Measure Value in Infrastructure Development not Price

[MPOE-PR]

As for "infrastructure"... it's nice to have a new bridge.. but the fact that it exists is not as useful in estimating value as statistics on how much traffic it carries. Toll roads are perfect for this because you can tell if it was worth it by seeing the operating businesses' profitability.

So it's nice to know that Bitinstant has "700.000 BTC points of sale" or "MSB licenses in 30 states" but the really useful information is how many people are actually using their $-BTC bridge (and paying at their toll booth). If Bitinstant, Coinbase or Mt.Gox are profitable and keep growing, other companies will emerge to copy their business models and build more roads. Or they themselves will build more bridges in other countries.

Which happens to be exactly why the people that matter have tolls in place.

Then they come and say "if you can't afford the toll you don't matter", and the horde that doesn't matter gets all ruffled up.

[QuestionAuthority]

Forex traders would disagree with you. The only way to value a currency is by price. Infrastructure matters in the fixing of price only as much as it creates faith in the currency.

Fundamental analysis studies the intrinsic value of a currency and uses indexes called economic indicators. Economic reports like GDP, CPI, retail sales, interest rates and industrial production help traders determine value. The value of Bitcoin can't be tracked this way.

Technical analysis of currency value can use the above indicators but also uses political stability, the reliability of paying debt, trade balances and demand for the currency as a commodity. This has little to do with infrastructure and everything to do with price. This is the only way to track Bitcoin.

People crudely speculating on current money flow or political circumstances are doing it right. They are attempting to use available knowledge to determine current value direction and make an informed trading decision.

Your definitions are wrong. Sovereign debt risk, trade balances and demand to hold cash balances in that currency are all FX fundamentals, together with other economic indicators. Technical Analysis is used a lot in forex, but technical indicators are mostly chart-related (see http://www.investopedia.com/terms/t/technicalanalysis.asp).

Also I don't see why the GDP of the Bitcoin economy can't be estimated, just as the GDP of many small countries are. In fact it should be easier, since the blockchain is public, whereas national accounting statistics miss out on a lot of stuff.

You can try it: http://en.wikipedia.org/wiki/Gross_domestic_product#Determining_GDP

Another, perhaps more interesting question would be... what is the point? GDP is a relatively useless statistic anyway. Much better to have the transaction volume (https://blockchain.info/charts/estimated-transaction-volume) or the transanction fees paid (https://blockchain.info/charts/transaction-fees) that will give you a really good idea of the Bitcoin economy's flow, size and growth.

Believe me, if economists (and traders) could have these kind of real time statistics on the US economy, they would not give a damn about crappy, government-estimated GDP.

Those definitions are textbook! At least you agree that infrastructure is a faulty metric for this "baby economy."

[MPOE-PR]

Also I don't see why the GDP of the Bitcoin economy can't be estimated, just as the GDP of many small countries are. In fact it should be easier, since the blockchain is public, whereas national accounting statistics miss out on a lot of stuff.

Of course, it has been. The problem is that much like the "power rangers" that like to write (bad, useless, buggy) code but don't like to read, just so the "economy experts" on the forum love to write (bad, useless, ignorant) nonsense but don't like to read.

Generally speaking it's the dirtiest that hate showering most and the ones that'd have the most to gain by reading that avoid it the most.