Topic: Why the high price (Read 2776 times)

Because some people like me beleive that's a "so better than any alternative" to use to exchange value, that they (I am) still willing to buy at that price.  Buy to use, to hoard, to speculate..

Bitcoin are both a currency AND a paiement processor...  That's so wonderfull, modern.. I'm not alone to think like that !  I know because the price is'nt sustained only be me

I'll pay double for a coin if you show your work on paper.

You are right, Bitcoin do not have a tangible format, but you could try cacasius coin and see if it makes you feel better  
https://www.casascius.com/

And it is produced by mathematical calculation which is extremely hard. Try to hash a block with a pen and a paper by yourself and you will understand why $27 is almost nothing compared to the amount of effort involved (and energy/heat used) in generating a bitcoin

People's value changes over time depends on technology and environment change. 200 years ago, if you dig out some petroleum, it worth very little, but now people spend huge amount of resource searching for it...

Facebook, eBay, and most service oriented businesses are valuable because they have a large user base.  If everyone decided that the service they provided was useless, the value of the company would be worthless.  The technology they use is meaningless without the users.  So based on the OPs logic, nobody should invest in or use these companies because the user base may someday vanish.

The price can be evaluated in a similar way to a stock. Companies which are not growing tend to be priced based on their dividends. ie. the price is a low multiple of earnings, because you evaluate what flow of returns you would get from your investment.

But companies that are still very much growing are based on their expected future potential. Their   price is a much higher ratio to earnings. They're being priced on future earnings. A track record of year over year increases in price are an indicator that the companies has met expectations.

I don't have a formula that can tell you what the bitcoin price should be based on fundamentals. But the price has increased each year quite significantly and someone looking at this might project that it would continue doing well and want to own some. Many people coming to that conclusion are going to be buyers in a market where not that many owners are selling.

In fact, most owners selling now are probably thinking they can buy back in at a lower price. I know I've made that mistake a couple times. Selling now is a gamble as much as buying because unknown future demand could easily mean these prices are never seen again and then when will they buy back in? Or demand could vanish in a panic and they've done well.

An ongoing series of positive news articles is not hurting demand right now.

I can buy 50 bikes with 100 bitcoins... so.. bitcoin > bike? XD
but then again, I only need 1 bike.

Good point.  Perhaps SPECIFIC utility, like utility as a currency.

Gold is more valuable that bitcoin in the manufacturing process of circuit boards.

A bicycle is more valuable than one hundred bitcoins in terms of recreational exercise around my neighborhood, but one hundred bitcoins are more valuable than a bicycle in terms of trade or resale.

value in sense of utility perhaps?
I know there are very few places that actually take gold anymore as currency, thus I have more buying power with my bitcoins.

This got me thinking.  What does it mean to be "more valuable than gold"?

I mean, that makes sense when comparing two materials - like "more valuable PER OUNCE".  But how do you compare two things of completely different make-up?  It's like comparing Computers and Oranges.  (see what I did there?)

It doesn't make sense to compare the price of one ounce of gold vs. one whole bitcoin, and say one is more valuable than the other, because the counter-argument would be "well let's use millibitcoins or milligrams or tonnes (or whatever)".

It seems like you have to get a common frame of reference between the two different commodities, in order to say one is more valuable than the other, when they each can be bought in divisible quantities.   And I can only think of two frames of reference:

1)  The total value of all of this commodity, at market price (what people refer to as Market Cap).
2)  The generally accepted risk-weighted rate of return for an investment in this commodity.

We can easily calculate #1, and Bitcoin is nowhere near Gold in that category.

Good luck on calculating #2.  I tend to think that Bitcoin has a much higher risk-weighted rate of return than gold at the present time and prices.  On the other hand, apparently every seller disagrees.

The bargaining positions are supply and demand. Someone wants some thing at time x for a price of y. Someone must be willing to sell that thing at time x for price y. Supply and demand.

No, please not the supply and demand fable again: prices are set only partially by supply and demand but principally by bargaining positions.
We know that since Aristoteles !
Capitalism and makets are two opposite forces. Capitalism unbalanced by market forces tend to build barriers to entry and monopolies.

The result is an ugly caricature of capitalism, called hypercapitalism. Markets are completely distorted and manipulated by a few.
This is the state of the world economy today, far from a "free economy".
A free economy requires capitalism balanced by markets.

In my usual style:


 

High price you say..??!!

If you take an needle and point it at your house on a world map, then u can see how small minded you(we) are...now lets take BTC and put it on the worldmap.. Still very small but if Btc gets worldwide adoption ( whitch is happening as we speak) it will work like an lever system it will takeoff like a rocket ...meaning to say that in four year from now you will look back and see what i meant...$27,- is nothing.. If you have the guts u can still make money buying btc as we speak.. ,,, !!! Or miss the boat,,, It´s small minded to think $27,- is much...

1gr of gold is something like $45,-  1 fucking GRAM and there is plenty of gold but not plenty of BTC

Hah! fooled you.. its not solid glass its plastic!

 Every currency is worth exactly as much as people are wanting to pay for it. Be it Bitcoin, USD, Euro, cattle, flowers, stones or some weird porn movies, doesnt matter as long as people are willing to exchange it for something else

because bitcoin is awesome and everyone wants it.


That's true. cool story bro!

Bitcoin doesn't have a high price, it is incredibly cheap. Get some while you can.

All there is to it is psychology. The value of something is set by supply and demand (in a free economy). There is no universal meaning or value to anything, thus value is as real as we think it is. You can argue why the masses believe in Bitcoin, but the fact that they do makes its value what it is. As of now, the value of 1 BTC is ~$27. The future value is another story, however.

I'm not sure how well established the EMH is now days, but it is an interesting read: http://en.wikipedia.org/wiki/Efficient-market_hypothesis

Go home hand, you are drunk.

I feel like that hand expects to break a solid glass sphere with that needle. Poor confused hand.