Topic: Bitcoin has no intrinsic value - page 2. (Read 499 times)

Supply and demand is the mechanism of price discovery. The profit comes from buying low and selling high. This is known as speculation. There's no other way to profit from owning Bitcoin, aside from shitcoin forks and airdrops, that are rare and unpredictable.


Who said anything about Bitcoin use? It's a topic about the origins of Bitcoin's value.

golds intrinsic value(financial) is derived from its mining costs of diesel and sluice machines
golds intrinsic values(feature) is derived from its use in the electronic and jewellery industry

bitcoins intrinsic value(financial) is derived from its mining costs of electric and asic machines
bitcoins intrinsic values(features) is derived from its use as a payment and investment utility

unlike fiat which requires people to hire lawyers and seek financial accountants and also bank managers to set up trusts and off shore holdings. bitcoin can do all this for free by setting up a multisig

unlike fiat where inheritance plans and such require lawyers, bank managers and accountants. bitcoin can set this up using timelocks and privkeys distributed between family

bitcoin can do many many things by itself without middlemen that fiat cant
bitcoin can even do more financial movements than the physical gold. cheaply

yea you cant make jewellery out of bitcoin(tangible) but you can easily prove ownership of it
yep a gold coin/ingot/bar has no identifier that puts a claim to any certain owner. so take it out of your house safe, and you have a hard time proving who owns it.
(try to engrave it.. someone can easily smelt it down and remove any identifier)
bitcoin however can easily prove ownership via signatures, and near impossible for someone to remove that identifier or move the value to their own identifier without your authorisation

Start by understanding how new Bitcoins are created or generated. The amount increases through mining. How do you mine Bitcoins? Can you do it with an old phone? No. Can you do it with a cheap laptop nowadays? No. Can you do it with a brand-new computer? No.

So what do you need? You need ASIC miners who are developed just to mine Bitcoin. Are they cheap and available on shops worldwide? No they are not. They are quite expensive and in most cases need to be pre-ordered because there aren't enough to support the demand. Is 1 ASIC miner enough? No, you need hundreds and thousands of them to be able to compete against the biggest mining firms in the world.

That's just one part of the story. You also need plenty or electricity to power up these hungry freaks of nature. Electricity costs money. As you can see, a lot of work needs to be done just so that you can have a chance to take part in a lottery, where if you are lucky you will win the main prize. The main prize is the block reward. Once you get your hands on those coins, you know you didn't get them cheaply with all the work and money you spent to prepare for that moment. Once they are in your wallet, you will value them.

Before anyone says you don't need thousands of miners to mine. I know that. You can have just one and divert your hashrate towards a mining pool where you will get an equivalent share of the coins once they find a block. Solo mining is an impossible task nowadays. 

I've been following Bitcoin and the cryptocurrency industry since 2009, and I'm still not sure what to think about Bitcoin long-term as a store of value. Economically speaking, it seems like it will have the same result as fiat currencies that are not tied to anything of intrinsic value.

In many of the conspiracy channels I follow on Telegram, there is a lot of discussion about Bitcoin losing all of its value as part of a thing called Devolution, which refers to the idea that Donald Trump and the US and other white hat militaries throughout the world are running a dragnet to catch all the bad guys.

As crazy as that sounds, there are some things that have been predicted about the crash of Bitcoin ( 1: the Three Gorges Dam breaking and destroying most of the Bitcoin mining servers; and 2: Bitcoin becoming environmentally unusable compared to alternatives) that seem like legitimate threats.

the PRICE is speculative.

EG
gold PRICE speculates between $1k to $2k
but golds VALUE sits at about $900..
yep no one can get gold for less than $900 and so golds underlying VALUE is $900

if while the lowest cost of acquisition was $900, the price speculated to say $3k then that difference of $2.1k speculation is a "bubble" where that hyped up PRICE can crash back down below $2k and get close to the $900 value at worse case.

bitcoins VALUE is near $30k. and while the price is at the moment $40k. it has reached $70k which that $70k PRICE was a bubble that corrected down again.
but the price has not dropped below the $30k value while the VALUE amount was at that $30k amount

..
bitcoins intrinsic value is not the price.. the 'store of value' amount of bitcoin is not the price.
once people realise that the 'value' and price are different measures. then people can see the difference.
and when people learn what the real VALUE number is. then when the PRICE moves up but the VALUE is not moving up at the same scale/rate. people can realise when the PRICE is speculating into the realms of bubble

in short..
yes the PRICE is based on random sentiment and sometimes empty reasons.. but the VALUE has reasons and math and actual costs and physical reason for existing

Everything can lose its value in an instant. For example, why is gold valuable? Because it's scarce. Why is Bitcoin valuable? Because it's useful and because it's rare. These are the factors that make a product valuable.

