RetireJapan

Posted: **Sun Feb 04, 2024 2:22 am**

Guys, how do you feel about Bitcoin now?

All these years, I’ve been tearing my hair out wondering what people see in it: I simply can’t find a way to judge if it’s cheap or expensive? Even way back in more innocent times, when Bitcoin was only worth $100 or $1000, I was saying to myself, well hey it has risen so much but why?

And then when I looked at the Japanese tax system and understood how high the taxes were, I simply thought, well, this is just not worthwhile. So I have never bought any kind of cryptocurrency.

Yet at the same time, when I see how much cryptocurrencies have risen, I find myself kicking myself and asking whether I missed the chance of a lifetime to become wealthy?

So I would like to ask you guys, does cryptocurrency have a logic of of its own when it comes to valuing it? Is there some way of thinking outside the box that I am unaware of?

I have read about the system where the Bitcoin rewards that are given to people who help generate new bitcoins is halved every four years, helping keep demand/ supply for bitcoin tight. However, even if that is true, other cryptocurrencies that are cheaper could become more popular, couldn’t they?

Oh, my brain is hurting…

Posted: **Sun Feb 04, 2024 2:54 am**

I own some trivial amount of crypto from I guess 2017 or thereabouts.

I rarely look at that account (yet another broker to prove my name to), but my impression is that it goes up and down like a yo-yo in value, from the odd times I do log in.

I don’t think something like that is going to make many people wealthy. It will make you stressed out trying to trade in and out of it though.

I guess you could tsumitate it and it would do ok.

In the end, can’t you and I just start up a copy of Bitcoin ourselves? Would our copy of Bitcoin be worth anything?

I’m it in for the curiosity, but expecting more from my equities, which represent ownership in companies that produce stuff that others value. Crypto asset related stocks should be buried in there somewhere as it is…

Posted: **Sun Feb 04, 2024 3:02 am**

IloveJapan wrote: ↑Sun Feb 04, 2024 2:22 am I simply can’t find a way to judge if it’s cheap or expensive?

There isn't one. It's pure speculation.

Here's a blog post I wrote in 2011, 13 years ago, before Bitcoin was worth anything. Since then Bitcoin became a thing, but I think the fundamentals are still true and Bitcoin has not become a currency, more a speculative gamble. It's true that you can make a lot of money, but it still feels like a carbon fiber submarine to me...

I've had time to do more reading since then, I spoke about an anthropologist's view on how money works in society here: https://www.retirejapan.com/forum/viewt ... 238#p23238

Here's a good sarcastic website
https://www.web3isgoinggreat.com/

Edit to add this blog post from the European Central Bank I shared later in the thread:
https://www.ecb.europa.eu/press/blog/da ... 23.en.html

Posted: **Sun Feb 04, 2024 3:30 am**

The bull case: https://www.youtube.com/watch?v=FUNQ4dHCxlA

Personally I don't see why it should have any value, but I've been wrong about Bitcoin for over ten years now.

If you decide to buy some, don't spend more than a small percentage of your portfolio on it.

Posted: **Sun Feb 04, 2024 6:02 am**

The biggest bear argument for most crypto is how utterly useless it is to well....use

Honestly it's a miserable to deal with, the price is just due to speculation and "scarcity"

Buy an insignificant amount, try to use it, transfer it,l to a personal wallet, etc. Then reassess.

Posted: **Sun Feb 04, 2024 8:50 am**

I've watched how unaffected the price of it has been, given that the SEC did approve some bitcoin ETFs.

There was a bit of a run-up leading to that--the anticipation--but that peaked at ~$46k, and it's 10% below that level now. And tho I'm an ignoramus on it, I can't see it moving higher.

Also, nobody is now talking about how great it was for bitcoin that there are now those ETFs which allow a direct play on it, without having to buy bitcoin itself.

(yawn)

Posted: **Mon Feb 05, 2024 6:34 am**

I can feel the anti-bitcoin sentiment in this thread, so I write this somewhat cautiously.

The intrinsic value in bitcoin is not in the tangible use that it possesses, but in how it cannot be controlled by any single entity. Also, no bitcoin can be "printed" randomly, and there is a maximum number of bitcoin that can ever be mined.

When bitcoin is considered "digital gold", many people say "but gold has physical use-cases... it's used in electronics manufacturing, the dental field, etc." Although that is true, the vast majority of mined gold is used as a storage of value. So, why is gold considered so valuable, outside of its physical use-cases? It has been regarded as a rare metal, difficult to find, mine, and refine. Its rarity makes it valuable. Bitcoin is similar, with its known maximum limit of 21-million whole units. The differences are that bitcoin is digital (much more easily transportable, doesn't need a fort knox to secure it), and new repositories of gold are being discovered (the maximum limit of gold is unknown).

