Economy Inflation and Bitcoin.....another look

[Eric Silva 2.0]

Financially intrinsic value is holding value in itself. Bitcoin is supposedly a currency to be used, yet it lacks the stability required to be used as such. You literally show an example of why bitcoin is a horrible currency with the 10,000 bitcoin for a pizza example. The scarcity argument was exactly the same argument people made for beanie babies. Something being scarce doesn't mean it has an actual value. In this case the value is propped up by people believe that it must continue to increase in value, but doesn't produce value by itself. As stated other blockchain can literally do the exact same thing as bitcoin. The fact the they constantly fail really reinforces the idea that they don't actually produce anything of value. Tulips were once I highly sought after commodity, the value was super inflated.

I'm happy that you are happy with your decision hopefully you don't become a bag holder when others sell off.

"Financially intrinsic value is holding value in itself."
Thank you for your answer to my question.
The U.S. dollar is considered the best or one of the best currencies out there. Since 1913 (The Fed) the dollar has lost more than 97% of its value. What is the intrinsic value of a dollar and what is the difference in intrinsic value of a 100 dollar bill and a 1 dollar bill? Why is one worth 99 dollars more? Is it just because the added two zeros? Seems kind of silly to me.

"Something scare doesn't mean it has an actual value."
I agree. Well said.

"Bitcoin is supposedly a currency to be used yet it lacks stability to be used as such."

I would call it money, digital money. I would say it is in the 'store of value' stage. The paper currencies of the world dominate transactions (including credit cards, credit etc..). The problem is they aren't a store of value. Bitcoin is in the speculative/accumulation stage so people are holding it as a store of value and everyone is trying to figure out what the value actually is. If bitcoin becomes a more serious medium of exchange is a good conversation. That time isn't now. I don't agree with your definition of intrinsic value. Take the internet boom of the 90's with all the tech stocks. Amazon and others were trading at incredible heights towards the end of the century. Amazon was losing money but the shares were rocketing higher. The stocks weren't trading on their so called 'intrinsic value' but something else was at play. I think with crypto and specifically bitcoin the same thing applies. I don't think it is easily understood. I also think many have been missing out on the best asset of the last decade and potentially this decade as well. There are a lot of sour grapes and I understand it. Everybody thinks they are a genius and when they miss out on something, they have to try and knock it down. It's tough to admit that other people saw something they didn't or dared to believe in something new. Many have been rewarded for being involved in bitcoin and other cryptos. It's been fun being a part of something that's helping people all over the world, especially in countries with very high inflation. Bitcoin has real utility and is already making a difference in the lives of many people.

https://www.nbcnews.com/news/latino/nonprofits-turn-cryptocurrency-help-needy-venezuelans-n1008726
https://www.coindesk.com/business/2020/11/11/venezuelas-bitcoin-story-puts-it-in-a-category-of-one/
https://bitpay.com/blog/africa-embr...ties,customers in underserved markets succeed.

 

[Eric Silva 2.0]

Bitcoins and all other crypto are just another form of fiat money. The intrinsic value is zero, just as it is for all other forms of fiat money. And I won't even be able to wipe my ass with it if/when the value goes to zero.

"Bitcoins and all other crypto are just another form of fiat money."
Not true

"The intrinsic value is zero."
Please define intrinsic value. If bitcoin has zero intrinsic value can you give me something that has intrinsic value and explain it please.

 

[aerius]

"Bitcoins and all other crypto are just another form of fiat money."
Not true

Absolutely true. A bitcoin only has the value it does because we say it does. In other words, by fiat. Just like all other forms of fiat money.

"The intrinsic value is zero."
Please define intrinsic value. If bitcoin has zero intrinsic value can you give me something that has intrinsic value and explain it please.

Hard, physical assets in your possession are the only things with intrinsic value. Your dwelling, your car, your cum socks (that's a Bryce Mitchell reference), and the toilet paper you wipe your ass with all have a non-zero intrinsic value. Dollars in your bank account, anything in your trading account, and all cryptos are all zeroes.

 

[Rob Battisti]

Absolutely true. A bitcoin only has the value it does because we say it does. In other words, by fiat. Just like all other forms of fiat money.



Hard, physical assets in your possession are the only things with intrinsic value. Your dwelling, your car, your cum socks (that's a Bryce Mitchell reference), and the toilet paper you wipe your ass with all have a non-zero intrinsic value. Dollars in your bank account, anything in your trading account, and all cryptos are all zeroes.

there is literally no asset harder than bitcoin.

