Perhaps I could ask you a simple question, then. How would you value a Bitcoin?.
I am not looking for a precise answer, but a rough range of what it should be worth.
It should be possible to do this for any financial asset.
I am not looking for a precise answer, but a rough range of what it should be worth.
It should be possible to do this for any financial asset.
I would go on bitstamp and see what people are trading them for. That would be around ~$620 at the moment.
If you think this isn't a valid way of valuing something then tell me: How would you value a 2 bedroom flat in London? My guess is you would see how much similar flats nearby are selling for (and if you say you would get an expert valuation - how are they getting the value?)
No such exercise is possible with Bitcoin, the 'value' of which could be argued to be anything.
In the end, everything is worth what its purchaser will pay for it. It's no different for bitcoin as for anything else
property values ultimately determined by rents and yields.
this is not circular at all.
not possible to value Bitcoin in the same way.
And rents and yields are determined by what people are willing to pay to rent the property.
Just like bitcoin value is determined by what people are willing to pay for bitcoins.
You're right your argument wasn't circular, what I meant was you were just pushing it to another level. The sale value is based on the rent value, but what is the rent value based on?
You cannot value Bitcoin like this because it does not produce an income and is not linked to the value of any other asset.
Now, to further complicate things, you have to put a value on that piece of that puzzle that actually changes hands during these transactions. Realistically, the value of it doesn't even matter if I want to go CAD -> BTC -> BTC -> USD. As long as the value between CAD and USD makes sense, the transaction was a success and all parties are happy.
This is what most people, generally the investment folk, don't understand about our new little technology here. Bitcoin isn't just about the value of a Bitcoin and a Bitcoins buying power. Bitcoin is a network. The value of the fuel for that network will very as people need it and as the cost associated with generating that fuel change. This is irrelevant though as the price of Bitcoin is not the measure of its usefulness, or its success.