Topic: WTF is a bubble anyway? (Read 1702 times)
Alas comprehension
Bitcoin players are mostly middle class IT people, they don't have an urgent need to cash out
Suppose that most people have a motivation to cash out after 100-1000x price appreciation (a historical scale for 2011 price bubble), before that, there won't be any major sell off
If more and more new adopters enter the game, and each of them waiting for a 1000x price appreciation, there will never be a crash unless the available USD is not enough
Suppose that most people have a motivation to cash out after 100-1000x price appreciation (a historical scale for 2011 price bubble), before that, there won't be any major sell off
If more and more new adopters enter the game, and each of them waiting for a 1000x price appreciation, there will never be a crash unless the available USD is not enough
As long as there are new people are entering, the price can seemingly rise forever.
Yet, speculation is a zero-sum game. Everybody's gain must come from somebody's loss.
FED is going to tighten sooner or later, that will generate some downward pressure due to reduced USD supply, but that's still 1-2 years away
Like NGZhang said, valuation is about trust. Currently bitcoin has not reached a deserved value because people are still doubt about it, but more and more people are starting to lose their trust of fiat money, sooner or later they will realize that it is better to trust mathematics and networks instead of a bunch of politicians and bankers
Like NGZhang said, valuation is about trust. Currently bitcoin has not reached a deserved value because people are still doubt about it, but more and more people are starting to lose their trust of fiat money, sooner or later they will realize that it is better to trust mathematics and networks instead of a bunch of politicians and bankers
So, what's the bitcoin's deserved value?
I'll say it. For the bitcoin has built in link between the price and the downward pressure on the price.
Currently, ($115) miners create around $400.000 daily in new bitcoin, and when the ASIC sellers get their production in order, a large percentage of that money will be sold on the exchanges every day. This means that you would need $200k to $300k every day, just to prop up the bitcoin price.
That's about double what Bitpay, the largest processor does each day.
So, for each $1 in Bitpay volume (not profit), you need $2 to $3 in "sucker" money. Sure, the price will come down.
Bitcoin players are mostly middle class IT people, they don't have an urgent need to cash out
Suppose that most people have a motivation to cash out after 100-1000x price appreciation (a historical scale for 2011 price bubble), before that, there won't be any major sell off
If more and more new adopters enter the game, and each of them waiting for a 1000x price appreciation, there will never be a crash unless the available USD is not enough
FED is going to tighten sooner or later, that will generate some downward pressure due to reduced USD supply, but that's still 1-2 years away
Like NGZhang said, valuation is about trust. Currently bitcoin has not reached a deserved value because people are still doubt about it, but more and more people are starting to lose their trust of fiat money, sooner or later they will realize that it is better to trust mathematics and networks instead of a bunch of politicians and bankers
Mining awards come in BTC, electric bills come in local currency. Once the music stops:
http://bitcoincharts.com/charts/mtgoxUSD#rg90zigDailyzczsg2011-06-04zeg2011-12-31ztgSzm1g10zm2g25zi1gVolzvzcv
Thank you. I am pretty much suffering of bad vision. You saved me from the usual ctrl++!
oh and nice thread too
oh and nice thread too
Great enthusiastic post .
Nice charts.
Oh and who's to say that Bitpay is the only merchant doing business? There are many!
.Nice charts.
Oh and who's to say that Bitpay is the only merchant doing business? There are many!
The South Sea Company one is fucking insane considering its on log scale...
Who is to say that Bitcoin will ever go down?
I'll say it. For the bitcoin has built in link between the price and the downward pressure on the price.
Currently, ($115) miners create around $400.000 daily in new bitcoin, and when the ASIC sellers get their production in order, a large percentage of that money will be sold on the exchanges every day. This means that you would need $200k to $300k every day, just to prop up the bitcoin price.
That's about double what Bitpay, the largest processor does each day.
So, for each $1 in Bitpay volume (not profit), you need $2 to $3 in "sucker" money. Sure, the price will come down.
I have 2 minirigs on order and I still plan on holding a majority of btc. Many are like me also.
lol sorry for the bold text I'm a little drunk hahaha
Although I totally wish you to be right, this sounds a lot like "this time it's different" and "permanent high plateau" talk - like those you hear at the peak... Who is to say that Bitcoin will ever go down?
I'll say it. For the bitcoin has built in link between the price and the downward pressure on the price.
Currently, ($115) miners create around $400.000 daily in new bitcoin, and when the ASIC sellers get their production in order, a large percentage of that money will be sold on the exchanges every day. This means that you would need $200k to $300k every day, just to prop up the bitcoin price.
That's about double what Bitpay, the largest processor does each day.
So, for each $1 in Bitpay volume (not profit), you need $2 to $3 in "sucker" money. Sure, the price will come down.
Every time word "bubble" is mentioned on this forum the bust is postponed by one day. In other words it simply cannot be bubble when everyone is saying that it is a bubble.
That's what I keep telling my friend who is convinced of a Bitcoin bubble yet he plans to buy cheap BTC after a crash...There won't be a real crash as long as there are people like that.
I have never seen two bubbles form on any stock or commodity in the time frame of Bitcoin existence.
I still reckon the first run up to $31 was exaggerated price discovery.
IMO, this run is a boom not a bubble.
I still reckon the first run up to $31 was exaggerated price discovery.
IMO, this run is a boom not a bubble.
lol sorry for the bold text I'm a little drunk hahaha
im jealous 
lol sorry for the bold text I'm a little drunk hahaha
actually I thought it was just fine. the bold text conveyed your passion for bitcoins and the possibility of it.
lol sorry for the bold text I'm a little drunk hahaha
lol, me too. just also posted bold text.
Anything measured in fiat-currency is in a bubble.
EARTH HAS 4 CORNER
SIMULTANEOUS 4-DAY
TIME CUBE
WITHIN SINGLE ROTATION.
4 CORNER DAYS PROVES 1
DAY 1 GOD IS TAUGHT EVIL.
SIMULTANEOUS 4-DAY
TIME CUBE
WITHIN SINGLE ROTATION.
4 CORNER DAYS PROVES 1
DAY 1 GOD IS TAUGHT EVIL.
lol sorry for the bold text I'm a little drunk hahaha
Yes, pretty much my feelings, minus the large bold text.
June 2011 was NOT a bubble. Even after the drop, Bitcoins were trading for more than four times the price they were in January of that year.
Charts mean nothing without a good understanding of scale and potential, two things for which you require imagination. To keep calling Bitcoin a bubble is a failure of the imagination, nothing else.
June 2011 was NOT a bubble. Even after the drop, Bitcoins were trading for more than four times the price they were in January of that year.
Charts mean nothing without a good understanding of scale and potential, two things for which you require imagination. To keep calling Bitcoin a bubble is a failure of the imagination, nothing else.
Amen! Good post!
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