Topic: Debate: Please explain to me why... (Read 421 times)

Your question has been answered, so do not confuse your own lack of understanding with other´s not understanding you "question". Please care to use bold characters when speaking with your family and friends or others that are happy about it - if you expect an answer that is.

It is Economy 101, which you obviously do not have a hint about - my only doubt is if it is really worth explaining to you like if you were a 6 year old (maybe you are). This has nothing to do with crypto, this is basic theory of how a competitive market with close substitutes work. I am sorry if you lack the basic understanding of how economy works. - StorJ is a "substitute" asset to bitcoin so the buyer would be considering buying one or the other for their store of value or future gains or other qualities (uniqueness, future expectations...)

Please familiarise yourself with the basic concepts of economy if you want to chose a user name such as Eye4Finance, Mr Momentum, etc.... Just to avoid making a fool of yourself.

But you are thinking this with the wrong perspective, the dynamics of this market were not designed, they emerged spontaneously, satoshi created bitcoin and then the first altcoin was created after some time, at the time we did not had stable coins and exchanging our coins for fiat the way we do now was impossible so the natural pair for any altcoin since that time has been bitcoin.

So what we are seeing now is a remainder of those times and when we take into account the lack of real use cases for most altcoins then it is completely natural to see this market behavior.

It's possible that it could happen, but there is also another possibility, when the altcoin price drops, they place it on usdt to find good areas to buy bitcoin. bitcoin is seen as a good asset, so if there is a decline or correction then people will look for areas to buy back

I now understand why they show those cards with spots when trying to diagnose possible....hmm... issues, some people see things where there is none and some obviously don't see a train coming. You desperately try to see things that are not there and at the same time ignore obvious facts.

Let's check the last year:
March 15, gold goes down, silver does the same
Start of August, silver makes a new ATH for the year, oh, wait, so does gold
November 27, after continuous decline what do they both do...of crash the same time.
When was the last dip, of it was March 31 for both silver and Gold....man this is weird.

Let's try a different approach, let's do the full 5years graph
Price of gold 5 years ago July 1, 2016  $1,331.75 oz  Price as I speak $1,910.64    43%
Price of silver5 years ago July 1, 2016      $19.24 oz   Price as I speak  $  28.02     45%

Looooooooooooool!!!!!!! Indeed, such a difference, 43 vs 45! A whole 2% in 5 years!!!!!

But you're right, I made a mistake, I mentioned things that actually have a purpose in life other than speculations unlike all those shitcoins you're so proud of.
Copetech has given you a brilliant answer, if you're too dense or too biased or too angry with the world to get it, sorry, I have no way to help you anymore, so it was a pleasure, but it's goodbye!

I don't know how true it is, but bitcoin is seen as an important asset in crypto and contains more than 30-50% in daily volumes. So a sensible way of telling you about that is -
Bitcoin rises in price, and alts are pegged to it so when btc/usd pair rises, ultimately the value of alts will also rise because btc now holds some extra value and the alt has also increased in both btc and usd or usd only.
For price decline, it could be -
Btc price comes down, so users sell alts to 'buy more btc for cheap'. That is only the reason based on my findings.

Very simple. This very answers spells it all and its not bitcoin alone though, this is what bitcoin actually capitalises on. It uses the amount of bitcoin in circulation to make this fluctuations with regards to depreciation and inflation come true.
Bitcoin was created to have a definite number for which, once the miners get to attain that number, there would no longer be any new bitcoin to introduce to the market. All that was to create that element of scarcity about it.
Like, if you take a look at the Cryptopunks form of NFT, its got a definite number. I think they tapped into bitcoins scarcity principle just that, its not mined. Its transferable from person to person on a bargained range. So, its no mystery, its just the law of demand and supply in action.

I wouldn't know about DOT and I can't tell you why it is good or why it is bad because I never made a research about it and never invested into it and that is why I am not a good expert to answer that question. But I can make a little change about the question and can give you a very very good answer.

Why do you think dogecoin went up? Why do you think eth went up? Why do you think anything goes up? Do you really think that all do look alike? Maybe that is the case? I mean not everything goes up just because it has a utility, there is nothing desirable about most coins but they are high all because there is a pump and hype for it.

It means it could be something very usable just like bnb or eth, or it could be something silly like doge, none of that matters, as long as there is a hype about a coin, that coin will go up no matter what type of coin it is.

I think you are looking at this as a person that are used to "fiat" currencies as a medium of exchange. Fiat currencies price does not fluctuate a lot, because the value is manipulated by the Reserve Banks. Bitcoin is a lot more volatile and it is a challenge for merchants to adapt to that, without using Payment processors.

