bitcoin down to $14000.."healthy correction" ..

[ZenZimZaliben]

It's driven by greed, nothing tangible.

The perceived value is high but there is tangible value because it took time/money to create. It is as tangible as buying stock in Technology stock which has a perceived value far beyond it's intrinsic value. Facebook, Twitter and many others.

 

[notb]

It is interesting how banks keep calling it currency.

source

Could you point where this publication calls crypto a currency? It's rather large.
In the meantime, the second paragraph starts with:
Virtual currencies resemble money

Other currencies are still the asset behind it.

You'll have to explain that...

There's no asset behind "gold" either you know.

Actually there is. Gold can be practically used as a material, so it can be priced as such.
Thing is... you're trying to support cryptos by saying that gold has similar history. But the actual truth is: gold was rubbish.
Yes, Bitcoin (or a different coin) alone could be a money anchor just like gold use to be. But Bitcoin is not alone. People create countless new cryptos all the time. There is no limit, no boundaries.

The perceived value is high but there is tangible value because it took time/money to create.

1) By definition a tangible asset is something material.
2) If something takes time or money, it means it's generating costs, not creating value. It's negative in a balance sheet.
For example: burning money takes money (and some time as well).
Value of an object is what someone else is willing to pay you for it. And he is not buying your work or time. He doesn't even know how much it costed you to produce. He's only buying an object that he will be able to use in some way afterwards.
In other words: price of an object is related to the value it can generate (the future), not the value that it consumed in production (the past).

There are a few observations that explain this very well
1) If one wants to buy the same object from two sellers, he'll be willing to pay the same price - despite the fact that they most likely had different production costs (time or money taken).
2) Lets say you're manufacturing nails. They are not identical, as there will be some variance of quality. Some nails will be usable, some not. They all costed the same to make, but they don't have the same value. Some will yield a negative value (a loss), because the only way to utilize them will be to recycle the material.

It is as tangible as buying stock in Technology stock which has a perceived value far beyond it's intrinsic value. Facebook, Twitter and many others.

"Technology stocks" are evaluated exactly the same way any other stocks would be. AFAIR you've already made this mistake lately.

 

[R-T-B]

You'll have to explain that...

It's pretty selfexplanatory. Investor interest in the technology IS it's backing.

Or was. I'd argue at this point the whole thing is a bubble. When it pops the value it settles on will restore normalcy. I'm not quite convinced we've popped completely yet, either.

 

[FordGT90Concept]

Other currencies are still the asset behind it.

Not really when they can turn on it on any given day.

There's no asset behind "gold" either you know. It also has no ceiling or floor beyond it's interested market.

Gold, itself, is an asset. Humans have desired it for millennia because it is shiny, because other people value it, and because it's an amazing metal (e.g. super conductor). Legal tender went fiat in large part because gold prices were skyrocketing after WWII. It was getting ridiculous trying to keep legal tender at sane value.

Facebook, Twitter and many others.

Their business is advertising/marketing.

 

[ZenZimZaliben]

C

"Technology stocks" are evaluated exactly the same way any other stocks would be. AFAIR you've already made this mistake lately.

Not a mistake...a fact. Twitter's stock far exceeds its value and almost completely driven by perception. IF you do not think the way people (the market) perceive a stock as being valuable/worthless isn't a huge factor in stock pricing then you are missing out on something critical here. Market conditions and perception drive the stock value...not how much assets they are sitting on because if that was the case twitter would be worth like 3.50. You can throw as much math at this as you want but in the end it is people trading stock and the value is deemed on their perception of that value.

 

[R-T-B]

Not really when they can turn on it on any given day.

This is the case with any currency backed by the dollar, ford.

Gold, itself, is an asset. Humans have desired it for millennia because it is shiny, because other people value it, and because it's an amazing metal (e.g. super conductor)

Did you just completely ignore my acknowledgement of that and comparison to Blockchains inherent technological value?

You could argue gold has uses, but well, so does blockchain, frankly.

People didn't always buy it because they would think it would rise. That's a recent thing.

 

[cdawall]

Could you point where this publication calls crypto a currency? It's rather large.
In the meantime, the second paragraph starts with:
Virtual currencies resemble money

I mean I am not going to say it is in the title, but it is in the title.

 

[FordGT90Concept]

This is the case with any currency backed by the dollar, ford.

