Topic: Where is the value? - page 2. (Read 2611 times)

Well Warren Buffet equivaled checque = bitcoin ( it¨s only paper, information) but you don´t have to forget to print this paper and process it you need banks so actually we´re talking about 5000bilion´s of USD value so what price have bitcoin which is replacing all these institutes? Well I think Btc value in 10 years will 10 - 100 000USD it´s true about this ... think about it :-)

Ostensibly, supply and demand.

Reality: market manipulation by illegal trading by BitStamp and BTC-E

What I love about BTC, is that we *never* really had a reason to question why does $1=$1.  We simply dont get taught alot of things about money. Making something "out of thin air", and millions of kilowatts, provokes people to ask these questions.

They are assets that hold the value of currencies like USD and others on a blockchain.

On coinmarketcap there are 3 in the top 40. NuBits, CoinoUSD & BitUSD

CoinoUSD is a user issued asset that has dollars in an actual bank backing it. I don't like that because it's centralized. https://coinomat.com/coinousd.php

NuBits is a decentralized dollar stable asset controlled by holders of NuShares and it creates and controls the currency supply similar to how a central bank does https://nubits.com/about/white-paper#buy-side-liquidity

BitUSD is a decentralized dollar stable asset by BitShares. It works similarly to a financial instrument that is called a contract for difference. http://bitshares.org/the-value-proposition-of-bitshares-part-ii-bitassets/

People who want to take a leveraged position on BitShares can short a BitAsset like BitUSD at the current exchange rate. The shorts are required to lock up $2 worth of BitShares as collateral for every BitUSD they short and they compete on how much interest they're willing to pay the longs.  

When a long (Someone who wants 1 BitUSD) meets a short, a new fungible BitUSD is created.
(BitUSD is destroyed when shorts cover to reclaim there collateral.)

It sounds complicated, but buying BitUSD is very simple and straightforward for the end user but results in a dollar stable decentralized asset which is transparently backed by an average of 300% collateral and pays interest.  It also means every BitUSD creates a lot of demand for BitShares

Disclosure: I own BitShares, so I'm biased for it.

I really think decentralized currency stable assets will transform the fortunes of crypto & the uptrend will resume once they gain adoption for the reasons described in my earlier post.

In the short term, no, in my opinion, it's exactly the opposite.

Early adopters aren't likely to be pro investers. They're likely to be (no offence meant) geeky types.

Now we have a load of guys sitting there with 10 - 200 BTC that at one point were pretty much useless. All of a sudden, they're worth quite a bit of money, but hard to turn to cash. So, now that BitPay will accept them on say Overstock, mr geek can buy himself a new PC or whatever with his BTC that he previously had no use for.

Problem is that BitPay just sell the BTC for cash straight away, thus increasing supply for BTC and driving down price.

Ahh but then what about the people that buy BTC to pay for goods?

Lol. Really. Pull the other one.

I worked it out once what it would cost for some goods in the UK paid in BTC.

I can't remember the exact figures, but it was something like I could buy a GPU/mobo/CPU from Scan and pay £900 in currency, or, I could go to LBC and buy Bitcoins, then use those Bitcoins to buy the same goods. With the markup on the BTC from LBC, then the reduced rate from BitPay at the other end, I would have had to buy about £1,050 worth of BTC for the same goods.

Alternatively, I could buy my BTC through BTCE. It would reduce the amount I had to pay slightly, maybe £975 or something, but to get funds into any of the exchanges takes ages. At least 3 days. By that time I could have had the goods delivered and installed.

It's quite the opposite.

if I understand well
you mean when demand get over supply, the price of Bitcoin will go up? (Correct me if I'm wrong, do not know much about economics, but I like to speculate in order to understand)
last year there was a big drop

Wouldn't more merchants accepting bitcoins give them more value as they (bitcoins) are then given more utility? To the majority of people if you can spend bitcoins at say a walmart, target, etc. they would be much more willing to buy them because of their benefits over USD.

Best comment so far. That's gold right there. 

