Cryptocurrency - where's the actual value?
Discussion
Crypto looks like Paypal without the charges. If, as is being argued, crypto and hard currencies are the same thing then either Paypal's existing dominance would have squeezed crypto out of existence or crypto would have squeezed Paypal out of existence.
Just because something had value when you paid for it doesn't mean it has ongoing real-world value. Let's say you bought a VHS video recorder off a mate for £100 back in 1997. You've still got the VHS and he's still got the £100. Your VHS is practically worthless and his £100 has depreciated a bit due to inflation - but he's sitting on some real world "value" to the tune of £100. When you buy crypto your "real money" goes to other people. In the longer term it's inevitable that you'll be left holding the VHS and someone else is keeping your real money. You're not going to be selling that VHS back to your mate for £100 any time soon.
Sure, you could recut the above paragraph inserting "gold" in place of "VHS" and get a different outcome. However, the point being made is not the physical existence of the gold or VHS but the presence or absence of long term value. Crypto has no long term history and neither is it backed by any government, industry or economy. As such it is not "gold", it's a "VHS", enjoying its moment in the spotlight but probably destined for oblivion when those left holding the crypto realise someone has made off with their real money.
Just because something had value when you paid for it doesn't mean it has ongoing real-world value. Let's say you bought a VHS video recorder off a mate for £100 back in 1997. You've still got the VHS and he's still got the £100. Your VHS is practically worthless and his £100 has depreciated a bit due to inflation - but he's sitting on some real world "value" to the tune of £100. When you buy crypto your "real money" goes to other people. In the longer term it's inevitable that you'll be left holding the VHS and someone else is keeping your real money. You're not going to be selling that VHS back to your mate for £100 any time soon.
Sure, you could recut the above paragraph inserting "gold" in place of "VHS" and get a different outcome. However, the point being made is not the physical existence of the gold or VHS but the presence or absence of long term value. Crypto has no long term history and neither is it backed by any government, industry or economy. As such it is not "gold", it's a "VHS", enjoying its moment in the spotlight but probably destined for oblivion when those left holding the crypto realise someone has made off with their real money.
There's two answers here, first is that bit coins value is no different from any other currency or commodity value in that it's linked to demand.
The second answer is what is creating demand for bitcoin isn't as clear as people using it as a traditional currency. There maybe a much larger demand or paradigm shift to utilize the ideas and the tech (code) of block chain processing. If block chain processing philosophy is generally adopted for the future of information exchange and mass distributed computing then there's no doubt money will be organized and transferred that way too.
The second answer is what is creating demand for bitcoin isn't as clear as people using it as a traditional currency. There maybe a much larger demand or paradigm shift to utilize the ideas and the tech (code) of block chain processing. If block chain processing philosophy is generally adopted for the future of information exchange and mass distributed computing then there's no doubt money will be organized and transferred that way too.
rockin said:
Crypto looks like Paypal without the charges. If, as is being argued, crypto and hard currencies are the same thing then either Paypal's existing dominance would have squeezed crypto out of existence or crypto would have squeezed Paypal out of existence.
Just because something had value when you paid for it doesn't mean it has ongoing real-world value. Let's say you bought a VHS video recorder off a mate for £100 back in 1997. You've still got the VHS and he's still got the £100. Your VHS is practically worthless and his £100 has depreciated a bit due to inflation - but he's sitting on some real world "value" to the tune of £100. When you buy crypto your "real money" goes to other people. In the longer term it's inevitable that you'll be left holding the VHS and someone else is keeping your real money. You're not going to be selling that VHS back to your mate for £100 any time soon.
Sure, you could recut the above paragraph inserting "gold" in place of "VHS" and get a different outcome. However, the point being made is not the physical existence of the gold or VHS but the presence or absence of long term value. Crypto has no long term history and neither is it backed by any government, industry or economy. As such it is not "gold", it's a "VHS", enjoying its moment in the spotlight but probably destined for oblivion when those left holding the crypto realise someone has made off with their real money.
