Bitcoin - Part 2

[Belz...]

It has a value like any currency. Unfortunately that value can fluctuate wildly, and it seems that for high amounts it's hard to convert BTC to USD; tippit's claim nonwithstanding.

[daenku32]

Originally Posted by Belz...

It has a value like any currency. Unfortunately that value can fluctuate wildly, and it seems that for high amounts it's hard to convert BTC to USD; tippit's claim nonwithstanding.

My point would be that if I as a person recognize that it stores no value, and that I would only use it for a temporary method of purchase (ie, buy a bitcoin in the morning, use it for a bitcoin purchase, and convert rest back to dollars), who would sell me that bitcoin in exchange for dollars? Who would keep a store of bitcoins (like a bank) for me to use when the value of the coin fluctuates so much?

I don't know if there is a business model that can operate for long term if their assets fluctuate as rapidly as the bit coin price.

[jhunter1163]

Originally Posted by daenku32

My point would be that if I as a person recognize that it stores no value, and that I would only use it for a temporary method of purchase (ie, buy a bitcoin in the morning, use it for a bitcoin purchase, and convert rest back to dollars), who would sell me that bitcoin in exchange for dollars? Who would keep a store of bitcoins (like a bank) for me to use when the value of the coin fluctuates so much?

I don't know if there is a business model that can operate for long term if their assets fluctuate as rapidly as the bit coin price.

There are only two ways to get BTC; mine them or buy them. Mining is quite expensive in terms of hardware and electricity and only people with high-end computer setups are doing it any more, pretty much; to buy BTC, you have to either know someone who has some or go through an exchange.

So, in our hypothetical, you buy, say, 10 BTC at the now-current rate of around $340 per through an exchange. You now have $3,400 worth of BTC; you cheerfully head off to eBay to go buy that jetski you saw there.

But when you go to check out, you're told you only have $3,000 worth of BTC because the value of a BTC has dropped to $300 since you made your purchase. (To be fair, that much of a drop that quickly might be an exaggeration, but not much of one.)

Again, to be entirely fair, there are positive swings of value for BTC, but the volatility of the price makes any kind of ordinary day-to-day usage extremely problematic. You simply don't know, when you go to sleep, if you'll have enough to buy your jetski when you wake up.

[The_Animus]

Originally Posted by jhunter1163

But bitcoin having no intrinsic value is a fault, and is entirely relevant. If its value goes to zero, its holders have no recourse whatsoever. In the extremely unlikely event that the USD goes to zero, I can still use those bills as toilet paper, or burn them for warmth, even leaving aside the faith and acceptance issues.

That's a great argument. I'm totally convinced and concede the point. However it seems then that toilet paper is by far the superior choice. You can wipe your behind much better, burn it for fire, attach to a stick as a torch, use it as a napkin, even write on it like a scroll. Seriously though stop making such blatantly ridiculous arguments.

Quote:

You and the other bitbugs

Not a bitbug, which btw is intended as ad hom name calling. You don't even understand my position. It's explained in either this thread or the other one assuming you actually care to be accurate.

Quote:

BTC clearly is not ready for prime time. Its flaws are not beyond repair but as presently constructed it is a poor choice both as an investment and as a "currency".

Not exactly what I believe but pretty close. Perhaps it should be left at that.

[Belz...]

Originally Posted by The_Animus

That's a great argument. I'm totally convinced and concede the point. However it seems then that toilet paper is by far the superior choice. You can wipe your behind much better, burn it for fire, attach to a stick as a torch, use it as a napkin, even write on it like a scroll. Seriously though stop making such blatantly ridiculous arguments.

It would be nice if you actually pointed out why it's ridiculous, though.

[The_Animus]

Originally Posted by Belz...

It would be nice if you actually pointed out why it's ridiculous, though.

Already did. Twice. So did Psion. What part about dollars being better than bitcoin because they can be used to wipe your butt is not blatantly ridiculous?

[Belz...]

Originally Posted by The_Animus

Already did. Twice. So did Psion. What part about dollars being better than bitcoin because they can be used to wipe your butt is not blatantly ridiculous?

What's obvious is that jhunter was using hyperbole to illustrate that actual dollars have value that BTC do not, namely that as a physical thing they can be used for a number of things.

[psionl0]

Originally Posted by jhunter1163

Quote:

You could make some arguably true statements against bitcoin like:
Bitcoin is not especially useful as a currency. or
Bitcoin is not especially useful as a store of value.

To my mind, the bolded are inarguably true.

