Bitcoin giveaway! :)

[Kshartle]

I think we're drifting way off topic. Perhaps we can bring it back to bitcoin. Did I miss Marc share what his strategy is for selling them ever or not?

[frommi]

It's my opinion that gold is going to go up in dollar price next year. Do you think my opinion can be wrong?

Yes. Its 50/50 . When you win someone else will loose. And with bitcoin its the same. The only clear winner is the man who takes the commissions.

Btw. Bitcoin can be used as money transfer medium regardless of its price in dollar. So its exchange price can be 1$ or 100$, it doesn`t matter for its transactionable value. But it has to be stable for that kind of usage. And when mining is not profitable it will simply stop. When nobody wants to buy bitcoins anymore the price will fall. Its just as simple as that .

[Kshartle]

If a belief turns out to be foolish, doesn't that mean it was wrong? It sounds like you're saying beliefs can't be wrong.

If I believed that buying a condo here in Florida in 2006 was a great idea......isn't it obvious that I was wrong? How is that different from trading valuable stuff for poop that turns out to be worthless? Aren't they both wrong?

Well let me back up a bit.

It's possible to be wrong of course. And it's possible to believe things that turn out to be wrong. But, and I realize this is kind of splitting hairs, I think there's a difference between believing something that turns out to be wrong and having an opinion on a subjective matter that turns out to cause problems for you.

I mean, we're talking about personal value scales here. This is Marginal Utility Theory 101. If you value gold, and I am a villager who values poop jars, is either of us wrong to value those things? You can say that I would be wrong as demonstrated by your ability to poop in jars and theoretically buy all the stuff owned by me and my fellow villagers, but what if we all prayed to a god who was actually able to transmute wood to gold and we flooded the market with gold and bought all your stuff and all your friends' stuff? Would you be wrong to have valued gold? My point is, just because people's personal value scales may cause them problems, I don't think they can be objectively judged to be right or wrong, or of they can, it has to be a moral level (i.e. we would all think that someone who has "exterminating the Jews" at the top of their value scale is morally wrong).

It's difficult for me to come up with an example of an opinion about a subjective matter that can conclusively be proven wrong. I might give it a little thought before concluding if you don't mind.

However I don't think how we apply this to bitcoin is subjective. Saying that it has value because it is easily transferable and portable and even scarce can all be proven false. I can paint a worthless original painting that is completely unique. The scarcity does not convey value. I can easily transport poop but the transportability does not make it valueable. How can those characteristics make bitcoin valuable if they can't make other things valuable? You still just have something that's scarce and transferable but still has no value.

It's ok, damn I think we are stuck on the point that value is purely based on opinion and not on extrinsic uses or intrisic properties. We disagree and are talking past each other which sucks. It's ok. I'd rather not descend into a pure argument.

[Pointedstick]

It's difficult for me to come up with an example of an opinion about a subjective matter that can conclusively be proven wrong. I might give it a little thought before concluding if you don't mind.

However I don't think how we apply this to bitcoin is subjective. Saying that it has value because it is easily transferable and portable and even scarce can all be proven false. I can paint a worthless original painting that is completely unique. The scarcity does not convey value.

But if an art critic happened to see your original painting that you thought was worthless and adored it, wouldn't that mean it has value--at least to him?

What I'm saying is that value is really something we demonstrate through our actions more so than some kind of inherent, calculable, quantifiable number you could arrive at if you studied it hard enough. If the art critic loves your painting, he is demonstrating that he values it. Now, that's a separate question from whether your painting is actually any good. Maybe you're a rotten painter and he's a hack. It may even be an objectively awful painting, like all modern art. And yet there are a lot of people out there who really like the modern art paintings that I think are a waste of space. The tastes and preferences of humans are what determine value, which is why you couldn't pay me to take a Jackson Pollock original but someone else might pay ten million dollars for it.

[Kshartle]

It's difficult for me to come up with an example of an opinion about a subjective matter that can conclusively be proven wrong. I might give it a little thought before concluding if you don't mind.

However I don't think how we apply this to bitcoin is subjective. Saying that it has value because it is easily transferable and portable and even scarce can all be proven false. I can paint a worthless original painting that is completely unique. The scarcity does not convey value.

But if an art critic happened to see your original painting that you thought was worthless and adored it, wouldn't that mean it has value--at least to him?

This is different than what we're discussing. The fact that it's scarce and easily transferred does not convey value. If they don't convey value here how can they convey value anywhere? I submit they can't and it's a fact that bitcoin does not have value because it is easily transferred or scarce. Those properties don't create value as the poop and painting demonstrate.

[Pointedstick]

This is different than what we're discussing. The fact that it's scarce and easily transferred does not convey value. If they don't convey value here how can they convey value anywhere? I submit they can't and it's a fact that bitcoin does not have value because it is easily transferred or scarce. Those properties don't create value as the poop and painting demonstrate.

