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Author Topic: [2017-10-14] Bitcoin Isn’t Money — It’s Like Diamonds  (Read 360 times)
aysha9872
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October 14, 2017, 06:44:33 PM
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Bitcoins is closer to diamonds than it is money, as its scarcity is its key attribute
Prices of bitcoin went through the roof and into the sky this week as traders decided it was the one true cryptocurrency. In just seven trading days, between Oct. 7 and Oct. 13, the bitcoin value has skyrocketed from $4,384 to $5,621. The new all-time high is $5,829, achieved overnight.

At $5,621, the bitcoin value represents nearly 55% of all cryptocurrency market cap — almost $94 billion. Ethereum, the next most popular coin, is worth about $31 billion. No other coin market is valued as high as $10 billion.

This has happened despite forks in both the bitcoin and ethereum blockchains; and a pending fork (dubbed SegWit2) in bitcoin scheduled to take place in November.

Nearly 95% of the bitcoin market had signaled support for SegWit2, which is designed to speed transaction processing. The decision by mining pool F2Pool, however, to back off its support set off a speculative frenzy.

What’s Going On?

It’s ironic that buyers have voted for bitcoin, as it has well-documented problems that make trading it difficult and expensive. While cryptocurrencies are touted as being highly liquid, bitcoin is the least liquid among them. That’s because its blockchain is old. It’s the equivalent of running all trades through a single PC in a cloud-based world.

But this is precisely why the latest boom has happened. Holders of bitcoin have simply held on. With no coins available to buy, prices skyrocketed like Cubs World Series tickets did last year.
The pending fork in bitcoin was supposed to have been settled by a New York agreement, engineered by Barry Silbert, whose Bitcoin Investment Trust was profiled by me this week as a “safe” place for retirement accounts to buy bitcoin.

Now, some bitcoin developers are condemning the fork, writing that coins held by Silbert’s Digital Currency Group may not be safe after the fork. DCG includes Coinbase, the most active bitcoin market in the U.S.

People or Technology

What’s being sold to traders and the media as a technical argument seems more like a political struggle. Bitcoin Core seems to resent the control Silbert and his fellow signatories have over the market and are revolting against it.

Under the New York agreement, control of the reference client after the fork will move next month from a “/bitcoin” directory at Github, the open source repository, into a /btc1 directory, under the control of Jeff Garzik in Atlanta, co-founder of blockchain developer Bloq. This will let the standard bitcoin block size grow, by two megabytes, which would ease trading bottlenecks.

From a technological perspective, the fork makes sense. From a market perspective, where traders want maximum value for what they have, it doesn’t. Bitfinex, a Hong Kong trading house, has created a futures market for speculating between the coins, which it has designated BCC, for Bitcoin Core, and BCU, for Bitcoin Unlimited.
These “Chain Split Tokens” show the new BCU coins created through SegWit2 trading for $447, less than 10% of what the older tokens are worth.

The Bottom Line

Bitcoin was designed to be a single global market, under decentralized control, but it is evolving into multiple markets, with Chinese and American players battling for control.

Right now, the Chinese have the advantage, because for all its technical problems a bitcoin token is rare and illiquid, thus highly prized for its scarcity. That’s behind the price rise, not the idea that bitcoin is money but the idea that the true bitcoin value is like diamonds — worth the extraordinary expense to mine and traded among elites based on that scarcity.
source: https://investorplace.com/2017/10/bitcoin-value-rules-cryptocurrencies/2/#.WeJaxTIo_IU
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October 15, 2017, 05:17:48 AM
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It is said that bitcoin has barely reach 1 percent of its potential, as compare to gold with a market of 8 trillion USD and compare it again with US currency market cap and circulation of 12 trillion, with the current bitcoin's market cap of 95 biliion, we could see that it is almost 1 percent against the gold value, the massive adaption has a  very long way to go, it will need a market cap of at least 1 trillion USD before we could say that it will race against gold. Bitcoin    today was purely a store of value or an asset an not purely currency for the masses.
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October 15, 2017, 05:48:17 AM
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It is said that bitcoin has barely reach 1 percent of its potential, as compare to gold with a market of 8 trillion USD and compare it again with US currency market cap and circulation of 12 trillion, with the current bitcoin's market cap of 95 biliion, we could see that it is almost 1 percent against the gold value, the massive adaption has a  very long way to go, it will need a market cap of at least 1 trillion USD before we could say that it will race against gold. Bitcoin    today was purely a store of value or an asset an not purely currency for the masses.

