Topic: Why do people think one Bitcoin will be worth $1000 (or more) - page 3. (Read 15384 times)

Bitcoin is a commodity.

It derives its value from a demand for liquidity speculators perceive a future increase in demand for liquidity as the number of uses and users increase. 

Whether it will hit $1000 dollars is simply a question of whether you think it brings enough to the table that its substitutes can’t or won’t be able to supply for the same level of liquidity.

It is hard to judge what the “Velocity of Bitcoin” at a price of $1000 would be, but the total value would be $21 billion. $21 billion sounds large, but is certainly not enough for the obvious competitor the US Dollar to consider it a true threat.  However that does not mean that other competing groups will not vie for that market. (I guarantee a bumpy ride)

There are 2 large barriers to entry into the market for a competing group. 

Goodwill – brand recognition, trust, and loyalty. 
Infrastructure – exchanges, mining network, merchants, skilled labor, and community support.

If you can put a value on these, it would provide a very important number in the value of a Bitcoin. 

Investment in both of these is on the raise lately and therefore the value/price of Bitcoin is growing as well. The very large investment in the ASICs is particularly impactful on Bitcoin’s value due to it increase in these barriers for competing vehicles. 

Not at all, this still maintains the "finite" property (there are still 21m BTCs) and attempts to expand the "highly divisible" property to "even more highly divisible".

Spot on. However you just made the other guy's argument. Prices are subjective and therefore subject to speculative bubbles. There is no reliable way to know whether BTC price is a bubble other than looking back 100 years from now.

Not sure what the issue here is... Let's just say the only "unit" is a Satoshi. There will never be more than 2.1 quadrillion Satoshis, right (100,000,000 * 21,000,000)?

So, let's do some of the math that yields the thousands per btc that you're questioning, but let's just use Satoshis:

Let's say bitcoin snags 1% of the current US monetary base (M1, from: http://www.federalreserve.gov/releases/h6/current/). That's 0.01 * $2,459,600,000,000 = $24,596,000,000

How many $ per Satoshi is that?
$24,596,000,000 / 2,100,000,000,000,000 = $0.0000117124 per Satoshi

1 BTC is simply defined as a collection of 100,000,000 Satoshis, at the protocol level. How much would 100,000,000 Satoshis be worth in the above scenario?
$0.0000117124 * 100,000,000 = $1,171.24

So that's why people think 1 BTC can be worth more than $1000.

Did I misunderstand your question somehow?

As a payment system it will probably be a "relative" success because of the unique characteristics of it.

As a currency it will probably be a "true" success because of the unique characteristics of it that fiat currencies lack (By the nature of them)

Most of the speculators rely on these information with various details and insights when they speculate the success of Bitcoin and the worth of a coin.

Now let's examine your rationale and try to counter argue:

1- The divisibility of Bitcoin will hinder the price to rise at some point:


    - This statement assumes that divisibility will divide current value which ignores fungible of bitcoins. It also describes a situation when the market will decide to "divide" a coin for less price just because it costs too much.

2- Bitcoins have no real value because they are not used in real life


    - In markets (where trade happens) in general. Nothing (I mean NOTHING) worth anything unless there is someone who is wiling to trade your goods for other goods.

Worth in real life as you call it depends on the owner of the good. Sand don't worth anything to you in real life unless you want to create glass for example. If I told you I am very interested in developing statistics on the probability of encountering a collision in SHA256. Does this consider a worth for bitcoin in "real life"? Art (the idea and not the physicality of them) is worthless in real life. The worth of it is an intellectual worth from the intellectual and emotional value you could absorb from it.


3- Bitcoin value is 100% speculation


   - Everything in life is 100% speculation in its price. As the production/consumption ratios between various types of goods are getting more predictable the market tend to stabilize the "speculated" prices (in a certain currency where its "Minting/Circulation-back-to-issuer" ratios is predicted fairly as well) hence it gives the illusion of being not "100% speculation".

