Fundamental analysis thread

[lebing]

I'm going to keep this thread updated with the most important fundamental reasons (not technical) which will in the long term, move the price. Hopefully over the long term this reduces the number of "OMG?! why is the price going X??" I will be limiting the updates I make to this thread to only those items which have the power to significantly affect adoption/ move the market. I'm sure I missed a few things, so feel free to post and remind me.

Bitcoin charts on bloomberg for employees, coming soon to everyone
http://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/
TLDR Bitcoin now officially mainstream

Bitpay partners with 3dcart
http://btcbible.com/bitpay-partners-with-3dcart/
TLDR Bitcoin now available as a payment option to 16,000 new merchants

Bitcoin finally coming to Africa
http://www.reddit.com/r/Bitcoin/comments/1hn0ue/kipochi_launches_first_bitcoin_wallet_in_africa/
TLDR A SMS/ web hybrid system is being developed now which will reach the place where bitcoin has the most potential for organic growth.

Bitcoin ETF (once approved by the SEC) coming soon
http://www.pcworld.com/article/2043473/winklevoss-twins-will-secure-bitcoins-like-gold-in-vaults.html
TLDR You might soon be able to purchase bitcoin derivatives from your stock broker

Webmoney (Russian Paypal with 11 million users) is now an exchange and wallet servicing p2p and merchants
http://www.thegenesisblock.com/bitcoin-access-expanded-to-over-11-million-users-of-webmoney/
TLDR Big pressure was just put on Paypal to integrate sooner rather than later.

Okcupid is now accepting bitcoin (7 million users)
http://arstechnica.com/business/2013/04/okcupid-says-it-will-accept-bitcoin-as-currency-falls-to-recent-low/

Hedge fund looking to inject 1 billion € into bitcoin for large investors
https://exante.eu/press/news/266/
TLDR Big €€€ starting to move into Bitcoin

Western Union looking to integrate bitcoin into services
http://mobile.blogs.wsj.com/cio/2013/04/01/western-union-eyes-digital-currency-services/
TLDR Bitcoin is on the verge of worldwide physical exchange infrastructure

Expensify Brings Bitcoin to Main Street
http://www.businessweek.com/articles/2013-03-29/expensify-brings-bitcoin-to-main-street
TLDR App with 200,000 business users is leveraging bitcoins strengths

New zealand, Cyprus & other Mediterranean countries considering/ have decided to confiscate "one time" X% of depositor funds
http://www.nytimes.com/2013/03/24/world/europe/russian-ties-put-cyprus-banking-crisis-on-east-west-fault-line.html?pagewanted=all&_r=0
TLDR The money you thought was safe from theft in your bank account is not safe (especially if you live in an at risk country in the euro zone).

FINCEN releases guidance for virtual currencies (bitcoin)
http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf
TLDR Small exchanges based in the USA will likely have a tough time due to this, but by making the grey legal area black & white, it will make larger players willing to step forward. In other words, bitcoin is now legal.

Blockchain forked, but problem solved
http://www.reddit.com/r/Bitcoin/comments/1a51xx/now_that_its_over_the_blockchain_fork_explained/
TLDR Double spend issue has been fixed in the short term and long term with the new roll out plan

Amazon fulfillment integrates with Bitpay
http://www.marketwatch.com/story/bitpay-integrates-bitcoin-with-fulfillment-by-amazoncom-2013-03-06
TLDR There is now a convenient way for anyone (registered business @ Amazon) to sell anything with bitcoins through Amazon

Bitspend.net
https://bitspend.net/
TLDR You can now buy ANYTHING on the net with bitcoins (under $100 during beta and under $1000 after beta ends)

Coinlab Bringing Bitcoin to Wall Street with MtGox Deal -
http://bitcoinmagazine.com/coinlab-bringing-bitcoin-to-wall-street-with-mtgox-deal
TLDR - Details are sketchy at this point, but it seems that there may be a deal coming up which will bring bitcoin into the forex market. I'm including this here because of the absolutely insane effect this would have on the price if this were in fact happening.

Mega - https://twitter.com/KimDotcom/status/302844443223023616
TLDR - The service formerly known as Megaupload (which was the top non-torrent based file sharing service on the net) is now accepting Bitcoins

Reddit - http://blog.reddit.com/2013/02/new-gold-payment-options-bitcoin-and.html
TLDR - One of the largest sites on the internet is now accepting bitcoin for their premium service!

