Why Bitcoin will collapse in price.

[porc]

You didnt explain why bitcoin is valuable! I explained to you why people want gold and dollar. You said bitcoin is rare and thus valuable. Well that is a description of its quantity not bitcoins value. If I say a deadly insect is rare do you think its valuable? Of course not.

Secondly, people would want dollar and gold because dollars and gold have importance to them as means for the achievement of their desired ends. That's what subjective value actually means...

Again abstract statements that pretend like bitcoin is in the same league as dollars and gold.

Gold is valuable because it is pretty and nice to look at. Thats why people want it.

Dollars are valuable because government forces people to accept them for payment of goods/debts.

Bitcoin is valuable because???

Say why you think Bitcoin has value!!

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[deisik]

Did you even read the thread? I have explained to you already why dollars are valuable. Fact is: you cant say why bitcoin is valuable because a bitcoin you transferred to me HAS!!! no value.

Water has value. Food has value. Nobody will discuss this. Sometimes it costs more (desert) sometimes less (rainforest). But it has VALUE!

Now Bitcoin? Its NOTHING and you know it! Thats why you are saying: Look at the dollar, it has not value too (which is incorrect).

Its like the fat boy saying: Yes I am fat but other boys are fat too, so its ok.
You say: The dollar has 0 value so it is ok that bitcoin also have 0 value.

Its not ok. And your comparison is false as dollars have value.

Calm down a little. I'm trying to explain you where the mistake you are making actually is. If you don't want to hear what I say you, then it is no use discussing it any further...

[porc]

Stop diverting. What is bitcoins value? You know it has 0 value but dont want to admit it, as you want to dump it on the next guy.

Water has value. Food has value. Nobody will discuss this. Sometimes it costs more (desert) sometimes less (rainforest). But it has VALUE!

You explain that USD has value because you HAVE to be able to exchange dollars for food, water etc.. Bitcoin has value by the same token, in that you can exchange it for food, water, ie things we all agree are valuable (we need them to survive).

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

[deed02392]

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

[porc]

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

Read before you write! I am talking about dollars which are nothing and how they become something (by government force). Now gold is something because it looks pretty. Why is bitcoin something?

You are correct: I dont need force to agree that something is worth something. But I do need to be forced by government to agree to nothing (dollar) is worth something (goods). Get it? How is the bitcoin community going to convince me that nothing (bitcoin) is worth something??

[deisik]

Again abstract statements that pretend like bitcoin is in the same league as dollars and gold.

These are not abstract statements, the economic theory behind them has its origins as early as the Middle Ages. Since the 19th century it has been thoroughly developed and is now accepted by most economists as the only one coherently explaining the real life economic phenomena related to valuation...

Do you really think that you are the only one who tried to question its findings or the cleverest among them?

[deed02392]

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

Read before you write! I am talking about dollars which are nothing and how they become something (by government force). Now gold is something because it looks pretty. Why is bitcoin something?

You are correct: I dont need force to agree that something is worth something. But I do need to be forced by government to agree to nothing (dollar) is worth something (goods). Get it? How is the bitcoin community going to convince me that nothing (bitcoin) is worth something??

Ah, I think I understand your point of view now. You're absolutely right, Bitcoin has zero value because on its own it isn't useful. But then if you value things only on their use, how 'useful' is gold to you when you can only survive on it if someone else gives it value? What if you had a bunch of gold and everyone decided they didn't think it was valuable? A farmer will not trade his crops with your gold and you would starve.

Bitcoin doesn't have value because it exists, it has value because it's useful. If you review the merchants accepting Bitcoin you will see how useful it is, thus why it has value.

[Soulfap]

Bitcoin is going up in price because people believe it will be used as a medium of exchange and store of value. If they realise this wont happen it will collapse in price. So lets look at these two aspects.

1) Medium of exchange.

Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?
No.

Why?

a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered.

b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money.

2) Store of Value

After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely.

Also Bitcoin is a technology, that can be outcompeted by other altcoins. Your wallet can be hacked. The average citizen cant judge if the code can or can not be hacked and thus more bitcoins created. If you want to store wealth over a long period of time investing in a technology is not the best and easiest option. Also Bitcoin is not useful or wanted. If you ask a Bitcoiner what can I do with it they will say: dump it on the next guy it will go up in price! Gold and Silver where always wanted (jewlery and nowadays industry) and thats why they became MONEY in the first place! They have unique properties and everybody love to hold them in their hand. This will always be the case ensuring significant value and acceptance. Nothing like this can be said for bitcoins. Thus I dont believe bitcoin will function as a store of value in any significant way.

