# So where are we with Bitcoin after 4 months of discussion?



## Brendan Burgess

I launched the Alternative Investments forum on 25th November with this post.

* Bitcoin is a clearly identifiable economic bubble*

Have I learnt anything?  Have I read anything which has changed my mind?

I have certainly learnt a lot about what is involved.  Blockchain seems to be a very useful technology.  There are other extraordinary cryptocurrencies like Tether which may well be scams. For the record, I have never believed that Bitcoin was a scam.

I learned how to spread bet on Bitcoin and sold Bitcoin in early January at $14,500.  So far, I have been lucky with this bet.  I placed some smaller bets on Bitcoin being below $5,000 at the end of the year.

While fp has written a great post on Why Bitcoin has value, no one has yet been able to explain why it's worth $1, $1,000 or $100,000.

The truth is that it has no value.  It's possible that it might have a residual value of a few cents, but even that seems very unlikely to me.

The only unknowns are the timing of its fall to zero and the journey it will take to get there.

I am really surprised how much of my time has been taken up by this. I check the price of BTC frequently, which is probably irrational, as I know that it will rise and fall.  Maybe it's not irrational, as there could be a sudden collapse and I might have to make a decision on closing out my spread bet.

The volatility of BTC was of academic interest to me until I spread bet on it.  It was great watching  it fall towards $6,000 but very dispiriting watching it rise again to $12,000.  This suggests that when there is no rational basis for valuing something, then really it could go to any price before it eventually falls to zero.  Although I set a stop loss at $34,500, I fully accept that this could still be triggered,even if the price today is down to $8,000. If it rises to $34,500 I will have lost my bet.

*The thing I still don't understand is why smart people believe stupid things? 
*
This never fails to surprise me. Whether it's creationism or the dot.com bubble or the Flat Earth.  The supporters of Bitcoin on askaboutmoney are clearly not stupid - look at the quality of their writing. In particular, fp's explanations of BTC shows a very high level of intelligence. But they believe stupid things.

There is some disconnection in the reasoning. The first premise may or may not be true, but the conclusion makes no rational sense.


Blockchain is wonderful...therefore BTC is worth $20,000 per coin.
The banks and international monetary system are corrupt...therefore BTC which is not corrupt, will replace them, so it must be worth $20,000 per coin.
Although the main trading is done in Japan, South Korea and China, it's very useful in developing countries in Africa, so it must be worth $20,000 per coin.
There is a limited supply of BTC ...therefore it's worth $20,000 per coin.
The intrinsic value is irrelevant. Bitcoin really is worth $20,000 because someone will pay that for it.
A Leonardo sold for $450m so Bitcoin is worth $20,000, at least.
And they discount all the danger signs

Virtually every economist of note says that it is worth nothing 

Virtually every investment commentator says that it is worth nothing 

It's possible that some strange activity by another cryptocurrency, Tether, has been responsible for the bubble 

Nothing is priced in Bitcoin in reality 

Although limited in supply, it forks off into other coins, thus increasing the supply 

"Hackers rob $70m worth of Bitcoin" 

Credit card companies ban purchases of Bitcoin
It might be something to do with herd behaviour.  If a big enough herd buys Bitcoin, some people will abandon reason and join the herd. They validate each other. 

*So have we wasted our time discussing Bitcoin on askaboutmoney? 
*
I don't think so.  It has been frustrating at times, but it has also been entertaining.

I doubt if any of the faithful have had their faith shattered.  Faith is much stronger than reason.

I have been confirmed in my non-belief. I still think it will be zero by the end of the year, but I am less sure of that timing now. I had a sense that the $20,000 was the bubble which would suddenly burst and drop to zero. Today's $8,000 is a lot closer to the $5,000 price I have bet on, but it could well be up again at the end of this year.

I hope that some people who were thinking of buying BTC have come across these threads and have been discouraged.

It will be a very useful record in years to come of how smart people can justify believing in stupid things. Or just maybe it will be a useful record in years to come of how so many clever people like the Duke and me could not foresee the demise of the euro, Dollar, Yen and Sterling and their replacement by Bitcoin.

Brendan


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## Negotiator

Brendan Burgess said:


> Virtually every economist of note says that it is worth nothing



^This is laughable.....virtually every economist of note said that Irish property prices would have a 'soft landing'. Economists are academics full of theories and love nothing more than giving examples from decades ago. If predicting the economy was that simple then they would all be Billionaires!  How many economists predicted the impact smartphones would have on the tech industry?  How many economists predicted the GFC?  How many economists predicted the likes of Amazon that was losing money for practically 20 years staight would become one of the biggest company in the world



Brendan Burgess said:


> Virtually every investment commentator says that it is worth nothing



Same as my previous reply. Commentator's are just that....they commentate on events after the fact!



Brendan Burgess said:


> It's possible that some strange activity by another cryptocurrency, Tether, has been responsible for the bubble


  This is absolute nonsense. I posted about Tether v BTC in another thread. It equates to about 0.75% of BTC market cap



Brendan Burgess said:


> Nothing is priced in Bitcoin in reality


 Agreed but neither is anything priced in Gold!



Brendan Burgess said:


> Although limited in supply, it forks off into other coins, thus increasing the supply



That's very simplistic but I'm not going to go into a full counterargument here because it would take too long. Forked coins are effectively new coins that have little to do with the coins they forked off. The supply of the original coin does not change



Brendan Burgess said:


> "Hackers rob $70m worth of Bitcoin"



I see this as something that is very similar to banks being robbed or bank accounts being hacked or large jewelry or vault heist etc. These sorts of things will always happen in every industry. If handled correctly, Cryptocurrencies are arguably a safer means of keeping your funds secure (ignoring the volatility and value issue for this example). If you keep them in cold storage (or deep cold storage) they are a million times safer than your cash in a bank or under your mattress (assuming you do it correctly etc).



Brendan Burgess said:


> Credit card companies ban purchases of Bitcoin


  I don't know too many operators in the banking industry that are Crypto enthusiasts. They are simply using their dominant position to try to curb it...might help them a little bit for now but they will be disrupted big time at some point in future (might take another decade to really start to bite) and they won't know what hit them!


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## newtothis

Brendan Burgess said:


> Virtually every economist of note says that it is worth nothing


I was really curious about this statement, so I went looking. A couple of examples: "Speaking with CNBC in advance of the upcoming World Economic Forum in Davos, Switzerland, where Shiller will give a talk, the author of the best-selling book _Irrational Exuberance_ said that Bitcoin “has no value at all unless there is some common consensus that it has value.”"

All I can say to this is "d'oh!". That's a bit like saying "water is wet": something has value precisely because there is some common consensus it has value. Note that he didn't say it has no value.

Another example: "Richard Jackman, an economist at the London School of Economics, and Savvas Savouri, an economist at Toscafund Asset Management, however, estimate the coin is still trading far higher than it should. "We often read in your pages the view that bitcoin has no value and therefore, in a rational market, would have no price, but that surely is wrong," the duo said Thursday in the Financial Times...." The quote goes on, but note they don't say it has no value, just that in their opinion it is badly overvalued.

So, where are these "economists of note" saying it has no value? If they are there, they seem prepared to ignore the evidence, which points to the opposite conclusion.


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## TheBigShort

I'm having a quiet night in before a busy St P's weekend. Enough time for a few glasses of wine, 'Wonderwoman' on Sky (not my choice) and a response to yet another Bitcoin thread - which, incidentally, and thanks to AAM and its contributors, provides entertaining, engaging and at times intriguing commentary from all sides.

That said, I do enjoy a bit of slicing and dicing, so here we go;



Brendan Burgess said:


> I have certainly learnt a lot about what is involved. Blockchain seems to be a very useful technology.



That's brilliant Brendan, I for one would be interested in hearing why you think blockchain is a very useful technology. Perhaps you could open a thread on it sometime?



Brendan Burgess said:


> While fp has written a great post on Why Bitcoin has value



Absolutely, for or against his/her views, s/he has an ability to engage the reader from start to finish. Contributions of merit and value I would say.



Brendan Burgess said:


> no one has yet been able to explain why it's worth $1, $1,000 or $100,000.



That's because value is subjective.
You can apply any methodology you want to determine for yourself what you think what anything is worth at any given time.
There is no scientific mathematical equation to determine the true value of any given thing at any given time.
There are mathematical equations and formulas to indicate what is a fair and reasonable price, but those equations and formulas are ultimately inconclusive and their determinations always subject to debate - the terms 'rip-off' and 'bargain' spring to mind.



Brendan Burgess said:


> The truth is that it has no value.



In your opinion, that's all.



Brendan Burgess said:


> The only unknowns are the timing of its fall to zero and the journey it will take to get there.