Obviously! You would have everybody believe that bitcoin prices will never rise again and that there will never be any satisfactory ways to spend or exchange bitcoins.

The problem is that you are not a fortune teller.

Anybody who was not acting out of sheer blind prejudice would have observed some inverse relationship between bitcoin prices and news about the state of the economy. While the PIIGS and Cyprus were in the news daily, the price of bitcoin soared. With news about Europe on the economic front relatively scarce and the US economy having improved somewhat, fewer people are turning to bitcoin and this shows in the price.

As far as spending bitcoins are concerned, you should monitor the progress of the Ripple system. https://wiki.ripple.com/Main_Page

Under this system, a payer can send payment in one currency and the payee receive it in another currency (or even commodities like gold) and the network does the necessary conversions. Ripple Labs claims to have to have signed its first two U.S. banks to use the Ripple protocol for real-time, cross-border payments. (https://ripple.com/blog/ripple-labs-...-two-us-banks/) If this system continues to expand, it could revolutionize the banking system altogether.

[Brian-M]

Back up to around US$350.

(Isn't there some informal rule that someone has to mention the price at least once per page?)

[psionl0]

Originally Posted by Belz...

What's obvious is that jhunter was using hyperbole to illustrate that actual dollars have value that BTC do not, namely that as a physical thing they can be used for a number of things.

I can't believe that you would endorse such a desperate overreach.

Just to put this silly nonsense to rest, currency notes make for very lousy toilet paper - especially the plastic variety that are used in Australia and other parts of the world. I wouldn't be burning them in the fireplace either since I don't know what noxious fumes would be produced.

If hyperinflation or some other problem rendered currency notes worthless, they would have no use whatsoever. Rather, disposing of the old notes would be the problem.

[Tippit]

Originally Posted by Brian-M

Back up to around US$350.

(Isn't there some informal rule that someone has to mention the price at least once per page?)

Only when it's tanking.

[Belz...]

Originally Posted by psionl0

I can't believe that you would endorse such a desperate overreach.

I didn't "endorse" it. I'm trying to put it into perspective. Just because I understand his argument doesn't mean I agree with or support it.

[Belz...]

Originally Posted by Tippit

Only when it's tanking.

That's a lie. I've been mentioning the price going back up several times. But you must be blinded by the piles of cash you made with BTC so you don't see it.

[psionl0]

Originally Posted by Belz...

I didn't "endorse" it. I'm trying to put it into perspective.

It is not possible to put sheer nonsense into any sort of perspective.

[jhunter1163]

So what is the intrinsic value of a Bitcoin?

[psionl0]

Originally Posted by jhunter1163

So what is the intrinsic value of a Bitcoin?

GOTO 188

[Belz...]

Originally Posted by psionl0

It is not possible to put sheer nonsense into any sort of perspective.

Have you considered that perhaps the reason why you think it's sheer nonsense is because you've failed to put it into perspective ?

[Tippit]

Originally Posted by jhunter1163

So what is the intrinsic value of a Bitcoin?

The intrinsic value of bitcoin, is nil. The extrinsic value stems from the fact that some people (not me personally) are willing to voluntarily accept it in exchange for money or goods and services. The fact that this de-centralized electronic "ledger system" works over the internet and great distances coupled with the fact that people are voluntarily willing to accept it makes it unique. At the very least, one is able to transfer funds into and out of oppressive political regimes in ways that are unprecedented before ever in human history. Of course, you have to expose yourself to some of the risk of holding such a digital "asset", but it still obviously has extrinsic value to some.

I do not agree with psion's assessment that the concept of intrinsic value is "fictitious". The intrinsic value of the USD while not nil, is essentially next-to-nil. Of course like bitcoin it also has extrinsic value, but for reasons related to military violence and the threat of such violence, the force of legal tender law, and conventional acceptance as a result of these two forces.

[Belz...]

Well if you think about it, gold has no intrinsic value, either. Nothing does unless you give it one.

[Tippit]

Originally Posted by psionl0

There is no such thing as "intrinsic" value. Something is valuable only if people believe it is valuable. That something might have uses other than as a medium of exchange doesn't give it this fictitious "intrinsic value".

That's ridiculous, as clearly there are things which either all, or virtually all people believe are valuable in and of themselves, not necessarily for what they represent or are symbolic of. Even if one of these things is not particularly valuable to you, as long as it has value to most others, you will find it valuable as well. The subset of these things which are not symbolic tokens can be said to have "intrinsic" value.