Conclusion:

I predict bitcoin to collapse in price (as it wont be used either as a medium of exchange nor as a store of value).

EDIT: The price increasing shows bitcoin is used as a speculative vehicle. It does not demonstrate bitcoins viability as a store of value or medium of exchange.

(Additional line of attack for governments: Government could come down hard on miners. They could make it illegal to mine bitcoins. Then bitcoin will lose all of its advantages compared to alternative cryptocurrencies. It will be a code like the rest of them.)

1) Medium of exchange.

A medium of exchange, is simply a platform (currency) used to exchange value. Bitcoin is a unarguably a medium of exchange as it is, however you are right in your conclusion that bitcoin currently is too volatile to be used as both a Medium of Exchange AND as a Store of Value. Traditionally, currencies have been used as both, because it is the norm, and it is a functional system. However, with a system like bitcoin in effect to cover one aspect, and temporarily another system, like the US Dollar, to cover the other aspect, you have a functioning system that operates just as well, if not potentially better.
 
a) Governments have not effectively made it impossible for people to use bitcoin as a medium of exchange. You are expected to pay taxes on bitcoin gains, as you are expected to with any capital gains. It is the same percentage, and it is the same laws that bind you to your rights through law. This is how the world works.

b) Governments won't prohibit merchants from accepting bitcoin. If you knew the first thing about in-depth politics, you would know that the stake is too high. Effectively, the government is controlled by the people. We are the voters, no matter how corrupt the system inside might be. If bitcoin grows exponentially, it will gain a massive fan-base and world-wide admiration as a new technological wonder. If the USA (example) were to ban the use of bitcoin for merchants, the decision alone would be widely regarded as a direct confrontation of the entire publics belief, and thus politicians will grasp at the opportunity to use pro-use of bitcoin as their marketing plan, and easily win the election come next term. The USA knows better than to put themselves up for risks like this. There simply is not incentive to block bitcoin for merchants, nor will there ever be.

2) Store of Value

This entire point is now made invalid, considering the explanation above.

As for bitcoin as a technology, it can indeed be outcompeted by other altcoins. This is where the open, free and democratic aspect of cryptocurrencies come in to play. It is the foundation of any healthy system. However, i find it extremely unlikely at this point, that any type of altcoin will surpass bitcoin in momentum, unless something comes along with groundbreaking new features that simply out-compete bitcoin by a massive margin.

Your wallet is as absolutely safe as you would like it to be. With the continuation of development on bitcoins infrastructure, which is an ongoing project, we all aim to make the use and adoption of bitcoin less time consuming, easier, safer and less demanding in general. Assuming bitcoin will fail because "your wallted can be hacked" is simply ridiculous.

As for bitcoins actual value. There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way. - Just because bitcoin does not hold "traditional intrinsic material value" does not mean it is not backed by something. Another argument some people make is that bitcoin is only worth what people belive it is worth, and thus it is worthless. This argument is flawed beyond reason. The more infrastructure and general development bitcoin gains, the more people believe it is worth, and thus the volatility will even out and stabilize somewhat over time. It is not until we reach the "equilibrium price" that bitcoin can truly 100% stabilize as a modern, global currency, though. Rome was not built in one day.

Conclusion

I predict bitcoin will continue to fluctuate from week to week, however continuously growing in the long-term, both through price as well as infrastructural development and wide-spread adoption. There will be times of growth, and there will be times of decline. However, in the long hold, bitcoin will revolutionize the world of economics, and will either be the precursor to, or the main content of, a completely changed financial system.

[deisik]

Again abstract statements that pretend like bitcoin is in the same league as dollars and gold.

Gold is valuable because it is pretty and nice to look at. Thats why people want it.

Dollars are valuable because government forces people to accept them for payment of goods/debts.

First of all, what you are talking about here ("pretty and nice to look at") is correctly called subjective value, because it exists only in the heads of humans, not by itself. And why do you think that all people universally find gold pretty and nice to look at? Secondly, Zimbabwean dollars are also a legal tender and can be used for payment of goods/debts. But no one wants to deal in with them. Why? Because their subjective value is next to nothing, and people try to get rid of them as soon as possible...

[porc]

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

Read before you write! I am talking about dollars which are nothing and how they become something (by government force). Now gold is something because it looks pretty. Why is bitcoin something?


You are correct: I dont need force to agree that something is worth something. But I do need to be forced by government to agree to nothing (dollar) is worth something (goods). Get it? How is the bitcoin community going to convince me that nothing (bitcoin) is worth something??

Ah, I think I understand your point of view now. You're absolutely right, Bitcoin has zero value because on its own it isn't useful. But then if you value things only on their use, how 'useful' is gold to you when you can only survive on it if someone else gives it value? What if you had a bunch of gold and everyone decided they didn't think it was valuable? A farmer will not trade his crops with your gold and you would starve.

