Does this assume that demand remains constant? Change in the demand of bitcoin can influence its price incremental to any price movement from fiat expansion.
Currently, everyone values and accepts fiat currency, and pretty much anything can be purchased with fiat. There are many people that do not value bitcoin, and would not accept bitcoin as a form of payment and I think that plays an important role in bitcoin's valuation.
Demand will rise over time, since bitcoin is purely based on volunteer adoption, people will only adopt it when they start to understand how money works, it will take decades for people to think and act (My 10 year old cousin already knows banks print money out of thin air, that is a great improvement  ). Fiat money is forced upon its users, thus banks must keep feeding them with fiat money in order to keep its adoption So fiat money expansion is inevitable and the increase of bitcoin popularity is also inevitable, at least for decades, like internet did |
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Can not see where this is going, I guess many consumers will just dig out coin and formatted the mobile phone, making bitcoin less and less |
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That was long  Money must be produced with similar value of its face value, otherwise it is just a IOU promise. However, since value is all subjective, the subjective measure of an IOU's value thus is based on the creditworthiness of the issuer |
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Another poor guy Does it really matter who invented fire  |
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We know that all the investment inevitably causes inflation in capital goods, this can be clearly observed on stock prices and house prices after added QE money supply
Although this kind of inflation does not count as inflation by CPI/PCE definition, it anyway indicated fiat money's reduced purchasing power against those capital goods: Same fiat money, now you can only buy one share while before you can buy 2 shares
However, bitcoin do not inflate as much. The increase of capital goods are caused by a large increase of fiat money supply, and the capital goods inflation as a result. But that will almost for sure cause their bitcoin price to drop (long term wise, currently bitcoin still have an inflation rate of more than 6%, that will be cut by half by next reward halving)
So, capital goods' value rises against fiat money (fiat money inflation), their value drops against bitcoin, thus bitcoin become the top performer in all investments
The reason for this is simple: Any capital goods, if you pour more fiat money into it, it will be produced in more quantity, thus reduce its value somewhat, but bitcoin's coin generation speed will not be affected by added fiat money supply, it is the most accurate measure of fiat money inflation
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If the investment return can not beat the inflation (I mean the inflation in capital products like house and stocks), then it is better to save in some anti-inflation currency like bitcoin
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A special currency suitable for special uses, mostly anti-inflation long term saving and international remittance, but since you seldom get it in the form of income, it will not be used widely
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Inflation of fiat money is exactly the reason you should use bitcoin as retirement savings, since it is anti-inflation, or even better, deflation. Its purchasing power would increase long term wise. A 100% increase in 4 years time frame seems to be guaranteed due to reward halving every 4 years
I would be disappointed if Bitcoin just managed to hold its purchasing power or increases marginally in the long term. I would put aside a small amount of money, be willing to take a hit if it disappears, but also expect a substantial return if it takes off. With large scale adoption, Bitcoin's price can take off and we as reasonably early adopters, may be rewarded. If bitcoin is officially regulated and well accepted like any other foreign currency, then the adoption will explode. However it is also possible that it will never gain a clear status from the government (Due to anonymity and no issuer), thus there will be less and less new people adopt bitcoin (Those who are geeky and brave enough to ignore the government directive are almost all on board now). And that will make the user base grow very slow. If the user base do not increase quickly, then 100% return in 4 years is already a quite good number |
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Bitcoin will go viral, i`m sure of that.
