Economy Inflation and Bitcoin.....another look

[Siver!]

Think about it more. You have a "currency" that one person owns all of. Why would anyone pay for it? How would it even be valued?

Why would you not be able to sell it? That's a better question than "why would anyone pay for it"?

Other cryptocurrencies exist, so that would be your market if you owned all of BitCoin and decided to sell. It has a history, you'd have had to pay whatever the going rate is, £500 billion or whatever.

I get the general principle that you want a currency trading, but it isn't worth $0 as long as there are people out there wanting what you've got.

 

[Jack V Savage]

Why would you not be able to sell it? That's a better question than "why would anyone pay for it"?

You would be able to sell it. You just wouldn't be able to attract buyers.

Other cryptocurrencies exist, so that would be your market if you owned all of BitCoin and decided to sell. It has a history, you'd have had to pay whatever the going rate is, £500 billion or whatever.

Yeah, you can create a crypto currency today and claim that your shares are worth whatever you want, but to actually convert it to something of value, you have to convince others. The history of prices would become irrelevant to valuation if one person acquired all of the coins.

I get the general principle that you want a currency trading, but it isn't worth $0 as long as there are people out there wanting what you've got.

The general principle being illustrated here is that a company worth $500B is producing goods and/or services that the market values highly. If you took it private as the sole owner, the value would still be astronomical. The value of a currency that one person owns is nothing.

 

[Siver!]

You would be able to sell it. You just wouldn't be able to attract buyers.

Yeah, you can create a crypto currency today and claim that your shares are worth whatever you want, but to actually convert it to something of value, you have to convince others. The history of prices would become irrelevant to valuation if one person acquired all of the coins.

The general principle being illustrated here is that a company worth $500B is producing goods and/or services that the market values highly. If you took it private as the sole owner, the value would still be astronomical. The value of a currency that one person owns is nothing.

No, I don't agree.

Crypto bros would almost certainly buy BitCoin if it had an exclusive owner.

BitCoin has more history than most and would be considered pretty prestigious if it went on the market to a 'second' prospective owner.

I think that's absolutely within the culture of the thing.

 

[panamaican]

I appreciate your explanation. I wasn't asking you to do homework but I'm just trying to get clarification on a term that's used by many people on here but seems to mean different things to different people. It's hard to have a conversation with language that isn't clear. I've been investing and trading in bitcoin and other crypto for many years so I have my own way of valuing it. I just find it curious that some people have such strong opinions on something they don't seem to know that much about.

You might be right that many people are holding it to cash out at a higher price. Every four years the inflation rate of bitcoin gets cut in half. Next year the inflation rate will be under one percent. The dollar and other currencies will continue their path towards being worthless. All things being equal, the price of bitcoin is going up. It's pretty simple.

"speculated intrinsic value"
Never heard of this and not sure what it means

Your confusion about "intrinsic value" is something that you should resolve. You can calculate something or you can speculate about it. Lots of financial professionals calculate intrinsic value using known data and weighting it accordingly. Speculated intrinsic value is when people assign an asset an intrinsic value without any specific data underlying it.

Here's the part that maybe you're struggling with, intrinsic value is a number. Let's take a house. It's being sold on the open market for $250k. That's the market value. But it's not the intrinsic value. The intrinsic value varies based on the calculation. Intrinsic value is different based on what the buyer values.

One person might take the market value of the various pieces of the property (the lumber, metal, etc.) and calculate intrinsic value as what they would sell for. Another person might see how much rental income the property would generate over the lifetime of owning it. Someone else might calculate how much they can sell it for in 5 years. Those are calculated values. However, someone might value the piece of mind of being closer to work. Someone else might value the school systems or living in the same neighborhood as their parents. Those aren't calculated values, they're speculative.

Even though it's always a mix of art and science, investors prefer calculated values over speculative ones because the point of investing in something is to eventually make money from it.

 

[Limeade]

How much is Doge coin worth now? Will it be a good hedge against inflation in 2025 and beyond?

 

[Jack V Savage]

How much is Doge coin worth now? Will it be a good hedge against inflation in 2025 and beyond?

Little less than 8 cents (down from 64 cents in 2021). The period of high inflation is already over. You can get inflation-protected bonds if you're really worried about a return. Or just stocks.