Why bitcoin will appreciate forever

[johnyj]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

(Edit: added the simulation of daily coin supply for 1, 2 and 4 years investing period)

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[Priceslide]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

[frankenmint]

amen brother.  Makes things more interesting when you put in the fact that you could buy at the 52 week high price if youre smart about it.  As I type this the ticker says 117 and put in my funds at 96 so it would make sense for me to dump it  whenever I feel comfortable - safe bet would be now, but I'd like to be much more risky and wait until it gets back to 200 a peice and then Ill cash a little bit out. 

Agree with alts.  What makes things more interesting though is exchanges.  I've found that with maybe 5 bitcoins (which is possible to appreciate very slowly over time) could allow adequate coverage across all alts to the point to where you can play the martingale strategy if desired.  I've seen great positive swings in value on my alts despite having used a substantial portion on litecoin market alts.  If the price of litecoin skyrockets, then in principle by proxy so do all those litecoin valuation dependent alts as well. 

We need an open api that allows any alt to be transacted like a bar code with a built in message to be attached.  mtgox and bitinstant (currently going through a website redesign) offer tools like these, but I'd prefer something open source along with the mobile wallet apps that could be used with standalone wallets...this would allow the ecosystem to takeoff!

[johnyj]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

Unless bitcoin had some major technical problem, alt-coins will remain a small part of the bitcoin market value. When it comes to money, you need only one type, because money's universal equivalent property. Bitcoin's first mover advantage is very clear, people need one type of digital currency that has limited total supply and no central authority, as long as bitcoin works, this demand is fulfilled

[xxjs]

A better coin is possible, better privacy and microtransactions, otherwise just as good as bitcoin. An altcoin that good could take good slice of the market, but I have not seen such altcoin yet, and hopefully I shall be able to see it coming in time before the mob sees it.

[J603]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

I don't get this logic. Your evidence for bitcoins appreciating forever... is that they appreciate forever? Why did the price of bitcoins increase from 10 to 11 in the first few lines? In order for Joe to make money, someone has to be willing to buy bitcoins for more than what they used to be worth... Who would buy bitcoins at the highest they've ever been?

[johnyj]

I don't get this logic. Your evidence for bitcoins appreciating forever... is that they appreciate forever? Why did the price of bitcoins increase from 10 to 11 in the first few lines? In order for Joe to make money, someone has to be willing to buy bitcoins for more than what they used to be worth... Who would buy bitcoins at the highest they've ever been?

Thanks for the question. I'm not 100% convinced of my logic, it is just a draft, but with your question, I can go a little bit deep into this topic

Price appreciated from 10 to 11, simply because there are not enough coin and there are more participants. Suppose that first year there are 10,000 people, each of them buy 0.36 coins per day at $10, total 3600 coins were bought every day

If second year there are 11000 people buying coins with same amount of dollar from each person ($3.6 per day), then there will not be enough coins, since 3600 coins per day is fixed in the protocol. They will get less coin for the same amount of dollar, so the exchange rate will rise

Not all the people will buy the coins at the highest price they've ever been, they will select a proper timing based on their judgement. Maybe price first rised to 13 then dropped back to 9 and end up at 11 at year end. Anyway, supply is fixed, if the coin have some history of good performance, and there are more people joining the bitcoin economy, the supply will be insufficient, the average price over a year will rise

The key point is: How to make sure that there are sustainable fiat money inflow into bitcoin (so it will not become a ponzi scheme or pyramid scheme), and what is the motivation behind those purchases

If you have more question regarding this, I will be very interested to hear

[J603]

Thanks for the question. I'm not 100% convinced of my logic, it is just a draft, but with your question, I can go a little bit deep into this topic

Price appreciated from 10 to 11, simply because there are not enough coin and there are more participants. Suppose that first year there are 10,000 people, each of them buy 0.36 coins per day at $10, total 3600 coins were bought every day

If second year there are 11000 people buying coins with same amount of dollar from each person ($3.6 per day), then there will not be enough coins, since 3600 coins per day is fixed in the protocol. They will get less coin for the same amount of dollar, so the exchange rate will rise.

The problem with this is that only bitcoin's rate of supply is fixed. Technically, there can be "infinite" bitcoins if we use more decimal places. All 7 billion of the people on this Earth can share one btc if we really want to.

Of course, this would mean that the price of 1 BTC will increase. However, only early adopters will benefit and that's assuming that they hoard and never sell all their bitcoins and then purchase more later.

Not all the people will buy the coins at the highest price they've ever been, they will select a proper timing based on their judgement. Maybe price first rised to 13 then dropped back to 9 and end up at 11 at year end. Anyway, supply is fixed, if the coin have some history of good performance, and there are more people joining the bitcoin economy, the supply will be insufficient, the average price over a year will rise

Again, there can't be an "insufficient" supply.

[johnyj]

The problem with this is that only bitcoin's rate of supply is fixed. Technically, there can be "infinite" bitcoins if we use more decimal places. All 7 billion of the people on this Earth can share one btc if we really want to.

Of course, this would mean that the price of 1 BTC will increase. However, only early adopters will benefit and that's assuming that they hoard and never sell all their bitcoins and then purchase more later.

