rkbabang

No not just scarcity alone. I just drew a happy face on a piece of paper at my desk. It is a scarce commodity, as only one such drawing exists in the world, but I don't think it is very valuable. Bitcoin has been cloned probably thousands of times and even though they all have the same or similar code they are not as valuable as Bitcoin. Why? I will say what I said a few messages above: "whether it has been colorful shells from far away or rare shiny metals, the free market has always used the hardest thing to create, find, or duplicate as money, as long as it was also easily transported, divided, and fungible. That was gold for centuries, but right now on planet Earth it is Bitcoin." You can create another crypto, even one exactly like Bitcoin, but anyone with 51% more computing power than you can destroy it. Bitcoin is secure like nothing else is right now. And that is what makes it valuable. Yes. This is happening, but it won't be overnight. People are comparing Bitcoin, which is ~15 years old, to gold which has been in use for thousands of years. Expecting Bitcoin to take over the world overnight isn't realistic. This will be a many decades long project.

I disagree with that part in the way that I think he meant it. There is a certain viewpoint that thinks money needs to be valuable for uses other than as money. I think having the properties which make something useful to use as money is a value in and of itself. Being good money is valuable without any other uses necessary. Money is the use. Bitcoin has been designed to have every quality a good money should have and it is extremely difficult to counterfeit . It's valuable because of the properties which would make it useful as money. It's funny that people think money should also do other things. No one looks at a car and says "Sure it can take you from point A to point B, but what else can it do? Can you wear it like jewelry"?

Exactly. There will be no way to mine more BTC out of a near-Earth asteroid.

This article is from 2009, by the late L. Neil Smith. Technically Bitcoin existed already, but the author hadn't heard of it yet. His point on gold toward the end is what I want to point out. from: "The Money of Your Choice" by L. Neil Smith and Rylla Cathryn Smith https://ncc-1776.org/tle2009/tle507-20090222-02.html "In the 16th century, the economy of Spain was more or less destroyed when conquistadores brought home tons of gold they'd looted from the New World. The value of gold, relative to other things, plummeted because the more there is of anything, the less any of it is worth, a phenomenon economists refer to as the "Law of Marginal Utility". Spain ceased to be a world power and became, instead, the first "sick man of Europe". In many ways, it has never recovered. (The Law of Marginal Utility, we insist, is not a law of economics or any kind of physical phenomenon—the quality of a commodity does not change simply because there is more or less of it—but is psychological in nature. If Man A has a thousand gold ounces, and Man B has a hundred, Man A will be less concerned about spending ten of his ounces, possibly because he will have many more left, at the end of such a transaction, than would Man B.) The future of monetary standards based on precious metals lies in the stars, or, more accurately, in the Asteroid Belt, where roughly a third of the millions of rocks circling the Sun between Mars and Jupiter are composed of metals, mostly iron and nickel. Other metals are present in lesser amounts: it has been said that a single metallic asteroid a mile in diameter contains more gold than has ever been mined on Earth, lying within relatively easy reach of the asteroid's surface. Thanks to the Law of Marginal Utility, importing that much gold would halve the perceived value of the gold we already possess. Given a future that offers relatively easy and inexpensive means of importing gold and other metals from space—current proposals for "space elevators" present just such an opportunity—within this century, the entire future global economy could be affected in exactly the same way that Spain's was 500 years ago, if America (and humanity) relies on gold and gold alone as a monetary standard. On the other hand, allowing the market to decide, and to constantly re-decide, what is money—and what is not—would prevent such a catastrophe."

I prefer Taco Tuesday to Humourless Humour Tuesday myself.

You are now predicting what will happen 120 years from now? I'm not sure what will happen next year. EDIT: But to seriously answer your question. If some nodes tried to do this, they would just succeed in creating a valueless fork of the blockchain. Anyone can fork the chain at any time. This has been done numerous times already.

I have no doubt you are 100% correct about his motives. He is doing what he thinks is right and has no desire to hurt anyone. You and he are correct in that bubbles do hurt people even if the asset which is bubbling has significant long term value, the crashes in price can cause significant pain to those not expecting it or prepared for it. I just think he's wrong about the long term value.

You'd be betting on SEC approval for an ETF. If that approval never comes the gap with NAV will only keep widening. I have no way to gauge how likely that approval is. The market certainly doesn't think that it's inevitable.

I look at it differently. The money / store of value function of gold IS its utility. This is something humanity needs, same as we need transportation, communications, food, water, etc, etc. BTC is a pure play store of value, better at it than gold, without the other uses complicating things.