I believe that he created it as a better currency and not as a payment system. If you think that the sole purpose of satoshi was to create something that you could earn profit from, then you never understood what he stood for. The decentralization part of bitcoin is the main reason, and it is a currency which means that there is a currency in the world where politics could not impact it and change it.

In regular nations, we keep seeing nations print money all the time and this devalues currency and the worse they act towards money and economics, the poorer you get whereas in crypto nothing like that could happen and nobody can print it, which is the power of bitcoin and why it was created.

It's true that the payment system was the real intention of why Satoshi created it but we all know that it's really not what has given Bitcoin the value it has today. It derives its value from the perceived angle of investment. It's not only newbies who get on the bandwagon that it's an investment opportunity, veterans too are involved. If Bitcoin were solely for decentralized payment system as conceived then it should be like stable coins whose value remain the same or almost the same year in and year out.

Is it a must that you should "invest" in Bitcoin?

If you feel there is a much better way which you think you know, then put your money there. Nobody is forcing you to own some bitcoins. It's a free world.

Ok, Mr Financial advisor, explain to us how Bitcoin generates value?

Oil could lose value and become worthless
Amazon stocks could lose value and become worthless
Gold could also lose value and become worthless
So what's your point?

The same small voice that assures you that Bitcoin could lose value and become worthless.

This is BS. Bitcoin generates profit from supply and demand. And "speculative trading" is not the main use of Bitcoin. Sure some people use it that way too but it is ALSO used as a currency and savings account. Look Africa. These examples prove your "purely speculative trading" claim very wrong.
https://youtu.be/qvwqoYSani0

The term intrinsic value has two meanings - financial and numismatic. Financial meaning only applies to stocks and other financial instruments, it's basically an objective value of how profitable this instrument can be based on its economic performance. This is not applicable to Bitcoin, because Bitcoin generates profit purely from speculative trading. The second meaning, the numismatic one, applies to coins - it is the value of the metal a coin is made of. Bitcoin is digital, so it has no intrinsic value in this sense.

There's nothing wrong with not having intrinsic value. Gold doesn't have one, gems don't have one. In fact it's good that Bitcoin is money in pure form, just like fiat money, because other uses don't interfere with its supply and demand.

1. Bitcoin is not experimental. It has been around 13 years, it runs on open source code which means that anyone can check the code and verify how it operates. Every single line of code. So there is zero question marks about how it operates and on what rules it operates. Also, it does not operate on any website. It operates on those thousands of machines that keep up the one and only Bitcoin blockchain.

2.1. Bitcoin could evaporate? No. Bitcoin runs on thousands of miners and nodes around the world. To be able to disappear, all these machines would need to be destroyed and people running them to be killed. Or else we can just run it on new machines. So this evaporating is kind of impossible to achieve.

2.2 If you mean by evaporating that it's price could go to zero tomorrow, again you need to think more about what would need to happen for that to become reality. Bitcoins price comes from supply and demand. And as long as there is demand (buyers) the price cannot go to zero. So price to go to zero there would need to be suddenly ZERO people in the whole planet who wants to buy Bitcoin. How would that happen? Only way would be if something better money gets invented and we have nothing better in the world at the moment. And even if we invent something better in lets say 200 years, it would be slow transition taking years from older monetary system to the new one. Just like it takes years now to move from fiat standard to Bitcoin standard.

I think it's a matter of perception for each person. When they may not accept the fact that it creates economic value, denying the things that BTC brings will not help you progress if you keep your perspective. At that point, Let's put yourself in the situation and assume that you are assuming. It just comes back to extreme negative when it declares BTC to be worthless. I'm curious if you invested in it or not and profited. Or how about a loss? I am also very neutral about many things that it brings, but I admit that I have earned money to pay for my current life. The difference here you may not realize, but do not think negatively. It's a problem that many people are very satisfied or happy with what it has created.

Nobody said bitcoin is the only and the best way to invest your money. You got that part wrong. You may decide to invest 1-2% of your total wealth and still be a crypto investor.

Your concerns are well grounded however. Bitcoin may indeed evaporate tomorrow without leaving a trace. It is written (or used to be, haven't checked the domain for a while) on the bitcoin.org website. It is experimental tech which nobody knows how it is going to end up.

