cryptocurrencies
- Thread starter mathman
- Start date
Little green pieces of paper with pictures of George Washington (or whoever) on them have no intrinsic value, either. Rather, they represent a kind of promise: if you give me one of your pieces of green paper, I'll give you some kind of physical item that I agree is "worth" one dollar. If you work for me for an hour, I've give you 20 pieces of green paper, and you can hope that other people will be willing to take your green pieces of paper in exchange for other physical items, or for services, or for other pieces of paper with mutually-agreed promises attached.
All kinds of things drive what value we assign to those little green pieces of paper. That's what economics is all about.
Bitcoin is no different. Instead of little green pieces of paper, there's a record on a computer somewhere that amounts to a promise to exchange fictional coins for real-world goods or services, according to a valuation agreed among those who deal in Bitcoin.
Seattle
Valued Senior Member
The difference is the backing of the full faith and force of the U.S. government vis the Bitcoin algorithm. They are both fiat currency however.
Are you sure?
I took fiat to be the domain of a government style arrangements
Bitcoins are more like a private club arrangement. Becoming more mixed since governments want to join in, I'm guessing, with the intent to control
You've probably made almost 40% profit already, given the price is currently 48k+.
"Too high" is a relative measure. If you're making such good returns then how is it "too high"?
Correct. And the more people that use it, and the wider its use, the greater the demand will be. That is why some forecast that it will reach 100k, 200k, 500k, even 1,000k eventually. And if so, you buying at 35k is hardly "too high", is it.
Seattle
Valued Senior Member
Yes, technically you are right. Bitcoin isn't a "currency". It's not government issued. Bitcoin is similar however in that it has no intrinsic value.Are you sure?
I took fiat to be the domain of a government style arrangements
Bitcoins are more like a private club arrangement. Becoming more mixed since governments want to join in, I'm guessing, with the intent to control
RainbowSingularity
Valued Senior Member
https://www.investopedia.com/terms/i/intrinsicvalue.asp
ones & zeros
cloud based money
if i wiped bitcoins out so they stopped existing
would it have any direct financial effect on money, assets, company's, markets etc ?
can we call that impact "intrinsic value" ?
note my unpaid non funded opinion
is that Elon is likely to make his electric cars to be the 1st cars ever to be purchasable by bitcoins
(in limited small numbers)
the novelty value of that transaction type will be significant advertising & Global market positioning even if his company carry's it as a loss to use for advertising purposes.
there are lots of multi millionaires who are pro science & pro technology who will buy such a car with bitcoins just to help be a part of the developing future even if it means the transaction is a bit tricky & is more an investment sale than a direct purchase etc(technology fair club membership etc whatever etc yadda yadda)
its smart thinking.
1 bitcoin per cheap car ...(current bitcoin value to expected budget tesla model)
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Good question
Some time ago I did read about someone who lost (threw out) a hard drive which had all his Bitcoin Information. As fast as I could make out his lost was the inability to buy with Bitcoin and to buy (exchange back) his Bitcoin for real money
I guess those two effects would happen to those holding Bitcoin. No effect anybody else
But interesting point. If someone has substantially Bitcoin holdings and looses access to the lot, does that event make the remaining Bitcoins more valuable?
Or are they somehow regenerated back into the original total?
Seattle
Valued Senior Member
If you did you would so I'm guessing you didn't.
Anything that reduces the supply in circulation puts upward pressure on the price. BTC that are in lost wallets are lost forever. Of the max 21 million BTC that will ever be in circulation, it is thought that up to 20% might be lost in this way.
But bear in mind that BTC that are lost have no different impact to the price than BTC that are stored safely away forever. The upward pressure comes from them not being circulated / usable. The downward pressure comes when they are subsequently sold (i.e. back in circulation). So all the Hodlers that are sitting on a store of BTC are similarly putting upward pressure on the value.
Yes. It's simple maths: if you bought USD10k of Bitcoin in 2010 when it was worth around USD0.10 then you would have 10,000 BTC. It is currently worth USD50k, so you would have USD500,000,000 worth of Bitcoin.
But then it is purely hypothetical, as (I'm assuming) you didn't, and you don't. At least if you had said "If I play the lottery I could win the jackpot and be rich" you would be saying something that is at least possible for everyone (eligible to play the lottery).
Seems a small number considering world population. Even taking out all those for whatever reason will never impact Bitcoin will be a large number remaining
What I am guessing is that Bitcoin will rise in value until the small number of holders decide en masse to sell off (extremely fast) large numbers of their Bitcoins to those OUTSIDE of their group for some tangible assets, real money, art etc
Magic. The group has made something out of nothing
Seattle
Valued Senior Member
You math is a bit too simple
You would have 100,000 BTC.Yeah, my mistake - he previously mentioned he had invested USD1,000 - so for some reason was working on that in the calculation, rather than the 10k I actually wrote. Still, 500m or 5,000m - you'd still be obscenely rich.You math is a bit too simple
The idea is that each Bitcoin is further divided into 100 million Satoshi - the smallest unit of Bitcoin. If each Satoshi replaced one cent (i.e. USD 0.01) then each BTC would be worth USD 1 million, and the 21 million BTC would be worth 21,000,000,000,000 - USD 21 TRILLION - which is roughly 10-15 times the physical US money in circulation.
The group may have, just as they may do when one of them wins the lottery and buys stuff. But if they sell to others, then they are gaining at the other's expense: they are basically letting others buy the stuff for them.
As with all speculations, whether you win or lose will depend on the demand for what you are perceived to have, and the timing of your buying/selling activity.