 

[Eric Silva 2.0]

Absolutely true. A bitcoin only has the value it does because we say it does. In other words, by fiat. Just like all other forms of fiat money.
I don't want to keep going round and round but I would encourage you to look up the definition of fiat as i


Hard, physical assets in your possession are the only things with intrinsic value. Your dwelling, your car, your cum socks (that's a Bryce Mitchell reference), and the toilet paper you wipe your ass with all have a non-zero intrinsic value. Dollars in your bank account, anything in your trading account, and all cryptos are all zeroes.

I don't want to keep going round and round with you. I would encourage you to look up the definition of fiat as it pertains to money or just fiat money.

"Hard, physical assets in your possession are the only things with intrinsic value."
Could you define intrinsic value and explain why that value would make any difference in real life. You say my cryptos are all zeroes but I could take 3 bitcoin and go purchase a Mercedes right now if I wanted. Could you give me an example of intrinsic value of a hard asset?

 

[Eric Silva 2.0]

Because as @LMP said - people are holding it hoping it goes up in value. So they won't spend it because that depletes their store of the valuable asset.

It's essentially become just another stock (to use a simple term that most people can follow). It rises and falls with consumer confidence, scarcity, etc. The core technology is widespread enough that bitcoin is no longer "the way" to make use of the blockchain.

It has intrinsic value like any tradeable asset but it's not going revolutionize commerce as people used to predict.

"Bitcoin is no longer "the way" to make use of the blockchain."
Maybe it's the other way around. Maybe the best way to use the blockchain is bitcoin.
What do you think the intrinsic value of bitcoin is and why are you so sure it's not going to revolutionize commerce?
For the record, I wouldn't go so far as to say it will revolutionize commerce. I would argue we are in a failing currency system and bitcoin is one of the possibilites to be at least part of the solution going forward.

Bitcoin inflation rate...... 1.7%
Bitcoin inflation rate at next halving (April 2024)...... .84%
Bitcoin inflation rate in 2028 (next halving) ..... approx .42%
U.S. inflation rate according to CPI.....almost 4% (inflation is much higher)
U.S. debt...... 33 trillion
U.S. debt in 2028 (next bitcoin halving)....... I would estimate it to be 55 trillion plus over 100 trillion more in unfunded liabilities
U.S. interest on debt in 2028....... I would guess over 1.5 trillion dollars.

Bitcoin seems like a no-brainer to me.

 

[aerius]

I don't want to keep going round and round with you. I would encourage you to look up the definition of fiat as it pertains to money or just fiat money.

It's literally in the name. Fiat. As in by fiat. It's only worth something because we say it is. It's really that fucking simple, I'm not sure what else you're trying to get at.

"Hard, physical assets in your possession are the only things with intrinsic value."
Could you define intrinsic value and explain why that value would make any difference in real life. You say my cryptos are all zeroes but I could take 3 bitcoin and go purchase a Mercedes right now if I wanted. Could you give me an example of intrinsic value of a hard asset?

All fiat money and cryptos only have value because we say they do. Your bank account is a bunch of electrons floating around in a server somewhere, same thing with your crypto unless you have an offline wallet. What's the value of a bunch electrons in cyberspace? Zero. Dollar bills? I can wipe my ass with them, that's their intrinsic value. The turds I shit out in the toilet this morning? I can use them to fertilize my garden and grow more food, there's some intrinsic value in that too.

The fact that you can buy something with it is completely irrelevant as to whether or not something has intrinsic value. Just because I can pull an NFT out of my ass and sell it to some schmuck for a $100k doesn't mean it's worth anything. It isn't. The intrinsic value of that NFT is zero, it's only worth the electrons that are used to store it.

 

[MeatheadMike]

I don't want to keep going round and round with you. I would encourage you to look up the definition of fiat as it pertains to money or just fiat money.

"Hard, physical assets in your possession are the only things with intrinsic value."
Could you define intrinsic value and explain why that value would make any difference in real life. You say my cryptos are all zeroes but I could take 3 bitcoin and go purchase a Mercedes right now if I wanted. Could you give me an example of intrinsic value of a hard asset?

Basically Fiat currencies have no intrinsic value, but are backed by governments, making them stable and ideal to transact with on a day to day basis.

