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posted by
cmn32480
on Wednesday June 07 2017, @12:31PM
from the where-it-is-all-made-up-and-the-dollar-value-does-matter dept.
from the where-it-is-all-made-up-and-the-dollar-value-does-matter dept.
Cryptocurrencies, as a whole, now hold over $100 billion in market cap for the first time. While bitcoin (BTC) leads the pack at just over $46.6 billion, or 47.9 percent of all cryptocurrencies, the recent surge in these other coins has helped to push the total cap over the top.
Since the Bitfinex hack low on August 2, bitcoin has traded better than JP Morgan, Goldman Sachs, Tesla, Apple, Google and gold. One of the few stocks to match the frenetic pace of bitcoin has been Nvidia, which is up over 200 percent since July of last year.
[...] Although China, Japan and South Korea are trading at a ~$100-plus premium compared to the exchanges in the United States, most of the volume [on June 5th] has been driven by USD.
Source: Bitcoin Magazine
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Cryptocurrencies Hit $100 Billion Market Cap
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(Score: 1, Funny) by Anonymous Coward on Wednesday June 07 2017, @12:53PM (14 children)
The intrinsic value of bitcoin is to trade for altcoins, and the intrinsic value of altcoins are to trade for bitcoin. They are so easy to trade and people love trade.
(Score: 4, Insightful) by VLM on Wednesday June 07 2017, @01:06PM (5 children)
The cost of the electricity it takes to mine the next one.
Its a simplification, and varies over time with block size and difficulty factor and a random effect based on the number of other miners. But in a simplistic black box effect on long term average you pump in $X of electricity to get a coin.
Note that's enormously more intrinsically valuable than the bills in my wallet and no one has a problem with the bills in my wallet.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @02:06PM (1 child)
People do mistrust fiat currency. And countries regularly fire up their printing presses to cause runaway inflation.
(Score: 2) by bob_super on Wednesday June 07 2017, @06:54PM
> cause runaway inflation
Great... as if one wasn't enough already.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @02:59PM (2 children)
So, as usual, you completely miss your own point.
It takes a lot of resources to mint a coin or produce the bills in your wallet—hey, it even takes electricity to do it!
What you're missing is that while the miner does need to take into account his expenditure for finding a block, that's not the determining factor in the price of BTC; as with all things, the price is determined by demand, and there's someone out there who desperately wants to buy some BTC because some crazy guy is selling a dream car only for BTC, and he is doing that because he wants to buy a lot of weed from a website on the Internet, etc.
The value of BTC comes from the fact that it is facilitating human interaction. Now, this is not an "intrinsic" value, because there is no such thing as "intrinsic" value; rather, it's a value that simply exists currently.
(Score: 2) by bob_super on Wednesday June 07 2017, @07:01PM (1 child)
Additionally, in many cases, the person mining the bitcoin did not invest said electricity, or even computing resources.
Ask big IT departments how many times they've found bitcoin mining software on machines.
Like an idiot, instead of pocketing that extra computing power the landlord and boss pay for, I'm just giving it away on folding@home [stanford.edu].
(Score: 2) by cafebabe on Thursday June 08 2017, @05:29PM
A friend now heats her home with a BitCoin ASIC. It is an outdated and inefficient unit but the rationale is simple. Over a winter, it may only provide enough funds for one pint of beer. However, that's a suitable quantity of funds in a suitable currency for further experimentation. Furthermore, it may only capture 1% of the value of electrical heating but you're probably capturing 0%. So, that's better than most people. Indeed, in her situation, it is arguably the most ethical action she could take.
1702845791×2
(Score: 1, Insightful) by Anonymous Coward on Wednesday June 07 2017, @01:28PM (7 children)
Something is either useful to someone or it's not.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @01:53PM (4 children)
With a tulip bulb, you can still grow a tulip.
(Score: 1, Touché) by Anonymous Coward on Wednesday June 07 2017, @02:15PM (2 children)
I suppose you are suggesting that cryptocurrencies are in a financial bubble.
You may be correct; however, that's entirely irrelevant in this discussion.
Try again.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @03:00PM (1 child)
A bubble implies there is an asset that is overvalued, except here there is no asset at all.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @03:13PM
It won't stop others from getting shit done.
(Score: 2) by cafebabe on Thursday June 08 2017, @05:43PM
In the tulip bubble, every tulip bulb would have to flower more than 1000 times for the value to be obtained. Unfortunately, tulip bulbs generally flower about five times. BitCoin has a slightly different property. Every coin can be divided into one billion separately tradable pieces and, with some downwardly compatible changes to software, this could be a billion billion pieces or more. In general, the vast majority of crypto-currencies have more granularity than the vast majority of paper currencies. (Stamping nine zeros on a Zambabwian dollar doesn't make the currency granular if they cannot be traded separately.)
1702845791×2
(Score: 3, Interesting) by VLM on Wednesday June 07 2017, @02:14PM (1 child)
Intrinsic is problematic even outside finance. There's a whole wikipedia article about value in the sense of philosophy and intrinsic vs non-intrinsic and its basically the same problem and nobody's figured it out in 2000+ years in philosophy so don't expect the financiers to figure it out for at least a couple thousand more years.
https://en.wikipedia.org/wiki/Instrumental_and_intrinsic_value [wikipedia.org]
My favorite analogy from the philosophers is intrinsic is a static value and non-intrinsic is a dynamic value. So if the only value of a bitcoin is there's millions of people to trade with, then it has HUGE non-intrinsic value. But a cryptocurrency cut off from the internet and all other human contact has little trade value so it has no intrinsic value.
The way the financiers see it, is not as access to traders but access to bubbles "greater fool theory" the kind of stuff you see in real estate or stock exchange for examples. In that way BTC has intrinsic value outside any bubble because it represents an expenditure of electrical energy. But currently it has non-intrinsic bubble related value in that I can buy one today and hope to sell it to a fool tomorrow for more, because people have been doing that for months with BTC and decades with real estate.
That's what makes "intrinsic" problematic, you have to have a philosophical meeting of the minds for like ten minutes of high level discussion before you can have any mutually common ground to discuss it.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @02:21PM
It sounds like you're just taking another word and making "intrinsic" a synonym for it, and then writing a tautology with these two words.
More to the point, I have no idea what you mean by "static"; in this context, it's another stupid word—something is only static in the context of certain parameters—it's not clear that the constants in physics are actually constant, but they may change so slowly that they are constant for all practical human purposes.
Extrapolate.