Saying it is worth zero, but not knowing when it will be zero is (as Delboy would say) "_about as useful as a pair of sunglasses on a bloke with one ear!"
_
Here are other tips, the iPhone 10 will return to zero, the shoes on my feet will return to zero, the Late Late Show, Sky Sports, the Xbox, the XFactor, Messi's wages for playing football.
All will return to zero. When? Who knows?



Brendan Burgess said:


> I am really surprised how much of my time has been taken up by this



Because it is a fascinating subject whether you are a skeptic or an optimist.



Brendan Burgess said:


> Blockchain is wonderful...therefore BTC is worth $20,000 per coin.



You just made that bit up, which in my opinion, diminishes your core argument that it is worthless. Anyone who takes to deliberately misrepresent the views of others devalues their own position in my opinion (that said, you may have a mathematical formula for arguing otherwise?).



Brendan Burgess said:


> The banks and international monetary system are corrupt



The banks and the international monetary system _are corrupted. _ It's important to understand the difference.
There are no 'evil banks' or 'evil conspiracy'. There is only what Adam Smith correctly identified as self-interest, and what Marx also correctly identified, as the conflict between those self-interests (or the inherent conflict within capitalism).

This sets the stage for democracy and government, courts and laws, rules and regulations, licences and permits, etc..etc..

When the rules are subverted, there are consequences...typically manifesting in investigations, criminal proceedings, convictions, etc

From time to time, when the rules are subverted to such an extent as to threaten the very structure upon which the system is built, and then the rules are changed (selectively) by way of 'too big to fail', or 'whatever it takes QE', then to me, the system is inherently corrupted, leaving the way for vast fraud and corruption evidenced by the litany of financial banking scandals in this country and in the broader Western developed economies over the last decade.

I may be wrong, perhaps it's all just coincidence?




Brendan Burgess said:


> therefore BTC which is not corrupt, will replace them, so it must be worth $20,000 per coin.



Admittedly there are those who proclaim that Bitcoin will do this, I've yet to read any such commentary here however.
It's important that you can differentiate between the comments you read here and whatever it is you are reading, watching, listening to elsewhere.



Brendan Burgess said:


> The intrinsic value is irrelevant.



Value is subjective, I think that point has been established. If you wish to argue the point perhaps you can provide an example of the intrinsic value of, well, anything at all?



Brendan Burgess said:


> A Leonardo sold for $450m so Bitcoin is worth $20,000, at least.



Another misrepresentation, based on fudge and spoofery. A financial column for 'The Sun' surely awaits you?



Brendan Burgess said:


> And they discount all the danger signs



Let's see them so?



Brendan Burgess said:


> Virtually every economist of note says that it is worth nothing



This statement is so devoid of actual factual information that it is hardly worth commenting on, except at least for this one point - Bitcoin, Blockchain, Cryptocurrency are all technological innovations. Why, oh why, would anyone rely on what any economist has to say about them?
For sure, their opinions on how people have _interacted and engaged _with this technology and how they consider it will impact (if at all), for positive or negative, on the economy, can be worth listening to. But any economists who proclaims that it is worth 'nothing' is, in my opinion, is spoofing.
I would be interested in knowing the names of at least some of these economists.



Brendan Burgess said:


> Virtually every investment commentator says that it is worth nothing



I can't comment, could be true, but to me such commentary is next to worthless.



Brendan Burgess said:


> It's possible that some strange activity by another cryptocurrency, Tether, has been responsible for the bubble



Perhaps, it could all fall flat on its face and in the end you could be right. You just haven't convinced me that you are.



Brendan Burgess said:


> Nothing is priced in Bitcoin in reality



I agree. And as pointed out up above, neither is anything priced in gold.



Brendan Burgess said:


> Although limited in supply, it forks off into other coins, thus increasing the supply



Art forks off into other forms, paintings, sculptures, music, dance, theatre - these will fork off too into oils and watercolours, abstract and modern, bronze and marble, rock and jazz, etc...etc...
Some will hold more value over others and not because of P/E ratios, but because of taste and timing.



Brendan Burgess said:


> Hackers rob $70m worth of Bitcoin"



So what? My Bitcoin can be hacked. My credit card _has _been hacked.



Brendan Burgess said:


> Credit card companies ban purchases of Bitcoin



Buying Bitcoin on credit is a risk to both those who buy Bitcoin and the persistence of the perpetual debt  based monetary system. Bitcoin is high risk, highly volatile, risking amounts greater than what you can afford to lose is not recommended in my opinion.
Banning purchases of Bitcoin on credit is a good idea, not a warning sign.



Brendan Burgess said:


> It might be something to do with herd behaviour. If a big enough herd buys Bitcoin, some people will abandon reason and join the herd. They validate each other.



There is validation in this. The €euro, in which there is plenty of analysis showing that it is fundamentally flawed (not that this needs proving anymore) was adopted across large swathes of the EU without barely a murmur of discontent is typical herd mentality.



Brendan Burgess said:


> So have we wasted our time discussing Bitcoin on askaboutmoney?



It's fun, let's be honest. I even have my own syndrome named after me, albeit it's done to dismiss and devalue my views, I'm satisfied at least that my views are based on actual events occurring rather than the tabloid, redundant tactics of spoofery and deliberate misrepresentation.



Brendan Burgess said:


> I doubt if any of the faithful have had their faith shattered.



That would be a failing on your part then?



Brendan Burgess said:


> Faith is much stronger than reason.



Sometimes, perhaps, obvious examples are religious faiths - does this mean you think Christianity, Islam, Judaism have no value?



Brendan Burgess said:


> I have been confirmed in my non-belief



I'm really happy that you have found your belief in all of this. That is important.



Brendan Burgess said:


> I still think it will be zero by the end of the year, but I am less sure of that timing now.



It didn't take long for your faith to waver, did it?



Brendan Burgess said:


> I had a sense that the $20,000 was the bubble which would suddenly burst and drop to zero.



Don't be modest Brendan, you considered cashing out your bet "as it fell to $6,000", by amazing coincidence, through hindsight, you managed to call both the peak and the bottom of the Bitcoin price.
Amazing! Surely you made a tidy packet?



Brendan Burgess said:


> Or just maybe it will be a useful record in years to come of how so many clever people like the Duke and me could not foresee the demise of the euro, Dollar, Yen and Sterling and their replacement by Bitcoin.



That's some call...again I repeat, it's important that you distinguish between comments made on this site and wherever else you are sourcing information.

_Happy St Patrick's Day!_


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## Negotiator

Happy St Patrick's Day indeed Big Short! It seems Cryptos are turning green too for the day that's in it!


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## Duke of Marmalade

Jayz B/S have you tried counting cryptos at that time of the morning

Plenty to come back on there but I will drip feed my ripostes.  I note that you are now adopting the _tecate (another early morning poster) _line that the community is not seeking to overturn the existing order.  In your case that would appear to be resignation to reality for it seems to me that if crypto did per chance blow the central banking conspiracy out of the water you would be in Shortie Paradise.

You really have gone overboard on the word games.  Yes of course all value is subjective.  I prefer oranges to apples.  But oranges and apples have intrinsic value,  I like them both. Intrinsic and subjective are not mutually exclusive.

One more for the moment.  Bitcoin is *not *a technology.  Blockchain is a technology.  Satellite television is a wonderful technology.  Hopefully this afternoon it will deliver to my living room a victory over the old enemy for which I would gladly pay.  But you must admit that 600 stone of tetestorone fighting over an egg is not technology.  That same satellite TV is capable of showing me instant pictures of a sand dune in the sahara,  to which I would give no value.  What am I going on about?  The analogy is that blockchain delivers bitcoin but no matter how marvelous is blockchain it of itself cannot give value to that which it conveys.


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## Brendan Burgess

As someone else said about dealing with flat earthers, it's like punching fog. 

So much of this stuff is repetitive and has been answered elsewhere that I will only respond to new arguments.



Negotiator said:


> virtually every economist of note said that Irish property prices would have a 'soft landing'.



In my summary post on house prices in 2007, I gave the views of independent economists.

You will find it at the end of the post

*What the independent experts have said*

December 2000  Central Bank warns that house prices could fall dramatically 

February 2002 [broken link removed] analyses the then housing bubble


November 2004 [broken link removed] (PDF)

March 2006  Dublin house prices heading towards 100 times rent earned

September 2005  US Federal Reserve report on house prices in different countries

November 2006 [broken link removed] “ even if there is some overvaluation, this should not necessarily mean that house prices would fall; the most likely way that the overvaluation would be corrected is via a period of low and stable house price inflation while the economy continues to grow. Bearing this in mind, a soft landing for house prices is the most likely outcome.”

