ETH = Game Over

[mining1]

Huh ? It is the truth, ETC made some people lose alot of money, and guess who those people where ? Immutability die hard supporters, they were like cockroaches here on btctalk hyping it, now they've noticed ETC isn't going up so they gave up. Those people deserved to lose the money, but among them there were honest people buying into the confusion. If i was overinvested i would have dumped by now, and i've invested in many more crypto projects even tho ethereum has by far the most potential, as in human resources, funding, clear roadman and projects.
And i've mined what i have, and i'm on profit for 6 months now.

[JayJuanGee]

Huh ? It is the truth, ETC made some people lose alot of money, and guess who those people where ? Immutability die hard supporters, they were like cockroaches here on btctalk hyping it, now they've noticed ETC isn't going up so they gave up. Those people deserved to lose the money, but among them there were honest people buying into the confusion. If i was overinvested i would have dumped by now, and i've invested in many more crypto projects even tho ethereum has by far the most potential, as in human resources, funding, clear roadman and projects.
And i've mined what i have, and i'm on profit for 6 months now.

There is nothing wrong with any of that, and surely it is good to align your investment with your point of view and within your financial means and timeline to the extent all that it is feasible.


Whether you lose money or earn money, that past performance does not foretell future performance, and the fact that a lot of folks lost money on any asset or crypto may be a sign that it is time to buy.  There are systematic ways to buy that help to lessen volatility risk and even to either dollar cost average and/or to buy while prices are going down and to sell while prices are going up.  Each person has to find what works for him/her within his/her own risk tolerance and personal circumstances, and it does not really matter so much if someone's view is different from someone else or another person makes more money or less money than someone else so long as whatever approach that is taken is tailored and appropriate to the person.

 

[dinofelis]

I must say that I remain a bit surprised concerning how long ETH retains nearly a 10x price premium on ETC...

I had actually expected some kind short-term dump of ETC, maybe lasting a couple of months and then slowly movement over a year or so towards ETH/ETC price parity (whether that is ETH prices coming down or ETC prices going up or a combination of both), yet with the current price actions and dynamics, I see that it could take quite a while for the matter to play out.  So it looks like ETH's game is not over, no?

If ETC and ETH, which are essentially identical products, were to have REAL USE as a DAPP platform, then near parity should occur economically, because "gas" on the cheaper chain is cheaper.   In as much as the demand for ETC/ETH would mainly have been to "pay for the gas", then parity would be inavoidable, and DAPPs would go to the cheapest chain, because the usage of the DAPP would be cheaper and hence more attractive.  This would rise the demand for the cheapest coin such, until parity is reached ; except if there is some "brand preference" effect which could explain some preference to use "more expensive" coins to burn because of a real or perceived higher quality.

But ETC nor ETH is used so much that its use has what so ever to do with the market price, which is PURE SPECULATION, and hence TOTALLY RANDOM.

The market price of ETH (or ETC) has nothing to do with its usage, which is essentially absent.  It is just a betting token in a casino.  And concerning betting, all odds are off.  

Note that we have exactly the same scenario with bitcoin, where the market cap that is sustained by the demand to use it as a *currency* is negligible compared to its real market cap, which is also nothing else but pure speculation, and hence totally random.

I believe that I am following you and agreeing with you all the way until you are suggesting that bitcoin is in "exactly the same scenario," which seems a bit too much of a false equivalency comparison for me.

Sure there is a lot of speculation in bitcoin that is driving bitcoin's price, yet bitcoin is a bit of a different beast from ethereum.  It's been around longer, it has quite a bit more progress on many of it's networking effects, including the fact that it is much more simple and secure in terms of what it does, and that is secure immutable decentralized transactions.

Sure it is true that many folks may not recognize distinquishing features of bitcoin and speculate on it in similar ways as ethereum, but in the end, ethereum had largely been riding on the coat-tails of bitcoin to play off it's success and to suggest that it is similar and even bitcoin 2.0, etc etc...  Well, let's get bitcoin 1.0 right first before we go off into some pie in the sky fantasy world involving what ethereum supposedly has to offer (prior to being secure).

My point was, that bitcoin is mainly bought too, with the idea of selling it at a higher price (to a greater fool), whether on short term ("trading") or on long term ("hodling and investing").  The demand for bitcoin too, is driven by "greater fool theory" mostly, and very rarely for "I need bitcoin to buy stuff on the internet", which is its real purpose.

That has nothing to do with the *nature* of bitcoin, but I'm just pointing out that the actual usage (its main demand, its main reason for transactions, and hence its main market cap support) is speculative in "greater fool theory", and not in "usage as internet money".

People want the price to rise (that's the essence of greater fool theory) to make benefit, and not to use it as a currency, which was its original goal and the reason of its existence.

So, anyhow, even though bitcoin has speculation, there is more there there with bitcoin, as compared with ethereum and the various other imitators and alt coins that proclaim to be bitcoin 2.0... blah blah blah.

But not much.

One has to face it: crypto is not used, or almost not.  Its market cap is essentially just tokens in a zero-sum casino.  And as such, anything goes.

The usage market cap of crypto is, totally ignorant guess, probably not even sustaining a market cap of a million dollars.

Even though the relative market caps of all of the cryptos are not very much, there is still a lot of innovation going on in a lot of the crypto spaces and a lot of probable migration of value that is currently going into such crypto spaces.  Sure, there is some cutting back and forth, for example when some crypto rips off some of it's investors, then some of those investors are going to be deterred and scared away from crypto, but in the end, the space is going to continue to grow and it continues to have a lot of space for growth that becomes more and more value that is beyond mere speculation.

My point is that there's no such thing as "investing" in crypto.  You only *gamble* on crypto if you pretend "investing".  You gamble in a greater fool theory casino.  Which doesn't mean that you cannot win a lot of money, but that is at the expense of other gamblers.

You can USE a crypto.  For bitcoin, that means: use it as a currency, to obtain when you sell stuff, and to spend when you buy stuff.  For ethereum, that means: by running DAPPs that do something in the real world, like renting a bicycle or an appartment, using storage space or a VPS, or I don't know what application that implements an agreement in the reasl world.

This real usage is VERY SMALL as compared to all the "investing", betting and gambling.  That was my point.  And bitcoin is not exempt of this, on the contrary.

For example, it is very meaningful for someone to use bitcoin to transfer value from one country to another and not have to pay hardly any fees.. and some of this is underground, but very valuable.  Also, transactions in the black market are very valuable, even though some folks may claim that such value does not count, but think about how liquid bitcoin becomes as more and more people begin to use it and as some of its interface and applications become more and more user-friendly.  

I agree with you.  That is REAL USAGE.  My point is that this use is minuscule as compared to the demand, transaction volume, and hence market cap.

This real usage is the only thing that counts.  I will agree with you that at least, bitcoin has SOME real usage ; ethereum, I have not the slightest idea of what real usage it has for the moment.

But overall, the whole crypto business is essentially a zero sum greater fool casino, and only very little real usage is happening.

[JayJuanGee]

[edited out]

My point was, that bitcoin is mainly bought too, with the idea of selling it at a higher price (to a greater fool), whether on short term ("trading") or on long term ("hodling and investing"). 

The demand for bitcoin too, is driven by "greater fool theory" mostly, and very rarely for "I need bitcoin to buy stuff on the internet", which is its real purpose.

Sure, of course, there is some truth to what you are saying in that there continues to be a lot more speculation in bitcoin rather than utility use, but so what?  Most of my point in responding to your earlier post was to assert that there is a lot more to bitcoin beyond speculation and should not be compared as an equivalent of ethereum, even though both of them share this speculation aspect.

Maybe bitcoin is 92% speculation, and if that is the case then ethereum is 98% speculation.  Alternatively, if bitcoin is 75% speculation, then ethereum is 90% speculation, and no matter what your attribution of speculation is, you are likely getting too distracted if you attempt to assert that both of them are similar based on the speculation component that concededly each of them have.

That has nothing to do with the *nature* of bitcoin, but I'm just pointing out that the actual usage (its main demand, its main reason for transactions, and hence its main market cap support) is speculative in "greater fool theory", and not in "usage as internet money".

Well, maybe you are correct, but you are still seem to be attempting to focus your entire analysis on the speculative component, and losing some of the dynamics of bitcoin and the differentiations between bitcoin and ethereum by maintaining such speculation focus.

Almost any new asset that has any liquidation at all is going to invite speculation, and especially when such speculation has shown to be profitable, and so what?  it is merely a component that evolves, and likely is more pronounced and present while the opportunities for growth are greatest and as the news gets out about its profit making potential, whether that be to the upside or the downside.

People want the price to rise (that's the essence of greater fool theory) to make benefit, and not to use it as a currency, which was its original goal and the reason of its existence.

again, so what?   Surely, aspects of speculation can be aggravating, especially when it causes price movements that destabalize the user base in various ways, but it remains an apparent necessary evil because it also brings investment and attention and allows such an asset to potentially develop based on the infusion of money and incentives for such development.  Despite a lot of speculation, there is also fundamental added value - especially with bitcoin that brings a kind of secure immutable decentralized value transmission and storage that had not been previously seen by mankind.

Sure, Ethereum brings some value too and in different ways, and also it would not be fair to completely criticize ethereum in terms of it ONLY being speculation - yet I would argue that the value brought by ethereum and the value brought by bitcoin are sufficiently different - yet bitcoin trumps ethereum in several ways because of its secure immutable decentralization - and also, it is quite likely that all of the components of ethereum can be absorbed into bitcoin, to the extent that they are useful, and it is a bit ludicrous to think that the same can be said about ethereum to absorb all of the aspects of bitcoin... hahahahahaha.. ethereum is not secure enough for such absorption, and recently, they have also demonstrated that they lack decentralized immutability.

So, anyhow, even though bitcoin has speculation, there is more there there with bitcoin, as compared with ethereum and the various other imitators and alt coins that proclaim to be bitcoin 2.0... blah blah blah.

But not much.

Sufficiently enough difference to make a material difference, and as I already asserted several times that sufficient and material difference is in terms of secure decentralized immutability.

Maybe we can agree to disagree about this point about whether there is a sufficient and material difference?  This will most likely play out in the market in the coming years, and I will concede that sometimes the better tech does not always prevail because there is more to the success of any development beyond which is better.

Nonetheless, in this case, I personally remain of the belief that bitcoin is fundamentally heads and shoulders above ethereum and above any competition that in the longer term it is likely to prevail, unless somehow it loses aspects of its secure decentralized immutability.

One has to face it: crypto is not used, or almost not.  Its market cap is essentially just tokens in a zero-sum casino.  And as such, anything goes.

The usage market cap of crypto is, totally ignorant guess, probably not even sustaining a market cap of a million dollars.

Even though the relative market caps of all of the cryptos are not very much, there is still a lot of innovation going on in a lot of the crypto spaces and a lot of probable migration of value that is currently going into such crypto spaces.  Sure, there is some cutting back and forth, for example when some crypto rips off some of it's investors, then some of those investors are going to be deterred and scared away from crypto, but in the end, the space is going to continue to grow and it continues to have a lot of space for growth that becomes more and more value that is beyond mere speculation.

My point is that there's no such thing as "investing" in crypto.  You only *gamble* on crypto if you pretend "investing".  You gamble in a greater fool theory casino.  Which doesn't mean that you cannot win a lot of money, but that is at the expense of other gamblers.

There are a lot of approaches to investing and gambling, and sure each of these practices are likely on a sliding scale.

I would argue that dollar cost averaging your investment into crypto and allocating in accordance with your total assets, cash flow, risk tolerance, timeline, view of various cryptos and other relevant considerations rises to a differing concept as compared with balls to the walls gambling.  There are extremes on both ends of gambling and investment, but there is also a significant difference that makes them quite different approaches when they are put into a systematic practice.... Yeah of course, each of them share concepts of determining probabilities and shorter and longer term approaches, but in the end, they are different when they are considered in different ways.

I know people who say that they are investing but are really engaging in gambling based on the way that they implement their strategies, and I also know people who have a kind of investment approach to gambling - but even though these concepts of investment and gambling can overlap, they are not the same thing.

You can USE a crypto.  For bitcoin, that means: use it as a currency, to obtain when you sell stuff, and to spend when you buy stuff.  For ethereum, that means: by running DAPPs that do something in the real world, like renting a bicycle or an appartment, using storage space or a VPS, or I don't know what application that implements an agreement in the reasl world.

This real usage is VERY SMALL as compared to all the "investing", betting and gambling.  That was my point.  And bitcoin is not exempt of this, on the contrary.

O.k... but so what?  Of course, there are a variety of useages of each, and some of those uses differ, and some of those useages are more developed in one platform versus another platform, but in the end, these are still being developed.

I can likely concede that useage of both bitcoin and ethereum are much less than a majority of the money going into them, and whether either is getting 2% useage or 25% useage or even 49% useage, so what?

Any asset has a combination of useage and speculation, and the earlier that an asset is in its development and adoption, the more likely that the extent of its useage will not be realized and development is still going on in order to create and evolve more use cases, which is certainly true with crypto currencies, and some are going to be more useful and developed than others, and to lump bitcoin into the same scene, merely because it is on a spectrum seems to be an oversimplification and largely misses the point because of such oversimplification presentations.

For example, it is very meaningful for someone to use bitcoin to transfer value from one country to another and not have to pay hardly any fees.. and some of this is underground, but very valuable.  Also, transactions in the black market are very valuable, even though some folks may claim that such value does not count, but think about how liquid bitcoin becomes as more and more people begin to use it and as some of its interface and applications become more and more user-friendly.  

I agree with you.  That is REAL USAGE.  My point is that this use is minuscule as compared to the demand, transaction volume, and hence market cap.

Good.. we agree, and hopefully, we can also agree that these kinds of developments can take a real hell of a long time to evolve.  Let's say that in 2013, there are 100 people using bitcoin to achieve nearly fee free and independent value transfers from USA to Mexico, and in 2016 there are 1,000 people who found out about bitcoin and are using such services.  these matters take time to discover, to put to use, and to sufficiently user friendly in order to reach the people who really benefit by such financial freedom.  And, as adoption increases, these actual uses put considerable upwards price pressures on bitcoin, and therefore disallow the ability of speculators, even if they want to, to push the price below a certain point because some of the folks will just be unwilling to sell at those lower price points and these kinds of dynamics snowball - even though there remains both speculation and utility, the utility begin to fundamentally push the boundaries of feasible speculations.

This real usage is the only thing that counts. 

Naw.  It is not the "only thing that counts"  Get real.  I will agree with you that actual useage is important in determining longer term value, and whether you should "invest" into something rather than just gamble, but you are not going to get rid of speculation and even some of the unfair and unpredictable aspects of speculation.  And, even with bitcoin, think about it, there are some folks who are likely engaging in behavior to lose money on bitcoin in order to profit in some other area, so they may purposefully be engaging in conduct to lose money on bitcoin because they want to suppress the price of bitcoin, and that is part of the speculation component that you cannot get rid of, even if you were to attempt to try to get rid of it.

I will agree with you that at least, bitcoin has SOME real usage ; ethereum, I have not the slightest idea of what real usage it has for the moment.

It sounds as if we are mostly disagreeing in the matter of what percentage of speculation versus useage to attribute to each asset.

But overall, the whole crypto business is essentially a zero sum greater fool casino, and only very little real usage is happening.

I continue to believe that you lose a lot of the point when you attempt to paint this matter in such extreme ways and to apparently attempt to lump all of these cryptos as if they were the same merely because they are largely driven by speculation.

