# Bitcoin discussion on Askaboutmoney.



## Fella (30 Nov 2017)

Is this really wise to discuss Bitcoin as an alternative investment , a lot of people come on here for financial advice and my fear is they are going to see Bitcoin as a genuine investment strategy. 
The words Bitcoin and investment don’t belong in the same sentence imo, it is a pure gamble with no strategy everyone is clueless to how this coin is valued and it’s going to end in tears unfortunately for some people . I hope people reading this forum understand that Bitcoin is not an alternative investment it’s a pure gamble.


----------



## ant dee (30 Nov 2017)

We don't talk individual stocks, don't talk house prices, so on that basis the fact we talk about bitcoin is a surprise.


----------



## Brendan Burgess (30 Nov 2017)

Hi Fella 

A very good question. 

When a separate forum was suggested for Bitcoin I rejected it out of hand on the grounds that it would be conferring a "respectability" on Bitcoin which it does not deserve.  I do not like associating the words "Bitcoin" and "investment" as it's not an investment.  

However after discussion with the mods and some other Frequent Posters we thought, that on balance, it was right to have a forum for "alternative investments". 

People thinking of buying Bitcoin may well check out askaboutmoney to see what people are saying.  If we ban it, they will find only the sites of the Bitcon faithful and might not get the counter-view. 

That is why I kicked off the forum with this thread: 

* Bitcoin is a clearly identifiable economic bubble*

and later, this one: 

*Bitcoin is not like gold*

I was pleased to see that most of the posters agree with the bubble argument. 

But we will keep it under review. 

Brendan


----------



## MrEarl (30 Nov 2017)

Brendan Burgess said:


> ....People thinking of buying Bitcoin may well check out askaboutmoney to see what people are saying.  If we ban it, they will find only the sites of the Bitcon faithful and might not get the counter-view. ....




Hello,

That for me, was probably the most important reason to have Bitcoin and the other cryptos discussed here... and I was one of the people who asked Mr. Burgess to consider the new forum.

AskAboutMoney.com has proven to be a well run, trusted source of reliable financial information over the years.  It does not have conflicts of interest when it comes to the likes of Bitcoin, so I would far rather come here to get honest answers then risk going elsewhere.


.


----------



## Fella (30 Nov 2017)

When investing in most things you can see what you are investing in , there is a value , people point to gold as a comparison but gold is a real tangible thing , if people stop believing in gold its price might fall but its still gold.
Bitcoin is a belief you are investing in something that requires others to believe in it also , if everyone stops believing in Bitcoin it will crash , the problem is if the price starts to crash there is nothing stopping Bitcoin dropping 90% in a day because there is no value holding the price up its just a belief system if people believe its worth 1$ thats the price it will be if they believe its worth 50,000$ thats the price it will be, you are gambling on what you think people will believe its price will be , expect huge swings in a market based on belief . It's close to a ponzi scheme for me. I don't believe it has any place in a serious investors portfolio , I also think guides on how to buy and hold Bitcoins on askaboutmoney are akin to having guides on how to open a Betfair account and gamble. 
If you must have a sub-forum on Bitcoin I think there should be a massive warning before each thread that Bitcoin is not an investment and you are very likely to lose 100% of your money.


----------



## Brendan Burgess (30 Nov 2017)

Fella said:


> If you must have a sub-forum on Bitcoin I think there should be a massive warning before each thread that Bitcoin is not an investment and you are very likely to lose 100% of your money.



Hi Fella 

Another interesting idea.  

So the mods should edit the first post in each thread and insert the following

*Warning:  Bitcoin is not an investment. You are very likely to lose all your money. For more information see *
*Bitcoin is a clearly identifiable economic bubble*

Something like that?


----------



## Fella (30 Nov 2017)

That sums it up nicely , if people want to still "invest" well they have been warned. Askaboutmoney is a very well respected forum , people may wrongly see Bitcoin as an alternative investment been endorsed just by its presence on the forum .


----------



## Sarenco (30 Nov 2017)

I love watching "shoe shine" moments happening in real time.

RTE ran a piece on their website this morning - "Do you know what Bitcoin is?".

What happened next?

Bitcoin plunged 20% in value.  (I don't think that had anything to do with RTE but you see my point..)

I think Fella makes a good point but I would hate to see any form of censorship of differing views on here.

