Bitcoin Bubble Burst A Good Thing?

[johnniewalker]

Does anyone else think the bursting of the "bitcoin bubble" (which is still deflating, I think) is a good thing? I don't believe bitcoins were designed to be a way to store wealth. And that is exactly what they were/what they were becoming. I think that their intrinsic value lies in their utility. I guess people en masse are starting to see that. Maybe now they can truly act as the kind of cryptocurrency the were designed to.

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[yocko06]

Bitcoin gains stability when it reaches a point when the world is using it.  these price drops are a really good chance to double your bitcoins or make some big profits.  simple sell when it's about to fall and buy again before it takes off. bitcoin has always done this in the past just on a smaller scale.  this drop is nothing new and bitcoin will exceed the highest price in time as it always does. 

[Explodicle]

Does anyone else think the bursting of the "bitcoin bubble" (which is still deflating, I think) is a good thing? I don't believe bitcoins were designed to be a way to store wealth. And that is exactly what they were/what they were becoming. I think that their intrinsic value lies in their utility. I guess people en masse are starting to see that. Maybe now they can truly act as the kind of cryptocurrency the were designed to.

I agree that the bubble burst is a good thing, but I disagree that bitcoins shouldn't be a form of wealth. IMHO any voluntary currency must first (and always) make a good asset or else no one will want to accept it. I'd much rather these crashes happen sooner than later, in decreasing severity every time. The most convincing evidence that Bitcoin isn't pure bubble is when it looks like The End but then recovers anyways.

If you're new here, and this is your first crash:

Previous crashes kept going down for months.

[johnniewalker]

@yock: I hope so!
@Explod: I see what you're saying. If you are holding the currency of any certain system, you are a "bearer" of wealth. What I meant was that I didn't want a single bitcoin to become worth the price of gold or something. I just feel like if that were the case, all BTC would be stores of wealth. The issue that I have with that is it would be such a waste-bitcoins were designed to be a form of currency, and had special utility. It would just be such a waste if they became hoarded like gold-their unique utility would be helpful in most every-day transactions; I think Satoshi wanted to develop a new currency/monetary system, not units of "1" costing hundreds or thousands of dollars. 

[lucas.sev]

@yock: I hope so!
@Explod: I see what you're saying. If you are holding the currency of any certain system, you are a "bearer" of wealth. What I meant was that I didn't want a single bitcoin to become worth the price of gold or something. I just feel like if that were the case, all BTC would be stores of wealth. The issue that I have with that is it would be such a waste-bitcoins were designed to be a form of currency, and had special utility. It would just be such a waste if they became hoarded like gold-their unique utility would be helpful in most every-day transactions; I think Satoshi wanted to develop a new currency/monetary system, not units of "1" costing hundreds or thousands of dollars. 

Bitcoins are not designed to be a currency, don't they have a limit of 10 transactions per second?

[vokain]

Bitcoins are not designed to be a currency, don't they have a limit of 10 transactions per second?

https://en.bitcoin.it/wiki/Scalability

The core Bitcoin network can scale to much higher transaction rates than are seen today, assuming that nodes in the network are primarily running on high end servers rather than desktops. Bitcoin was designed to support lightweight clients that only process small parts of the block chain (see simplified payment verification below for more details on this). A configuration in which the vast majority of users sync lightweight clients to more powerful backbone nodes is capable of scaling to millions of users and tens of thousands of transactions per second.

[lucas.sev]

Bitcoins are not designed to be a currency, don't they have a limit of 10 transactions per second?

https://en.bitcoin.it/wiki/Scalability

The core Bitcoin network can scale to much higher transaction rates than are seen today, assuming that nodes in the network are primarily running on high end servers rather than desktops. Bitcoin was designed to support lightweight clients that only process small parts of the block chain (see simplified payment verification below for more details on this). A configuration in which the vast majority of users sync lightweight clients to more powerful backbone nodes is capable of scaling to millions of users and tens of thousands of transactions per second.

Well with ASIC-dominated block chain processing having 10 transactions per sec is quite disappointing

[vokain]

Bitcoins are not designed to be a currency, don't they have a limit of 10 transactions per second?

https://en.bitcoin.it/wiki/Scalability

The core Bitcoin network can scale to much higher transaction rates than are seen today, assuming that nodes in the network are primarily running on high end servers rather than desktops. Bitcoin was designed to support lightweight clients that only process small parts of the block chain (see simplified payment verification below for more details on this). A configuration in which the vast majority of users sync lightweight clients to more powerful backbone nodes is capable of scaling to millions of users and tens of thousands of transactions per second.

