opinions: bitcoin and other crypto

coming to the end of my degree and i've got to do some interesting research. i won't give the full run down on what i've done (and given that im undergraduate, at best all i can do is suggestive research), but essentially what i've found is the price of bitcoin depends seemingly almost entirely on 'fundamentals' ie other economic factors like assets and growth, and nothing to suggest its got anything special about it

the reason why i find this interesting is because bitcoin is totally insubstantial. even normal money is guaranteed by something we believe in, and that's shaky ground to begin with. but cryptocurrency seems depends on 'the system' whilst being totally outside of it

what do you think? how can it come out of nowhere, based on nothingness, and hold value?

Reply 1

Reue

20

Original post by HoldThisL

how can it come out of nowhere, based on nothingness, and hold value?

Much like most collector items?

Reply 2

HoldThisL

OP

21

Original post by Reue

Much like most collector items?

not really, no, because they're tangible. if all else fails, they exist in a way bitcoin can't

Reply 3

anosmianAcrimony

20

It’s a pyramid scheme and an investment bubble like many others. For the moment it attracts more investment because its supposed value is going up, and that investment causes the supposed value to continue to go up. Eventually it will hit some limit and cease to attract more investment or increase in supposed value. At that point Bitcoin owners will panic and try and sell it all, it will become worthless, and a lot of people will lose a lot of money. We’ll be lucky if it doesn’t trigger a recession.

This is fairly similar to the panic that caused the recession in 2008. These huge financial conglomerates like Fanny Mae and Freddy Mack were making a killing in speculating on and selling, between themselves, large packages of mortgages on real estate that had been missold to the real estate owners and which the owners had very little chance of being able to pay back. The value of these mortgages, and the packages thereof, was hugely overestimated - it was the speculation on them that was actually (supposedly) generating money. Eventually it became apparent that the mortgage packages were worthless and it all came tumbling down.

And again, it’s fairly similar to the stock market crash that caused the American Great Depression in the 1930s. TL;DR: Speculating on the value of things that have no inherent value can produce a thriving, apparently profitable market in the short term, but will inevitably lead to a crash.

(edited 2 years ago)

Reply 4

Reue

20

Original post by HoldThisL

not really, no, because they're tangible. if all else fails, they exist in a way bitcoin can't

"if all else fails" a beanie baby, for example, isnt going to be much use.

Reply 5

HoldThisL

OP

21

Original post by anosmianAcrimony

It’s a pyramid scheme and an investment bubble like many others. For the moment it attracts more investment because its supposed value is going up, and that investment causes the supposed value to continue to go up. Eventually it will hit some limit and cease to attract more investment or increase in supposed value. At that point Bitcoin owners will panic and try and sell it all, it will become worthless, and a lot of people will lose a lot of money. We’ll be lucky if it doesn’t trigger a recession.

And again, it’s fairly similar to the stock market crash that caused the American Great Depression in the 1930s. TL;DR: Speculating on the value of things that have no inherent value can produce a thriving, apparently profitable market in the short term, but will inevitably lead to a crash.

bitcoin isn't a typical pyramid scheme (and im not sure i could convince someone it was one at all) because the process is much more passive than a typical pyramid, but i think you're broadly correct

maybe something that'll save us is that bitcoin depends on other things more than things depend on bitcoin so the fallout is minimised. but the longer its boom continues, the more it will become a part of mainstream financial assets

Original post by Reue

"if all else fails" a beanie baby, for example, isnt going to be much use.

they also don't have a trillion dollar market cap

Reply 6

Reue

20

Original post by HoldThisL

they also don't have a trillion dollar market cap

That wasnt the point I was referring to.

Reply 7

anosmianAcrimony

20

Original post by Reue

"if all else fails" a beanie baby, for example, isnt going to be much use.

Yeah, but a beanie baby will retain its value in anything short of a complete collapse of civilisation, because it just has sentimental/collector’s value for some people. People want to buy it just to have it and get joy from it. Maybe its value will fluctuate over time but it’s very unlikely to go from 100-0.

Bitcoin, on the other hand, has very little real inherent value. Nobody buys a bitcoin because they just want to own one and it brings them joy - they want it to appreciate and make them money. When it’s losing them money, they’ll get rid of it. When everyone does that, it becomes worthless.

Reply 8

anosmianAcrimony

20

Original post by HoldThisL

bitcoin isn't a typical pyramid scheme (and im not sure i could convince someone it was one at all) because the process is much more passive than a typical pyramid, but i think you're broadly correct

maybe something that'll save us is that bitcoin depends on other things more than things depend on bitcoin so the fallout is minimised. but the longer its boom continues, the more it will become a part of mainstream financial assets

they also don't have a trillion dollar market cap

Original post by firemyst

Through Binance I am in a program where I earn a lot of *_passive_* income from crypto and blockchain technologies, so I am essentially making money (over 0.5% *per day* that compounds) while I sleep :-) I didn’t want to risk losing thousands of dollars overnight when someone like Elon Musk tweets/says something on a tv show, so for me this is less risk, less stress, but still highly profitable. Anyway, if you’re interested, send me a message and I can give you more details.