To discount this concept in favor of some absolute nihilistic concept of everything having subjective value isn't very useful when describing the real world.

[Belz...]

Originally Posted by Tippit

That's ridiculous, as clearly there are things which either all, or virtually all people believe are valuable in and of themselves, not necessarily for what they represent or are symbolic of. Even if one of these things is not particularly valuable to you, as long as it has value to most others, you will find it valuable as well. The subset of these things which are not symbolic tokens can be said to have "intrinsic" value.

No, because that's not what the word means.

[psionl0]

Originally Posted by Tippit

That's ridiculous, as clearly there are things which either all, or virtually all people believe are valuable in and of themselves, not necessarily for what they represent or are symbolic of. Even if one of these things is not particularly valuable to you, as long as it has value to most others, you will find it valuable as well. The subset of these things which are not symbolic tokens can be said to have "intrinsic" value.

To discount this concept in favor of some absolute nihilistic concept of everything having subjective value isn't very useful when describing the real world.

Did you read what you just wrote?

You just said that things have value because people assign value to them. The idea that something could have value in the absence of people makes no sense.

[Captain_Swoop]

Originally Posted by jhunter1163

So what is the intrinsic value of a Bitcoin?

Whatever you can get for it, like anything else.

[The_Animus]

Originally Posted by Tippit

That's ridiculous, as clearly there are things which either all, or virtually all people believe are valuable in and of themselves, not necessarily for what they represent or are symbolic of. Even if one of these things is not particularly valuable to you, as long as it has value to most others, you will find it valuable as well. The subset of these things which are not symbolic tokens can be said to have "intrinsic" value.

To discount this concept in favor of some absolute nihilistic concept of everything having subjective value isn't very useful when describing the real world.

The only things that i would consider to have intrinsic value are those necessary to sustain life such as water.

Everything else has only as much value as the average person gives it. An abacus was once very useful and now not at all. Similarly things that are valuable today like a combustion engine car may be worthless in 100 years. Further just because someone is crazy and pays $1million for some actors used tissue doesn't make it worth $1million. I'd claim that most things value is what the average of a large group would pay for it.

[Tippit]

Originally Posted by psionl0

Did you read what you just wrote?

You just said that things have value because people assign value to them. The idea that something could have value in the absence of people makes no sense.

Indeed, the value of anything in the absence of people to value it is nothing, but neither is that a particularly useful concept. The concept of intrinsic value depends upon people. The fact that you, someone who values things, needs food to stay alive, means that at the very least, food has intrinsic value. So do the things required to make or prepare food, and to make the job of making food or the things that make food easier. Of course, there are a lot of other things that have intrinsic value, like water, shelter, tools, commodities, etc... The fact that the value of these things may vary from person to person, or from time to time, doesn't mean they don't have intrinsic value.

[Tippit]

Originally Posted by The_Animus

The only things that i would consider to have intrinsic value are those necessary to sustain life such as water.

Anything tangible which has some property of being useful or appreciable by a large number of people has intrinsic value.

This does not include things with token or symbolic value. This doesn't mean that tokens can't have value, or that they can't even have some limited intrinsic value, but their value is "extrinsic", or more subjective and dependent on other things.

Quote:

Everything else has only as much value as the average person gives it. An abacus was once very useful and now not at all. Similarly things that are valuable today like a combustion engine car may be worthless in 100 years. Further just because someone is crazy and pays $1million for some actors used tissue doesn't make it worth $1million. I'd claim that most things value is what the average of a large group would pay for it.

The temporality of value doesn't exclude something from having intrinsic value. The abacus had quite a bit of intrinsic value when it was cutting edge technology, now it's mostly collectible. Remember, the argument was whether or not intrinsic value exists, and it does.

[Belz...]

Originally Posted by Tippit

Anything tangible which has some property of being useful or appreciable by a large number of people has intrinsic value.

Again, you are using your own personal definition of that word. That's not very helpful.

[psionl0]

Originally Posted by The_Animus

The only things that i would consider to have intrinsic value are those necessary to sustain life such as water.

Be careful not to conflate "economic value" with "non-economic value". The economic value of something is what people are willing to give in exchange for it.

Water is indeed necessary to sustain life and is priceless when your life is on the line. However if you live in an area where water is plentiful and freely available to everybody then you are not going to be able to sell that water so its economic value is not very high. Similarly, you might live in a desert and have access to the only source of water there but if there is nobody around to buy that water off you then you can't say it has economic value.