Well with ASIC-dominated block chain processing having 10 transactions per sec is quite disappointing

oh well we'll live

[600watt]

Does anyone else think the bursting of the "bitcoin bubble" (which is still deflating, I think) is a good thing? I don't believe bitcoins were designed to be a way to store wealth. And that is exactly what they were/what they were becoming. I think that their intrinsic value lies in their utility. I guess people en masse are starting to see that. Maybe now they can truly act as the kind of cryptocurrency the were designed to.

bitcoin has many faces. it is money for the digital age. as a payment method it is facing the same dilemma as any payment system: merchants will only "invest" in it (time, effort, programming, etc.) if enough people use it (and therefore need to know about it). but people will only start using it, when there are enough merchants within the game.
bitcoin is overcoming this obstacle kind of gracefully by showing its speculative face: bubbles and steep rises and downfalls create publicity. since it is decentralized, no company can put out millions for any mainstream marketing. the bitcoin chart is its marketing agent. the higher the price, the more people learn about it and want to participate. that is why bitcoin has been, is and will be rising.

if numbers get too large to be useful (price above 1 k $) there will be a switch to smaller increments, like mBTC.


edit: spelling

[vokain]

The bubble is dead! Long live the bubble!

we all live in a yellow bubble-ine

[monkeybars]

I don't think there is a bubble. There was a speculative price spike just like in 2011. The price is continuing along the same trajectory it's been on for three years.

[vokain]

I don't think there is a bubble. There was a speculative price spike just like in 2011. The price is continuing along the same trajectory it's been on for three years.

Primary uptrend since pizza!

[superduh]

fiat currency is speculative in it of itself. most global fiat currency goes through an average of 30 years before being worth nothing. however, people DO hold currency as a store of wealth just like anything else: gold, real estate, stocks, cars the list goes on.
there is nothing wrong with bitcoins being used as a store of wealth just like everything else in the world!! just like any other currency or commodity that can be stored.
bubble bursting it's fine. we are still in the early stages and it's still got many bursts to go. as people have mentioned it is on a trajectory upwards. that is all that people need to realize. those trying to make a quick buck - whatever. people do it everyday on FOREX and you know what some are quite wealthy just by doing so

[RationalSpeculator]

I don't think there is a bubble. There was a speculative price spike just like in 2011. The price is continuing along the same trajectory it's been on for three years.

You are right in that normally a bubble is something where price goes back to pre-bubble levels, which is not the case with bitcoin.

However, a bubble is also defined by exponential rises and violent crashes of more than -50%. Bitcoin certainly experienced that and if the low ends up being $40, the current price around $90 will also have proven to be hot air.

[Explodicle]

@yock: I hope so!
@Explod: I see what you're saying. If you are holding the currency of any certain system, you are a "bearer" of wealth. What I meant was that I didn't want a single bitcoin to become worth the price of gold or something. I just feel like if that were the case, all BTC would be stores of wealth. The issue that I have with that is it would be such a waste-bitcoins were designed to be a form of currency, and had special utility. It would just be such a waste if they became hoarded like gold-their unique utility would be helpful in most every-day transactions; I think Satoshi wanted to develop a new currency/monetary system, not units of "1" costing hundreds or thousands of dollars. 

Then you'd think he would have made more than 21 million of them!

Fortunately, this can be fixed client-side without changing the protocol: just go into your Bitcoin-Qt settings and tell it to display mBTC. The number of zeros displayed is completely arbitrary and up to you. I realize it's cumbersome to say "millibitcoins" for now, but so is "New Peso" - because of inflation and deflation, the common vernacular has to adapt periodically or else get stuck with too many zeros in one direction or the other. There's no way around it, even for gold-backed and fiat currencies.

[notme]

@yock: I hope so!
@Explod: I see what you're saying. If you are holding the currency of any certain system, you are a "bearer" of wealth. What I meant was that I didn't want a single bitcoin to become worth the price of gold or something. I just feel like if that were the case, all BTC would be stores of wealth. The issue that I have with that is it would be such a waste-bitcoins were designed to be a form of currency, and had special utility. It would just be such a waste if they became hoarded like gold-their unique utility would be helpful in most every-day transactions; I think Satoshi wanted to develop a new currency/monetary system, not units of "1" costing hundreds or thousands of dollars. 

Then you'd think he would have made more than 21 million of them!

Fortunately, this can be fixed client-side without changing the protocol: just go into your Bitcoin-Qt settings and tell it to display mBTC. The number of zeros displayed is completely arbitrary and up to you. I realize it's cumbersome to say "millibitcoins" for now, but so is "New Peso" - because of inflation and deflation, the common vernacular has to adapt periodically or else get stuck with too many zeros in one direction or the other. There's no way around it, even for gold-backed and fiat currencies.

You seem to be implying that in order for bitcoin to be a store of value it has to be held in round numbers.  I don't get it.

[monkeybars]

Fortunately, this can be fixed client-side without changing the protocol: just go into your Bitcoin-Qt settings and tell it to display mBTC. The number of zeros displayed is completely arbitrary and up to you. I realize it's cumbersome to say "millibitcoins" for now

I call em mills and mikes. In a few years, a mill will pay for a family's monthly rent and a mike will buy a cup of coffee