic or extrinsic? I don't think discussing semantics is very useful here. Gold still holds a traditional importance in the financial system, even if it's considered a relic of the past. You can bet that if a major financial crisis were to happen, many transactions would default on using precious metals. In the worst case, barter. But since barter is very impractical and has major limitations, it's likely people would rather use precious metals again. There could be other types of exchanges, such as people using very general staples as currency (medicines, food stuffs, clothes), but I can't see how people would somehow default on some cryptocurrency, just because you argue none of these is intrinsically valuable. There still can be established a hierarchy of what people would be more likely to consider more trustworthy as a medium of exchange.

Since the end of gold standard, no currency is backed by assets 1-1. So you might as well get rid of that idea all together. And even the value of gold is based more on a mass belief, rather than the intrinsic qualities it does have. Just like the value of paintings

Neither was a gold standard order based on assets, if we follow your argument that gold is not intrinsically valuable. Is there any asset that can be valued apart from its instrumental usefulness anyway?

Paintings are often bought not just because they have an inherent value, as much as because they are considered to be pinnacle tokens of a culture. They're used as a safe storage of financial value by investors. And of course, some rich people buy them just because they like them or want to decorate their reputation with tokens of high culture.

Cryptocurrency, on the other hand, is used simply for financial speculation and nothing else. The big whales use it as just another market in which they can just play to milk and crush the little investors in the long-term.

Cryptocurrency is not only used for financial speculation. People have been paying with Bitcoins for years now, and not only on the deep web. It is becoming increasingly more accepted as a form of payment. There is obviously a lot of speculation, but that is far from all there is to it. I'm not sure if you're intentionally exaggerating or not, but regardless it is a quite substantial exaggeration.

Bitcoin certainly does not play the part of gold, and neither is anyone who's involved with Bitcoin claiming such a thing—at least not anyone I am aware of. If the people weren't screwed over so heavily by their governments Bitcoin wouldn't have all this traction. The main thing Bitcoin has in common with gold the theoretical supply cap and the ever-increasing difficulty to mine it. I'm not sure if there always will be Bitcoins left to mine or whether it will all end the year 2140, but that's nothing to worry about yet.

So nobody finds it odd that 60% of the Bitcoin trades have been done by Koreans and noone has even bothered to query the resident expert on all things Korean on this matter? :/

Radix_Lecti wrote:So nobody finds it odd that 60% of the Bitcoin trades have been done by Koreans and noone has even bothered to query the resident expert on all things Korean on this matter? :/

My guess is that it's because he is wrong.

Dolan wrote:

umeu wrote:In the way that intrinsic value is commonly understood, gold has no such value, or atleast very little. Unless you argue aestethic value. Gold as an asset is about usefulness. This is indeed what gives gold value, but its not intrinsic. Its extrinsic as the value is derived from the idea and function we attach to it.

Indeed gold as a chemical tool does make it valuable. But not to the extent it is valued today.

Does it really matter whether the value ascribed to it is intrinsic or extrinsic? I don't think discussing semantics is very useful here. Gold still holds a traditional importance in the financial system, even if it's considered a relic of the past. You can bet that if a major financial crisis were to happen, many transactions would default on using precious metals. In the worst case, barter. But since barter is very impractical and has major limitations, it's likely people would rather use precious metals again. There could be other types of exchanges, such as people using very general staples as currency (medicines, food stuffs, clothes), but I can't see how people would somehow default on some cryptocurrency, just because you argue none of these is intrinsically valuable. There still can be established a hierarchy of what people would be more likely to consider more trustworthy as a medium of exchange.

Since the end of gold standard, no currency is backed by assets 1-1. So you might as well get rid of that idea all together. And even the value of gold is based more on a mass belief, rather than the intrinsic qualities it does have. Just like the value of paintings

Neither was a gold standard order based on assets, if we follow your argument that gold is not intrinsically valuable. Is there any asset that can be valued apart from its instrumental usefulness anyway?

Paintings are often bought not just because they have an inherent value, as much as because they are considered to be pinnacle tokens of a culture. They're used as a safe storage of financial value by investors. And of course, some rich people buy them just because they like them or want to decorate their reputation with tokens of high culture.

Cryptocurrency, on the other hand, is used simply for financial speculation and nothing else. The big whales use it as just another market in which they can just play to milk and crush the little investors in the long-term.