Surely that's the great advantage of this forum?  People can solicit a range of opinions and then make up their own minds.

I might well think that crypto currencies are total nonsense but I'm open to being convinced otherwise.

Well, kinda


----------



## cremeegg (1 Dec 2017)

Of course we should discuss Bitcoin as an investment, if for no other reason that it is an interesting discussion.



ant dee said:


> We don't talk individual stocks, don't talk house prices, so on that basis the fact we talk about bitcoin is a surprise.



We don't speculate on the future movements of house prices, we frequently discuss property as an investment.


----------



## ant dee (1 Dec 2017)

cremeegg said:


> We don't speculate on the future movements of house prices, we frequently discuss property as an investment.


So, are we going to stop speculating that bitcoin is in a bubble?


----------



## MrEarl (1 Dec 2017)

In fairness, I don't think there's really any speculation about that particular point _ant dee_ 

bubbles occur, in property, in bitcoin etc. the speculators just have to conced that they are gambling that the bubble won't burst while they  have exposure to the particular market.

And just for the record, I'm far from anti-bitcoin, or anti-speculation, I just think it's vital that everyone goes into these markets with their eyes wide open


----------



## Brendan Burgess (9 Dec 2017)

On reflection, I think that the decision to discuss it was correct. 

It has not required too much moderation. The main problem for the moderators has been that people discuss every topic in every thread, rather than in specific threads. 

But it will be a really valuable historical record of the live discussion during a bubble. It would be great to have had discussion forums during Tulipmania.  

It's astonishing that clever, rational people could be holding onto something worthless when they could sell them for $15,000.  They will read back on this forum and wonder what were they thinking. 

Brendan


----------



## Dan Murray (12 Dec 2017)

Moved from the thread on shorting Bitcoin

Brendan,

Do you really want to explain to people the mechanics of extreme gambling?

I believe that this is not appropriate. There is a risk that some people could get burned and burned badly.


----------



## Brendan Burgess (12 Dec 2017)

Dan Murray said:


> Do you really want to explain to people the mechanics of extreme gambling?



Eh. This whole forum is about extreme gambling. Paying $15,000 for something which is worth nothing in the hope that a Greater Fool will pay more for it before it crashes to zero. 

I want to find out how to exploit the Tulipmania while limiting the risk. I think that a put option is the way to do it. 

Brendan


----------



## Dan Murray (12 Dec 2017)

My belief is that BTC will not be the same price in 6 or 12 months time so I agree that if you want to bet on its trajectory, there is a lot of money to be won (and lost!).

I just don't think it's appropriate to explain the mechanics of these things as there is a risk that some people will take on these bets without sufficient knowledge or experience and get burned badly.

BTC is really, really high risk - all bubbles (if that's what it is) are similar but different. It is so full of risks - _those we know, we know; those we know, we don't know and of course, those we don't know, we don't know.
_
Obviously, it's your decision but I am just urging caution here.


----------



## Fella (12 Dec 2017)

This is one of the reasons I don’t think Bitcoin should be discussed on this forum , this forum has become askaboutbitcoin
. 
There seems to be rules in place that prohibit people discussing individual shares or house prices but Bitcoin is a free for all. 

As a former advantage/professional gambler I would urge serious caution in shorting Bitcoin , I don’t believe in Bitcoin but I’m staying well away, this is not advantage gambling it’s erratic and the chances of going bust are extemely high. I don’t think this forum is going in the right direction as a well established money advice forum , shorting Bitcoin guides are irresponsible at best.


----------



## Dan Murray (12 Dec 2017)

Fella said:


> There seems to be rules in place that prohibit people discussing individual shares or house prices but Bitcoin is a free for all.
> 
> As a former advantage/professional gambler I would urge serious caution in shorting Bitcoin , I don’t believe in Bitcoin but I’m staying well away, this is not advantage gambling it’s erratic and the chances of going bust are extemely high. I don’t think this forum is going in the right direction as a well established money advice forum , shorting Bitcoin guides are irresponsible at best.



I couldn't agree more with all of the above, Fella. Well said.


----------



## Merowig (12 Dec 2017)

Dan Murray said:


> My belief is that BTC will not be the same price in 6 or 12 months time so I agree that if you want to bet on its trajectory, there is a lot of money to be won (and lost!).
> 
> I just don't think it's appropriate to explain the mechanics of these things as there is a risk that some people will take on these bets without sufficient knowledge or experience and get burned badly.
> 
> ...



