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Discussion in 'MKJ Off-Topic' started by One More For The Road, Oct 21, 2020.

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    One More For The Road

    One More For The Road Points Member


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    Oct 21, 2020
    #1
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    Last edited: Dec 5, 2020
       
  2. CFB Fan

    CFB Fan Junior Member


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    The proper term is speculate in Bitcoin. Warren Buffet is correct. Bitcoin does not generate cash flow. It's value is determined by what the next fool will pay for it. I know the SF Fed wrote a paper on Bitcoin which suggested that it should be valued as a commodity who's floor price is the cost to extract and that is determined by the cost of electricity consumed by server farms mining it. What happens after all the Bitcoins are mined?

    They estimate that the server farmers deployed to mine Bitcoin consume enough electricity to equal the output of 7 nuclear power plants. What is produced by that? A barter coin used by drug dealers to launder money.
     
  3. GaryB

    GaryB Junior Member


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    Currencies and hard commodities don't produce cash flow, so why is that characteristic a detriment? A currency measures cash flow and is a medium of exchange, which I'm guessing could be accomplished using Bitcoin. Also, since currencies have no value (but, are priced against other currencies), wouldn't the same constraints exist for Bitcoin?

    It seems inevitable that cryptocurrencies will replace currencies in the not too distant future. As we have seen with the Euro, a medium of exchange that is not priced based on the economics of the sovereign nation raises numerous issues. If the world went to a common cryptocurrency, wouldn't the issues that European sovereigns have with the Euro be magnified?
     
  4. CFB Fan

    CFB Fan Junior Member


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    1) The Fed just announced that it will be coming out with it’s own digital currency.

    2) Bitcoin is not backed by a standing army or an economy. It is merely traded amongst speculators. Save for the block chain component, it trades like beanie babies or baseball cards.

    3) Have at it. We need fools like you to make the markets work.
     
  5. Jpltrojan

    Jpltrojan Junior Member


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    The mere fact that the authorities have allowed it to continue should tell you all you want to know about Bitcoin or any of the others. The Gov will establish the medium of exchange...period. Everything else is a novelty.
     
    CrownoftheValley likes this.

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