Bubble or no, from a personal perspective I will not use bitcoin as a currency to exchange goods - things like purchasing items or paying salaries. Bitcoin's value is just too volatile, why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks? But as a medium for investment, like buying stocks, bitcoin does provide a novel and alluring option.
Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
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Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#12Is there any possibility of another virtual currency - a Bitcoin competitor - being created? Surely this would have a big impact on the value of Bitcoin.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#13Is there any possibility of another virtual currency - a Bitcoin competitor - being created? Surely this would have a big impact on the value of Bitcoin.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#14I'd love to get an economist studying why the value of bitcoins goes up. After all, they're infinitely reusable, totally fungible, and incredibly low friction. The only reason for their value to rise (rather than them just being passed around at the same price indefinitely) is if people expect them to rise, or if there's a shortage (forcing people to use fractions of a bitcoin to represent the same number of dollars…
You've answered your own question. It is all of the above.
The price system in any market factors in all of the information and motivations of the participants, and balances them out with a single value : the price.
The killer feature of the freely-trading market is the price. It communicates the state of the market as both an input and an outcome of the actions of the market players.
Remember that for any exchange to occur, two things of unequal value have to be exchanged by two willing participants. But the inequality between the items being exchanged is in the eye of the individual holder. The motivations are rarely the same for each participant, so you can never actually make blanket statements about why a market moves where and when it does - very rarely does a single issue dominate a price, because in those circumstances you have a market that stops exchanging if everyone has the same view.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#15So, what happens with the mining task after all the bitcoins have been introduced?
It follows an exponential decay curve, so we'll never mine the last bitcoin; rather, each year we mine half the ones that are left. (I'm not sure how the quantization works when we do get to the literal last one, but that's many decades away).
2140. Roughly the year we'll hit this point.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#16Is there any possibility of another virtual currency - a Bitcoin competitor - being created? Surely this would have a big impact on the value of Bitcoin.
There are many. https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrenc...
Do you know if any of these are likely to reach the heights of BitCoin anytime soon, or are we a while off that?
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#17Earlier quoted context omitted.
There are many. https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrenc...
Do you know if any of these are likely to reach the heights of BitCoin anytime soon, or are we a while off that?
Two promising open source cryptocurrencies that are not bitcoin forks are Ripple and Opentransactions. These can also be used on top of Bitcoin, or the others, to provide some functionality (such as decentralized exchanges) that Bitcoin itself has not.
As for a big impact on the value of bitcoin, I don't think so. Bitcoin has the networking effects for now, many people are working on accepting them. It may be that the additional cost of accepting, for example LTC is lower when already accepting BTC, but BTC has a large first mover advantage.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#18Is there any possibility of another virtual currency - a Bitcoin competitor - being created? Surely this would have a big impact on the value of Bitcoin.
There have been a lot of alternatives[1] spring up, but as far as I can tell, they're all very similar to Bitcoin, so none of them solve big problems that Bitcoin doesn't already (variations include mining being not so biased towards GPUs/ASICs and small changes to the way blocks and coin supply are handled). Fundamentally, they're all variations on the same theme.
If a new currency was developed that solved some of the big problems that Bitcoin has[2], possibly by working in a fundamentally different way, I can see that currency becoming the dominant digital currency.
1. https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrenc...
2. People disagree on this, but I would list things including its deflationary nature and its fragility (human error can cause vast losses in a way that traditional banking prevents). On the other hand, a currency that really was anonymous would serve a purpose too.
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#19Bubble or no, from a personal perspective I will not use bitcoin as a currency to exchange goods - things like purchasing items or paying salaries. Bitcoin's value is just too volatile, why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks? But as a medium for investment, like buying stocks, bitcoin does provide a novel and alluring option.
>why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks?
Why would you pay someone a certain amount in USD, when you could buy Bitcoins instead and they would probably rise to 10 times the current value in a few weeks?
Re: Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm
#20Bubble or no, from a personal perspective I will not use bitcoin as a currency to exchange goods - things like purchasing items or paying salaries. Bitcoin's value is just too volatile, why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks? But as a medium for investment, like buying stocks, bitcoin does provide a novel and alluring option.
> why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks?
Thanks for being a living example of the chilling effects of deflation.