Why is Bitcoin so cheap? | Bitcointalksearch.org

RationalSpeculator

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Quote from: Foxpup on September 21, 2013, 11:21:12 PM

Quote from: RationalSpeculator on September 21, 2013, 08:49:43 AM

Yes, for all debt, but does that mean for goods and services too?

No. Goods and services are not debt. When you grab goods off a store shelf, you don't owe the store anything (unless you walk out with the goods without having bought them, but that has its own problems). Ever wondered how stores are allowed to refuse to accept $100 bills, even though $100 bills are legal tender? It's precisely because they're not required to accept legal tender. Now, if you steal something from the store, get arrested, and the court orders you to pay for the goods you stole, then you have a debt and the store is forced to accept legal tender, but otherwise they don't.

Interesting. When I was in the Netherlands many merchants don't accept €500, €200 and sometimes even not €100 bills due to too much risk for counterfeit.

Foxpup

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Quote from: RationalSpeculator on September 21, 2013, 08:49:43 AM

Yes, for all debt, but does that mean for goods and services too?

No. Goods and services are not debt. When you grab goods off a store shelf, you don't owe the store anything (unless you walk out with the goods without having bought them, but that has its own problems). Ever wondered how stores are allowed to refuse to accept $100 bills, even though $100 bills are legal tender? It's precisely because they're not required to accept legal tender. Now, if you steal something from the store, get arrested, and the court orders you to pay for the goods you stole, then you have a debt and the store is forced to accept legal tender, but otherwise they don't.

SpeculateThis

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Quote from: Adrian-x on September 20, 2013, 07:30:20 PM

Quote from: Zangelbert Bingledack on September 14, 2013, 01:34:44 AM

It's simple. Less than 0.1% of people know enough about Bitcoin to believe with high confidence that there is a 20% chance it will reach that price in ten years, let alone people with the capacity to risk substantial capital and the patience and time to set up a secure wallet and jump through exchange hoops. Heck, even on this forum few people are truly confident of this, if they believe it at all.

It takes an awful lot of knowledge, understanding, dedication, research, patience, thinking, vision, and even daringness regarding possible legal risks to fill the above prerequisites. On top of all that, most of the people who understand economics (Austrian economics, of course) well enough to get why Bitcoin will change the world are convinced by that same economics they learned that "Bitcoin cannot be money." Moreover, Bitcoin sounds really cheesy/scammy when people first hear about it, and it relies on many counterintuitive, "obviously impossible" facts, like how a private key can be used to sign a transaction without revealing the key when broadcasting it.

There are the scammers and get rich quick schemers who are attracted to the whole idea, and they fleece, the sheep who follow those brave enough to tread in the new Bitcoin world. And despite all you think you know, you will be lumped in with them.

And then there are the faithful soothsayer's, constant warnings of the pending ides of March, who back there predictions with real world experience.

Huh?

User705

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There are plenty of laws that force certain payments onto merchants. Not to mention there are plenty of laws that force specific prices on merchants as well so yes there is a lot of force behind fiat.

molecular

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good point, MurrayPaul and RationalSpeculator.

I guess what I said was wrong.

RationalSpeculator

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Quote from: molecular on September 21, 2013, 07:11:33 AM

Quote from: RationalSpeculator on September 20, 2013, 08:18:34 PM

Quote from: johnyj on September 20, 2013, 02:39:59 PM

Market price mostly decided by market participants' psychology. Cost helps people to establish a start point of psychology support of its value. It is worth noting that although fiat money cost nothing to make, its value still have some psychology support, because it is believed to be backed by the government (in fact it is only backed by merchants who accept fiat money payment, just like bitcoin)

+1

People always say fiat has value because you need it to pay taxes.

But who values fiat for that? I value fiat because I need it to buy goods & services much more than to pay taxes.

It's the merchant who decides indeed. And currently he decides fiat.

The merchant doesn't decide this. Legal tender laws say fiat has to be accepted for settlement of all debt. Hereby the merchant is forced to accept fiat.

Yes, for all debt, but does that mean for goods and services too?

If so, are bitcoin shops not breaking the law then?

murraypaul

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Quote from: molecular on September 21, 2013, 07:11:33 AM

Quote from: RationalSpeculator on September 20, 2013, 08:18:34 PM

Quote from: johnyj on September 20, 2013, 02:39:59 PM

Market price mostly decided by market participants' psychology. Cost helps people to establish a start point of psychology support of its value. It is worth noting that although fiat money cost nothing to make, its value still have some psychology support, because it is believed to be backed by the government (in fact it is only backed by merchants who accept fiat money payment, just like bitcoin)

+1

People always say fiat has value because you need it to pay taxes.

But who values fiat for that? I value fiat because I need it to buy goods & services much more than to pay taxes.

