If I had a bitcoin...

[Externet]

If I had a bitcoin in a virtual wallet, and the restaurant accepts such 'currency';  how would the restaurant give me the change from buying a $3 hamburger from a bitcoin 'valued' at $15,000 ?

[Endy0816]

You pay 0.0002, probably a bit more if there are any fees. It can go down to 8 decimal places at the moment.

[iNow]

Same way you have single dollars and receive change in dimes, nickels, and pennies. Fractional currency. 

[joanunderwood]

Very interesting, relevant and very relevant topic. I like some of the ideas I read above, but recently even the cryptocurrency market, namely bitcoin and a few other cryptocurrencies, has gone up a lot, and this is just the beginning. If the most influential people in the world invest in cryptocurrencies, then it is safe to say that this is the future of humanity. I have also been working in the trading business for 5 years, and what I see now in the market of cryptocurrency still impresses and shocks me at the same time. A lot of information about statistics and analysis of the cryptocurrency market can be found on the website that the rules prohibit me from advertising.

Edited February 23, 2021 by Phi for All
commercial link removed by moderator

[dimreepr]

It only has value while your computer can remember it.

[MigL]

That is the problem with cryptocurrencies, and the stock market in general.
They are not based on anything of actual, inherent value, but a 'confidence' that they are somehow valuable.
Elon Musk buys some verson of bitcoin for his son ( whatever his name is ) and that currency jumps in value because of E Musk's popularity/celebrity status.
A bunch of kids push the failing stock of a gaming company on Reddit, and its stock goes up two orders of magnitude.

The big problem is, that without inherent value, that confidence can be lost just as quick.
A few people start selling, confidence is lost, everybody sells, and you lose your shirt.

I have a big problem with any currency that started out 30 odd years ago, by being 'mined' on computers with fast video cards.
How exactly does that bestow a value to something ?

[dimreepr]

5 minutes ago, MigL said:

How exactly does that bestow a value to something ?

Because someone else wants it, which only work's with a full belly and somewhere dry to sleep...

[CharonY]

1 hour ago, MigL said:

I have a big problem with any currency that started out 30 odd years ago, by being 'mined' on computers with fast video cards.
How exactly does that bestow a value to something ?

Isn't it true for a vast swath of capitalist markets, though? I mean you can buy and sell debts, bet on increase/decrease of values and so on. Compared to that, a blockchain is almost physical.

[iNow]

2 hours ago, MigL said:

That is the problem with cryptocurrencies, and the stock market in general.
They are not based on anything of actual, inherent value, but a 'confidence' that they are somehow valuable.

Kinda like greenbacks, or gold, or ad infinitum... this issue you cite isn't specific to crypto. 

[MigL]

55 minutes ago, iNow said:

Kinda like greenbacks, or gold, or ad infinitum...

Greenbacks ( or whatever country's currency ) is backed by that country.
You would have to lose confidence in the whole country, for its currency to brcome worthless.
( don't get me wrong, currencies are devalued all the time )

And gold has an inherent value based on its scarcity.

I can easily see a bunch of kids on Reddit, starting nd pushing a new cryptocurrency, until it gains popularity, and value.
They then sell at huge profits, and 'investors' are left holding the bag.

As there was nothing of value actually produced, how is this any different from a scam ?

[John Cuthber]

10 minutes ago, MigL said:

And gold has an inherent value based on its scarcity.

That's interesting.

You could say the same of platinum and silver.
But their relative cash values change.

 

[Endy0816]

4 hours ago, MigL said:

That is the problem with cryptocurrencies, and the stock market in general.
They are not based on anything of actual, inherent value, but a 'confidence' that they are somehow valuable.
Elon Musk buys some verson of bitcoin for his son ( whatever his name is ) and that currency jumps in value because of E Musk's popularity/celebrity status.
A bunch of kids push the failing stock of a gaming company on Reddit, and its stock goes up two orders of magnitude.

Lot of the big hedge funds were attempting to short the stock and someone figured it out. Wouldn't have worked normally.

 

4 hours ago, MigL said:

I have a big problem with any currency that started out 30 odd years ago, by being 'mined' on computers with fast video cards.

How exactly does that bestow a value to something ?

Mining helps to log/verify transactions in a ledger(in addition to receiving a possible reward). Really the ledger, or blockchain, that underlies bitcoin's value. Creates artificial scarcity if you want to think of it that way.

 

Edited February 23, 2021 by Endy0816

[iNow]

2 hours ago, MigL said:

And gold has an inherent value based on its scarcity.

No, not really. Many things are scarce, yet not valuable. Gold is only valuable because we say it is. 

My basic point is that value itself is a social construct. Paper money, coins, art, baseball cards, and all of the countless other things we trade and exchange only have value because we as a culture say they have value. 

We agree that I can exchange it for goods and services you provide me. If I handed you bag full of my belly lint, it wouldn’t magically have value just because it’s scarce. 

Your attack on cryptocurrency applies equally to all mediums of exchange outside of a pure barter system. 

It’s just another form of cash, only transacted digitally and hard to trace, but cash is not based on anything of actual inherent value either. It too is based on a 'confidence' that it is somehow valuable.

Edited February 23, 2021 by iNow

[MigL]

7 minutes ago, iNow said:

My basic point is that value itself is a social construct. Paper money, coins, art, baseball cards, and all of the countless other things we trade and exchange only have value because we as a culture say they have value. 

I can assign value to a hierarchy, and a lot of people will agree with me, and invest.
Yet I ( and they ) will be charged with running a pyramid scheme.

I may sell you an imaginary bridge, which you believe has value.
And I'll be charged with fraud.

