[Finance] The cryptocurrency (Bitcoin etc) thread

[nicko31]

Article in Times today setting out that many of the companies involved with crypto are little more than brass plate operations, all taking a cut in spread and fees and of course all unlicensed as crypto is unregulated.

Crypto has no intrinsic value, so anyone getting involved is hoping to win in what is effectively a zero sum game: I make money at the expense of dumb asses who don't. There will be a few winners who get timing right but as always the smart guys are the operators who skim small percentages of $billions traded, they win whatever the price.

I invest large amounts but not a cent in crypto. It is Dutch tulips; I really have no sympathy for anyone who loses out.

All the warning signs have been there in recent months, the big sell off in speculative assets has been occurring in the US.

Warren Buffet is usually right in the end, value wins

 

[Bold Seagull]

All the warning signs have been there in recent months, the big sell off in speculative assets has been occurring in the US.

Warren Buffet is usually right in the end, value wins

Many of us don't understand the value of digital yet.

My kids were into Fortnite as I'm sure many were or still are, and I could never get why skins were so important. There was no enhancement to the gameplay whatsoever other than you looked different. So here's the rub, how you looked in that game was vitally important to many of the 80 million players, and so digital skins had value, rare ones even more so.

This is the tip of the iceberg in terms of what digital value is. I can tell you Barclays is actually exploring sponsoring EA Sports FIFA rather than the PL because 250 million players play FIFA, advertising in the digital world is getting more exposure than the real world.

Value does win. But then again, what is value?

 

[Berty23]

Many of us don't understand the value of digital yet.

My kids were into Fortnite as I'm sure many were or still are, and I could never get why skins were so important. There was no enhancement to the gameplay whatsoever other than you looked different. So here's the rub, how you looked in that game was vitally important to many of the 80 million players, and so digital skins had value, rare ones even more so.

This is the tip of the iceberg in terms of what digital value is. I can tell you Barclays is actually exploring sponsoring EA Sports FIFA rather than the PL because 250 million players play FIFA, advertising in the digital world is getting more exposure than the real world.

Value does win. But then again, what is value?

Agree with this. New skins for my kids is like new trainers when I was a kid. People pay for the brand even if they are actually an inferior shoe. Shows the matter. It is basically fashion where people pay loads of something they could get for a fraction of the price but it has a badge.

Times are changing and us old fogies (I am 42) need to keep an eye on what our kids are up to.

V bucks innit.

 

[Tyrone Biggums]

Article in Times today setting out that many of the companies involved with crypto are little more than brass plate operations, all taking a cut in spread and fees and of course all unlicensed as crypto is unregulated.

Crypto has no intrinsic value, so anyone getting involved is hoping to win in what is effectively a zero sum game: I make money at the expense of dumb asses who don't. There will be a few winners who get timing right but as always the smart guys are the operators who skim small percentages of $billions traded, they win whatever the price.

I invest large amounts but not a cent in crypto. It is Dutch tulips; I really have no sympathy for anyone who loses out.

So crypto companies with large contracts with business and organisations that pay them have no intrinsic value?

What about IoTex who recently were awarded a contract with the US Navy to develop a system that supercharges their ability to record and store medical records?

No value?

What about Arweave who provide long term data storage solutions in a sector that was worth 65 billion in 2020 and is growing every year due to the need for improved data storage solutions?

No value?

 

[Tyrone Biggums]

All the warning signs have been there in recent months, the big sell off in speculative assets has been occurring in the US.

Warren Buffet is usually right in the end, value wins

Berkshire Hathaway invested 500 million into a pro-Bitcoin digital bank in May.

 

[beorhthelm]

Many of us don't understand the value of digital yet.

My kids were into Fortnite as I'm sure many were or still are, and I could never get why skins were so important. There was no enhancement to the gameplay whatsoever other than you looked different. So here's the rub, how you looked in that game was vitally important to many of the 80 million players, and so digital skins had value, rare ones even more so.

This is the tip of the iceberg in terms of what digital value is. I can tell you Barclays is actually exploring sponsoring EA Sports FIFA rather than the PL because 250 million players play FIFA, advertising in the digital world is getting more exposure than the real world.

Value does win. But then again, what is value?

digital value as you say will be huge, NFTs and micropayments will be common place. just not yet, and money paid for NFT profile pictures is just silly.

interesting question about value. many companies have significant value attributed to them through intangibles, ie brand, and we dont think twice about. value is a odd concept that we assume we understand but probably dont when think deeply about it, slightly different meanings in context.

