Bitcoin & Other Cryptocurrencies

uair01

Justified & Ancient
Joined
Apr 12, 2005
Messages
2,934
Reaction score
3,257
Points
184
Location
Rotterdam
Note: I find this fascinating stuff, so please don't start a flame war and get this thread locked.

https://blog.dshr.org/2021/01/the-bitcoin-price.html?m=1

There seems to be a lot of discussion going on now about Bitcoin value. I learn a lot of economics from it:

Secondly, she takes aim at the circulating BTC supply:
Another problem is that although 18.6m bitcoins have indeed been mined, far fewer can actually be said to be “in circulation” in any meaningful way.

For a start, it is estimated that about 20 per cent of bitcoins have been lost in various ways, never to be recovered. Then there are the so-called “whales” that hold most of the bitcoin, whose dominance of the market has risen in recent months. The top 2.8 per cent of bitcoin addresses now control 95 per cent of the supply (including many that haven’t moved any bitcoin for the past half-decade), and more than 63 per cent of the bitcoin supply hasn’t been moved for the past year, according to recent estimates.
The small circulating supply means that BTC liquidity is an illusion:
the idea that you can get out of your bitcoin position at any time and the market will stay intact is frankly a nonsense. And that’s why the bitcoin religion’s “HODL” mantra is so important to be upheld, of course.

Because if people start to sell, bad things might happen! And they sometimes do. The excellent crypto critic Trolly McTrollface (not his real name, if you’re curious) pointed out on Twitter that on Saturday a sale of just 150 bitcoin resulted in a 10 per cent drop in the price.
 

Stormkhan

Disturbingly familiar
Joined
May 28, 2003
Messages
4,345
Reaction score
1,012
Points
184
So, basically, the value of bitcoin is artificial and relies on support, as against currencies that are related to a physical property? If you have gold bullion then you 'have' that value in currency? And bitcoin etc. are based on hypothetical, not corporeal, value. The bitcoin billionaires are billionaires because they say they are, and everyone believes them?
Neat.
Sounds like a trustworthy and stable means of economy.
 

Analogue Boy

Bar 6
Joined
Aug 10, 2005
Messages
11,194
Reaction score
10,762
Points
309
Why didn’t he write down the password and keep it in a bank safe deposit box?
 

XBergMann

Fear not, I mean no harm to your planet
Joined
Jul 22, 2009
Messages
419
Reaction score
768
Points
109
So, basically, the value of bitcoin is artificial and relies on support, as against currencies that are related to a physical property? If you have gold bullion then you 'have' that value in currency? And bitcoin etc. are based on hypothetical, not corporeal, value. The bitcoin billionaires are billionaires because they say they are, and everyone believes them?
Neat.
Sounds like a trustworthy and stable means of economy.
Currencies are not related to physical property at all that all stopped with the suspension of the gold standard. Currencies can be created out of thin air by a central bank employee adjusting the money supply.

All financial instruments rely on support including stocks, bonds and even baseball cards. Someone paid $5.2mn for a single baseball card recently.

Supply and demand just like the price of meat in Billingsgate market goes up and down.
 

marhawkman

Ephemeral Spectre
Joined
Nov 2, 2019
Messages
437
Reaction score
377
Points
64
Currencies are not related to physical property at all that all stopped with the suspension of the gold standard. Currencies can be created out of thin air by a central bank employee adjusting the money supply.

All financial instruments rely on support including stocks, bonds and even baseball cards. Someone paid $5.2mn for a single baseball card recently.

Supply and demand just like the price of meat in Billingsgate market goes up and down.
Yeah modern "currency" is little more than a number on a spread sheet. In the old days currency was always things that had intrinsic values. Gold coins could be melted to make jewelry or something. "official" tender was about weights and measures. 2 one-once gold coins are worth the same as one 2 ounce coin.. since people only cared about gold weight.

But for people who don't want to weigh every coin every time it's spent, then came the idea of minted coinage with stamped weights. But then comes fraudulent coinage that looks the same but actually has less gold in it....

Then came a period with coinage with official "values" where the value(such as 1$) stamped on the coin had little to do with the actual value of the coin. Which eventually lead to the modern system where there's no intrinsic value whatsoever.
 
Top