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Bitcoin biting the dust?

TSwizzle said:
Gospel said:
TSwizzle said:
Bitcoin hit a new high of $98k. November last year it was around $35k. Nice little earner.
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Inflation is Bitcoins Spinach. Everyone herp derps over to crypto when they're seeking to hedge against inflation and other market woes. Whether it works or not is a different argument I'm not making.

Edit and by everyone I mean the people who invest in Crypto.
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I don't think that is a good strategy. One could suffer very significant losses in a matter of days. I wouldn't consider buying Bitcoin at the current price.
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Warren Buffet says not to buy things we don't understand. Almost nobody understands Bitcoin.
 
Wiploc said:
Warren Buffet says not to buy things we don't understand. Almost nobody understands Bitcoin.
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I think when it comes to investing Buffet is probably right. I don't understand Bitcoin but I still bought a little bit and made a little bit of money, about a $4k profit but there is no way I would invest a large amount of money in Bitcoin. I just like to dabble with money I can afford to lose. I have tried to understand what Bitcoin is all about and read a number of articles by "experts" but I am not convinced they understand it either.
 
TSwizzle said:
Wiploc said:
Warren Buffet says not to buy things we don't understand. Almost nobody understands Bitcoin.
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I think when it comes to investing Buffet is probably right. I don't understand Bitcoin but I still bought a little bit and made a little bit of money, about a $4k profit but there is no way I would invest a large amount of money in Bitcoin. I just like to dabble with money I can afford to lose. I have tried to understand what Bitcoin is all about and read a number of articles by "experts" but I am not convinced they understand it either.
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I strongly recommend Going Infinite by Michael Lewis. It's fascinating. And it makes the point that most people in digital currency don't know any more about it than you and I do.
 
Jimmy Higgins said:
TSwizzle said:
I don't think that is a good strategy. One could suffer very significant losses in a matter of days. I wouldn't consider buying Bitcoin...
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There is no known basement for Bitcoin. It could get up to $500k in 2 years... or be $15.91 in two years. There is no safe price to buy Bitcoin... at least, not without insider info.
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Well, that's the beauty of a distributed blockchain. There's no mechanism by which anyone could have inside information. There are no insiders.
 
https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp

Sounds like a pile of bullshit. It's basically all about supply and demand. Weird. Plus crypto is bad for the environment. While I don't really understand exactly how it's mined. I've gotten the impression that it's an awful way to make currency.

A bitcoin has value because it can be exchanged for and used in place of fiat currency, but it maintains a high exchange rate primarily because it is in demand by investors interested in the possibility of returns.


Of course, many other factors influence Bitcoin's value. Read on to learn more about why Bitcoin has value.


KEY TAKEAWAYS​

  • Bitcoin has value because it can function as a store of value and a unit of exchange. It also demonstrates six key attributes that enable its use in an economy.
  • The definition of value in a currency has changed over centuries from physical attributes to the velocity of its use in an economy.
  • Bitcoin demonstrates the attributes of a currency, but its primary source of value lies in its restricted supply and increasing demand.
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As Bitcoin has also become accepted as a medium of exchange, stores value, and is recognized as a unit of account, it is considered money.


Two of the most influential factors behind Bitcoin's price volatility are greed and the fear of missing out on large returns. Greed is generally considered a negative trait, but in these modern (and expensive) times, it is natural for people to want more money. In fact, society and the businesses operating within it even encourage the desire for more.
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Bullmoose Too said:
TSwizzle said:
Bitcoin hit a new high of $98k. November last year it was around $35k. Nice little earner. What givens bitcoin, or any cryptocurrency, it’s value?
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What gives bitcoin, or any cryptocurrency, it’s value?
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The same thing that made shares in the South Sea Company valuable. The same thing that made tulip bulbs valuable. The same thing that makes gold valuable.

People either believe (incorrectly and absurdly) that these things are highly valuable; Or they believe (correctly, at least for a while) that they will be able to sell them at a higher price than they paid for them, to people who believe (incorrectly and absurdly) that these things are highly valuable.

Some bubbles last a long time. Gold lost its reason to be valued, as soon as major currencies dropped it as their base, but still the bubble keeps growing.

Will the market ever run out of useful idiots? If most of the copper that had ever been mined was sitting unused in storage in the form of ingots, the price of copper would be in the toilet - and copper is at least very useful for all kinds of things. But almost all of the gold ever mined is just sitting around in very expensive storage facilities, and it has very few uses.

So why is gold valuable? Because it is valued. And why is it valued? Because it's valuable.

Same for cryptocurrencies.
 
southernhybrid said:
Sounds like a pile of bullshit. It's basically all about supply and demand. Weird. Plus crypto is bad for the environment. While I don't really understand exactly how it's mined. I've gotten the impression that it's an awful way to make currency.
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Basically a mining rig is a computer with multiple graphics cards attached solving math problems (as I understand it) to earn coins. For most people the energy used to run the systems costs more than what you can earn from the coins. Unless you're Russian oligarchs and get your power for free to run things like this:
1732669467319.png

Not to mention it's made the cost of graphics cards skyrocket. Which is probably why NVidia is so valuable now.
 
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bilby said:
Bullmoose Too said:
TSwizzle said:
Bitcoin hit a new high of $98k. November last year it was around $35k. Nice little earner. What givens bitcoin, or any cryptocurrency, it’s value?
Click to expand...

