Topic: Fundamentals translated (Read 1458 times)
Bitcoin is a totally new kind of asset, actually. Its uniqueness is what brings new use-cases we can't even think of right now. It really is a freaking open protocol that can be used to transfer and store money - and everyone can use it without even registering somewhere first!
There are 21 million coins that will ever exists, a lot of them are lost forever the supply is even smaller, there are about 2 million BTC users right now as far as I know, some owning a lot of them. You do the math. The price of 1 BTC is a lot higher than what it is right now. See you in 10 years, will bump this thread.
Until we have all the figures, it's quite difficult to actually work out the maths to determine whether right now bitcoin is over or undervalued. Even though coins are lost each day, somehow there are still new coins getting introduced to the market coming from the mining and whatever the net value here, demand has to overcome that or less price will continue to fall.
It's actually much worse than that.
The supply is infinite as it requires only a soft fork to increase the number of digits. Now its 8 but it could as well be made 10 or 20 or 1000. This makes the whole concept flawed by design and one of the big reasons why any value above a few cents is total bullsht.
The supply is infinite as it requires only a soft fork to increase the number of digits. Now its 8 but it could as well be made 10 or 20 or 1000. This makes the whole concept flawed by design and one of the big reasons why any value above a few cents is total bullsht.
There are 21 million coins that will ever exists, a lot of them are lost forever the supply is even smaller, there are about 2 million BTC users right now as far as I know, some owning a lot of them. You do the math. The price of 1 BTC is a lot higher than what it is right now. See you in 10 years, will bump this thread.
It is not only about something being rare that makes it valuable. Rare things without liquidity cannot be worth much, simply because there are no many people who want to buy them, because the risk they will get stuck with their rare thingy forever is pretty high. That means that there is a lot to be done for Bitcoin between now and 10 years from here to provide the liquidity (mass adoption). Only then we can speak about sustainable higher price.
There are 21 million coins that will ever exists, a lot of them are lost forever the supply is even smaller, there are about 2 million BTC users right now as far as I know, some owning a lot of them. You do the math. The price of 1 BTC is a lot higher than what it is right now. See you in 10 years, will bump this thread.
I agree with the OP on the main thesis, i.e., unless we see a really broad adoption of Bitcoin (meaning, using 80-20 rule, if we will be able to pay for 80% of the goods/services we need in Bitcoin), the main driving force behind the price movement will be and stay the speculation. As for the examples used, you may have your own better ones, but I believe the Lambo one pretty much nails it: we are still only able to buy some trinkets, and even then, not many do so. Also, with the current value of Bitcoin inflated to $270 a piece, there are some practical concerns you may issue regarding this broad adoption: imagine paying for your shopping in a small cafe, bar or just buying a newspaper - not all people beyond this forum are getting on well with two digits after the comma, now you want them to deal with 8 digits. Go and ask about it at your local newspaper store, how well would they feel with that.
PS. I know that cafes where you can pay with Bitcoin exist already, but imagine how that can work on a big scale, with people around you who never heard of Bitcoin.
PS. I know that cafes where you can pay with Bitcoin exist already, but imagine how that can work on a big scale, with people around you who never heard of Bitcoin.
No, YOU get real!
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
Dangerous like someone could die?
School me then bro. What is erroneous or incomplete?
Scarcity. Get real... With 2.1 quadrillion units, there are plenty, so it's not that scarce. That's 2,100,000,000,000,000 or more Dollars than in existence. All the QE in the world wouldn't catch up to that.
If you are going to use the satoshi as the unit of account, and you did, then the price you assign is per satoshi, not per Bitcoin. You are then trying to argue that all the QE in the world cannot make a satoshi worth $1. Well, if that did happen, a Bitcoin would be worth $100 million. So you are essentially setting up an argument against Bitcoin being currently worth $100 million per coin. I agree it's not currently worth that much. It's currently priced at about $268 per coin, not $100 million. It's currently worth much more than that, though.
Well 'TrollingU', you could at least compare Satoshis, the lowest denomination of Bitcoin with cents, the lowest denomination of USD..
The total value of Bitcoins in the world is $4billion more or less, so they don't need to be used by every person in the world for everything, in fact they can be used by very few people and still be undervalued. I have spent far more than $100 worth of Bitcoin this year, and I own several bitcoins. I am just one of 7billion on earth. The potential is there to be massive, that has to be taken into account when looking at the price too.
Unlike what we can see in fiat fundamental that applies to a country like for example employment rate, non farm payrolls, industrial output, retail sales, bitcoin has none of that literally although indirectly we can link that to the mining output and difficulty. So the fundamental when I say refer to bitcoin is basically the growth measured in terms of acceptance rate that applies to both individuals and businesses. How many new bitcoiners are joining the community each day, the transaction amount and such.
Obviously used satoshi as that last measure, but only because if the eventual take over of fiat happens and it becomes a 1:1 ratio, then that means there will be more USD worth of BTC than USD in existence, ever. So how is that not a valid argument?