Bitcoin doesn't have value because it exists, it has value because it's useful. If you review the merchants accepting Bitcoin you will see how useful it is, thus why it has value.

Ok now we are getting somewhere. Golds value is that it is pretty. Now sometimes pretty is not priced highly in the market (if everyone is starving). That is a different issue. Its like this with every luxury good. Might there be extreme scenarios when even the farmer is starving and does not want to trade food for gold/silver. Yes. But its unlikely.

Now Bitcoin is worth nothing. Why would anybody ever accept nothing for something?

This is why Bitcoin cant work.

[Zarathustra]

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

Read before you write! I am talking about dollars which are nothing and how they become something (by government force). Now gold is something because it looks pretty. Why is bitcoin something?

You are correct: I dont need force to agree that something is worth something. But I do need to be forced by government to agree to nothing (dollar) is worth something (goods). Get it? How is the bitcoin community going to convince me that nothing (bitcoin) is worth something??

Ah, I think I understand your point of view now. You're absolutely right, Bitcoin has zero value because on its own it isn't useful. But then if you value things only on their use, how 'useful' is gold to you when you can only survive on it if someone else gives it value? What if you had a bunch of gold and everyone decided they didn't think it was valuable? A farmer will not trade his crops with your gold and you would starve.

Bitcoin doesn't have value because it exists, it has value because it's useful. If you review the merchants accepting Bitcoin you will see how useful it is, thus why it has value.

Yes. Absolutely no difference between Gold and Gold 2.0

[deisik]

Bitcoin is valuable because???

Say why you think Bitcoin has value!!

Bitcoin is valuable (or has value, if such form suits you better) to those people who find the properties inherent to it useful for the achievement of their aims. These are security, deflationary nature, fixed supply and limited number of coins ultimately possible to mine. Probably, there are some other properties that contribute to its subjective valuation by people, but these will suffice. Once you get the hang how things actually work with respect to valuation, everything will become clear and easily comprehensible...

[deed02392]

Ok now we are getting somewhere. Golds value is that it is pretty. Now sometimes pretty is not priced highly in the market (if everyone is starving). That is a different issue. Its like this with every luxury good. Might there be extreme scenarios when even the farmer is starving and does not want to trade food for gold/silver. Yes. But its unlikely.

Now Bitcoin is worth nothing. Why would anybody ever accept nothing for something?

This is why Bitcoin cant work.

From what you have said, dollars were worth nothing when they first started too. But everyone decided to agree they were worth something and then allowed the government in those early days to use them etc.. They are a standard exchange now because they are established. Bitcoins COULD work and equally they could fail in which case they would be worth nothing. But a lot of us don't think that will happen.

[porc]

As for bitcoins actual value. 1) There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - 2) However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way.

1) No they formulate it incorrectly. They say: Dollar had value (back in the day) because it was backed by gold. And gold has value because it is pretty to look at. So the dollar bill itself has no value (nothing). It derives its value because it is a claim on gold (back in the day it did).

Now bitcoin is like the dollar bill (actually worse because you cant burn it to create heat). It is nothing. I cant do anything with a bitcoin. Now you say well true, but its backed by the miners. Well that does not add value. I cant redeem the miners and sell them can I? Now some bitcoiners will say: Well you can transfer bitcoin cheaply. Well just because I can transfer nothing cheaply (what a waste I have after all transferred NOTHING) does not mean that nothing thus is something. Its still nothing. If the bitcoin arrives at my place I can still not do anything with it can I?

2) The comparison to facebook is totally flawed. I can do stuff with facebook. What can I do with bitcoin? Nothing.

 

[porc]

Ok now we are getting somewhere. Golds value is that it is pretty. Now sometimes pretty is not priced highly in the market (if everyone is starving). That is a different issue. Its like this with every luxury good. Might there be extreme scenarios when even the farmer is starving and does not want to trade food for gold/silver. Yes. But its unlikely.

Now Bitcoin is worth nothing. Why would anybody ever accept nothing for something?

This is why Bitcoin cant work.

From what you have said, dollars were worth nothing when they first started too. But everyone decided to agree they were worth something and then allowed the government in those early days to use them etc.. They are a standard exchange now because they are established. Bitcoins COULD work and equally they could fail in which case they would be worth nothing. But a lot of us don't think that will happen.

No its different. Initially we used gold and silver as money. They were something. But because it was cumbersome (gold silver are heaving, typical for somethings ) we started trading paper claims on gold and silver (dollars, aka money substitutes). These where something because they where backed by gold.