December 2006 [broken link removed] "we may be looking forward to large and prolonged falls in real house prices of the order of 40–50 per cent, and a collapse of house building activity." (PDF)


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## Brendan Burgess

Negotiator said:


> Agreed but neither is anything priced in Gold!



Gold is not a currency. 

Bitcoin is held out to be a currency. 

Brendan


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## Brendan Burgess

No, I didn't. It's a summary of the main argument put forward by the Bitcoin faithful.  Take fp's brilliant Key Post. He kicks off on the explanation of Blockchain and that is just one example.


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## Brendan Burgess

Did the credit card company refund you as a matter of interest? 

My credit card was also used by someone else.  Visa reversed all the charges and issued me with a new card. 

If someone hacks into AIB and empties my bank account, AIB will be responsible, not me.   I presume that the same holds true for the crypto exchanges, but are they in a position to refund the stolen money? 

Brendan


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## newtothis

Brendan Burgess said:


> In my summary post on house prices in 2007, I gave the views of independent economists.
> 
> You will find it at the end of the post



That may well be true, but where are "Virtually every economist of note says that it (Bitcoin) is worth nothing"?


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## Brendan Burgess

Hi newtothis

Good question. I did a quick Google search and came up with lots. 

Here is one from 2013 

*Why don’t economists like Bitcoin?*

I am not aware of any reputable economist who thinks that Bitcoin is not a bubble.  I have done a quick Google search and can't find any. 
Perhaps there are some? 

I genuinely want to see someone putting forward a piece of analysis showing what the value of Bitcoin is.  I have not seen anyone doing it.  Many of you believe it has value, but you won't show your workings. 


Brendan


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## TheBigShort

Beannachtaí Lá Féile Phádraig, a chairde go léir. Bua iontach inniu ar fad do na fir i nglas. Tá na piontaí scaoilte anois agus 'The Dubliners' ag seinnt thar na haerthonnta. Is am domsa sos beag a thógaint ach is dóigh go mbeidh mé ar ais arís níos déanaí! 
Ach, ceist coitianta, cad é an luach bunúsach a baineann le Lá Féile Pádraig? Is dóigh nach féidir é a tomhas?


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## Brendan Burgess

TheBigShort said:


> cad é an luach bunúsach a baineann le Lá Féile Pádraig? Is dóigh nach féidir é a tomhas?



Ach ní infheistíocht nó airgead é! 

Brendán


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## TheBigShort

Brendan Burgess said:


> Ach ní infheistíocht nó airgead é!
> 
> Brendán



Ní airgead é, aontaím, ach is infheistíocht mór é. Ó thaobh Bord Fáilte agus an tionscail turasóireachta comh mhaith leis an Taoiseach sa Theach Bán, tá deis mór tradála ag baint leis.


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## Negotiator

TheBigShort said:


> Beannachtaí Lá Féile Phádraig, a chairde go léir. Bua iontach inniu ar fad do na fir i nglas. Tá na piontaí scaoilte anois agus 'The Dubliners' ag seinnt thar na haerthonnta. Is am domsa sos beag a thógaint ach is dóigh go mbeidh mé ar ais arís níos déanaí!
> Ach, ceist coitianta, cad é an luach bunúsach a baineann le Lá Féile Pádraig? Is dóigh nach féidir é a tomhas?



I don't speak Irish so unfortunately this post makes about as much sense to me as some of Brendan's babble about Cryptos on here! 

Sorry Brendan, I couldn't resist!  I'm sure you'll contest that I'm not exactly babble free myself! 

Cracking match this afternoon.....we did it, finally!


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## ant dee

I just want to point out, you are all aware that all blockchains are different?

A decentralised blockchain needs an underlying asset.
The b_itcoin blockchain_ and _bitcoin_ are reliant on each other. You cant separate them...

You can clone the _bitcoin blockchain_ and make it _DukeCoin_ _blockchain_, that will not give _DukeCoin_ any value ( sorry I meant price... or is it worth?) and it certainly wont make the _DukeCoin_ _blockchain_ more secure or reliant than the spreadsheet i keep on my Google drive.


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## Duke of Marmalade

ant dee said:


> I just want to point out, you are all aware that all blockchains are different?
> 
> A decentralised blockchain needs an underlying asset.
> The b_itcoin blockchain_ and _bitcoin_ are reliant on each other. You cant separate them...
> 
> You can clone the _bitcoin blockchain_ and make it _DukeCoin_ _blockchain_, that will not give _DukeCoin_ any value ( sorry I meant price... or is it worth?) and it certainly wont make the _DukeCoin_ _blockchain_ more secure or reliant than the spreadsheet i keep on my Google drive.


I think I see what point you are making.  Let me try another metaphor for the point I was trying to make.  Imagine someone invented a technology for transferring grains of sand instantly all over the World, the grain of sand being the "asset".  That would be a truly amazing technology and one could see a future where it might be able to "beam me up Scottie".  But as it stands it delivers an asset  that is worthless. 

So the bitcoin blockchain transfers digital entries on a decentralised ledger which are immutable etc. etc. So what?


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## ant dee

I see. So I guess blockchain is worthless as well.


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## newtothis

Brendan Burgess said:


> Hi newtothis
> 
> Good question. I did a quick Google search and came up with lots.



So did I, and I can't find a single one!



Brendan Burgess said:


> Here is one from 2013
> 
> *Why don’t economists like Bitcoin?*
> 
> I am not aware of any reputable economist who thinks that Bitcoin is not a bubble.  I have done a quick Google search and can't find any.
> Perhaps there are some?



There are plenty (all?) who think it's a bubble, but thinking Bitcoin is grossly over-valued is* not* the same as saying it has *no value*, which is what you are continuously claiming.

There are even some (reputable) economists who put a value on what they think it should be ($20), such as: http://uk.businessinsider.com/2-eco...g-it-should-be-trading-at-20-2018-2?r=US&IR=T

You clearly have a different opinion, which is fine. That's all they are, however: opinions on what the value should be. The fact is that the value is not zero and stating it is all the time won't make it true.




Brendan Burgess said:


> I genuinely want to see someone putting forward a piece of analysis showing what the value of Bitcoin is.  I have not seen anyone doing it.  Many of you believe it has value, but you won't show your workings.
> 
> 
> Brendan



It's not my belief it has a value, it's a fact! The fact that it is being bought and sold all the time establishes that.

The analysis is simple, and one I've already pointed out: it's something that is traded and the value is set by the market. You may as well say show me the analysis of what the value of a Picasso painting is, or indeed anything.


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## TheBigShort

The problem with the detractors of bitcoin in these discussions as I see it, is the continous use of misinformation, misrepresentation of other posters comments to try fudge the topic being discussed.

Just some obs;

1. I have read fpalbs Key Post on bitcoin and nowhere does it say that bitcoin is worth $20,000 as implied in the OP of this topic which purports to summarize previous discussions.

2. There is a difference between something in a bubble and something having zero value. The two are not always the same.

3. Intrinsic value. The arguement is pushed that bitcoin has no intrinsic value. It appears that this is based on it not having EPS or p/e ratios? Yet, simultaneously im told, an apple has instrinic value. I agree, the intrinsic value of an apple is its use for providing sustenance as a food source. But thats it, that is its intrinsic value. We can try monetize that intrinsic value, but how that is done is subjective and the monetary price calculated is also subjective. 
Bitcoins intrinsic value is its use to hold and transfer money outside of the centralised monetary system on a trustless blockchain. Thats it, that is its intrinsic value. We can try all sorts of ways to put a monetary value, and consider all sorts of factors to do so, but all of that is wholly subjective. 
4. Ive read Krugmans 'bitcoin is evil' piece, and while he is highly skeptical of its use, to the point of being almost dismissive, nowhere does he state that it has zero value. 
5. There is a strange tendency for the ABC's to constantly refer to the economists for guidance and opinion on bitcoin. Fair enough, but economists are generally as clueless about the future as anyone else (this is evident when you listen to various economics and all have different outlooks about the economy - they cant all be right?).
Economists are best placed to analyze after the fact information. The blockchain is technological, bitcoin is a manifestation from that technology. 
Why are economists regarded so highly here?


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## elacsaplau

TheBigShort said:


> The problem with the detractors of bitcoin in these discussions as I see it, is the continous use of misinformation, misrepresentation of other posters comments to try fudge the topic being discussed.



Aontaím go hiomlán



TheBigShort said:


> ....economists are generally as clueless about the future as anyone else



How dare you! The bloody cheek of you insulting my noble profession!


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## Negotiator

A


elacsaplau said:


> How dare you! The bloody cheek of you insulting my noble profession!



Give us a few predictions about the economy so and we'll analyze it in a couple of years time!


