Topic: ETH = Game Over - page 5. (Read 40482 times)

Great!!!!!!!!!

I will give a short reply too.

Even though you seem to concede that we don't really know for sure the amount of speculation versus utility in bitcoin, and even if we accept 95% as a rough estimate of the current state of affairs, your characterization of that portion as equivalent of "greater fool theory" undermines and distracts from any meaningful analysis regarding what is really going on in bitcoin and the value, impact and importance of the quality of that current 5% utility (or whatever that evolving number may be).

I just want to stress again that I DON'T say that "bitcoin is a ponzi game", and I DON'T say that bitcoin doesn't have any real usage.  Bitcoin is a real monetary asset, that can have (and has, up to a certain point) real, genuine usage as such, and can bring real value as a new form of monetary asset, improving competitive advantage for those that use it.

I'm only saying that, unfortunately, today, most (95% say) of bitcoin activity, and hence most (95%) of its market cap is DOMINATED by "greater fool theory" usage at the *expense* of this real, genuine usage, and at the expense of its genuine value proposition, and that if this stays that way, it will end up killing bitcoin all together in the long run.

There.  I managed to give a short reply.  

By the way, here are a couple more thoughts about the utility of bitcoin - reflected through a couple of interesting current event links:

First:  a bit of a historical perspective from reddit peeps, and a few war stories from them.

https://www.reddit.com/r/Bitcoin/comments/55mm36/we_need_to_take_a_moment_and_look_back_at_how_far/


Second, you may have recalled that in about mid-2014, naughty america had gotten quite a bit of coverage in the bitcoin space when they began to accept bitcoin for purchases ( described in this article)

Now naughty america is exploring ways to protect their property rights by uses of blockchain.  interesting, real and useful.

http://www.newsbtc.com/2016/10/03/naughty-america-eyes-blockchain-fight-adult-content-piracy/

I don't think so.  I have identified some pretty severe flaws in your thinking and your reliance upon superficial made up shit in order to support your various theories.

Including but not limited to, you fail and refuse to give any value to speculation, and you attempt to view utility in narrow manners, and also sometimes get caught up in nearly irrelevant timelines of decades, hundreds or thousands of years into the future.  

O.k.  Sure you can argue until your blue in the face and make sense, but you are failing and refusing to deal with real facts and suitable logic.


This is almost all repetition, and you should already realize the reasons why i do not agree, but you keep on and on about the matter.


In your seeming desire to want to come to the conclusions that you prefer, you seem to falsely attribute arguments to me, and refuse to absorb what I actually said... including inabilities to decipher exact motives of folks, and giving some value to speculation. Let's say for example that there is only 5% utility in the present, but even with that there is speculation about present and future utility.. So even if utility is at a smaller than expected number, speculation about utility is meaningful speculation that has utility in itself in spite of your failure/refusal to attribute any value to such speculation and to define it with your unreal conditions.



You could be correct here, but you still seem to be missing the point with your giddy and goofy focus on trying to be correct with your lame theory and removal from facts.


Yep.  Weigh possible outcomes in order to make a fairly decent estimate regarding whether and how much to invest.  This not only changes over time, but also individuals come to different conclusions based on perspective and imperfect information and all of that continues to evolve.. even though some people may have more set plans and more evolving plans.



Yeah, this happens all over the place, and sometimes folks actually get a profit and sometimes they do not.  so what?  Sometimes people are risk averse, and they want to cash out before they lose whatever gains they had.  This conduct does not support your stupid-ass theory.



So what?  There is a lot of speculation, I will concede to that.  

By the way, there is speculation in both directions, and there is also price manipulation in both directions.



For one thing, we do not know the numbers exactly, but I suggested even giving you the benefit of the doubt about the 95% speculation, that does not prove your point unless you want to assume that I am also agreeing with you regarding your dumb ass theory that speculation has little to no value.

I already stated speculation can also involve utility in itself and it can be speculating about present or future utility.  And, sure, the more likely that the speculation is correct about either present or future utility, the more solid is the price formulations that come out of such speculations.


Bitcoin's ecosystem is evolving, so utility is not a locked in number, and they number of users or their viewpoint is not locked in either.

You try to lock in things that are already difficult to pinpoint which leads to additional errors and further faulty conclusions.


O.k.  you recognize that there is evolution of perspective, and that perspective can evolve both ways.  You are suggesting more speculation, and sure it could evolve in that direction - even though that seems to be the less likely scenario that you are painting for your own seemingly trolling purposes.


Yeah right.  Not very likely of a scenario.


You are correct that utility rises slowly, but perspectives can change quickly based on expected future value.

I agree that short term bursts in price are very likely large percentages of speculation (likely in the 95% territory), but even these speculations can be anchored in utility, and in this regard, bitcoin has a lot more utility than ethereum.




Yeah right, "by definition"  - your "definition"  

We may be throwing around these numbers, but let me just point out an example of how utility could evolve from .05% to 1% to 3% to 5% to 10% etc.  If there is some utility there, that utility can evolve in either direction, and it can also partially drive the level of speculation, perspectives about the asset and how solid is the speculation.



You seem to even recognize that utility/speculation portions can evolve, and you could be correct that certain levels of one or another need to be sustained, yet in respect to bitcoin, you seem to either be arguing in the abstract or arguing back from the conclusion that you want to reach.

Also, your expectations of whether an asset has to be majority utility seems to be pulled out of thin air, too.  

I think that we may agree about some of the fundamentals, including the fact that there needs to be some utility in order for there to be some meaningful and longer term value.  We disagree on the amounts that are present in bitcoin and the implication of what utility is there and even seem to disagree about some of the value that actual speculation brings (especially when such speculation has foundations in perceptions of actual utility rather than pie in the sky utility which is a larger portion of what ETH represents(actually ETH seems to have some utility too that has grown over time, but the utility of ETH is much more amorphous and seemingly smaller than that of BTC and that is what seems to largely differentiate the two))

The funny thing is that you are giving the arguments that indicate exactly what you are trying to deny.

My thesis now is: "most people are into bitcoin, mainly because they expect a price rise"

From that proposition, I think we can agree that "greater fool theory" follows. 

We can formulate my thesis differently, but logically equivalent: "if many people that have a demand/are holding bitcoin, were to expect a price stagnation, they wouldn't hold onto their coins, or they wouldn't express a demand for it."

You deny this.  Hence, your statement is: "most people in bitcoin use it as a currency/store of value and are NOT into it mainly because they expect a price rise".  Or equivalently: "if most people who are now, or in the future, in bitcoin would know for sure that the price wouldn't rise, they would still express their demand for bitcoin / hold on their coins".

BTW, when you write this:


that is not in contradiction: the point is that people EXPECT a price rise, even if they give it a probability of a price decrease.  It is all about expectation values, and risk aversion, we agree.  But this doesn't change the main statement, that people are mainly IN bitcoin because of their expectation to make a benefit.

Let us now look at how you are REALLY appreciating the importance of bitcoin's price in the demand for it:


--> probabilistic expectation of value increase


--> "cashing out to make a benefit on price rise"


--> "large majority is speculation" (on price rise, what else...)


--> It does.  It is exactly that.  If 95% is "to the moon speculation" then my "assertion that almost all of bitcoin is speculation" is for sure correct ! 


--> Why would that be the case ?  Is the percentage (5%) rising or decreasing over time ?  If most people in bitcoin now are speculating on greater price, why on earth would newcomers be different, and "true users" ?  My impression is rather that the bitcoin market cap rose much more than the actual currency usage (for instance, on dark markets), which would rather indicate that the "bitcoin user population" is evolving more towards speculation than to usage.   

I don't see any reason to expect the future adoption of bitcoin by new users to be radically different than the current one, and if anything, it goes more and more in the direction of speculation, while "currency adoption", say, on stores and so on, is not following.

When the price rose during spring this year, this was clearly NOT related to a higher amount of demand for usage as a currency.  It was not because all of a sudden, Amazon allowed people to pay in bitcoin or something and people rushed out to obtain bitcoins to do their shopping on Amazon. 