People are already gambling as they continue to buy Bitcoins - so nothing wrong with selling Bitcoins. It is a huge risk and some people will get burned in any case. So either all Bitcoin discussions should be removed or selling Bitcoins remains to be a valid discussion point. 
If I would know where the top is I would short as well the hell out of it. Though that Bitcoin reaches 150k or something ridiculous is equally possible as there is no limit to peoples hysteria before it crashes.


----------



## fpalb (12 Dec 2017)

Trying to prohibit information on the internet is pointless, people are hearing about bitcoin from all over the place at the moment, it's in the media, and anyone can simply google "buy bitcoin", "short bitcoin" or "trade bitcoin" and dive in without knowing what they're doing. IMHO Education is better than prohibition, especially unenforceable prohibition.

The best thing you could do imho is have a big sticky at the top of this forum warning of the risky nature of bitcoin, and that it's very easy to lose ALL of your stake if you trade it, and especially easy on leverage.


----------



## Brendan Burgess (12 Dec 2017)

The discussion on Bitcoin has been very informative.

It will be extremely useful the next time there is a bubble in something else. We will be able to refer back to this forum and say "Look at how people abandon all reason when there is a bubble.". 

It's very clear from the discussions on shorting Bitcoin that they are very risky.  

If someone googles "shorting Bitcoin" and finds some other site, they may not get the warnings. If they come across Askaboutmoney, they will at least see the risks and warnings. 

I understand the risks of shorting fully. I would like a put option if that is possible and that means I can buy a put option for €10,000 or however much I am prepared to lose and limit my risk to that.  So it's worth discussing as someone may be able to tell me how to do it.



Brendan


----------



## Dan Murray (12 Dec 2017)

Brendan,

I am very familiar with this world but I cannot, in conscience, comment on the mechanics because of the concerns I have outlined. I understand your points and those of Merowig and Fpalb. Actually, Fpalb had a great line:


fpalb said:


> IMHO Education is better than prohibition, especially unenforceable prohibition.



In many ways, it's bloody hard to argue with that! Nonetheless, I just have a definite sense of unease about going down this route. Fella has made many genuinely fascinating posts in the past about gambling - well worth reading lads and lassies. On balance, I am with him on this one.

This may all be moot anyway - here's a prediction!!.......my sense is that nobody who has participated in the debate to date will be able to help you at a technical level. Just my hunch!! I promise to eat much humble pie - if I'm wrong that is!


----------



## Duke of Marmalade (12 Dec 2017)

As for the comments about the appropriateness of this discussion, I haven't found an AAM thread as useful as this since we discussed Brendan Investments 10 years ago.  If anybody, as a result of reading this, risks more than they can afford by shorting BTC, they should be immediately removed from any access to the internet.


----------



## Dan Murray (12 Dec 2017)

Duke of Marmalade said:


> I haven't found an AAM thread as useful as this since we discussed Brendan Investments 10 years ago.



I agree that this has been a very interesting and educational process. I have for a long-time been an admirer of AAM. I just believe that, on balance, going that additional step of explaining how to get involved in the crack cocaine of gambling is a step too far for my tastes. That's all.


----------



## Daddy Ireland (3 Feb 2018)

Just wondering why discussion on individual crypto is allowed on the forums and discussion on individual shares isn't.


----------



## TheBigShort (17 Feb 2018)

Daddy Ireland said:


> Just wondering why discussion on individual crypto is allowed on the forums and discussion on individual shares isn't.



Im going to say, that individual shares are legal entities within a corporate structure. Thus, if you say anything that may be perceived as influencing the price downward on this site, then this site may be subject to a legal action.
And unlikely as it is that myself and Brendan would ever agree on as much as a coin toss, I do appreciate the opportunity afforded, courtesy of this site to discuss matters within, and as such think it prudent to avoid individual stock prices.

Bitcoin on the otherhand has no corporate structure, no legal entity. We could be talking gold 2.0 or hot air 2.0.
There is no legal liability (that I can see).