Interesting choice of a fiat currency as an example. It only shows how fiat currencies are inferior to Bitcoin. Due to inflation and other events a bank note or a bill loses (and rarely gains!) a portion of its purchasing power. Due to lack to "proper" divisibility of the bill (and other currency diseases Bitcoin is immune of by design) it gives you the illusion of prices still the same. a cup of coffee worth 1$ will still worth 1$ even though the seller want to sell it for 104 cents (4%!) to compensate the rise of beans prices due to rise of another related good..... due to the currency in question loses some of its speculated worth! But The amount of 1 cent coins in (attainable) circulation will make this an even harder problem.

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As an electronic cash system (Which I don't know why people focus on Bitcoin the currency and ignores Bitcoin the electronic cash system). Although of the alluring features Bitcoin have. It needs to improve a considerable amount both in community adoption and technologies used to attain a world wide embrace.

- Lophie, wrote this at 5AM. Hopped up on caffeine and no sleep since yesterday. Dunno if this make any sense at all, If you had a good read throw me some coins so I can sleep with a smile  

So what happens if bitcoin becomes too impractical to use?
Will it still succeed? And in what?

The question is too complicated to answer in one post but bitcoin will succeed because fiat currency is inferior and no one entity can control or stop bitcoin.

And look how successful and persistent that idea has been. The Catholic Church is the richest organization in the world, backed by religion.

I'm on neither side here, so I will not be arguing. Supply and demand dictates the value, it is that easy. Contextual value is hard to define, however. A drop of water would have an infinite value for someone lost in the desert (demand is extremely high) but no or very little value for someone bathing in a (clean) lake. I do think it is hard to compare Bitcoin to the tulips 'bubble'. Tulips are infinite (for the sake of this discussion at least) and can not store value for an infinite time. It is easier to compare Bitcoin to gold or silver. The question if an hotel accept Bitcoin is wrongly asked; it should rather be if it ever will. There are obviously arguments to be made if that will happen or not though. The current value is what it is. It is not over-valued or under-valued. It is what it is. (:

In fact, since bitcoin doesn't have a value he should just give them away...

You keep refering to bitcoin as another tulip mania.
But you haven't put forwared a single good argument to support that.

Please answer what i asked in my last post: define the word 'value' in this context.

Wise words. They apply for Bitcoins. And for tulips.

At least the tulip madness did not turn into a religion. Reading some of the comments here one might think Bitcoin is already a religion.

Have you ever asked yourself this question?

Nothing has a value by it self. Supply and demand controls the value. If enough people believe something is valuable, it is. At the moment, the demand for Bitcoin seems to be mostly speculative and store of value, but the reason for demand does not make it less valuable.

You're really talking about convenience right?  Right now it is more convenient to do those things with dollars, that's true.  But, I trust you are aware that the US dollar has been around for a couple HUNDRED YEARS right?  It's kind of established?  It's completely unfair to compare a fledgling 4 year old digital currency to a major one and expect it to immediately have the same utility and convenience.  The junkyard of history is littered with detractors of new technologies and innovations, where given enough time, they turn out to be tomorrow's mainstream.  

Why do you think noone uses bitcoin to transfer large amounts of money across the world?  People actually do this.  They also use it to buy stuff off of Amazon and to buy pizza.

They think bringing up the tulips argument make them look smarter.

As it turns out , it only show their lack of knowledge.

I wouldnt be pissed man, the idiot dig himself deeper.

Why do you even own bitcoin?  Seriously just sell them if you feel they are next to worthless, and stop clogging bitcointalk with your idiotic arguments.  


He brought up the tulips, it pisses me off every time.  

The value of Bitcoin is what you can do with it.
The value of Bitcoin is NOT how much is worth in $.

Yeah, well, i'm a gonna pee over this one again..
FTFY!

Or else please define what you think 'Value' means in this context.