posted by jmogIf gold/platinum was extremely abundant on some other planet and the aliens showed up with a crap ton of it, it would probably ruin the Earth's economy for awhile as well.
Indeed. But you know what they can't show up with? Bitcoin. ;)
posted by justincredibleIndeed. But you know what they can't show up with? Bitcoin. ;)
I used to play Everquest MMO. There was an exchange rate for their in game money (tunar/krono depending on version of game) to USD. The exchange rate was no different than USD to Euro, or USD to Bitcoin.
The problem is when the game became far less popular (few people play it now) the rate basically went away. Meaning what used to be roughly $100 USD for 1 million tunar/krono, now 1 million tunar/krono probably wouldn't get you 1 USD.
Soon as bitcoin becomes less popular, like EQ/tunar, the rate will skyrocket making it worthless just like Venezuelan money.
Its not a guarantee that it will become worthless, but the chance is there and it is a decent chance.
With that being said, I wish I had bought bitcoin over a decade ago...
posted by justincredibleIndeed. But you know what they can't show up with? Bitcoin. ;)
But Bitcoin is still valued base off the USD. And, while the USD went off the gold standard decades ago, Earth's currencies are still loosely based off of gold and other rare metals.
If an alien came in with a crap ton of gold, bitcoin would be just as useless as USD.
posted by jmogSoon as bitcoin becomes less popular, like EQ/tunar, the rate will skyrocket making it worthless just like Venezuelan money.
Its not a guarantee that it will become worthless, but the chance is there and it is a decent chance.
With that being said, I wish I had bought bitcoin over a decade ago...
I only seeing it gaining in popularity as the ecosystem evolves. I could certainly be wrong, but I'm betting on being right.
posted by jmogBut Bitcoin is still valued base off the USD. And, while the USD went off the gold standard decades ago, Earth's currencies are still loosely based off of gold and other rare metals.
If an alien came in with a crap ton of gold, bitcoin would be just as useless as USD.
Sure, it's "price" is given in USD, because that's our currency. But that isn't what gives it its worth/value.
posted by justincredibleSure, it's "price" is given in USD, because that's our currency. But that isn't what gives it its worth/value.
So what gives it worth then?
Feel free to disagree, obviously. But: https://bitcoinmagazine.com/guides/what-makes-bitcoin-valuable
And again, I'm in no way shape or form making any guarantee that bitcoin will ever be anything more than it currently is. But, as a libertarian, the fundamentals are very intriguing to me.
I'm starting a deep dive into the Austrian school of economics. Bitcoin seems to align very well with that school of thought, it would not be a surprise if Satoshi, whoever the hell he/they may be, was/is an adherent of that school.
posted by jmogBut Bitcoin is still valued base off the USD. And, while the USD went off the gold standard decades ago, Earth's currencies are still loosely based off of gold and other rare metals.
If an alien came in with a crap ton of gold, bitcoin would be just as useless as USD.
Going back to this example. I think your logic would also dictate that the USD is what gives gold its worth. Since the price of gold is denoted in USD.
posted by justincredibleFeel free to disagree, obviously. But: https://bitcoinmagazine.com/guides/what-makes-bitcoin-valuable
In other words it is fiat. It is not "fiat" as in a government says it has value. It is fiat because the people who wrote the code say it has value.
Yeah, no flaw in that plan...there is a reason that the USD only fluctuates about 0.5% per day while Bitcoin fluctuates about 5% per day, or 10 times as much.
Like was said above, can't be used as normal currency as a shop may lose all of its profits by the end of the day unless their prices change by the hour.
Bitcoin is like the stock market/mutual funds. Good investment, not good as currency. It is too volatile.
posted by jmogIn other words it is fiat. It is not "fiat" as in a government says it has value. It is fiat because the people who wrote the code say it has value.
No. The market says it has value. Because they are buying it. It's the free market in action, is it not?
Fiat currency is fiat currency, because the govt decrees it currency and forces you to use it. No one is forced to buy or use bitcoin, so that's a very bad comparison.
posted by justincredibleNo. The market says it has value. Because they are buying it. It's the free market in action, is it not?
Your own link said that the coders give it value by keeping it "rare" and scheduled releases. How is that less "fiat" than what the US Government does with the USD?
Are the coders, so far, sticking to a set schedule and not changing it? Sure. Will they forever? who knows.
What makes it that different, fiat value wise (meaning someone is just saying it has value so it has value) if its a government or a group of coders? Either way some "entity" is just saying "this is valuable".
posted by justincredibleFiat currency is fiat currency, because the govt decrees it currency and forces you to use it. No one is forced to buy or use bitcoin, so that's a very bad comparison.
Little caviat, no one is forcing anyone to buy/use the USD, the only mandate is that places of business accept it. I can do as I please and barter with something different as long as the other person/company agrees with said form of currency.
posted by justincredibleFiat currency is fiat currency, because the govt decrees it currency and forces you to use it. No one is forced to buy or use bitcoin, so that's a very bad comparison.
Aha, so it has value for the same reason that gold, silver, gems, etc have value then...because people like it/want it/its currently rare?
The US Government has the printing press and can push out more money whenever they want.
The coders can do the same, they can increase/decrease the speed at which new bitcoin are made, they just haven't done so yet. They have stuck with the "plan" so far.
Basically if you take the printing press for the USD and just put it at a constant rate of printing...you have Bitcoin...
posted by jmogYour own link said that the coders give it value by keeping it "rare" and scheduled releases. How is that less "fiat" than what the US Government does with the USD?
Are the coders, so far, sticking to a set schedule and not changing it? Sure. Will they forever? who knows.
What makes it that different, fiat value wise (meaning someone is just saying it has value so it has value) if its a government or a group of coders? Either way some "entity" is just saying "this is valuable".
