Merged: Bitcoin - Part 3

[psionl0]

Originally Posted by jeremyp

It's a zero sum game.

Already discussed - many times. BTC is no more a zero sum game than any other commodity.

[lomiller]

Originally Posted by Suddenly

It's the same thing in that it is putting money at risk hoping that you get more back.

A casino may "put money at risk" on individual bets but the likelihood of them making money overall is essentially a certainty. Few investments are that certain, but the principle is the same, stack the odds in your favor and make numerous smaller investments instead of putting it all in one spot.

Originally Posted by Suddenly

Like prediction markets. These can be efficient in determining the probability of an outcome. The point spread/money line is basically that. When the prediction is about a football game it generally has little real world application.

Sports betting isn't gambling from the perspective of the bookmaker. If they do their job correctly they make money no matter what the outcome of the game.

[lomiller]

Originally Posted by psionl0

Already discussed - many times. BTC is no more a zero sum game than any other commodity.

This claim has already been debunked multiple times. repeating it doesn't make it any stronger than the previous times you have asserted it.

[psionl0]

Originally Posted by lomiller

This claim (that bitcoin is a zero sum game) has already been debunked multiple times. repeating it doesn't make it any stronger than the previous times you have asserted it.

ftfy.

[lomiller]

Originally Posted by psionl0

I don't understand the subject so I "fix" other people posts when I don't have an answer

ftfy...

[Suddenly]

Originally Posted by lomiller

A casino may "put money at risk" on individual bets but the likelihood of them making money overall is essentially a certainty. Few investments are that certain, but the principle is the same, stack the odds in your favor and make numerous smaller investments instead of putting it all in one spot.



Sports betting isn't gambling from the perspective of the bookmaker. If they do their job correctly they make money no matter what the outcome of the game.

I was making a substantial amount of money over a long number of trials betting sports and playing poker by finding +ev situations. I was still gambling no matter how analytically I went about it.

It's I guess a matter of semantics. Gambling is seen by many as a pejorative term and those who put money at risk are prone to define it in a way that excludes what they do.

[jeremyp]

Originally Posted by psionl0

Already discussed - many times.

Yes, you were proved wrong in those discussions.

Quote:

BTC is no more a zero sum game than any other commodity.

BTC is not a commodity.

And, as has been pointed out to you many times, with commodities, you have got the commodity. There's always a demand for gold, for example, to make things with, even if you have trouble selling it on the commodities market, you can sell it to jewellers and electronics manufacturers.

[lomiller]

Originally Posted by Suddenly

I was making a substantial amount of money over a long number of trials betting sports and playing poker by finding +ev situations. I was still gambling no matter how analytically I went about it.

It's I guess a matter of semantics. Gambling is seen by many as a pejorative term and those who put money at risk are prone to define it in a way that excludes what they do.

But what you were doing is fundamentally different than what the casino is doing. In sports betting, as long as the casino sets the odds so that there is ~ equal betting on either side they literately can't lose money. They are, in essence, collecting a fee to allow you to bet against someone else.

Speculators in the commodity market play a slightly similar role, but because there are other benefits to producers and consumers like risk mitigation and more efficient capital utilization everyone can still win (where in the sports betting someone looses more than you win)

It's not risk free, but calling anything with an element of risk "gambling" waters down the term. Is a bank gambling when they make a loan because the borrower may default? Are you gambling when you drive to work because you could get in an expensive accident on the way?

[Suddenly]

Originally Posted by lomiller

But what you were doing is fundamentally different than what the casino is doing. In sports betting, as long as the casino sets the odds so that there is ~ equal betting on either side they literately can't lose money. They are, in essence, collecting a fee to allow you to bet against someone else.

They are gambling that they can set and move the line to balance the books.

They gamble, they just collect enough vig to where they are making money in the long run unless they are complete muppets. That's the only difference, really. If it weren't for that I could essentially arbitrage odds across books and also win with no risk.

Quote:

Speculators in the commodity market play a slightly similar role, but because there are other benefits to producers and consumers like risk mitigation and more efficient capital utilization everyone can still win (where in the sports betting someone looses more than you win)

The business of speculation is in isolation a zero sum game. The middlemen trading wheat contracts among themselves are absolutely playing a zero sum game. Not all of them can win.

That this game itself has the societal/economic benefits you describe is a different issue.

