p-townag said:

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northeastag said:

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It was actually an honest question.

If Bitcoin is a financial investment, it's an investment with no future cash flow or earnings, so it's impossible to value it using a PV of future cash flow or earnings analysis.

If Bitcoin is a "store of value", meaning a currency, since it is both virtual and global, it isn't possible to use the methods of value (PPP, IRP, etc.) that would customarily be used for currencies.

When thinking of Bitcoin, I'm often reminded of the old interview question (or joke) asking candidates how much they would pay for a zero coupon perpetual bond.

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It's digital gold. An asset without an issuer. A commodity. And it's perfectly scarce. How would you describe gold in terms of PPP, IRP, etc?

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I wouldn't. Who would use IRP for any commodity?

But you are saying bitcoin is a commodity? Pretty sure it doesn't meet that definition. But going with that concept anyway, there still isn't an explanation on how to value it.

northeastag said:

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p-townag said:

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northeastag said:

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It was actually an honest question.

If Bitcoin is a financial investment, it's an investment with no future cash flow or earnings, so it's impossible to value it using a PV of future cash flow or earnings analysis.

If Bitcoin is a "store of value", meaning a currency, since it is both virtual and global, it isn't possible to use the methods of value (PPP, IRP, etc.) that would customarily be used for currencies.

When thinking of Bitcoin, I'm often reminded of the old interview question (or joke) asking candidates how much they would pay for a zero coupon perpetual bond.

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It's digital gold. An asset without an issuer. A commodity. And it's perfectly scarce. How would you describe gold in terms of PPP, IRP, etc?

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I wouldn't. Who would use IRP for any commodity?

But you are saying bitcoin is a commodity? Pretty sure it doesn't meet that definition. But going with that concept anyway, there still isn't an explanation on how to value it.

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Thanks for answering. I agree, I wouldn't use IRP to describe Bitcoin.

Bitcoin is classified as a commodity by the CFTC.

https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf

I view it as an asset first and foremost. An asset without an issuer. Similar to land, gold, etc.

Whether it becomes a dominant medium of exchange or currency remains to be seen, but most currencies/media of exchange are assets/stores of value first.

Thanks for that. I guess I am just too old, with too much old fashioned fundamentalist thinking to understand it.

Sometimes it's just difficult to get one's head around a completely new concept. But hey, I'll keep following it.

Anytime! It's a fascinating subject. If you're really interested in the topic, there are some very cool lectures/podcasts/books on the topic. The Bitcoin Standard is excellent and is on audiobook. I started as skeptical, then viewed it as a speculative investment, and now I'm convinced it's the most ethical and best asset in the history of the world.





https://spotify.link/O24oT15FnDb

Choose your Fighter. #Bitcoin pic.twitter.com/B1xxf5FN5O

— Michael Saylor⚡️ (@saylor) December 17, 2023

I'm considering moving back my BTC from my cold wallet Ledger Nano XP back to Coinbase

just for short term so that I can practice using the technology and don't forget everything I need to know.

I have my ledger charging and the password works (it has been about 8 months since before I moved overseas that I last used it)

so I want to practice.

are the TWENTY catch phrases you write down just for the being able to get back in if you forget the 4 digit password?

or if you lose the Ledger Nano? but I also use the "ledger live" to see how my account is doing. is that linked with anything?

so my BTC is actually on the Nano? that's why I need the 20 catch phrases in case I lose it?

Questions re: Saylor's definition of monetary inflation:

1. Are we just talking about the total value of money in circulation (as per this link: Federal Reserve Board - Data)?

2. Wouldn't the true inflation rate be the difference between the value of money in circulation and the value that is created by the economy?


So if the monetary supply increased by 10% but the actual value created in the economy ALSO increased by 10%, then wouldn't that be zero inflation?


Counter-example, if there was NO new money printed by the government, wouldn't we have massive deflation?


This isn't some kind of gotcha... I really am trying to understand.

Seeing this thread reminded me of an old bitcoin thread I actually posted on and the OP never came back like they said they would to answer my questions. https://texags.com/forums/57/topics/3296805


Do we consider bitcoin a technology?

yes. in addition to being a store of value and medium of exchange, it's also an invention, a discovery, a network, and a protocol.