We seem to agree that useage matters, and the extent of useage of bitcoin as compared to ethereum makes a difference to bitcoin having more value than ethereum.  I continue to think that you are getting into too much denigration of bitcoin when you attempt to over attribute the speculation component and seem to lose insight regarding the degree to which bitcoin remains heads and shoulders above ethereum or any other crypto that is out there.  Furthermore, ethereum is likely heads and shoulders above many of the other 100s of pump and dump coins that add no actual value at all.  Even if I believe that ethereum is largely shit, I will concede that it does add some innovations, experimentation and possible use cases to the crypto space.. Maybe only a small amount, but Ethereum adds more than 100s of other alt cryptos that are offering even less utility.  These are not all or nothing considerations and small nuances can make differences between calling one coin a pump and dump ponzi scheme and another coin such as bitcoin as a contributor of paradigm shifting innovation and value.

[dinofelis]

Sure, of course, there is some truth to what you are saying in that there continues to be a lot more speculation in bitcoin rather than utility use, but so what?  Most of my point in responding to your earlier post was to assert that there is a lot more to bitcoin beyond speculation and should not be compared as an equivalent of ethereum, even though both of them share this speculation aspect.
...

The point is that, when one compares crypto currencies, one has tendency to look at the market cap.  Bitcoin is champion there for the moment, and probably still for quite some time.  However, that market cap is essentially a measure of the greater fool theory gambling, and as such, meaningless. 

I have nothing against speculation an sich.   However, speculation in a zero-sum game is quite ridiculous (that said, if you're good at it, you can become rich, I won't deny that), because the gains of some, are the losses of others.  All people participating in such a game are just trying to rip one another off.

This is totally different with investing and speculating on the stock market.  The stock market is not a zero-sum game, because there is influx of dividend and there is economic growth (increase of production capital value).  If I hold stock of a small company in which I invested, say, $1000,-, and if that stock grows, it means that my $1000,- have been used very well by that small company to acquire production capital in such a way that it produces a lot of value, and generates economic growth.   When I sell that stock for $5000,- to someone else, I'm not ripping off anybody, because that stock is now really worth $5000,- with the dividends that go with it.  Of course there's a part of speculation, in that when I sell my stock, I hope to sell it to someone that will OVER estimate the value of that stock.  But even if I sell it at the "right price" if I did a good investment, I make benefit, in the sense that I *get some of the produced value and the economic growth*.

In other words, on the stock market, everybody, or most people, can get benefit.

Not so in the zero-sum game of trading tokens.   The $10,- you spend on a bitcoin in 2011 didn't bring any growth, capital investment, or what so ever.  The fact of selling that for $600,- today is not the fact of getting a reward of an investment in production capital.  It is only "greater fool" stuff, which works, as long as there is "more adoption" (more greater fools).

The last layer of adopters will have paid for all the benefit of everybody in bitcoin.  Like with black tulips.  And that last layer will have run out of 'greater fools'.

Now, there's nothing "morally wrong" with participating in a mutual rip-off scam, but at least you should know that it is that and nothing more.

But the big problem with all that, is that the market cap is WAY TOO HIGH.  This attracts a lot of troubles, like regulators intervening, institutions getting interested in bitcoin and all that. 

As you say, some speculation is unavoidable, and even good for the fluidity of markets.  But when an asset is essentially driven by speculation, it gets denatured and its true purpose gets drowned by the speculative activity around it.

I would by large have preferred bitcoin to have been at $10, of which $9 is demand for real usage, rather than $600, with probably something like $10 from demand for usage.   Thats $590 of trouble and regulation for nothing, harming its real usage.

I have to say that I have no idea about the "real usage" of bitcoin versus the "real usage" of ethereum.  Both are tiny.  I guess you're right that bitcoin is somewhat more used (I use it, not much, but it is essentially my only "activity" in crypto, to buy stuff), simply because I have NO IDEA where ethereum is used "for real" that is not gambling, betting or another form of lottery.

[JayJuanGee]

Sure, of course, there is some truth to what you are saying in that there continues to be a lot more speculation in bitcoin rather than utility use, but so what?  Most of my point in responding to your earlier post was to assert that there is a lot more to bitcoin beyond speculation and should not be compared as an equivalent of ethereum, even though both of them share this speculation aspect.
...

The point is that, when one compares crypto currencies, one has tendency to look at the market cap.  Bitcoin is champion there for the moment, and probably still for quite some time.  However, that market cap is essentially a measure of the greater fool theory gambling, and as such, meaningless. 

I have nothing against speculation an sich.   However, speculation in a zero-sum game is quite ridiculous (that said, if you're good at it, you can become rich, I won't deny that), because the gains of some, are the losses of others.  All people participating in such a game are just trying to rip one another off.

Dinofelis.  You seem to be a fairly smart guy; however, you are just coming off as a bit wrong-headed in your attempts to characterize markets, etc, including the value of bitcoin in comparison to other cryptos.

To me, it seems that your oversimplification is likely going to get you into trouble regarding recognizing the value of bitcoin and various methods of investing that go beyond gambling, pyramid schemes and ponzi schemes.

This concept of investing in bitcoin is a zero sum game comes off as ridiculous, and it sounds like some of the same incomplete nonsense arguments that are made regarding social security being a ponzi scheme... ridiculous.

This is totally different with investing and speculating on the stock market.  The stock market is not a zero-sum game, because there is influx of dividend and there is economic growth (increase of production capital value).  If I hold stock of a small company in which I invested, say, $1000,-, and if that stock grows, it means that my $1000,- have been used very well by that small company to acquire production capital in such a way that it produces a lot of value, and generates economic growth.   When I sell that stock for $5000,- to someone else, I'm not ripping off anybody, because that stock is now really worth $5000,- with the dividends that go with it.  Of course there's a part of speculation, in that when I sell my stock, I hope to sell it to someone that will OVER estimate the value of that stock.  But even if I sell it at the "right price" if I did a good investment, I make benefit, in the sense that I *get some of the produced value and the economic growth*.

In other words, on the stock market, everybody, or most people, can get benefit.

I doubt that it is really worth it to get into these kinds of comparisons with you. Sure, crypto currencies are like stocks in several ways and they are not like stocks in several ways, and in the end, we can evaluate the differences between various cryptos and we can evaluate the differences between various stocks.  Performance of stocks and cryptos are going to correlate with various conditions in the market and they are also going to correlate (and accordingly differ from one another) based on various fundamentals that are attributable to particulars that are individual to that stock, asset or crypto.

Not so in the zero-sum game of trading tokens.   The $10,- you spend on a bitcoin in 2011 didn't bring any growth, capital investment, or what so ever.  The fact of selling that for $600,- today is not the fact of getting a reward of an investment in production capital.  It is only "greater fool" stuff, which works, as long as there is "more adoption" (more greater fools).

I am beginning to get the sense that it is a waste of time to engage with you about these kinds of wrong-headed theories.  Sure, you are free to have those kinds of beliefs and to spout your opinion, and I get the sense that you are losing quite a bit of insight regarding the value of bitcoin and potentially regarding the value of a variety of other matters in life by suggesting that bitcoin is a kind of ponzi scheme that relies on "greater fools" as you like to suggest over and over and over..

The last layer of adopters will have paid for all the benefit of everybody in bitcoin.  Like with black tulips.  And that last layer will have run out of 'greater fools'.

Yes, you are free to invest accordingly, if that is what you believe.

Now, there's nothing "morally wrong" with participating in a mutual rip-off scam, but at least you should know that it is that and nothing more.

Yeah right.  We are not all dumb, merely because we don't see your conclusion here. 

I agree with you that some cryptos are likely kinds of ponzi schemes, but we are getting repetitive here if you expect that anyone here (including me) wants to get lured into distracting and baloney arguments to continue to differentiate the various cryptos... people are free to engage in such differentiations for themselves and come to their own conclusions... and really this thread is supposed to be about matters related to "ETH game over" blah blah blah, and we seem to be getting quite far afield.

But the big problem with all that, is that the market cap is WAY TOO HIGH.  This attracts a lot of troubles, like regulators intervening, institutions getting interested in bitcoin and all that. 

As you say, some speculation is unavoidable, and even good for the fluidity of markets.  But when an asset is essentially driven by speculation, it gets denatured and its true purpose gets drowned by the speculative activity around it.

I think that I already made my various points regarding this, and in essence if you believe one asset is either over valued or undervalued then you should invest accordingly.  And, therefore, it seems that in accordance with your viewpoints,  you should have little to no investment into any cryptos.  I have different conclusions, especially in regard to bitcoin, and I am already investing according to my viewpoint, and it does not matter too much to me whether you have a negative viewpoint or not, I am recognizing you as getting caught up into overlysimplified and erroneous assessments based on your perceptions including the value of speculation and the underlying fundamental values, which differ from my assessments.

I would by large have preferred bitcoin to have been at $10, of which $9 is demand for real usage, rather than $600, with probably something like $10 from demand for usage.   Thats $590 of trouble and regulation for nothing, harming its real usage.

Of course we differ in views and an asset is worth as much as folks are willing to pay for it.  Accordingly, the security of bitcoin could allow for a $100k price point per BTC, but surely it could take some time to get there and I am NOT holding my breath.  In other words, I have the sense that the odds of bitcoin going up is greater than it going down, and you can hold out for $10 per bitcoin if you like, and good luck with that.

I have to say that I have no idea about the "real usage" of bitcoin versus the "real usage" of ethereum.  Both are tiny.  I guess you're right that bitcoin is somewhat more used (I use it, not much, but it is essentially my only "activity" in crypto, to buy stuff), simply because I have NO IDEA where ethereum is used "for real" that is not gambling, betting or another form of lottery.

O.k.   We kind of agree that bitcoin is used more than ethereum, and in essence, there are probably not too many folks who could point out actual useage locations for ethereum (besides trading), though I am sure that a few exist , and some of the die hard ethereum folks may know about these obscure useage avenues of ethereum.

[dinofelis]

Dinofelis.  You seem to be a fairly smart guy; however, you are just coming off as a bit wrong-headed in your attempts to characterize markets, etc, including the value of bitcoin in comparison to other cryptos.

To me, it seems that your oversimplification is likely going to get you into trouble regarding recognizing the value of bitcoin and various methods of investing that go beyond gambling, pyramid schemes and ponzi schemes.

This concept of investing in bitcoin is a zero sum game comes off as ridiculous, and it sounds like some of the same incomplete nonsense arguments that are made regarding social security being a ponzi scheme... ridiculous.

It seems as if I'm hitting some kind of religious sensibility here

Social security is not a ponzi scheme, because you're not "investing" in social security to get out more when you hand it over to a greater fool.

The reason why I say that "investing" in bitcoin (and any other crypto) is a zero-sum game, is simply because it OBVIOUSLY is, and that should be obvious if you look at the value flows: there is no value creation !  There is no production of any good or service.

That is not something negative: hell, it was DESIGNED to be a zero sum game, because that is what a monetary system ideally is !  A monetary asset is something, that ideally, is just a transport/store of value, not a generator of value.  If it is a store, then at best, it is zero-sum.  In reality, it will be lossy (in fact, bitcoin IS lossy: all the mining and all the fees on exchanges are losses to the bitcoin value storage).

So, you can use bitcoin to store value for a while, between two transactions: one where you deliver value (as goods and services), and obtain the store, and one where you hand over the store, and obtain value (as goods and services).  Yes, you can also deliver other stores of value and obtain again other stores of value if you find that practical.  
Bitcoin is lossy, but not so much: the mining fee, the inflation, and the exchange fees eat something, but this is competitive with other stores of value like fiat or so.

But, as we said, there's no value creation in a monetary system, apart from its very existence, which has the created value of all those things that you can do with it that you couldn't do without it.  In other words, yes, bitcoin and other crypto HAS a created value as such by its usage, like a truck has value because it can transport stuff, if that transport *improves* production quality of goods and services, but not if you are just riding around with an empty truck.

As such, a monetary system derives its utility from its usage, and hence, its value from its usage (I'm talking about the system an sich, not about the value stored in the system).  This justifies the fact that the system is somewhat lossy, and "burns value".

The value of a monetary asset system, however, should not be confused with its market cap.  They have not much in common.  In fact, the value of the system itself is difficult to estimate.  A good analogy is the value of a truck as an capital good, as compared to the value of the contents it transports.  The value of the truck as a capital good is the amount of value that using the truck allows to create: the fact that you can transport things with the truck, instead of with a train, allows for a more efficient creation of goods and services.  THAT is the value of the truck: the competitive edge it brings you.  But that has nothing to do with the value of the stuff it transports.  Whether it transports detritus (negative value) or very expensive furniture (high value) has nothing to do with the competitive edge the use of the truck brings you.
The "market cap" is what a monetary system *transports* in a certain way.  That is not an estimate of the value of the system itself (the competitive edge it brings you over other solutions to the same problem of storage of value like fiat, gold, ...).  If bitcoin *transports* 10 billion, it doesn't mean that it is *worth* 10 billion, not more than if a truck transports 5 tons of gold, the truck itself would be worth 5 tons of gold.

So you can store value in a monetary system for the short term (between earning it, say, as a salary, and spending it, say, to buy food), or you can store value in a monetary system for the long term (between "putting something aside my whole life" and "profiting from it when I'm old" or "leaving something for the kids").  But the hypothesis is always that the value "in" is of the order of the "value out".

Most monetary systems, apart from gold, come into existence, and then die off.  There's no reason to assume that this will not happen with any crypto too.  In the beginning, when the system "takes value" (loads the truck) there is some seigniorage taken by "early adopters", which is compensated by the losses suffered by the "late users" (when the truck is discharged) - exactly because it is a zero-sum game.  However, if that monetary system exists for a very long time, these two "side effects" are negligible ; early adopters will have obtained gains at the expense of the future generation that will suffer the losses when the system dies, but that is, if the monetary system is really used, a small effect compared to its USAGE as an intermediate store of value during the whole period when it was in steady state.

I mean by that, that the period where the value of the monetary system is stable, and hence "value in" equals "value out" grossly as a store of value, will last hopefully much longer than the "rise" and the "fall" periods ; it is during this period that the monetary system really works as a store of value.

There's no value to be made during that period, and that's the aim: it is a store, nothing more.  You can hence not "invest" in it.

You can gamble on the rise, and if you do so, you are just profiting from those that will lose out on the fall.  And yes, it can work.  But that is a temporary phenomenon (during the rising phase), and, at the expense of others (during the falling phase).  This is not a durable "investment" at all.

So essentially, the phases in a monetary system's existence are:
1) a phase of "greater fools" when you can find greater fools, and you make benefit
2) a (hopefully long) phase of "same fools": value in is about value out, and the thing is a store of value
3) hyperinflation and the end of it, value lost.

The benefits made in 1) are financed by the losses suffered in 3).  This is why this thing is zero-sum.

As it should be.

Again, compare this to the typical life of a company.   A company issues stock, and with that money, it makes production capital and creates goods and/or services.    At the end of its life, it goes broke, and the stock becomes toilet paper.

However, in as much as at every moment in time, the stock is correctly evaluated (in practice impossible but let us assume that...) the stock price always reflects the diminished cash flow of all future dividends minus a risk aversion fee.  The initial stock holder is hence just rewarded for the value he permitted to create (that didn't exist before).  It doesn't come out of the pocket of a looser.  The successive stock holders will get something, in as much as the initial stock holder compensated for his risk and didn't take everything.  When the stock is dead, in principle, nobody lost any money if all estimates were right, because they have been compensated with dividends which are a NET INFLUX of value because there is VALUE CREATION.    This is "investing": allowing for value creation, and taking the reward for that.

The FUNDAMENTAL difference between stock and a monetary asset is that stock returns dividend, and its value estimation is based upon the estimation of the dividend ; while a monetary asset is based upon an infinitely recursive belief system (which is necessarily wrong because no monetary system lasts forever).   Stock value estimation can integrate the finiteness in time of its existence ; a monetary asset derives its value from the denial of that finiteness in time.  A monetary asset only has value in as much as one believes in its eternity (which is obviously going to be false).

