Cryptocurrencies

[tooskinneejs]

1 hour ago, TwoCitiesCapital said:

 

This point has been belabored to death in the 192 pages of this thread - and others. 

 

It's not really my responsibility to rehash it again. The materials are there, discussed, debated, and sources if you're genuinely curious. 

 

Not really in the mood to expend more energy having the same conversation 

So simple it can't be explained.

[james22]

3 hours ago, Fly said:

They are both on the same team. 

 

Exactly.

[james22]

24 minutes ago, tooskinneejs said:

So simple it can't be explained.

 

Nothing is so simple it can be explained to the simple.

[Santayana]

14 hours ago, Dave86ch said:

It's not for everyone, but it will eventually become part of everyone's pension fund.

But since most people don't have pension funds (at least in the US) how meaningful is that?

[TwoCitiesCapital]

1 hour ago, tooskinneejs said:

So simple it can't be explained.

 

 

If that is what you've taken from reviewing the last 192 pages, then yes. 

 

If you haven't reviewed the last 192 pages and are simply goading me to subsidize your laziness, then also yes. 

 

We all get the amount of BTC we deserve - do the work to deserve it. 

Edited April 23, 2025 by TwoCitiesCapital

[tooskinneejs]

3 hours ago, TwoCitiesCapital said:

 

 

If that is what you've taken from reviewing the last 192 pages, then yes. 

 

If you haven't reviewed the last 192 pages and are simply goading me to subsidize your laziness, then also yes. 

 

We all get the amount of BTC we deserve - do the work to deserve it. 

192 pages is nothing.  There were 371 pages on Sears, much of it filled with people convincing themselves of value when none existed.  I don't post much, but have been around for a long time.  I watched Sears unfold and I've watched this unfold.  I'm not sure the situations are that different.

 

I think an accurate evaluation of Bitcoin is that there is no intrinsic value but there is an extrinsic value based entirely on belief.  As to the original Q&A between us, there is no value from the network because holders of this virtual currency have no ownership interest in the network.

 

There will doubtless be many people who make money from speculating in Bitcoin, but it won't be because of true intrinsic value, it will only be because someone else believes the story more than them.

 

Thanks for your time and good luck.

[Dave86ch]

9 hours ago, Santayana said:

But since most people don't have pension funds (at least in the US) how meaningful is that?

In my country, the employer has a fund where it invests money on behalf of its employees.

The employees don't decide how the money is managed, and I'm quite sure that at some point, many people will be exposed to Bitcoin without having chosen it.

 

[Dave86ch]

8 hours ago, tooskinneejs said:

192 pages is nothing.  There were 371 pages on Sears, much of it filled with people convincing themselves of value when none existed.  I don't post much, but have been around for a long time.  I watched Sears unfold and I've watched this unfold.  I'm not sure the situations are that different.

 

I think an accurate evaluation of Bitcoin is that there is no intrinsic value but there is an extrinsic value based entirely on belief.  As to the original Q&A between us, there is no value from the network because holders of this virtual currency have no ownership interest in the network.

 

There will doubtless be many people who make money from speculating in Bitcoin, but it won't be because of true intrinsic value, it will only be because someone else believes the story more than them.

 

Thanks for your time and good luck.

You’re trying to value a tool,

In the same way you’d value a company that sells tools.

 

Take a metallic, tapered helical cylinder.

By itself, it’s worthless.

Just a strangely shaped piece of metal.

 

Does it have value?

To the inventor, yes.

It solves a problem.

To everyone else? Probably not.

Most people don’t try to solve problems.

They don’t even see them.

They just accept reality as it is.

 

To see its value, you have to engage with it.

Study it.

Use it.

Build systems around it.

Teach others how it makes life better than before.

 

Eventually, it gets a name: the screw.

Other tools are created to interact with it.

Mental models are formed.

A new standard is born.

 

Life becomes easier, but only if you have the screw.

The screw has a network.

And now, it’s valuable.

Because you have to buy it in a free market.

 

Digital tools follow the same path,

But they’re harder to see, harder to grasp.

 

They're abstract.

They don’t feel real until someone puts them everywhere.

And only then do we realize life has improved.

 

What we need now is digital scarcity.

 

But who can deliver it?

 

No one.

Because no one can be trusted

Not as coin masters,

Not as information keepers.

 

What have we had until now?

Illusions.

Systems that work

Until they collapse.

Currencies rise and fall.

Empires with them.

 

What do we need?

 

A tool.

