Bitcoin Forum

Lately i've been going back throught the old satoshi posts and there are at least two i found really interesting.

First this one

https://bitcointalk.org/index.php?topic=845.msg11403#msg11403


And the other is this one

https://bitcointalk.org/index.php?topic=242.msg2078#msg2078


The main difference i see between bitcoin and a regular commodity is that a regular commodity's price is aligned around production cost, whereas bitcoin is the other way around which is the production cost gravitate around the demand's price.

So thats the eternal question around bitcoin is what is supposed to be the "right" price for it ?

My reasoning is that instead of asking this question peraphs the good question is how to know if it is overpriced ?

And the answer would be another question, how do you inflate artificially a commodity market ? By people with too much monney hoarding it to expect the price to rise and making more profit out of it than just exchanging it as utility as a regular use.

With this reasoning people with lots of monney hoarding expecting to make a profit would end as the Hunt brothers.

People using it as its supposed to be as a commodity or currency would not loose too much as not having too much in stock at any point.

Then ok there are always external economic factor that lead to people being more in saving or spending moods, so there is always some amount that is going to be organically saved. But then saving like keeping monney under the matress is a different attitude than hoarding for profit like "investing" as if it is a stock or a productive asset with some level of risk.

Is this reasoning correct ?

After all bitcoin was designed as digital cash with the coins circulating from address to address which is also part of the security model as i understand it because it makes it even more pointless to search for hash collision on a public address as the coins are always moving and are not supposed to sit on an address for long period but move between single use address which also increase anonymity.

If this is correct it mean some kind of "silver thursday" at some point when hoarders make the price so high nobody really want to buy it anymore and it ends up loosing all value on the market.

Anyway bitcoin as a currency can function at any market price as long as it not null because it still needs to be mined so the price cant go to zero but it can function at 1$ if thats the global economic value as a commodity.

I think a regular commodity's price is always aligned not with production cost but with demand, so that the production cost may remain constant while the price rises and falls. Moreover, even if the production cost goes through the roof, without demand, the price would still be falling. The same is basically true with Bitcoin.


Is there such a thing as right price for Bitcoin? I mean, outside the realm of demand? I think there's none. The market determines the price. Of course, there are certain factors that affect the demand such as Bitcoin's scarcity, government regulations, competition within the crypto market, crumbling fiat, and so on. But everything will boil down to demand or how much people would be willing to pay for it.


Well, there are certain technical tools for it. There's Williams %R, Bollinger Bands, RSI, and numerous others, which I am not really a fan of. Fundamentally, though, if only a handful of wealthy investors like the Hunt brothers are buying in massive amounts, hoarding, while the rest are selling, taking advantage of the exponentially rising prices, the price is probably a bubble.


If you're asking about artificially increasing the price of a commodity, then hoarding is a time-tested strategy. If there's a regular use of it which results to the increase of price, then I guess it's not anymore artificial.


The circumstances surrounding the case of the Hunt brothers are different with Bitcoin's. It was more like the Hunt brothers and certain partners versus the United States government. In no way, could the Hunt brothers succeed. Whatever success was definitely temporary. It couldn't be sustained. Not to mention that the production of silver was continuous.

The main difference between Bitcoin and a commodity is that a commodity consumed.


The price is always determined by supply and demand.

However, the quantity theory of money states that MV=PQ, so the value of the money supply is PQ/V. The supply comes from MV and the demand comes from PQ.

The theoretical price can also be thought of as the risk-adjusted discounted future price.

Whether or not it is overpriced depends on how you think it compares to these metrics.


Hoarding temporarily affects the supply. The price rises as coins are hoarded and likewise it falls as hoarded coins are sold.

Well if you can call USD, CNY, GBP, TRY,.... and the rest of more than a hundred fiat currencies being traded in Forex markets commodities then you can also call bitcoin a commodity.

The only thing that sets bitcoin apart (which is a temporary characteristic) is that its price is being decided in a rather small market that has caused a lot of volatility. Otherwise in the future when bitcoin reaches mass adoption and the market is not so small to be manipulated by the overly excited traders, its price will be stable too. By that time it becomes easier to see that the price depends solely on supply and demand, both of which will have reached a fixed and balanced state.

Well, most governments define Bitcoin and Crypto currencies as Commodities, because they want to protect their Fiat currencies from disruption. All other Fiat currencies can be traded as Commodities (Forex Currency markets) and the same goes for Bitcoin... so it is a Currency and it can be traded as a Commodity.  ;)

Satoshi just showed the world what will happen if it is only traded as a Commodity... which is not the route most of us wants this experiment to go. (It will be much better if it is a currency, because it will generate miners fees and that is the oil of the whole Bitcoin eco system)  ;)

For me bitcoins are a currency that is very similar to all the major currencies traded around the world like Euro, Dollar, etc. Both crypto and fiat don't pay any dividends, and both rely on investor confidence. Fiat money has a country and their economy behind it to guarantee some value, but investors look more at the future. The only difference is that there is a central bank behind fiat money that guarantee me to use that money to buy goods on my country. What they don't guarantee is a certain value for the money, since the gold standard was demolished the value fluctuates. So both cryptos and fiat money fluctuates freely. For me the guarantee that I can actually use my bitcoins comes from the large number of investors. As long as people are interest in the coin will there be value and an active market.
So I would say bitcoins are more than just a commodity market.

a commodity is a raw material used in the production of a secondary product

gold-> jewellery and circuits
beef-> burgers and mincemeat
wheat-> bread and cereal
oil-> fuel and plastics

gold has 2 markets. the commodity (produce demand) and asset market(investment/store of wealth)

bitcoin more aligns to an asset market. not a commodity market

IMO Bitcoin is a Digital Asset or Commodity similar to Domain Names.

You are buying ownership of a piece of the Blockchain.

It's not just production but at the same time there are other things as well, one cannot just strike aside things like :
- economic situation of the country
- the world's probelms like the pandemic
- the availability of goods or resources in that particular place
There are so many things! How you evaluate bitcoins is actually not something that simple, bitcoins is very different that traditional things, plus it depends on person to person. For me it's more like an asset than an actual commodity. It's better as a store of value. That again depends from person to person as well. Value is entirely personal as well.

Bitcoin is assets and that is why is valuables and people is using it as a currency, commodity of bitcoin is determine by market standard but i will not believe such that many people have another definition of assets and commodity, asset in bitcoin is talking of investment while commodity is also talking of production and productivity of a product, so their is interchanges of them in bitcoin what really prominent is investment which is the asset you have in bitcoin

The idea of supply and demand ok, but to me it seems more and more to be some kind of sophism more than anything. Look like some form of sollipism like i make the reality how i want it to be. But in reality you will rarely find some instance when this logic apply in real life. There is always a reasonable price to expect for something at a particular time. Then the price can vary following different factors etc but it's the thing i really fail to see with bitcoin. I mean whyt bitcoin worth 100x more now than 5 years ago ?

https://saylordotorg.github.io/text_microeconomics-theory-through-applications/s13-03-asset-markets-and-asset-prices.html


This summarize the problem as i see it :)

I mean ok you take real-estate for example where this kind of logic that the price can flucuate much depending on the demand. But then if the price of a certain real estate is much higher than another you can be sure the person paying significantly higher amount for this particular place is having a good reason to do so. Maybe it's close to a good school for their kid, maybe they like the neighrborhood. In any case there is always a good reason for someone to buy something at a higher price.

Stocks as share of a company are a different story, because history has proven the human mind is capable of incredible thing, and when you buy a share, you buy some share of future revenue of a work, most likely on royalities on the developement of sometime new that will pay off dividends , and history has shown many time how some brilllant mind can create things entierely new.

But bitcoin is not a stock, holding a coin on exchange is not going to pay any salary, and in anycase the main creator isn't being paid from it. The person who make a profit is the one selling on the exchange, the exchange who takes some operational fees and period.

When i see the original discussion, they were more concerned about bitcoin taking off, and of course at first it would be under evaluated, can see this as initial launch discount price, and to my knowledge this practice has never lead to any kind of market collapse, not to break any hearth, but i think we are way beyond a phase of initial launch discount.

Can always say ok but you can buy a fraction of it, but as anything in bitcoin it's much of a relativist game, so if you have only dust coins they will be hard to move because of fees and network congestion, so i thinks it's partially false to say some dust bitcoin has same value than more of it due to fees and network constraint.

Even the idea of it being an asset or store of value seems pretty moot, or contradictory with the idea that it's impossible to determine it's right price, and that it's highly flucuating from unknown and unpredictble factor, that seems to be contradictory with it as being a good store of value. Then ok with current state of global economy, it's not unreasonable to expect a massive crash sooner or latter, and there is clearly a high demand for some kind of hedge, or some asset that will resistant inflation, but at any rate i don't think the problem is mostly the one of monney printing, there are much deeper problem within the productive economy than only monney printing, and in any case regarding this fact that everyone say there is no way to really reliably determine bitcoin value doesn't make it a very good store of value. Other than for billionere who can set the price as they want by hoarding a massive stock of it.

