American Economics Thread

[voyager1]

Guys in economics, the only thing that has value is what we as human perceive as valuable

So if by tommorow there was a world government and it decided that the currency would be, rolls of toilet paper, then immediately its value would shoot up a thousand times or even more.

So for bitcoin, some people perceive it as valuable and thats why its price is so high.

And this is why the Digital Yuan is so important, because the Chinese Central Bank itself backs it, so its like an entire nation pushing it to be recognised on the world stage

 

[gelgoog]

What makes legal tender valuable is the threat of force by the State basically.
You need to pay your taxes with the currency of the nation you are in.

Bitcoin thus far is no such thing so the whole thing is a bubble.

 

[quantumlight]

Guys in economics, thebonly thing that has value is what we as human perceive as valuable?

So if by tommorow there was a world government and it decided that the currency would be, rolls of toilet paper, then immediately its value would shoot up a thousand times or even more.

So for bitcoin, some people perceive it as valuable and thats why its price is so high.

And this is why the Digital Yuan is so important, because the Chinese Central Bank itself backs it, so its like an entire nation pushing it to be recognised on the world stage

Ask yourself how much trade is done in bitcoin?

China is the world's largest trading partner and its still ascending

Thats all you need to know to see the long term prospects of bitcoin vs digital Yuan

 

[quantumlight]

Guys in economics, the only thing that has value is what we as human perceive as valuable

A picaso artwork can be worth millions to the right buyer under the right circumstances... but in times of war and famine it wouldnt fetch a sack of potateos

Energy sources like a barrel of oil or uranium always has intrinsic value because its a storage of energy that can be used to do work...

Gold contains energy of supernova locked inside it but cannot be used in nuclear fission however it has electronic applications and the fact that its very rare in the universe gives it inherent value... and its very stable doesnt corrode etc plus it stood the test of time...

Bitcoin wont even survive DCEP digital Yuan....

bitcoin is just an global online excel spreadsheet thats syncrhonized across everyones computers for the purposes of logging bookkeeping entries.... once you realize that you finally see it makes no sense to spend electricity of a small nation to mine for these coins... its a net energy sink for society and provides zero energy nor resources in return ... all you are doing is swapping one currency for another, like shuffling chairs on deck of sinking Titanic or transfer/redistribution of wealth in a ponzi pyramid, and in fact there is no practicality since it cannot even be used in daily life since transaction fee is astronomically high

 

[horse]

This Bitcoin thingy is quite interesting if one was following it. I stopped following it immediately when it was born, because the price was not stable. Not sure what was the point. Someone would manage to hide their assets and evade taxes, but in the end does note even what that is worth anymore on any given day.

Gold and silver, their price, they were connected to each other. The interest rates, gave ideas of what would be the rate of return for other financial vehicles. But Bitcoin was connected to nothing. No joke!

The tulip bulb mania happened a few hundred years ago, and forget those details. The tulip bulb is connected to nothing too.

What makes Bitcoin interesting is the mania has lasted a while now. The tulip bulb from what I think I remember ran up once, and collapsed and that was recorded in the history books. But that crazy run up was basically one year or two. Forget now.

Look how long the Bitcoin run up is going. After it collapsed the first time, such as the tulip bulb, you would think we will not hear much about Bitcoin anymore. Yet, here we go again!

It is interesting that way because here we actually have a real live mania, just like the tulip bulbs, and no one is really studying it.

 

[quantumlight]

Look how long the Bitcoin run up is going. After it collapsed the first time, such as the tulip bulb, you would think we will not hear much about Bitcoin anymore. Yet, here we go again!

Because the dollar is on the way out, bitcoin might be here to stay for a while. it might even go to a million...
That still doesnt change the fundamental reality of it all...
Long term I see all nations switching to digital blockchain based currencies... and there would be a metablockchain for international settlements to take place, (a federated general ledger of transactions between nations) which would get rid of need for a global reserve currency or systems like SWIFT

 

[BlackWindMnt]

Gold is relatively rare in the universe. It takes a supernova i.e. a star blowing up to create it.

Right now launch costs are so high space mining makes no sense.
It might change if things like Starship are all they're cracked up to be but I doubt it.