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## TheBigShort

Brendan Burgess said:


> Did the credit card company refund you as a matter of interest?



In fairness they did yes.


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## elacsaplau

Give us a break, Negotiator.

Economics 101: Never make predictions - especially about the future.

Heroic predictions (......like some folk here might do) are for amateurs!!


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## Brendan Burgess

TheBigShort said:


> The problem with the detractors of bitcoin in these discussions as I see it, is the continous use of misinformation, misrepresentation of other posters comments to try fudge the topic being discussed.



I don't think that you will find one materially inaccurate statement from the ABCs which is misleading. 

For example, I said  "Blockchain is wonderful...therefore BTC is worth $20,000 per coin."

This is a fair summary of the attribution of value to BTC which actually derives from the blockchain. It is a summary post. 

The problem Shortie is that you are trying to find small "errors" in what the ABCs are saying and therefore you miss the main point.

No one has yet shown why Bitcoin has any value whatsoever.  
The best the ABCs can come up with is that it is "subjective". 

The purpose of this discussion is not to win an argument. 

The purpose is to help those of you who own Bitcoin to realise how foolish it is and to help you to retain your profits.  

It is also to stop people losing money through participating in the Bitcoin mania. 

The ABCs make all sorts of irrelevant arguments - straw men arguments.  You might well win them. But that is not the point. 

The point is that Bitcoin has no value. Nothing you or anyone else has said has suggested why it might have a value. 

In time, you will come to realise this. I genuinely hope that you will recognise the mania for what it is before it's too late. 

We are telling you now during the bubble that this is a bubble.  That is useful.  You should listen.

Brendan


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## elacsaplau

Brendan Burgess said:


> We are telling you now during the bubble that this is a bubble.  That is useful.  You should listen.



I'd be very interested to understand when BTC attained bubble price levels.


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## TheBigShort

Brendan Burgess said:


> No one has yet shown why Bitcoin has any value whatsoever.



In your opinion. 
In my opinion fpalbs posts and the posts of others both here and elsewhere explaining the tech side of all this, coupled with my own views of the monetary system and geopolitical affairs, plus an understanding of the potential benefits and advantages of a decentralised trustless currency as I see it, all add up to value to me. 
Not to you, but to me. And that is what I am trying to help you with. That because you see no value in it, doesnt mean it doesnt hold value for others.



Brendan Burgess said:


> The purpose is to help those of you who own Bitcoin to realise how foolish it is and to help you to retain your profits.



How do you think you are going with that?



Brendan Burgess said:


> It is also to stop people losing money through participating in the Bitcoin mania



This is wholly disingenuous. You have a vested interest in trying to persuade people to sell.



Brendan Burgess said:


> The point is that Bitcoin has no value. Nothing you or anyone else has said has suggested why it might have a value.



Nothing that I or anyone else has said has suggested _to you _why it might have value.


----------



## Brendan Burgess

elacsaplau said:


> I'd be very interested to understand when BTC attained bubble price levels.



This is not an easy question to answer.  It wasn't on the 5th March 2016. 

Bitcoin is worth nothing. 

So when people were giving away a pizza for 10 Bitcoins, Bitcoin was then overvalued. 

But at $1 or $10, it didn't really matter. 

It's clearly a bubble now.  It was always overvalued.  But it's a grey area between overvaluation and  a bubble.

Brendan


----------



## Brendan Burgess

TheBigShort said:


> This is wholly disingenuous. You have a vested interest in trying to persuade people to sell.



Not at all. 

Bitcoin is worth nothing. 

As someone who has spreadbet on Betcoin to fall, I do want it to fall to zero ASAP. 

I think that the discussion on Askaboutmoney will help a few people, but it won't affect the price of Bitcoin. 

Brendan


----------



## ant dee

Brendan Burgess said:


> Bitcoin is worth nothing.


You write this so often, makes me wonder, who is it you are really trying to convince.


----------



## newtothis

Brendan Burgess said:


> Bitcoin is worth nothing.



You keep repeating something that is factually incorrect.

What would you do if someone gave you 1,000 Bitcoin? I'm guessing you'd sell them pretty quickly. Now, if that happened, would you still think they are worth nothing and have no value? You seem completely blind to this, which I find more than a little baffling. Repeating "Bitcoin has no value" will not make it true, though maybe you're trying to convince yourself by repitition? 

Mind you, I guess like a broken clock that's right twice a day you may well be right at some point in the future: that time may be tomorrow, next month, next year or never. Pretty much the same can be said about any currency.


----------



## Brendan Burgess

newtothis said:


> What would you do if someone gave you 1,000 Bitcoin? I'm guessing you'd sell them pretty quickly.



Of course I would sell them immediately. They are worth nothing. But the price is $7,700. I have yesterday's Irish Times here. It's worth nothing. But if someone wants to give me $7,700 for it, then I will sell it to them.    If they can find a "greater fool" to pay them $50,000 for  yesterday's Irish Times at the end of the year, I won't begrudge them.

I do appreciate that telling creationists that they are wrong won't change their belief that the World was created by God 7,000 years ago. Telling Flat Earth theorists that they are wrong won't change their mind.  I think that Bitcoin should be a little bit different. It's just a financial decision.  I know that it's become a matter of faith to you. But I do expect that some of you will realise that the weight of evidence is just so overwhelmingly against your belief that you will either change them or at least take some of your profits, just in case those of us who tell you it's worth nothing might be right. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> It is also to stop people losing money through participating in the Bitcoin mania.



You are being disingenuous once more. You know I have made money on bitcoin, and others too.
If anyone had followed your advice on bitcoin from the get-go, that advice would have cost them.



Brendan Burgess said:


> As someone who has spreadbet on Betcoin to fall, I dot want it to fall to zero ASAP



Interestingly you deem it ok for yourself to risk money but not others, isnt that a tad patronising and hypocritical? 

Your dogged insistance that bitcoin is worthless and will return to zero is noted. But its your revelations of your spread bet strategy and considerations that I find most intriguing. 
You have a stop-loss at circa €34k and an initial cash-out strategy at €3k. Indicating a realisation at both ends of the bet you could get this wrong. 
Not only that, but perhaps with a little bit more than hindsight at play, you amazingly sensed that $20,000 would be the peak of its run _and _ you considered cashing out "as it fell to $6,000", which transpired to be the bottom of its bear-run. 
Unfortuately you dont appear to have profited from these insights, which may diminish the value of your other insights somewhat.


----------



## TheBigShort

Brendan Burgess said:


> Of course I would sell them immediately.



But you are already standing on a profit with bitcoin on your spreadbet? Why are you not cashing in 'immediately'?


----------



## Brendan Burgess

TheBigShort said:


> Not only that, but perhaps with a little bit more than hindsight at play, you amazingly sensed that $20,000 would be the peak of its run _and _ you considered cashing out "as it fell to $6,000", which transpired to be the bottom of its bear-run.



Hi Shortie

Have I not explained this to you before?

I will try again.

It's not possible to forecast the temporary movements of an irrationally priced thing such as Bitcoin. The madness of crowds is unpredictable.

So I did not identify the top or the bottom at the time.

I started the Alternative Investments Forum and wrote this
* Bitcoin is a clearly identifiable economic bubble*
  when Bitcoin was about $8,700 if I am reading the charts correctly.

I have said elsewhere, that had I paid attention to Bitcoin when it was $100 and if I had been able to short it, I would have done so. I would have had a stop loss at probably around $200, so I would have lost my bet.

The first post that I wrote about betting on it falling is December 12th when it was about $17,000. It took me another few weeks to find spread betting, find out how it works, and get the cash together. By that time it had fallen to $14,500.

So the timing of my bet has been good but not optimal.  I have also been lucky so far.  I could well have short sold at $100.

But this is so far. I have not won my bet until the money is in the bank.  While I am up at the moment, I am very risk conscious and I know that it could still rise to $34,500 and I would lose my bet.

In early February, there was a sharp fall over about the course of a week.  Of course anyone who had bet on it falling would consider cashing out. In particular, I remember having lunch with a friend of mine when it was around $6,000 and he suggested I should close out. He has reminded me of this recently. There is nothing magic about that.

If I had sold out at $6,000 I would have considered myself lucky when it rose again to $12,000.  But when it later falls to $3,000 I would regret it.

*Let me repeat in case you miss the key point: I can't predict the short term movements of Bitcoin or any other irrationally priced item.  
*
I can tell you that it will eventually fall to zero, but I don't know when.As you will see from the following record, I am betting on it falling below $5,000 by the end of the year, but I accept that I may lose this bet. 

