>Using mathematical modeling and experimental economics, two University of Pittsburgh researchers tried to determine Bitcoin’s value, and concluded that it’s "an asset which has no value by traditional measures" and may be in a bubble. Its price is largely driven by the opinion of fringe buyers, often holding erroneous views. As these fringe buyers run for cover, worried that their investment is not as secure as they thought, the price plummets. It goes up when the fringe buyers feel safe enough to step back in, they wrote
bloomberg.com
Using mathematical modeling and experimental economics...
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if i made it i woulda fuckin wanted to buy that jacket
university. of. pittsburgh.
Do currencies usually have value? I dont understand. At least bitcoin is deflationary. Jesus they are stupid.
> ree let's fud BTC because any day now all the normies will see Jewish economic theory for the scam that it is and we'll be out of a job
Crypto is the ultimate redpill
>Do currencies usually have value?
Yes, a countries GDP is treated as capital. A countries Debt to GDP ratio affects the credit rating it receives as this shows the theoretical ability to repay any debt. This system implies that there isn't private ownership of capital
one of the best mathematics teams in the country desu
CRYPTO IS A SCAM... YOUVE BEEN WARNED
A currency is only as strong as the the economoy behind it. Money is a contract between parties on how to exchange labor. There is no mathematical formula for this, not for anything related to markets. All existing formulas to value something make too many unjustified assumptions. Value is subjective, if you would have two experts valueing amazon, they would come with two different numbers. Economics is a joke and so are those mathematicians from pitsberg, maybe they should leave school and go into the real world.
Value is subjective, its an emotional number that a group of people assign too something.
You talking shit faggot?
The euro and dollar fluctuate every day, it's not because their reserves change, but the emotional perspective on the outlook of the future of those currencies changes.
Bitcoin is only as strong as the bitcoin economy behind it. Bitcoin gives you access to purchase goods unaccessable to other currencies. Bitcoin allows you to evade laws, transfer money all over the world, relativelt fast. This is the value of bitcoin.
And still can't solve simple intristic value of bitcoin which is the cost of resources to mine single coin.
its has value. math isnt even involved in crypto whatsoever its a fucking currancy.
If you want to bake bread and spend a million dollars doing it. It doesn't make the bread worth a millions dollars if there is other bread that is just as good but costs less. But you probably wont sell it for less than what it costs.
Well if you sell your million dollars bread for less than million dollars, it only means you are dumb.
Aka researchers discover warm water.the value of bitcoin is the price to play the game
Yes indeed
"bubble" is a term for a rally someone isn't enjoying
Awesome, now do the dollar.
But there isn't other bread that is just as good. In fact right now you can't own your own bread. You can only borrow it and do some limited processes with and the banks and the governments can take it away from you with no proper excuse.
Crypto is an unique bread worth a million dollars.
Princeton used modelling and technical analysis to declare that Clinton had a 99% probability of winning. Pic Related.
The problem? Memes don't obey the laws of nature or any of it's sub-laws like economics.
Yeah those Tulip rallies and South Sea 'rallies' really worked out well.
WEW LAD
The problem is these people are trying to model subjective things which has too many unknown variables. Of course they would failed miserably.
and hedge against national currencies
spotted the thread brainlet
I'm surprised had the courtesy to explain it to you consider it was obvious you would just end up saying something dumb likeas if it was a retort instead of thanking the kind person who took his/her time to help you understand reality better
the value of bitcoin is pretty subjective.
Just look up the shit storm regarding economics being considered a science.
None of this is objective user.
Expect, I was trying to point out that there is obvious base value to cryptocurrency. And it's the cost of actually producing it and securing the network. Anything above that is speculative and emotional value. Not sure who the brainlet is.
Value of something is determined by what people are willing to pay for it. It could be 5000 or it could be 0. It has nothing to do with production costs.
This guy gets it.
