Stupid BitCoin Question
Discussion
k all about this stuff.Yes. but not in many places. You can convert it back to fiat (often through a few different exchanges and currencies) to get there. Some banks are a bit funny about it, given the audit trails. There's a whole crypto thread over here that you might find useful: https://www.pistonheads.com/gassing/topic.asp?h=0&...
Loads of things have been worth massive amounts against usd, then worth nothing. It all depends if you believe it isn't just one massive ponzi scheme run by manipulation?
The price is heavily manpuliated nothing like any other asset in the free world, what is its actual worth well that depends if you buying or selling?
The price is heavily manpuliated nothing like any other asset in the free world, what is its actual worth well that depends if you buying or selling?
Austin_Metro said:
Stupid question no 2: why are they worth anything? Anyone got a good link to an explanation.
Yours, from 1980, with thanks
Austin.
ETA. Ps. I will google it.
Simply because people believe they are. And currently because people believe they will be worth more tomorrow.Yours, from 1980, with thanks
Austin.
ETA. Ps. I will google it.
Austin_Metro said:
Stupid question no 2: why are they worth anything? Anyone got a good link to an explanation.
Yours, from 1980, with thanks
Austin.
ETA. Ps. I will google it.
It's underlying value is the use as a currency. There are millions of people in third world countries who do not have a bank account but have mobile phones and internet/mobile data. But that doesn't make headlines. What makes headlines is the minority illegal activity involved using crypto currency.Yours, from 1980, with thanks
Austin.
ETA. Ps. I will google it.
They would transfer money to family and friends using bitcoin. I wouldn't be surprised if Bitcoin's true value is around $2000 to $3000 based on it being used as a currency. As its use expands then its value will grow.
The speculative investments driving the price up and down leaves massive volatility which puts to shade its underlying value.
wheelerc said:
There is an incredibly long answer and lots of debate, but the short answer is scarcity and fungibility.
I would say scarcity and cost of obtaining it. They call it mining for Bitcoin for a reason. Like gold, there isn't much of it, and what there is expensive to find initially.leef44 said:
It's underlying value is the use as a currency. There are millions of people in third world countries who do not have a bank account but have mobile phones and internet/mobile data. But that doesn't make headlines. What makes headlines is the minority illegal activity involved using crypto currency.
They would transfer money to family and friends using bitcoin. I wouldn't be surprised if Bitcoin's true value is around $2000 to $3000 based on it being used as a currency. As its use expands then its value will grow.
The speculative investments driving the price up and down leaves massive volatility which puts to shade its underlying value.
Bitcoin will probably not make it as a currency. They would transfer money to family and friends using bitcoin. I wouldn't be surprised if Bitcoin's true value is around $2000 to $3000 based on it being used as a currency. As its use expands then its value will grow.
The speculative investments driving the price up and down leaves massive volatility which puts to shade its underlying value.
It is too slow. Nothing is priced in BTC and no one is using it as a currency as they "hodl" because they think it will be worth more tomorrow, so why would they spend it today.
I believe that when the bubble bursts it will take BTC down so badly that even the zealots will lose faith in its value.
I am also interested in what will happen when mining is no longer worthwhile as I understand that is what maintains the blockchain ledger. It is costly.
Another cryptocoin may work as a currency, but will probably be one backed by a fiat currency, a nation, or a large company like facebook or amazon.
M-pesa and similar mobile phone based money transfer systems have been widely adopted in Africa and work for those without banking. Anyone who has been to rural Kenya will know the penetration of mobiles to even the most remote pastoralists in the last decade.
Also there are a fixed amount of Bitcoin. 21 million and that's it.
In theory if the price of gold went up enough you could start filtering it out of seawater, or mining it from asteroids. But there will never be any more Bitcoin.
As others have said, all normal currencies are fundamentally only worth what their issuing government say they are worth. At points in the past there were fixed exchange rates and even now some governments try to directly set the value of their currency (pegging against the dollar or whatever). Most government manipulate the value of their currency to a greater or lesser extent - setting interest rates, doing Q.E. or whatever.
