Bitcoin Forum

Because the number of bitcoins that can ever be created is limited, because the cost of mining bitcoins will keep getting higher and higher as it gets more difficult to mine, because less and less bitcoins will be mined the more there are mined, because awareness and adoption and infrastructure can only grow, because more people are going to want bitcoins, and because fiat is inflationary,  the value of bitcoins will and can only rise. Bitcoin has the law of mathematics backing it, the only certain law that governs the universe.

the price rises based on the demand for owning/using it as well a vehicle for speculation.

All that means absolutely nothing if there is no demand. People need to use bitcoin, and want to purchase bitcoin, and right now we are just a niche in the grand scheme. Bitcoin is not all that convenient and simple to work with at the moment, it will take some time or end up as a failed experiment.

This is the labour theory of value, and it is bogus. Just because something is difficult and expensive to produce, does not mean it is valuable.

if that would be true, then having 100M dividends would be pointless

Are you saying there's no demand for bitcoin? If you, or anyone here wishes to get rid of their bitcoins, I'll gladly take them. At no charge ;)
 

There is demand from you and me, but not the general public

As long as those in Bitcoin continue to be in bitcoin and continue to support BTC this is true.

there's no demand for gold from the general public either. How many percent of the world populations owns gold? Yet gold prices have risen and are at an ATH. And gold's true intrinsic value isn't even close to the perceived market price, but that didn't stop it from demanding the current price it is now innit. Scarcity is what gave gold its value. Bitcoin has that same element and it's knowingly finite. That's all you need to make something valuable. coupled with fungibility and liquidity of course.

There used to be demand for gold, it used to be the universal currency and some national currencies are still linked with gold (so most people don't even need to own actual gold). The US disconnected the dollar form gold since Nixion was president and that is the only reason it seems like there is no demand for it, but let's be honest here bitcoin doesn't come anywhere close at the moment, even though bitcoin works much better as a currency.

If scarcity is the main factor that gives value why are 90% of alt/shitcoins completely worthless?  Just because there is a supply cap doesn't mean people will jump hoops to get it.

In the world of cryptocurrency, the one with the first mover advantage is the be all end all. All other altcoins that comes after the first one will basically have to be based on the first one, even though and no matter it has better features or not. The way cryptocurrencies work or even exist in the first place is because of Bitcoin. So Bitcoin can't ever die, just like Internet can't ever die. It's a protocol. There may be an Internet 2.0 if there needs be and in the same way there will be a Bitcoin 2.0 if there needs be but it won't ever disappear.

I hope you're right nuff said.. im highly invested myself but i have a level of caution too

I think the main ideas in this thread are correct in that there are many reasons which are unique to btc that implies it can only become universal and therefore rise in value. fiat is manipulated as are gold prices at the moment but i am not aware of any currencies still backed by gold? any examples you can give?

It's precisely that fiat isn't backed by gold anymore, something that has a limit and is finite, that fiat is inflationary. That is precisely why we have million dollar homes and billion dollars companies. Because there is no limit how many fiats can be printed out of thin air. Fiat which is unlimited need to compensate for something like Bitcoin which is limited. It's simply the law of mathematics

Actually, there probably isn't anymore, my mistake

in which case gold like btc which has a commodity value as well as a currency value and is known to have a limited supply, so it must be grossly undervalued! I think we just wait and see how it plays out.

If it can only rise then why is it often dropping? There are no guarantees in this social experiment. I believe it has a future. But my opinion plus a cup of coffee equals... a cup of coffee.

i hope that you are right, guys

To quote Albert Einstein: "as far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality."

In reality, there are a lot of factors to consider. Market manipulations. Human fear and stupidity. Unawareness. Computer glitches and human errors. etc.

But if you truly understand the mechanism behind Bitcoin as a cryptocurrency, you would be baffled as well as to why there can be drops in its price when it should be linearly increasing in an ideal, purely mathematical and logical world

that brings us back to the obvious "no one can fortell the future" however i plan future events in the hope things remain stable enough for them to come to be. if you refer to btc price changes there are enough reasons on this forum to explain that, however I believe that btc is an idea who's time has come and it is a mathematically based platform that will eventually change everything. its more than a social experiment it is a functioning alternative to give back individuals autonomy that has been appropriated by one means or another for the last 6000 years. that's worth being a part of imo.

You could say the exact same for the market for all the turds and other forms excrement that I will produce in a lifetime. I will only ever produce so much faeces in during my life, therefore my shite should fetch top dollar in the market place and the value of it can only ever go up. After all, it has the laws of mathematics backing it and mathematics governs the universe.

Referring to bolded section, I'm not sure that anything is really being said here.  This is what it seems like you're saying:
1) The price can only go up in "an ideal, purely mathematical and logical world."
2) We don't live in such a world, so the price goes down sometimes.

Here's my question:  In "an ideal, purely mathematical and logical world," who is going to be the idiot to sell their BTC to the first buyer?

If A buys BTC from B, then A is saying "the BTC I bought is worth more to me than what I paid for it," and B is saying "the money I received is worth more to me than than the BTC I sold for it."

Basically, I'm just pointing out that it's not baffling whatsoever as to why the price drops.  For every buyer there is a seller, and it's just sort of nonsense to talk about a hypothetical reality which is so far removed from the reality we have now.

Oh, btw, a money that linearly increases in value up to infinity without dropping implies that nobody is ever using that money to buy anything, ever.  Sort of defeats the purpose of money in the first place, don't you think?

Lol. Are you tryna troll? If there are infrastructures for your turds, atm machines that take your turds and converts them to money, machines that can make you generate your turds 24/7, your turds will be the same 20 or 100 years from now and not rot into something entirely useless, and you can only be producing less turds than you are today keep its value, heck, why not. But can you though, with you and your turds? Face it mate, you and your turds are worth shite as it should be

Referring to bolded section, what guarantees more people are going to want bitcoins?

