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A Prediction: Bitcoin Is Doomed to Fail

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Re: A Prediction: Bitcoin Is Doomed to Fail

#201

Post by kazagistar »

tedunangst wrote: post #171
jafaku wrote: post #141

Earlier quoted context omitted.

News flash: A transaction requires a buyer and a seller. If you bought Bitcoin, someone else sold Bitcoin.

That doesn't account for an imbalance in the number of potential buyers and sellers. It's very easy to buy a house for $100 million. Go to your real estate agent and say "Here's a $100 million. Buy me a house." It is, however, considerably harder to sell a house for $100 million.

What do you think determines the price? If you can't sell a bitcoin, you lower the price til you can sell it. If you can't buy a bitcoin, you raise how much you will pay until you can buy one.

The only reasons it is different with houses is because people are emotionally invested in them, not all houses are equivalent (and thus their value is unique per house), and liquidity is hence really low, and market prices adjust slowly.

Bitcoins are worth a thousand dollars because people who own them are not willing to part with them for less, and people who are buying them are willing to pay that much. This is economics 101. You can always cash out at the market price, unless liquidity is low; the only time that happens is in a teeny market or a crash.

Re: A Prediction: Bitcoin Is Doomed to Fail

#202

Post by dinkumthinkum »

kdeforche wrote: post #132
fleitz wrote: post #119

Earlier quoted context omitted.

I don't think you understand even if the vendor accepts bitcoins, and even if I bring my laptop I still can't buy anything in under 5 minutes. https://blockchain.info/charts/avg-confirmation-time

Yes you can. You do not necessarily need a confirmation if you are willing to take a small risk (and a vendor accepts risks much bigger than that if he's in business).

Or I can use actual money and forget all this nonsense ... Which do I choose?

Re: A Prediction: Bitcoin Is Doomed to Fail

#203

Post by dinkumthinkum »

nostrademons wrote: post #14

I think Bitcoin's doomed to fail, but not for the reasons the article suggest. There're ample historical counterexamples of currencies that are not tied to a government. Gold is the most obvious example; if currency was inextricably tied to governments, there would not have been a mad rush to colonize the New World (and extract its gold reserves). In prisons cigarettes frequently serve as currency, as a medium of exc…

Your examples have intrinsic value. This is pretty easy ...

Re: A Prediction: Bitcoin Is Doomed to Fail

#204

Post by dinkumthinkum »

Aqueous wrote: post #30
nostrademons wrote: post #14

I think Bitcoin's doomed to fail, but not for the reasons the article suggest. There're ample historical counterexamples of currencies that are not tied to a government. Gold is the most obvious example; if currency was inextricably tied to governments, there would not have been a mad rush to colonize the New World (and extract its gold reserves). In prisons cigarettes frequently serve as currency, as a medium of exc…

If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it to BitCoin, minute-by-minute. The prices float up and down with the currency, so pricing is largely a non-problem. It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace.…

Do you not see how this makes bitcoin irrelevant. What do the merchants do after they take the payment, now they have worthless bitcoins.

Re: A Prediction: Bitcoin Is Doomed to Fail

#205

Post by SilasX »

mindstab wrote: post #104
stevewilhelm wrote: post #101

Earlier quoted context omitted.

> It may fail as "money" (in a narrow sense) and still succeed as a global platform. I think that was the author's point. For example, Paypal, Amazon or the IRS could announce tomorrow they will accept payment in Bitcoins but peg their BTC/USD exchange rate to one. Speculation would all but stop and Bitcoins would become a transaction platform.

No, because no one would give them bitcoins at 1:1 and they can't magic up their own, they 'd have to buy them at market price and then sell them at a hilarious loss.

They can't magic up their own, but they can issue bitcoin-substitutes, in the same way that banks issue dollar-substitutes in the form of USD credits on your account, redeemable for 1 USD worth of debt owed to the bank.

It's an open question whether such substitutes will trade on par with the real "in-blockchain" thing. Personally, I doubt it.

Re: A Prediction: Bitcoin Is Doomed to Fail

#206

Post by vectorpush »

fat0wl wrote: post #61
asperous wrote: post #27

Earlier quoted context omitted.

Personally, I don't believe in Bitcoin either, but one thing I was considering is that Bitcoin is usable as long as its value isn't 0 (though it might be incredibly difficult to use with fluctuations). So the question is will it crash to 0? Seeing the price soar to 1,000 means that people in the future might always be willing to purchase it at some price, hoping that it will return to that level. Though, as it stands…

this is the root of my belief as well -- that it is a speculative farce, but so long as it is above 0 it will continue to be in use. Another poster made me aware of this joke that I think summarizes Bitcoin pretty accurately. http://www.getamused.com/jokes/pennystock.html Only in this case it's not a single buyer.

Only in this case it's not a single buyer.

i.e. completely invalidating the comparison.

Re: A Prediction: Bitcoin Is Doomed to Fail

#207

Post by weavejester »

fat0wl wrote: post #84
jamestnz wrote: post #55

Earlier quoted context omitted.

Something that might be considered an "intrinsic" value of bitcoin is its ability to instantly and securely transfer wealth across large distances at zero or near-zero cost. This is an feature not present in some of the incumbent currencies and store-of-value assets. For example, physically shipping hundreds of kilograms of gold (or physical, folding USD) is a costly exercise fraught with security risks, and the risk…

This intrinsic value can be mirrored by any cryptocurrency or even just a parallel network of Bitcoin. It is no justification for $1000/coin the way overzealous BTC investors claim.

Bitcoin's security against double-spending is proportional to how many clock cycles are spent mining, which is affected by the price of Bitcoin. A parallel network with a far lower market cap would be less secure.

$1000 per coin is speculation, but it's not particularly different from a startup people are buying into purely because of where it might be in five to ten years. The effect on Bitcoin is magnified somewhat because the maximum number of shares is capped.

Unless something radically better than Bitcoin comes along, I don't see it being replaced any time soon.

Re: A Prediction: Bitcoin Is Doomed to Fail

#208

Post by weavejester »

dinkumthinkum wrote: post #204
Aqueous wrote: post #30

Earlier quoted context omitted.

If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it to BitCoin, minute-by-minute. The prices float up and down with the currency, so pricing is largely a non-problem. It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace.…

Do you not see how this makes bitcoin irrelevant. What do the merchants do after they take the payment, now they have worthless bitcoins.

Most Bitcoin payment processors provide merchants with direct bank deposits. It's really little different to using a credit card processor, except the rates are cheaper and the audience smaller.

Re: A Prediction: Bitcoin Is Doomed to Fail

#209

Post by zik »

nivertech wrote: post #179

At dot-com time, everybody said "this is a new economy, old rules don't apply". Same in this thread "Bitcoin is a new technology, old rules don't apply" ...

Not at all. Bitcoin's value will continue to increase while the new technology is adopted using the old rule of supply and demand. Then it'll stabilise. No new rules are needed.

Re: A Prediction: Bitcoin Is Doomed to Fail

#210

Post by brentweaver »

I think BC is a fantastic platform--I am sure the currency will see some massive spikes (we are on it) and bigger troughs--but to make the assertion that it will completely fail is a bit ignorant. The only downside I see right now is the valuation of goods pretty much has to keep a real-time pricing engine in place for anyone that wants to take BC. Much like in countries that experience super high inflation or deflation...they have to first look up the value of the currency before they can complete a transaction which is a total pain. Right now there isn't much risk from the perspective of a vendor b/c the value of the currency keeps going up compared to other currencies. The second that trend goes the other way, me as a vendor might not be so interested in taking BC anymore unless it's totally liquid and I can sell it on the market instantaneously.
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