As with many things, the price of something is whatever someone is willing to pay for it. Not to sound snarky, but just because you don't understand it doesn't mean someone else doesn't.

Bitcoin's price is pretty unpredictable; and as someone has already stated in this thread, the price did not spike as expected when the ETF approvals happened. "Bitcoin does what bitcoin does". But if you look at this chart of bitcoin's price action since its inception, there is typically a major run-up after a halving event, but that occurs about 1~2-years later. Maybe the ETF price-jump will happen later, too... who knows.

But bitcoin do what bitcoin do. And between what it do, there is a heckuva lot of volatility. Don't put your retirement savings into it.

Someone in here said just put a small percent into it, which I agree with. And if possible, purchased p2p.

Posted: **Mon Feb 05, 2024 8:08 am**

cocacola wrote: ↑Mon Feb 05, 2024 6:34 am I can feel the anti-bitcoin sentiment in this thread, so I write this somewhat cautiously.

Haha, I don’t personally have anything against people who want to own lots of Bitcoin. It’s a free world.

it cannot be controlled by any single entity.

Indeed I would regard that as an attractive quality. Not passing judgement but the Russians also would probably think along these lines, since they have been frozen out of SWIFT.

Also, no bitcoin can be "printed" randomly, and there is a maximum number of bitcoin that can ever be mined.

This is that part where I go hmmm.

Bitcoin software is just creating data.

But data is just data.

I believe anyone can start up a new cryptocurrency or copy the existing one more or less, and just create Bitcoin 2.0 and therefore, even more data. (I have a few alt cryptos in my account even.)

But no one can (yet) just create a new copy of gold.

Central banks bought a whole lot of gold last year, I gather. When they start buying Bitcoin I might reconsider.

Come to think of it, Japanese yen (and most modern currencies) is just data more or less, isn’t it

Posted: **Mon Feb 05, 2024 8:53 am**

sutebayashi wrote: ↑Mon Feb 05, 2024 8:08 am Not passing judgement but the Russians also would probably think along these lines, since they have been frozen out of SWIFT.

I know where you are getting at, trying not to be political. Myself as well, when Russia was cut from SWIFT, I immediately thought "ah, bitcoin". But that is the beauty of bitcoin: it is free from political control, global (and local) financial control. Many uber-pro-bitcoiners believe that bitcoin can solve many of the world's problems, as no single entity (*cough* America *cough*) can coerce, manipulate, inflict suffering, to another entity through money. Jumping off of the Russia topic, anti-bitcoin people always point to bitcoin being used for terrorism, drug-trafficking, illicit activity. Actually, the most-used currency currently for all of this is... the US dollar.

Bitcoin software is just creating data.

But data is just data.

I believe anyone can start up a new cryptocurrency or copy the existing one more or less, and just create Bitcoin 2.0 and therefore, even more data. (I have a few alt cryptos in my account even.)

But no one can (yet) just create a new copy of gold.

Good point, but there is something called the "network effect". Bitcoin was the first-ever decentralized cryptocurrency (aside from earlier attempts like ecash, hashcash and the like). Its main codebase, as well as coin economics has not changed since its inception, which is a testament to how incredibly pristine of a thing that it is. Since it is first of its class, it has first-mover advantage -- everyone has heard of "bitcoin". The network effect is part of that knowledge and name-value in the zeitgeist. There have been other forks of bitcoin, like Litecoin, Bitcoin Cash, Bitcoin Satoshi's Vision, etc. but none of them have caught on. You can very well fork your own version of bitcoin and name it something else, but it will take a lot of marketing money and muscle to compete with the original bitcoin. Not to mention you will have to convince developers as smart as those maintaining the original bitcoin to jump onto your project. This is why the term "shitcoin" exists. All other coins besides bitcoin are considered shitcoins. Sure, there are platforms like Ethereum and Solana, which "do more" than what bitcoin can do, but they are not in the same class as bitcoin. Those are more "utility" coins, where bitcoin is the "money" coin. There are also "Layer-2" projects that ride on top of bitcoin to give more real-world utility to bitcoin, while keeping the main codebase (the Layer-1) as pristine as possible. But bitcoin's main purpose is to give economic freedom, without the threat of violence or coercion. Gosh, I sound like such an evangelist.

Central banks bought a whole lot of gold last year, I gather. When they start buying Bitcoin I might reconsider.

There are nation states, like Ecuador, which has adopted bitcoin as one of its main currencies. It still uses the US dollar alongside bitcoin, and the adoption by regular citizens of bitcoin has been iff-y. But regardless of the lack of adoption of bitcoin (it's a bit technically difficult to use, the value fluctuates so unpredictably), just the move itself of a nation to adopt it is so telling. It shows how poor countries who rely on the US dollar (and are hurt the most by it) just want to break away. BRICS is another sign of countries wanting to be free of the US dollar.

