Scarcity decreases dramatically.
So should value, at that point.
So should value, at that point.
Are you actually not aware of the difference between scarcity and availability, or are you just having a bit of fun at our expense?
Topic: Why won't BTC drop in Value when Mainstream? (Read 4769 times)
Are you actually not aware of the difference between scarcity and availability, or are you just having a bit of fun at our expense?
I haven't said there is no use for them. Those things I mentioned are really cool things too.
I fully support cryptocurrencies, and Bitcoin, to the extent it makes sense.
As a store of value, it's even better.
Only as long as the price goes up.
Mr. BittBurger, what you've just said is one of the most insanely idiotic things I have ever read. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
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I think what OP is getting at is that there will be a perceived decrease in scarcity when there are more readily-available outlets for people to trade in Bitcoin. Now you sort of have to know someone who knows someone or know the secret handshake. The amount of work or knowledge necessary to obtain Bitcoin will in fact decrease. The cost to obtain Bitcoin (separate from its trading value) will go down.
Yes. This is what i was getting at. And the simple fact that there will be a literal (not just perceived) decrease in scarcity *because* its more readily available. Right now you have 100 geeks owning Bitcoins.
Then, you will have 100,000 people of all genres owning bitcoins.
Scarcity decreases dramatically.
So should value, at that point.
-Burger-
I haven't said there is no use for them. Those things I mentioned are really cool things too.
I fully support cryptocurrencies, and Bitcoin, to the extent it makes sense.
As a store of value, it's even better.
I think what OP is getting at is that there will be a perceived decrease in scarcity when there are more readily-available outlets for people to trade in Bitcoin. Now you sort of have to know someone who knows someone or know the secret handshake. The amount of work or knowledge necessary to obtain Bitcoin will in fact decrease. The cost to obtain Bitcoin (separate from its trading value) will go down.
A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
I think you left out a very important aspect that your story does not address, and I think you should give yourself more credit, because your story was interesting to me! If the shop owner wanted to sell the cocoa for 1 dollar, but decided to sell it for .10 cents to the first person because he forgot his wallet. Either this first person basically received 9 cups of cocoa for free(he has basically bought money), or the initial value of the cocoa is now .10 cents(that's what he bought it for) It can be assumed that if the shop owner sold 1 cup for 10% of his original valuation of the cocoa, his $1 valuation of his cocoa is not correct(im not saying higher or lower). Also, if he was willing to sell a 25% stake of his total stock of cocoa for only .10 cents(22.5% loss), It creates a scenario such as what we have seen with bitcoin.A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
A large portion of the original btc's were sold at very very cheap rates so you run into a very possible scenario of overvalue. For example. if the guy decides not to drink his .10 cent cocoa and instead goes back to town and sells it to someone for $10 and then the guy goes back and buys the other 3 cups for $1 each, but the shop owner says no not gonna happen. Now the guy is left with 10 dollars and no cocoa(He's a day trader, so he's happy he made a good profit, but he has also been alienated by the store owner because he would not sell him his other 3 cups for $1 each(the owner wants everyone to have a taste, i.e support the btc community, don't horde coins, etc).
The shop owner hears through the grapevine that his precious cocoa has been sold for 10x his intended value, and the man doing it has made a profit of nearly 100x(he bought it for .10). So just like any good businessman, he has to increase prices exponentially of its actual value due to the original man selling his first cup for $10. If he sold his original cup for .10 cents and it was then sold for $10 he decides just as the first cup he sold went for 100x it was originally bought for(.10 cent), he decides to use that same principle on his original valuation of his cocoa. The cocoa now costs $100 per cup. His price had to increase over 1000x its original sale price before he has even made a dime(well he did make 1) The next day people eagerly line up to buy as many $100 cups of cocoa as they can. Turns out there are only 3 more cups left for the day. The first 3 people in line get their $100 cocoa. "Man that's a steal they said" As time passes the demand for his cocoa increases, but he only has 2 cups of cocoa for the next day. He cannot continue charging $100 as it's taking him an increased amount of effort to produce the same amount of cocoa.(increase in difficulty) and he's also running out of cocoa(fixed amount of btc) So he increases the price to $300 per cup. The next day he only has 1 cup and it gets sold for $1000(they love supporting their local cocoa community) The cocoa guy continues to raise his price while at the same time having less and less cocoa available. Eventually he has to sell in quantities lower than 1 cup.(millicoins w/e you guys call them) and people eventually start trading their cocoa for other things because cocoa has gained such a great reputation(average joe adoption). Well, unbeknownst to everyone in the community the man who originally received the first cup of cocoa never actually drank it(he stored,horded,speculated w/e) So it is now known that this one man holds an incredible amount of wealth in cocoa, based on very little if any risk.
No matter how much the people love their cocoa, are they really going to allow this one man to hold so much wealth and control over them just because he has the cocoa? I don't believe so(some may say that is the situation today), and just by the very nature of how being wealthy works there is only so much you can buy with wealth. Think about the billions of dollars bill gates has donated, do you think having one person in control of that much wealth devalues or increases the value of the wealth in which they are measured in? In the case of the man with the cup of cocoa, his inability to meet the needs or expectations of an economy that bases worth on an exponential overvalue of a currency will inevitably lead to a redistribution of the wealth because of his inability to spend all of his money at the current valuation, thus causing a devaluation in currency. Similarly to what has happened with the USD.
The reason this situation is plausible is because of the cheaply aquired btc's and the millions of bitcoins that have been reported lost. If at somehow in time a method is found to retrack those coins and make them usable there will be a massive spike in supply of coins in relation to how much an actual coin can buy you at that time.
http://en.wikipedia.org/wiki/Supply_shock
More demand for bitcoin equals higher prices. Unless we move the decimal place, thus increasing the supply of BTC. 210 million total BTC anyone? 
