BITCOIN

User232002

Well, its Walmart. Average IQ of their shoppers probably below 100. And yes, the fees are extortionate.

Linton

darren232002 said:

Linton said:

I am very confused.  Please unconfuse me.....

P/E = Price/Earnings.  In share world Earnings are the profit per share of the underlying company. Please could you explain how a crypto can have Earnings?  Yield is dividend/price.    The dividend comes from the profits of the underlying .company.  Where do the dividends come from for Bitcoin? 

Haven't we literally already had this discussion in another thread?

I pointed out SUSHI which charges a fee on transactions and distributes that back proportionally to token holders. At the time I distinctly remember telling you that its current payment (dividend) per single token (share) was running at 12% APY. I told you that there is essentially no difference between SUSHI's business model and your typical high street FX shop. You want others?

AAVE is a decentralised lending solution where you can deposit crypto assets and the protocol will lend them out to other users. The protocol charges the other users interest and distributes these revenues back to the depositers and, in some ways, to token holders. Kinda looks like the business model of a bank (well, before the CBs gave them unlimited money and they didn't need depositers anymore) right? It currently has nearly $20B locked inside its protocol.

ETH burns transaction fees for any network use which increases the scarcity and therefore value of the remaining tokens. Since July, $2.5B worth of ETH has been burnt. That's network usage from people willingly paying to interact with contracts on the network and that value has directly accrued to holders of the asset. In other words, by holding the token you own a share of the underlying network, and the fees of the network are equivalent to profits of a company. This gets even better when you consider that ETH is moving to PoS and so by staking your ETH and securing the network you can earn a yield of ~6% APY (in addition to any price increase caused by the aforementioned fee burn).

Plenty of others too: https://cryptofees.info/

As for Bitcoin, its harder to generate a yield from it and it involves arbitrage, but last time I went down that rabbit hole was tedious so I'd rather just ignore it. 

From your description Sushi and AAVE are companies which could make a profit and distribute dividends.  If Sushi and AAVE were quoted cpompanieds (I dont know whether they are or not) you could calculate a P/E and Yield.  You cannot claim that somehow Bitcoin is doing it.    Just like gold miners and gold dealers do work from which they make profits and pay dividends. The have P/Es and Yields not the gold.  The gold just sits there.

The point is that if Sushi was a quoted company it would have a share price, make profits and possibly pay out a dividend.  So it would have a P/E and a Yield.  Now you could work out a reasonable band of share prices given the P/E and Yield.  You cant work out a reasonable price of gold from the  profits a gold miner makes and you cant work out a reasonable price for Bitcoin from the P/E and Yields of the companies that happen to "process" it.  

tebbins

darren232002 said:

tebbins said:
There is no objective way to value either, all you can do is guess about the remaining mine-able gold content of Earth, future industrial demand, utility/uptake, how long until gold is made redundant as a store of wealth because of space mining... They are so different that the means of attempting to value either are incomparable. 

(1) There is plenty of literature written as to the reasons why gold has been valued the way it has. Durability, Fungibility, Divisibility, Scarcity etc.. These are objective metrics we can compare Gold and Bitcoin on. I'd suggest scrolling down to the handy colour coded table: https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1

(2) "So different that the means of attempting to value either are incomparable.' You clearly lack the intellect to model a situation. You seem to believe that models must be exact in order to be useful. All models are broken; but they can still be useful.

tebbins said:

I assume by metrics and inflows you mean how much is left, roughly 50,000 tons of gold, 2.5m BTC (plus however much in other crypto assets) and how much fiat money is flowing into Crypto & gold - this information is not how valuations are arrived at.

Current. Its not how current valuations are arrived at. If Gold is worth $10T and Bitcoin is worth $1T but their inflows are perpendicular to each other in Bitcoins favour, what do you think happens in time? 

Oh and by metrics I was referring to the table in the article above.

tebbins said:

Crypto coins have no intrinsic yield, and no earnings in the same way companies, bonds, real estate and cash do.

I disagree. But its another strawman anyway. Bitcoin isn't trying to be a company, bond or RE. Does gold have an intrinsic yield? By the way, would you like to define an 'intrinsic yield' please? Sounds like something you've just made up, which as usual only includes things you like.

tebbins said:

I understand that crypto assets can have a yield via lending or crypto "banks", which is very risky.
I also understand that there are businesses in the crypto space you can invest in, again, risky.

