Eff You Money

[james22]

1 hour ago, Blake Hampton said:

I’m not trying to be rude when I ask this, but what honestly is the use for Bitcoin?

 

And I'm not trying to be rude, but I'm not going to answer this.

 

1. I just did, in response to Parsad. 

 

Did you not see that?

 

2. If I do, I'm seen as cheerleading, which bothers some.

 

3. If I do, you'll only have follow-up questions. 

 

4. Because I'm bored AF by the same questions.

 

(You'll see the answer to Parsad there several times.)

 

5. Because you'd read the Cryptocurrencies and MSTR threads if you really were interested. 

 

5. Wrong thread.

[pricingpower]

On 12/27/2024 at 2:26 PM, ICUMD said:

Also any recommended reading or books devoted to borrowing money for investment purposes?

"Safe Haven: Investing for Financial Storms" by Mark Spitznagel (Author), Nassim Nicholas Taleb (Foreword) might be a good book to check out.  It's more about the premise that buying downside protection enables you to run your book leveraged and get an overall higher absolute return (not just about reducing "risk").  Optimal amounts of debt end up pretty nuanced based on an individual's tax situation I think as it is mostly shifting timing and type of gains and whether you itemize tax deductions etc.  

 

Personally I think scenario analysis is the best underused tool for calibrating what safe amounts of leverage are, to start if your portfolio couldn't withstand even the worst event in US markets living memory (~90% stock market drawdown during Great Depression) I'd want to be able to articulate why that's a good idea.

[SharperDingaan]

2 hours ago, 73 Reds said:

Who values a relationship in dollar terms?  There are a lot of ways to protect yourself against inflation.  The issue is how and why does BTC uniquely protect you against anything?

 

Point was that just because there is no future cash flow; it does not mean that you can't put a value on it. Unique, as there is a maximum 21M token when fully issued; whereas more gold is produced every day, without limit. All points discussed in detail, in the crypto thread.

 

SD  

Edited Thursday at 05:49 PM by SharperDingaan

[73 Reds]

43 minutes ago, SharperDingaan said:

 

Point was that just because there is no future cash flow; it does not mean that you can't put a value on it. Unique, as there is a maximum 21M token when fully issued; whereas more gold is produced every day, without limit. All points discussed in detail, in the crypto thread.

 

SD  

I for one don't know what the number of tokens has to do with the value of something that doesn't generate anything and is not otherwise "interesting".  Independent of a market built purely on speculation, 1 token and 1 billion tokens does precisely the same thing for me (nothing).  

[Parsad]

10 hours ago, james22 said:

 

Gold matured into its recognized "intrinsic" value long ago. Likewise silver, and why Buffett could believe some ratio had been established between the two.

 

The work of living artists is speculated upon, the works of passed artists usually has a consensus-established "intrinsic" value. 

 

Bitcoin/crypto was speculative (you may believe it is still). But as (if) it manages to prove itself, it'll grow into its "intrinsic" value.

 

 

I shouldn't take the bait, but . . . 

 

Purpose: protecting economic value

 

Tangible: strongest computer network in the world

 

 

Strongest computer network presently...let's just make that clear.  Future computers would be able to break crypto encryption in minutes...and we are on the verge of that processing power.

 

Let me make this simple:  Tell me the fair value of bitcoin, gold or a Banksy artwork piece.

 

Cheers! 

[Parsad]

10 hours ago, james22 said:

 

What's your definition of value?

 

The method by which you determine something's future value?

 

That seems a pretty minor point of differentiation from speculators and Growth investors who also believe they invest in things that will be worth more in the future than it is now.

 

I'll repeat the question in my last post to answer this:  Tell me the fair value of Bitcoin, gold or a Banksy artwork piece?

 

Cheers!

[Parsad]

10 hours ago, Blake Hampton said:

I would start with a use-case.

 

The price of oil is inherently speculative, but at its base, oil is one of the most important items powering the global economy.

 

Oil actually has some utility...as does orange juice, coffee, gold, etc.  You can make money off of any of those, but it is generally speculative.  Even artwork has more utility than Bitcoin, since you can appreciate the beauty or meaning of artwork.  Bitcoin can't even offer that!    

 

What utility does Bitcoin have presently?  It isn't a replacement for fiat currency, because you have to use fiat currency to buy Bitcoin and use fiat currency to sell Bitcoin.  It's incredibly volatile for transactional purposes.  If the world collapses tomorrow, you can't use bitcoin for transactional purposes since it is only accessible through the internet.  It's not universally accepted yet.  It probably won't even have the most sophisticated security architecture within a decade.  

 

Cheers!

[ICUMD]

@pricingpower  thanks very much for the suggestions. Will have to check out Spitznagels book. Also agree with scenario analysis.

