More dodgy Bitcoin goings on....

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Forums › Finance and wealth management › More dodgy Bitcoin goings on....

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509 posts

Ultimate Geek
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#1000821 7-Mar-2014 15:40

Hyperinflation is caused by printing of money and very often political and financial manipulation of markets. Notice how many countries are going broke and then under significant pressure to beg for more debt from the IMF

Bitcoins value is made up of four parts :

1/Mining is not free , it costs electricity and significant processing power to mine them, but the process of mining adminisiters the system, the equivalent of the worlds banks, and financial services, all transactional and record keeping.

2/ The value between fiat currencies and bitcoin is not that different. I can buy a growing number of items with bitcoin and have no trouble selling them.

3/ Gold, diamonds, gems etc are valuable, mainly because they are rare on the surface of the earth. Sure gold has some value in electronics, the value of bitcoin is closely tied to its finite amount of 21M units. Fiat currencies don't until significant banking regulations permit, have that value

4/ It is an alogrhythm, it can't be manipulated by politicians. The media influence on the population is however a factor , but thats a cognition problem not one with the currency :)

MikeB4

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#1000822 7-Mar-2014 15:40

hashbrown:
KiwiNZ:
hashbrown:
KiwiNZ: Exactly that, a bit coin has no tangible value, a Gold Sovereign has a tangible value, that is at the value of the gold. A Dollar note has next to zero tangible value scrap paper is not worth much but has intrinsic value. A Bitcoin has zero tangible value and zero intrinsic value.

Buying and selling goods etc does not give the exchange media value in itself.

You can tie yourself up in semantics all you like, but if I can exchange X bitcoins for a jetski then X is exactly 1 jetski's worth of Bitcoin.

Show me a model where that falls over.

errr seen the News lately?

Which bit? Stupid people losing bitcoin by treating an online exchange as a bank or the elderly man being chased in a Prius?

good grief

The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

hashbrown

463 posts

Ultimate Geek

#1000854 7-Mar-2014 15:55

KiwiNZ: The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

That is a fundamental point on which we'll have to disagree.

DravidDavid

1907 posts

Uber Geek

#1000865 7-Mar-2014 16:11

There will be a few that loose faith in Bitcoin, but it won't impact it on a large scale for very long. There are plenty of people who missed out at the beginning, waiting for the market to crash to buy in. The market bounces back and a new thread on Geekzone can be created.

That's what happens with every market. It crashes down and bounces back. That's how I can see it happening anyway.

turnin

509 posts

Ultimate Geek
Inactive user

#1000867 7-Mar-2014 16:14

hashbrown:
KiwiNZ: The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

That is a fundamental point on which we'll have to disagree.

Thats right, there has never been a Global Financial Crisis.

mattwnz

20155 posts

Uber Geek

#1000872 7-Mar-2014 16:21

Too me, it just seems too much like gambling. Someone I know who are using it for business as a replacement for cash are buying and selling in the same market so not making anything from the swings in value.

MikeB4

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#1000873 7-Mar-2014 16:25

turnin:
hashbrown:
KiwiNZ: The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

That is a fundamental point on which we'll have to disagree.

Thats right, there has never been a Global Financial Crisis.

And there is intrinsic value, it can be here today and gone tomorrow. However the intrinsic value of currency has its underpinnings in the system backing it. E.G the US dollar it's value rises and falls but is backed by the Federal reserves. Bitcoin does not have the underpinning so it's intrinsic value is low.
So a financial crisis, which currency is only a part there of, will affect a currencies value however given sufficient underpinning that value bounces back.

Now rarity does play to some degree in the value of Bitcoin however as rarity does not provide underpinning the value is tentative.

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turnin

509 posts

Ultimate Geek
Inactive user

#1000879 7-Mar-2014 16:39

KiwiNZ:
turnin:
hashbrown:
KiwiNZ: The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

That is a fundamental point on which we'll have to disagree.

Thats right, there has never been a Global Financial Crisis.