 

[Bold Seagull]

https://www.bbc.co.uk/news/business-60121538

 

[Driver8]

https://www.bbc.co.uk/news/business-60121538

So you can pay £30k for a photo of something whilst Julian Lennon keeps the actual item. The world has truly gone mad.

 

[Half Time Pies]

digital value as you say will be huge, NFTs and micropayments will be common place. just not yet, and money paid for NFT profile pictures is just silly.

interesting question about value. many companies have significant value attributed to them through intangibles, ie brand, and we dont think twice about. value is a odd concept that we assume we understand but probably dont when think deeply about it, slightly different meanings in context.

I would imagine that Buffett is talking about the underlying value that a company has when you strip away any speculation about possible future value and potential i.e. the value of assets owned by the company and the things that it produces.

The only value of a crypto currency right now is the optimism that someone else will be willing to pay more for it in the future. Without that optimism it's effectively worthless.

 

[Half Time Pies]

So you can pay £30k for a photo of something whilst Julian Lennon keeps the actual item. The world has truly gone mad.

I read somewhere that NFT's are potentially a great way to launder money, may help explain some of these inflated prices.

 

[Bold Seagull]

So you can pay £30k for a photo of something whilst Julian Lennon keeps the actual item. The world has truly gone mad.

It is a bit mad. The world is moving on though. My kids don't really understand music albums. I try to 'educate' them in how a band or artist want to put together a group of songs as an entity, I even bought a record player and dug out loads of LPs - but while they were fascinated in how a load of grooves made music and the 'retro' value of it, they're not that interested, they make playlists of the tracks they like on a music service. The value of having an actual item no longer has the same value. I've got boxes of CDs in the loft - what value do they have now, very little I expect.

Why can a stamp be worth £100,000s just because it was printed wrong, or on a certain date with a certain batch? It cannot be used for anything, it's a sticky bit of paper that's it. Why does it have that much value? Because people want it. Pure and simple. Same as gold, same as anything really. Gold is a relatively useless metal compared to others, but it's rare and pretty so people want it. When you break down what value is, then if people want stuff in the digital world, then actually its no different to how we attribute value in the real world. Why is someone buying a stamp for £30k anymore ridiculous than a £30k unique digital artifact?

 

[Marshy]

Ups and Downs, plenty of them, but Crypto is here to stay. Eventually there maybe only 20 of them.

But in my opinion its the best opportunity you will get in this lifetime to get in early on something huge.

Its way way bigger than you can imagine i think.

As i have said before it will swallow all other asset classes. Everything will be tokenised eventually.

 

[Tom Hark Preston Park]

It is a bit mad. The world is moving on though. My kids don't really understand music albums. I try to 'educate' them in how a band or artist want to put together a group of songs as an entity, I even bought a record player and dug out loads of LPs - but while they were fascinated in how a load of grooves made music and the 'retro' value of it, they're not that interested, they make playlists of the tracks they like on a music service. The value of having an actual item no longer has the same value. I've got boxes of CDs in the loft - what value do they have now, very little I expect.

Why can a stamp be worth £100,000s just because it was printed wrong, or on a certain date with a certain batch? It cannot be used for anything, it's a sticky bit of paper that's it. Why does it have that much value? Because people want it. Pure and simple. Same as gold, same as anything really. Gold is a relatively useless metal compared to others, but it's rare and pretty so people want it. When you break down what value is, then if people want stuff in the digital world, then actually its no different to how we attribute value in the real world. Why is someone buying a stamp for £30k anymore ridiculous than a £30k unique digital artifact?

Well I guess that if you own the stamp, you own the stamp. You could pay £30k to be entered into a online ledger to say you own a unique monkey picture but you don't own the copyright. You don't own anything really *



*I didn't pay £30k for this monkey picture.But somebody did. Probably paid a lot more in fact.Latter day equivalent of paying to have a star named after you or buying the title Lord of Preston Manor. As you say, it's a bit mad

 

[Marshy]

NFTs in art and music are the way of getting people in.

They are really going to be used for things like house deeds etc. It has a ton of use.

 

[Bold Seagull]

Well I guess that if you own the stamp, you own the stamp. You could pay £30k to be entered into a online ledger to say you own a unique monkey picture but you don't own the copyright. You don't own anything really *

View attachment 144299

*I didn't pay £30k for this monkey picture.But somebody did. Latter day equivalent of paying to have a star named after you or buying thr title Lord of Preston Park. As you say, it's a bit mad

The tenner in your pocket is only worth £10 because someone promises the bearer of it that if they wanted it could be exchanged for £10 in actual gold. Sir Issac Newton may well be staring down at crypto as the logical progression of currency - the standardised promise to the bearer of value.

