Topic: Bitcoin is a snowball, not a bubble - page 2. (Read 3926 times)

Some good photoshopper might want to overlap the 2 images.

I agree that your characterization and scenarios are possible.  A larger marketcap does contribute to confidence and other positive network effects for a currency.  The current chart could end up being like others I've seen where, say, an exploration company discovers a huge gold deposit, and then the market prices that in overnight as a vertical gapped rise to a permanently higher plateau level.  In this case, Bitcoin hasn't discovered a new gold deposit, but has discovered a new and more efficient monetary system with potential worldwide usage in the billions or trillions, and the vertical rise is occurring over several months and not overnight due to the slower speed at which the news is spreading via traditional media, plus the difficulty of getting funds to Gox.

There was a good blog post over the weekend outlining a similar argument to yours, differentiating between the implications of a rising price for an asset, versus a rising price for a currency.  Food for thought for any speculators getting scared by the BTC chart:

http://konradsgraf.com/blog1/2013/4/6/hyper-monetization-questioning-the-bitcoin-bubble-bubble.html

Yes.


Soon.


And some drawbacks.


the more power it uses,


and it uses even more electric energy,


Surely if something pops, it will be a fuse.

Ah, but the sum of the parts was still the same, just smaller units. Satoshi balls if you will. Unlike a bubble which just dissipates into nothingness.

Bubbles must pop as they grow, snowballs don't have to. This 'bubble' word is on the tip of every tongue, we must change this perspective.

Snowballs do not grow forever. I've tried.

I once made a snowball that was 8ft in diameter. By the time it reached that size it took 3 large guys to push it any further.

Then when one of them stood on top it cracked and broke in half.

So basically, there is no point talking of bubbles or snowballs, growth MUST stop at some point.

There's been a lot of discussion here about whether we're in the middle of a bubble and if so when it's going to pop. I believe that Bitcoin is unlike many other forms of investments or assets because it's the first major non-government backed currency of our times. It's also a cutting edge technology that actually has lots of in-built advantages over other forms of modern currencies, let alone tulips of shells or whatever else the media tries to compare it to.

So, I like to think of Bitcoins right now as a snowball rather than a bubble. As long as we keep moving, the thing is just going to get bigger. Currencies are not like other assets where too much interest could be a bad thing, to the contrary, currencies only can become established if it grows large enough. So Bitcoin in fact needs to keep growing for it to become a legit currency, if it stalls and stops moving, I'm afraid it's just going to melt away.

Here's the snowball factor: the higher price goes, the more people hear about it, the more people learn about it, the more people buy it, the more people use it, then the price goes even higher, and more and more people keep getting added to the mix. All the meanwhile, as more people get into it, the more business are interested in it, the more businesses start using it, the more other businesses need to start considering it to not give competitors an edge, and so acceptance keeps on growing, at which point price rises, more media, more people etc... Basically it's a self-sustaining loop and this snowball NEEDS to get bigger. Once the snowball grows large enough and a critical mass has been reached with the number of people/businesses accepting it - then it will have reached a stable point and won't be able to melt without some insane outside pressure (like the sun aka governments). So, nowhere in this story does anything have to 'pop'.

I would have liked the snowball to grow a little slower so that the infrastructure would have a chance to grow with it (more stable exchanges, more UI friendly wallets etc) - but fast movement is certainly better than no movement.