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Perhaps I could ask you a simple question, then. How would you value a Bitcoin?. I am not looking for a precise answer, but a rough range of what it should be

Perhaps I could ask you a simple question, then. How would you value a Bitcoin?. I am not looking for a precise answer, but a rough range of what it should be worth. It should be possible to do this for any financial asset.

abstrct 13y ago
How do you value a network able to send 'value' across the globe immediately. What does PayPal and Visa value their networks at? I imagine it is a good chunk of change. Now, to further complicate things, you have to put a value on that piece of that puzzle that actually changes hands during these transactions. Realistically, the value of it doesn't even matter if I want to go CAD -> BTC -> BTC -> USD. As long as the value between CAD and USD makes sense, the transaction was a success and all parties are happy. This is what most people, generally the investment folk, don't understand about our new little technology here. Bitcoin isn't just about the value of a Bitcoin and a Bitcoins buying power. Bitcoin is a network. The value of the fuel for that network will very as people need it and as the cost associated with generating that fuel change. This is irrelevant though as the price of Bitcoin is not the measure of its usefulness, or its success.
shawabawa3 13y ago
> How would you value a Bitcoin? I would go on bitstamp and see what people are trading them for. That would be around ~$620 at the moment. If you think this isn't a valid way of valuing something then tell me: How would you value a 2 bedroom flat in London? My guess is you would see how much similar flats nearby are selling for (and if you say you would get an expert valuation - how are they getting the value?)
- james1071 13y ago
  Flat-rental income 20k p.a. Valuation 400k at 5% yield. Maximum plausible valuation might be 600k Lowest plausible valuation might be 250k No such exercise is possible with Bitcoin, the 'value' of which could be argued to be anything.
  - shawabawa3 13y ago
    That's kind of a circular argument. How did you get the rental income? In the end, everything is worth what its purchaser will pay for it. It's no different for bitcoin as for anything else
    - james1071 13y ago
      er..you check local rents and use that number instead of guessing. property values ultimately determined by rents and yields. this is not circular at all. not possible to value Bitcoin in the same way.
      - shawabawa3 13y ago
        > property values ultimately determined by rents and yields And rents and yields are determined by what people are willing to pay to rent the property. Just like bitcoin value is determined by what people are willing to pay for bitcoins. You're right your argument wasn't circular, what I meant was you were just pushing it to another level. The sale value is based on the rent value, but what is the rent value based on?
        james1071 13y ago
        As I have said, it is straight forward to come up with a valuation range for a property. At the bottom of the range, it would be attractive to borrow money and rent it out. You cannot value Bitcoin like this because it does not produce an income and is not linked to the value of any other asset.

abstrct 13y ago

How do you value a network able to send 'value' across the globe immediately. What does PayPal and Visa value their networks at? I imagine it is a good chunk of change. Now, to further complicate things, you have to put a value on that piece of that puzzle that actually changes hands during these transactions. Realistically, the value of it doesn't even matter if I want to go CAD -> BTC -> BTC -> USD. As long as the value between CAD and USD makes sense, the transaction was a success and all parties are happy. This is what most people, generally the investment folk, don't understand about our new little technology here. Bitcoin isn't just about the value of a Bitcoin and a Bitcoins buying power. Bitcoin is a network. The value of the fuel for that network will very as people need it and as the cost associated with generating that fuel change. This is irrelevant though as the price of Bitcoin is not the measure of its usefulness, or its success.

shawabawa3 13y ago

> How would you value a Bitcoin? I would go on bitstamp and see what people are trading them for. That would be around ~$620 at the moment. If you think this isn't a valid way of valuing something then tell me: How would you value a 2 bedroom flat in London? My guess is you would see how much similar flats nearby are selling for (and if you say you would get an expert valuation - how are they getting the value?)

james1071 13y ago
Flat-rental income 20k p.a. Valuation 400k at 5% yield. Maximum plausible valuation might be 600k Lowest plausible valuation might be 250k No such exercise is possible with Bitcoin, the 'value' of which could be argued to be anything.
- shawabawa3 13y ago
  That's kind of a circular argument. How did you get the rental income? In the end, everything is worth what its purchaser will pay for it. It's no different for bitcoin as for anything else
  - james1071 13y ago
    er..you check local rents and use that number instead of guessing. property values ultimately determined by rents and yields. this is not circular at all. not possible to value Bitcoin in the same way.
    - shawabawa3 13y ago
      > property values ultimately determined by rents and yields And rents and yields are determined by what people are willing to pay to rent the property. Just like bitcoin value is determined by what people are willing to pay for bitcoins. You're right your argument wasn't circular, what I meant was you were just pushing it to another level. The sale value is based on the rent value, but what is the rent value based on?
      - james1071 13y ago
        As I have said, it is straight forward to come up with a valuation range for a property. At the bottom of the range, it would be attractive to borrow money and rent it out. You cannot value Bitcoin like this because it does not produce an income and is not linked to the value of any other asset.