Why is Bitcoin "digital gold" crashing right now?

[Brendan Burgess]

Hmm, dont know about that.

I agree. No one really wins these arguments until the outcome is known.

Tecate thinks I am irrational.

I think he is irrational.

It's not really possible to reach an agreement.

Brendan

 

[tecate]

That tells us all we need to know.

Not so fast Brendan. I believe where we left off was that you were going to tell us what calculation someone should use to determine the fair price of gold.

What is the calculation for determining the faIr price of gold?

it seems that you have no way at all of working out whether Bitcoin is $1, $100 or $10,000 or $1 million

It seems that you have no way at all of working out whether Bitcoin Gold is $1, $100 or $10,000 or $1 million.

Who knew? . It seems that the two scarce assets have even more in common than we ever imagined.

 

[Fella]

I agree. No one really wins these arguments until the outcome is known.

Tecate thinks I am irrational.

I think he is irrational.

It's not really possible to reach an agreement.

Brendan

I can admire @tecate for his rational arguments. He is very well educated on Bitcoin.
I think at very least you should either educate yourself on Bitcoin or not post more in the thread because your input is not helping anyone reading the thread.
To be honest the bag of hot air and toenails chat becomes boring after a while , only @Duke of Marmalade who seems educated on Bitcoin but also seems to fuel your postings with "boss" your toenails analogy is funny , it's not funny it's pointless.
Askaboutmoney should be a place to actually learn stuff about cryptocurrency not read childish posts that you and Duke are posting back and forth. If I want to read forum tit for tats I'll go to boards.ie

 

[Duke of Marmalade]

Hmm, dont know about that.

Have to say, for a subject I admit to know nothing about. Im fascinated. Great arguments on both sides.

I suppose I should drop the attempts at humour, AAM not a good medium for that. I thought my protests of total objectivity would be a clue. Nevertheless the Boss had come up with some clever little demolitions of the infallibility of tecate's 7 tests.

 

[Brendan Burgess]

What is the calculation for determining the faIr price of gold?

tecate

Do you know how completely irrational that is?

You are saying, that not only does the value of Bitcoin depend on the price of gold but it also depends on what my view of the price of gold is.

I have never bought gold or owned gold - maybe years ago I bought a gold cross as a present.

I have no idea of the price of gold. I have little interest in it. I am neither going to buy it nor short it.

You seem unable to determine a value for Bitcoin.

And it's clear why. It's not worth anything.

It might be useful just as a cheque book is useful. But it's not worth anything

Brendan

 

[tecate]

Nevertheless the Boss had come up with some clever little demolitions of tecate's 7 tests.

The seven universally recognised characteristics of a good store of value? If you call ignoring them and not assessing the nonsensical things that Brendan likens Bitcoin to on this thread clever....

You are saying, that not only does the value of Bitcoin depend on the price of gold but it also depends on what my view of the price of gold is.

Bitcoin is an asset. Gold is an asset. You are suggesting that if there isn't a neat and tidy calculation (like you might use P/E ratio to try to determine the fair value of an equity stock) for Bitcoin, then the conclusion you draw is that Bitcoin has no value?
On that basis, I am asking you to let us all know what neat little formula can be used to determine the fair price of gold.

If there isn't one, have we just stumbled upon an amazing discovery? Is the $9 trillion gold market a complete sham?

I have no idea of the price of gold. I have little interest in it.

The title of this very thread alludes to the development of Bitcoin as 'digital gold'. It's entirely relevant to compare them.

Double Standards
So far you've presented with three double standards in this discussion:

1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.
2. The core of your argument is that Bitcoin has zero intrinsic value* and on that basis alone you say that it is worth zero. However, you don't apply the same standard to intrinsically valueless FIAT money (i.e. €uro, USD, GBP, etc.).
3. In the absence of a neat formula to determine the fair price of Bitcoin, you say that it has zero value. Yet when I ask you to apply the same standard to gold, you tell me that's irrational.

