I don’t think BTC has much intrinsic value. Maybe less than gold. Then again, I think few if anybody buys BTC for intrinsic value.
2 Likes
As why I’m ok with my initial 10k investment (currently worth 19.5k). If I make it to 100k, great. Might help me reach my FIRE number 1-2 years earlier. But I would never put my whole FIRE plan into jeopardy by investing significant amounts in it. I want a guarantee that I’ll reach my goal in my early 50s. Stock ETFs are as close as I’m going to get to that.
2 Likes
There are many ways to achieve one’s goals.
I think it doesn’t need to be either /or.
Charlie Munger did it with active investing, Jack Bogle did it with passive, Michael Saylor with BTC, IKEA with furniture selling & I am sure many did with real estate.
I often feel I might come across critiquing people who invest in BTC. But I think just as you and I believe stocks will bring us closer to our goal, BTC HODLers also believe the same for their investment.
Let’s just accept everyone and their views because I think everyone has deep dived into the topic and come to different conclusion
We don’t need to always agree.
6 Likes
The intrinsic value is the energy put in to confirm the truth on the blockchain. Every 10min the truth is more firm and stronger. The energy is captured.
You can write a book and sell it. As paper book what’s the intrinsic value? A book can be burnt to heat or is it more. What about only digital version of the book? It’s sold for money. The work you put in to write the book is what costs or have a price.
4 Likes
Actually in other words
Owning Bitcoin is like owning small stake in the network of blocks which gets robust after every transaction (impossible to hack). Right?
The only question remains -: what is this network used for today and what would it be used for in future?
2 Likes
I think we should distinguish between cost and value. Someone can spend a year writing a book and it could be crap another do the same and it’s the next Harry Potter. So it’s not necessarily that doing work is enough to have value - work has incurred an intrinsic cost, but doens’t necessarily create value.
For me, the intrinsic value of BTC is the ability to make transactions on the most widely supported/robust blockchain, which includes the ability to send BTC. Of course, the value of this depends on the continued support of BTC infrastructure and increases in value the more BTC is adopted and accepted.
5 Likes
I would say the value of the book is in the knowledge it contains or the entertainment it brings, irrespective of the time spent by the author. Some fancy looking books might have added value due to the material they’re made of or their look. I’m not sure I would call that “intrinsic” but it’s still a property of the book (to look gaudy) that some people will value and other won’t.
Unless we can get energy out of Bitcoins, I wouldn’t call the energy put in as the intrinsic value of it. Bitcoin existing as a standalone asset that you can prove ownership of but can’t be easily taken from you (if you own your own keys and have healthy practices regarding their safekeeping - which doesn’t seem to me to be mainstream anymore but I may be wrong on that) would be its intrinsic value in my book. Some people might value it, others won’t. Nowadays, there is an added social status value not so different of the value of having a book in your library for the value of displaying it and not reading it. There again, some people will value that and others won’t.
Some people will find value in Bitcoin. Some won’t. That doesn’t mean they’ll be poor and many of them will have fun on their way to reaching their financial goals (answering to @SwissTeslaBull’s ‘HFSP’'s bait because I’m weak minded like that).
7 Likes
It’s about how much energy you have to put in to change a block. Earlier than last 24 blocks it’s impossible theoretically. Last several blocks also practically.
There’s nothing special about the 24th block in the past, theoretically. It’s just more work to rewrite older blocks.
Theoretically it’s possible if you somehow control the majority of mining power.
Whether anyone will ever be in this position we don’t know.
And whether it’s possible for incentives to even align in a way that would make it worth it for some powerful party to attempt the attack.
That’s crap. The nodes verify blocks, not the miners.
I don’t believe that Bitcoin’s value lies in energy capture. On the contrary, Bitcoin seems to be an inefficient system for converting energy into value.
That said, it’s not the energy required to validate blocks that determines its price, but rather the value generated through its use. Bitcoin has no intrinsic value - that’s a fact. Its value relies entirely on the balance between supply, demand, and the perceived utility by its users.
By contrast, blockchain technology has genuine intrinsic value due to its numerous applications, but this does not directly apply to the tokens derived from it.
