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Not a single one of those cryptos that claim to peg to the dollar is fully capitalized. Pricing a "market cap" for a crypto when only a tiny percentage of it i

Not a single one of those cryptos that claim to peg to the dollar is fully capitalized. Pricing a "market cap" for a crypto when only a tiny percentage of it is trading in the market is not a realistic measure of value.

chii 7y ago
i agree. A more realistic value is definitely the sum total of transactions conducted using said coin. Counting market cap as value is like counting the market cap of WeWork using the funding valuation they got for a small % of equity.
- jkhdigital 7y ago
  Bitcoin is a monetary asset with no underlying fundamental value. Transaction volume is meaningless. The only thing that matters is what someone is willing to pay for it.
  - Vindicis 7y ago
    Not to mention that it's always just a hairsbreadth away from being obliterated by Governments if they ever choose to.
    - mirimir 7y ago
      As I recall, Bitcoin was designed for resilience to government pressure. But that's never been tested, in any substantive way. I'm not aware of any reason why the Bitcoin network couldn't switch to VPN-level overlay networks. Using Tor would be somewhat problematic, given the limited bandwidth. But I'm pretty sure that it'd be doable. Other options include Orchid and Loki. Mining could be an interesting issue. Government pressure could render large-scale mining operations unworkable. But as I understand it, the Bitcoin network could function just as well with far^N less mining capacity. Difficulty would just decrease with less mining competition. And that would mitigate the key negative impact of electricity usage.
      - judge2020 7y ago
        Bitcoin isn't resilient because trading goods for bitcoin doesn't happen, therefore BTC is reliant on people being able to purchase it using their existing government-controlled money using regulated bank accounts.
        mirimir 7y ago
        There's probably a workaround for that. Or there arguably would be, if enough people cared enough. Not too many years ago, there were trusted services that sold Bitcoin (and Liberty Reserve and Pecunix) for cash sent anonymously through the mail. I haven't needed that for years, but I'm pretty sure that such services still exist. And given the escrow sector that's developed to serve dark marketplaces, trust is likely far more verifiable. Cryptocurrency and meatspace money are now entirely separate for me. I earn all the cryptocurrency that I need anonymously online. And I don't risk manifesting it as meatspace cash. While that's not currently workable for most people, I don't see why it couldn't become so.
        belltaco 7y ago
        >Cryptocurrency and meatspace money are now entirely separate for me. I earn all the cryptocurrency that I need anonymously online. And I don't risk manifesting it as meatspace cash. While that's not currently workable for most people, I don't see why it couldn't become so. How do you buy things in real life?
        mirimir 7y ago
        With meatspace money. In my case, savings. But I could also have income. The point is that my online anonymous coward personas and my meatspace identity are as isolated as I can manage.
        chii 7y ago
        > With meatspace money i.e., you cannot fulfil your meatspace needs using cryptocurrency as of yet. It doesn't matter that you are able to isolate your identity online from your meatspace identity. And this is what gov't can easily enforce - through money laundering laws. If ever cryptocurrency becomes prevalent enough to offer meatspace usage directly, you can bet your bottom dollar that gov't will regulate, and prevent anonymous spending (at least, for any large-ish amounts).
  - jmkd 7y ago
    This is a description of monetary assets, of which bitcoin is an example.
  - GoblinSlayer 7y ago
    Not so long ago oil of all things went into negative price range. I wonder what fundamental values are out there underlying money.
    - ivalm 7y ago
      Taxes and tanks (also for now usd is the settlement currency for lots of contracts). Also, oil has large carry costs. Many things with large carry costs are called toxic garbage and have negative value. Oil is just a useful so it mostly has positive value, but the moment you can’t use it, it joins in valuations other toxic garbage.
darawk 7y ago
Yes they are. Please don't spread this nonsense: https://cointelegraph.com/news/trueusd-audit-shows-full-us-dollar-backing https://cointelegraph.com/news/trueusd-audit-shows-full-us-d... Not only are many of them full backed, but they all trade extremely close to parity with one another. Which means that they are all considered relatively safe by the people actually holding them.
- oarsinsync 7y ago
  > but they all trade extremely close to parity with one another. Which means that they are all considered relatively safe by the people actually holding them. trading rather than holding. The people doing the trades are the ones determining the pricing. The people holding are reducing the supply of the asset in the market, but they're not actively participating in pricing of trades.
  - darawk 7y ago
    The current price is the equilibrium of supply and demand. Not only are the holders holding, but the market makers are providing liquidity at those prices. Deep liquidity.
eru 7y ago
Do you mean fully capitalized in the same sense as 'backed' or in a different sense?

