Dumitru Posted November 27, 2013 Share Posted November 27, 2013 I'd like to address a couple of statements that were made and which are not quite in accordance with reality. Nobody can mine 1 bitcoin for the equivalent of 10 dollars' worth of electricity and some computer time. If it were possible, a bitcoin would not cost $1000 on the open market. It is a little difficult to do the math, but the cost to mine 1 bitcoin is somewhere closer to the market price of 1 btc. Intrinsic value is an oxymoron, at least as I understand the meaning of the words. Intrinsic is an objectively measurable property of an item like density, resistivity, molecular mass, mechanical strength and so on. This can be independently assessed to be identical throughout the world. Value is a subjective assessment of the item in question, and it would vary throughout the world according to supply and demand. As far I can tell, the concept of intrinsic value is a square circle. Perhaps people mean "commonly and readily agreed upon value" Alt-coins. The bitcoin protocol is open source, and I can create my own Dumitrucoins tomorrow, however those will be completely incompatible with bitcoin, of negligible market penetration, thus very limited use and sadly, limited value Dumitrucoins will also lack network effect, a major factor in the success of bitcoin. Bubbles: there have been bubbles, and there will be many more. I did notice that they have been getting orders of magnitude less intense between booms and busts. I believe this trend will continue, although there's no requirement for it to do so. Gold had and has its booms and busts too. Backing: Bitcoin does not need backing because it is desirable, thus valuable due to its own properties. Further, any entity which proposes a digital currency "backed" by anything introduces counterparty risk, meaning you have to trust said entity to make good on its promise to redeem its potatocoin into so many potatoes on demand. We know how well that turned out for gold, the holiest of metals. The following is an oversimplification, but it goes like this: Bitcoin requires trust only in the distributed miners' network to not inflate. However, all miners have a vested interest in making sure bitcoin is not inflated by other miners, thus they all remain vigilant of the actions of the other miners, and keep each other in check. I do believe bitcoin is a black swan event for Peter, and gold's golden days are behind it. Link to comment Share on other sites More sharing options...
Wesley Posted November 27, 2013 Share Posted November 27, 2013 +1 for a good post explaining some issues in the discussion, thanks! Link to comment Share on other sites More sharing options...
drehen360 Posted December 1, 2013 Share Posted December 1, 2013 Dumitru, Thank you for your thoughts. I have a few of my own regarding the Bitcoin discussion. I think that expecting a single crypto currency to completely replace the current system in the near future is highly unlikely. However, it was mentioned in the discussion that the average consumer will not opt, or like, to use more that one currency. I disagree. If more options were available, the average Joe could hedge themselves from fiat currencies. There are several examples of consumers opt (or out of necessity ) for this in Colonial America. The British sterling and Spanish Real were commonly exchanged. After the German hyperinflation, the Wara was local script used parallel with the Reichsmark in 1920s-1930s Germany due to no liquidity from banks. I see a near future where at Amazon checkout you can pay with Visa- AMEX -PayPal- BitCoin -Dumitrucoins -YuanCoin you get the picture. I'm a little tired of the fear porn from the Gold bug- Armageddon facton telling me to get my Gold-Guns n' God. They may be correct about the gold n' guns, but the future could be so much brighter! Cheers. Link to comment Share on other sites More sharing options...
FreedomPhilosophy Posted December 1, 2013 Share Posted December 1, 2013 Comparing bitcoin and gold is like comparing linux to apples. Link to comment Share on other sites More sharing options...
Naer Posted December 2, 2013 Share Posted December 2, 2013 Comparing bitcoin and gold is like comparing linux to apples. Comparing bitcoin and gold is like comparing linux to apples.Or comparing bitcoin to gold is like comparing pc games to sports Link to comment Share on other sites More sharing options...
marius Posted December 7, 2013 Share Posted December 7, 2013 If the bitcoin news isnt waking people up to the opportunities of the internet and technology, i dont know what will...I still have a lot to learn about bitcoin.Dumitru, where are you from? Link to comment Share on other sites More sharing options...
Hugh Akston Posted December 8, 2013 Share Posted December 8, 2013 I can independently assess that the value of water in the desert is higher than in the Amazon. I do not see the square circle? If objective value do not apply regarding goods, surely they can not apply to moral values? I can not objectively state that the red Ferrari is going to be more valuable than the yellow one, but I can objectively determine that the Ferrari is going going to have more value than the rainbow coloured Volkswagen Beetle, whilst acknowledging that there might be circumstances such as the Mardi Grass in Sydney that could conceivably lead to a situation where someone might have a different preference. Link to comment Share on other sites More sharing options...
Josh F Posted December 10, 2013 Share Posted December 10, 2013 Aesthetics, economics, etc are about subjective preferences. I like jazz, I want a ferrari, etc. Morality deals specifically with objectively preferred behavior. Math is objective, for example. Choice of car is subjective. See what I mean? Link to comment Share on other sites More sharing options...
Recommended Posts