I just don't get it.

[molecular]

If you want to understand the potential (or inevitable) adoption of Bitcoin, then look at the adoption of the internet. As the internet is a force of freedom of speech, so will Bitcoin be the force of freedom of exchange.

Given your statement (which i agree with), I think it's slightly amusing how the built-in coin generation rate curve looks a lot like the Internet adoption curve:



That's most likely a meaningless coincidence.  

However, the interesting point from the chart, is that if the adoption rate of both phenomena are similar, it would imply that most of the adoption (& price gains?) will occur approximately within 10 years, i.e. by 2020.  The X factor being that the existence of the Internet accelerates information dispersion and uptake by at least twofold, but on the negative side a brand new type of money has to deal with an entrenched legacy mentality and infrastructure that is tougher to convert.  So perhaps Bitcoin might only need 4 or 5 years to reach global awareness and adoption (similar to something like Facebook between 2008 to 2012), or it could take 20 years to fully overcome the inertia of existing moneys and payment systems.

Rick Falkvinge 2011 in Prague: "I predict bitcoin will reach usability sometime in 2019". (with "usability" here he means "mainstream adoption")

watch vid for more great stuff:

http://www.youtube.com/watch?feature=player_detailpage&v=mjmuPqkVwWc#t=1563s

[n8rwJeTt8TrrLKPa55eU]

i'm much more interested in comparing Bitcoin asymptotic growth to this:

He he, that's the best case scenario, 100% of USD printed going straight to BTC, the same way that many folks in banana republics currently put all their money into USD right after they get their paycheck.  Could happen within the next 10 years once the UST bond bubble bursts and the USD starts losing its irrational reputation as a safe parking place.  And imagine not just the USD monetary base, but the entire plane's monetary base trying to fit into 21 million units.

[n8rwJeTt8TrrLKPa55eU]

Rick Falkvinge 2011 in Prague: "I predict bitcoin will reach usability sometime in 2019". (with "usability" here he means "mainstream adoption")

watch vid for more great stuff:

http://www.youtube.com/watch?feature=player_detailpage&v=mjmuPqkVwWc#t=1563s

Thanks, I have a soft spot for Falkvigne and hope to meet him in person someday.  Aside from digging his championing of liberty in general, his fantastic series of Bitcoin articles in 2011 (including the famous "putting all my savings in Bitcoin") were my personal catalyst for dipping my first toe into the BTC waters.

[cypherdoc]

Rick Falkvinge 2011 in Prague: "I predict bitcoin will reach usability sometime in 2019". (with "usability" here he means "mainstream adoption")

watch vid for more great stuff:

http://www.youtube.com/watch?feature=player_detailpage&v=mjmuPqkVwWc#t=1563s

Thanks, I have a soft spot for Falkvigne and hope to meet him in person someday.  Aside from digging his championing of liberty in general, his fantastic series of Bitcoin articles in 2011 (including the famous "putting all my savings in Bitcoin") were my personal catalyst for dipping my first toe into the BTC waters.

i hope he didn't get hurt too bad selling.  he must've been whipsawed bad.

[Monster Tent]

Its yet to be seen if bitcoin can scale given the block size issue and a hard fork managed badly could seriously put a dent in confidence.

There are good reasons to be cautious.

[n8rwJeTt8TrrLKPa55eU]

i hope he didn't get hurt too bad selling.  he must've been whipsawed bad.

Yep he should've re-read his own articles and stayed the course during those dark days.

[molecular]

Rick Falkvinge 2011 in Prague: "I predict bitcoin will reach usability sometime in 2019". (with "usability" here he means "mainstream adoption")

watch vid for more great stuff:

http://www.youtube.com/watch?feature=player_detailpage&v=mjmuPqkVwWc#t=1563s

Thanks, I have a soft spot for Falkvigne and hope to meet him in person someday.  Aside from digging his championing of liberty in general, his fantastic series of Bitcoin articles in 2011 (including the famous "putting all my savings in Bitcoin") were my personal catalyst for dipping my first toe into the BTC waters.

i hope he didn't get hurt too bad selling.  he must've been whipsawed bad.

