Bitcoin Forum

Hi all,

I would like to know why comparing the BTC vs early internet investments the inflation is always not taking into account. It is always said, that the costs of launching a start-up has changed over the last two decades. Is it now more expensive?

Thanks in advance for an answer!

It probably depends wildly on what kind of start up you want to start, but my guess is the cost to start a startup has gone down.  Mainly because nowadays most everyone has a computer powerful enough and internet connection fast enough to create and maintain a website right from home.  This allows lot of service type "start ups" or even new products to be advertised, sold and such right from home, eliminating a lot of the cost/hassle that was probably there before.

In addition, there is so much knowledge out there that you could teach yourself just about anything you need related to doing business, such as how, when and where to advertise, etc, that you could learn a lot from others mistakes and save a lot of money when starting up!

https://en.wikipedia.org/wiki/Diffusion_of_innovations
https://en.wikipedia.org/wiki/Technology_life_cycle

They try to find analogies to guesstimate and predict where we are in btc adoption and when there will be worldwide adoption.

I think internet is a good model to make predictions on bitcoin as they are closely related and have lots of similarities.

Ok, but then the inflation should be taking into account if u compare BTC Investments nowadays with the investments of the internet 20 years ago. Does someone know why it is not the case? I dont get it ???

Launching BTC company is different than investing in BTC directly because you are tight to the old rules of business. It all depends what business are you going to start.
In general BTC startup does not require a big money. IF you want to know what are the hottest bitcoin startups you can read this article: http://www.quora.com/What-are-the-hottest-Bitcoin-startups (http://www.quora.com/What-are-the-hottest-Bitcoin-startups)

What's important for a start up is the business model. If business is sound, profits and growth would probably in the double digits, inflation (increased cost of "raw materials") is almost negligible.


Costs of a start-up has lowered over the last two decades. It is much easier and cheaper to start a company and promote it's products. I do think it is harder to be successful because ideas propagate quicker and more competition enters the market as easily as the incumbent.

Inflation is a pretty inaccurate thing. It makes sense, when it comes to food, shelter, etc., but it doesn't make much sense, when it comes to technical stuff. Look at the cost of a computer 20 years ago and now.
The service sector is also just way bigger than 20 years ago. That means, that when you start a business, it might be sufficient, when you can code to have product, you can rent the whole infrastructure pretty cheap.
But that also means that there is much more competition. Lower costs=more people try to get into this market.
So, I don't think, you can't really compare internet in 1980 with Bitcoin today. There are just so much things, to take into account.

Interest in bitcoin has started to pick up 2015 year. VC investments in bitcoin-related firms rose to $64.9 million across 14 deals in the first quarter, nearly 90% of the money raised last year. If funding kept up that pace, it would top $200 million this year.

Bitcoin Investment Vs different investment can be pictorised as:


http://ei.marketwatch.com//Multimedia/2014/04/25/Photos/OR/MW-CB204_bitcoi_20140425152900_OR.jpg?uuid=e0f775f0-ccaf-11e3-bb0c-00212803fad6

Not only that, but there is software out there now that pretty much builds a website for you.  So if you don't want to pay someone to do it, you can just do it yourself!  I used Imageline's EZ generator to make my website, and I don't know ANY coding.  I did have to learn a few really basic things in html, but I mean REAL basic.  Plus their help in the forums are second to one: on a couple of cases I got a software update just for little ole me.  Now THAT is service!

But if I was starting a real business, I would hire someone to make the site.  It was quite a lot of work to make the site even with the software, and I don't think it looks 100% professional.  But that is ok, it is just a hobby site anyways.

Most early internet investments would've turned to dust by now. They served their purpose and then were eaten by better options. It's hard to think what's still standing and thriving from back then other than the internet itself.  

That may be a fine reason to buy coins themselves rather than any of the infrastructure that's sprung up around it. Most of what's around today will barely be remembered five years from now. Bitcoin itself certainly will be.

Yes, the costs went down over the last years. Everyone can now create highly scalable apps and websites in short time just by using the infrastructures of Google or Amazon. Years ago, every startup had to manage this on their own. This times are over. Now they can completely focus on core development.

Ofcourse inflation matter in technical stuff too.. 250 million in 1995 is worth way way more than 250 million today..

Bitcoin adoption could be able to grow exponentially a lot faster than internet adoption.

To access the internet people needed to have a reason, and then they needed to buy a computer, the needed to buy a modem separately in the early days, and then they needed to buy internet service.

They already have reasons to use Bitcoin, they already have smartphones and computers, and getting a wallet is free. 

So if there is a smartphone app that uses Bitcoin and it becomes popular, it can go from 0 users to 50 million in a few weeks. 

Yeap, if you take inflation into account 250 million turn into around 450 million assuming an average yearly inflation rate of 3%.

Yes, because Ive seen in the Coindesk Bitcoin Report for Q2 a VC investment comparison with the Internet and below there is an asterisk which says "Inflation rate not taking into account -c osts of launching a start-up has changed over the last two decades"