Topic: 2013-03-31 Forbes 'Is Bitcoin Doing Well Or Is It Just A Bubble?' (Read 1711 times)

Actually some bottomless fries sound pretty good right now, if I wasn't avoiding carbs at the moment.

Red Robin

Where are YOU dining out that costs MORE than $9.60 a meal, Mr. Rockefeller? 

Ah. allow me to translate:

in the language of those of us who are broke "dining out," means buying food for your family from a fast food facility with a dollar menu. or at like steak and shake or something if your REALLY doing well.

if you're doing well enough to be able to afford kitchenware, it would have cost a little less to just prepare food at home, so you pay a little extra to spare yourself the work that in rich people world normally gets done by slaves.

EDIT: after being a giant smartass about it, I realized you might live in New York or something, where everything seems to cost ALOT more.

Yes. The Bitcoin monetary base is purely M0.
The effective monetary base for the US is more like $10tn supporting the $15tn GDP.


Zerohedge has this in a current article: http://www.zerohedge.com/news/2013-03-31/visualization-modern-fractional-reserve-banking-and-how-cyprus-fits

The dollar is falling in value for sure, but it's not the Zimbabwean dollar we're discussing - yet.

The BTC price hike is mainly due to pure demand for BTC. Some of it may be driven by fear of inflation and banksters, yes, but it's mostly just new peeps wanting BTC for whatever reason, IMHO.

The author of this article claims that unregulated markets move like how bitcoin recently has, but doesnt mention that it is likely because the dollar value is falling more so than the price of bitcoin going up.

The faith in fiat is the reason for the higher prices.

Most people with phd's in economics nowdays do not even know this simple fact.

According to this Wiki article, the "montary base" is not M1, but M0, which is smaller than M1 but no longer reported by the Federal Reserve.

http://en.wikipedia.org/wiki/Monetary_base

First fail: A Fellow from the Adam Smith Institute harbouring delusions toward the perfection of regulated markets?


Second Fail: He doesn't have any to cash out ... lolol ... not qualified to comment.

Wonder what the Adam Smith Institute position on free market money vs State monopoly fiat is? Old guys in suits need to wake up to their responsibilities, particularly to the suffering wrought by a failed financial system.

Where are you "dining out" that only costs $9.60 a meal?

About a week ago, BitPay, the largest (by a wide margin) bitcoin payment processor reported month-to-date transactions through merchants using their service of $2 million.

Yes,  $2 million for about three weeks.    Obvoiusly, that's growing fast -- but let's give it 100X growth over the next year, to $200 million a month, or about $2.4 billion on an annual basis.  If the U.S. GDP of $16 trillion works off of $1 trillion of money supply that's 16:1 of transactions of economic activity versus the money supply (velocity would be 16, calculating it that way).

So using that same number, the $2.4 billion of economic activity and velocity of 16 means bitcoin's value a year from now should be about $150 million, or about a BTC/USD of $12.50.

The thing is, if bitcoin continues to grow for use for all kinds of financial transactions, including forex speculation, it wouldn't be $200 million a month but maybe $200 million an hour.  And thus today's $93 BTC/USD would be incredibly undervalued.

After cringing when listening to someone mention borrowing on a credit card to buy 5 bitcoins I heard the justification that if Bitcoin goes to zero, that person is out $500 and dines out one day a week less over the following year.  But if it goes to $10K per bitcoin, that builds a good base towards retirement for that person.  When just a little over two years ago when bitcoin first crossed parity with the dollar (Feb 2011), predictions of $100 a bitcoin seemed just bizarre to most, yet inevitable to others (Falkvinge, Max Keiser, among members of this forum).

No, I don't think so, molecular.  Bemused and patronizing is more like it.  And that's cool.

I've noticed that an awful lot of already successful people turn up their noses at bitcoin.  I suspect some of that may be because successful people are constantly being badgered to invest in everything under the sun - and they're always on guard... always defensive about it.  But part of it may be that they just don't care any more - they've got theirs, and they're just playing defense.

This is a good and evolutionary thing.  The ranks of the 1% need to be completely turned over - they're corrupt and nepotic and turn everything to shit.  More than anything, I'm hoping bitcoin will accomplish this in the long run.  Fair warning though:  if I were alive in a hundred years I'd probably be saying the same thing about the bitcoin 1%...  

http://blockchain.info/charts/estimated-transaction-volume

This chart shows that daily transaction volume is about 300,000 BTC.

It seems nobody in the comments section on Forbes has taken issue with this... so what is an approximate figure for the yearly USD value of Bitcoin transactions?
Is there a site with a regularly updated estimate of this?

These analyses always try to fit Bitcoin into pre-existing molds. "this isn't how stocks behave" or "the price is rising too fast for it to be a good currency"

It's a bit like a Yap Islander saying the USD isn't a good enough money because quarters, nickels and dimes are too small 

Beyond the obvious error where he writes "monetary base of $600 billion" (M1 is $2.6 trillion), he is simply wrong.

U.S. GDP is about 5.8 times M1.

Bitcoin transaction value is about 10 times the Bitcoin M1 (109.5 million / 11 million).

Of course, GDP is a small part of total transaction value, but at least Bitcoin is in the same ballpark.

What if bitcoin is not a "normal" new currency?


This guy would've cached out at $3 in early 2011. And that's why he doesn't have any coins.

Do I sense some envy and/or regret in his tone?

2013-03-31 Forbes 'Is Bitcoin Doing Well Or Is It Just A Bubble?'
http://www.forbes.com/sites/timworstall/2013/03/31/links-31-march-is-bitcoin-doing-well-or-is-it-just-a-bubble/