So ok can take the argument of it being usefull for poor migrant to send monney home, but let me ask this question, how many of you has already invested 1$ in cash transfer system for that poor migrant can some monney home ? How valuable do you really think this is ?

Same for salvador, how many of you would have invested even 1$ into salvador economy, and even if they hire the best financial counselling to bootstrap new currency for their economy, how many would have bought even 1$ of it thinking it's going to make you rich ?

The idea that it's not used in the industry like other metals ok, that's a good point, but then also it's a digital technology, so it's normal it's not being used in the manufacture industry, maybe it can be compared to a databse into the digital economy.

Domain name same, in themselve they don't worth much, they have value because they are used by another buisness who will use the name as part of a marketting strategy, and they will make monney with their buisness, the domain name is just a part of it and its value depend completely on the success of the buisness behind it, not much in domain registration itself.

I mean that's just to throw some reflection and market parallel to find what kind of dynamic to expect. And it seems to me at this point the only way to really expect a huge rise from it is only by practicing some form of shady things like market conerning or pyramid scheme, which never really last very long in a free market where competition lead price toward a minimum for the demand. If the demand is only fueled by the perspective of resell profit while not adding any value to it by just holding it on an exchange , it cannot end well.


see hal finney on it :)

https://bitcointalk.org/index.php?topic=1388.msg37762#msg37762

Strange how Satoshi described Bitcoin as "peer-to-peer electronic cash", but in the post mentioned in OP called it a commodity.


Who said that coins are supposed to be frequently moved instead of sitting there for years? There's nothing in Bitcoin's protocol that could incentivize that. The only reason to move coins to new address is if there's a protocol upgrade featuring new address format, which doesn't happen often.

Commodity asset, asset of storage, etc. all of those are not most important things about Bitcoin.

The most important thing are
- Bitcoin is Bitcoin
- It is unique
- It has only 21M Bitcoin in total supply that is unchanged.
- More than 90% Bitcoin has been mined so far
- Only less than 10% Bitcoin is left for mining until 2140
- Bitcoin gives you your own bank.
- No one can steal your Bitcoin if you don't lose private keys.

There is no direct incentivie to it, but as i understand it from the original discussion it seem to me the only way bitcoin can really gain long term value is using it as a medium of exchange, if everyone just hoard their coin in a wallet without motion, the long term value is limited.

found another interesting post related to the topic

https://bitcointalk.org/index.php?topic=57.msg415#msg415




I need to read more, but already as much as i see reference to merchent, transaction, and regular thing, i never see a mention of the merit of hoarding it as something that would really add long term value to bitcoin.

hoarding does not cause any merit for value rise

highschoolers think its a supply-demand thing. whereby there are 19mill coins. but billions of people with fiat wanting it.

actually the 19mill coins hoarded on private keys is not the supply.. . the markets price is not based on 19mill coins. its based on just a few hundred thousand coin deposited into an exchange, whereby the market price is based on which of those few hundred thousand coin are actually on market orders.
(your not part of the market if your not on the market)

even more depth
the market orders are not based on there being hundreds of people buying hundreds of coins right this second. instead if you look at the market orders you will see small orders of 0.1 and less being 'taken'  and affecting the price

yep you dont need to buy a whole coin to set/make a market price.
if you just spend $42 buying 0.001btc you then set the price at $42,000 per btc

you dont need to sell all 19mill coins all at $42k each to then make the market value $42k

what actually sets the value. is peoples willingness to not sell if the price dips too much.
this happens when people look at the price they acquired their coin for.

if a person acquired a coin in 2011 for 10c. he wont sell it for 9c
if another person sold another coin for 20c. the first person might try selling his for 20c too

now the new acquirer has 2 coin at 20c and wont sell it for 19c each. but might sell it for 26c each.
and so as time goes by. the price rises due to not wanting to sell at a loss. and not wanting to sell unless their is a gain.
and these gains add up

so passing coin around where the next person to get it will have a higher acquisition cost to refuse to sell below.
..
another metric of value is mining cost.
if it cost just $1 to mine an ounce of gold in your back yard. using just a spoon and coffee filter. then everyone would be selling it for $1.01-$3 as the ''spot price range' of value(NOT the $1k-$2k range)

the reason gold's spot price remains over $1k-$2k is because mining costs are over $900.
no one on the planet is silly enough to sell gold for under $900

98% will refuse to sell for under $1100. and less % the higher the price
what you find is those willing to sell below $1600. if they did sell at $1600 that new acquirer will try to avoid to sell it for less than $1650+,  thus the movement of assets sets a new % of acquirers desire to not sell below a certain value

..
heres an interesting thing.
it wont matter how many coins are on a market deposit balance sheet
it wont matter how much dollar are on a market deposit balance sheet

ever all the btc sellers all communicated that as of this minute everyone should refuse to sell their coin for less than $67k.
even if only one person with $6.70 was to buy coin (0.0001btc).. thats the price the market puts as the price for btc. $67k for 1btc.

ther could be 5milion coins wanting to be sold. and 5 trillion dollars ready to buy(or make up any number of any side)
but if there is only 1 order being placed. and that order was 0.0001btc for $6.70.   then that order makes btc $67k

and one more thing, decentralized Bitcoin is not regulated by anyone. Bitcoins are very unique. become a pioneer of cryptocurrency digital currency that is integrated with the blockchain and every transaction made will not be deleted by anyone.

Bitcoin can be one of two things effectively, when it had low adoption levels it worked well as a currency because the market was so liquid and people were not intent on hoarding it. It's primary usage at that point was still open as a tool to exchange value, as the volatility was more stable and we saw very companies opening up to accept it slowly. As it has gotten much more popular it has morphed, or tipped the scales towards, becoming simply a commodity. Like gold, people are hoping that it will hold its value and slowly increase over time. It still has a very useful purpose of being a decentralized unit of exchange that is not subject to unnecessarily high or arbitrary fees, but that only works at higher amounts. It has much less purpose, due to fees and time taken to validate, as a more instantaneous exchange of value.

This logic make sense but still needs to ask why would people would buy it to begin with. If its only to expect a future profit by holding it, i have hard time to see how it would make sense in the long term.

If you just think you are going to sell it back at roughly the same price you bought it the logic holds.

If you just buy it to sell it back at significantly higher price should really wonder what would really move the market enough from the moment you buy to the future moment you want to sell. If not some form of market cornering that cannot be sustainable in a free market.

And it doesnt account for people who would spend it to buy something which would not directly translate to an euro/dollar valuation. In a bitcoin utopia you would expect a whole economic network around it in sort that it doesnt even hit an exchange with fiat.

And its more like this that bitcoin should develop with the demand as a paiment system with the demand as bitcoin being superior to competitor system.

I dont see any other way that it can develop long term.

Already bitcoin price is highly manipulated due to the limited supply and we call them whales, until now bitcoin is used as an asset or atleast 99% of them so yes its like a collectible item but in future the things will change when we use it as medium of exchange because by that time the distribution of bitcoin is more diluted so it may not be easy to accumulate all of them and collapse it.

there is a point where something has to have a use/purpose/function/desire. yes if bitcoin had no function and was just a bunch of locked assets held forever in a trust owned by a company thats only value was the investment. then prices could go to $0. because no one would have to mine something that never has to move, and has no reward for trying to move the unmovable

but because bitcoin does something (medium of exchange/buy goods & services with it) transferable. and then there is costs of that transfer and security of the asset(mining cost). then no one would sell if too cheap.

EG if mining was $1 a coin. people wont sell it for 99c but no one would buy it for premiums above $2, as they could just mine it themselves(with a little effort)

but because mining is over $30k now in every region of the planet. no one can mine it for less. so everyone would buy it if it ever went down to $31k. preventing it going to $29k because people would refuse selling it for less.

but yes bitcoin needs to have a function/use/reason for people to mine or want bitcoin.
which is why i am a very loud advocate that bitcoin should remain a 'digital cash' and not be pushed into being just a 'reserve/treasury' for custodial services.

(keeping a good reason to mine. and having a reason for users to hold, spend, transfer, invest, buy things. makes bitcoin have utility worth securing).

altcoins on the other hand. that have no real life purpose(cant buy goods) and are mined without cost(pos) can drop to zero.
and many have.
inshort dont hoard PoS coins. there is absolutely nothing supporting a bottomline value of non-zero. PoS can go to zero. PoS is no underlying value and 100% speculative emotion

Yes its a bit the point if everyone just sit on their coin waiting for the value to rise it very likely nothing is going to happen and the price is just going to crash.

if everyone bought at say $6 in 2012. and just hoarded. all them 11mill coins in circulation at the time. never changing hands.
and the market only moved due to fresh mind coins. at mining cost of $200 in 2013 $2000 in 2017  $20,000 in 2021
then there would be 11million coins that would happily sell for anything from $20k all the way down to $6.20 and still feel they have profited.

however if those having 11mill coins colectively in 2012. sold 2mill in 2013
if then the 9m coin($6v) and 2m coin($200) then sold 4mill in 2015($400)
if then the 7m coin($6v) and 4m coin($400) then sold 6mill in 2017($2000)
if then the 5m coin($6v) and 6m coin($400) then sold 6mill in 2017($2000)

its now a market with instead of 11mill able to sell down to $6.20
there is now in 2017 a 6mill support that refuses to sell for less than $2k
so if the price was $2.1k and no one of the 6m2017 wanted to sell yet. then only the 5m 2012($6v) are on offer
and slowly there are less people willing to sell down to low numbers. and more people bringing up the base value

in short letting coins switch hands where the new owner sets new value, helps set new value

i personally use 2 metrics.
mining cost(lowest and highest costs).. and UTXO value at creation(price value when a transaction value last moved)

The problem with most crypto project is they try to fit in a classic financial model with this triangle

Developpers - investors - end users.