If 3600 people purchase 3600 coins, each of them will receive 1 coin in average, if 7200 people purchase 3600 coins, each of them will get only 0.5 coin. If the amount of fiat money spent per person is the same, per coin cost will double

Regarding the sustainability, my first post just tried to show: It does not matter if you are an early adopter or not, as long as there are another people similar to you purchase bitcoin the year after you, you only need to purchase once and then you are able to cash out 10% each year forever

Imagine this: There are 10000 people purchased bitcoin in 2013, from 2014 they start to cash out and never buy any coin again. In order to maintain a price increase of 10% per year, you only need 11000 people to purchase bitcoin in 2014 (same amount of investment from each of them). And those 11000 people will also do the same, they never buy any coin  after 2014, cash out 10% per year. And 2015 you need 12100 people to purchase bitcoin in order to maintain the price appreciation speed, and so on...

Of course the real situation is a bit complex, because you will have those extra coin supply coming from those early buyers (they cash out 10% of their coins each year), that will make the coin supply increase at the beginning. But due to the coin supply will cut by half every 4 years, long term wise daily coin supply would still shrink

I took some numbers and did a deeper analysis, Y axis showing the daily coin supply (Edit: this chart is wrong, see the later chart below)



You can see that 10% cash out strategy will not change bitcoin's deflative nature. The interesting thing is, even a 50% cash out strategy still won't change the long term projection, although the coin supply will increase more during the first 4 years, but after 11 years, its daily coin supply will drop below the level of the 10% cash out strategy

This chart also indicated: It is always at the beginning of the decade you will face a big sell pressure from the early adopters. If they never reinvest, their sell pressure on the market will get less and less each year

Now with this chart, the long term sustainability is even clearer

Another question is: If every year more people need to buy the coins and they only buy coin once, for how long the earth population is enough to support the scenario

My first thought: Every year there are many people joining the work force, and those people will have some extra money to purchase bitcoin. As long as those people put more money into bitcoin than previous year (due to rising income or rising population), and bitcoin supply is constantly shrinking (even include the cash out from early adopters), the price appreciation can be guaranteed forever. This is the same mechanism of a pension fund

With a guaranteed income from bitcoin value increase, people will have the confidence to spend, and no matter what kind of cash out strategy they have, it will not hurt the long term appreciation trend of bitcoin. This means, a deflative currency still encourage people to spend because of their guaranteed future income! Isn't it amazing for such a genius design from Satoshi?  

[CoinChex]

Dude you need a disclosure at the bottom of this -

*Past performance is not indicative of future results.  Nothing is guaranteed.  The opinion of the author is his own and does not directly reflect the opinions of the bitcoin economy.

[foggyb]

A better coin is possible, better privacy and microtransactions, otherwise just as good as bitcoin. An altcoin that good could take good slice of the market, but I have not seen such altcoin yet, and hopefully I shall be able to see it coming in time before the mob sees it.

There are ALREADY altcoins out there that offer improvements on bitcoin. Everyone must be dumping their bitcoins for these better coins, right?

Some argue that while no current altcoin offers any significant improvement over bitcoin, "someday" it will happen....Well, take a look at betamax versus vhs. Betamax was unquestionably the superior format. But they lost the format war because they came 2nd. I predict the same fate for any new altcoin startup.

The 3rd reason that I believe a 'better' altcoin won't usurp bitcoin is this: bitcoin protocol can be upgraded. Its not static.

[johnyj]

Dude you need a disclosure at the bottom of this -

*Past performance is not indicative of future results.  Nothing is guaranteed.  The opinion of the author is his own and does not directly reflect the opinions of the bitcoin economy.

Ha, this statement applies perfectly to fiat money, which no one knows how much more FED will print. For a fixed total supply money like bitcoin, such kind of statement is not needed. People get used to an uncertain future because once a while FED will come out and destroy all the people's projection with their OMO

I'm not selling any financial products or services, just some research and a conservative hypothesis, not related to real world historical performance of bitcoin in anyway

[Cluster2k]

Bitcoin will only appreciate in value "forever" if people who want to own bitcoins are willing to pay ever higher prices for them.  There is also always scope for something better, faster and easier to use to come along which can send bitcoin's value plummeting.  Enjoy the ride and don't forget to cash out to cover all costs.

[xxjs]

A better coin is possible, better privacy and microtransactions, otherwise just as good as bitcoin. An altcoin that good could take good slice of the market, but I have not seen such altcoin yet, and hopefully I shall be able to see it coming in time before the mob sees it.

There are ALREADY altcoins out there that offer improvements on bitcoin. Everyone must be dumping their bitcoins for these better coins, right?

Some argue that while no current altcoin offers any significant improvement over bitcoin, "someday" it will happen....Well, take a look at betamax versus vhs. Betamax was unquestionably the superior format. But they lost the format war because they came 2nd. I predict the same fate for any new altcoin startup.

The 3rd reason that I believe a 'better' altcoin won't usurp bitcoin is this: bitcoin protocol can be upgraded. Its not static.

They have to be better all things considered, and not just a little bit better, because of the reputation that bitcoin now builds up. But a better coin is thinkable. It could also be an improvement of bitcoin itself.

[xxjs]

1. Value of bitcoin started at 0, and after some time had a value. If you want to apply a function for that transition, it can not be exponential, because the exponential function will all ways be 0. Something easy: additional, or maybe magical.

2. In the beginning, the value will be exponential, for two reasons: each new user spawns new users, and, the coins are more usable for indirect trade as there will be more traders with bitcoins.

3. As all humans in the world get on (or all that wants to use bitcoins), the number of new users will flatten. 2 and 3 represents an S-curve.

4. When the adoption is completed, we have only left growth in productivity, natural expansion of the user base because the world population increases, and lost coins. All these means lower prices measured in bitcoins (price deflation, higher bitcoin value).

Speculation tends to speed up the change and make us achieve the top of the S earlier.