Having said that;

https://www.zerohedge.com/news/2018-02-11/arizona-senate-passes-bill-allow-tax-payments-bitcoin

Its not the done deal, and within the bill there is a requirement to revert any tax paid in bitcoin to US$ within 24hrs.
But nonetheless, it gives a snapshot of the where the thinking is on bitcoin. It certainly puts a massive dent in the notion that governments will ban it, or 'crackdown' on it, or tax it 90-100% in my opinion.


----------



## Brendan Burgess (17 Feb 2018)

Hi Shortie

Discussion of shares has been banned since the site started in 1999, - long before any MIFID legislation which might have caused problems for us.

The reason it's banned is because anonymous posters and even posters in their own name have nothing to contribute to the value of shares.  I can go off and do as much analysis as I like and it won't increase my chances of picking a winner or identifying a loser.(Unless of course, Warren Buffet decides to contribute.) 

Then you have all the technical analysis nonsense - "Ryanair is now about to break out of its head and shoulders pattern." 

And finally, the moderation overhead would be just too high.  If someone owns shares in CRH and someone else says that they are overvalued, it can become bitter.

A lot of these points also apply to Bitcoin.  But we have allowed discussion as we would of any other major financial topic which is likely to lose people a lot of money.  So we made an exception to the no shares discussion, when AIB was priced at a huge multiple of its real worth. And we made an exception again for AIB when it was a big topic around the time of the rights issue.( I think we may have made another exception, but I just can't remember it offhand.) 

But, for me, the most important thing about allowing the  Bitcoin discussion is that we will have a record of how some very clever people managed to allow themselves exchange cash for a bag of hot air.  This might be a lesson for the next bubble. But the dot.com guys forgot the tulip lessons. And the Bitcoin faithful have forgotten the tulip lessons and the dot.com lessons. And in ten years, those participating in the next bubble will have forgotten the lessons of the tulip bubble, the dot.com bubble and the crypto bubble.

Brendan


----------



## TheBigShort (17 Feb 2018)

Thanks Brendan, I appreciate the views. Just a few obs if I may;



Brendan Burgess said:


> A lot of these points also apply to Bitcoin



That is somewhat a contradiction from your own position. 
Either bitcoin is a bag of hot air (in which  case it has no relation to the aforementioned shares) or it is an asset class, of some sort, with value (in which case the points you made do relate)?



Brendan Burgess said:


> the most important thing about allowing the Bitcoin discussion is that we will have a record of how some very clever people managed to allow themselves exchange cash for a bag of hot air.



And without judging who is, and who is not 'very clever', where do those who managed to exchange the 'hot air' for cash profit stand in all of this? 

Its ok actually, Im pretty sure this thing is going to run and run. How it will pan out is anybodys guess, but as exchanging cash for 'hot air' is bad, so too is exchanging cash to time the market. 
At least AAM has a record of those who tried to predict its demise also, and bet money on it.


----------



## Brendan Burgess (18 Feb 2018)

TheBigShort said:


> where do those who managed to exchange the 'hot air' for cash profit stand in all of this?



If I win in a casino, it does not make me clever. It just makes me lucky.

If one paid real cash for hot air, that was a mistake. If one later sold it on to a Greater Fool for a higher price, then fair play.  But it does not change the fact that they were foolish to buy Bitcoin in the first place.

Your personal approach to buying a small bit of Bitcoin "to see how it works" was clever. You made money on it - you should now sell it all before it drops to zero.


Brendan


----------



## TheBigShort (18 Feb 2018)

Granted, I went on a speculative ride which paid off. 
But as much as my punt was speculative so too are those that are predicting its demise, or its price at a given time.


----------



## MrEarl (18 Feb 2018)

TheBigShort said:


> ....But as much as my punt was speculative so too are those that are predicting its demise, or its price at a given time.



Agreed, and would respectfully refer to Brendan's recent spread betting where he has taken small positions "against" Bitcoin.


In general, I think we focus too much on Bitcoin here.  I am of the view, that other cryptos are now more likely to be adopted as the new payment mechanism, than Bitcoin.  Litepay for example cannot be discounted.  XRP may yet become the preferred currency, even if more for institutional transactions. VEN appears to be gaining ground in Asia. For me, that suggests there may be a true value in VEN, Litecoin or Ripple. Projects like Bankera may play an important part in how things ultimately pan out.



.