The Bitcoin price will also become less volatile in the future, when bitcoins gets distributed to more people and you will have a scenario where there are less whales to manipulate the price. (Large Whales are currently manipulating the Bitcoin price) 

Well, different alt coins has their own value and functionality and hence their prices move up and down because of investors or big business who want to actually utilize the coin instead of just trade and making profits! Now, all most all alt coins are based on the idea of block-chain and Bitcoin in fundamental level and so they also go up and down as the demand for that fundamental value increase or decrease!

Ok so if that example is what you call "fact" or "reality"... then there isn't much we can talk about.

Exhibit A: https://delistbitcoin.com/media/metals.png

I've quickly compiled a number of metals and it is readily self-evident and amazingly obvious that gold has ZERO to say about the prices of other metals. Go take a look.
Frankly this example is SO bad I actually propose you retract it and we'll all pretend you never made it.
If those are the kinds of "facts" you base your arguments on then I am happy we disagree

Source: https://markets.businessinsider.com/commodities/palladium-price
(in case you need a fourth example just how Gold has nothing to do with the price of other precious metals)

Basically -  Not Even Wrong https://rationalwiki.org/wiki/Not_even_wrong.

When the price of bitcoin falls and affects other prices such as altcoins it is due to the effects of the FUD. It is generally caused by several factors, such as the most recent. Ban a Bitcoin by the government of Turkey, Fud the government of China, the influence of Elon Musk's tweets, there are so many elements that affect market prices (Central Bank, Governments, FED, Influencers, etc.).

The crypto market is dynamic, volatile and never sleeps for beginners it is difficult to get used to for those with experience the best defense is hodl. Being a holding bitcoin and in cryptocurrencies is a great challenge.
To know how we are doing, I agree with this article:

https://cointelegraph.com/news/bitcoin-price-drops-below-35-000-pulling-altcoins-to-multi-month-lows/amp

I originally typed DOGE, but then realized I just didn't want to deal with all those decimals. $0.20 (99.999%SV/0.001%IV) and I still think my decimals are too far right!

You see, that's the problem, you're from the start trying to see things that are not there.
How about you do another, far more accurate comparison, bitcoin is gold, ethereum is silver, and the others are some other precious metals.
When the precious metals market goes down the drain because India is not buying gold as it used to everything goes down. Fact!  Reality! 

In your example, you try to picture those coins as things that have already proven their utility when none, absolutely none of those coins has ever done something worth mentioning even in real life, and to confirm you that I'm not that biased as you might think, look even at BTC, do you see millions using it daily? We're down 15% in capacity and fees are low as 4sat last block because usage is losing big time compared to holding and speculation
Rather than seeing altcoins like airplanes, you should look at them like the Concorde or flying cars, extraordinarily on paper but not economically feasible or attractive in real-life situations.
 

And again you fail to understand the fact that is written with 100 miles tall letters in front of you, that their whole value is just speculation that somebody will pay more than what you've paid for. Users? Lol, don't make me laugh, 1000 transfers a day out of which most are actually people deposition and withdrawing from exchanges? Look at them in blockexplorers, I see Binance and Huobi every three lines, and that with a lot of exchanges not yet tagged.
You're starting to look more and more like a gamer who meets some guys for the first time and he thinks everyone is insane because they haven't heard of fortnite. Well, surprise, unless you let go of your own biased you will not be able to see things how they really are.


Loved this one  Damn this was good!

OK, congratulations!
I have been lurking in this forum for about a year, while greedily searching out every bit of information and education I can find before finally pulling the trigger to start investing into Cryptos. In all this time, this is the FIRST time I have ever been tempted to register and post.

With that in mind, let me see if I can make a worthy first contribution by formulating and articulating a valid theory to ponder.

First let me explain, that in my view, the value of BTC as all crypto coins are a sum total of 2 primary types of value, "Intrinsic" & "Speculative". Many express this as "Supply & Demand" but I see that as FAR too generic for Cryptos and certainly so for this conversation!

Bitcoin's Intrinsic value is as a world currency not tied to any specific country, government, or market & as a store of value to hedge against inflation. Of course it's Speculative Value is based on the world's perception of what it is and will be worth at any given time. Currently, with it's price bouncing around the area of $36k I would estimate it to be about 33% Intrinsic and 66% Speculative. Back in April when it was at ATH range of $65k I would have (did) judged it as 20% Intrinsic & 80% Speculative. The Hype and the Pump of "Bitcoin Reaches ALL TIME HIGH!!!" Drew a lot of attention and people were paying outrageous amounts out of pure FOMO. But then w/ EM's Green FUD and China threatening to cut off ⅕th of the world's population from trading BTC the Speculative Value (SV) has diminished as the Intrinsic Value has stayed relatively stable. Now of course that's not to say the Intrinsic Value (IV) can't be increased or decreased by drastic measures, I just don't think it really has. Maybe it's grown by 1-2% but that's it. Now if China truly cut out ⅕th of the world's population from ever using BTC, that certainly would decrease it's IV overnight! (I just don't believe they did or even can)