Dramatic things can happen: War, general destruction of capital and productivity: higher prices (lower bitcoin value). A deadly epidemic disease, fewer users: higher prices(lower bitcoin value). Bitcoin goes out of fashion because all states of the world gradually transforms to totalitarianism: higher prices (lower bitcoin value).

[shields]

Some argue that while no current altcoin offers any significant improvement over bitcoin, "someday" it will happen....Well, take a look at betamax versus vhs. Betamax was unquestionably the superior format. But they lost the format war because they came 2nd. I predict the same fate for any new altcoin startup.

Great example, nothing will ever top VHS right? it has first mover advantage, meaning no superior video formats will ever replace it.

[johnyj]

1. Value of bitcoin started at 0, and after some time had a value. If you want to apply a function for that transition, it can not be exponential, because the exponential function will all ways be 0. Something easy: additional, or maybe magical.

The value maybe never started at 0, since there is a cost, no matter how small it is. Running CPU mining on a computer still need some hardware investment and electricity and maintenance

2. In the beginning, the value will be exponential, for two reasons: each new user spawns new users, and, the coins are more usable for indirect trade as there will be more traders with bitcoins.

3. As all humans in the world get on (or all that wants to use bitcoins), the number of new users will flatten. 2 and 3 represents an S-curve.

4. When the adoption is completed, we have only left growth in productivity, natural expansion of the user base because the world population increases, and lost coins. All these means lower prices measured in bitcoins (price deflation, higher bitcoin value).

Yes, an exponential increase in the user base will cause the price to rise quickly, but due to there are always new baby born each day, the new users that start to purchase bitcoin will stay relatively stable after a full saturation of existing potential users

In such a situation, the price appreciation will purely depend on the population growth and productivity growth. Suppose that population growth is 0, e.g. every day same amount of new people start to purchase bitcoin, then productivity growth will decide the growth of the bitcoin value. Since there will never be liuquidity problem with bitcoin, the productivity growth will always be at their optimum speed

[xxjs]

1. Value of bitcoin started at 0, and after some time had a value. If you want to apply a function for that transition, it can not be exponential, because the exponential function will all ways be 0. Something easy: additional, or maybe magical.

The value maybe never started at 0, since there is a cost, no matter how small it is. Running CPU mining on a computer still need some hardware investment and electricity and maintenance

Don't agree with this one, we don't support valuation base on cost around here, only subjective valuation from the market.

2. In the beginning, the value will be exponential, for two reasons: each new user spawns new users, and, the coins are more usable for indirect trade as there will be more traders with bitcoins.

3. As all humans in the world get on (or all that wants to use bitcoins), the number of new users will flatten. 2 and 3 represents an S-curve.

4. When the adoption is completed, we have only left growth in productivity, natural expansion of the user base because the world population increases, and lost coins. All these means lower prices measured in bitcoins (price deflation, higher bitcoin value).

Yes, an exponential increase in the user base will cause the price to rise quickly, but due to there are always new baby born each day, the new users that start to purchase bitcoin will stay relatively stable after a full saturation of existing potential users

In such a situation, the price appreciation will purely depend on the population growth and productivity growth. Suppose that population growth is 0, e.g. every day same amount of new people start to purchase bitcoin, then productivity growth will decide the growth of the bitcoin value. Since there will never be liuquidity problem with bitcoin, the productivity growth will always be at their optimum speed

Mostly agree. You forgot the lost coins. The consequence of all this is, yes, bitcoins will appreciate forever, but hopefully eventually rather slowly so it does not disturb the day to day trade.

[johnyj]

Some argue that while no current altcoin offers any significant improvement over bitcoin, "someday" it will happen....Well, take a look at betamax versus vhs. Betamax was unquestionably the superior format. But they lost the format war because they came 2nd. I predict the same fate for any new altcoin startup.

Great example, nothing will ever top VHS right? it has first mover advantage, meaning no superior video formats will ever replace it.

Consumer products and money are very different

Money must be able to carry value through decades, people put their value and trust in money, highest credibility and popularity is the key

Most of the credibility of bitcoin come from its limited total supply. Alt-coins are inflation in the crypto currency world, this is against the idea of deflative currency, and dilute the wealth in crypto currency world. Even they are technically superior, they are politically wrong

I have mined several different coins but most of them disappeared after 1 year, finally I realized that people here don't want their wealth to be stolen by inflation, be it a central bank or an alt-coin

[johnyj]

The motivation behind alt-coin is very clear: Many people missed the chance to be an early adopter of bitcoin, they saw the huge benefit of being an early adopter of bitcoin (much less difficulty and much more coins), and want to become an early adopter of an alt-coin

But this is the same as time travel trading. When thousands of geeks were mining bitcoin with their CPUs and GPUs, the price of bitcoin were very low, they never knew that one bitcoin will worth $100 today, just like today's miner never know if one bitcoin will worth $10,000 some time in the future

And, just as my analysis revealed, the early adopter's sell pressure will only be temporary during the first several years, it becomes less and less each year, for all the people joined after the first reward halving, they won't be affected too much

I made the chart again from 2009 (Edit: corrected an error in previous calculation, those cashed out coins would be bought together with newly mined coins and they will increase the daily coin supply until each reward halving)



For 10% cash out strategy, the coin supply will be shrinking slowly. The 20% cash out strategy would keep the coin supply constant, and 50% cash out each year will cause the daily coin supply to increase very fast. A price appreciation can be projected if cash out less than 20% per year