Contrast with commodities (oil, lumber, wheat, etc) and stocks (shares of an actual company), which have intrinsic value but are subject to short term volatility due to market speculation, making them less than ideal for day to day transactions.

Then you have crypto-currencies, which have no intrinsic value and are not they backed by anything. Their perceived value is derived purely from speculation, and their high volatility makes them useless as day to day currency. It doesn't mean there isn't money to be made off them, but they aren't worth anything on their own, outside of speculation.

 

[Blayt7hh]

What’s the actual point in the OP? It just seems like random complaining followed by a quip to let us know that he’s really cool and smart because he buys into the blockchain.

 

[Jack V Savage]

What’s the actual point in the OP? It just seems like random complaining followed by a quip to let us know that he’s really cool and smart because he buys into the blockchain.

Yeah, no point. Just shows he's clueless about a few things but plugged into rightist CT vibes.

 

[panamaican]

"Bitcoin is no longer "the way" to make use of the blockchain."
Maybe it's the other way around. Maybe the best way to use the blockchain is bitcoin.
What do you think the intrinsic value of bitcoin is and why are you so sure it's not going to revolutionize commerce?
For the record, I wouldn't go so far as to say it will revolutionize commerce. I would argue we are in a failing currency system and bitcoin is one of the possibilites to be at least part of the solution going forward.

Bitcoin inflation rate...... 1.7%
Bitcoin inflation rate at next halving (April 2024)...... .84%
Bitcoin inflation rate in 2028 (next halving) ..... approx .42%
U.S. inflation rate according to CPI.....almost 4% (inflation is much higher)
U.S. debt...... 33 trillion
U.S. debt in 2028 (next bitcoin halving)....... I would estimate it to be 55 trillion plus over 100 trillion more in unfunded liabilities
U.S. interest on debt in 2028....... I would guess over 1.5 trillion dollars.

Bitcoin seems like a no-brainer to me.

I'm glad you feel this way but I'm pretty sure you're wrong. I've been following bitcoin for a while, back when it was in the hundreds of dollars. I've taken payment in bitcoin.

I said it's intrinsic value is the same as any tradeable asset, that its variable based on generic market forces. The premise years ago was that bitcoin was going to be immune from that kind of volatility and gradually come to have value as a means of effectuating commercial transactions. I no longer consider that true. Will go to $1,000,000? Maybe. But it's just as likely to go to $1,000. Either way is going to be dictated by events in the broader world and not by anything that bitcoin itself does.

 

[Eric Silva 2.0]

What’s the actual point in the OP? It just seems like random complaining followed by a quip to let us know that he’s really cool and smart because he buys into the blockchain.

I would say the actual point of my thread is that Bitcoin isn't dead like so many intelligent people think it should be. It's a top asset this year (up over 100% YTD) and the reasons why are still misunderstood. I do think I am cool, not sure about really cool. I wouldn't say it's because I buy into the blockchain but for other reasons that have nothing to do with this thread. I think the blockchain is great technology but it's bitcoin that's the cool part. I wouldn't say i'm smart, very few have accused me of that. I would say that bitcoin is continuing to thrive and have a place in the world due to inflation and the crumbling of the economic system that's happening at what I would describe as a very slow pace. What's very interesting to me in this thread and others before it is how sure people here (most of which are much smarter than me) believe that the system is sustainable and working. I guess there is comfort in believing things won't or aren't changing but just because it's comfortable and sounds right doesn't mean it's true.
Will bitcoin be the savior in the new system as the currencies continue their decline (rising prices)? If I had to bet on it I would probably say no. Will it be part of the solution moving forward? I think the answer is most likely yes.

 

[Eric Silva 2.0]

I'm glad you feel this way but I'm pretty sure you're wrong. I've been following bitcoin for a while, back when it was in the hundreds of dollars. I've taken payment in bitcoin.

I said it's intrinsic value is the same as any tradeable asset, that its variable based on generic market forces. The premise years ago was that bitcoin was going to be immune from that kind of volatility and gradually come to have value as a means of effectuating commercial transactions. I no longer consider that true. Will go to $1,000,000? Maybe. But it's just as likely to go to $1,000. Either way is going to be dictated by events in the broader world and not by anything that bitcoin itself does.

