Topic: Why Bitcoin will collapse in price. - page 13. (Read 24619 times)

Why exchange something for nothing? I dont care if nothing is rare. Its still nothing.

you can buy almost everything, do not you? what you are saying is misleading there are no cops in the shops. You do not need violence to emit currencies, you can just be a bank. If there will be, and it will, rich people owning both bitcoins and other assets in no way the value can go to 0. So it is a store of SOME value, given the rareness cyclical hoarding comes, that's a fact and depends all on the portability and safeness of this asset, which are REAL values no other asset can show. It does not matter if a btc is worth 1 dollar or thousand, it's a safe store for a million dollars wealth, that's enough. That's different from tulip mania because tulips are not inherently a safe storage, we can't say the same of all other bubbles. Paradoxically having no backing asset but just an excellence in cryptographic safety makes this bubble a no bubble or the perfect bubble, as you wish. Only security issues definitely matter.  

I wonder if we apply the term "market cap" to things like copper and iron if these values would be greater than that of gold.

Take the number of kilograms in reserves in the world times their price per kilogram = market cap.

The US government forces US citizens to trade with dollars. The Chinese can take their dollars and buy goods the Americans produce. The American producer has to accept the paper dollar (that for itself has no value) because government is pointing a gun at him.  Basically nothing (paper dollar) becomes something because the US government walks into the shop with me with guns and "convinces" the shop owner that I can trade Nothing (my paper dollar) for Something (his goods).

Now what can I do with bitcoin once you transferred it to me?

You make a lot of good arguments here.   

I'll tell you about mining:  Mining is a side effect for maintaining a kind of transaction list.  The fact that they get 25 BTC every 8 minutes doesn't add value to bitcoin but it does give us a maximum price.  If Bitcoin rises too high, people can buy mining equipment and make a profit mining.  This maximum goes up with difficulty (lower returns per Hash) and it goes up with time (lowering block reward).  Since there are so many miners maintaining the transaction list, "block chain", we can rely on this with great certainty.  That is why miners add value to bitcoin, even though you could say they also take away by inflating the supply.

sdp

Yes but you do not pay taxes in dollars in china. But china has north of 1 trillion dollars reserves. It's enough that SOMEONE BIG ENOUGH accepts bitcoin for whatever use we know the btc hoarders community is going to double every 3 months becoming as large and as difficult to move than US governement, why all this people should renounce to the unique safety and rareness of this asset? Only a governement war against bitcoin could succed, and also in this case some value will be left. What can we say about this value left one hundred years later? coludn't hoarding restart? That's what's happening since 2009, why should it change? every regulation, taxes, etc. is just an approval of the existence of btc, and EVERY RARE ASSET WITH SOME STEADY DEMAND IS A STORE OF VALUE. Why? because at some time ther will be hoarding of that asset and self renforcing demand. Look at the chart of gold... Copper is beautyful and useful, but not rare so the use value is not important   In every case btc we have really a lot of time before any real bubble, we have to reach at least 500 billions market cap to end the ponzi scheme base. So, have a good ride!

The dollar has value because the US government forces US cititzens to trade with it and accept it for payments of debts. It also expects taxes to be paid in dollar. If this forceful enactment was not backing the US dollar it would have no value and would not be used as a media of exchange.

The miners are a cost to bitcoin. I fail to see how they give bitcoin value. Again what can I do with a bitcoin once you transferred it to me?

1) Ply provide your quote that answers following question: What can I do with my bitcoin once you have transferred one to me?

2) I have explained in detail why capital gains have to be payed on bitcoin (read the thread). "Only pay capital gains tax if you refuse to continue trading with Bitcoins". This is incorrect. If you trade your Bitcoin for goods the law views this as selling your bitcoin. The selling of your bitcoin triggers capital gains tax. Again: Thats why nobody is using alternative media of exchange.

watch it like the dragon fefnir in the Nibelungen saga and fell rich. What do you do with dollars in china? you do not spend it and they have not any practical use. But dollars are a reserve currency (store of value) because are backed by some important power. The computing power backs btc as the most powerful network, and it's going to increase over time.

I believe I have addressed this point, how about a reply to those of us who have mentioned the fact you ONLY need to pay capital gains tax if you refuse to continue trading with Bitcoins?