 

Edited April 24, 2025 by Dave86ch

[rkbabang]

16 hours ago, tooskinneejs said:

192 pages is nothing.  There were 371 pages on Sears, much of it filled with people convincing themselves of value when none existed.  I don't post much, but have been around for a long time.  I watched Sears unfold and I've watched this unfold.  I'm not sure the situations are that different.

 

I think an accurate evaluation of Bitcoin is that there is no intrinsic value but there is an extrinsic value based entirely on belief.  As to the original Q&A between us, there is no value from the network because holders of this virtual currency have no ownership interest in the network.

 

There will doubtless be many people who make money from speculating in Bitcoin, but it won't be because of true intrinsic value, it will only be because someone else believes the story more than them.

 

Thanks for your time and good luck.

 

 

Not that different?   

 

Sears went down and down and down the entire existence of the Sears thread and Bitcoin has gone up and up and up the entire existence of this one. 

 

Sears was a failing business burning through its capital, that happened to own some real estate, which it was going out of its way not to monetize.

 

Bitcoin is a new asset class, the first digital property/commodity in existence backed by the most secure network ever built by mankind, which is now currently in its adoption phase.

 

Yeah, it's uncanny, practically identical situations. 

 

[tooskinneejs]

30 minutes ago, rkbabang said:

 

 

Not that different?   

 

Sears went down and down and down the entire existence of the Sears thread and Bitcoin has gone up and up and up the entire existence of this one. 

I was referring to this...

 

"...much of it filled with people convincing themselves of value when none existed...I watched Sears unfold and I've watched this unfold.  I'm not sure the situations are that different."

[Vish_ram]

Now I get the logic.

 

if tooskin watches something and is convinced it has no value (based on number of pages in CoBF board) when many perceive it has some value then it is a zero.

 

[rkbabang]

Yes.

 

Tooskin's Law:  If tooskin watches something and is convinced it has no value (based on number of pages in CoBF board) when many perceive it has some value then it is a zero.  Sometimes phrased as "Anything tooskin thinks has no value is Sears."

 

 

Edited April 24, 2025 by rkbabang

[rkbabang]

I've owned Bitcoin for about 11 years and have been following 14 years or so.  In all that time the arguments against it are always the same, or very similar.    There is one argument that is most common on this board, but not much elsewhere - I'll call it the value investor's argument - which is:  "It doesn't produce cashflow".   Yeah, well these people would never invest in gold (just shiny rocks), diamonds, oil futures, paintings, or antique cars either, so it isn't really an argument against Bitcoin itself, it is just someone telling you that it is outside the category of things they like to invest in.  That is perfectly fine, you shouldn't buy any Bitcoin, yet people seem to get worked up over it (on both sides).  It's like an electrician stating that he doesn't do plumbing.  That's fine, you can make your money in some other way.

 

The other argument is the more common one with the general public and it is the one tooskin is using.  It is in the form:  "I don't understand why it has value, therefore it has no value."   or  "I think it has no value, so it has no value."   You can't really argue against that either.   I mean, the info is out there, I've answered why I think it has value myself probably 20 -30 times right here on this board, as have many others.  At this point more than 15 years after Bitcoin was created there are more articles and good books on the subject than it is possible to mention in this post.   If you just don't get it - or you don't want to understand it - or you understand but don't agree - then, yeah, you probably shouldn't buy Bitcoin either.

 

[thepupil]

As a nocoiner, I personally like I understand its value as digital gold. I find these arguments convincing. Not for me but I get it. 
 

I do not understand its value as a medium of exchange. Like the above grocery store example. I firmly fall into the “don’t get it” camp here.
 

 

[Vish_ram]

This is what clicked for me. 
 

The art world. The Picasso and the Warhols. 
 

imagine there’s only one Picasso that everyone wants and each pixel or fraction is available for sale and posted in a public ledger. Enough people buy these pixels as a store of value as competing ones are ravaged by inflation.  The ledger is unhackable and can’t be destroyed.

 

No one makes fun of a Picasso owner. There’s always a market and a willing buyer. It more than goes up with inflation. 
 

Storing one’s wealth in Land, building, equities etc have their own risk. 
 

oddly larger the BTC price more money it attracts and more wealth it can store. If BTC is at 100T, it can absorb $1T in and out without a ripple.

 

you can’t do that with equities. If $1T flows in, companies/insiders sell stock and dilute it. 

[Metta]

Matt Huang made 5000x on Byte Dance investment.