With Bitcoin the situation is pretty clear since the beginning , satoshi didnt really get paid for the developpment, there is no known investor, so its supposed to be mostly focused on utility value.

Now most coin try to achieve the three ends of the triangle which is supposed to pay developpers AND investors AND  providing utility value at the same time which look a bit like shrodinger coin.

Satoshi didnt sell an investement model to pay a team of developpers that would yeld some return.

Trying to sell cryptos as an investement can only be a flawed model in the long run imo.

The way i see it, if you see short term you pay developpers with the money, medium term its the investors, long term its the utility value for users.

Most crypto projects see short to medium term. And end up as pseudo ponzi boarding user as pseudo investors to pay back the initial investors back, and the utility value goes down the drain.

In the model of bitcoin its only long term on the utility value.

You are caught up in sophism yourself since you are confusing price with value.
Price can change at any time with irrelevant things. That doesn't change the value though. Value is still decided based on supply and demand, and there will be a reasonable value for everything at any time.

For example a while ago the bitcoin value was above $6k and still due to many reasons (some of the irrelevant) price dropped to $3k.

The whole argument is still irrelevant to the topic you started though. Price varying with different factors isn't a reason to call it a commodity. We have the same thing with fiat. For example during the past 2 weeks our local currency tanked for no reason except FUD and mass panic for about 25%. It is back to where it was today but as you can see price changes like that but the value remains the same. At the same time we define fiat as a currency just like we define bitcoin as a currency simply because of the utility they provide not because of how people treat them (people invest in US dollar these days and make profit from the volatility).

That's an odd thing to write because supply and demand are literally defined in terms of price (and quantity). I guess it would help to  define "price" and "value" and explain the difference between them.

For me, they are basically the same, except that price is a objective aggregate measure of value, which itself is subjective. In other words, something may have a price, but its value to higher to some and lower to others.

It can be used in the chain in an useful buisness as a paiment system ? Like a database or network service ?

Its a digital economy so of course you are not going to build a car with it.

Maybe its like let say an carburetor,  in itself it has no use, but as part of car in use then it does.

Then if you want to hoard carburetors without there are much functionning cars using expecting to make a fortune out of it .. well good luck with that.

Demand is the complicated part of the duo, specially for something that is still in the process of adoption. Demand like value is also hard to measure.
If we define demand as adoption and all that comes with it then it is deciding the value of bitcoin as I said above but if it is defined as the number of buy orders on exchanges then it is deciding the price. I consider the later to be a wrong definition whereas the former is more complete.

This is why price is always arbitrary while value is fundamental. Which means demand (ie. buy orders) can drop on an exchange like it did in 2017 and price can drop down significantly (to 10 cents IIRC) whereas demand (adoption) for bitcoin remains the same ergo value of bitcoin doesn't change regardless of that arbitrary price drop.

Im ok with this distinction but then still if there is some appreciable value and the price differ too much from it, it means someone is making a loss and the buisness is not sustainable in a free market.

Its exemple i took before with asset arbitration with the coffee.

but because mining the cheapest region on the planet is $31k a coin right now and $66k a coin in most expensive region, the value window is within that range.

no one wants to mine and sell at a loss so refuse to sell below $31k
many countries cant mine for $31k as their costs are higher so they would prefer to buy at or above $31k. providing good support to keep prices at or above $31k

no one wants to buy at a premium above $66k as everyone on the planet can mine at or under $66k
so they would prefer to mine-to-sell if prices were near $66k. providing resistance to keep prices below $66k

the 'supply/demand' negotiations sit within this window.
if the price was near/at the top end. beyond good value. then thats deemed 'bubble'

i never treated the $65k ATH and the $69k ATH as sustained value. both were premium hype bubble price that would correct more inline of the window of value

Bitcoin is like currency commodity of bitcoin, bitcoin investment while commodity production and also used for interchange so many peoples used them and using the transaction to altcoin also so bitcoin is commodity market.

Is bitcoin a commodity market. Well, i guess the answer is yes because it can be traded on traditional markets as well as crypto exchanges.

Actually bitcoin can be determined in some many ways It coud be a currency, an asset or commodity either. It is based on what your doing with it.

Bitcoin is not a product to have a production cost that sets its value. In fact bitcoin is the exact opposite of any product, its price sets its "production cost" due to how difficulty is designed to work.

BTW how did you come up with $31k as cheapest? By my calculation I'm paying between $0.0007 and $0.005 per KWH which I don't think there is anything cheaper on the planet and I get a lot lower than $31k.

What satoshi said makes sense. Bitcoin isn't a stock because it has no earnings, no dividend etc.. It certainly don't belong to a company. But is it really a commodity? I mean, if bitcoin is a commodity, then all the other alts are also commodities. Is commodity something you can create in your house? I am not sure about that. It surely has the characteristics of a commodity but... I believe it acts more like a currency.

In other words, you think that bitcoin has some "intrinsic value", that is, a set of unchangeable useful characteristics and properties that make it valuable in itself regardless of the market price and temporary supply and demand fluctuations. These inner qualities of bitcoin are what people adopting bitcoin should be thinking about, but not about a speculative demand for it where a bunch of traders, who primarily care about profit in fiat terms, decide every day at which price it is best to sell or buy bitcoin to maximize their wealth. I agree the qualities bitcoin has, the functions bitcoin performs, the freedom bitcoin may give to people are more important than the market price of it. All other people should think as I do to ensure bitcoin is being adopted for the right reason. However, the problem with "intrinsic value" (if such a thing even exists which I highly doubt) is that it is a highly subjective concept in the first place. The qualities of bitcoin that you consider inalienable and significant may be viewed differently by other people. For example, Michael Saylor doesn't care about the censorship-resistance of bitcoin because no one would censor Michael Saylor's transactions anyway. He also doesn't want bitcoin to be considered a medium of exchange because it implies inconvenience, additional regulatory risks, and uncertainty. This is not to say that I don't like him, I am just trying to make my point. Value is always subjective, it varies from one individual to another and cannot be measured or aggregated at all.

Well it is not just one reason that adds to intrinsic value of bitcoin. People who dump their fiat for bitcoin have seen something in it that attracted them. That may be the decentralized nature (no centralized authority controlling it), or the deflationary nature of bitcoin (with a supply cap) or a lot of other things. Even those who buy bitcoin only for profit are unknowingly doing it for these characteristics since profit is gained due to things like capped supply, etc.

If Saylor doesn't care about censorship-resistance that would be because he doesn't understand what it means, like those who say they don't care about their privacy.

Even if the value is at least partially subjective, it doesn't mean there is no good reason for any individual to estimate the price at this or that based on their own subjective valuation and needs.


Other coins might have their own model, you can find like nushare who had another model, or coins with multiple tokens some pegged to fiat or other, some that are used to represent ownsership or seen as a share, or are not made as a currency or commodity.

Commodity is an object with a use value. In addition, the use value of an object will create an exchange value, which is modified by market expectations. The buying and selling value of Bitcoin is completely determined by market expectations. Then, the value of the dollar is expressed relative to other goods and currencies. While the value of Bitcoin is only determined relative to the value of the dollar. Basically, the rules set by the government aim to protect investment users in order to avoid fraudulent investment products that will harm society. In addition, these regulations will later help the cryptocurrency business grow and be better directed.

I think we are just coming back to the whole gold vs bitcoin debate here and the thing I keep coming back to is that bitcoin is a commodity, a currency and other things. It really can’t be defined. In my opinion it’s in an asset class all of its own.  I also believe it’s a hedge asset, as many people are using it as that (maybe not as stable as gold but more upside).

I agree with you, Bitcoin is hard to explain if it's a commodity or a currency or whatever. However, if we follow as Satoshi said, Bitcoin is a commodity. when we make BTC a commodity, there will be no threat to FIAT currencies in any countries. Like in my country for example, if BTC is considered a currency, then BTC should not be used in Indonesia. However, since it is a commodity and accepted by the government as a commodity, it is legal to trade BTC. So, in the end, BTC is BTC, where its function will be different according to the point of view of each individual.

I just finished reading the whole thread it was very interesting.

