[GNC] Bitcoin is legal currency in El Salvador - why notadd BTC?

Michael or Penny Novack stepbystepfarm at comcast.net
Fri Dec 10 08:52:18 EST 2021


> Michael, it seems your concern with bringing in quotes is that Bitcoin is not sufficiently liquid or available for public trading? In a former life I traded Bitcoin and I can tell you .......

NO ....... I was NOT discussing the liquidity of "bitcoin". That should 
have bee clear enough but apparently you were too focused on the 
specific status of bitcoin to recognize that I was bringing up the issue 
of "assets without well defined value". I was reacting to the fact that 
people in this discussion were using :"stocks" as an example of 
something that would always have a well defined "published value" (as do 
many commodities that are traded). I was saying "not necessarily so".

I was trying to point out that 100 shares of "General Motors" did have a 
publicly published value but 100 shares (representing a 1/10th interest) 
of "High Meadows Jerseys, LLC" would not. And in fact, that while 
entities like the first example represent most of the capitalization of 
entities of the second example make up the majority of all corporations.

The issue is how to represent? Assuming you WERE s shareholder in that 
family farm, what value do you have on your books for this asset? It is 
NOT liquid and there is no published price and shares change hands only 
at rare intervals so price paid last time might be far off the mark. Or 
to put the matter in another perspective (from the small business's 
point of view) how do we account for valuation of the business when one 
of these rare transactions takes place at a price far from "book 
value"?   << look up "goodwill" in accounting>>

This is just as true with commodities. 10 troy ounces of gold is one 
sort of commodity asset and 10K board feet of red oak another.  You'd be 
able to get quotes for the first and expect the actual price you could 
get to be close to that and be able to trade most any day. But with the 
second none of those things would be true. You might be able to find the 
price range of sales taking place the previous month in your area but 
that might cover a 100% range low to high and you'd have to find a buyer 
(the mill that bought the last batch sold probably is working on that 
and not looking for another batch at the moment).

Michael D Novack



More information about the gnucash-user mailing list