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Old 09-04-2021, 10:00 AM
 
473 posts, read 405,130 times
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Quote:
Originally Posted by Hoonose View Post
Intrinsic value is nice to diversify and stabilize a commodities existence and value.

The appearance of numerous competitors, muddles all their value. They tend to draw on the same demographic of investors. Since those competitors arise from essentially nothing, they dilute the related market and value. A bit like inflation.
Yes, different cryptos have different competitive characteristics. Concluding it is dilutive (zero-sum) is not something I can deduce. Perhaps you can help explain that. The market (demand, quantity available, etc.) determines the value of each. I prefer Bitcoin because of its cap on total coins. Other cryptos do not compete on that point, AFAIK. It does not mean they do not also have value. They are just not as significant to me. Cardano is kind of interesting.
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Old 09-04-2021, 10:10 AM
 
18,801 posts, read 8,466,915 times
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Quote:
Originally Posted by lpc123 View Post
Yes, different cryptos have different competitive characteristics. Concluding it is dilutive (zero-sum) is not something I can deduce. Perhaps you can help explain that. The market (demand, quantity available, etc.) determines the value of each. I prefer Bitcoin because of its cap on total coins. Other cryptos do not compete on that point, AFAIK. It does not mean they do not also have value. They are just not as significant to me. Cardano is kind of interesting.
These alternative crypto investments have a much more limited audience than gold. Mostly individuals, tending towards younger gambling males. So by having so many crypto based alternatives these potential investors have more choices. And more choices in this particular investment class, means more chance of things going awry, more chance of scams and more chance of Gov't intervention and/or control. Which all tend to lower the value of Bitcoin itself.
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Old 09-04-2021, 10:39 AM
 
473 posts, read 405,130 times
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Quote:
Originally Posted by Hoonose View Post
These alternative crypto investments have a much more limited audience than gold. Mostly individuals, tending towards younger gambling males. So by having so many crypto based alternatives these potential investors have more choices. And more choices in this particular investment class, means more chance of things going awry, more chance of scams and more chance of Gov't intervention and/or control. Which all tend to lower the value of Bitcoin itself.
For the stock market, this is considered an important concept:

"In the short run, the market is a voting machine but in the long run it is a weighing machine" - Benjamin Graham

It means that in the short term, prices are driven by sentiment (fad/speculation), while in the long term, prices approximate something you can actually measure - financial results.

Bitcoin is obviously not the same as stocks in that it does not generate any production, just as gold does not produce more gold. The above quote therefore does not track...at least not all of it.

It is evident there is sentiment/speculation behind some of the interest in crypto. It is not evident to me that the 'greater fool' theory is the only thing determining its value.

What is evident? That Governments use currency dilution to wipe away debt, thereby punishing savers and rewarding borrowers. That is real inflation (or tax, depending on your point of view). Bitcoin is not dependent on Government, and cannot be diluted. In that way, Bitcoin has real value to anyone attempting to preserve wealth from dilution.

While individual Governments may ban Bitcoin, and that is a legitimate risk factor (in my view, the reason behind much of the volatility), the global adoption of Bitcoin and its decentralized means of transacting is not within the ability of all Governments to control. If Governments are not accumulating Bitcoin, that is good, because it confirms they cannot manipulate its value (unlike gold, for instance).

I agree the speculative risk is real, but to say it is the only thing (a la tulip mania) is naive.
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Old 09-04-2021, 10:56 AM
 
18,801 posts, read 8,466,915 times
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Quote:
Originally Posted by lpc123 View Post
Bitcoin is obviously not the same as stocks in that it does not generate any production, just as gold does not produce more gold. The above quote therefore does not track...at least not all of it.

It is evident there is sentiment/speculation behind some of the interest in crypto. It is not evident to me that the 'greater fool' theory is the only thing determining its value.

What is evident? That Governments use currency dilution to wipe away debt, thereby punishing savers and rewarding borrowers. That is real inflation (or tax, depending on your point of view). Bitcoin is not dependent on Government, and cannot be diluted. In that way, Bitcoin has real value to anyone attempting to preserve wealth from dilution.

While individual Governments may ban Bitcoin, and that is a legitimate risk factor (in my view, the reason behind much of the volatility), the global adoption of Bitcoin and its decentralized means of transacting is not within the ability of all Governments to control. If Governments are not accumulating Bitcoin, that is good, because it confirms they cannot manipulate its value (unlike gold, for instance).

I agree the speculative risk is real, but to say it is the only thing (a la tulip mania) is naive.
Bitcoin numbers are limited, but not numbers of other similar alternatives, and then those allowed numbers. There are few alternatives to Gold, like silver and platinum to dilute that investment mindset. Bitcoin is diluted with other cryptos, possibly including sovereign ones.


The greater fool theory applies to nearly any investment. But IMO with Bitcoin it is the greatest of fools.

Bitcoin has not been a good way around inflation. So far. Nor Gold. Bitcoin drops when more general economic SHT hits the fan.

IMO if Gov'ts in general were collecting Bitcoin, that would specifically raise its value.
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Old 09-04-2021, 11:07 AM
 
4,940 posts, read 3,049,488 times
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Quote:
Originally Posted by lpc123 View Post
While individual Governments may ban Bitcoin, and that is a legitimate risk factor (in my view, the reason behind much of the volatility), the global adoption of Bitcoin and its decentralized means of transacting is not within the ability of all Governments to control.

Does not the means to buy and sell apart from corrupted, government backed banking systems either:
A. Force them to ban the competition.?
B. Force them to create Fedcoin?.
BTW, Cryptos aren't too far behind gold here in the U.S. on ownership; around 10% on gold and 11% on silver.
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Old 09-04-2021, 12:50 PM
 
473 posts, read 405,130 times
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Quote:
Originally Posted by Sunbiz1 View Post
Does not the means to buy and sell apart from corrupted, government backed banking systems either:
A. Force them to ban the competition.?
B. Force them to create Fedcoin?.
BTW, Cryptos aren't too far behind gold here in the U.S. on ownership; around 10% on gold and 11% on silver.
It sort of goes to the question of whether the Government can control the Internet. If Elon Musk gets his way (https://www.starlink.com), even China will not be able to prevent full and free access to the Internet. Think of crypto as the next evolutionary step of what the Internet is capable of.
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Old 09-04-2021, 02:06 PM
 
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who said 11% on silver?
Silver has always been a big disappointment to investors.
As for cryto,never understand it,although I have tried.
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Old 09-04-2021, 02:08 PM
 
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How does and did Botcoin fare when 1 million people lost electricty?
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Old 09-04-2021, 02:15 PM
 
18,801 posts, read 8,466,915 times
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Quote:
Originally Posted by mojo101 View Post
How does and did Botcoin fare when 1 million people lost electricty?
They still need cash and pocket change. Most money is electronic, so it wouldn't be much different than with ordinary money. Most people hold onto Bitcoins, not exchange them or use them for purchases very often.
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Old 09-04-2021, 02:21 PM
 
Location: South Jordan, Utah
8,182 posts, read 9,210,537 times
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Quote:
Originally Posted by mojo101 View Post
How does and did Botcoin fare when 1 million people lost electricty?
The same as debit and credit cards
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