The prediction of the OP was still very good so far that the model would make bitcoin fail as a currency because of the high investibility that would encourage people to hoard it and benefit from it as a pseudo pyramid scheme than using it as a currency.

The symptoms he described as people would only buy or sell it with a sweat of anxiety being extremely fearfull of sudden price move in one direction or another loosing sleep over trading chart rather than quietly using it as a currency to be spent to buy things as it was intended has fully realise.

I dont think this was the intention i see more the dynamic as it was the only option to launch it initially is to leave the potential for a huge profit to attract new users and it would probably never have taken off without this, with the halving increasing as bitcoin take popularity and risk of it being abandonned diminish. The fact that the coin he mined didnt move tend to proove this intention.

Knowing that i didnt see any counter argument against the logic of hoarding it as a speculative asset is just going to a dead end in the long run, as the utility as a spending tool goes to zero and the ever going demand based on prospective of making a future profit on the sale cannot be sustainable.

It cannot even really stabilise its funny to see people making this argument when btc was at 10$ saying it will probably stabilise latter as it gain traction but not at all, even at 50k$ and billioneres getting in the game its still the same yoyo of sudden bursts and crashes.

Some people described the mecanics of this very early actually. If there is no incensitive to spend it and only to hoard it waiting for the price to increase it can never be stable and only go through yoyo of bubble and bursts until it finally crash because it cant be told to be a good store of value with such speculative hoarding use without any value added, can never stabilise even a little, cannot be used a currency either and in the end going to be sacrified for all intent and purpose in the name of short term greed.

Maybe im a bit pessimistic but i dont see how the situation could evolve otherwise.

As a viable currency or even a store of value it should behave roughly as a commodity but clearly its not and probably never will.

I agree with you, bitcoin now has many functions in the crypto world. bitcoin when interpreted as a commodity, then bitcoin is included in a commodity asset, but on the other hand bitcoin has been used as a legal medium of exchange in several countries, so bitcoin is included in the category of legal medium of exchange.

1. seems you are still unsure of what a pyramid scheme is..
a pyramid scheme is where when something is sold at the end customer. there is a trail of people above that all get a % of that customers funds.
in bitcoin one person has it. one person buys it. its an asset swap not a pyramid,
if i sold my coin today, the person i got my coin from years ago does not get a % of the funds of my sell to a new person
bitcoin is not a pyramid

2. seems you are still unsure of what commodities are..
a commodity is a raw material used to create other products.
and asset is different. an asset holds value by-and-for its own unique features as-is. not its future different product.

bitcoin is bitcoin. its nothing else and does not become anything else. so its an asset. valued on its own merits/features/cost of acquisition

This logic is always moot, its like if i say i will start to hoard rocks, supply and demand the value is subjective someone is going to buy it at 100k. My rocks are like no other rocks. Does it looks like a sound logic to you ?

The fact that this behavior was anticipated this the very beginning, seen by satoshi hal finney and other since the very beginning show that its no different from any other market that existed before since market exists.

Either it takes off as a currency spent to buy good or it dies in the long run, or just become a niche for gamblers and crazy speculators spending their day on trading chart trying to figure when to enter and leave at the expanse of others in a null sum game.



And historically all currencies arose from some kind of commodity backing. Its not even the way its used but how its supposed to behave as a market.

The two kind of people i saw saying this model is ok are :

1. People seeing the pyramid scheme potential rubbing their hand seeing they are going to make millions as eraly adopter. As of today most of the post i see on this board are people still behaving as early investors in a pyramid scheme.

2. People who are more sound and rational saying that it doesnt make sense in the long run to use it this way, that early adopter can behave like this and it was more or less on purpose to give an incencitive to early adopters but the only way that make sense in the long term is the adoption as a currency with a dynamic roughly appraoching a commodity market.


Otherwise its only people playing hit and run with enter/exit strategy to extract a quick profit out of it which cannot last for ever and makes unusable as a currency which is the only way forward in the long run.

That was the first impression of the creator and also the people around but, it changes a lot this time, people are now considering Bitcoin as a huge investment and a moneymaker like stocks in the market. Even though it wasn't the purpose of this creation but that is now how it was meant to be. Whether it can be a commodity or not, people are giving hope for this, and eventually, it is.

It can be somehow a very important thing to the people and can be part of their life. And it can be more valuable in the future when it happens that it was officially considered as legal tender.

An investement in the sense something that grow in value can only happen if some value is created along the way. Hoarding them on an exchange with hit and run strategy doesnt add any value to it. On the contrary.

And it can never be recognized as legal tender by anyone a little bit serious as long as this tendancy dominate the market.

Giving hope ok look like make-believe fairy tales if it doesnt add a value in a buisness or another.

Nobody wants to use it if they needs to loose sleep and spend their life monitoring trading chart fearfully watching every move. Its the perfect definition of a very bad currency.

Merchants are not going to make their accounting on a daily basis, maybe every month or mostly every year when they fill their tax declaration. For the vast majority they wont spend their life on a trading chart to know if the last transactions is going to make them rich or bankrupted.

bitcoin and golds value is not just 'its a currency or jewellery'. its value is also from its cost of acquisition
if you could mine gold or pick up rocks for just $1 in your back yard. and anyone could do the same. no one would pay $2000 a ounce for it. the most they would pay is $2 premuim to avoid the sweat, dirt of getting their hands messy.

because gold costs over $900 to mine. thats why people pay atleast $900. and no one is foolish to sell gold for less than $900.
the reason why gold cant escape above a $2.5k ATH at the moment and bitcoin cant escape above a $69k ATH at the moment is because everyone on the planet can mine for less than a certain premium and so would stop buying at a certain peak because its cheaper/more convenient to mine.
gold has a value window based on acquisition cost of $900-$2.5k, bitcoin has a value window of $30k-$70k

yes if bitcoin becomes useless as a currency then the desire to maintain bitcoin will  drop. miners will want to maintain(mine) something else. and slowly with only a few miners left getting high% of the reward for less effort. the costs come down and thus the value comes down. which is why having utility is important. but its the secondary to its underlying value(cost of acquisition). there is a relationship between utility (desire) and mining(supply). but the value(price) is more linked to the acquisition value range.


again you say "commodity"
a commodity is a raw material used to create other products
oil=fuel/plastic, beef=burgers/steak, wheat=bread/cereal

gold is yes a commodity but its also an asset. gold sits on 2 markets.
dont confuse golds mining/currency reserve/investment (asset class) with its jewellery/electronics(commodity class)
bitcoin fits similarly to golds asset definition.. but bitcoin no way fits into golds commodity definition

as for saying its a pyramid scheme(facepalm) well your listening to the wrong 2 people. whichever one calls it a pyramid scheme. stop listening. and instead learn:
no one gets recurring income from the sell of bitcoin.
there is no bunch of investors all depositing into a central pot that paying out monthly interest/dividends
there is no 'team' of downstream or upstream lineage of investors getting paid by a downstream seller
its not like when someone sells coin. he then has to pay 10% to his supervisor, and 8% to their supervisor

who ever owns the coin and sells the coin keeps the funds for the sell. there is no pyramid 'sharing' of revenue structure in bitcoin.

early adopters/hoarders (not selling) have no impact on the price because they are not the ones making offers.
bitcoins price is only from those selling at the price they want to sell at and only they get the income of that sale

Well its satoshi who said its like a commodity for many reasons, he must know something about it, he made it no ?

I can try to pull all the substance of the several 20+ pages thread ive read that contain discussion with satoshi hal finney and other people at the origin of bitcoin.

The global conclusion is that either its supposed to be used as a currency, either its just a bullshit scheme for pseudo investors to scam each others in a null sum game out of empty promises.

And sound monney is aligned with gdp, commodity stream. Its not an asset class store of value, gold reserve or whatever. At best like some flacky art piece sold anywhere from 1$ to 100$ depending on the mood and amount of monney to launder.



Yeah you are right its what is called a pyramid scheme, but what meant is more like greater fool scheme, where the same things is sold over and over again at higher price each time someone being ripped off a bit more.