Next let's talk about the fact that 99% of the general population, when they hear "Cryptocurrency" immediately think "BitCoin". It's just a fact that most people know very little about the Crypto market, even including a large percentage of those IN the market. There's a pretty significant learning curve and in general, interest/hype about BTC is the primary gateway to opening that Pandora's Box. So if BTC is getting nothing but FUD or worse absolute silence, then there is no growth, no new blood entering the Crypto world and therefore the SV shrinks exponentially and even the IV may retract a bit. Now since you gave the example of an AltCoin utility token for data storage (I don't remember it's name, I'd never heard of it and it doesn't matter) to build on your example. Maybe it's really useful as a cloud storage solution and has a lot of subscribers buying tokens to store and transfer data, so maybe it's IV is 75% and it's SV is only 25%. So since most of the population equates Crypto with BTC, a majority of the SV of all coins comes from people's perception of BTC. So if BTC's value hits the roof and goes to $100k (SV85%/IV15%) then your AltCoin that was $2.00 (SV25%/IV75%) would likely go up to about $2.75 (SV30%/IV70%). More people would be introduced to it due to the Hype of BTC equating Hype in the crypto world as a whole, but it's primary value is IV so it's SV would only increase marginally from those that actually took the time to learn about it. Of course if it was DOT at $2.00 (SV99%/IV1%) the same 300% jump in BTC price may take it up to $12.00(SV99%/IV1%).

So why should it be this way? Well, something has to create the Hype to bring in new blood to learn about the formidable new world of Cryptos, and who better to splash the headlines than the Big Original BTC? Consequently, we end up with various ShitCoins that pop up randomly riding Hype bubbles and Pop into oblivion because they had no IV, but at the same time the coins that actually seem to be built on IV get their healthy boosts of SV along the way without ever really being distracted from what their original value really was (LTC & ETH).

So there's my theory, as best as I could express it in limited time. Go ahead guys, proceed to tear into it.

Nope - it's because it does not answer my question. What you and most other people in the thread here do is explain how the current market works, not why this is how a proper market should work, and why it makes sense that the price of BTC basically dictates the prices of every other asset.

Let me try with another example.

Suppose - BTC is a steam train, that revolutionized hitherto horse-drawn transportation. A marvelous feat of engineering.
Suppose further that alt-coins are airplanes, ships and trucks.
In your case, I suspect you will say alt-coins are trains that run on spaghetti tracks and melt when it's too hot - that's fine, it doesn't matter.

What does matter is - each time there are supply problems with coal and the BTC train network has problems, the prices of air fares, shipyards and trucks also wildly jumps up and down. In your case, coal price rises cause havoc in the spaghetti rail business. When governments threaten to regulate those damn noisy train machines and shares in the steam train business dive, at the same time shares in airlines and shipping companies fall even more.

What I want to know, is how is this a healthy market? How does it make sense? Why should an event in the steam train business impact any other business at all? Maybe you don't like flying, or you get sea-sick on boats - OK, you don't have to like boats or airplanes... but why should developments in the train market impact those markets? Because that is basically the situation.

You are not sticking to the topic; I am not asking for a value judgment on the merits of alt-coins, or whether they are worth anything. I am asking you why a movement in BTC price should have any relationship with the price of alts. You talk about people having a choice, but the truth is that this choice is severely restricted and far less meaningful than it should be. The fact you evidently think investing in alts is a silly choice - that's fine But all this is not relevant to the question.


Let me phrase it some other way still.

If I asked you - Stompix, I have invented a new type of asset, and I need you to come up with a design for how a market to trade these assets would work. You diligently get to work, and come up with a model for a market that makes sense. I'd bet my life on it that the feature "prices of all assets are derived from and/or go up and down with the price of the top asset" would not be a part of that design.

Yet, that is the current crypto market design.


That the earth is not flat is a fact that can be proven by empirical study. Your answers are correct (albeit slightly biased against alts) if the question was "Explain to me how the prices of alt-coins work in the current market design" - but that is not the question. I guess what I am trying to illustrate is that the way the market is operating right now is very far from reasonable or sensible; and again, you are totally free and at liberty to not give a s**t about alt-coins, that's totally cool. But surely even if you totally don't care about alts, you still gotta admit that the influence of the price of BTC on their value is absolutely without any merit.

Take game tokens, for instance, like MANA or ENJ. They have absolutely nothing to do with BTC. BTC could disappear tomorrow, nothing in their neck of the woods would change. Yet, if BTC price moves, so does theirs. This is ridiculous; in-game items don't suddenly become worth less or more, the games they are used in do not depend on BTC, BTC has nothing to say or add to those ecosystems. Yet it directly impacts tens of thousands of users as their tokens change in value for no reason that has anything to do with the economies of said tokens. And just to be clear - I don't hold any of those and personally don't care much for them, but I DO care about the broader crypto landscape that is basically "held hostage" by the fortunes of BTC. Surely, even if you think alt coins are nonsensical, even you should think that to be incorrect

Because you don't seek a real answer, you seek an answer that you want to hear and you dismiss everything else because you don't like it.