Just for the record, here are my bets on Bitcoin

1) Sold short when it was $14,500 with a stop loss at $34,500 (For clarity, the actual stop loss is $24,500 as that was the maximum allowed by IG Index. I will reset it higher if Bitcoin rises above $14,500)
2) A small bet on Betfair in January at about 15/1 if I recall correctly for it to fall below $5,000 by end of January. Bet lost.
3) Various bets on Betfair for it to be below $5,000 by the end of 2018. Average odds 1.2/1.  I could cash out this at a small profit now.
4) A few bets with Paddy Power for it to be below $15,000 at the end of the year
5) I see that I placed two bets of €5 each on Betfair on 4th January. Both at 4/1. One that it would be below $5,000. The other that it would be above $50,000.  I don't know if the > $50,000 bet was an error or if it was related to this thread. 

I also considered other bets e.g. that Bitcoin would fall below $5,000 during 2018. The odds were too short though and I judged the end of year odds better. 

*So let me repeat, in case you missed the bit in bold above. I can't predict the short term movements of Bitcoin. 
*
Brendan


----------



## newtothis

Brendan Burgess said:


> Of course I would sell them immediately. They are worth nothing. But the price is $7,700. I have yesterday's Irish Times here. It's worth nothing. But if someone wants to give me $7,700 for it, then I will sell it to them.


Not true! You've just proved it's worth $7,000 to that person. If you have a whole collection of people who think the same (i.e. an open trading market, as in that for Bitcoin) and the market price is $7,000, then it's worth $7,000 by definition. If you want to believe it's worth nothing, that's fine - it's just your opinion. The facts speak differently. It's exactly like if you want to believe the earth is flat, then that's fine - it's what you believe, but the provable fact is that it's not.


----------



## TheBigShort

Brendan Burgess said:


> So let me repeat, in case you missed the bit in bold above. I can't predict the short term movements of Bitcoin.



But if someone gave you 1,000 bitcoin you would sell immediately because they are 'worth nothing'. 

You wouldnt consider holding onto any even though you admit its price could rise? 



Brendan Burgess said:


> 2) A small bet on Betfair in January at about 15/1 if I recall correctly for it to fall below $5,000 by end of January. Bet lost.



The way im reading all of this is that you are the one losing money on bitcoin. 
I do hope you take your own advice and cash out now.


----------



## TheBigShort

Brendan Burgess said:


> Let me repeat in case you miss the key point: I can't predict the short term movements of Bitcoin or any other irrationally priced item.



I agree, no-one can. But we can all take a guess, have a hunch, cant we? Sometimes those guesses, hunches, turn out to be spot on or very close. Most often they are not. 

In terms of your guesses, hunches etc with bitcoin, you were amazingly close to sensing its peak at $20,000 and so close to its bottom when considering cashing out at $6,000. 
I would have said this is amazing foresight, had it not been for the fact that you have shared this in hindsight. 

So, perhaps to be clear, bitcoin price trajectory is currently heading south. Do you have a sense of what price you might cash out at now? Are you considering any other price level at this point?


----------



## Brendan Burgess

TheBigShort said:


> I would have said this is amazing foresight, had it not been for the fact that you have shared this in hindsight.



Shortie

Did you read the post? I am telling you with hindsight that I would have sensed a peak and bet on it at $100. I am telling you that from the time I first said it was a bubble, it rose more than 100%.  I am not claiming any insight into its short term movements at all.



TheBigShort said:


> Do you have a sense of what price you might cash out at now? Are you considering any other price level at this point?



Check out this thread
*When to close out my short position on Bitcoin?*

Brendan


----------



## elacsaplau

Brendan Burgess said:


> This is not an easy question to answer.  It wasn't on the 5th March 2016.
> 
> Bitcoin is worth nothing.



I think it's fair enough to have different opinions.

Where I'm struggling with is the logic.

BTC has no value but when it was at c. $400 on the 5th March 2016 it was not in a bubble.

Arguing simultaneously that BTC is a bag of air and that at 400 bucks it wasn't in a bubble is flat earth stuff if ever I've heard it.


----------



## TheBigShort

Brendan Burgess said:


> had a sense that the $20,000 was the bubble which would suddenly burst and drop to zero.



Brendan, I can only go with what is put in front of me. I agree you have no more insight than anyone else into short-term price flucuations.
I am merely pointing out to you that your contradictory views. The above comment refers to the bubble bursting and going to zero. 
In another comment you stated that you considered cashing out at $6,000. Why would anyone consider cashing out at $6,000 when their senses are telling them that the bubble has burst and is going to zero?
Why would anyone consider cashing out at $6,000 when the trajectory of the price was very much in line with your overall stated position of bitcoin returning to zero?

All im saying is that there is a high level of irrationality in your postings about bitcoin price and value. To such an extent that it is yourself that has a recorded loss on bitcoin. 

Surely, you should heed your own advice now and cash out any profits before you lose more money?


----------



## Brendan Burgess

elacsaplau said:


> BTC has no value but when it was at c. $400 on the 5th March 2016 it was not in a bubble.



Hi elacs

Sorry for the confusion. I worded that badly.






What I was trying to say was "There wasn't a particular day e.g. 5th March 2016 when Bitcoin suddenly became a bubble. In other words, I am not saying that on 4th March, it was not a bubble. Then on the 5th March it was a bubble.

Bitcoin is worth nothing.

It was worth nothing at any time. That is very clear to anyone who looks at it with a cold eye which is very difficult for someone who has bought it and who is sitting on paper profits. 

As it was always worth nothing, it was always overpriced.

It was clearly in a bubble when I started writing about it in November. It's clearly in a bubble now.

When the bubble started is more a question of definition.


----------



## Brendan Burgess

TheBigShort said:


> Why would anyone consider cashing out at $6,000 when their senses are telling them that the bubble has burst and is going to zero?



How many times do I have to explain this?  It's clearly explained in the thread to which I referred you?

But I will try once more.

I cannot predict the madness of crowds.

When Bitcoin falls to $3,000, it does not mean that it will continue on in a straight line to zero. Bitcoin has staged dramatic recoveries before.

At $3,000, my maximum additional profit is $3,000. My potential loss from there is theoretically unlimited, subject to my stop loss. Bitcoin could fall to $3,000 and then rise again to $20,000 and continue on past my own loss limit of $34,500.

So at $3,000 I would be risking $31,500 to gain $3,000.  So I will probably cash out when it falls to $3,000. Not sure yet. Or as someone else suggested in that thread, I might cash out half of it.

The ideal thing for me would be to cash out at $3,000 and then see Bitcoin rise again to $20,000. And I would probably short sell again then.

Brendan


----------



## Brendan Burgess

TheBigShort said:


> Why would anyone consider cashing out at $6,000 when the trajectory of the price was very much in line with your overall stated position of bitcoin returning to zero?



I wonder would it help you to understand this point if I change the figures a bit. 

Let's say Bitcoin had hit $40,000 but had since dropped to $4. 

I think that it's worth nothing, so in theory, I should short sell at $4 and collect my money when it goes to zero. 

But it could stage a recovery.  My maximum profit would be $4 and my potential loss would be $40,000. 

Shortie - thanks for pushing me on this. My repeated attempts to explain it to you has clarified it a bit in my own mind. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> I think that it's worth nothing, so in theory, I should short sell at $4 and collect my money when it goes to zero.
> 
> But it could stage a recovery. My maximum profit would be $4 and my potential loss would be $40,000.



You could do that, and thats what could happen - buts thats not what you have done, and that is not what has happened. 
It just further implies more irrational thinking on your part.

I would hope you take on board your own advice and cash out now, in case you lose more money on bitcoin.


----------



## Duke of Marmalade

I am going to address the question in the title of the thread.

My first observation is that after all the "hot air" nobody appears to have changed sides, indeed possibly the debate has become more entrenched, reminding me of the NI situation or the Leave/Remain discussion in UK or indeed the Abortion debate in RoI.

When I entered this forum I had a vague sense of what bitcoin was and whilst skeptical I was of a fairly open mind.  I guessed that some beautiful and very scarce mathematical objects were involved.  Thanks in particular to the efforts of _fp _I am now considerably better informed.  But _tecate _has also been helpful.  Whilst he clearly is more part of the religious wing of the community than _fp_, nonetheless he knows his onions.  Amateur followers should take note of _tecate's _warnings on Tether and take special note that he is not holding bitcoin at the moment.

Any way, I digress.  What I now find is that far from a thing of beauty bitcoin consists of the ugliest mathematics known to Man.  Whilst hash cryptography is of mild mathematical interest, the performing of billions of trial and error hash puzzles with zero intellectual input is frankly obscene.

