Topic: Wences on bitcoin value-- thoughts? (Read 732 times)

He downplays the currency and merchant angle a lot. At that price level it would have to be one of the most desirable things on the whole planet. Considering the ease which it can be spent and transferred it's natural that the use as currency would develop. Maybe not for everyday stuff, but the big spends he's fretting about.

Even if you don't care for it as a currency yourself, there'd be no shortage of third parties willing to take it out of your hands so the things that people would customarily dump for - college tuition, medical bills, house deposit - wouldn't be necessary. You'd offload it and the market would trundle on. It would be a closed loop with the added bonus of fiat clamouring to enter at every possible opportunity.

Widespread use as some type of currency, even if it's only for giant transactions, is the endgame I think, not the beginning.

I think that something the Bitcoin community has to be honest about, at least amongst ourselves is what Bitcoin is about today and what we would like it to be. Sometimes we make it look like it's about things we want it to be in the future. The truth is when we look at the volume of people buying the "stock" of Bitcoin and the flow of people buying their first bitcoin. It's mostly about buying & holding. It's totally fine, it's a decent use case. It's not a two-sided market : for me to buy & hold it doesn't require a counterparty to accept Bitcoin. I simply have to agree to a price that someone is selling. It has been working for 3 years and I think we can depend on that. It's not some theory, some hypothesis, it's working and it can keep working

Is there any way to estimate that bolded part at all?

I'm willing to bet that there are many, many people who've gone far beyond the affordable loss level. We won't hear from many of them but they're out there. And I don't think it's 'safe money' either. It'll be the first thing to go if people come under financial pressure and it's ready to be sold if there's a vast price rise. It's a long term bet and a luxury. It needs to transition to being the very last thing you'd ever want to let go of.

Ironically, we have to thank Bitcoin's volatility for people not investing money they cannot afford to loose. As long as the Bitcoin price remains highly volatile and perceived as risky, we are OK. Begin to worry when it is perceived as a sure thing that everybody should own a lot of.

He downplays the currency and merchant angle a lot. At that price level it would have to be one of the most desirable things on the whole planet. Considering the ease which it can be spent and transferred it's natural that the use as currency would develop. Maybe not for everyday stuff, but the big spends he's fretting about.

Even if you don't care for it as a currency yourself, there'd be no shortage of third parties willing to take it out of your hands so the things that people would customarily dump for - college tuition, medical bills, house deposit - wouldn't be necessary. You'd offload it and the market would trundle on. It would be a closed loop with the added bonus of fiat clamouring to enter at every possible opportunity.

Widespread use as some type of currency, even if it's only for giant transactions, is the endgame I think, not the beginning.

Well, if hundreds of millions of people own it and bitcoin is worth $1,000,000, a cup of coffee might cost $15,000.

Of all the ways in which Bitcoin could fail the one that worries me most, because I think it has the highest probability of all the bad things that could happen, is a price panic that drives the price to zero, or $15, from which it may be very hard for Bitcoin to recover the public's trust.

Right now most of the money that is invested in Bitcoin is money people can afford to loose and that makes it safe money. So when Bitcoin goes from $1,200 to $200 there is not a vicious cycle of people who need to sell, because they cannot afford to loose more money, that drives the price to zero.

It is hard to estimate how many people on bitcoins, but it may be somewhere between 13 and 15 million people right now. If Bitcoin is successful we will see hundreds of millions of people own Bitcoin and, eventually, billions. The only way we can get to billions of people owning Bitcoin is by the price going up by several orders of magnitude, let's say $ 1 million (but this is highly speculative and risky). So, if I am right, and Bitcoin has to go from $390 to $1,000,000 the best way for it to get there without crashing irreversibly is with as much volatility as possible.If bitcoin went up a couple percentage points every week and everybody began to think about it as a "sure" thing, investing money that was destined to pay for kids colleges or for retirement, that is a disaster waiting to happen price wise. Because when Bitcoin corrects those people have to sell because they cannot take more losses, potentially creating a vicious circle which is hard to reverse.

Ironically, we have to thank Bitcoin's volatility for people not investing money they cannot afford to loose. As long as the Bitcoin price remains highly volatile and perceived as risky, we are OK. Begin to worry when it is perceived as a sure thing that everybody should own a lot of.