Mine yeah, but when mine is replicated by a hundred thousand that think the same, look where your utility is going, down the drain!
So rather than dismissing my opinion, you should look at how many think the same as me and how many think like you, obviously from the dump that correlates with every bitcoin price dump my horde is bigger than yours, and that's what decides the price.


I don't want to but at the same time I can't stop them and I don't care about them at all, everyone is free to make his own choices, remember? Freedom, my money, my decisions, my keys? The coins are going up because of speculations we're entering another bull run, speculation that more money will be invested, enough to finally dump the coin and count the earnings in fiat.
And you're mistaken if you think I believed even for a second that people who are holding bitcoins right now are doing it for some idealistic world or financial revolutions or something, maybe 1-2% of them are still believing in that,  the rest are just like the people who went into altcoins, doing it for the gains in fiat. And that's one more reason why you have the markets move in the same directions at the same pace.


For some people it doesn't make sense that the Earth is not flat, that doesn't change things, we're telling you what's happening in the markets and why this is happening, the fact that you don't want to accept the answers as rational doesn't mean the answers are not true.


waves, nem, zcash, dash, iota, neo, eos....
I've heard of so many "improvements" that I can't help but laugh whenever another revolutionary coin comes to "improve" something that works so fine even without a token or a coin.  But again, you're trying to see something that is not there and you're calling everyone else blind because they don't see the same mirage you're admiring right now, just don't get too caught up in it and lose common sense.

And yet again, this is not actually an answer to my question.
Even if ALL alt-coins, every single one of them, is a total scam, a useless waste of space that nobody should in their right mind want - why should the price of such a hunk of useless have anything to do with BTC? Why should its price go UP if BTC goes up? Down when BTC goes down? Even if the only "utility" it might have is to waste people's money and provide pointless work for dead-end projects... what does it have to do with BTC?

In fact - if you think BTC is so wonderful and fantastic - why would you want these totally useless coins to "take advantage" of BTC price rises...? If you think alts are dumb nonsense, wouldn't the world be a fairer place if they could not profit from BTC price gains...?

I am yet to hear why the value (or,. if you want, degree of uselessness, whatever) of DOT, ADA or ATOM should change because the value of BTC has changed. And let me re-iterate once again, because it looks like this distinction can be hard to keep in mind - I am not asking WHY, in the current market setup, it changes, but why it is rational and/or reasonable that this should be so.

Your opinion on whether alt-coins are useful, nonsense, great or a scam has zero bearing on this question.

On a personal note as an aside, if you think the DOT system makes "no improvements" on the BTC architecture I think you need to ask yourself how you define "improvement". And that's after convincing yourself that somehow magically bitcoin is the only software in the history of mankind where version 1.0 was the best one to be ever released and continues to be so more than a decade after launch.

How about you answer yourself another thing first. What's the utility, desirability, and demand of DOT?

And to understand it better, you should know that I had to check coingecko as I had no clue that DOT stands for Polkadot, nor do I know what this coin is supposed to accomplish or to solve. And another question, if I'm probably unaware of it, has it today fixed any of those things, has it revolutionized something worth mentioning? My hunch is no. My hunch is that everyone that holds those coins is interested in the price, their trust in the utility is zero, they are just waiting to make some profits, dump it when its clear the coin will not be able to do a x5 overnight, and switch to the next altcoin that promises the same revolution we've had 200 times already.

Also, if there was distinct utility, desirability, and demand for it, why did it get influenced when BTC skyrocketed?
What changed in the utility, desirability, or demand between November 2020 and February 2021 to make the price go x7 in value?

OK so the price of the alt-coin is only tentatively correlated with its demand, that's the whole problem. At time X, with BTC at 40K, the price for a DOT is $40. At time X+3 hours with BTC tanking to 33K, the price for DOT is $24. Now - if you can please explain to me what, exactly, the price of BTC has made different about the utility, desirability or demand of DOT, I am dying to hear it. Of course, the answer is
"nothing" and that is exactly why having BTC trading pairs where the BTC volatility automatically impacts all other assets a really bad idea.

If you were tasked with designing a market for the trading of some type of asset... if your design included this kind of behavior as a feature, everybody would think it's a really crappy design. Yet here we are.

the increase in the price of bitcoin or altcoin is based on the large demand for that asset. and the demand is usually based on many factors. and of course sometimes whales give a big role to increase a coin. for example bitcoin where Tesla announced the use of bitcoin, and the price immediately skyrocketed