Bitcoin in theory can't be manipulated as it doesn't have anyone in control of it. In practice if it gained sufficient traction I would expect governments to hide behind the "used by criminals" line and put in place restrictions on its use and/or fix the exchange rate of Bitcoin to their currency (just because a Bitcoin is theoretically worth £100000, it doesn't help you if the government mandates that BTC->GBP can only be carried out on its own exchange and at a rate of 1BTC=£1000. Granted people would start doing triangle conversions or using other instruments but you get the idea - governments will interfere and manipulate).
So it's going to be interesting - in theory the value of a Bitcoin should almost always increase because you simply can't make more of them whereas the world population and demand for goods/services is always increasing, but in practice I can't see governments easily giving up the ability to control their currency.
In theory if the price of gold went up enough you could start filtering it out of seawater, or mining it from asteroids. But there will never be any more Bitcoin.
As others have said, all normal currencies are fundamentally only worth what their issuing government say they are worth. At points in the past there were fixed exchange rates and even now some governments try to directly set the value of their currency (pegging against the dollar or whatever). Most government manipulate the value of their currency to a greater or lesser extent - setting interest rates, doing Q.E. or whatever.
Bitcoin in theory can't be manipulated as it doesn't have anyone in control of it. In practice if it gained sufficient traction I would expect governments to hide behind the "used by criminals" line and put in place restrictions on its use and/or fix the exchange rate of Bitcoin to their currency (just because a Bitcoin is theoretically worth £100000, it doesn't help you if the government mandates that BTC->GBP can only be carried out on its own exchange and at a rate of 1BTC=£1000. Granted people would start doing triangle conversions or using other instruments but you get the idea - governments will interfere and manipulate).
So it's going to be interesting - in theory the value of a Bitcoin should almost always increase because you simply can't make more of them whereas the world population and demand for goods/services is always increasing, but in practice I can't see governments easily giving up the ability to control their currency.
Flooble said:
So it's going to be interesting - in theory the value of a Bitcoin should almost always increase because you simply can't make more of them whereas the world population and demand for goods/services is always increasing, but in practice I can't see governments easily giving up the ability to control their currency.
Its only value it what people think it is worth, and it has no inherent worth, although it has a great cost, both to mine, and to maintain the system. It is backed by nothing but speculation.
Simpo Two said:
It makes you wonder what any currency is actually worth, if it's not backed by gold etc. It's all IOU notes.
Let's not think about it in case is all goes 'phut' in a cloud of purple dust.
I thought the answer was that most currencies are worth something because thats what you have to pay your tax in without going to jail.Let's not think about it in case is all goes 'phut' in a cloud of purple dust.
Austin_Metro said:
Stupid question no 2: why are they worth anything?
Nothing stupid about that question. Personally, I don’t believe any of the explanations given by the faithful.I’m tempted to suspect the whole thing is classic “pump and dump”. It’s significant that Tesla, whose sky high value I don’t understand, is now getting in bed with Bitcoin, whose sky high value I don’t understand. At the same time retail investors are piling into any Next Big Thing they’ve heard online and interest rates are on the floor.
There’s an old fashioned guide to investing which says don’t put your money into things you don’t understand.
rockin said:
Austin_Metro said:
Stupid question no 2: why are they worth anything?
Nothing stupid about that question. Personally, I don’t believe any of the explanations given by the faithful.I’m tempted to suspect the whole thing is classic “pump and dump”. It’s significant that Tesla, whose sky high value I don’t understand, is now getting in bed with Bitcoin, whose sky high value I don’t understand. At the same time retail investors are piling into any Next Big Thing they’ve heard online and interest rates are on the floor.
There’s an old fashioned guide to investing which says don’t put your money into things you don’t understand.
Is Elon Musk the one behind Bitcoin?
If not, who actually is?
If the whole thing just switches off one day who's door do you knock on to get your money back?
And when you invest 100k into Bitcoin, where does that money actually go?
Edited by Trevor555 on Sunday 21st February 10:43
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