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BTC bubbles

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Re: BTC bubbles

#11

Post by tudorizer »

dragontamer wrote: post #4

When a worthwhile Futures market hits, then BTC will really stabilize. He's right. Without shorting, options, and future contracts... it becomes impossible for BTC to stabilize in the wake of media exposure. Add on to the fact that the majority of BTC users seem to be idiots (ie: they look at the price as some sort of indicator of BTC penetration, as opposed to more useful statistics), and you've definitely got a sit…

You are talking to the wrong kind on BTC users. Hopefully, most of this type of users are gone after the recent events. Aside from that, there's still a vibrant community of people who make useful stuff with BTC.

Re: BTC bubbles

#12

Post by leoedin »

stephencanon wrote: post #7
Nursie wrote: post #3

Earlier quoted context omitted.

I'd almost be surprised if it doesn't hit that within a few weeks. Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

But bitcoins do have a use. There's at least a few million dollars a month of value moving through Silk Road.

However, it's not in the interest of users of BTC to use a wildly unstable currency. My prediction is that bitcoin will be replaced at some point by another crypto currency which fixes some of its major flaws - particularly its deflationary nature.

Re: BTC bubbles

#13

Post by jeremyjh »

joshuahedlund wrote: post #5

Are prices only well described by log periodic power laws if market participants don't know they are well described by log periodic power laws, or does that make things more complicated?

I don't think that a bubble feels like a bubble to the participants driving it. I remember seeing this same phenomenon with gold prices a couple of years ago. So many people were adamant that "this time its different" even though we have seen gold spike and crash many dozens of times throughout history. Now that some of these people are losing lots of money in gold maybe their views change but it won't matter, next time will be same for the people driving it.

Re: BTC bubbles

#14

Post by Nursie »

tudorizer wrote: post #11
dragontamer wrote: post #4

When a worthwhile Futures market hits, then BTC will really stabilize. He's right. Without shorting, options, and future contracts... it becomes impossible for BTC to stabilize in the wake of media exposure. Add on to the fact that the majority of BTC users seem to be idiots (ie: they look at the price as some sort of indicator of BTC penetration, as opposed to more useful statistics), and you've definitely got a sit…

You are talking to the wrong kind on BTC users. Hopefully, most of this type of users are gone after the recent events. Aside from that, there's still a vibrant community of people who make useful stuff with BTC.

Have you ventured over to bitcointalk?

The speculators aren't in any danger of disappearing, no sir, this is just an opportunity to buy 'cheap' bitcoin and increase their holdings. Because obviously squirrelling away as much of it as possible will help it become a viable currency...

Re: BTC bubbles

#15

Post by mikeash »

stephencanon wrote: post #7
Nursie wrote: post #3

Earlier quoted context omitted.

I'd almost be surprised if it doesn't hit that within a few weeks. Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

There's no such thing as the "real value" of anything, only what people will pay. And that is pretty obviously not zero.

Re: BTC bubbles

#16

Post by melvinmt »

stephencanon wrote: post #7
Nursie wrote: post #3

Earlier quoted context omitted.

I'd almost be surprised if it doesn't hit that within a few weeks. Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

We have to be careful when we question the "real value" of specific assets as we may tumble in an essentialist philosophical debate where we have to question the "real value" of every single asset in the universe. There is no inherent difference between gold and bitcoins, they're both scarce assets, one in slightly higher demand than the other. The value of assets is mostly[1] determined by both supply and demand, and as long as the demand is higher than the (more or less) fixed supply of bitcoins, the value will always be > $0.

[1] Please enlighten me if you know more ways of determining the value of assets.

Re: BTC bubbles

#17

Post by gnaritas »

leoedin wrote: post #12
stephencanon wrote: post #7

Earlier quoted context omitted.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

But bitcoins do have a use. There's at least a few million dollars a month of value moving through Silk Road. However, it's not in the interest of users of BTC to use a wildly unstable currency. My prediction is that bitcoin will be replaced at some point by another crypto currency which fixes some of its major flaws - particularly its deflationary nature.

> particularly its deflationary nature

Which IMHO is what will kill it; it's just a terrible feature for a currency.

Re: BTC bubbles

#18

Post by dragontamer »

Nursie wrote: post #14
tudorizer wrote: post #11

Earlier quoted context omitted.

You are talking to the wrong kind on BTC users. Hopefully, most of this type of users are gone after the recent events. Aside from that, there's still a vibrant community of people who make useful stuff with BTC.

Have you ventured over to bitcointalk? The speculators aren't in any danger of disappearing, no sir, this is just an opportunity to buy 'cheap' bitcoin and increase their holdings. Because obviously squirrelling away as much of it as possible will help it become a viable currency...

Indeed. But with a futures market, they will be able to speculate in both directions. Futhermore, businessmen who rely on the BTC USD price will be able to buy futures, and be able to settle down on a future spot price on BTC.

IE: A business expects to get say 10 BTC in 30 days... but wants the money in USD. So he wants to buy a contract to sell 10 BTC 30 days from now. It can even be in the form of call / put options.

A vibrant speculative community will provide these businessmen with contracts. And then everyone benefits. Speculators will begin to add value to the market. As opposed to now, where all of them seem to be relying on the greater fool theory.

Re: BTC bubbles

#19

Post by shawabawa3 »

leoedin wrote: post #12
stephencanon wrote: post #7

Earlier quoted context omitted.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

But bitcoins do have a use. There's at least a few million dollars a month of value moving through Silk Road. However, it's not in the interest of users of BTC to use a wildly unstable currency. My prediction is that bitcoin will be replaced at some point by another crypto currency which fixes some of its major flaws - particularly its deflationary nature.

> particularly its deflationary nature.

As far as I can tell, there's no real reason it has to stay deflationary.

At some point there could be a consensus that inflation would be good for bitcoin and they could patch the client to start increasing the new bitcoins per block.

tbh I don't know why it isn't inflationary, if it was you could remove/reduce transaction fees as miners would always have an incentive

Re: BTC bubbles

#20

Post by lmgftp »

mikeash wrote: post #15
stephencanon wrote: post #7

Earlier quoted context omitted.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

There's no such thing as the "real value" of anything, only what people will pay. And that is pretty obviously not zero.

Willingness to pay is someone's valuation. That's not the real value. That's not the inherent value. The inherent value of BTC is nill, except as a speculative commodity.

I won't further comment on BTC since both sides are staunchly rooted in their positions.

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