[OT] Just How Undervalued is Bitcoin?
In a previous thread I asked if Bitcoin was a bubble:
https://www.tuscl.net/?page=post&id=5180…
The TUSCL Consensus (TM) seems to be that it is.
Now for those of you who do not believe it is a bubble, I'm with you. The new question is: Just how undervalued is it? I personally have trouble seeing how it is not at least a $35,000 coin.
How the rest of you? Where do you see the price heading?
https://www.tuscl.net/?page=post&id=5180…
The TUSCL Consensus (TM) seems to be that it is.
Now for those of you who do not believe it is a bubble, I'm with you. The new question is: Just how undervalued is it? I personally have trouble seeing how it is not at least a $35,000 coin.
How the rest of you? Where do you see the price heading?
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So if you prefer to answer with crypto space market cap, go ahead.
http://www.businessinsider.com/bitcoin-c…
"All money" in the world (read the article if you want their definition) is listed as $84 trillion. So Bitcoin would have to capture 1/4 of that.
At lot of he volitility is is the exchange rate is due to all of the speculative trading and investing. So that's to be expected and as it turns out necessary. The publicity and network effects of bring the speculators on board is needed to help promote its acceptance.
Once more people are using BTC to actually buy stuff instead of just investing we will probably see more stability. But I doubt we'll see as much stability as we see with central planning, banking, and policies. But that's sort of the point and the true end game.
So much of the gold market is buried in Ft. Knox, so if all hell broke loose who's currency are you going to rely on, the rubble, the pound, the Euro, the dollar(US), the peso, the Franc? Lol!! The default will be precious commodities after currencies, then perishable and non-perishable goods. But essentially these (currencies and commodities) are backed by the US political presence, so someone that states the US dollar is a fiat currency is essentially ceying out bullshit because there's no consequences when nobody runs for the exits. If people actually do respond to the word "fire", they sure as hell ain't running to shore up cryptic currency. He'll trade will essentially stop if that happened, which is why tangibles will always be a safer haven than a currency, even a cryptic one. Never say the US dollar is fiat, unless you live outside of the US. Yes I wrote it, you're unpatriotic if you believe in a fiat currency.
True fiat means arbitrary. The dollar floats, albeit way less numerically than the Yuan or cryptic currency. However there is more behind it than words when you have over 25% of the worlds GDP using it domestically, without regards to how its denominated against other currencies abroad when business gets done over seas.
It's benchmarked against commerce, so if it really was a true fiat, then commodities would be highly volatile from day to day, because you can really price the dollar to baskets of commodities; metals, lumber, livestock, and real estate. Since a house today may cost $250k, it still will be priced the same next week or in a few months with CPI in mind. It doesn't go from $250k to $350k and then back down to $150k within a year. I believe we are debating to what degree the term "fiat" means, or "is".
Maybe true lessez-faire isn't possible since the world is more global, more trade, more state and military power, and less isolationist.
But does the Fed have too much power, unconstitutionally? Don't they fuck up as much as they get right? What's FAIR versus what's FREE? Does the current Fed+POTUS strike the right balance? Is central banking a capitalist or a communist concept? We got it from the King of England, no? Never said they can't have gold reserves. But the central manipulation?
/1. "Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly."
/2. "To coin Money, regulate the value thereof, and of foreign Coin, and fix the a Standard of Weights and Measures;"
Where does the Fed fall? Constitution or Manifesto?
Reference:
https://www.archives.gov/founding-docs/c… (Hamilton, Madison, Jefferson; 1787)
https://www.marxists.org/archive/marx/wo… (Marx, Engels; 1848)
The prices are close to real value today but still maybe 2X what they should be if the Fed was playing with interest rates. A $400,000 house bought on 3% down might only be half that if there wasn't so much credit manipulation.
A lot of a homes value today is its ZIP code plus the school district its in. Decouple the schooling with freedom and vouchers and the prices would be closer to real market clearing prices, with 20% down, and local bank holding the mortgage instead of these crazy mortgage investment instruments sold by too-big-to-fail national banks.
Most families buy these homes because they are trying to give give their children a good educational foundation for life while still living in a safe area. Hence the bidding wars, up or down. Education is sold as the investment for future opportunity.
So, what gives bitcoin its value ? Is the belief that bitcoin has value the only thing that gives it value ?
I really don't understand any of this. At first blush, I don't see why anyone would view crypto currency as an investment or even an asset if there is nothing behind it.
P.S. the US dollars are arbitrarily designed; the choice of which person's face appears on the front of the paper bills is completely arbitrary with regards to the decree that the paper bill is, by formal declaration (i.e. fiat), money.