[Parsad]

10 hours ago, SharperDingaan said:

 

You might want to move this conversation to the crypto thread, where there are numerous posts around this. Valuing BTC is no different to trying to value a relationship, where there ALSO isn't a future cash flow to present value. Inflation protection is the major usage case for BTC, not the trying to pay for something.

 

SD  

 

+1!  Cheers!

[ICUMD]

Bitcoin I think will always have it's collectors.  Much like cabbage patch dolls from the 80s.

 

Unlike the doll market or art market, I think Bitcoin and crypto is subject to a whole lot more market distortion by wealthy promotors who got in at the ground level. 

 

What an incredible job they have done btw.

An incredible pyramid. What wealth 'Crypto bros' have obtained without providing any meaningful productivity.

 

Furthermore, BTC is infinitely divisible, which goes completely counter to its proposed rarity. Probably better off with a bored ape NFT.  At least that can be enjoyed and is non divisible.

 

It's hardly ubiquitous - it's difficult to open Bitcoin accounts for the majority of the worlds population, therefore fails as a medium of exchange. At least gold and silver will be accepted anywhere in the world.

 

My hard earned cash gets exhanged for a good, service or productive asset. 

 

Crypto is a hard no for me.

 

[Parsad]

7 hours ago, SharperDingaan said:

 

Point was that just because there is no future cash flow; it does not mean that you can't put a value on it. Unique, as there is a maximum 21M token when fully issued; whereas more gold is produced every day, without limit. All points discussed in detail, in the crypto thread.

 

SD  

 

Hi SD, yes gold is mined every day, but the idea is the same...limited supply long-term, thus acts as a deflationary asset rather than an inflationary asset.

 

I'm not against Bitcoin or crypto, and I think there is money to be made there...as proven by many.  But I'm simply stating that it is speculative, not cash-flow based; is presently difficult to use for transactional purposes; consumes massive amounts of energy; and may not be as secure as people think considering where quantum chips and AI will soon be.  I don't think our opinions differ much on these things.

 

Cheers!

[Dalal.Holdings]

Yep. Quantum computing is an existential threat to bitcoin, all of crypto.

 

Also, there is more gold in our solar system that is not on earth, but other planets & asteroids. 

 

There are lots of tail risks in these supposed “store of value” investments that none of their dogmatic proponents want to discuss.

[Parsad]

4 minutes ago, ICUMD said:

Bitcoin I think will always have it's collectors.  Much like cabbage patch dolls from the 80s.

 

Unlike the doll market or art market, I think Bitcoin and crypto is subject to a whole lot more market distortion by wealthy promotors who got in at the ground level. 

 

What an incredible job they have done btw.

An incredible pyramid. What wealth 'Crypto bros' have obtained without providing any meaningful productivity.

 

Furthermore, BTC is infinitely divisible, which goes completely counter to its proposed rarity. Probably better off with a bored ape NFT.  At least that can be enjoyed and is non divisible.

 

It's hardly ubiquitous - it's difficult to open Bitcoin accounts for the majority of the worlds population, therefore fails as a medium of exchange. At least gold and silver will be accepted anywhere in the world.

 

My hard earned cash gets exhanged for a good, service or productive asset. 

 

Crypto is a hard no for me.

 

 

It is more than that.  While I'm a pessimist in terms of the current belief in crypto being a replacement for fiat currency, the theory and possible creation of such currency is real and has its benefits...especially the decentralization of money and deflationary hedge.  I'm just not convinced that what we have now and what we've created is the true replacement for fiat currency.  It will come...I just think that those buying now may get effed over as time passes.  Thus I would rather stick to things I can value...buy them below intrinsic value and sell above intrinsic value...isn't that far easier and safer?  Cheers!

[Parsad]

2 minutes ago, Dalal.Holdings said:

 

There are lots of tail risks in these supposed “store of value” investments that none of their dogmatic proponents want to discuss.

 

Yes, probably over generations.  But not really based on any single lifetime.  

 

If you can safely compound capital at 10% or better over time, inflation isn't really going to have the impact that many people feel would be safeguarded by crypto.  

 

Ask yourself, what net benefit would be gained by Buffett if he had simply bought gold or crypto (if available) 60 years ago, rather than just build Berkshire?  He's well ahead of the game by what he did by probably some $200B-$250B dollars from where he would have been based on inflation.  I don't think it would be any different over the next 100 years.

 

Cheers!

[ICUMD]

12 minutes ago, Parsad said:

crypto being a replacement for fiat currency, the theory and possible creation of such currency is real and has its benefits...especially the decentralization of money and deflationary hedge. 

Currencies, by virtue of their property, need to succumb to inflation. A widely used decentralized currency which is a inflationary hedge would not seem to be in the interest of any country.

 

Not saying it won't happen, but what advantages (tax or  otherwise) would a government have by a citizenship that uses a non centralized currency?