Well, if it is 95% - 5%, clearly we have an almost totally (95% !) speculation dominated asset, and that is *by definition* an asset one demands to be able to get rid of it at a higher price: greater fool.  I don't see how one can escape this iron logic.

An asset is not "greater fool" if its demand for speculative purposes is very small (say, <10% <20%) as compared to its demand for usage (here, store of value in the long run, or currency usage to buy stuff with).  If an asset's demand is totally dominated (95%!) by speculation, then we have the schoolbook example of a greater fool driven system.  It would indeed mean that the day that all speculators realize that they are "the last in the row" and that there are no greater fools, the demand would plummet by a factor 20 (from 95% to 0%, which leaves 5% of real usage: 1/20) and hence the market cap too.
If an asset suffers from 10% speculation, the day the speculators realize they are the "last fools", then that asset's demand (and hence its market cap) would only drop 10%, as 90% of its demand is unrelated to expectations of price rise.

That's all.

In other words, you are just making shit up based on an assumption that is not based in reality and the real complexity of people and their various motivations.



And, hence you are assuming a lot.


I doubt that your hypothetical matters, because there is a scheme of probabilities, and people are weighing probabilities.


If any outcome was completely certain, then that would be a kind of perfect information, which is pie in the sky theoretical, not practical regarding discussions of the future.  Sure some outcomes are more probable to occur than others, yet people are still going to have varying estimations of various possible outcomes, and also frequently get some variation of it wrong and have to act at various points down the road to correct their earlier actions.  Another mistake is to assume that everyone is playing balls to the walls, when in reality a large number of people play incrementally. and that is just the way the world works.. even though you got both kinds of behavior and various kinds of behavior in between.



some would if they do not know of any other better place to park their value.  But again, recall that people may have a tentative plan for when they are going to need their money, so they are going to park their value in various locations based on various needs for liquidity, especially when a lot of folks live pay check to pay check and may be very limited in the amount that they are investing longer term.






I am not sure why you keep harping on some kind of idea of most.  If someone creates a one or two year investment plan, then they are going to attempt to figure some kind of store of value, but if they are worried about volatility, they may store less.

By the way, based on fundamental differences, bitcoin has a much higher upside potential than gold, and you should realize that as well... and that possible upside creates a certain amount of value that is part of the mixed value calculations.




some are prepared for those kinds of scenarios.  whether it is happy or not, no one really knows where the price is going, and they just calculate probabilities, as I already stated several times.

Some folks are going to cash out well before $1,000, too.. there are lots of variations, and some folks will be jumping in at $1,200




You are starting to sound like a troll, and you are reading too much of the negative press that is customarily spread regarding bitcoin users being irrational blah blah blah.



I did not say that bitcoin market cap is mainly driven by usage.  I said that it is a combination of factors and motives, and I likely agree with the scenario that a large majority is speculation, but that is not going to undermine bitcoin because of its current utility and its likely increased longer term utility.  On the other hand, I do not consider speculation to be a bad thing, and I do not consider bitcoin to be anywhere near the level of ETH speculation. 


I don't claim to really have any grasp of the actual percentage driven by speculation, such as "to the moon", but even if it were true that 95% were such "to the moon" speculation, that does not undermine my prior claims, and also that seems to be a move a little bit off of your earlier position that you were asserting that almost all of bitcoin was speculation (similar to ETH). 



Maybe i should have said that better?  The exact percentage of the motivations are not that important, because even if we currently have 95 % speculation, that 5% utility is going to evolve and become a likely greater percentage as the adoption continues.


Probably you are correct there, that we do not have a lot of information regarding specific motivations, although there may be various attempts at analyzing such.. whether based in fact or not, may be a different story.


Probably we are disagreeing mostly on the importance of speculation versus utility rather than the actual proportions of either, though we may disagree a little bit about the proportions as well.


of course everyone wants to buy low and sell high, but in actual practice they don't always achieve such and they gotta lot of other things going on in their lives and including changes in their perspectives that cause them to buy high and sell low.




again I don't necessarily doubt the proportions only the significance of such.


I think that both of us are starting to go all over the place and really probably talking past one another.

I still am of the position that bitcoin is in its very early stages and even if you attempt to describe the population of potential bitcoin users as a smaller group, there remains a whole hell of a lot of development still going on a very low level of adoption, whether that adoption begins to explode in the coming years or if it takes a decade or more to develop to a greater degree that significantly creates upwards price pressures on bitcoin.



This is not a hope for the moon.  This is a description of the actual facts.


You are talking nonsense.  bitcoin is being developed on an ongoing basis and its network is increasing on an ongoing basis and the hash power is going up.. .. so it is not pie in the sky to recognize very likely upward price pressures based on all these developments.   Any prudent investor should prepare for price movements in either direction, but I think that it remains prudent to put a decent stake in bitcoin anywhere between 1% and 10% of liquid investment assets.. some may chose more and others may chose less. 

Assessments are made based on the now and the various possibilities, not based on hypothetically that someday all of the adoption is going to stop... bitcoin has barely even reached any kind of significant audience, and there remains considerable space for growth.  it is not greater fools or pyramid scheme or ponzi scheme or any of those variations, even though you continue to assert that you are arguing the more mild version of "greater fools"  which remains ridiculous if you account for the actual facts and logic.

This is indeed the main point of contend.  I thought it was more or less acknowledged that people "investing" in bitcoin do it mainly because MOON.  The other reasons to buy bitcoin would be "store of value" and "currency" (both are the same concept, only the time scale of holding is different), and hence actual USAGE, which, I thought we agreed upon, is only a tiny fraction of bitcoin's actual demand.  The "buying because of selling higher", I thought (which I call "speculation") was the main drive of the volume, of the demand, and hence of the market cap and *hence of the price* of bitcoin.

You have to do the gedanken experiment: suppose that all people holding bitcoin now would, by some element of magic, KNOW that they are going to sell their coins at $600 in the future (because a genie has come and told them for instance).

Suppose that a genie tells all potential bitcoin buyers that they will sell their coins, if they buy them, at about the same value.  Do you think still many people would be holding/buying bitcoin ?

Those like me that buy bitcoin to buy some services on the net would be happy, and not change their habits.  But do you really think that *most* of the market cap, most of the holders, most of the buyers, would continue their activity of holding, buying if somehow they KNEW that they would sell their coins (or use their coins) at exactly the same market value as they bought them ?   Or would the whole thing crumble down ?  Be honest.


That would be true usage as "store of value" (like gold is: nobody is expecting "exponential growth" of the price of gold - you can think that there are good and bad moments to enter gold, but in general, people buy gold as a STORE of value for the long term, exactly as you describe).  Do you really think so that most bitcoin holders are in for that ? 


Imagine that bitcoin remains in the $100 - $1200 range for decades.  Would most current bitcoin holders be happy you think ?


Well, if most bitcoin holders do what you suggest, then you are right, that is not greater fool theory, but that is just USAGE as a (long term) store of value.  But my impression about everything I read about people's motivations for going into bitcoin is MOON!  And without that hope for MOON! they wouldn't simply be there. 

If what you write is correct, then the actual market cap of bitcoin is mainly given by bitcoin USAGE, and not by speculation.  That would be great. Honestly, I don't believe that.



My idea of the demand of bitcoin is that it is 95% driven by "hope for MOON!", and that if in one way or another, there wouldn't be that hope, they wouldn't bother holding any coin.



No.  The motivations are essential.  They distinguish between greater fool theory, and "fundamental growth".  In the first case, the growth charts are the main or sole motivation ; in the second case, they are the consequence.  In the first case, there cannot be anything else but a crash when "full adoption" is reached, in the second case, when full adoption is reached, charts stabilize.

But the charts themselves can not distinguish whether they are "cause and effect" or "only effect".


I'm sorry.  I thought it was clear for you as well as for me that the main bitcoin activity is speculative, and I wanted to bring you to the inevitable conclusion that follows logically from it.
Now I see that you are in fact not convinced that most bitcoin activity (amongst which "holding" is also a kind of activity) is driven by speculation.  In that case, I can understand that you come to a different conclusion.

I simply have not the impression that this is what motivates people mainly to buy or hold bitcoin.   I can be wrong, but I thought we agreed on that, and now it seems that we aren't in agreement there.