I can't name any country's legal tender not being recognized by another country. The exchange rate of it may be next to nothing but it's still an agreement that is honored. It once again goes back to assets. Even though Zimbabwe's dollar has a terrible exchange rate, Zimbabwe itself has assets and their currency is still recognized as legal tender.

Did you just completely ignore my acknowledgement of that and comparison to Blockchains inherent technological value?

Blockchain is fundamentally a distributed database technology. Blockchain technology can be divorced from the cryptocurrency incentive system attached to it.

Blockchain is not licensed, copyrighted, trademarked, or anything. It's intellectual property value is zero as a result of that.

Not a mistake...a fact. Twitter's stock far exceeds its value and almost completely driven by perception. IF you do not think the way people (the market) perceive a stock as being valuable/worthless isn't a huge factor in stock pricing then you are missing out on something critical here. Market conditions and perception drive the stock value...not how much assets they are sitting on because if that was the case twitter would be worth like 3.50. You can throw as much math at this as you want but in the end it is people trading stock and the value is deemed on their perception of that value.

Twitter collects a lot of information on its users that it sells. It also has intellectual property and facilities as assets. Twitter is basically a 21st century version of a TV station. The reach of it is what makes it valuable.

 

[ZenZimZaliben]

Twitter collects a lot of information on its users that it sells. It also has intellectual property and facilities as assets. Twitter is basically a 21st century version of a TV station. The reach of it is what makes it valuable.

Welcome to the 21st century version of currency it's called crypto-currency its reach is world wide and no 1 nation controls it.

 

[R-T-B]

Welcome to the 21st century version of currency it's called crypto-currency its reach is world wide and no 1 nation controls it.

As I said: The technology, the network, this ias cryptos "intrinsic value" and sorry Ford, I don't think it's divorcable at all.

 

[R0H1T]

The perceived value is high but there is tangible value because it took time/money to create. It is as tangible as buying stock in Technology stock which has a perceived value far beyond it's intrinsic value. Facebook, Twitter and many others.

That's like saying the barn you built next door is worth a million dollars, or whatever, for the effort you put in it. The answer to crypto is obviously the riddle Varys talked about in the GoT, power lies where

 

[R-T-B]

That's like saying the barn you built next door is worth a million dollars, or whatever, for the effort you put in it.

Uh, no, because it's easy to build a barn door and no one is going to say you earned a million dollars an hour. The tech in bitcoin and crypto is by some industry titans admissions (including, and quoting Bill Gates) "a technical tour de force" Whoeever or whatever Satoshi Nakamoto was, it's quite honestly amazing what he/she/they achieved.

 

[R0H1T]

Uh, no, because it's easy to build a barn door and no one is going to say you earned a million dollars an hour. The tech in bitcoin and crypto is by some industry titans admissions (including, and quoting Bill Gates) "a technical tour de force" Whoeever or whatever Satoshi Nakamoto was, it's quite honestly amazing what he/she/they achieved.

We're talking about the intrinsic or even perceived value of the barn.

It is but BTC itself isn't worth $20k or whatever high it's gonna achieve, not without the (artificial) limited supply & the billions poured into it by many who I assume are looking to make a quick buck. In that BTC is like a security (instrument) or some form of investment, where people are looking just for returns. Without this hype, of unlimited gains, where do you think BTC would end up or would the avg Joe even invest into BTC? Hence the Varys reference.

 

[R-T-B]

We're talking about the intrinsic or even perceived value of the barn.

By the public though.

It is but BTC itself isn't worth $20k or whatever high it's gonna achieve, not without the (artificial) limited supply & the billions poured into it by many who I assume are looking to make a quick buck. In that BTC is like a security (instrument) or some form of investment, where people are looking just for returns. Without this hype, of unlimited gains, where do you think BTC would end up or would the avg Joe even invest into BTC? Hence the Varys reference.

I agree it's a bubble now. I said that a few posts ago.

I still think it has a ways to pop, too. But it's not without value entirely.

 

[R0H1T]

By the public though.



I agree it's a bubble now. I said that a few posts ago.

I still think it has a ways to pop, too. But it's not without value entirely.

Partly disagree with what you said. I don't really care about BTC per se, but the fallout will hurt many, not unlike the 2008 crash ~ speaking from personal experience.