Bitpay - http://blog.bitpay.com/search?updated-max=2012-12-06T10:13:00-05:00&max-results=7
TLDR - Merchants are signing up in droves with Bitpay's (and other payment processors) payment system

Wordpress - http://en.blog.wordpress.com/2012/11/15/pay-another-way-bitcoin/
TLDR - The largest blog network on the internet is now accepting bitcoins. This paves the way for wider, mainstream bitcoin adoption

Coinbase - http://blog.coinbase.com/post/42587245753/coinbase-is-now-selling-over-1m-usd-of-bitcoin-per
TLDR - It just got alot easier for users in the largest bitcoin market in the world (USA) to acquire bitcoins and it is showing up in the numbers.

SatoshiDice/gambling potential: http://calvinayre.com/2013/02/01/business/why-bitcoin-can-no-longer-be-ignored/
TLDR - While its not possible to gamble with dollars in the US, it is possible with bitcoins. The big players are starting to take notice of this fact and over the next few months its likely that we will see one emerge onto the scene

Blockchain: https://blockchain.info/charts/my-wallet-n-users?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

TLDL - The best online wallet is experiencing exponential growth of new users

[lebing]

source: http://www.runtogold.com/bitcoin-price/

[lebing]

reserved

[lebing]

Updated with Reddit announcement

Reddit - http://blog.reddit.com/2013/02/new-gold-payment-options-bitcoin-and.html

[niko]

No bad news whatsoever? At least developers' words of caution?  I just spent 10 minutes trying to come up with something serious, but failed.

[molecular]

this is a good idea...

I think the ECB paper was a huge bullish event since journalists can now quote from a "trusted source" (lol, can't believe I said that) about bitcoin:
http://www.forbes.com/sites/jonmatonis/2012/11/03/ecb-roots-of-bitcoin-can-be-found-in-the-austrian-school-of-economics/

Do you also accept more general fundamental properties of bitcoin as bull-reasons? Here are a few for starters I wont back up with articles:

• Bitcoin is sound free market money with known supply for the people against authoritarian
• Bitcoin has low barrier to entry and can be used anonymously
• The network effect: bitcoin is viral interenet money

[lebing]

this is a good idea...

I think the ECB paper was a huge bullish event since journalists can now quote from a "trusted source" (lol, can't believe I said that) about bitcoin:
http://www.forbes.com/sites/jonmatonis/2012/11/03/ecb-roots-of-bitcoin-can-be-found-in-the-austrian-school-of-economics/

Do you also accept more general fundamental properties of bitcoin as bull-reasons? Here are a few for starters I wont back up with articles:

• Bitcoin is sound free market money with known supply for the people against authoritarian
• Bitcoin has low barrier to entry and can be used anonymously
• The network effect: bitcoin is viral interenet money

I agree Mol that the ECB paper was big for the reputation of the currency & knowledge among the "elites", but I won't include it here because I really want to limit it to only those events which will affect the price directly.

I don't think a background on the properties of bitcoin is possible/ desirable for within the confines of this thread. Most people get to this subforum because they already understand these things anyway.

[molecular]

this is a good idea...

I think the ECB paper was a huge bullish event since journalists can now quote from a "trusted source" (lol, can't believe I said that) about bitcoin:
http://www.forbes.com/sites/jonmatonis/2012/11/03/ecb-roots-of-bitcoin-can-be-found-in-the-austrian-school-of-economics/

Do you also accept more general fundamental properties of bitcoin as bull-reasons? Here are a few for starters I wont back up with articles:

• Bitcoin is sound free market money with known supply for the people against authoritarian
• Bitcoin has low barrier to entry and can be used anonymously
• The network effect: bitcoin is viral interenet money

I agree Mol that the ECB paper was big for the reputation of the currency & knowledge among the "elites", but I won't include it here because I really want to limit it to only those events which will affect the price directly.

I don't think a background on the properties of bitcoin is possible/ desirable for within the confines of this thread. Most people get to this subforum because they already understand these things anyway.

Maybe you should consider slightly renaming this thread then, because I was thinking exactly of that (fundamental properties) when I read the title. Maybe something like: "fundamental events", I don't know...

[lebing]

this is a good idea...

I think the ECB paper was a huge bullish event since journalists can now quote from a "trusted source" (lol, can't believe I said that) about bitcoin:
http://www.forbes.com/sites/jonmatonis/2012/11/03/ecb-roots-of-bitcoin-can-be-found-in-the-austrian-school-of-economics/

Do you also accept more general fundamental properties of bitcoin as bull-reasons? Here are a few for starters I wont back up with articles:

• Bitcoin is sound free market money with known supply for the people against authoritarian
• Bitcoin has low barrier to entry and can be used anonymously
• The network effect: bitcoin is viral interenet money

I agree Mol that the ECB paper was big for the reputation of the currency & knowledge among the "elites", but I won't include it here because I really want to limit it to only those events which will affect the price directly.

