Liquidity problem

[yvv]

this is not going to happen, because 99.9% of people do not even know about bitcoins

That's a bit like, a guy from 1970 arguing that there can be no Internet, because 99% of the people do not even know what a computer is.
Why the hell does that 99.9% number have to remain static?

I did not said that it have to remain static. I said that today, newcomers are still entering the pyramid, that's why bitcoin value increases. But this will be over very soon.

[joesmoe2012]

this is not going to happen, because 99.9% of people do not even know about bitcoins

That's a bit like, a guy from 1970 arguing that there can be no Internet, because 99% of the people do not even know what a computer is.
Why the hell does that 99.9% number have to remain static?

And for all we know bitcoin could just be the beginning of crypto-currencies. The model T was a great car, but i wouldn't want to commute with one these days.

[yvv]

And for all we know bitcoin could just be the beginning of crypto-currencies. The model T was a great car, but i wouldn't want to commute with one these days.

This is written million times on bitcoin wiki and around this forum. Nevertheless, there are still plenty of dreamers who think that hoarding bitcoins will make them rich, because it will continue to raise in value forever.

[yvv]

And for all we know bitcoin could just be the beginning of crypto-currencies. The model T was a great car, but i wouldn't want to commute with one these days.

This is written million of times on bitcoin wiki and around this forum. Nevertheless, there are still plenty of dreamers who think that hoarding bitcoins will make them rich, because it will continue to raise in value forever.

[notme]

Of course, everybody contributes different amount. This does not change the fact that bitcoins can not continue to appreciate 10 times every year longer than couple of years more. 

Do you mean to tell me the potential upside is no more than 10,000% (10X for 2 years)?  Bummer.  Here I was thinking I could make some money.

[Jutarul]

Right now, capitalization of bitcoins is $1B. If it continues to appreciate 10 times per year, its capitalization would reach $1T in 3 years. To reach this number, every single person in developed world would need to invest $1K into bitcoins.

false.

No investment is needed at all. Only the time preference for saving vs. dissaving has to change for the price to move. To give you an extreme example - if everybody stops selling bitcoin, the price is infinite. If nobody buys bitcoin, the price is zero. No funding needed. Please study price discovery mechanisms before you make conclusions like that.

[Kazu]

To reach this number, every single person in developed world would need to invest $1K into bitcoins. An this is not going to happen, because 99.9% of people do not even know about bitcoins.

Its probably not going to reach 1T market cap in 3 years. However do you really think that every single person in the developed world invests aprx. $414 into XOM? Of course not. Don't even get me started on gold. Let me explain to you how things work. Rather than every single person investing $1k, a few rich guys invest 1000 times what the 'average' person would have to. Then, if you're lucky, they'll use use that 1000 times investment they just made as collateral to borrow money to invest another 1000 times more than what the 'average' person would have to. Then there's the whole idea that the market cap is partially 'missing' because it is being held by either wallets with either an unknown private key, or people that aren't spending/selling bitcoins at any given time.

[carolstreet444]

And why new people won't want to spend that much money into bitcoin, if they saw this thing appreciated 10 times per year averagely

This happens only because each year newcomers pay 10 times more to buy bitcoins from those, who bought them 10 times cheaper last year. This will not happen forever. When inflow of newcomers into the system will stop, the game will be over. This happens with all financial pyramids sooner or later.

What? Bitcoin no is pyramid. We great investment are!

[joesmoe2012]

To reach this number, every single person in developed world would need to invest $1K into bitcoins. An this is not going to happen, because 99.9% of people do not even know about bitcoins.

Its probably not going to reach 1T market cap in 3 years. However do you really think that every single person in the developed world invests aprx. $414 into XOM? Of course not. Don't even get me started on gold. Let me explain to you how things work. Rather than every single person investing $1k, a few rich guys invest 1000 times what the 'average' person would have to. Then, if you're lucky, they'll use use that 1000 times investment they just made as collateral to borrow money to invest another 1000 times more than what the 'average' person would have to.

Same point i was trying to make but much better job of explaining it.

[MonadTran]

This is written million times on bitcoin wiki and around this forum.

Repeating the same thing a million times does not add significance to it. An alt-currency might, or might not, become more significant than Bitcoin. As soon as I notice this happening, I would start diversifying.

there are still plenty of dreamers who think that hoarding bitcoins will make them rich, because it will continue to raise in value forever.

It might continue rising in value for my entire life, which is good enough for me. It might drop to 0 as well, but I do not see how this is more likely than a permanent 100x increase in value.

[yvv]

Right now, capitalization of bitcoins is $1B. If it continues to appreciate 10 times per year, its capitalization would reach $1T in 3 years. To reach this number, every single person in developed world would need to invest $1K into bitcoins.

false.

No investment is needed at all. Only the time preference for saving vs. dissaving has to change for the price to move. To give you an extreme example - if everybody stops selling bitcoin, the price is infinite. If nobody buys bitcoin, the price is zero. No funding needed. Please study price discovery mechanisms before you make conclusions like that.

Oh yes, money appear out from thin air. Don't you understand that if some miners or hoarders make X USD profit from selling bitcoins, this is just because other hoarders lose exactly the same amount?