I don't think something can be both a discovery and an invention.

As far as technologies, networks, and even a protocol - I worry about their resilience as we head into the future. But I'm a worrier by nature. It's finiteness is it's most important quality and can never be hacked or altered in any way, even as technologies advance at the same pace they have over the last 100 years.

Certainly, for a worrier like me, there are also concerns about the resilience of any financial system, government, nation. Less so within my own lifetime, of course - but long term.

bagger05 said:

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Questions re: Saylor's definition of monetary inflation:

1. Are we just talking about the total value of money in circulation (as per this link: Federal Reserve Board - Data)?

2. Wouldn't the true inflation rate be the difference between the value of money in circulation and the value that is created by the economy?


So if the monetary supply increased by 10% but the actual value created in the economy ALSO increased by 10%, then wouldn't that be zero inflation?


Counter-example, if there was NO new money printed by the government, wouldn't we have massive deflation?


This isn't some kind of gotcha... I really am trying to understand.

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That's a fantastic question. And while I wish I could give a comprehensive answer, I cannot. All I can say is that, based on the value of dollars in circulation in the graphs from the federal reserve website you provided, it appears as though the value of currency in circulation has doubled from 2012 to 2022. By contrast, GDP has not doubled in that same time frame based on the data I've found:

https://www.statista.com/statistics/188105/annual-gdp-of-the-united-states-since-1990/

Further, I'm sure someone like Saylor could explain it better than me, but my feeling is that dollars in circulation should not mirror GDP.

ac04 said:

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not super interested in theorizing or debating about what happens 100+ years from now.

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Almost no one is interested, I get it

p-townag said:

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bagger05 said:

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Questions re: Saylor's definition of monetary inflation:

1. Are we just talking about the total value of money in circulation (as per this link: Federal Reserve Board - Data)?

2. Wouldn't the true inflation rate be the difference between the value of money in circulation and the value that is created by the economy?


So if the monetary supply increased by 10% but the actual value created in the economy ALSO increased by 10%, then wouldn't that be zero inflation?


Counter-example, if there was NO new money printed by the government, wouldn't we have massive deflation?


This isn't some kind of gotcha... I really am trying to understand.

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That's a fantastic question. And while I wish I could give a comprehensive answer, I cannot. All I can say is that, based on the value of dollars in circulation in the graphs from the federal reserve website you provided, it appears as though the value of currency in circulation has doubled from 2012 to 2022. By contrast, GDP has not doubled in that same time frame based on the data I've found:

https://www.statista.com/statistics/188105/annual-gdp-of-the-united-states-since-1990/

Further, I'm sure someone like Saylor could explain it better than me, but my feeling is that dollars in circulation should not mirror GDP.

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Milton Friedman has a good lecture about inflation being the ratio of dollars in circulation vs the basket of goods and services produced. I do think this theory has been updated and built upon in terms of how the money supply is defined but the basic foundation holds.

Complete Idiot said:

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ac04 said:

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not super interested in theorizing or debating about what happens 100+ years from now.

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Almost no one is interested, I get it

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FWIW, I have wondered this too. From what I've seen, the answer is typically either that they will have to add more bitcoin to the system to continue the mining incentives, or they will have to reward miners with existing bitcoin at that point via transaction fees.

I would favor the second option, as long as it's not too much. Either option would require a majority consensus from the community to go into effect from my understanding.

The current monetary system in the US will just be 50 years old in 3 years. So that is why you see the apathy towards answering questions for problems that won't arise for another 117 years.

Diggity said:

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if you're dying to "practice", just move a little bit back to coinbase. There's no reason to pay fees (and risk exposure) by moving it all back to a place that you didn't trust in the first place.

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correct! that is my plan

I was able to use the Ledger Nano with the correct password.

now I just want to practice moving a few hundred dollars back to coinbase.

thanks for the instructions

p-townag said:

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The numerical password on your ledger is just to access your device. The 12 or 24 words recovery seed phrase is the way to access your account on the blockchain. So if you forget your ledger password or lose your ledger, that's fine. Just buy a new cold wallet and use the 12 or 24 words to reconstitute your account on the new wallet.