But the real eye opener for me is the fact that there are thousands of cryptos including bitcoin offspring.  I definitely thought bitcoin was something unique before I joined this discussion.  To see online exchanges with lists of cryptos all trading on a continuous basis and with so called "market caps" which a medium sized enterprise would give a right arm for is mind boggling.  I know there are those who see this as evidence of the indomitable human spirit attempting to throw off the chains of a corrupt central banking elite.  To me it is a sordid spectacle of avarice with people trying to make vast fortunes out of nothing.  They must mostly be fraudulent, though some will be motivated by religious fervour.  I don't think bitcoin was originally fraudulent - you would hardly launch a fraud advertising that 2 pizza trade for 10,000 bitcoin

Of course I have enjoyed the banter and the debate, I reckon it accounts for as much as 25% of my posts over the last 20 years.  And I am €1,500 the richer due to following the _Boss _tip to short.


----------



## newtothis

Brendan Burgess said:


> I think that it's worth nothing...



Progress at last: an admission it's an opinion, not a fact! 

People believe all sorts of strange things: the earth is flat, the moon landings are fake, Trump is a great president, Ryan Tubridy is entertaining, the list goes on.......


----------



## elacsaplau

newtothis said:


> Progress at last: an admission it's an opinion, not a fact!
> 
> People believe all sorts of strange things: the earth is flat, the moon landings are fake, Trump is a great president, Ryan Tubridy is entertaining, the list goes on.......



Ah, come on now, Negotiator.

I can just about go along with the first two - but Trump & Tubs - that's a real stretch!


----------



## Brendan Burgess

Duke of Marmalade said:


> They must mostly be fraudulent, though some will be motivated by religious fervour. I don't think bitcoin was originally fraudulent



Hi Duke

I presume you are not suggesting that Bitcoin itself is fraudulent?  I don't think that normal trading in it is either. 

Of course fraudsters are piggybacking on it and launching fraudulent cryptos.  And there are people conning others into parting with real money to buy Bitcoin, but they are not actually buying Bitcoin. 

Brendan


----------



## Negotiator

elacsaplau said:


> Ah, come on now, Negotiator.
> 
> I can just about go along with the first two - but Trump & Tubs - that's a real stretch!



Good to see I'm not the only one mistaking identities on here this morning! 

Don't worry elacsaplau......it's still too early on a Sunday the day after Paddy's so all is forgiven!


----------



## newtothis

elacsaplau said:


> Ah, come on now, Negotiator.



Fake news! Fake news!



elacsaplau said:


> I can just about go along with the first two - but Trump & Tubs - that's a real stretch!



Look to the evidence! Look to the evidence! But I guess the point is belief has nothing to do with evidence......


----------



## newtothis

To pick up on the title of the thread, here’s where I am on Bitcoin:

-  People believe the craziest things, even when all the evidence points to the contrary. Declaring Bitcoin to have no value whilst simultaneously betting its value will drop below a certain point at best points to a certain cognitive dissonance, at worst opens you up to ridicule.

-  I haven’t heard anyone arguing it isn’t in a bubble at the moment, and I wouldn’t disagree with anyone on that, if only on the basis of walking like a duck, sounding like a duck….. So, maybe this is something we can all agree on?

-  Just because it costs little to create and nothing to own doesn’t make it unusable as a currency: a €50 note has pretty much the same attributes.

-  Because of its price volatility, it’s currently pretty much (completely?) useless as a currency: something more typically seen in cases of hyper-inflation, where going to a baker to buy bread with a wheelbarrow full of cash only to be told: “Sorry, mate, you need a bigger wheelbarrow…” neatly illustrates the problem. If you don’t know when you acquire your currency how much it’s likely to be worth by the time you get to spend it, you have a problem.

-  I believe therefore that Bitcoin has entered the Chocolate Teapot phase of its existence: pretty much useless as its stated purpose (for now) but retaining value as something else; the said Chocolate Teapot is a poor carrier of tea but depending on the quality of the chocolate a very tasty treat.

-  In the same way, Bitcoin may have lost its value as a currency, but it’s gained it as a speculative form of investment, though not one for the faint hearted. There’s nothing unusual in this where something designed for having value for one thing (e.g. a Ferrari GTO which was designed for and had value as a race winning car) has ended up the same way (a carrier for speculative investment).

-  Bitcoin has some useful attributes to act as a currency (for example, probably more secure from being faked then cash) and in its early days certainly acted like one before the price started to rocket, but then there’s any number of things that have acted as currency over the centuries. They’re all dependent on a common view of their value, ease of holding and trading and so on, but most of all confidence.

-  Bitcoin could escape its price bubble; if and when it does it could remain as something for price speculation, it could revert to acting as a currency, it could become the major currency, it could be outlawed, who knows? I don’t, so I think I’ll go ask an economist or two, who seem to enjoy predicting the future……


----------



## Brendan Burgess

Hi newtothis

Excellent post. 

You seem to be suggesting that Bitcoin has no use at all except that Greater Fools will put a price on it. 

Bitcoin is worthless. 

It's price is $7,400 and will fall to match its worth. 

Brendan


----------



## Negotiator

Brendan Burgess said:


> It's price is $7,400 and will fall to match its worth.


 
Am I detecting a little cockinness in your tone there Brendan while Bitcoin is tanking?   You went very quiet while it rallied back up to $12k!


----------



## newtothis

Brendan Burgess said:


> Hi newtothis
> 
> Excellent post.



Thanks!



Brendan Burgess said:


> You seem to be suggesting that Bitcoin has no use at all except that Greater Fools will put a price on it.



As the moment, yes, though I used slightly different language: a "speculative investment...not for the faint hearted". It's quite possible that if and when the volatility calms down it may revert to being a useful currency, but that's speculation. As I suggested: maybe consult an economist for guidance about the future? or two if you want more than one opinion?




Brendan Burgess said:


> Bitcoin is worthless.
> 
> It's price is $7,400 and will fall to match its worth.



Here's where my feeble brain can't cope with the cognitive dissonance. On planet newtothis "worth" means "having a particular value, especially in money" (the quote is from planet Earth's Cambridge dictionary), so saying it's worthless and in the next sentence pointing out its price is $7,400 has me flummoxed. Price is the very thing that establishes something has value.

Just out of interest, what do the terms "value" and "worth" mean on planet BB?


----------



## Brendan Burgess

Hi Negotiator

My position has not changed since I first made this post on 25 November last: 
* Bitcoin is a clearly identifiable economic bubble*

Bitcoin was worth nothing then. 
Nothing at all has changed in the meantime. 
No one has provided any analysis or calculations to show what its value is. 

My position would change if the circumstances changed e.g. Trump decides to peg Bitcoin to the dollar. 

If someone comes up with calculations to estimate its value or a range of values, my position could change. But I am not expecting that. 

Not sure what you mean  by cockiness.  I have always said it was worth nothing. In many areas of life and finance there are areas of uncertainty and I will offer a "pros and cons" view for example, I believe that shares are a better investment than property but I will list out the pros and cons of each.

But there is no room for doubt here. Bitcoin is worth nothing. And there really is no point in doing an "on the one hand..." polite type of post. 

That is an interesting observation that I posted less when Bitcoin was recovering. I was not aware of it. 

I am posting a lot today, because what else would I be doing in this weather and I am responding to some very active posters. 

Brendan


----------



## newtothis

Brendan Burgess said:


> Bitcoin was worth nothing then.
> Nothing at all has changed in the meantime.
> No one has provided any analysis or calculations to show what its value is.



I note the partial change of terminology (from "value" to "worth"), though sadly you seem to have reverted form stating an opinion, however bizarre ("I think that it's worth nothing"), to a declarative statements that conflict with reality.

It *is* worth something: it's being bought and sold all the time! You don't need any analysis or calculations to see how valuable it is: just sell some and the price will tell you!


----------



## elacsaplau

This and other threads remind me about of the old one that the Holy Roman Empire was neither holy nor Roman.

"Bitcoin being in a clearly identifiable bubble"? It seems to me, and by Brendan's own admission, that when it obtained bubble status is neither clear nor identifiable! 



Brendan Burgess said:


> No one has provided any analysis or calculations to show what its value is.



No one has provided any analysis or calculations to show when BTC's pricing entered bubble country.

[I've lost track of the number of times that I've asked this question. This question was always conveniently ignored until today. Today's answer from Brendan did not illuminate a whole lot.]


----------



## Negotiator

Brendan Burgess said:


> I am posting a lot today, because what else would I be doing in this weather and I am responding to some very active posters.



Fair enough....I guess we're all in the same boat in that regard. 

You've defo been consistent in saying Bitcoin is going to zero, in fact there's no getting away from that around here! Haha


----------



## Brendan Burgess

It will probably cost you a lot of money trying to win arguments about terminology rather than looking at what is actually happening and what will happen in the future. 

Let's try to use some neutral terminology. 