Looking back at 2011-2012, the coin supply actually increased a lot (over 10000 coin per day) due to the cash out pressure from early adopters, maybe that is the reason the last price crash is much more severe than this time (it crashed from 30 to 3)

This chart is just a hypothesis, we all know that there are many coins never moved since they were mined, the actual cash out speed could be less than 5% per year

[johnyj]

I went a little bit deeper into this analysis, here is a screen shot of my excel sheet:

In the upper part of the chart, each row represent part of the coin supply, row 2 represent the number of coins coming from daily mining reward, row 3 through row 9 are number of coins sold by a corresponding row of investors in the lower part of the chart

In the lower part of the chart, each row represent the number of coins that a group of investors hold

Take Row 29 for example: This group of investors mine/purchase all the daily coin mined during the first 4 years period, the number of coins they hold rise year after year. From the 5th year, they stop buying and start to sell part of their holdings every year, at a rate that is defined in cell A1(10% in this chart), so their number of coins shrink continuously through F29, G29, etc...

Row 30: From the 5th year, another group of investors enter the market, they have the same strategy: First save for 4 years and then spend 10% each year. Notice that they could only mine/purchase 6480 coins per day: F2 (daily coin generation) and F3 (cash out by the first group of investors)

Row 31 means another group of investors from the 9th year enter the market, and they could only get 6120 coins per day due to a summarize of J2,J3 and J4 (J3 and J4 are spending from 1st and 2nd group investors)

Row 23 is a summarize of all the coin supply from the upper part of the chart, e.g. the total daily coin supply on market

[johnyj]

The recent polls (https://bitcointalk.org/index.php?topic=296264 and https://bitcointalk.org/index.php?topic=295753) indicated that majority of the miners and traders will select a less than 10% per year spending strategy, so this chart shows the daily coin supply under such a spending strategy



The chart showed different daily coin supply under 3 different scenarios: Investing for 1,2 or 4 years, then spend 10% each year afterwards

Under a 10% spending strategy, after about 16 years, the daily coin supply will be stabilized at a level around 5000-6000 bitcoins. The volatility for 2 and 4 year curve comes from the assumption that one group of investors only purchase during a 2 or 4 years period, in reality the curve should be much smoother, since there are investors starting anytime

So it is clear to see, under a 10% spending strategy, the future daily coin supply will never get above 5000-6000 coins, and if the investment increase due to more population or higher productivity, the coin value will appreciate forever

Even all the existing person have already fully invested in bitcoin, there are still 370,000 babies born every day. Suppose that each day same amount of person start to invest in bitcoin, and they are competing for those 5000 coins, they would averagely get 0.0135 coin per person  

Suppose that each person need $ 1,350,000 for a comfortable retirement, and they put all those savings into bitcoin and get 0.0135 coin, e.g. 1,350,000 satoshi, this means 1 satoshi = 1 usd,  1 BTC will worth 100 million dollars, this might be the highest possible value bitcoin can achieve

[David Rabahy]

It is clear the OP is just beginning to understand the dynamics of this thing called Bitcoin (and many other things).

When I purchased my Bitcoins on an exchange, the coins came from someone (or perhaps multiple people) willing to sell them (the Bitcoins weren't created then and there new just for me).  If I *ever* sell my Bitcoins on an exchange then they will go to someone et al willing to buy them; if there is no one then I won't be able to sell them at all, i.e. the effective exchange rate goes to zero.  The number of Bitcoins doesn't go up or down per se during these exchanges.

The exchange rate (for example, USD/BTC) can vary (sometimes wildly) even when people brand new to Bitcoin are or are not purchasing their very first Bitcoins ever.  The exchange rate is fundamentally a measure of relative confidence with the supply and demand dynamics impacting the confidence considerably.  The Bitcoin exchange rate is very unlikely to increase steadily.  Predicting when exactly to exchange out 10% each year is actually much harder than imagined.  Worse, if you expect it to continue to rise then why exchange out at all?  If you take too much into Bitcoin and need to exchange some out to make purchases available only in fiat then that was a risk (some might call it a mistake).

New people are born; old people die (for now).  New people have little ability at first to purchase Bitcoins; they might be given some as gifts.  Dying old people put their Bitcoins at risk of being lost if they don't take steps to make them available to their beneficiaries.

A wide variety of hopefully unlikely catastrophes can befall Bitcoin pushing confidence down; down even to zero.

[johnyj]

The exchange rate is fundamentally a measure of relative confidence with the supply and demand dynamics impacting the confidence considerably.  The Bitcoin exchange rate is very unlikely to increase steadily.  Predicting when exactly to exchange out 10% each year is actually much harder than imagined.  Worse, if you expect it to continue to rise then why exchange out at all?  If you take too much into Bitcoin and need to exchange some out to make purchases available only in fiat then that was a risk (some might call it a mistake).

The biggest confidence of bitcoin comes from the limited/fixed supply and unlimited demand. It can not be inflated by central banks, nor inflated by added gold producers. You can spend 10% per year by evenly distribute the spending throughout the year.

You start to cash out or spending when you have already accumulated enough coins, and if you cash out carefully, you won't affect the constantly shrinking supply trend. (Actually, even with a 100% cash out strategy (everyone sold all of their coin after one year), the daily coin supply will still stablize after 10 years, and it will only be 1 magnitude higher than a 10% cash out scenario, like 60,000 coins per day) And of course those 370,000 babies per day will not buy the coin when they were born, but when they grew up 20 years later. Currently you have more than 500,000 grown ups entering the bitcoin world everyday due to higher birth rate 20 years ago, and no old people die with bitcoin savings yet

Daily coin supply for 100% cash out strategy after a certain investment period


I think at current price level, those who have already accumulated >10k bitcoins are the major spenders in bitcoin economy. In fact, lots of bitcoin promoters today are those early adopters who accumulated enough coins and have the motivation to drive this ecosystem further

[zachcope]

You need to consider the difference between the fiat price of bitcoin vs the purchasing power in goods and services of a bitcoin.