Would you be willing to define intrinsic value or at least as you understand it? People keep using that term to mean different things.
What I hear in your post is that people thought bitcoin would behave a certain way and that might not be true. No argument from me. It just seems you are certain about things that I'm not so certain about. I'm trying to keep an open mind. I don't agree that bitcoin is just as likely to go to 1,000 as 1,000,000. I couldn't disagree more. That's one of the main reasons for the thread. The inflation problem in the U.S. and the world (rising prices and currencies becoming more worthless every day.....some more than others) guarantees the need for new general beliefs about money. I've owned and traded bitcoin for 7-8 years now. As people come to understand the flaws in the current system, it seems obvious to me that bitcoin will be part of the solution. Will it be dicated by events in the broader world? Absolutely! I think the answer to that would begin in the answer to my first question to you. Most aren't willing to answer or discuss that and the thread has been stalemated because of it.

 

[Eric Silva 2.0]

Basically Fiat currencies have no intrinsic value, but are backed by governments, making them stable and ideal to transact with on a day to day basis.

Contrast with commodities (oil, lumber, wheat, etc) and stocks (shares of an actual company), which have intrinsic value but are subject to short term volatility due to market speculation, making them less than ideal for day to day transactions.

Then you have crypto-currencies, which have no intrinsic value and are not they backed by anything. Their perceived value is derived purely from speculation, and their high volatility makes them useless as day to day currency. It doesn't mean there isn't money to be made off them, but they aren't worth anything on their own, outside of speculation.

"Basically fiat currencies have no intrinsic value, but are backed by governments, making them stable and ideal to transact with on a day to day basis."

What does it matter what the intrinsic value is of currencies or anything else for that matter? I'm not sure why people are talking about this. They are backed by governments but are they really stable? I don't think so. The dollar has lost ~97% of it's value since 1913 (The Fed). If you are saying stable meaning they aren't volatile, I could agree with that. What's the use of owning something that is moving towards zero and is guaranteed to lose purchasing power? Are paper currencies great for day to day transactions? Of course they are. That's their biggest strength.

What is the intrinsic value of oil and how did you come up with your answer?

"Then you have cryptocurrencies which are not backed by anything. Their perceived value........"
Does it matter that in Zimbabwe, Venezuela, Brazil, Turkey, Lebanon and many other countries the currency is backed by a government? Does it matter if I live in London and my paper currency is backed by the guy with the big ears (King Charles) or backed by Prince Harry or Meghan Markle? Who cares? I just think many people are missing it when it comes to bitcoin. Warren Buffett missed the whole tech boom of the 90's? Is he still the greatest investor who has ever lived? I think so but if he isn't he's right up there. I think the same thing is happening with bitcoin for similar reasons.

 

[Blayt7hh]

I would say the actual point of my thread is that Bitcoin isn't dead like so many intelligent people think it should be. It's a top asset this year (up over 100% YTD) and the reasons why are still misunderstood. I do think I am cool, not sure about really cool. I wouldn't say it's because I buy into the blockchain but for other reasons that have nothing to do with this thread. I think the blockchain is great technology but it's bitcoin that's the cool part. I wouldn't say i'm smart, very few have accused me of that. I would say that bitcoin is continuing to thrive and have a place in the world due to inflation and the crumbling of the economic system that's happening at what I would describe as a very slow pace. What's very interesting to me in this thread and others before it is how sure people here (most of which are much smarter than me) believe that the system is sustainable and working. I guess there is comfort in believing things won't or aren't changing but just because it's comfortable and sounds right doesn't mean it's true.
Will bitcoin be the savior in the new system as the currencies continue their decline (rising prices)? If I had to bet on it I would probably say no. Will it be part of the solution moving forward? I think the answer is most likely yes.

You didn’t really connect anything you were talking about together in the op

 

[Jack V Savage]

The dollar has lost ~97% of it's value since 1913 (The Fed). If you are saying stable meaning they aren't volatile, I could agree with that.

Right. You keep using that talking point about "the dollar" but I'm not sure if you realize what you're saying. Physical dollars printed in 1913 are worth much less than dollars today. Advances in monetary technology (i.e., moving past commodity-based money) have allowed us to prevent wild swings in both directions (inflation and deflation) that produced huge economic disruptions and to produce consistent, low inflation, which means if you look at really long timeliness, there's more total inflation, but it's totally irrelevant to the real economy.

 

[Andy Capp]

"If the U.S. dollar fails so does Bitcoin"
Incorrect. Bitcoin will be priced in whatever the new currency will be. I'm assuming we won't be on a bitcoin standard which is a small possibility. The current system won't last. It's just a matter of how fast or slow it continues to crumble.