About Crypto:
"I think crypto is progressing in three rough stages. First as money, second as a financial system, and third, as a kind of Internet platform. And I think it's coming into focus most on the first two. Useful as money, useful as a financial system. I think the Internet platform is probably the most illegible at the moment."

This podcast is very good for people to understand more about Crypto.

https://joincolossus.com/episode/investing-at-the-frontier/

Edited April 25, 2025 by Metta

[73 Reds]

11 hours ago, Vish_ram said:

This is what clicked for me. 
 

The art world. The Picasso and the Warhols. 
 

imagine there’s only one Picasso that everyone wants and each pixel or fraction is available for sale and posted in a public ledger. Enough people buy these pixels as a store of value as competing ones are ravaged by inflation.  The ledger is unhackable and can’t be destroyed.

 

No one makes fun of a Picasso owner. There’s always a market and a willing buyer. It more than goes up with inflation. 
 

Storing one’s wealth in Land, building, equities etc have their own risk. 
 

oddly larger the BTC price more money it attracts and more wealth it can store. If BTC is at 100T, it can absorb $1T in and out without a ripple.

 

you can’t do that with equities. If $1T flows in, companies/insiders sell stock and dilute it. 

I think collectibles, particularly unique collectibles fall into a different category.  BTC, gold etc.. don't fit.  People own collectibles for reasons that often extend far beyond the price they fetch.

[Blake Hampton]

13 hours ago, rkbabang said:

I've owned Bitcoin for about 11 years and have been following 14 years or so.  In all that time the arguments against it are always the same, or very similar.    There is one argument that is most common on this board, but not much elsewhere - I'll call it the value investor's argument - which is:  "It doesn't produce cashflow".   Yeah, well these people would never invest in gold (just shiny rocks), diamonds, oil futures, paintings, or antique cars either, so it isn't really an argument against Bitcoin itself, it is just someone telling you that it is outside the category of things they like to invest in.  That is perfectly fine, you shouldn't buy any Bitcoin, yet people seem to get worked up over it (on both sides).  It's like an electrician stating that he doesn't do plumbing.  That's fine, you can make your money in some other way.

 

The other argument is the more common one with the general public and it is the one tooskin is using.  It is in the form:  "I don't understand why it has value, therefore it has no value."   or  "I think it has no value, so it has no value."   You can't really argue against that either.   I mean, the info is out there, I've answered why I think it has value myself probably 20 -30 times right here on this board, as have many others.  At this point more than 15 years after Bitcoin was created there are more articles and good books on the subject than it is possible to mention in this post.   If you just don't get it - or you don't want to understand it - or you understand but don't agree - then, yeah, you probably shouldn't buy Bitcoin either.

 

You must be a rich man indeed

[rkbabang]

Just now, Blake Hampton said:

 

You must be a rich man indeed

 

Not as rich as I should be given what I wrote above.  In 2011 I was reading about Bitcoin and reading the Bitcoin talk forum, but never bought any.   I remember when it hit $1, but never bought any.  It next hit my radar when I read that it was over $1000.   I thought I missed it, but when it crashed I bought a little in 2014 around $200.  But, again, not as much as I should have.  It was more of playing with a technical curiosity than an investment.  So I have more Bitcoin than a lot of people, but no where as much as I wish I had bought.  I didn't really understand its value until sometime after starting this discussion here in 2017.   Also I spent time playing with altcoins/shitcoins as well.

[tooskinneejs]

14 hours ago, rkbabang said:

 

 

The other argument is the more common one with the general public and it is the one tooskin is using.  It is in the form:  "I don't understand why it has value, therefore it has no value."  

 

I'm not sure how you come to that conclusion from my explanation of its purported value:

 

"I think an accurate evaluation of Bitcoin is that there is no intrinsic value but there is an extrinsic value based entirely on belief."

 

There have now been three different answers to the question of value:

 

1.  Ownership of bitcoin gives you ownership of the network - This is demonstrably false.

 

2.  Its akin to owning a screw after screws were first invented (i.e., a useful tool) - I'm not sure that anyone got rich off owning screws in the early days.  Making them, maybe.  Owning them, doubtful.

 

3.  Its like owning a fraction of a highly desired piece of art - I think this is the most accurate analogy and it corresponds to the premise noted in my quote above regarding the basis for its value - 100% extrinsic value.

 

One thing is interesting for sure, there seems to be a wide disparity of views as to why people believe it has value.  

[james22]

Bitcoin is a better mousetrap.