This is where the regulators need to step in & take control, I'm pretty sure the ones gaining most out of this current fad are the same bunch who make money every time a bubble bursts. I see use for blockchain in the banking system but crypto coins, without strict regulations are online casinos as far as I'm concerned. The tech has merit, most of the (current) tech based products are useless IMO.

 

[notb]

I mean I am not going to say it is in the title, but it is in the title.

Oh. That's a big LOL.
The term used here is "virtual currency". It's been introduced into European legislation few years ago.

"Virtual currency" is no more a currency than "false advertising" is advertising or "poor understanding" is understanding.

Seriously, you should really study this topic a bit more.

Not a mistake...a fact. Twitter's stock far exceeds its value and almost completely driven by perception. IF you do not think the way people (the market) perceive a stock as being valuable/worthless isn't a huge factor in stock pricing then you are missing out on something critical here. Market conditions and perception drive the stock value...not how much assets they are sitting on because if that was the case twitter would be worth like 3.50. You can throw as much math at this as you want but in the end it is people trading stock and the value is deemed on their perception of that value.

I've said it earlier: I don't know much about Twitter and I won't comment on its stock price.
And you still don't understand the idea. Stocks are not directly related to assets (market capitalization is not equal net assets).
You're building your opinions on a principle that doesn't exist.

 

[flmatter]

Stocks are not directly related to assets (market capitalization is not equal net assets).

umm yes they are that is where the value comes from initially. Without it everything is worth nothing and you are letting speculators build that value. You have to be and have an asset, ie something of value for people to buy into for stocks and bonds to really make a difference. Otherwise it is crap shoot. Why would I buy stock in something that has no value or assets behind it? Just like the railroads back in the 1800's would you buy into a rail line that has no rails?

 

[Outback Bronze]

Hey guys,

Would just like to say that I think this (weather crypto is currency or not) is making for a very interesting and awesome discussion.

I was asking my wife and she thinks it isn't. So I ask asked her why...

Then I ask my step father and he thinks it is. So I ask him why...

My best mate thinks it isn't......

Me personally, I think it is more currency than not.

There really is both side's of the fence on this discussion. I really feel its what you personally believe rather than any related given facts on both alternatives.

This might soon change though.
Cheers.

Edit:
Definition of currency

plural currencies
1a : circulation as a medium of exchange
b : general use, acceptance, or prevalence

 

[flmatter]

at the end of the day a person a has to ask themselves what they are willing to take for payment for services or goods rendered. Whether it is cold hard $USD or something else barter and trade like it was 150 years ago. That is what defines currency. If you are business and willing to take everything at market value great, or just $usd great. I am a mechanic and a hobbyist in weaponsmith and photography I take payment in what I need at the time, cash, bit, trade, whatever... I have exchanged some crazy shit to complete jobs. Guess what.... the world still turns and everyone is still happy. I have had gold and silver bars in hand, guns, stocks and bonds, cash, bullets.... I have also traded or sold them off as well. The market is wide open to whoever is buying what. Bit, gold, usd so at the end it is what the business or you are willing to take. If they want sheep then so be it....

 

[trog100]

i am into crypto purely as an investment.. whatever people think it is.. commodity.. security or currency i dont really care because it could be any of them..

if i want to buy anything i still use paypal and i dont see that changing any time soon..

trog

 

[R-T-B]

Partly disagree with what you said. I don't really care about BTC per se, but the fallout will hurt many, not unlike the 2008 crash ~ speaking from personal experience.

I don't think you understand my post.

I think it's already begun it's "pop." I don't see it rising from here and frankly, the world hasn't ended yet.

I see another coin taking hold personally. One with more utility.

 

[TheMailMan78]

To everyone in this thread its been a great read with zero flaming. Keep it up. Love the debate.

Saw an economist last night talking to Tucker and he was saying bitcoin is an interesting principle but, it has yet to catch the serious eyes of any government. He also seemed to allude to that its a risk UNTIL its regulated and it can't be considered a real currency until then.

What I see in that is what Rome had to do with coin back in the day. Bitcoin is verifiable but it's non-insured and isn't backed by anything. To me that's what keeps it from being a real threat to normal currency.

@R-T-B lost my coins because I lost my job which made me lose access to the servers I mined them on. Passwords and everything were in my desk.