----------



## Brendan Burgess (18 Feb 2018)

TheBigShort said:


> But as much as my punt was speculative so too are those that are predicting its demise, or its price at a given time.



Hi Shortie 

There is nothing speculative about predicting its demise. Bitcoin will demise itself.  That is a certainty. Have no doubt about it.

Making a short term forecast of an irrationally priced thing is not very sensible. That is why when Firefly started the Bitcoin valuation game I did not make any short-term predictions, but focussed on the end of 2018 price which I believe will be <$100.  

I might well be wrong about the timing, but not about its ultimate value which is zero.

Brendan


----------



## TheBigShort (18 Feb 2018)

Brendan Burgess said:


> There is nothing speculative about predicting its demise. Bitcoin will demise itself. That is a certainty. Have no doubt about it.



Yes Brendan, so you keep repeating. And no-one (that im aware of) is doubting that you may be correct at some point. 

What is in doubt for some including me, is your assertion as to _why _it will return to zero, namely it is 'hot air' and has 'no intrinsic value'.

I can easily say that I have no idea of its true value and that its current price is driven primarily by market demand. 
But I cannot agree that it has no use or purpose. I think the concept behind it has value and in turn is now disrupting the way we transact with one another. 
It may all fall flat on its face, but I would consider th current trajectory of its lifespan to be long-term.


----------



## Negotiator (18 Feb 2018)

Brendan Burgess said:


> Hi Shortie
> 
> There is nothing speculative about predicting its demise. Bitcoin will demise itself.  That is a certainty. Have no doubt about it.
> 
> ...



I find it incredible that you are predicting the demise of BTC with such certainty and dismissing it as nothing more than gambling. On what basis are you making that assumption?   Do you apply the same logic to all Cryptos or just BTC?    Also, do you have a good understanding of the underlying technology of blockchain when you make all your assumptions?

Could BTC crash to less than €100 by the end of 2018.....yes of course it's a possibility, but extremely unlikely in my opinion and especially in such a short timeframe. I should state for the record that BTC's technology is actually far inferior to many other Cryptos in my opinion both recent and more established ones like ETH etc so I am not particularly bullish on BTC over the long term. In fact I would see a 'flippining' happening at some point down the road (perhaps the next 2-4 years) where the stronger ones overtake it (by market cap, transaction numbers and use cases etc). So for that reason I don't hold BTC but I do hold a number of alt coins including some from ICO stage.

Even though I am not bullish on BTC's long term dominance, I still don't see it crashing to zero or anywhere near it for that matter. I still feel it may well hold on to it's 'digital gold' status over the long term but perhaps trade at a more modest price compared to other Crytpos (which still might be a lot higher than where it is today price-wise). Anyone shorting BTC today is absolutely insane in my opinion.

It drives me crazy when the 'overly conservative' among us (sorry Brendan but I would have to put you in that category) just dismiss BTC/Blockchain/Cryptos as either a big ponzi scheme that 'has to' come crashing down without at least talking about the underlying technology and what Cryptos can and will do in the future. And if I hear the word Tulipmania one more time....    By the way, Tulipmania lasted about 1 year if I remember correctly.......BTC has been around for nearly 10 years which is a lifetime in technology terms too!

I'm not for 1 second suggesting that many Cryptos (perhaps 95%) are not going to crash and burn, I truly believe they most likely will. We all know there are a ridiculous amount of scams and even just plain stupic Cryptos which are not going anywhere fast! They will die out just like a poorly run company. It is the recent hype in Cryptos that have kept these sh1tcoins afloat but the tide will go out on these in the medium to long term, no doubt about that, as people get more savvy on which ones are the winners. Also the industry itself needs to find it's feet as it's still in it's infancy obviously but water finds it's level and so too will Cryptos. I see it as almost identical in many ways to the internet when it was first born. No one really had a clue that it was going to do all the amazing things it does today (including smartphones apps, cloud computing, social media etc etc). But people did generally have a fair idea that the internet was going to be HUGE and a game changer.

Needless to say back in the dot.com bubble, many people got burned because they just piled into EVERY company in the space thinking they were all going to do well. That's happening right now in Cryptos and so many people will get their a$$e$ handed to them at some stage down the road. As I said earlier, despite BTC's inferior technology and scaling issues etc (which are actually solvable by the way and the vested interests may well reach agreement eventually on solving it at some stage) I still don't think it will be one of the major casualties because of it's 'brand' awareness and 'digital gold' status etc.

