Bitcoin is a collectors items
meltdem.substack.com
meltdem.substack.com
The trillions of dollars in QE are mostly hoarded in banks, not pumped into the markets. This is evident as M0 has increased greatly, while M1 hasn't. The purchases made in QE are mostly government bonds, the revenue of which is mostly spent on government salaries and entitlements. That's why there is very little general inflation, there aren't any big sums of new money flowing into consumer goods.
The trillions of private dollars chasing returns are still mostly risk-averse. It's not venture capital. It's not going to small business or home-owners. It may have gone into government bonds before, now it's going into the S&P. That's asset price inflation.
Buying commodities such as gold (or Bitcoin) as a hedge against inflation is irrational, when assets such as stocks are both inflating in terms of price and appreciating in terms of actual value, at the same time.
Of course, irrationality has never prevented prices to rise, but when your fundamentals are based mostly around "greater fool theory", you should perhaps reconsider your allocation.
"It’s only a matter of time until people figure out that bitcoin is the ultimate collectible."
I wouldn't deny that there's a certain sentimental value to owning one of "only" 21 million Bitcoins, but I wouldn't personally put it anywhere near five figures.
For comparison, like many others, I enjoyed playing the original Super Mario on the NES as a child. It came on a cartridge of which about 40 million units exist, with a current value of around $10.
One of the biggest fascinations I had in games was the EVE marketplace. If you dont know, EVE is a scifi mmo. The economy in the game is so legit, the devs have an econ PhD to analyze it and use it to help balance the game when new gear is in. Theres a good youtube video about this to help give a better explanation, but the jist of it, items in EVE are not permanent. Other mmos you can use whatever item indefinitely then sell it when you get something better. Dying and collecting your gear is trivial. Thus items have lower values, especially when better ones come in over time. In eve, when your ship goes boom, only 25%-50% or so of it survives... and whoever killed you nabbed it. This keeps the market value stable(ish). A bigger better gun or ship is no longer neccesarily better. The value, and I'm not talking about just price but the overall market demand, goes up for parts and ships that are niche and cost effective.
I'm on a phone and this is getting too long. Overall bitcoin is an investment vehicle based on privacy and scarcity. The first part no one can deny is rather brilliant and as far as I know has worked out as advertised (though let's not kid ourselves who 90% of that demographic is). The second part... I swear to everyone reading this, just get The Great Courses so you can listen to their Econ 101 class. Or just get it from the library or even get a random econ textbook. Read it. I bet you within 30 to 50 pages you'll fully grasp how childish bitcoin is. At that, everytime a major media news source has their econ expert talk, you'll realize they were all at the bottom of their classes.
Oh, somewhere in there I meant to say your comparison to Mario was bad because that game has inherent value, both nostalgia and still fun to play. You're comparing to something with no value other than giving utility companies more money due to the excess electricity generated to mine bitcoin. I still say Satoshi was just elec execs who drunkenly came up with this crypto scam: https://digiconomist.net/bitcoin-energy-consumption/
However, it does not follow that therefore a valuation of thousands of dollars per unit of Bitcoin may be justified and not just due to speculative frenzy. I'm picking the NES game because it has roughly the same amount of units available and most people own them as a collectible, not to actually play it.
It will take effort to prove that you indeed do have one or more of the "finite" (21 million is a big finite when it comes to collectibles) bitcoins.
Collectors like to show off their collections. And since most people in the world, many techies included, cannot discern what is true from what is counterfeit when it comes to virtual items, there will be many times more fake bitcoin collections than real ones.
You're better off collecting words. Those are finite too, and some fall out of use or even exist only in some dead languages.
Is it really? Here's how you can verify wallet ownership in about 10 minutes:
- The one who like you to verify the ownership generates a signature file from whatever they want
- Ask the owner of the wallet to add the hash of that file to OP_RETURN in a transaction from their wallet
- Wait for the transaction to be validated (longest step)
- The one who wants to verify the ownership can now compare the latest transaction from the wallet to the hash of their signature file
Same process applies for proving ownership of bank accounts, although if done in the weekend/evening, verifying the bank account will take longer time and you need to have a receiving bank account to read the signature hash, otherwise the process is mostly identical.
The rest of your comment is based on that you can't prove you own any bitcoins, hence worthless as you can prove you own bitcoins, it's trivial really. A quick search before thinking out loud would have shown you the answer.
Now, to prove authenticity of an item obviously takes a lot longer - you need art experts to validate your Van Gogh, and some beanie baby specialist to affirm that your toys aren't counterfeit, but that's besides the point: when you show off a collection, you are doing so to let people view and admire it, not authenticate it.
Just as you say, you don't want to verify ownership every time someone views your thing. You do it once with a trusted 3rd party, get a certificate or whatever you want, and hang it next to your piece.
If you now wanna show off your bitcoin worth, get a e-ink display connected to a raspberry pi that shows the current value of your bitcoin wallet. Have the certificate you acquired for this wallet right next to the e-ink display. Now exactly the same as if you were to show off your Van Gogh.
Bit false of you to compare showing a Van Gogh with verifying a bitcoin wallet. More appropriate to compare verifying a Van Gogh with verifying a bitcoin wallet, and we both surely know which one is faster and more reliable.
You can prove any given bitcoin is yours just by transfering exactly the amount requested by the viewer from one address to another (also yours). It costs whatever single transaction costs and takes exactly as long. You can do it as many times as you need, and you don't need any third party, just a computer connected to the internet that is sufficiently secure for you.
https://btc.monokh.com/address/tb1qfapwkjkhe5vh592ypym6qj8k5...