 

The USD when it was tied to the gold standard was just that.  US government abolished that because of its constraints and confiscated the gold!

 

I think gold is still the king in this regard.

China and eastern countries are still accumulating gold.  

[james22]

1 hour ago, Parsad said:

Tell me the fair value of bitcoin, gold or a Banksy artwork piece.

 

$96,920/coin, $2,673/ounce, Girl With Balloon $25.4M

[james22]

42 minutes ago, ICUMD said:

BTC is infinitely divisible, which goes completely counter to its proposed rarity.

 

Can you end world hunger with an infinitely divisible single pizza?

[Parsad]

9 minutes ago, ICUMD said:

Currencies, by virtue of their property, need to succumb to inflation. A widely used decentralized currency which is a inflationary hedge would not seem to be in the interest of any country.

 

Not saying it won't happen, but what advantages (tax or  otherwise) would a government have by a citizenship that uses a non centralized currency?

 

The USD when it was tied to the gold standard was just that.  US government abolished that because of its constraints and confiscated the gold!

 

I think gold is still the king in this regard.

China and eastern countries are still accumulating gold.  

 

You are correct.  I would imagine any country with any significant debt, would not want Bitcoin to succeed as a global decentralized currency, as it would kill their fiat currency.  

 

But the idea long-term would seem to make sense if humanity actually starts to reach places outside of just planet Earth and no longer relies on nation sovereignty.  A global currency is inevitable.  It would also solve the issues created around a common currency like we discovered with problems around the Euro and different levels of debt, interest rates and economic circumstances.  

 

Cheers!

[Parsad]

4 minutes ago, james22 said:

 

$96,920/coin, $2,673/ounce, Girl With Balloon $25.4M

 

Nope, that's not fair value...that's market value.  What is their intrinsic values?

 

Cheers!

[james22]

2 minutes ago, Parsad said:

Nope, that's not fair value...that's market value.  What is their intrinsic values?

 

Moar.

[Parsad]

1 hour ago, james22 said:

 

Moar.

 

Phhhhffffftttt!  Please.  Cheers!

 

 

[73 Reds]

12 hours ago, Parsad said:

 

Hi SD, yes gold is mined every day, but the idea is the same...limited supply long-term, thus acts as a deflationary asset rather than an inflationary asset.

 

I'm not against Bitcoin or crypto, and I think there is money to be made there...as proven by many.  But I'm simply stating that it is speculative, not cash-flow based; is presently difficult to use for transactional purposes; consumes massive amounts of energy; and may not be as secure as people think considering where quantum chips and AI will soon be.  I don't think our opinions differ much on these things.

 

Cheers!

Every piece of US currency contains the words "This Note is Legal Tender for all Debts, Public and Private".  Inflation aside that is what is commonly called backing.  BTC is backed by nothing.  It is a whim that comes and goes predominantly due to fear of a flawed, but effective current system of fiat currencies.  It is, however the perfect subject for EFF You Money;  one day we'll wake up and the price of BTC will align with its real value and utility by saying F-U  to its owners.   

[boilermaker75]

12 hours ago, Dalal.Holdings said:

 

Yep. Quantum computing is an existential threat to bitcoin, all of crypto.

 

Also, there is more gold in our solar system that is not on earth, but other planets & asteroids. 

 

There are lots of tail risks in these supposed “store of value” investments that none of their dogmatic proponents want to discuss.

 

There is a lot of gold even nearer, the core of the earth. Enough to cover the entire surface of earth with a 1.5 foot thick layer!

[james22]

20 minutes ago, 73 Reds said:

BTC is backed by nothing.

 

I'm beginning to believe this is a form of value investor manifesting.

 

Attempting to will something into being.

 

"If you refuse to believe it, it won't come to pass."

[SharperDingaan]

1 hour ago, 73 Reds said:

Every piece of US currency contains the words "This Note is Legal Tender for all Debts, Public and Private".  Inflation aside that is what is commonly called backing.  BTC is backed by nothing.  It is a whim that comes and goes predominantly due to fear of a flawed, but effective current system of fiat currencies.  It is, however the perfect subject for EFF You Money;  one day we'll wake up and the price of BTC will align with its real value and utility by saying F-U  to its owners.   

 

All of this is addressed, in detail, in the crypto thread.

 

BTC is backed by crowd sourced CPU power, BTC protocol, and a cap on the maximum number of BTU that can be produced. It exists so that central bankers can never take your wealth away from you; whether by confiscation, intentional inflation, currency controls, or a visit to the graveyard. And so good a technological alternative to fiat currency, that central bankers around the world have been forced to add competitive payment alternatives such as Central Bank Digital Currency (ie: eYuan).

 

Back in the day we got around on horse and buggy, then motorcars were invented ....  today, the horse and buggy lives in an outdoor museum. Change.

 

SD 

Edited Friday at 03:11 PM by SharperDingaan