5 ms·

>Current bitcoin holders can only see gain if new "investment" (I find that term funny since it's a "security" with no fundamentals) comes in. That's pretty muc

>Current bitcoin holders can only see gain if new "investment" (I find that term funny since it's a "security" with no fundamentals) comes in. That's pretty much the definition of a Ponzi scheme. Equally true of most other commodities and currencies, right? If you have a gold bar, or a stack of 10 Euro notes, the only way you make money off of it is if enough more people want to buy gold/Euros that the price goes up. Neither asset does anything on its own. A critical ingredient of a Ponzi scheme is fraud.

bandrami 9y ago
Equally true of most other commodities and currencies, right? No; if I hold a stock I receive a dividend from the company and a vote in their governance; if I hold a bond I receive interest payments; if I hold bauxite I can use it to make whatever you make with bauxite.
- kobeya 9y ago
  A stock or bond is neither a commodity nor a currency.
pbh101 9y ago
The price of a traded item can go up, even with no investment: people do not have to trade for the price to increase or decrease. Sometimes price movements coincide with lots of actual trades occurring, and sometimes they coincide with very few/no trades occurring. The latter happens once in awhile. Taken to the extreme to illustrate: if everyone together today instantly decided each bitcoin was worth $1b, then in that first instant, nobody would sell and no trades would occur, but the price would be very different.
- muti 9y ago
  If the price is determined by how much someone is willing to buy or sell for, how do you determine the price when there are no trades being made? How does simply deciding 1 bitcoin is worth $1b effect the value of bitcoin if no one is willing to buy at that price?
  - pbh101 9y ago
    1. There is more than one way to measure 'price,' and 2. 'willing to buy' and trades executed are two different things. If you are measuring the price of bitcoin by looking at the price of the last trade that occurred, then you are right: trades need to happen for you to get price information. But there is also the order book. In [1], thousands of 'intents to trade'/outstanding orders are displayed but no trades are listed. When I looked at the page, the highest anyone was willing to buy (in this specific order book at this time) was $4076, and the lowest anyone would sell was $4086. This is a good indicator of the current consensus on Bitcoin price but isn't actually trade data. Now, let's say the market gets just a little more bullish on Bitcoin and someone places an order to buy at $4080. Has the price of Bitcoin changed? One could argue yes if you judge price from the order book: from ~$4081 to ~$4083 or so. But no trades have occurred. So back to the original question: in the absence of trade data, the price of bitcoin can be seen from what everyone decides it is, via an order book. [1] https://www.bitstamp.net/market/order_book/ https://www.bitstamp.net/market/order_book/

bandrami 9y ago

Equally true of most other commodities and currencies, right? No; if I hold a stock I receive a dividend from the company and a vote in their governance; if I hold a bond I receive interest payments; if I hold bauxite I can use it to make whatever you make with bauxite.

kobeya 9y ago
A stock or bond is neither a commodity nor a currency.

pbh101 9y ago

The price of a traded item can go up, even with no investment: people do not have to trade for the price to increase or decrease. Sometimes price movements coincide with lots of actual trades occurring, and sometimes they coincide with very few/no trades occurring. The latter happens once in awhile. Taken to the extreme to illustrate: if everyone together today instantly decided each bitcoin was worth $1b, then in that first instant, nobody would sell and no trades would occur, but the price would be very different.

muti 9y ago
If the price is determined by how much someone is willing to buy or sell for, how do you determine the price when there are no trades being made? How does simply deciding 1 bitcoin is worth $1b effect the value of bitcoin if no one is willing to buy at that price?
- pbh101 9y ago
  1. There is more than one way to measure 'price,' and 2. 'willing to buy' and trades executed are two different things. If you are measuring the price of bitcoin by looking at the price of the last trade that occurred, then you are right: trades need to happen for you to get price information. But there is also the order book. In [1], thousands of 'intents to trade'/outstanding orders are displayed but no trades are listed. When I looked at the page, the highest anyone was willing to buy (in this specific order book at this time) was $4076, and the lowest anyone would sell was $4086. This is a good indicator of the current consensus on Bitcoin price but isn't actually trade data. Now, let's say the market gets just a little more bullish on Bitcoin and someone places an order to buy at $4080. Has the price of Bitcoin changed? One could argue yes if you judge price from the order book: from ~$4081 to ~$4083 or so. But no trades have occurred. So back to the original question: in the absence of trade data, the price of bitcoin can be seen from what everyone decides it is, via an order book. [1] https://www.bitstamp.net/market/order_book/ https://www.bitstamp.net/market/order_book/