You're saying that these things have no inherent value and I agree with you. I think you're right that we're at an impasse because I believe that value is entire subjective based on the wants and emotions of humans, and you're saying that at least some part of value is inherent and rationally discoverable (I think). We'll probably just agree to disagree.

The point, I and many others value Bitcoin based on its particular characteristics that are useful for exchange, and don't particularly care that there's no inherent value behind it. Why do we value Bitcoin instead of something else that has similar traits? Memetics. There's a meme behind Bitcoin that is driving further popularity, and in my opinion, that meme is itself one of the primary drivers of its present and future value. There's a story behind Bitcoin. It's unusual. It's unregulable by governments. It's controversial. All of these things create interest which, in my opinion, gives it more value than it would have in the absence of that interest. It's not a rational thing, it's a human thing. 

[Kshartle]

This is different than what we're discussing. The fact that it's scarce and easily transferred does not convey value. If they don't convey value here how can they convey value anywhere? I submit they can't and it's a fact that bitcoin does not have value because it is easily transferred or scarce. Those properties don't create value as the poop and painting demonstrate.

You're saying that these things have no inherent value and I agree with you. I think you're right that we're at an impasse because I believe that value is entire subjective based on the wants and emotions of humans, and you're saying that at least some part of value is inherent and rationally discoverable (I think). We'll probably just agree to disagree.

The point, I and many others value Bitcoin based on its particular characteristics that are useful for exchange, and don't particularly care that there's no inherent value behind it. Why do we value Bitcoin instead of something else that has similar traits? Memetics. There's a meme behind Bitcoin that is driving further popularity, and in my opinion, that meme is itself one of the primary drivers of its present and future value. There's a story behind Bitcoin. It's unusual. It's unregulable by governments. It's controversial. All of these things create interest which, in my opinion, gives it more value than it would have in the absence of that interest. It's not a rational thing, it's a human thing. 

Cool.

Still interested in Marc's plans for his BTC if he's willing to share them.

[Bean]

So, a little back on topic.

Decided to turn mining it into a hobby.  Should break even on mining, then just transfer the proceeds in to my silver VP on a regular basis.

My net transfers to my VP would be no different than it is today and if bitcoins go mainstream I win two fold.

[Pointedstick]

Yes a belief that something has value can persist even when it has none......but long can it last?

To dig up and continue the battery of a thoroughly dead horse, I just wanted to point out that such peculiar-seeming memes as "this thing I would otherwise have no use for has value as a medium of exchange!" can stick around for a long, long time. For example, cowry shells were used as a medium of exchange in large parts of Africa for literally thousands of years: https://en.wikipedia.org/wiki/Shell_money

The Bornu Empire, for example, used shell money from the 600s until about 1900. If in 1744, the Peter Schiff of the Bornu empire had told people to wake up and smell the flowers, that their shells were not really useful in any way to them, they their economy was vulnerable to being crashed by sailors hauling cargoloads of cowry shells from mollusk-abundant foreign shores, and that they should use gold or silver or some other precious metal as a currency, he would have been laughed at and died alone more than 150 years before his warnings had any relevance to the monetary realities of the area. His children, and their children, and their children would all have continued to use their cowry shells as money without any problem.

Also, poopinajar.com is actually available for registration in case anyone wants it.  Could be a good speculation opportunity to grab such a, well, such a memorable .com domain before someone else does!

[Kshartle]

Yes a belief that something has value can persist even when it has none......but long can it last?

To dig up and continue the battery of a thoroughly dead horse, I just wanted to point out that such peculiar-seeming memes as "this thing I would otherwise have no use for has value as a medium of exchange!" can stick around for a long, long time. For example, cowry shells were used as a medium of exchange in large parts of Africa for literally thousands of years: https://en.wikipedia.org/wiki/Shell_money

The Bornu Empire, for example, used shell money from the 600s until about 1900. If in 1744, the Peter Schiff of the Bornu empire had told people to wake up and smell the flowers, that their shells were not really useful in any way to them, they their economy was vulnerable to being crashed by sailors hauling cargoloads of cowry shells from mollusk-abundant foreign shores, and that they should use gold or silver or some other precious metal as a currency, he would have been laughed at and died alone more than 150 years before his warnings had any relevance to the monetary realities of the area. His children, and their children, and their children would all have continued to use their cowry shells as money without any problem.

Also, poopinajar.com is actually available for registration in case anyone wants it.  Could be a good speculation opportunity to grab such a, well, such a memorable .com domain before someone else does!

Were the shells enforced, (i.e. fiat)? How did they prevent inflation?

[Pointedstick]

Were the shells enforced, (i.e. fiat)? How did they prevent inflation?

I'm not sure about either of those. I'll have to get back to you.