To me, and I grant this is just my lay opinion, you're inviting disaster to put your money into something that is deliberately stripped of all the safeguards and other legal protections against bad actors, unlike the traditional monetary system, which has, at least attempted, to protect the consumer from fraudsters.

A very small number of people who are in on the scam will get wealthy while the rest are all victims of the likes of SBF.

I think that's really stupid.

 

[Andy Capp]

Basically Fiat currencies have no intrinsic value, but are backed by governments, making them stable and ideal to transact with on a day to day basis.

Contrast with commodities (oil, lumber, wheat, etc) and stocks (shares of an actual company), which have intrinsic value but are subject to short term volatility due to market speculation, making them less than ideal for day to day transactions.

Then you have crypto-currencies, which have no intrinsic value and are not they backed by anything. Their perceived value is derived purely from speculation, and their high volatility makes them useless as day to day currency. It doesn't mean there isn't money to be made off them, but they aren't worth anything on their own, outside of speculation.

TY, my point, exactly.

 

[panamaican]

Would you be willing to define intrinsic value or at least as you understand it? People keep using that term to mean different things.
What I hear in your post is that people thought bitcoin would behave a certain way and that might not be true. No argument from me. It just seems you are certain about things that I'm not so certain about. I'm trying to keep an open mind. I don't agree that bitcoin is just as likely to go to 1,000 as 1,000,000. I couldn't disagree more. That's one of the main reasons for the thread. The inflation problem in the U.S. and the world (rising prices and currencies becoming more worthless every day.....some more than others) guarantees the need for new general beliefs about money. I've owned and traded bitcoin for 7-8 years now. As people come to understand the flaws in the current system, it seems obvious to me that bitcoin will be part of the solution. Will it be dicated by events in the broader world? Absolutely! I think the answer to that would begin in the answer to my first question to you. Most aren't willing to answer or discuss that and the thread has been stalemated because of it.

I've defined it twice as I see it, relative to bitcoin.

But if you want a generic definition: Intrinsic value is a measure of what an asset is worth.

Investors look for gaps between an asset's intrinsic value and it's market price. When the market price is lower than the intrinsic value, they invest and hope to sell for a profit when the market price rises to the intrinsic value. When the market price is higher than the intrinsic value, they don't invest because the asset is overpriced.

Bitcoin is not blockchain. Even 10 years ago, people understood that the highest value was primarily in the blockchain technology, not the bitcoin application. Bitcoin's potential applicability to global commerce was where it's value was. I think that time has degraded that value for bitcoin but not the value for the blockchain.

You're free to speculate that in 30+ years people will be using bitcoin, and not some other crypto currency, to manage a substantial part of their financial transactions. I don't think it will happen. It will be a minor player.

 

[Eric Silva 2.0]

Right. You keep using that talking point about "the dollar" but I'm not sure if you realize what you're saying. Physical dollars printed in 1913 are worth much less than dollars today. Advances in monetary technology (i.e., moving past commodity-based money) have allowed us to prevent wild swings in both directions (inflation and deflation) that produced huge economic disruptions and to produce consistent, low inflation, which means if you look at really long timeliness, there's more total inflation, but it's totally irrelevant to the real economy.

"You keep using.....'the dollar' but i'm not sure you realize what you're saying."

I do. I'm using the dollar because it is perceived as stable and the best or close to it when it comes to these fiat currencies. If I used the Zimbabwe Dollar, Turkish Lira or the Argentine Peso I'm sure you'd agree with me that it would be worth it to store most or all of my money in bitcoin rather than local currency (let's leave out other options for the sake of precision).

"Advances in monetary technology........prevent wild swings in both direction............look at really long timelines, there's more total inflation, but it's totally irrelevant......"

I would agree with your general idea but there are weaknesses in this system. Over the short term those weaknesses don't matter but it's the accumulation and the long term where the problem is starting to show up. There isn't a solution in the present system. That's where we disagree and I disagree with most on this board. I guess it's why I invest in things like bitcoin (and others) and many on here say it's worth less than toilet paper, CT, right-winger etc..... It's also a big reason for the thread. Bitcoin is getting real attention from CEO's, money managers and many others. To pretend it's some fringe asset when it has a market cap higher than Tesla, Costco Toyota, Home Depot,Exxon Mobil and Walmart is disingenuous to say the least.