You have not addressed my point. What can I do with my Bitcoin once you have transferred them to me?

yes btc could be replaced by other peer to peer crypto currencies, but the whole capitlization of cryptos is going to explode. And btc will be the leader in the first place. The value of gold itself relies on some kind of inertia.

no btc cannot be hacked if you buy a new pc and you open your principal wallet just in case of big transactions. An uber safe protocol is definitely cheaper and safer than building a caveau.

No, there is no strict need of jewelery in gold. You can wear false gold without anyone noticing, you can alsa wear wonderful copper jewels, but gold is rare. Prices of gold have big swings, but grow on the long term, in no way at this point the value of btc will go to zero, to much difficult to destroy the whole organism. So, because btc are rare, hoarding will restart in cycles in the very same way it did from 2009. No need of btc as an everyday currency for this behaviour.

There's a US couple who are currently LIVING off BTC, i.e. paying bills, rent, buying food etc. with only BTC.

If I were a coffee beans producer and lived like this couple in that all my necessities could be bought with Bitcoin, I might reasonably think to sell my beans to coffee shops for Bitcoins. If the coffee shop then sells the coffee for Bitcoins, there is an end-to-end transfer of only Bitcoins - no capital gains tax needs to be calculated or paid because there is no increase in capital from currency exchange.

This is the future us early adopters are expecting. The market is young now because it's not widely accepted, but we feel that it can and will be.

Funniest thread ever IMO

Yes. But I dont think it is a good store of value versus gold.

I have explained this in the second paragraph under heading 2):


Now let me explain this paragraph in more detail (a lot of people seem to have missed it).

Definition store of value: To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved. WIKI

Now lets look at useful: 1 Bitcoin of course is not useful in and of itself. So already we have a problem. However lets broaden the term to mean that bitcoin is useful when  others accept it for payment of goods and services or if I can convert it to currency (dollar) which is accepted for these goods and services.

Now you already said that bitcoin wont be a media of exchange (which I believe is correct as government will prohibit it). This leaves us with bitcoins only use: its ability to be traded into currency. So all you have left basically is an artificial agreement to use it as a store of value and accept its worth. Its totally artificial and thus NOT predictable nor suitable. People could decide not to accept nothing (bitcoin) for something. People could decide to use a different cryptocurrency. Many people might lose trust in the code or not even begin to trust it.

Gold is fits the definition perfectly. Its reliable usefulness is that its pretty and not everybody can have this form of pretty (rare). This value judgement by society has been established since the dawn of man and cant be replaced. So its much more suitable than bitcoin for storing value over lets say a 15 year period.

A) Again, what spread costs are you talking about?

B) Adoption (the decision to hold bitcoins) on a large scale is a gradual process, it started at 0 and has grown over the years, this is in fact a perfect example of something happening gradually.  As confidence increases some might even increase their stake of sales held in bitcoin gradually over time.  Not even sure why how gradual it is for a singular participant to choose to hold bitcoin or not would be in contention.

"After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely."

that's a completely wrong assumption. Bitcoins will be used as a medium of exchange like diamonds, but they will be converted in faster currencies, fiat or not, for everyday shopping. Bitcoins will be hoarded because they are SAFER, that's a strong point, than all other options and portable. It' does not matter that they are useless in terms of consumption (like jewelery).

A) No. Accepting bitcoin for payment means holding onto them. The merchant has already calculated the average spread costs and priced these costs in his products.  If you buy with bitcoin and calculate all the costs (spread buying spread selling for dollars) you will not be competitive and thus bitcoin cant become a medium of exchange as its only benefit are its transaction cost. Thus merchants dumping means the rejection of bitcoin.

B) Its not a gradual thing. You either decide to convert X amounts of dollars into bitcoin or you dont. You either hold dollar or bitcoin.

dear porc,

as gold is bitcoins are a store of value before beeing an everyday currency. Why? because people like to be safe: if you are very rich you do not trust in banks or goverments, you hoard gold aside of other assets but you have to build a caveau if you want to keep gold safe and someone can still steal it. instead you can hide several copies of your btc wallet everywhere. That's why cryptocurrency is the MOST safe value store ever. Probably btc will never be everiday's money just because it's a too good value store, that does not mean it will not grow exponentially in price.

http://en.wikipedia.org/wiki/Gresham%27s_law

Sorry I'm not familiar with "digital gold" so I have no frame of reference for your comment.  Have a link?

As I said the paperwork side can be automated away (or already is) and so will be a negligible cost and the exchange fees are either competitively low or free.

I don't see "taxing the medium of exchange" as a viable threat to bitcoin at this time, though I'd be willing to entertain some figures that demonstrate it is if you have some.