That's the case of every tradeable asset.  The only question is if that behaviour is only "sugar on top of the usage demand", or is motivating the bulk of the demand.


Indeed.  The only thing that can really give one an idea are the individual motivations of people of why they have a demand for bitcoin.  If their main motivation is to "buy low and sell high", then we know we are in "greater fool".  If their main motivation is to use it as a currency to buy stuff on the internet (it isn't, this we know), or if their main motivation is to "hold value for later" (like gold), then we are in a "fundamentals" paradigm.

I thought it was clear that the first motivation outnumbers significantly the second, but you seem to doubt that.  Fair enough.


Ok, the argument doesn't change, read then: "when 3/4 of the ultimate number of people use bitcoin".  Point was simply that "increasing adoption" will stop SOMEWHERE and I gave you the ultimate upper bound.  So at a certain point, more than half of the people that ever will use bitcoin, will have bought bitcoin and hold it.  These people will not be able to hope that they will find other people buying their stash for much more.  These people cannot reasonably hope for "more adoption".  At a certain point, growth stops.  If GROWTH was the motivation to be in the game, the game will crash.  That was my point, because I thought that you and I agreed that most people were in bitcoin to "invest" (that is to say, to sell higher, a LOT higher).  Given that you now take the position that this is not the case, my logical deduction doesn't hold any more.


This is again some kind of "hope for MOON!", no ?

"one day we will reach saturation, but that's still far in the future and the price will still grow, grow grow !!"

But that was exactly my argument.  One day it stops if that's the motivation.  As long as it doesn't stop, one can get in and out and get rich.

There's nothing wrong with forking at all, except to the extent that it may be controversial, and ETH's recent hardfork should have taught folks that none of us should take the extent of controversial for granted.  Accordingly, there should be even more reluctance towards hardforking and/or attempting to impose consensus unless we really can recognize overwhelming consensus on whatever the topic of the hardfork.  For example, if the hardfork is fixing a noncontroverted bug (for example accidentally mined 21 million coins in one block, or something like that).





Actually, it is possible that if the scaling up of bitcoin was presented in its pure technical sense and both evidence and logic had been presented to justify such scaling up, then it is possible that some kind of scaling solution could have been achieved in a fairly short period of time.  

A couple problems with both XT and Classic was that there were hidden agendas regarding attempting to change governance also, and really in the end, the case for actual technical problems were not as strong as XT and Classic folks were making them out to be, so a lot of the passion regarding the scaling debate is not really technical, but instead political and also concerns about personality.. rather than technically justified.  Further, there have been some pretty contradictory positions taken in respect to seg wit.  When seg wit was first announced, it was pretty much non-controversial because even a large number of the XT and Classic proponents (such as Gavin and Jeff Garzik) were in favor of seg wit, at least as an interim solution.  However, with the passage of time, it became more and more clear that seg wit should be implemented as a softfork rather than a hardfork because a certain amount of sabatoge and ill will had been generating around it, largely from the governance aspects of the XT and Classic supporters, rather than any kind of meaningful and constructive technical criticisms.






Sure, finite block sizes could become or remain a design aspect of bitcoin, because there seems to have generated some rationale why limits should be imposed, largely considering defending some kinds of attacks and also possibly generating some mining incentives through fee generation and justification for reasonable fees.






Seems like I may agree with you, if you are talking about immutability within the context of bitcoin, but I do think that immutability has to be considered within the context of secure and decentralized value storage, too.




could be.





So what if ethereum can be a coin if it is not clear about whether it is secure, and even we have never been clear about the total number of coins and whether or how such movement to proof of stake.. and in the end, so what  about alot of this lovey dovey smart contract bullshit when it is ahead of its time.  Sure, there are a lot of good ideas with smart contracts that have to be worked out.  

Bitcoin, on the other hand, has a fairly narrow assurance in respect to providing secure decentralized immutable value transfer/storage through proof of work, and that is a humungous achievement on its own so long as it can continue to last, which is proving to be lasting and lasting and being developed upon in order to continue to foresee future growth (through ongoing future adoption and ongoing development that is not all clearly known at the moment because the market is going to reward or punish which parts have more utility and which parts do not and what system built upon such are going to prosper financially).






You keep reading what you want to into the supposed "main reasons" for people to buy bitcoin.

Sure some folks may hope for an exponential growth in value of their investment, but such exponential growth expectation is not a necessary condition or motivation for investing.  I think I already outlined this, but investors could also consider that the coin will hold value better than other investments and not lose value.  Accordingly, a person may consider that there is a 1% chance that the BTC price will grow to the $3 to $5k price territory in the coming years, but a 80% chance that it is going to stay above $500, and lots of variations in between, and that may be good enough... Sure, possibilities of exponential growth, but when you calculate all of the possibilities, it just may show that bitcoin has a decent likelihood (in spite of likely volatility) to hold it's value with decent likelihood of modest appreciation (and seemingly better than alternative places to put 1% to 5% of the assets of the investor).  

That scenario is no where near having an unreasonable expectation to become rich  if you attribute a mere probability to such upward price scenarios and also including considerations of downside risk, too.  Greater adoption does not equal greater fool as you like to denigratingly suggest with your faulty and incomplete framing of the situation and the calculations that folks may undertake.




I already explained that there are a lot of reasons why greater adoption is going to take place, and we don't even know all of them at the moment.. it is just a decent place to put anywhere between 1% and 10% of your total quasi liquid investment funds (and people are going to vary regarding how much they believe is good for their circumstances.





There is no main reason because there are a variety of reasons that are going to keep developing with the passage of time that are going to be a combination of A and B, when the price is going up, there are going to be a lot more from the B camp, and when people assess fundamentals, there will be more of those in the A camp.  This diversity is going to exist throughout the globe while folks have differing regulatory environments, differing financial incentive, differing access to information, differing development in their immediate surroundings that could cause greater or lesser bitcoin utility opportunities.





We don't have to have any "main growth" anything.  As long as the better mousetrap is built, people will continue to come, and it does not really matter about whether it is main or not as long as development continues, which it has continued.  

There are a multitude of charts on blockchain.info

https://blockchain.info/charts

and in other locations that show ongoing and continued growth, and the main reasons do not really matter so long as such growth continues, which there is no indication that it going to stop.  Sure, it could go flat for periods of time and maybe it will even decrease a bit or fail to grow as exponentially as folks had hoped, but who cares, in the end bitcoin remains a good investment, and if some other better place comes to put 1% to 10% of your quasi-liquid investment assets, then the money can be moved.





 
you are coming off as a bit patronizing here.

I have already done these kinds of calculations for myself in terms of the utility of bitcoin and it's various value propositions in terms of short term, medium term and longer term, and I continue to engage such calculations from time to time over the past nearly 3 years that I have been in bitcoin.  Some of my strategies of my investment in bitcoin are quite more involved than a large number of other people, but I do what is good for me and the time that I have available for such.

People are going to engage in various levels of these kinds of value calculations for themselves, and some calculations are going to be more gut level and others will be more informed.  Some will be more right for the person and some will be ill thought out, and in the end, it doesn't really matter that much because with the passage of time, bitcoin is going to continue to prevail - and if something better comes along, then each person can chose the extent to which, s/he diversifies assets into that other asset.





 you are repetitive.



 Yeah some people gamble more than others, too, in the way that they allocate their investments and their lives in general.  Some people regret and others don't look back.  Lot's of variety, and some of it works better than others - whether you go long or you go short - whether you leverage your approach or you take some intermediate or modest approach.  Some folks may chose to invest 80% of their quasi liquid assets into bitcoin, and others may be more conservative at .05% and there are a lot of variations that may or may not be very well thought out, but just deciding to invest $100 or to invest the equivalent of 1BTC, but then over time, there may be reconsideration, to buy high and sell low or to sell low and buy high.  Folks can be quite irrational, sometimes, and we should all realize these kinds of dynamics are ongoing, but does not necessarily turn them into a "greater fool."



Whatever.  You have now created a decades long framework in which we are likely never really going to be able to verify how it plays out or if you were correct.