Which I guess brings that back to bitcoin. Bitcoin trading is zero sum just like any commodity trade. That's a fair statement. It's also fair to say that the wheat zero sum game benefits the world outside the game while the bitcoin game harms the world outside the game. Which is more to the point.

Quote:

It's not risk free, but calling anything with an element of risk "gambling" waters down the term. Is a bank gambling when they make a loan because the borrower may default? Are you gambling when you drive to work because you could get in an expensive accident on the way?

All life is a gamble. It's a term often used as a pejorative to make a negative personal value judgement about the social desirability of the risk taking activity in a way that promotes fear of the uncertainty of life.

[psionl0]

Originally Posted by lomiller

I don't understand the subject so I "fix" other people posts when I don't have an answer

ftfy.

[psionl0]

Originally Posted by jeremyp

Yes, you were proved wrong in those discussions.

Nope. The idea that bitcoin is a "zero sum game" never went beyond mere assertion.

Originally Posted by jeremyp

BTC is not a commodity.

By which definition do you go by? Why can't a digital asset be classified as a commodity?

Originally Posted by jeremyp

And, as has been pointed out to you many times, with commodities, you have got the commodity. There's always a demand for gold, for example, to make things with, even if you have trouble selling it on the commodities market, you can sell it to jewellers and electronics manufacturers.

This is plain nonsense. The price of gold is based almost purely on speculation and the only reason that most people buy gold bullion is so that they can find a bigger fool later on to sell it to at a higher price.

[lomiller]

Originally Posted by psionl0

I made a fool of myself trying to put words into other peoples mouths again..

ftfy

[psionl0]

Originally Posted by lomiller

I made a fool of myself trying to put words into other peoples mouths again..

ftfy.

[lomiller]

Originally Posted by psionl0

Why can't a digital asset be classified as a commodity?

A commodity is a non-fungible economic good used in the production of other items. Bitcoin is neither an economic nor is it a material used in the production of other items. By definition, then, it's not a commodity.

[lomiller]

Originally Posted by psionl0

I did it again, I just can't help myself.

ftfy

[psionl0]

Originally Posted by lomiller

A commodity is a non-fungible economic good used in the production of other items.

That is a very narrow definition. The Cambridge dictionary give a much more comprehensive definition:

SOCIAL STUDIES: anything that can be bought and sold.

STOCK MARKET, FINANCE: a substance or a product that can be traded in large quantities, such as oil, metals, grain, coffee, etc.

FINANCE: a financial product that can be traded.

NATURAL RESOURCES: a thing or a quality that is useful.

https://dictionary.cambridge.org/dic...lish/commodity

[jeremyp]

Originally Posted by psionl0

Nope. The idea that bitcoin is a "zero sum game" never went beyond mere assertion.


By which definition do you go by? Why can't a digital asset be classified as a commodity?


This is plain nonsense. The price of gold is based almost purely on speculation and the only reason that most people buy gold bullion is so that they can find a bigger fool later on to sell it to at a higher price.

No. BTC is a zero sum game. You add up the wins and subtract the losses and they come to zero. That is the definition of zero sum. The clue is in the word zero.

[jeremyp]

Originally Posted by lomiller

A commodity is a non-fungible economic good used in the production of other items. Bitcoin is neither an economic nor is it a material used in the production of other items. By definition, then, it's not a commodity.

Commodities are fungible.

Other than that, this is the definition I am using. Psionl has come up with some other definitions but they are not relevant because the important point is that things like gold and frozen concentrated orange juice have the property of being useful to make stuff with.

[psionl0]

Originally Posted by jeremyp

No. BTC is a zero sum game. You add up the wins and subtract the losses and they come to zero. That is the definition of zero sum. The clue is in the word zero.

So gold bullion is also a zero sum game.

[psionl0]

Originally Posted by jeremyp

CPsionl has come up with some other definitions but they are not relevant because the important point is that things like gold and frozen concentrated orange juice have the property of being useful to make stuff with.

How many people make things from gold bullion?

[jeremyp]

Originally Posted by psionl0

How many people make things from gold bullion?

It’s gold. Gold is used for lots of things.

[jeremyp]

Originally Posted by psionl0

So gold bullion is also a zero sum game.

Yes.

The difference between it and BTC is that you have a commodity if you buy it, not just a hope that you can sell it for more.

[psionl0]

Originally Posted by jeremyp

It’s gold. Gold is used for lots of things.

Especially occupying space in vaults.

Originally Posted by jeremyp

Yes.

