I'm by no means an expert...
Bitcoin value has doubled in 5 months, quadrupled in a year. When global economy is hardly growing at all, a shooting star that gains 300% must either have very good fundamental reasons for doing so, or it's likely a bubble.
Are there fundamental reasons for a currency to have or gain value? There are many theories about this, but as opposed to any other currency, the *coins have
- no intrinsic value like gold reserve
- no state or other organisation backing it
- not even a company that operates that thing in a coordinated manner.
Bitcoin has proven that these aren't always necessary, in a short term at least. That's absolutely reasonable, because of the factors that make a currency work:
- reasonably stable
- people trust in it
- liquidity (i.e. you can buy/purchase without disrupting the whole system)
- convertibility.
Bitcoin clearly has never been stable, but as long as the trend goes up, investors had no reason to complain about it. The fact that e.g. a vendor couldn't sell products with meaingful price tags in BTC would otherwise kill a currency, but as an online currency, users seem to have successfully worked around this issue so far.
So far so good. If we look at the current backlog though (e.g.
https://jochen-hoenicke.de/queue/), two things become obvious:
- the system is overwhelmed by the demand
- it has been so for weeks now
- no obvdious signs for a change.
People in this forum keep constantly repeating that this is "an attack" or "transaction spam". Firstly, the distribution of transaction fees in the mempool statistics clearly show that the backlog isn't caused by spam. But even if it was, users of any service can expect from an operator that they fix this problem, either by increasing capacity, filtering, whatevere. Consider gmail, hotmail, gmx etc. delivering their email either not at all or after a couple of weeks "because there's an increased amount of spam" -- that's preposterous and they would vanish from the market very soon. To conclude: Pointing at Spam is incorrect in the first place and a bad excuse anyways.
Bitcoin is dysfunctional right now and has been for a very long time. It has become unreliable, transactions may be stuck for ever or a long time, the user experience is catastrophic. Liquidity and convertibility are heavily impaired to sey the least.
The impact on trust should be obvious. The childish disputes about how to fix the mempool problem and the inability to come up with a solution to a problem that has been known for years, paints a disastrous picture of how this stuff is operated. Why would Bitcoin users, as soon as they understand the problem -- there hasn't been any news coverage so far -- continue to use a product when it's operated by lunatics and both expensive and unreliable?
My personal conclusion:
* The chart shows a hype and shouts out loud: "Correction ahead!"
* Bitcoin has no intrinsic value backing it
* Bitcoin doesn't work and kills the trust of it's users.
Yes, I think this is a bubble.
Disclaimer: I do not advocate any altcoins. I do own Bitcoins and even Litecoins. Current balance: 0,08 BTC (80 mBTC), 1,6 LTC. This huge investment may have influenced the opinions expressed above.