I have already concluded - in my infinite wisdom - hahahahahaha- that you are likely not correct.

"When 3/4 of the world".. that is just ridiculous.  We are likely at .01% of the world's population that has some kind of investment in bitcoin, and you are talking about 75%?  Why don't you deal with real numbers?

If bitcoin gets to 1% of adoption, then that could likely be 100x increase in price and 100x increase in the complexity of the infrastructure.  Even going to 1% is not very likely to take place any time in the very near future.  Bitcoin remains in very infancy levels of adoption and development with a lot of potential for growth, but such growth is not inevitable.  At the same time, bitcoin has computing power dedicated to its security that is 1,000s of times, greater than any existing super computer and even several super computers combined.  So, bitcoin remains in a very unique place with a lot of upside potential, and merely because Ethereum is trying to ride on bitcoin's coat tails does not mean that ethereum is some kind of equal concept with it's pumped centralized marketing.

Honestly, to me, forking over the scaling now wouldn't really be a breaking of immutability, because "limited blocks" is maybe not a clearly defined intend which was obvious to people starting to use bitcoin.  The block size was until recently nothing else but a technicality.  However, from the moment that the finite block size starts to have economic impact, and people start adapting to it (the scarceness of room on the block can be an economic incentive), then of course, this finite block size has become part of the "bitcoin paradigm", and changing it then would mean a break of immutability. 

To me, immutability is not some technicality, but a matter of "respect of the original intend of the contract that underlies the cryptocurrency at hand".  And note that this contract is NOT a smart contract, but one of intend.  This is why "hard forking", which is "breaking the smart contract" of the crypto currency, is NOT a break of immutability if that hard fork only touches upon technical aspects, and doesn't touch the economic paradigm of the crypto.  The block size was long time a technical matter.   When it starts to play an economic role (such as fee market etc...) then the block size becomes part of the paradigm, and modifying it becomes "breaking immutability" (like changing the emission rate of bitcoin would be).


Well, ethereum can be used as a coin exactly as bitcoin is, it is faster, it has not the same block size limitations, AND one can write buggy smart contracts on it  


That framework is not faulty at all.   If *the main* reason to buy bitcoin is because one "expects an exponential rise with greater adoption", meaning, one expects more and more people to buy bitcoin FOR EXACTLY THE SAME REASON, namely, an exponential rise and one calls the influx of all these people expecting that, "greater adoption", then we have the schoolbook illustration of "greater fool theory".

If on the other hand, you expect greater adoption because people are going to USE IT A LOT as a currency, NOT buying it mainly because they expect a price rise, but because of this greater adoption, there is a price rise, then you are right.

However, face it.  Answer honestly for yourself the following question:

What is the main reason for most people buying/holding bitcoin ?

A) they buy/hold it because the want to use it as a currency/store of value, and *they are not motivated by an expectation of rise of price*.

B) most people buying/holding bitcoin buy it/hold it because *they expect a rise of price*.

If the answer is A, you are right, we are NOT in the "greater fool" paradigm ; the price rise is just a reflection of larger adoption.  However, if the answer is B, then we are in exactly the defining property of a "greater fool theory" situation.

If "most people buying/holding bitcoin" are essentially motivated to do so because they expect a rise of the price, and if most "adoption" comes from people motivated by the expectation of a greater price, we are having the schoolbook example of "greater fool theory".  It is only when the MAIN DEMAND, and when the MAIN GROWTH has nothing to do with an expected price rise, that one is NOT in "greater fool theory".

Now, ask yourself honestly, whether that is true.  Ask yourself whether, with bitcoin, MOST new people getting into bitcoin do this for OTHER reasons than an expectation of price rise.  If your answer is that most people get into bitcoin NOT because they expect the price to rise, THEN you are right and this is not "greater fool theory".   Really ?

But, mind you, greater fool theory works extremely well to get rich, as long as there are enough greater fools !  I'm not saying that it is not working !



 This "greater fool theory" thing can work positively for decades.  By the time 3/4 of the world population is gambling on bitcoin, expecting to find another 3/4 of the world population to sell their coins at higher price, several generations of bitcoin holders will have become rich.  It is that last 3/4 - a fraction that will be the last of great fools, and end up being bag holders of something they bought (like everyone else before them) to make a benefit, and see that they are just bag holders.   But this may take decades.  Greater fool theory works, as long as you are not the last (and largest) generation.

Yeah, it is almost as if we are beating this comparison contrast to death, and from my point of view, too much comparison contrast may cause some losing of perspective, and surely, I am critical of you to some extent, dinofelis, because I believe that your various comparison points are losing some nuances, and creating more details and specifics does not really help to make the matter more clear or even more correct.




Even with these simple descriptions regarding immutability, you are all over the place in qualifications and characterizations of recent history.



Sure, but some folks invest in both and some folks  are maximalists in one coin or the other. Yet, at the same time, the social structure is constantly evolving, even though there were some historical foundations that influence each, whether we are talking about hard core folks within each respective community or the multitude of varying perspectives that are the likely majority and more mixed.




Well, part of the recent battle in bitcoin does have to do with some folks wanting to make bitcoin more mutable in terms of the scaling debate, and even though some folks lobbied fairly strong criticisms towards bitcoin difficulties in achieving consensus seem to have resulted in some folks changing their perspective to appreciate difficulty in change (especially when you are already starting with a very solid system that is not broken and securely preserves immutable decentralized value) is a kind of bitcoin feature rather than a bug.  So some folks have come to recognize and appreciate bitcoin more because it is seeming fairly resilient and difficult to change, even though there still remain some loud mouths out there that continue to shout about how broken bitcoin is, and if you are allowing that nonsense to sway your opinion about bitcoin, then you are caught up in the same kind of denigrating misconceptions and false equivalencies.




This is a kind of nonsense to suggest that ethereum can do more than bitcoin, but it's actual use in the real world has not been demonstrated yet, therefore ethereum has potential improvements upon bitcoin.  I will concede that there are some things that ethereum can do that bitcoin cannot, but who gives a ratt's ass about that when bitcoin still continues to be able to do what it was designed to do like no other competitor, and the fact that bitcoin is still evolving and developments are being made, it is quite likely that in the relatively near future, bitcoin is going to be able to materially and at a sufficient enough level do everything that the various competing cryptos can do (even if these things cannot be done directly on the bitcoin's blockchain, they could be done on side chains that allow for some absorption and at least cooperative symbiosis regarding the incorporation of the various "competing" crypto technologies while still using some of the security aspects of bitcoin).




Yeah, you continue and continue and continue with your faulty framework.  Yes, there is some speculation and betting going on with each of the coins, and frequently we see various kind of unfounded hype mechanisms in ethereum that clearly reach a much higher level then what is taking place in bitcoin, but yeah, there are some folks in bitcoin who like to hype a lot too, because they truly and correctly believe that exponential BTC price growth has a much more likely chance of taking place with greater adoption and greater development.  You seem to get caught up in considerably misplaced denigration of bitcoin by attributing this greater adoption and development to labelling these later entrants as "greater fools"

Even though there remains some likelihood that your framework captures some apparent dynamics in the crypto space, describing the situation as either short term or long term greater fools, should cause you to recognize that there is something wrong with your framework, because a large number of folks don't give a shit about the long term if such long term is 100 years later, so we need framing and considerations that are more immediate for folks, regarding hourly volatility, 30 days, 1 year, 5 years... These shorter terms are much more concrete, even though in order to have a decent short-term plan, there still needs to be some outline regarding how the longer term is intended to play out in order for folks to have perspective regarding the shorter term periods.



Being the first really only matters if there is some kind of meaningful innovation that is not really within the realm of being copied by others.  