What gives bitcoin, or any cryptocurrency, it’s value?
Click to expand...
The same thing that made shares in the South Sea Company valuable. The same thing that made tulip bulbs valuable. The same thing that makes gold valuable.

People either believe (incorrectly and absurdly) that these things are highly valuable; Or they believe (correctly, at least for a while) that they will be able to sell them at a higher price than they paid for them, to people who believe (incorrectly and absurdly) that these things are highly valuable.

Some bubbles last a long time. Gold lost its reason to be valued, as soon as major currencies dropped it as their base, but still the bubble keeps growing.

Will the market ever run out of useful idiots? If most of the copper that had ever been mined was sitting unused in storage in the form of ingots, the price of copper would be in the toilet - and copper is at least very useful for all kinds of things. But almost all of the gold ever mined is just sitting around in very expensive storage facilities, and it has very few uses.

So why is gold valuable? Because it is valued. And why is it valued? Because it's valuable.

Same for cryptocurrencies.
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The bizarre difference between valuable rocks and cryptocurrency is rocks are fairly easy to identify and weigh, while crypto's value is dependent on electrical power. A hard drive or any other cyber memory device looks like any other similar piece and there's no way to know what it contains, unless you have the infrastructure to open it.

I could have a billion dollars worth of bit coin, but unless some other billionaire is willing and able to provide a computer and an internet connection, it is worthless. I would be better off with a sack of rice and a jar of dried beans.
 
ZiprHead said:
Basically a mining rig is a computer with multiple graphics cards attached solving math problems (as I understand it) to earn coins. For most people the energy used to run the systems costs more than what you can earn from the coins. Unless you're Russian oligarchs and get your power for free to run things like this:
View attachment 48621

Not to mention it's made the cost of graphics cards skyrocket. Which is probably why NVidia is so valuable now.
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That thinking is so 2018. Nvidia shot up and corrected in 2018 due to the fortunes of the bitcoin mining business. "Shot up" is a phrase that here means it peaked at $7 a share*. Today it's worth $136. Nvidia goes for that much now because its GPUs are used for training large language models. At this point bitcoin mining is a niche use, just like the video game graphics acceleration they take their name from.

(* Adjusted for stock splits.)
 
Bomb#20 said:
ZiprHead said:
Basically a mining rig is a computer with multiple graphics cards attached solving math problems (as I understand it) to earn coins. For most people the energy used to run the systems costs more than what you can earn from the coins. Unless you're Russian oligarchs and get your power for free to run things like this:
View attachment 48621

Not to mention it's made the cost of graphics cards skyrocket. Which is probably why NVidia is so valuable now.
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That thinking is so 2018. Nvidia shot up and corrected in 2018 due to the fortunes of the bitcoin mining business. "Shot up" is a phrase that here means it peaked at $7 a share*. Today it's worth $136. Nvidia goes for that much now because its GPUs are used for training large language models. At this point bitcoin mining is a niche use, just like the video game graphics acceleration they take their name from.

(* Adjusted for stock splits.)
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Thanks for the update. I did not know that.

I do know I wanted a new video card early last year and I couldn't afford anything close to what I wanted.
 
TSwizzle said:
Bullmoose Too said:
TSwizzle said:
Bitcoin hit a new high of $98k. November last year it was around $35k. Nice little earner.
Click to expand...

What gives bitcoin, or any cryptocurrency, it’s value?
Click to expand...

I have no idea. I can't make sense of it.
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Same thing that causes people to value some ugly Jackson Pollock squiggle: the eminently rational judgment that other people will continue to value it for the same reason. It's a classic self-fulfilling prophecy.

DBT said:
Like Tulips, the perception that there is money to be made gives it value.
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Not like tulips. The supply of bitcoins is permanently limited, just like the supply of Jackson Pollock squiggles is, just like the supply of tulips isn't. Relying on self-fulfilling prophecy as an investment strategy comes with a baked-in fatal flaw if you do it with tulips.
 
Bomb#20 said:
TSwizzle said:
Bullmoose Too said:
TSwizzle said:
Bitcoin hit a new high of $98k. November last year it was around $35k. Nice little earner.
Click to expand...

What gives bitcoin, or any cryptocurrency, it’s value?
Click to expand...

I have no idea. I can't make sense of it.
Click to expand...
Same thing that causes people to value some ugly Jackson Pollock squiggle: the eminently rational judgment that other people will continue to value it for the same reason. It's a classic self-fulfilling prophecy.

DBT said:
Like Tulips, the perception that there is money to be made gives it value.
Click to expand...
Not like tulips. The supply of bitcoins is permanently limited, just like the supply of Jackson Pollock squiggles is, just like the supply of tulips isn't. Relying on self-fulfilling prophecy as an investment strategy comes with a baked-in fatal flaw if you do it with tulips.
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My point was that the value of an investment is a matter of a desire or need for profit, money to be made. I know bitcoin is not the same as tulips....except for the idea of making a lot of money by buying into it.
 
ZiprHead said:
I do know I wanted a new video card early last year and I couldn't afford anything close to what I wanted.
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Yeah, the people who used gasoline as a cleaning fluid back when it was an otherwise-discarded byproduct of kerosene manufacturing were probably pretty ticked off when all those rich men with their "motorcars" started bidding up the price. :frown:
 
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