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tl;dr pros: decentralized, judgement resistant store of value cons: unconnected to any economic fundamentals, therefore without any analytical way to determi

tl;dr pros: decentralized, judgement resistant store of value cons: unconnected to any economic fundamentals, therefore without any analytical way to determine price.

alexro 9y ago
Fundamentals are same as in social networks. But we don't know yet how to formalize them clearly.
deleted 9y ago
[deleted]
DenisM 9y ago
There are fundamentals: aggregate demand for money laundering and currency control evasion.
- vasilipupkin 9y ago
  right, but money laundering is to take dirty dollars and convert them to clean dollars. It's not obvious to me how aggregate demand for money laundering supports a specific price of bitcoin. If bitcoin is a mechanism for doing it, then the right metric is to look at the fees people charge for laundering money, not the amt of money laundered.
  - option_greek 9y ago
    With cryptocurrencies those two are tightly coupled. For example if 10mil had to be laundered in one go and the entire market cap is just 10mil or so, liquidity becomes a concern.
  - DenisM 9y ago
    If there are $20b waiting to be laundered and the total number of bitcoins is 20m the aggregate demand would support $1000 value of BC. This is what I would call "direct utility". There is also "indirect utility" - mindset of bystanders who are willing to transact BC because they know that others will provide liquidity.
    - vasilipupkin 9y ago
      why does it support $1000? if I launder 1 dollar, I buy a bitcoin and sell a bitcoin, so why does it support any particular stable value?
bradleyjg 9y ago
Assuming you mean legal judgement, I don't see why they'd be especially resistant. If the coins are held at an exchange then they are as reachable securities held that way. If they are in cold storage they are as reachable as a negotiable instrument (e.g. bearer bonds) or chattels for that matter (e.g. gold coins). The case of H. Beatty Chadwick is also worth keeping in mind (spent 14 years in jail in contempt of court because he claimed that he had lost all his money right before a divorce and the court didn't believe him.)
- sillysaurus3 9y ago
  If the coins are held at an exchange then they are ss reachable a securities held that way. If you're storing coins on an exchange, they're not your coins. The point of BTC is you don't need to do that. The case of H. Beatty Chadwick is also worth keeping in mind (spent 14 years in jail in contempt of court because he claimed that he had lost all his money right before a divorce and the court didn't believe him.) A solid point, but two counterarguments: There's safety in numbers – if everyone were to do this, courts probably wouldn't jail more than a dozen or so – and at the end of your jail term, you'd still have your wealth.
  - bradleyjg 9y ago
    > There's safety in numbers – if everyone were to do this, courts probably wouldn't jail more than a dozen or so As I mentioned, there's nothing specific to bitcoin about this strategy. You can do it with buried gold coins or with cash as HBC did. Or a dozen other ways. If "everyone" wanted to do it, they would have already. But ... > and at the end of your jail term, you'd still have your wealth. How much is 14 years of your life worth?

tl;dr pros: decentralized, judgement resistant store of value cons: unconnected to any economic fundamentals, therefore without any analytical way to determine price.

alexro 9y ago

Fundamentals are same as in social networks. But we don't know yet how to formalize them clearly.

deleted 9y ago

[deleted]

DenisM 9y ago

There are fundamentals: aggregate demand for money laundering and currency control evasion.

vasilipupkin 9y ago
right, but money laundering is to take dirty dollars and convert them to clean dollars. It's not obvious to me how aggregate demand for money laundering supports a specific price of bitcoin. If bitcoin is a mechanism for doing it, then the right metric is to look at the fees people charge for laundering money, not the amt of money laundered.
- option_greek 9y ago
  With cryptocurrencies those two are tightly coupled. For example if 10mil had to be laundered in one go and the entire market cap is just 10mil or so, liquidity becomes a concern.
- DenisM 9y ago
  If there are $20b waiting to be laundered and the total number of bitcoins is 20m the aggregate demand would support $1000 value of BC. This is what I would call "direct utility". There is also "indirect utility" - mindset of bystanders who are willing to transact BC because they know that others will provide liquidity.
  - vasilipupkin 9y ago
    why does it support $1000? if I launder 1 dollar, I buy a bitcoin and sell a bitcoin, so why does it support any particular stable value?

bradleyjg 9y ago

Assuming you mean legal judgement, I don't see why they'd be especially resistant. If the coins are held at an exchange then they are as reachable securities held that way. If they are in cold storage they are as reachable as a negotiable instrument (e.g. bearer bonds) or chattels for that matter (e.g. gold coins). The case of H. Beatty Chadwick is also worth keeping in mind (spent 14 years in jail in contempt of court because he claimed that he had lost all his money right before a divorce and the court didn't believe him.)

sillysaurus3 9y ago
If the coins are held at an exchange then they are ss reachable a securities held that way. If you're storing coins on an exchange, they're not your coins. The point of BTC is you don't need to do that. The case of H. Beatty Chadwick is also worth keeping in mind (spent 14 years in jail in contempt of court because he claimed that he had lost all his money right before a divorce and the court didn't believe him.) A solid point, but two counterarguments: There's safety in numbers – if everyone were to do this, courts probably wouldn't jail more than a dozen or so – and at the end of your jail term, you'd still have your wealth.
- bradleyjg 9y ago
  > There's safety in numbers – if everyone were to do this, courts probably wouldn't jail more than a dozen or so As I mentioned, there's nothing specific to bitcoin about this strategy. You can do it with buried gold coins or with cash as HBC did. Or a dozen other ways. If "everyone" wanted to do it, they would have already. But ... > and at the end of your jail term, you'd still have your wealth. How much is 14 years of your life worth?