It does matter, because there is little reason why digital gold can't perform the same function as metal gold and replace it. Just as digital money can perform the same function as paper money and is slowly replacing it.

The argument of golds historical track record is solid because this whole thing is based on faith. and while definitely in favor of gold its not an argument per se against crypto. If bitcoin would survives for enough time, then this is no longer something in favor of gold.

The point about value is that money, gold, crypto etc are supposed to represent value of something else. Theyre a token. But theyre becoming to be valued just for itself. Which is weird because they have little or no use. So if that bubble bursts,youre gonna be stuck with a useless commidity. Just like the tulip bubble. That wouldnt happen with barter. Although there are other drawbacks to that which basically rule it out as useful in a service based economy

umeu wrote:It does matter, because there is little reason why digital gold can't perform the same function as metal gold and replace it. Just as digital money can perform the same function as paper money and is slowly replacing it.

It's still not legal tender. And with China banning it altogether.. I dunno, I don't see how it would be a globally relevant means of exchange. The quantity of money in any normal economy can increase as a result of economic growth, but if any country adopted a cryptocurrency, how would their economic growth be reflected? By constant deflation?

The argument of golds historical track record is solid because this whole thing is based on faith. and while definitely in favor of gold its not an argument per se against crypto. If bitcoin would survives for enough time, then this is no longer something in favor of gold.

No matter how long crypto would survive, its lifespan couldn't beat the lifespan gold or fiat currency enjoyed. Don't underestimate the power of tradition though, it's more powerful than the power of faith, since it's based on habits/customs that whole societies acquire throughout centuries.

The point about value is that money, gold, crypto etc are supposed to represent value of something else. Theyre a token. But theyre becoming to be valued just for itself. Which is weird because they have little or no use. So if that bubble bursts,youre gonna be stuck with a useless commidity. Just like the tulip bubble. That wouldnt happen with barter. Although there are other drawbacks to that which basically rule it out as useful in a service based economy

When did fiat currency come to be valued by itself? It's always valued depending on the strength of a particular economy. And of context (eg, the old example with the value of diamond vs the value of water in the desert). Fiat currency is only as strong as an economy is and because it's legal tender that is accepted as legal compensation for economic exchanges between economic agents or institutions.

I get the whole anarchist vibe that people get from this stateless currency, but this is far from being a viable replacement for fiat currency right now. The fact that it gets valued because of its scarcity makes it a bad replacement for fiat currencies in growing economies. It doesn't allow for much in terms of economic adjustment. Just like gold did back in the 1931 in the UK, when the Labour government wanted to devalue the sterling because it was uncompetitive, but hesitated to cut unemployment benefits by 20% to achieve that adjustment in purchasing power. The gold standard proved to be a straitjacket for their financial policy, which severely limited their choices in making adjustments to the economy. So the gold standard, while it had some advantages in keeping inflation more stable, it wasn't an economic panacea at all. On the other hand, fiat currency allows for more flexibility, but it comes at the price of price stability. Cryptocurrency would have the disadvantage of limited supply to a much bigger extent than gold did, since with gold you can still mine and mint new currency, but with crypto, you can't. (Its supply will end completely at some point.) Right now, you can get an idea about its valuation relative to other fiat currencies, but what if there was no such means of exchange? How would you even adjust prices relative to cryptocurrency? How would you measure one country's competitiveness relative to another's?

The purpose of Bitcoin is not to completely replace national currencies. It serves as an alternative in situations where national currencies aren't sufficient. Whether people buy coffee with their Bitcoins is quite irrelevant. There is no issue trying to buy coffee with national currency, but trying to buy weed with it is harder. There is no issue trying to transfer $200 to your friend's account, but there is an issue trying to transfer $20,000. There is no issue holding national currency in times of prosperity and with a government that doesn't manipulate the currency against its people, but those are both fantasies.

Of course, it is possible that you could buy coffee with your Bitcoins as well, but that is certainly not a requirement for Bitcoins to be of value. If that happens it is probably for the sake of convenience when people mainly hold Bitcoin instead of national currency.

The Financial Services Commission in Seoul said all forms of ICOs are prohibited in the country
(29 Sept.2017)

Will BTC hit $12K today? Time will tell!

No need to wait for time. I will tell. Yes, it will!

I think when Bitcoin futures hit the stock market, the price for a bitcoin will increase even more, even if just temporarily.