The fiat price will go up faster than the purchasing power so that the 100 dollar cash out becomes worth less and less over time.

This is due to fiat inflation vs increased utility of bitcoin as a store of value and way to transfer value over time.

[Shallow]

These charts don't really make much sense. Bitcoin could drop significantly at any time and there is a possibility (albeit a small one) of an altcoin usurping bitcoin.

[cowandtea]

Not if the Bitcoin market continue to get harass by US government. At this rate, every Bitcoin related market would be closed down and Bitcoin would had no value

[hashman]

Not if the Bitcoin market continue to get harass by US government. At this rate, every Bitcoin related market would be closed down and Bitcoin would had no value

Yeah, like remember all those other things folks claiming to be goverment officials claimed the right to confiscate?  They really dropped in value didn't they. 

[johnyj]

You need to consider the difference between the fiat price of bitcoin vs the purchasing power in goods and services of a bitcoin.

The fiat price will go up faster than the purchasing power so that the 100 dollar cash out becomes worth less and less over time.

This is due to fiat inflation vs increased utility of bitcoin as a store of value and way to transfer value over time.

The cash out strategy is based on a percentage of bitcoin holding, nothing to do with exchange rate. You should also consider that not only fiat money can exchange bitcoin, but also anything else with a value (goods/services/gold/securities, etc...), they will further reduce the daily coin supply on the exchanges

[Johnny Bitcoinseed]

I'm thinking that eventually bitcoin will stand on its own.  That is, you don't so much trade bitcoin for dollars and then dollars for bitcoin.  Rather you earn bitcoin through your job or business and then spend them for the stuff you need and want - the people on the receiving end then spend the bitcoins and round and round it goes, no dollars needed.

As the bitcoin economy grows, each bitcoin will buy an increasing amount of stuff - its value is increasing because of its limited nature.  But you never run out because bitcoins can be divided into tens of thousands of units.  Perhaps one day 1/1000th of a bitcoin could purchase what one full bitcoin does today.

[Erdogan]

I'm thinking that eventually bitcoin will stand on its own.  That is, you don't so much trade bitcoin for dollars and then dollars for bitcoin.  Rather you earn bitcoin through your job or business and then spend them for the stuff you need and want - the people on the receiving end then spend the bitcoins and round and round it goes, no dollars needed.

As the bitcoin economy grows, each bitcoin will buy an increasing amount of stuff - its value is increasing because of its limited nature.  But you never run out because bitcoins can be divided into tens of thousands of units.  Perhaps one day 1/1000th of a bitcoin could purchase what one full bitcoin does today.

Bitcoin stands on its own. It can be traded for other currencies and goods and services.
Currently it is most practical to value it in USD, but for users of the other major currencies Yen, Pound, Euro and Renminbi, those currencies could be used for valuation. The valuation used is normally the good/money or money/money pair that has the thickest market. If necessary the users can change that in no time. See "thick market" on investopedia.

[johnyj]

Actually the "less than 10% cash out strategy" is a typical practice in today's fiat money system. For example, most of the QE money went into commercial banks' pocket by purchasing bad loans from them but they save all that money at FED and receive a 2% interest for those money, only those interest were spent. A typical pension scheme is also trying to spend the interest

Since bitcoin does not generate any interest (No one will use bitcoin to invest since itself is already the most profitable investment), the only way to benefit from bitcoin is to spend coins. But that is very positive, since it re-distribute the coin to other people and so on, not like today's system, rich people only spend the interest and their fiat money get more and more, thus the wealth distribution is extremely unbalanced after several generation

[morphtrust]

I'm thinking that eventually bitcoin will stand on its own.  That is, you don't so much trade bitcoin for dollars and then dollars for bitcoin.  Rather you earn bitcoin through your job or business and then spend them for the stuff you need and want - the people on the receiving end then spend the bitcoins and round and round it goes, no dollars needed.

As the bitcoin economy grows, each bitcoin will buy an increasing amount of stuff - its value is increasing because of its limited nature.  But you never run out because bitcoins can be divided into tens of thousands of units.  Perhaps one day 1/1000th of a bitcoin could purchase what one full bitcoin does today.

this is kinda what I am angling for by working on getting a community of people making something tangible that they have little to no money invested in making, just labor so we can start building a community that stands on crypto currency only.

possibilities are endless from making common lye used for making bio diesel to a number of other things like paper, to ferric chloride, both from table salt, using cheap ugly but still new and powerful solarcells that can cost as little as 14 cents per watt they output. I have found a way to extend the useful life of a solar cell too for anyone interested so you can either expand how long you can use them up to 5 times longer, or concentrate more light (reflectors made of anything but I plan on using MDF and aluminum foil) so you get 5 times more power RIGHT NOW but the lifespan is only as long as they are normally with out protection, thus you can get that value out of them faster rather than having to wait to get it.

There are tons of other things out there too that we can make at home easily if we only knew how to, so it is all down to figuring that out, and developing the skill set to allow the production and investing our spare time to do it for bitcoin or some other alt currency, instead of dollars or yuan

would be nice to figure out what our hourly time is actually work in a sort of community like that and use that to base our value on the bitcoin we collect for our work,

and we can be more flexible too by charging bitcoin for the products, and dollars (if you are in the USA) for shipping or something, till we have some people join the community that can and are willing to provide shipping for bitcoin.

