Merged Bitcoin - Part 3

jeremyp said:
Commodities are fungible.

Other than that, this is the definition I am using. Psionl has come up with some other definitions but they are not relevant because the important point is that things like gold and frozen concentrated orange juice have the property of being useful to make stuff with.
Click to expand...

thx. I'm not sure why I wrote non-fungible, I did mean to say fungible.
 
lomiller said:
90% of all the gold mined each year gets turned into Jewlery
Click to expand...

Jewelry probably isn't the best example. It's basically a scam. You've just taken your store of value and modified its shape so it's wearable. You could argue it's useful for style or displaying wealth but it's essentially no different than tying a small hunk of gold around your neck. No more useful than taking a digital wallet, transferring it to a physical one and wearing it around your neck.

Jewelry has little utility. Most of its value is thanks to decades of advertising campaigns making it a symbol of love or status along with hoarding supply and limiting the amount sold. And when you go to sell it you're very likely getting a fraction of what you paid for it.

There are other real world applicable uses for gold but it is so abundant that we are fine using 90% of it on Jewelry. If anything that seems to attest to how little use it really has.
 
Last edited:
The_Animus said:
Jewelry probably isn't the best example. It's basically a scam. You've just taken your store of value and modified its shape so it's wearable.
Click to expand...
I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.

The_Animus said:
Jewelry has little utility.
Click to expand...

Don't confuse utility with usefulness. While usefulness is one form of utility it's not the only form of utility. The satisfaction or enjoyment people get from owning or consuming goods\services are also a form of utility. Owning and wearing jewelry makes some people happy therefor it has utility. This is true even if it has little utility to you as the utility of anything varies from person to person, this why trade results in a net gain in utility.
 
lomiller said:
I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.
Click to expand...

Which is why I mentioned that it's done for style or a status symbol. But those only have value because we've collectively agreed they do and I thought the whole point of this was asking what value is left when that collective agreement stops.

Don't confuse utility with usefulness. While usefulness is one form of utility it's not the only form of utility. The satisfaction or enjoyment people get from owning or consuming goods\services are also a form of utility. Owning and wearing jewelry makes some people happy therefor it has utility. This is true even if it has little utility to you as the utility of anything varies from person to person, this why trade results in a net gain in utility.
Click to expand...

I get that but if you're going to include satisfaction and enjoyment then that applies to basically everything including tulip bulbs and BTC. I bet plenty of people got satisfaction and enjoyment from buying and owning them. If the price of either gold or BTC dropped significantly I think the satisfaction and enjoyment of buying and owning either would also drop significantly. Gold would still have more utility because it has some commercial uses and people can still use it for fashion but it would be more akin to a plastic bracelet.

For the most part jewelry is people convincing other people that their shiney object is worth much more than it really is. BTC for the most part is people convincing other people that their digital coin is worth much more than it really is
 
lomiller said:
I don't agree. If it's just a store of value there would be no need to go to the time and expense to turn it into jewelry in the first place, keeping it as a simple lump of gold would suffice.
.
Click to expand...

It just occurred to me that bitcoin and jewelry have an identical use case.

Wearing deceptively expensive looking jewelry is basically a go bag for someone deep in white collar crime. If you have to jump a plane to Costa Rica or wherever on short notice it's good to be wearing something you can sell for five figures once you get there to bridge the time until you can establish the fake identity necessary to access the offshore accounts.

Bitcoin makes that whole chore way more simple. So I guess the bitcoin as precious metal thing has legs...
 
The_Animus said:
Which is why I mentioned that it's done for style or a status symbol. But those only have value because we've collectively agreed they do and I thought the whole point of this was asking what value is left when that collective agreement stops.
Click to expand...

It doesn't matter why people get satisfaction from owning\wearing jewelry, the point is that they do.

The_Animus said:
I get that but if you're going to include satisfaction and enjoyment then that applies to basically everything including tulip bulbs and BTC. I bet plenty of people got satisfaction and enjoyment from buying and owning them.
Click to expand...

