Whats "backing" bitcoin?

[franky1]

when i see people say, when someone wants something, they assign a value to it and that becomes the price.. WHAT A LOAD OF B.S

i want a porche to me i value it as $500.. guess what folks.. a porche is not suddenly going to be $500..
we ALL want car fuel to be cheaper.. does it make car fuel cheaper by all agreeing to it NO!
we ALL want the new games consoles to be half the rediculous prices they are advertised at. does it make it happen NO!

the price of items are dictated by the supplier, basically the cost of production and wages/profit margin added.

so lets get to it.
if a ounce of gold could be dug from the ground using a pickaxe for under 2 minutes of working. do you think it would still or ever of got to the many thousands of dollar price it is now.. or do you think that the miners now taking a week of labour force of a team of men driving excavators, and sluice machines have something to do with the gold high price compared to last century.

compared to a bicycle.. they have wheels and they help people travel faster then walking. do you think a car should be the same price as a bicycle simply because they both have the same fundimental function.. NO do you think it may have something to do with the costs of production, the expertise and the teams of engineers involved.

now then guys instead of shouting out bitcoin is pure speculation and nothing else.

grab a graph of gold mining costs for the last 150 years. then overlay gold prices. do you see a pattern. now thats been said i think you can guess the next task i ask you to do.

go grab a graph of mining costs/difficulty/electric costs and over lay the bitcoin price. see the pattern.

you will learn that just like anything its all about cost of production as the main % of true value. then added to that is where some profit and manipulation happens.

the best way of knowing the difference between true value and a profiteering ramp& dump is to check to see if the hashrate / difficulty or new mining technology has suddenly appeared. if not, then dont expect the sudden surges in prices to last.

now concentrating on bitcoin, difficulty and new tech has been increasing in the last couple months so these new prices are expected to stay. as for todays altcoin ramps and dumps.. well thats another story.

but bitcoin is backed by the cost of production
gold is backed by the cost of production
FIAT is backed by the value of time of people working ( inshort minimal wage)

think about it if everyone suddenly got a pay rise, the prise of a loaf of bread will increase. with pay rises stagnant the retail prices of the bare essentials remain stagnant. (give or take exceptions)

rant over

[hilariousandco]

when i see people say, when someone wants something, they assign a value to it and that becomes the price.. WHAT A LOAD OF B.S

i want a porche to me i value it as $500.. guess what folks.. a porche is not suddenly going to be $500..
we ALL want car fuel to be cheaper.. does it make car fuel cheaper by all agreeing to it NO!
we ALL want the new games consoles to be half the rediculous prices they are advertised at. does it make it happen NO!

the price of items are dictated by the supplier, basically the cost of production and wages/profit margin added.

It doesn't work like that. Things are only worth what people are prepared to pay. Companies can choose the value of Porsche, fuel and games consoles, but if they try sell them at ridiculous, unaffordable prices; people wont pay it. If we all agreed that we're not going to pay for fuel at it's current prices; guess what: the companies would have to lower the price of it. Supply and demand.

[glub0x]

the backing notion is a very funny argument to me.
Everything is very relative, yeah gold is backed by ohh wait 2000 years of trading? Just as monarchy was before we kick the ass of the kings and just swap.
Things are backed by faith and faith can change. It happens all the time to be true.

We changed politic system , we changed religion, we changed currency, we changed language sometimes for good reason, sometimes for bad and sometimes for no reason.

Any reason is good to me, bitcoin is a step forward period.

[hilariousandco]

the backing notion is a very funny argument to me.
Everything is very relative, yeah gold is backed by ohh wait 2000 years of trading? Just as monarchy was before we kick the ass of the kings and just swap.
Things are backed by faith and faith can change. It happens all the time to be true.

We changed politic system , we changed religion, we changed currency, we changed language sometimes for good reason, sometimes for bad and sometimes for no reason.

Any reason is good to me, bitcoin is a step forward period.

This is it. The state of the world and peoples' apathy to major issues continually perplexes and appals me. People feel so defenceless to change anything, but they don't realise they power we hold and how easily we could change things for the better. It's us that hold the power, not governments, we only grant it to them, just your average sheeple cannot even comprehend this. Who continually votes for these crooks that do nothing but transfer tax payers money into the hands of corporations and spend billions of our taxes on wars? If everyone in the country refused to vote or pay taxes do you think politicians will work for free? Can they throw us all in jail? Who will pay for the prisons or the jailers? Who will fund the monarchs? They would have to get off their arse and earn their own money instead of living off the state. People simply do not understand our collective power.

Cryptocurrency could singe-handedly destroy the banksters and fiat money-printers if we as a people wanted it to. I'm not saying democracy is useless, but it has failed us. We can use a little bit of anarchy as our leverage for revolution. The current system is not sustainable or fair to anyone but those who profit billions from it.

[AnonyMint]

grab a graph of gold mining costs for the last 150 years. then overlay gold prices. do you see a pattern. now thats been said i think you can guess the next task i ask you to do.

go grab a graph of mining costs/difficulty/electric costs and over lay the bitcoin price. see the pattern.

Oooh that is good. Thank you very much.

Now note how Bitcoin kills itself on funding mining.

You've just elevated my confidence substantially. Thank you. This is the most important post I've read in while.

[AuroraHF]

Bitcoins are not really backed by things such as gold. However, bitcoins have utility and is accepted by many kind of stores. If everyone stops accepting them, then bitcoins are practically useless in my opinion.