Your conclusion was that "the fundamental value is far lower than the speculative price". You assert that the true value of Bitcoin is less than the current market price of $270. But the argument you provided did not support that conclusion. You instead provided arguments in support of there not being enough dollars to value Bitcoin at $100 million per coin ($1 per satoshi), which is completely irrelevant to your conclusion.
No, YOU get real!
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
Dangerous like someone could die?
School me then bro. What is erroneous or incomplete?
Scarcity. Get real... With 2.1 quadrillion units, there are plenty, so it's not that scarce. That's 2,100,000,000,000,000 or more Dollars than in existence. All the QE in the world wouldn't catch up to that.
If you are going to use the satoshi as the unit of account, and you did, then the price you assign is per satoshi, not per Bitcoin. You are then trying to argue that all the QE in the world cannot make a satoshi worth $1. Well, if that did happen, a Bitcoin would be worth $100 million. So you are essentially setting up an argument against Bitcoin being currently worth $100 million per coin. I agree it's not currently worth that much. It's currently priced at about $268 per coin, not $100 million. It's currently worth much more than that, though.
No, YOU get real!
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
I think you know a little bit about bitcoin but your little knowledge is a dangerous one because it's incomplete and you're an idiot.
Scarcity. Get real... With 2.1 quadrillion units, there are plenty, so it's not that scarce. That's 2,100,000,000,000,000 or more Dollars than in existence. All the QE in the world wouldn't catch up to that.
If you are going to use the satoshi as the unit of account, and you did, then the price you assign is per satoshi, not per Bitcoin. You are then trying to argue that all the QE in the world cannot make a satoshi worth $1. Well, if that did happen, a Bitcoin would be worth $100 million. So you are essentially setting up an argument against Bitcoin being currently worth $100 million per coin. I agree it's not currently worth that much. It's currently priced at about $268 per coin, not $100 million. It's currently worth much more than that, though.
I see a lot of talk around here about the fundamentals of Bitcoin. There is definite positives in the fundamentals but how do they really stack up? Is this price tag of $270 really supported by the fundamentals? Let us see
All prices use the current rate of $270/BTC and assumes someone would market buy the coins necessary to make a purchase.
All prices are at the extreme end of the spectrum
The floating fundamentals (Floating because these will change over time with external events and demand)
@dish network
Figure monthly access is around $130/month. So for BTC0.5 you can have TV and internet. This 0.5BTC is easily absorbed in either direction at any price. Any Bitcoin price easily supports this service.
@Overstock.com
You can easily spend some loot there. Figure you buy a modest house full of furniture for $30 grand. That is still less than 100 BTC. Again, any price can support this since a million people aren't exactly crawling over each other to make a purchase at overstock using Bitcoin
@newegg
Say you want to build the state-o-the-art top end computing monster. $3-5000 should do it with all peripherals included. Currently ~15-20 BTC to purchase such a machine. Again, this barely registers on the charts and is easily supported by sub-$100 prices where 30-50 BTC would be needed.
@Tesla motors
To buy the latest and greatest tesla has to offer, you'll need to shell out ~$105,000 or BTC388.88. However, demand for a tesla S still doesn't hold this price up above here since you can acquire these coins with a mere 0.7% slippage. Not a big bump for the market to handle.
@Microsoft
Windows 8 can be bought with BTC0.4. The Xbox network could provide more demand than that, but it still has not. Why? CC are easier because everyone already has them?
Lamborghini (there is currently only one dealer that accepts Bitcoin, so this assumes all of them do)
With prices around $200k one can be had with BTC740. This would actually make a dent in the order book at one exchange or another, but would not be more than an outlying spike that would be ignored on other exchanges. Lets assume that every person who buys a lambo over the next year will use Bitcoin. With a little over 2000 units sold worldwide per year, that's 167/month x 740BTC = 123,580 BTC required per month to facilitate these purchases. Now THAT is a big dent and some huge demand. That would be one way that the next bubble could start. But lets face it, that isn't going to happen so we'll use some more realistic figures. 2 Lamborghini's that I know of, have ever been bought using BTC. 2/6 (years of Bitcoins' existence) = .33 units per year and multiply that by 740BTC price and you get 244.2 BTC per year spent on Lambo's. Not much
Before any of you chime in with "I can send money anywhere for nearly free" or "decentralized" or "no charge backs" or "scarcity" or "can't be counterfeited" etc... "so my coins are worth $10,000,000/each right now". lol. Those are static fundamentals (Static because they have a value but that value isn't fully realized yet and that value doesn't change once it is realized). Fundamentals that will be priced in organically as the majority realizes the fundamental flaws with the current systems in place. If you think they are worth $10M or even $10k each right now, then I'll happily send you every last coin in my cold wallet (currently about 1200) for $10,000 each. That's cheap right? so wudya say?
The bolded features above are what I think are the most important fundamentals listed from this last section.
But I do have arguments against some of these static fundies.
Decentralized. The public is stupid and lazy. They don't know how to handle money and many don't know how to secure their computer. A decentralized currency means that they have no recourse and no one to blame when their money poofs away. They don't like to be at fault. The general public doesn't like these traits.
