Topic: Bitcoin's price seems to be the final indicator of it's success or failure! (Read 1198 times)

You mind posting a link to this video? 

This is an interesting observation but I think it's driven by people that don't understand what bitcoin is supposed to be. If  bitcoin is a medium of exchange (which it is) then the growth or decline of its value per fiat doesn't matter. It's stable price matters, but not whether it's stable at $50/BTC or $5000/BTC...only that it is stable.

The press unfairly equates the $/BTC conversion to success or failure and they do so only because it's an easy, dramatic story to tell....afterall, most media outlets are in the business of sell drama.

Why don't we hear more about Bitcoin Days Destroyed?  Everybody talks about coin age for staking their trendy altcoins.

Does anybody use the ABE blockchain explorer?

Discussions like this remind me that I am a veteran around here.

The metric you are looking for is called Bitcoin Days Destroyed.

It discounts frequently moved coins. That way it is harder to game than the raw transaction per day metric. Ironically, a sudden spike in that metric can be a sign of trouble since old cold-storage wallets are suddenly being touched.

There was even a bounty for this calculation.

Or just number of purchases from BitPay and Coinbase. Number of transactions + amount.

But still, that's just one of many indicators. Buying things is not the only use of bitcoin. And I reckon number of purchases will decline along with the price fall.

No, we can not really trust that stat, but we could tweak it, e.g. by measuring the transactions per day of the 100 biggest merchants.

Price is all PR. You should watch the latest video with Andreas in a podcast, its very clear the price is not that important, plus we are still up looking at the big picture.

I am a litttle concerned can we trust that stat however, i think the transactions per day would be higher now anyway so yeah...

True, the problem is you cannot really compare bitcoin to anything, as it's a new, unprecedented invention/project. So many would just put it in the same categories as stocks or commodities and focus entirely on the price.

But it's not necessarily appropriate. It's a bit like saying that internet is not doing very well because people are not willing to pay high bills for data usage as they did in the past.

Well, yes. If you have a high inflationary coin, looking only at the price per coin without checking market cap could give you the false picture.

But for someone who bought such coins as an investment, market cap is irrelevant, he would be only interested in price per coin, and he would likely define the success or failure of the coin only by its price.

In a perfect market, price is a good indicator, but BTC's market is twisted. The market will become clearer to read with the number of users increasing. Today, a few people can bring it down or up.

Market cap is a much better metric than price because the price is proportional to the the number of bitcoins.

Adoption is more important than the price itself. When more than 1 million or a bit fewer than that people get part of their pay with Bitcoin, the price will be much higher.

If the price of Bitcoin had never gone over $1.00, it would be considered a huge success. 

A new virtual currency, made up by some guy and only a few years old, that's already worth as much as the U.S. Dollar?  That's huge!

But then we'd probably need more supply.

@FederalReserveofWIP
Could you reply on my thread?
https://bitcointalksearch.org/topic/the-price-of-bitcoin-if-it-succeeds-927769

I'd really like some professional opinion on that.

I think a good indicator is the adoption, how many companies are using it as a payment method, transaction per day, number of active bitcoin holders. If we want to rate it based on value, importance of a currency that would be what I'll refer to rather than the price. Price is more for people towards investment. Yeah price is high, it's success for their investment. Low is failure and such.

Thank you.  We are always happy to answer any questions you might have.

Chairman, Federal Reserve of WIP

that was very scholarly reply..nice

Price is indeed very relevant to it's initial value and success, but that is based entirely on it's properties like any other thing we value. It's properties are assessed as having value by humans and it's properties help us to determine it's current and potential future usefulness. It's price is based on our collective opinions of it's usefulness as a unit of account, as a network based on overwhelming consensus, and as a store of value as well as our collective speculation about it's future usefulness. Decentralized money is just one of the first truly amazing protocols of the internet with much more to come because of it. Decentralized information based on the highly libertarian roots of the internet itself has led to this point.   Money is incredibly useful to account for the distribution of scarce resources in a world of humans with unlimited desires and greed. Bitcoin can only be acquired or issued in a few different ways and one of them is not being borrowed into existence with interest to the benefit of a centralized issuer. You must:

1. mine (it with all of the electricity costs, technical prowess, and risk that that entails). This is good and P.O.W. is absolutely a necessary algorithm. Mining is what validates and secures transactions on the network. Rather than being wasted this energy used gives value to bitcoins. Energy is literally converted into cryptographically unique and verifiable "coins" or entries on the distributed ledger.  
2. Produce and trade goods or services for it. This is a fundamental use case and why retail adoption like Dell, Overstock, and MSN are so important even if they immediately dump for fiat atm.
3. Steal it (only very smart and talented yet morally corrupt need apply) One point here is that this is really nothing new. All valuable resources are attractive to thieves.
4. Scam others for it. Again, nothing new to human nature and nothing inherent to the bitcoin protocol.  
5. There are no other options. It can't be counterfeited, borrowed, or legislated into existence.  

Bitcoin (in the sense of both the capital and small b) Has the economic underpinnings and incentives, network effect, and first mover advantage to crush everything else in a hyperbitcoinization event that will likely be incredible to watch unfold. I know it has been an amazing thing for me so far in the last five years.

The waves of bitcoin adoption are highly influenced by the euphoric heights and despairing valleys of it's price volatility as it weaves its way to towards maximum adoption before it settles down to lower volatilty that is more reflective of population growth and other factors. It will raise hopes, reward production and innovation and crush false dreams and malinvestments in it's wake as it claws it's way to the top. Anything to replace it will need to be vastly better and I haven't seen that yet. The one thing I see coming that could destroy bitcoin is a condition for the planet of non scarcity of all goods and services. It's possible this will be the case as the free market is a often postulated to be a conspiracy to reduce the price of all goods to zero.

Take precautions and act accordingly gentlemen. I'm just some guy from the internet.

No it is not.
I think, the most important indicator is transactions per day. That says a lot more about the currency than the price.