[franky1]

It doesn't work like that. Things are only worth what people are prepared to pay. Companies can choose the value of Porsche, fuel and games consoles, but if they try sell them at ridiculous, unaffordable prices; people wont pay it. If we all agreed that we're not going to pay for fuel at it's current prices; guess what: the companies would have to lower the price of it. Supply and demand.

lol oh you and others are just proving my very first line

when i see people say, when someone wants something, they assign a value to it and that becomes the price.. WHAT A LOAD OF B.S

that is high school level minded answers... please ditch your ABC books and your maths for dummys books and get into the real world..

no company would sell anything at a loss... meaning below production price... get this through to the reality center of your minds people.

put it this way.

the prices are set, basically the cost of production and wages/profit margin added.

let me repeat it 5 times for you all

basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.

ok give it time to settle in and then ill explain.

imagine a porsche COST to produce $50k, to get it to the showroom $2k and to add on just 5% commission for the sales guy
totalling $54.6k this us the nearest to TRUE value. and in most cases customers would finds this acceptable,

the show room would NEVER sell for less then $52k. yet if the commission was 40% totalling $70k then this is speculated, pure profit, extortionate, and people will only pay this if demand was soo high that they have no other choice but pay it.

the supply and demand for this porsche would be a price volatility between $52k $70k... NOT $1-$70k  no one would in any sane way sell for less then cost price...

so true value is cost price and market value is a little ontop for personal profit. afterall if no one is making any profit, no one can make a living..

so now read my words again and put them into the scenario i just wrote.

basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.
basically the cost of production and wages/profit margin added.

bitcoins are not magically produced for free.. think about miners costs...

now then if a bitcoin price suddenly rises and you cannot see a mining cost reason (difficulty jump/ hashrate jump) then its simply a rise in price caused by  speculated, pure profit, extortionate.

and finally again explaining.. in the last few months difficulty, hashrate and mining equipment costs have risen. so yes the sudden rise of bitcoin price on the market is expected and is based MORE SO on extra costs, rather then a ramp & dump.

if you think this is not true then try this.

make a loaf of bread knowing that it will take you 1 hour of your time and your only source of income. you have to pay yourself minimum wage, plus the cost of the ingredients.

now i offer you $3 for that loaf, which is more expensive than going to a shop. but i feel the extra 50c (20%) is worth it for the 'personal touch'.
would you accept my offer, which is a fair market offer..no you would not..

if however you were making 100 loaves a hour and after adding labour and ingredients together the price of production came below $3. then of course you will accept my offer.

its all about price of production as the MAIN consideration.... the inexplicable ramps and dumps are the speculation/profiteering part.

now i hope to leave you all with those thoughts and now have an active eye on the graph patterns of difficulty/hashrate in future to see if a ramp/dump is justified or not.

goodnight.

[techstorm2]

Utility is backing bitcoin.

Usefulness.

It does things that Gold could never do.

It does things that US Dollar could never do.

Bitcoins ability to send money, anywhere in the world, free of charge, and almost instantly, makes it a savings of literally Trillions of dollars to the consumers of the world.

Thats Trillions of dollars of intrinsic value right there.

Add to that the elimination of 3-5% (to sometimes up to 10% if its an international rewards card) merchant fees that merchants pay, and Bitcoin is backed by Trillions more of savings to Merchants.

Amazon.com would save hundreds of thousands of dollars in merchant fees every month just by switching to Bitcoin.

-----------------

Bitcoin is something new.  It isn't "backed" by traditional things (useless things like "Its pretty" or "Govt can print more").

That is only 2 things Bitcoin can do.   And it can do more ....

Bitcoin is backed by its capabilities.  it does something nothing else has been capable of doing before.

At least this is the answer I give people.

+1 perfect answer. 

[hilariousandco]

It doesn't work like that. Things are only worth what people are prepared to pay. Companies can choose the value of Porsche, fuel and games consoles, but if they try sell them at ridiculous, unaffordable prices; people wont pay it. If we all agreed that we're not going to pay for fuel at it's current prices; guess what: the companies would have to lower the price of it. Supply and demand.

lol oh you and others are just proving my very first line

when i see people say, when someone wants something, they assign a value to it and that becomes the price.. WHAT A LOAD OF B.S

that is high school level minded answers... please ditch your ABC books and your maths for dummys books and get into the real world..

no company would sell anything at a loss... meaning below production price... get this through to the reality center of your minds people.

You're wrong: http://www.forbes.com/sites/erikkain/2013/09/20/sony-to-take-a-loss-on-playstation-4-sales/

Many games consoles and also other companies sell at a loss. Sometimes on purpose, sometimes not. If a PS4 costed a ridiculous amount to make and was priced at a $10,000, very few people would buy it. When people refuse to pay for something, the company will likely go out of business or they will need to reduce the price to survive. I think it was the original Mini Cooper that was selling at a loss initially even though they didn't admit it. I think it was Ford couldn’t understand how they were making a car for so cheap so they tried themselves to replicate it and failed. It later turned out Mini were selling the cars at quite big loss. They wanted to sell a car "anybody could afford". The cars became massively popular and the demand and price rose for them, so the marketing turned out to be very affective in the long run even though they were initially losing money on each vehicle.

There's also the Gillette razorblades model. He sold the razors for hardly anything and at a loss so people would buy them. He hoped people would pay a ridiculous price for the blades and they did: http://www.investopedia.com/terms/r/razor-razorblademodel.asp

Your logic and the way you conduct your argument is very "high school level minded".

[PenAndPaper]

The best thing that i 've read so far as an answer to your question is that bitcoin has a value because people yesterday beleived that is has a value and most likely will beleive the same tomorrow

[Coma]

Bitcoins ability to send money, anywhere in the world, free of charge, and almost instantly,...

How can you say "almost instantly" and not say "almost free of charge". Because fees do exist.
And I think fees are going to be a HUGE problem in a few years.