Now Nixon (I think it was him) removed the gold backing and effectively made dollars nothing. But he replaced gold with government force. We have to accept dollars and thus we trade something for nothing. This would never happen in the free market. This is why Bitcoin wont succeed.

[Soulfap]

As for bitcoins actual value. 1) There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - 2) However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way.

1) No they formulate it incorrectly. They say: Dollar had value (back in the day) because it was backed by gold. And gold has value because it is pretty to look at. So the dollar bill itself has no value (nothing). It derives its value because it is a claim on gold (back in the day it did).

Now bitcoin is like the dollar bill (actually worse because you cant burn it to create heat). It is nothing. I cant do anything with a bitcoin. Now you say well true, but its backed by the miners. Well that does not add value. I cant redeem the miners and sell them can I? Now some bitcoiners will say: Well you can transfer bitcoin cheaply. Well just because I can transfer nothing cheaply (what a waste I have after all transferred NOTHING) does not mean that nothing thus is something. Its still nothing. If the bitcoin arrives at my place I can still not do anything with it can I?

2) The comparison to facebook is totally flawed. I can do stuff with facebook. What can I do with bitcoin? Nothing.

 

Now i am 100% confident you are an absolute troll. There is no way someone who has the competence to know what bitcoin is, actually makes those assumptions and claims that you do. You can do stuff with facebook, but you can't do anything with bitcoin? Are you seirous? - I'll let you take a breather and come back on this one, because i genuinely don't believe you are completely incompetent.

Edit: Read this: https://bitcointalk.org/index.php?topic=363779.0

[flynn]

It is beyond my understanding why to are so desperate trying to convince us that the Bitcoin is worth nothing.

Unless you have an agenda and are paid by bankers or something alike, which I could understand,
why don't you just leave this place ? You will NOT convince us that $900 = 0 whatever you say.

Everything is worth something on this planet, even dirt or sand, or shit (some country use it to be converted into gas).
Whether you agree on the current pricing of these thing or not is irrelevant.
You don't make the market's prices.

[porc]

It is beyond my understanding why to are so desperate trying to convince us that the Bitcoin is worth nothing.

Unless you have an agenda and are paid by bankers or something alike, which I could understand,
why don't you just leave this place ? You will NOT convince us that $900 = 0 whatever you say.

Everything is worth something on this planet, even dirt or sand, or shit (some country use it to be converted into gas).
Whether you agree on the current pricing of these thing or not is irrelevant.
You don't make the market's prices.

Tullips (at they had some value) where once enormously expensive. Does that mean that Tulips where worth their price?

[flynn]

Tullips (at they had some value) where once enormously expensive. Does that mean that Tulips where worth their price?

Of course, if you found someone to buy it.

[porc]

It is beyond my understanding why to are so desperate trying to convince us that the Bitcoin is worth nothing.

Unless you have an agenda and are paid by bankers or something alike, which I could understand,
why don't you just leave this place ? You will NOT convince us that $900 = 0 whatever you say.

Everything is worth something on this planet, even dirt or sand, or shit (some country use it to be converted into gas).
Whether you agree on the current pricing of these thing or not is irrelevant.
You don't make the market's prices.

You say bitcoin has value. You say I have to just read this post to understand:

1) Bitcoin has no intrinsic value, 2) the network does. Thats what everyone is missing altogether and or misrepresenting.

3) The networks value is derived from it's ability to send value across political and geographic borders, nearly instantly and dirt cheap, with minimum effort. Additionaly it enables this without the risks commonly found in traditional financial instruments and value stores. Risks like hyper-inflation, manipulation, ceisure or other meddling by governments or institutions for whatever reason.

The ability to move value is enormously valuable.
 

1) He agrees with me that Bitcoin has no value for itself (like for example water that quenches thirst, food to feed my children). This statement is obviously true, as I cant do anything with 1 bitcoin.

2) He says the network of miners gives bitcoin value (how? the bitcoins are not a claim on the mining equipment. I cant sell the mining equipment or take it in my possession. Again dollar bills once where a claim on gold that I could take in my possession).

3) He says "the networks value is derived from its ability to send value instantly and dirt cheap".

Now when he refers to "sending value" he is talking about bitcoins. Because after all you are sending bitcoins. However as he has established in the first part of his first sentence "Bitcoin has no (intrinsic) value". So he is contradicting himself.

To summarize the information he gives us: 1 Bitcoin has no value (=nothing) and this absence of value can be sent at a cost.

Now how exactly is this convincing?

As I said previously: Incurring costs (energy which is something) to send nothing does not make nothing valuable. It is a waste of energy.