Can you please point to an example of a 'crypto bank' (as you describe them) that has ever defaulted or been unable to return funds or yield payments to its customers? If you can't, on what basis are you asserting that these banks are 'very risky'? Why is a business operating in the crypto space any more risky than a business operating in a brick and mortar space? Do you have any background in modelling risk? I suspect the answers are 'no' and 'because I don't like them.'

The bank protocol I referenced earlier that lends out funds to its customers has strict LTV limits. If they breach these, they get liquidated. This means you can't end up with a Bill Hwang situation where there is a load of unpaid debt and nobody knows who owns what because credit was given. In May/July this year, over $1T was wiped off the crypto market in a 60% drawdown. There were no bailouts, no contagion and no systemic risk. If I remember correctly thats about half the drawdown of the 2008 financial crisis and about 5 times Evergrande. Our system is more secure and robust.

tebbins said:

However, I am not aware of how a digital currency can generate a yield or earnings passively in the same way that a bond or company does, on its own, without anything else needing doing.

Well, we've been over this in the other thread and it was unbelievably tedious so I'm not going over it again. Besides, as I've already stated, Bitcoin isn't a bond or a company. Interesting to note you've changed the definition now to 'without anything else needing doing.' This seems to pretty much be your MO.

tebbins said:

Which is why I'm asking you, since you are claiming these facts to be true, to explain how these facts are true, to a lay/beginner audience, in plain English, and provide your sources.

All I see so far is someone with little to no understanding of investing, parading as someone with @bowlhead99 levels of knowledge.

What facts specifically are you referring to?

Look, bottom line here is that you aren't interested in having an intellectually honest debate. If you defined 'intrinsic value,' I'd rip that definition to shreds because (spoiler alert) there isn't a coherent definition of such a thing. Its a phrase used by people to describe something they think they know but that they can't define.

And this is the crux of all I see from you. You are so desperate to define Bitcoin as a 'bad investment,' you will change your definitions and arguments at will in order to arrive at the end goal. I've already shown you, at great pain, how you can use certain markets to capture a spread on your Bitcoin. Does it matter if it is called an 'arbitrage' or a 'dividend'? Why does it matter that you 'have to do something extra'? Does that somehow preclude it being a yield because I've had to click a few buttons or use a bit of knowledge? Before you say yes, can we consider that you stated cash has an 'intrinsic yield,' but cash under my mattress doesn't generate a return. Would you like to  amend your definition again?

Bitcoin is an abstract concept, and only people who can think abstractly will get it.

I really can't be bothered with this anymore it's just boring.
Clearly the only thing that will convince you you're wrong will be when the Crypto bubble/craze finally bursts/passes but by then you'll feel a bit embarrassed about how you got suckered in. The language you're using and the enthusiasm you're demonstrating about Crypto are no different to .com stock traders in the 90s.
You won't convince me of whatever your point is, clearly you have no interest in doing so either.
I suppose good luck and don't say I didn't warn you.

Adyinvestment

Linton said:

From your description Sushi and AAVE are companies which could make a profit and distribute dividends.  If Sushi and AAVE were quoted cpompanieds (I dont know whether they are or not) you could calculate a P/E and Yield.  You cannot claim that somehow Bitcoin is doing it.    Just like gold miners and gold dealers do work from which they make profits and pay dividends. The have P/Es and Yields not the gold.  The gold just sits there.

The point is that if Sushi was a quoted company it would have a share price, make profits and possibly pay out a dividend.  So it would have a P/E and a Yield.  Now you could work out a reasonable band of share prices given the P/E and Yield.  You cant work out a reasonable price of gold from the  profits a gold miner makes and you cant work out a reasonable price for Bitcoin from the P/E and Yields of the companies that happen to "process" it.  

You are complicating this unnecessarily (I have seen some of your posts Linton and find it hard to believe you have not grasped the concept)

Perhaps the below will make this easily understood.Forget P/E, Dividends and yields etc.




I deposit £xxxx of Bitcoin on NEXO - as long as that Bitcoin is on their exchange they pay me the equivalent of 5% a year in Bitcoin for keeping it there - that's it nice and simple. 

