Thanks, everybody. Seems more clear now. 

I know about supply and demand theory, and I have been studying it. I understand it theoretically. But I don't fully understand how it functions when you take into account real transactions.

I have one very stupid, amateurish question to ask... regarding some fundamentals.
I know when a lot of people buy bitcoin (or anything else), the price is expected to rise.
Also when a lot of people sell it, the price is dropping.

However, each transaction has 2 sides. If you sell, you must sell TO SOMEONE, and that person BUYS, the exact same amount that you sell.
Also, when you BUY bitcoin, you buy it from someone, who sells it to you...

Also, it would be logical to say that whenever buying rises, the selling rises for the same amount, and vice versa.
Actually, the amount bought and amount sold, at any moments are the same.

So how can then selling push prices down and buying push them up?

I understand that with buying "new cash enters bitcoin economy" for example, if I buy, I spend cash on bitcoin, and bitcoin economy gets stronger for my amount of cash.

But what actually happens. At the same time someone SELLS that bitcoin to me. So there are actually 2 events... or each transaction has two sides. Cash actually goes into his pocket.

Now I guess if buyer initiates transaction, he maybe needs to accept slightly higher price, so if it starts from buyer, this is that pressure that drives prices up. And if seller initiates transaction, he can accept slightly lower price, which pushes the price down...

I am not sure if this is good understanding...

Those who have bitcoin would just be getting richer and richer without doing any real work.

But you can't just get rich out of thin air? All the others would be losers.

And if a lot of people had bitcoin, they would decrease all their economic activities because the most profitable thing is simply hoarding.

And this is not good, because without activity, economy collapses. We would get Great Depression 2.0.

(or 3.0. if you count late 2000s recession as 2.0)

Anyway, that's pretty much all i have to contribute at this moment. I don't feel like breaking your dreams. Just wanted to share some of my thoughts with you. I hope bitcoin's future will be such that it doesn't cause too many shocks and that it really achieves all the noble goals that you all desire, without too many side effects. I am not sure if this will happen, but that's what I would like to happen. Also, I think slower and steady growth is better for bitcoin as well, because it would mean wider adoption. Constant cycles of bubbles and crashes alienate a lot of people from it, and also a lot of people earn or lose a lot of money quickly and this is always tough play. I've heard of people dreaming about bitcoin. I know for myself that I wouldn't like to be so obsessed by one thing. Even now, even if I don't own any bitcoins, I follow the charts and discussions every day and follow it with excitement. I think I would get unhealthily obsessed if i actually owned some.

I would be happy and euphoric initially, but not sure how I would feel about it in long term. It's like winning lottery. I've watched some documentaries about people winning lottery, and most of them didn't keep their money in long term, some even became depressed or even poorer eventually.

Also, Google is not the same as bitcoin. Because google creates value through it's services, while bitcoin is just a store of value and means of exchange.

I also agree that constant economic growth is not sustainable and not desirable. But I think it's too early for that. Advanced western economies are already approaching zero growth. But undeveloped countries still need economic growth, and a lot of it, if they ever plan to approach western standards of living.

Also, economic growth does not necessarily mean using more resources. Today, most of the things created in economy are immaterial things. Services. This tertiary sector dominates in GDP of developed countries. And it's not resource intensive economic activity. With the development of technology, it will be possible to create more value with using less resources.

It is true, but today's richest people also had to work hard or to be very inventive to become rich. Bill Gates is a very talented person who created a big company and Windows is the most used operating system in the world. So he deserves it. It's not easy to do what Bill Gates did. The same is true for most self-made billionaires. They all achieved extraordinary things, or they were extremely talented in some area.
This is completely different from someone who simply buys bitcoin, and 5 years later, voila, he is a millionaire.


I actually think that this wouldn't achieve any redistribution at all. It would just reinforce current distribution even more. Those who were rich would become even richer, and those who were poor would become even poorer.

Today, most of bitcoin owners are young, educated, anglo-saxon men. People who already come from rich backgrounds. Those who can afford to spend money on it, and who can afford to lose money. And also those brave enough (and maybe greedy enough) to risk and to jump in it early.
Women are grossly underrepresented, as are minorities, people whose first language is not English, people from less developed countries etc.

And if you look at current distribution of bitcoins, it's way more unequal than general distribution of wealth in the world. Gini index for bitcoin economy is extremely high.

Also, I am looking at the bigger picture. While astronomical rise would surely benefit those who have bitcoin, I am not sure if it would benefit the entire society and economy. So my desire is greater good for everyone, and not just owners of bitcoin. And that would be possible, in my opinion, by more gradual rise, and gradual adoption.

With lottery you have mathematically proven extremely small chance of winning (close to zero). So for people lottery is just a game. People buy it, and expect to lose money.

With bitcoin some people expect FOR SURE to increase their wealth 100 or 1000 times.
Exponential growth is quite dramatic thing, that can lead to disasters.
I am not wishing anyone ill, i am just frightened by such huge expected rises of value.
I think it should be a more gradual thing. And also I am a bit shocked by feelings of entitlement.
If I had a lot of money, I would maybe buy just one or two bitcoins, just in case they boom, that I am not the last one left behind.
But I would never put all of my money into it. I wouldn't even put most of my money into it. Probably just a small fraction.

When it comes to accepting large inheritance I am undecided about whether it's ethical or not. Maybe inheritance law could be modified if not abolished completely. However, it's normal and natural for parents to want to leave something for their children, so I don't think it's really wrong. And also they probably worked hard for years to earn that money, so they can decide what to do with  it as they please.

Edit for spelling mistakes.

Maybe. Supporting the technologies and companies that are connected to it is maybe the most appealing part of it for me.

Thanks for your replies.

When i said you need to work hard to earn money, I didn't necessarily mean holding a standard 9 to 5 job and being exploited by a company.
But actually doing something, creating some value. Being active.
You can do this when you have your own company as well. But all the companies create some value, some product that some people will use.
With philosophy of holding bitcoins, you create nothing, and potentially earn enormous sum of money.
And of course there is a lot of risk involved in it. But a lot of people speak of logarithmic charts and long term trends, and take huge future increase for granted. For them it's not about if, but when. I don't understand this feeling of being entitled to increase your wealth by, say, 100 or 1000 times in few years, by doing nothing and just holding bitcoin.

If such an attitude becomes too widespread, I'm afraid it can affect economy negatively.

Hey, it wasn't meant as an attack on you. If I had bitcoin, i would also want it to rise. It's natural.
I wanted to buy it at some point.
But maybe I would have second thoughts and also feel a bit bad about it.
I am just afraid if bitcoin can really destabilize economy?

I don't really understand you folks. Why you want so much that it goes to the moon? If I had bitcoins I wouldn't feel this way. If the value of my assets increased that much as you all want and expect, I wouldn't feel good about it. It would feel to me like an undeserved reward. My deeply held belief is that you have to work hard to become rich, and not just sit down and watch your wealth increase.

I think potential big increase in value of bitcoin is not good for anyone.
It's not good for economy, because people would spend less, hoping their bitcoins would become even more valuable.
Less spending = less economic activity.
People would also work less. Why work, if you can just do nothing and watch your bitcoins become more valuable.
Less work = less economic activity.
People would also invest less in real companies. Why invest in something that grows slow, when you can invest in bitcoin which grows fast?
Less investments = less economic activity.

I hope bitcoin will never go mainstream and rise so fast in value. It could cause total economic collapse.
And also early adopters would get too rich, while all the later adopters would be in very bad position.

I really desire, if it ever becomes mainstream, that it grows VERY SLOWLY.