There are sooooo many ifs that you have factored, perhaps wrongly, into your surety. But my response was to btc being useful for a retirement account. I called it a currency. Is it a currency or an investment? If it's a currency, then the best thing for it would be price stability. In that case, btc would be absolutely horrible to sock away for retirement, because inflation would eat it away--and I mean inflation of fiat, because I do not expect the major currencies to collapse in our lifetimes, and since things are priced in fiat and btc is largely purchased with fiat, btc is tied to fiat. I could be wrong. If it's an investment, what justifies it's price? It represents no earnings as a stock does, or debt like a bond does. It's major advantages are as a currency: it's quick to transmit and the fees are very low. It's not even a physical thing like precious metals, art, or stamps. You might be sure btc will go viral, but I'm not so sure it'll be around in 20 years. Again, I could be totally wrong. Inflation of fiat money is exactly the reason you should use bitcoin as retirement savings, since it is anti-inflation, or even better, deflation. Its purchasing power would increase long term wise. A 100% increase in 4 years time frame seems to be guaranteed due to reward halving every 4 years As for investment, at a higher level of abstraction, all the investment is about growing your purchasing power. You receive some stock dividend or bond interest, but if those income and principal added together still bring you less purchasing power (due to hyperinflation), then that is a bad investment. However, if you hold bitcoin and its purchasing power doubled or even quadrupled during a hyperinflation, that's a good investment It is difficult to imagine where is the bitcoin's value established upon. Again, at a higher level of abstraction, value is all about trust, as long as there are some people trust bitcoin and willing to accept bitcoin in exchange for other valuables, it has some people backing it with real world resources. Although those backing is very distributed, they are all volunteer, which is very different from a government-backed-currency (typically forced upon its citizen domestically). Some day in 2009, north Korean government decided to abandon its currency and go for a new one, no one could against it and people with lots of cash saving lost a fortune. But for all the bitcoiners around the world to abandon the bitcoin at the same time is very unlikely if not totally impossible. From this point of view, bitcoin's value also comes from its non-political nature |
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The long term price appreciation trend must be hold to make bitcoin success
Suppose that bitcoin's price does not double every 4 years, but dropped after 4 years, then it will not hold its promise as long term store of value due to its deflative nature. Without this character, it will lose lots of supporters and go even worse. Today 90% of the coins are hold by the long term investors
In theory, reward halving will reduce the new money supply by 50%, similar to FED suddenly cut its money supply by half every 4 years, thus the price of bitcoin should at least double after each reward halving
Reward halving will drive lots of existing mining equipment out of business. With diminishing mining income, many will give up mining and purchase the coin directly, this will reduce the difficulty and raise the price
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The idea of liberland is great, however it does not need to take any physical form, otherwise you must spend lots of resources to physically protect the land, thus make it economically unfeasible
Rothschild families' biggest achievement lies in that they successfully virtualized their wealth into stocks bonds and debts, circulating around the world, thus become physically invincible from greedy local monarchs. Bitcoin enabled exactly the same thing but has much higher security and international reach
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I remember during 2013 spring, some one from Dubai ordered tons of KNC jupiter, maybe this is the result of that operation But wait, for a cash trades you can sell any amount, even 1 million bitcoins, so this does not say a lot |
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The traceable part is the spot of purchasing. If you want to acquire large amount of bitcoin, you have to either deal with a regulated exchange or an exchanger with money transmitter license, they will verify your identity and record the transaction Another way is to get a large mining farm and dig out clean coins, so I guess in the future the mining equipment maker would also be regulated as a money transmitter service and require buyer's id card But anyway, money laundering have many different forms, clever criminals will always find innovative way to launder money. I think the primary goal of money laundering law is not for prevent money laundering, but give banks a right to examine all the money flow so that excessive money will not flow to undesired area, mostly for sanction reasons |
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Each reward halving is like a FED meeting decided to cut the money supply by half. Even for a worldwide currency like USD, cut the money supply by half will make it at least appreciate 25% against other currencies, so for a small currency like bitcoin, a price double is not surprising
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The word "backed by" is a typical psychological trick. In fact you can't redeem USD for anything other than USD from the government even it is "backed by the full faith and credit of US government". People never need to redeem anything with USD, they just need merchant acceptance
Similarly, even if the currency is backed by gold, it means in principle you can redeem gold for that currency, but once the currency is widely accepted in circulation, people seldom need to redeem gold, since the currency is much more convenient to use than gold. Only during a panic and doubt of the currency's value (hyperinflation), some people will try to redeem gold, but then central bank can easily stop the redeem responsibility like in 1971
So the word "backed by" is very similar to insurance, just an empty promise to give users confidence to hold and use their currency
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When Bitcoin will be accepted at OPEC.