It's the merchant who decides indeed. And currently he decides fiat.

The merchant doesn't decide this. Legal tender laws say fiat has to be accepted for settlement of all debt. Hereby the merchant is forced to accept fiat.

Your own sentences contradict each other.
Buying something is not a settlement of debt. Merchants are not forced to accept fiat currencies for sales.

molecular

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Quote from: RationalSpeculator on September 20, 2013, 08:18:34 PM

Quote from: johnyj on September 20, 2013, 02:39:59 PM

Market price mostly decided by market participants' psychology. Cost helps people to establish a start point of psychology support of its value. It is worth noting that although fiat money cost nothing to make, its value still have some psychology support, because it is believed to be backed by the government (in fact it is only backed by merchants who accept fiat money payment, just like bitcoin)

+1

People always say fiat has value because you need it to pay taxes.

But who values fiat for that? I value fiat because I need it to buy goods & services much more than to pay taxes.

It's the merchant who decides indeed. And currently he decides fiat.

The merchant doesn't decide this. Legal tender laws say fiat has to be accepted for settlement of all debt. Hereby the merchant is forced to accept fiat.

Spaceman_Spiff

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Quote from: btcgoldsilver on September 20, 2013, 07:45:13 PM

Great conversation. Some people say the only certainties in life are death and taxes, however i disagree about taxes. We are forced to pay them but doesn't mean it is certain.Revolution is possible.

I disagree about death. Revolution is possible ( http://sens.org/ ).

ronimacarroni

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Quote from: notme on September 20, 2013, 09:20:24 AM

Quote from: GodHatesFigs on September 20, 2013, 01:59:21 AM

Quote from: Singlebyte on September 13, 2013, 11:16:51 PM

Bitcoin is valued at EXACTLY what is is worth TODAY. No more and no less. The market takes ALL factors into consideration and dictates what its price is at any given moment in time. Tomorrow BtC will also be exactly right...regardless if it is up or down. If the equilibrium starts to tilt in any direction the market will correct it within minutes.

This. The market is efficient.

If the market is efficient, how come price was $266 one day, and then $50 two days later? What changed? Oh yeah, nothing but the price itself. If you claim the market approaches efficiency in the limit, I won't argue. But at any given moment the market can be super inefficient.

A free market goes through three stages, boom, bust, stabilization.
The reason for the boom was probably due to the fact that foodler started accepting bitcoins.

RationalSpeculator

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Quote from: johnyj on September 20, 2013, 02:39:59 PM

Market price mostly decided by market participants' psychology. Cost helps people to establish a start point of psychology support of its value. It is worth noting that although fiat money cost nothing to make, its value still have some psychology support, because it is believed to be backed by the government (in fact it is only backed by merchants who accept fiat money payment, just like bitcoin)

+1

People always say fiat has value because you need it to pay taxes.

But who values fiat for that? I value fiat because I need it to buy goods & services much more than to pay taxes.

It's the merchant who decides indeed. And currently he decides fiat.

I have gold, not to buy goods since no one accepts it, but to be insured against armagedon. Because then gold will be the only money that merchants accept.

I have bitcoin not to buy goods as barely anyone accepts it, but to have my future secured. Because I speculate in the future bitcoin will be the only money merchants accept.

btcgoldsilver

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Great conversation. Some people say the only certainties in life are death and taxes, however i disagree about taxes. We are forced to pay them but doesn't mean it is certain.Revolution is possible.

Adrian-x

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Quote from: Zangelbert Bingledack on September 14, 2013, 01:34:44 AM

It's simple. Less than 0.1% of people know enough about Bitcoin to believe with high confidence that there is a 20% chance it will reach that price in ten years, let alone people with the capacity to risk substantial capital and the patience and time to set up a secure wallet and jump through exchange hoops. Heck, even on this forum few people are truly confident of this, if they believe it at all.

It takes an awful lot of knowledge, understanding, dedication, research, patience, thinking, vision, and even daringness regarding possible legal risks to fill the above prerequisites. On top of all that, most of the people who understand economics (Austrian economics, of course) well enough to get why Bitcoin will change the world are convinced by that same economics they learned that "Bitcoin cannot be money." Moreover, Bitcoin sounds really cheesy/scammy when people first hear about it, and it relies on many counterintuitive, "obviously impossible" facts, like how a private key can be used to sign a transaction without revealing the key when broadcasting it.

There are the scammers and get rich quick schemers who are attracted to the whole idea, and they fleece, the sheep who follow those brave enough to tread in the new Bitcoin world. And despite all you think you know, you will be lumped in with them.

And then there are the faithful soothsayer's, constant warnings of the pending ides of March, who back there predictions with real world experience.

RationalSpeculator

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Activity: 294

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This bull will try to shake you off. Hold tight!

