Anyone have fundamentals to support a higher value on BTC?

[FreddyFender]

"Bitcoin can protect their wealth against hyper-inflation"

I myself have long been concerned about eventual hyper-inflation however, that is not occurring with USD at the moment.  Nor do I know of any indicators that suggest it will happen in the near future.  The past two to three weeks I'd describe BTC as the currency hyper inflating.  In fact at this point I consider it an over price commodity and my link above will explains it in great detail if you go to the full article.

- I already included some of your fun things like Western Union and ATMs which is being considered but hasn't happened (Speculation).
- Many in mainstream think of Kim Dot Com as a criminal.  His greed and actions did cause him a lot of problems.  While he has had success his business methods differ from mine.  I'm more curious about those who see no risk in BTC.  Using a huge risk taker like him as an endorsement makes me think you must see the risk.

So far none of the points show me that BTC is going up based on its value as a currency.  Many new services may accept it but the volume before this run up does not indicate to me that this run up is not (above $50USD/BTC) speculation.  I counter the claim that those insisting this is a bubble don't know what is going on.  In return I say those claiming this is not a bubble do not understand that massive speculation always ends with disaster.  I'm sure I don't need to rehash all of the past run ups based on speculation we saw die.  Every since the 1990s I've made money shorting speculators.  It is a very simple method that makes a lot of money.

USD is experiencing a dramatically increased rate of inflation. Google Tomato Soup Index.

Bitcoin ATM is absolutely happening. Not speculation. Keep up.

The wonderful thing about Bitcoin is that if you're too dense to understand the problems with your statements, you are the one that suffers. It's another reason Bitcoin is going to succeed. People who are in the right finally get rewarded.

Have fun sticking to the "it's a bubble" nonsense, I've been hearing it since the price went from $2 to $3. You guys don't understand what Bitcoin is.

I remember the jump from $0.11 to $0.17-19 and everyone was convinced it would fall/fail/implode/rot.

Hmmm, nothing like this occurred. I assure you the drum of challenge is long and relentless. I was looking for Bitcoin before I knew what was a bitcoin. I learned of a theory that the current bottleneck of commerce was working against market forces. It led me to Bitcoin in April 2010.
The theory is based on the fact that the missing wealth of the current system would appear through technology and change, whether aided by us, or by steamrolling all protesters. Read up on technological change since the middle ages and you see many opportunities and pitfalls for entrepreneurs. We are actively forcing the door of change against all 6 centuries of financial repression.
I feel bad for the manuscript writers of the 15-16 century, saboteurs of the late industrial period, industrial modernists of current times, and the business elites of the past 20 years. Never saw it coming/no warning. Technology spares no mal-adapters, contrarians, ludites, or soapbox sideshow bobs. Enjoy the show and keep your wallet fat.

FF

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[evoorhees]

Yesterday the buying frenzy got absolutely crazy with the bitcoin price rising 20% in three hours. People bought bitcoins for up to $148 each. How insane is that? Did real-world bitcoin use suddenly rise by 20% in those few hours?

People forget that the "proper price" of Bitcoin does not equal it's "transactional value" but rather transaction value + NPV of future transactional value. 

It is correct that the current transactional value of Bitcoin does not justify the $130 price.

BUT that is only half the equation, for the future transactional value discounted for the present must be factored into the correct price.

Or in other words, if the "proper price" for Bitcoin based solely on its transactional use in five years time is $500, then the proper value today is probably about $250, discounted both for time and for unknown risks (the whole thing could fail tomorrow, and this should be priced in).

Nobody knows what the proper transactional value in the future will be, but whatever it is, the proper price today is based in part on it.

[dg2010]

Of course there is value. Thanks to the blockchain and the computing power we have an element which is scarce and impossible to counterfeit.

Of course? Why of course? You must have it all worked out or it must be SOOO obvious to you.

You are getting confused like the other guy. Explain to me the value of all of the historical compute power which has gone into the blockchain and the blockchain itself?

There is 0 value to those components. That doesn't mean Bitcoin doesn't have value, but you cannot say that there is a residual value to the blockchain or to the power that went into crunching those blocks because there isn't.

[Beta-coiner1]

Hmmmm perhaps more users on these forums than ever?

