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Email this7:34 am
February 11, 2024
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mordko said
This is a red herring. If gold was priced as a commodity it wouldn’t cost anywhere near $4K an ounce. The price of gold is entirely defined by its perceived value as an investment and to diversify risk.
Countries hold gold reserves for reasons very different from needing jewelry in an emergency.
When things go crazy, price of gold shoots up even though people buy less jewelry. With actual commodities prices drop like a stone when demand for goods tanks in a recession.
You're just proving my point. Yes, gold trades higher than its commodity value, and company stocks often trade higher than the value of the company. That's speculation. Trading in Bitcoin is just the buyer speculating that they can sell it for more than what they paid.
What's the difference between the value of Bitcoin and the value of Charles Ponzi's imaginary investments? I think it's funny that some people dismiss Trump's meme coin ( Oh, that's not real cryptocurrency!) but Bitcoin (Oh, that's real!).
8:03 am
April 27, 2017
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qzjxk said
You're just proving my point. Yes, gold trades higher than its commodity value, and company stocks often trade higher than the value of the company. That's speculation. Trading in Bitcoin is just the buyer speculating that they can sell it for more than what they paid.
What's the difference between the value of Bitcoin and the value of Charles Ponzi's imaginary investments? I think it's funny that some people dismiss Trump's meme coin ( Oh, that's not real cryptocurrency!) but Bitcoin (Oh, that's real!).
I am ok with you calling gold “speculative” if you define it as something that has a value entirely defined by human perception. Keep in mind that it maintained value for 5000 years. For centuries the value of money was based on the price of gold. Hasn’t been the case for the last 50 years but the value of gold is still there.
The difference between the value of bitcoin and the value or Charles Ponzi’s scheme is fraud. Its fundamental. Ponzi guaranteed return and claimed that it was derived from some kind of genuine price arbitrage. Both of these claims were lies. Bitcoin gives no guarantee. Everyone knows it’s volatile. Everyone knows the price is driven purely by (limited) supply and demand. Exactly like gold, but with shorter history.
“Speculative” investment isn’t a fraud. Ponzi scheme is. Simple.
10:23 am
February 11, 2024
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mordko said
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Everyone knows the price is driven purely by (limited) supply and demand. Exactly like gold, but with shorter history.“Speculative” investment isn’t a fraud. Ponzi scheme is. Simple.
I think the price of Bitcoin is being manipulated by the big money people who are promoting/pumping it. What's in a name? Call it what you like, it is what it is.
I like to compare Bitcoin to some piece of junk that is designated as a rare antique because the supply is limited. Then its price is driven up to thousands or millions of dollars by speculators who have no interest in the piece of junk other than what they can sell it for.
11:30 am
April 27, 2017
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qzjxk said
I think the price of Bitcoin is being manipulated by the big money people who are promoting/pumping it. What's in a name? Call it what you like, it is what it is.
I like to compare Bitcoin to some piece of junk that is designated as a rare antique because the supply is limited. Then its price is driven up to thousands or millions of dollars by speculators who have no interest in the piece of junk other than what they can sell it for.
That’s your opinion and you are entitled to it. Recently someone told me that paintings by Marc Chagall are “junk”. No arguing with that.
Prices for all sorts of things are “manipulated”. Silver is a famous example. Certainly was the case early on but now at over $3 trillion market cap Bitcoin is hard to manipulate but I am not an expert.
Opinions are fine but the simple fact is that Bitcoin itself is not a fraud or a Ponzi scheme.
2:25 pm
February 11, 2024
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mordko said
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Opinions are fine but the simple fact is that Bitcoin itself is not a fraud or a Ponzi scheme.
The Wikipedia page for Stock Generation says it was a Ponzi scheme. Yet the people who ran it called it a game and were quite clear that the shares were virtual and there were no real investments involved. The SEC tried to shut it down but the U.S. District Court for the District of Massachusetts "ruled in favor of Stock Generation, stating that the site adequately described the market as "a game", not an investment vehicle". The United States Court of Appeals for the First Circuit later reversed the District Court decision and the SEC eventually shut it down.
Whether Bitcoin is a Ponzi scheme, or not, is subjective.
1:11 am
November 18, 2017
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Gold has always had uses - decoration, corrosion resistance, malleability (to resist cracking in teeth, etc.), conductivity and a whole host of esoteric electrochemical properties. Supply and demand constantly adjust this, and part of the demand is speculative.
What anything is worth is exactly what someone can be found to pay for it. That varies, too.
RetirEd
5:06 am
April 27, 2017
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Several factors influence gold prices, including inflation, interest rates, market sentiment, as well as supply and demand.
PIMCO believes changes in real (inflation-adjusted) yields have been the most significant drivers of gold prices over the past couple of decades.
https://www.pimco.com/ca/en/resources/education/understanding-gold-prices
7:50 am
December 7, 2011
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mordko said
Several factors influence gold prices, including inflation, interest rates, market sentiment, as well as supply and demand.
How about production/mining cost?
I think, that production should be mentioned first.
Until humans will figure out how to "create" gold from nothing (as Bitcoins, for example), production/mining cost will be important factor, in my opinion.
9:06 am
April 27, 2017
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Winnie said
How about production/mining cost?
I think, that production should be mentioned first.
Until humans will figure out how to "create" gold from nothing (as Bitcoins, for example), production/mining cost will be important factor, in my opinion.
That’s one of the key similarities.