[Possum577]

Any updates on this theory given the recent and significant sell off this week or based on the new retailers that have entered the market place accepting Bitcoin?

Clearly the price stability or appreciation is important to us all and there's not much thorough research on the topic.

[nizamcc]

this is a bullshit theory

[johnyj]

Any updates on this theory given the recent and significant sell off this week or based on the new retailers that have entered the market place accepting Bitcoin?

Clearly the price stability or appreciation is important to us all and there's not much thorough research on the topic.

I saw a poll recently showing that about 80% of people are holding their coins, so the basic behavior has not changed much. But you can see from the chart, if everyone is investing for one year and then start to spend, the daily coin supply will actually rise year after year until the next reward halving

The natural appreciation tendency is caused by reward halving every 4 years, that will give a 19% appreciation each year when money inflow does not grow

However, even we had a huge boost in user adoption, that won't make a 10 fold increase in money inflow in one year. Money inflow can be several times higher than last year, resulting an exchange rate of several hundred dollars

Usually the technology shift causes lots of miners to lose the ability to mine and forced them to buy on exchanges, thus creating a rally. Now technology shift is over and daily coin supply will still be about 5000 coins. Since many new established large mining farms in china only sell the mined coins, the coin supply can be bigger than the time when ASIC first arrived. It is a test for how much money inflow the market really has

Anyway, a 19% increase in price during a time frame of one year is almost guaranteed, anything beyond that can be regarded as a bonus due to expoential increase in adoption and money inflow

To keep exchange rate at $500, for 5000 coins you need $2.5 million net inflow every day, that is about one apartment in big capital cities

[juliogf]

What happened?

[neurotypical]

What happened?

Bitcoin went up forever happened:



Now it's time for a slow uptrend since it will not go under the mean. This is math.

[johnyj]

A little summarize about the development during past year:

First, increased usage will reduce the daily coin supply on market thus raise its value,
An easy way to make bitcoin worth millions of dollars
However, the effect is not as large as long term hodling: If you constantly spend 10 coins every month, then only 10 coins will disappear from exchange, but if you hold 10 coins, they will also disappear from exchanges, for a long time

With more established exchanges, the usage as remittance medium just become more user friendly. Now I'm doing all my international transactions using bitcoin, if the receiver is in a country that have good bitcoin exchange. It is much cheaper and faster than traditional way

There are still limited spaces to spend bitcoin, but that means majority of merchant still have to learn how to use bitcoin by themselves, instead of relying on payment processor like bitpay. And that require a thorough understanding of bitcoin security, it will take some time. It is not recommended to rely on any third party to take care of your bitcoin, while majority of people are not geeks, this is still the major obstacle towards mass adoption

Mining difficulty does not drop, this indicated that the demand is still strong. If the demand drops, the mining difficulty will drop, because majority of the demand is fulfilled by mining (lowest possible cost to get coin)

So far, we have not seen hyperinflation following the huge scale of fiat money printing. Just like stock market bubble, as long as fiat money hold its value, big institutions would still ride the wave for a while. But those institutions are fully aware of the overvalued situation of fiat money, now it is a fiat money bubble, they will get rid of their fiat money positions as soon as they see the sign of a crash, we just don't know how and when it will happen

[lahm-44]

bitcoin will be appreciated forever due to its advance technology and awesome thinking the satoshi has made most of the possible system of future In short I can say he has showed us the way to develop our future a lott cooler that it was we guys has access to markets so now we can design our own future

[ummina]

well... i think bitcoin like a magnet shipon visitor, and interest to join it.
very interesting for me, we can make money from here...
and if we can use easily and continue, this is very funny, and like a chat. just like that.
the money we can make very much if we get the positions up like Legendary "oh my god" the payment may be very much...
but if like me still little. just make it make it and make it,,, never no.... fight to try and try never give up.
you can get happynes in the end.

[johnyj]

There are two problems:

1. Price depends on supply and demand, and you cannot predict what might happen to the price without knowing what will happen to both supply and demand. Furthermore, you can't assume that demand will rise constantly. It is possible for demand to fall even as adoption rises.

2. You are confused about the meanings of the word "supply". "Supply" as in "money supply" is not the same as "supply" as in "supply and demand". The money supply is the total number of bitcoins in existence. It effects the supply (as in supply and demand) in the market, but is not the same thing. Furthermore, supply and demand are curves, not numbers. The price is at their intersection.

It does not matter what is the definition of supply, there are 5000 coins net sell every day on market, that is calculated after considering several facts getting from poll. There is larger transaction volume daily, but those are day traders and short term speculators, basically the buying and selling volume cancel each other, only the net sell amount matters

In fact the total money supply in bitcoin is irrelevant, because many of them does not exist in circulation. It's the money in circulation matters. FED printed 5x USD but the money in circulation remains the same, that's the reason the USD did not crash in value by 5x

As analyzed, if the demand falls, the first thing we will notice is that the mining difficulty will go down. Because mining is the lowest cost to get bitcoin constantly, serious investors will always first seek large mining operation, if they can not get coin through mining, they will consider buying on open market. That is the reason when ASIC arrives, suddenly many investors lost the ability to get coin from mining, thus they all went to market to purchase, and made the price rise 10 fold

So far the mining difficulty is still rising, means the demand is still strong. If difficulty jumps up, then it means the demand is extremely strong

[Erdogan]

There are two problems:

1. Price depends on supply and demand, and you cannot predict what might happen to the price without knowing what will happen to both supply and demand. Furthermore, you can't assume that demand will rise constantly. It is possible for demand to fall even as adoption rises.

