Why do people think one Bitcoin will be worth $1000 (or more)

[jubalix]

I think many people (newbies) think the value of Bitcoins can only go up is because they know there will never be more than 21 Millions Bitcoins on this planet. Bitcoins are scarce compared to the 7 billion humans on this planet or the trillions and trillions of USD and EURO in the financial markets.

What they forget is that you can, almost indefinitely, divide a Bitcoin. In milli-Bitcoins (mBTC), micro-Bitcoins (µBTC) - or Satoshis (0.00000001 BTC). So there’s plenty of Bitcoins left for everyone on this planet. Or Satoshis (300,000 Satoshi for every human to be exact).

As long as Bitcoins are not used in "real life" (e.g. I can buy stuff from Amazon or pay a pizza with them) they have zero value. OK one could say they have at least the value of the electricity that has been used to create them.

But on the other hand no one measures the value of a 100 Dollar note with the paper and the ink that it's composed of. A 100 Dollar note has it's "value" because it's accepted everywhere and I can get "stuff" for it.

Bitcoins are accepted almost nowhere – hence their "value" is pure from speculation. It can be 50cent today, 50 USD in a month and 10cent in two month. No one should complain if he has lost money. We have all seen this before. In the 17th century in the Netherlands: The Tulip Mania.

http://en.wikipedia.org/wiki/Tulip_mania



This was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed. The price of tulips skyrocketed because of speculation in tulip futures among people who never saw the bulbs. At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman.

The more I read OP, he does not understand people are trading in fiat for BTC, this alone back bicoin. I don't mine, I swap fiat for bitcoin think about it.

[BitCoinLoft]

In every system sooner or later stability is reached. Even in those systems that look and seem chaotic there is some sort of stability. Likewise, Bitcoin will reach stability and will settle down on a certain value. Honestly, I don't believe anyone can now predict accurately what the stable value of Bitcoin will be. It could be $1,000 per BTC or it could be 10 cents. The fact that Bitcoin is divisible will not affect the price. Gold is divisible too but this fact does not change its value. What affects value, though, is the supply and demand. And in this respect, Bitcoin is perfectly protected. No matter how powerful mining hardware hits the market, this won't have considerable impact. Only smaller miners will see the effect - sharks will eat 'em. That's why I think it's better to trade to make profits than to mine unless you have really good hardware.

Sorry, but it is not technically correct to compare Bitcoin to tulip bubble either. That was a totally different economic story with totally different characteristics. I would not go deeply into economic detailes. One of the many things that was different is that today we live with (almost) perfect information. When tulips crashed, it would take many days before all "participants" could be notified. However, in our era, information flow is almost instant and thus market reaction is very quick.

All in all, I believe that Bitcoin does have bright future.

[TimJBenham]

People not familiar with Bitcoin don't see a difference.  They say that anyone can start a new type of coin tomorrow.  When you try to explain how it is difficult to gain traction for a new type of coin they just look at you funny.

I'm sure that if you're the US or the EU you could create a new coin and give it enormous traction. I expect that is coming: StateCoin. StateCoin will have many advantages. It wont be anonymous, so criminals wont be able to use it to do bad things to children. Even better, StateCoin will support remote confiscation, so the financial police will be able to get your money back if it is stolen. StateCoin will integrate smoothly with the banking system, with your cellphone account, with government welfare agencies, and of course with the tax office. StateCoin will remove the need to carry dirty, inconvenient cash. In fact cash will be phased out.

[mobodick]

In every system sooner or later stability is reached.

That seems to be categorically false.
Maybe you mean 'every closed system' but bitcoin is hardly a closed system and is not designed to be one in any way.

[Jobe7]

...you're wrong in each point by the way. You can buy pizza with Bitcoin and BitPay just figured out how to provide service for sellers with goods in an amazon warehouse.

I am at Olivia Plaza Hotel, Barcelona, Spain at the moment.
I have 12BTC in a wallet on my smartphone.
I am hungry and want a pizza.

Question for you: What do I do now?

Send me the 12BTC, and I will make sure a pizza of your choice is delivered. I will throw in a free bottle of wine.

What he said, I'll make 2 pizza's

[||bit]

...you're wrong in each point by the way. You can buy pizza with Bitcoin and BitPay just figured out how to provide service for sellers with goods in an amazon warehouse.

I am at Olivia Plaza Hotel, Barcelona, Spain at the moment.
I have 12BTC in a wallet on my smartphone.
I am hungry and want a pizza.

Question for you: What do I do now?

Send me the 12BTC, and I will make sure a pizza of your choice is delivered. I will throw in a free bottle of wine.

lol ....  and a taxi driver for the day.

[davidgdg]

One thing about the whole tulip story that just doesn't make sense:

To create tulip bulbs you just plant bulbs in favourable soil and environment and 1 year later you dig it up to find many more new bulblets, replant in larger trays and so on. why the fuck would people enter a speculation frenzy on such an easily duplicated item?

BTC is completely different it has proof of work, getting increasingly harder. Ecenomically it is the same as gold. But unlike gold you dont have to stripmine the earth to get it.

BTC doubters can bite my shiny metal ASS!

The story doesn't make any sense because the story is wrong. There was no tulip mania bubble. The price went up 30x because the law changed so that "buyers" did not have to complete if the price fell. They just had to pay a 3% fee to the seller. So sellers just raised their prices 30x to compensate. It's all in Wiki.