This Forget about supermarket, bitcoin does not bring you any good in buying a bottle of milk, just like you can not buy milk with stocks and options. Judging from the market today, bitcoin is mostly used for high value transactions. In future, it will be used for virtual product purchasing or international whole sale, and invested by pension fund, social security fund etc... The built-in design of supply decrease guaranteed a long term appreciation potential, thus make it a very good diversification in the portfolio of any institution |
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Maybe Greece will suddenly default and followed by other southern European countries, and who will be the biggest loser? Those who heavily invested in government bonds, typically pension funds and social security funds. But the fail of those investments only hurt the old people and unemployed people
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Every libertarian is a walking contradiction since technological automation is going to prove a marxist-friendly method as the only way out when unemployment gets stacking up perpetually, and once the bubble of "new" stupid useless jobs to cover up the unemployment rates blows, and this method is universal welfare, unless you want riots daily due pissed off people not having minimum resources meet.
This is not true. A libertarian is only a walking contradiction if he doesn't, at the same time, accept social Darwinism in which cultural, economical and social heritage is part of the struggle for the fittest. The normal outcome of this is a world, in which only the possessors of fully automatic capital survive (the others die of starvation). This has a lot of advantages, in the first place ecological advantages: one doesn't need to be a large number of capital possessors. So making most people (non-capital possessors) starve to death is a serious improvement of most ecological problems. If only a million or so of capital possessors survive, they would be able to live in great luxury, with a minimal burden on the environment, and possessing essentially the whole planet. It would finally be life in paradise. Of course, there would be a painful transition from a labor-driven economy with a lot of people, and a huge ecological burden, to a purely capital driven economy, fully automated. People dying of hunger would struggle, and probably cause a lot of problems before dying out. But once they are gone, the problem would be solved, and a purely capitalist paradise would emerge. You underestimated the power of starving people Lots of starving people connected together will become a destructive power, if organized by some resource rich guys, can make a sudden change in the landscape of upper class. And political fight is a daily business in the upper class, starving people is their weapon |
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As long as new coin has a production cost due to healthy competition, the coin generation scheme can even increase at a small and constant percentage each year, like Milton Friedman described
Although the speed of money supply increase might looks the same, it is very different than the way that fiat money supply grows today, since the growth of later is based on debt, and the growth of bitcoin is based on work already done
And later when economy is running out of steam (nothing grows forever), the bitcoin's value will not be impacted by a total debt meltdown like fiat money (this has not happened yet, but is developing quickly)
Currently everyone thinks that total coin supply should be capped, but maybe one day if bitcoin gained mass adoption, people will start to realize that capped total supply will make the value of bitcoin unstable forever, one bubble every 4 years, makes it a speculation heaven, not suitable as a currency. In fact even today, majority of the people treat bitcoin as a long term speculation instrument
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You don't need blockchain to monetize the assets, you just print new money and send to employees as salary to spend, and tell every merchant this is legal tender, backed by government assets, so that they will accept it. Of course they need to setup a settlement network in second currency, but that's a simple change in domestic banking network
As a result, all the euros in the country are collected and returned to debtors and the new currency circulate inside greece, this is essntially an exit of EMU
From ECB point of view, as soon as Greece start to make their own money, the total money supply in Eurozone can not be controlled by them anymore, so Greece must exit EMU
Greeks don't WANT to leave the Euro. They realize it has been a disaster and STILL want to stay. Its like Illinois and California electing the same goons over and over who have driven their states to pauper status. We imply the populace is itching to tear down the Brussels's headquarters but the opposite is true - the vast majority of Europeans want to remain in the EU. Yes, it makes no sense but the idea of the old national currencies (I loved using liras, francs, marcs, pesetas, drachmas) is fading quickly. Why Scandinavia countries never join EMU? There is much more to lose when you lose the right to create your own money. I don't think just simply remove the foreign currency exchange will bring so much benefit. Of course Greece can get cheap credit from ECB, but when they can print their own money, they don't even need cheap credit, they can create credit by themselves |
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