[Vish_ram]

2 hours ago, tooskinneejs said:

 

I'm not sure how you come to that conclusion from my explanation of its purported value:

 

"I think an accurate evaluation of Bitcoin is that there is no intrinsic value but there is an extrinsic value based entirely on belief."

 

There have now been three different answers to the question of value:

 

1.  Ownership of bitcoin gives you ownership of the network - This is demonstrably false.

 

2.  Its akin to owning a screw after screws were first invented (i.e., a useful tool) - I'm not sure that anyone got rich off owning screws in the early days.  Making them, maybe.  Owning them, doubtful.

 

3.  Its like owning a fraction of a highly desired piece of art - I think this is the most accurate analogy and it corresponds to the premise noted in my quote above regarding the basis for its value - 100% extrinsic value.

 

One thing is interesting for sure, there seems to be a wide disparity of views as to why people believe it has value.  

 

 

You are getting caught up in circular arguments. Taking bits and pieces of what one says and trying to fit it into your existing flawed framework.

 

The art world reference is about understanding value of scarcity & adoption by people. Picasso is scarce and also embraced by rich folks. (Bitcoin is scarce and embraced by rich and poor). Maybe you can call Bitcoin as a collectible afforded by a poor man too. This is like owning a pixel of a Picasso. 

 

Ownership of Bitcoin gives you access/use of the network, not ownership of network. The network is owned by the collective indirectly. That has intrinsic value. Using internet to transfer your wealth.

 

Screws aren’t scarce. 

 

Bitcoin’s intrinsic value can come from

1) scarcity (inflation protection)

2) 24 by 7 network on internet that provides an exchange mechanism (free from govt, central banks etc)

3) security (cryptography)

4) adoption that has a self-fulling prophesy (first mover advantage maybe)

 

I’ve seen some silly arguments like 

for 1, i’m an aging balding man and my hair follicles are scarce. that doesn't make it valuable. 

for 2, there are so many shit coins freely traded on internet, that doesn't make it valuable. 

for 3, i’ve worthless crap secure in my banks locker, that doesn't make it valuable. …….

 

The combination of 1-4 above makes it valuable.

Edited April 25, 2025 by Vish_ram

[Seanzy]

I am not an expert by any means, but I will attempt to explain my thought process. 

 

Why does anything have value? Because of purchasing power. If something gives you purchasing power, then it has value. 

 

Bitcoin gives you purchasing power, and so do dollars.

Bitcoin's purchasing power has increased over time, the purchasing power of dollars has decreased.
 

Fifteen years ago, someone paid 10,000 Bitcoin for two pizzas, or 5,000 Bitcoin per pizza.

 

Today, you can buy 5,000 pizzas with one Bitcoin (approximately).

 

We can't say the same for anything else considered "valuable", whether it is dollars, gold, stocks, real estate, etc.

 

Even though some of these "valuable" things have increased in purchasing power over some time periods, the dollars we use to measure them have not.

 

Bitcoin allows you to escape from this catch-22 by diversifying away from a fiat money system.

 

This is because Bitcoin is connected to scarcity in the physical world. It requires a tremendous amount of computational power and energy to produce or increase its supply. In fact, Bitcoin is more rare than gold when you look at their stock to flow ratios.

 

The physical world has grown in value over time. The population has grown, assets have grown, value has been created over time, thereby increasing the world's supply of "valuable" things that can be used as purchasing power.

 

Imagine if the money supply did not increase over time. Then, as the world's supply of valuable things grew, we would expect overall prices to also rise, because money measures the level of value in the system. We use money to track or gauge value.

 

Imagine if everyone in an economy began with a fixed $100 net worth, and everyone were very productive and innovative.

 

Over time, they would quickly realize every dollar needed to invest in a new business project would be very in demand, and people would be much more inclined to save rather than invest.

 

In a system with zero monetary supply growth, dollar bills would become hundreds and pennies would become dollars over time, and people would be much more inclined to save rather than invest.

 

While the physical world has grown in value over time, the "valuable" things (dollars) we use to measure that growth in purchasing power have been eroded due to monetary debasement. 

 

Imagine if water were considered money. Water evaporates over time. If you kept your water in a measuring cup, you might have 1 cup of water today, which could purchase 1 unit of goods. 

 

But tomorrow, due to evaporation, you would have less purchasing power. Many people in the economy would expend their daily energy to dig up more water to live on, consume, and survive. 

 

They hope to produce more water for themselves than the amount lost due to evaporation. This is similar to investors buying stocks to save up for retirement, hoping to beat inflation.

