Bitcoin Forum

It's been another good week for Bitcoin, with prices pushing toward $600 on strong volume. Prices managed to top over $590 twice earlier in the week, before settling down to $567 early Wednesday.

The price move puts Bitcoin solidly above its 50-day moving average, which would be a bullish indicator if Bitcoin obeyed the same traditional trading metrics as other commodities, which has not been clearly established. There's still the widespread perception that simply because a market exists then Bitcoin has value, which is quite a leap. The value in Bitcoin is in the underlying technology, not in Bitcoin itself, which makes the application of traditional metrics, derived from either commodities or currency, only slightly better than a Ouija board.

Currency only has value if it's redeemable for a physical commodity, like gold, or it's backed by a government or other entity willing to support the price. Any physical commodity has some intrinsic value; even rocks can be crushed and used in the construction of roads; tulip bulbs can be planted and yield flowers; and even nitrogen, the most common element in our atmosphere, can be liquefied. Bitcoin, on the other hand, has an intrinsic commodity value of zero.

Some of our readers interpret that reality as some kind of a slam on Bitcoin, which is ludicrous. Just because Bitcoin is something new that defies traditional metrics doesn't mean it's worthless. Just because the bulk of Bitcoin's value is in the frictionless trading technology doesn't mean Bitcoin itself is not useful. While a Bitcoin may lack value in the traditional economic sense, the reality is you can still take your Bitcoin, right now, and trade it for $567 real world dollars, backed by the full faith and credit of the United States of America. That's up from just a couple of weeks ago, when a Bitcoin would only net you around $450 USD.

There are also hopeful signs in the near-term for Bitcoin, with the entrance of commercial players working on the regulatory hurdles surrounding Bitocin. There is also news that BitPay is processing $1 million dollars a day in Bitcoin payments, along with news that eBay is considering integrating Bitcoin payments with PayPal. You can tell sryptocurrencies are something substantial when companies like Western Union are trying to patent some elements of the concept.

Challenges Ahead

Still, Bitcoin faces challenges in the days ahead that are not trivial. There is still the question of whether Bitcoin developers can keep ahead of hackers and scammers and, right now, the consumer protections against Bitcoin theft are largely informal.

There's also the bigger question from the consumer point of view, of why use Bitcoin when you can just as easily pay with a debit or credit card? The answer is consumers will use Bitcoin when the items they purchase cost less. The most disruptive and exciting potential for Bitcoin and cryptocurrencies is the challenge to the stranglehold that banks have on payment processing. If vendors shave 2%-5% off the price for the people paying with Bitcoin, that's when Bitcoin will have real-world value. Until then there's little incentive for customers to slog through the technicalities and accept the associated risk.

To see sustainable growth and stability in its value proposition, Bitcoin has to grow its presence in the mobile market. Right now Bitcoin payments are shut out of both Apple and Google, although there is some indication Google is at least looking. Ironically, it may be the potential for frictionless micro-payments in Bitcoin that could be the biggest driver of growth in mobile infrastructure.

The value of cryptocurrencies is clear as is the value of the blockchain. For Bitcoin itself, time will tell. There are numerous examples in history when the first entrant into a new market is not the one that eventually comes out on top.





-Redtea
Independent News for the Right-Minded American



redteadotcom


Mod note: Doxxing discussion split and moved to: https://bitcointalk.org/index.php?topic=632151.0

You say you can "trade it for $567 real world dollars". Can you describe the process of doing that in detail? Then explain the process of acquiring more Bitcoins in detail including the identification process?

It takes a really special kind of oblivious to write fluff pieces targeted to a clueless demographic, and post them to a Bitcoin message board!

well, yeah, the right might be kind of clueless.. but i don't think he said anything over the top or misinformed.

For me these challenges seem pretty trivial.

I second these observations. My pizza cost me 0.0372 BTC today as opposed to 0.0414 last week.

Bitcoin is the preferred method for buying pizzas. Lowest transaction fee, 1 click payment and I can now successfully order pizza under a false name since the pizza man no longer sees my bank/cc details. on top of this, every BTC spent on pizza is one that won't be found by the tax man.

Laszlo was a prophet in more than 1 regard.

I thought the op was generally informative and about right. However I dislike an immediate attack on the person as opposed to what was said!.  as regards the above comment -weekly I buy BTC on local bitcoins .com- -not dollars but for £. occasionally I sell the same way. its not as anonymous as I would like because I still have to interface with my bank which has kyc!. However not knowing but hoping the developers are cleverer than the hackers/scammers is a dampener on the network I think. For me the tipping point will arrive with either/or a reliable android app for a hot wallet and a credit card at a sensible cost.

