Topic: Why bitcoin will appreciate forever - page 8. (Read 20115 times)

There are some hard statistics from the blockchain, like number of transactions and the number of unspent outputs. Currently unspent outputs is at 32 million. That could mean the number of users are somewhere between 1 and 10 million. But it turns out that some people never redraw coins from the exchange where they bought them. Maybe it is too difficult or risky, or they just don't know it is possible, living with a fiat/stockbroker mindset.

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

1. Fiat supply (debt-backed money) is required to be inflated to infinity to support itself, otherwise the system will crumble. If there is 100 trillion debt, 100 trillion money and 5% interest, you need another 5% of the money supply (5 trillion extra) to repay the debt = new money needs to be created to keep the debt serviced. Compound interest effect has a "compound" effect in the fiat money supply. The ratio of fiat supply:btc supply is ensuring the long-term appreciation of BTC, but it'll take a while longer in order for BTC's inflation to slow down a bit.

2. Gold/silver output is also getting inflated by new mining output. While it may be better compared to fiat, it still has uncertainties in its inflation model like "what if a large gold deposit is found that is a game changer" or what happens if new mining techniques increase the output dramatically.

In light of the above two, I believe it's hardly relevant whether people cash out or not as the existing maximum supply is fixed for BTC. Sure, if someone cashes out a million coins it can have a bearish effect on price, but in the long run it won't matter that much.

Each fiat money is a guarantee of exchanging any good in that specific country, I would like to see the future where people refuse to accept their domestic fiat money because it is created out of nothing, but that is not the case right now, 99% of people (including many famous entrepreneurs) have zero knowledge about fiat money, they are all playing the bank's fiat money game without understanding how the game is designed


Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times, so the value does not drop enough fast with the supply. 99% of people are short sighted, if a currency drops in value by even 5% per year, most of the people just don't care, as long as their income is enough to deal with the living expense. They maybe complain the rising living cost, but they won't take any action. Only Zimbabwe-like hyperinflation that increase the money supply by 10 fold in a month will cause a currency to fail

Who is going to stop me?  We trade what we like, that is a fact.      


However there is no -guarantee- of a willing exchanger for any good, no matter whether you choose to call that good money or not.  How is this not obvious?  


??  I'm not sure I follow you here.  We don't know how much USD has been issued, nobody does.  All we know is since the FED took over the value of a USD has dropped to well under 1% of its previous value vs. gold or oil or housing or food or clothing.  

you can't exchange iron ore for anything else except money, but with money you can exchange anything, the liquidity preference is different. If you produce 5x more iron ore, most likely the price will crash to 1/5, but FED has proved that printing 5x more USD will not affect its value

The demand for money can be driven by many psychological cause, most notably purchasing of high valued goods and building a safety net for future. Nothing prevent everyone from accumulating 1 billion dollar and do nothing with those money: A large amount of reserve just increase the feeling of safety dramatically and positively affect their mental status, even most of the consumptions in today's life is already enough good and cheap

No no. Since there is no production (in principle) and no consumption (the money just moves from one owner to another ad infinitum), the demand is only demand to hold the money in the reserve. (For consumable commodities, think of reserve demand as a large heap of iron ore in front of a steel factory, the reserve is grown when the ore seems cheap to the steel-maker, and reduced when he envisions a lower price in the future).

The demand to hold money in reserve is the only reason to hold money, and the supply is other people running down their reserves for any reason. By trading against something else, price pairs are discovered. The reasons behind the supply and demand, respectively,  is basically the same, only inversed. The actual amount each market actor wants to hold, depends on everything, and changes continually.