chii 7y ago

i agree. A more realistic value is definitely the sum total of transactions conducted using said coin. Counting market cap as value is like counting the market cap of WeWork using the funding valuation they got for a small % of equity.

jkhdigital 7y ago
Bitcoin is a monetary asset with no underlying fundamental value. Transaction volume is meaningless. The only thing that matters is what someone is willing to pay for it.
- Vindicis 7y ago
  Not to mention that it's always just a hairsbreadth away from being obliterated by Governments if they ever choose to.
  - mirimir 7y ago
    As I recall, Bitcoin was designed for resilience to government pressure. But that's never been tested, in any substantive way. I'm not aware of any reason why the Bitcoin network couldn't switch to VPN-level overlay networks. Using Tor would be somewhat problematic, given the limited bandwidth. But I'm pretty sure that it'd be doable. Other options include Orchid and Loki. Mining could be an interesting issue. Government pressure could render large-scale mining operations unworkable. But as I understand it, the Bitcoin network could function just as well with far^N less mining capacity. Difficulty would just decrease with less mining competition. And that would mitigate the key negative impact of electricity usage.
    - judge2020 7y ago
      Bitcoin isn't resilient because trading goods for bitcoin doesn't happen, therefore BTC is reliant on people being able to purchase it using their existing government-controlled money using regulated bank accounts.
      - mirimir 7y ago
        There's probably a workaround for that. Or there arguably would be, if enough people cared enough. Not too many years ago, there were trusted services that sold Bitcoin (and Liberty Reserve and Pecunix) for cash sent anonymously through the mail. I haven't needed that for years, but I'm pretty sure that such services still exist. And given the escrow sector that's developed to serve dark marketplaces, trust is likely far more verifiable. Cryptocurrency and meatspace money are now entirely separate for me. I earn all the cryptocurrency that I need anonymously online. And I don't risk manifesting it as meatspace cash. While that's not currently workable for most people, I don't see why it couldn't become so.
        belltaco 7y ago
        >Cryptocurrency and meatspace money are now entirely separate for me. I earn all the cryptocurrency that I need anonymously online. And I don't risk manifesting it as meatspace cash. While that's not currently workable for most people, I don't see why it couldn't become so. How do you buy things in real life?
        mirimir 7y ago
        With meatspace money. In my case, savings. But I could also have income. The point is that my online anonymous coward personas and my meatspace identity are as isolated as I can manage.
        chii 7y ago
        > With meatspace money i.e., you cannot fulfil your meatspace needs using cryptocurrency as of yet. It doesn't matter that you are able to isolate your identity online from your meatspace identity. And this is what gov't can easily enforce - through money laundering laws. If ever cryptocurrency becomes prevalent enough to offer meatspace usage directly, you can bet your bottom dollar that gov't will regulate, and prevent anonymous spending (at least, for any large-ish amounts).
- jmkd 7y ago
  This is a description of monetary assets, of which bitcoin is an example.
- GoblinSlayer 7y ago
  Not so long ago oil of all things went into negative price range. I wonder what fundamental values are out there underlying money.
  - ivalm 7y ago
    Taxes and tanks (also for now usd is the settlement currency for lots of contracts). Also, oil has large carry costs. Many things with large carry costs are called toxic garbage and have negative value. Oil is just a useful so it mostly has positive value, but the moment you can’t use it, it joins in valuations other toxic garbage.

darawk 7y ago

Yes they are. Please don't spread this nonsense: https://cointelegraph.com/news/trueusd-audit-shows-full-us-dollar-backing https://cointelegraph.com/news/trueusd-audit-shows-full-us-d... Not only are many of them full backed, but they all trade extremely close to parity with one another. Which means that they are all considered relatively safe by the people actually holding them.

oarsinsync 7y ago
> but they all trade extremely close to parity with one another. Which means that they are all considered relatively safe by the people actually holding them. trading rather than holding. The people doing the trades are the ones determining the pricing. The people holding are reducing the supply of the asset in the market, but they're not actively participating in pricing of trades.
- darawk 7y ago
  The current price is the equilibrium of supply and demand. Not only are the holders holding, but the market makers are providing liquidity at those prices. Deep liquidity.

eru 7y ago

Do you mean fully capitalized in the same sense as 'backed' or in a different sense?