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Author Topic: How can collapse of USD affect bitcoin?  (Read 4361 times)
Erdogan
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March 26, 2014, 09:53:01 AM
 #61

Money has to be either:

  • Something of inherent and reliable value. (gold, silver, cigarettes, bullets)
  • Unit of account backed by the authority

Bitcoin is neither.

Bitcoin is vessel on any given unit of exchange

Nah. Everything has value, either direct use value or exchange value or both. Exchange value, which you also could call money value, comes from the reservation demand that the traders set out. Whatever is money, is what the traders prefer to use.

The value comes from the minds of the individuals, different for everyone.

Most things has use value, so you buy it (demand it) because you want to use it. Doesn't make a difference if you consume it right away, and the value disappears, or it is a durable good that you consume over years. The point is that you aquire it for the value it gives you, or the inherent value. It makes no sense to hoard bicycles if you want to save for your daughters education. 

When something is used in indirect exchange, its value increases as a consequence. Some things have both types of value, example gold, but it is impossible to exactly define the magnitude of the use value part compared to the exchange value part.

Fiat money has only exchange value, making it pure money, a nice invention. It is not the zero inherent (use value) that is its problem, rather it is the fact that someone controls the supply irresponsibly.

With bitcoin you have the advantage of pure money (no intrinsic value) and at the same time it is not centrally controlled, so nobody can steal value from the hoarders by creating more. It is nearly perfect, clean, pure money, with only some small drawbacks compared to some other money, that can easily be fixed using added services.

tl;dr that was a rerun of the value discussion, some new users may find it interesting.


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MatTheCat
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March 26, 2014, 01:24:46 PM
 #62

@wobber

Bitcoin is money. It has inherent value (will ever be, electricity is used to mine them, this gives it value and we cannot clone them). Authority that backs bitcoin up is the community.

Thank you to spend the time to write those words Smiley

@Erdogan

You are right Smiley

Oh, and can I still use that electricity. Can I take one Bitcoin and turn it into so many watts of electrical power?

Kraken Account, Robbed/Emptied. Kraken say "Fuck you, its your loss": https://bitcointalk.org/index.php?topic=1559553.msg15656643#msg15656643

Bitfinex victims. DO NOT TOUCH THE BFX TOKEN! Start moving it around, or trading it, and you will be construed as having accepted it as an alternative means of payment to your USD, BTC, etc.
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March 26, 2014, 01:59:55 PM
 #63

Oh, and can I still use that electricity. Can I take one Bitcoin and turn it into so many watts of electrical power?

That's what I do, every month when I pay my utility bill, so yes, in fact you can.  About 6mwh per btc, here.

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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March 26, 2014, 02:16:15 PM
 #64

@wobber

Bitcoin is money. It has inherent value (will ever be, electricity is used to mine them, this gives it value and we cannot clone them). Authority that backs bitcoin up is the community.

Thank you to spend the time to write those words Smiley

@Erdogan

You are right Smiley

Oh, and can I still use that electricity. Can I take one Bitcoin and turn it into so many watts of electrical power?

You can buy electric power with bitcoin, but you can not squeeze out the electricity used to mine it. Production of coins have a cost, but no direct use value - so what? The value of the system to the world trade can be epic. Not that I care too much, I am interested in what is in it for me, but it is sometimes good to know that my rational selfish actions are not destructive to society.


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aminorex
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March 26, 2014, 07:43:18 PM
 #65

Money has to be either:

  • Something of inherent and reliable value. (gold, silver, cigarettes, bullets)
  • Unit of account backed by the authority

Bitcoin is neither.

Bitcoin is vessel on any given unit of exchange

Bitcoin is both:

Bitcoin is a ledger entry in the leading global ledger, which has an effective monopoly on access to free markets.  The ability to play in that game is of inherent and reliable value.  It is a unit of account backed by the authority of secp256k1/ripem160/sha256d, an authority which is more effectively and justly enforced than any human law in history.

The protocol is the vessel.

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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March 27, 2014, 04:14:19 PM
 #66

Eventually everyone is going to figure out that Bitcoin has no value outside of investment and it's going to die. Speculation of a dollar collapse affecting Bitcoin is just that, speculation.

I think the real question is...

"How will the Bitcoin collapse affect the dollar?"


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March 28, 2014, 12:04:11 PM
 #67

Eventually everyone is going to figure out that Bitcoin has no value outside of investment and it's going to die. Speculation of a dollar collapse affecting Bitcoin is just that, speculation.

I think the real question is...

"How will the Bitcoin collapse affect the dollar?"



That will be an epic deflation of prices of goods measured in dollars. The price of a big mac will be reduced from 100000000000 USD down to 79 USD.


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dead_bit
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All hope has died


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March 30, 2014, 01:57:24 AM
 #68

Eventually everyone is going to figure out that Bitcoin has no value outside of investment and it's going to die. Speculation of a dollar collapse affecting Bitcoin is just that, speculation.

I think the real question is...

"How will the Bitcoin collapse affect the dollar?"



That will be an epic deflation of prices of goods measured in dollars. The price of a big mac will be reduced from 100000000000 USD down to 79 USD.

If only something would deflate the dollar...

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March 30, 2014, 04:39:34 AM
 #69

I much more interesting way to interpret this question is, if the value of the dollar fell 10% in almost one go against the Euro & GBP etc, would the value of bitcoin also fall a similar amount against those currencies? It's time the Bitcoin wasn't only priced in USD. FOr me, my costs are priced in USD (well, Hongkong$ which is linked with us$) so I mind a lot less than I would if I lived in the UK.

So how about we consider the question of a USD 'collapse' being a very sudden substantial (10%) decrease against the rest of the worlds currencies rather than a total collapse. Is that's what required to stop bitcoin being so closely linked to the USD? Long gone are the days when the us$ was the obvious international currency of choice.
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