1k was an overshoot of the speculative bubble top. Long term wise, the coin value should be close to its mining cost, which should rise over time if there is no major disaster in bitcoin ecosystem

Higher price will raise the difficulty since it created speculative mining demand - make a quick buck with mining, that is also a demand. Speculation demand is always part of the bitcoin demand, but it changes with price, not like other demands. Currently we are in a low volatility period, thus speculative demand is at its minimum. If the speculative demand is dropping while difficulty is rising, then you know there are some other type of demand quietly driving the difficulty up. Because the supply of bitcoin on market is very easy to estimate, that makes the demand the only variable that can affect price, and demand is very easy to spot through difficulty, which makes it extremely simple to model the future valuation

By the way, money's value is decided by a consensus, supply and demand theory never works on money, because money can be regarded as having infinite demand, thus any change in supply will not affect money's value. This seems start to apply to bitcoin too: Bitcoin's demand can be very very high, but its value is not really decided by supply and demand, but by a consensus, around the mining cost, similar to gold

when you speak of not attracting new users based on volatility.. are you expecting minimum like 1k like we did see fake value with mt.gox

i know I got in it cause there was no option of making money and another form to get cash.

Only English people using Pound is enough to support its value, similarly, only IT interested/Libertarian/Austrian economists giving bitcoin strong support can maintain its value. For merchants, it is so easy to accept international payment with bitcoin, just download an app. It has not gained enough traction because of its volatility, it takes time for people to get rid of their fear towards new things

This is correct, and the vision that bitcoin will appreciate forever, also depends on that market actors (everybody) regard bitcoin as the best money. Otherwise, it will not happen.

It does not matter what is the definition of supply, there are 5000 coins net sell every day on market, that is calculated after considering several facts getting from poll. There is larger transaction volume daily, but those are day traders and short term speculators, basically the buying and selling volume cancel each other, only the net sell amount matters

In fact the total money supply in bitcoin is irrelevant, because many of them does not exist in circulation. It's the money in circulation matters. FED printed 5x USD but the money in circulation remains the same, that's the reason the USD did not crash in value by 5x

As analyzed, if the demand falls, the first thing we will notice is that the mining difficulty will go down. Because mining is the lowest cost to get bitcoin constantly, serious investors will always first seek large mining operation, if they can not get coin through mining, they will consider buying on open market. That is the reason when ASIC arrives, suddenly many investors lost the ability to get coin from mining, thus they all went to market to purchase, and made the price rise 10 fold

So far the mining difficulty is still rising, means the demand is still strong. If difficulty jumps up, then it means the demand is extremely strong

well... i think bitcoin like a magnet shipon visitor, and interest to join it.
very interesting for me, we can make money from here...
and if we can use easily and continue, this is very funny, and like a chat. just like that.
the money we can make very much if we get the positions up like Legendary "oh my god" the payment may be very much...
but if like me still little. just make it make it and make it,,, never no.... fight to try and try never give up.
you can get happynes in the end.

bitcoin will be appreciated forever due to its advance technology and awesome thinking the satoshi has made most of the possible system of future In short I can say he has showed us the way to develop our future a lott cooler that it was we guys has access to markets so now we can design our own future

A little summarize about the development during past year:

First, increased usage will reduce the daily coin supply on market thus raise its value,
An easy way to make bitcoin worth millions of dollars
However, the effect is not as large as long term hodling: If you constantly spend 10 coins every month, then only 10 coins will disappear from exchange, but if you hold 10 coins, they will also disappear from exchanges, for a long time

With more established exchanges, the usage as remittance medium just become more user friendly. Now I'm doing all my international transactions using bitcoin, if the receiver is in a country that have good bitcoin exchange. It is much cheaper and faster than traditional way

There are still limited spaces to spend bitcoin, but that means majority of merchant still have to learn how to use bitcoin by themselves, instead of relying on payment processor like bitpay. And that require a thorough understanding of bitcoin security, it will take some time. It is not recommended to rely on any third party to take care of your bitcoin, while majority of people are not geeks, this is still the major obstacle towards mass adoption

Mining difficulty does not drop, this indicated that the demand is still strong. If the demand drops, the mining difficulty will drop, because majority of the demand is fulfilled by mining (lowest possible cost to get coin)

So far, we have not seen hyperinflation following the huge scale of fiat money printing. Just like stock market bubble, as long as fiat money hold its value, big institutions would still ride the wave for a while. But those institutions are fully aware of the overvalued situation of fiat money, now it is a fiat money bubble, they will get rid of their fiat money positions as soon as they see the sign of a crash, we just don't know how and when it will happen

Bitcoin went up forever happened:



Now it's time for a slow uptrend since it will not go under the mean. This is math.