Bitcoins' contradiction - the scissor in your head

runam0k

legendary

Activity: 1092

Merit: 1001

Touchdown

Quote from: homo homini lupus on January 14, 2015, 11:08:24 AM

Quote from: runam0k on January 14, 2015, 10:44:58 AM

"To the moon" is based on the idea of exponential growth in demand (caused by, for example, just a tiny fraction of annual international wholesale trade being transacted in bitcoins). Such growth would greatly outpace so-called Bitcoin "inflation", so yes, you can have "an inflationary period for decades" and at the same time go to the moon. 3600 bitcoins per day (current reward) sounds like a lot but in the grand scheme of things (i.e. the context of international capital markets) it's not. It's a rounding error.

your only problem is: you don't get an 'exponential demand' going with this inflation because people don't demand things that are this volatile.
No profit = no adoption
high volatility = no adoption

it's fail, mofos - and so are you

Who says the volatility is permanent? It's highly unlikely. Bitcoin is young, not properly understood and ridiculously illiquid. Anyone involved in the capital markets fully understands that this extreme illiquidity necessarily means massive price volatility. Fortunately, there are people who love price volatility -- and they're fast learning about Bitcoin. They trade not just the asset (bitcoins) but the volatility itself. They create financial instruments to trade the volatility. Before long the trading of the asset, the trading of its volatility, the availability of financial instruments such as derivatives and the development of regulations and legal certainty combine to greatly reduce volatility. That's how markets work. Bitcoin will be a more viable product and that's when we'll see exponential growth. It's not going to happen overnight, of course. Bitcoin has been around for six years already and yet the very first regulated Bitcoin derivative was introduced only late last year!

EDIT: Believe it or not, Bitcoin's one-year volatility from late '13 to late '14 actually halved (from 137% to 66% -- it's still huge, of course, but it's coming down).

Or maybe you're right and your post has enlightened us all and convinced us to sell. Thanks!

homo homini lupus

member

Activity: 84

Merit: 10

Quote from: runam0k on January 14, 2015, 10:44:58 AM

"To the moon" is based on the idea of exponential growth in demand (caused by, for example, just a tiny fraction of annual international wholesale trade being transacted in bitcoins). Such growth would greatly outpace so-called Bitcoin "inflation", so yes, you can have "an inflationary period for decades" and at the same time go to the moon. 3600 bitcoins per day (current reward) sounds like a lot but in the grand scheme of things (i.e. the context of international capital markets) it's not. It's a rounding error.

your only problem is: you don't get an 'exponential demand' going with this inflation because people don't demand things that are this volatile.
No profit = no adoption
high volatility = no adoption

it's fail, mofos - and so are you

JamesBrown

member

Activity: 98

Merit: 10

Light is waves
Light is particles
Electrons can be here and there simultaneously

Bitcoin is a currency
Bitcoin is a commodity
Bitcoin is neither and both at the same time

runam0k

legendary

Activity: 1092

Merit: 1001

Touchdown

"To the moon" is based on the idea of exponential growth in demand (caused by, for example, just a tiny fraction of annual international wholesale trade being transacted in bitcoins). Such growth would greatly outpace so-called Bitcoin "inflation", so yes, you can have "an inflationary period for decades" and at the same time go to the moon. 3600 bitcoins per day (current reward) sounds like a lot but in the grand scheme of things (i.e. the context of international capital markets) it's not. It's a rounding error.

DanielT

newbie

Activity: 45

Merit: 0

The high bitcoin inflation was here at December 2013... the time when early adopter hodlers were the "new wealthy elite".

smalltimer

sr. member

Activity: 252

Merit: 250

Two positions maintained by the bitcoin supporters:

1) the high bitcoin inflation is good for the fair distribution of the coins
2) it's going to the moon

You can't have an inflationary period for decades and at the same time go to the moon.
Think about it. Distribution/inflation and mooning at the same time - It's a contradiction.

The coin is going to stagnate at rockbottom in distribution-modes until at least 2018.
We learn this from how altmarkets behaved in the past.

Pumping something up that's inflationary is really utter monkeybusiness. Yes, you are the monkeys with fear of missing out.

There are enough coins for everybody! Every day more!

Topic: Bitcoins' contradiction - the scissor in your head (Read 690 times)