Supply is very limited for both. You have two factors at play for gold. Availability of gold reserves and ore quality deteriorates over time, however extraction technology improves, keeping the rate and real cost relatively stable.
Same for bitcoin: it gets harder to “mine” it over time but computer power improves. You certainly can’t “mine” bitcoin for free; requires significant up front investment as well as operating costs. I am not an expert on these things but its generally available info.
9:32 am
January 10, 2017
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There is no need to get hung up on terminology. Technically Bitcoin is not a Ponzi scheme as there is no "hidden fraud" involved. Relating the buying and selling of Bitcoin to a 'Ponzi Scheme' loosely relates to one attribute of Ponzi Schemes. That is, just like Ponzi schemes, Bitcoin critics who think it will go to zero someday, see it as 'the greater fool theory", that early investors who sell in time make money while the last investors (before it goes to zero) will go bust.
As for Bitcoin and Gold, they are definitely not the same. People buy and sell gold because it is used for jewellery, for industrial components and because of these two uses, is also bought and sold by investment speculators hoping they can sell it for a profit.
99% percent of Bitcoin buyers are speculating and hoping they can sell it for a profit. This is essentially gambling with the added risk of a 'rug pull' where the whole thing collapses suddenly. IMO a large economy (US, Europe, China) creating their own cryptocurrency could be the seed of Bitcoins demise.
The other 1% want to get ahead of the game as they believe Bitcoin will replace fiat currency and usher in a world where money can no longer be printed at will, as there is a hard limit to the number of Bitcoins that can be mined - 21 Million to be exact. The fact that the world moved away from the Gold Standard as it was too limiting for world economic growth makes this possibility almost zero.
10:00 am
April 27, 2017
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Copper has lots of uses. Its use is far more extensive than that of gold. Wiring, transportation, construction, medical applications, mitigation of biofouling, etc.
The price of copper is defined by supply and demand for industrial use. When the economy is in recession, price of copper drops because its use drops.
The price of gold is defined not by its use for jewelry but by risk management of investor and government portfolios and the fear factor in general. When fear factor shoots up the price of gold goes up even if people stop buying jewelry during “scary” times.
The role of “usefulness” for gold in pricing is minimal; its a symbol and an investment asset with the price driven by perception of value.
If you consider perception of value as irrelevant, “speculating” and “gambling” then gold is an asset for “greater fools”.
12:34 pm
April 14, 2021
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Lodown said
The other 1% want to get ahead of the game as they believe Bitcoin will replace fiat currency and usher in a world where money can no longer be printed at will, as there is a hard limit to the number of Bitcoins that can be mined - 21 Million to be exact. The fact that the world moved away from the Gold Standard as it was too limiting for world economic growth makes this possibility almost zero.
If 21 million is truly the upper limit, then why bother with all the mining effort? Why not just issue the 21 million and be done with it?
2:00 pm
November 8, 2018
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Alexandre said
Bitcoin plunges below $24,000 and the crypto meltdown claims another casualty
Is this the start of the cryptocurrencies Ponzi scheme unraveling?
I started this topic 2.5 years ago, and I am ready to admit my mistake.
I look back and laugh at myself.
One day, this crypto thing will unravel. They always do. It might not happen during our lifetime, but it will, eventually.
If you bought bitcoin and made a profit from it, good for you. My ethical standards prevent me from buying/selling crypto, but I am not here to force my values on anyone else.
(I won't call crypto an investment, so not "investing" but "buying/selling").
I'll just keep watching from the sidelines. Let's see in another 2-3 years where bitcoin is.
3:01 pm
March 30, 2017
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Maybe my definition is wrong, but to be a ponzi scheme, one uses new investor's money to pay old investors' promised return, and by offering an outsided return, it keeps attracting new investors, and the music keeps playing.
By that definition, bitcoin is nth like that at all. You have a buyer, a seller, they agree on a price, transaction takes place. Its all legit, whether the underlying asset is real or touchable or useful or not is NOT even relevant.
3:18 pm
August 30, 2023
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Comparing Bitcoin to Gold is insult to Gold. Gold was there before any currency and is a precious metal. It can never go to zero.
How do you value Bitcoin?
3:24 pm
April 27, 2017
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How do you value gold?
3:26 pm
August 30, 2023
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mordko said
How do you value gold?
It is a physical asset and will always have a value > 0
Bitcoin (can it go to 0)
3:34 pm
April 27, 2017
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zgic said
It is a physical asset and will always have a value > 0
Bitcoin (can it go to 0)
If you remove investment and cultural/perceptional value, gold as a commodity will have a tiny fraction of applications (constantly reducing in scope) and the price would be far, far less than 10%.
I anticipate that many currencies will have no physical representation but will have value. E-books have no physical representation but they have value.
“Physicality” is a spurious argument. Both gold and Bitcoin are valued based entirely on the perceived value and what people want to oay.
3:59 pm
March 30, 2017
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zgic said
It is a physical asset and will always have a value > 0
Bitcoin (can it go to 0)
Half joke but my physical human waste is a physical asset, you want to pay me to take it off my hands ?
If so, that’s much better than me paying sewage and water cost every time I flush it down the toilet 
4:37 pm
August 30, 2023
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savemoresaveoften said
Half joke but my physical human waste is a physical asset, you want to pay me to take it off my hands ?
If so, that’s much better than me paying sewage and water cost every time I flush it down the toilet
You didn't answer my question. Can Bitcoin go to 0?
Please write your comments in the forum.