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> Everything is animal spirits now in search of yield. Zirp explains exactly why asset prices are inflating, as I said before, animal spirits are an unnecessar

> Everything is animal spirits now in search of yield. Zirp explains exactly why asset prices are inflating, as I said before, animal spirits are an unnecessary hypothesis. > Because people are expecting it to get to $100k, which means it's a hot commodity in a speculative bubble. Not everyone who buys into a bubble believes that the underlying fundamentals justify the price in the long run- they just believe that there's room to grow, and that there are greater fools to sell to. When there are underlying fundamentals, as in the case of bitcoin, its not necessary to speculate on why people might buy a thing otherwise. Certainly there are people who buy because its trendy. Thats not really relevant though.

Apocryphon 6y ago
I think it all goes back to your original statement about bitcoin enthusiasts being more likely to have a better understanding of fiat than the average person. Upon closer retrospection, you are probably right, because even if the BTC market might be dominated by bandwagoners who are only preoccupied about asset value and the potential for reselling it for real fiat money once it's at a desired price, the "enthusiasts" probably do in fact understand the technology enough to understand its implications.
pmiller2 6y ago
What are these "fundamentals" you speak of? Why should I pay anything at all for a record of the fact that someone, sometime in the past solved a useless math problem?
- chordalkeyboard 6y ago
  Scarcity. It’s ledger money. People want a unit of exchange that won’t depreciate as a result of the creation of new units. bitcoin meets that need.
  - pmiller2 6y ago
    So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all. As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency. If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue. I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable. PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain.
    - chordalkeyboard 6y ago
      > So what if it's scarce? So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD. > Why should I be transacting using a record of someone's solution to a useless math problem to begin with? People who want to transact don’t wonder why they need an exchange medium. > As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency. Why should anyone care about your opinion on btc? You don’t even seem to understand why a currency should be scarce (in the economic sense). > If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue. Obviously, you’re mistaken about inflation. > I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable. “Scarce” here refers to the economic sense of the word, not its common analogue. > PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain. This would be a good opportunity for you to reflect on why USD are decreasing in value while BTC are increasing.

Apocryphon 6y ago

I think it all goes back to your original statement about bitcoin enthusiasts being more likely to have a better understanding of fiat than the average person. Upon closer retrospection, you are probably right, because even if the BTC market might be dominated by bandwagoners who are only preoccupied about asset value and the potential for reselling it for real fiat money once it's at a desired price, the "enthusiasts" probably do in fact understand the technology enough to understand its implications.

pmiller2 6y ago

What are these "fundamentals" you speak of? Why should I pay anything at all for a record of the fact that someone, sometime in the past solved a useless math problem?

chordalkeyboard 6y ago
Scarcity. It’s ledger money. People want a unit of exchange that won’t depreciate as a result of the creation of new units. bitcoin meets that need.
- pmiller2 6y ago
  So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all. As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency. If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue. I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable. PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain.
  - chordalkeyboard 6y ago
    > So what if it's scarce? So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD. > Why should I be transacting using a record of someone's solution to a useless math problem to begin with? People who want to transact don’t wonder why they need an exchange medium. > As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency. Why should anyone care about your opinion on btc? You don’t even seem to understand why a currency should be scarce (in the economic sense). > If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue. Obviously, you’re mistaken about inflation. > I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable. “Scarce” here refers to the economic sense of the word, not its common analogue. > PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain. This would be a good opportunity for you to reflect on why USD are decreasing in value while BTC are increasing.