Not an exact comparison, since silver tarnishes and gold doesn't. Aluminum would actually be a better comparison. Gold however is far more rare than silver or aluminum. So maybe the over valuation isn't quite 99%, but you are in the ball park.

I don't know what the ultimate value of BTC will be, or even should be. No one does, but that doesn't mean it isn't calculable. There are 21M BTC (I know some have been lost, so 21M at most). The wealth which it will need to ultimately store is in the tens (maybe hundreds) of trillions USD. You can get a rough number from that. You don't need to be exact just roughly right. If I am correct it will reach a point where it is stable and grow only with the productivity of the economy. It will be a roller coaster until then as money is as much a cultural thing as it is a market or political thing. It will take time.

Gold would have very little value if used only for its industrial uses. It would be priced much lower and used much more if it wasn't valued as money or a store of value.

Exactly. This was setup to fail. What you see failing and what you are going to continue to see failing are the centralized "coins" and exchanges. It is a proof that public blockchains have value not a refutation of it. Creating a centralized organization around crypto is like writing an email, saving it on a floppy disk, and mailing it via the USPS. "See! Email is useless!"

Not that I would criticize them in any way for it. They did what worked for them and it worked like nothing else ever has for anyone else. My criticism is strictly pointed only in the direction of the people who think that it is impossible for them to ever be wrong about anything. I don't think Buffett and Munger consider themselves to be omniscient or infallible, but some of their followers clearly think that and aren't afraid to say so.

Do the Charlie & Warren worshipers who say things like "It always surprises me that when Buffett and Munger say that cryptocurrencies are worthless, there are thousands of intelligent people arguing otherwise," even acknowledge that it is possible for them to be wrong about something? Are they even human? I wouldn't be surprised to see a cult form after their deaths and every word they've ever spoken published as the cults gospel. No one is always correct. Einstein made mistakes too, he even admitted to them later on. The fact is that whether it has been colorful shells from far away or rare shiny metals, the free market has always used the hardest thing to create, find, or duplicate as money, as long as it was also easily transported, divided, and fungible. That was gold for centuries, but right now on planet Earth it is Bitcoin.

Then don’t.

The problem is they keep calling people who make a lot of money fast “the next Buffett”. But that isn’t how Buffett did it himself. The ones calling these people the next Warren Buffett don’t understand Warren Buffett. It isn’t a curse, just misapplied labeling.

Statistically air travel is safer, so if everyone is on a different flight the seed phrase should be safe.

I agree. Fidelity is rolling out their crypto accounts soon, but they will be limited at first. You will not be able to withdraw your crypto into a private wallet. Once Fidelity allows crypto withdrawals I doubt that I will ever use Coinbase again.

This is true. You need to make arrangements for this with someone you trust while you are still alive. And maybe a backup if that person is someone you are frequently in a car or plane together with.

The good thing about a CBDC is that it will replace the scammy stable coins like Tether. It will make exchanges between BTC and USD easier and safer without putting some shady stable coin in the middle. That will make the market more efficient and less prone to a crisis like what will happen when Tether finally blows up as I expect it will. BTC isn't going away. The USD is not a safe store of value and never will be, BTC isn't now, but it will eventually become one.

Agreed. I use COIN's trading services, then get everything right back out. I was nervous as hell when I sold my crypto last year and had a large dollar amount in Coinbase for a couple of weeks. I put the entire amount I wanted to sell in all at once and sold it. I didn't realize Coinbase had a cash withdrawal limit. I could only transfer a certain amount per day and a certain amount per week into my bank account. Had I realized this I would have sold my crypto over a few weeks rather than all at once. Live and learn. I don't trust the exchanges at all. We've seen blowups in the past and will see more in the future. People seem not to be able to learn that lesson.

"We saw what can go wrong if a centralized token, trading on an unregistered exchange, blow up this week," Saylor said in a CNBC interview. "I think the bitcoiners have been predicting this for a long time." "Saylor said that now is a "really good time" to be accumulating bitcoin." https://seekingalpha.com/news/3905742-microstrategys-saylor-we-feel-like-we-are-trapped-in-a-dysfunctional-relationship-with-crypto-and-we-want-out I agree.

My guess is Tether. Saylor just has to keep holding and maybe adding and he'll be fine.

The same place your money goes if you had deposits at a bank that went bankrupt before FDIC. It has been said before and can't be repeated enough: "Not your keys, not your crypto".