What happened was that became the price someone was willing to pay for it. That’s not the same as value.
It isn’t? There’s some objective method of valuation that doesn’t depened upon hte price someone is willing to pay? One that rests, perhaps, in the Galactic Brain of a solanum?
Perfectly willing to agree that the price someone is willing to pay be different from that Spud is. But other than that….
So I’ll buy Bitcoin and argue to HMRC that on my death it has no value and hence no IHT bill, citing the “number one economics blogger in the UK” as support.
I think this is good evidence of Van Patten’s suspicion that Murphy used a ringer to pass his accountancy exams,
As a market trader the only real thing is price discovered in a transaction. And that’s ephemeral & no longer exists. Since both & seller were satisfied in the transaction. The next price will be discovered in the next transaction.. So the concept of “value” is way out in fantasy land.
Does he pay a coupla hundred quid for a loco for his train set? I wouldn’t, so what’s its value?
Strictly speaking, BF, Bitcoin is valueless. Currencies aren’t valued against other currencies. They’re valued by the goods & services they’re exchangeable for in commerce. Since very little of the issuance of Bitcoin is being utilised in commerce, it’s impossible to do that. Will the supermarket accept your Bitcoin in exchange for a can of beans? No it won’t. So it has no value.
@BiS
By that definition, a dollar is worthless because I can’t exchange it for goods in my local Tescos. I need to convert it to Euro before it will be accepted. There is a subset of shops (mainly based in the USA) who will accept a dollar.
Similarly there is a limited market where bitcoin is able to be used as tender but for most uses I will need to exchange it.
Having “missed the boat” on Bitcoin – I assumed it to be a digital version of “Tulipomania” – I’m still not sure that I “get” it… OK, so at the moment, 1 BitCoin is approaching $100,000, but is there actually any legitimate business that happily accepts the things to settle a transaction? Can I walk into my local Bentley dealer and buy a Continental for a shade under 5BitCs? Is it possible actually to convert BitCs into dollars, pounds or bullion? If not, it still is in the realms of Tulipomania and will the inevitable crash finally turn up?
Yours, confused…
Baron J.
Gunker, you have it exactly. The dollar is indeed worthless. It’s a token of value used in US commerce. It’s not a thing, it’s a concept. A placeholder in transaction strings. Since US commerce is separate from Spanish commerce I can’t purchase items at my local supermarket in US$. They won’t accept them. They’re valueless.
What is commerce? People exchanging goods & services. Money is just a convenient token of value to make commerce more efficient. The value is in the goods & services, not the pieces of paper.
Gunker, you have it exactly. The dollar is indeed worthless. It’s a token of value used in US commerce. It’s not a thing, it’s a concept. A placeholder in transaction strings. Since US commerce is separate from Spanish commerce I can’t purchase items at my local supermarket in US$. They won’t accept them. They’re valueless.
What is commerce? People exchanging goods & services. Money is just a convenient token of value to make commerce more efficient. The value is in the goods & services, not the pieces of paper.
That was odd. The page reloaded after the post with the comment still in the form & not showing as posted. Mysteries of the interweb.
BIS
Are you really arguing that a holding of a non-domestic currency (eg $ or £ in Spain) is valueless because you can’t buy 20 Bensons with it in a supermarket? But you can exchange it into EUR to buy them?
I can’t face visiting his site, as he trotted out the old lefty favourite: a capitalist knows the price of everything and the value of nothing?
Is the sort of facile statement I’d expect from him.
@BJ
Almost all the issuance of BC is held by speculators. The BC price is nothing but opinion. The recent up mark is just a sign of more buyers than sellers. Be interesting to see the volume & how much BC has been actually been traded. Might be a small amount as a proportion of total issuance. In fact the sharp up tick would a sign that it is. Buyers have been unable to find sellers at lower transaction prices so is an indication of transactions that didn’t happen.
I think I first became aware of BC back when they were 4 bucks. And I didn’t buy them then for the reason I wouldn’t buy them now. There may come a day when sentiments change & speculators attempt to profit take. And that could result in a market that is all sellers but no buyers. Sellers will offer BC at progressively lower prices but still not find buyers. Who’s going on a plummeting price? So it will freefall all the way towards zero to the jubilation of all of us want to see cryptocurrencies used in commerce. This isn’t an opinion. It’s a prediction. It will happen. Any currency should value by the goods & services it’s exchangeable for not speculators’ opinions.
So the boat you missed is one with a tissue paper hull. And no lifeboats.
The only transactions I would do in BC would be transients. Where the parties at either end are acting in unison. A buy at one end with matching sale at the other.
If you want a market opinion, BC has been trading pretty flat since early in the year until Trump’s embrace of Dogecoin. That went up over 300% & BC seems to have followed it. My guess there will be a lot first time speculators in this market so eventually they will want to profit take. A simple absence of buyers should return BC to the March to November floor where buyers & sellers were roughly matched. There’s nothing really out there in the way of new information apart from Trump’s running his mouth. But that floor may not be there. A sharp extensive downward price move may encourage profit taking at lower prices & now you’re on the way to BC Armageddon. It’s a very inviting short. If I had the nerve I’ve probably got enough leverage to make a billion or two. Buy myself a small S. American country for my retirement
Just another story of the potato’s inability to believe that anyone but him is the arbiter of value.
Someone values Bitcoin at $100k, a choice of phone, a boat, financial services, not paying tax…. Whatever the bugbear of the day is. How dare people be free to value things differently from some fat dumpy retard in his spare room of knowledge.
But why don’t they value MEEEE so much screams the all wise retired (before sacked) professor
@BF
Yes. The very fact that you have to use the exchange system proves it.
Why does something have to be accepted tender to have value. I have a house. I can’t take it to the supermarket. It’s valueless?
An ounce of gold?
An Apple share — which pays a dividend?
A Tesla share — which doesn’t pay a dividend?
@Matt
With all of those, could you tell me now exactly what you would get for them if you sold them? If the answer’s no, which it should be, then the notion of value is meaningless. It simply presumes a price, which is based on the price in a previous transaction. That price satisfied both buyer & seller so no longer exists.
Yeah, value’s a useful fiction. An approximation. True value is the assessment of an individual. And everyone values things differently. The engine that drives commerce. The seller must value it less than the buyer does or there would be no transaction.
One appreciates this if one deals with things like stock market portfolio valuations The valuation was done at the prices at the time of the valuation. It ceased to be true a second later. One doesn’t know what one would realise for any of the shares if one wanted to sell them. It would be what a buyer offered for them. So the valuation is nothing but a fuzzy guidance to might be true now.
Value is the price you feel you should be paid to sell something, often understanding that you won’t be paid that much. We evens have terms like sentimental value to help us rationalise this. Value is also the price someone thinks they should pay to buy that thing. These two values are often different and somewhat arbitrary. If a deal is done the price paid is dictated by circumstances and not necessarily linked to either value. However the transaction might change one or both parties perception of the value of the item. Which all goes to show that value is a very nebulous concept and only slightly related to price.