Bitcoin Forum
June 16, 2024, 08:31:15 PM *
News: Voting for pizza day contest
 
   Home   Help Search Login Register More  
Pages: [1]
  Print  
Author Topic: 2013-03-31 Forbes 'Is Bitcoin Doing Well Or Is It Just A Bubble?'  (Read 1687 times)
Manticore (OP)
Member
**
Offline Offline

Activity: 70
Merit: 10



View Profile
March 31, 2013, 10:43:44 PM
 #1

2013-03-31 Forbes 'Is Bitcoin Doing Well Or Is It Just A Bubble?'
http://www.forbes.com/sites/timworstall/2013/03/31/links-31-march-is-bitcoin-doing-well-or-is-it-just-a-bubble/
molecular
Donator
Legendary
*
Offline Offline

Activity: 2772
Merit: 1019



View Profile
March 31, 2013, 11:11:15 PM
 #2

Quote
And a month back, before the most recent trebling, others were saying that Bitcoin was already a bubble:
Quote
With apologies to Scott Sumner, I say Bitcoin is a bubble. Outside of war and rebellion, do “normal” new currencies behave
this way?

What if bitcoin is not a "normal" new currency?

Quote
Myself, if I had any, I’d be cashing out around now.

This guy would've cached out at $3 in early 2011. And that's why he doesn't have any coins.

Do I sense some envy and/or regret in his tone?


PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
odolvlobo
Legendary
*
Offline Offline

Activity: 4354
Merit: 3261



View Profile
March 31, 2013, 11:20:59 PM
Last edit: March 31, 2013, 11:47:29 PM by odolvlobo
 #3

Quote
The US money supply supports the $15 trillion of the US GDP for example. And that GDP is a significant multiple of the monetary base of $600 billion or so. The same holds true of other currencies around the world ... With Bitcoin it is very different indeed. Transaction value ... is much lower for Bitcoin than the outstanding value of the currency is.

Beyond the obvious error where he writes "monetary base of $600 billion" (M1 is $2.6 trillion), he is simply wrong.

U.S. GDP is about 5.8 times M1.

Bitcoin transaction value is about 10 times the Bitcoin M1 (109.5 million / 11 million).

Of course, GDP is a small part of total transaction value, but at least Bitcoin is in the same ballpark.

Join an anti-signature campaign: Click ignore on the members of signature campaigns.
PGP Fingerprint: 6B6BC26599EC24EF7E29A405EAF050539D0B2925 Signing address: 13GAVJo8YaAuenj6keiEykwxWUZ7jMoSLt
Piper67
Legendary
*
Offline Offline

Activity: 1106
Merit: 1001



View Profile
March 31, 2013, 11:32:31 PM
 #4

These analyses always try to fit Bitcoin into pre-existing molds. "this isn't how stocks behave" or "the price is rising too fast for it to be a good currency"

It's a bit like a Yap Islander saying the USD isn't a good enough money because quarters, nickels and dimes are too small  Grin
julz
Legendary
*
Offline Offline

Activity: 1092
Merit: 1001



View Profile
March 31, 2013, 11:33:10 PM
 #5

Quote
It’s just not true that people are doing multiple billions a year of Bitcoin transactions. The number is well below that $ billion of the outstanding value of the currency.

It seems nobody in the comments section on Forbes has taken issue with this... so what is an approximate figure for the yearly USD value of Bitcoin transactions?
Is there a site with a regularly updated estimate of this?

@electricwings   BM-GtyD5exuDJ2kvEbr41XchkC8x9hPxdFd
odolvlobo
Legendary
*
Offline Offline

Activity: 4354
Merit: 3261



View Profile
March 31, 2013, 11:36:02 PM
 #6

Quote
It’s just not true that people are doing multiple billions a year of Bitcoin transactions. The number is well below that $ billion of the outstanding value of the currency.

It seems nobody in the comments section on Forbes has taken issue with this... so what is an approximate figure for the yearly USD value of Bitcoin transactions?
Is there a site with a regularly updated estimate of this?

http://blockchain.info/charts/estimated-transaction-volume

This chart shows that daily transaction volume is about 300,000 BTC.

Join an anti-signature campaign: Click ignore on the members of signature campaigns.
PGP Fingerprint: 6B6BC26599EC24EF7E29A405EAF050539D0B2925 Signing address: 13GAVJo8YaAuenj6keiEykwxWUZ7jMoSLt
BTC Books
Member
**
Offline Offline

Activity: 84
Merit: 10



View Profile
March 31, 2013, 11:42:23 PM
 #7


This guy would've cached out at $3 in early 2011. And that's why he doesn't have any coins.

Do I sense some envy and/or regret in his tone?


No, I don't think so, molecular.  Bemused and patronizing is more like it.  And that's cool.

I've noticed that an awful lot of already successful people turn up their noses at bitcoin.  I suspect some of that may be because successful people are constantly being badgered to invest in everything under the sun - and they're always on guard... always defensive about it.  But part of it may be that they just don't care any more - they've got theirs, and they're just playing defense.

