Author Topic: Do you think Bitcoin is a safe store of value?  (Read 85534 times)

rkbabang

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3377
Re: Do you think Bitcoin is a safe store of value?
« Reply #450 on: December 07, 2017, 09:57:30 AM »
Tulipmania!

Just curious, at what age and price point would this move from being tulips to being an actual store of value ala gold?   Ignore volatility, bc it seems obvious to me that at a certain market cap volatility will be similar to that offild today. 

This was written in April/2013:  ( https://fee.org/articles/bitcoin-for-beginners/ )

"As of this writing, a Bitcoin is trading for $88.249.  Just three years ago, it hovered at $0.14. Many people look at the current market and think, surely this is a speculative bubble. That could be true, but it might not be. People are exchanging an unstable, fiat paper for something with a real title that cannot be duplicated. Everyone knows precisely how many Bitcoins exist at any time. Anyone can observe the transactions taking place in real time. A Bitcoinís price can go up and down, and thatís fine, but there is no real speculation going on here that is endogenous to the Bitcoin market itself.  Is it a pyramid scheme? The defining mark of a pyramid scheme is that more than one person has an equal claim on the same money or good. This is physically impossible with Bitcoin. The way the program is set up, it is a strict property rights regime with no exceptions."


zgrendi

  • Jr. Member
  • **
  • Posts: 81
Re: Do you think Bitcoin is a safe store of value?
« Reply #451 on: December 07, 2017, 01:59:52 PM »
Tulipmania!

Just curious, at what age and price point would this move from being tulips to being an actual store of value ala gold?   Ignore volatility, bc it seems obvious to me that at a certain market cap volatility will be similar to that offild today. 

This was written in April/2013:  ( https://fee.org/articles/bitcoin-for-beginners/ )

"As of this writing, a Bitcoin is trading for $88.249.  Just three years ago, it hovered at $0.14. Many people look at the current market and think, surely this is a speculative bubble. That could be true, but it might not be. People are exchanging an unstable, fiat paper for something with a real title that cannot be duplicated. Everyone knows precisely how many Bitcoins exist at any time. Anyone can observe the transactions taking place in real time. A Bitcoinís price can go up and down, and thatís fine, but there is no real speculation going on here that is endogenous to the Bitcoin market itself.  Is it a pyramid scheme? The defining mark of a pyramid scheme is that more than one person has an equal claim on the same money or good. This is physically impossible with Bitcoin. The way the program is set up, it is a strict property rights regime with no exceptions."


Do you believe that this parabolic spike up is driven by the world suddenly realizing the fundamental value of bitcoin?  What is that fundamental value?  Every other knucklehead on the planet is picking up a little bc right now to play the rush.  They have no clue how the technology works or what its intrinsic value is. I'm not saying bc is valueless, its actually has some neat uses.  So do tulip bulbs, they can grow lovely flowers. 

Please show me an example of an asset that has spiked in value like this that wasn't a bubble.


wachtwoord

  • Hero Member
  • *****
  • Posts: 1141
Re: Do you think Bitcoin is a safe store of value?
« Reply #452 on: December 07, 2017, 02:20:26 PM »
Probably gold back in ancient times (but obviously at a delayed speed due to a much lower population and absense of world wide instant communication network.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

MRCR - FELP - ALS.TO - PDER - COMX - WWIB.OL -
 SODI - NVTR - ADDC - UPGI - HNFSA - IPO.TO - BONL - BWEL - GNW - NYRT - POE.V

rkbabang

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3377
Re: Do you think Bitcoin is a safe store of value?
« Reply #453 on: December 07, 2017, 03:17:48 PM »
Tulipmania!

Just curious, at what age and price point would this move from being tulips to being an actual store of value ala gold?   Ignore volatility, bc it seems obvious to me that at a certain market cap volatility will be similar to that offild today. 

This was written in April/2013:  ( https://fee.org/articles/bitcoin-for-beginners/ )

"As of this writing, a Bitcoin is trading for $88.249.  Just three years ago, it hovered at $0.14. Many people look at the current market and think, surely this is a speculative bubble. That could be true, but it might not be. People are exchanging an unstable, fiat paper for something with a real title that cannot be duplicated. Everyone knows precisely how many Bitcoins exist at any time. Anyone can observe the transactions taking place in real time. A Bitcoinís price can go up and down, and thatís fine, but there is no real speculation going on here that is endogenous to the Bitcoin market itself.  Is it a pyramid scheme? The defining mark of a pyramid scheme is that more than one person has an equal claim on the same money or good. This is physically impossible with Bitcoin. The way the program is set up, it is a strict property rights regime with no exceptions."


Do you believe that this parabolic spike up is driven by the world suddenly realizing the fundamental value of bitcoin?  What is that fundamental value?  Every other knucklehead on the planet is picking up a little bc right now to play the rush.  They have no clue how the technology works or what its intrinsic value is. I'm not saying bc is valueless, its actually has some neat uses.  So do tulip bulbs, they can grow lovely flowers. 

Please show me an example of an asset that has spiked in value like this that wasn't a bubble.



People all over the world (rich and poor, dumb and smart, educated and ignorant) use the USD every day. Do you think 1 in 10 has a deep understanding of the Federal Reserve system and how it works?

