BITCOIN

thomas91169

# of bans = 5203
Established Member
Joined
Mar 2, 2006
Messages
25,662
Location
San Diego, CA
LOL crypto bros.

"But its a currency" except you cannot buy anything with it. It never will be a currency given the vol and positive expected value.

"But its a hedge against fiat currency." To own it you need to convert fiat currency into it. To monetize it you need to convert it back into fiat currency.

"But its anonymous." Except the only way you can transact is via an exchange which tracks all transactions. The IRS deems crypto property which means that you have to pay cap gains taxes on it.

Not defending crypto or anything but keep in mind too all these things are based on what they are capable of doing today. If it continues its trajectory it most certainly can be used to buy things, without needing to convert to fiat on either end. No idea with the IRS part but they get their grubby hands on everything so not sure that's a con against crypto or a fact of life until someone with balls (bigger than Trump) eliminates them as a governmental agency (like id do).
 

Klaus

Well-Known Member
Established Member
Premium Member
Joined
Jan 18, 2018
Messages
14,092
Location
minnesota
I have most of my money in Fidelity and Vanguard. I can't buy anything with it. I have to convert it back to dollar before I could. See what I did there? ;)

That is because stocks and bonds are not currency. They are an asset that you transact in via an actual currency. Likewise Bitcoin is an asset that you transact in via an actual currency but is not a currency itself.
 

Klaus

Well-Known Member
Established Member
Premium Member
Joined
Jan 18, 2018
Messages
14,092
Location
minnesota
Not defending crypto or anything but keep in mind too all these things are based on what they are capable of doing today. If it continues its trajectory it most certainly can be used to buy things, without needing to convert to fiat on either end. No idea with the IRS part but they get their grubby hands on everything so not sure that's a con against crypto or a fact of life until someone with balls (bigger than Trump) eliminates them as a governmental agency (like id do).

Positive expected value is the biggest hurdle to cryto becoming what its proponents think it will become. A currency is merely a medium of exchange. You would never trade it for something else if you think it will be worth more than what you are trading for. You cannot simultaneously think that crypto will be worth more in the future and think that it is a currency. It is either an asset or a currency, it cannot be both.
 

Rb0891

Well-Known Member
Established Member
Premium Member
Joined
Feb 9, 2020
Messages
4,000
Location
Indiana
Positive expected value is the biggest hurdle to cryto becoming what its proponents think it will become. A currency is merely a medium of exchange. You would never trade it for something else if you think it will be worth more than what you are trading for. You cannot simultaneously think that crypto will be worth more in the future and think that it is a currency. It is either an asset or a currency, it cannot be both.
This is a pretty good point. I see them all as assets aside from Bitcoin which is basically a volatile currency. That being said I believe people trade currencies all the time based on future value. Certainly not as volatile though.
 

Adower

Well-Known Member
Established Member
Joined
Sep 3, 2005
Messages
2,813
Location
SAC
Imagine if you were this guy. I just read an article about this:

In 2010 Laszlo Hanyecz purchased two papa murphys pizzas for 41$. He used bitcoin which equated at that time to 10,000 bitcoins. Today, that is worth 3 billion dollars.

Not sure how they got that math, looks more like 300M to me but still....
 

mysticsvt

southernmustangandford
Established Member
Premium Member
Party Liquor Posse
Joined
May 31, 2004
Messages
9,070
Location
Charleston, SC
Imagine if you were this guy. I just read an article about this:

In 2010 Laszlo Hanyecz purchased two papa murphys pizzas for 41$. He used bitcoin which equated at that time to 10,000 bitcoins. Today, that is worth 3 billion dollars.

Not sure how they got that math, looks more like 300M to me but still....

You simply can’t discredit crypto because it has been a legit investment since inception. There are countless stories such as the pizza one you mentioned or the tip in Bitcoin that made an amateur artist rich. No one wouldn’t put a grand in Bitcoin back when it was pennies. It’s now grown in so many aspects and so many entities have excepted and invested and more everyday. I have no doubt it will continue to gain momentum and become more secure in time. People can disclaim it or invest what they can afford to lose. I’ve enjoyed it immensely but as I’ve said it’s only about 5% of my portfolio. 15k is the highest I’ve hit this far....just play money.
 

CompOrange04GT

Anyone have a strap on my girl can use on me?
Established Member
Joined
Jul 26, 2011
Messages
8,773
Location
Texas
You simply can’t discredit crypto because it has been a legit investment since inception. There are countless stories such as the pizza one you mentioned or the tip in Bitcoin that made an amateur artist rich. No one wouldn’t put a grand in Bitcoin back when it was pennies. It’s now grown in so many aspects and so many entities have excepted and invested and more everyday. I have no doubt it will continue to gain momentum and become more secure in time. People can disclaim it or invest what they can afford to lose. I’ve enjoyed it immensely but as I’ve said it’s only about 5% of my portfolio. 15k is the highest I’ve hit this far....just play money.

wasn’t one of the cryptos employees or something of some company ... he was paid in bit coin for his salary.. and became a millionaire due to it


Edit it was a coinbase employee.
 