Let's say I want to make dirt a currency.  So, I take a shovel, go out in my backyard, and I start digging.

Things to note:
1) The amount of dirt is limited.
2) The deeper I dig, the harder it will be to keep digging.  This is hard work.
3) The deeper I dig, I will eventually need better equipment or even some help to do the job (infrastructure + adoption).
4) Dirt has the laws of mathematics backing it.

Will the value of dirt only keep getting higher and higher?

Yes. I realized that. In reality, we do not live in a mathematical, logical world. Which is what Albert Einstein is implying. For the laws of mathematics and logic is certain, it cannot and never can be applied to our 'real' world which we are living in. For mathematics has no emotion, or 'life'. In other words, maths or logics is kinda like death. No emotions, no expressions, no life. It is simply yes or no. Correct or incorrect. Emotionless. Yet we, as humans, are emotional. That is what defines us as living, human beings after all.

I think, that we are so used to a currency that is inflationary, that we cannot grasp the concept of a currency that is deflationary. But wouldn't it be a good thing though? We spend our money right here right now because we know our money is going to be of a lesser value tomorrow. So we get rid of our money as soon as we receive it. Is that a good thing, necessarily? What if we have a currency that is deflationary, that the money we have today is going to worth more tomorrow. We wouldn't be spending our money on stuff unless we absolutely needed it. Wouldn't be a bad thing I suppose. We won't waste as much. Won't be so much waste as in garbage and scavenging the earth for resources because we need to make things to spend our money on because the value of our money keeps decreasing everyday anyway.

A currency that is deflationary, is the complete opposite of a currency that is inflationary. That's what Bitcoin's about.

Not if I can easily get dirt from my backyard with no expenses at all. I would even give away my dirt for free cos I have plenty in my backyard. That would make dirt as useless as, well, dirt. But let me ask you. Do people want money? If yes then people want Bitcoins. Bitcoin is the equivalent of money in digital form. Money is simply something that holds a certain value. A 20 dollar holds 20 dollars worth of USD. Only difference is a 20 dollar note is worth 20 dollars USD no matter what. But 1 bitcoin can be worth anything the current price is at. Doesn't matter. It still represents a value. Now a 20 dollar note will and forever be worth 20 USD. But a bitcoin fluctuates. That's about it. Bitcoin holds a monetary value, just that it fluctuates.

The value of the dollar also fluctuates.  Both 1 BTC and 1 USD will always be worth 1 BTC and 1 USD respectively.  However, the value of both fluctuates with respect to the goods and services they are used to purchase.  BTC is in no way different from fiat in this regard, though currently it fluctuates *more* than fiat (I.e. it's very volatile).  A volatile currency doesn't make good money.  BTC has a long way to go to get to a point where market depth will be sufficient to minimize volatility, but of course this is simply an inevitable consequence of being new.

I don't believe there's any part of what you said that concretely justifies a necessary demand for BTC that couldn't be said for any other type of money.  I'm not saying there aren't any, but simply being deflationary or scarce aren't good enough reasons to be desired.

There are nasty consequences that can result from an economic environment where consumers hoard rather than spend their money.  The most immediate problem is that businesses start to go belly-up when their overhead and expenditures outpace revenue.  A deflationary currency won't help you when you get fired because the company you were working for can't afford to keep you on board any longer.  Contrary to what some other here might have you believe, being deflationary isn't a magical ingredient that suddenly makes unsound money sound.

It's very natural to hoard as much something that is deflationary just as it is to spend as much something that is inflationary. But knowing fiat is inflationary, people still save. And knowing Bitcoin is deflationary, people still spend. The thing with currency is it works not because it's inflationary or deflationary, it works because its value is relatively stable. As long as the price remains stable with no drastic volatility, a currency can gradually be worth less or be worth more yet still serve its purpose, a medium of monetary value in exchange for goods and services. When the Zimbabwean dollar experienced hyperinflation, prices are so drastic that from the moment you pick something up from the shelves to paying it at the counter, the price could have already changed. That would be unsound money to you, a hyperinflationary fiat backed by nothing but the word of the Zimbabwean government saying how much it's worth. An inflationary currency can depreciate close to zero. But a deflationary currency's value can only go up.  Which currency would you rather be holding?

Buying and selling bitcoin has become harder here (Australia).  Previously I could buy and sell using local online exchanges just by submitting an order and my bank account details.  That was early 2014.  Now I need to submit my driver's license, or passport, and at least another form of ID.  Feh to that.  I don't trust the site to keep my precious details secure (hello MtGox!).

There are many things without any market demand but still commands a high price, simply because someone is pumping money into them

For example those higher and higher towers in many major cities around the world, fireworks which only a few people watching, and those ghost towns with thousands of empty apartments in China

Bitcoin is similar, you don't really need bitcoin to survive, but it makes a lot of fun. You become a decentralized central banker immediately as soon as you start your mining rig, and you start to think about strategies to stabilize the exchange rate of your issued money and promote it to the world

Deflation cause less spending, thus create a race to the bottom spiral, and hurt economy, this is a consensus for modern economists. But with an inflative currency, you lose the option of saving, you are forced to do risky investments because the cash saving will just lose purchasing power year over year

So, if you have two currency running side by side, one deflative currency for saving and one inflative currency for spending, then both problem solved. I think this is the best part of bitcoin, very suitable to use as a long term value store

Bitcoin price's is not as simple as that.
Just because something is difficult and expensive to produce, does not mean it is valuable.

bitcoin came from $0.00001 and could end at there later

lol, you're dumb.

Well, only if people want Bitcoin. See what happen to Litecoin?