I think its because many of us roll our eyes when someone starts babbling on and on with technical analysis and super cool day trading terms.  It implies they think they've got the skinny on why bitcoin is at the current price, and what its going to do next, which most feel is impossible.  

-B-

something about the writing style in OP just makes me like cringe, i dont know what it is though, anybody else feel like this? i have no idea why!

yeah, it's um.. how i'd write if i were trying really hard to appear legit/professional. i'm not hating though, that's just the thought that ran across my mind.

OP is a strong writer, but has a narrow perspective of what "instrinsic value" means. OP's definition is limited by the box of soon to be obsolete financial technology.

I feel like this piece is a good second draft.  I find the points supporting bitcoin and the points pointing out its limitations/short comings/ challenges are randomly spread out through the article rather than positive points first, negative points second or vice versa (don't know how to spell that).

I also agree he is a little confused about intrinsic value, as is everyone.  I don't have the answer, and I believe the OP does correctly point to the fact that because  bitcoin is something new and different, classical financial definitions and terminology don't apply.  We need new definitions.

Bottom line is, there are challenges ahead, but this is an unstoppable force.  I would rather have a currency back by every single participant around the globe than a currency backed by one centralized government group who can take decisions for everyone with out their input.

Can't dis community participation though.  Thanks for the article.
Peace. 

It's nice to see the price rising up steadily without it being spiked up on the back of some good news (or the opposite on the back of some bad).


I think many people don't know or understand what intrinsic value means, plus something not having intrinsic value doesnt mean its worth anyless.

I enjoyed the article. Need to update for the +600 value now.  ;D

Thanks for sharing redtea.

Bitcoin has proven that this statement is false.

Yeah clearly this is not the case. I think this is probably going by the old definition of what money is, but I think it's time for a redefining for the current times. The idea of money is most certainly going to change for the better.

If a person believed that the bots on mtgox was responsible for driving bitcoin price up . One could also argue that this could be the "true" high price as of yet of bitcoins. And if thats so despite all the fud from China and other regions of the world its still rising I take that as a fantastic sign at bitcoins resiliency and future growth.

Any opinions?

Steve

Yes it's certainly arguable given 1. price manipulation at gox , 2. The accompanying bubble, and 3. The idea that the recent bear market consisted of a lot of stolen coins being sold on the market (although there's no proof of that).

They were way over valued before the GOX meltdown then they were way under valued in March and April of this year. I don't know where the true value is now but I suspect it is north of $1000.

The volume in USD is pretty high lately, this could indicate the rally is real. And it's going to be huge if it is.

The uptrend in going too fast in my opinion, I'm still holding but I fear in the next days we could see a bear trap,
after that the rally will continue its way to the ATH.

I don't think its too fast.

Price can behave like a spring...the harder/longer you
push it down, the more violently it reacts when its
uncorked.

There's been a lot of people waiting a long time to
see where the bottom is and jump back in, and I
think that's what's happening now.

Next 2 weeks, I would expect price to test $700 and
then maybe settle in around $675.

The price now is $608, over $600, going up smoothly. It is a good sign without speculative move in China. The price is more steady. I think it is no easy for the price to go over $1000 again!

The earlier peak of $1,242 was achieved as a result of market manipulation and extensive fraud by the Mt Gox exchange. So I agree with you. Reaching the $1,000 mark is not at all easy.

Unless, of course, it's being manipulated again and the price is just another scam. There have always been people making fortunes manipulating the price.

Bitcoin is moving in such a strong direction right now. I wouldn't be surprised if it breaks $750-$800 by the end of June to be honest. Now is a great time to invest everything you possibly can into Bitcoin!

BTC prices increase too fast i think
still don't see major correction

hmm do you think BTC is manipulated again right now? like october-november last year?
interesting ;D

About to test $700

Yes people are getting into Bitcoin because they are seeing how much value it really has... Atleast 100x the current price.

As always  we can only guess as to the future price of coins..   right now 12.8 mill  of them have been freed or mined or whatever.

At 600 a piece that is under 7.7 billion usd.

 this is a small amount of money  so a few deep pocket people can maneuver it.


Read up on how the Hunt brothers pushed the price of silver from under 10 usd to over 50 usd an oz. (around 1978)

 So I would say how would any of us know if 4 or 5 billionaires are planning to put in a lot of money to jack coins up.

Answer is we would not know.

WOOT go US. US bouta be so rich over the rest of the world.

It's gonna keep going up !!

Who's propping it up this time now that Gox is gone?