Why The Fair Price Of Bitcoin Is $0

[bitrebel]

http://www.businessinsider.com/the-fair-price-of-a-bitcoin-is-zero-2013-12

This is a great article and very "to the point" about bitcoin.
Many people will complain about it, detractors who support bitcoin, but the article makes 100% perfect sense to me.

What do you guys think?

My main argument right now against the $1000 value, despite how many I hold and the increased profits I have attained, is the following:

Bitcoin is mainly for 2 purposes.
For a relative amount of anonymity.
For the ability to send transactions, full proof, over thousands of miles, virtually cost free.
Both of those are key values of bitcoin.
However, now there are many alternative cryptocurrencies that accomplish the same thing.

All we need is (1) to work with at any given time and it does not have to be a single chosen "ONE", like bitcoin.
It can be almost any of them that are built to last.

So, if the value is not in the bitcoin itself, then it has no specific value other tha nit's primary purpose for which it's most useful. the ones I just outlined.
Thought?

[TrabajoDeLaNoche]

The actual price is highly speculated. Nobody is buying bitcoins to buy pizzas, they are buying bitcoins to sell them at a higher price for real money like dollars and euros. Maybe in the future this fact will change but i doubt so.

[kjj]

No.

Bitcoin is established.  For people to switch to one of the scamcoins, that scamcoin needs to provide more value than bitcoin does.  So far, none of them provides more value, and almost all of them provide less value, sometimes even negative.

For me, the funny part was when he quoted someone saying they didn't know what the fair price for bitcoin was.  So much wrong with that...

[bitrebel]

To send value whatever it is you are sending needs to first have value.

Yes, any other cryptocurrency can displace bitcoin, but so far there is no strong reason for that to happen. If one is created which actually makes improvements on bitcoin, people will sell bitcoins to obtain these new coins.

Will those new improved coins also have a fair price of $0 because some day a better coin may take it's place? No, for the same reason that isn't true of bitcoins today.

Not making sense as far as my argument is concerned.

I'm saying this....

If you are in Paris, and I am in Africa, and I need a virtual currency to save time and trouble and expense, then I can use any of the dozens of crypto currencies available.
If the price I owe you is $1000, I can send you (1) bitcoin valued at $1000 or (1000) feathercoins valued at $1, it does not matter as long as you get paid.
Now, if you place the feathercoin on the exchange, you sell them and get your $1000 value out of it, or if you cannot do that, you sell them for bitcoin on an exchange and then cash out. the point is, that i'm making, is that bitcoin is being used to speculate on, and currencies that are volatile and do not have intrinsic value that can actually be measured somehow (bitcoin has intrinsic value, but it cannot be measured against the dollar or any other currency necessarily), only serve a purpose for the transfer of money safely and accurately, which bitcoin also does. That means any crypto currency will serve this purpose.

[bitrebel]

The actual price is highly speculated. Nobody is buying bitcoins to buy pizzas, they are buying bitcoins to sell them at a higher price for real money like dollars and euros. Maybe in the future this fact will change but i doubt so.

I know one person who isn't buying bitcoins to sell them at a higher price for fiat. So... better recheck your facts.

No, he is right. The Majority of people are not buying bitcoins to transact with them, they are speculating on them, which gives nothing but "imaginary value" to something.

[bitrebel]

No.

Bitcoin is established.  For people to switch to one of the scamcoins, that scamcoin needs to provide more value than bitcoin does.  So far, none of them provides more value, and almost all of them provide less value, sometimes even negative.

For me, the funny part was when he quoted someone saying they didn't know what the fair price for bitcoin was.  So much wrong with that...

Bitcoins have ZERO established value. You cannot value bitcoins at all.
Whatever you say, is pretty much emotional opinion, unless you can state how bitcoins have a established value and how it would be measured, and WHY?

The purpose bitcoin serves, is also served by other crypto currencies as well. You must remember, money is only a medium of exchange unless it also has intrinsic value like gold.
Gold is valued because of the exactness of it's extraction. Bitcoin started off being extracted for next to nothing and tens of thousands were mined for next to nothing, now they are mined with extreme difficulty and cost, and with much less earned. This is NOTHING like gold, in it's mining features, despite how much Satoshi tried to make it similar.

Without an intrinsic value that can be measured, it still serves purpose and has value, but it's different. It has value in it's ability to serve as a medium of exchange. It's speed, accuracy, inability to chargeback, and anonymity and low transaction fee costs. That is bitcoins value, but it cannot be measured in dollars consistently unless all bitcoins were mined at the same value and cost.

[bitrebel]

To send value whatever it is you are sending needs to first have value.