Anyway, enough of a rant from me on this but I just wanted to at least through in some counter arguments to the complete dismissal of BTC/Cryptos.....it really does drive me insane when I hear people saying it. It's also worth noting that it normally comes from people in the financial services industry (obviously a massive threat to the industry) and from people of a certain generation. We are in a RAPIDLY changing world with technology at the forefront of this change. People are afraid of change and will pushback against things like this so it is to be expected. It's like most people in their 50's or younger who are lucky enough to have their parents still alive.......they are in the main clueless when it comes to computers, smartphones, gadgets etc and it's frustrating to watch them not utilize such life enhancing tools (they are only here to help make our lives easier/better even if they don't always achieve that function!). The question is.....do you want to be this person in the decades ahead when you go to give your kids pocketmoney in cash and they look at you as if you've got 10 heads! 

I'd love to hear your arguments against any of my comments but please go into more detail if you are going to just dismiss BTC/Cryptos as nothing more than pure speculation and a gamble!


----------



## Brendan Burgess (18 Feb 2018)

Negotiator said:


> I'd love to hear your arguments against any of my comments but please go into more detail if you are going to just dismiss BTC/Cryptos as nothing more than pure speculation and a gamble!



Hi Negotiator 

There are threads where I have asked people to explain why Bitcoin has value. 

No one has yet shown any financial value to it. 

I have asked why it went from being "worth" $1,000 to $20,000 in 12 months. 

No one has answered. 

It's really not up to me to show that a bag of hot air is worth nothing. If someone wants me to pay $10,000 for something, they have so show some basis for that.  They haven't because there is no basis. 

Brendan


----------



## Negotiator (18 Feb 2018)

Seen as you are not going to make any effort in arguing your case why you think it's nothing more than 'hot air', I'll try to explain why I think it's not........

If I had said to you 20 years ago that many of these dot.com companies (namely Amazon) was not going to make a single penny over the next 20 years but would become the largest company in the world by 2020, would you have believed it?  Would you have bought a single share in this company that was built on 'hot air'?

I suspect the answer would have been an emphatic NO followed by a blank look that said 'HAVE YOU LOST YOUR MIND?'    Whilst anyone who called the dot.com crash back in the day were absolutely right, those same individuals would've have missed out on one the greatest success stories of a century. Cryptos are the same in that the vast majority of Cryptos are insanely overvalued and are totally worthless in most cases. But there will be winners among them and hopefully they will emerge sooner rather than later so the industry starts to mature and get the respect it deserves.

Why did Bitcoin go from $1,000 to $20,000 in 12 months?......simple supply and demand metrics and what people were willing to pay for them given the available supply. I think to a large extent people really liked the idea of owning a 'digital currency' that could be spent/sent anywhere in the world within a matter of minutes at a low cost (both of which have proved to be a stumbling block as it gained popularity but that's another discussion!). I think to a large extent it was mostly bought by software engineers/techies who could really see how secure it was and had confidence in it. But later started to go more mainstream.....who doesn't like the idea of a digital currency that is decentralized from governments and banks. People were willing to put a value on this and even though it can't be valued the same way a security or company is, people made up their own mind on what they thought it was worth. Everything has a value where someone is willing to pay money for it.

I think we could go round in circles forever if one isn't willing to accept that this is a new industry being born and that normal rules do not necessary apply. I'm not saying this in a 'this time is different' way to all the 'speculation' aspect to Cryptos but I am saying that we need to think laterally when it comes to Cryptos and how this new disruptive industry may evolve.

People put a value on all sorts of things for all sorts of reasons. Would you value a big square piece of white canvas with a single line painted onto it at $5,000,000?  No? Didn't think so and neither would 99.9999999% or the rest of the population. However a small number of people would apply this value to certain 'paintings' and that values it at $5,000,000 whether everyone else agrees with it or not.

If there is one thing I can't be more sure of, it's that Cryptos are here to stay and will continue to evolve and thrive. We might end up with 10, 20, 50 or 100 viable Cryptos driving 95% of the industry but it will be a MASSIVE industry (a lot bigger than it is today) and will be used for a so many different and innovative ways that hasn't even been thought of yet.

