Cryptocurrency - where's the actual value?

[egomeister]

Benjaminpalma said:

egomeister said:

No value in frictionless and low cost international value transfers?

That's a feature. It does not give crypto currencies inherent value as their supply is limitless and they aren't exchanged for value at their creation.

We're going round in circles here... what is the inherent value of GBP?

[Benjaminpalma]

egomeister said:

We're going round in circles here... what is the inherent value of GBP?

GBP is sourced from the real world in exchange for goods and services, not from the ether in exchange for helping GBP to exist.

And, the supply of GBP is tightly controlled.

[egomeister]

Benjaminpalma said:

GBP is sourced from the real world in exchange for goods and services, not from the ether in exchange for helping GBP to exist.

And, the supply of GBP is tightly controlled.

So, if bitcoin was to gain traction as a transactional medium it would fulfil the same criteria...

[Behemoth]

Benjaminpalma said:

That's a feature. It does not give crypto currencies inherent value as their supply is limitless and they aren't exchanged for value at their creation.

No, each one is not limitless at all. Bitcoin is finite. If you wanted to make a copy of sterling & call it Benjamin's Pound, you can go ahead. That doesn't mean sterling is limitless does it?

You don't appear to understand the function or purpose of mining a Bitcoin. I think you need to read a little more about it rather than waste time debating hot air here.

[Benjaminpalma]

Behemoth said:

No, each one is not limitless at all. Bitcoin is finite. If you wanted to make a copy of sterling & call it Benjamin's Pound, you can go ahead. That doesn't mean sterling is limitless does it?

Yes, I know Bitcoin is finite - but the number of crypto currencies isn't. Why would Bitcoin be special and have value other than the cachet of being first?

Behemoth said:

You don't appear to understand the function or purpose of mining a Bitcoin. I think you need to read a little more about it rather than waste time debating hot air here.

I understand mining. As I said before, I understand everything about Bitcoin bar the minutiae of coding and algorithms. Everything.

I think you need to pluck your head from the sand and appreciate that it is cryptomania which is the (dangerous) source of hot air.

[Behemoth]

Benjaminpalma said:

I understand mining. As I said before, I understand everything about Bitcoin bar the minutiae of coding and algorithms. Everything.

If you did, you wouldn't question the value of rewarding a miner with bitcoin at the creation of bitcoin.

What makes one fiat currency more valuable than another? Myriad reasons. It's not simple, is it?

[TooMany2cvs]

Behemoth said:

What makes one fiat currency more valuable than another? Myriad reasons. It's not simple, is it?

Mostly, yes. People want their money backed by the government/central bank of a particular economy, because that government/central bank are doing something right.

[x5x3]

Benjaminpalma said:

And, the supply of GBP is tightly controlled.

it is so tightly controlled that when things get tough they just print some more and give it a long name in the hope it fools most of the population.....

With BTC there is no one person or organisation that can decide to create more BTC.

[Benjaminpalma]

x5x3 said:

it is so tightly controlled that when things get tough they just print some more and give it a long name in the hope it fools most of the population.....

Which leads to measurable and predictable inflation. Not a massive problem.

x5x3 said:

With BTC there is no one person or organisation that can decide to create more BTC.

Bitcoin - no. But anyone can make a new cryptocurrency and sell it off to some mugs/money launderers/tax evaders.

[x5x3]

Benjaminpalma said:

x5x3 said:

it is so tightly controlled that when things get tough they just print some more and give it a long name in the hope it fools most of the population.....

Which leads to measurable and predictable inflation. Not a massive problem.

you know that is just not true. If the government had such great control of the economy and GBP then we'd all be gazillionaires by now. The fact is they don't.

Benjaminpalma said:

x5x3 said:

With BTC there is no one person or organisation that can decide to create more BTC.

Bitcoin - no. But anyone can make a new cryptocurrency and sell it off to some mugs/money launderers/tax evaders.

indeed - the same as anyone can start an "investment scheme" and sell it off to mugs/money launderers/tax evaders. It does not make the valid schemes invalid.

[FredClogs]

£10 says on it "I promise to pay the bearer the sum of £10". It's an IOU a debt note for future or past services or goods. All money is created through future debt.