However the fact that many different African cultures all used shells of some sort suggests to me that it must not have been entirely forced.

[Gumby]

Were the shells enforced, (i.e. fiat)? How did they prevent inflation?

I'm not sure about either of those. I'll have to get back to you.

However the fact that many different African cultures all used shells of some sort suggests to me that it must not have been entirely forced.

I could be wrong about this (because obviously I wasn't there), but I think some anthropologists believe that gold and other shiny elements became fashionable and "desirable" as possessions and later currency (over shells) because chieftains and other primitive political leaders would adorn themselves with bright and shiny colors/elements to distinguish themselves from the common folk. In a way, that theory suggests that the primitive political leaders encouraged us to want gold and silver.

And, supposedly, the first use of gold coins, as money, was around 700 B.C. (despite the fact that gold had been considered "valuable" long before that). Prior to that, you had a lot of receipts, clay tokens and early metals and shells that acted as currency. This suggests that "currency" didn't always need to be something that was intrinsically "valuable".

Obviously metals have desirable qualities to them, but it's interesting to think the jump from sea shells to metals may have been fueled by chieftains and primitive political leaders. It's also worth pointing out that a "coin" is a man made object that required a lot of technology to create (coins are a very modern invention in terms of human history). Before that technology existed, people were more than willing to use less desirable receipts, shells, sticks, clay tokens as money. Later, metal spades and knives became currency in China, but I believe it was political leaders / emperors (such as the first emperor of China Qin Shi Huang) who abolished those older forms of currency and demanded that currency become "standardized" to early copper coinage.

Coins, of course, allowed the governments to exert control over a currency's design, liquidity, distribution and debasement (by mixing in lesser metals). It's sort of ironic that most governments standardized peoples' various currencies into controlled metals since we tend to think of metals as a way to prevent governments from abusing currency.

Edit: By the way, if you want to read a good bedtime story, take a look and stories of Qin Shi Huang. That was one crazy dude.

[Marc De Mesel]

I'm curious as to your plans and thoughts on bitcoin since you own them. I'd rather here the opinion of someone who has actually purchased since I am skeptical.

I'm planning to mainly save them and sometimes spend them.

[Peak2Trough]

What a thread!

I looked into building a mining rig earlier this year, just as everyone was about to transition to ASICs.  I finally decided it wasn't going to be worth the hassle with the difficulty increases that were sure to come after the ASICs finally delivered, and it looks like that is still the case.

What I *should* have done during that research period is buy some coins for speculative investment purposes, but for one reason or another I never did.

I'm a little late to the party, but Marc you've intrigued me enough to start my first wallet.  If your generous offer is still available, then a big thanks in advance for my first bitcoin.  If not, thanks for bringing it back to my attention anyway

Wallet:  1NG8Gf8k4gHYVaqJf4Z2oxikTQYp7yDCQb

P2T

[frommi]

You really learn that an investment theory doesn`t work, when people in a forum discussing this theory are begging for money.

[dragoncar]

You really learn that an investment theory doesn`t work, when people in a forum discussing this theory are begging for money.

It's not begging, more like taking some coins from an open hand.  And the coins are interesting more than valuable.

[AdamA]

Here's a pretty good (short) article about the possibility of a bitcoin bubble.  In spite of it's title, it's pretty impartial. 

http://www.businessinsider.com/bitcoin-bubble-2013-11

[HB Reader]

Here's a pretty good (short) article about the possibility of a bitcoin bubble.  In spite of it's title, it's pretty impartial. 

http://www.businessinsider.com/bitcoin-bubble-2013-11

Yeah, I think it's a reasonable treatment of the subject.

I used to work with a very smart and worldly lawyer who escaped Hungary as a teenager during the 1956 Soviet crackdown.  In the early 1990s he repeatedly lectured to me that the "internet idea" was a passing fad.  Before he retired around 2000 he was spending over two hours a day online doing serious research.  No real lesson here -- just that the world sometimes changes a lot faster than we can imagine it will. 

Bitcoin probably won't survive as anything like a major currency or gold longer term, but who knows what it might morph into or where it might go before then.  We'll see.

[Marc De Mesel]

What a thread!

I looked into building a mining rig earlier this year, just as everyone was about to transition to ASICs.  I finally decided it wasn't going to be worth the hassle with the difficulty increases that were sure to come after the ASICs finally delivered, and it looks like that is still the case.

What I *should* have done during that research period is buy some coins for speculative investment purposes, but for one reason or another I never did.

I'm a little late to the party, but Marc you've intrigued me enough to start my first wallet.  If your generous offer is still available, then a big thanks in advance for my first bitcoin.  If not, thanks for bringing it back to my attention anyway

Wallet:  1NG8Gf8k4gHYVaqJf4Z2oxikTQYp7yDCQb

P2T

There you go P2T

Sorry to hear you didn't buy any coins then. 

