Bitcoin, real or fake commodity?

Discussion in 'Finance, Investing & Economy' started by feyenoordsoccerfan, Jan 8, 2021.

  1. [​IMG]
    Today Bitcoin went over the 40,000 treshold.
    Some call it a fake investment, akin to Ponzi schemes. Others call it the liberation from political manipulation of currencies.

    So what is the truth?
     
  2. Bitcoins, according to wiki, is the result of solving a complex mathematical problem.
    Each new bitcoin is harder to find.
    Some compare it to finding new prime numbers.
    Each bitcoin discovered by solving the mathematical problem is unique, just like a prime number is.
    The process of how to find a bitcoin is published and open for scruteny by the brightest mathematicians.
    So if it's a fake, is there scientific proof of that?
     
  3. Bitcoin dropped to $30,468 and back to $36,633.
    upload_2021-1-12_17-37-41.png
     
  4. Some call it a pyramid scheme or a Ponzi scheme.
    It isnot.
    These two are scams in that new money is pulled in (without real assets/investments against it) and paid out to early investors as a return. So basically one buys air. Once no new money comes in, the last who entered lose all their money.

    So it is obvious the bitcoin isnot one of those two. There's no new money being brought in by investors to pay old investors a return.
    The only way an old investor can make money is by selling his bitcoins. He's not getting a constant revenue while the "scam" runs.

    Bitcoin investments however can be regarded a bubble, by inflating the value of the limited number of bitcoins.

    Bitcoins are real. The only question is what is their value.
     
  5. So the bitcoin can be in a bubble stage.
    Is there a way to determine that?
    There are statistical ways to find out how far a value has gone beyond the standard deviation of the bitcoin value.
    One of them is the
    upload_2021-1-12_23-9-25.png

    To make the judgement one needs:

    1st. the current market value of the bitcoin and multiply it with the number of bitcoins in existance.

    2nd. the total value of transactions completed. It's the adding of all prices paid when a bitcoin was "moved".

    3d. the Z-score. This is the number of standard deviations an observed value is above or below the mean value of the bitcoin.


    Is it a correct/useful way to determine where one is regarding the value of the bitcoin?




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  6. Another danger of bitcoins is losing your digital keys.
    https://www.wallstreet-online.de/na...en-euro-schwere-bitcoin-brieftasche-vergessen


    https://www.chicagotribune.com/cons...0210114-7cihaizahvbevmlnogp6dh3bae-story.html
    Lost passwords lock millionaires out of their Bitcoin fortunes
    By Nathaniel Popper
    The New York Times |
    Jan 14, 2021 at 11:44 AM





    Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million.

    The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7,002 bitcoins. While the price of Bitcoin dropped sharply on Monday, it is still up more than 50% from just a month ago when it passed its previous all-time high of around $20,000.





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