In just about every way, digital bitcoin proofs are better than art collections in terms of display and verification.
- Is your art collection independently verifiable by everyone?
- How long does it take to verify your art?
- Can you share your original piece of art + an "original certificate" digitally with anyone in the world?
- Can you share your art collection without risk of theft or damage?
For Bitcoin, the answer to all those is yes and much more.
If you only want to prove ownership of an address, you can simply sign a message with the private key behind it. There's a "sign message" feature in the bitcoin qt client for this purpose. I think Electrum also supports it.
This statement could not be further from the truth. It's far easier and more reliable to prove that you own an authentic Bitcoin than it is to prove that you own an authentic painting.
In fact, Bitcoin is the most auditable asset in the history of mankind. The audit process can be done in a decentralized way and carries 0 risk and unlike the auditing processes of other valuable assets, it can be carried out quickly, cheaply and at any scale.
All other auditing processes rely on trusting a third party, not Bitcoin. It's the perfect asset.
Sooner or later, the reserve banks of the world are going to be forced onto cryptocurrencies. Bitcoin is better than gold in terms of supply inelasticity and auditability; these are the two most important features from a reserve asset. Bitcoin is also gaining ground in terms of universal recognition which is the third most important feature.
But in any case, most users have a hard time understanding cryptocurrency systems. Thus, it would be very easy to provide bogus info which looks convincing to a layperson. And because fakes would be common, it would take extra care to _really_ prove your collection is real.
It's worse than that. You can divide BTC into a lot of tiny pieces. So there are lot more than 21 million pieces. Most collectibles are valuble as the whole thing, not little pieces sliced off of them.
Bitcoin therefore acts like a share of the economic value provided by its network. Not so different from fiat currencies such as Dollars and Euros but its value is more tightly integrated with its network since software systems have a stronger technical lock-in factor (whereas fiat relies more on legal and psychological factors for lock-in).
I've read that as the number of people interested in a given kind of collectible shrinks, the market gets increasingly illiquid, but the nominal values don't change much - people don't want to sell at a loss, so when the value is much lower than the last posted trade, trades just don't happen.
Once the market of interested collectors dries up, the value vanishes. So to play the collectible game on true value-less items, one must time the entrance and the exit to take advantage of other players.
The stock market has been great because the population has been booming. The holders looking to sell have no trouble finding buyers looking to buy so they lock in their appreciation. The real estate holders in Detroit and now maybe SV (recent buyers) didn’t do great because demand for their asset cratered.
It’s anyone’s guess what will happen to Bitcoin. Will it go mainstream causing the buyer class to massively outstrip the seller class and lock in huge gains for the current holders (to the moon!) or will it become as illegal as heroin in the major markets causing all legit holders to exit and the price to tumble to next to nothing?
Only one thing is certain, in this time of uncertainty, you will certainly have no trouble finding lots of people willing to tell you which one it’s going to be with absolute certainty in their conviction.
Finite-ness is over-rated [1], and for Proof-of-Work cryptocurrencies, harmful to long-term stability [2].
[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
[2] https://www.cs.princeton.edu/~arvindn/publications/mining_CC...
Based on what I've seen lately, Bitcoin seems to be perceived as a sort of exotic asset that is however becoming more palatable to 'serious' institutional investors. If things continue down this road, my feeling is that Bitcoin and perhaps a few other crypto currencies will end up with some sort of gold-like role in the investment landscape.
Note however that I'm referring to bullion, not rare coins that are collected for their own sake and that can fetch prices that far exceed those of their gold content.
For analogy, I’d be curious how the vintage currency collectible market compares with that of other collectibles.
Desire to own any collectible thing decreases with the value of given collectible. At least in most collectors.
For example, is stamp collecting still as big as ever, or is it going away because of email?
When I was younger people had started collecting phone cards (which were used in my country to make phone calls from phone cells). Since phone cells and phone cards don't really exist anymore, do new collectors even enter the market?
Bitcoin is money.
But that isn't what people are talking about, they are talking about investments. The only reason to move investments over to bitcoin is if you think that you are getting in at the beginning of a pump and dump scheme.
[1] https://dandanua.github.io/posts/why-i-wouldnt-recommend-usi...
It's absolutely what happens with collectibles and arts.
https://www.larvalabs.com/cryptopunks/forsale
https://etherscan.io/address/0xb47e3cd837dDF8e4c57F05d70Ab86...
Here is where switching from silver to meaningless metal in Roman currency was one of the big reasons for Rome's collapse. A currency backed up by something with "money printing disabled" is key to a currency not turning devalued over time.
http://i1.wp.com/money.visualcapitalist.com/wp-content/uploa...
Bitcoin is pure mania, it's completely worthless and enables the worst of the worst people in the world.
Bitcoin does produce something.
It produces "facts" that everyone agrees on (entries on the blockchain). Facts that everyone agrees on are somewhat rare, and this provides value as these facts can be used to prove things.
Whether the value this provides justifies the current price of bitcoin is an open question (I doubt it) but anyone relying on the blockchain for keeping a record has an interest in ensuring the value of bitcoin is not zero
Exactly.
“A financial instrument that brings out the worst in people—greed—won't change the world for the better.” —I wish I never bought bitcoin; https://www.quitfacebook.org/file/greed.html.