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November 23, 2013, 06:17:12 AM |
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supply and demand people. the supply of bitcoin is increasing slower than the demand for it. as for what drives all this new demand i would say its the prospect of it increasing in value. the only reason it is so high in value at the moment is because more people keep buying it which increases its value causing more people to buy ad infinitum. this is why we get these patterns of exponential growth. with btc being in the media lately demand has greatly increased. For those who think bitcoins use as a medium of exchange is driving price, i think thy are mistaken. the demand for that use just isn't that great. i think the growth we see is kind of a self fulfilling prophesy. everybody is buying because they expect price to go up, they only profit if more people buy as well. it wouldn't surprise me if btc turned into some kind of pyramid scheme, not because it was designed to be one, but because it could be exploited and turned into one. Although, i guess you would have to consider it a decentralized pyramid scheme. as i think the market is controlled by our collective fear and greed, and not any individual or small group.
its funny, i dont think btc will ever see mass adoption, but i think it will grow in value just because people will continue to decide it has more and more value, because the numbers keep going up and going up fast. I buy bitcoin to get in before the bubbles and to get out before the pop. i profit on others loss. I chase those exponential curves. so speaking individually greed drives my demand, and i think its the same for most recent adopters.
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