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I think we are saying the same thing. Apple/Adidas might have inflated prices today, but they're also creating actual products, selling for actual money, in act
by nikanj 9y ago
I think we are saying the same thing. Apple/Adidas might have inflated prices today, but they're also creating actual products, selling for actual money, in actual stores.
That's the key difference. Bitcoin is as valuable as Beanie Babies. Those too had a perceived brand value, which was supposed to keep on rising forever.
- 21 9y agoThe fact that you or I don't value an asset doesn't mean that that's asset value must therefore be zero. I wouldn't pay 5 million dollars for Michal Jackson's glove, but some people did. That in itself makes it more valuable that let's say it's cost of manufacture. And it's valuation is rational, but in a more complicated kind of rationality than the simple ones presented in economics 101 books. I think you are a person which believes that this is a correct approach: https://en.wikipedia.org/wiki/Homo_economicus https://en.wikipedia.org/wiki/Homo_economicus I don't
- nikanj 9y agoI believe in the god of P/E. If you’re unable to find a greater fool to buy the Michael Jackson glove, how long do you have to hold it before the income covers purchasing costs? For Apple stock, the number might be high, but it is not infite. For Bitcoin, there’s _no_ annual income from holding it. Intangibles can still have substantial real value. For example, the Jackson record copyrights - while completely immaterial - still bring a very nice chunk of revenue every year.
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- hndamien 9y agoBitcoin creates the same value as VISA, Paypal and Banbks as a means of transferring money. If transferring money without these middle men is as valuable as a beanie baby, then please explain the similar utility created? It is also a fantastic means for storing wealth and moving it without qeustion, but I'll admit that the volatility makes this use case substantially less useful than the payment network which is the true value, regardless of price (so long as it is non-zero).
- nikanj 9y agoHolders of bitcoin do not get value from these transactions. The transaction fees go to the miners, not to people HODLing bitcoin.
- mrhappyunhappy 9y agoEarly adopters are speculating on future value while eventual adopters May use it for its intended purpose.
- hndamien 9y agoEarly adopters think it is sound money.
- hndamien 9y agoThe transaction fees are the cost of the transaction, not the value created.
- erikpukinskis 9y agoHolders of bitcoin provide stability for people doing short term trades (buying coins to send Grandma in Iran). Traders provide the liquidity. Grandma provides the cash to pay off both.
- shrimpx 9y agoBitcoin is precisely like beanie babies that can be transfered electronically without middle men.