What they then use this for to generate more than the 5% is completely up to them (although they do explain this)

tebbins

Scottex99 said:

darren232002 said:

Buying Bitcoin will probably be the best investment of your life. Most people saying that Bitcoin isnt an investment and that it is gambling have very little idea why BTC is valuable. Look around, its not conspiracy theorists and rednecks buying Bitcoin, its rocket scientists, CEO's, institutions and computer programmers/STEM graduates. These guys know the way the world is going. JP Morgan in 2017 said BTC is a ponzi, in 2021 they are advising their clients to put a % of their portfolio in it and predicting prices in the $140k range. Citigroup threw out a $300k+ price prediction. These aren't idiots - they are the institutions you trust to manage your 'investments.' 

Lastly, if you know anything at all about the crypto space right now, you would know its possible to get 10% APY interest on stable coins very easily for gods sake. That is, coins denominated in USD. You deposit $10k now, you'll have $11k next year. No exposure to volatility and all denominated in USD. The only risk you have is (1) GBP/USD risk and (2) counter-party risk, which is almost negligible if you stick to the big providers. With a bit of work and knowledge, you can find 30% interest. I've been personally getting 100%+ APY interest paid and compounded daily for the last 3 months in one of the safest projects out there.

I'm not really interested in having a long discussion with people that are still babbling about ponzi's, tulips, intrinsic value or hexadecimal numbers in cyberspace. If you don't get it, I don't have time to explain it to you. But I would strongly encourage people to look in to this space because it will be the greatest wealth creation event of my generation. Its literally the internet version 2.0.

Bingo.

HFSP to the no coiners bro, lolz

Quoting this for the benefit of the forum just to serve as a reminder of the... Let's say acumen of the pro-crypto posters. While his posts have become longer and look cleverer, the substance and quality remains unchanged. Just read though these threads carefully and you'll see how these hacks have been exposed as the BS merchants by the real heavyweights.

User232002

Linton said:

From your description Sushi and AAVE are companies which could make a profit and distribute dividends.  If Sushi and AAVE were quoted cpompanieds (I dont know whether they are or not) you could calculate a P/E and Yield.  

So we are agreed that some crypto assets can be assessed on P/E measures. I believe this was the original point of contention wasn't it when you implied that no crypto could have earnings?

In an earlier post, you stated that:

Linton said:

 Yield is dividend/price

This is how to calculate yield on a stock; yield more generally is a measure of return in proportion to what was invested. 

Linton said:

You cannot claim that somehow Bitcoin is doing it.

You can earn a return on Bitcoin in a few different ways. By this, I do mean a direct return on the asset itself by capturing a variety of arbitrage spreads. However, it does require some knowledge and last time it was a painful conversation so I don't wish to repeat it. As Adyinvestment stated, its probably best done by giving your money to a company that specialises in doing this for you and taking a cut. This obviously incurs counter party risk and lowers your yield though. Some people choose not to pursue this and accept 0% on their Bitcoin because 'not your keys, not your coins.' 

Linton said:

You cant work out a reasonable price of gold from the  profits a gold miner makes and you cant work out a reasonable price for Bitcoin from the P/E and Yields of the companies that happen to "process" it.  

I've never claimed this at all. Bitcoin price models aren't based on the yield generated by the asset. I keep pointing out that its a strawman argument to say 'Bitcoin isn't a stock.' Like, obviously it isn't. It isn't trying to be. If you judge children by their ability to juggle, you'll end up with a load of clowns and no scientists.

The fundamental use case of Bitcoin is of providing a store of value as hard money. That it can do that and provide an opportunity to capture a yield currently is quite nice. But this yield will probably trend to zero over time as markets become more efficient and liquid.

User232002

tebbins said:

I really can't be bothered with this anymore it's just boring.

What does it say about the strength of your arguments that you can't find faults in a few hundred word post? Perhaps its time for a bit of humility and introspection.

tebbins said:

Clearly the only thing that will convince you you're wrong will be when the Crypto bubble/craze finally bursts/passes but by then you'll feel a bit embarrassed about how you got suckered in. 

Like it did in 2013? 2017? Bubbles don't pop and then re-inflate repeatedly. And yes, it'll do the same in 2021/22.

Unlike yourself, I am completely dispassionate regarding my Bitcoin. I want it to work, but I have very clear invalidation points.

Wheres yours? If in 2026 BTC is approaching $300k and is commonly held by large multinational companies as a reserve asset and many sovereign wealth funds or central banks, do you change your opinion on it?

tebbins said:

The language you're using and the enthusiasm you're demonstrating about Crypto are no different to .com stock traders in the 90s.