Klaus

Well-Known Member
Established Member
Premium Member
Joined
Jan 18, 2018
Messages
14,092
Location
minnesota
This is a pretty good point. I see them all as assets aside from Bitcoin which is basically a volatile currency. That being said I believe people trade currencies all the time based on future value. Certainly not as volatile though.

This is a bit of a rabbit hole but you might find this interesting so I will proceed....

The only "value" of a currency is what you can trade it for. Currency does not generate cash flow and has no intrinsic value beyond its use as a medium of exchange. Trading of currency occurs because of relative value. This means that it is undervalued or overvalued relative to another currency (interest rate parity) or relative to what you can purchase with it (purchasing power parity).

Interest rate parity: Interest Rate Parity (IRP) Definition
Purchasing power parity: What Is Purchasing Power Parity (PPP)?

A fun way to determine valuation on a purchasing power basis is via the "big mac index." This converts the price of a big mac in any country back to USD. The point is that a big mac is a big mac so all else equal it should be priced the same in each country. This is not the case however.
What Is the Big Mac Index?

Due to inflation currency has a negative expected value. This is different than relative value described above. Crypto bros think crypto has positive expected value which is why they hoard it rather than spend it. A hoarded currency is not a currency.
 

Great Asp

Well-Known Member
Established Member
Premium Member
Joined
Mar 17, 2007
Messages
4,219
Location
St. Louis
LOL crypto bros.

"But its a currency" except you cannot buy anything with it. It never will be a currency given the vol and positive expected value.

"But its a hedge against fiat currency." To own it you need to convert fiat currency into it. To monetize it you need to convert it back into fiat currency.

"But its anonymous." Except the only way you can transact is via an exchange which tracks all transactions. The IRS deems crypto property which means that you have to pay cap gains taxes on it.

negative waves.jpg


I'm just a guy looking to make a few bucks.... :D

E
 

Rb0891

Well-Known Member
Established Member
Premium Member
Joined
Feb 9, 2020
Messages
4,000
Location
Indiana
This is a bit of a rabbit hole but you might find this interesting so I will proceed....

The only "value" of a currency is what you can trade it for. Currency does not generate cash flow and has no intrinsic value beyond its use as a medium of exchange. Trading of currency occurs because of relative value. This means that it is undervalued or overvalued relative to another currency (interest rate parity) or relative to what you can purchase with it (purchasing power parity).

Interest rate parity: Interest Rate Parity (IRP) Definition
Purchasing power parity: What Is Purchasing Power Parity (PPP)?

A fun way to determine valuation on a purchasing power basis is via the "big mac index." This converts the price of a big mac in any country back to USD. The point is that a big mac is a big mac so all else equal it should be priced the same in each country. This is not the case however.
What Is the Big Mac Index?

Due to inflation currency has a negative expected value. This is different than relative value described above. Crypto bros think crypto has positive expected value which is why they hoard it rather than spend it. A hoarded currency is not a currency.
Rabbit hole indeed... Crypto is all different too. Hell, I liken much of it to more of a high risk tech stock...
 

quad

Well-Known Member
Established Member
Joined
Jun 1, 2004
Messages
8,073
Location
Detroit
This is a bit of a rabbit hole but you might find this interesting so I will proceed....

The only "value" of a currency is what you can trade it for. Currency does not generate cash flow and has no intrinsic value beyond its use as a medium of exchange. Trading of currency occurs because of relative value. This means that it is undervalued or overvalued relative to another currency (interest rate parity) or relative to what you can purchase with it (purchasing power parity).

Interest rate parity: Interest Rate Parity (IRP) Definition
Purchasing power parity: What Is Purchasing Power Parity (PPP)?

A fun way to determine valuation on a purchasing power basis is via the "big mac index." This converts the price of a big mac in any country back to USD. The point is that a big mac is a big mac so all else equal it should be priced the same in each country. This is not the case however.
What Is the Big Mac Index?

Due to inflation currency has a negative expected value. This is different than relative value described above. Crypto bros think crypto has positive expected value which is why they hoard it rather than spend it. A hoarded currency is not a currency.
Klaus you are going to jinx crypto like you jinxed Trump! Get out of the damn thread lmao! ;)
 

thomas91169

# of bans = 5203
Established Member
Joined
Mar 2, 2006
Messages
25,662
Location
San Diego, CA
This is a bit of a rabbit hole but you might find this interesting so I will proceed....

The only "value" of a currency is what you can trade it for. Currency does not generate cash flow and has no intrinsic value beyond its use as a medium of exchange. Trading of currency occurs because of relative value. This means that it is undervalued or overvalued relative to another currency (interest rate parity) or relative to what you can purchase with it (purchasing power parity).

Interest rate parity: Interest Rate Parity (IRP) Definition
Purchasing power parity: What Is Purchasing Power Parity (PPP)?