That said, in as much as a monetary system is used as a store of value on storage times *much shorter* than the life time of the system itself (say that bitcoin will "live" for 40 years, then a few years of storage is "short"), it is useful and the service provided by that storage can overcome the potential losses when the system comes to an end.  But for that, the system has to be used as a store of value for real.  So, saying: I have access to a certain value right now because I sell some land, which I want to store and use 10 years from now, when my kids go to college, is a right way to use a monetary asset, if you believe that the monetary system will not collapse within 10 years (if it does, you have been financing the gains of early adopters with the value of your land).

And now we come to the bad effects of *dominant* speculation.  Speculation an sich is good: it is the "oil" that fluidizes the market, that brings extra information to price.  Ideally, speculation should be almost impossible if the market is efficient, but speculation is necessary to make the market efficient.

As long as speculation has only a marginal effect on the overall price of an asset (essentially, is only of the size of the volatility), speculation plays its role as lubricant.   
The problem however, with a price of an asset made ESSENTIALLY out of speculation, is that this price is totally unstable.  A monetary asset normally has a price given by Fisher's formula: the price is set by the DEMAND for the asset to use it as store of value (the amount of value, and the average storage time ; the inverse of the average speed of circulation).  The usage of that store of value is normally determined by its competitive edge over other stores of value, and hence you can compare that price to the price of any other market-determined good or service: its price is set by its usage and the competitive edge it brings.  This price is quite robust as long as the usage pattern is robust ; as long as there are good reasons to use this store of value over another.  However, this is not the case with a speculation-dominated price.  That price is entirely dependent on belief, which can change from one day to another.

And the problem with most crypto market caps is that they *essentially* consist of speculation, and only marginally of the price set by the demand for its use (given by Fisher's formula).  This makes that these assets are totally unreliable, *especially* as store of value.  So this domination of speculation kills the usage of it.

But my conclusion remains that one cannot "invest" in a monetary asset.  One can USE a monetary asset to transport value from today to later.  Early adopters will gain, at the expense of late users, but this phenomenon is not an "investment".  An "investment" is an action where you use value today not to consume directly, but to do things that create new value in the future.  That is not possible in a system that only TRANSPORTS value.  If you get more out, that means that someone has lost it on the other end.  Which is not the case with an investment.

[mining1]

If you think people gonna build dapps on ETC, you are delusional. This is not a currency only project, it needs leadership / developers. Or you haven't noticed how fast the attacks on the  Ethereum network have been tackled by ethereum foundation ? Nobody is going to build anything substantial on ETC because there's no development / developers, no leadership, no security with an uncertain future.

So ETH is better because it's seriously centralized ?

Ethereum is the most decentralized project there is. chandler guo, probably the biggest miner in the world, only controls ~100gh/s out of almost 6th/s. Leadership is not centralization. You're bad at trolling sir.

[dinofelis]

Leadership is not centralization.

Of course leadership is centralization.  It is not compulsory centralization, but it is centralization nevertheless.  In the same way that a de facto monopoly is a monopoly, even if it is not imposed with state violence but "happens in the market".

Only a leaderless system can pretend at decentralization.

[dinofelis]

I agree with you that some cryptos are likely kinds of ponzi schemes, but we are getting repetitive here if you expect that anyone here (including me) wants to get lured into distracting and baloney arguments to continue to differentiate the various cryptos... people are free to engage in such differentiations for themselves and come to their own conclusions... and really this thread is supposed to be about matters related to "ETH game over" blah blah blah, and we seem to be getting quite far afield.

I'm not talking about a Ponzi scheme.  You should differentiate "greater fool theory" with a Ponzi.  A Ponzi is a scam, because there is an entity ENGAGING in providing great returns on the basis of a system which must fail for sure.  The scam resides in the impossible engagement.  It is of the same nature as selling you the moon.  If I engage into selling you the moon, I'm a scammer if you accept the contract, and I do not deliver the moon.  No matter how crazy my engagement is, as *I* make it, *I* am responsible for providing it and if I know from the start that I'm not capable (because of mathematics) to do so, I'm just an outright scammer.

A Ponzi is a scam, because there is a contractual engagement into delivering high returns whereas my method for OBTAINING these returns is based on a pyramid scheme which has to fail.  So the Ponzi scammer is taking engagements he knows he cannot keep.

However, "greater fool theory" is not an engagement, but a *behaviour* in the belief that you will find a fool that will buy that asset at a higher price than you did (acting as the "greater fool" for the person selling to you).

The pyramid construction is the same, but in the case of "greater fool" you are participating willingly, and you (should) know that at the end of the line, the last fool will lose, but you are gambling on the fact that it is not yet you, while in the case of a Ponzi, someone has made false engagements based upon revenue supposed to come from such a pyramid.

What is sure, is that each time, such a system crumbles.  But in the case of a Ponzi, the losses result in an engagement not kept, while in normal "greater fool theory", you've just been gambling that you're not the "last fool", which can, or cannot, work out.

TL;DR: a Ponzi is a scam, "greater fool theory" is a bet.

[Spoetnik]

Agreed Dinofelis.. another dumb comment from ming1

And this right here is why we have to keep posting.
Because all year round these guys have been pounding this place into submission with manipulative lies.
I watched as dev's long ago realized they could "win" by sock-puppet account spamming bullshit here.
It actually works on the peons here who eat it up.
Basically if you post a lie enough at Bitcointalk it becomes truth to "investors"
Such as ?
There was a FUD campaign as you all love to put it LOL
On Quark way back guys kept saying it was premined.. so the audience here ended up believing it !

There is manipulative pricks here that know the game well.
They have no interest in truth & honesty ..they are here to make money period .

People always say to me why don't you mind your own business basically.
Well..
Why is it i am the ONLY one in all of Crypto that remembers then brings up
how the Doge dev said it was launched as a joke and how he said he quit because of a lack of community support ?

Why is it i am one of the very few people who ever mention the scammy bullshit with Ethereum ?
It's been a suspicious swirling vortex of scammy activity since before it even launched.
And hell most of these idiots here don't even know when it launched.. yet they are arguing about it..
I just posted to some guy defending ETH it was from 2014 when he said ETH was "only 10 months old"
or..
Like FEBO does with Monero or or or ororororooror ro or o ro r or or or oro ro ro ro ror or
It goes on & on.. morons show up late and a dollar short lying their ass off & crying FUD for bucks.

And it fucking disgusts me because they should fuck the fuck off out of my Crypto scene !
It's mine not theirs and they can leave not the other way around.

Pack your bags scammers and GTFO !  

You know Butters has not DENIED any of the accusation on him or Ethereum since day one.
He simply stays silent and won't show his face here but the Army of puppet accounts pop up here to do his bidding.

They also randomly banned me from their IRC channel to censor me too.
Which i have logged in full so there is no way to bullshit their way out of that either.
I did nothing wrong.. they just manipulate.. it's all they do in Crypto.

Explain to me who was buying blocks of 100 BTC worth of ETH on ICO launch day in 2014.
Don't tell me it's the same guys who pumped the fuck out of it in 2016 two year later.
And who mysteriously had millions worth to publicly admit to dumping.. V. BUTTERS ?
Yeah.. Butters ! ..he admitted it !
And no he never did say where he got the money either !

And what in gods name was up with Coindesk ?
Do you all remember the massive intense spamming campaign they were doing with ETH in 2014 ?
I had mentioned lots back then it was mighty fucked up how they latched onto ETH and were constantly running these massive "Stories" that were basically advertisements.

..on a coin ICO no one had even heard of or even cared about.

Did you all know that ?

NO YOU DIDN'T
Because you are all fucking dipshit noobs who know fuck all yet loiter around here arguing like you KNOW THINGS.

Or you are a fucking fraud.

How do i know ?
Because YOU would be the mother fucker bringing this shit up ..not me EVERY DAMN TIME !

I know that you know that i know pricks.. and i have known ALL ALONG
And guess what ?
You can't win.. i am god damn bullet proof.

Spoetnik posts FUD and 8 NOOB accounts pop up with a hollow proclamationa..
"I like XYZ coin"
"XYZ coin is good"
"XYZ coin will over take Bitcoin soon"
"XYZ coin has a good community"

and so on..


I know your game and i am better at it than you.. YOU CAN'T WIN

Trying to bump your "FUD" away and bury "the turd in the punch bowl"
But it won't work..  

[JayJuanGee]

Dinofelis.  You seem to be a fairly smart guy; however, you are just coming off as a bit wrong-headed in your attempts to characterize markets, etc, including the value of bitcoin in comparison to other cryptos.

To me, it seems that your oversimplification is likely going to get you into trouble regarding recognizing the value of bitcoin and various methods of investing that go beyond gambling, pyramid schemes and ponzi schemes.

This concept of investing in bitcoin is a zero sum game comes off as ridiculous, and it sounds like some of the same incomplete nonsense arguments that are made regarding social security being a ponzi scheme... ridiculous.

It seems as if I'm hitting some kind of religious sensibility here

Nah, don't try to denigrate  criticisms of your position by asserting that they seem religious, because then you are going to become even more ridiculous.

Each person is going to come to any matter with knowns and unknowns and leaps of faith in terms of logic to support such conclusions and observations.

There is little value to assert that opinions that vary from yours are religious merely because you either do not agree with the facts or the logic or the extent of weight that is given to either facts or logic.

Social security is not a ponzi scheme, because you're not "investing" in social security to get out more when you hand it over to a greater fool.

Great.  At least you agree with that part, and part of my point was that your arguments directed at the alleged ponzi scheme nature of bitcoin were starting to seem like those same arguments from folks who fallaciously argue that social security is a ponzi scheme.

The reason why I say that "investing" in bitcoin (and any other crypto) is a zero-sum game, is simply because it OBVIOUSLY is, and that should be obvious if you look at the value flows: there is no value creation !  There is no production of any good or service.

Of course there is value creation.. how many times do I have to repeat and point out the various values.

For example, has there ever been a secure decentralized immutable ledger/storage of value. Go ahead, name one?

In its current state and its current history, Bitcoin is absolutely paradigm shifting, even if it could take 20 years for the price to follow? or there is a possibility that it could end up getting destroyed in some kind of way.

That is not something negative: hell, it was DESIGNED to be a zero sum game, because that is what a monetary system ideally is !  

Maybe you are mixing up terms?  zero sum game is different from scarcity or limited supply or whatever you are attempting to mean by your description of bitcoin as a zero sum game (which implies lack of value apart from the coin itself).

A monetary asset is something, that ideally, is just a transport/store of value, not a generator of value.  If it is a store, then at best, it is zero-sum.  In reality, it will be lossy (in fact, bitcoin IS lossy: all the mining and all the fees on exchanges are losses to the bitcoin value storage).

bitcoin is a kind of asset that is different from any that have come before it, and sure it is intended to have monetary attributes.  


http://www.economicsdiscussion.net/money/top-8-qualities-of-an-ideal-money-material/609

"An ideal money material should possess the following qualities:

General Acceptability:
Portability:
Indestructibility or Durability:
Homogeneity:
Divisibility:
Malleability:
Cognizability:"

Bitcoin's white paper frames these attributes a bit differently, but similar ideas as the ideas in the above linked post.

So, you can use bitcoin to store value for a while, between two transactions: one where you deliver value (as goods and services), and obtain the store, and one where you hand over the store, and obtain value (as goods and services).  Yes, you can also deliver other stores of value and obtain again other stores of value if you find that practical.  

Yes, those are decent descriptions of a couple of the use cases of bitcoin to transmit value and to store value.

 

Bitcoin is lossy, but not so much: the mining fee, the inflation, and the exchange fees eat something, but this is competitive with other stores of value like fiat or so.

I don't completely understand what you mean by "lossy?"  There are expenses in using any system that stores and transmits value, and so these cost benefits are going to be relative to one another.  Some systems will be more efficient than other systems, and some systems will hold their value better than other systems.  In the end, it could take years and years (and maybe even decades) to suss out the relative value of each, but also in the end, each of us needs to consider the value for ourself and the value of such systems in order to determine for ourselves the extent to which we may choose to invest or gamble in one system versus another.
 

But, as we said, there's no value creation in a monetary system, apart from its very existence, which has the created value of all those things that you can do with it that you couldn't do without it.  In other words, yes, bitcoin and other crypto HAS a created value as such by its usage, like a truck has value because it can transport stuff, if that transport *improves* production quality of goods and services, but not if you are just riding around with an empty truck.

As such, a monetary system derives its utility from its usage, and hence, its value from its usage (I'm talking about the system an sich, not about the value stored in the system).  This justifies the fact that the system is somewhat lossy, and "burns value".

Sure, but don't delve into oversimplification by attempting to describe things that you do not know, there is a variety of values that are subjective and objective... and those values also are going to change over time and depending on circumstances.  An apple is going to have a whole hell of a lot more value for someone who is starving than a bitcoin, but if the person is not starving then a bitcoin would likely have higher value, because currently, he could sell such a bitcoin for nearly $600.
 
  

The value of a monetary asset system, however, should not be confused with its market cap.  They have not much in common.  In fact, the value of the system itself is difficult to estimate.  A good analogy is the value of a truck as an capital good, as compared to the value of the contents it transports.  The value of the truck as a capital good is the amount of value that using the truck allows to create: the fact that you can transport things with the truck, instead of with a train, allows for a more efficient creation of goods and services.  THAT is the value of the truck: the competitive edge it brings you.  But that has nothing to do with the value of the stuff it transports.  Whether it transports detritus (negative value) or very expensive furniture (high value) has nothing to do with the competitive edge the use of the truck brings you.
The "market cap" is what a monetary system *transports* in a certain way.  That is not an estimate of the value of the system itself (the competitive edge it brings you over other solutions to the same problem of storage of value like fiat, gold, ...).  If bitcoin *transports* 10 billion, it doesn't mean that it is *worth* 10 billion, not more than if a truck transports 5 tons of gold, the truck itself would be worth 5 tons of gold.

 You and I have different opinions regarding the value of market cap as an indicator of value when it comes to bitcoin.  Sure, bitcoin's actual market cap is very important because  it can show relative value compared to other financial systems, assets or possible investments, and it can also help to demonstrate liquidity and ability to manipulate prices, and it can also help to analyze the extent to which there is overvalue or undervalue in terms of the price per unit.

So you can store value in a monetary system for the short term (between earning it, say, as a salary, and spending it, say, to buy food), or you can store value in a monetary system for the long term (between "putting something aside my whole life" and "profiting from it when I'm old" or "leaving something for the kids").  But the hypothesis is always that the value "in" is of the order of the "value out".

 no disagreement, here.

Most monetary systems, apart from gold, come into existence, and then die off.  There's no reason to assume that this will not happen with any crypto too.  

 who cares?  I am not going to live 1,000 years, so I could give a ratt's ass what is going to live for 1,000 years, and sometimes 50 years could be too long to plan depending on how long someone expects to live or even the person believes that 50 years may matter in terms of the present value.  

Currently more relevant timelines would likely be less than 50 years, because the further we attempt to project out probabilities the more difficult it becomes and the more irrelevant it becomes to what should be our own personal calculations.

In the beginning, when the system "takes value" (loads the truck) there is some seigniorage taken by "early adopters", which is compensated by the losses suffered by the "late users" (when the truck is discharged) - exactly because it is a zero-sum game.  However, if that monetary system exists for a very long time, these two "side effects" are negligible ; early adopters will have obtained gains at the expense of the future generation that will suffer the losses when the system dies, but that is, if the monetary system is really used, a small effect compared to its USAGE as an intermediate store of value during the whole period when it was in steady state.

 again, so what?  There is going to be some higher levels of profit from early adopters in any system that appreciates in value and early adopters recognize the value of holding the asset.

