No question. It's pretty evident they are aggressively spending on acquisition to boost their top line numbers. Timing wise, this effect will probably show up after they IPO and for their first publicly reported earnings announcement. Which will hopefully keep the stock price high long enough for the employee lock-up to expire.
Article says friend is in Manhattan and earned (i.e. total comp) $1.2mm. Very unusual for anyone in finance to have that high a salary short of being a CEO earning $10mm+.
Suppose he lives on the UWS in a 2000 square foot 3-4 bedroom condo which he bought for $4mm and has a $3mm mortgage. With a 30year fixed mortgage, that's maybe $180k a year. Don't forget the $60+k a year in condo fees and taxes. Throw in anywhere from $40-80k for nanny/childcare/preschool for the 1-2 kids he may have and you already have nothing left over if he went to a $600k comp.
I'm not saying he can't choose to live more conservatively, but when you're used to making $1.2mm a year, it's not hard to imagine how he got here. High cost of living does play a part, especially in NYC.
The number is without question much smaller than the current market cap of BTC. The current price and number of shares traded on the exchanges is not very meaningful since exchanges are unregulated and you have behavior such as wash trading where you can manipulate the price and inflate volume.
What I would like to know is how much money has actually been transferred into the exchanges. That is what matters. If Coinbase has 12 million accounts, and on average only $100 was invested (I'm assuming there are MANY opened yet unfunded accounts), then we're talking about $1.2billion at play moving back and forth on that exchange. (this is just a hypothetical number, I would love Coinbase to produce statistics, but know they have no incentive to.)
If no new accounts get opened and no more money flows in, That $1.2b will slowly drop to zero as Coinbase and the miners eat up that pool with fees.
I'll disagree. Gold once mined will be there for us forever. Bitcoin once mined will need us to perpetually mine it to exist.
Gold will survive a nuclear war. EMP blasts, Hard drive failures, viruses, quantum computing and the lack of an internet connection aren't real risks to gold.
In the throws of WWIII, with buildings burning to the ground off in the distance, as you cross the border to mexico with just the clothes on your back, which would you rather line the seams of your jacket with: gold? Or a piece of paper with some numbers that unlocked your 'virtual currency'?
Let's see how well that shared belief holds up then.
This meme needs to die. You think if bitcoin became a transaction standard there wouldn't be thousands of institutions and companies servicing the use of bitcoin? You don't think Coinbase won't become just like JPMorgan and employ 100k people to provide customer service? Just look at all the startups and people currently employed to figure out blockchain today. So take your assumption of all of modern-day finances's electricity demands and add that to the infinite loop of energy that is required to keep your bitcoins in existence whether you transact or not.
I agree that this might be a wealth transfer to China. Bitcoin inherently does not hold any value, it is a ledger. When someone buys bitcoin, someone else sells it and takes the cash out of the system.
Right now, a lot of mining is still taking place in China since energy is cheap. These miners sell their coins outside of China and bring cash back into the mainland to pay for the energy and hardware used for mining. So in it's most simplistic form, when you buy a bitcoin, you are adding to the earnings of Chinese energy companies and hardware companies (and some naturally goes to speculators and miner margins).
That's an interesting statement. I've never thought of it that way. In essence, Chinese miners are exporting subsidized Chinese energy (via mined coins) for foreign currencies. Sounds very much the M.O of Chinese trade practices (not meant to be overly negative, I'm just saying).
Other communist states were/are doing the same: exporting a product of their captive workforce for foreign hard currency. For instance Uzbekistan is exporting cotton picked up by school students which are essentialy a slave work force. China is just a bit more "liberal" in this regard.
No, bitcoin is not subsidizing Chinese energy. They're paying for the energy being used at the price it costs to use it. I imagine the amount of energy used to mine in China is not a significant fraction of the overall energy production of China.
I think you got the causality backwards in the parent comment. China is subsidizing energy and, indirectly, Bitcoin. The parent assumes the price of energy in China is below cost. I'm not sure, but I wouldn't be surprised to learn this was true.
> Bitcoin inherently does not hold any value, it is a ledger.
I just want you to be aware that those 2 sentiments are directly contradictory. A ledger has value -- an online, world-wide, decentralized, distributed, peer-to-peer ledger moreso. Estimate the value of the ledger (this is a significantly different endeavour than estimating market cap), divide that value by the total number of BTC in circulation, and you have estimated the value of a BTC.
Why? Based on what? That's like saying "a state machine has value". That might be true in some contexts, but an arbitrary implementation of a concept is not necessarily valuable. Certainly, the value prospect of the ledger has no relationship to how many cryptotokens the ledger accounts to one's balance (that is to say, buying up cryptotokens is purely speculative because owning more does not make the ledger more useful)
A ledger that me and another entity (such as a friend I owe money to or a retailer I want to buy from) can both agree on to use to accomplish transactions is pretty handy.
their direct possessions (money, real estate, license, ...) are much smaller then their total value. fractional reserve banking and all that. A significant fraction of their value comes from their reputation (to have an incorruptible ledger), ability to transact and Branding. bitcoin has those as well.
I see what you're saying, and that's an interesting way of thinking about the intrinsic value of Bitcoin. I suppose in estimating the value of the ledger you should also consider the negative value contributions to having this particular ledger, such as environmental impact, potential to destabilize governments, expected loss from hacking/user error, etc and see whether that outweighs the benefits of what some may perceive to be positive value.
I suppose what I meant to say is there is technically no money sitting somewhere held for owners of bitcoin to lay claim to.
The dollar just ledges itself, since it's not backed by gold anymore. Most dollars are just entries in a database somewhere (and I would argue that paper dollars are really a distributed kind of ledger too).
Some people claim the dollar has value because the government accepts it for taxes, but the IMF's SDRs function as currency (within an exclusive population), aren't backed by anything, aren't accepted for taxes by anyone, and are worth $300 billion.
You know they will. But they should have no basis as this is an unregulated market and global, so local governments will have no incentive to socialize the losses of foreign citizens.
Governments need to quickly enforce suitability guidelines along the lines of accredited investor status asap (I believe some countries already working on this.) Some would argue this is unfair, but people just getting by have no business playing in this wild west.
I really don't understand how people can relate gold to bitcoin - other than the fact they both seem to trade at prices unrelated to fundamental underpinnings.
In my opinion, bitcoin is not digital gold, and quite the opposite. Both require a large amount of energy to be mined, however, once gold is produced (i.e. found), there is no more energy required to keep that nugget of gold in existence. Bitcoin, on the contrary, requires a constantly increasing amount of energy to maintain it's utility.
If today we stopped mining gold, all the mined gold in the world will still be there and will probaly increase in value due to scarcity.
If today we stopped mining bitcoin, all the bitcoin in the world will be worthless.
You don't get to pick just the bitcoin exchanges as well. If bitcoin ever became a standard, you would by your logic have to include every financial institution that pops up to service bitcoin, custody bitcoin, swipe bitcoin at a store - and include all their headquarters etc etc. That whole layer you include for fiat will also exist for bitcoin, only, now we have the much larger energy expenditure to maintain bitcoin vs fiat.