Most Online Ever: 4856 (April 03, 2013, 08:23:06 PM)

[phlogistonq]

Who says the current fundamentals have to support the current price?
I think it is obvious that the current price is based on the expectation that bitcoin will have a higher market cap and is going to be used extensively for payments -in the future-.

No. It is based on the expectation of getting rich quick. People buy bitcoin because the price is rising

Yes, there will be many of those people. Heck, I was one of them in may 2011. And they will begin to watch the price, read about them, and in the process learn about bitcoins, their promise and their advantages. They will this have joined our community being the proud owner of a few bitcoins that soon will be considered cheap, and, importantly, having become enthousiastic about it, they they will spread the news.

If you wait for mass adoption to actually happen first, you are not going to profit. The profit comes from having the foresight that bitcoin is going to be great. The profit is the reward you get for having that insight and actually betting on it becoming true.

The profit comes from recognizing a price bubble in time and getting out when it is still possible.

Yes, you can make a nice short term profit that way, as many have (and many now curse themselves for doing so).
Ofcourse the price will go down some day. Perhaps soon. Perhaps even to single-digits (which I very much doubt personally).
But for this to happen, there has to be some extremely bad news. Otherwise, everyone will just view it as a great buying opportunity. Having missed the boat once, many will not make that mistake again. Interestingly, the fork chain did not do it. The news has to be REALLY bad. Government ban may do it, but the FinCEN statement shows that gov ban is actually not imminent, in fact they appear to be regulating it properly, paving the way further for mainstream adoption.

Even if there is a problem, we have seen in the last year they will be solved eventually, and bitcoin will rise from the ashes. This makes a huge difference. Last year, for all we knew, the crash could have been the end of it. It was the first time it went up and back down and many thought that would be all that ever came of bitcoin. Now we know that it can and will rise again unless there is a very good reason for it. So far, I haven't seen one.

What we are currently seeing is just a lot more people getting that insight and betting their money on it. At some point, most people will have some bitcoins, however much they feel comfortable with , just like everyone now has an internet connection or a mobile phone, and then the price will level off.

A "permanently high plateau". We can talk again tomorrow, after you will have seen what the bitcoin price actually does instead.

Who cares about a dip tomorrow except for day traders? (especially on a friday/weekend). How about a few months from now? Next year? Ofcourse the price fluctuates. Has there been a 51% attack today? gov ban? somebody made cryptography useless somehow? So why should bitcoin crash to oblivion tomorrow?

Probably we will see a few oscilations as the price stabilizes, as we see now on a smaller scale after every jump. Then, we are all set for large scale use. Everyone has some, the price is more or less stable, and the current objections currently often raised (hoarding, unstability, etc) have vanished .

A beautiful dream. They hoped for it because they wished it so much. Reality is rarely so nice.

If bitcoin survives for long enough, this dream might actually come true to some extent. But do not think we are there already. That will take more years and more price bubbles.

Ofcourse we are not there. That was actually the point, you can benefit now from the insight that we are -going to be- there someday. And a few years only! That is a true revolution. Think back how long it took to implement internet widely, cell phones etc. These were recent examples of revolutionary enabling technologies that went from nerdy to mainstream. It took a decade or so, and I fully expect bitcoin to follow those examples (and put my money where my mouth is).

[hgmichna]

Yesterday the buying frenzy got absolutely crazy with the bitcoin price rising 20% in three hours. People bought bitcoins for up to $148 each. How insane is that? Did real-world bitcoin use suddenly rise by 20% in those few hours?

People forget that the "proper price" of Bitcoin does not equal it's "transactional value" but rather transaction value + NPV of future transactional value. 

It is correct that the current transactional value of Bitcoin does not justify the $130 price.

BUT that is only half the equation, for the future transactional value discounted for the present must be factored into the correct price.

Or in other words, if the "proper price" for Bitcoin based solely on its transactional use in five years time is $500, then the proper value today is probably about $250, discounted both for time and for unknown risks (the whole thing could fail tomorrow, and this should be priced in).

Nobody knows what the proper transactional value in the future will be, but whatever it is, the proper price today is based in part on it.

So you are telling me that in those three hours a lot of people suddenly saw the light and understood the essence of bitcoin, and therefore they pushed its price up by 20%? LOL.

The truth is that these newbie speculators want to get rich quick. They buy bitcoins because the price rises. Then the price rises because they buy bitcoins. That is how bubbles are made.

