Topic: [2014-12-22] Why Bitcoin Apps and Bitcoin Speculators Need Each Other (Read 616 times)
December 22, 2014, 12:57:14 PM
A nice synthesis on how the system works as a whole. It should probably be a must read for new Bitcoin adopters, as it speaks about the Ecosystem.
December 22, 2014, 12:23:02 AM
http://www.coindesk.com/bitcoin-apps-bitcoin-speculators-need/
What can we learn from looking at the system as a whole?
1.Without speculators, there would be no bitcoin. They provide miners, applications, and other participants with liquidity. If you have bought or sold bitcoin as a speculator, you have helped enable the emerging ecosystem of bitcoin apps. While speculative bubbles will swell and pop from time to time (see: 2013-2014), this does not change the underlying value of the network or the possibilities for the protocol.
2.Bitcoin-enabled apps and services are the main driver of underlying demand for bitcoin, and as a result, the main driver of the price of bitcoin, since the supply of bitcoin is fixed. But it will take time to see the effect. It is much faster and easier to place a buy/sell order than it is to build a bitcoin-enabled service. Still, 2014 saw the emergence of the first wave of these apps, enabled in large part by services like Chain, which significantly reduce the cycle time for building them. As these services grow, and more services come online, the price of bitcoin will steadily rise.
What can we learn from looking at the system as a whole?
1.Without speculators, there would be no bitcoin. They provide miners, applications, and other participants with liquidity. If you have bought or sold bitcoin as a speculator, you have helped enable the emerging ecosystem of bitcoin apps. While speculative bubbles will swell and pop from time to time (see: 2013-2014), this does not change the underlying value of the network or the possibilities for the protocol.
2.Bitcoin-enabled apps and services are the main driver of underlying demand for bitcoin, and as a result, the main driver of the price of bitcoin, since the supply of bitcoin is fixed. But it will take time to see the effect. It is much faster and easier to place a buy/sell order than it is to build a bitcoin-enabled service. Still, 2014 saw the emergence of the first wave of these apps, enabled in large part by services like Chain, which significantly reduce the cycle time for building them. As these services grow, and more services come online, the price of bitcoin will steadily rise.
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