Yes, any other cryptocurrency can displace bitcoin, but so far there is no strong reason for that to happen. If one is created which actually makes improvements on bitcoin, people will sell bitcoins to obtain these new coins.

Will those new improved coins also have a fair price of $0 because some day a better coin may take it's place? No, for the same reason that isn't true of bitcoins today.

Not making sense as far as my argument is concerned.

I'm saying this....

If you are in Paris, and I am in Africa, and I need a virtual currency to save time and trouble and expense, then I can use any of the dozens of crypto currencies available.
If the price I owe you is $1000, I can send you (1) bitcoin valued at $1000 or (1000) feathercoins valued at $1, it does not matter as long as you get paid.
Now, if you place the feathercoin on the exchange, you sell them and get your $1000 value out of it, or if you cannot do that, you sell them for bitcoin on an exchange and then cash out. the point is, that i'm making, is that bitcoin is being used to speculate on, and currencies that are volatile and do not have intrinsic value that can actually be measured somehow (bitcoin has intrinsic value, but it cannot be measured against the dollar or any other currency necessarily), only serve a purpose for the transfer of money safely and accurately, which bitcoin also does. That means any crypto currency will serve this purpose.

You can do that because those coins have value. If every coin has a "fair price of $0", good luck using them to send value around the world.

I'm not saying bitcoin is the only coin with value, I'm saying whichever coin you choose, it has to have value before you can use it to send value! Therefore, the "fair price" can not be $0.

Intrinsic value is a terrible combination of words.

Ageed!
And I agree it's value cannot be $0. It has to be something. But it can also be $1.00, or $1000.00 No difference.

[bitrebel]

To send value whatever it is you are sending needs to first have value.

Yes, any other cryptocurrency can displace bitcoin, but so far there is no strong reason for that to happen. If one is created which actually makes improvements on bitcoin, people will sell bitcoins to obtain these new coins.

Will those new improved coins also have a fair price of $0 because some day a better coin may take it's place? No, for the same reason that isn't true of bitcoins today.

Not making sense as far as my argument is concerned.

I'm saying this....

If you are in Paris, and I am in Africa, and I need a virtual currency to save time and trouble and expense, then I can use any of the dozens of crypto currencies available.
If the price I owe you is $1000, I can send you (1) bitcoin valued at $1000 or (1000) feathercoins valued at $1, it does not matter as long as you get paid.
Now, if you place the feathercoin on the exchange, you sell them and get your $1000 value out of it, or if you cannot do that, you sell them for bitcoin on an exchange and then cash out. the point is, that i'm making, is that bitcoin is being used to speculate on, and currencies that are volatile and do not have intrinsic value that can actually be measured somehow (bitcoin has intrinsic value, but it cannot be measured against the dollar or any other currency necessarily), only serve a purpose for the transfer of money safely and accurately, which bitcoin also does. That means any crypto currency will serve this purpose.

You can do that because those coins have value. If every coin has a "fair price of $0", good luck using them to send value around the world.

I'm not saying bitcoin is the only coin with value, I'm saying whichever coin you choose, it has to have value before you can use it to send value! Therefore, the "fair price" can not be $0.

Intrinsic value is a terrible combination of words.

Ageed!
And I agree it's value cannot be $0. It has to be something. But it can also be $1.00, or $1000.00 No difference.

Well... not 100% true. If a bitcoin was only worth $1.00, you could only send about $12 million dollars today (and you would have to own all the bitcoins, which in and of itself would make their value questionable). That massive transaction which happened last week would have been impossible.

You are absolutely right. That's a great point. Bitcoin will expand to whatever it needs to. However, most buying and spending with bitcoin is also based on speculation and issues surrounding speculation. Like mining for example. many miners would not have been sold, and all those bitcoins then never redeemed were it not for the speculation. Nobody is buying 12 million worth of drugs on silk road at a time.

[Hfertig]

To send value whatever it is you are sending needs to first have value.

Yes, any other cryptocurrency can displace bitcoin, but so far there is no strong reason for that to happen. If one is created which actually makes improvements on bitcoin, people will sell bitcoins to obtain these new coins.

Will those new improved coins also have a fair price of $0 because some day a better coin may take it's place? No, for the same reason that isn't true of bitcoins today.

Most of the altcoins do have improvements over bitcoin

[mgio]

Bitcoin is not worth zero. And here is why:

I promise I will buy every bitcoin for $ 0.0001 each. Yes, I have $2,100 set aside and I will buy all 21 million coins for 1/100th of a penny, I guarantee it and will put it in writing if necessary. There, we've established a lower limit for the price of bitcoin because I will buy all your bitcoins for 1/100th of a cent at any time purely for the collectors value of them in case they fail.

