How many tulips would you sell a bitcoin for?

[aynstein]

Just wondering.

[BittBurger]

They use this analogy because :

1) The dumb ones are just parrots, and have heard others say it.

2) The slightly smarter ones understand the analogy, but label Bitcoin itself as "worthless".  Which is obviously nonsense.  They are either uneducated on its purpose, or don't care.

3)  Then there's the proper use of the analogy.  Tulip mania is supposed to be when something is overpriced as far as its true current value.  Used this way, the Tulip analogy could be correct.  For example, Bitcoin is still very new.  Does it have the infrastructure, the commerce (as a currency), and the level of adoption necessary to value it at $1000 yet?  Probably not.  

---------

Its current *actual* value, based upon its current adoption, current financial benefit to mankind, use as a currency, and infrastructure may justify a much lower trade price.  It's still new.  Andreas Antanopoulous has commented that Bitcoin could drop to $20 tomorrow, and it wouldn't surprise him one bit.  And such a thing shouldn't worry anyone either.  Its trading price does not currently reflect its level of adoption. The infrastructure is still very new.  But it *is* being built.  So the Tulip analogy, applied properly to Bitcoin, would simply say that Bitcoin hasn't brought "$1000 worth of value per coin to humanity just yet".  But here's the important caveat:  There isn't anything necessarily wrong with a speculative *current* overvaluation if the technology is this ground breaking.

People who truly understand this innovation are making bets on its future adoption, usefulness, and benefit to mankind.  Yes ---- that is speculation.   But "experts" say that speculation itself is somehow inherently a bad sign.  This is incorrect thinking.  People are buying in to Bitcoin, and are willing to pay a price that they feel justifies its potential. If you want to nitpick, the trade price is actually far undervalued for its potential.  The power of this innovation is staggering.  6 Billion possible "customers"....

How to get away from the Tulip reference?  Get the infrastructure built.  Get the startups going.  Get the creative thinking going.  Get new businesses to begin building on top of the protocol, and provide necessary products and services around the technology (like Gyft, and Robocoin, and Mastercoin).  Get the adoption up.  Get merchants to start adopting en masse.  It has already begun.  And this is why Bitcoin will not go to $0.00.   It now has tangible value in society.

Is it truly worth $1,000 per coin right now?  Probably not. Is it worth $25, $50, $250?  Maybe.  With 12,000 BitPay Merchants. $100k in transactions in the 1st week on the 1st Bitcoin ATM.  A $100,000 Tesla car purchase.  Trips into Space. Shopify enabling it for thousands more merchants. Subway shops in LA.  Police Chief Salary paid in Bitcoin. Towns in Europe with numerous brick and mortar businesses accepting it. People using it instead of Western Union to send money home. The volume of cash that has been pumped into the trading market.  The value of the Blockchain itself ....  It may take 2-5 years for the infrastructure to justify a $1000 valuation.   It may only be 1 year.  We could scream right past a justified $1000 price tag in very little time.  It all depends how quickly the infrastructure is built, and the commerce starts flowing.

-Burger-

[aynstein]

Excellent effort, but ... I think the network is worth a tiny bit, like waaaaaay more. IMO.

[BittBurger]

Excellent effort, but ... I think the network is worth a tiny bit, like waaaaaay more. IMO.

Good point.  I edited out the dollar amount and added some more appropriate phrasing.

Thanks.

[Sindelar1938]

Matter of time before that happens

Think with a 3 to 5 yr holding horizon, this is a good place to be in...

[aynstein]

see my post explaining bitcoin value, I just made it...inspired by this poll.

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

[Sitarow]

Excellent effort, but ... I think the network is worth a tiny bit, like waaaaaay more. IMO.

The examples posted here for argued value is like trying to put a price on the internet itself back in the late 90's.

[Sindelar1938]

Amusing thread
Anyone who likens btc to the tulip frenzy does not understand what value is
That's distinct from disagreeing about whether btc currently represents good value or not

[bryant.coleman]

I'll exchange 1 BTC for a pack of 5,000 Darwin Hybrid Tulips.

Then I'll exchange those tulip bulbs for $2,500 and buy 2.5 BTCs.

[Mjbmonetarymetals]

The tulip bubble was nearly 100 years in the making, in the final period the most prized tulips were those that had a viral mutation that made it weak, leggy and even more difficult to cultivate than the standard variety. To use the tulip analogy correctly -


Bitcoin woud need to continue to gain momentum for decades followed by replacement by a weaker variety of crypto that ultimately would cause prices of the whole crypto-commodity sector to fail. Plus the fact that a "tulip" had no "utility" other than to look at, they were not even cultivated rather mounted in glass display cases to demonstrate ones wealth.

[LiteCoinGuy]

what´s the worth of a unique financial system which offers things that nothing else can provide today?

[hilariousandco]

How many Tulips are in a Beanie Baby? Cos I would trade my BTC for Tulips then for Beanie Babies then for potatoes.