We also know that rich people have more abilities to get rich and stay rich as compared with poor folks.  Also, people who are informed about matters have more abilities to profit from the information that they know as compared with uninformed folks.  There are a lot of injustices in the world, and bitcoin likely has the potential to address a lot of those injustices in substantial and material ways, even though it may not cure all injustices and some folks are likely to disproportionately benefit from being an early adopter... so fucking what?  Those are current dynamics in the world, but it does not necessarily make bitcoin a bad thing or a ponzi scheme or a scam or a zero sum game as you continue to assert.

I mean by that, that the period where the value of the monetary system is stable, and hence "value in" equals "value out" grossly as a store of value, will last hopefully much longer than the "rise" and the "fall" periods ; it is during this period that the monetary system really works as a store of value.

There's no value to be made during that period, and that's the aim: it is a store, nothing more.  You can hence not "invest" in it.

 I agree that there are going to be lifecycle aspects to any asset or money that may cause it to be more or less valuable to other assets and money, and each of us has to determine the extent to which we are going to invest in one system or another, and sometimes we may not have access or information to help us with our diversification decisions, and we do the best that we can to invest and/or diversify based on information and access that we have available to each of ourselves.

You can gamble on the rise, and if you do so, you are just profiting from those that will lose out on the fall.  And yes, it can work.  But that is a temporary phenomenon (during the rising phase), and, at the expense of others (during the falling phase).  This is not a durable "investment" at all.

 This is seeming repetitive... about whether we are gambling or investing and what factors and access do we have and find relevant.

So essentially, the phases in a monetary system's existence are:
1) a phase of "greater fools" when you can find greater fools, and you make benefit
2) a (hopefully long) phase of "same fools": value in is about value out, and the thing is a store of value
3) hyperinflation and the end of it, value lost.

 Sounds like you are just making up some factors and attempting to apply them to all assets/money... which is not very convincing at all.

The benefits made in 1) are financed by the losses suffered in 3).  This is why this thing is zero-sum.

As it should be.

 sounding like goofy logic and theory to me.

Again, compare this to the typical life of a company.   A company issues stock, and with that money, it makes production capital and creates goods and/or services.    At the end of its life, it goes broke, and the stock becomes toilet paper.

However, in as much as at every moment in time, the stock is correctly evaluated (in practice impossible but let us assume that...) the stock price always reflects the diminished cash flow of all future dividends minus a risk aversion fee.  The initial stock holder is hence just rewarded for the value he permitted to create (that didn't exist before).  It doesn't come out of the pocket of a looser.  The successive stock holders will get something, in as much as the initial stock holder compensated for his risk and didn't take everything.  When the stock is dead, in principle, nobody lost any money if all estimates were right, because they have been compensated with dividends which are a NET INFLUX of value because there is VALUE CREATION.    This is "investing": allowing for value creation, and taking the reward for that.

The FUNDAMENTAL difference between stock and a monetary asset is that stock returns dividend, and its value estimation is based upon the estimation of the dividend ; while a monetary asset is based upon an infinitely recursive belief system (which is necessarily wrong because no monetary system lasts forever).   Stock value estimation can integrate the finiteness in time of its existence ; a monetary asset derives its value from the denial of that finiteness in time.  A monetary asset only has value in as much as one believes in its eternity (which is obviously going to be false).

That said, in as much as a monetary system is used as a store of value on storage times *much shorter* than the life time of the system itself (say that bitcoin will "live" for 40 years, then a few years of storage is "short"), it is useful and the service provided by that storage can overcome the potential losses when the system comes to an end.  But for that, the system has to be used as a store of value for real.  So, saying: I have access to a certain value right now because I sell some land, which I want to store and use 10 years from now, when my kids go to college, is a right way to use a monetary asset, if you believe that the monetary system will not collapse within 10 years (if it does, you have been financing the gains of early adopters with the value of your land).

 Sure this happens, but again oversimplification when attempting to describe these kinds of lifecycles for all assets and to suggest that you have any kind of clue regarding what stage any asset is in, including bitcoin.

And now we come to the bad effects of *dominant* speculation.  Speculation an sich is good: it is the "oil" that fluidizes the market, that brings extra information to price.  Ideally, speculation should be almost impossible if the market is efficient, but speculation is necessary to make the market efficient.

As long as speculation has only a marginal effect on the overall price of an asset (essentially, is only of the size of the volatility), speculation plays its role as lubricant.   
The problem however, with a price of an asset made ESSENTIALLY out of speculation, is that this price is totally unstable.  A monetary asset normally has a price given by Fisher's formula: the price is set by the DEMAND for the asset to use it as store of value (the amount of value, and the average storage time ; the inverse of the average speed of circulation).  The usage of that store of value is normally determined by its competitive edge over other stores of value, and hence you can compare that price to the price of any other market-determined good or service: its price is set by its usage and the competitive edge it brings.  This price is quite robust as long as the usage pattern is robust ; as long as there are good reasons to use this store of value over another.  However, this is not the case with a speculation-dominated price.  That price is entirely dependent on belief, which can change from one day to another.

And the problem with most crypto market caps is that they *essentially* consist of speculation, and only marginally of the price set by the demand for its use (given by Fisher's formula).  This makes that these assets are totally unreliable, *especially* as store of value.  So this domination of speculation kills the usage of it.

 Yes, you seem to be repeating points that you already made that you believe that there is too much value in bitcoin that is associated with speculation,and you attribute little to no value to speculation.  Fine.  We differ in our assessment and how much weight we give to the usefulness of speculation and how much speculation that we believe is actually taking place in bitcoin as compared with other cryptos.

But my conclusion remains that one cannot "invest" in a monetary asset.  One can USE a monetary asset to transport value from today to later.  Early adopters will gain, at the expense of late users, but this phenomenon is not an "investment".  An "investment" is an action where you use value today not to consume directly, but to do things that create new value in the future.  That is not possible in a system that only TRANSPORTS value.  If you get more out, that means that someone has lost it on the other end.  Which is not the case with an investment.

O.k.. whatever, you are not really justifying any further your repeated conclusion with this additional analysis.  Let's just agree to disagree to the extent to which bitcoin can serve as an investment in comparison to pure speculation, gambling or ponzi scheme.

[JayJuanGee]

I agree with you that some cryptos are likely kinds of ponzi schemes, but we are getting repetitive here if you expect that anyone here (including me) wants to get lured into distracting and baloney arguments to continue to differentiate the various cryptos... people are free to engage in such differentiations for themselves and come to their own conclusions... and really this thread is supposed to be about matters related to "ETH game over" blah blah blah, and we seem to be getting quite far afield.

I'm not talking about a Ponzi scheme.  You should differentiate "greater fool theory" with a Ponzi.  A Ponzi is a scam, because there is an entity ENGAGING in providing great returns on the basis of a system which must fail for sure.  The scam resides in the impossible engagement.  It is of the same nature as selling you the moon.  If I engage into selling you the moon, I'm a scammer if you accept the contract, and I do not deliver the moon.  No matter how crazy my engagement is, as *I* make it, *I* am responsible for providing it and if I know from the start that I'm not capable (because of mathematics) to do so, I'm just an outright scammer.

A Ponzi is a scam, because there is a contractual engagement into delivering high returns whereas my method for OBTAINING these returns is based on a pyramid scheme which has to fail.  So the Ponzi scammer is taking engagements he knows he cannot keep.

However, "greater fool theory" is not an engagement, but a *behaviour* in the belief that you will find a fool that will buy that asset at a higher price than you did (acting as the "greater fool" for the person selling to you).

The pyramid construction is the same, but in the case of "greater fool" you are participating willingly, and you (should) know that at the end of the line, the last fool will lose, but you are gambling on the fact that it is not yet you, while in the case of a Ponzi, someone has made false engagements based upon revenue supposed to come from such a pyramid.

What is sure, is that each time, such a system crumbles.  But in the case of a Ponzi, the losses result in an engagement not kept, while in normal "greater fool theory", you've just been gambling that you're not the "last fool", which can, or cannot, work out.

TL;DR: a Ponzi is a scam, "greater fool theory" is a bet.

Thanks for your clarification. O.k.  I will concede that I was likely conflating terms such as ponzi scheme, pyramid scheme and greater fools theory and attributing all of those to your criticism of bitcoin.  In the end, I doubt that it matters regarding the degree which you are criticizing bitcoin, even if we agree to stick to the lesser definition of "greater fools theory."  Even with such "greater fools theory," I think that you are oversimplifying what is going on with bitcoin and failing/refusing to adequately recognize value in bitcoin beyond your simplified assertion of "greater fools."

[dinofelis]

...

I can only discuss on the basis of argumentation.  If you just announce that I'm oversimplifying, missing issues and so on, without a logically constructed argument on the basis of mutually accepted starting points, then there's not much to discuss.  I tried to outline all the elements in my argumentation of why "investing" in a crypto currency is nothing else but betting in a zero-sum game, which is different from *using* a crypto currency as a store of value, and which is different from investing in the stock market.

"greater fool theory" applies each time there is a zero-sum game in which people engage so vehemently to "make profit" (sell more expensively than they buy) that the price is determined by the demand by these actors.  From black tulips, to south sea bonds to any other such situation.  In other words, when these conditions are present:

1) there is no value creation as such, or in any case much less than the market price increase
2) the item is a near-collectible

1 + 2 imply essentially a zero-sum game.

3) people mainly demand the asset because they expect it to be sold at a higher price (looking for a greater fool).

we have the essential behaviour that builds up a speculative bubble.

This usually collapses, because when one runs out of sufficient "greater fools", the price does not increase any more.  Contrary to a store of value, people are NOT interested in using the asset as a store of value, but just as a generator of benefit ; if they lose faith in higher price, the demand plummets.   When the demand plummets, two things can happen: people can hold, hoping for a rise again, or people can panic-sell.   If they panic-sell, we have the bubble crashing down.  If they hold, the asset can turn into a store of value, of which, however, the price will slowly deflate, because the overall demand for holding it as a store of value is way lower than the earlier demand for making profits.  

Of course there is value creation.. how many times do I have to repeat and point out the various values.

For example, has there ever been a secure decentralized immutable ledger/storage of value. Go ahead, name one?

In its current state and its current history, Bitcoin is absolutely paradigm shifting, even if it could take 20 years for the price to follow? or there is a possibility that it could end up getting destroyed in some kind of way.

I know that this is an argument by bitcoin proponents, but it is false.  There is no value in "paradigm shift" as such.  The only value comes ultimately from the increase in goods and services produced that comes from it ; so from the competitive edge in the production of goods and services.  In as much as bitcoin would allow for a more fluid production of goods and services, because payments would be better, easier and so on, I agree that the bitcoin system creates value.  But abstract concepts such as "paradigm shift" and "immutable ledger" are of not much value, apart for a few geeks (like myself) enjoying these ideas.  
Value comes from the competitive edge in the production of goods and services, because, as you also point out, in the end, all value comes from the personal enjoyment of the consumption of goods and services.

Maybe you are mixing up terms?  zero sum game is different from scarcity or limited supply or whatever you are attempting to mean by your description of bitcoin as a zero sum game (which implies lack of value apart from the coin itself).

A zero sum game is a game-theoretic notion, where the sum of the gains by certain actors is equal to the losses of the other actors (so that the total algebraic sum of all gains is zero - hence the name).  The balance has to be made "at the end of the game".

A system that shifts tokens around in return for value (here, measured in $) is obviously a zero-sum game.  Every monetary system is supposed to be a zero sum game.

You have a zero-sum game whenever there is no state in which ALL participants got out more than they started with.  

Exchanging goods is NOT a zero sum game.  If I exchange an apple for an orange, that is because initially I have an apple, and you have an orange, and I value an orange more than an apple, while you value an apple more than an orange.  If we exchange my apple and your orange, we BOTH win in value.  I have something I value more, and you have something you value more.  We are both winners, this is not zero-sum.

Producing goods is not a zero sum game.  If I have flower and an oven, and I bake bread, then I have now a bread, which I value more than the flower, and my free time.  That's why I made the bread in the first place.

However, exchanging tokens for dollars and dollars for tokens, when all is said and done, has ONLY resulted in shifting dollars from one to another.  The total sum of dollars in equals the total sum of dollars out.  If some got more out of it, others must have put in more than they got out.  That's zero sum.  And there is no "I value this dollar more than that dollar".   The day that bitcoin is $0, which is "at the end of the game", all dollars "in" are equal to all dollars "out".   So it is evidently a zero-sum game.

Bitcoin is lossy, but not so much: the mining fee, the inflation, and the exchange fees eat something, but this is competitive with other stores of value like fiat or so.

I don't completely understand what you mean by "lossy?"  There are expenses in using any system that stores and transmits value, and so these cost benefits are going to be relative to one another.  Some systems will be more efficient than other systems, and some systems will hold their value better than other systems.  In the end, it could take years and years (and maybe even decades) to suss out the relative value of each, but also in the end, each of us needs to consider the value for ourself and the value of such systems in order to determine for ourselves the extent to which we may choose to invest or gamble in one system versus another.

Sure.  What I meant was: contrary to, say, the distribution of physical coins, once it is done, bitcoin needs to spend resources to keep running.  So it is not exactly zero-sum: the total amount of value in is partly spend on mining electricity and hardware and so on.  The "dollars out on electricity for mining" is a net loss of the system.

You are right that it is the "price of having the bitcoin system".  I don't deny this.  But that makes that it is *not even* zero sum.  In as much as it would be value-generating (competitive edge in production of goods and services) this price could be justified.  

Sure, but don't delve into oversimplification by attempting to describe things that you do not know, there is a variety of values that are subjective and objective... and those values also are going to change over time and depending on circumstances.  An apple is going to have a whole hell of a lot more value for someone who is starving than a bitcoin, but if the person is not starving then a bitcoin would likely have higher value, because currently, he could sell such a bitcoin for nearly $600.

You see, here you've lost me.  Of course I adhere to the subjective value theory of the Austrian school.  But this is not in contradiction, or not a proof of "oversimplification" on my part at all.   There is no "subjective value" to "dollars in and dollars out" because dollars are just means to obtain goods and services at market prices.  All dollars are equal and its "usage" is equal (market price).
You cannot convince me that someone who has paid $100 and got out $10, can nevertheless have gained value, as compared to someone who put in $10, and got out $100.  The first one has lost value, and the second one gained value, no matter what.  This is NOT the same as me losing an apple for an orange, and winning subjective value, and you losing an orange for an apple, and ALSO winning subjective value (which is why our trade was not zero-sum but mutual benefit).

There cannot be a net flux of dollars from A to B while being "mutually beneficent".   (except as a gift).

You and I have different opinions regarding the value of market cap as an indicator of value when it comes to bitcoin.

It is quite elementary: the value of the truck is not the value of what it can transport.  

 Sure, bitcoin's actual market cap is very important because  it can show relative value compared to other financial systems, assets or possible investments, and it can also help to demonstrate liquidity and ability to manipulate prices, and it can also help to analyze the extent to which there is overvalue or undervalue in terms of the price per unit.

Absolutely not.  This is then, I think, our main point of difference.  The value of a monetary system as system is the value of the truck.  The market cap is what it transports.  These are two totally different notions.

The value of the system itself is the competitive edge in the production of goods and services that the existence of the system provides.

Most monetary systems, apart from gold, come into existence, and then die off.  There's no reason to assume that this will not happen with any crypto too.  

 who cares?  I am not going to live 1,000 years, so I could give a ratt's ass what is going to live for 1,000 years, and sometimes 50 years could be too long to plan depending on how long someone expects to live or even the person believes that 50 years may matter in terms of the present value.  