If bitcoin becomes to mainstream and becomes tooOnly if the value is derived from fiat like Bitcoins do. regulated, the need will emerge for less regulated and more anonymous coins.
I believe if there will be attempts to regulate, it will apply to all cryptocurrencies
Only if the value is derived from fiat like Bitcoins do.
bitcoins don't derive their value from fiat. We just denote their value in fiat money because that is the most easy and convenient way to represent the value.
Bitcoins value will be the same as ever other thing in this world is based on, simply what someone will pay for it. Therefor bitcoin will never reach a million a coin or anything close to. Simply because no one will ever pay 1million for it.
You will always have other currencies accepted. Bitcoin will never be that needed for the price to go insanely high.
You will always have other currencies accepted. Bitcoin will never be that needed for the price to go insanely high.
Depends in what you can buy with a bitcoin. If I can buy a million beers with one bitcoin, bitcoin is worth a million beers. Or 1.2 million doughnuts.
Bitcoins value will be the same as ever other thing in this world is based on, simply what someone will pay for it. Therefor bitcoin will never reach a million a coin or anything close to. Simply because no one will ever pay 1million for it.
Who said anything about anyone paying one million for a bitcoin? By the time the price is one million USD/BTC, people will be buying milli-bitcoin (millies) and micro-bitcoins (mikes). When the unit of everyday interest shifts to millies and then to mikes, why will the price of an entire bitcoin scare people away?
But then there needs to be allowed more than 7 transactions / second, or your example does not work.
Bitcoins are really like new gaming consoles, or the occulus rift, or google glass.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
Explain how people will do things like using Silk Road and bypassing Western Union when sending money without a cryptocurrency.
I haven't said there is no use for them. Those things I mentioned are really cool things too.
I fully support cryptocurrencies, and Bitcoin, to the extent it makes sense.
Bitcoins are really like new gaming consoles, or the occulus rift, or google glass.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
Explain how people will do things like using Silk Road and bypassing Western Union when sending money without a cryptocurrency.
I am playing Devil's Advocate by creating this thread. I don't necessarily believe what I am saying. And I hope I am wrong.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
When the average Joe buys bitcoin, he will be buying small fractions of a bitcoin because the price is so high.
Bitcoins are really like new gaming consoles, or the occulus rift, or google glass.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
People who have nothing to do with them get them and sell them to suckers who desperately want them because it's trendy.
Bitcoins value will be the same as ever other thing in this world is based on, simply what someone will pay for it. Therefor bitcoin will never reach a million a coin or anything close to. Simply because no one will ever pay 1million for it.
Who said anything about anyone paying one million for a bitcoin? By the time the price is one million USD/BTC, people will be buying milli-bitcoin (millies) and micro-bitcoins (mikes). When the unit of everyday interest shifts to millies and then to mikes, why will the price of an entire bitcoin scare people away?
Do you shy away from U.S. currency because 100,000 dollar Federal Reserve Notes have been printed? If your answer is no, then why would people shy away from millies and mikes just because there is a unit of bitcoin that is worth a lot?
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You will always have other currencies accepted. Bitcoin will never be that needed for the price to go insanely high.
There is a lot of evidence that fiat currencies will collapse.
Think back to all those holiday seasons in which a new gaming console was coming to market. Supply was limited to around 25%-50% of target capacity, but increasing, and they were widely available. Every store was getting them in stock and anyone could just walk in and buy one. Pretty much exactly the scenario you are describing here.
So according to you, since you can get one anywhere, the value would go down. Therefore we'll just go to craigslist and... Hey! What the hell? Everyone's got a 400% markup on these things!
Fast forward 6 months or so, everyone who REALLY wanted one got it, and you can generally find them on store shelves (supply is way up). The secondary market value is almost exactly the retail value.
This would indicate that supply vs demand is what drives price (as they say on the first day of economics class) and not availability, as nobody ever said.
So according to you, since you can get one anywhere, the value would go down. Therefore we'll just go to craigslist and... Hey! What the hell? Everyone's got a 400% markup on these things!
Fast forward 6 months or so, everyone who REALLY wanted one got it, and you can generally find them on store shelves (supply is way up). The secondary market value is almost exactly the retail value.
This would indicate that supply vs demand is what drives price (as they say on the first day of economics class) and not availability, as nobody ever said.
If every person in the world would use Bitcoin there would be 1/600th BTC on average per world citizen.
21E6/7E9 = 1/3000
When going mainstream more people wanting bitcoins and demand increases, hence demand curve shifts right.
Same amount of bitcoins being held and same amount of bitcoins being mined, supply curve stays the same.
Therefore new price forms where supply and demand meet, price will go up.
P = Price
Q = Quantity
D = Demand
S = Supply
Same amount of bitcoins being held and same amount of bitcoins being mined, supply curve stays the same.
Therefore new price forms where supply and demand meet, price will go up.
P = Price
Q = Quantity
D = Demand
S = Supply
As you said, quantity will not increase following the increase in price, so the supply curve should be a vertical line, actually that line will tilt towards left since the supply of bitcoin will decrease with a higher price (people will spend less coin to purchase the same thing)
BTW, the demand curve may not be like that either, since for bitcoin the demand will rise following a price skyrocket of bitcoin, and it will fall after bitcoin price crashed
Anyway, when demand rises, the price will go up
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
I believe if there will be attempts to regulate, it will apply to all cryptocurrencies
Only if the value is derived from fiat like Bitcoins do.
The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time.
The end.
This is great and I think it's applicable to the bitcoin economy. We're currently in the process of paving that path, but we still don't know how many people will venture across it and whether or not there'll be an oversupply of cocoa.
Supply is fixed!
Yes, oversupply = little demand relatively to supply.
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