Bitcoin had more than 4 years of nearly exclusive resolution of the double spend problem, and yeah, it did not come out of the blue, but it built upon other information and ideas to truly fix such problem.  One of the telltale signs of bitcoin's security advantage remains that even a few years ago, there was so much computing power invested into bitcoin that it made it very difficult to attack, and we know that even since that time, hashing power has gone up exponentially to generate security hundreds of times more valuable than the current price.  Anyhow, yeah, if there were some better coin, the bitcoin miners could direct their mining in another direction, and sure bitcoin's security advantage is not flawless, but currently, there remains almost no competition with that security aspect of bitcoin, and if something better seems to be evolving, I have no personal problem to diversify some of my investment into that something other.  Even though maybe Monero could be in the ballpark of something that seems to have decent potential at the moment, Ethereum is no where near to being in the ballpark with all of its pie in the sky, lack of a real world application pumping hype marketing and difficulties even camouflaging any kind of decentralized immutability (Maybe ETC could have something in this regard?)

ETH is all game and all games will be over sometime but i don't think it is near the end yet.
it is still getting pump and dumped and now we are seeing the bubble phase of eth and soon this will be over and a new game will start and go up again!

The point I wanted to make is that what keeps ETH alive (while it shouldn't), is something bitcoin is also undergoing: it is MAINLY a betting token in a greater fool system.  The things that *should* have made ETH crumble don't count for betting tokens, and that's why it is still there, and what I wanted to outline, is that bitcoin is *also* mainly used as a betting token.
But there are differences between ETH and bitcoin too, and maybe I wasn't clear about that.  I guess that the main difference is that bitcoin is still an immutable block chain in its spirit, while ETH isn't - that should have killed it, except as a betting token.  The "social structure" of bitcoin and of ethereum are different.  They both suffer from imperfections: bitcoin's simple ASIC based mining algorithm makes for mining centralization ; ethereum's initial emission scheme makes for stake holders' centralization with very strong influence by the initial dev team.  It has now turned out that this last aspect is fatal for immutability, while the first aspect hasn't yet shown this problem.  But bitcoin has probably a much larger, and diversified "community" than ethereum, which may be the ultimate protection against mutability.

And although ethereum can do everything bitcoin can, but not the other way around, bitcoin is actually also really used, while I haven't yet seen the slightest real world application of ethereum.   My point was, though, that even this usage of bitcoin is small as compared to the "betting token" aspect of bitcoin.

However, even in the "betting token" sphere, there is probably a difference between ethereum and bitcoin, and that is the time constant of expectation of finding someone who will pay more: that time constant with bitcoin is very long (there are many hodlers) ; I don't know if there are many ethereum hodlers, willing to hold ethereum for years even if the price plummets "temporarily".

And then, bitcoin has something that no altcoin has and never will have: bitcoin was the first.

If you look back at the transition of this topic, you will see that Dinofelis made a comment that largely put ETH and bitcoin in a very similar category, and suggesting that they are both merely speculative investments and seeking the greater fool.  I reacted to that comment by asserting that bitcoin is quite different from ETH and brings quite a bit of value and paradigm shifting newness that is either not brought by ETH or at least ETH is not quite in the same place as Bitcoin in terms of what value is bringing to the table.

Even though not explicitly, it is related.  ETH *should have been game over* if it were something that were actually used.  But ETH is not used, it is a betting token.  Like most crypto.  Betting tokens don't need to have much solid properties.  Only the belief that you will find someone wanting to pay more for it, in the illusion that he will find an even greater fool paying still more.  Whether the transactions are reversible or not, whether the block chain functions or not, or whether it even exists, doesn't really matter.  Only the belief that you will find someone more gullible and more greedy than you.  And the world is big.  The belief can be justified.  In that case, you win the bet. 

Did you two guys say anything about Ethereum being "game over" ?
Sorry i skipped past your comments.

Let it be known, i am no longer the long post ranter around here.  

Here ye, here ye, we have a new rant-champion to dethrone Spoetnik (Shelby)
And you're lookin' at 'em (scroll up)  

I shit you not the last couple comments here made browser sputter & lag when scrolling.
So what's the matter everyone ?
Why are you not whining up a storm insulting the fuck out of them (like you have done to me 100's of times)

PS:

ETH = GAME OVER

It was doomed from the damn start.
There is a reason Crypto gove 0 fucks about it between 2014 & 2016.
If it had any reasonable chance in hell at dethroning BTC etc we would have seen signs long ago.
Which is why the ICO was ignored and the dev was testing the waters with little "feeler" topics.
When the ICO was launched they would post on average once a month topics that said "What do you think about Ethereum?" over & over..
And NO ONE would even post a word !
..except me of course    

But wait !
It don't stop there..

They realized eventually they had to organize a super pump and ultra hype / spam campaign
in cahoots with the usual Coindesk shenanigans (Coindesk was running "stories" on ETH since 2014)
Yup.. they realized they were running out of time and had to do something.
There was one option available or the shitheads who stole all the ICO coins would be caught broke with worthless shit tokens.

Somebody whispered in Butters ear that if he wanted his millions and millions of ETH coinz to be worth *anything* he had one option.. a pump !
A pump unheard of and never seen before in all of crypto.
A facade / charade of historic proportions.
Accompanied by a spam campaign the likes of which no one had seen previously..
Proof was the instant over night flood of brand new accounts created to hammer this section with ETH "shill" topics.
But they hit social media etc too.. one girl posted here in ALT main that she had gotten PM spam on other sites about Ethereum before the big pump.

This was a scam..

A coordinated carefully orchestrated and aggressively executed plan !

And it worked.

Why because i have said all along you are all predictable and... DUMB.
And that you are all whale food.. low hanging crypto fruit ripe for the pickin's

They knew damn well all they had to do was keep pouring Bitcoin into Ethereum on centralized exchanges.
That would produce a a predictable result.. greedy profiteer lemmings would start piling in *late* to the slaughter.

I watched it play out from 2014 on.. every step of the way.

And i tell you now.. ETH is dead idiots.
It's about as dead as it's going to get aside from a healthy price drop (correction) that is sorely needed.
It should be BELOW $1 each.. not $20+ a fucking god damn coin  
And it will be .. sooner or later.

The exodus has begun.. popularity waned and the profiteers wandered off because the PUMP stopped.
ETH tard's seem to think they can simply post here commentary to bring back the crowd..
NOPE ..won't work !
Neither is your bragging about how great it is.. it falls on deaf ears.
Because the people who got involved did .. because of the damn PUMP.
NOT because it has "features" etc

Hell it could cure cancer but unless it makes these greedy kidiot profiteer investards a fast & large profit..
they don't give a fuck.

So think about.. use your brain people.
Unless the dev's and their manipulation team start the super pump all over again expect the con to continue to drift off into obscurity like a bad meme not cool anymore.

Yup.. ETH really does truly in fact = Game Over.

And you can tell by opening your eyes and use basic common sense.

Why do i post this ? Because it's the TRUTH !
And unlike the little cock suckers making Ethereum who publicly admitted to dumping on you for millions of dollars in Bitcoin i actually *DO* care about people getting suckered into ICO scheme con's.

V. Butters got his paycheck for a million in BTC ..do you guys shilling for it doing all the work ?
How much did you get paid ?

Well, I appreciate that you are fairly specific with your response and explanation, yet you are still coming off as a bit pretentious and selective in pointing out some aspects of superior utility in other cryptos while giving a bit of a backhanded slights to bitcoin.

Based on our extended discussion, I'm sure that each of us are sufficiently knowledgeable about the crypto space to recognize that these matters are works in progress, and many "competitive" cryptos would not be around except for the fact that they learned from bitcoin and they are attempting to improve on it in various ways.  Certainly, the better of these cryptos are going to survive and add value in various kinds of ways, whether competing with bitcoin or complementing it.  Bitcoin is also going to be able to evolve, too, and possibly even integrate some of the better aspects of various other cryptos to the extent that it is feasible for bitcoin to do so.

I am not arguing any one crypto, even though bitcoin remains quite a bit ahead of these various competing cryptos for the time being, so there is no problem for folks to chose the extent to which they may want to diversify their investment into other cryptos, to the extent to which they perceive value in such other cryptos, whether such perceptions are erroneous or not.  Each of us are going to come to varying conclusions regarding how we proceed and the extent to which we feel that we have adequate knowledge or information in order to decide whether, if and how much to diversify our investment(s), whether that is in the crypto space or other traditional financial assets and/or currencies.




