Bitcoin has features people want in a currency: 1. Anonymity 2. Portability. All you need is an internet connection and a password to access your bitcoin funds, in any amount, anywhere in the world 3. A stable/predictable supply that cannot be manipulated by governments and central banks 4. Virtually no transaction costs 5. Infinitely divisible, allowing for microtransactions we don't bother with today. This is why it's not a bubble. These are specific, identifiable, valuable features of bitcoin. Right now there is alot of arbitrage, but as bitcoin becomes more ubiquitous and the infrastructure more robust, the value will stabilize.
CLUTCHFANS CASE STUDY: I was doing a lot of thinking....Moes bashed Bitcoin the same way he did Reggie Bush before their story was told - so I feel comfortable betting against Moes. With the Mt Gox situation at the lowest of the low, the cost of a coin went down to below $600. Because the situation at Mt Gox can't possibly get any worse than it is right now IMO, I think Bitcoin has only one place to go. UP. UP. UP. I just bought 5 coins at $578.94 each. We'll give it 6 months and then I'll cash out. Will Sactown profit or lose? Place your bets. The tip jar will see something if I profit.
how does its nature make it illiquid? maybe right now because spending it is difficult... but once most merchants and services take bitcoin what is holding it back?
Money is only worth what it is because of the collective trust that it is worth something. Thus, bit coin is too lame of a name to be trusted long term.
Really? Let's see them. Unless I'm buying something that I really, really do not want the Federal government to know what I'm buying, why do I care about this? Not to mention that no, as recent Federal investigations show: if the Feds really want to know what you're buying, they will, and no fancy tech code is going to stop them.. There are these things called "debit cards" which let me do this without an internet connection. Or are you always connected to the Internet when you're walking down the street? I know I'm not. Yup, we've certainly seen how stable Bitcoin is over the past few days. Or can you name any period where the value of the dollar fell by 25% in a couple of weeks if not days? Oh, so it's a way to get around taxes. Well, I knew that already. Because there's no demand for them. Half cents and quarters cents existed in the past, you know, and you always hear about how we should get rid of pennies because no one uses them. People don't care if they're paying 99 cents for a gallon of milk as opposed to 98.8769 cents. You in fact conceded it yourself that bitcoin's nature makes it illiquid when you stated that "it will be stable once it's all mined out." See, let's say that there are 20 million bitcoins in total. That number will inevitably shrink over time, because just like dollars can be destroyed, so can bitcoins. There was that news report a few months back of a man who had lost a hard drive filled with a huge amount of bitcoins at the bottom of a landfill, and there are of course other examples. As time goes on, these sorts of incident inevitably happen. This means that there are fewer and fewer bitcoins available, and at the same time, the bitcoin fans believe that there will be more transaction done with bitcoins. That means that each individual bitcoin will be worth more over time. But that's a HUGE problem - because people will inevitably horde bitcoins and not spend them because if they choose not to spend them, the bitcoins that they horded will be more valuable. This is a huge problem for an economy.
the collective trust of bitcoin is inherent in the way its algorithm exists, is mined, and transferred with hash encryption along the blockchain with timestamps. its value comes from being a decentralized, anonymously transferrable unit of value in a world of increasing control and centralization.
if bitcoin are lost over time or destroyed, and the value of the remaining ones goes up.. will people horde them and stagnate the economy, or will the demand for them be so high, because of the real-life advantages that it offers people, that it will be almost impossible to stop a bitcoin economy?
You want me to answer why someone would value privacy? Not total anonymity, but more than exists currently. Internet connections are more ubiquitous than support for debit card transactions. The supply of Bitcoin is predictable, and becomes more stable over time. There's no demand for physically creating those small amounts of currency. Bitcoin does not have that problem. Microtransactions have applications we haven't begun to consider (crowd funding/investing/tipping/giving for example). The supply stabilizes over time, that has nothing to do with the liquidity (ability to move currency around).
1) Just because you don't care about anonymity doesn't mean others don't too 2) That method of getting will never, ever be legal. This is fair but you can't just compare one feature and say BTC is inferior to cards because it isn't as portable. Cards and paper money don't have the other features listed; and, who knows, at some point, internet connection will be much more ubiquitous. Internet on the phone has been growing the past few years. There have been phone wallet software made. The scenario I imagine is people will be using their phones as their wallets with BTC: engage a communication between your phone and their machine using NFC, this turns on your phone's wallet software, you enter your pass or your fingerprint, transaction commences. Not this **** again. We've addressed this already. OK, good. The infinite divisibility isn't actually for small transactions (though it can be used for that). It was originally there to address the issue of Bitcoins getting lost. There will be only 21m Bitcoins ever mined. Ever. When coins are lost, they're gone forever. Having infinite divisibility allows whatever number of coins are left to facilitate the whatever economy size. Whether you have 21m BTCs or 1 BTC in the economy, you can have whatever economy size you want because the point is floating i.e. that car that costs 5 BTC in the 21m BTC network will cost 2.38 x 10^-7 in the 1 BTC scenario. Yes is an actual concern. I'm curious as to how this plays out too. But it's the only one that's a real issue. Idk if someone more knowledgeable has an answer to this. This is what's happening now. That's why it's a bubble. Still, supposing more and more commercial entities begin accepting BTC i.e. it's actually used as currency, then that's a good outlook.
it's pretty hard to steal when you've got it correctly kept in cold storage.. bitcoin gives us freedoms, but it also forces the responsibility of guarding the money upon us. i mean, thats how it usually always has been in the history of earth. if youre a bitcoin billionaire you can keep your coin at the lloyds of london bitcoin vault
Meaning there isn't enough of it. The total market cap of bitcoin is only around $7 billion. You can only reasonably move a few thousand bitcoins at a time without impacting the market too much. You physically need more bitcoins so more people can exchange them so there is more liquidity.
when or if each bitcoin is worth 100,000+ then transactions will be in increments of bitcoin. the market cap could be +1 trillion eventually. the liquidity is as liquid as molecules in water.. you can make transactions with small fractions of a coin
What's funny is the best looking chart out of all those cryptocurrencies is dogecoin lol.....well based on market cap.
If bitcoin does go mainstream (i.e. tons of people use it), but there's only a finite supply (21 million bitcoins?). Then surely as the demand for bitcoin goes up, but the supply of bitcoin stays fixed, then the price of bitcoin will just keep going up. So the things you want to buy with bitcoin (say a car), denominated in bitcoins, will keep going down.
Exactly, contrast that with central bankers that can devalue currency with a keystroke by creating more supply and giving it to big banks (bailouts, zero interest loans, etc). With bitcoin this is mathematically impossible to do.
