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There is zero rational basis for any movement in cryptocurrencies, and it was spiking at the same time that the normal stock market was hitting record highs. R

There is zero rational basis for any movement in cryptocurrencies, and it was spiking at the same time that the normal stock market was hitting record highs. Rationally, bitcoin should be worth close to nothing.

lawlessone 7y ago
you're probably right.
shawnz 7y ago
You mean just like gold?
- endorphone 7y ago
  Gold has intrinsic high value in an enormous number of processes, and is a physically very rare element with very novel properties. Cryptocurrency isn't remotely rare -- one can create a hundred Bitcoin clones in an afternoon -- and has zero fundamental value. It solves no real problem, and is worse at virtually everything than alternatives. The comparison with gold has always been specious. If a tiny, tiny fraction of holders of bitcoin liquidated to cash, it would be worth close to nothing overnight.
  - shawnz 7y ago
    Gold's intrinsic value is obviously nowhere near its value on the market. Bitcoin does have some intrinsic value too as an international payments system, which like gold clearly is not the only driver of the price. Furthermore I don't see how you can compare the rarity of gold versus bitcoins. What makes one "more rare" or "less rare" than the other? Are we comparing grams to bits, or what? > If a tiny, tiny fraction of holders of bitcoin liquidated to cash, it would be worth close to nothing overnight. Being opposed to Bitcoin because you think it's too volatile is a totally different argument than "its value isn't defined intrinsically".
    - endorphone 7y ago
      The entirety of mined gold, over the history of mankind, wouldn't fill an Olympic swimming pool. It has become exponentially more difficult to mine, and can't be created outside of alchemy (e.g. some radioactive processes). Gold has a comparable price to platinum, and is positively cheap compared to rhodium. Gold has been valued by pretty much every civilization throughout history, independently and for the same reasons, even before its unique properties gave it secondary value. I don't invest in gold, have little of it, and I don't know how this strawman got erected, but gold has a much better case than cryptocurrencies at having a so-called intrinsic value. On the cryptocurrency side there are literally thousands of active offerings, and the barrier to entry to create one or a hundred more is negligible. They offer incredibly little value (outside of crime), and are largely illiquid with enormous transaction costs at every step. The transaction history of cryptocurrencies if aggregated would be 99.999+% trading and gambling, with a rounding error of transactions for illicit purposes. And a minuscule amount of early-adopter, feel-good "look I used it to buy a pizza" legitimate transactions. As to your last line, that's another strawman and certainly isn't the argument I'm making. What I am saying is that no cryptocurrency currently in play has any legitimate intrinsic value, and because of that the trading of the same is effectively a game of chicken where everyone waits to see who blinks. There is a non-zero chance that Bitcoin could crash to effectively $0 in a short period.
      - shawnz 7y ago
        > gold has a much better case than cryptocurrencies at having a so-called intrinsic value. The point is that the intrinsic value doesn't come anywhere close to explaining the price in either case. And what about cash? That also doesn't need intrinsic value to be worth something. > On the cryptocurrency side there are literally thousands of active offerings, and the barrier to entry to create one or a hundred more is negligible. I don't see why the scarcity of one cryptocoin affects the value of the others. Creating a new coin doesn't devalue existing coins.

lawlessone 7y ago

you're probably right.

shawnz 7y ago

You mean just like gold?

endorphone 7y ago
Gold has intrinsic high value in an enormous number of processes, and is a physically very rare element with very novel properties. Cryptocurrency isn't remotely rare -- one can create a hundred Bitcoin clones in an afternoon -- and has zero fundamental value. It solves no real problem, and is worse at virtually everything than alternatives. The comparison with gold has always been specious. If a tiny, tiny fraction of holders of bitcoin liquidated to cash, it would be worth close to nothing overnight.
- shawnz 7y ago
  Gold's intrinsic value is obviously nowhere near its value on the market. Bitcoin does have some intrinsic value too as an international payments system, which like gold clearly is not the only driver of the price. Furthermore I don't see how you can compare the rarity of gold versus bitcoins. What makes one "more rare" or "less rare" than the other? Are we comparing grams to bits, or what? > If a tiny, tiny fraction of holders of bitcoin liquidated to cash, it would be worth close to nothing overnight. Being opposed to Bitcoin because you think it's too volatile is a totally different argument than "its value isn't defined intrinsically".
  - endorphone 7y ago
    The entirety of mined gold, over the history of mankind, wouldn't fill an Olympic swimming pool. It has become exponentially more difficult to mine, and can't be created outside of alchemy (e.g. some radioactive processes). Gold has a comparable price to platinum, and is positively cheap compared to rhodium. Gold has been valued by pretty much every civilization throughout history, independently and for the same reasons, even before its unique properties gave it secondary value. I don't invest in gold, have little of it, and I don't know how this strawman got erected, but gold has a much better case than cryptocurrencies at having a so-called intrinsic value. On the cryptocurrency side there are literally thousands of active offerings, and the barrier to entry to create one or a hundred more is negligible. They offer incredibly little value (outside of crime), and are largely illiquid with enormous transaction costs at every step. The transaction history of cryptocurrencies if aggregated would be 99.999+% trading and gambling, with a rounding error of transactions for illicit purposes. And a minuscule amount of early-adopter, feel-good "look I used it to buy a pizza" legitimate transactions. As to your last line, that's another strawman and certainly isn't the argument I'm making. What I am saying is that no cryptocurrency currently in play has any legitimate intrinsic value, and because of that the trading of the same is effectively a game of chicken where everyone waits to see who blinks. There is a non-zero chance that Bitcoin could crash to effectively $0 in a short period.
    - shawnz 7y ago
      > gold has a much better case than cryptocurrencies at having a so-called intrinsic value. The point is that the intrinsic value doesn't come anywhere close to explaining the price in either case. And what about cash? That also doesn't need intrinsic value to be worth something. > On the cryptocurrency side there are literally thousands of active offerings, and the barrier to entry to create one or a hundred more is negligible. I don't see why the scarcity of one cryptocoin affects the value of the others. Creating a new coin doesn't devalue existing coins.