Yeah, the party has started already but you are still early. The masses have not yet joined so the best is yet to come. Prices will likely go from the current $500 to $5000 in already 1 year, $50,000 in 2 years, $500,000 in 3 years and may even overschoot to $5 million per coin.

I think those entering at $50,000 will be late to the party, those entering at $500,000 per coin too late, those entering at $5 million might get a serious hangover for a while.


I think this because most bitcoiners find the fair value of bitcoin to be - at least - the same as the USD or EUR. And newcomers can easily be convinced of that because that is still being modest. The true potential of crypto currencies is to become more valuable than all fiat + gold combined, and in the process erode their value. Just like cars became more valuable than and eroded the value of horses, wagons and trains. Or the internet became more valuable than and eroded the value of radio, television, newspapers and magazines.

But very important, just like with car companies or dotcom companies, most of the speculative gains and fortunes (the boom) are made the first few years of the new industry, after which a large correction will come wiping out all the air, after which the strongest will survive (or new will arise) and will go up slowly and steady for many decades, taking over the world. 

[Rien]

My point is they are inherently worthless.

And that is where you are wrong.
They may be worthless to you, but I assure you they are not worthless to me. And a few million people like me.
You cannot make me accept your point of view or anybody of those currently holding bitcoins.

If we agree that bitcoins have no value....extrinsic or intrisic.....then what is supporting the price other than the belief that it will keep rising (i.e. a bubble)?

Well, we do not agree that they have no value.

[Rien]

It's really simple.

I desire Bitcoins for the following reasons:
1. speculative purposes; I believe the price will continue to rise
2. in case it ever develops into a real stable currency, I want to have some already

It's probably simpler than that: bitcoins have value to you. Point 1 and 2 may be simple rationalizations. They are probably true as well, but I do not think that I would make a conscious decision about bitcoins having value based on these two point. The value comes from a deeper emotional reason I believe. Point 2 alludes to that in the use of the words "I want to have some".

Everybody that is on the receiving end of Marc's generosity WANTS those bitcoins. Even to the extend that they have traded some of their finite time in order to be able to receive the bitcoins. A better proof of bitcoin value cannot be found imo.

[Rien]

The way I see value:

Value is always relative. Absolute value does not exist.
If absolute value does not exist then the terms intrinsic value or extrinsic value have no meaning.
Use of the terms intrinsic value or extrinsic value to me indicate a desire (possibly subconscious) for an absolute value. Quite likely in order to relieve a felt anxiety about the future.

If something has no value to me, then I simply will not make any effort at all in obtaining it. I would not even open my hand to receive it. In so far Kshartle is consistent: he has not asked Marc for bitcoins

I on the other hand have, I have thus spend some of my valuable (finite) time in order to obtain these bitcoins. The same goes for everybody else who has received bitcoins. This proves that we find value in bitcoins.

[Kshartle]

Everybody that is on the receiving end of Marc's generosity WANTS those bitcoins.

That is true. My question is why?

[edsanville]

The way I see value:

Value is always relative. Absolute value does not exist.
If absolute value does not exist then the terms intrinsic value or extrinsic value have no meaning.
Use of the terms intrinsic value or extrinsic value to me indicate a desire (possibly subconscious) for an absolute value. Quite likely in order to relieve a felt anxiety about the future.

If something has no value to me, then I simply will not make any effort at all in obtaining it. I would not even open my hand to receive it. In so far Kshartle is consistent: he has not asked Marc for bitcoins

I on the other hand have, I have thus spend some of my valuable (finite) time in order to obtain these bitcoins. The same goes for everybody else who has received bitcoins. This proves that we find value in bitcoins.

I agree with this.  What you describe is the ordinal utility theory and the subjective theory of value.  These are a couple of the cornerstones of Austrian economics.  Mises goes into ordinal utility in the Theory of Money and Credit, which was an eye-opening read for me.

I do value bitcoins, and I believe decentralized, electronic currencies have a very bright future, indeed.  I plan on buying a few more bitcoins.  Anyone who wants to get rid of a few of their unwanted "worthless" bitcoins, let me know and I'll post my address .

[Kshartle]

The way I see value:

Value is always relative. Absolute value does not exist.
If absolute value does not exist then the terms intrinsic value or extrinsic value have no meaning.

This is quite a leap to a illogical conclusion. You need to eat food or you'll die. Therefore you value food and will trade other things of value for it. The value of food is based on the external or extrinsic use of the food as fuel for your body. You can believe that food is worthless, but your actions...like everyone else's prove that belief is false.

You can believe you aren't getting wet when you stand in a monsoon but that would just make you crazy.

If a Ferrari and a Renault both cost 10k Euro.....which one would you rather buy if you needed a car? Why would you and 99.99% of all people buy the same car (*hint....not the Renault)?