What is the Value of a Bitcoin.
Updated
This post is an attempt to have a good faith and civilised discussion about the numerical value of a Bitcoin.
Not stating the properties that give Bitcoin "A value". A discussion into how we actually can assign a number value to the price a Bitcoin would be fairly priced.
Hopefully we can have an interesting discussion where people share their ideas and no one resorts to name calling.
A guy can dream ...
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Here are some of my thoughts.
I'm not going to attempt to give a formula for valuation but I will talk about some of the things I think are the actionable factors.
BTC is Best Defined as a Commodity.
No one uses it as a currency. It's silly to talk about it as if people do. It's better to define it as a commodity. Something people produce at a cost to them with the aim of profiting from it.
As a commodity, there's an intrinsic value but since commodities can only have values added by human labour and BTC is mined passively - there's no additional value.
This would make BTC a zero sum game. But that's a totally different topic.
A commodity's price is very much a supply/demand thing.
If a big oil well blows up, the price of oil goes up because we need to use the same amount of oil and there's less of it.
People use this same general idea to support a bull thesis in BTC but I'd argue the fact people actually need and use oil daily and people buy BTC hoping it's worth more later give extremely different demand profiles. One of utility and one of speculation.
The supply of BTC has increased. People talk about the halving meaning more scarcity but there's more BTC available today than there ever has been.
I don't know how reliable Google trends data is for demand but if we were to use that demand clearly peaked in 2018.
It looks like a lot of people were interested in the hype, got in - got nailed and didn't come back.
So, the fact there's more BTC than there ever has been. Some metrics tell us less new people are interested in BTC and the people who are extremely interested in BTC are for the most part already fully exposed ... how would this create a positive supply/demand dynamic?
Isn't the supply increasing while the demand shrinks?
Would be if these metrics are any use (Which they may or may not be. I didn't do extensive research).
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Now you. Explain how we can derive a numerical value for a fair price for Bitcoin.
Hopefully we can have well thought out, respectfully posed ideas that people can have a good faith debate on and this will be interesting for all involved.
Not stating the properties that give Bitcoin "A value". A discussion into how we actually can assign a number value to the price a Bitcoin would be fairly priced.
Hopefully we can have an interesting discussion where people share their ideas and no one resorts to name calling.
A guy can dream ...
-------------------------------------------------------------------------------------------------------------
Here are some of my thoughts.
I'm not going to attempt to give a formula for valuation but I will talk about some of the things I think are the actionable factors.
BTC is Best Defined as a Commodity.
No one uses it as a currency. It's silly to talk about it as if people do. It's better to define it as a commodity. Something people produce at a cost to them with the aim of profiting from it.
As a commodity, there's an intrinsic value but since commodities can only have values added by human labour and BTC is mined passively - there's no additional value.
This would make BTC a zero sum game. But that's a totally different topic.
A commodity's price is very much a supply/demand thing.
If a big oil well blows up, the price of oil goes up because we need to use the same amount of oil and there's less of it.
People use this same general idea to support a bull thesis in BTC but I'd argue the fact people actually need and use oil daily and people buy BTC hoping it's worth more later give extremely different demand profiles. One of utility and one of speculation.
The supply of BTC has increased. People talk about the halving meaning more scarcity but there's more BTC available today than there ever has been.
I don't know how reliable Google trends data is for demand but if we were to use that demand clearly peaked in 2018.
It looks like a lot of people were interested in the hype, got in - got nailed and didn't come back.
So, the fact there's more BTC than there ever has been. Some metrics tell us less new people are interested in BTC and the people who are extremely interested in BTC are for the most part already fully exposed ... how would this create a positive supply/demand dynamic?
Isn't the supply increasing while the demand shrinks?
Would be if these metrics are any use (Which they may or may not be. I didn't do extensive research).
-----------------------------------------------------------------------------------------------------
Now you. Explain how we can derive a numerical value for a fair price for Bitcoin.
Hopefully we can have well thought out, respectfully posed ideas that people can have a good faith debate on and this will be interesting for all involved.
Note
When I propose it's just a speculative mania and no one really cares about the value a lot of people seemed very perturbed about that. So ... this is your chance to convince me otherwise.
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