It might be useful just as a cheque book is useful. But it's not worth anything

As useful as a cheque book? I'd really encourage you to think about rolling back on that as it will age just about as well as Krugman's fax machine gaffe. Let me take that a step further - it had aged before you had written it - even outdoing Krugman!

The Bitcoin Whitepaper can be found here. I would encourage you to read it.



*Bitcoin does actually have intrinsic value as it's an energy standard.

 

[Sunny]

This is fast becoming another Tesla thread which I see has also raised its ugly head again. Arguing about the value of bitcoin is pointless. I reckon I am in a majority of people who simply do not understand enough about digital currency, does not trust digital currency like bitcoin and is completely indifferent to it. Just like the majority of people are also completely indifferent to the direction of other asset classes. Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does. All people are doing is trying to make money by speculating. Good luck to you but that's all it is. Speculation. It doesn't mean bitcoin will ever be widely accepted. Doesn't mean bitcoin will be the digital asset that survives in the long term if any of them do. Bitcoin at 9000 doesnt mean bitcoin is brilliant and is going to change the world. Bitcoin at 0 doesnt mean the concept is worthless. But that it is all it is. It is just a concept that is being used in some small narrow experimental way. Depsite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......

 

[tecate]

Arguing about the value of bitcoin is pointless.

I think it's a very worthwhile discussion to have - but you said that you're indifferent to it. If that's the case, maybe just unfollow the thread?

Just like the majority of people are also completely indifferent to the direction of other asset classes.

Ok, so why would they click on a thread that is specifically about said subject?

Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does.

See above.

It doesn't mean bitcoin will ever be widely accepted.

A couple of things. Bitcoin doesn't have to appeal to the mass market to continue to develop and establish itself as a store of value or digital gold. As regards day to day transactional use, sure there's a speculation as to whether it will continue to develop a broader appeal in that context. What of it? There is speculative interest in so many things but always with new technology/innovation.

Despite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......

Presumably anyone that partakes in this discussion has an interest - otherwise why would they waste anyones time in posting here.
Secondly, what major tech doesn't take years? How long did it take to get from Arpanet to internet? How long has AI been knocking around and why are we only seeing the results of it more recently? Mobile tech? IoT?

Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......

This is the 'alternative investments' sub-forum and its being considered and discussed here in that context. If you are bored or disinterested then why open the thread?

 

[Firefly]

This is fast becoming another Tesla thread which I see has also raised its ugly head again. Arguing about the value of bitcoin is pointless. I reckon I am in a majority of people who simply do not understand enough about digital currency, does not trust digital currency like bitcoin and is completely indifferent to it. Just like the majority of people are also completely indifferent to the direction of other asset classes. Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does. All people are doing is trying to make money by speculating. Good luck to you but that's all it is. Speculation. It doesn't mean bitcoin will ever be widely accepted. Doesn't mean bitcoin will be the digital asset that survives in the long term if any of them do. Bitcoin at 9000 doesnt mean bitcoin is brilliant and is going to change the world. Bitcoin at 0 doesnt mean the concept is worthless. But that it is all it is. It is just a concept that is being used in some small narrow experimental way. Depsite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......

That's a super post and I agree 100%

There may be some edge cases but until lots and lots of people start using Bitcoin to buy stuff I can't see how lots and lots of people will trust it as a store of value

 

[Duke of Marmalade]

1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.

I think it was I who did the miscounting. You actually gave 8 UACs. However, I decided to check with the fountain of all wisdom:

To fulfill its various functions, money must have certain properties:[28]

• Fungibility: its individual units must be capable of mutual substitution (i.e., interchangeability).
• Durability: able to withstand repeated use.
• Divisibility: divisible to small units.
• Portability: easily carried and transported.
• Cognizability: its value must be easily identified.
• Scarcity: its supply in circulation must be limited.

So there is in fact only 6. But strangely they do not coincide with your UACs which either means Wiki has made a rare booboo or you are mistaken in the universality of your tests. Anyway you do agree on 5 of the tests. You decided to leave out "Cognizablity:its value must be easily identified". Are you sure you were running a fair contest? I doubt that anyone could describe a currency which gyrates between 4,000 and 13,000 in the previous 52 weeks as having a value that can be easily identified. I know you have excused the laddie for sowing a few adolescent wild oats.

