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Author Topic: Does Bitcoin had a back up by real money?  (Read 1205 times)
jaysabi
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August 23, 2018, 07:33:29 PM
 #61

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

Ah but if it has no intrinsic value, how can they declare it an asset? Can't have both I'm afraid...

In the new age of the internet, anything online can be deemed to have intrinsic value. We saw this phenomenon in the late 1990's when everyone thought it would be a great idea to invest in websites with a lot of hits. These hits were of course perceived value, but they were being sold as intrinsic value. Logic had it at the time that more hits meant more profits for a company.

The intrinsic value in bitcoin is the blockchain behind it. That very code makes it worth much more than any other idea in the last 20 years.

You're confusing intrinsic value with extrinsic value. Intrinsic value is something that has value due to utility or some innate feature of the object that makes it valuable; essentially that the value comes from within (hence the name "intrinsic"). Extrinsic value is the value people assign to something, perhaps even arbitrarily. Silver has intrinsic value because it's a necessary metal for many industrial uses. Water has intrinsic value because it's necessary to survive.  Both of these have value that comes from within the commodity.  Bitcoin has value because everyone just decides it does. That's why it has value as an asset and it isn't intrinsic.

Your website example is not an example of things with intrinsic value. It was people arbitrarily assigning value to something that had no intrinsic value, which eventually collapsed the bubble. Bitcoin has traced the same path with the 70% crash this year.  Additionally, Bitcoin isn't necessary for blockchain, so if you want to make the argument the blockchain has intrinsic value (and I'm not even sure I agree with that), it would mean nothing for Bitcoin.
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September 08, 2018, 02:07:27 PM
 #62

on exchanges, in speculative and not just order, there is reinforcement of the crypto currency with real money. People enter their dollars / rubles / euros and buy bitcoins on them, coins are reinforced directly with money, which in turn is backed by the real sector, where they earn money for goods and services. The growing turnover of "living money" inevitably supports and increases the cost of bitcoin.

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September 08, 2018, 02:25:54 PM
 #63

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?

Yes, Bitcoin is backed by our Fiat currency. Though it is a digital currency, it could also serve as a means of transacting online because it can be converted to Fiat if used as a payment.

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September 21, 2018, 08:57:08 AM
 #64

Now the process of exchanging Bitcoin for real money has become easier due to the popularization of localbitcoins, but still it takes considerable time, in some countries it carries the risks of blocking cards and has high commissions of 5-8%.

awawo
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October 05, 2018, 09:57:06 AM
 #65

Bitcoin is back up by it market capitalization and that is why bitcoin is registered in the world exchange market using the blockchain technology as it bank and once it market capitalization in the exchange market remains high the central bank have no choice then to back it up with traditional faint money so long as the block can be min.

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October 08, 2018, 02:31:54 AM
 #66

maybe, or maybe there is a bank that supports and is ready to print money on every bitcoin exchange to fiat? I also haven't found a theory about it.

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October 08, 2018, 12:30:04 PM
 #67

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

Ah but if it has no intrinsic value, how can they declare it an asset? Can't have both I'm afraid...

In the new age of the internet, anything online can be deemed to have intrinsic value. We saw this phenomenon in the late 1990's when everyone thought it would be a great idea to invest in websites with a lot of hits. These hits were of course perceived value, but they were being sold as intrinsic value. Logic had it at the time that more hits meant more profits for a company.

The intrinsic value in bitcoin is the blockchain behind it. That very code makes it worth much more than any other idea in the last 20 years.

You're confusing intrinsic value with extrinsic value. Intrinsic value is something that has value due to utility or some innate feature of the object that makes it valuable; essentially that the value comes from within (hence the name "intrinsic"). Extrinsic value is the value people assign to something, perhaps even arbitrarily. Silver has intrinsic value because it's a necessary metal for many industrial uses. Water has intrinsic value because it's necessary to survive.  Both of these have value that comes from within the commodity.  Bitcoin has value because everyone just decides it does. That's why it has value as an asset and it isn't intrinsic.

Your website example is not an example of things with intrinsic value. It was people arbitrarily assigning value to something that had no intrinsic value, which eventually collapsed the bubble. Bitcoin has traced the same path with the 70% crash this year.  Additionally, Bitcoin isn't necessary for blockchain, so if you want to make the argument the blockchain has intrinsic value (and I'm not even sure I agree with that), it would mean nothing for Bitcoin.
What is "real money" you are talking about? If you mean fiat currency what does really make fiat money "real money"? Is it the governmental backed currency? Because there are tokens and coins that are backed up governments as well, go check Estonia and Venezuela who has governmental backed money yet none of them are as big as neither bitcoin nor dollars.

Is it the common usage? Because bitcoin is used and has a higher marketcap than most countries money as well. Is it laws and acceptance? Because I am pretty sure there are more places in the world where you can spend bitcoin and can't spend Zimbabwe trillions. Bitcoin IS REAL MONEY.
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October 08, 2018, 01:22:22 PM
 #68

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

Ah but if it has no intrinsic value, how can they declare it an asset? Can't have both I'm afraid...

In the new age of the internet, anything online can be deemed to have intrinsic value. We saw this phenomenon in the late 1990's when everyone thought it would be a great idea to invest in websites with a lot of hits. These hits were of course perceived value, but they were being sold as intrinsic value. Logic had it at the time that more hits meant more profits for a company.

The intrinsic value in bitcoin is the blockchain behind it. That very code makes it worth much more than any other idea in the last 20 years.

You're confusing intrinsic value with extrinsic value. Intrinsic value is something that has value due to utility or some innate feature of the object that makes it valuable; essentially that the value comes from within (hence the name "intrinsic"). Extrinsic value is the value people assign to something, perhaps even arbitrarily. Silver has intrinsic value because it's a necessary metal for many industrial uses. Water has intrinsic value because it's necessary to survive.  Both of these have value that comes from within the commodity.  Bitcoin has value because everyone just decides it does. That's why it has value as an asset and it isn't intrinsic.

Your website example is not an example of things with intrinsic value. It was people arbitrarily assigning value to something that had no intrinsic value, which eventually collapsed the bubble. Bitcoin has traced the same path with the 70% crash this year.  Additionally, Bitcoin isn't necessary for blockchain, so if you want to make the argument the blockchain has intrinsic value (and I'm not even sure I agree with that), it would mean nothing for Bitcoin.
Well everyone keeps saying bitcoin is decentralized and so forth but I feel like bitcoin is heavily reliant on dollar, whatever dollar does bitcoin reacts and whatever governments does bitcoin react as well. What if ETF of bitcoin gets accepted tomorrow? We know it will go up, hell it will skyrocket and if a governmental acceptance increases your price than you can't call it a decentralized object, it is bound to governments of the world and the economists of the world. However bitcoin is not "backed" by anything, obviously for that to happen the price of it should be tied to something and it is not.
jestbenen8
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October 10, 2018, 10:22:15 AM
 #69

maybe, or maybe there is a bank that supports and is ready to print money on every bitcoin exchange to fiat? I also haven't found a theory about it.
Yeah bitcoin has real money on its back because when I buy bitcoin I will have to pay for it. Exchange will convert my local currency into dollar and then into bitcoin. That’s why I can say that all the bitcoin in the world has a value in real money and you can cash your coins any time for real money. Ups and downs do not affect the capitalization of real money.
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October 10, 2018, 12:03:48 PM
 #70

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?


That is what happening now while bitcoin is in a stage of public analizing towards negotiation for final acoption for every people. You are definitely true local exchanger now is a back up of bitcoin to fiat money.

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