Gold also has intrinsic value in itself as it can be used for all sorts of applications. Including industrial applications. It can be used as a cathalyst for several kinds of chemical reactions. The fact it is a noble metal which doesn't corrode also makes it useful.

That gold is created in a super nova is irrelevant when you have asteroid worth 10 quintillion covered with gold, platina and other metals. The first person that can mine and return metals from asteroids can pretty much destroy the global economy because we will have more resources then we can ever use. Industrial usage of gold is really low like 10% or so if i'm not mistaken. Most of the gold is used in jewelry. Also it took a stars to fuse hydrogen into oxygen, then a supernova to release that oxygen into space. Its the rarity/quantity and the demand that determines the value once you have gold in abundance gold will be worth pennies.

Ask yourself how much trade is done in bitcoin?

China is the world's largest trading partner and its still ascending

Thats all you need to know to see the long term prospects of bitcoin vs digital Yuan

The narrative to use bitcoin as a way to pay for things died years ago, the current story/narrative that its a store of value and a asset you can use to protect yourself against inflation of the dollar and euro. That's all people really need is a narrative to believe in, states can give some incentive to believe it by telling its citizens they need to pay their taxes in that currency and what is and what isn't legal tender.

The digital yuan is a payment system not a store of value different use cases, different narrative. Given that its a fiat system it could be printed all the way to zero. Its has no built in mechanism to hard cap the amount like bitcoin.

Even the digital yuan can't be as free as bitcoin, China could abuse the digital yuan just like the US abuses the digital dollar. China could freeze Germany's digital yuan accounts at the PBoC like the US and UK have done with Iran's dollar accounts or like Venezuela's gold reserves in London. There's a reason why Iran and Venezuela started bitcoin mining and pay each in bitcoin to trade.

 

[quantumlight]

That gold is created in a super nova is irrelevant when you have asteroid worth 10 quintillion covered with gold, platina and other metals. The first person that can mine and return metals from asteroids can pretty much destroy the global economy because we will have more resources then we can ever use. Industrial usage of gold is really low like 10% or so if i'm not mistaken. Most of the gold is used in jewelry. Also it took a stars to fuse hydrogen into oxygen, then a supernova to release that oxygen into space. Its the rarity/quantity and the demand that determines the value once you have gold in abundance gold will be worth pennies.

By this same token, bitcoin is 100% speculation currently propped up by the social "network effect"... its blockchain that is the underlining protocol and there is no limit to the number of cryptocurriences that can be spawned into existence...

Bitcoin can go the way of myspace, friendster, secondlife, xanga or livejournal and not be worth a single penny when that happens.

Bitcoin is not a storage of value, Bitcoin is an excel spreadsheet bookkeeping entry, digital bits on a server that has no tangible form, is not a raw resource, and neither is it a source of energy... its intrinsic value is absolutely zero

 

[quantumlight]

Its has no built in mechanism to hard cap the amount like bitcoin.

You are aware bitcoin smallest unit is (0.00000001 BTC) right? and they've already rescaled several times for convinence, right?

With settlement aggregation they can effectively subdivide the Satoshi, making the 21 million bitcoin cap truly meaningless...

Payment aggregation will have to be a thing, because the transaction fees will be astronomical and the blockchain size out of control... Im not paying $16 bitcoin fee for a pack of chewing gum.

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[BlackWindMnt]

By this same token, bitcoin is 100% speculation currently propped up by the social "network effect"... its blockchain that is the underlining protocol and there is no limit to the number of cryptocurriences that can be spawned into existence...

Bitcoin can go the way of myspace, friendster, secondlife, xanga or livejournal and not be worth a single penny when that happens.

Bitcoin is not a storage of value, Bitcoin is an excel spreadsheet bookkeeping entry, digital bits on a server that has no tangible form, is not a raw resource, and neither is it a source of energy... its intrinsic value is absolutely zero

Lets just agree to disagree, the future will tell who is right and who isn't.

At the end of the day all money is debt and debt is nothing more then a excel spreadsheet entry.

You are aware bitcoin smallest unit is (0.00000001 BTC) right? and they've already rescaled several times for convinence, right?

Yeah that unit is called a satoshi, people don't really care about it, just like people don't really care about cents or pennies.