[Ekaros]

One thing about the whole tulip story that just doesn't make sense:

To create tulip bulbs you just plant bulbs in favourable soil and environment and 1 year later you dig it up to find many more new bulblets, replant in larger trays and so on. why the fuck would people enter a speculation frenzy on such an easily duplicated item?

BTC is completely different it has proof of work, getting increasingly harder. Ecenomically it is the same as gold. But unlike gold you dont have to stripmine the earth to get it.

BTC doubters can bite my shiny metal ASS!

The story doesn't make any sense because the story is wrong. There was no tulip mania bubble. The price went up 30x because the law changed so that "buyers" did not have to complete if the price fell. They just had to pay a 3% fee to the seller. So sellers just raised their prices 30x to compensate. It's all in Wiki.

It was all future trading. In a bad way. Which has been proven to be bad many times. There is place for futures, but missuse of them leads to bubbles...

[manfred]

thats why:
https://bitcointalk.org/index.php?topic=169881.msg1766044#msg1766044

[bitcool]

In every system sooner or later stability is reached.

That seems to be categorically false.
Maybe you mean 'every closed system' but bitcoin is hardly a closed system and is not designed to be one in any way.

well, unless our ET friends bring BTC back to their homes, most would consider 6 billion people on earth as a closed system.

[onealfa]

Non typical weekend :

[Wekkel]

This is going to end well above $1,000.

[Operatr]

Well, the Bitcoin market cap is about $1.5 Billion, a lot of money composed of several other currencies, a drop in the bucket of the total world's currency. As Bitcoin only grows as other fiats are converted into Bitcoin, slowly eating up these meatworld money systems. What is the price of a Bitcoin when it's market cap is $1.5 Trillion someday? Probably a lot more than what it is now. Those early to the party may walk away very wealthy people in our freshly minted brand new economy free of bankster scams and government lies.

[Zaih]

I really hope Bitcoins will soon be accepted as a median of exchange. I don't see why not either. We're growing so fast atm, it's becoming a more and more feasible idea to accept Bitcoins.

At this rate I wouldn't be surprised if Bitcoin became more accepted than Paypal!

[Wekkel]

People not familiar with Bitcoin don't see a difference.  They say that anyone can start a new type of coin tomorrow.  When you try to explain how it is difficult to gain traction for a new type of coin they just look at you funny.

I'm sure that if you're the US or the EU you could create a new coin and give it enormous traction. I expect that is coming: StateCoin. StateCoin will have many advantages. It wont be anonymous, so criminals wont be able to use it to do bad things to children. Even better, StateCoin will support remote confiscation, so the financial police will be able to get your money back if it is stolen.

Would you have faith in a Bitcoin that could be confiscated by a bureaucrat because it is labelled 'stolen'. Until recently, even bank accounts were deemed sacred (tax authorities need to attach a bank account; simple confisquation not allowed).

However, a decent State coin would certainly not be without merits. The State might as well just adopt Bitcoin once it has matured.

[simonk83]

I think many people (newbies) think the value of Bitcoins can only go up is because they know there will never be more than 21 Millions Bitcoins on this planet.

You r right. But 95% users of this forum own bitcoins and hope to make a fortune spreading this delusion. They don't have strong arguments to support the delusion

Says the guy pushing Bytecoin at every turn

[TimJBenham]

People not familiar with Bitcoin don't see a difference.  They say that anyone can start a new type of coin tomorrow.  When you try to explain how it is difficult to gain traction for a new type of coin they just look at you funny.

I'm sure that if you're the US or the EU you could create a new coin and give it enormous traction. I expect that is coming: StateCoin. StateCoin will have many advantages. It wont be anonymous, so criminals wont be able to use it to do bad things to children. Even better, StateCoin will support remote confiscation, so the financial police will be able to get your money back if it is stolen.

Would you have faith in a Bitcoin that could be confiscated by a bureaucrat because it is labelled 'stolen'.

No, but the sheeple seem perfectly happy with Paypal. Paypal can take money back whenever it wants, basically. The sheeple demand someone give their money back when they fail to secure their bank accounts. They seem happy to accept slow, reversible bank transfers as the price for this. The sheeple want to be able to change their minds, so they love paying by credit card and don't seem to mind having the cost of this built into the price.

[zakoliverz]

Go ahead and buy a few, but treat it as riskier than the stock market, so don't make it a BIG investment. Maybe 5-100 dollars, tops, unless you think you're rich enough to invest, have enough money to stabalize the market in a pinch, and still have enough other assets to keep going.

[MonkeyBear68]

Bitcoin is a very easy and cheap way to send money across the internet. The more businesses that accept it, and the more people that use it, the higher the value of a single BTC will need to be in order to serve the market. $1000/BTC is not unreasonable once it gains wider acceptance.

I am down about $120,000 from last weekend and I still believe in bitcoin as a very easy and cheap way to send money across the internet. The price of a single BTC is still more than what it was on April 1. The value simply went up too quickly and caused a temporary bubble. MtGox going down so much did not help.

Because bitcoin is a virtual commodity that acts as the medium for transfer, and goods are priced in dollars, it is crucial that we have stable reliable bitcoin exchanges!!! The bitcoin protocol itself is robust, the exchanges need work!

[John Self]

We were recently in the 'new paradigm' stage of that bitcoin bubble chart that everyone keeps posting.