I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post. The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.
M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.
That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily. Not a completely bad point, but in order to compensate for growing adoption, V would need to keep on rising. Exponentially, to compensate for exponentially rising adoption/usage. Not likely. Probably impossible in fact, considering the technical limitations and tradeoffs of the network. In a thread a while ago, I made a (relatively simplistic) argument that, if Bitcoin is used as a method for Internet payments (and only for that) on the order of yearly Paypal volume today - a comparably modest goal, I'm sure you'll agree - and making a few extremely conservative estimates for the necessary parameters involved (including V), we arrive at a valuation of around $2000 per unit. The single biggest not-so-conservative assumption I am making is that those transactions are actually taking place on chain, not off chain, which could be an (unfortunate, because trust requiring) development. ( Link to my post, the calculation is under Addendum #2) Back to the topic: I set V_year = 10, which is a conservative value considering that actual velocity of Bitcoin is probably a lot lower currently. M1's V_year seems to be able to reach into the range of 10 ( WP link), but usually is lower, so if the Bitcoin network would be stable anywhere 10 it'd be a) pretty efficient, and b) the argument you mention, that increased adoption and usage doesn't lead to proportionally higher valuation, doesn't hold. the only way to know how this theory will work in reality is to sit-back and watch how things will develop, although it would be really hard to get "real" numbers, but estimates could do as well. |
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I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post. The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.
M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.
That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily. pretty sure he means price will rise more then use, which is true, it will probably go twice as high as it should.  being a perma-bull made you blind, what he is saying is crystal clear let me repeat it: That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily. |
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I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post. The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.
M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.
That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily. |
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Some people are still having early life support problems with RC4 There, corrected that for you. Now. Riddle me this.  Bitcoin is supposed to be a eCash system. If you can trace almost every transaction, without going through some effort to remove the tracing, is it an eCash system? I'm a big supporter of Bitcoin. I won't have a bad word said against it. But it did not achieve what it set out to achieve, as stated in the first line heading of the white paper. That is the Nr. 1 unresolved 5 year Bitcoin problem Darkcoin is trying to engineer a solution for. I just asked you if you are still having problems, didn't ask for a Bitcoin lecture about what satoshi said. |
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but at least he (Fonzie) claims to be making various investments in BTC.... and you?
You mean, help pay for Winklevum and Winklevee's new Ferrari? Sorry, I am not smart enough for that. Jorge, your posts are high quality and usually accurate, in fact it is I consider you one of the most close to reality poster (oda.krell is also a good poster) , you know people hate the truth or what goes against their will/wish, don't bother so much with them and please keep your posts coming, I really enjoy reading them. The point is: what is he doing here? He is dogmatic, closed of, prejudiced, not open to arguments, repetitive and on top of that fucking smug. I'm quite surprised anyone ever enjoys his presence in any setting. I also think it's very sad he's an academic since all those qualities above need to be the inverse for him to be able to make a meaningful contribution to science of any sort whatsoever. well, we don't drink from the same bottle do we ? I really think he has some real good inputs, it is your problem if you think they don't fit your agenda or what you wish to hear, I tend to be objective and try to reasonably hear both sides... I agree that sometimes we cross some lines which is normal (especially in this thread) but this shouldn't disappoint you all at once. It's not that he doesn't agree with me. It's that he doesn't seem to understand and respond to counter arguments and merely repeats his statements in different wording. It seems he's unable to participate in any intelligent argument. well, I don't know, I really didn't come across this, I will pay more attention... but I still think he has some real good inputs... maybe I am more compatible with him than you with him ? I did notice that how people personally engage into a matter is really important in terms of how the audience usually receive it, for example, I cant stand Risto, and this is mostly because of the way he engages his audience, see this doesn't mean that everyone hates him, I did notice that he has some audience that goes all the way to defend him which is strange for me but understandable for them... maybe this is the problem with Jorge and many others here ? also, maybe because we don't engage in person (face to face)there is many hidden expressions that could change the way a statement is received... for example: me telling you "oh screw you..." in person how you receive it would depend on the way I said it, if I say it with an angry face and hand waving you may get insulted and offensive but if I said it with a big smile/laugh you would receive it as a joke or a meaningless act.... but in the forums it is all different, I am sure that people don't understand each-other because of this problem add to that we are not all native English speakers. |
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but at least he (Fonzie) claims to be making various investments in BTC.... and you?