 

Now, instead of starting with a fixed $100, imagine if everyone in the economy started with 1 cup of water and 1 house for themself to live in, and they worked to maintain a steady 1 cup of water for themselves to survive and do business with.

 

Each person has 1 major asset, their home, and they measure that asset with their 1 cup of water. In this economy, 1 cup of water provides 1 home's worth of purchasing power, or 1 unit of purchasing power.

 

Now let's say everyone were productive and innovative, and the economy doubled in size. Let's say everyone invents tools and constructs their own second home as an investment property for their children.

 

Assuming each person still maintains about 1 cup of water in net worth, 1 cup of each person's water would no longer represent 1 home's worth of purchasing power to them, it would represent more.

 

If they were to sell all their assets, they would demand 2 cups of water, not 1, and certainly not 1/2 cup, because they have two homes now. This is a good thing because value was created through innovation and productive home construction.

 

After all the hard work performed and value created by continuously digging for water, cutting down trees for lumber, building houses, and using water to innovate and do business with each other, everyone who started with 1 cup of water in this economy would value each cup as 2 homes instead of 1.

 

They would essentially be measuring twice as many goods with the same amount of water. If you've ever heard the term "too many dollars chasing too few goods", then this type of inflation might sound familiar (sorry, my understanding of this and explanations are far from perfect).

 

This is a problem. You can't measure an expanding physical world with a fixed money supply, because physical currency wears down over time, and because some goods are consumed and disappear, such as food. Also, some services are not tangible. For the physicists out there, essentially, energy is dissipated in this system as heat.

 

To address this problem, the government allows borrowing and monetary printing to replace bills that get destroyed and to make up for consumption, or goods that leave the system entirely when they are consumed (food, drinks, services). 

 

Carefully controlling the money supply allows the government to track a growing economy without excessive inflation. This can happen digitally as well.

 

And this is where Bitcoin comes in. Each Bitcoin is essentially the 1 cup of water that each person is working to maintain. As the economy expands, the purchasing power of each Bitcoin increases to track that growth in value.

 

If there were no other "valuable" things to track the economy, then Bitcoin's growth would track the economy's growth.

 

Bitcoin is like a scoreboard. It's just a number on a website that represents purchasing power.

 

If you use online banking, when you log into your bank account, you can see a digital number on a website that represents your purchasing power. That scoreboard is arguably an outdated technology, because the referee can change the score as he pleases.

 

Only you have the password to your account, but the referee has access to freeze your funds if they want. The referee in this case is the bank or the government. 

 

The referee also determines how many dollars are chasing how many goods, which also affects your purchasing power.

 

With Bitcoin, only YOU have access to lower your score. Anyone can send you Bitcoin to raise your score, but they don't have access to lower it.

 

And there is no referee to change the supply of Bitcoin which could alter your purchasing power, because as I mentioned before, Bitcoin requires a tremendous amount of computational power and energy to produce or increase its supply. It's a new technology scoreboard that serves as an agreed upon source of truth to measure every participant's purchasing power.

 

There has never been an asset bubble that lasted for fifteen years. From a performance perspective, nearly every single person who bet against Bitcoin or failed to invest in Bitcoin, was wrong.

 

These facts along with the fact that Bitcoin is driven by publicly auditable code that has never been hacked are enough to convince me personally that there are two primary risks regarding Bitcoin:

 

1. Not owning Bitcoin. Most investors have 100% of their assets invested in stocks, bonds, cash, gold, and real estate, which are all measured against dollars. Allocating 5% of their portfolio away from the eroding fiat money system will lower their risk of purchasing power erosion. (this is not a recommendation)

 

Think about it, we are certain about 3 things in this world, death, taxes, and inflation. We know our dollars are losing value over time. Why not allocate away from dollars or other currencies (which are indirectly derived from dollars).

 

2. A major, worldwide, systemic risk involving multiple nations and possibly war, the type of news that could disrupt the world order. I am talking about news so big that the risk of the Bitcoin network being hacked becomes a threat.

 

To clarify, I have advocated for those among my network to ignore 99.9% of news about Bitcoin and simply dollar cost averaging with at least 1% to 5% of one's overall portfolio allocation since 2018. 

 

I pay attention primarily to systemic risks regarding quantum computing, newer technologies, or the possibility that Bitcoin is in fact designed by America's enemies to destroy the US dollar hegemony from its mysterious outset (a low probability but catastrophic possibility to be considered).

 

 

[james22]

 

[james22]