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There is no underlying value. No intrinsic value. The value is purely a function of speculative demand. And while previously people anticipated the demand woul

There is no underlying value. No intrinsic value. The value is purely a function of speculative demand. And while previously people anticipated the demand would go up "organically" because of actual real-world usage, you know to pay for stuff and such, that hasn't really materialized in the way we hoped. How many actually use BTC for things like that? At its BEST it has usage to purchase other coins - but that's about it. It is digital gold, but with seemingly less IRL usage. When I started with BTC 12 years ago, the community was really optimistic on the potential use cases - but mostly the aspect of it replacing expensive wire transfers, potential for being a digital currency you could use in your daily life. After each hype cycle that belief diminished, and it became more apparent that people only buy it to get richer by the means of speculation. The days of BTC 1000x'ing are long gone. Even if 1 BTC is to go for $1MM, that's "only" a 21.5x increase, and it would mean that BTC alone has a 21 trillion cap. That's half of the entire S&P500 market cap. And you'd still have a slew of other safe coins that competes against BTC for the same money. So, my point is: While BTC is still the king of crypto, it lives in a financial market that is mostly driven by speculation and expectations of huge returns. The very same investors can earn a lot more by gambling on "lesser" coins. There's still money to be made, but that boils down to people buying and selling between the various boom and bust cycles. We're 15 years into this now.

