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I think the author comes pretty close to what I think is the right answer: on the scale of nations, BTC doesn't matter. It's an experiment. It's not more anon

by parsimo2010 6y ago

I think the author comes pretty close to what I think is the right answer: on the scale of nations, BTC doesn't matter. It's an experiment. It's not more anonymous than paper currency, and not much more effective at laundering money. Governments aren't worried about it because it isn't really changing anything. If I want to buy a nuke, tank, or a fighter jet, BTC isn't solving the the hard problems related to that (taking delivery of said nuke, tank, or jet without being intercepted). BTC is enabling stoners to buy drugs online, and frankly, governments aren't that worried because stoners were already buying drugs. I also don't think it's so much as "governments don't care about people storing wealth" so much as "it's not storing wealth." It's not worth as much as you think it is, and it's not that good at storing wealth (I will accept that it may be a decent high-risk opportunity for growth). The current $1 trillion market cap is calculated by assuming all of the 18.65 million BTC ever mined could be sold at the current asking price. But they can't be, because the order books aren't that deep and never will be, plus there are a lot of mined BTC that are in wallets with lost keys. It's probably still worth more than some small countries, but BTC definitely isn't worth $1 trillion. And when you consider BTC as a store of wealth, gold is a way better choice. I don't want my store of wealth to be experiencing gargantuan shifts in value over a few weeks. It might sound like I'm shitting on BTC. I'm not, I think it's a cool experiment. I like the idea of being able to transfer money to friends without fees, and I'm glad that crypto helps keep banks honest. It was certainly novel. If I were to shit on anyone, it would be cryptocurrency bros that are full of themselves and think that their one thing is going to turn the world upside down. I'm for BTC as long as people don't get too hung up about it and instead we see BTC as helping us figure out ways to do financial things better.

gruez 6y ago
> The current $1 trillion market cap is calculated by assuming all of the 18.65 million BTC ever mined could be sold at the current asking price. But they can't be, because the order books aren't that deep and never will be You can say that about literally any asset because "market cap" doesn't mean "liquidation price".
- morpheos137 6y ago
  Assets that have a real income stream behind them at least have a price floor. For example you would not expect a house to sell for less than the present value of some number of years rent, you would not expect the sum of shares of a company to sell for less than the liquidation value of its assets less its liabilities, etc. Bitcoin has precisely 0 equity or income stream attached to it. It is not an income producing asset. It does not grant claim to real assets like a bond or a stock. There is zero underlying. That is why the term "Bitcoin market cap" is BS. There is nothing to capitalise. Bitcoin could be priced at $0 or $1,000,000 either way its present price per unit does not relate to the net value of all Bitcoins as a market cap would.
  - gruez 6y ago
    >Assets that have a real income stream behind them at least have a price floor. [...] Bitcoin has precisely 0 equity or income stream attached to it. Is this a relevant factor considering that many assets are trading several times above this price floor? In other words, if you bought $5000 worth of shares in a highly overvalued company (eg. GME or TSLA), and the bubble pops, is it really much consolation to you that there's a price floor of $100 rather than $0? >That is why the term "Bitcoin market cap" is BS. There is nothing to capitalise. This is technically correct in the sense that "market cap" is only defined for companies (according to wikipedia at least), so you could say that it's wrong to quote the "market cap" for anything other than companies (cryptocurrency, precious metals, commodities, houses).
    - morpheos137 6y ago
      >Is this a relevant factor considering that many assets are trading several times above this price floor? Yes. But the market can stay "irrational" for a long time. Many people have won the greater fool game over the years. >This is technically correct in the sense that "market cap" is only defined for companies. Market cap is a measure of the total equity of company as priced in the stock market. Since nobody can own the "Bitcoin network" like they can own a shares of a company "market cap" is nonsense when used as a term to describe the value of the Bitcoin network. There is no underlying equity to capitalise at any price.

gruez 6y ago

> The current $1 trillion market cap is calculated by assuming all of the 18.65 million BTC ever mined could be sold at the current asking price. But they can't be, because the order books aren't that deep and never will be You can say that about literally any asset because "market cap" doesn't mean "liquidation price".

morpheos137 6y ago
Assets that have a real income stream behind them at least have a price floor. For example you would not expect a house to sell for less than the present value of some number of years rent, you would not expect the sum of shares of a company to sell for less than the liquidation value of its assets less its liabilities, etc. Bitcoin has precisely 0 equity or income stream attached to it. It is not an income producing asset. It does not grant claim to real assets like a bond or a stock. There is zero underlying. That is why the term "Bitcoin market cap" is BS. There is nothing to capitalise. Bitcoin could be priced at $0 or $1,000,000 either way its present price per unit does not relate to the net value of all Bitcoins as a market cap would.
- gruez 6y ago
  >Assets that have a real income stream behind them at least have a price floor. [...] Bitcoin has precisely 0 equity or income stream attached to it. Is this a relevant factor considering that many assets are trading several times above this price floor? In other words, if you bought $5000 worth of shares in a highly overvalued company (eg. GME or TSLA), and the bubble pops, is it really much consolation to you that there's a price floor of $100 rather than $0? >That is why the term "Bitcoin market cap" is BS. There is nothing to capitalise. This is technically correct in the sense that "market cap" is only defined for companies (according to wikipedia at least), so you could say that it's wrong to quote the "market cap" for anything other than companies (cryptocurrency, precious metals, commodities, houses).
  - morpheos137 6y ago
    >Is this a relevant factor considering that many assets are trading several times above this price floor? Yes. But the market can stay "irrational" for a long time. Many people have won the greater fool game over the years. >This is technically correct in the sense that "market cap" is only defined for companies. Market cap is a measure of the total equity of company as priced in the stock market. Since nobody can own the "Bitcoin network" like they can own a shares of a company "market cap" is nonsense when used as a term to describe the value of the Bitcoin network. There is no underlying equity to capitalise at any price.