Scarcity on something that is useless in every sense, probably not. But bitcoin is not in that category.

Gold's annual production is around 2500 tons. There are a few metals which have a production that is counted in just a few tons per year, typically in the PGE (Platinum Group of Elements). These metals fluctuate wildly in their prices as their scarcity alone allows their marketcap and price to be squeezed high through a single buy, or dumped quite lower with a few not-so-dramatic moves in terms of $$$. But noone says "ohh Iridium is a pump and dump because it was $400 in 2010, $1100 in 2012 and fell to $400 in 2013". You know it's a small market and that fluctuations are to be expected.

Bitcoin is similar in a sense. Yet, beside being scarce, it also has something to offer. It can do online payments, it can preserve wealth in the long run - especially for multiple countries that run double digit inflation, it can be a diversification asset, it can bypass capital controls, it can offer banking services even to kids who are gaming and want to sell or buy a fictional item or a game account in an MMORPG - which would otherwise be impossible without using their parents bank/CC/paypal etc, it can even be considered a collectible as the first decentralized digital currency (which is a historic event analogous to the first coins or first paper notes). People are paying hundreds or thousands of dollars for a good condition uncirculated coin of 100 years ago, just because this type of coin is harder harder to find than a coin in average circulated or worn condition. In any case, as far as BTC is concerned, the scarcity factor means that not many people can hold 1 BTC - but we all know that. Which, by necessity, will make the prices go much higher.

Many people that are trading bitcoin do so from the U.S. or Europe and they have a fundametal problem in appreciating it. We do not really understand or appreciate the benefits of what bitcoin can do for countries that do not have numismatic stability or easy international transactions through banks/paypal/credit cards etc due to quotas, controls, government approvals to buy even 10 dollars worth of stuff, etc.

For an American or a European, bitcoin is a very misunderstood asset because most of its benefits are not readily visible. The same is true for gold btw - most people will prefer money in the bank rather than gold. Having numismatic stability for a few decades makes you forget that your currency is just faith-backed money that can fall over the cliff overnight just because there was an international shock, a war, some political mess, etc etc. But countries that are immersed in that kind of shit do not value their fiat - they only value land, gold, tangible assets, hard currency (if they can get their hands on it) and Bitcoin (because through bitcoin they can actually have the equivalent of hard currency - despite their government blocking access to hard currency). So, in a sense, hard currencies like the dollar are not directly competitive with Bitcoin, but weaker ones are, because Bitcoin is the medium to have access to dollars despite a government's effort to prevent the population from stacking foreign exchange or using it to store wealth, or using it to conducting international trade.

Traders are in awe when they see a nice 10-15% spread to a Chinese exchange, but they have no idea that some people are arbing 50 or 100% for selling BTCs (in local currency equivalent of $$$) in countries that have numismatic instability.

Nice metaphor.

As much as I hate to admit. He is right regarding no government will put up with non-control currency for long.

Banks until now have said we love the blockchain, but hate Bitcoin.

Jamie seems to be running down the blockchain as well. He says the blockchain wouldn't offer improvement in areas like trading of stocks. This is plain silly. Why would you be satisfied with a 2 day settlement period, armies of men keeping track of transactions, possibilities of errors, etc, while the blockchain can do a better job in 10 minutes?

Wasn't the price high yesterday as there was a Silk road auction? It's down today and one user predicted this as well.

Six times the Army of Northern Virginia BTC assaulted the heights of Little Round Top 500.   Six times the 20th Maine 500 repelled them.

Courtesy of Brian Kelly, author of the Bitcoin Big Bang

http://bitcoinbigbang.com

Is It Sustainable?
In short, yes.  There are two reasons why BK thinks the bitcoin rally will last 1.) Limited Supply 2.) Halving Day. First lets address the limited supply – the total amount of bitcoins that will ever exist is 21 million, but there are currently only 14.8 million in circulation. The remainder of the coins will be minted over the next few decades as payments to miners who confirm and process transactions.  The positive news-flow has certainly increased price speculation and the limited supply exacerbates the move.  One way to look at the limited supply is to look at how many people could amass a stake of $100,000 worth of bitcoin.  At current prices (~$400) $100k is 250 bitcoins. Since there are only 14.8 million in circulation, this means that only 59,200 people in the entire world could own $100k worth of bitcoin.  When one considers there are 11,000 hedge funds and 7,000 mutual funds (total 18k), if they all wanted to buy a tiny stake of $100k they would take up 30% of the total supply.

One thing to add, of those 14.8 million "in circulation" remember 1 million belongs to Satoshi and are locked up, potentially as many as 2-3 million maybe be lost forever on dormant hard drives, a few million are held in strong hands leaving only a couple million for actual trading and up for grabs by weaker hands.

Agreed... but stock owners are speculating on future dividend gains that may or may not be realized when they purchase stock. Just like with bitcoin. But unlike bitcoin, stocks have little use or utility while you own them. A lot of stock doesn't even allow you any voting power.

2014 Jun 01 (on the way down):

Unless it's been previously mentioned, perhaps we should have Death Star cost parity. I assume everyone will want their own one eventually anyway.

Price has doubled in a month.

This has happened in each of the previous jumps.

Previously this translated into a doubling again 2 weeks later, then another doubling 1 week later...then...

Every night this week I went to bed expecting to see a dump when I awoke the next morning, but the price had shot up. It is an insane parabolic rise and I'm beginning to wonder how high it can go. At this rate it will surpass 2013. Strangely people appear to be dumping alts to buy Bitcoin when its usually vice versa. Very few of them have risen in percent USD as much as Bitcoin, they are dropping in value against it.

10K at least. price is on a log scale.

chinese household holdings (20 trillion usd) + capital controls = do the math (if only 1% trickles down into bitcoin)

Circle jerk temp check?

With past 30 days bitcoin has risen 60%.

Since we are already on a parabolic rise, you take 1.6 into the power of 2, that gives us 2.56.

Now we extrapolate by multiplying the current price of nearly 400$ with 2.56 and we will get 1024$.

During the next 30 days bitcoin will reach 1024$. Since 1024 is already a power of 2 and a cryptographically significant integer, it is an omen that silently confirms my claims.