You included 3 more.
Verifiable. What does that mean?
Censorship Resistant whatever that means I wouldn't dare call it cultist. Anyway, poor old Fiat got completely beaten up by our hero in this category.
Established History this gave a consolation prize for the old guy, I presume to convince the grandstands of the overall fairness of the contest.

As useful as a cheque book? I'd really encourage you to think about rolling back on that as it will age just about as well as Krugman's fax machine gaffe. Let me take that a step further - it had aged before you had written it - even outdoing Krugman!

The Bitcoin Whitepaper can be found here. I would encourage you to read it.

I think you have mixed up your files a bit there. It was the Boss who referenced cheque books and I don't think he deserves to be beaten up by Krugman's Fax Machine. I have read the White Paper. I was really excited as I turned the pages and then came the big let down. Satoshi admits the great hole in his whole scheme. Where is the value in a digital entry, no matter how scarce, verifiable or censorship resistant it might be?

 

[Sunny]

I think it's a very worthwhile discussion to have - but you said that you're indifferent to it. If that's the case, maybe just unfollow the thread?

Ok, so why would they click on a thread that is specifically about said subject?

See above.


A couple of things. Bitcoin doesn't have to appeal to the mass market to continue to develop and establish itself as a store of value or digital gold. As regards day to day transnational use, sure there's a speculation as to whether it will continue to develop a broader appeal in that context. What of it? There is speculative interest in so many things but always with new technology/innovation.

Presumably anyone that partakes in this discussion has an interest - otherwise why would they waste anyones time in posting here.
Secondly, what major tech doesn't take years? How long did it take to get from Arpanet to internet? How long has AI been knocking around and why are we only seeing the results of it more recently? Mobile tech? IoT?

This is the 'alternative investments' sub-forum and its being considered and discussed here in that context. If you are bored or disinterested then why open the thread?

Sorry, I didn't realise I wasn't worthy to open or comment on a thread. Excuse my ignorance. I will leave it to the experts like yourself

 

[Brendan Burgess]

Double Standards
So far you've presented with three double standards in this discussion:

1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.
2. The core of your argument is that Bitcoin has zero intrinsic value* and on that basis alone you say that it is worth zero. However, you don't apply the same standard to intrinsically valueless FIAT money (i.e. €uro, USD, GBP, etc.).
3. In the absence of a neat formula to determine the fair price of Bitcoin, you say that it has zero value. Yet when I ask you to apply the same standard to gold, you tell me that's irrational.

Hi tecate

I will ask you again. How do you arrive at a value of $10,000 for one bitcoin?

It's not a trick question. It's not a hypothetical question.

I do not know how to value gold and I have no interest or stake in its value.
I share your concerns about fiat currencies. But if they are worthless, that does not make Bitcoin valuable. Or if it does, can you explain how it's calculated?

As I say, I have no interest or knowledge in the price of gold. I am very interested in the price of Bitcoin. I am planning to short it again when I have a bit of cash and it hits $10k.

But if someone can show me that it has value, then I won't put my money at risk.

Brendan

 

[tecate]

I do not know how to value gold and I have no interest or stake in its value.
As I say, I have no interest or knowledge in the price of gold. I am very interested in the price of Bitcoin. I am planning to short it again when I have a bit of cash and it hits $10k. But if someone can show me that it has value, then I won't put my money at risk.

Once again, you're suggesting that if there is no tidy calculation to determine fair market value for Bitcoin, that it has no value. I'm asking you to defend your point and tell me why that contention wouldn't apply to gold (assuming that you have no tidy calculation to determine the fair market value of gold ...as I've already asked you a couple of times - last year...and now on this thread)? Are you suggesting that the $9 trillion gold market is a sham?

I am planning to short it again when I have a bit of cash and it hits $10k.
But if someone can show me that it has value, then I won't put my money at risk.