Sure, I agree with you that bitcoin can be manipulated in very similar ways, but your assertion regarding "exactly the same" remains to be seen whether they are going to be able to accomplish "exactly the same" because bitcoin is not "exactly the same" kind of asset as those other assets.  Our history is still to unravel in this regard, and the chances of your being wrong, regarding "exactly the same" is almost a certain because even though history may rhyme in a variety of ways, none of it evolves "exactly the same."

Furthermore, whether some asset is manipulated or not or "able to be manipulated", we gotta see how it plays out.  I do agree with you regarding manipulation taking place at a loss in terms of the buy high and sell low principles of the manipulator, but to the extent that bitcoin may be able to stave off some of the fractional reserve concepts and other fractional tools and folks may be able to continue to recognize some price differentiation in owning actual bitcoin, rather than having them listed somewhere, then it is going to be more and more difficult to manipulate BTC prices downwards because limited supply and at a certain point, people are going to refuse to sell and the manipulators are going to run out of coins to sell.




I am kind of with you  in the above discussion until you get into the "greater fools" discussion, yet even if I end up agreeing with everything that you said in the above few paragraphs, none of it really matters because in the end, people can figure out the extent to which they invest or don't invest and the extent to which they have confidence or not in bitcoin.  Whether that confidence cascades or stays propped up will depend on a variety of factors including some of the ideas that you outline in the above paragraphs... and as you suggest, the up and down of such confidence (or lack there of) can take years to play out.  Whether you believe the long term price direction is upwards or downwards will be in your own vision of matters, and certainly you should invest according to such upwards or downwards vision, whatever you believe the direction to be (whether short term or longer term).




O.k.  Here you are kind of admitting that you are striving to live in the world of "ought" rather than the world of "is".. and so maybe we do not materially disagree on what is the "is" versus what is the "ought", but personally, I am not going to lose sleep in attempting to make the world of the "is" into an "ought" rather than just attempting to deal with what "is" rather than what I wished it would be.




You strongly implied such with your explanations and examples and your discounting less tangible forms of value that I was presenting (namely secure decentralized immutable transfer/storage of value).




It seems that you are boxing yourself in too much when you try to categorize value and utility too much.  There is also perceived value, subjective versus objective value, future value, erroneous attributes of value (which may related to speculation), and likely other forms of value that may not fit so neatly into your attempts to categorize.




Yes, there may not be as much present value and utility of bitcoin for banked westernized people who already feel fully served by traditional banking and credit institutions.  Not all folks in the world can get a visa card or a bank or whatever to store and/or transmit value.




I am not talking only about the immutable ledger of information but the immutable ledger that is transmitting value.  I am describing bitcoin broadly to assert that bitcoin solved the double spend problem to create a never before seen secure immutable decentralized transaction/storage of value.  Or at least that seems to be the case, as far as I can tell with my current understanding of the bitcoin situation and what it is offering that significantly differs from what had been offered previously.





No.  It seems that you are exaggerating too much, and attributing too much greed to folks.  Sure, some folks may want bitcoin to appreciate in value to great extent, but that is not a necessary condition for someone to hold some value in bitcoin.  They also may want bitcoin to hold its value, even though they perceive that their fiat currency is losing value.  So, there can be quite a variation in the amount of volatility that people will put up with and how much appreciation or depreciation they will tolerate or expect, depending on what are their asset/currency options.




You seem to be assuming too much and attributing too much to people in a generalizing kind of way.  There is quite a bit more variance in the thinking of people and their various circumstances or options or even their financial means than what you are outlining.

Furthermore perceptions of volatility will also be affected by price points and recent history and whether they are attempting to figure out volatility risk by holding longer term or for a shorter time period.



Yes, if you attempt to simplify too much, then you are missing variance.  A person may decide to put 1% of his/her assets into bitcoin as a hedge against other assets, or they may chose some other amount that is at his/her comfort level, and the method of liquidation or the timeline may be a bit in the air at the time of the initial purchase of the bitcoin.  There is going to also be certain levels of technological sophistication,and at this point, likely most of the bitcoin are held by more technologically nerdy people, even though there are likely scatterings of holdings amongst the masses.



You are not really saying anything here.  Yeah, price can go up and can go down, and in the end you are kind of suggesting that in the longer run, the price is going down, but really you are just stabbing in the dark with this based on your overall perception that bitcoin is overvalued.  

In the end, I don't really disagree that you are allowed to have your perception of value based on whatever information and logic that you want.. no problem with that.



You are one of those "liberty" nut jobs... hahahahaha..

You know what, it really does not matter whether we ascribe to one philosophy or another, in the end, each of us needs to find the various tools that work for his/her own perspective and situation.  Surely, bitcoin may serve some folks in that regard and there may be some other coins that serve other folks in terms of their own perspective, and for some folks, they want to completely run away from some of the crypto currency aspects and the current crypto developments.  That is fine too, even though to me, it seems that there is quite a bit of interesting developments in the crypto space, and difficult to keep up with everything whether attempting to follow just a few coins or attempting to follow the space more broadly.



Yeah, sure I agree with you about that, and the numbers would likely be more graduated.


Here are some examples of price prediction posts that I made in May 2016 and in September 2015.

https://bitcointalksearch.org/topic/m.14813511

Of course, viewpoint and opinion and projections are going to change with the passage of time and changes in the market conditions.



Did I ever say credit cards are bad or that fiat is bad or anything is bad merely because it is not bitcoin?  

I really doubt it, and if I did then maybe I need to correct myself or maybe it was a certain context.

I am merely suggesting that bitcoin is bringing a certain kind of utility that has never been seen before, and that is part of its value.. Sure credit cards and traditional banking institutions and currency can still have a lot of value, and of course the traditional institutions are going to have a lot of value because the continue to be used by almost everyone.  Even folks who claim to be attempting to live on completely bitcoin are having to interface with traditional institutions and currencies etc...

For example, I use credit cards all the time.. easy fast and on a personal level does not seem to cost me anything.. and it even appears that I am rewarded for such useage.  Just because I use credit cards does not mean that a certain portion of my assets and investment cannot be in the future of bitcoin.. which I presently hold and presently have figured out ways to profit from holding and trading bitcoin (which puts me into an extreme minority for possibly a considerable amount of time into the future).

Anonymity.  Bitcoin is way, way, way too transparent.  Monero, zcash, you name it, but these are better systems in principle, because they allow privacy and sufficient anonymity to make dragnetting difficult.
There are other problems with bitcoin, like the finite money supply, and the bumpy halvings.   And finally, the too simple PoW, which allowed for asics, and brings centralization and with it, the potential loss of immutability. But it was a very good "first go".   It got many things right too ; amazingly many.


This is the other problematic potential failure of bitcoin and crypto in general, in the same way that gold was misused.   As the principal task of governments is to extort value from people, the trick central banks usually play with other monetary assets, especially if they are in short supply, is the following:  "buy high, sell low".  That can sound stupid, but it isn't.  "buy high, sell low" is a bad idea if you cannot print money.  If you can print money, then it doesn't cost you anything to buy high, and to sell low.  What you obtain, is a higher volatility of the asset, and hence a lower useful value as store of value, and as such, a higher rate of adhesion to your fiat, while pumping true value from the people to the financial sector via inflation.  It is a way to pump fiat in the economy, and to render, at the same time, the other store of value volatile.
People have been producing lots of value to obtain gold when it is high, and then turn it in to the central bank because it is buying up gold, pumping its price higher and higher.  When people have stored a lot of value in that gold, then the central banks start selling gold, crashing its price.  People having put aside a lot of value in gold simply lose that value.  It makes gold a less reliable store of value.  Because the state-finance PTB don't want you to have a store of value over which they don't have control.   Bitcoin can undergo exactly the same manipulation.


If you use a monetary system as a currency, there is a natural demand for that currency that develops, and that sets a price.   This is what is given by Fisher's formula.   Whether the monetary asset is used as a short-term currency, or a longer-term store of value, doesn't really matter, but it is true that a longer-term store of value requires (and produces) a higher market cap than a short term currency.  But in these cases, as the demand follows from a rational "competitive edge" of this store of value over another one, one can think that this demand is robust, and can increase when more people adopt it.  

