Topic: Fair Price of Bitcoin: $518? (Read 4606 times)
The 'fair' price of bitcoin is relevant to its current use. $518 may be fair but it could be much more or much less depending on demand and that is what's key. We need more people owning and transacting with it for the value to inflate.
Is it just me, or did this "Fair Price" calculation use the Labor theory of value? That's the discredited Marxist notion that the value of an item is based on the amount of work to produce it. For example, if we could somehow assign my labor a value of $10/hour, and I spent 100 hours hacking at a hunk of rock with a chisel, the resulting sculpture would be supposedly valued at $1000 - even if it was an unrecognizable mess (which is what I would expect).
Assigning value to bitcoin based on the costs involving in mining it is going at it backwards, IMHO.
Assigning value to bitcoin based on the costs involving in mining it is going at it backwards, IMHO.
Might be backwards to you, but the cost of mining is what at the moment determines the value of bitcoins. The miners spend X amount on the mining rigs and expect X+profit for the coins they mine.
Love your take on the Labor theory
It is backwards to think that miner's costs determine the value of bitcoin. Miners can only move the price by selling (or choosing not to sell) the coins they mine. If miners were to completely stop selling, there are enough coins being traded that it wouldn't affect the price that much, at least in the short term.
The cause-effect relationship is indeed the other way around: the difficulty follows the market price. If the price drops too much, it is no longer economical for some miners to continue operating, and the hash rate drops.
If we take miners out of the equation, the "fair" dollar price should be determined by the amount of trade that uses bitcoins, the money velocity of bitcoins, and the number of bitcoins in existence. So if there are 15M BTC out there, and the transactions performed using BTC add up to $15B/year and each bitcoin changes hands 10 times a year, then the fair price is 15B/15M/10 = $100.
Note that both the trade volume and money velocity are just random guesses here.
Saw some exciment today, hopefully we will reach $300 this week and $518 in the coming months.
The market disagrees. And since only the market counts, the price is about $280 at this point.
Agree the only price that counts in the end is the market price. You may complain that the market may be rigged, as e.g., many gold bugs do, but in the end of the day that is all what counts.
A stable price of $5000 would be great
Don't count on Bitcoin having price stability at $5,000, or any other amount measured in fiat.But apparently we can't deny the fact that bitcoin cannot be valued as 1btc=1btc because most of the people are accustomed of seeing some prices in $$.
Nothing can ever be valued by itself, that's recursive, everything is only valued by what you can trade it for.
A stable price of $5000 would be great
Don't count on Bitcoin having price stability at $5,000, or any other amount measured in fiat.But apparently we can't deny the fact that bitcoin cannot be valued as 1btc=1btc because most of the people are accustomed of seeing some prices in $$.
But in the current times? I think it's a no. Unless we get some massive adoption then we can safely say that 1btc=1btc and we can price things with btc.
A stable price of $5000 would be great
Don't count on Bitcoin having price stability at $5,000, or any other amount measured in fiat.But apparently we can't deny the fact that bitcoin cannot be valued as 1btc=1btc because most of the people are accustomed of seeing some prices in $$.
A stable price of $5000 would be great
Don't count on Bitcoin having price stability at $5,000, or any other amount measured in fiat.But apparently we can't deny the fact that bitcoin cannot be valued as 1btc=1btc because most of the people are accustomed of seeing some prices in $$.
Most of you don't seem to understand what "fair price" means. There's fair price and then there's market price.
This is valuing Bitcoin as if it were a company and the equipment used to secure and distribute transactions are the assets.
Your idea that we shouldn't even be using fiat is off-topic.
The valuation is accurate, Bitcoin is currently undervalued.
This is valuing Bitcoin as if it were a company and the equipment used to secure and distribute transactions are the assets.
Your idea that we shouldn't even be using fiat is off-topic.
The valuation is accurate, Bitcoin is currently undervalued.
I agree with you with what your saying. What I don't agree is what Fair price is for. Market price in my mind is always the fair price because that is what you can buy/sell it for at a given time. Fair Price is a speculation of what someone thinks it is worth, and to me that is worthless
It simply isn't. Fair price is certainty, market price is speculation.
Going to disagree with you there completely. Fair price is:
In accounting and economics, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. It takes into account such objective factors as: acquisition/production/distribution costs, replacement costs, or costs of close substitutes.