Even if Bitcoin replaces all money on Earth the average person wonít understand the technology behind it anymore than they have a deep understanding of how the cellphone in their pocket works.

SharperDingaan

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2487
Re: Do you think Bitcoin is a safe store of value?
« Reply #454 on: December 07, 2017, 04:57:06 PM »
"Every other knucklehead on the planet is picking up a little bc right now to play the rush.  They have no clue how the technology works or what its intrinsic value is. I'm not saying bc is valueless, its actually has some neat uses.  So do tulip bulbs, they can grow lovely flowers."

... Just to add to this.
I've had 4 students approach me this week alone - asking to meet for a beer, & talk about how Bitcoin and Etherium works. Shocks the hell out of them, when I tell them where the Etherium ATM is! 

SD

DooDiligence

  • Hero Member
  • *****
  • Posts: 1127
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: Do you think Bitcoin is a safe store of value?
« Reply #455 on: December 07, 2017, 05:05:27 PM »
Nearly every friend I have has asked me about cryptocurrency & these are people who've asked about investing in the past & when I start with "think of stocks as an ownership stake in a biz" their eyes glaze over. 😥
abc | abev | aapl | bbh | brk.b | cri | cvs | dva | dis | ew | ffxdf | gpc | mo | nvo | sftby | vde

8 months left in the BRK.B 1st of the month DCA program (hoping 4 a selloff 2 go all in!)

-----

https://twitter.com/tunawish

Mark Jr.

  • Full Member
  • ***
  • Posts: 143

SnarkyPuppy

  • Sr. Member
  • ****
  • Posts: 471
Re: Do you think Bitcoin is a safe store of value?
« Reply #457 on: December 07, 2017, 05:20:20 PM »
Nearly every friend I have has asked me about cryptocurrency & these are people who've asked about investing in the past & when I start with "think of stocks as an ownership stake in a biz" their eyes glaze over. 😥

Is it possible that you're explaining two independent and largely unrelated situations with one framework?  Is a bubble (severe price rise without similar increases in value) fundamentally different for a brand new commodity versus a business with cash flow stream? Is it possible that future events are easily predictable and obvious at first glance?   

Is it possible that you're correct and this is the most obvious bubble of all bubbles?  Absolutely.

Is it appropriate to simply dismiss as a bubble because of recency bias related to asset classes which are valued in fundamentally different ways from the asset we are currently discussing?  I'm not so sure. 

DooDiligence

  • Hero Member
  • *****
  • Posts: 1127
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: Do you think Bitcoin is a safe store of value?
« Reply #458 on: December 07, 2017, 06:18:12 PM »
Nearly every friend I have has asked me about cryptocurrency & these are people who've asked about investing in the past & when I start with "think of stocks as an ownership stake in a biz" their eyes glaze over.

Is it possible that you're explaining two independent and largely unrelated situations with one framework?

I totally am & thanks for making me aware of the distinction.

My answer to any friend who asks me about bitcoin is "always try to understand what you're putting your hard earned into."

I've asked each of them to read up on crypto$ & then teach me because I totally don't understand it & am not willing to put in the time to learn.

I told a buddy of mine's kid who's a finance major, that if he could convince me I'd toss a little cash his way.

(rkbabang graciously provided me with a great set of reference links which I passed on to the kid but so far, nobody's reported back & as I said before, I'm not willing to put in the time to, oh crap; do I really have to read up on this?)

---

You're also right about my dismissing something due to bias & I would add, my own ignorance (I'll remain blissful on this one...)
« Last Edit: December 07, 2017, 06:42:20 PM by DooDiligence »
abc | abev | aapl | bbh | brk.b | cri | cvs | dva | dis | ew | ffxdf | gpc | mo | nvo | sftby | vde

8 months left in the BRK.B 1st of the month DCA program (hoping 4 a selloff 2 go all in!)

-----

https://twitter.com/tunawish

tede02

  • Sr. Member
  • ****
  • Posts: 350
Re: Do you think Bitcoin is a safe store of value?
« Reply #459 on: December 07, 2017, 06:37:33 PM »
Nearly every friend I have has asked me about cryptocurrency & these are people who've asked about investing in the past & when I start with "think of stocks as an ownership stake in a biz" their eyes glaze over. 😥

Is it possible that you're explaining two independent and largely unrelated situations with one framework?  Is a bubble (severe price rise without similar increases in value) fundamentally different for a brand new commodity versus a business with cash flow stream? Is it possible that future events are easily predictable and obvious at first glance?   

Is it possible that you're correct and this is the most obvious bubble of all bubbles?  Absolutely.

Is it appropriate to simply dismiss as a bubble because of recency bias related to asset classes which are valued in fundamentally different ways from the asset we are currently discussing?  I'm not so sure.

I think you're over analyzing.  It's basically exactly what Peter Lynch talks about in his books.  When you start to hear regular people talking about a new hot investment concept often, it is a red flag for excesses.  It's just crazy right now.  I know of at least two people, who probably couldn't explain what a mutual fund is, that are buying bitcoin.  When easy money is being made, that is also a huge warning for speculation.  Howard Marks always mentions, "What the wise man does in the beginning, the fool does in the end."