P.P.S. gold was not arbitrarily used as commodity money for thousands of years. Rather, the unique physical and chemical properties of gold make it suitable for use as money.
You can debate all day long if the US dollar is fiat currency, because it is similar in nature. The Zimbabwe currency was a fiat currency a decade or so ago and hyperinflated because it didn't represent anything due to loss of political presence. That is what a true fiat currency looks like.
For those of you who want to dig into the weeds and know the details of "fiat", I can only recommend you to use the term correctly. Otherwise, framing the US dollar as fiat is total embellishment beyond proportions of sanity. It's not an attack of intelligence on anybody, other than using the term loosely for mere presence of fear. The term fiat to the US dollar is the same as the guys like Ron Paul and Porter Stansberry stating you should put all of your money into gold and precious metals. It goes too far !! That's all.
\quote
Legal Tender Status
...
Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.
\end quote
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Is Donal Trump a republican?
Both terms "doctor" and "Republican" are overstated. I think my points about the US dollar being labeled a fiat currency are pretty good.
Without exchange that exchange BTC for USD, I bet we'd be back to the days of Laszlo bartering 10,000 BTC for 2 large pizzas again.
I was talking with the Older Indian gentleman who runs the convenience store near me a few years back. He had no problem accepting BItcoin using the same process: he wouldn't run it through his PoS just yet, but we could run it through our phones or computers, barter out a rough BTC value between like two of us -- for this pile of groceries will you take 0.0045 BTC? OK, deal -- , then do the exchange. Wait the few minutes for it to clear, then we'd be good.
Some places officially or unofficially take PayPal and many take Apple Pay (really NFC like MC PayPass). Though those are all USD. But many are more open to alternative methods of payment these days.
Twentyfive, my wife jokes that if someone were to steal or rob my Bitcoin, she thinks I wouldn't be able to talk to robbery Dept at the police station I'd be directed to the detective in-charge of the-theft-of-Pokemon-cards Dept. Lol!
Is Bitcoin a fiat currency? I would say it is, because, at the end of the day, there is nothing backing it other than a good reputation and growing acceptance and guaranteed production schedule.
Why does the USD have value even though it is Fiat? Good track record, strong economy backing it, and competent stewards like the Fed, and US government. (Or should I say relative to other countries, at least? :-) )
Why does Bitcoin have value? Good track record, growing economy backing it, competent stewards. But, mostly, I think because, assuming SHA-256 is secure, it has a guaranteed production rate which nobody can do anything to fuck with.
I'm with you and crazyjoe on this one. Market seems to be speaking pretty loudly and clearly on this one.
Oddly enough, a big enemy of Bitcoin right now is the fact that it appreciates so fast, that people are reluctant to spend it. See Gresham's law.
I would say all the buyers who missed the initial run ups eager to get in on a decent price would be the support. Russia, China and other countries also certainly have an interest in seeing a competitor to the USD.
I didn't change any position this week. Haven't for a little while now. I like my current allocations. I was never into any ICO stuff to begin with.
Bitcoin is pegged only to intellectual property rights, and it is not very well diversified in that right. It's sole bet is anti-government. Think about that for longer than 1 second, maybe even two seconds so you can let that sink in. For your sake, I hope I'm wrong.
Intelligent people are there own worst enemy. They push the envelope in non-rational behaviors. They anchor to an idea, which is a bias much like confirmation bias. When presented with new ideas, or even old ideas, they ignore it and rationalize things the way an intelligent person wants to see it to be.
Thomas Jefferson, Ben Franklin, and even Albert Einstein were smart enough to understand their limitations. An individual is only as smart as him/herself. To diversify amongst others is much wiser. Therefore you will likely never beat out over your lifetime and indexing or buy and hold the market approach. Bitcoin is such a small part of the market, you're buying a lot of hope at this point. My opinion of course...
Say what? It's all open source. People copy from each quite freely. I don't think even the major protocols (e.g. the ZeroKnowledge ones) are close. It won't matter anyway, b/c people who just use the patented idea since who are you going to sue? The blockchain? How you going to force it to pay.
The Chinese are getting wise and the PBOC is recommending they launch in their own national crypto-currency asap to try and dampen the rise of Bitcoin.
I don't think a Chinese crypto currency (Yuan backed) would cut it, however, because China just has too much debt (if you thought the US was bad!) and due to the inflation rate. They've had trouble selling bonds before.
Only a Fed crypto currency, or, much weaker choice, Euro crypto currency would cut it, IMO. I don't think the US is an any danger of moving quickly with that clown Donald Trump running the circus, so I guess that would leave it all up to Europe.