This was just a way to prove that bitcoin, like any monetary system, is obviously a zero sum game.

again, so what?  There is going to be some higher levels of profit from early adopters in any system that appreciates in value and early adopters recognize the value of holding the asset.

Sure, but at the expense of the losers at the end.  In the case of a "greater fool" asset, it will come when the thing collapses.  In the other case, it will come from the losses people suffer when the asset slowly depreciates.  It is in the nature of a zero sum game that there is no MUTUAL BENEFIT, but only winners and losers.  That was my whole point.  There is no "mutual benefit" that results in the taking of profits.

We also know that rich people have more abilities to get rich and stay rich as compared with poor folks.  Also, people who are informed about matters have more abilities to profit from the information that they know as compared with uninformed folks.  There are a lot of injustices in the world

I'm not talking about injustice.  But an "investment", like a "trade" is normally meant to bring mutual benefit.  In a zero sum game, there's not such a thing.  There are winners and there are losers, nothing else.  

Telling people they "should invest in crypto" is hoping they will become your losers, not attracting partners for mutual benefit.   Because there's no such thing as mutual benefit in a zero sum game.  If you want to win, you have to find some losers.  Right now, or in the future.

I agree that there are going to be lifecycle aspects to any asset or money that may cause it to be more or less valuable to other assets and money, and each of us has to determine the extent to which we are going to invest in one system or another, and sometimes we may not have access or information to help us with our diversification decisions, and we do the best that we can to invest and/or diversify based on information and access that we have available to each of ourselves.

Again, if you are speculating on monetary assets, all you can do is participating in a zero sum game, and hence hope for losers that will finance your benefits.  That's not the case when you invest in production: there, everybody can benefit, and there is mutual benefit and value creation.

The benefits made in 1) are financed by the losses suffered in 3).  This is why this thing is zero-sum.

As it should be.

 sounding like goofy logic and theory to me.

You may try to elaborate, because to me it sounds rock-solid.  An asset with no usage value and unrelated to production, grows in "value belief", people give more and more value for it, and in the end, it loses all value again.   The perfect zero-sum game. Tell me how it is NOT so that the gains made in the "rising slope" are compensated by the losses at the falling slope ?  Obviously it is !

Sure this happens, but again oversimplification when attempting to describe these kinds of lifecycles for all assets and to suggest that you have any kind of clue regarding what stage any asset is in, including bitcoin.

Not ALL assets, but *monetary* assets, of which the only value resides in the belief that someone will give value for it.

Yes, you seem to be repeating points that you already made that you believe that there is too much value in bitcoin that is associated with speculation,and you attribute little to no value to speculation.

Of course there is little value to speculation, apart from fluidizing the market, in which case its effect on the price should only be of the order of the volatility.  Speculation on oil is good to fluidize the oil market.  However, if the oil price triples because of speculation, then that's counter productive and renders oil a risky asset.  If the oil price is mainly determined by production and usage, then the oil price is relatively stable and the "right" price for the optimal allocation of resources.  If the oil price is mainly speculative, oil will be too expensive and it will be under-allocated, resulting in a poorer economy performance overall (one will use more expensive substitutes for oil where the usage of oil would have been the right thing to do).
In as much as speculation can diminish the price fluctuations of the oil price, until the volatility is mostly gone apart from totally unknown new information, it contributes to economic well being.  In as much as speculation pumps the price, it makes oil too expensive, and too volatile, harming economic well being.

Bitcoin speculation has driven the price of bitcoin way, way over its economic usage as a store of value system and a payment system ; the only two elements that can bring competitive edge.  This has induced very high mining costs, and has made bitcoin (like oil) way more expensive than necessary for bringing the competitive edge in production it could have brought if it were mainly used as a payment system and a store of value system.  It has also brought higher volatility to bitcoin.

Both the higher mining costs, the higher volatility are HARMING the economic production improvements and the economic well being bitcoin could have brought - in the same way as too high oil prices and price volatility due to excessive speculation on oil harm its economic utility.

[JayJuanGee]

...

I can only discuss on the basis of argumentation.  If you just announce that I'm oversimplifying, missing issues and so on, without a logically constructed argument on the basis of mutually accepted starting points, then there's not much to discuss.  I tried to outline all the elements in my argumentation of why "investing" in a crypto currency is nothing else but betting in a zero-sum game, which is different from *using* a crypto currency as a store of value, and which is different from investing in the stock market.

Yep.  We are just getting repetitive at a certain point.

"greater fool theory" applies each time there is a zero-sum game in which people engage so vehemently to "make profit" (sell more expensively than they buy) that the price is determined by the demand by these actors.  From black tulips, to south sea bonds to any other such situation.  In other words, when these conditions are present:

1) there is no value creation as such, or in any case much less than the market price increase
2) the item is a near-collectible

1 + 2 imply essentially a zero-sum game.

Yes and it appears that one of the main differences in your view and mine remains that you believe that there is little to no value in bitcoin, and it is pure speculation, and I am suggesting that the value in bitcoin is greater than what you calculate it to be.  We don't really need to get into further discussions.

3) people mainly demand the asset because they expect it to be sold at a higher price (looking for a greater fool).

we have the essential behaviour that builds up a speculative bubble.

Yes, I already conceded that there is a lot of speculation going on in bitcoin.  It could be anywhere between 75% and 95%.  I don't really know or care too much, because it is what it is, and in the end, whatever remains of value, whether that is 5% or 25%, that is also important, but it is not the only thing that matters.  The bitcoin market and reasons for people getting in is what it is and it is evolving and likely to continue to be more and more valueable with the passage of time.  You can chose to invest or not based on present value of expected future value.  and each come to our own assessment regarding the extent to which we value bitcoin and the extent to which we can invest (or gamble) our own assets in order to be involved in buying or selling bitcoins.

This usually collapses, because when one runs out of sufficient "greater fools", the price does not increase any more.  Contrary to a store of value, people are NOT interested in using the asset as a store of value, but just as a generator of benefit ; if they lose faith in higher price, the demand plummets.   When the demand plummets, two things can happen: people can hold, hoping for a rise again, or people can panic-sell.   If they panic-sell, we have the bubble crashing down.  If they hold, the asset can turn into a store of value, of which, however, the price will slowly deflate, because the overall demand for holding it as a store of value is way lower than the earlier demand for making profits.  

Of course there is value creation.. how many times do I have to repeat and point out the various values.

For example, has there ever been a secure decentralized immutable ledger/storage of value. Go ahead, name one?

In its current state and its current history, Bitcoin is absolutely paradigm shifting, even if it could take 20 years for the price to follow? or there is a possibility that it could end up getting destroyed in some kind of way.

I know that this is an argument by bitcoin proponents, but it is false.  There is no value in "paradigm shift" as such.  

O.k.  So we disagree.  Why do we need to continue to beat a dead horse, if we disagree?

I believe that there is value creation and there is some importance to the value creation, and you believe that there is not.  Those starting points affect our considerations of the matter and our actions.  Case closed, no?

The only value comes ultimately from the increase in goods and services produced that comes from it ; so from the competitive edge in the production of goods and services.  In as much as bitcoin would allow for a more fluid production of goods and services, because payments would be better, easier and so on, I agree that the bitcoin system creates value.  But abstract concepts such as "paradigm shift" and "immutable ledger" are of not much value, apart for a few geeks (like myself) enjoying these ideas.  
Value comes from the competitive edge in the production of goods and services, because, as you also point out, in the end, all value comes from the personal enjoyment of the consumption of goods and services.

O.k great.  So you agree that there is some very small level of value, and you place little to no weight on whatever value happens to be there.  I place greater weight on whatever value is there.  Those are our starting points to our positions and actions.

Maybe you are mixing up terms?  zero sum game is different from scarcity or limited supply or whatever you are attempting to mean by your description of bitcoin as a zero sum game (which implies lack of value apart from the coin itself).

A zero sum game is a game-theoretic notion, where the sum of the gains by certain actors is equal to the losses of the other actors (so that the total algebraic sum of all gains is zero - hence the name).  The balance has to be made "at the end of the game".

A system that shifts tokens around in return for value (here, measured in $) is obviously a zero-sum game.  Every monetary system is supposed to be a zero sum game.

You have a zero-sum game whenever there is no state in which ALL participants got out more than they started with.  

Sure it does not hurt that you continue to explain zero sum game, but we already know that the difference in our opinion does not have to do with the concept of zero sum game but instead the extent to which we find any value added in bitcoin and whether or not that value added is at a materially high enough level to make a difference to the outcome.  Both of us come out different in that regard, so why would we need to discuss the other matters?  Except you want to present information that is no longer relevant to our actual disagreement.

I am not disagreeing with the concept of zero sum game or how it is applied or whatever, except to the extent to suggest that it is not completely applicable to bitcoin because of the value created and value added in bitcoin makes it a beast that is something other than what you are describing with your simple zero sum game application.

Exchanging goods is NOT a zero sum game.  If I exchange an apple for an orange, that is because initially I have an apple, and you have an orange, and I value an orange more than an apple, while you value an apple more than an orange.  If we exchange my apple and your orange, we BOTH win in value.  I have something I value more, and you have something you value more.  We are both winners, this is not zero-sum.

Yes, one thing is that the objects themselves are not the same, but sometimes, when you have similar objects, they can be valued differently by different people, and that is frequently referred to as accounting for subjective value.   We should likely agree that there are a variety of tangible and intangible ways to attribute value.

Producing goods is not a zero sum game.  If I have flower and an oven, and I bake bread, then I have now a bread, which I value more than the flower, and my free time.  That's why I made the bread in the first place.

However, exchanging tokens for dollars and dollars for tokens, when all is said and done, has ONLY resulted in shifting dollars from one to another.  The total sum of dollars in equals the total sum of dollars out.  If some got more out of it, others must have put in more than they got out.  That's zero sum.  And there is no "I value this dollar more than that dollar".  

Yes, you assume the conclusion that you want to reach and that is that the various tokens are locked into some kind of fixed value; however, even money has a moving value that depends on a variety of factors including governmental conduct, supply and how people view it (present and future value).

The day that bitcoin is $0, which is "at the end of the game", all dollars "in" are equal to all dollars "out".   So it is evidently a zero-sum game.

Absent some surprise technical situation, I doubt that bitcoin is going to zero any time soon.  Nonetheless, I agree that bitcoin is likely to continue to experience considerable volatility in the coming one to ten years.  Whether we need to invest in bitcoin today based on our view of time periods beyond 10 years, depends on ourselves and our situations.

Bitcoin is lossy, but not so much: the mining fee, the inflation, and the exchange fees eat something, but this is competitive with other stores of value like fiat or so.

I don't completely understand what you mean by "lossy?"  There are expenses in using any system that stores and transmits value, and so these cost benefits are going to be relative to one another.  Some systems will be more efficient than other systems, and some systems will hold their value better than other systems.  In the end, it could take years and years (and maybe even decades) to suss out the relative value of each, but also in the end, each of us needs to consider the value for ourself and the value of such systems in order to determine for ourselves the extent to which we may choose to invest or gamble in one system versus another.

Sure.  What I meant was: contrary to, say, the distribution of physical coins, once it is done, bitcoin needs to spend resources to keep running.  So it is not exactly zero-sum: the total amount of value in is partly spend on mining electricity and hardware and so on.  The "dollars out on electricity for mining" is a net loss of the system.


You are right that it is the "price of having the bitcoin system".  I don't deny this.  But that makes that it is *not even* zero sum.  In as much as it would be value-generating (competitive edge in production of goods and services) this price could be justified.  

So what?  I already addressed this.  There is going to be various expenses with any system that has value, whether that be guarding or transporting such assets, and such costs will increase the more valuable the asset becomes.

Sure, but don't delve into oversimplification by attempting to describe things that you do not know, there is a variety of values that are subjective and objective... and those values also are going to change over time and depending on circumstances.  An apple is going to have a whole hell of a lot more value for someone who is starving than a bitcoin, but if the person is not starving then a bitcoin would likely have higher value, because currently, he could sell such a bitcoin for nearly $600.

You see, here you've lost me.  Of course I adhere to the subjective value theory of the Austrian school.  But this is not in contradiction, or not a proof of "oversimplification" on my part at all.   There is no "subjective value" to "dollars in and dollars out" because dollars are just means to obtain goods and services at market prices.  All dollars are equal and its "usage" is equal (market price).

You cannot convince me that someone who has paid $100 and got out $10, can nevertheless have gained value, as compared to someone who put in $10, and got out $100.  The first one has lost value, and the second one gained value, no matter what.  This is NOT the same as me losing an apple for an orange, and winning subjective value, and you losing an orange for an apple, and ALSO winning subjective value (which is why our trade was not zero-sum but mutual benefit).

There cannot be a net flux of dollars from A to B while being "mutually beneficent".   (except as a gift).

It still remains that the basis of our reaching differing conclusion revolves around how much value we attribute bitcoin and to the extent to which we consider the value material.  I attribute more than you, and that makes a difference in the rest of our assessments.

again, so what?  There is going to be some higher levels of profit from early adopters in any system that appreciates in value and early adopters recognize the value of holding the asset.

Sure, but at the expense of the losers at the end.  In the case of a "greater fool" asset, it will come when the thing collapses.  In the other case, it will come from the losses people suffer when the asset slowly depreciates.  It is in the nature of a zero sum game that there is no MUTUAL BENEFIT, but only winners and losers.  That was my whole point.  There is no "mutual benefit" that results in the taking of profits.

You seem to be assuming the end point before we get there.  These concepts could take decades to roll out, and in the mean time, there is going to be value and utility, even though in the end you, say:  "look, I told you zero sum game.. blah blah blah"  O.k.  decades later, who the fuck cares if you were right because in the meantime there was utility being made and experienced.

We also know that rich people have more abilities to get rich and stay rich as compared with poor folks.  Also, people who are informed about matters have more abilities to profit from the information that they know as compared with uninformed folks.  There are a lot of injustices in the world

I'm not talking about injustice.  But an "investment", like a "trade" is normally meant to bring mutual benefit.  In a zero sum game, there's not such a thing.  There are winners and there are losers, nothing else.  

Telling people they "should invest in crypto" is hoping they will become your losers, not attracting partners for mutual benefit.   Because there's no such thing as mutual benefit in a zero sum game.  If you want to win, you have to find some losers.  Right now, or in the future.

You can invest to whatever level you believe is appropriate for your own circumstances, or not at all.  Up to you.  I am not telling anyone, except to lead by example (in my own investment into bitcoin), and also I have a variety of other investments, so I also believe in diversification of assets since various asset classes perform differently under different market conditions.

I agree that there are going to be lifecycle aspects to any asset or money that may cause it to be more or less valuable to other assets and money, and each of us has to determine the extent to which we are going to invest in one system or another, and sometimes we may not have access or information to help us with our diversification decisions, and we do the best that we can to invest and/or diversify based on information and access that we have available to each of ourselves.

Again, if you are speculating on monetary assets, all you can do is participating in a zero sum game, and hence hope for losers that will finance your benefits.  That's not the case when you invest in production: there, everybody can benefit, and there is mutual benefit and value creation.

There are all kinds of ways that any person can invest and each person can diversify to the extent that s/he believes that one asset is going to move in value and to shift investments with the passage of time.  Investments are not necessarily locked in, unless you chose to make them locked in or to the extent that you may have expenses associated with various investments that you make.

The benefits made in 1) are financed by the losses suffered in 3).  This is why this thing is zero-sum.

As it should be.

 sounding like goofy logic and theory to me.