The difference between it and BTC is that you have a commodity if you buy it, not just a hope that you can sell it for more.

ORLY?

[lomiller]

Originally Posted by jeremyp

Commodities are fungible.

Other than that, this is the definition I am using. Psionl has come up with some other definitions but they are not relevant because the important point is that things like gold and frozen concentrated orange juice have the property of being useful to make stuff with.

thx. I'm not sure why I wrote non-fungible, I did mean to say fungible.

[lomiller]

Originally Posted by psionl0

How many people make things from gold bullion?

90% of all the gold mined each year gets turned into Jewlery

[The_Animus]

Originally Posted by lomiller

90% of all the gold mined each year gets turned into Jewlery

Jewelry probably isn't the best example. It's basically a scam. You've just taken your store of value and modified its shape so it's wearable. You could argue it's useful for style or displaying wealth but it's essentially no different than tying a small hunk of gold around your neck. No more useful than taking a digital wallet, transferring it to a physical one and wearing it around your neck.

Jewelry has little utility. Most of its value is thanks to decades of advertising campaigns making it a symbol of love or status along with hoarding supply and limiting the amount sold. And when you go to sell it you're very likely getting a fraction of what you paid for it.

There are other real world applicable uses for gold but it is so abundant that we are fine using 90% of it on Jewelry. If anything that seems to attest to how little use it really has.

[lomiller]

Originally Posted by The_Animus

Jewelry probably isn't the best example. It's basically a scam. You've just taken your store of value and modified its shape so it's wearable.

I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.

Originally Posted by The_Animus

Jewelry has little utility.

Don't confuse utility with usefulness. While usefulness is one form of utility it's not the only form of utility. The satisfaction or enjoyment people get from owning or consuming goods\services are also a form of utility. Owning and wearing jewelry makes some people happy therefor it has utility. This is true even if it has little utility to you as the utility of anything varies from person to person, this why trade results in a net gain in utility.

[The_Animus]

Originally Posted by lomiller

I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.

Which is why I mentioned that it's done for style or a status symbol. But those only have value because we've collectively agreed they do and I thought the whole point of this was asking what value is left when that collective agreement stops.

Quote:

Don't confuse utility with usefulness. While usefulness is one form of utility it's not the only form of utility. The satisfaction or enjoyment people get from owning or consuming goods\services are also a form of utility. Owning and wearing jewelry makes some people happy therefor it has utility. This is true even if it has little utility to you as the utility of anything varies from person to person, this why trade results in a net gain in utility.

I get that but if you're going to include satisfaction and enjoyment then that applies to basically everything including tulip bulbs and BTC. I bet plenty of people got satisfaction and enjoyment from buying and owning them. If the price of either gold or BTC dropped significantly I think the satisfaction and enjoyment of buying and owning either would also drop significantly. Gold would still have more utility because it has some commercial uses and people can still use it for fashion but it would be more akin to a plastic bracelet.

For the most part jewelry is people convincing other people that their shiney object is worth much more than it really is. BTC for the most part is people convincing other people that their digital coin is worth much more than it really is

[Suddenly]

Originally Posted by lomiller

I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.
.

It just occurred to me that bitcoin and jewelry have an identical use case.

Wearing deceptively expensive looking jewelry is basically a go bag for someone deep in white collar crime. If you have to jump a plane to Costa Rica or wherever on short notice it's good to be wearing something you can sell for five figures once you get there to bridge the time until you can establish the fake identity necessary to access the offshore accounts.

Bitcoin makes that whole chore way more simple. So I guess the bitcoin as precious metal thing has legs...

[lomiller]

Originally Posted by The_Animus

Which is why I mentioned that it's done for style or a status symbol. But those only have value because we've collectively agreed they do and I thought the whole point of this was asking what value is left when that collective agreement stops.

It doesn't matter why people get satisfaction from owning\wearing jewelry, the point is that they do.

Originally Posted by The_Animus

I get that but if you're going to include satisfaction and enjoyment then that applies to basically everything including tulip bulbs and BTC. I bet plenty of people got satisfaction and enjoyment from buying and owning them.

No one disputes a tulip bulb has utility, it can be used to grow a pretty flower, something many people gain satisfaction from. This isn't enough to drive prices to the heights they reached during the tulip bubble, that was driven by speculation, not the utility of a Tulip bulb.