This is a good and evolutionary thing.  The ranks of the 1% need to be completely turned over - they're corrupt and nepotic and turn everything to shit.  More than anything, I'm hoping bitcoin will accomplish this in the long run.  Fair warning though:  if I were alive in a hundred years I'd probably be saying the same thing about the bitcoin 1%...  Undecided

Dankedan: price seems low, time to sell I think...
Stephen Gornick
Legendary
*
Offline Offline

Activity: 2506
Merit: 1010


View Profile
April 01, 2013, 01:57:17 AM
 #8

so what is an approximate figure for the yearly USD value of Bitcoin transactions?
Is there a site with a regularly updated estimate of this?

About a week ago, BitPay, the largest (by a wide margin) bitcoin payment processor reported month-to-date transactions through merchants using their service of $2 million.

Yes,  $2 million for about three weeks.    Obvoiusly, that's growing fast -- but let's give it 100X growth over the next year, to $200 million a month, or about $2.4 billion on an annual basis.  If the U.S. GDP of $16 trillion works off of $1 trillion of money supply that's 16:1 of transactions of economic activity versus the money supply (velocity would be 16, calculating it that way).

So using that same number, the $2.4 billion of economic activity and velocity of 16 means bitcoin's value a year from now should be about $150 million, or about a BTC/USD of $12.50.

The thing is, if bitcoin continues to grow for use for all kinds of financial transactions, including forex speculation, it wouldn't be $200 million a month but maybe $200 million an hour.  And thus today's $93 BTC/USD would be incredibly undervalued.

After cringing when listening to someone mention borrowing on a credit card to buy 5 bitcoins I heard the justification that if Bitcoin goes to zero, that person is out $500 and dines out one day a week less over the following year.  But if it goes to $10K per bitcoin, that builds a good base towards retirement for that person.  When just a little over two years ago when bitcoin first crossed parity with the dollar (Feb 2011), predictions of $100 a bitcoin seemed just bizarre to most, yet inevitable to others (Falkvinge, Max Keiser, among members of this forum).

Unichange.me

            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █
            █


nimda
Hero Member
*****
Offline Offline

Activity: 784
Merit: 1000


0xFB0D8D1534241423


View Profile
April 01, 2013, 02:26:23 AM
 #9

...that person is out $500 and dines out one day a week less over the following year.
Where are you "dining out" that only costs $9.60 a meal?
marcus_of_augustus
Legendary
*
Offline Offline

Activity: 3920
Merit: 2349


Eadem mutata resurgo


View Profile
April 01, 2013, 02:29:34 AM
 #10

Quote
Indeed, given the speed of the rise in value it looks a great deal more like a bubble: something that private currencies and unregulated financial markets are prone too, as we know.

First fail: A Fellow from the Adam Smith Institute harbouring delusions toward the perfection of regulated markets?

Quote
Myself, if I had any, I’d be cashing out around now.

Second Fail: He doesn't have any to cash out ... lolol ... not qualified to comment.

Wonder what the Adam Smith Institute position on free market money vs State monopoly fiat is? Old guys in suits need to wake up to their responsibilities, particularly to the suffering wrought by a failed financial system.

barbarousrelic
Hero Member
*****
Offline Offline

Activity: 675
Merit: 502


View Profile
April 01, 2013, 02:30:35 AM
 #11

Quote
The US money supply supports the $15 trillion of the US GDP for example. And that GDP is a significant multiple of the monetary base of $600 billion or so. The same holds true of other currencies around the world ... With Bitcoin it is very different indeed. Transaction value ... is much lower for Bitcoin than the outstanding value of the currency is.

Beyond the obvious error where he writes "monetary base of $600 billion" (M1 is $2.6 trillion), he is simply wrong.

U.S. GDP is about 5.8 times M1.

Bitcoin transaction value is about 10 times the Bitcoin M1 (109.5 million / 11 million).

Of course, GDP is a small part of total transaction value, but at least Bitcoin is in the same ballpark.


According to this Wiki article, the "montary base" is not M1, but M0, which is smaller than M1 but no longer reported by the Federal Reserve.

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

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
smoothie
Legendary
*
Offline Offline

Activity: 2492
Merit: 1473


LEALANA Bitcoin Grim Reaper


View Profile
April 01, 2013, 03:27:42 AM
 #12

The author of this article claims that unregulated markets move like how bitcoin recently has, but doesnt mention that it is likely because the dollar value is falling more so than the price of bitcoin going up.

The faith in fiat is the reason for the higher prices.

Most people with phd's in economics nowdays do not even know this simple fact.