1) People are paying $7,500 today for one Bitcoin. 
2) There is absolutely no basis for this price whatsoever 
3) At some stage in the future, the people who are paying $7,500 today will not be able to sell them for anything more than cents, if they can sell them at all. 
4)They will lose $7,500 or so per Bitcoin purchased today if they still own them. 

You may redefine the meaning of worth or value to mean price.  I suppose that is your choice. But it's dangerous. It would be more helpful if you were able to distinguish between price and value. 

Brendan


----------



## Brendan Burgess

elacsaplau said:


> No one has provided any analysis or calculations to show when BTC's pricing entered bubble country.
> 
> [I've lost track of the number of times that I've asked this question. This question was always conveniently ignored until today. Today's answer from Brendan did not illuminate a whole lot.]



elacs - I don't answer every question asked, because some of them are of no relevance whatsoever.

One of the issues with bubbles is that they are often not identifiable during the bubble phase.

Take the Irish property bubble.  It went from fairly valued to overvalued to bubble.  But it was always worth something. I don't think that you can say what day it went from overvaluation to bubble.

Bitcoin is different. Bitcoin was never worth anything. So it didn't go from being fairly valued to overvalued to bubble.

But let me stress again.  Look at what is happening in reality.  You are in danger of winning arguments about terminology but losing a lot of money by ignoring what is happening in reality.

Let me repeat:

1) People are paying $7,500 today for one Bitcoin.
2) There is absolutely no basis for this price whatsoever- I would call this a bubble.  Someone else might call it "overvalued". 
3) At some stage in the future, the people who are paying $7,500 today will not be able to sell them for anything more than cents, if they can sell them at all.
4)They will lose $7,500 or so per Bitcoin purchased today if they still own them. They will get no satisfaction from saying "Brendan may well have been right that it was overvalued but he was wrong in calling it a "bubble"."

In a similar vein,  If Bitcoin settles down at 50 cents for a long-time. It might even be pegged to the dollar. You will great pleasure from saying that I was proved wrong because I said it was worth "nothing".  But you will have lost a lot of money. 

Brendan


----------



## elacsaplau

So - are you saying - yes or no please - that it's price was in bubble territory at $10. It's a straight question.


----------



## Brendan Burgess

It's a meaningless question of language and of absolutely no implication. 

It was overvalued at $10.  

Brendan


----------



## elacsaplau

Why am I not surprised that I wouldn't get a straight answer?


----------



## demoivre

Where we are is even more threads on Bitcoin which must be an AAM record. I'm here a long time and I've never seen so many different threads on the same topic, most of which are/have gone around in circles.


----------



## Brendan Burgess

Hi elacs

You must have missed this post. 

https://www.askaboutmoney.com/threa...nths-of-discussion.207613/page-4#post-1560685

I tried to explain it to you. But it's a long one and not really capable of answering in one word or one date. 

Brendan


----------



## newtothis

Brendan Burgess said:


> It will probably cost you a lot of money trying to win arguments about terminology rather than looking at what is actually happening and what will happen in the future.


Nope - unlike you, I haven't spent anything on speculating on the value of Bitcoin, and have no intention of doing so, so I've nothing to gain or loose. I've already made the point I've no idea what will happen in the future, and don't see much point in speculating, given I've nothing to loose or gain.



Brendan Burgess said:


> Let's try to use some neutral terminology.
> 
> 1) People are paying $7,500 today for one Bitcoin.


If you say so: I've no interest in how much they're paying, certainly not enough to bother to look it up.



Brendan Burgess said:


> 2) There is absolutely no basis for this price whatsoever


Yes there is: assuming the figure is acurate, it's the price it's being bought and sold at by real people with real cash. Same as the basis for believing the cost of a pint is whatever it is: it's what real people are paying real cash for it.


Brendan Burgess said:


> 3) At some stage in the future, the people who are paying $7,500 today will not be able to sell them for anything more than cents, if they can sell them at all.


In your opinion: clearly not in the opinion of many others.


Brendan Burgess said:


> 4)They will lose $7,500 or so per Bitcoin purchased today if they still own them.


In your opinion......


Brendan Burgess said:


> You may redefine the meaning of worth or value to mean price.


No I didn't! I literally quoted the accepted definition from a dictionary: it's you who doesn't seem to understand what they mean. I've asked a couple of times what you *think* they mean, but you haven't bothered to reply.



Brendan Burgess said:


> I suppose that is your choice. But it's dangerous.


How is it dangerours to use words according to their accepted meaning? I'd say it's dangerous, or at best confusing, to choose your own meaning: how on earth are people expected to communicate if they make up their own meanings? I guess that's the meaning of "alternative facts"!




Brendan Burgess said:


> It would be more helpful if you were able to distinguish between price and value.


I am able; it's you who seem to have the difficulty in understanding what they mean: maybe you could explain to us what you think they mean, because using their conventional meanings your statements make no sense. How can something of no value sell for $7,500?​


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## ant dee

Brendan Burgess said:


> Trump decides to peg Bitcoin to the dollar.


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## elacsaplau

Brendan,

In post 45, you correctly pointed out that there may come a point where shorting BTC would be a bad bet - i.e. an unfavourable bet or as I described it at the outset of this debate an asymmetric bet not in your favour.

The corollary of this is that there may also a point where holding (or going long) BTC would be a good bet - i.e. a favourable bet or asymmetric bet in one's favour.

This price or inflection point changes over time and it is not an exact science.

My point at the outset of this debate was that for many years I thought the odds, in holding BTC and based on its evolving price, were in my favour. You didn't acknowledge this a few months ago and I could never understand why. Do you acknowledge this now - it's a simple corollary of what you have said yourself?


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## Gus1970

Duke of Marmalade said:


> Let me try another metaphor for the point I was trying to make. Imagine someone invented a technology for transferring grains of sand instantly all over the World, the grain of sand being the "asset". That would be a truly amazing technology and one could see a future where it might be able to "beam me up Scottie". But as it stands it delivers an asset that is worthless.



How can that be worthless if i can organise a beach party in my backyard the moment that the sun shines? Supply is higher in sand available, but certainly not worthless


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## Duke of Marmalade

Gus1970 said:


> How can that be worthless if i can organise a beach party in my backyard the moment that the sun shines? Supply is higher in sand available, but certainly not worthless


You would need a Canon lawyer to post in these parts.  So a grain of sand is not worthless.  Can I for the sake of saving my finger tips from typing have it understood that when in future I say "worthless" I mean "next to worthless".


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## TheBigShort

Duke of Marmalade said:


> You would need a Canon lawyer to post in these parts.  So a grain of sand is not worthless.  Can I for the sake of saving my finger tips from typing have it understood that when in future I say "worthless" I mean "next to worthless".



The grain of sand is worthless, or next to worthless, because there is an abundant supply beyond any reasonable, or even irrational demand for it.
If it were scarce, sun holiday resorts would compete over it and in turn a market would set with buyers and sellers jacking up the price.
And considering the technology behind your invention, think of the value of not having sand in your ham sandwhiches at the beach anymore!


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## Brendan Burgess

elacsaplau said:


> In post 45, you correctly pointed out that there may come a point where shorting BTC would be a bad bet - i.e. an unfavourable bet or as I described it at the outset of this debate an asymmetric bet not in your favour.
> 
> The corollary of this is that there may also a point where holding (or going long) BTC would be a good bet - i.e. a favourable bet or asymmetric bet in one's favour.



Hi elacs - here is post 45



Brendan Burgess said:


> Let's say Bitcoin had hit $40,000 but had since dropped to $4.
> 
> I think that it's worth nothing, so in theory, I should short sell at $4 and collect my money when it goes to zero.
> 
> But it could stage a recovery.  My maximum profit would be $4 and my potential loss would be $40,000.






> The corollary of this is that there may also a point where holding (or going long) BTC would be a good bet



I am not sure that this follows. Genuinely, I don't know. So it's a very good question.

I have sold Bitcoin short at $14,500

I am minded to close out at $3,000 and pocket the winnings of $11,500.

I could hold out until it falls to $1,000 and increase my winnings to $13,500

Let's assume I do this.

Then let's assume Bitcoin falls to $4.

Should I take a punt buying 1,000 coins at $4?

I would expect to lose that bet as I expect that Bitcoin will fall to zero.

But might it be worth betting on a dead cat bounce?

I just don't know.

It's one thing exploiting the madness of crowds selling at $14,500 when you know it's worth nothing.

It's quite another thing buying something you know is worth nothing on the grounds that the crowd might be mad enough again to push it back up to $100.

Brendan


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## elacsaplau

Brendan Burgess said:


> I am not sure that this follows. Genuinely, I don't know.