Money and economy is about social relations and are very poorly analysed by mathematics models (formalist economy)
Read Nick Szabo writings on the socio-cultural aspect of money
Also read Polianyi and Marshall Salhins for the basics of economic anthropology
Whoa, so it goes down when more people are selling by volume and goes up when more people are buying by volume?
>?utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-markets&cmpid=socialflow-twitter-business
Unbloat your links, doofus.
Pretty much all of this. It's impossible to say where crypto is heading but since it already gained appreciation it's cemented its value and is highly unlikely to drop below highs from the previous pump cycle without some external factor driving it.
What you are talking about is the speculative aspect. Read the post again very carefully.
nigger those fags admit that bitcoin is valued by how many people use it to transact, but come to the conclusion there are not that many rn and that thus it's overvalued.
pnas.org
They have value because you need it to buy stuff. For the same reason Bitcoin has or at least used to have a value since you needed it to buy drugs, guns and other fun, illegal stuff online.
That is the same conclusion, after much though about this, that I have derived to.
Bitcoin is worht something because you need it to access its payment network.
It is evident then that Bitcoin HAS to have a fundamental value, as long as it is used to buy stuff, there's no question that it has fundamental value and can't go to zero.
In other words, if HODLers start selling then price will pick up eventually, at some level, by the actual users of the network.
Using mathematical modelling and experimental economics i concluded that humans as a species are a worthless asset with no value to the universe and may be in a bubble its value is largely driven by circle jerking themselves into a huge ball of erroneous conceptions like religion human rights and muh equality
it's also absolutly clear that bitcoins value proposition is multi factored. for one, fast cheap and reliable transactions. you need to own bitcoin to do this. second, it's the first mover of this kind, the numero uno, the king, with most active developement etc. it is secured by the most hash power.
it's safe. you own the keys, you can spend the coins. etc etc the list goes on.
Do you know what value means? Look up the word before you post. Even if mining costs 5000 something it still doesn't mean people would or should pay that much for it. People see speculative value in so that's why they're willing to pay ridiculous sums for it.
this is the list that creates the demand for bitcoin. and as we all know, the supply is limited. the rest is just those two factors playing out.
What I'm saying, there's _base value_. And that base value is the cost of producing and securing the network. Anything above or below this is _speculative value_. Even for example, if people think bitcoin would be less than the base value it only means that people _consider_ it to be worth less. Only when mining reduces in numbers the base value starts to change. FYI bitcoin's perceived value still hasn't gone below the base value that is about $4000. If you don't think producing costs don't matter then you really should take a look at the markets around you again.
E.g. if there were no speculative market around your asset, at what price would you list it on the market? Yeah, you would calculate the production costs and maybe add some small % for small profit.
People not being able to distinguish modern fancypants circlejerking from the labour theory of value. Sad!
>BTC is $0.01 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $0.10 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $1.00 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $10 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $100 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $1,000 but has no value because its backed by nothing, its a bubble, tulips! lmao
>BTC is $10,000 but has no value because its backed by nothing, its an ecological disaster! Its gambling! ban it! shut it down!
>BTC is $100,000 its the single greatest threat to the financial industry and disrupts all modern monetary policy it must be stopped at all costs!
>BTC is $1,000,000 the federal reserve announces it has been accumulating bitcoins for years and will begin to exchange small fractions of microbitcoins in exchange for the depreciated USD. Read about how bitcoins can help you and your family!
>Wall St pays people millions to analyze the markets but I'm smarter than Wall St when it comes to making money
>I don't try to quantify anything because the math is too difficult for me anyway
>I go by my feelings of the market
>"making 10000% gains in a year isn't an obvious sign of a bubble, it's sustainable"
>inb4 "but I'm smarter than everyone and am going to exit the market first!"
You could replace bitcoin and cryptocurrency with the words gold and metal and that article makes just as much sense. That’s largely because none of the reasoning is explained.
I don't plan to ever "exit" bitcoin. When bitcoin is in the hundreds of millions of USD it will be because almost no one is using the depreciated dollar anymore.