[148861] in cryptography@c2.net mail archive
Re: [Cryptography] On Security Architecture, The Panopticon,
daemon@ATHENA.MIT.EDU (ianG)
Tue Dec 31 14:25:52 2013
X-Original-To: cryptography@metzdowd.com
Date: Tue, 31 Dec 2013 13:09:48 +0300
From: ianG <iang@iang.org>
To: cryptography@metzdowd.com
In-Reply-To: <E0544C20-3E7F-49FA-B5D4-E85D803A8826@gmail.com>
Errors-To: cryptography-bounces+crypto.discuss=bloom-picayune.mit.edu@metzdowd.com
On 31/12/13 06:40 AM, Robert Christian wrote:
> =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D
> Regarding calling it a bubble:
> =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D
>
> A bubble is =93A theory that security prices rise above their true value
> and will continue to do so until prices go into free fall and the bubble
> bursts.=94
Probably best put as 'price rises above its long term ability to deliver =
returns to the owners, ...' because...
> To call it a bubble means that you must have a tangible grasp on its
> true value.
>
> Nobody knows what the true value is, but we know that:
There is no such thing as 'true value' in any measurable or definable =
sense. There is only price on a market. This might indicate today's =
'value' but it changes momentarily, and it's better to talk about =
today's price if one wants to test economic theories.
...
> If BitCoin saw only a 1% adoption worldwide, each coin would be valued
> at $31,000 US dollars. From that perspective, it=92s a deal today at $750
> per coin.
From that perspective, you have an expectation of future prices going up.
Hold that thought close.
> The point being, you can=92t call it a bubble unless you can identify what
> its value should be.
Wrong. You can't call it a bubble unless the people inside have an =
expectation that the price will rise, where that expectation is based =
more on people's expectations than the delivery of productivity and real =
returns.
Probably you're confusing 'tangible' value with measurable metrics in =
some physical sense such as commodities.
Payments are an 'information' good, sometimes called a virtual good. =
They no less valuable than say movies or web pages, all of which are =
virtual and intangible in terms of not being haptic or touchable.
A payment's value can be proxy-measured by transaction costs. So, a =
wire has value, with costs from $10 to $100 with costs rising with the =
bank's incapabilities. Paypal has fees of around 4.2%, plus the =
incompetence loading.
That's a value that people will pay to get that good. BTC has clear =
benefits there that are definitely measurable.
> Today it represents .015% of the world's currency. The question we ought
> to be asking is, what will that number look like in 2014, 2015, and the
> foreseeable future?
One of the *symptoms* of a bubble is that insiders frequently talk it up =
:) That's a simple incentives result, there's no reason to believe =
that insiders have the lock on economic analysis just because they hold BTC.
Before we go further, why is it that Bitcoin community don't want to =
label their thing as a bubble? Or a ponzi or pyramid?
Is it just because these are bad words, of poor respect?
iang
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