Most of what's in that quoted section is reasonable enough. But the key points are just nuts.
The natural price of Bitcoin is far, far lower than where it stands right now, probably around the same level it was last summer, after its first catastrophic crash and before its second.
How has the author determined 'the natural price' of Bitcoin? I *do* think it's actually reasonable to define a 'natural price'... take an estimated fiat value of all the goods and services traded in Bitcoin over the past month, or year or whatever, divide by the number of bitcoins circulated in that timeframe. But such a price is a theoretical construct, probably impossible to actually get an accurate value for.
the bigger fear is if the natural price for Bitcoin can go low enough that it no longer becomes efficient to run these mining rigs.
The author has forgotten about the inbuilt difficulty change that keeps the mining network roughly in equilibrium. Price drops too low -> most miners drop out -> difficulty goes down -> mining becomes more profitable -> miners come back. Not to mention that with ASICs coming up, electricity costs, which became the bane of GPU miners, will become relatively unimportant for a while (year or so, maybe) until we come full circle again with a mining network made entirely of ASICs.
But the more Bitcoin fans boost the bubble, the bigger the shock's going to be when it pops.
True enough, ASSUMING that we have a bubble in the first place. As other posters have mentioned there's a much bigger bitcoin economy than there was two years ago.