I really look forward to all this playing out Brendan so we see who ends up eating humble pie......as much and all as I love pie I hope it's not me!


----------



## Fella (18 Feb 2018)

Brendan Burgess said:


> Hi Negotiator
> 
> There are threads where I have asked people to explain why Bitcoin has value.
> 
> ...




I keep repeating the same thing like you , but I keep trying to explain it in a way you will understand. I am in agreement with you on Bitcoin been crazy to have gotten this far and I would never buy it or invest in it. Where we differ is I don't think people are going to come around to your and my way of thinking , I just don't see that fundamental mind shift change in the masses , the longer Bitcoin is around the more it is in people's mind as worth something and the less likelihood it reaches zero . It doesn't need everyone to accept it as worth something to be stop it crashing it only needs a core group who are accepting of its value and want to trade/exchange it at that value. Do you understand that you need to change these peoples mind to profit from your gambling on Bitcoin? One of the key principles of economics is something is worth what people are willing to pay for it , if people want to pay 10k for a bag of hot air then they it is worth that , but a bag of hot air is not a good example , you would be better off comparing it to something that is worthless but doesn't have an infinite supply , a bag of hot air can't be worth 10k because anyone can get a bag and put hot air in it , I can't get Bitcoins now without paying for them.

So please stop comparing infinite things with finite things if we are to have an proper discussion on the subject.

At the end of the day you are gambling that this will reach 0 it might (i highly doubt it) or it might not but everyday that passes your doomsday prediction looks a lot less likely and eventually you may have to admit you got this one wrong .


----------



## Negotiator (18 Feb 2018)

I guess you're right Fella, we could probably argue our cases til the cows come home and it wouldn't change anyone's mind on the matter. I just like to at least be open to the possibilities of what Cryptos can do. It's the blanket 'dismissal' of the entire industry/technology in one word (ie- scam, ponzi, fraud, worthless, hot air (sorry that's 2 words! ) that drives me nuts!


----------



## Brendan Burgess (18 Feb 2018)

Negotiator said:


> this is a new industry being born and that normal rules do not necessary apply. I'm not saying this in a 'this time is different' way to all the 'speculation' aspect to Cryptos but I am saying that we need to think laterally when it comes to Cryptos and how this new disruptive industry may evolve.



This is exactly what people said during the dot.com boom.

You can't apply normal valuation rules i.e. judging a share by its potential profits is "old fashioned".  But it was and still is the only way to do it. 

And just as in the dot.com boom, we were unable to persuade the believers that this time it is no different. The rules of maths and finance still apply. 

There is no income from Bitcoin. The only reason you are prepared to pay $10,000 for it today is that you expect someone else will be prepared to pay $20,000 for it at some time in the future.

Sure this complete irrationality can continue for some time.

But at some stage, the price will reflect its value - which is zero.

By the way, I have not seen anyone on askaboutmoney dismiss blockchain.  I know that I have said on a few occasions that Bitcoin is not a fraud, although fraudsters use it, just as they use cash.

When someone shows a calculation using numbers to show that Bitcoin is worth something, I will be delighted to review it.

But until someone makes an actual case that Bitcoin is worth something - then it's worth nothing.

The supply of crypto is unlimited just as hot air is unlimited.

Brendan


----------



## Negotiator (18 Feb 2018)

Brendan Burgess said:


> This is exactly what people said during the dot.com boom.
> 
> You can't apply normal valuation rules i.e. judging a share by its potential profits is "old fashioned". But it was and still is the only way to do it.
> 
> And just as in the dot.com boom, we were unable to persuade the believers that this time it is no different. The rules of maths and finance still apply.



I agree the rule of maths still apply but finance has changed considerably and will continue to do so at breakneck speed. Of course P/E's and profit matters but if you only applied that logic then where does that leave one of the biggest and most successful companies of our generation namely AMAZON.COM?   They pretty much have never made a single cent since they started in business nearly 25 years ago. Does that value the company at a big fat ZERO?  No, it values it at $700bn and counting!  Big difference between that number and zero don't you think!! 



Brendan Burgess said:


> There is no income from Bitcoin. The only reason you are prepared to pay $10,000 for it today is that you expect someone else will be prepared to pay $20,000 for it at some time in the future.


  There is no income from Gold, Antiques, Art etc.....does that make them worthless too?   