What are currency stable assets? How do they work?

More and more people who don't trust the global banking system anymore.
More and more people who don't want to pay tax on everything.
More and more people who want to shop online without being traced.

BTC's growing, and so is the number of people using it.

It seems correct to say that the supply side is growing faster that the demand side right now, but we know the supply's growth will be halved sometimes, so we shall remain confident in the longer term. There will be a day when demand will outgrow supply, just like it did last year.

Well done. I think in 6 months to a year this will be self evident to the majority.

Small economies can function around their own currency because everything is priced in it. Rent, utilities, labour & most supplies. So if you know your outgoings are 5000 BananaBits, then you can keep the BananaBits you receive as payment even if they're volatile. However if someone pays you in a volatile MonkeyNuts you have no choice but to sell them for BananaBits. This is Bitcoin's problem. Every business is working around expenses priced in their own fiat currency or one of the major fiats if they do business internationally. Anything other than fiat is currently unsuitable as a transactional currency. Even if they were paid in Gold they would have to convert to fiat to budget for their expenses, unless their country worked on a gold standard.

Example: You have an online retail business - If your next 3 months of expenses - staff, rent, utility and average supplies totals $45 000 and you make $50 000 worth of Bitcoin. How much of it can you keep in Bitcoin and pay your expenses as they're due, knowing that you'll be able to meet them?

The answer is very little because even if Bitcoin goes down 20% you're now in the red. Most retailers work on very tight margins of a only a few %, so this is a problem they can't have.

Even if your supplier accepts Bitcoin, the price they charge in Bitcoin fluctuates with the exchange rate. So you can't set aside 500 BTC for a supplier that charges 1 BTC a widget because if Bitcoin halves in value, he'll charge 2BTC a widget and your budget will be messed up.

(An exception to this is countries with highly inflationary currencies, which is why Argentina is often cited as most likely to adopt Bitcoin. In their case a highly volatile currency like Bitcoin is superior to a rapidly depreciating one.)

What is the solution?

It is simple, straightforward and already here. Currency stable assets. Businesses can hold the stable currency asset while we can hold the unstable crypto-currency that backs it. The more demand there is for the stable BitCurrency the more the value of the backing currency increases.

Using the same example above

You have an online retail business - If your next 3 months of expenses - staff, rent, utility and average supplies totals $45 000 and you make 50 000 BitUSD. How much of it can you keep in BitUSD and pay your expenses as they're due, knowing that you'll be able to meet them? The answer is you can keep nearly all of the earnings in BitUSD.

Overstock for example tried to keep a bit of their sales in Bitcoin and probably got bitten with the price fall, whereas they could have kept it in BitUSD & not had that problem while still supporting crypto-currency.

I think this is fairly straightforward and I have yet to see a decent rebuttal to this argument.

I also believe crypto is doing better than ever before, more people know about it, more places accept it and more transactions are happening. The price is a reflection of the volatility problem not of the lack of Bitcoin adoption.

You may hear a lot that the value is in the blockchain. It is a new technology where there is information kept in a public blockchain. The reality of it is it forms a decentralized network forming a currency that can transfer value for goods and services and that one single Bitcoin alone can run an entire economy. There is a lot of value in that.

The Bitcoins protect the Blockchain and the Blockchain protects the Bitcoins.
Can not have one without the other.

You can't love the Ledger System and not its Ledger Currency.

P.S. I think price is current Buy Demand..

This is a question that has been debated and debated. Some argue their is no value, some argue their is extreme untapped potential. Likely the truth rest in the middle somewhere. The market, as always will decide the value.

And how to maintain the Blockchain, without bitcoins?

There is only value if users actually trade the currency not just hodl it.

In the long term, the Blockchain looks good, Bitcoins aren't really necessary




Yes, bitcoins must be bought but they are then sold at the other end...

Don't forget that in order to buy something with bitcoins, you have to buy the bitcoins, driving the price up.

I don't see anything in the near term either, but in the long term, Bitcoin looks good.