There mere fact that the value of something can vary between large limits depending on location and circumstances gives lie to the concept of "intrinsic value".

[Brian-M]

Originally Posted by Belz...

Well if you think about it, gold has no intrinsic value, either. Nothing does unless you give it one.

It has utility value as a corrosion-resistant coating and for fillings in dentistry. Plus a gold bar might make a pretty good paperweight or doorstop.

[psionl0]

Originally Posted by Brian-M

It has utility value as a corrosion-resistant coating and for fillings in dentistry. Plus a gold bar might make a pretty good paperweight or doorstop.

And it is shiny. Never forget the shine!

[Belz...]

Originally Posted by Brian-M

It has utility value as a corrosion-resistant coating and for fillings in dentistry.

Only if you care about dentistry.

[Tolls]

Originally Posted by psionl0

And it is shiny. Never forget the shine!

But it makes for rubbish toilet paper...I expect.

[jhunter1163]

Aaaaaaaand... the big boys are in the ring now.

There are not one, but two competing digital wallets out: Apple Pay (backed by you-know-who) and CurrentC (backed by Walmart). Whichever system wins in this latest tech clash, Bitcoin loses. Once one or the other (or both) of these gain wide acceptance for e-commerce, BTC will be relegated to a niche product for people who want anonymity (a small but nonzero segment of the market).

http://www.msn.com/en-us/money/spend...now/ar-BBcf6xs

[psionl0]

Originally Posted by jhunter1163

Whichever system wins in this latest tech clash, Bitcoin loses.

So a mobile phone ap that is less convenient than a credit card, has security flaws, allows Walmart to scrutinize your purchasing history and saves Walmart credit card transaction fees is going to sound the death knell for bitcoin?

Nice find.

[jhunter1163]

I notice you didn't comment on Apple Pay, which is;

1. already rolled out (CurrentC doesn't roll out till January)
2. considered to be more secure than CurrentC anyway and
3. receiving positive reviews from retailers and users

Anything to add?

[Belz...]

Originally Posted by psionl0

So a mobile phone ap that is less convenient than a credit card, has security flaws, allows Walmart to scrutinize your purchasing history and saves Walmart credit card transaction fees is going to sound the death knell for bitcoin?

Nice find.

How is bitcoin more convenient than a credit card ? And doesn't it have security flaws ?

[psionl0]

Originally Posted by jhunter1163

I notice you didn't comment on Apple Pay

Apple Pay seems to be a little better than CurrentC - as long as you don't wish to go shopping at Walmart or any of the other retailers that have signed onto MCX.

But when I can simply wave my Mastercard Debit Card at a Paypass terminal and not press a single button, neither system seems particularly tempting to me. Either way, these are just alternative methods of having national currency deducted from your bank account.

Maybe mobile phone apps will eventually phase out debit/credit cards but not as long as we have competing systems like these. These retailers would have been better off getting on to the Ripple network which is more universal and can deal with multiple currencies (including the crypto currencies). You could pay with bitcoins (or even gold) and the retailer receive USD in a matter of seconds.

[psionl0]

Originally Posted by Belz...

How is bitcoin more convenient than a credit card ? And doesn't it have security flaws ?

Bitcoin can be as secure as you want to make it but it doesn't reward the careless.

I think I have made it pretty clear in the past that I don't see a major role for bitcoin in retail spending (not unless something like Ripple takes off). Its primary role is as a buy and hold commodity.

[Tippit]

Originally Posted by jhunter1163

I notice you didn't comment on Apple Pay, which is;

1. already rolled out (CurrentC doesn't roll out till January)
2. considered to be more secure than CurrentC anyway and
3. receiving positive reviews from retailers and users

Anything to add?

I guess that explains why Apply mysteriously decided to ban all bitcoin apps. Not so mysterious anymore.

[Fudbucker]

Originally Posted by jhunter1163

Aaaaaaaand... the big boys are in the ring now.

There are not one, but two competing digital wallets out: Apple Pay (backed by you-know-who) and CurrentC (backed by Walmart). Whichever system wins in this latest tech clash, Bitcoin loses. Once one or the other (or both) of these gain wide acceptance for e-commerce, BTC will be relegated to a niche product for people who want anonymity (a small but nonzero segment of the market).

http://www.msn.com/en-us/money/spend...now/ar-BBcf6xs

Apple's throwing their hat in the ring???

I thought I might buy a few bitcoins, just like buying a few lottery tickets, but it looks like that ship has sailed.