You don't own the copyright if you buy a stamp or piece of art, you own that stamp or piece of art, you have no right to copy or duplicate it because it is copyrighted to the creator. Whether that monkey picture was a real print, or a digital artifact, you wouldn't own the copyright unless the creator expressly gave you permission.

It's mad because ownership is a concept based on the real world. You have no issue with the stamp because it's a stamp, you can touch it therefore it has value. However the world is moving rapidly away from this concept. I barely have cash anymore. I hardly even use a phyiscal credit card either. It's all virtual. Why do you need the actual stamp when I never need an actual tenner?

 

[beorhthelm]

I would imagine that Buffett is talking about the underlying value that a company has when you strip away any speculation about possible future value and potential i.e. the value of assets owned by the company and the things that it produces.

The only value of a crypto currency right now is the optimism that someone else will be willing to pay more for it in the future. Without that optimism it's effectively worthless.

thats exactly what Buffet invests on, company tangible assets and cash flow from product. he famously dosnt invest in gold because its non-productive. also didnt invest in tech stocks partially due to no product (change his view with Apple - clear product there). others consider considerable value in gold of shares or Facebook.

most shares, investments in general, are held in the hope of future someone paying more, thats really not a very good argument. whether there's utility to someone, determines if its worthless or not. many crypto i wouldnt touch with a bargepole but someone uses it and think it'll be the next next tech so attribute value.

 

[Half Time Pies]

The tenner in your pocket is only worth £10 because someone promises the bearer of it that if they wanted it could be exchanged for £10 in actual gold. Sir Issac Newton may well be staring down at crypto as the logical progression of currency - the standardised promise to the bearer of value.

You don't own the copyright if you buy a stamp or piece of art, you own that stamp or piece of art, you have no right to copy or duplicate it because it is copyrighted to the creator. Whether that monkey picture was a real print, or a digital artifact, you wouldn't own the copyright unless the creator expressly gave you permission.

It's mad because ownership is a concept based on the real world. You have no issue with the stamp because it's a stamp, you can touch it therefore it has value. However the world is moving rapidly away from this concept. I barely have cash anymore. I hardly even use a phyiscal credit card either. It's all virtual. Why do you need the actual stamp when I never need an actual tenner?

Because the value of the tenner doesn't exist in the form of a note and money hasn't been backed by gold since the 1970's. The note or the numbers in your bank account are only valuable because you need it to operate within the system. Currency really only has value because the government issue it and we need it to pay taxes etc. In many ways the government is like the banker in monopoly, until they dish the currency out, you cant play the game.

The NFT has value only because of the optimism that at some point in the future someone else will be willing to pay more for it. The stamp has value because of a number of things, its scarcity, age and history etc. Once you lose it, it's very difficult to replace.

 

[beorhthelm]

Well I guess that if you own the stamp, you own the stamp. You could pay £30k to be entered into a online ledger to say you own a unique monkey picture but you don't own the copyright. You don't own anything really *

you buy provenance, like the art world, statement that you held this item and it was traded for this. no i dont entirely buy into that either, the valuations are insane and ripe for manipulation (again, like art). current pfp are really a prototype for NFT. that ledger entry could give you copyright, royalties or other rights.

 

[deletebeepbeepbeep]

https://youtu.be/YQ_xWvX1n9g

 

[Bold Seagull]

Because the value of the tenner doesn't exist in the form of a note and money hasn't been backed by gold since the 1970's. The note or the numbers in your bank account are only valuable because you need it to operate within the system. Currency really only has value because the government issue it and we need it to pay taxes etc. In many ways the government is like the banker in monopoly, until they dish the currency out, you cant play the game.

The NFT has value only because of the optimism that at some point in the future someone else will be willing to pay more for it. The stamp has value because of a number of things, its scarcity, age and history etc. Once you lose it, it's very difficult to replace.

Since the suspension of the gold standard in the 1930s, however that didn't really fit my bringing Newton into it.

The stamp only has value because of collectors. If people want to collect NFTs or own them, it is no different, only less established, less reliable, less predictable, same thing though nonetheless. If people stop collecting stamps, they'll lose all their value, just the same if someone stops wanting an NFT, it will lose it's value.