You may try to elaborate, because to me it sounds rock-solid.  An asset with no usage value and unrelated to production, grows in "value belief", people give more and more value for it, and in the end, it loses all value again.   The perfect zero-sum game. Tell me how it is NOT so that the gains made in the "rising slope" are compensated by the losses at the falling slope ?  Obviously it is !

We don't really need to elaborate, because we already see where we differ.  I attribute value to bitcoin, and you do not, and in my view, not attributing value leads to bad application of theories.  And, maybe you consider my theories equally goofy, because I attribute value to bitcoin when you believe that little to no value should be attributed.

Sure this happens, but again oversimplification when attempting to describe these kinds of lifecycles for all assets and to suggest that you have any kind of clue regarding what stage any asset is in, including bitcoin.

Not ALL assets, but *monetary* assets, of which the only value resides in the belief that someone will give value for it.

the dollar and bitcoin are not equal monetary assets.. so when you attempt to describe them as if they are equal, you are oversimplifying, no?

Yes, you seem to be repeating points that you already made that you believe that there is too much value in bitcoin that is associated with speculation,and you attribute little to no value to speculation.

Of course there is little value to speculation, apart from fluidizing the market, in which case its effect on the price should only be of the order of the volatility.  Speculation on oil is good to fluidize the oil market.  However, if the oil price triples because of speculation, then that's counter productive and renders oil a risky asset.  If the oil price is mainly determined by production and usage, then the oil price is relatively stable and the "right" price for the optimal allocation of resources.  If the oil price is mainly speculative, oil will be too expensive and it will be under-allocated, resulting in a poorer economy performance overall (one will use more expensive substitutes for oil where the usage of oil would have been the right thing to do).
In as much as speculation can diminish the price fluctuations of the oil price, until the volatility is mostly gone apart from totally unknown new information, it contributes to economic well being.  In as much as speculation pumps the price, it makes oil too expensive, and too volatile, harming economic well being.

Bitcoin speculation has driven the price of bitcoin way, way over its economic usage as a store of value system and a payment system ; the only two elements that can bring competitive edge.  This has induced very high mining costs, and has made bitcoin (like oil) way more expensive than necessary for bringing the competitive edge in production it could have brought if it were mainly used as a payment system and a store of value system.  It has also brought higher volatility to bitcoin.

Both the higher mining costs, the higher volatility are HARMING the economic production improvements and the economic well being bitcoin could have brought - in the same way as too high oil prices and price volatility due to excessive speculation on oil harm its economic utility.

You believe bitcoin is overvalued, and in general, I believe bitcoin is undervalued.

Actually, I don't ever really attempt to know the short-term price direction of bitcoin, so personally, I am prepared for the price to move in either direction.  If prices go up, I sell and if prices go down, I buy.

But, in the longer term, I expect bitcoin prices to go up, whether that longer term is 1 year, 5 years or 10 years.  In any event, my conclusion is that based on the current status of bitcoin, bitcoin is undervalued, but that does not necessarily mean that prices might not return down into the $200s, even though I believe that it would be quite tough (absent either technical or some other major changes) that prices would dip into the $200s for any meaningful amount of time.

[dinofelis]

Yes and it appears that one of the main differences in your view and mine remains that you believe that there is little to no value in bitcoin, and it is pure speculation, and I am suggesting that the value in bitcoin is greater than what you calculate it to be.  We don't really need to get into further discussions.

I do value bitcoin a lot.  I think it is a great invention in the century-long battle for freedom.  It lacks a few properties, but that is understandable as it was the "first go".  

However, I think you *over value* bitcoin too much and (hence my pointing to "religious sensibilities") it seems that you react almost allergically when you think that someone is downtalking bitcoin.  I'm not.  I'm a bitcoin fan.  But I don't like what is happening.  I'm just saying that the immense amount of speculation is KILLING the real value of bitcoin.

In as much as that immense amount of speculation is an unavoidable phenomenon when something like bitcoin sees the daylight, then unfortunately I have to say that this would indicate that, despite its promises, it is a failed project.  But the hope is still that this speculative effect will go away ; although I don't like it at all and I'm starting to fear that it is killing the project all together.

As anything, the value of something is what it brings you in the end, as enjoyment - and economically, that means, as goods and services you can consume.

Yes, I already conceded that there is a lot of speculation going on in bitcoin.  It could be anywhere between 75% and 95%.  I don't really know or care too much, because it is what it is, and in the end, whatever remains of value, whether that is 5% or 25%, that is also important, but it is not the only thing that matters.

This is where we fundamentally differ in opinion.  THIS is the only thing that really brings value.  The speculative aspect doesn't bring value, and harms the non-speculative part.  The speculative aspect is NOT the value of it.  The only little bit of value that speculation brings, is fluidity in the market and price information correction ON THE CONDITION that it doesn't dominate the price.  And this is what goes wrong: it does dominate the price.

Each time an asset is dominated by speculation, its real usage suffers, and I think that in the case of bitcoin, that ratio is so unhealthy that it might outright kill it.

 The bitcoin market and reasons for people getting in is what it is and it is evolving and likely to continue to be more and more valueable with the passage of time.  You can chose to invest or not based on present value of expected future value.  and each come to our own assessment regarding the extent to which we value bitcoin and the extent to which we can invest (or gamble) our own assets in order to be involved in buying or selling bitcoins.

The sole source of value of something is the "joy of consumption" it brings to people, and this value, as compared to the value of other things, is what makes the market price, because of the demand that is generated for it and the limited offer that it suffers from.  But the effect can of course be very indirect.  A glass  of champagne has direct value, and hence I'm willing to pay a market price for it, because of the joy it brings me by drinking it, or the joy I can offer someone I like by giving it to him/her.
A hammer has value, because I can use it to make stuff I enjoy.   This is a capital good.  I can make stuff other people enjoy, to trade it for stuff I enjoy.  And so on.  But *in the end* value, and hence market price, comes from the improvement of production of goods and services the thing that has a price allows for.  The source of all value, and hence of market price, comes from production, or improvement of production, or improved consumption of goods and services.  There is no other source of value.

A monetary system has great value, because it brings several improvements in production, and improvements in consumption, to the economy: the indirection allows you to split multi-party trades into 2 by 2 trades, separated in distance and in time.  If I have apples, you have oranges, and Joe has bananas, and I want oranges, you want bananas, and Joe wants apples, then instead of having to come together the 3 of us, at the same moment, to do our trade with 3 parties, we can do this 2 by 2, and at different moments in time.  THIS is the principal value that a monetary system brings us: making multi party instantaneous trading into 2-2 exchanges separated in time and distance.  The essential function of such a system is that it can TRANSPORT market value in time and space.  
It is similar to the transport of goods, in the following sense.  Goods can be made easier at some locations and at certain moments, but they are best consumed at other places and at other times.  As such, storing goods (transport in time) and moving goods (transport in time) improves the quality of production and consumption.  The system that allows for transport in time, and transport in space, brings as a value, the improvement in quality of production and consumption.  

But nobody in his right mind is going to say that the value of a warehouse (the construction) equals the value of the goods stored in it.  Yes, it has some value because production and consumption has improved somewhat, but it is not the TOTAL value of the goods inside.   That's absurd.  In the same way, the value of a truck is there, because the existence and usage of a truck allows for a somewhat better consumption and production.  But the value of the truck is not the TOTAL value of what it transports of course.

And in the same way, the value of a monetary system is NOT equal to the  market value it transports in time, although it does have some value, because it improves consumption and production somewhat.

Ideally, the market value of a transport system (the value that is created by the bringing into existence of the system) is of the order of the INCREASE in value creation in production and consumption it allows to establish.  If similar systems exist, then its market value will reside in the IMPROVEMENT over other systems that it brings to consumption and production.  This is what I called "the competitive edge it brings".

Compare it to transport of goods.  If trains exist, and it costs (in consumed electricity, usage of material, personnel salaries, ....), say, $1000,- to transport goods from the production site to the consumption site with a train, and now a truck exists, which can not only do that for only $700, but also improves the consumption experience with $100, and improves the production by $200, then the VALUE of the "truck system" is $300 + $100 + $200 = $600 in this case: it has consumed less resources ($300 less), has allowed a better consumption ($100 more), and has improved the production ($200 worth).  But if this applies to goods that cost themselves, say, $7000,-, then the value of the truck system is NOT $7000,-  

It HAS some value (here $600, the competitive edge it has allowed), but the value is not equal to what it transports of course.

I believe that there is value creation and there is some importance to the value creation, and you believe that there is not.  Those starting points affect our considerations of the matter and our actions.  Case closed, no?

But I agree with you.  Only, that value creation is not the market cap.  It is much, much less.
But it is not zero.

O.k great.  So you agree that there is some very small level of value, and you place little to no weight on whatever value happens to be there.  I place greater weight on whatever value is there.  Those are our starting points to our positions and actions.

That is exactly my point.  Bitcoin has *potentially* a huge value, in usage as a currency, and in usage as a longer term store of value.  But *for the moment* that potential is not used much.  If the bitcoin competitive edge over other financial systems is, say, an improvement of 5% (imagine that bitcoin is "free transport of value" and others ask a fee of 5%, then bitcoin brings a competitive edge of 5% of the value it transports), and 10% of its market cap is used that way, as a currency, then the VALUE of the bitcoin system is 0.5% of its market cap.

My point is that this value proposition is HARMED by the dominant speculation, because this brings in volatility (which harms the competitive edge bitcoin can bring over other financial systems), it brings higher mining costs (because the high market cap goes with high mining difficulty).  It might even render bitcoin non-competitive and kill ALL of its competitive edge.

That's my rant about dominant speculation: it KILLS potentially the value of the bitcoin system.

I am not disagreeing with the concept of zero sum game or how it is applied or whatever, except to the extent to suggest that it is not completely applicable to bitcoin because of the value created and value added in bitcoin makes it a beast that is something other than what you are describing with your simple zero sum game application.

Ok, I hope that with what I said above, you can more clearly see what I mean.   I estimate the current VALUE of the bitcoin system, as the improvement of goods and services it brings to people, as much less than a percent of its market cap, and maybe zero.   I hope I made clear why I think that bitcoin DOES have the potential to have value, and why excessive speculation kills it.

Absent some surprise technical situation, I doubt that bitcoin is going to zero any time soon.

The point is that you have to establish "zero sum" at the end of the game.  In a million years if you wish so.  Sooner or later, bitcoin will be at $0, whether next year, or 7000 years from now.

But you are right that the bitcoin system DOES produce some value during that time (like a company does), but ONLY when it helps improve consumption and production.  Speculation doesn't do that.  Only "transport of value" with a competitive edge over other financial systems helps improve consumption and production.   As I outlined earlier, the value that is actually produced by the bitcoin system (the improvement it brings to consumption and production over what exists already for doing so, like VISA and gold) is very small, and maybe even zero, exactly because of the speculative dominance.

This is why I don't like that speculative dominance.

[JayJuanGee]

Yes and it appears that one of the main differences in your view and mine remains that you believe that there is little to no value in bitcoin, and it is pure speculation, and I am suggesting that the value in bitcoin is greater than what you calculate it to be.  We don't really need to get into further discussions.

I do value bitcoin a lot.  I think it is a great invention in the century-long battle for freedom.  It lacks a few properties, but that is understandable as it was the "first go".  

Even though bitcoin was the "first go", it remains the best out of any crypto, so are you expecting some kind of bitcoin 2.0 to come along?

However, I think you *over value* bitcoin too much and (hence my pointing to "religious sensibilities") it seems that you react almost allergically when you think that someone is downtalking bitcoin.  I'm not.  I'm a bitcoin fan.  But I don't like what is happening.  I'm just saying that the immense amount of speculation is KILLING the real value of bitcoin.

You are all over the place, including this here comment.  We are talking on a public forum, and I am responding to your comments, that is not religion nor whether someone over values or under values something.  Each of us invests according to our views, hopefully, if we are able to.

In as much as that immense amount of speculation is an unavoidable phenomenon when something like bitcoin sees the daylight, then unfortunately I have to say that this would indicate that, despite its promises, it is a failed project.  But the hope is still that this speculative effect will go away ; although I don't like it at all and I'm starting to fear that it is killing the project all together.

As anything, the value of something is what it brings you in the end, as enjoyment - and economically, that means, as goods and services you can consume.

speculation is going to exist.  Live with it.  Also, it is very possible that bitcoin could receive considerable additional and strong attacks from governements and banks, and those may end up being characterized as if such activities were speculation.

Yes, I already conceded that there is a lot of speculation going on in bitcoin.  It could be anywhere between 75% and 95%.  I don't really know or care too much, because it is what it is, and in the end, whatever remains of value, whether that is 5% or 25%, that is also important, but it is not the only thing that matters.

This is where we fundamentally differ in opinion.  THIS is the only thing that really brings value.  The speculative aspect doesn't bring value, and harms the non-speculative part.  The speculative aspect is NOT the value of it.  The only little bit of value that speculation brings, is fluidity in the market and price information correction ON THE CONDITION that it doesn't dominate the price.  And this is what goes wrong: it does dominate the price.

It's a part of life, and also seems to have been anticipated as part of the dynamics of bitcoin, even by satoshi.

We are repeating, but as an asset increases in value, it increases in utility, speculation and even motives for being attacked.  These concepts were not lost upon Satoshi when designing the initial platform.

Each time an asset is dominated by speculation, its real usage suffers, and I think that in the case of bitcoin, that ratio is so unhealthy that it might outright kill it.

Not likely at this point.  Let's revisit in a couple of years, and see where we are at.

 The bitcoin market and reasons for people getting in is what it is and it is evolving and likely to continue to be more and more valueable with the passage of time.  You can chose to invest or not based on present value of expected future value.  and each come to our own assessment regarding the extent to which we value bitcoin and the extent to which we can invest (or gamble) our own assets in order to be involved in buying or selling bitcoins.

The sole source of value of something is the "joy of consumption" it brings to people, and this value, as compared to the value of other things, is what makes the market price, because of the demand that is generated for it and the limited offer that it suffers from.  But the effect can of course be very indirect.  A glass  of champagne has direct value, and hence I'm willing to pay a market price for it, because of the joy it brings me by drinking it, or the joy I can offer someone I like by giving it to him/her.
A hammer has value, because I can use it to make stuff I enjoy.   This is a capital good.  I can make stuff other people enjoy, to trade it for stuff I enjoy.  And so on.  But *in the end* value, and hence market price, comes from the improvement of production of goods and services the thing that has a price allows for.  The source of all value, and hence of market price, comes from production, or improvement of production, or improved consumption of goods and services.  There is no other source of value.

You are talking nonsense if you are suggesting that items only have value if they are concrete and material.

I don't claim to know all the ways to articulate the value of bitcoin, yet as I already said on several occasions, there is some value to secure immutable decentralized transactions, and bitcoin brings that at a level never seen before, which equals value.

A monetary system has great value, because it brings several improvements in production, and improvements in consumption, to the economy: the indirection allows you to split multi-party trades into 2 by 2 trades, separated in distance and in time.  If I have apples, you have oranges, and Joe has bananas, and I want oranges, you want bananas, and Joe wants apples, then instead of having to come together the 3 of us, at the same moment, to do our trade with 3 parties, we can do this 2 by 2, and at different moments in time.  THIS is the principal value that a monetary system brings us: making multi party instantaneous trading into 2-2 exchanges separated in time and distance.  The essential function of such a system is that it can TRANSPORT market value in time and space.  
It is similar to the transport of goods, in the following sense.  Goods can be made easier at some locations and at certain moments, but they are best consumed at other places and at other times.  As such, storing goods (transport in time) and moving goods (transport in time) improves the quality of production and consumption.  The system that allows for transport in time, and transport in space, brings as a value, the improvement in quality of production and consumption.  

