Bitcoin doesn't need to be a currency to be successful. It will in fact be wildly successful even if only functioning as a store of value, the tax havens amounts to trillions. The first phase is speculation and this is where we are now... people believe in bitcoins future potential and that is what drives the price up and the large market cap will make it viable for large fortunes to be stored in bitcoin, eventually it will stabilize at much higher prices. At that point it will work well as a way to settle debt even if we're not able to do as many transactions as other networks I don't think it matters. Micro-transactions can happen off-chain, big money stored safely away from government and bankers.
How can big money be stored away safely if bitcoin is still tied to fiat currency? If fiat currency collapses, bitcoin no longer has anything to compare itself to, so how would we express value then? Using valuation in bitcoin itself? How would that work since there's a limited amount...
bitcoin to hookers&blow ratio
I proposed this back in June (If I may quote a flippant post I made back then):
BTC Utilty "The Hooker Point"
July 06, 2013, 11:07:42 AM
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I just posted this on a topic elsewhere, but I wanted to give it a thread of its own as it is about BTC price and utility which are fundamental concerns to us all:
Quote from: tokeweed on July 06, 2013, 09:26:13 AM
i cant even get a hooker for btc.
This is one of the most insightful comments I have seen on this forum for some time.
As someone interested in economics, I think the establishment of a measure for the adoption level of a digital currency would be useful, and I think 'The Hooker Point' is perfect for it.
If we take an average city of (say) 100,000 inhabitants we can deem it to have reached this point when it is possible within the city's limits to find a locally available defined sexual service directly from a provider (without a 3rd party exchange involved) with a given currency in a (controlled) 24 hour period.
So a country can be defined by how many Hooker Point cities it has, or what proportion of its qualifying cities have reached the Hooker Point (for BTC).
Comparisons can be made over time and against other countries.
Since currencies go back to pre-literate times and prostitution is the oldest profession, it is a measure likely to remain current for the foreseeable future.
Further comment on price and utilty:
1. Market prices fall when more people want to sell than buy, and prices rise for the opposite reason.
2. People's choice as to whether they wish to be a buyer or seller is affected by their needs (entering or leaving a market due to the need to buy or sell what the market trades) or for reasons of sentiment (optimism or pessimism about the market price).
3. Although economics supposedly deals in rational situations in the market place, it is a fact that markets and sentiments are not necessarily rational. A herd instinct, or copying instinct means that people often buy because people are buying - or sell because people are selling.
4. At present BTC has little practical utility (see 'Hooker Point' above). Therefore, the market for it is much more heavily influenced by sentiment than other markets. Since most people do not need to pay their rent or buy food with it, its value is almost entirely based on sentiment.
The only conclusion a rational person can reach in the light of the above is that any price predictions for BTC are very likely to be completely and utterly useless.
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