And there is intrinsic value, it can be here today and gone tomorrow. However the intrinsic value of currency has its underpinnings in the system backing it. E.G the US dollar it's value rises and falls but is backed by the Federal reserves. Bitcoin does not have the underpinning so it's intrinsic value is low.
So a financial crisis, which currency is only a part there of, will affect a currencies value however given sufficient underpinning that value bounces back.

Now rarity does play to some degree in the value of Bitcoin however as rarity does not provide underpinning the value is tentative.

federal reserves of what exactly ?

MikeB4

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#1000885 7-Mar-2014 16:47

turnin:
KiwiNZ:
turnin:
hashbrown:
KiwiNZ: The only value Bitcoin has is faith, if it loses that it loses everything. A few more incidents like Mt Gox and the Canadian event and the faith evaporates.

That is a fundamental point on which we'll have to disagree.

Thats right, there has never been a Global Financial Crisis.

And there is intrinsic value, it can be here today and gone tomorrow. However the intrinsic value of currency has its underpinnings in the system backing it. E.G the US dollar it's value rises and falls but is backed by the Federal reserves. Bitcoin does not have the underpinning so it's intrinsic value is low.
So a financial crisis, which currency is only a part there of, will affect a currencies value however given sufficient underpinning that value bounces back.

Now rarity does play to some degree in the value of Bitcoin however as rarity does not provide underpinning the value is tentative.

federal reserves of what exactly ?

For the example I used I suggest you look up USA fiscals

turnin

509 posts

Ultimate Geek
Inactive user

#1000896 7-Mar-2014 17:05

Fiscal Policy is not value, actually fiscal policy removed any real value from the Us fiat when they removed the gold standard back in 1970. The US owes much much more money than it has gold. My question stands, federal reserves of what ?

MikeB4

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#1000897 7-Mar-2014 17:09

turnin: Fiscal Policy is not value, actually fiscal policy removed any real value from the Us fiat when they removed the gold standard back in 1970. The US owes much much more money than it has gold. My question stands, federal reserves of what ?

I will leave that for you I have no desire to strata a Financial principles 101 course.

turnin

509 posts

Ultimate Geek
Inactive user

#1000908 7-Mar-2014 17:38

KiwiNZ:
turnin: Fiscal Policy is not value, actually fiscal policy removed any real value from the Us fiat when they removed the gold standard back in 1970. The US owes much much more money than it has gold. My question stands, federal reserves of what ?

I will leave that for you I have no desire to strata a Financial principles 101 course.

No I don't need a 101 course :) was simply asking, since you said bitcoin was based on faith and that the federal reserve backs fiats, what they are backed with. so far I see a tiny amount of gold and a whole heap of faith, how ironic.

MikeB4

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#1000913 7-Mar-2014 17:47

turnin:
KiwiNZ:
turnin: Fiscal Policy is not value, actually fiscal policy removed any real value from the Us fiat when they removed the gold standard back in 1970. The US owes much much more money than it has gold. My question stands, federal reserves of what ?

I will leave that for you I have no desire to strata a Financial principles 101 course.

No I don't need a 101 course :) was simply asking, since you said bitcoin was based on faith and that the federal reserve backs fiats, what they are backed with. so far I see a tiny amount of gold and a whole heap of faith, how ironic.

A couple of numbers for the US...
$148,000,000,000
4,578 tons of gold @ $1350.04 per ounce

There is a start

turnin

509 posts

Ultimate Geek
Inactive user

#1000924 7-Mar-2014 18:06

yup, thats about 1% of their debt

us debt is $ 17,425,000,000,000 ( 50K per person)
1 tonne of gold at 1500 $US is worth 48,200,000
4500 tones of gold is worth $216,900,000,000
so 99% of its backing is in good old non tangible faith.

MikeB4

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#1000933 7-Mar-2014 18:22

turnin: yup, thats about 1% of their debt

us debt is $ 17,425,000,000,000 ( 50K per person)
1 tonne of gold at 1500 $US is worth 48,200,000
4500 tones of gold is worth $216,900,000,000
so 99% of its backing is in good old non tangible faith.

add in all the other facets of worth

Bitcoin is backed by ???????????

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