But nobody in his right mind is going to say that the value of a warehouse (the construction) equals the value of the goods stored in it.  Yes, it has some value because production and consumption has improved somewhat, but it is not the TOTAL value of the goods inside.   That's absurd.  In the same way, the value of a truck is there, because the existence and usage of a truck allows for a somewhat better consumption and production.  But the value of the truck is not the TOTAL value of what it transports of course.

And in the same way, the value of a monetary system is NOT equal to the  market value it transports in time, although it does have some value, because it improves consumption and production somewhat.

Ideally, the market value of a transport system (the value that is created by the bringing into existence of the system) is of the order of the INCREASE in value creation in production and consumption it allows to establish.  If similar systems exist, then its market value will reside in the IMPROVEMENT over other systems that it brings to consumption and production.  This is what I called "the competitive edge it brings".

Compare it to transport of goods.  If trains exist, and it costs (in consumed electricity, usage of material, personnel salaries, ....), say, $1000,- to transport goods from the production site to the consumption site with a train, and now a truck exists, which can not only do that for only $700, but also improves the consumption experience with $100, and improves the production by $200, then the VALUE of the "truck system" is $300 + $100 + $200 = $600 in this case: it has consumed less resources ($300 less), has allowed a better consumption ($100 more), and has improved the production ($200 worth).  But if this applies to goods that cost themselves, say, $7000,-, then the value of the truck system is NOT $7000,-  

It HAS some value (here $600, the competitive edge it has allowed), but the value is not equal to what it transports of course.

You can describe the value all that you like, but in the end, the value is also what people are willing to pay for it, and if they are willing to pay $600, then it is worth $600 at that particular time.

I believe that there is value creation and there is some importance to the value creation, and you believe that there is not.  Those starting points affect our considerations of the matter and our actions.  Case closed, no?

But I agree with you.  Only, that value creation is not the market cap.  It is much, much less.
But it is not zero.

O.k..


You think it is worth less and I think that it is worth more... so what?  We can each invest accordingly, and find out which way it is going to go.  I already said that I have no fucking idea in the short term, but I expect in the longer time that the price will continue to rise.  I don't really feel any need to justify that any more than I already have.

O.k great.  So you agree that there is some very small level of value, and you place little to no weight on whatever value happens to be there.  I place greater weight on whatever value is there.  Those are our starting points to our positions and actions.

That is exactly my point.  Bitcoin has *potentially* a huge value, in usage as a currency, and in usage as a longer term store of value.  But *for the moment* that potential is not used much.  If the bitcoin competitive edge over other financial systems is, say, an improvement of 5% (imagine that bitcoin is "free transport of value" and others ask a fee of 5%, then bitcoin brings a competitive edge of 5% of the value it transports), and 10% of its market cap is used that way, as a currency, then the VALUE of the bitcoin system is 0.5% of its market cap.

Present value can also be assessed based on future perceived value.  People really do that.

My point is that this value proposition is HARMED by the dominant speculation, because this brings in volatility (which harms the competitive edge bitcoin can bring over other financial systems), it brings higher mining costs (because the high market cap goes with high mining difficulty).  It might even render bitcoin non-competitive and kill ALL of its competitive edge.

That's my rant about dominant speculation: it KILLS potentially the value of the bitcoin system.

I doubt that speculation kills value, and as the market cap increases and investment and use vehicles continue to be developed, volatility likely continues to go down, and even possibly volatility remains on a kind of upward trajectory based on continued development, use, adoption and upwards price pressures.

I am not disagreeing with the concept of zero sum game or how it is applied or whatever, except to the extent to suggest that it is not completely applicable to bitcoin because of the value created and value added in bitcoin makes it a beast that is something other than what you are describing with your simple zero sum game application.

Ok, I hope that with what I said above, you can more clearly see what I mean.   I estimate the current VALUE of the bitcoin system, as the improvement of goods and services it brings to people, as much less than a percent of its market cap, and maybe zero.   I hope I made clear why I think that bitcoin DOES have the potential to have value, and why excessive speculation kills it.

No.  We should just agree to disagree because it doesn't really do a whole hell-of-a lot of good to keep repeating the same thing in different scenarios when it already appears quite obvious what is the source of our disagreements and we have kind of beaten the subject to death.

Absent some surprise technical situation, I doubt that bitcoin is going to zero any time soon.

The point is that you have to establish "zero sum" at the end of the game.  In a million years if you wish so.  Sooner or later, bitcoin will be at $0, whether next year, or 7000 years from now.

The theory of zero sum does not matter to me if it takes a million, or even one hundred years to play out because I am going to be long dead by then.  I make decisions based on shorter time lines than that, and I could give a ratts ass about something that is going to happen in a couple hundred years..

But you are right that the bitcoin system DOES produce some value during that time (like a company does), but ONLY when it helps improve consumption and production.  Speculation doesn't do that.  Only "transport of value" with a competitive edge over other financial systems helps improve consumption and production.   As I outlined earlier, the value that is actually produced by the bitcoin system (the improvement it brings to consumption and production over what exists already for doing so, like VISA and gold) is very small, and maybe even zero, exactly because of the speculative dominance.

This is why I don't like that speculative dominance.

You are throwing out the baby with the bath water.

We have all kinds of bad financial systems, such as credit cards, etc, and they are centralized and creating a lot of utility, in spite of being bad.  Bitcoin is going to take over some of that space in the future, and that is part of the reason why it's current price is lower than it's expected future price.

[dinofelis]

Even though bitcoin was the "first go", it remains the best out of any crypto, so are you expecting some kind of bitcoin 2.0 to come along?

Anonymity.  Bitcoin is way, way, way too transparent.  Monero, zcash, you name it, but these are better systems in principle, because they allow privacy and sufficient anonymity to make dragnetting difficult.
There are other problems with bitcoin, like the finite money supply, and the bumpy halvings.   And finally, the too simple PoW, which allowed for asics, and brings centralization and with it, the potential loss of immutability. But it was a very good "first go".   It got many things right too ; amazingly many.

speculation is going to exist.  Live with it.  Also, it is very possible that bitcoin could receive considerable additional and strong attacks from governements and banks, and those may end up being characterized as if such activities were speculation.

This is the other problematic potential failure of bitcoin and crypto in general, in the same way that gold was misused.   As the principal task of governments is to extort value from people, the trick central banks usually play with other monetary assets, especially if they are in short supply, is the following:  "buy high, sell low".  That can sound stupid, but it isn't.  "buy high, sell low" is a bad idea if you cannot print money.  If you can print money, then it doesn't cost you anything to buy high, and to sell low.  What you obtain, is a higher volatility of the asset, and hence a lower useful value as store of value, and as such, a higher rate of adhesion to your fiat, while pumping true value from the people to the financial sector via inflation.  It is a way to pump fiat in the economy, and to render, at the same time, the other store of value volatile.
People have been producing lots of value to obtain gold when it is high, and then turn it in to the central bank because it is buying up gold, pumping its price higher and higher.  When people have stored a lot of value in that gold, then the central banks start selling gold, crashing its price.  People having put aside a lot of value in gold simply lose that value.  It makes gold a less reliable store of value.  Because the state-finance PTB don't want you to have a store of value over which they don't have control.   Bitcoin can undergo exactly the same manipulation.

It's a part of life, and also seems to have been anticipated as part of the dynamics of bitcoin, even by satoshi.

If you use a monetary system as a currency, there is a natural demand for that currency that develops, and that sets a price.   This is what is given by Fisher's formula.   Whether the monetary asset is used as a short-term currency, or a longer-term store of value, doesn't really matter, but it is true that a longer-term store of value requires (and produces) a higher market cap than a short term currency.  But in these cases, as the demand follows from a rational "competitive edge" of this store of value over another one, one can think that this demand is robust, and can increase when more people adopt it.  

In other words, its market cap will rise because of its increased usage as a store of value, and this is a solid, fundamental market cap.  The only way to make it fall, is if people suddenly don't want to use bitcoin any more as a store of value or currency, because it has lost its competitive edge (a better crypto comes along, fiat improves in quality, ....).

However, if the main demand is because of an expectation of a rise in value and "making benefit", then we are in the school example of "greater fool theory".  Sooner or later, one will run out of greater fools, and the price rise will come to a halt.  At that point, the demand will drop, and hence the market cap will drop.  If people were using bitcoin, not because it had a competitive edge as a store of value, but rather because of "making benefit", then at a certain point, they will realize they won't get any.  At that point, there's no stopping to the decrease in value.  The time scale on which this happens will depend on the time scale over which people were expecting to make benefit.  If they are thinking that it will take 5 years, then it will take a few times 5 years before the price drops after peaking.  If they think that it will take 10 years, then it may take several decades after peaking.

But the conclusion is unavoidable: if the main demand for bitcoin comes from the desire for "making benefit", sooner or later, this thing will come crashing down (although the crash will take several times the "expectation time" after peaking).

We are repeating, but as an asset increases in value, it increases in utility, speculation and even motives for being attacked.  These concepts were not lost upon Satoshi when designing the initial platform.

Indeed, and this is why it is such a pity that 90% or more of the market cap is made up by speculation.  It would be much better is the market cap of bitcoin were 10 times smaller, and essentially made up of its usage.  It would stay much, much more under the radar than now, it would have a much more robust market cap, much less volatility, waste less on mining, and have a higher competitive edge.

You are talking nonsense if you are suggesting that items only have value if they are concrete and material.

I never said that, at all.  I said that all SOURCE of value is consumption, whether that is material or immaterial (like services).  That means that something can only obtain value if it is directly consumed, or if in one way or another, it improves consumption (and/or production of the consumed goods).   This "indirect" can be very indirect, but it has to lead to improved production and/or consumption.  A monetary system has value if it helps improving production and/or consumption.
For instance, money on the dark net markets improves consumption of illicit goods, and also helps in its distribution and hence in its production.  In as much as fiat is delicate to use there, there is real value if a system can serve as a reliable monetary system that is lacking.  And the consumption of illicit goods brings a lot of satisfaction, and hence has a lot of value: the source of all value in dark net markets.
But transactions with everything legal and all taxes and so on, I have difficulties seeing the value of crypto over credit card systems.   I can just as well buy something with VISA than with bitcoin, and in fact, in most cases, I have more protection.  The fees are negligible compared to most taxes.  So it is difficult to have a competitive edge over something like VISA.  There may be a small one, but it will not be huge.

I don't claim to know all the ways to articulate the value of bitcoin, yet as I already said on several occasions, there is some value to secure immutable decentralized transactions, and bitcoin brings that at a level never seen before, which equals value.

Well, the use as an immutable ledger represents an infinitesimal part of the market cap of bitcoin.  You can estimate that by the transaction volume of bitcoin that is related to "registering something on the ledger".  That is infinitesimal to the overall bitcoin volume.

You can describe the value all that you like, but in the end, the value is also what people are willing to pay for it, and if they are willing to pay $600, then it is worth $600 at that particular time.

Well, if people are willing to pay $600 for it, because they count on selling it for $1200, and if people are willing to pay $1200 for it because they count on selling it for $2400, and so on, sooner or later, there are going to be people that are disappointed.  If the majority of people wanting to pay $600 for it, do this because they want to sell it at $1200, and if the majority of people .... then the majority of people buying bitcoin are going to be immensely disappointed at a certain point in time.  And when people buy something and are disappointed, demand plummets like a stone.  That's the point.

If people are willing to pay $600 for it, because they find it the best store of value they can find, then when they sell it again for $600 7 years from now, they will be satisfied, and demand will be robust.  If people are willing to pay $600 for it because they need bitcoin to buy something tomorrow, then the demand will be solid, and the price robust.

See what I mean ?  The first case (greater fool theory) is not sustainable.  the second all the more.

You think it is worth less and I think that it is worth more... so what?  We can each invest accordingly, and find out which way it is going to go.  I already said that I have no fucking idea in the short term, but I expect in the longer time that the price will continue to rise.  I don't really feel any need to justify that any more than I already have.

I think the price can still rise, because there is still a sea of greater fools.  On the other hand, the blocks seem to start to be "full", so the system is near full load ; some pony tricks can give us a small factor, but then it will be full again.  But one day, it will not rise any more.  So much is sure.

I'm not interested in investing.  I'm interested in liberty.  Bitcoin could have helped, but that seems to be more and more remote now.

Present value can also be assessed based on future perceived value.  People really do that.

So if bitcoin is now at $600, it means that one gives it, say, 10% chance to be at $6000, and 90% chance to be at $0 in the future.  Or one gives it 100% chance to remain at $600.  Or one gives it 50% chance to be at $1200, and 50% chance to be at $0.  I'm oversimplifying, because one has to take into account risk aversion, and risk-free interest of course.
But that's the idea.

No.  We should just agree to disagree because it doesn't really do a whole hell-of-a lot of good to keep repeating the same thing in different scenarios when it already appears quite obvious what is the source of our disagreements and we have kind of beaten the subject to death.

Ok, fair enough

We have all kinds of bad financial systems, such as credit cards, etc, and they are centralized and creating a lot of utility, in spite of being bad.

If they create a lot of utility, they aren't so bad, are they

[JayJuanGee]

Even though bitcoin was the "first go", it remains the best out of any crypto, so are you expecting some kind of bitcoin 2.0 to come along?

Anonymity.  Bitcoin is way, way, way too transparent.  Monero, zcash, you name it, but these are better systems in principle, because they allow privacy and sufficient anonymity to make dragnetting difficult.
There are other problems with bitcoin, like the finite money supply, and the bumpy halvings.   And finally, the too simple PoW, which allowed for asics, and brings centralization and with it, the potential loss of immutability. But it was a very good "first go".   It got many things right too ; amazingly many.

Well, I appreciate that you are fairly specific with your response and explanation, yet you are still coming off as a bit pretentious and selective in pointing out some aspects of superior utility in other cryptos while giving a bit of a backhanded slights to bitcoin.

Based on our extended discussion, I'm sure that each of us are sufficiently knowledgeable about the crypto space to recognize that these matters are works in progress, and many "competitive" cryptos would not be around except for the fact that they learned from bitcoin and they are attempting to improve on it in various ways.  Certainly, the better of these cryptos are going to survive and add value in various kinds of ways, whether competing with bitcoin or complementing it.  Bitcoin is also going to be able to evolve, too, and possibly even integrate some of the better aspects of various other cryptos to the extent that it is feasible for bitcoin to do so.

I am not arguing any one crypto, even though bitcoin remains quite a bit ahead of these various competing cryptos for the time being, so there is no problem for folks to chose the extent to which they may want to diversify their investment into other cryptos, to the extent to which they perceive value in such other cryptos, whether such perceptions are erroneous or not.  Each of us are going to come to varying conclusions regarding how we proceed and the extent to which we feel that we have adequate knowledge or information in order to decide whether, if and how much to diversify our investment(s), whether that is in the crypto space or other traditional financial assets and/or currencies.

speculation is going to exist.  Live with it.  Also, it is very possible that bitcoin could receive considerable additional and strong attacks from governements and banks, and those may end up being characterized as if such activities were speculation.

This is the other problematic potential failure of bitcoin and crypto in general, in the same way that gold was misused.   As the principal task of governments is to extort value from people, the trick central banks usually play with other monetary assets, especially if they are in short supply, is the following:  "buy high, sell low".  That can sound stupid, but it isn't.  "buy high, sell low" is a bad idea if you cannot print money.  If you can print money, then it doesn't cost you anything to buy high, and to sell low.  What you obtain, is a higher volatility of the asset, and hence a lower useful value as store of value, and as such, a higher rate of adhesion to your fiat, while pumping true value from the people to the financial sector via inflation.  It is a way to pump fiat in the economy, and to render, at the same time, the other store of value volatile.
People have been producing lots of value to obtain gold when it is high, and then turn it in to the central bank because it is buying up gold, pumping its price higher and higher.  When people have stored a lot of value in that gold, then the central banks start selling gold, crashing its price.  People having put aside a lot of value in gold simply lose that value.  It makes gold a less reliable store of value.  Because the state-finance PTB don't want you to have a store of value over which they don't have control.   Bitcoin can undergo exactly the same manipulation.