Bitcoin is the opposite. Bitcoin is created through processing work already done, it's created through the processing of transactions, it lags not leads the demand and is not created through debt.

This is the difference.

[Benjaminpalma]

FredClogs said:

Bitcoin is created through processing work already done

For "work" here read "mining" - i.e. no more than helping the currency itself to exist.

This is the crux of it all for me, and why Bitcoin has no real value in spite of its innovative charateristics.

[TooMany2cvs]

Benjaminpalma said:

FredClogs said:

Bitcoin is created through processing work already done

For "work" here read "mining" - i.e. no more than helping the currency itself to exist.

This is the crux of it all for me, and why Bitcoin has no real value in spite of its innovative charateristics.

Yup. We're right back to that circular logic from page 2 of the thread...

[Benjaminpalma]

TooMany2cvs said:

Yup. We're right back to that circular logic from page 2 of the thread...

Is it that folk don't understand this - or don't want to understand this as they're wearing the Emperor's new clothes themselves?

It's such a basic and fundamental point.

[FredClogs]

Benjaminpalma said:

FredClogs said:

Bitcoin is created through processing work already done

For "work" here read "mining" - i.e. no more than helping the currency itself to exist.

This is the crux of it all for me, and why Bitcoin has no real value in spite of its innovative charateristics.

Theory says that because bit coin cannot be created by debt it decentralizes control of money from government and central banks, who raise money through creation of debt and pushes that onto others. Bitcoin is only created as a response to economic activity not ad a stimulus to create it.

[Ginge R]

I know a couple of very well informed people who understand much more about this than I ever will. Notwithstanding that, there are tens of millions of ignorant punters who see rising values and just jump onboard the latest thing. Today, the regulator issued a notice about ICO/crypto. When you see Paris Hilton pushing them, you know the world's gawn mad.

https://www.reuters.com/article/us-britain-bitcoin...

http://citywire.co.uk/wealth-manager/news/fca-warn...

[TooMany2cvs]

Ginge R said:

When you see Paris Hilton pushing them, you know the world's gawn mad.

Not necessarily the world, but certainly anybody who decides she's a good source of investment advice...

TBF, though, those two articles are specifically referring to ICOs - Initial Coin Offerings - where somebody's launching cryptocurrency number 973, accepting payment in established cryptocurrencies, to fund something particular. Surely nobody, even those who do think Paris Hilton is a trustworthy IFA, would be quite so daft as to fall for that load of steaming bks?

Edited by TooMany2cvs on Tuesday 12th September 11:39

[Behemoth]

TooMany2cvs said:

where somebody's launching cryptocurrency number 973, accepting payment in established cryptocurrencies, to fund something particular. Surely nobody, even those who do think Paris Hilton is a trustworthy IFA, would be quite so daft as to fall for that load of steaming bks?

They most certainly will. The boiler room brigades are hard at it.

Meantime, there's plenty of fake news manipulation in attempts to get cheap Bitcoins. Here's a good example from this morning: https://twitter.com/cnLedger/status/90753504041789...

[Behemoth]

NickCQ said:

it's all about national income and government power to levy taxes on that income denominated in GBP. As discussed upthread. Doesn't exist yet for BTC.

WindyCommon said:

For all their faults, sovereign fiat currencies represent a call (via taxation) on the productive capacities of their issuing nations. CC's - in their present formats - have no such depth.

Well that didn't take long. In Switzerland, you can now pay your tax in BTC

https://www.swissinfo.ch/eng/business/swiss-fintec...

Not much yet, but it's beginning.

[NickCQ]

Behemoth said:

NickCQ said:

it's all about national income and government power to levy taxes on that income denominated in GBP. As discussed upthread. Doesn't exist yet for BTC.

WindyCommon said:

For all their faults, sovereign fiat currencies represent a call (via taxation) on the productive capacities of their issuing nations. CC's - in their present formats - have no such depth.

Well that didn't take long. In Switzerland, you can now pay your tax in BTC

https://www.swissinfo.ch/eng/business/swiss-fintec...

Not much yet, but it's beginning.

That is very interesting, although no mention of how the conversion rate works - the key word in my quote is 'denominated'
If it's just done at spot CHF / BTC then it's not really that different from anything else, it's just that the Swiss revenue does the conversion transaction rather than you.