Bitcoin And Such

[Kyle M]

I mean store of value like gold or silver. Bitcoin is different, it is only worth ANYTHING now because of what people are willing to pay for it in fiat currency. It is currently only relevant to that trend and its value is extremely volatile. It doesn't hold any inherent value and is only worth anything because of what people will pay for it in fiat (you can't go into a store and buy food with it unless you first sell it to someone for dollars, then use those dollars to buy food). Literally, next month people may only be willing to pay $200 per bitcoin. If you put your bitcoin wallet in a safe for ten years and then took it out to use it, are you confident it would be worth what it was when you bought it, if anything at all? Do you remember the dot com bubble?
I'm not saying there isn't a lot of (fiat) money to be made out of bitcoin and the other cryptos right now if you get in and get out at the right times (which I have already done a few times), i'm talking about if it is worth anything on its own accord without fiat currency (which is what I was initially commenting on regarding you and JDreamer's back and forth).

Ok so you are a hard currency person. Fair enough, I have sympathies along that line. The thing is, nothing has "intrinsic value." All value is subjective. Oil was not a "resource" until refining was invented to produce kerosene and eventually gasoline and thousands of other petrochemicals. Oil was a pollutant that ruined farmland when it bubbled up from a dug well.

Gold is also only a resource to the extent that it is useful. Of course I believe it will continue to be useful, as jewelry and in electronics etc. for a long time, but it's value is still subjective. Bitcoin also *may* have a value that we cannot now comprehend, as farmers could not comprehend the value of oil and cavemen the value of gold. It does one well to have the confidence one's knowledge and thought processes tempered by humility with unknowns. We don't know what the future will bring, but I for one think that the particular distributed ledger and code associated with bitcoin core development has value and will continue to have value for people to hold the bitcoins.

 

[haidut]

Why you would pay $15000 for a unit of virtual currency

Technically, all fiat currencies including the USD are also virtual currencies. It all comes down to how many people believe in that currency (lunacy) and are willing to exchange goods/services for it.

 

[nbznj]

I'm not sure I understand the frenzy that keeps sending bitcoin higher and higher (many predicting another peak around 25k, then 50k mid term, 100k+ long term) when many alt coins seem to support much better technologies

as of myself I'm happy to have gotten 900+ ripple a bit under 1 dollar the week before christmas. If Bitcoin was AOL then I think ripple might be the next Google although its market cap may limit its value per coin. Who knows. Many predict its market size will surpass Bitcoin soon, making it the #1 coin and no mainstream media is talking about it.

I also like the other alt coins with a high market cap / low value per coin such as nem, ada, lumen, tron. I think it's worth splitting a couple of ETH or a few LTC (both of which may keep being very useful, especially for ICOs) and get the 4 I mentioned.

 

[Kyle M]

I'm not sure I understand the frenzy that keeps sending bitcoin higher and higher (many predicting another peak around 25k, then 50k mid term, 100k+ long term) when many alt coins seem to support much better technologies

as of myself I'm happy to have gotten 900+ ripple a bit under 1 dollar the week before christmas. If Bitcoin was AOL then I think ripple might be the next Google although its market cap may limit its value per coin. Who knows. Many predict its market size will surpass Bitcoin soon, making it the #1 coin and no mainstream media is talking about it.

I also like the other alt coins with a high market cap / low value per coin such as nem, ada, lumen, tron. I think it's worth splitting a couple of ETH or a few LTC (both of which may keep being very useful, especially for ICOs) and get the 4 I mentioned.

Be careful with Ripple, it is a centralized system associated with government. It can easily be inflated, unlike stodgy bitcoin where change is very difficult to make to the protocol. Stodginess is the backing imo, curmudgeon-money

 

[Lejeboca]

Technically, all fiat currencies including the USD are also virtual currencies. It all comes down to how many people believe in that currency (lunacy) and are willing to exchange goods/services for it.

+1 .
At least bank notes (i.e., before we went 'electronic') have their intrinsic value of paper printing.
Even a limited supply of tangible assets [trees, in the case of paper notes], is not comparable with a 'trust me, there is only a limited supply of bitcoin' idea. The 'trust me' approach is logical (algorithmic) and not an intrinsic one.
All the 'trust me' currency approaches failed as history tells us: 'Trust me: Dollar is an equivalent of gold ($35 per ounce)' was believed in Breton Woods.
Can't we already now create an unlimited number of fractions of even a single bitcoin ?

Be careful with Ripple, it is a centralized system associated with government. It can easily be inflated, unlike stodgy bitcoin where change is very difficult to make to the protocol. Stodginess is the backing imo, curmudgeon-money

Having a central bank might not be bad for a thing to become *currency* : It's central bank's job to 'lean against the wind' to stabilize currency value.

 

[Kyle M]

Having a central bank might not be bad for a thing to become *currency* : It's central bank's job to 'lean against the wind' to stabilize currency value.

That's certainly what they say their job is. Kind of like how the US military's job is to benevolently police the world, and the FDA/AMA ensure the quality of medicine and pharmacology for the citizenry.

 

[Kyle M]

Can't we already now create an unlimited number of fractions of even a single bitcoin ?

No, the fractions (Satoshis) are explained in the protocol, and they are part of the code. The proof of work and difficulty functions are all related to this. If you don't understand what that means, I wouldn't make sweeping statements about crypto.

 

[dbh25]

Technically, all fiat currencies including the USD are also virtual currencies

Can you define the criteria for a virtual currency?

 

[haidut]

Can you define the criteria for a virtual currency?