Well I really doubt that it has only reached 1% of the market. It has reached much more than that for sure. Infact what I feel now is that in coming years may be 5- 10 years down the line as technology changes there would be something new come up which will be might have more demand than btc so prices would dip in that case.

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October 15, 2017, 06:13:55 AM
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It is said that bitcoin has barely reach 1 percent of its potential, as compare to gold with a market of 8 trillion USD and compare it again with US currency market cap and circulation of 12 trillion, with the current bitcoin's market cap of 95 biliion, we could see that it is almost 1 percent against the gold value, the massive adaption has a  very long way to go, it will need a market cap of at least 1 trillion USD before we could say that it will race against gold. Bitcoin    today was purely a store of value or an asset an not purely currency for the masses.

Well I really doubt that it has only reached 1% of the market. It has reached much more than that for sure. Infact what I feel now is that in coming years may be 5- 10 years down the line as technology changes there would be something new come up which will be might have more demand than btc so prices would dip in that case.

If BTC has a bright future, then BTC price is due to stabilize at some point. The difficulty is to know in which range the price will stabilize. If it gets more stable, it will encourage people to buy more.
I have friends who know nothing about BTC and their fear is " I do not want to buy because the price fluctuates too much ". In short they think it is too unpredictable.
Without being expert, I think the price could gets more stable around 20k to 30k in 5 years from now which would already be awesome if you ask me, but again we do not all have the same target.
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October 15, 2017, 10:15:28 AM
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Nearly 95% of the bitcoin market had signaled support for SegWit2, which is designed to speed transaction processing. The decision by mining pool F2Pool, however, to back off its support set off a speculative frenzy.


I believe this information is no longer accurate, because according to cointelegraph miners support has fallen below 80 percent, so we won't probably see the fork going on after all. We already heard about the F2Pool withdraw, and now some exchanges are anoucing the same, like BitMEX for example. As far as technology goes the "benefits" from this fork are not that good compared to the risks. Also I'm sure we can achieve fast transactions times with the Lightning Network, so I prefer that option, compared to a hard fork.

As for bitcoins being like diamonds, I would say they are much better. They are scarce like diamonds and precious metals, but they are far more practical to use than those things because they are easier to store, easier to spend, and more secure. Right now bitcoin is the future.

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October 15, 2017, 10:17:31 AM
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The diamond comparison is a genuinely shit one.

The diamond market is rigged. You can't sell them for what you paid for them. New supplies open up regularly. Artificial diamonds are getting better all the time.

Convincing people that diamonds are desirable, rare and worth what the cartels ask for them is one of the greatest marketing sleights of hand of recent times.

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October 15, 2017, 11:04:40 AM
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It’s ironic that buyers have voted for bitcoin, as it has well-documented problems that make trading it difficult and expensive. While cryptocurrencies are touted as being highly liquid, bitcoin is the least liquid among them. That’s because its blockchain is old. It’s the equivalent of running all trades through a single PC in a cloud-based world.

But this is precisely why the latest boom has happened. Holders of bitcoin have simply held on. With no coins available to buy, prices skyrocketed like Cubs World Series tickets did last year.
The pending fork in bitcoin was supposed to have been settled by a New York agreement, engineered by Barry Silbert, whose Bitcoin Investment Trust was profiled by me this week as a “safe” place for retirement accounts to buy bitcoin.


That's a really dumb statement to say that cryptocurrencies are known for being liquid - even those that can theoretically can process 30 or 50 transactions per second are nothing in comparison to something like Visa. It's also wrong that Bitcoin is scales the worst of all coins - with SegWit it's maximial capacity is on the level of many altcoins. And it's a lie that Bitcoin is so limited because the technology is old - the limit was installed long ago for a very valid security reasons. The person who wrote this article has very poor understanding of how Bitcoin works.