That said, I am essentially on your side and see the same things that you see. Bitcoin is an invention of fundamental importance. The idea of a high-tech currency that is independent from government meddling and from sucking banks will never go away again.

If bitcoin survives another couple of years, I agree that its price may well rise, and I am hoping for that just as you do. But in the short term we will keep seeing hordes of crazy pseudo-speculators, price bubbles, volatility, electronic theft, failing exchanges, Ponzi schemes, attacks from governments, the whole lot. And there is still the risk that bitcoin fails, for one reason or another.

The good speculator has a balanced view.

[Arzack]

+ It's a very young market; young people tend to be more bullish, they usually live with their parents and don't even know what self-sustaining feels like

+ Internet effect (huge increase when this goes really viral) (look Mt. Gox queue)

+ People aren't investing big % of their wallet like they'd do with bonds and stuff like that, and are more inclined to risk

+ Bots placing offers at 0.1 push the price up while unexperienced pseudo-little investors just click "buy LTC"

+ DDoS attacks didn't cause a bubble 2 days ago

+ Prices are going up even though DDoS attacks happened

+ Even though prices are (very?) pumped now, BTCs are a great invention and will became the only internet currency in a distant future

+ People know about DDoS attacks/Gox lag and future raids will have smaller impact

+ We know bubbles can occur in wall street, but current BTC market is very different in many ways (2011 bubble was hack-induced)

[Wuji]

Last post on this thread was 4/5 at $140.

Today we hit $258 (five days later) and I got out yesterday.


I was a bull and now I believe this bubble can not contain much more hot air.  Any other bulls starting to change their tune or are a lot of you guys still thinking fair market value is $1,000-$10,000, or maybe 5 billion (heh)?  A lot of people chimed in this thread and I read every word of every post.  Never did see anything tangible to support the price.  I only saw more unjustified speculation and ignoring of some huge risks.  The biggest risk I can forsee are, again, a more trusted source than Satoshi-WTF popping up over night.  If Silk road switches to another currency (with less unknowns and risks) I wonder what will keep the BTC value up?  Will all other vendors take note and jump on the bandwagon?  Will the BTC ATM guy who hasn't dealt with regulations yet decide to switch as well?  Are you going to be able to get out before the massive dump?  Will those of you asking people selling early if they regret it, later regret holding on if you can't sell fast enough?  After 15 years of non-stop investing the only regrets I remember are when I was buying high and selling low.  I never let emotions and numbers affect my decisions.  Only facts and evidence drive my strategy having made many mistakes holding on too long too many times.

I think these are very valid concerns and there are logically more likely paths than $1000 or more for a BTC.  With this high of price I would of expected to hear more from the current code developers.  Surely they own coin and don't want the price to fall.  There are unanswered questions still about many mysterious and I don't see those being addressed.  That has not helped my confidence level as price increases while value is speculation based.  And, don't worry if the price hits $1000 today I'll have no regrets.  I've already made more profit than any investments recently and I'm happy.  I would regret if I didn't already get out and the price hit $100 again though.  Anyway I'm out and will be watching the price for now and move on to other ventures.  I'm going back to lurker mode and just stay up on current events until something big happens, besides more price increase.  Happy investing folks!

[Malawi]

With BTC at $250 it means that $900.000 are mined every day..

[wopwop]

With BTC at $250 it means that $900.000 are mined every day..

You're not supposed to know that

[Wuji]

With BTC at $250 it means that $900.000 are mined every day..

Was this meant to imply a support for the value of a coin or just an interesting tidbit?  If the former I say usage determines value not the worth of what is being mined.

[warpio]

I'm still holding. Not because I think the price will go up further or that the bubble won't pop. But because I truly believe my wealth is safer in Bitcoin than it would be if it were held in a bank. The looming bitcoin crash will look like nothing compared to the banking crisis, which has already started and has been escalated by Cyprus and shows no signs of slowing down... I used to think I would've cashed out into dollars by this point, but that's looking to be a lot riskier than just holding my bitcoins and using them to buy whatever I need.

of course there's also the risk of a bug in the bitcoin protocol causing a crash to $0, but that risk remains the same with or without a bubble.

The only sensible option for cashing out your bitcoins right now would be to convert them directly into a hard asset like gold, silver, or real estate. Those are all less convenient and harder to secure than bitcoins.

[wopwop]

With BTC at $250 it means that $900.000 are mined every day..