Galanwe 3y ago
Bitcoin has no day to day usage because of its volatility. The more ETFs like that appear, the lower it's volatility, and thus you will be able to see real world usage pop up. Also, the more regulation, the easier it will be to hold and use BTC to buy stuff.
- garydevenay 3y ago
  I use Bitcoin almost every day. Using fiat rails is painful.
  - helsinkiandrew 3y ago
    > I use Bitcoin almost every day Please explain how!
npoc 3y ago
The IRL usage is as a savings account. As more people understand its fundamental qualities (or even just see number go up) and save their wealth in it, it's value will become less volatile and it will become more useful as a unit of account and day-to-day medium of exchange. It will be >$10M/BTC before that'll start to happen though.
- TrackerFF 3y ago
  If we're going to look at it from a fundamental perspective - what drives people to purchase BTC? I don't know about you, but close to 100% of everyone I know that have bought BTC (and other coins, for that matter) the past 5-10 years have done it in hopes of it going to the moon. The bitcoin maxis are at this point a fringe movement, a distant past, really. If you put all your savings on index funds, there is some predictability and underlying assets to reason for. What is the best predictor for whether crypto goes up or down? How can you possibly predict what triggers its price, if there's little to none real-life usage? Unless we see widespread adaption of some sort, for actual concrete applications, it is just going to be pure speculation. But I agree on volatility - ETFs can certainly reduce volatility if there's enough growth.
  - npoc 3y ago
    I have all my savings stored in bitcoin. I do it because I've spent 100s of hours learning what money really is and can see that bitcoin is the best form of it, certainly the best long term store of value. I also know that the best long term store of value will ultimately be where the world's stored value is moved to.
    - Gareth321 3y ago
      I like your courage, but you really should diversify. Life is long and none of us have a crystal ball. If you don't trust USD, get some other currencies, including crypto. Get some property. Gold. Bonds. Stocks. Savings. Shit happens and you need to defend your portfolio as well as maximise profits.
ur-whale 3y ago
> No intrinsic value The rest of your long rant is basically useless, because the last 2 words above have strictly no meaning when put together
- TrackerFF 3y ago
  If you invest in a company that produces disinfectants, during a pandemic, you can reasonably assume that there's both demand, and that the value of the company is a function of their ability to produce disinfectant, how much inventory they have etc. - in fact, this can be measured / inferred through their financial reporting. Likewise, if you invest in a pharma company that produces insulin, and there's a insulin shortage, same principle applies. Or maybe you want to invest in some heavy machinery company, so naturally the valuation depends on how much their assets are worth. And how much they're making off their services in sales. In any case, for all the above, there is some base value - some intrinsic value, which is possible to calculate. Hell, even gold is predictable. If there's physical demand for gold (which there is), you can come up with how much physical gold is needed, at minimum. But how do you calculate that for, say, bitcoin? I'm having a hard time coming up with anything. I can't point to any application which would require people to strictly use bitcoin, and thus driving up demand. No policies that require people to pay with bitcoin. I guess one could argue that the hardware needed to mine bitcoin has a value, which could set some minimum for what miners are willing to sell BTC for - but otherwise it seems to be only supply and demand. It is the "demand" part which I find difficult.
  - ur-whale 3y ago
    I am only saying that there is no such thing as intrinsic value. Or to put it differently, it is an idea that has little to no predictive power and therefore is of no great value. There is only one very reliable principle to reason with in that space: supply and demand. It has been observed to work every time for thousands of years, and therefore very much akin to what physicist like to call a postulate or a law (as in the second law of thermodynamics, yet to be actually proven from other principles, but observed to work every single time in the real world). Go back to all of the examples you listed above, and dig deep enough, you will see that every single item's vaunted intrinsic value boils down to one thing : there is a demand for these things or the product they put out in the market, therefore they have value. I repeat : there is no such thing as intrinsic value, there is just supply and demand. Intrinsic value is a delusion. And in the case of Bitcoin, there is clearly demand for it. Therefore it has value. Why there is demand for it is not something you can easily analyze, because you'd have to get inside the brain of every market participant, each of which has followed a different line of reasoning to get to a conclusion about the value of Bitcoin. Some of these will be rational. Some won't. It doesn't matter. Only the aggregate outcome does matter. You are trying to claim that you don't understand why there is a demand for Bitcoin and you don't because in your world, things have to have "intrinsic value" for there to be demand for it. a) your premises are clearly incorrect: the current market price for Bitcoin clearly indicates that there is demand for it. Therefore it has value. Therefore the notion of "intrinsic value" is clearly of little practical use. b) the *reason* why there is demand for it may very well be hard for you to understand based on *your* postulate that things must have "intrinsic value" (no such thing, remember?) for there to be demand for something. Just abandon the idea that intrinsic value is a valuable concept, get back to supply and demand, and the world will start making sense again.
uzbit 3y ago
> There is no underlying value. No intrinsic value. I'm surprised this comment still shows up. The intrinsic value is literally all of the energy spent ensuring the validity of the blockchain via expensive PoW. If you want to point at something with no intrinsic value, look to the fiats.
LAMike 3y ago
> When I started with BTC 12 years ago Wow, you must be rich and retired from Bitcoin right? You had the opportunity to by at single/double digits and you secured generational wealth? Hoping this is true :)

Galanwe 3y ago

Bitcoin has no day to day usage because of its volatility. The more ETFs like that appear, the lower it's volatility, and thus you will be able to see real world usage pop up. Also, the more regulation, the easier it will be to hold and use BTC to buy stuff.

garydevenay 3y ago
I use Bitcoin almost every day. Using fiat rails is painful.
- helsinkiandrew 3y ago
  > I use Bitcoin almost every day Please explain how!

npoc 3y ago

The IRL usage is as a savings account. As more people understand its fundamental qualities (or even just see number go up) and save their wealth in it, it's value will become less volatile and it will become more useful as a unit of account and day-to-day medium of exchange. It will be >$10M/BTC before that'll start to happen though.