Ok, well you'll need to watch the market a bit more closely as it hit $10k momentarily yesterday. It's interesting that you're considering going short as I'm long Bitcoin right now.

I share your concerns about fiat currencies. But if they are worthless, that does not make Bitcoin valuable. Or if it does, can you explain how it's calculated?

You claim that the price of bitcoin should be zero as it has no intrinsic value. I'm asking you if FIAT has no intrinsic value, then why are you not telling us that it is worthless?

 

[tecate]

We've been through this before your Dukeness. This thread considers Bitcoin's use case as digital gold and a store of value in its own right. You're quoting the characteristics of a medium of exchange and not those of a store of value. The distinction was made to you a few weeks ago already. You're in complete troll mode at this point.

Sorry, I didn't realise I wasn't worthy to open or comment on a thread. Excuse my ignorance. I will leave it to the experts like yourself

You said that you were indifferent to the topic and that 'you couldn't care less'. I mean, forgive my ignorance but I'm confused as to why you want to post if that's the extent of your contribution.

There may be some edge cases but until lots and lots of people start using Bitcoin to buy stuff I can't see how lots and lots of people will trust it as a store of value

I disagree but I guess we will see how it plays out. Bear in mind that 'buying stuff' is not the only Bitcoin use case. Remittances, cross border transactions and settlement are also relevant when it comes to Bitcoin. With Microsoft's decentralised digital identity tool, ION going live on the Bitcoin blockchain yesterday, it looks like stuff is even being built on top of the network...and yet, we're told by Brendan that there's no utility here.

 

[Duke of Marmalade]

We've been through this before your Dukeness. This thread considers Bitcoin's use case as digital gold and a store of value in its own right. You're quoting the characteristics of a medium of exchange and not those of a store of value. The distinction was made to you a few weeks ago already. You're in complete troll mode at this point.

And you are in complete denial. You have trolled on and on about the universally accepted tests for a currency. When I point out that they are a bastardisation by a fellow cultist of the true UACs you retort that the latter are about medium of exchange whilst the cultist UACs were addressing store of value and that my citing the true UACs is off topic. You really mean us to accept that ducking? What have Portable, Fungible, Divisible got to do with store of value?

 

[tecate]

And you are in complete denial. You have trolled on and on about the universally accepted tests for a currency. When I point out that they are a bastardisation by a fellow cultist of the true UACs you retort that the latter are about medium of exchange whilst the cultist UACs were addressing store of value. You really mean us to accept that ducking.? What have Portable, Fungible, Divisible got to do with store of value?

You are telling porkies now Dukey. Where's your link to that info that you quote above? You are listing the characteristics of a medium of exchange - not of a store of value.

 

[Duke of Marmalade]

You are telling porkies now Dukey. Where's your link to that info that you quote above? You are listing the characteristics of a medium of exchange - not of a store of value.

Rather sad attempts to move the goal posts, tecate. What have Fungibility, Portability and Divisibility got to do with store of value? You have stated categorically these to be universally accepted tests for such a store.

 

[tecate]

Rather sad attempts to move the goal posts, tecate. What have Fungibility, Portability and Divisibility got to do with store of value? You have stated categorically these to be universally accepted tests for such a store.

Disingenuous much? I'll ask you once more. Please post a link to the information you refer to in post #230.

 

[Brendan Burgess]

Tecate

I don't have any gold so I don't care about its value. I have never been a fan.
I try to minimise my holding of currencies. And I share your concern about the risk to them due to inflation caused by printing.

Now could you please tell me why you are long on something priced at $10,000. Presumably you have done a calculation which shows you that it's worth $10,000?

I am genuinely interested and it's not just academic. If I am missing something, I don't want to risk shorting it.

Please, tell me how you arrived at that valuation?

Brendan

 

[tecate]

Brendan,

The thread concerns the consideration of Bitcoin as digital gold. It's entirely relevant. And I will ask again - (and full disclosure - I'll keep asking until you answer) - how do you determine the fair price of gold? If you can't, it seems according to your logic, then its price should be zero and the $9 trillion gold market is a sham.

Please clarify.