I hope he re-bought around the conference when price was around $3.

[Bit_Happy]

...
What are the factors at play here.. Help me make an informed decision.
...

...Why do financially sensible people jump lemming-like into hare-brained speculative frenzies--only to jump broker-like out of windows when their fantasies dissolve? We may think that the Great Crash of 1929, junk bonds of the '80s, and over-valued high-tech stocks of the '90s are peculiarly 20th century aberrations, but Mackay's classic--first published in 1841--shows that the madness and confusion of crowds knows no limits, and has no temporal bounds. These are extraordinarily illuminating,and, unfortunately, entertaining tales of chicanery, greed and naivete. Essential reading for any student of human nature or the transmission of ideas.

Extraordinary Popular Delusions and the Madness of Crowds

[wachtwoord]

i'm much more interested in comparing Bitcoin asymptotic growth to this:

Does this graph mean what I think it does. If it does then it's much worse than I thought and my opinion wasn't that conservative to begin with ... wtf

(So I am asking have the amount of dollars in circulation tripled since 2008? :|)

[kibblesnbits]

1) Either Bitcoin goes to $0 in a few years or to very high levels like $10,000/$100,000+.

Orrrrrr, it could be somewhere in between.  I'll wager that BTC will not be $0 and it will not be $10k/$100k within your estimates.  To make a statement like that is foolish.  

To the OP, sorry you took everything off the table.  In my experience, unless you have the foresight like ZB that your investment may be 0, sell off a little and take some profits.  I started this experiment when BTC=4$, sold a little, bought a little, and never looked back.   Best you could hope for now is maybe a correction like 10-20% and get back in the game.  

[DeathAndTaxes]

Does this graph mean what I think it does. If it does then it's much worse than I thought and my opinion wasn't that conservative to begin with ... wtf

(So I am asking have the amount of dollars in circulation tripled since 2008? :|)

Well this is the monetary base.  So it isn't all dollars it is the fed's balance sheet.  But since the monetary base is the starting point for FRB yes the amount of dollars has "exploded" over the last couple years.  Here is the equivalent chart for the M2.



The FED only know one way to stimulate the economy and that is to pour dollars on everything like gasoline.  The M2 has "only" expanded 60% or so in the last three years.  Why?  The FED can't directly change the amount of money in circulation.  It can only create conditions where banks increase debt which produces more money.  However banks have found this great loophole.  They borrow money from the FED for essentially 0% dump it into Tbonds for 2% to 3% and collect a nearly risk free return. 

Still 60% M2 inflation in three years is pretty huge.  You may be wondering if the number of dollars has increased by 60%+ why haven't prices almost doubled.  Well velocity has fallen off a cliff.



The more the economy stagnates the more the FED does the only thing it can do which is print more dollars, however banks are growing loans so the economy sees less and less of that money.   So the fed keeps printing and printing and printing in order to coax the economy to life.  Kinda like someone who can't get a barbaque lit so their solution is to keep dumping gasoline on it.  One gallon doesn't work, lets try 2 gallons, 5 gallons, 50 gallons, hey back up that tanker truck.

However if the economy ever grew by any significant % suddenly their would be a "shortage" of dollars velocity would skyrocket and that would be the spark for an inflationary inferno.  Of course the omniprescent FED will see this coming and contract the money supply at the perfect time to neither hurt growth nor let inflation get out of control.  If it sounds highly risk, don't worry the FED has a great track record with the almost inhuman precision needed to manipulate the world's large economy.  As an example of their awesome skill in manipulating the economy to maximum benefit, take a look at the housing bubble.  They quickly saw that low interest rates were fueling an utterly unstable bubble in housing prices and were able to gently bring prices down averting the recession of 2008 and expanding the economic expansion for 2000 straight through 2013 with massive growth in real GDP, employment, and overall prosperity ... er wait.

[creativex]

Thanks for that, it's the velocity of money that is often overlooked. The fed is out of tools and is really painted into a corner at this point.