Naturally, value will have a time component - what's valuable today isn't necessarily so tomorrow. VHS was a bad store of value but 250GTO's less so. The Venezuela Bolivar seemed a much better prospect a few years back too...Just because something had value when you paid for it doesn't mean it has ongoing real-world value. Let's say you bought a VHS video recorder off a mate for £100 back in 1997. You've still got the VHS and he's still got the £100. Your VHS is practically worthless and his £100 has depreciated a bit due to inflation - but he's sitting on some real world "value" to the tune of £100. When you buy crypto your "real money" goes to other people. In the longer term it's inevitable that you'll be left holding the VHS and someone else is keeping your real money. You're not going to be selling that VHS back to your mate for £100 any time soon.
Sure, you could recut the above paragraph inserting "gold" in place of "VHS" and get a different outcome. However, the point being made is not the physical existence of the gold or VHS but the presence or absence of long term value. Crypto has no long term history and neither is it backed by any government, industry or economy. As such it is not "gold", it's a "VHS", enjoying its moment in the spotlight but probably destined for oblivion when those left holding the crypto realise someone has made off with their real money.
Of course crypto has no long term history, it's a new thing! I don't think that is a pre-requisite of value, and anyway how is it supposed to acquire it without the passage of time? What backing would you like to see for crypto to legitimise it in your eyes?
egomeister said:
Naturally, value will have a time component - what's valuable today isn't necessarily so tomorrow. VHS was a bad store of value but 250GTO's less so. The Venezuela Bolivar seemed a much better prospect a few years back too...
It's fallen because the value-base (the Venezuelan economy) has declined in value, due to abysmal mis-management (by the Venezuelan government).And that's what the thread is asking. What IS that value-base for BitCoin and friends?
What those talking it up are trying very hard to avoid is the one and only answer that really can be given. There is none.
[quote=egomeister[Of course crypto has no long term history, it's a new thing! I don't think that is a pre-requisite of value, and anyway how is it supposed to acquire it without the passage of time?
egomeister said:
What backing would you like to see for crypto to legitimise it in your eyes?
Some kind of value-base behind it/them.How many different cryptocurrencies are extant, anyway? It would appear to be over 900... https://coinmarketcap.com/all/views/all/
Is that really sustainable...? If they all have the same value-base (none), then why can some be unsustainable but others sustainable? If they are all perfectly sustainable, just because, then why can't I get a blockchain up and kicking, and start number 901 this afternoon?
TooMany2cvs said:
If they are all perfectly sustainable, just because, then why can't I get a blockchain up and kicking, and start number 901 this afternoon?
I don't remember anyone saying they are all sustainable? Maybe they are but I suspect not.If you want to start 901 then go for it - there is nothing stopping you (well you might need to read up on the technicalities etc).
TooMany2cvs said:
egomeister said:
Naturally, value will have a time component - what's valuable today isn't necessarily so tomorrow. VHS was a bad store of value but 250GTO's less so. The Venezuela Bolivar seemed a much better prospect a few years back too...
It's fallen because the value-base (the Venezuelan economy) has declined in value, due to abysmal mis-management (by the Venezuelan government).And that's what the thread is asking. What IS that value-base for BitCoin and friends?
What those talking it up are trying very hard to avoid is the one and only answer that really can be given. There is none.
egomeister said:
Of course crypto has no long term history, it's a new thing! I don't think that is a pre-requisite of value, and anyway how is it supposed to acquire it without the passage of time?
Well, quite. The Euro had no long-term history back in the early 00s, but it did have that value-base - the economies of the EuroZone countries, and the management of the European Central Bank. What it didn't have for the first three years was any actual cash currency...egomeister said:
What backing would you like to see for crypto to legitimise it in your eyes?
Some kind of value-base behind it/them.How many different cryptocurrencies are extant, anyway? It would appear to be over 900... https://coinmarketcap.com/all/views/all/
Is that really sustainable...? If they all have the same value-base (none), then why can some be unsustainable but others sustainable? If they are all perfectly sustainable, just because, then why can't I get a blockchain up and kicking, and start number 901 this afternoon?
