Let me start by saying that I do not know all of the facts, which is the reason for this topic. The person who can provide the most convincing argument to my concerns will be given 1 BTC should I decide to invest. That incentive is just to put out there, really what I would like is a civil and hopefully mostly troll-free discussion.
From the FAQ, "in the first 4 years of the Bitcoin network, 10,500,000 BTC will be created." So 2,625,000 BTC's per year. BTC's fluctuate in price but lets use $15 per BTC as a baseline. In order to sustain that price over a year period, NEW money would have to be injected in excess of $39 million per year. Perhaps slightly less as not all will go to market, so lets say, $30 million. First problem I see:
Where does this money come from? We have very small scale exchanges, and the largest one has been hacked and isn't even open yet. A further barrier is the $1,000 transaction limit. How do you get $30 million a year in with that sort of limit imposed. Yes, that limit can be removed by providing verifying information, however, the scale we're talking about is going to take institutional investors. Will these institutional investors be willing to lose their anonymity to invest here? And even so, the next is my biggest concern....
Bitcoin in unpatented intellectual property. Everyone who has ever taken an Econ 101 class should understand the law of supply and demand. Lets say BTC gets this $30 million investment per year, that sort of money is going to spur competition. As long as there is demand and profit to be made, competitors will come. The primary protection against competition is patents, trademarkets, etc.. Lets look at a company like Pfizer for example and their immensely successful drug Lipitor. Lipitor is patented resulting in Pfizer being the only drug manufacturer allowed to produce the product. Once that patent runs out, generic brands of the drugs will come online and Pfizer will no longer be making large gains on the drug. They know this, everyone knows this.
Bitcoin has no patent and in fact, is open source. There is nothing to stop a competitor from coming in, copying the model, maybe even improving on it, and bring it to market. Look at it this way, if you're an investor would you really invest multi-millions of dollars worth of capital in something that can be copied today? Why not create your own? Whose to stop Google from coming in and making Googlecoins? Any profitable venture will result in competition. This may be good for P2P currency's longevity but I'm strictly talking about BTC from an investment standpoint. If it were legal to make an exact copy of Lipitor and bring it to market today, would it happen? You're damn right it would.
I have other concerns, the bad press, the security issues, lack of merchants, etc. but really those are my two big ones and they sort've tie in together. Again, I'm coming at this from an investment standpoint. I see Bitcoin's value as rampant speculation. I don't want to use the "B" word, but the price appreciation is unsustainable (LONG-TERM) in my view.
What are your thoughts?
From the FAQ, "in the first 4 years of the Bitcoin network, 10,500,000 BTC will be created." So 2,625,000 BTC's per year. BTC's fluctuate in price but lets use $15 per BTC as a baseline. In order to sustain that price over a year period, NEW money would have to be injected in excess of $39 million per year. Perhaps slightly less as not all will go to market, so lets say, $30 million. First problem I see:
Where does this money come from? We have very small scale exchanges, and the largest one has been hacked and isn't even open yet. A further barrier is the $1,000 transaction limit. How do you get $30 million a year in with that sort of limit imposed. Yes, that limit can be removed by providing verifying information, however, the scale we're talking about is going to take institutional investors. Will these institutional investors be willing to lose their anonymity to invest here? And even so, the next is my biggest concern....
Bitcoin in unpatented intellectual property. Everyone who has ever taken an Econ 101 class should understand the law of supply and demand. Lets say BTC gets this $30 million investment per year, that sort of money is going to spur competition. As long as there is demand and profit to be made, competitors will come. The primary protection against competition is patents, trademarkets, etc.. Lets look at a company like Pfizer for example and their immensely successful drug Lipitor. Lipitor is patented resulting in Pfizer being the only drug manufacturer allowed to produce the product. Once that patent runs out, generic brands of the drugs will come online and Pfizer will no longer be making large gains on the drug. They know this, everyone knows this.
Bitcoin has no patent and in fact, is open source. There is nothing to stop a competitor from coming in, copying the model, maybe even improving on it, and bring it to market. Look at it this way, if you're an investor would you really invest multi-millions of dollars worth of capital in something that can be copied today? Why not create your own? Whose to stop Google from coming in and making Googlecoins? Any profitable venture will result in competition. This may be good for P2P currency's longevity but I'm strictly talking about BTC from an investment standpoint. If it were legal to make an exact copy of Lipitor and bring it to market today, would it happen? You're damn right it would.
I have other concerns, the bad press, the security issues, lack of merchants, etc. but really those are my two big ones and they sort've tie in together. Again, I'm coming at this from an investment standpoint. I see Bitcoin's value as rampant speculation. I don't want to use the "B" word, but the price appreciation is unsustainable (LONG-TERM) in my view.
What are your thoughts?
It states here that there are atleast 1,000 transactions per block if you do the math since there are about 8,000 transactions per hour and 8 minutes per block generation. Just look at the staggering amount of recorded transactions that the Bitcoin network is keeping for the past 9 years. You are aware of Cambridge Analytica and the bad press about them just think for a second how much money changed hands between them and Facebook just to avail of the customer data from Facebook. Now think about the database that the Bitcoin network is building right how much do you think it will cost. It is available to everyone and it is backing the value of Bitcoin now and into the future. The database of transaction is so huge that there is no way to see it as something finite. Data is the number one treasure of Bitcoin. There is no way that something like this could be a "B" . If you believe in bad press there is no way that you will be able to see an analysis such as this one.
Forty two coin is an alternative coin but today one unit is worth more than 26,000 thousand dollars. The whole cryptocurrency market is in a slump but 42 coin is resilient. Just think of a way on how to sustain a coin with just 42 units. Bitcoin has 21,000,000 million units and you think that it is unsustainable but this coin is seemingly sustainable?
BIT20 is an index fund of top 20 cryptocurrencies and last January there was a point when it reached 400,000 dollars per unit. This fund is a cryptocurrency fund. If it can breach 400,000 dollars what will stop Bitcoin from reaching 1,000,000 dollars per unit. Do you still think that Bitcoin is unsustainable. Yes it lacks the patent but just as you have stated a patent is limited to 25 years. Bitcoin doesn't like 25 years of life span. Besides, a patent is a publicly available pieces of documents. Anyone can copy your idea and concept once you apply for a patent very similar to open source.