You mean, help pay for Winklevum and Winklevee's new Ferrari? Sorry, I am not smart enough for that. Jorge, your posts are high quality and usually accurate, in fact it is I consider you one of the most close to reality poster (oda.krell is also a good poster) , you know people hate the truth or what goes against their will/wish, don't bother so much with them and please keep your posts coming, I really enjoy reading them. The point is: what is he doing here? He is dogmatic, closed of, prejudiced, not open to arguments, repetitive and on top of that fucking smug. I'm quite surprised anyone ever enjoys his presence in any setting. I also think it's very sad he's an academic since all those qualities above need to be the inverse for him to be able to make a meaningful contribution to science of any sort whatsoever. well, we don't drink from the same bottle do we ? I really think he has some real good inputs, it is your problem if you think they don't fit your agenda or what you wish to hear, I tend to be objective and try to reasonably hear both sides... I agree that sometimes we cross some lines which is normal (especially in this thread) but this shouldn't disappoint you all at once. |
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but at least he (Fonzie) claims to be making various investments in BTC.... and you?
You mean, help pay for Winklevum and Winklevee's new Ferrari? Sorry, I am not smart enough for that. Jorge, your posts are high quality and usually accurate, in fact it is I consider you one of the most close to reality poster (oda.krell is also a good poster) , you know people hate the truth or what goes against their will/wish, don't bother so much with them and please keep your posts coming, I really enjoy reading them. |
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people still having problems with RC4 ?
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I've decided to invest only $20K back, because according to perma-bulls 1 BTC will make me a millionaire regardless, so why be greedy ? we have to leave some coins so others can be millionaires too You will miss your entry point and buy back at a loss. what entry point you are talking about ? I don't understand your post !!! |
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I love how people cancel their bids when the price is going down, it is like no one is really sure about what they want, this just confirm the "they buy high and sell low" theory |
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@ChartBuddy, can you please explain to us how you generate that graphics or one website to found it? It doesn't appear on the "Explanation" section chartbuddy is a bot  , you have to ask Ricky about that. |
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mmmm, I think that the real bottom (that I am waiting for) is far away from today or this week, maybe not even this month, yes this means that we just entered a long bear market, unless some magic and huge buys comes in to fix what I am watching in the 1w MACD. I've decided to invest only $20K back, because according to perma-bulls 1 BTC will make me a millionaire regardless, so why be greedy ? we have to leave some coins so others can be millionaires too  |
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These dumps make me so tired...
you better go rest now, because we will have allot of these. |
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to the " we will never see sub 500 again"... told you |
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https://www.youtube.com/watch?v=T1X6qQt9ONgThe day bitcoin had a crash below $1. Those that purchased at those prices, are living the life of rich fuckers. I'm gonna be a rich fucker if you guys help crash the price of Darkcoin. Thanks for working for me. You are my bitches. nope, you are pulling that from your ass, the whole trades were reversed... |
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We will never see <500 USD again
I've heard this so many times... |
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I think it wont go more than 550...the bid side will build up and another dump will follow.
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Investing in Bitcoin later when the price bottoms or investing it in gold for the long term scenario that I think will happen (war, total collapse...).
Right now silver seems cheap as sh*t to me, and that's what you can go buy groceries with in SHTF What is SHTF? Shit Hits The Fan You think you can still buy groceries when shit hits the fan? you can get them for free if you are a bad ass with a better gun than the groceries store owner... and if you have the morals to do that. So where does silver come in? Is the store owner a werewolf? Will there even be grocery store owners then? When (if) the Shit hits the fan gold and silver will be cheap as fuck. If you have stuff people want or need like truck loads of salt, toilet paper, caned food, fuel..... they will sell you the gold at rock bottom prices. Once the worst is over after 7 years and people dont need to worry about essential any-more the gold price goes trough the roof you buy whole factories with it or whole city blocks with the PM. ok then buy a shit load of guns to sell later |
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Investing in Bitcoin later when the price bottoms or investing it in gold for the long term scenario that I think will happen (war, total collapse...).
Right now silver seems cheap as sh*t to me, and that's what you can go buy groceries with in SHTF What is SHTF? Shit Hits The Fan You think you can still buy groceries when shit hits the fan? you can get them for free if you are a bad ass with a better gun than the groceries store owner... and if you have the morals to do that. So where does silver come in? Is the store owner a werewolf? Will there even be grocery store owners then? we don't know yet, this is why we have to be prepared shit maybe investing in some company that make weapons would be also wise...a really dark world we are living at, but it is about to get darker  |
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Investing in Bitcoin later when the price bottoms or investing it in gold for the long term scenario that I think will happen (war, total collapse...).
Right now silver seems cheap as sh*t to me, and that's what you can go buy groceries with in SHTF What is SHTF? Shit Hits The Fan You think you can still buy groceries when shit hits the fan? you can get them for free if you are a bad ass with a better gun than the groceries store owner... and if you have the morals to do that. |
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