[bitrebel]

Bitcoin is not worth zero. And here is why:

I promise I will buy every bitcoin for $ 0.0001 each. Yes, I have $2,100 set aside and I will buy all 21 million coins for 1/100th of a penny, I guarantee it and will put it in writing if necessary. There, we've established a lower limit for the price of bitcoin because I will buy all your bitcoins for 1/100th of a cent at any time purely for the collectors value of them in case they fail.

But you are not buying them to use them, you are buying them to sell at a (hopefully) higher price, so your argument is not valid. Or at least, not sincere.

[bitrebel]

This should not be about bulls vs bears, okay folks?

It's about the true value of bitcoin, and speculation is welcomed. But lets not be biased here, please. It's a simple argument, stating that bitcoin is great for transferring value, and even storing value, but it's not valuable in itself to be valued at $1000 or more. It does not make sense to me. Everyone is welcome to post their argument though. Please be concise and sincere.

[Qoheleth]

However, now there are many alternative cryptocurrencies that accomplish the same thing.

For any altcoin to do the job as well as Bitcoin does it, that altcoin must have too much mining power for an attacker to outvote the network.

Are there "many alternative cryptocurrencies" with hashrates high enough that I couldn't get a couple hundred thousand dollars worth of hardware and double-spend with impunity?

Which blockchain are miners throwing computation power at? That's the one that you can actually have confidence is atomic and irreversible.

Right now, that's Bitcoin.

[traderCJ]

No, he is right. The Majority of people are not buying bitcoins to transact with them, they are speculating on them, which gives nothing but "imaginary value" to something.

All value is "imaginary".  That is, value is a byproduct of mass psychology.  A bar of gold is worth something because other people agree.  I don't care if it has industrial applications.  The value of it is still a human consensus.

And regarding alt coins .. what makes BTC the "best" bitcoin-style currency out there is the mining power.  That hashrate is what makes it the gold standard of crypto.  Without that backbone, BTC is nothing special.

[bitrebel]

However, now there are many alternative cryptocurrencies that accomplish the same thing.

For any altcoin to do the job as well as Bitcoin does it, that altcoin must have too much mining power for an attacker to outspend.

Are there "many alternative cryptocurrencies" with hashrates high enough that I couldn't get a couple hundred thousand dollars worth of hardware and double-spend with impunity?

Which blockchain are miners throwing computation power at? That's the one that you can actually have confidence is atomic and irreversible.

Right now, that's Bitcoin.

Yes, however, if you are only using it for a transfer of value and not a store of value, any crypto currency will do as long as it has not been hacked, and so far, none of them have been, without the community knowing about it. Correct?

[Le Happy Merchant]

Bitcoins have ZERO established value.

This is patently false.

If even two people have Bitcoin wallets, the value has been established. One phone on earth is useless, as is one computer with internet, but once there are two, things get interesting.

[bitrebel]

No, he is right. The Majority of people are not buying bitcoins to transact with them, they are speculating on them, which gives nothing but "imaginary value" to something.

All value is "imaginary".  That is, value is a byproduct of mass psychology.  A bar of gold is worth something because other people agree.  I don't care if it has industrial applications.  The value of it is still a human consensus.

True, however, many products in our society get their retail and wholesale values from the cost of manufacture. And as I stated, with bitcoin, it fluctuates too much from some people to other people, based on when they started mining.

In other words, a bar of gold is worth at least $400, say, because it took that much to mine it, and it never goes below that value, in our society, no matter what. Then you add, shipping fees, and retail costs etc. and everyone is stuck with a small degree of profits and they can decide how much to make and how much to discount, from that. But bitcoin cost some people $100 to mine 10,000 of them while other cost $10,000 to mine 10 of them.

That's the point, simply stated.

[bitrebel]

Bitcoins have ZERO established value.

This is patently false.

If even two people have Bitcoin wallets, the value has been established. One phone on earth is useless, as is one computer with internet, but once there are two, things get interesting.

I did not say they have NO VALUE, I said they have no "established value" which is completely different.

[kehtolo]

To send value whatever it is you are sending needs to first have value.

Yes, any other cryptocurrency can displace bitcoin, but so far there is no strong reason for that to happen. If one is created which actually makes improvements on bitcoin, people will sell bitcoins to obtain these new coins.

Will those new improved coins also have a fair price of $0 because some day a better coin may take it's place? No, for the same reason that isn't true of bitcoins today.

Top, top answer. +1. Succinct and to the point.

[Le Happy Merchant]

Bitcoins have ZERO established value.

This is patently false.

If even two people have Bitcoin wallets, the value has been established. One phone on earth is useless, as is one computer with internet, but once there are two, things get interesting.

I did not say they have NO VALUE, I said they have no "established value" which is completely different.

Wow, chuck poo. Read my post.