███████████████████████████████████████

            ,╓p@@███████@╗╖,           
        ,p████████████████████N,       
      d█████████████████████████b     
    d██████████████████████████████æ   
  ,████²█████████████████████████████, 
 ,█████  ╙████████████████████╨  █████y
 ██████    `████████████████`    ██████
║██████       Ñ███████████`      ███████
███████         ╩██████Ñ         ███████
███████    ▐▄     ²██╩     a▌    ███████
╢██████    ▐▓█▄          ▄█▓▌    ███████
 ██████    ▐▓▓▓▓▌,     ▄█▓▓▓▌    ██████─
           ▐▓▓▓▓▓▓█,,▄▓▓▓▓▓▓▌          
           ▐▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌          
    ▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓─  
     ²▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓╩    
        ▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀       
           ²▀▀▓▓▓▓▓▓▓▓▓▓▓▓▀▀`          
                   ²²²                 
███████████████████████████████████████

. ★☆ WWW.LEALANA.COM        My PGP fingerprint is A764D833.                  History of Monero development Visualization ★☆ .
LEALANA BITCOIN GRIM REAPER SILVER COINS.
 
nobbynobbynoob
Hero Member
*****
Offline Offline

Activity: 784
Merit: 1000


Annuit cœptis humanae libertas


View Profile WWW
April 01, 2013, 03:44:08 AM
 #13

The dollar is falling in value for sure, but it's not the Zimbabwean dollar we're discussing - yet.

The BTC price hike is mainly due to pure demand for BTC. Some of it may be driven by fear of inflation and banksters, yes, but it's mostly just new peeps wanting BTC for whatever reason, IMHO.

Earn Free Bitcoins!   Earn bitcoin via BitcoinGet
BTC tip: 1PKkvuwC24Vqjv9odigXs1QVzE66jEJqmb (if <200 µBTC, please donate to charity)
LTC tip: LRqXaNdF79QHvhPpS5AZdEJZnLiNnAkJvq (if <Ł0,05, please donate to charity)
solex
Legendary
*
Offline Offline

Activity: 1078
Merit: 1002


100 satoshis -> ISO code


View Profile
April 01, 2013, 11:01:04 AM
 #14

Quote
The US money supply supports the $15 trillion of the US GDP for example. And that GDP is a significant multiple of the monetary base of $600 billion or so. The same holds true of other currencies around the world ... With Bitcoin it is very different indeed. Transaction value ... is much lower for Bitcoin than the outstanding value of the currency is.

Beyond the obvious error where he writes "monetary base of $600 billion" (M1 is $2.6 trillion), he is simply wrong.

U.S. GDP is about 5.8 times M1.

Bitcoin transaction value is about 10 times the Bitcoin M1 (109.5 million / 11 million).

Of course, GDP is a small part of total transaction value, but at least Bitcoin is in the same ballpark.


According to this Wiki article, the "montary base" is not M1, but M0, which is smaller than M1 but no longer reported by the Federal Reserve.

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

Yes. The Bitcoin monetary base is purely M0.
The effective monetary base for the US is more like $10tn supporting the $15tn GDP.


Zerohedge has this in a current article: http://www.zerohedge.com/news/2013-03-31/visualization-modern-fractional-reserve-banking-and-how-cyprus-fits

WishIStartedSooner
Sr. Member
****
Offline Offline

Activity: 252
Merit: 250


View Profile
April 01, 2013, 12:05:26 PM
 #15

...that person is out $500 and dines out one day a week less over the following year.
Where are you "dining out" that only costs $9.60 a meal?

Ah. allow me to translate:

in the language of those of us who are broke "dining out," means buying food for your family from a fast food facility with a dollar menu. or at like steak and shake or something if your REALLY doing well.

if you're doing well enough to be able to afford kitchenware, it would have cost a little less to just prepare food at home, so you pay a little extra to spare yourself the work that in rich people world normally gets done by slaves.

EDIT: after being a giant smartass about it, I realized you might live in New York or something, where everything seems to cost ALOT more.
Roger_Murdock
Sr. Member
****
Offline Offline

Activity: 342
Merit: 250



View Profile
April 01, 2013, 12:59:46 PM
 #16

...that person is out $500 and dines out one day a week less over the following year.
Where are you "dining out" that only costs $9.60 a meal?

Where are YOU dining out that costs MORE than $9.60 a meal, Mr. Rockefeller?  Tongue
nimda
Hero Member
*****
Offline Offline

Activity: 784
Merit: 1000


0xFB0D8D1534241423


View Profile
April 01, 2013, 09:24:36 PM
 #17

...that person is out $500 and dines out one day a week less over the following year.
Where are you "dining out" that only costs $9.60 a meal?

Where are YOU dining out that costs MORE than $9.60 a meal, Mr. Rockefeller?  Tongue
Red Robin Tongue
justusranvier
Legendary
*
Offline Offline

Activity: 1400
Merit: 1009



View Profile
April 01, 2013, 09:29:08 PM
 #18

Red Robin Tongue
Actually some bottomless fries sound pretty good right now, if I wasn't avoiding carbs at the moment.
Pages: [1]
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!