If its a one time thing ok, then if everyone is only buying it to hoard it and only wait for the best time to buy / sell all the time waiting for some hype campaign to make insane profits of course its going to have an impact on the price. And it can only ends in constant price rouler coaster, while people start to hoard then play greater fool scheme 2, 3 , 4 ,5 times until the price crash and here we go again, its the same loop for 10 years. With almost zero legit use in commerce as a currency, while its this same thing sold each time as the future source of profit, that its going to be world currency, replacing fiat etc etc

Fear greed in crypto.plot

https://www.carnfieldwebdesign.co.uk/category/bitcoin-fear-and-greed-index/


A market mostly driven by emotion in a constant roller coster cannot be told to be a good asset / store of value.

this is where again value and price need to be realised as different measures.

golds bottom line value is ~$900. no one wants to sell below this because the cost of mining gold is higher then this. and years of buying gold has raised its current owners acquisition costs to also be over $900

same with bitcoin its bottomline support value is about $30k.

the premium (point no one wants to buy above) is gold:$2.5k and bitcoin $70k

the PRICE. of gold sits somewhere in the middle of $0.9k-$2.5k.. and yea the volatility of the ups and downs within this window where the price bounces up and down is the market sway of emotion.
but thats not to say gold has no underlying value either economic value or utility value

the PRICE. of bitcoin sits somewhere in the middle of $30k-$70k.. and yea the volatility of the ups and downs within this window where the PRICE bounces up and down is the market sway of emotion.
but thats not to say bitcoin has no underlying value either economic value or utility value

bitcoin has more utility than many crapcoins(utility) and also because its PoW instead of PoS, bitcoin has economic value.

i would agree your assertions of pure emotional sway of markets and things going to zero apply more to crap-PoS coins. but bitcoin is different to those. for many many reasons

what you need to realise is.. the store of VALUE (value) is not the current $43k. its store of VALUE (value) is $30k+
where at the moment the extra $13k is yes speculative emotional premium, speculating the store of VALUE(value) will eventually reach more then their early purchase of $43k

stop imagining the PRICE as an equal VALUE line. and realise there are differences.

EG milk, each week it can go up and down in price at a retail store.. in the UK we have it going from £1-£1.50($1.37-$2.06)
what is deemed as value to an end users is when its near to the £1($1.37). and when its premium its nearer the £1.50($2.06)
this by itself, this swing in current retail prices regularly is not enough to call milk a pyramid, your thinking: because a farmer sold it for £0.40 to a pasteurising factory, who sold it for £0.47 to a distribution centre/wholesaler who sold it for £0.57 to a retailer. who sold it to a customer for £1-£1.50

a pyramid is where when things are sold at the bottom the money moves up the levels.
EG customer pays retailer who then pays wholesaler who then pays pasteuriser who then pays farmer(in backward reward)
a pyramid is also from top down. 1 recruit 3 who recruits 9 who recruits 27
there is no 1 3 9 27 split of different people who benefit from a sale.


with anything sold in retail. its just money between buyer to seller.
and also, art is an asset..
art is not a commodity. nor a pyramid

seems. you are not yet willing to consider things.
you want to call bitcoin a pyramid (backward paying reward program scam)
you want to call bitcoin a ponzi (share investment treasury scam)
you want to call bitcoin a commodity (raw material used to make products)
you want to call bitcoin flaky art (asset)

can you atleast make your mind up on one?

I agree with some of your points, OP, but not with your pessimism.

The primary reason people originally hoarded Bitcoin is because of the estimated worldwide adoption as an international currency; if you got BTCs for a low price as an early adopter, you could be always sure to make a huge profit if this happened. This has changed a bit since then, now there is a significant part of Bitcoin investors who simply speculate on "catching the best moment" to buy and sell.

At the same time, there are some indicators that seem to show that Bitcoin is now even less used as a currency than, let's say, in 2015-2017. For example, in some countries there are less merchants accepting it, and there were also events like the failure of OpenBazaar's dev team OB1.

I also agree that this tendency, if it should continue, is bearish for Bitcoin, because of the reasons already explained by you and various people here, particularly odolvlobo here (https://bitcointalk.org/index.php?topic=5380519.msg58940304#msg58940304). As an asset which generates no cashflows, and with an "intrinsic value" very difficult to grasp, the best fundamental indicator we have is the Quantity Theory of Money; i.e. adoption in terms of the number of transactions. So if this indicator is not clearly rising and thus indicating an adoption "as a currency", Bitcoin will continue to be a speculative "collectible" with pretty clueless investors guiding themselves primarily by superficial technical analysis (and such "fundamentals" like Elon Musk's tweets), and there is always the danger that at some moment nobody wants to be the greater fool (https://en.wikipedia.org/wiki/Greater_fool_theory).

But still, nothing is lost - at the contrary there are reasons to be optimistic.

One of the biggest indicators that the "currency" usage could come back eventually is the adoption of the Lightning Network. It grew very steeply in 2021, now it grows slower but still steadily and much more pronounced than before 2021.

Lightning adoption is bullish for two reasons. First because the main use case is trading goods and services, and not hoarding (for hoarding, on-chain txs are better/safer), and second, because value is frozen in LN channels. These Bitcoins can of course be unfrozen but they will probably stay there longer than in a "normal" UTXO and thus unavailable to "hoard and sell" speculation.

Then there is the movement of states adopting it as legal tender, with El Salvador, which also should boost "currency" usage.

There is also no reason to "not" spend Bitcoins if you think it will go up more. Simply spend it and re-buy, you will be strengthening its ecosystem and network effect.

The best case scenario would be that Lightning/currency usage would continue to rise and eventually (most likely in a couple of years, not in 2022) become the main use case for Bitcoin again. Speculation will always exist, but if currency usage increases, this should result in a more stable price, even more so if eventually "fixed prices in Bitcoin" become a thing so you can anchor the value of a BTC to certain goods or services.

So a virtuous cycle could evolve: Bitcoin becomes more stable but still attractive as an investment, and as it stabilizes, it becomes also gradually more usable as a currency.

But pow is not a production cost, you can mine exactly the same amount of bitcoin at the exact same rate with two rasperry pi for 3 cents a month. Its a proof of work used to solve the byzantine général problem, fondamently bitcoin cost nothing to produce. Therefore it has no bottom value.

The pow adjust with the economic value of the network to avoid 51% attacks not the other way around. That's where you reasoning is fondementally flawed.

Currently clearly its more like a cheap pop star or flacky art rather than gold that has been used a store of value since antiquity.

The main difference i see between bitcoin and a regular commodity is that a regular commodity's price is aligned around production cost, whereas bitcoin is the other way around which is the production cost gravitate around the demand's price.
[/quote]

The main difference between bitcoin and commodity is bitcoin is. a virtual currency while commodity involves buying, selling and trading of raw products.

Well lightning network is different than bitcoin its not to put a coin in the franky box, but its much more complicated than bitcoin, bitcoin is fundementally simple, 3 people in the world can install a node, and they will be able to run the network, have an address, mine it and make paiment in a secure manner. Nobody needs to be tech savy, have any preeixisting fund, nothing needs to be locked or anything. And you could have roughly the same functionality with an spv wallet or such.

Plus LN wouldnt change much to the problem of volatlity and speculation games.

And i dont think the "scaling problem" is the issue at least for e commerce a delay of even 1h is still mangeable, even paypal can have similar delay. Its not likely the order is going to be processed in the minute on an online platform and some internal token can be used with bulk paiment if you really want to attract compulsive buyers. I dont think its really the deal breaker here.

For real shops maybe more and still there is also an old thread where satoshi talked about the soda machine where this kind of problem is issued. The vendor could check on the main's mining pool to see if the transaction is in their memory pool, in theory there should be relatively safe way to prevent double spend and work around confirmation time, especially for small paiments.

In theory, I will not complain about this, because consciously or unconsciously it can be justified. On the other hand, they can now be said to be a useful medium of exchange in several countries, including those who have adopted it.
actually for the commodity itself it is a tiny fraction of bitcoin now.

so much wrong again..
sorry but someone with 55petahash and someone with 110terra hash is not going to get the same bitcoin reward amount.

you are not going to earn 6.25bitcoin using a raspberry pi for 3 cent a month.
you are going to get a couple sats.
and you will calculate the cost:reward as such. where by someone with 55peta is going to get more based on his work

EG with gold
if you had 2 people in the same quarry digging for gold. the guy with the expensive excavator and sluice machine will earn more gold, than a guy with a pickaxe and a sifting dish.


..
im starting to think you entered this crypto sector via PoS crapcoins and that set your narrative of crypto when you didnt get your promised "get rich quick" . and now angered and jealous you are now trying to say crapcoin PoW low hashrate but bubble inflated value.. and PoS zero cost/loss reward income narrative, applies to bitcoin too.

sorry but crapcoins have a whole different valuation,. utility, cost economic model
(oh look, your first forum post (https://bitcointalk.org/index.php?topic=1766020.msg17636195#msg17636195), is you doing a scammy ICO for a PoS crapcoin.. not surprised)

The first bitcoins were mined at higher rate than today with 3 cpus. there is no minimum amount of work to pull out to mine a bitcoin, it's only relative to the network economic worth.

and gold in the times of the egyptians, romans and even upto the american wild west, were done via pickaxes finding gold nuggets the size of potato's

but now its more gold dust requiring shifting tonnes of dirt per ounce using excavators

someone with a pickaxe today will not get the same reward as someone with a excavator and sluice machine today.

there is actually minimal work. its called the difficulty.
you have to processes trillions of hashes to find a block solution.

at todays cost
a raspberry pi will take decades to get lucky.
a mining farm of 500 asics will find 1 a day.

a pool(gold quarry) could combine loads of workers and combine efforts, but a single worker doesnt get the whole reward... its shared based on work done. (division of labour) so a small worker will only get a few sats for his few penny electric work

i know your stuck in the PoS narative that the only sole user that signs a block gets the reward, but bitcoins PoW is nothing like PoS solo signing

