Bitcoin Blowback: Back to the Drawing Board?

My contention that Bitcoin is more currency than asset and that it cannot be valued provoked reaction, some reasoned and some not. While I continue to believe that Bitcoin's end game is to become a currency, either widely accepted or a gold-like niche, I think that you could make the case for some crypto currencies, like Ethereal, being more commodities than currencies and others, like ICOs, being more assets.
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[scrt]

Professor Damodaran, out of the many many videos I've watched on your channel, I've yet to disagree with you on anything of substance. You are truly the closest thing to being the ultimate authority on corporate finance and valuation that we have in our time.

[theintelligentcpa]

Thank you Professor. I think I’ve rewatched this video at least 10x.

[briancrane]

Thank You Professor, your explanations are crystal-clear as always. I'm reminded of the advent of black pearls and the story of marketing them. No one knew how to price them so smart merchandisers placed them in windows alongside white pearls. The association stuck and black pearls are considered equal in value. BTC has no intrinsic value but placing it next to 'currencies' associates its price with that commodity. Thank You again!

[jonathantan]

your sir professor damodaran, are the most valuable one i ever subscribed to on youtube

[mftgdeserteagle]

Professor can you please do a video on asset allocation? How you see the portfolio construction process from an asset allocation point of view (assets to consider, risk profile, ...). It would be very much appreciated!

[amazingsciencetech]

Dr. Damodaran what do you think of IOTA? How would you evaluate IOTA? Just because it is different than any other Block-chain Cryptocurrency.

[konathala]

Great video sir.

Yes, Bitcoin is a currency and not an asset. Currency cannot be so volatile as a medium of exchange or as the basis for trade. Bitcoin price has to stabilize at some point (which i think will be much more than the current price) where it can be considered as currency.

Till then i think it can be considered as an asset.

Sorry for my bad english

[ivankadefenseforce]

Another point: Bitcoin is not anonymous in the slightest. The entire network can be mapped using graph theory. To buy it you need to submit all your information for KYC/AML requirements. If you don't buy it legit then you are money laundering and the Bitcoin dealers are tracked/arrested.

[X-Portfolio]

Dear Professor Damodaran. In my opinion, Bitcoin must rather be considered as a development than a fixed product. Bitcoin was developed as a digital currency. After the first success as a currency, it was discovered by speculators and has currently more to be considered as a speculative object. Now there are two scenarios that are realistic to me. Either it will never be accepted as a currency and will go down in history as a bubble, or it will be accepted as a universal currency. For this, however, it has to change hands and adopt a more stable exchange rate with regard to established currencies or commodities. I doubt that this is possible, since the constant increase in computing costs requires a constantly rising exchange rate of the currency, since otherwise it is no longer profitable for the miners to provide the necessary Bitcoin infrastructure. What do you think?

[JapaneseStockInvestor]

Hi, I always enjoy your video!
I want to see a movie, which focus on your book review or your lifestyle.

[dimanyc]

Great video, but your argument about sand and bull crap not being a commodity is a tough one. Definition of commodity is that it's something of value and that is likely used as a medium for producing a final good. Sand is used in construction and has value as was mentioned below. Bull crap is used as a fertilizer in many countries and, therefore, is also a medium to produce crop (not crap).

[AlexQMcDonnell]

Professor, why not look at the data on number of transactions as a measure of a cryptocurrency’s level of reach and trust? Although much of the transaction activity today is trading activity (not commercial activity), this figure could be a useful intrinsic(ish) guidepost.

[dericflairmultiverse]

do a lecture or video on ethereum please!!!

[Secretsofsociety]

Bitcoin is a currency. It is just a very poor currency because it is deflationary. Who would want to take out a loan in BTC? I think block chain will have a more interesting use as equity but the cash flows have to link to the coins.

[abdullahal-hazzani]

I think it is clear that its a currency, for one obvious reason, you can buy things with bitcoin.

[august]

You should look more at Ethereum! Greart video as always.

[ivankadefenseforce]

With all due respect, I think you are missing the mark on Bitcoin. Anything can be loaned for "interest". It is not a currency - you will find almost no normal people using it for transactions day to day. Bitcoin is not scarce, there are hundreds of other coins which can gain greater networks with better features such as anonymity (e.g. monero) and quantum resistant encryption. The only argument you could possibly make is why Bitcoin is greater than other cryptos. However, its features are worse. You need to make an argument that the Bitcoin network will be the "strongest" forever. I don't think that case has been made or can be made.