[wachtwoord]

Thanks for explanation. It is much more in line with what I thought then, an exponential increase that seems to be in line with the last 15-20 years at least and not much steeper than the 15-20 years before that. Pretty depressing but tripling the amount of a currency in circulation is a hell of a lot worse than 60% dilution i the same period. 200% dilution (tripling) looks like the beginning of hyperinflation

Edit:

If these numbers are accurate how can 60% inflation be true for the ~5 year time frame? Don't Keynesians aim for a long term inflation of 2.5-3%? Even for 3% they shouldn't inflate the currency base with more than 1.03^5 = 1.16 (16%) then! 60% is 9.9% YOY. Has this been going on since 1995? Hell even the incline between 1980 and 1995 looks way too steep.

[creativex]

Thanks for explanation. It is much more in line with what I thought then, an exponential increase that seems to be in line with the last 15-20 years at least and not much steeper than the 15-20 years before that. Pretty depressing but tripling the amount of a currency in circulation is a hell of a lot worse than 60% dilution i the same period. 200% dilution (tripling) looks like the beginning of hyperinflation

Edit:

If these numbers are accurate how can 60% inflation be true for the ~5 year time frame? Don't Keynesians aim for a long term inflation of 2.5-3%? Even for 3% they shouldn't inflate the currency base with more than 1.03^5 = 1.16 (16%) then! 60% is 9.9% YOY. Has this been going on since 1995? Hell even the incline between 1980 and 1995 looks way too steep.

It is way too steep to go on indefinitely, but if you're massively indebted and lack the means to repay then repaying with massively devalued currency may be your only option aside from open default.

[DoomDumas]

Bitcoin are the future for peoples.. more and more peoples are realizing it.

Fiat are so much debase, and it's only the begining of the realm where fiat are heading to toilet paper use..

World economies are in a so bad shape.. The future is not bright at all..

It took me more than a year to realize how much this thing (bitcoin) is great.  Under 100$ it really undervaluated.. IMO, it will stabilize well over 1000$ !
Before realizing how powerfull bitcoins are, I've sold more than 5000 under a dollar.

This is not yet a bubble, look at all-time data log chart, you will see that we are'nt even entering in the bubble territory. 

Bitoin are to money, what's email are to regular post and even a lot more.. welcome to the future..

When you'll pay 200$ for a week of potatoes, you'll understand.. those who are pilling fiat for their old days will regret so much !

[johnyj]

Just read some interesting literatures about gold rush in california. During the first 5 years after gold discovery, some 300,000 people moved into this area to mine gold and on average each person digged out some gold that worth around 70,000 USD in today's price

Based on general economic theory, extra money supply will create inflation, but the California gold rush just proved how wrong that theory is. The prosperity of west coast were largely driven by the discovery of those gold and the increased purchasing power of these area, and the inflation rate during those years are almost zero based on US statistic data

This again proved that inflation has no direct relation to money supply, as long as those money are honest and debt free. It is only those fiat money generated out of thin air could create hyper inflation, since people have little trust in those money

[cypherdoc]

i'm much more interested in comparing Bitcoin asymptotic growth to this:

Does this graph mean what I think it does. If it does then it's much worse than I thought and my opinion wasn't that conservative to begin with ... wtf

(So I am asking have the amount of dollars in circulation tripled since 2008? :|)

it was $800B back then.  it's almost quadrupled since.

[oakpacific]

i'm much more interested in comparing Bitcoin asymptotic growth to this:

Does this graph mean what I think it does. If it does then it's much worse than I thought and my opinion wasn't that conservative to begin with ... wtf

(So I am asking have the amount of dollars in circulation tripled since 2008? :|)

it was $800B back then.  it's almost quadrupled since.

Where do you think Bitcoin is in this curve?

[cypherdoc]

actually, i'm very fond of Roman Candles.  when you see something like this, you know you got a problem:

[cypherdoc]

i'm much more interested in comparing Bitcoin asymptotic growth to this:

Does this graph mean what I think it does. If it does then it's much worse than I thought and my opinion wasn't that conservative to begin with ... wtf

(So I am asking have the amount of dollars in circulation tripled since 2008? :|)

it was $800B back then.  it's almost quadrupled since.

Where do you think Bitcoin is in this curve?

Bitcoin is the vertical part; except you need to color it green.