Any symbol without intrinsic value. I guess this would move the discussion as to what intrinsic value is, and that can get very philosophical. But a rough definition would be something that on its own would not be considered useful by any sane adult person (I know, there is probably no such thing) living in a modern society. Numbers are a good example. Intrinsically, Bitcoins have no more value than the number 5 for example.

 

[Lejeboca]

Can you define the criteria for a virtual currency?

In folk parlance, virtual currency is backed only by 'F16s and marines'
But seriously, I second @haidut answer.

 

[haidut]

virtual currency is backed only by 'F16s and marines'

I would say this is not limited to virtual currency. The dominance (especially commercial) of any country on the world stage is mainly determined by its military muscle. I have yet to see a country rule the world through its incredible scientific achievements from which every human being benefits. Somebody would say that such a country would not be interested in ruling the world as their mindset would be very different from what a ruler country would look like. But I contend that there is no such country period. If a country has dramatic achievements in science/technology it usually quickly becomes a minion to a military power, "voluntarily" of course.

 

[Ritchie]

Technically, all fiat currencies including the USD are also virtual currencies. It all comes down to how many people believe in that currency (lunacy) and are willing to exchange goods/services for it.

Any symbol without intrinsic value. I guess this would move the discussion as to what intrinsic value is, and that can get very philosophical. But a rough definition would be something that on its own would not be considered useful by any sane adult person (I know, there is probably no such thing) living in a modern society. Numbers are a good example. Intrinsically, Bitcoins have no more value than the number 5 for example.

Well fiat currency used to be backed by precious metal. This has been abandoned now of course but was gold really the only thing that gave the dollar and other fiat currencies any value? How about the nation of workers of a country, the military behind that country, the production of a nation, the production of a global economy, our laws, our morality, our agreed upon barter system and how that becomes structured into the very fabric of our personal lives, our communities, our economic and political systems. I would say all these things and more combine and result in the actual value of the dollar, or other forms of fiat currency. In other words there is something to be said for our nationally/internationally agreed upon system when discussing the value of currency. Now, we know this can all go south like we have seen in certain countries past and present, however we know that this happens when that country's political structure and economic production is collapsing and the actual fabric of their system isn't structurally sound anymore. So of course the dollar and fiat currency in general is implicitly dependent upon that nations' system.
Bitcoin, on the other hand, has none of this structure and nationally/internationally agreed upon system of value. Thus realistically it cannot be compared to fiat currency and the dollar in terms of value. Perhaps it will in the future but right now that is a mythical future world that has no reality in current times. Current investment in bitcoin is purely speculative and it is only being driven by the next persons belief that the value will keep going up to the moon. Once this growth of value is perceived en masse to have stopped or reached its peak, well why would anyone buy bitcoin anymore? At that point people invested will either hold on to their coins, jumping at any slight variation in value in fear of a crash as relative to fiat currency and the dollar, or they will sell. If they sell en masse (which is the most likely scenario), it will all come crashing down.

Ok so you are a hard currency person. Fair enough, I have sympathies along that line. The thing is, nothing has "intrinsic value." All value is subjective. Oil was not a "resource" until refining was invented to produce kerosene and eventually gasoline and thousands of other petrochemicals. Oil was a pollutant that ruined farmland when it bubbled up from a dug well.

Don't see how the practical use of oil is relative here, oil is another resource bought and sold in fiat currency for a purpose in use. It's value is due to its practical applications. In a foreseeable future of renewable energy, battery cars, solar power etc, oil will be a lot cheaper and in less demand (of course there will always be some demand for its use as an energy source but potentially nothing like we see today). Point is we need a currency system in place to function in the modern world in place of barter, and fiat currency is our agreed upon unit of trade. We need something to act as a unit of currency unless we go back to small communities with a barter system and the entire world as we know it collapses. Until bitcoin becomes that majority agreed upon unit of currency it really holds no value apart from speculation or against fiat.

 

[Kyle M]

Point is we need a barter system in place to function in the modern world, fiat currency is our agreed upon unit of currency and barter.

We need something to act as a unit of currency unless we go back to small communities and the entire world as we know it collapses. Until bitcoin becomes that majority agreed upon unit of currency it really holds no value apart from speculation or against fiat.

Barter or money, pick one.

You can have units of account for small transactions, units of credit, and units of account for final settlement of large transactions (reserve currency). For example, during the Bretton Woods agreement period, nations around the world used their individual currencies in their nations. People used Francs or Dinars for their everyday transactions. But when nations traded, or a huge transactions had to clear, both parties used USD.

 

[michael94]

What about vaulted silver with blockchain technology? Kyle and Ritchie

 

[Ritchie]

What about vaulted silver with blockchain technology? Kyle and Ritchie

So the key to an actual physical vault of precious metal is held in a blockchain and then distributed? Very interesting proposition

 

[x-ray peat]

Any new thoughts after the big sell off? Under 7,000. Which way from here?

 

[churchmouth]

Further down. Who knows what it is really worth.

 

[nbznj]

it's hitting the RSI support or a bit under, it won't go down much further and will bounce back. Cycles.

 

[tankasnowgod]

+1 .
At least bank notes (i.e., before we went 'electronic') have their intrinsic value of paper printing.

Having a central bank might not be bad for a thing to become *currency* : It's central bank's job to 'lean against the wind' to stabilize currency value.

100 Trillion Dollar Bill, Printed by the Central Bank of Zimbabwe- Zimbabwe 100 Trillion Dollar Banknote, 2008, AA Series, NEW

Currently holds way more value as a collectible than when it was used as "money" back in 2009,

 

[tankasnowgod]

What about vaulted silver with blockchain technology? Kyle and Ritchie

Who would be guarding the vault? The US Treasury lied about the amount of silver it had stored for decades..... Billions of Ounces were being used in the Manhattan Project.