In other words, its market cap will rise because of its increased usage as a store of value, and this is a solid, fundamental market cap.  The only way to make it fall, is if people suddenly don't want to use bitcoin any more as a store of value or currency, because it has lost its competitive edge (a better crypto comes along, fiat improves in quality, ....).

However, if the main demand is because of an expectation of a rise in value and "making benefit", then we are in the school example of "greater fool theory".  Sooner or later, one will run out of greater fools, and the price rise will come to a halt.  At that point, the demand will drop, and hence the market cap will drop.  If people were using bitcoin, not because it had a competitive edge as a store of value, but rather because of "making benefit", then at a certain point, they will realize they won't get any.  At that point, there's no stopping to the decrease in value.  The time scale on which this happens will depend on the time scale over which people were expecting to make benefit.  If they are thinking that it will take 5 years, then it will take a few times 5 years before the price drops after peaking.  If they think that it will take 10 years, then it may take several decades after peaking.

But the conclusion is unavoidable: if the main demand for bitcoin comes from the desire for "making benefit", sooner or later, this thing will come crashing down (although the crash will take several times the "expectation time" after peaking).


Indeed, and this is why it is such a pity that 90% or more of the market cap is made up by speculation.  It would be much better is the market cap of bitcoin were 10 times smaller, and essentially made up of its usage.  It would stay much, much more under the radar than now, it would have a much more robust market cap, much less volatility, waste less on mining, and have a higher competitive edge.


I never said that, at all.  I said that all SOURCE of value is consumption, whether that is material or immaterial (like services).  That means that something can only obtain value if it is directly consumed, or if in one way or another, it improves consumption (and/or production of the consumed goods).   This "indirect" can be very indirect, but it has to lead to improved production and/or consumption.  A monetary system has value if it helps improving production and/or consumption.
For instance, money on the dark net markets improves consumption of illicit goods, and also helps in its distribution and hence in its production.  In as much as fiat is delicate to use there, there is real value if a system can serve as a reliable monetary system that is lacking.  And the consumption of illicit goods brings a lot of satisfaction, and hence has a lot of value: the source of all value in dark net markets.
But transactions with everything legal and all taxes and so on, I have difficulties seeing the value of crypto over credit card systems.   I can just as well buy something with VISA than with bitcoin, and in fact, in most cases, I have more protection.  The fees are negligible compared to most taxes.  So it is difficult to have a competitive edge over something like VISA.  There may be a small one, but it will not be huge.


Well, the use as an immutable ledger represents an infinitesimal part of the market cap of bitcoin.  You can estimate that by the transaction volume of bitcoin that is related to "registering something on the ledger".  That is infinitesimal to the overall bitcoin volume.


Well, if people are willing to pay $600 for it, because they count on selling it for $1200, and if people are willing to pay $1200 for it because they count on selling it for $2400, and so on, sooner or later, there are going to be people that are disappointed.  If the majority of people wanting to pay $600 for it, do this because they want to sell it at $1200, and if the majority of people .... then the majority of people buying bitcoin are going to be immensely disappointed at a certain point in time.  And when people buy something and are disappointed, demand plummets like a stone.  That's the point.

If people are willing to pay $600 for it, because they find it the best store of value they can find, then when they sell it again for $600 7 years from now, they will be satisfied, and demand will be robust.  If people are willing to pay $600 for it because they need bitcoin to buy something tomorrow, then the demand will be solid, and the price robust.

See what I mean ?  The first case (greater fool theory) is not sustainable.  the second all the more.


I think the price can still rise, because there is still a sea of greater fools.  On the other hand, the blocks seem to start to be "full", so the system is near full load ; some pony tricks can give us a small factor, but then it will be full again.  But one day, it will not rise any more.  So much is sure.

I'm not interested in investing.  I'm interested in liberty.  Bitcoin could have helped, but that seems to be more and more remote now.


So if bitcoin is now at $600, it means that one gives it, say, 10% chance to be at $6000, and 90% chance to be at $0 in the future.  Or one gives it 100% chance to remain at $600.  Or one gives it 50% chance to be at $1200, and 50% chance to be at $0.  I'm oversimplifying, because one has to take into account risk aversion, and risk-free interest of course.
But that's the idea.


Ok, fair enough


If they create a lot of utility, they aren't so bad, are they

Even though bitcoin was the "first go", it remains the best out of any crypto, so are you expecting some kind of bitcoin 2.0 to come along?




You are all over the place, including this here comment.  We are talking on a public forum, and I am responding to your comments, that is not religion nor whether someone over values or under values something.  Each of us invests according to our views, hopefully, if we are able to.


speculation is going to exist.  Live with it.  Also, it is very possible that bitcoin could receive considerable additional and strong attacks from governements and banks, and those may end up being characterized as if such activities were speculation.





It's a part of life, and also seems to have been anticipated as part of the dynamics of bitcoin, even by satoshi.

We are repeating, but as an asset increases in value, it increases in utility, speculation and even motives for being attacked.  These concepts were not lost upon Satoshi when designing the initial platform.




Not likely at this point.  Let's revisit in a couple of years, and see where we are at.


You are talking nonsense if you are suggesting that items only have value if they are concrete and material.

I don't claim to know all the ways to articulate the value of bitcoin, yet as I already said on several occasions, there is some value to secure immutable decentralized transactions, and bitcoin brings that at a level never seen before, which equals value.



You can describe the value all that you like, but in the end, the value is also what people are willing to pay for it, and if they are willing to pay $600, then it is worth $600 at that particular time.




O.k..


You think it is worth less and I think that it is worth more... so what?  We can each invest accordingly, and find out which way it is going to go.  I already said that I have no fucking idea in the short term, but I expect in the longer time that the price will continue to rise.  I don't really feel any need to justify that any more than I already have.



Present value can also be assessed based on future perceived value.  People really do that.


I doubt that speculation kills value, and as the market cap increases and investment and use vehicles continue to be developed, volatility likely continues to go down, and even possibly volatility remains on a kind of upward trajectory based on continued development, use, adoption and upwards price pressures.




No.  We should just agree to disagree because it doesn't really do a whole hell-of-a lot of good to keep repeating the same thing in different scenarios when it already appears quite obvious what is the source of our disagreements and we have kind of beaten the subject to death.


The theory of zero sum does not matter to me if it takes a million, or even one hundred years to play out because I am going to be long dead by then.  I make decisions based on shorter time lines than that, and I could give a ratts ass about something that is going to happen in a couple hundred years..


You are throwing out the baby with the bath water.

We have all kinds of bad financial systems, such as credit cards, etc, and they are centralized and creating a lot of utility, in spite of being bad.  Bitcoin is going to take over some of that space in the future, and that is part of the reason why it's current price is lower than it's expected future price.

I do value bitcoin a lot.  I think it is a great invention in the century-long battle for freedom.  It lacks a few properties, but that is understandable as it was the "first go".  

However, I think you *over value* bitcoin too much and (hence my pointing to "religious sensibilities") it seems that you react almost allergically when you think that someone is downtalking bitcoin.  I'm not.  I'm a bitcoin fan.  But I don't like what is happening.  I'm just saying that the immense amount of speculation is KILLING the real value of bitcoin.

In as much as that immense amount of speculation is an unavoidable phenomenon when something like bitcoin sees the daylight, then unfortunately I have to say that this would indicate that, despite its promises, it is a failed project.  But the hope is still that this speculative effect will go away ; although I don't like it at all and I'm starting to fear that it is killing the project all together.

As anything, the value of something is what it brings you in the end, as enjoyment - and economically, that means, as goods and services you can consume.


This is where we fundamentally differ in opinion.  THIS is the only thing that really brings value.  The speculative aspect doesn't bring value, and harms the non-speculative part.  The speculative aspect is NOT the value of it.  The only little bit of value that speculation brings, is fluidity in the market and price information correction ON THE CONDITION that it doesn't dominate the price.  And this is what goes wrong: it does dominate the price.

Each time an asset is dominated by speculation, its real usage suffers, and I think that in the case of bitcoin, that ratio is so unhealthy that it might outright kill it.