This means that fair price POTENTIAL to be worth something, or it COULD, in the future be worth that, Again, it is a speculation of what the market price is and what it could be.
That's not what it means. It says potential market price because market price is unpredictable and based on human behavior. Fair price is based on factual evidence and rational logic.
Edit:
Let me give you an example. You and a buddy are neighbors in some remote place. You grow pears in 1 acre, he grows apples in 1 acre. At the end of the grow you and him like to trade some so you both have apples and pears. This season brought you 200 pears and him 400 apples. Fair price has it that you would give him 1 pear for each 2 apples. But, your buddy gives you some long story about how his wife hates pears and convinces you to give him 1 pear for each 1 apple, this is market price.
Market price is indeed based on what people are thinking. It depends on the way how people view how the price is going to be and is purely based on speculations without relying on solid factual evidence.
i don't think there is such thing as a "fair price", everything is subjective, bitcoin price should be as a high as possible, due to its deflationary nature
Bitcoin fair price will always be whatever buyers are willing to pay. 518 is a little high from the looks of it. There needs to be big news to drive the price up and maintain it.
price is a natural attributes, fair is only in human society,
so i could say that coindesk article is advertising
so i could say that coindesk article is advertising
To put things straight, you are comparing a formula to Bitcoin's price? I don't think it's fair to determine the price of one Bitcoin. We all can argue back and forth about what the price of a Bitcoin "should be", but you can not pinpoint it based on miners. Personally, I do agree the price of a Bitcoin is below what it "should be", (or maybe what I want it to be), but, a formula is not something that can value Bitcoin. Reading the wikipedia article, the formula derives from predicting stock values, so I could see why someone would cross over to BTC.
One more thing I would like to mention is,
I have seen many people barking about "The price should be this, the price should be that." One thing I would like to ask such people is: Have you ever done anything for Bitcoins in order to get it to that price? Just talking BS about price won't get it to there where you want it to be. So, either stop being over-smart or do something to get it to the price you want it to be at.
I have seen many people barking about "The price should be this, the price should be that." One thing I would like to ask such people is: Have you ever done anything for Bitcoins in order to get it to that price? Just talking BS about price won't get it to there where you want it to be. So, either stop being over-smart or do something to get it to the price you want it to be at.
The price is the average of what everyone is willing to pay for it, there are far to many people to get the mean so just blurt out any number you think and it may well be right
Or just take a look at the market price and that will give you the 'fair' price if your lucky
Or just take a look at the market price and that will give you the 'fair' price if your lucky
Fair price for 1 satoshi in fiat scrip is this:
It is unethical to endorse violence-backed fiat by accepting it in trade for private keys.
In rational self-interest terms, it is also quite stupid to accept the value of national fiat for everyone except the people printing it and their close friends.
The miracle of fiat is that the governments of these nations have convinced millions of people that they are their close friends. The miracle is that people believe this.
The miracle of bitcoin is that it represents mathematically provable truth based money. This antidote is being injected into a society of deceit.
It is unethical to endorse violence-backed fiat by accepting it in trade for private keys.
In rational self-interest terms, it is also quite stupid to accept the value of national fiat for everyone except the people printing it and their close friends.
The miracle of fiat is that the governments of these nations have convinced millions of people that they are their close friends. The miracle is that people believe this.
The miracle of bitcoin is that it represents mathematically provable truth based money. This antidote is being injected into a society of deceit.
Marvelous post. This is why im never, ever selling. I find absolutely no reasons to ever sell Bitcoin for objectively inferior currency. WHATS the point in any case? I would much rather hold future gold. Until I have a magic ball that would tell me "look, tomorrow there will be a big correction, sell now then REBUY more", my Bitcoin is only leaving my wallet to purchase goods and services.
The fair price is where the buyer and the seller can agree...it'll never be a single price, it will always be changing.
That's called market price.
Yes there is. http://en.wikipedia.org/wiki/Fair_value
The fair price is where the buyer and the seller can agree...it'll never be a single price, it will always be changing.
That's called market price.
The fair price is where the buyer and the seller can agree...it'll never be a single price, it will always be changing.
That's called market price.
So what's Ben Graham's formula?
The fair price is where the buyer and the seller can agree...it'll never be a single price, it will always be changing.
The fair price is where the buyer and the seller can agree...it'll never be a single price, it will always be changing.
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