What baffles me, is that I can imagine two scenarios in five years:
1. We can't believe that 1BTC was worth $1k.
2. We can't believe that 1BTC was worth only $1k.
Yes, and as they say: *past performance is not indicative of future gains. IMO the ultimate matter to be settled is whether or not bitcoin will become a long-term universally accepted store of wealth. If it is, then the price must increase far higher. If not, then the question we have is: How high will the price go until the market concludes that it will not be?
I shared your bafflement initially, but on reflection the situation makes a lot of sense. What would really be strange is if a bitcoin is still worth about $1000 in five years. It is a safe bet that the value will be significantly higher or lower then. The trick is figuring out which way it will go.... Do you have a sell price in mind, or are you holding tight?
If you buy some bitcoins, be careful not to throw them away like this guy : http://www.theguardian.com/technology/2013/nov/27/hard-drive... How careless can you be to throw out 4 MILLION POUNDS!
In 5 years, we'll all be sad that bitcoin failed to become what it meant to be. The speculation around the currency is the worst thing that could happen. Anything (like the tulip in the XVIII, modern art, houses, etc) can become a vehicle for speculation. But once it reach these amount of madness it become just that: an investment. Nobody will use it. It will never be an independent money system. And , in the end, it will crash. If I was in the board of director of the FED, getting the bitcoin to become a new Tulip market would be a wet dream. It mean, it will never concurrence the "real" currencies.
I give it an even chance of that happening. It should be remembered, however, that 1 BTC is really an arbitrary unit. People refer to mBTC (0.001), and these are currently worth $1 each. uBTC are a steal at just 0.1 cents. Still, as far as becoming a currency, I think the fact that bitcoin's mining curve is not at all related to adoption makes for a very volatile store of value. I don't know. Diamonds are nearly worthless, but we pay lots of money for them.
You may be referring to the Paradox of Value. If you haven't seen it before it's a good puzzle you might want to think about before following the link. Why are diamonds more costly than water?
Diamonds are not an investment's vehicle. It's the opposite: We cannot sell them once we bough them. "uBTC are a steal at just 0.1 cents" .. yeah as long some other people think the same. But the actual REAL line of thinking of everyone is " uBTC worth nothing, but it still can raise 1000 %" I'll buy it. And everyone is right. Not buying BTC at the moment is the dumbest thing to do. Even when you know it will crash, it can still raise a lot more. And everyone think he'll be clever enough to sell before uBTC goes back to 0,001 cents. It's a hope market.
Too bad bitcoins weren't created by the global bureaucracy and they will be fought against forever by most major financial institutions out of pure fear -.-
I don't know if that will be the case. The Senate hearing last week seemed to suggest otherwise. Read page 10, which begins the Federal reserve's opinion to the Senate.
Very interesting read. It seems to me that the anti-virtual currency crowd makes a pretty good point here, unfortunately -- money laundering and removal of currency from the US becomes infinitely easier, right? What's the counter-argument? The bit where they outlined all the law enforcement measures they had taken against virtual currencies recently wasn't convincing to me.
To me bitcoin is just a libertarian wet dream that will collapse in disaster. Even if it is generally accepted eventually, the current price will collapse dramatically. There is no case in history that I'm aware of in which a commodity can sustain a 1,000,000 fold price increase in the space of a couple years and not come back to reality. People are deluded by the old "But this time it's different!" mantra.
If not, what price would you ask? Bitcoin has been around for a while, but if it has a future of wide global usage, it is clearly still in its infancy. "This time it's different!" is a sucker's mantra. But still ... this time it's different. Was there ever another commodity in which the total supply was permanently capped? I have compared bitcoin to genuine Picasso paintings. The total supply can only decrease over time. Fashions influence their value, but they can't lose value because of decreasing scarcity.the current price will collapse dramatically
Would you be willing to promise to sell me 100 BTC (or a bag of peanuts, if bitcoin ceases to exist) in five years for a total price of ten dollars? Seriously, with signatures and escrow and whatever we need to make a deal.There is no case in history that I'm aware of in which a commodity can sustain a 1,000,000 fold price increase in the space of a couple years and not come back to reality.
I agree, for commodities I am aware of. But there is also an annoying statistical anomoly that I see frequently. Country X has the fastest-growing GDP in Region Y. It's true, but Country X is really tiny compared to the others in that region. It's easy to grow fast when you are young and small. I once doubled my body weight in a week, back in my zygote days.
Obviously not. There's no upside for me in that case. I'm not going to make a hard price prediction. There is a chance BTC will be worth a decent amount years from now, but if so, it will be through gradual adoption, which will make the price increase steadily. As it stands now, this is a bubble. Bubbles all burst eventually.Would you be willing to promise to sell me 100 BTC (or a bag of peanuts, if bitcoin ceases to exist) in five years for a total price of ten dollars? Seriously, with signatures and escrow and whatever we need to make a deal.
I don't mean to suggest that you don't make a good point. There is no way I would accept less than, say, $10,000 for the promise to sell 100 BTC in five years. It's too risky. But on the buying side, I get uncomfortable at only $100. There is a huge amount of uncertainty. But what about Google stock? It was a positive frenzy at the IPO in 2004, when the first stocks went on sale for $85 per share. Was there ever a more obvious bubble? Yet GOOG trades today at about 1 BTC per share.Bubbles all burst eventually.
If your time horizon extends to the heat death of the universe, then this is undeniable. And it has been true of all traditional commodities I know of. (Tulipomania was a great read.) All investments come to naught on a long enough time scale.
The point is, if you are bullish on bitcoin, you can buy them and hope to gain. If you are skeptical, you can still put money (and therefore credibility) behind your position and hope to gain by shorting bitcoin. The current graph does make the word bubble come to mind. But this is exactly how it looked running up to $100. I was too skeptical then to buy in, so my money has been earning a safe 0.1% at Wachovia instead of gaining 20x. People still make money selling tulips.There's no upside for me in that case.
There's ten bucks (less the cost of peanuts) in it for you. If that's not enough, you can name your price. (For the record, I am in at ten. I would consider it for $100.)
It sure is a brutal way to disperse a world currency if that is what it is to become. It's funny that it's so enthusiastically compared to the value of fiat currency, when it is supposed to be a genuine replacement for it. Real BTC value would mean an economy dependent upon it.
How do you think they could effectively go after BTC holders? They list forfeiture/seizure as a strategy, but this kind of reeks of all the legal action against torrenting all over again, but I can imagine since this time it's about currency, it's going to be A LOT more vicious.