Was this meant to imply a support for the value of a coin or just an interesting tidbit?

It implies that atleast 900.000$ is currently needed to go into bitcoin per day to keep the price stable at its current price for long term

if less than 900.000$ is poured into bitcoin per day, the price will go down eventually (as new miners profit margin diminish due to hashpower catching up to the price rise)

a fact greatly ignored by pretty much everyone advocating bitcoin

[Wuji]

I'm still holding. Not because I think the price will go up further or that the bubble won't pop. But because I truly believe my wealth is safer in Bitcoin than it would be if it were held in a bank. The looming bitcoin crash will look like nothing compared to the banking crisis, which has already started and has been escalated by Cyprus and shows no signs of slowing down... I used to think I would've cashed out into dollars by this point, but that's looking to be a lot riskier than just holding my bitcoins and using them to buy whatever I need.

I have those fears long term for USD but not in the near future.  You think a devalue of the USD is likely in the very near future, more so than a bubble burst?

The only sensible option for cashing out your bitcoins right now would be to convert them directly into a hard asset like gold, silver, or real estate. Those are all less convenient and harder to secure than bitcoins.

My research has shown golds value is speculation based only it has a lot of trust just like a USD.  I believe gold is also a bubble and will start buying it again at $1200/oz.  Maybe $1400 or so if it stabilizes there.  I'm not so sure it is safer than USD.  Gold does not have a lot of industrial usage and no one knows for sure if all of it that is "owned" actually exist.  A lot of people own pieces of paper that represent gold stored in underground vaults.  Whether all that gold exists has yet to be proven.

[warpio]

I'm still holding. Not because I think the price will go up further or that the bubble won't pop. But because I truly believe my wealth is safer in Bitcoin than it would be if it were held in a bank. The looming bitcoin crash will look like nothing compared to the banking crisis, which has already started and has been escalated by Cyprus and shows no signs of slowing down... I used to think I would've cashed out into dollars by this point, but that's looking to be a lot riskier than just holding my bitcoins and using them to buy whatever I need.

I have those fears long term for USD but not in the near future.  You think a devalue of the USD is likely in the very near future, more so than a bubble burst?

No, but I'm looking to store my wealth long term, and for that I find it safer to ride the BTC roller coaster wherever it will take me than to trust a bank with my money.

And then again, I'm sure the Cypriots thought "My bank savings are safe for the near future, at least" just the same as Americans are thinking right now.

[Wuji]

No, but I'm looking to store my wealth long term, and for that I find it safer to ride the BTC roller coaster wherever it will take me than to trust a bank with my money.

Agreed, I haven't trusted a mainstream bank with money since 1998.  I keep it in FDIC backed CU's.  Looking to move it to Frankfurt in non-euro form possibly at the moment.

[Wuji]

And then again, I'm sure the Cypriots thought "My bank savings are safe for the near future, at least" just the same as Americans are thinking right now.

Well there is a huge difference.  Cypriots money was in Euro which they do not control.  They don't have to ability to print more to make payments like us Americans do.  It is impossible for a country to go bankrupt when they have fiat and print money.  It simply creates a long term issue of unsustainable debt.

Edit - Since you sound like a non-American I just wanted to add FDIC means my money is backed by Federal Insurance.  Based on our history and recent events in Cyprus I feel confident they will not suddenly try to tax my accounts.  Cyprus was a haven for money laundering which is why I think they thought about the tax.  I have no short term fear on the dollar or my accounts.

[Wuji]

Well after the last run up and increased volatility I sold off last night as I said here this morning.  I think I came back to this thread about an hour before the sell off started.  Sorry to anyone who held on or lost money.  I know I've made the same mistake myself many times.  Investing and making money means never letting emotions affect decisions on when to buy and sell.  The board is crazy now with all kinds of post.  I'll be back buying coin once the price stabilizes again or if there is some better news on fundamentals.

[Beta-coiner1]

I see a new record for searches as of Monday via Google trends for 'Bitcoin'.I also saw someone mentioned that Gox accounts were at the 18-19,000 count last I heard.

[deadweasel]

I see a new record for searches as of Monday via Google trends for 'Bitcoin'.I also saw someone mentioned that Gox accounts were at the 18-19,000 count last I heard.

those are the old metrics, on with the new!   i have no idea what they are yet.