Scarcity. Get real... With 2.1 quadrillion units, there are plenty, so it's not that scarce. That's 2,100,000,000,000,000 or more Dollars than in existence. All the QE in the world wouldn't catch up to that.
In conclusion, While Bitcoin is indeed getting fundamentally stronger, the fundamental value is far lower than the speculative price, and the price is far higher than is necessary to sustain this entire list of floating fundamentals. Only when the richest motherfuckers on the planet have to move money to buy a yacht or when Boeing begins accepting Bitcoin to buy 787's will the price really be fundamentally supported at prices that are a lot higher than it is right now. Even 5 Billion people buying a coffee at their local java shop would only use every Bitcoin exactly once. Since that isn't likely to happen any time soon means that it is yet another false hope of fundamental support at this time. What we need is daily use cases (Gorceries, clothing and utilities). Not periodic big ticket purchases. More will come, eventually, but until they do, a $270 Bitcoin is 98% speculative whether you like it or not. Quit rushing into the next bubble because it'll only fall hard again next time because it isn't ready.
All prices use the current rate of $270/BTC and assumes someone would market buy the coins necessary to make a purchase.
All prices are at the extreme end of the spectrum
The floating fundamentals (Floating because these will change over time with external events and demand)
@dish network
Figure monthly access is around $130/month. So for BTC0.5 you can have TV and internet. This 0.5BTC is easily absorbed in either direction at any price. Any Bitcoin price easily supports this service.
@Overstock.com
You can easily spend some loot there. Figure you buy a modest house full of furniture for $30 grand. That is still less than 100 BTC. Again, any price can support this since a million people aren't exactly crawling over each other to make a purchase at overstock using Bitcoin
@newegg
Say you want to build the state-o-the-art top end computing monster. $3-5000 should do it with all peripherals included. Currently ~15-20 BTC to purchase such a machine. Again, this barely registers on the charts and is easily supported by sub-$100 prices where 30-50 BTC would be needed.
@Tesla motors
To buy the latest and greatest tesla has to offer, you'll need to shell out ~$105,000 or BTC388.88. However, demand for a tesla S still doesn't hold this price up above here since you can acquire these coins with a mere 0.7% slippage. Not a big bump for the market to handle.
@Microsoft
Windows 8 can be bought with BTC0.4. The Xbox network could provide more demand than that, but it still has not. Why? CC are easier because everyone already has them?
Lamborghini (there is currently only one dealer that accepts Bitcoin, so this assumes all of them do)
With prices around $200k one can be had with BTC740. This would actually make a dent in the order book at one exchange or another, but would not be more than an outlying spike that would be ignored on other exchanges. Lets assume that every person who buys a lambo over the next year will use Bitcoin. With a little over 2000 units sold worldwide per year, that's 167/month x 740BTC = 123,580 BTC required per month to facilitate these purchases. Now THAT is a big dent and some huge demand. That would be one way that the next bubble could start. But lets face it, that isn't going to happen so we'll use some more realistic figures. 2 Lamborghini's that I know of, have ever been bought using BTC. 2/6 (years of Bitcoins' existence) = .33 units per year and multiply that by 740BTC price and you get 244.2 BTC per year spent on Lambo's. Not much
Before any of you chime in with "I can send money anywhere for nearly free" or "decentralized" or "no charge backs" or "scarcity" or "can't be counterfeited" etc... "so my coins are worth $10,000,000/each right now". lol. Those are static fundamentals (Static because they have a value but that value isn't fully realized yet and that value doesn't change once it is realized). Fundamentals that will be priced in organically as the majority realizes the fundamental flaws with the current systems in place. If you think they are worth $10M or even $10k each right now, then I'll happily send you every last coin in my cold wallet (currently about 1200) for $10,000 each. That's cheap right? so wudya say?
The bolded features above are what I think are the most important fundamentals listed from this last section.
But I do have arguments against some of these static fundies.
Decentralized. The public is stupid and lazy. They don't know how to handle money and many don't know how to secure their computer. A decentralized currency means that they have no recourse and no one to blame when their money poofs away. They don't like to be at fault. The general public doesn't like these traits.
Scarcity. Get real... With 2.1 quadrillion units, there are plenty, so it's not that scarce. That's 2,100,000,000,000,000 or more Dollars than in existence. All the QE in the world wouldn't catch up to that.
In conclusion, While Bitcoin is indeed getting fundamentally stronger, the fundamental value is far lower than the speculative price, and the price is far higher than is necessary to sustain this entire list of floating fundamentals. Only when the richest motherfuckers on the planet have to move money to buy a yacht or when Boeing begins accepting Bitcoin to buy 787's will the price really be fundamentally supported at prices that are a lot higher than it is right now. Even 5 Billion people buying a coffee at their local java shop would only use every Bitcoin exactly once. Since that isn't likely to happen any time soon means that it is yet another false hope of fundamental support at this time. What we need is daily use cases (Gorceries, clothing and utilities). Not periodic big ticket purchases. More will come, eventually, but until they do, a $270 Bitcoin is 98% speculative whether you like it or not. Quit rushing into the next bubble because it'll only fall hard again next time because it isn't ready.
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