But its the network value who is driving the hashrate up not the otherway around. Bitcoin could work perfectly with a total market cap of 1$ and 3 raspberry pi mining it. You would have exactly the same amount of bitcoin being mined at the same rate.

what you actually find is that. the price is affected by hashrate and also blockhalving(that affect miners costs)

in 2013 when asics first came online the price went __/ shifting the 'value window' up to levels where people thought its worth buying bitcoin at higher prices before previous due to the new higher costs of mining are more expensive/inconvenient to mine.

when hashrate drops and cheaper to mine because less people share bigger parts of the reward the price goes down
in 2021 when china banned mining the hashrate went down from 165exa to 90exa. and the price ^---\

..
yes in some expensive hobby mining scenarios of little guys they choose to switch miners off after a price dip(react to price within window). but for the large mining farms. they continue to mine and they affect the window.

all of which fit into the relationship between the speculative price and the value window.
the price within the value window speculates up and down between the min and max value depending on the emotion of individuals. but the value window itself(currently $30k-$70k) is set by the mining cost/cost of acquisition

cheapest mining at 4cent/kwh is $30k bottom value. and most expensive(germany/japan) at 32cent/kwh is $70k

all emotional speculation of price volatility sit within this value window

It would make no sense for miners to expand more energy per block than someone is willing to pay thinking it would increase the value. Bitcoin price will not double if miner decide to buy twice more asics. But the hashrate will surely decrease if bitcoin price fall down.

you seem to not grasp the value window vs the price..

but then again. in this topic you also failed to grasp
what a pyramid is
what a commodity is
what an asset is

so its either best you go spend some time using google to research economics. or just take some time to re-read things over again, because you either missed some crucial things.. or just unwilling to learn.

if you want to know why miners increase their asics

countries like russia/iceland which have cheap electric and are at the bottom end of the window of $30k can afford to increase hashpower and still profit because the price is above the bottom.

this extra hashpower then means other miners get less reward for their work. meaning their costs increase.
meaning for instance japan/germany at 32cent/kwh have a increase of their cost per coin that would extend above $70k current window top.

also for instance europe/usa have a increase of their cost per coin due to the hash competition that would extend above their $41k cost meaning they are more inclined to buy at $43k if their costs surpassed the price.

some euro-americans already do prefer to buy at $43k now instead of mine at $41k because the effort in buying an asic, setup and having a noisy, warm home 24/7 is not worth it so they would rather pay a slight extra to get coin now rather than mine slowly
you may have noticed with the prices why there is some support stopping it dropping below $40k to head to bottom $30k. and why there is resistance of topping more then $45k to head back to $70k
this is because alot of american miners/traders are hopping in and out of the mine-to-sell vs buy-to-hold threshold of american cost of acquisition support in this price area

also while those in japan/germany($70k cost) are already more interested in buying at $43k rather then mining at $70k+
they are adding to the buy support to keep prices up

and with the bottomline value regions who can sell. as they increase their asics they are less willing to sell and instead hoard for the price to move up due to the value window adjustment

and so the buy support offsets any sell push. and the price moves up.

this then when the price moves up, makes those at the bottom value that can afford to mine no matter what market conditions are, can increase their asics again.. and so the value window adjusts up. and the price within the window moves up/down depending on the individual emotions of different regions

..
i do understand your anger.
its obvious that your jealous, upset, resentful that you didnt get rich from PoS ICO scams, and though that experience set your narrative for what you think crypto economics is like. you now turn to an actual working economic model of bitcoin, but seem to not like the fact that bitcoin has a proper economic structure, or not understand bitcoins economic structure.. and so want to flame war silly stories of how bitcoin must be pyramid, commodity, useless. purely out of spite that you cant get rich for low cents per day cost like you were promised on PoS ICO scam promotions

sorry but bitcoin is nothing like ICO's or PoS coins

The Bitcoin node software (and generally: all digital wallet software solutions) hides a lot of complexity. There is also Lightning software with a similar usability. I don't consider that a problem for adoption.

I don't say it can directly "solve the problem", but it can lead to more acceptance by merchants and users, and thus lead to the virtuous cycle I described in the last post, where Bitcoin can stabilize and slowly become more usable as a currency, and thus "sustain its value" over time. Not only because it's instant, but also because it saves lots of transaction fees (there are still fee peaks where you pay >$5 if you want an 1-day confirmation, and this problem will probably increase in the future).

Even worse: without LN or other scaling solutions like sidechains and statechains (which are still in prototype/idea stage) Bitcoin won't support an increase of more than 50% in terms of transaction density compared with now. Layer-1-TPS, even if it could be increased to let's say 20 or 30, is simply too little for worldwide adoption as a currency. (And no, I don't want the 1 MB/4 MB block size rule to be removed. It is important to keep the network safe and open imo, but that's a completely different discussion).

I'm not an unconditional Lightning supporter, for example I support also Paul Sztorc's sidechain ideas (https://www.drivechain.info/), but I think it is a big piece in the puzzle leading to Bitcoin adoption as a currency.

You dont understand anything and make wild assumptions based on not much more than bitcoin price. You should Google a bit more instead of listenning to the wrong person or the wrong voice in your head.

Making ad hominem argument is easy. Making real argument much harder.

I never participated in any ico or being advocate for pos.

The bitcoin econmic model is as a paiment system. Either its 1$ market cap or 3 billion doesnt change anything. Making it only based on bubble roller coaster for that peope can get rich out nothing but techno babbling and hoarding is not going to lead anywhere.

What i would like it to be is a functional paiment system as it was intended to be not a get rich quick scheme based on empty promises, bubble, and techno babble fomo and so on.

Otherwise it has zero interest for me but have fun selling your bitcoin bubble scam to relieve yourself from your frustration, looks like someone needs to compensate for something ?

 

thats what bankers said when offering bank promissory notes 'pegged' to gold in the 1900's.. and now gold is not a daily use currency nor are bank notes pegged to gold.. and the wild west gold rush is dead

just watch out for the PR of "you never have to close your LN channel you can just rebalance"
"you dont need to settle to get bitcoin its expensive fee, try an altcoin settlement via atomic swap"

its the old banking game.
"dont take your gold out to move banks. here have a cheque wrote to another bank"
"dont take your gold, here have some brass, nickel and copper coins"

---

Re: [ANN][ICO][ADX]Iadix Coin POS Purenode HTML5 Blockchain, Starts 15th Feb.

you literally made an ICO of a PoS coin using your own username as the coin designation.

Its some friend who wanted to do this but the goal was not to do a pos coin, if you read well you will see i pulled from this project, and if you look in the newer thread you will see what it is. This thread is dead for years lol for the moment its still hybrod pow/pos because its a testnet and i dont want to spend elecricity to mine a testnet.

And if you dig deeper like on my steem account you will see ive been critic of ico for a while. And i still say this in the last post of the newer thread which is more what my plan was since the beginning.

Its my friend who wanted to make this ico thing but then when i saw their plan was just to make shitcoins to sell poker chips i pulled out. Moved the github, changed the name, it was not my plan at the begining.

If doing an ico with a pos coin was what i wanted to do because im so frustated with fomo i would have kept going with this thing with my friends. I had the opportunity to do it but i didnt.  Nobody got hurt, i pulled before some real monney was engaged but its not me who wanted to do this.

They are people i lived with for years im still in contact with them but im not doing any project with them anymore.

And im still on this position since the beginning, selling crypto as an investement cannot work. And can only ends in scammy scheme and people loosing monney. Which is why i didnt do an ico. And still have no intention to do one more unless i find a good manner to represent an investement as a share/ stock or something. But for the moment the only scheme that can really work is seeing crypto currency as a paiment system, not some investement, store of value asset shinny gold to sell a bubble or whatever.

But it is a bit off topic if you want to discuss this project go in the proper thread ;)

Even if the transactions volume is a problem for large scale adoption, already can see 75% - 95% of the volume is the speculative use on exchange from people expecting a high return on their stash, which is also what is driving the price up, and energy use for mining very high.

But even so the main problem i see is even let say tomorrow there is a real organic demand as a currency based on a sustainable economic value, then the price is going to rise, the hoarder are going to cash out and crash the price.

Meaning anyone who want to really pull an use as a currency has to pay the hoarders lords waiting for their lambo without bringing any value to the network which is currently maybe 90-95% of the economic value today.

And then you are still going to have the crazy price / sentiment roller coaster of people seeing this as an investement mostly depending on hype campaign and techno babble, price manipulation, bubbles and bursts and only wanting more of this. Waiting some third world country to crash their economy and adopt bitcoin to cash out their profits.