[yvv]

What? Bitcoin no is pyramid. We great investment are!

It was not mean to be, but it actually is right now.

[Kazu]

What? Bitcoin no is pyramid. We great investment are!

It was not mean to be, but it actually is right now.

By that logic any appreciating asset is a pyramid scheme.

[notme]

Right now, capitalization of bitcoins is $1B. If it continues to appreciate 10 times per year, its capitalization would reach $1T in 3 years. To reach this number, every single person in developed world would need to invest $1K into bitcoins.

false.

No investment is needed at all. Only the time preference for saving vs. dissaving has to change for the price to move. To give you an extreme example - if everybody stops selling bitcoin, the price is infinite. If nobody buys bitcoin, the price is zero. No funding needed. Please study price discovery mechanisms before you make conclusions like that.

Oh yes, money appear out from thin air. Don't you understand that if some miners or hoarders make X USD profit from selling bitcoins, this is just because other hoarders lose exactly the same amount?

Your statement is only true on the day bitcoin hits a value of 0.

[Odalv]

This happens only because each year newcomers pay 10 times more to buy bitcoins from those, who bought them 10 times cheaper last year. This will not happen forever. When inflow of newcomers into the system will stop, the game will be over. This happens with all financial pyramids sooner or later.

Why would the inflow of newcomers stop, in any foreseeable future? Bitcoin has obvious advantages over fiat, its march can easily continue for as long as there is fiat currency left in the world.

You know, the number of people on the Earth is finite. And the number of anarcho-libertarians is even more finite.

Right now, capitalization of bitcoins is $1B. If it continues to appreciate 10 times per year, its capitalization would reach $1T in 3 years. To reach this number, every single person in developed world would need to invest $1K into bitcoins. An this is not going to happen, because 99.9% of people do not even know about bitcoins. And there are altcoins popping up every week.

Bitcoin market is going to reach saturation in couple of years maximum. And after that, depreciation in value is unavoidable, since millions of hoarders will want to sell their btc at same rate as they do now, because they need to pay their bills in fiat, but no newcomers will want to buy this btc at this rate anymore.

a) As of 2008, there were 10 million people around the globe who are classified as U.S.-dollar millionaires.

b) market capitalization
- Apple Inc.  $401.83B
- Microsoft   $302.06B
- IBM           $215.11B
- Facebook   $63.54B

c) Bitcoin will not inflate, so even 1 BTC = $100,000 USD (after reach saturation) it will better to hold BTC (keeps value) than USD (loses value over time).

[carolstreet444]

Meaning you gold pyramid scheme is too? No worth is if invest nobody more any? Apple is no pyramid, Apple is apple yummy grateful sunbaked

[Kazu]

b) market capitalization
- Apple Inc.  $401.83B
- Microsoft   $302.06B
- IBM           $215.11B
- Facebook   $63.54B

You guys sure like tech companies don't you.

[Odalv]

b) market capitalization
- Apple Inc.  $401.83B
- Microsoft   $302.06B
- IBM           $215.11B
- Facebook   $63.54B

You guys sure like tech companies don't you.

Bitcoin is in early stage, only tech guys can understand what is Bitcoin. :-) But this will change in next few years.

[yvv]

Its probably not going to reach 1T market cap in 3 years. However do you really think that every single person in the developed world invests aprx. $414 into XOM? Of course not. Don't even get me started on gold. Let me explain to you how things work. Rather than every single person investing $1k, a few rich guys invest 1000 times what the 'average' person would have to. Then, if you're lucky, they'll use use that 1000 times investment they just made as collateral to borrow money to invest another 1000 times more than what the 'average' person would have to. Then there's the whole idea that the market cap is partially 'missing' because it is being held by either wallets with either an unknown private key, or people that aren't spending/selling bitcoins at any given time.

It does not matter if few rich guys invest a lot or many poor guys invest little. It is true that many bitcoins were not in circulation since they were mined. But this does not change anything. If you bought btc last year and sold today at 10x price, this is just because guys who lost their opportunity last year give you their money. They do this because they think that next year some fools will give them 10x more. And this is not going to continue for long. The amount of fools who are ready to bring money into system saturates quickly.

[notme]

Its probably not going to reach 1T market cap in 3 years. However do you really think that every single person in the developed world invests aprx. $414 into XOM? Of course not. Don't even get me started on gold. Let me explain to you how things work. Rather than every single person investing $1k, a few rich guys invest 1000 times what the 'average' person would have to. Then, if you're lucky, they'll use use that 1000 times investment they just made as collateral to borrow money to invest another 1000 times more than what the 'average' person would have to. Then there's the whole idea that the market cap is partially 'missing' because it is being held by either wallets with either an unknown private key, or people that aren't spending/selling bitcoins at any given time.

It does not matter if few rich guys invest a lot or many poor guys invest little. It is true that many bitcoins were not in circulation since they were mined. But this does not change anything. If you bought btc last year and sold today at 10x price, this is just because guys who lost their opportunity last year give you their money. They do this because they think that next year some fools will give them 10x more. And this is not going to continue for long. The amount of fools who are ready to bring money into system saturates quickly.

Bitcoin has uses besides trading