Quote from: antikvark on November 27, 2019, 07:24:29 AM

Quote from: BartS on November 27, 2019, 04:26:00 AM

Quote from: antikvark on November 25, 2019, 07:22:40 PM

Imagine an electronic producer that pays $10,000 for 1 gram of gold, while in the same time a metal with better electrical properties costs less then a cent.

Imagine a trader who gives his 10,000 units of fiat currency X for the same amount of fiat currency Y, although the bank created X with his 5,000 square foot luxury mansion as a collateral, while the collateral for X was only Kia Pride vehicle.

Imagine an investor that pays $1,000 for a stock with a book value of $1 and earnings of $0.01, while in the same time he can buy a stock with a book value of $2,000 and earnings of $500 for the same amount of money.

Imagine a guy that pays $1,000 for the Cheeseburger while in the same time he can get the Big Mac for only $1.

The above scenarios would be crazy because no one would trade his thing for something that has thousands or millions time less utility. Nor would someone pay a thousand or a million times more money for the same or even worse thing. That is why the above scenarios are not possible in reality.

But... in the crypto world, they are possible. People are paying thousands or even million times more for bitcoin than for some altcoins, even though these coins have the same features as bitcoin. Functions and features of cryptos are pretty straightforward. Elimination of expensive brokers, lawyers, and other typical middlemen. Low transaction costs. Transactions are transparent, quick, permanent, and hard to fake. Cryptos that are priced below $0.001 have all these functions and features. But, people in the crypto world buy bitcoin that is priced above $7,000. They are paying millions time more for the same thing. Why they behave so irrationally?

Your problem is that you are assuming that bitcoin is just a technology and that it should be treated as you treat your smart phone in which as soon as you can find a better and cheaper deal you replace your current one.

But bitcoin is as a currency and all currencies requires the trust of the people in order to function appropriately, what altcoins are missing is the trust that we have in bitcoin not only because it was the first cryptocurrency ever created but also because it has the highest hashing power, the best developers and the best community.

Of course that being the first in the industry and having reputation means something. For example, if a bakery has good brand reputation, consumers trust it, and feel good about purchasing its bread rolls, they might pay $2, $3, or even $10 dollars for these rolls if competitors sell them at $1. But no one would pay $1,000,000, since they are just flour, water, and yeast mixed together. The same is with cryptos. They are just numbers associated to address that are transferred through the network via some protocol. In that sense, bitcoin is equal to thousands of other cryptos, and there is no rational reason for it to cost millions times more than them.

Bitcoin is also a network and most of its value derives from the Metcalfes law, basically the value of a network is determined by the amount of people that uses that network, this is why social networks like Facebook and others are valued at billions of dollars even if they do not seem to produce anything, and this is true for bitcoin as well, bitcoin has millions of users, once it has hundreds of millions you will be able to use it to buy almost anything you want since you will have more users to interact with.