I don't see being issued and "backed" by a government as having huge value beyond the fact that such currencies become the standard means of transaction with and inside that country. At the moment I see that bitcoin has the potential to fulfil this (and indeed more extensively precisely because it doesn't have that geographical base). In this context I'd say there is potential it's overvalued at the moment, given there seems to be minimal transactional volume (apart from paying for malware decryption
)Edited by egomeister on Monday 11th September 12:11
x5x3 said:
TooMany2cvs said:
If they are all perfectly sustainable, just because, then why can't I get a blockchain up and kicking, and start number 901 this afternoon?
I don't remember anyone saying they are all sustainable? Maybe they are but I suspect not.TooMany2cvs said:
If they all have the same value-base (none), then why can some be unsustainable but others sustainable?
x5x3 said:
If you want to start 901 then go for it - there is nothing stopping you (well you might need to read up on the technicalities etc).
If we're agreeing they aren't all sustainable, then I'd be wasting my time to do so.TooMany2cvs said:
If we're agreeing they aren't all sustainable, then I'd be wasting my time to do so.
That is not necessarily the case - you might have the best idea yet. Of course it will take you the next few months to research the subject area properly before you can launch Skeptic-coin 
x5x3 said:
TooMany2cvs said:
If we're agreeing they aren't all sustainable, then I'd be wasting my time to do so.
That is not necessarily the case - you might have the best idea yet. Of course it will take you the next few months to research the subject area properly before you can launch Skeptic-coin Surely, since none of them have any value-base behind them, there's no differentiator bar the trading environments that accept/convert/issue them? The value-base is in the originator's intent in launching that particular crypto-currency, and/or their marketing around it?
Only one was first to market - BitCoin. Is there inherent value in that USP, 8 years later, or is that just a historical wrinkle now, and it has to be considered with all the other competitors?
TooMany2cvs said:
But what differentiates them?
Surely, since none of them have any value-base behind them, there's no differentiator bar the trading environments that accept/convert/issue them? The value-base is in the originator's intent in launching that particular crypto-currency, and/or their marketing around it?
Only one was first to market - BitCoin. Is there inherent value in that USP, 8 years later, or is that just a historical wrinkle now, and it has to be considered with all the other competitors?
As with any technically complex market segment, you need domain insight to understand the differentiators which are profound and go beyond brand awareness.Surely, since none of them have any value-base behind them, there's no differentiator bar the trading environments that accept/convert/issue them? The value-base is in the originator's intent in launching that particular crypto-currency, and/or their marketing around it?
Only one was first to market - BitCoin. Is there inherent value in that USP, 8 years later, or is that just a historical wrinkle now, and it has to be considered with all the other competitors?
Behemoth said:
TooMany2cvs said:
But what differentiates them?
Surely, since none of them have any value-base behind them, there's no differentiator bar the trading environments that accept/convert/issue them? The value-base is in the originator's intent in launching that particular crypto-currency, and/or their marketing around it?
Only one was first to market - BitCoin. Is there inherent value in that USP, 8 years later, or is that just a historical wrinkle now, and it has to be considered with all the other competitors?
As with any technically complex market segment, you need domain insight to understand the differentiators which are profound and go beyond brand awareness.Surely, since none of them have any value-base behind them, there's no differentiator bar the trading environments that accept/convert/issue them? The value-base is in the originator's intent in launching that particular crypto-currency, and/or their marketing around it?
Only one was first to market - BitCoin. Is there inherent value in that USP, 8 years later, or is that just a historical wrinkle now, and it has to be considered with all the other competitors?
TooMany2cvs said:
Do go on...