But, if you ever lose your 12 or 24 word recovery phrase, your bitcoin is lost forever. Or if someone steals the 12 or 24 words, they can easily steal your bitcoin.

Ledger live is simply the user interface Ledger uses to let you access your wallet and perform transactions.

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correct! that is my plan

I was able to use the Ledger Nano with the correct password.

now I just want to practice moving a few hundred dollars back to coinbase.

thanks for the instructions

p-townag said:

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The numerical password on your ledger is just to access your device. The 12 or 24 words recovery seed phrase is the way to access your account on the blockchain. So if you forget your ledger password or lose your ledger, that's fine. Just buy a new cold wallet and use the 12 or 24 words to reconstitute your account on the new wallet.

But, if you ever lose your 12 or 24 word recovery phrase, your bitcoin is lost forever. Or if someone steals the 12 or 24 words, they can easily steal your bitcoin.

Ledger live is simply the user interface Ledger uses to let you access your wallet and perform transactions.

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do some people write down the ENTIRE bitcoin blockchain password/address and access that rather than using a 4 digit password to protect a cold wallet?

I'm trying to determine the best place to store the 24 phrases and understand EXACTLY what it is I can't forget over the next decade

etch in on a piece of stainless steel and bury it in the backyard

LMCane said:

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p-townag said:

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The numerical password on your ledger is just to access your device. The 12 or 24 words recovery seed phrase is the way to access your account on the blockchain. So if you forget your ledger password or lose your ledger, that's fine. Just buy a new cold wallet and use the 12 or 24 words to reconstitute your account on the new wallet.

But, if you ever lose your 12 or 24 word recovery phrase, your bitcoin is lost forever. Or if someone steals the 12 or 24 words, they can easily steal your bitcoin.

Ledger live is simply the user interface Ledger uses to let you access your wallet and perform transactions.

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do some people write down the ENTIRE bitcoin blockchain password/address and access that rather than using a 4 digit password to protect a cold wallet?

I'm trying to determine the best place to store the 24 phrases and understand EXACTLY what it is I can't forget over the next decade

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Yes, there are many philosophies. The biggest thing is to guard the 24 words in the best way you can.

Never take a photo of your words or email them or expose them to a camera or audio recording. Never tell them to anyone. Never allow them to have any chance of getting on the internet.

Some people prefer to just memorize them (brain wallet). The benefit is you hold them and no one knows you have them, and you can transport your wealth anywhere at anytime. The downside is someone could torture you to get you to give them away. Also, if you get injured or killed, the Bitcoin is gone forever. Or you get dementia or you just forget.

Another option is writing them down and keeping them in a very safe place, either at your home or elsewhere. The downside is someone could possibly find them, and they could be destroyed by fire or flood.

Another popular option is getting them stamped on a stainless steel plate that can't be destroyed by fire or flood. They could potentially still be found by someone, however.

Finally, many hard core Bitcoiners are setting up "multisig." It's too complicated to explain here, but just YouTube Bitcoin multisig. The gist is having several distributed sets of words. For instance, you have one set at home, a company has a second set, and your great aunt Bethel has a third set. You can only access your Bitcoin if you obtain two of the three sets of phrases.

aTmAg said:

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There is no point in looking beyond the price instability of bitcoin. Because of that alone, it is useless.

Bitcoin has not generally trended upward. Just because it's higher now than it was when it was first created doesn't mean squat. Look at it's (short) lifetime graph: It's gone from basically 0 to $60K, back down to $30K back up to $65K, back down to $15K and now at around $35K. All in less than a decade. To say that is a "general upward trend" is laughable. It's been all over the place.

Unlike owning stock in a company that builds stuff and pay dividends, or land that can be farmed or rented, gold that can be used as jewelry and in industry, and so on, the ONLY possible utility that bitcoin has is to be used as money. Yet one of the primary roles of money is to be a unit of account. So bitcoin being so ridiculously volatile makes it useless as money. Who in their right mind would offer or take out a mortgage in terms of bitcoin? Nobody sane. So it literally has practically zero utility.

So it's only "value" is speculative. Everybody who owns it has to hope they can find a bigger sucker to sell it to later. That's a system destined to fail.

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Still mired in muddy thinking ATMag?