The market, literally, is saying it's valuable by buying it.
Regardless, it looks like we're at an impasse and just have to agree to disagree.
I cant afford a bitcoin so I don't think it has a future :)
I hope it's not the future at least or I won't be able to afford money.
posted by kizer permanenteI cant afford a bitcoin so I don't think it has a future :)
I hope it's not the future at least or I won't be able to afford money.
You don't have to purchase an entire bitcoin. You could purchase 0.000001 btc, if you wanted to.
posted by jmogAha, so it has value for the same reason that gold, silver, gems, etc have value then...because people like it/want it/its currently rare?
The US Government has the printing press and can push out more money whenever they want.
The coders can do the same, they can increase/decrease the speed at which new bitcoin are made, they just haven't done so yet. They have stuck with the "plan" so far.
Basically if you take the printing press for the USD and just put it at a constant rate of printing...you have Bitcoin...
It's not like there are 5 people coding on bitcoin. It would take market consensus to change the direction. Not government diktat.
posted by Verbal KintWhy does it really matter what the form of currency is since the amount of a person's wealth is physical currency is estimated to be 8%?
I am much less than that, I bet I have less than $1000 of actual cash to my person.
Your total would also include your on-demand deposits and any CD's or Bonds with settlement in USD. It would exclude other assets, including stocks, because you could sell that for whatever.
So if you have $1000 cash at home, and $5k in the bank and another $10k in CD's, then you actually have $16k.
Here's another kick in the nuts for you: your house and stocks would still have value if the USD crashed overnight. But then where would potential buyers come up with the money to pay you when their liquidity went to zero?
posted by justincredibleThe market, literally, is saying it's valuable by buying it.
As a commodity, not as currency. Purely speculative gamble that bitcoin WILL be worth something. The demand is primarily investors and not consumers/purchasers.
The better comparison might be stock in Uber. The company has no value. It makes no money. But the STOCK has value because investors believe it will one day make a profit. When the investors/speculators bail, then crypto becomes worthless.
Or go a step further and it's the tech bubble of the late 90's. Most of those companies are long gone. Yeah, there were a few survivors and perhaps that will be the case with crypto. I just can't see the current crop surviving because it has no fundamental economic bindings. I think they all get crushed when the big banks come out with their own crypto.
posted by jmogI used to play Everquest MMO. There was an exchange rate for their in game money (tunar/krono depending on version of game) to USD. The exchange rate was no different than USD to Euro, or USD to Bitcoin.
The problem is when the game became far less popular (few people play it now) the rate basically went away. Meaning what used to be roughly $100 USD for 1 million tunar/krono, now 1 million tunar/krono probably wouldn't get you 1 USD.
Soon as bitcoin becomes less popular, like EQ/tunar, the rate will skyrocket making it worthless just like Venezuelan money.
Its not a guarantee that it will become worthless, but the chance is there and it is a decent chance.
With that being said, I wish I had bought bitcoin over a decade ago...
Everquest is an underrated game
posted by justincredibleI wonder if this thread will bring BoatShoes out of the woodwork to talk about MMT?
posted by gutEvery time I mention treasuries I wait....
First thing I thought of as soon as I saw this thread.
posted by jmogThe coders can do the same, they can increase/decrease the speed at which new bitcoin are made, they just haven't done so yet. They have stuck with the "plan" so far.
Not quite. Yes, they did cap it, but based on HOW Bitcoin is mined, it necessarily requires more and more effort to create a single new one with each previous one mined. So, without any kind of enforced cap, its creation still runs on a sort of hyperbola with the axes being the total number currently in the market and the expended computing effort necessary to mine an additional one. Allegedly (I've never mined), it's getting to the point that, even if you account for some of the more radical predictions on value down the road, it's just not worth the cost to mine them anymore. Essentially, even with a bullish view, it costs more than a BTC will ever likely be worth to mine a BTC, so the market curbs the number in existence.
posted by gutAs a commodity, not as currency. Purely speculative gamble that bitcoin WILL be worth something. The demand is primarily investors and not consumers/purchasers.
Generally, this is what I think has been ... and still is ... the biggest drawback to any cryptocurrency. With the rise in popularity and perceived value, they've largely been treated as investments as opposed to currency, and as such, it's best to treat them that way (or at least to view them that way).
Having said that, there is one difference between cryptocurrency and the stocks you referenced: They're actually THE preferred method of transaction on the dark web because of the anonymity. And as a result, those who accept them also don't convert them right away either, because sellers on dark web markets are often also buyers on dark web markets (not to mention the fact that it's not the worst way to hide income from the IRS). It's a microcosm, to be sure, and what is propelling it there isn't really replicable in an open market, because anonymity is less valuable. But it does seem to have a base there, and I don't anticipate it going away altogether, if for only that reason.
It is also worth mentioning that, at least for BTC, it is the basis of many of the other altcoins. Their value is bound to BTC as opposed to being bound to USD, so with regard to that specific cryptocurrency, it does share that foundational principle (XMR, for example, isn't valued per USD, but per BTC).
I'm not saying whether or not it will survive. I think it needs to drop in value in order for that to happen. Its use needs to NOT be as as a growth investment, but as a tool of exchange, and I think it will eventually happen once all the HODL bros stop pumping the hell out of it every few months, which will help with the volatility.
Just had some knucklefuck try to pitch me some "program" on making "huge profits" from trading crypto.
I wasted as much of his time as possible and then proselytized for my view that crypto will never be legitimate money until its utility is transactional first and investment-based second (as any official currency on the FX is).
I think I might have just red-pilled this dude into understanding that it's basically treated like a really volatile version of oil or corn right now, and as such, he's not "trading" crypto; he's buying and selling it.
I swear, the people that buy into these crypto MLMs are some of the lowest-watt bulbs.