Believing something has value, may induce you to part with your hard-earned money, but we ( and the Government ) take a dim view of some such scams.
Again, you are explaining the similarities.
I'm more interested in knowing why we treat them differently.

[StringJunky]

25 minutes ago, iNow said:

No, not really. Many things are scarce, yet not valuable. Gold is only valuable because we say it is. 

My basic point is that value itself is a social construct. Paper money, coins, art, baseball cards, and all of the countless other things we trade and exchange only have value because we as a culture say they have value. 

We agree that I can exchange it for goods and services you provide me. If I handed you bag full of my belly lint, it wouldn’t magically have value just because it’s scarce. 

Your attack on cryptocurrency applies equally to all mediums of exchange outside of a pure barter system. 

It’s just another form of cash, only transacted digitally and hard to trace, but cash is not based on anything of actual inherent value either. It too is based on a 'confidence' that it is somehow valuable.

Wasn't cash originaly tied to physical reserves of value?

[iNow]

2 minutes ago, StringJunky said:

Wasn't cash originaly tied to physical reserves of value?

Maybe, but those physical reserves were also only valuable because we agreed they were 

17 minutes ago, MigL said:

m more interested in knowing why we treat them differently

May be helpful to expand on this. Who is “we,” what is “them,” and different how?

[zapatos]

8 hours ago, MigL said:

That is the problem with cryptocurrencies, and the stock market in general.
They are not based on anything of actual, inherent value, but a 'confidence' that they are somehow valuable.

The stock market's value comes in part from a company's infrastructure and inventory. Certainly GMs automobiles and plants have inherent value.

[iNow]

25 minutes ago, zapatos said:

The stock market's value comes in part from a company's infrastructure and inventory. Certainly GMs automobiles and plants have inherent value.

Unfortunately, scenarios like GameStop hitting $483/share on Jan 28 (making it briefly the single largest company on the Russell 2000 Index) suggest a flaw in this core argument regarding the market being reflective of inherent value.

IMO it’s much more reflective of human psychology in large groups. What these large groups choose to value on any given day is quite volatile and need not be girded by underlying infrastructure or resources. 

[zapatos]

Just now, iNow said:

Unfortunately, scenarios like GameStop hitting $483/share on Jan 28 (making it briefly the single largest company on the Russell 2000 Index) suggest a flaw in this core argument regarding the market being reflective of inherent value.

IMO it’s much more reflective of human psychology in large groups. What these large groups choose to value on any given day is quite volatile and need not be girded by underlying infrastructure or resources. 

To be precise, I said the stock market's value comes in part from a company's infrastructure and inventory which is factual. Value also comes from profitability, management, future sales, capital structure, etc. 

The inherent value of cars is a fact of life today. It may not be so in 50 years but it is something you can count on when valuing GM.

GameStop's inherent value did not go up with the market manipulations but  it did not drop with the market manipulations either.

[Endy0816]

1 hour ago, iNow said:

Unfortunately, scenarios like GameStop hitting $483/share on Jan 28 (making it briefly the single largest company on the Russell 2000 Index) suggest a flaw in this core argument regarding the market being reflective of inherent value.

IMO it’s much more reflective of human psychology in large groups. What these large groups choose to value on any given day is quite volatile and need not be girded by underlying infrastructure or resources. 

Yeah, it is more perceived value though invisible hand will make any flawed perception obvious eventually.

Granted in the Gamestop thing there was also the short sale going on. Perceived value was impacted by the knowledge that the short sellers would need to buy back the shares they were shorting.

 

[MigL]

GM is old school; they actually make something.

I found this, in today's news, quite interesting ...

"Throughout the last few months the internet has seen a surge in meme stocks (stocks which an online community, like Reddit's retail investor forum Wall Street Bets, decide to trade en masse) and cryptocurrency purchases. Another cryptocurrency called Dogecoin was created as a meme coin but experienced a meteoric rise earlier this month because Musk was tweeting about taking the coin's value "to the moon," at $1 per share (so far, it's peaked at about 7 cents).
Bitcoin's value is also experiencing a steep plunge; the cryptocurrency fell about 12% Tuesday."

From    How Elon Musk Lost $30 Billion Overnight – and the Title of World's Richest Man (msn.com)

Something is wrong, when one person ( E Musk ) with 47 Million followers, can affect the population as to the perceived value of a currency, service or even product, for their own benefit.

[iNow]

Unrelated: Am I the only one who keeps reading this thread title to the rhythm/theme of this?

 

1 hour ago, MigL said:

Something is wrong, when one person ( E Musk ) with 47 Million followers, can affect the population as to the perceived value of a currency, service or even product, for their own benefit

This is how the market has always functioned. The only difference now is Redditers and regular Joes similar to you and me are doing it and not just hedge fund managers who’ve done it this way for decades and been treated like masters of the universe. 

Edited February 24, 2021 by iNow

[Phi for All]

17 hours ago, iNow said:

Unrelated: Am I the only one who keeps reading this thread title to the rhythm/theme of this?

Yours is MUCH better than mine. I've been bitcoining in the morning, bitcoining in the evening, bitcoining all over this land!

[iNow]

Sorry to say that I had to look that one up as I wasn’t previously familiar with the hammer song. 

Edited February 24, 2021 by iNow

[zapatos]

19 hours ago, iNow said:

Unrelated: Am I the only one who keeps reading this thread title to the rhythm/theme of this?

 

1 hour ago, Phi for All said:

Yours is MUCH better than mine. I've been bitcoining in the morning, bitcoining in the evening, bitcoining all over this land!

The only reason I came came up with this one is so that I can quit hearing your two songs every time I see this thread! 

If I had a (million) bitcoin...