The sole source of value of something is the "joy of consumption" it brings to people, and this value, as compared to the value of other things, is what makes the market price, because of the demand that is generated for it and the limited offer that it suffers from.  But the effect can of course be very indirect.  A glass  of champagne has direct value, and hence I'm willing to pay a market price for it, because of the joy it brings me by drinking it, or the joy I can offer someone I like by giving it to him/her.
A hammer has value, because I can use it to make stuff I enjoy.   This is a capital good.  I can make stuff other people enjoy, to trade it for stuff I enjoy.  And so on.  But *in the end* value, and hence market price, comes from the improvement of production of goods and services the thing that has a price allows for.  The source of all value, and hence of market price, comes from production, or improvement of production, or improved consumption of goods and services.  There is no other source of value.

A monetary system has great value, because it brings several improvements in production, and improvements in consumption, to the economy: the indirection allows you to split multi-party trades into 2 by 2 trades, separated in distance and in time.  If I have apples, you have oranges, and Joe has bananas, and I want oranges, you want bananas, and Joe wants apples, then instead of having to come together the 3 of us, at the same moment, to do our trade with 3 parties, we can do this 2 by 2, and at different moments in time.  THIS is the principal value that a monetary system brings us: making multi party instantaneous trading into 2-2 exchanges separated in time and distance.  The essential function of such a system is that it can TRANSPORT market value in time and space.  
It is similar to the transport of goods, in the following sense.  Goods can be made easier at some locations and at certain moments, but they are best consumed at other places and at other times.  As such, storing goods (transport in time) and moving goods (transport in time) improves the quality of production and consumption.  The system that allows for transport in time, and transport in space, brings as a value, the improvement in quality of production and consumption.  

But nobody in his right mind is going to say that the value of a warehouse (the construction) equals the value of the goods stored in it.  Yes, it has some value because production and consumption has improved somewhat, but it is not the TOTAL value of the goods inside.   That's absurd.  In the same way, the value of a truck is there, because the existence and usage of a truck allows for a somewhat better consumption and production.  But the value of the truck is not the TOTAL value of what it transports of course.

And in the same way, the value of a monetary system is NOT equal to the  market value it transports in time, although it does have some value, because it improves consumption and production somewhat.

Ideally, the market value of a transport system (the value that is created by the bringing into existence of the system) is of the order of the INCREASE in value creation in production and consumption it allows to establish.  If similar systems exist, then its market value will reside in the IMPROVEMENT over other systems that it brings to consumption and production.  This is what I called "the competitive edge it brings".

Compare it to transport of goods.  If trains exist, and it costs (in consumed electricity, usage of material, personnel salaries, ....), say, $1000,- to transport goods from the production site to the consumption site with a train, and now a truck exists, which can not only do that for only $700, but also improves the consumption experience with $100, and improves the production by $200, then the VALUE of the "truck system" is $300 + $100 + $200 = $600 in this case: it has consumed less resources ($300 less), has allowed a better consumption ($100 more), and has improved the production ($200 worth).  But if this applies to goods that cost themselves, say, $7000,-, then the value of the truck system is NOT $7000,-  

It HAS some value (here $600, the competitive edge it has allowed), but the value is not equal to what it transports of course.


But I agree with you.  Only, that value creation is not the market cap.  It is much, much less.
But it is not zero.


That is exactly my point.  Bitcoin has *potentially* a huge value, in usage as a currency, and in usage as a longer term store of value.  But *for the moment* that potential is not used much.  If the bitcoin competitive edge over other financial systems is, say, an improvement of 5% (imagine that bitcoin is "free transport of value" and others ask a fee of 5%, then bitcoin brings a competitive edge of 5% of the value it transports), and 10% of its market cap is used that way, as a currency, then the VALUE of the bitcoin system is 0.5% of its market cap.

My point is that this value proposition is HARMED by the dominant speculation, because this brings in volatility (which harms the competitive edge bitcoin can bring over other financial systems), it brings higher mining costs (because the high market cap goes with high mining difficulty).  It might even render bitcoin non-competitive and kill ALL of its competitive edge.

That's my rant about dominant speculation: it KILLS potentially the value of the bitcoin system.


Ok, I hope that with what I said above, you can more clearly see what I mean.   I estimate the current VALUE of the bitcoin system, as the improvement of goods and services it brings to people, as much less than a percent of its market cap, and maybe zero.   I hope I made clear why I think that bitcoin DOES have the potential to have value, and why excessive speculation kills it.


The point is that you have to establish "zero sum" at the end of the game.  In a million years if you wish so.  Sooner or later, bitcoin will be at $0, whether next year, or 7000 years from now.

But you are right that the bitcoin system DOES produce some value during that time (like a company does), but ONLY when it helps improve consumption and production.  Speculation doesn't do that.  Only "transport of value" with a competitive edge over other financial systems helps improve consumption and production.   As I outlined earlier, the value that is actually produced by the bitcoin system (the improvement it brings to consumption and production over what exists already for doing so, like VISA and gold) is very small, and maybe even zero, exactly because of the speculative dominance.

This is why I don't like that speculative dominance.

Yep.  We are just getting repetitive at a certain point.




Yes and it appears that one of the main differences in your view and mine remains that you believe that there is little to no value in bitcoin, and it is pure speculation, and I am suggesting that the value in bitcoin is greater than what you calculate it to be.  We don't really need to get into further discussions.




Yes, I already conceded that there is a lot of speculation going on in bitcoin.  It could be anywhere between 75% and 95%.  I don't really know or care too much, because it is what it is, and in the end, whatever remains of value, whether that is 5% or 25%, that is also important, but it is not the only thing that matters.  The bitcoin market and reasons for people getting in is what it is and it is evolving and likely to continue to be more and more valueable with the passage of time.  You can chose to invest or not based on present value of expected future value.  and each come to our own assessment regarding the extent to which we value bitcoin and the extent to which we can invest (or gamble) our own assets in order to be involved in buying or selling bitcoins.





O.k.  So we disagree.  Why do we need to continue to beat a dead horse, if we disagree?

I believe that there is value creation and there is some importance to the value creation, and you believe that there is not.  Those starting points affect our considerations of the matter and our actions.  Case closed, no?


O.k great.  So you agree that there is some very small level of value, and you place little to no weight on whatever value happens to be there.  I place greater weight on whatever value is there.  Those are our starting points to our positions and actions.



Sure it does not hurt that you continue to explain zero sum game, but we already know that the difference in our opinion does not have to do with the concept of zero sum game but instead the extent to which we find any value added in bitcoin and whether or not that value added is at a materially high enough level to make a difference to the outcome.  Both of us come out different in that regard, so why would we need to discuss the other matters?  Except you want to present information that is no longer relevant to our actual disagreement.

I am not disagreeing with the concept of zero sum game or how it is applied or whatever, except to the extent to suggest that it is not completely applicable to bitcoin because of the value created and value added in bitcoin makes it a beast that is something other than what you are describing with your simple zero sum game application.




Yes, one thing is that the objects themselves are not the same, but sometimes, when you have similar objects, they can be valued differently by different people, and that is frequently referred to as accounting for subjective value.   We should likely agree that there are a variety of tangible and intangible ways to attribute value.





Yes, you assume the conclusion that you want to reach and that is that the various tokens are locked into some kind of fixed value; however, even money has a moving value that depends on a variety of factors including governmental conduct, supply and how people view it (present and future value).



Absent some surprise technical situation, I doubt that bitcoin is going to zero any time soon.  Nonetheless, I agree that bitcoin is likely to continue to experience considerable volatility in the coming one to ten years.  Whether we need to invest in bitcoin today based on our view of time periods beyond 10 years, depends on ourselves and our situations.



Sure.  What I meant was: contrary to, say, the distribution of physical coins, once it is done, bitcoin needs to spend resources to keep running.  So it is not exactly zero-sum: the total amount of value in is partly spend on mining electricity and hardware and so on.  The "dollars out on electricity for mining" is a net loss of the system.


You are right that it is the "price of having the bitcoin system".  I don't deny this.  But that makes that it is *not even* zero sum.  In as much as it would be value-generating (competitive edge in production of goods and services) this price could be justified.