And lightning network or any scaling solution is not going to solve this.

just because it needed people to buy 10,000btc to buy 2 pizza's in 2010. does not mean with the price rise people need to buy the same 10,000 coins now for 2 pizza's.. where you think that means it costs people $430,000,000 to 'pay the hoarder lords' for 2 pizza..
you are wrong.

in 2010 it cost $25 for two pizza's..
in 2022 i can still pay $25 and get 0.00058139 and use that 0.00058139 to get 2 pizza
i can still use bitcoin with $25 to get $25 worth of pizza.. nothing has changed

i know i know. in egyptian times pharaohs only needed to pay for a whip to slap 1000 slaves into getting the pharaoh 50kg of gold.
now it costs atleast $1.5mill in excavators and sluicemachine and labour to get 50KG of gold.
but in the days of pharaohs. a slave would only get bread for 50grams of gold(1.76 ounces)
these days you can get bread for 0.02grams

you dont need to pay lords or pharaohs for their 50kg of gold or their 10000btc. you can buy miligrams and sats

..
your argument is based on you just wishing that you could still get 10000btc for $25 today, and upset that you would have to pay $430k today for 10,000 or only get 0.00058btc for $25

well im sorry but houses in the 1950's may have sold for $5k. but now they are worth $250k, you cant travel back in time to get a house for $5k. and if you could the only reason why you want to go back in time to 'beat the economy' is because you want to 'get rich' like the people that realised real estate economy bitcoins economy before you did.. dont hate it..
just accept you now know about bitcoin and know bitcoin will be around for years and the economics are still the same meaning you can be a hoarder too now and take your $25 (0.00058) and get more for it in the future.

here is a thought.
instead of being jealous of early adopters for taking the risk of the less known asset from years ago.. instead be proud of the risk they took.

if there were 2 people. 1 bought into a PoS and 1 bought into a PoW. they would both on day 1 be taking a risk on the future potential.
however by use of their example you can see the PoS investor failed and the PoW investor won. and so with this test you are now more risk averse to PoS and more safe investing in PoW.

yes PoS economics are not the same as PoW and it has now been proven by early adopter example to be the case

My argument is not based on this, your argument is based on false assumptions and projection. I dont care about how many bitcoin i have at which price if the value is just going to be a roller coaster made of bubbles and crashes every two monthes, requiring to spend my life on trading chart to know if its going x2 or /2 in the next week. Again i have zero interest in those scheme. The rest is your imagination and projections

Hoarders just make the circulation if Bitcoin decrease, which isn't a bad thing necessarily. Just means the coins in circulation become more valuable. People have also been concerned that the ~21 million coin cap (minus the coins that are permanently lost) isn't enough for global adoption.  The number of coins doesn't matter, nor does it matter if the coins are finite. As long as some portion of the total supply is in circulation, the price will be adjusted due to demand.

I wouldn't anticipate hoarders to cause BTC's price to fall. I'd think it'd have the opposite effect by causing demand to increase.

The demand ok but for what purpose ? Hoarding it again to pull the price up again ?

market price is not dependant on the 19mill coins in circulation(hoarded or lost)
its dependant on the small amount of those 19mill that are actually traded(on market orders, deposited in exchanges)

yep market price only changes when orders are actually filled by actually having coin on the market.

the hoarders refusing to sell are not affecting the price. because they are not selling.. they are hoarding.
heres a few motto's for you:
a price does not move without a sell
for every seller is a buyer
buyers and sellers work together to make/set/change a price

yep buyers and sellers affect the price. not hoarders

its not hoarders philosophy you should interrogate. its the mindset of the day traders. and what 'value' they see as their purchase/sell limits.

once you grasp this concept then you can move one step closer to getting your answer answered about how markets and price valuations work.

so take some time to understand its the markets that are involved in the market price. and users in the market that decide on a value window by their collective emotions and limits that set the window of value for the price to speculate inbetween.

i have a nice hoard from 2012. and IF i were to put my coins into a market i can(then and only then) affect the market.
but guess what. i am not affecting the market. because i am hoarding

so try to understand the values of those who actually are on the market
i already gave you a few tip-bit examples of things you can research into in previous posts.

and i strangely know you will probably not want to seek and answer, and just want to slam insults just to enforce your pre-formed opinion.
but please just give it a try, research some options. and then you can either verify your opinion or change your opinion. just dont fear testing your opinion, with worrying that your opinion might be wrong.

---

out of curiosity.
is your understanding of what you feel as the way markets work, based purely on your experience of commodities.
where you see any commodity in circulation, need to be sold in X days.
is that why you dont like hoarding, because its not something you experienced.

is so, the only reason no one hoards beef, milk, orange juice, coffee beans.. is simple.
those commodities have a shelf life. hoard them too long and they go rotten

this is another reason why bitcoin is not a commodity, but an asset. because it has no shelf life forcing it to be sold quick.
(other crapcoins have 'demurrage' features, where bits of coin are lost if hoarded)

but bitcoin is not trying to be a commodity. its an asset. and assets are suppose to be owned long term

But they are hoarding with the sole purpose of selling it at higher price to make a profit .. But this dynamic was studied since the beginning, bitcoin has a strong appeal to bubble, for the reaons that the price is completly flexible, that it's deflationists with less and less being mined over time, and the value is indexed on nothing. So there is always this expection that the price can increase in the future. But if it's the only reason to buy it, it cannot work in sustainable manner. The only way it can gain sustainable value is if there is a legit demand for it's utility value as a paiment system.


But the two are completely related, hoarders only hoards because they are also traders and waiting for the good moment to sell with a profit. They don't just hoard to have a nice bunch of shiny coins on their wallet to put on their shelves as a decoration.


Well i have experience in many area, my understanding i think is more based on how stocks as investement gaining value really work, because i learned this with people with 30 year of experience in wallet street market, from the old school of thought akin to warret buffet. It's even the question that was asked in the thread where satoshi answered, it was are bitcoin like stocks of investement, and it's not.

Commodity can also have long term value, think about furnitures, maybe cars, but the main point is that they have utility value, and their price is mostly made out of their utility value. Unlike stocks whose value is appreciated on a future potential. When you buy a stock, explicity you are buying something that doesn't yet exist and still has to be created. Hence why there is a risk in stock investement, and also why it can rise in value, eventually a lot if the thing being created out of the investement bring lot of utility value with royaltees and no competition.

Bitcoin is not a commodity maybe, but the point is that in the context of asking if it's an investement like a stock, the answer is it's more like a commodity, because it's value it's mostly derived from utility value. It's the only way it make sense.

As an "investement" the profit can only be based on unsustainable various kind of great fool games, ponzis, highly speculative bubbles and burst with a value based on nothing solid at all. The mining is not the value of bitcoin. Nobody would pay for a bunch of hash. The value is derived from it's utility value as a decentralized paiment secured by pow. The pow is a mean to an end, not what the value is based on.

i have coin.. not just to hoard, but to spend too. i pass it to another person on the blockchain. without me having to use a exchange market. my utility of bitcoin and my hoarding of bitcoin does not affect the price of bitcoin, due to my activity/inactivity(both not market order related). bitcoin is not just a 2 option, hoard or market exchange. its also personal swaps, and personal lock-up for altnets, where altnets then move value in different currency.
you can be a trader on things like localbitcoins and not affect the market price of coinbase/binance

what affects the market price of the viewed PRICE of bitcoin is the trades that happen on the prominent exchanges.

i can if i chose to. lock up bitcoin(hoard) peg it to an altnet. use the altnet to swap for an altcoin and change the altcoins price on a prominent altcoin exchange. without impacting bitcoins price and without moving bitcoin after the lock. thus appear as if bitcoin is still being hoarded, yet my 'funds'(wealth) have moved on.
and whomever i locked my bitcoin into. then has an acquisition cost of today. meaning he wont sell today at 0 profit.
and i certainly didnt(in hypothetical scenario) sell my bitcoin. so the bitcoin that i was hoarding for ~10 years is not now deemed as valued at its 10year old value. nor has this allotment changed the bitcoin market price.

so as you can see there are alot more nuances, and depth to value and price and what effects both

you dont buy furniture or cars on the commodities market.
you buy beef, oil, wheat. raw materials.... which later (after market) become products (assets/stock)
you mention cars.. so steel, lithium, oil would be the commodity, which later after market is used to build a car


bitcoin is a new asset class that has many functions. it can fit on the forex(currency) market. it can sit on the investments stock/shares market(ETF)
but it wont be a commodity in terms of a raw material used in production of another product.


also. you mention "value derived".
pick anything. lets say milk(again)
a retail customer may value milk at between £1-£1.50 as thats the value window they expect to all pay somewhere in between.
the price however changes due to the retailers choice to sell it at good value(near £1) or sell it at premium(near £1.50).
EG all retailers refuse to sell below £1 and all customers refuse to buy above £1.50

the reasons to sell it at different prices(within the value window) can be things like:
+greed(profit)
- wanting to gain more custom
+higher production cost from farm
-lower production cost from farm
+higher acquisition cost from wholesaler
-lower acquisition cost from wholesaler
-just have so much and its time to get paid for what they have, even at cost

also on the flip side of the market offer, the buyer might only want to buy:
-cheap out of greed.
+pay a premium if its something they need and cant get cheaper by other methods.
+pay a premium because the other methods are not easy to get to

but these buyer/seller PRICE negotiations happen inside the general value window of £1-£1.50
yes one week milk might be £1.20, the next £1.40. the next £1.50 and then offered at 20% off(back to £1.20)

but on the outside of the box economics. right now the milk value window is £1-£1.50.. where as 20 years ago it was £0.60-£1.. where by the PRICE was fluctuating within the window of 20 years ago

I don't really see this danger.