 

[trog100]

south korea has just announced some crypto trading restrictions.. i suppose regulations might be a better word..

having said that crypto has been trading at a %25 premium compared to the rest of the world.. the "mania" is greater there for reasons unknown to me..

this is causing another general crypto pull back.. how low it goes is yet to be seen..

i dont think anything has popped yet.. just the normal pull backs on its way up..

trog

ps.. for what its worth the dollar is down and gold is up near the 1300 level..

 

[notb]

umm yes they are that is where the value comes from initially. Without it everything is worth nothing and you are letting speculators build that value. You have to be and have an asset, ie something of value for people to buy into for stocks and bonds to really make a difference. Otherwise it is crap shoot. Why would I buy stock in something that has no value or assets behind it?

But every business has (should have ) some value behind it. It's just that not every value is reflected in the balance sheet.
Market valuation comes from future cashflow, i.e. future profits. What you're thinking about is more like a default analysis, i.e. you're evaluating a company based on its bankrupcy estate (what can be sold when you close the business).

But you are right there is some issue with current pricing of few internet/tech companies (in US). But it's not because it's way above their assets. It's because it's way above their earnings.
Investors look at a very simple indicator: P/E ratio (price / earnings).
For large, stable companies with good profit (especially in manufacturing) it's usually between 10 and 20, but 20-40 is still OK for growing internet companies.
Intel's forecasted PE ratio is ~14.
Apple: 19
Oracle: 20
Microsoft: 30
Facebook: 34
SAP: 34
Alphabet: 35
but...
Netflix: 190
Amazon: 300

i am into crypto purely as an investment.. whatever people think it is.. commodity.. security or currency i dont really care because it could be any of them..

But what are you investing in...?
The whole financial industry tries to decide what cryptocurrency is for a reason - not because they're bored. The result will determine how we'll use cryptos in the future - hence, what they're worth.
If Bitcoin becomes the new world-wide currency, it'll be worth a lot. If it'll remain just an online payment method, it'll be worth a lot less. If it's banned, it'll be worth close to nothing.

Think about FCOJ (Frozen Concentrated Orange Juice). We know what it is, how it can be used. As a result, the price is fairly stable and it is considered a proper commodity for serious investing.
But for a moment imagine a situation, when we don't know, how FCOJ will be used in the future. Maybe it'll be a ubiquitous food product? Maybe it'll just be an aroma for dish detergent? And every day there would be a new report about how FCOJ affects health and which countries accept or ban it.
Think how this would affect price volatility... And this is where we are with cryptos today.

 

[FordGT90Concept]

As I said: The technology, the network, this ias cryptos "intrinsic value" and sorry Ford, I don't think it's divorcable at all.

Technology: I could write my own blockchain code right now and even create an ICO if I wanted to. There is no hurdles for me doing that other than my time. Blockchain, therefore, has no intellectual property, no assets, no intrinsict value. It's a concept, no more and no less.

Network: cryptocurrency has no ownership of the network. It's value, intellectual property, assets, and so on are derived from all the Internet service providers routers, switches, and gateways and the hardware of its users. The network is a cost, not an asset. It can only be monetized through coins which also have no intrinsict value.

You don't think it's divorcible because cryptocurrency has no incentive to exist without the coin incentive. Blockchain does. If I were a small business with three locations, I could have a server at each location and create a blockchain database that lives on each server. It creates redundancy and security at realtively low cost. There is no reason to incentivize third parties to get involved. That's where blockchain will be in the future, not platforms to raise money.

Uh, no, because it's easy to build a barn door and no one is going to say you earned a million dollars an hour.

Pretty sure I could create a new ICO in less time and cost than it would take me to build a barn to code. All you need is Visual Studio Community or GCC and a little knowhow. Building a barn, you need craploads of materials from cement, to screws, to wood. You'll also need to get the approval of the county or city. On top of that, your taxes will go up because it adds value to your property (assuming property tax is levied). Depending on the size of barn, it's going to cost $30,000+ and that's not counting paying yourself.

ps.. for what its worth the dollar is down and gold is up near the 1300 level..

Trump administration changed the tax code and Federal Reserve raised interest rates. Gold typically responds to those changes.

Netflix: 190
Amazon: 300

They both have a lot of growth potential yet. With Netflix, investors are watching what they do with subscription rates and how subscribers respond. I think they bumped up the rate twice in recent history and the number of people that unsubscribed wasn't much. It bolsters the likelihood of future profits.