Well, I actually accept that the corollary isn't quite water-tight but it's almost there. It satisfies me because, compared with the expected volatility of BTC, it's definitely close enough.

Have a think about it. You are now a dab hand at Betfair - so let's use it for a simple example. Take a two horse race, if I back an outcome at 3.0 or lay the opposite outcome at 1.5, is there any material difference especially when what is being bet on is so explosive?


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## Duke of Marmalade

The bit that still has me scratching my head is the relevance of the unit.  $10,000 sounds an awful lot for one bitcoin.  But in fact it is only 1% of 1 cent for one satoshi.  If the exchanges were quoting in satoshi rather than bitcoin would it look so overpriced?

What really matters I suppose is the total market cap of bitcoin.  This is around $160 billion.  Are we really expected to believe that "miners" solving brain dead hash puzzles have added the same value to the human race as, say, 10 million new cars?


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## TheBigShort

I dont see it as adding value as much as reducing the value of fiat currency to the equivalent amount of $160bn.


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## ant dee

Technically, there is only one unit of account in the code and that is a satoshi. Its just that the wallets, exchanges and block explorers decide to aggregate and display them as Bitcoin


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## Brendan Burgess

elacsaplau said:


> Well, I actually accept that the corollary isn't quite water-tight but it's almost there.



Not sure that it is. 

But let's say there is a horse on Betfair at 1,000/1.  So I can bet €100 on it or lay €100. 

Even if I think it has virtually no chance of winning, I would not  make either bet although presumably one of them is good odds. 

So I can sell Bitcoin at $4 or buy one at $4.   There is something attractive about buying something at $4 even if it's worth nothing, because Greater Fools had once put a price of $20,000 on it. It would be very risky short selling it, even if it's worth nothing. 

It's not the same as, say, Ryanair shares. Say I can go long or short at €17.  I could go short and face the possibility that they rise to €170, but that would be a slow process and I would have time to get out. 

I would have sold Bitcoin short at $1,000 had I known about it.  But I would have lost my bet, because I would probably have set the stop loss at $2,000.   If I sold it short at $4, I would probably have to set the stop loss at $8.  So it would be a coin toss. 

I don't know if we have any other models to go by.  A worthless item rising from $1,000 to $20,000 over the course of a year. When it crashes towards zero, will it just grind to a halt, or will there be plenty of people buying it at $4 or $40 because of the hope value? 

Brendan


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## tecate

What the hell happened here over the weekend!  - you've all certainly been busy!



Duke of Marmalade said:


> I note that you are now adopting the _tecate (another early morning poster) _line that the community is not seeking to overturn the existing order.  In your case that would appear to be resignation to reality for it seems to me that if crypto did per chance blow the central banking conspiracy out of the water you would be in Shortie Paradise.


I don't know how many times you have to be told this but there are very few people that believe that Bitcoin / Crypto is going to replace FIAT in its entirety.  I would suggest that of those that do, they are pretty new to the space and don't have a full understanding of it.  However, you continue on with your assumption.
Bitcoin/Crypto does some things well - and FIAT has it's own merits.  Therefore, Crypto will canabalise what are today certain lucrative revenue streams of the banks or those allied to them.  As regards the 'resignation' remark, I'd have to have changed my position for this to be relevant...that's not the case.  I view myself as a pragmatist.

As a small example of the assumptions you are making, I am NOT an 'early morning poster'.  It may appear that way - but that's not the case.  Sometimes folks draw the wrong conclusions...the other recent example being the accusation that me and BigShort were the same poster!


Duke of Marmalade said:


> One more for the moment.  Bitcoin is *not *a technology.  Blockchain is a technology.


Someone has already corrected you on this - but I'll reinforce the point.  You cannot distinguish between Bitcoin and the *Bitcoin* blockchain.  They are one and the same thing - and yes, it is a technological advancement.
Can technology be copied ?  Sure.  You have been invited countless times to setup Marmalade coin - see how that fares as I can assure you that the argument that Bitcoin is not finite because we can have 1500 odd coins is nonsense.  Any without merit (of which there are a shed load) will eventually disappear.  Those that do have merit will carry out - but they may have a completely different application to bitcoin.  Those that have merit and wish to supercede bitcoin may well do so...or again, if they don't, they will fall by the wayside.  Bottom line - having loads of crypto's does not dilute the finite resource that is bitcoin.
You could use the same analogy with FIAT.  If you started a new FIAT tomorrow, does it dilute the strength of the USD or Euro?




Duke of Marmalade said:


> But _tecate _has also been helpful.  Whilst he clearly is more part of the religious wing of the community than _fp_, nonetheless he knows his onions.  Amateur followers should take note of _tecate's _warnings on Tether and take special note that he is not holding bitcoin at the moment.


Firstly, I'm a pragmatist.  I'm NEVER religious about anything....perish the thought!  Otherwise, thank you for suggesting that I 'know my onions'....however, regrettably I am only scratching the surface in my knowledge of crypto generally...I either have not got the understanding or can't keep up as the space is moving at such a rate of noughts.
You are right to say that I do have concerns around Tether.  It's one thing that I disagree with Negotiator on.  Market cap includes BTC that has been lost (of which we don't know how much but it considered to be sizeable), that which is being HODL'ed and generally not in circulation.   My concern is that the injection of btc via Tether affects the liquidity of BTC i.e. the money that is ACTUALLY being swirled around.  I hope I'm wrong but it seems that way to me.
Furthermore, whichever point of view is relevant in that respect, it will not mean the end of the btc project.  It may burn investors once it is finally outed (if ever?...as I can't see the mechanism for that right now).  But you're quite right - I simply don't feel comfortable holding one btc until that issue is somehow dealt with.


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## Duke of Marmalade

tecate said:


> As regards the 'resignation' remark, I'd have to have changed my position for this to be relevant...that's not the case.  I view myself as a pragmatist.
> 
> As a small example of the assumptions you are making, I am NOT an 'early morning poster'


I was addressing B/S when I said he was resigned to not achieving his ultimate dream of bringing down the corrupt central bank elites.  I note that you have got similarly mixed up before.

Yes, I realise it is not morning in Columbia or wherever you happen to be.


tecate said:


> Someone has already corrected you on this - but I'll reinforce the point.  You cannot distinguish between Bitcoin and the *Bitcoin* blockchain.  They are one and the same thing - and yes, it is a technological advancement.
> Can technology be copied ?  Sure.  You have been invited countless times to setup Marmalade coin - see how that fares as I can assure you that the argument that Bitcoin is not finite because we can have 1500 odd coins is nonsense.  Any without merit (of which there are a shed load) will eventually disappear.  Those that do have merit will carry out - but they may have a completely different application to bitcoin.  Those that have merit and wish to supercede bitcoin may well do so...or again, if they don't, they will fall by the wayside.  Bottom line - having loads of crypto's does not dilute the finite resource that is bitcoin.
> You could use the same analogy with FIAT.  If you started a new FIAT tomorrow, does it dilute the strength of the USD or Euro?


I wasn't making the lack of scarcity argument.  B/S had indicated that he admired the technology that is bitcoin.  I elsewhere drew a more graphic metaphor.  A grain of sand does not get value because some marvelous technology magics it instantly from the Sahara to my living room.  A digital entry on a Smartphone similarly does not get value because of the technology that delivered it.


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## TheBigShort

Duke of Marmalade said:


> I was addressing B/S when I said he was resigned to not achieving his ultimate dream of bringing down the corrupt central bank elites. I note that you have got similarly mixed up before.



From the guy who pulled out a time-travelling sand machine as a comeback to advance his arguement.


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## tecate

Duke of Marmalade said:


> I was addressing B/S when I said he was resigned to not achieving his ultimate dream of bringing down the corrupt central bank elites.  I note that you have got similarly mixed up before.


I wasn't aware that was his position so my apologies.  In my defence, there's been so much hyperbole, is it any wonder if I find the dialogue confusing.



Duke of Marmalade said:


> wasn't making the lack of scarcity argument.


Fair enough.  If you never have done so (?).  However, many here continue to do so on an ongoing basis.  It's an argument that doesn't hold any water.


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## Duke of Marmalade

tecate said:


> Fair enough.  If you never have done so (?).  However, many here continue to do so on an ongoing basis.  It's an argument that doesn't hold any water.


Well I have made that argument but not on this occasion.  I do think the proliferation of cryptos and offspring forks detracts from bitcoin.


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## TheBigShort

tecate said:


> I wasn't aware that was his position so my apologies



Its not. On occasion, in on-line discussions, the tendency to exaggerate, inflate and/or side-step points raised is not an uncommon trait of those discussions. Sticking the facts cant be difficult for some, albeit most regular posters can be guilty of this at some point I assume. Some more so than others.


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