First, there are many hoarders, all with their own entry point and "desired ROI". Many of the early adopters from 2010/11 already should have cashed out 90%+ of their holdings. So there are always some cashing out, some buying in.

Now imagine adoption grows further and further. While some will cash out "the traditional way" on the way upwards, there will be many who will prefer holding. Or even better: trading their BTC to goods like houses, cars, gold and so on. If there is enough adoption, then this will not hurt the price: it will strengthen BTC as a currency even more as it will begin to really circulate.

One advantage even for holders who absolutely don't give a f* about Bitcoin adoption which could bring them to "cash out" buying things directly with BTC (and thus, strenghten the "currency" aspect) is that there may be less (or none, like now) KYC/AML measures than if they cash out via an exchange.

And I bet that only a minority would cash out everything, most will cash out, let's say, 50-70% of their holdings at each major price mark - e.g. 100K, "gold parity" (400-500K), 1 million. (I personally don't know if Bitcoin can reach a million USD, but gold parity should be doable.)

A world with real Bitcoin adoption would be very different from now when nobody really knows if Bitcoin really catches on and 30-50% crashes are possible so many are tempted to rapidly take profits after a big price increase because value could "go to zero". In a "Bitcoin adoption" world, in contrast, there a lot of "real value" involved, a large ecosystem of businesses working with Bitcoin, so it's out of the question that Bitcoin "will fail". There would be probably even entities and persons backing the price in some way, for example merchants who are benefitted by Bitcoin adoption could offer fixed prices in BTC for their goods.

I think these phenomena are temporary. Ethereum managed to survive the ICO scam wave of 2017/18, which was really bad and investors were very naive. The 2021 "Gamestop/Elon Musk wave" is perhaps different because no real scam is involved, but it also will lead to many naive investors broke, which will be much more careful in the future. With each of these waves, investors mature, and are increasingly less prone to put their money in an ultra-risky gamble. This also will help stabilize the price.

Like I already wrote, Lightning is only one of many tools which could lead to more merchant and "usage as a currency" adoption. It won't affect the "technobabble" guys at all, it's a different user group which will grow independently of it. So while it's true that "Lightning will not solve it", the macro-trend of more currency usage will eventually solve it, if it continues.

Of course, Bitcoin can fail on the path to adoption, but I'm optimistic, and the Bitcoin community can also help to not let it fail, promoting long-term thinking and discouraging the "gamble" mentality a bit.

@franky1: Please don't derail, I won't discuss Lightning advantages/disadvantages here. There are many other threads for that, thanks.

Such a good read. Even with the topic or thought being pretty common, it still piques my interest and makes me ponder every time I encounter it. The main thing here though is the people's greed. As long as greed exists, there is always money to be made, and when there is money to be made anything that can be exploited will he exploited regardless of what it is. Be it crypto currencies or natural resources. The price of bitcoin, we can only speculate until all coins get mined. But even then, price will still continue to be volatile. Either way, we won't reach such time so I prefer to focus on the near future instead and secure a future for my offsprings leaving the far future for them to oonder about.

philosophy and nature:
though from nature of caveman and apes. we have had the natural 'ability'' of greed and exploitation. although modern civilised culture has managed to disrupt and suppress the exploitation, via laws of many things, such as making theft illegal and fraud.
however laws are still loose in regards to greed. gluttony is not a crime. capitalism isnt a crime. so in modern times greed is still part of our nature and culture that has been allowed.

everyone wants more then they have. if we didnt we would starve, by rationing food. we would be poor by not seeking wealth, we would be unentertained by not wanting more from life.
though greed can lead to exploitation, it doesnt mean it will. thats why bitcoin is code, because code makes rules.

bitcoin is decentralised to avoid exploitation by hackers trying to edit block data and transactions.
bitcoin is immutable to avoid the exploitation by chargeback refund scammers
bitcoin requires signatures to avoid the exploitation by fake identities pretending they own the coin

Indeed greed is vital but it seems I came short of explaining. What I actually meant was excessive greed. Since too much of anything won't do any good. And by exploitation (since I am not good with techy and programming topics) I meant taking advantage of patience, kindness, naivety, etc., or manipulating market through a wide variety of ways. Having Musk's brilliant way of leading sheeple as an example, or if conspiracies are your thing, whales communicating with each other to control market pricess and take from small guys their bitcoin (or any crypto in that matter) cheaply. Which may morally look wrong in the eyes of some but is the law of the jungle as we call it.

Which is why I tend to focus on things I can control instead and make the best of the cards I'm dealt with to avoid headaches.

(If quite messy to understand, apologies. Really not that good at expressing thoughts since this isn't my primary language)

excessive greed can lead to exploitation. but thats why bitcoin is good, it has more rules than say bank notes(cash)
you can write rules into bitcoin and into exchanges.

for instance to avoid large volatile pump and dumps on exchanges. the exchange can code a 'circuit break' that freezes market trading if the price dips by more then x% in one order, or one hour of orders

i already sated some summarised bitcoin features that circumvent some exploitations, but bitcoin also has many other rules to protect users. the only thing it cant protect is human emotion. so people still need to keep themselves in check and be responsible for their actions.

EG human emotion in cash transactions. is where for instance a retailer yesterday had price tickets for milk at £1.20 and overnight the retailer changed the ticket to show £1.40, and customers then have to just accept they are paying 1/6th more

where as on bitcoin exchange markets, the exchange could code rules so that anyone making a sell cant sell 1000 in one order and instead limit it to 1btc per order, aswell as limiting how many orders from that user can be allowed per minute. to prevent fast spikes/crashes

in code, any rule can be made, thats how code works. it makes rules.
bitcoin has much more safety potential and already active safety than say bank notes/human emotion

So to sum it up, conspiracy about price manipulation really isn't real and is hindered by the rules set by the codes? Welp. It seems I am scared of nonsense then and that the real problem is not price manipulation but crowd manipulation and one's control on his or her self emotions when making decisions. Every day is another chance to learn. Thanks.

alot of people think its "whale" manipulation of exchanges.
but after studying things. its not. its actually the minnows


in 2013-4 when the markets were $400 there were whales making walls of 1000btc
obviously with prices at $40k now it means a similar 'wall' only needs to be 10btc deep

this is because although the market is portrayed as supply and demand. where instead of 2013-4 supply was only 12mill coins and now there are 19mill.. the more supply in circulation has not resulted in more supply on the market.
eg. if average order was 2btc in 2013-4, youd think with 50% more in circulation average orders would now be 3btc

however, most market orders now are of 0.01btc-10btc not 1btc-1000btc in earlier years.

meaning there is probably an equal 100x less coin in exchanges offsetting an equal 100x more price.

sellers have figured out that buyers are not spending more money. they instead are spending the same amount.
so if someone in 2013 wanted to spend $600 a month he would get 1.5btc in 2013-4. where as now he would get 0.015btc.

the market price does not mean someone in 2013-4 who regularly paid $600 a month to buy crypto is now buying $60,000 a month.
buyers value per order has not changed. and so its the sellers who dont want to crash the market by selling 1.5btc now or even 2.25btc with there being 50% more supply in circulation than in 2013-4.
instead decide to play the economics game, offer smaller amounts of coin

imagine it this way. a seller.. with 1.5btc. wanting $60k
right now he can make 2 choices.
sell 1.5btc at $40k/btc =$60k fiat
sell 0.1btc(15 times) at $4.01k= $60.15k   (0.1*15=1.5)

sellers find it easier to not try selling 1.5btc at 40.1 as that creates a wall keeping price below that, but if he has small orders that fill of 0.01 for $401, they fill fast and are seen as a price lift to $40.1, even without buyers having to buy up tens of thousands of dollars to achieve it.

what im saying is dont worry about the only last few whales pushing 10btc.. instead watch out for the minnows putting in 0.01btc orders spaced out by $1 a coin meaning small orders causing large movements in prices

sellers realise instead of trying to push 1.5 coins on a market which can cause the price to go down. if they sell small portions in small amounts at a slight premium. the buyers dont notice the big hit as much. but it pushes the market price

ill add this for reference

code can prevent big whale wallers, but human emotion and greed will play the opposite and find a way to play the markets

This has been very helpful and now I am seeing the market in a widely different perspective. It seems I have been scaring myself with the wrong things. Thanks for sharing this information sir. Really feels good to know a bit more which can improve my future decisions. Right now, having this information I would like to ask sir if you would permit me to quote this information and share it to the local board so I can help some of my countrymen who also have the same misconceptions as I.

its a public forum, the quote button is there for a reason. so go ahead. i have no issues with it

Thanks. I'll do so now :D