Lyn Alden: 7 Misconceptions about Bitcoin
sorry couldn’t resist
MM, I appreciate the information but I still don’t get why the price follows the stock/flow. I see the correlation but not the causation.
stock to flow is just one measure of a value proposition.
debeers (cecil rhodes) understood this over 100 years ago.
bitcoin is often referred to as digital gold, but it also shares a quality with diamonds. the supply is strictly controlled. diamonds of gem quality have no intrinsic value. the value of diamonds was created by the marketing of debeers. demand was created through marketing, ie convincing men and women that when you get engaged you must do so with a diamond ring which loses half its value once it leaves the store. diamonds are actually the most plentiful gem stone. if the market was flooded with diamonds they would not be worth much.
similarly when elon starts mining asteroids for gold he will have to do so judiciously because if gold’s stock to flow goesdown so will the price. in silver now there are large premiums because the stock to flow has risen.
btc does not follow stock to flow exactly but it is close enough to be an accurate measure up until now. the unique thing about btc is the flow rate is programmed in and is immutable and predictable. btc has appreciated not because of stock to flow. entirely. it is just one aspect of its value proposition. the network effects of increased adoption are also a driver of price. 2013 i whisper to a friend “you know btc will be halving soon there will be less available you should get some now because the price will go up” last april i whisper to my friend “you know there are 12.5 btc mined every 10 minutes next month it will be 6,25 you should get some because the price is going to go up” well 8 years ago the network was miniscule and there was no indication that btc would continue its adoption trajectory.
there is always a price rise right after a halving. scarcity increases its value proposition. adoption increases its value proposition. shifts in utility from payment rail to store of value increase its value proposition. there is no single component of the ecosystem which affects the price independent of the others. you can look at all the other coins out there to see the truth of that.
what makes human intelligence valuable? its stock to flow lol
you assert btc has no intrinsic value.
please provide data to prove that statement.
Intrinsic value is a finance/ economic term which refers to an asset’s value and how that value is driven entirely by the discounted value of all the future cash flows that the asset will generate.
For example, if you buy a car, its intrinsic value is the value you get from renting out the car, and selling that car at the end of its useful life gives you the car’s terminal value. In this case, the car will be an investment. However, if you buy a car but fail to make money from it, somehow, the value of the car would correspond to the car’s resale value. This is because a car is a depreciating asset.
Thanks again for the info. I’ll check out the video.
Does he address the connection between stock/flow and price?
What I don’t get is: gold, silver, every commodity has a stock to flow ratio, but their prices do not follow that trend, correct? So why does BTC?
The correlation is amazing. I just don’t grasp the causation.