Topic: How much of a bubble is this? - page 2. (Read 5564 times)

Hey, people took their beanie babies seriously back in the day I expect that in a few years, the word "bitcoin" will be in the same league as beanie babies, as a failed investment vehicle that people latched onto in hopes of a huge ROI that fizzled out. I don`t think bitcoins will go away entirely, and they very welll could be used for similar utility as today (ie. engaging in illegal online activities such as drugs and crimes against children). There will be online articles about how people paid $500 for one "coin", believing that it was the dawn of a new era, but eventually people realized that there was no good reason to obtain them, and many people lost their shirts as a result when values fell back down to a few dollars per coin. People will wonder... what the hell were they thinking?

Mary has some savings.  She can put them on the bank, and earn less than inflation, or she can put them in bitcoin, losing 1% one-time.
After a few years, Mary decides she wants to buy a TV.  In a freak occurrence, in contrasts to all previous years, bitcoin didn't return massive gains, but gained only a few percent to compensate for inflation.  Mary happily buys the TV with her bitcoin.  She then decides to receive her future paychecks in bitcoin, negating the conversion fees.

This bubble keep inflating and inflating. I wonder how it will pop. Oh, I know. Hard and violent!

It does seem to me that the vast majority of money flowing into bitcoin right now is not to be spent on the current selection of good and services.

However...how much does day to day spending using as a currency/the bitcoin economy etc. REALLY matter?

The parallel between bitcoin and gold is often drawn. Nobody buys gold to spend it on a coffee. It has value despite the fact you can't use it to buy things off Amazon...so perhaps although bitcoin is technologically capable to be used as a day to day currency (with quite a bit of  additional infrastructure development and merchant acceptance) it may warrant a high value even if it is not being used in this way.

As a few smart people have wisely pointed out, people are not buying Bitcoins to spend them.  I mean, how stupid do you have to be to believe that.  Let's look at it:

Scenario A:

Mary wants to buy a new TV.  That TV costs $500.  She goes to her favorite online store, types in her debit card number and her debit card is charged. TV arrives in about a week.

Total Cost:  $500
Total Time:  ~ 1 week

Scenario B:

Mary wants to buy a new TV.  That TV costs $500.  Mary also heard the hype on a new technology called Bitcoin and figured this is the best payment method for her.  So, Mary goes on Coinbase and purchases $500 worth of Bitcoin and pays 1%.  Then she waits a week.  When the Bitcoin's finally arrive, she goes to her favorite online store, only to find that they don't accept Bitcoin.  

Scenario C:

But lets assume her favorite store does take Bitcoin.    Mary wants to buy a new TV.  That TV costs $500.  Mary also heard the hype on a new technology called Bitcoin and figured this is the best payment method for her.  So, Mary goes on Coinbase and purchases $500 worth of Bitcoin and pays 1%.  Then she waits a week to get her Bitcoins.  And it's a good thing because it will take Mary at least that to figure out how to safely store her new Bitcoins and download the blockchain.  Or, maybe she just stores them on Coinbase, which is the ideal way to store Bitcoins anyway.    When the Bitcoin's finally arrive, she goes to her favorite online store, pays for the TV with her $500 worth of Bitcoins and the TV arrives in about a week.

Total Cost:  $505
Total Time:  ~ 2 weeks

Moral of the story.  GET REAL!  There is no Bitcoin "adoption" because there is almost nothing to adopt.  You can barely use them.  Cash and debit cards are FAR superior to Bitcoin's, as it relates to making everyday transactions. The day may come where this is no longer true, but that day is not today, nor any day during this bubble inflation.  The is pure speculative buying.  People are simply looking to get a high ROI.  If you believe anything contrary to that, you are delusional and I would NEVER take advice from you because you simply do not live in reality.

Right, because beanies babies are useful, like a censorship resistant digital currency with a hard supply limit and bounded inflation.

We are at the dawn of a new era. Bitcoin needs to stabilize which it will someday but maybe not soon.
Every currency, every stock starts off volatile and stabilizes at some point.

That said people having fiat money need to spend it fast before it gets worthless whereas with bitcoin spending less will give you more.

I`m sure a beanie baby collector in 1996 would have said the same thing. 

Nobody who has held for 18 months or more has taken a loss.

A currency that fluctuates anywhere from 10% to 80% in one day is a horrible store of value. It`s far too voiltile now to have any confidence in future valuations. In order for it to stabilize, people need to actually use it to purchase goods and services, not just speculate. I just don`t see the need for people to convert their fiat to bitcoin, costing them fees, so they can buy Subway sandwiches.

I believe that speculation solves a catch-22, notably, how do you get people on board a currency and use it, when there is nothing to use it on? Well...the speculators get on board first, whether it's driven by greed, or a dream, or whatever. But now that early speculators, or even investors that have produced large profits, have some wealth, they will begin to want to spend it. Why? Because, you have the choice of either cashing out your winnings and paying a hefty gains tax on it, or directly spending the coins into something you want.  And the market will respond by offering items for those speculators that they can pay in bitcoins directly. And we're already seeing this happen: it's cumbersome, for the most part, at least for now, but remember, you can't solve the catch-22 otherwise.

So because there are speculators in bitcoin driving up the price you aren't for bitcoin? Did I misunderstand this?

To be honest, until you prove you donated your fiat from those exchanged coins to good causes, it is basically the cheapest commodity to date (pretty much): TALK.

I've learned one huge truth in life, is that TALK IS CHEAP.

I have to agree, new price will be set around 200. But with more merchants accepting BTC, the price can rise with time

Oh so your claims are still baseless then right? You admit it by the fact that you still have no proof to share with all of us.

If you had access to such information you would be able to make a boat load on knowing exactly when prices would go up and down.

Just because  Chinese person buys bitcoins for a profit does not mean that it isn't "adoption". In fact I could claim that it is temporary adoption if we want to get technical. AS they have possession of the coin(s) and thus have "adopted" it even if for a short period (in your presumed scenario that ALL the chinese are doing this and not just some LOL).

Your definition of adoption is clearly different than what the market's believe that means.

That is what your argument boils down to: a difference in definition of a word. Period.  

I think btc is going to glow red hot through $1000 reaching $1200 with a retrace back to $950.

i do get tired of repeating this, pehaps I should put it in a signature.


I sold all my Bitcoins at 200ish and donated the resultant fiat to good causes. I did not get involved with Bitcoin to make money for doing nothing, I was interested in a genuine alternative currency model, not the speculation which has taken over.

Do you have any bitcoins? If the exchanges are supposed to be providing fraudulent prices then how much would you say 1 BTC should go for? I may be interested in obtaining some from you. Maybe we could form our own exchange together and broadcast the REAL price to all of the internet. Maybe our real exchange with real prices will set all the others straight.

I will publish my research soon, there are just a few things I need to finish off, and also provide each of the exchanges mentioned and opportunity to address the findings prior to my going public with them.

Prove it.

That's right you can't. Your claims are baseless.

May be, may be not...

Assuming that it is a bubble , it is still in its infancy . Each " financial bubble inflated " at least 2 years. Bitcoin at this " inflation " (assuming that the bubble ) started when the price for the first time crossed $ 200 .

And when all your friends start talking about Bitcoin , when every newscast on television reports of how Bitcoin has risen in the last day , when the taxi driver who rides you boasted that he invested in Bitcoin .... only then we can talk for " financial bubble", and only then is the right time to sell your Bitcoin.