Just because stocks went up higher during the last decade you don't invest 100% into stocks. You diversify.

it depends on what you understand bitcoin as. I don't think that Bitcoin can just become worthless in future time without the signs indicating its irrelevant of future devalues.. some people kicking against that bitcoin is not an asset, so what is bitcoin, is very obvious that some asset become disvalue in reference time but it will take long periods such will happen.. using gold as illustration, before was threading in the market, but right now it has it limitations, because it potentials and firm has reduced because of existence of bitcoin, so before bitcoin can be worthless another thing that is greater than bitcoin will be into existence.

You could really say the same about any fiat currency. They are all just units of value we use to exchange for goods or services at a later point. Now, Bitcoin is a lot more volatile than most fiat currencies so that is where the distinction really comes into play. If you woke up tomorrow and discovered that the savings in your bank account could only buy 80% of what they bought yesterday, you'd likely be very annoyed. It can go up in value as well, but people generally like stability and consistency. I have a feeling that for Bitcoin at least it will improve over time as the amount of holders goes up and this should bring the volatility down. It's actually rather useful having a global currency that does not have to sit between the whims of local exchange banks.

The exact same goes for Gold, Silver and other precious commodities. If people would stop using them for making jewelry and don't look at them as a save way to store money than the price would be a complete other. It all depends on supply and demand, and what investors think the price should be in the future. The exact same thing holds for bitcoins and other crypto currencies. As long as there are other investors who believe in their value we will have an active market to buy and sell cryptos. Just one investor will make sure that Bitcoins don't become worthless. Just imagine a new very big gold mine is being created increasing the gold supply by x2, the price would drop overnight. With bitcoins that can't happen, we can't just find a big supply nobody have heard of overnight. The limited supply of bitcoins is what makes it so valuable.

Try and change the title because it gives wrong information about bitcoin. Bitcoin is an asset, it is digitally created but it has an intrinsic value.

I can not say it is the best way to invest but it is one of the ways to earn passive profits. Just hold, leave it for long time and make profit from it.

If early adopters were thinking like this, they will not buy bitcoin and nothing will be like institutions that are now investing in bitcoin. If institutions are also thinking like this now, they will not also invest.

Nothing has intrinsic value. Value is subjective.

People who don't understand bitcoin, often have not read about the Austrian School of Economy.

BITCOIN is the network with the blockchain.. you cannot take bitcoins off the bitcoin network. thats the whole premiss, promise and security of bitcoin. the blockchain secures bitcoins to the blockchain..
and YOU literally in the same paragraph of saying you never said anything bad about bitcoin, ended the same paragraph by saying in your silly minded view that bitcoin(the actual bitcoin blockchain network) 'can never offer'

LN is a different network .. the HINT is in the meaning of the N in LN
LN does not even use satoshis' it makes payments and accounts for fee costs in millisats. using a message format that the bitcoin network cannot even understand

so please stop deluding yourself and others that your altnet is the proposition people should shift over to by stop using the bitcoin network

grow up and actually learn what the bitcoin network is. and then learn that other networks pretending to be bitcoin are not bitcoin.

LN is a separate network that allows promises of future settlements of MULTIPLE currencies.
LN is not a bitcoin thing. LN is a multi asset thing.

LN is not a bitcoin layer(like a skin of an orange fruit... its a hybrid tree branch connecting multiple fruit together.)
or if you want a different analogy. its not a bitcoin highway.. its a bridge to a different nation where diversity happens where everyone has to 'ride share' and no one can independently own their own vehicle solo on this separate nation

oh and by you disliking the whole 'bitcoin should not be used for 'coffee/donation' amounts. well then the unbanked people earning say $2 in 3 days are not going to be able to buy bitcoin to then lock up to then play with the LN promissory notes (LN smart contracts are a promise without the settlement aspect)

as for your obsession with the altnets.. just check your post history for endless examples of you advertising LN.. heck you even advertised it here with your silly uptopian falsehoods.

LN is at best a niche side service. its not a unque bitcoin only feature. its not even the same network as bitcoin not the same unit of measure as bitcoin. plus it just doesnt work to scale

imagine that wiki wanted to accept LN balance. they would need to set up either thousands of small balance channels with regular donators. whereby those donators have to also allow some of their locked balance to be used by others routers. or they would need to fiund a LARGE channel partner that can cope with many thousands of users routing through them.. in both cases it does not work in the real world..

as for you pretending you have never suggested that people should stop using bitcoin for the donation/coffee/small amounts billions of people find essential amounts..
again check your post history.. here is just one of many examples

your major problem is that when you imagine people talking about scaling BITCOIN. and wanting to donate or buy small price items with BITCOIN.. your brain does not understand the meaning of BITCOIN and instead your brain diverges into thinking about your other network which you pretend is bitcoin.