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October 15, 2017, 12:15:00 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust
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October 15, 2017, 12:21:43 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust

Bitcoin can be bought nearly everywhere too
Bitcoins are declared as Money in Coutrys like Swiss and Australia
The fact that you think Bitcoin can maybe go over 10K shows me
that you understood the Full potencial of Bitcoin!!!
It also do not depend on trust as with this commect you showed your
unexpirience as Bitcoin depends on Supply and Demand my Friend...
Better Inform better before you blame yourself...

BITCO.WORLD          │         The Best Bitcoin Faucet
J O I N   N O W   &   C L A I M   B T C   4   F R E E
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October 15, 2017, 02:55:28 PM
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Funny but I agree that Bitcoin's scarcity is its attribute, similar to that of diamonds. It is because its supply and demand plays a huge factor in the determination of its current real-time value.

Yes, you can say it is not money because it is not something recognized by most governments. Now I am in an awkward position as to how to classify it. Although what puzzles me more is its capacity to be converted to a currency and be withdrawn as such in an instant, which is not a quality of diamonds.
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October 16, 2017, 12:25:11 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust

If you are saying that it's easier to trust on diamonds in comparison to bitcoins, I would say you are mistaken. Diamonds can be counterfeit, and not everyone will notice that right away, so you can be scammed. Bitcoins on the other hand can't be counterfeit, so it's actually easier to trust on them for payments. Also, like it has already been said here, there are a lot of countries that recognize bitcoin as currency or an asset, so I still say they are better than diamonds.

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October 16, 2017, 12:49:42 PM
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This is not a good analogy. It's a common misconception that diamonds are rare, hence their value, but they're actually one of the most common gemstones. Try looking it up.
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October 16, 2017, 01:40:29 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust

You serious? Try walking around any major city in the world with a diamond and the need to sell it and see how much money you end up with. It'll be far, far less than what you were conned into paying for it.

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October 16, 2017, 02:04:10 PM
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It is said that bitcoin has barely reach 1 percent of its potential, as compare to gold with a market of 8 trillion USD and compare it again with US currency market cap and circulation of 12 trillion, with the current bitcoin's market cap of 95 biliion, we could see that it is almost 1 percent against the gold value, the massive adaption has a  very long way to go, it will need a market cap of at least 1 trillion USD before we could say that it will race against gold. Bitcoin    today was purely a store of value or an asset an not purely currency for the masses.

Well I really doubt that it has only reached 1% of the market. It has reached much more than that for sure. Infact what I feel now is that in coming years may be 5- 10 years down the line as technology changes there would be something new come up which will be might have more demand than btc so prices would dip in that case.

In 5-10 years bitcoin will spread all over the world and the emergence of any other currency will be doomed to resistance. Who wants to lose millions and billions invested in bitcoin. But bitcoin will experience great difficulties as an investment asset if governments are to deal with it. Without turnover in trading bitcoin nothing. And turnover is not because all hold coins and wait for the growth in their price. A vicious circle.
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October 16, 2017, 02:57:03 PM
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It doesn't really matter what Bitcoin is in general terms. It's a multifunctional tool that allows itself to be utilized in various ways to suit the end user ~ I personally see Bitcoin more as gold, but then in digital form.

Some people might see it purely as an investment option, and others just look to utilize its currency aspect ~ the name doesn't really matter here, its usage does, and that's something people should understand for once.

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October 16, 2017, 03:39:47 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust
You looking at this comparison the wrong way, bitcoin is money that has people working for it and in the process helping preserve its value, and given the opportunity to pick either bitcoin or diamonds I would go for btc because diamonds can now be forged which is bad for its market unlike btc which is had to forge.
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October 16, 2017, 04:02:08 PM
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Even price was more than 10,000 $ bitcoin will never be like  Diamonds Because  Diamonds is real money and can be buy all over world but bitcoin Depend only to trust

You serious? Try walking around any major city in the world with a diamond and the need to sell it and see how much money you end up with. It'll be far, far less than what you were conned into paying for it.

Indeed.

Diamonds are only perceived as valuable in rap lyrics, Hollywood fiction and advertisements for diamonds (and the 3 are all essentially advertisements for diamonds, whether the lyric/screenplay authors know it or not). Years of Hollywood crime movies have somehow convinced all sorts of fools that diamonds are a useful asset, they're not

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