No one disputes a tulip bulb has utility, it can be used to grow a pretty flower, something many people gain satisfaction from. This isn't enough to drive prices to the heights they reached during the tulip bubble, that was driven by speculation, not the utility of a Tulip bulb.

As for bitcoin, I guess there *could* be people who gain satisfaction from owning bitcoin just for the sake of owning bitcoin, but remember consumption of that resource is part of the definition of utility. IOW if it has utility to someone, they would want to keep it forever just for the good feelings they get from owning it. IOW they are not interested to trading it, speculating on it's value or getting rich from owning it, the simple act of having it is what they derive pleasure from.

While It's possible there are some people out there who love bitcoin just for the warm and fuzzy feeling it gives them, this doesn't seem to be the case with most people who buy it. They are buying it because they think they can sell it for a higher price later on, they are no interested in consuming it or keeping it.
 
psionl0 said:
https://www.nrcan.gc.ca/our-natural...l,many electrical and technology applications.
Click to expand...
Funny. you seem to have missed the very next line after the one you quoted.

The uncertainty brought on by the COVID-19 pandemic in 2020 was largely responsible for the 40% increased use of gold as an investment.
Click to expand...


I will concede an error in the 90% number. I misremembered 90% as being jewelry when it's actually Jewelry + industrial. The number commonly quoted is 78% used in Jewelry with another 11% used in industrial applications, though apparently this was falling a bit even before the pandemic.

The point I made stands, gold is primarily used in consumer and industrial products just like any other commodity.
 
psionl0 said:
No available figures are that accurate and it is misleading to exclude surface gold anyway.

One set of figures suggests that jewellery is at best a secondary use of gold:

https://www.nrcan.gc.ca/our-natural...l,many electrical and technology applications.
Click to expand...

The exact amount of gold being used for something is not important. The point is that it can be used for something. If speculation were to magically disappear, all that gold in vaults won’t be useless, it’ll be sold so that people can decorate themselves or make electronics or whatever.

Of course speculation in gold can’t magically disappear. There will always be an opportunity to buy gold from suppliers and sell it to consumers. This is not the case with BTC. It could be made illegal or somebody could crack the encryption or people could see it for what it is and the fad would be over.
 
jeremyp said:
This is not the case with BTC. It could be made illegal or somebody could crack the encryption or people could see it for what it is and the fad would be over.
Click to expand...
That's quite a wish list you have created. The mere fact that you have listed these unlikely events proves that bitcoin is not the automatic failure that you wish it to be.
 
The_Animus said:
No more useful than taking a digital wallet, transferring it to a physical one and wearing it around your neck.
Click to expand...

Which happens all the time...nope


Sometimes people want to meet other people to have sexual relationships, and yes, sometimes decorations facilitate those sorts of things. I'm pretty sure wearing a wallet around your neck isn't going to result in a good morning after
 
Not exactly transparent.

There’s a wild theory that the price of Bitcoin is being propped up—and the academic who proved manipulation in 2017 suspects it may be happening again

In conclusion, Griffin says, the Griffin-Shams study showed concrete proof of manipulation in 2017 and 2018, and that a single individual did the rigging. “We don’t have concrete analysis this time,” he says. “The truth may emerge in specific stories, if there is collusion.” The lesson, he says, “is that the Bitcoin market remains highly vulnerable to manipulation.”
Click to expand...

(Highlighting mine. )
 
"The lesson, he says, “is that the Bitcoin market remains highly vulnerable to manipulation."

Manipulation tends to increase volatility in stocks. Easy to see in historicals such as those First Jersey Securities hawked at regular intervals. No reason to think it's different in crypto.

Makes speculation, or gambling if you prefer, more fun and tends to increase average prices. At least while the manipulation continues.

It's a feature, not a bug.
 
You must log in or register to reply here.

Back
Top Bottom