[2017-12-24] {theguardian} Bitcoin is a bubble, but ...

[hugeblack]

Bitcoin is a bubble, but the technology behind it could transform the world

Will Hutton

Humanity’s earliest, truly transformative general purpose technologies were the ability to cross-fertilise plants and cross-breed animals. Suddenly, it made more sense to farm than to hunt and gather. The surge in agricultural output meant humans could do other things than worry about survival; they could live in cities. Human civilisation began.

The story of the subsequent millennia has been how some 30 general-purpose technologies of equal power, ranging from the printing press to the steam engine, have driven similar leaps in transforming our economy, our lives and our civilisation. Today, we are living through another.



Digitisation is, if anything, even more powerful: it is a meta general-purpose technology. No area of human activity will be left untouched by the translation of the physical into digital data. Already, it has created astonishing new capacities: the chances are that you are reading this on a smartphone or tablet. But the adventure is only just beginning. Everything – from banking to health – is about to experience similar transformations.

Last week, the growing impact of blockchain and the price of one of the crypto-currencies it underwrites – bitcoin – hit the front pages. Regulators stopped the US stock market trading in the Crypto Company (a tiny penny stock whose main asset is its name) after its shares jumped 2,000%, so that it briefly, and stunningly, joined the Fortune 500 with a value of $12bn. As extraordinary, when the Long Island Iced Tea Corp – yet to make a profit – announced that it was changing its name to Long Blockchain Corp, its shares jumped 500%. The price of bitcoin itself – $1,000 at the start of the year – briefly hit $19,000 per “coin” last week before falling to $11,000 and then recovering to $14,000 yesterday. A crazy wildness, emulating every financial bubble in history, has settled on US investors.

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[Lieldoryn]

Stock market traders always called bitcoin a bubble. I don't agree with it. The idea of bitcoin is good and it is not intended as a bubble. We know a few examples of how ruined the company? They, too, bubble? For such statements are nothing but attempts at information warfare against competitors. But I agree that right now bitcoin is far from ideal.

[BitHodler]

Stock market traders always called bitcoin a bubble. I don't agree with it. The idea of bitcoin is good and it is not intended as a bubble. We know a few examples of how ruined the company? They, too, bubble? For such statements are nothing but attempts at information warfare against competitors. But I agree that right now bitcoin is far from ideal.

The main thing is that all traditional investors try to apply their traditional market knowledge on Bitcoin, but that obviously doesn't work. If we go up like 100%, for them it will be a clear sign of a developing bubble.

But as we have experienced in the last years, there hasn't been such a thing as a bubble. The price keeps going up as the demand is picking up nicely, and this is a process that will take years and years.

In other words, this bubble as they like to call it, will continue to grow larger and larger. Current pull back is perfectly normal considering the growth that we have gone through, so people shouldn't get worried.

[CyberKuro]

Inevitable development of the technology, including bitcoin in the monetary system.
Bitcoin gain value because people believe it's worth something, meant to be a currency but lately bitcoin has lost its utility appeal and most people just treat it as an investment object to generate profits. It has been proven as the price swings significantly within minutes, even rise and fall as much $1000 is a common thing these days.
Bitcoin isn't a bubble, but if this condition continues, bitcoin may not be used as means of payment due to scale problems still unresolved.

[DooMAD]

Regulators stopped the US stock market trading in the Crypto Company (a tiny penny stock whose main asset is its name) after its shares jumped 2,000%, so that it briefly, and stunningly, joined the Fortune 500 with a value of $12bn. As extraordinary, when the Long Island Iced Tea Corp – yet to make a profit – announced that it was changing its name to Long Blockchain Corp, its shares jumped 500%.

This is the problem with stock markets.  So much of it is automated, artificial trading.  Human beings weren't making those trades based on careful analysis, market research or any kind of experience or insight.  There's no time for that anymore, as High Frequency Trading means thousands of trades are made in the space of minutes.  Machines (that had evidently been programmed by utter cretins) were making those trades because they were fed some media headlines with the words 'blockchain', 'crypto' and 'fintech' in them, so the machines bought shares in companies they mistakenly assumed to be dealing in those fields.  HFT is a menace. 

It's almost joke, but millions of dollars move around because of complete foolishness like this.  As such, the markets are effectively nothing but fakery now.  And while it's certainly possible some people out there are only holding Bitcoin because it's in the headlines, one would hope that most users have actually done some research and understand why Bitcoin might actually provide tangible benefits.  So this is yet another reason why all the arguments about "bubbles" and "tulips" apply far more to the "traditional" finance sector than they do to Bitcoin.

[vit05]

There is a difference between call Bitcoin a bubble and called the momentum a Bubble. You could say that Nasdaq prices are in a bubble. The housing market was in a bubble.

But what differs Bitcoin today from other speculative assets is that it is difficult to use leverage when investing in Bitcoin. Governments will not change some rules so you can buy more Bitcoin. Banks will not give you money so you can buy more Bitcoins. COmpanies will not be able to invest in Bitcoins.

Usually, bubbles burst when the leverage option stops or become impossible. We are not still at that time with Bitcoin. There is more money that will come to the table.

[greeklogos]

Inevitable development of the technology, including bitcoin in the monetary system.
Bitcoin gain value because people believe it's worth something, meant to be a currency but lately bitcoin has lost its utility appeal and most people just treat it as an investment object to generate profits. It has been proven as the price swings significantly within minutes, even rise and fall as much $1000 is a common thing these days.
Bitcoin isn't a bubble, but if this condition continues, bitcoin may not be used as means of payment due to scale problems still unresolved.

Bitcoin is going to be used only for a cold storage, cause with such fees and transaction speed it just going to be the most unpopular coin, in the case of transactions. Yes, the price is going to be high, but people will move to fast and cheap fees alts for easy use.

[iamTom123]

Stock market traders always called bitcoin a bubble. I don't agree with it. The idea of bitcoin is good and it is not intended as a bubble. We know a few examples of how ruined the company? They, too, bubble? For such statements are nothing but attempts at information warfare against competitors. But I agree that right now bitcoin is far from ideal.

I partly agree with you. The thing is that the term 'bubble' has so many meaning and indicators which sometimes bewildered me. Anybody can call Bitcoin to be a big bubble but will it pop soon? With Bitcoin, it is more of a rollercoaster ride because its value can go up and go down within minutes. In fact, am seeing the usual correction as the best way why Bitcoin up to now is still staying afloat.

Critics of Bitcoin have been wishing for it to go away but through the years of that rollercoaster ride we learned that Bitcoin is here to stay though we have to understand that not all times will Bitcoin appear rosy and lively as there are also gloom and downturns. There will be 'crashes' and there will be 'moons' for sure. Bitcoin all the way...the Lightning Network is coming soon.

[reliable]

Inevitable development of the technology, including bitcoin in the monetary system.
Bitcoin gain value because people believe it's worth something, meant to be a currency but lately bitcoin has lost its utility appeal and most people just treat it as an investment object to generate profits. It has been proven as the price swings significantly within minutes, even rise and fall as much $1000 is a common thing these days.
Bitcoin isn't a bubble, but if this condition continues, bitcoin may not be used as means of payment due to scale problems still unresolved.

Bitcoin is going to be used only for a cold storage, cause with such fees and transaction speed it just going to be the most unpopular coin, in the case of transactions. Yes, the price is going to be high, but people will move to fast and cheap fees alts for easy use.

It is going to be difficult for btc if the transaction does not improve and the fees are going high like always . Thus no many people have switched to Ether or other altcoins where the transaction is almost instant and negligible fees. BTC as right said would be used mostly for the cold storage or only for investment purpose only.