A fun way to determine valuation on a purchasing power basis is via the "big mac index." This converts the price of a big mac in any country back to USD. The point is that a big mac is a big mac so all else equal it should be priced the same in each country. This is not the case however.
What Is the Big Mac Index?

Due to inflation currency has a negative expected value. This is different than relative value described above. Crypto bros think crypto has positive expected value which is why they hoard it rather than spend it. A hoarded currency is not a currency.

Wouldn't that be true for any type of savings or retirement investing or anything like that then? You build up $1m in retirement funds, and until the point it matures and you start spending it, its hoarded currency and therefore not currency. If you put $1k into some make-it-rich stock today and don't touch it, is it no longer currency?

Speaking of big macs, what if in a year or two big macs can be purchased for some sort of crypto? Is it currency then? I see alot more places starting to take crypto as a form of payment. If that happens, then what?

Crypto bigly intrigues me, thats why I ask and like talking about it like this.
 

Weather Man

Persistance Is A Bitch
Established Member
Joined
May 18, 2012
Messages
26,057
Location
MN
Wouldn't that be true for any type of savings or retirement investing or anything like that then? You build up $1m in retirement funds, and until the point it matures and you start spending it, its hoarded currency and therefore not currency. If you put $1k into some make-it-rich stock today and don't touch it, is it no longer currency?

Speaking of big macs, what if in a year or two big macs can be purchased for some sort of crypto? Is it currency then? I see alot more places starting to take crypto as a form of payment. If that happens, then what?

Crypto bigly intrigues me, thats why I ask and like talking about it like this.

Federal reserve is talking about a USA crypto tied to the dollar. I'm sure China and everyone else would follow suit. Game over for the guys trying to use their crypto as currency. Only the drug lords would stick with non backed crypto.
 

Klaus

Well-Known Member
Established Member
Premium Member
Joined
Jan 18, 2018
Messages
14,092
Location
minnesota
Wouldn't that be true for any type of savings or retirement investing or anything like that then? You build up $1m in retirement funds, and until the point it matures and you start spending it, its hoarded currency and therefore not currency. If you put $1k into some make-it-rich stock today and don't touch it, is it no longer currency?

Speaking of big macs, what if in a year or two big macs can be purchased for some sort of crypto? Is it currency then? I see alot more places starting to take crypto as a form of payment. If that happens, then what?

Crypto bigly intrigues me, thats why I ask and like talking about it like this.

I am not stating that crypto is not a potential store of value. I am stating that it is not a currency. There is a difference.

In the example above you converted a currency into an asset. The asset appreciated. You then converted it back into currency and used the currency as a medium of exchange. The fact that you converted the currency into an asset speaks to your lack of confidence in the ability of the underlying currency to appreciate.

There are very few places that take crypto and those that do are merely a novelty. And with good reason, everyone thinks that bitcoin is going to appreciate. If you think that bitcoin is going to double in a year you are really paying 2x the USD price of a big mac (less inflation). I wonder how many teslas were paid for in bitcoin? I cannot find an account of a single one.

I am not bearish on bitcoin BTW. I just think people misunderstand it. Most talk about it as if it is "money" when it is not. The closer comparison is jewelry or art i.e. a means to store significant value in a small package that is outside the financial system.
 

lOOKnGO

Keep'um smiling
Established Member
Joined
Oct 1, 2009
Messages
6,974
Location
White Post, Va
Crypto will spend like a prepaid credit card. Turbotax has already set up the line item questions in figuring tax obligations on expenditures. It's here and ready to use to buy tangible items. Its still in it's infancy but until you see how trading works and with just the small percentages made for exchange management times by trillions of exchanges that will happen will revolutionize global spending. The key will come down to the security of said credit. It's wild to see the progress it has made so far.
 

MG0h3

Well-Known Member
Established Member
Joined
Jul 23, 2014
Messages
14,178
Location
El Paso, TX
Crypto will spend like a prepaid credit card. Turbotax has already set up the line item questions in figuring tax obligations on expenditures. It's here and ready to use to buy tangible items. Its still in it's infancy but until you see how trading works and with just the small percentages made for exchange management times by trillions of exchanges that will happen will revolutionize global spending. The key will come down to the security of said credit. It's wild to see the progress it has made so far.

A significant problem is the volatility if used as currency.

Imagine if you sold something two weeks ago for BTC.

Wonder how the handful of NFL players that accepted BTC for their salary earlier this year are feeling.

I think it’s great for trading and making profits that way, but too volatile for much else.


Sent from my iPhone using the svtperformance.com mobile app
 

KilledbyKenne

Well-Known Member
Established Member
Joined
Aug 28, 2013
Messages
1,451
Location
Mountains
I would think anyone agreeing to be paid in Bitcoin has to believe in it long term and they aren't that worried about a correction along the way. It's not all that different than receiving a large bonus in stock options for your company. Instead of receiving cash, you get an asset that could go down short term but is generally believed that it will trend upward over the long term.
 

Users who are viewing this thread



Top