2013-03-28 - Bull Market Thinking - Bitcoin Bubble 2.0

[btcbug]

http://bullmarketthinking.com/bitcoin-bubble-2-0-from-a-monetary-standpoint-they-are-on-par-with-the-stuff-you-find-at-chuck-e-cheese/

"While bitcoins cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as namecoin*, freicoin*, and litecoin* in place."


What do you guys think of this idea that I quoted from the article above? Bitcoins can be hyperinflated in substance, meaning that so many competing currencies will be created that Bitcoins will keep losing value? Is this a valid concern?

In my opinion simply creating a new currency does not automatically mean that competing currencies lose their value. People actually need to give that new currency value by adopting it. If Bitcoin was the only currency in the world and somebody introduced another 21 million units of a competing currency people what incentive would people have to use it? If nobody else currently accepts it how could hyperinflation be possible? A general and rapid increase in prices could not happen unless pretty much everyone simultaneously agreed that the new currency was just as valuable as the original Bitcoin.

For some reason this sounds like a topic that has probably been discussed in the past, but I did not see a post regarding this article or this topic. Apologies if this has already been addressed.

[Gabi]

Nah, i can make gabicoin if i want, and it will be totally worthless.

[marcus_of_augustus]

Best coin wins and to the vector go the spoils.

Different coins will win market share dependent on their money-ness properties, including network-effect (hype).

Also theoretically possible a better coin could beat out bitcoin by hijacking it's mining hash-power using merged mining but providing better monetary properties (inherent strong anonymity, totally free tx, etc)

[Mike Christ]

Oh no; you mean the existence of pesos, rubles and yen mean "currency" (aka the dollar) can be hyperinflated in substance?

Oh, and did I mention, my grocer doesn't take any of those alt-currencies; not even the euro!!  Gotta be some kind of conspiracy.

Silliness aside, if nobody accepts those currencies as tender, they don't work.  Nobody wants to use 100 different altcoins.  We're all going to default to a few, and since this is the Internet, we're literally ALL going to default to a few--not just Americans all defaulting to the dollar, not just all Japs defaulting to the yen, but anyone and everyone coming together and using the same ones.

OTOH, once a dev releases wallet software which can safely store all the coins in one app, and displays the rates at which each coin translate into how much they're worth in Bitcoin, then we can use pretty much any coin we personally prefer.  I can use Bitcoin, Litecoin, Terracoin, Peepeecoin, all conveniently located in the same (secure) wallet.  That is, as long as a coin is popular enough to have market data

[hacknoid]

I think the problem with the competing currencies is that for any of them (including Bitcoin) to survive to large adoption by the masses, people have to feel comfortable using them.  ATM most people are not really "getting" bitcoin, although a few are.  When alt currencies of a similar type pop up, the natural inclination would be to say "well, why use those and not bitcoin?"  At which point I worry someone will say "altcoinA solves these problems that bitcoin has..."  Now the perception could be had that even among the knowledgeable early adopters there is concern about Bitcoin, leading to hesitation in using it.  With everyone saying "altcoinX solves these problems that altcoinY has", it leads to infighting (or the perception thereof) and undermining the general public's opinion of the whole concept.

Then again, maybe I am just overthinking it!   

[Mike Christ]

I think the problem with the competing currencies is that for any of them (including Bitcoin) to survive to large adoption by the masses, people have to feel comfortable using them.  ATM most people are not really "getting" bitcoin, although a few are.  When alt currencies of a similar type pop up, the natural inclination would be to say "well, why use those and not bitcoin?"  At which point I worry someone will say "altcoinA solves these problems that bitcoin has..."  Now the perception could be had that even among the knowledgeable early adopters there is concern about Bitcoin, leading to hesitation in using it.  With everyone saying "altcoinX solves these problems that altcoinY has", it leads to infighting (or the perception thereof) and undermining the general public's opinion of the whole concept.

Then again, maybe I am just overthinking it!   

What's likely to happen is a group of people who understand Bitcoin will advocate it in such a way to point out its pros against fiat and why it's a much better alternative.  The more people who adopt it, the more the herd follows.  They may not completely understand Bitcoin, but they'll know why it's the superior alternative to useless watered-down guvvy funny munny.

However, the media is also playing the game if discrediting Bitcoin, and driving people away from it; it's all propaganda, you see.  They're paid to influence, and they'll influence the herd in whichever way their masters (a handful of people, if you can believe it) feel; and of course, that handful of people are filthy stinking rich, so they're going to make sure you stick with the dollar no matter what it takes.

The undecided are ripe and ready to go either way.  The thinkers may not be rich, but they are plentiful.

[hacknoid]

However, the media is also playing the game if discrediting Bitcoin, and driving people away from it; it's all propaganda, you see.  They're paid to influence, and they'll influence the herd in whichever way their masters (a handful of people, if you can believe it) feel; and of course, that handful of people are filthy stinking rich, so they're going to make sure you stick with the dollar no matter what it takes.

The undecided are ripe and ready to go either way.  The thinkers may not be rich, but they are plentiful.

I hope they are plentiful.  And maybe thats enough...

And I certainly agree about the herd - we have all seen how the masses are influenced by the media - and it is exactly that point that I worry about.  Both the dissemination of knowledge as well as the spreading of FUD is well underway, and I just worry about adding confusion to the mix.

I fully believe that bitcoin is a great concept and have no doubts about its potential for success... but that doesn't mean it will achieve it.

[Mike Christ]

Easiest way to kill a giant is in its infancy.

[BTC Books]

Best coin wins and to the vector go the spoils.

That is either a serendipitous typo... or a very clever play on words.