Come to think of it, Japanese yen (and most modern currencies) is just data more or less, isn’t it

Heh, the "money" we have in our bank accounts, what we spend on credit cards... all just data. That's why bank runs are a real thing. This is the farce of the banking system. Bitcoin aims to solve a lot of that.

I believe that there are philosophical reasons and economic reasons to consider bitcoin. It really wouldn't hurt to buy a bit (you don't need to buy a whole bitcoin, it's divisible up to 8 decimal places) and hold it in your own wallet. It's a cool process to learn, can get as geeky or non-geeky as you want, and might open your mind to other stuff that's happening in the world. It definitely has opened my eyes.

Posted: **Mon Feb 05, 2024 8:56 am**

cocacola wrote: ↑Mon Feb 05, 2024 8:53 am
sutebayashi wrote: ↑Mon Feb 05, 2024 8:08 am Not passing judgement but the Russians also would probably think along these lines, since they have been frozen out of SWIFT.
I know where you are getting at, trying not to be political. Myself as well, when Russia was cut from SWIFT, I immediately thought "ah, bitcoin". But that is the beauty of bitcoin: it is free from political control, global (and local) financial control. Many uber-pro-bitcoiners believe that bitcoin can solve many of the world's problems, as no single entity (*cough* America *cough*) can coerce, manipulate, inflict suffering, to another entity through money. Jumping off of the Russia topic, anti-bitcoin people always point to bitcoin being used for terrorism, drug-trafficking, illicit activity. Actually, the most-used currency currently for all of this is... the US dollar.

Bitcoin software is just creating data.

But data is just data.

I believe anyone can start up a new cryptocurrency or copy the existing one more or less, and just create Bitcoin 2.0 and therefore, even more data. (I have a few alt cryptos in my account even.)

But no one can (yet) just create a new copy of gold.

Good point, but there is something called the "network effect". Bitcoin was the first-ever decentralized cryptocurrency (aside from earlier attempts like ecash, hashcash and the like). Its main codebase, as well as coin economics has not changed since its inception, which is a testament to how incredibly pristine of a thing that it is. Since it is first of its class, it has first-mover advantage -- everyone has heard of "bitcoin". The network effect is part of that knowledge and name-value in the zeitgeist. There have been other forks of bitcoin, like Litecoin, Bitcoin Cash, Bitcoin Satoshi's Vision, etc. but none of them have caught on. You can very well fork your own version of bitcoin and name it something else, but it will take a lot of marketing money and muscle to compete with the original bitcoin. Not to mention you will have to convince developers as smart as those maintaining the original bitcoin to jump onto your project. This is why the term "shitcoin" exists. All other coins besides bitcoin are considered shitcoins. Sure, there are platforms like Ethereum and Solana, which "do more" than what bitcoin can do, but they are not in the same class as bitcoin. Those are more "utility" coins, where bitcoin is the "money" coin. There are also "Layer-2" projects that ride on top of bitcoin to give more real-world utility to bitcoin, while keeping the main codebase (the Layer-1) as pristine as possible. But bitcoin's main purpose is to give economic freedom, without the threat of violence or coercion. Gosh, I sound like such an evangelist.

Central banks bought a whole lot of gold last year, I gather. When they start buying Bitcoin I might reconsider.
There are nation states, like Ecuador, which has adopted bitcoin as one of its main currencies. It still uses the US dollar alongside bitcoin, and the adoption by regular citizens of bitcoin has been iff-y. But regardless of the lack of adoption of bitcoin (it's a bit technically difficult to use, the value fluctuates so unpredictably), just the move itself of a nation to adopt it is so telling. It shows how poor countries who rely on the US dollar (and are hurt the most by it) just want to break away. BRICS is another sign of countries wanting to be free of the US dollar.

Come to think of it, Japanese yen (and most modern currencies) is just data more or less, isn’t it
Heh, the "money" we have in our bank accounts, what we spend on credit cards... all just data. That's why bank runs are a real thing. This is the farce of the banking system. Bitcoin aims to solve a lot of that.

I believe that there are philosophical reasons and economic reasons to consider bitcoin. It really wouldn't hurt to buy a bit (you don't need to buy a whole bitcoin, it's divisible up to 8 decimal places) and hold it in your own wallet. It's a cool process to learn, can get as geeky or non-geeky as you want, and might open your mind to other stuff that's happening in the world. It definitely has opened my eyes.

When is the last time you used Bitcoin to purchase something?

RetireJapan

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