No idea what language you are talking about, but lets be clear that people in the 90's were correct. Right now, I'm sure there is a completely online billion dollar pet company somewhere and I think its fair to say that you'd struggle to live a productive life nowadays without the internet and the businesses that run on it. It gave us FAANG who, for all their Orwellian faults, have been drivers of immense value creation over the last decade.

They were just getting ahead of what the technology was actually capable of at the time. There were sites very similar to YouTube started in the early 00's and some started in the late 00's. YouTube succeeded partly because it launched at a crossover point in adoption and internet speed. However, the user network of cryptocurrencies is growing at a faster rate than the internet did. 

Everybody in crypto knows the technology is ahead of its time and knows that a crash is coming when valuations as a whole get out of hand. I'll be the person here when Bitcoin is at $150k telling people that buying here might not be a good financial decision. AAVE as an example is great, but for starters it needs (1) a more user friendly and less crypto native UI/UX for mass adoption and (2) a decentralised, fair and blockchain based reputation system similar to a credit score. How those problems get solved I don't know. Perhaps AAVE solve them or perhaps another protocol solves it before them. The innovation and the uncertainty around it is what makes this space incredibly profitable.

tebbins said:

Quoting this for the benefit of the forum just to serve as a reminder of the... Let's say acumen of the pro-crypto posters. While his posts have become longer and look cleverer, the substance and quality remains unchanged. Just read though these threads carefully and you'll see how these hacks have been exposed as the BS merchants by the real heavyweights.

You do realise we are two different people right? In any event, I am sure it was a joke. At some point, Bitcoiners tend to become exasperated at debating the same trivial points over and over again. Your points were understandable in 2013, tired and stubborn in 2017; now they are simply evidence of being unwilling to accept the reality in front of you.

Can you please point out the parts in this thread where 'these hacks have been exposed as the BS merchants by the real heavyweights,' please?

Zola.

There comes a point when those who refuse to get it, and clearly don't want to get it, should be left to their own devices. Not worth the effort. Im happy for many to not get it. More bitcoin for us. 

As Michael Saylor said "you get bitcoin at the price you deserve" 

Also...as Satoshi Nakamoto said on the bitcoin talk forum way back when bitcoin was barely even a penny 

“If you don't believe it or don't get it, I don't have the time to try to convince you, sorry.”

Scottex99

Yep at this stage Tebbins you’re just cluttering up your precious forum by replying to every BTC/Crypto thread with some random thoughts that seem to be falling out of your brain.

You don’t get it, you refuse to get it, that’s fine, nobody that pro crypto cares what you do. We’ve all give reasonably good answers to people asking how to invest or where to stake etc, the rest of the time is trying to explain the potential value of crypto to you which is a useless endeavor pretty much, although Darren has done an excellent job.

We’re all prepared for the volatility, for the blow off top, for the rapid gains and losses and what they mean for us personally. What are you planning to do when BTC hits $150k-250k and the whole industry market cap is catching up with Gold? You might want to start planning because, on this side WAGMI.

Scottex99

adamp87 said:

RolandFlagg said:

Today's news (stolen from Coin Bureau newsletter):

American supermarket giant, Walmart has announced plans to install a full 8,000 Bitcoin ATMs in its stores and has recently completed the introduction of an initial 200, as a pilot project.

These ATMs will allow customers to purchase and claim BTC via a redemption code but will not, for the time being, facilitate the withdrawal of BTC based funds.

Although some users have voiced concern over the transaction fees involved in utilizing these ATMs, I see this as a great step toward mass adoption. Even those who spend little-to-no time on the web, will now be exposed to cryptocurrency…

https://www.bloomberg.com/news/articles/2021-10-21/walmart-shoppers-can-now-buy-bitcoin-at-200-kiosks-in-its-stores?srnd=cryptocurrencies

I honestly just don't understand this idea, or how likely it is that someone rocks up to a vending machine and decides to buy BTC. Surely there's not a market for that, and the fees must be insane to make it worthwhile, when you can literally do it via an app on your phone much easier.

Well there's the obvious one for whoever may be walking around with 25k of cash in their pocket....

But yeah makes no sense to me either, it's more of a gimmick. If you are willing to pay 7-12% to use one then fair enough but there are hundreds of apps for that too. 

Here's one in Andalucia that I spotted yesterday