[franky1]

The tulip bubble was nearly 100 years in the making, in the final period the most prized tulips were those that had a viral mutation that made it weak, leggy and even more difficult to cultivate than the standard variety. To use the tulip analogy correctly -


Bitcoin woud need to continue to gain momentum for decades followed by replacement by a weaker variety of crypto that ultimately would cause prices of the whole crypto-commodity sector to fail. Plus the fact that a "tulip" had no "utility" other than to look at, they were not even cultivated rather mounted in glass display cases to demonstrate ones wealth.

the final reason the tulip craze ended is the same as other things. supply.. tulips became common, every medium paid family had them and were growing their own. in the end the price tanked. if tulips could only grow from a master plant. like a queen plant, where their was limited supply and not everyone could clone/reproduce tulips. the craze would still be growing now.

bitcoin has this limited supply. so bitcoin will succeed longer then the tulips did. and with that it is worth mentioning, even today you can still buy tulips for 15pence (20c) so even now tulips are still not 'worthless'

what´s the worth of a unique financial system which offers things that nothing else can provide today?

imagine a financial system where someone offered you a digital coin upfront, but had you sign a contract that at the end of the month you had to repay in FIAT + x%. and if you did not repay, thy would take you to court to get permission to remove valuables from your home, or even take ownership of your home dependant on how much you failed to repay.

would you consider this a good financial system compared to bitcoin?
well.. visacard and mastercard are worth billions

[aynstein]

imagine a financial system where someone offered you a digital coin upfront, but had you sign a contract that at the end of the month you had to repay in FIAT + x%. and if you did not repay, thy would take you to court to get permission to remove valuables from your home, or even take ownership of your home dependant on how much you failed to repay.

would you consider this a good financial system compared to bitcoin?
well.. visacard and mastercard are worth billions

Imagine my amusement when I lent a friend 1.5 BTC in June under the agreement it must be repaid in BTC. I don't think he gets the joke. 

[stompix]

They use this analogy because :

1) The dumb ones are just parrots, and have heard others say it.

2) The slightly smarter ones understand the analogy, but label Bitcoin itself as "worthless".  Which is obviously nonsense.  They are either uneducated on its purpose, or don't care.

3)  Then there's the proper use of the analogy.  Tulip mania is supposed to be when something is overpriced as far as its true current value.  Used this way, the Tulip analogy could be correct.  For example, Bitcoin is still very new.  Does it have the infrastructure, the commerce (as a currency), and the level of adoption necessary to value it at $1000 yet?  Probably not.  

---------

Its current *actual* value, based upon its current adoption, current financial benefit to mankind, use as a currency, and infrastructure may justify a much lower trade price.  It's still new.  Andreas Antanopoulous has commented that Bitcoin could drop to $20 tomorrow, and it wouldn't surprise him one bit.  And such a thing shouldn't worry anyone either.  Its trading price does not currently reflect its level of adoption. The infrastructure is still very new.  But it *is* being built.  So the Tulip analogy, applied properly to Bitcoin, would simply say that Bitcoin hasn't brought "$1000 worth of value per coin to humanity just yet".  But here's the important caveat:  There isn't anything necessarily wrong with a speculative *current* overvaluation if the technology is this ground breaking.

People who truly understand this innovation are making bets on its future adoption, usefulness, and benefit to mankind.  Yes ---- that is speculation.   But "experts" say that speculation itself is somehow inherently a bad sign.  This is incorrect thinking.  People are buying in to Bitcoin, and are willing to pay a price that they feel justifies its potential. If you want to nitpick, the trade price is actually far undervalued for its potential.  The power of this innovation is staggering.  6 Billion possible "customers"....

How to get away from the Tulip reference?  Get the infrastructure built.  Get the startups going.  Get the creative thinking going.  Get new businesses to begin building on top of the protocol, and provide necessary products and services around the technology (like Gyft, and Robocoin, and Mastercoin).  Get the adoption up.  Get merchants to start adopting en masse.  It has already begun.  And this is why Bitcoin will not go to $0.00.   It now has tangible value in society.

Is it truly worth $1,000 per coin right now?  Probably not. Is it worth $25, $50, $250?  Maybe.  With 12,000 BitPay Merchants. $100k in transactions in the 1st week on the 1st Bitcoin ATM.  A $100,000 Tesla car purchase.  Trips into Space. Shopify enabling it for thousands more merchants. Subway shops in LA.  Police Chief Salary paid in Bitcoin. Towns in Europe with numerous brick and mortar businesses accepting it. People using it instead of Western Union to send money home. The volume of cash that has been pumped into the trading market.  The value of the Blockchain itself ....  It may take 2-5 years for the infrastructure to justify a $1000 valuation.   It may only be 1 year.  We could scream right past a justified $1000 price tag in very little time.  It all depends how quickly the infrastructure is built, and the commerce starts flowing.

-Burger-

And we have a 20% increase in number of transactions from January:
https://blockchain.info/charts/n-transactions?showDataPoints=false&timespan=&show_header=true&daysAverageString=7&scale=0&address=

Something fishy going there

[aynstein]

I believe the people have spoken. Bitcoins are worth one Troll of bit coins.

Actually, full disclosure, this was done in jest. Yup.