2 Likes
The attacker needs to waste a ton of energy to generate the longest chain of valid blocks. The fact that it would be a valid block chain so that nodes would accept is what makes it expensive. It’s trivial to create an invalid incoherent block.
It’s possible of course for majority of nodes to then coordinate/collude and discard/censor the attackers longest chain after the fact.
I’m just ranting that you say that something is theoretically impossible, when it’s in fact very unlikely / very expensive / game theoretically unstable…
I’d rather go with Lyn Alden without arguing anymore…
“I just consider proof-of-stake to be unsuitable for a democratized, decentralized, censorship-resistant global money, especially as this article shows how negligible the negative impact of Bitcoin’s energy usage is for the world, along with bringing a number of positives.”
You don’t even need a majority.
green…
1 Like
The value of BTC is that it has no direct colleration to other asset classes.
So central banks can’t inflate it, the stock market cannot influence it.
So if you believe in the narrative that: central banks will not stop printing more and more money, and that there might be a black swan event that can impact largely the global economy (climate change, war, etc), then you need an easily movable asset, similar to gold.
This is about the value part: so it is a new mean for storing the value, the weatlh.
The price is in FOMO because there are companies and central banks, talking about the idea of having some reserves in BTC. I think the companies should not do that, as they also do not store value in gold. So companies like microstrategy are hype for me, not real value. But the central banks might really consider BTC soon. I could even imagine a China, Russia, USA cold war, where collecting BTC would be a pár of the strategy. For this scenario, I think it is not stupid to still keep the BTC. If the hype goes away quickly, then no 200k next year, but maybe 200k in 5 years…not too good in %, but still okeish for storing wealth.
5 Likes
I write this long, but only once, because I also agree that we should not give here investment advice, if someone doesn’t consider BTC, it is potentially a good decision. Potentially not, who knows. Only 2 more things: 1. You should never quickly jump to an answer, as the thinking process is the value. If you quickly say about something that’s stupid, it might mean some emotional connection to the topic. 2. If you believe that a Nike shoe or Coke has a value, but gold or BTC not, then you are not comparing apples. And you can think only in the current global flourishing economy. A Coke might have no value in a war, and even if you buy 10l of coke, you can’t be sure that in 20 years you can sell it for the Inflation adjusted price. So the whole thing is about narratives. But for sure, to see a lot of children winning and losing a lot on crypto can shade the values of the market. Of course I talk only about BTC, the alts for me are gambling, it I ma also just too old, or not investing enough brain power into them 
5 Likes
In other words, the energy spent mining BTC is a sunk cost, just like the time spent writing the book, so it’s no longer relevant once you have the BTC / the book.
Time will tell, but I’m under the impression that in a black swan event, highly speculative investments like BTC and what currently propels it (e.g. MSTR / Tether) will be the first to crash. Heck, just look at the impact of FTX. What would happen if MSTR collapsed and was forced to sell its BTC?
There’s still a fundamental difference that, at least right now, BTC is way less useful than gold / coke / shoes. Its use as a currency is very minor (even a dodgy stablecoin like USDT is more relevant as a currency than BTC). Hence the discussion about its intrinsic value: you can speculate on shoes thinking a lot of people will want them later because they don’t want to go around barefoot and somehow nobody will produce shoes anymore, but the main reasoning to speculate on BTC is that you expect that even more people will speculate on it later, not that they will need them.
3 Likes
My mistake. I made too many arguments, so I decreased the value of my main argument: it is not controlled by any government, it is not directly correlated to the global economy,or other asset classes.
I think the most, people who consider this as a value since many many years, believe these assumptions are strong values. Dot
How do we know that it is not “controlled” by the government? Is it better if it can be that it is “controlled” or can be manipulated (the same way government prints or takes money out of supply) by people like Musk/Saylor or other people/companies who have reasonable enough amount of BTC which allows them to move the market and trigger bull/bear spikes/runs?
What was mentioned before and what makes this argument an interesting one is that current wave was triggered by Trump election and expectation of crypto friendly government(s). What would happen to BTC price in case of other result of the elections?
1 Like