Sure, I agree with you that bitcoin can be manipulated in very similar ways, but your assertion regarding "exactly the same" remains to be seen whether they are going to be able to accomplish "exactly the same" because bitcoin is not "exactly the same" kind of asset as those other assets.  Our history is still to unravel in this regard, and the chances of your being wrong, regarding "exactly the same" is almost a certain because even though history may rhyme in a variety of ways, none of it evolves "exactly the same."

Furthermore, whether some asset is manipulated or not or "able to be manipulated", we gotta see how it plays out.  I do agree with you regarding manipulation taking place at a loss in terms of the buy high and sell low principles of the manipulator, but to the extent that bitcoin may be able to stave off some of the fractional reserve concepts and other fractional tools and folks may be able to continue to recognize some price differentiation in owning actual bitcoin, rather than having them listed somewhere, then it is going to be more and more difficult to manipulate BTC prices downwards because limited supply and at a certain point, people are going to refuse to sell and the manipulators are going to run out of coins to sell.

It's a part of life, and also seems to have been anticipated as part of the dynamics of bitcoin, even by satoshi.

If you use a monetary system as a currency, there is a natural demand for that currency that develops, and that sets a price.   This is what is given by Fisher's formula.   Whether the monetary asset is used as a short-term currency, or a longer-term store of value, doesn't really matter, but it is true that a longer-term store of value requires (and produces) a higher market cap than a short term currency.  But in these cases, as the demand follows from a rational "competitive edge" of this store of value over another one, one can think that this demand is robust, and can increase when more people adopt it.  

In other words, its market cap will rise because of its increased usage as a store of value, and this is a solid, fundamental market cap.  The only way to make it fall, is if people suddenly don't want to use bitcoin any more as a store of value or currency, because it has lost its competitive edge (a better crypto comes along, fiat improves in quality, ....).

However, if the main demand is because of an expectation of a rise in value and "making benefit", then we are in the school example of "greater fool theory".  Sooner or later, one will run out of greater fools, and the price rise will come to a halt.  At that point, the demand will drop, and hence the market cap will drop.  If people were using bitcoin, not because it had a competitive edge as a store of value, but rather because of "making benefit", then at a certain point, they will realize they won't get any.  At that point, there's no stopping to the decrease in value.  The time scale on which this happens will depend on the time scale over which people were expecting to make benefit.  If they are thinking that it will take 5 years, then it will take a few times 5 years before the price drops after peaking.  If they think that it will take 10 years, then it may take several decades after peaking.

But the conclusion is unavoidable: if the main demand for bitcoin comes from the desire for "making benefit", sooner or later, this thing will come crashing down (although the crash will take several times the "expectation time" after peaking).

I am kind of with you  in the above discussion until you get into the "greater fools" discussion, yet even if I end up agreeing with everything that you said in the above few paragraphs, none of it really matters because in the end, people can figure out the extent to which they invest or don't invest and the extent to which they have confidence or not in bitcoin.  Whether that confidence cascades or stays propped up will depend on a variety of factors including some of the ideas that you outline in the above paragraphs... and as you suggest, the up and down of such confidence (or lack there of) can take years to play out.  Whether you believe the long term price direction is upwards or downwards will be in your own vision of matters, and certainly you should invest according to such upwards or downwards vision, whatever you believe the direction to be (whether short term or longer term).

We are repeating, but as an asset increases in value, it increases in utility, speculation and even motives for being attacked.  These concepts were not lost upon Satoshi when designing the initial platform.

Indeed, and this is why it is such a pity that 90% or more of the market cap is made up by speculation.  It would be much better is the market cap of bitcoin were 10 times smaller, and essentially made up of its usage.  It would stay much, much more under the radar than now, it would have a much more robust market cap, much less volatility, waste less on mining, and have a higher competitive edge.

O.k.  Here you are kind of admitting that you are striving to live in the world of "ought" rather than the world of "is".. and so maybe we do not materially disagree on what is the "is" versus what is the "ought", but personally, I am not going to lose sleep in attempting to make the world of the "is" into an "ought" rather than just attempting to deal with what "is" rather than what I wished it would be.

You are talking nonsense if you are suggesting that items only have value if they are concrete and material.

I never said that, at all.

You strongly implied such with your explanations and examples and your discounting less tangible forms of value that I was presenting (namely secure decentralized immutable transfer/storage of value).

 I said that all SOURCE of value is consumption, whether that is material or immaterial (like services).  That means that something can only obtain value if it is directly consumed, or if in one way or another, it improves consumption (and/or production of the consumed goods).   This "indirect" can be very indirect, but it has to lead to improved production and/or consumption.  A monetary system has value if it helps improving production and/or consumption.

It seems that you are boxing yourself in too much when you try to categorize value and utility too much.  There is also perceived value, subjective versus objective value, future value, erroneous attributes of value (which may related to speculation), and likely other forms of value that may not fit so neatly into your attempts to categorize.

For instance, money on the dark net markets improves consumption of illicit goods, and also helps in its distribution and hence in its production.  In as much as fiat is delicate to use there, there is real value if a system can serve as a reliable monetary system that is lacking.  And the consumption of illicit goods brings a lot of satisfaction, and hence has a lot of value: the source of all value in dark net markets.
But transactions with everything legal and all taxes and so on, I have difficulties seeing the value of crypto over credit card systems.   I can just as well buy something with VISA than with bitcoin, and in fact, in most cases, I have more protection.  The fees are negligible compared to most taxes.  So it is difficult to have a competitive edge over something like VISA.  There may be a small one, but it will not be huge.

Yes, there may not be as much present value and utility of bitcoin for banked westernized people who already feel fully served by traditional banking and credit institutions.  Not all folks in the world can get a visa card or a bank or whatever to store and/or transmit value.

I don't claim to know all the ways to articulate the value of bitcoin, yet as I already said on several occasions, there is some value to secure immutable decentralized transactions, and bitcoin brings that at a level never seen before, which equals value.

Well, the use as an immutable ledger represents an infinitesimal part of the market cap of bitcoin.  You can estimate that by the transaction volume of bitcoin that is related to "registering something on the ledger".  That is infinitesimal to the overall bitcoin volume.

I am not talking only about the immutable ledger of information but the immutable ledger that is transmitting value.  I am describing bitcoin broadly to assert that bitcoin solved the double spend problem to create a never before seen secure immutable decentralized transaction/storage of value.  Or at least that seems to be the case, as far as I can tell with my current understanding of the bitcoin situation and what it is offering that significantly differs from what had been offered previously.

You can describe the value all that you like, but in the end, the value is also what people are willing to pay for it, and if they are willing to pay $600, then it is worth $600 at that particular time.

Well, if people are willing to pay $600 for it, because they count on selling it for $1200, and if people are willing to pay $1200 for it because they count on selling it for $2400, and so on, sooner or later, there are going to be people that are disappointed.

No.  It seems that you are exaggerating too much, and attributing too much greed to folks.  Sure, some folks may want bitcoin to appreciate in value to great extent, but that is not a necessary condition for someone to hold some value in bitcoin.  They also may want bitcoin to hold its value, even though they perceive that their fiat currency is losing value.  So, there can be quite a variation in the amount of volatility that people will put up with and how much appreciation or depreciation they will tolerate or expect, depending on what are their asset/currency options.

 If the majority of people wanting to pay $600 for it, do this because they want to sell it at $1200, and if the majority of people .... then the majority of people buying bitcoin are going to be immensely disappointed at a certain point in time.  And when people buy something and are disappointed, demand plummets like a stone.  That's the point.

You seem to be assuming too much and attributing too much to people in a generalizing kind of way.  There is quite a bit more variance in the thinking of people and their various circumstances or options or even their financial means than what you are outlining.

Furthermore perceptions of volatility will also be affected by price points and recent history and whether they are attempting to figure out volatility risk by holding longer term or for a shorter time period.

If people are willing to pay $600 for it, because they find it the best store of value they can find, then when they sell it again for $600 7 years from now, they will be satisfied, and demand will be robust.  If people are willing to pay $600 for it because they need bitcoin to buy something tomorrow, then the demand will be solid, and the price robust.

See what I mean ?  The first case (greater fool theory) is not sustainable.  the second all the more.

Yes, if you attempt to simplify too much, then you are missing variance.  A person may decide to put 1% of his/her assets into bitcoin as a hedge against other assets, or they may chose some other amount that is at his/her comfort level, and the method of liquidation or the timeline may be a bit in the air at the time of the initial purchase of the bitcoin.  There is going to also be certain levels of technological sophistication,and at this point, likely most of the bitcoin are held by more technologically nerdy people, even though there are likely scatterings of holdings amongst the masses.

You think it is worth less and I think that it is worth more... so what?  We can each invest accordingly, and find out which way it is going to go.  I already said that I have no fucking idea in the short term, but I expect in the longer time that the price will continue to rise.  I don't really feel any need to justify that any more than I already have.

I think the price can still rise, because there is still a sea of greater fools.  On the other hand, the blocks seem to start to be "full", so the system is near full load ; some pony tricks can give us a small factor, but then it will be full again.  But one day, it will not rise any more.  So much is sure.

You are not really saying anything here.  Yeah, price can go up and can go down, and in the end you are kind of suggesting that in the longer run, the price is going down, but really you are just stabbing in the dark with this based on your overall perception that bitcoin is overvalued.  

In the end, I don't really disagree that you are allowed to have your perception of value based on whatever information and logic that you want.. no problem with that.

I'm not interested in investing.  I'm interested in liberty.  Bitcoin could have helped, but that seems to be more and more remote now.

You are one of those "liberty" nut jobs... hahahahaha..

You know what, it really does not matter whether we ascribe to one philosophy or another, in the end, each of us needs to find the various tools that work for his/her own perspective and situation.  Surely, bitcoin may serve some folks in that regard and there may be some other coins that serve other folks in terms of their own perspective, and for some folks, they want to completely run away from some of the crypto currency aspects and the current crypto developments.  That is fine too, even though to me, it seems that there is quite a bit of interesting developments in the crypto space, and difficult to keep up with everything whether attempting to follow just a few coins or attempting to follow the space more broadly.

Present value can also be assessed based on future perceived value.  People really do that.

So if bitcoin is now at $600, it means that one gives it, say, 10% chance to be at $6000, and 90% chance to be at $0 in the future.  Or one gives it 100% chance to remain at $600.  Or one gives it 50% chance to be at $1200, and 50% chance to be at $0.  I'm oversimplifying, because one has to take into account risk aversion, and risk-free interest of course.
But that's the idea.

Yeah, sure I agree with you about that, and the numbers would likely be more graduated.


Here are some examples of price prediction posts that I made in May 2016 and in September 2015.

https://bitcointalk.org/index.php?topic=178336.msg14813511#msg14813511

Of course, viewpoint and opinion and projections are going to change with the passage of time and changes in the market conditions.

We have all kinds of bad financial systems, such as credit cards, etc, and they are centralized and creating a lot of utility, in spite of being bad.

If they create a lot of utility, they aren't so bad, are they

Did I ever say credit cards are bad or that fiat is bad or anything is bad merely because it is not bitcoin?  

I really doubt it, and if I did then maybe I need to correct myself or maybe it was a certain context.

I am merely suggesting that bitcoin is bringing a certain kind of utility that has never been seen before, and that is part of its value.. Sure credit cards and traditional banking institutions and currency can still have a lot of value, and of course the traditional institutions are going to have a lot of value because the continue to be used by almost everyone.  Even folks who claim to be attempting to live on completely bitcoin are having to interface with traditional institutions and currencies etc...

For example, I use credit cards all the time.. easy fast and on a personal level does not seem to cost me anything.. and it even appears that I am rewarded for such useage.  Just because I use credit cards does not mean that a certain portion of my assets and investment cannot be in the future of bitcoin.. which I presently hold and presently have figured out ways to profit from holding and trading bitcoin (which puts me into an extreme minority for possibly a considerable amount of time into the future).

[Spoetnik]

Did you two guys say anything about Ethereum being "game over" ?
Sorry i skipped past your comments.

Let it be known, i am no longer the long post ranter around here.  

Here ye, here ye, we have a new rant-champion to dethrone Spoetnik (Shelby)
And you're lookin' at 'em (scroll up)  

I shit you not the last couple comments here made browser sputter & lag when scrolling.
So what's the matter everyone ?
Why are you not whining up a storm insulting the fuck out of them (like you have done to me 100's of times)

PS:

ETH = GAME OVER

It was doomed from the damn start.
There is a reason Crypto gove 0 fucks about it between 2014 & 2016.
If it had any reasonable chance in hell at dethroning BTC etc we would have seen signs long ago.
Which is why the ICO was ignored and the dev was testing the waters with little "feeler" topics.
When the ICO was launched they would post on average once a month topics that said "What do you think about Ethereum?" over & over..
And NO ONE would even post a word !
..except me of course    

But wait !
It don't stop there..

They realized eventually they had to organize a super pump and ultra hype / spam campaign
in cahoots with the usual Coindesk shenanigans (Coindesk was running "stories" on ETH since 2014)
Yup.. they realized they were running out of time and had to do something.
There was one option available or the shitheads who stole all the ICO coins would be caught broke with worthless shit tokens.

Somebody whispered in Butters ear that if he wanted his millions and millions of ETH coinz to be worth *anything* he had one option.. a pump !
A pump unheard of and never seen before in all of crypto.
A facade / charade of historic proportions.
Accompanied by a spam campaign the likes of which no one had seen previously..
Proof was the instant over night flood of brand new accounts created to hammer this section with ETH "shill" topics.
But they hit social media etc too.. one girl posted here in ALT main that she had gotten PM spam on other sites about Ethereum before the big pump.

This was a scam..

A coordinated carefully orchestrated and aggressively executed plan !

And it worked.

Why because i have said all along you are all predictable and... DUMB.
And that you are all whale food.. low hanging crypto fruit ripe for the pickin's

They knew damn well all they had to do was keep pouring Bitcoin into Ethereum on centralized exchanges.
That would produce a a predictable result.. greedy profiteer lemmings would start piling in *late* to the slaughter.

I watched it play out from 2014 on.. every step of the way.

And i tell you now.. ETH is dead idiots.
It's about as dead as it's going to get aside from a healthy price drop (correction) that is sorely needed.
It should be BELOW $1 each.. not $20+ a fucking god damn coin  
And it will be .. sooner or later.

The exodus has begun.. popularity waned and the profiteers wandered off because the PUMP stopped.
ETH tard's seem to think they can simply post here commentary to bring back the crowd..
NOPE ..won't work !
Neither is your bragging about how great it is.. it falls on deaf ears.
Because the people who got involved did .. because of the damn PUMP.
NOT because it has "features" etc

Hell it could cure cancer but unless it makes these greedy kidiot profiteer investards a fast & large profit..
they don't give a fuck.

So think about.. use your brain people.
Unless the dev's and their manipulation team start the super pump all over again expect the con to continue to drift off into obscurity like a bad meme not cool anymore.

Yup.. ETH really does truly in fact = Game Over.

And you can tell by opening your eyes and use basic common sense.

Why do i post this ? Because it's the TRUTH !
And unlike the little cock suckers making Ethereum who publicly admitted to dumping on you for millions of dollars in Bitcoin i actually *DO* care about people getting suckered into ICO scheme con's.

V. Butters got his paycheck for a million in BTC ..do you guys shilling for it doing all the work ?
How much did you get paid ?