2. You are confused about the meanings of the word "supply". "Supply" as in "money supply" is not the same as "supply" as in "supply and demand". The money supply is the total number of bitcoins in existence. It effects the supply (as in supply and demand) in the market, but is not the same thing. Furthermore, supply and demand are curves, not numbers. The price is at their intersection.

This is correct, and the vision that bitcoin will appreciate forever, also depends on that market actors (everybody) regard bitcoin as the best money. Otherwise, it will not happen.

[johnyj]

There are two problems:

1. Price depends on supply and demand, and you cannot predict what might happen to the price without knowing what will happen to both supply and demand. Furthermore, you can't assume that demand will rise constantly. It is possible for demand to fall even as adoption rises.

2. You are confused about the meanings of the word "supply". "Supply" as in "money supply" is not the same as "supply" as in "supply and demand". The money supply is the total number of bitcoins in existence. It effects the supply (as in supply and demand) in the market, but is not the same thing. Furthermore, supply and demand are curves, not numbers. The price is at their intersection.

This is correct, and the vision that bitcoin will appreciate forever, also depends on that market actors (everybody) regard bitcoin as the best money. Otherwise, it will not happen.

Only English people using Pound is enough to support its value, similarly, only IT interested/Libertarian/Austrian economists giving bitcoin strong support can maintain its value. For merchants, it is so easy to accept international payment with bitcoin, just download an app. It has not gained enough traction because of its volatility, it takes time for people to get rid of their fear towards new things

[luciann]

There are two problems:

1. Price depends on supply and demand, and you cannot predict what might happen to the price without knowing what will happen to both supply and demand. Furthermore, you can't assume that demand will rise constantly. It is possible for demand to fall even as adoption rises.

2. You are confused about the meanings of the word "supply". "Supply" as in "money supply" is not the same as "supply" as in "supply and demand". The money supply is the total number of bitcoins in existence. It effects the supply (as in supply and demand) in the market, but is not the same thing. Furthermore, supply and demand are curves, not numbers. The price is at their intersection.

This is correct, and the vision that bitcoin will appreciate forever, also depends on that market actors (everybody) regard bitcoin as the best money. Otherwise, it will not happen.

Only English people using Pound is enough to support its value, similarly, only IT interested/Libertarian/Austrian economists giving bitcoin strong support can maintain its value. For merchants, it is so easy to accept international payment with bitcoin, just download an app. It has not gained enough traction because of its volatility, it takes time for people to get rid of their fear towards new things

when you speak of not attracting new users based on volatility.. are you expecting minimum like 1k like we did see fake value with mt.gox

i know I got in it cause there was no option of making money and another form to get cash.

[johnyj]

As analyzed, if the demand falls, the first thing we will notice is that the mining difficulty will go down. Because mining is the lowest cost to get bitcoin constantly, serious investors will always first seek large mining operation, if they can not get coin through mining, they will consider buying on open market. That is the reason when ASIC arrives, suddenly many investors lost the ability to get coin from mining, thus they all went to market to purchase, and made the price rise 10 fold

So far the mining difficulty is still rising, means the demand is still strong. If difficulty jumps up, then it means the demand is extremely strong

The difficulty depends on the price (w.r.t the cost of mining). The price depends on both supply and demand. Therefore, demand can be lower when the difficulty rises and vice versa.

Higher price will raise the difficulty since it created speculative mining demand - make a quick buck with mining, that is also a demand. Speculation demand is always part of the bitcoin demand, but it changes with price, not like other demands. Currently we are in a low volatility period, thus speculative demand is at its minimum. If the speculative demand is dropping while difficulty is rising, then you know there are some other type of demand quietly driving the difficulty up. Because the supply of bitcoin on market is very easy to estimate, that makes the demand the only variable that can affect price, and demand is very easy to spot through difficulty, which makes it extremely simple to model the future valuation

By the way, money's value is decided by a consensus, supply and demand theory never works on money, because money can be regarded as having infinite demand, thus any change in supply will not affect money's value. This seems start to apply to bitcoin too: Bitcoin's demand can be very very high, but its value is not really decided by supply and demand, but by a consensus, around the mining cost, similar to gold

[johnyj]

There are two problems:

1. Price depends on supply and demand, and you cannot predict what might happen to the price without knowing what will happen to both supply and demand. Furthermore, you can't assume that demand will rise constantly. It is possible for demand to fall even as adoption rises.

2. You are confused about the meanings of the word "supply". "Supply" as in "money supply" is not the same as "supply" as in "supply and demand". The money supply is the total number of bitcoins in existence. It effects the supply (as in supply and demand) in the market, but is not the same thing. Furthermore, supply and demand are curves, not numbers. The price is at their intersection.

This is correct, and the vision that bitcoin will appreciate forever, also depends on that market actors (everybody) regard bitcoin as the best money. Otherwise, it will not happen.

Only English people using Pound is enough to support its value, similarly, only IT interested/Libertarian/Austrian economists giving bitcoin strong support can maintain its value. For merchants, it is so easy to accept international payment with bitcoin, just download an app. It has not gained enough traction because of its volatility, it takes time for people to get rid of their fear towards new things

when you speak of not attracting new users based on volatility.. are you expecting minimum like 1k like we did see fake value with mt.gox

i know I got in it cause there was no option of making money and another form to get cash.