TrackerFF 3y ago
If we're going to look at it from a fundamental perspective - what drives people to purchase BTC? I don't know about you, but close to 100% of everyone I know that have bought BTC (and other coins, for that matter) the past 5-10 years have done it in hopes of it going to the moon. The bitcoin maxis are at this point a fringe movement, a distant past, really. If you put all your savings on index funds, there is some predictability and underlying assets to reason for. What is the best predictor for whether crypto goes up or down? How can you possibly predict what triggers its price, if there's little to none real-life usage? Unless we see widespread adaption of some sort, for actual concrete applications, it is just going to be pure speculation. But I agree on volatility - ETFs can certainly reduce volatility if there's enough growth.
- npoc 3y ago
  I have all my savings stored in bitcoin. I do it because I've spent 100s of hours learning what money really is and can see that bitcoin is the best form of it, certainly the best long term store of value. I also know that the best long term store of value will ultimately be where the world's stored value is moved to.
  - Gareth321 3y ago
    I like your courage, but you really should diversify. Life is long and none of us have a crystal ball. If you don't trust USD, get some other currencies, including crypto. Get some property. Gold. Bonds. Stocks. Savings. Shit happens and you need to defend your portfolio as well as maximise profits.

ur-whale 3y ago

> No intrinsic value The rest of your long rant is basically useless, because the last 2 words above have strictly no meaning when put together

TrackerFF 3y ago
If you invest in a company that produces disinfectants, during a pandemic, you can reasonably assume that there's both demand, and that the value of the company is a function of their ability to produce disinfectant, how much inventory they have etc. - in fact, this can be measured / inferred through their financial reporting. Likewise, if you invest in a pharma company that produces insulin, and there's a insulin shortage, same principle applies. Or maybe you want to invest in some heavy machinery company, so naturally the valuation depends on how much their assets are worth. And how much they're making off their services in sales. In any case, for all the above, there is some base value - some intrinsic value, which is possible to calculate. Hell, even gold is predictable. If there's physical demand for gold (which there is), you can come up with how much physical gold is needed, at minimum. But how do you calculate that for, say, bitcoin? I'm having a hard time coming up with anything. I can't point to any application which would require people to strictly use bitcoin, and thus driving up demand. No policies that require people to pay with bitcoin. I guess one could argue that the hardware needed to mine bitcoin has a value, which could set some minimum for what miners are willing to sell BTC for - but otherwise it seems to be only supply and demand. It is the "demand" part which I find difficult.
- ur-whale 3y ago
  I am only saying that there is no such thing as intrinsic value. Or to put it differently, it is an idea that has little to no predictive power and therefore is of no great value. There is only one very reliable principle to reason with in that space: supply and demand. It has been observed to work every time for thousands of years, and therefore very much akin to what physicist like to call a postulate or a law (as in the second law of thermodynamics, yet to be actually proven from other principles, but observed to work every single time in the real world). Go back to all of the examples you listed above, and dig deep enough, you will see that every single item's vaunted intrinsic value boils down to one thing : there is a demand for these things or the product they put out in the market, therefore they have value. I repeat : there is no such thing as intrinsic value, there is just supply and demand. Intrinsic value is a delusion. And in the case of Bitcoin, there is clearly demand for it. Therefore it has value. Why there is demand for it is not something you can easily analyze, because you'd have to get inside the brain of every market participant, each of which has followed a different line of reasoning to get to a conclusion about the value of Bitcoin. Some of these will be rational. Some won't. It doesn't matter. Only the aggregate outcome does matter. You are trying to claim that you don't understand why there is a demand for Bitcoin and you don't because in your world, things have to have "intrinsic value" for there to be demand for it. a) your premises are clearly incorrect: the current market price for Bitcoin clearly indicates that there is demand for it. Therefore it has value. Therefore the notion of "intrinsic value" is clearly of little practical use. b) the *reason* why there is demand for it may very well be hard for you to understand based on *your* postulate that things must have "intrinsic value" (no such thing, remember?) for there to be demand for something. Just abandon the idea that intrinsic value is a valuable concept, get back to supply and demand, and the world will start making sense again.

uzbit 3y ago

> There is no underlying value. No intrinsic value. I'm surprised this comment still shows up. The intrinsic value is literally all of the energy spent ensuring the validity of the blockchain via expensive PoW. If you want to point at something with no intrinsic value, look to the fiats.

LAMike 3y ago

> When I started with BTC 12 years ago Wow, you must be rich and retired from Bitcoin right? You had the opportunity to by at single/double digits and you secured generational wealth? Hoping this is true :)