I don't think a background on the properties of bitcoin is possible/ desirable for within the confines of this thread. Most people get to this subforum because they already understand these things anyway.

Maybe you should consider slightly renaming this thread then, because I was thinking exactly of that (fundamental properties) when I read the title. Maybe something like: "fundamental events", I don't know...

Good call - I changed it to fundamental analysis

[xcsler]

Bearish data: Scalability?
I'm not a technie but the whole scalability issue concerns me a bit. I don't know whether to believe Hearn et al. or Kaminsky.
All I do know is that it takes a long time to sync Bitcoin-qt on my laptop and Bitcoin hasn't yet been entered the mainstream.  What happens when the number of transactions per day increases 10,000 fold?

[byronbb]

Bearish data: Scalability?
I'm not a technie but the whole scalability issue concerns me a bit. I don't know whether to believe Hearn et al. or Kaminsky.
All I do know is that it takes a long time to sync Bitcoin-qt on my laptop and Bitcoin hasn't yet been entered the mainstream.  What happens when the number of transactions per day increases 10,000 fold?

They use a wallet like blockchain.info. Most end users will never deal with a wallet on their computer, nor should they.

[piramida]

It only makes sense to have the full blockchain if you are actively mining (and even then, can just have unspent inputs, full chain can be stored for archival purposes on several machines only). So thin clients should obviously be promoted on the bitcoin main site, when devs consider it is ready for wide adoption.

[xcsler]

Does the presence of the full blockchain on only a few machines make the Bitcoin network more vulnerable to fraudulent transactions?

[MonadTran]

+ Mega & BitVoucher:

https://twitter.com/KimDotcom/status/302844443223023616

Just days after the Reddit announcement. Things are starting to unroll.

[lebing]

+ Mega & BitVoucher:

https://twitter.com/KimDotcom/status/302844443223023616

Just days after the Reddit announcement. Things are starting to unroll.

Thanks, I was lazy yesterday =P

Updated

[xxjs]

Long time fundamental forward outlook:

The value of a bitcoin will rise with adoption, until some optimal adoption level is achieved. On the way up, speculators who correctly foresee this level, will put an upward pressure to the value earlier.

If speculators erroneusly predict the optimal adoption level, the value may overshoot, and we will have a period with lower value.

When the optimal level of adoption is reached, a bitcoin hoard can no longer be regarded as an entrepreneural investment, so bitcoin will slowly move from the hoards to profit making investments in the real economy. That is a slow downwards pressure on the value of a bitcoin.

Additionally, economic events will happen around the world, creating volatility for bitcoin as it does for other currencies.

You will have to fill in the metrics for yourself, it is not really possible to predict.

[KTE]

That's about right, the long term fundamental outlook. Right now I have a hard time believing that there is a single opportunity in all of the financial industry that has more visible potential than BTC. The viability of a level headed investment on BTC comes from the visible risk of BTC being orders of magnityde lower than you would expect for something that has this much potential. Sugar on top, the risks have diminished considerably in the past year.

That this possibility exists is only possible because BTC is such a novel concept that it requires a considerable amount of expertise to assess not only the potential but much more importantly the risks.

[xxjs]

I totally agree. This is unprecedented, rewart/risk is higher than any other investment. A once in a lifetime opportunity.

[TraderTimm]

On a fundamental basis, I see the freedom that bitcoin offers as being a huge inducement. I'd also like to see us move away from edge-exchanges when trying to 'value' bitcoin. The redeemable quality of bitcoin is an attraction right now, but I'd like to have just BTC to BTC transfers happening than any BTC --> Sovereign Currency trades.

You can't put a price on freedom, so fundamentally I see a bright future for bitcoin and its successors (if any).

[xxjs]

On a fundamental basis, I see the freedom that bitcoin offers as being a huge inducement. I'd also like to see us move away from edge-exchanges when trying to 'value' bitcoin. The redeemable quality of bitcoin is an attraction right now, but I'd like to have just BTC to BTC transfers happening than any BTC --> Sovereign Currency trades.

You can't put a price on freedom, so fundamentally I see a bright future for bitcoin and its successors (if any).

I agree. When adoption is completed, there is still tons of reasons both to use and to save bitcoins.