Why Bitcon has value, an austrian school prespective

Discussion in 'Economics' started by Daal, Dec 6, 2020.

  1. Daal

    Daal

  2. Pekelo

    Pekelo

    Why does a Tesla stock have value? Because people think it does. Same with Bitcoin.
     
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  3. I'm gonna laugh so hard when the riemann hypothesis is proven and all tokens become worthless
     
  4. No, and that is the vital difference. Stocks are valued because of discounted future cash flows. Now the estimation of future cash flow is not pure science. But it's a vital difference between a crypto currency whose value is entirely based on hope and trust and a business with stable cash flows that can be extrapolated into the future. With a degree of uncertainty of course but those risk premia are also priced in.

    I am not making a value judgment I simply point out the Stark differences. Other categories of assets that are mostly based on pure supply and demand are properties and those on trust is fiat currency. Different asset classes, different valuation approaches, is my point.

     
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  5. MrMuppet

    MrMuppet

    As long as ET doesn't get away from this "hope and trust" thing and doesn't learn why after all these years Bitcoin is still not dead we will read these funny posts :D
     
  6. piezoe

    piezoe

    Most people who buy stocks haven't the vaguest knowledge of their discounted future cash flow. Nor do they necessarily buy them on the recommendation of someone who does.

    I disagree with respect to fiat currency. You can pay your taxes with fiat currency, a very practical reason for valuing it. You can't pay your taxes with bitcoin.
     
    Last edited: Dec 6, 2020
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  7. TimMykes

    TimMykes


    Bitcon=Discounted Future Schmuck Flow

    If you use that , I want credit for it
     
  8. Peter8519

    Peter8519

    If bitcoin is just one of the cryptocurrencies then there is no limit to the creation of blockchains. There is no method to limit the blockchain inflation unless there is a governing body of cryptocurrency.

    This is the Yahoo Cryptocurrency heat map.

    Crypto_heat_map.jpg
     
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  9. TimMykes

    TimMykes

    amazing insight
    Peter8519

    I made the same observation when bitcon was $10

    welcome to the club
     
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  10. longshort

    longshort

    1. Prices <> value and wealth. Easy to see when prices are inflated out of thin air with no change in society's wealth.

    2. Bitcoin has value, it's just negative. Waste of electricity with no real world wealth/utility to show for it. It's realistically not good for anything other than speculation. You could at least plant those tulip bulbs and get a flower.
     
    #10     Dec 7, 2020
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