Quote from: Zangelbert Bingledack on September 14, 2013, 01:34:44 AM

It's simple. Less than 0.1% of people know enough about Bitcoin to believe with high confidence that there is a 20% chance it will reach that price in ten years, let alone people with the capacity to risk substantial capital and the patience and time to set up a secure wallet and jump through exchange hoops. Heck, even on this forum few people are truly confident of this, if they believe it at all.

It takes an awful lot of knowledge, understanding, dedication, research, patience, thinking, vision, and even daringness regarding possible legal risks to fill the above prerequisites. On top of all that, most of the people who understand economics (Austrian economics, of course) well enough to get why Bitcoin will change the world are convinced by that same economics they learned that "Bitcoin cannot be money." Moreover, Bitcoin sounds really cheesy/scammy when people first hear about it, and it relies on many counterintuitive, "obviously impossible" facts, like how a private key can be used to sign a transaction without revealing the key when broadcasting it.

I feel really special now Grin

Thanks!

johnyj

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Market price mostly decided by market participants' psychology. Cost helps people to establish a start point of psychology support of its value. It is worth noting that although fiat money cost nothing to make, its value still have some psychology support, because it is believed to be backed by the government (in fact it is only backed by merchants who accept fiat money payment, just like bitcoin)

User705

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Quote from: xxjs on September 20, 2013, 04:34:56 AM

Quote from: User705 on September 20, 2013, 02:34:46 AM

Please clarify your definition of "worth" because you and others here seem claim a bitcoin or anything for that matter is worth exactly what two people made a deal for on one of many exchanges with varying prices and not only that but no one else on that exchange was willing to buy or sell at that price. Ohh if only it was that simple. Just so you know where I'm coming from. I don't pretend to know what something is worth and furthermore I believe in any complex system no one can know what it's worth. Not any experts and not "the market" either.

The value is what the actors decide for themselves. A trade comes into being the moment one actor changes his mind, and his value assesment increases to a level above the current best seller, or someone lowers his valuation to a level lower than the current highest bidder. Nobody is in agreement of the prices. As long as nobody changes his mind, the market is cleared and no trade can happen. The latest price is only the latest price, it is not the value. There is no defined overall value. This is the market. As long as nobody is coerced into buying and selling, it is a free market. I like it, it is kind of magic.

+1

notme

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Quote from: GodHatesFigs on September 20, 2013, 01:59:21 AM

Quote from: Singlebyte on September 13, 2013, 11:16:51 PM

Bitcoin is valued at EXACTLY what is is worth TODAY. No more and no less. The market takes ALL factors into consideration and dictates what its price is at any given moment in time. Tomorrow BtC will also be exactly right...regardless if it is up or down. If the equilibrium starts to tilt in any direction the market will correct it within minutes.

This. The market is efficient.

If the market is efficient, how come price was $266 one day, and then $50 two days later? What changed? Oh yeah, nothing but the price itself. If you claim the market approaches efficiency in the limit, I won't argue. But at any given moment the market can be super inefficient.

johnyj

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Maybe a few people with good knowledge in IT and finance can invest a lot in bitcoin, but for normal people, they are interested in bitcoin because they are curious about the mechanism behind it, it is so cool Cool

xxjs

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Quote from: User705 on September 20, 2013, 02:34:46 AM

Please clarify your definition of "worth" because you and others here seem claim a bitcoin or anything for that matter is worth exactly what two people made a deal for on one of many exchanges with varying prices and not only that but no one else on that exchange was willing to buy or sell at that price. Ohh if only it was that simple. Just so you know where I'm coming from. I don't pretend to know what something is worth and furthermore I believe in any complex system no one can know what it's worth. Not any experts and not "the market" either.

The value is what the actors decide for themselves. A trade comes into being the moment one actor changes his mind, and his value assesment increases to a level above the current best seller, or someone lowers his valuation to a level lower than the current highest bidder. Nobody is in agreement of the prices. As long as nobody changes his mind, the market is cleared and no trade can happen. The latest price is only the latest price, it is not the value. There is no defined overall value. This is the market. As long as nobody is coerced into buying and selling, it is a free market. I like it, it is kind of magic.

User705

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Activity: 896

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First 100% Liquid Stablecoin Backed by Gold

Please clarify your definition of "worth" because you and others here seem claim a bitcoin or anything for that matter is worth exactly what two people made a deal for on one of many exchanges with varying prices and not only that but no one else on that exchange was willing to buy or sell at that price. Ohh if only it was that simple. Just so you know where I'm coming from. I don't pretend to know what something is worth and furthermore I believe in any complex system no one can know what it's worth. Not any experts and not "the market" either.

Topic: Why is Bitcoin so cheap? (Read 9560 times)