As for bitcoin, I guess there *could* be people who gain satisfaction from owning bitcoin just for the sake of owning bitcoin, but remember consumption of that resource is part of the definition of utility. IOW if it has utility to someone, they would want to keep it forever just for the good feelings they get from owning it. IOW they are not interested to trading it, speculating on it's value or getting rich from owning it, the simple act of having it is what they derive pleasure from.

While It's possible there are some people out there who love bitcoin just for the warm and fuzzy feeling it gives them, this doesn't seem to be the case with most people who buy it. They are buying it because they think they can sell it for a higher price later on, they are no interested in consuming it or keeping it.

[psionl0]

Originally Posted by lomiller

90% of all the gold mined each year gets turned into Jewlery

No available figures are that accurate and it is misleading to exclude surface gold anyway.

One set of figures suggests that jewellery is at best a secondary use of gold:

Quote:

In 2020, gold demand for investment purposes reached 47%, overtaking jewelry at 38% as its primary use.

https://www.nrcan.gc.ca/our-natural-...20applications.

[lomiller]

Originally Posted by psionl0

https://www.nrcan.gc.ca/our-natural-...20applications.

Funny. you seem to have missed the very next line after the one you quoted.

Quote:

The uncertainty brought on by the COVID-19 pandemic in 2020 was largely responsible for the 40% increased use of gold as an investment.

I will concede an error in the 90% number. I misremembered 90% as being jewelry when it's actually Jewelry + industrial. The number commonly quoted is 78% used in Jewelry with another 11% used in industrial applications, though apparently this was falling a bit even before the pandemic.

The point I made stands, gold is primarily used in consumer and industrial products just like any other commodity.

[jeremyp]

Originally Posted by psionl0

No available figures are that accurate and it is misleading to exclude surface gold anyway.

One set of figures suggests that jewellery is at best a secondary use of gold:

https://www.nrcan.gc.ca/our-natural-...20applications.

The exact amount of gold being used for something is not important. The point is that it can be used for something. If speculation were to magically disappear, all that gold in vaults won’t be useless, it’ll be sold so that people can decorate themselves or make electronics or whatever.

Of course speculation in gold can’t magically disappear. There will always be an opportunity to buy gold from suppliers and sell it to consumers. This is not the case with BTC. It could be made illegal or somebody could crack the encryption or people could see it for what it is and the fad would be over.

[psionl0]

Originally Posted by jeremyp

This is not the case with BTC. It could be made illegal or somebody could crack the encryption or people could see it for what it is and the fad would be over.

That's quite a wish list you have created. The mere fact that you have listed these unlikely events proves that bitcoin is not the automatic failure that you wish it to be.

[gabeygoat]

Originally Posted by The_Animus

No more useful than taking a digital wallet, transferring it to a physical one and wearing it around your neck.

Which happens all the time...nope


Sometimes people want to meet other people to have sexual relationships, and yes, sometimes decorations facilitate those sorts of things. I'm pretty sure wearing a wallet around your neck isn't going to result in a good morning after

[Gord_in_Toronto]

Not exactly transparent.

There’s a wild theory that the price of Bitcoin is being propped up—and the academic who proved manipulation in 2017 suspects it may be happening again

Quote:

In conclusion, Griffin says, the Griffin-Shams study showed concrete proof of manipulation in 2017 and 2018, and that a single individual did the rigging. “We don’t have concrete analysis this time,” he says. “The truth may emerge in specific stories, if there is collusion.” The lesson, he says, “is that the Bitcoin market remains highly vulnerable to manipulation.”

(Highlighting mine. )

[marting]

"The lesson, he says, “is that the Bitcoin market remains highly vulnerable to manipulation."

Manipulation tends to increase volatility in stocks. Easy to see in historicals such as those First Jersey Securities hawked at regular intervals. No reason to think it's different in crypto.

Makes speculation, or gambling if you prefer, more fun and tends to increase average prices. At least while the manipulation continues.

It's a feature, not a bug.

[jeremyp]

Originally Posted by psionl0

That's quite a wish list you have created. The mere fact that you have listed these unlikely events proves that bitcoin is not the automatic failure that you wish it to be.

The fad being over is not unlikely. It will happen one day.

[psionl0]

Originally Posted by jeremyp

The fad being over is not unlikely. It will happen one day.

So will the heat death of the universe. The question is, which event will occur first?

[wareyin]

Originally Posted by psionl0

So will the heat death of the universe. The question is, which event will occur first?

That is a good question. Will people ever stop falling for con jobs, or will humanity itself die out first?