Brendan Burgess said:


> By the way, I have not seen anyone on askaboutmoney dismiss blockchain. I know that I have said on a few occasions that Bitcoin is not a fraud, although fraudsters use it, just as they use cash.


  Fair enough, I guess I took your dismissal of Bitcoin as completely worthless without even mentioning blockchain technology as a dismissal of blockchain too.......I also haven't seen your earlier posts on the topic so apologies, my bad! But it would be nice if you could mention what your thoughts are in relation to blockchain when dumping on BTC so we can see your more complete arguments!



Brendan Burgess said:


> When someone shows a calculation using numbers to show that Bitcoin is worth something, I will be delighted to review it.


  Show me a calculation using numbers that show how a painting with no title by Jean-Michel Basquiat (painted just a few decades ago) is worth $110m? (sold at this price last year!)   To a layman, a 10 year old could've painted this and you wouldn't have know the difference!



Brendan Burgess said:


> But until someone makes an actual case that Bitcoin is worth something - then it's worth nothing.


  Bitcoin has been in existence nearly 10 years now and would need to fall by 99%+ in value before it's worth less than what is was back then........it has a long way to fall before it's worth nothing! 



Brendan Burgess said:


> The supply of crypto is unlimited just as hot air is unlimited.


  You generally put forward decent arguments but this is not one of them!


----------



## TheBigShort (18 Feb 2018)

Brendan Burgess said:


> No one has yet shown any financial value to it.



Plenty of people have shown you why they _believe _it has value. From the tech side and elsewhere. From my perspective I consider the concept intriguing. And in line with views of general geopolitical and economic events, that concept offers me an alternative option to store wealth (albeit it is unfinished, volatile, risky etc). That has value, to me. Not to you, but to me. I'm willingly to pay, you are not. 



Brendan Burgess said:


> You can't apply normal valuation rules i.e. judging a share by its potential profits is "old fashioned". But it was and still is the only way to do it.



This is too narrow a perspective. How do you value a Gibson guitar that is mass produced but owned by Elvis Presley to be $300,000? Or a Da Vinci painting that went from £200m to £450m in twenty minutes? Especially when it's possible to commission a top artist to replicate it for €15-20,000?

What value would you put on AAM? How would you calculate its financial price, and what price would you get if you put it up for sale? By your reasoning there should be no difference as the only way to value it is through its potential profits?


----------



## Negotiator (18 Feb 2018)

TheBigShort said:


> What value would you put on AAM? How would you calculate its financial price, and what price would you get if you put it up for sale? By your reasoning there should be no difference as the only way to value it is through its potential profits?



I would put a high valuation on this analogy.......brilliant!


----------



## Brendan Burgess (18 Feb 2018)

TheBigShort said:


> What value would you put on AAM? How would you calculate its financial price, and what price would you get if you put it up for sale? By your reasoning there should be no difference as the only way to value it is through its potential profits?



Correct, that is the only way to put a financial value on Askaboutmoney - its potential profits.  I don't see why that is a difficult concept, but maybe I am missing something?  While Askaboutmoney has no income or profits, it has no financial value.  

If we accepted ads or sponsorship and made profits or had the potential to make profits, it would be valued at some multiple of those profits.  

The internet does not suspend the rules of finance or valuation.  We got hoarse explaining to people that putting .com after a business name did not immediately make it worth millions. 

The only people making money out of Bitcoin are those who can find a Greater Fool to whom they can sell it for more than they paid for it. As with a ponzi scheme, there is a limit to the number of Greater Fools. 

Brendan


----------



## TheBigShort (18 Feb 2018)

Brendan Burgess said:


> While Askaboutmoney has no income or profits, it has no financial value.



No financal value, really? Would you sell it for €1?
€1,000?
€100,000?
€10m?
€100m?

If a buyer were to offer, and a seller to accept, is this not financial value? Ditto a Da Vinci painting or Presley guitar?


----------



## Negotiator (18 Feb 2018)

Brendan Burgess said:


> Correct, that is the only way to put a financial value on Askaboutmoney - its potential profits. I don't see why that is a difficult concept, but maybe I am missing something? While Askaboutmoney has no income or profits, it has no financial value.



Please give me a shout if you are ever putting anything up for sale Brendan, I love picking things up for a fraction of the price they are truly worth!


----------