What's your expertise? Whatever it is, you are better placed to pick stocks in that domain than any Joe Bloggs investor trying to do desk research from a zero knowledge base to accomplish the same. It's as simple as that. If you don't understand the basics of cryptography and software development languages & development processes then it's a steep learning curve. Comprehension of traditional currencies and traditional monetary systems is only the tip of the iceberg & may arguably be the wrong iceberg.
TooMany2cvs said:
And that's what the thread is asking. What IS that value-base for BitCoin and friends?
What those talking it up are trying very hard to avoid is the one and only answer that really can be given. There is none.
This is the inescapable conclusion I've reached from this thread.What those talking it up are trying very hard to avoid is the one and only answer that really can be given. There is none.
Anyone can create a cryptocurrency. They are created from thin air and, while technically clever, have no fundamental value.
At least Bitcoin has given us blockchain.
Behemoth said:
TooMany2cvs said:
Do go on...
What's your expertise? Whatever it is, you are better placed to pick stocks in that domain than any Joe Bloggs investor trying to do desk research from a zero knowledge base to accomplish the same. It's as simple as that. If you don't understand the basics of cryptography and software development languages & development processes then it's a steep learning curve. Comprehension of traditional currencies and traditional monetary systems is only the tip of the iceberg & may arguably be the wrong iceberg.Or just cryptocurrencies other than the big boys, Bitcoin and Ethereum? Even within that pair, why would I go for Ethereum over Bitcoin?
You've said that there's "profound" differentiators, then that they're simply too hard to understand or explain. Apart from some possibly being fraudulent, or being based on crappy blockchain implementations, what are they?
I think you both have proven it is something you do not understand and cannot be bothered to research for yourselves and hoped a quick post on PH would provide all the answers. I'm guilty of this too but on other forums/topics
People have tried to help you out but unless you do your own research and understand the technologies involved then it is difficult to help you.
I'm concerned that you would take the views of people on PH over and above doing your ow research.
I'll try again - here is another good but quick guide (nothing to do with me or anyone I know) - https://mycrypto.guide.
People have tried to help you out but unless you do your own research and understand the technologies involved then it is difficult to help you.
I'm concerned that you would take the views of people on PH over and above doing your ow research.
I'll try again - here is another good but quick guide (nothing to do with me or anyone I know) - https://mycrypto.guide.
TooMany2cvs said:
So, basically, only ubergeeks should even consider using cryptocurrencies, because it's too hard for Joe Average to pick the right one of the 900?
If by "using" them you mean paying someone else crypto in exchange for sthg, right now, you'd probably need to be a bit geeky to use them, yes. It's a bit like the web in the mid 90s. It's easy to pick the most well known from the 900, but it's very difficult to separate the other few wheats from the bales of chaff.TooMany2cvs said:
Or just cryptocurrencies other than the big boys, Bitcoin and Ethereum? Even within that pair, why would I go for Ethereum over Bitcoin?
It's well written about elsewhere, even in threads on here. Ethereum is not a cryptocurrency, it is essentially a development platform. Ether is the crypto token used in it. That's key to the problem I have with Ether's current market value.TooMany2cvs said:
You've said that there's "profound" differentiators, then that they're simply too hard to understand or explain. Apart from some possibly being fraudulent, or being based on crappy blockchain implementations, what are they?
Read the white papers or at least summaries of them. Get insight into the developer team backgrounds and knowledge of the chosen code base / infrastructure. Then, you probably need insight into the token's chosen space. Not all are designed to be world currencies. For example, some are designed to allow hiring of CPU power and all sorts of other magical oddities. How would you determine what is a "crappy" blockchain implementation? You'd need some knowledge about that subject, wouldn't you?x5x3 said:
I'm concerned that you would take the views of people on PH over and above doing your ow research.
I have looked and looked and looked. There is nothing - I repeat nothing - out there setting out where the value in cypto currencies lies - other than rewarding those activities necessary for its own existence and security.Benjaminpalma said:
I have looked and looked and looked. There is nothing - I repeat nothing - out there setting out where the value in cypto currencies lies - other than rewarding those activities necessary for its own existence and security.
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