1k was an overshoot of the speculative bubble top. Long term wise, the coin value should be close to its mining cost, which should rise over time if there is no major disaster in bitcoin ecosystem

[Erdogan]

As analyzed, if the demand falls, the first thing we will notice is that the mining difficulty will go down. Because mining is the lowest cost to get bitcoin constantly, serious investors will always first seek large mining operation, if they can not get coin through mining, they will consider buying on open market. That is the reason when ASIC arrives, suddenly many investors lost the ability to get coin from mining, thus they all went to market to purchase, and made the price rise 10 fold

So far the mining difficulty is still rising, means the demand is still strong. If difficulty jumps up, then it means the demand is extremely strong

The difficulty depends on the price (w.r.t the cost of mining). The price depends on both supply and demand. Therefore, demand can be lower when the difficulty rises and vice versa.

Higher price will raise the difficulty since it created speculative mining demand - make a quick buck with mining, that is also a demand. Speculation demand is always part of the bitcoin demand, but it changes with price, not like other demands. Currently we are in a low volatility period, thus speculative demand is at its minimum. If the speculative demand is dropping while difficulty is rising, then you know there are some other type of demand quietly driving the difficulty up. Because the supply of bitcoin on market is very easy to estimate, that makes the demand the only variable that can affect price, and demand is very easy to spot through difficulty, which makes it extremely simple to model the future valuation

By the way, money's value is decided by a consensus, supply and demand theory never works on money, because money can be regarded as having infinite demand, thus any change in supply will not affect money's value. This seems start to apply to bitcoin too: Bitcoin's demand can be very very high, but its value is not really decided by supply and demand, but by a consensus, around the mining cost, similar to gold

No no. Since there is no production (in principle) and no consumption (the money just moves from one owner to another ad infinitum), the demand is only demand to hold the money in the reserve. (For consumable commodities, think of reserve demand as a large heap of iron ore in front of a steel factory, the reserve is grown when the ore seems cheap to the steel-maker, and reduced when he envisions a lower price in the future).

The demand to hold money in reserve is the only reason to hold money, and the supply is other people running down their reserves for any reason. By trading against something else, price pairs are discovered. The reasons behind the supply and demand, respectively,  is basically the same, only inversed. The actual amount each market actor wants to hold, depends on everything, and changes continually.

[johnyj]

No no. Since there is no production (in principle) and no consumption (the money just moves from one owner to another ad infinitum), the demand is only demand to hold the money in the reserve. (For consumable commodities, think of reserve demand as a large heap of iron ore in front of a steel factory, the reserve is grown when the ore seems cheap to the steel-maker, and reduced when he envisions a lower price in the future).

The demand to hold money in reserve is the only reason to hold money, and the supply is other people running down their reserves for any reason. By trading against something else, price pairs are discovered. The reasons behind the supply and demand, respectively,  is basically the same, only inversed. The actual amount each market actor wants to hold, depends on everything, and changes continually.

you can't exchange iron ore for anything else except money, but with money you can exchange anything, the liquidity preference is different. If you produce 5x more iron ore, most likely the price will crash to 1/5, but FED has proved that printing 5x more USD will not affect its value

The demand for money can be driven by many psychological cause, most notably purchasing of high valued goods and building a safety net for future. Nothing prevent everyone from accumulating 1 billion dollar and do nothing with those money: A large amount of reserve just increase the feeling of safety dramatically and positively affect their mental status, even most of the consumptions in today's life is already enough good and cheap

[funkenstein]

you can't exchange iron ore for anything else except money,

Who is going to stop me?  We trade what we like, that is a fact.      

but with money you can exchange anything,

However there is no -guarantee- of a willing exchanger for any good, no matter whether you choose to call that good money or not.  How is this not obvious?  

the liquidity preference is different. If you produce 5x more iron ore, most likely the price will crash to 1/5, but FED has proved that printing 5x more USD will not affect its value

??  I'm not sure I follow you here.  We don't know how much USD has been issued, nobody does.  All we know is since the FED took over the value of a USD has dropped to well under 1% of its previous value vs. gold or oil or housing or food or clothing.  

The demand for money can be driven by many psychological cause, most notably purchasing of high valued goods and building a safety net for future. Nothing prevent everyone from accumulating 1 billion dollar and do nothing with those money: A large amount of reserve just increase the feeling of safety dramatically and positively affect their mental status, even most of the consumptions in today's life is already enough good and cheap

[johnyj]

but with money you can exchange anything,

However there is no -guarantee- of a willing exchanger for any good, no matter whether you choose to call that good money or not.  How is this not obvious?  

Each fiat money is a guarantee of exchanging any good in that specific country, I would like to see the future where people refuse to accept their domestic fiat money because it is created out of nothing, but that is not the case right now, 99% of people (including many famous entrepreneurs) have zero knowledge about fiat money, they are all playing the bank's fiat money game without understanding how the game is designed

the liquidity preference is different. If you produce 5x more iron ore, most likely the price will crash to 1/5, but FED has proved that printing 5x more USD will not affect its value

??  I'm not sure I follow you here.  We don't know how much USD has been issued, nobody does.  All we know is since the FED took over the value of a USD has dropped to well under 1% of its previous value vs. gold or oil or housing or food or clothing.  

Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times, so the value does not drop enough fast with the supply. 99% of people are short sighted, if a currency drops in value by even 5% per year, most of the people just don't care, as long as their income is enough to deal with the living expense. They maybe complain the rising living cost, but they won't take any action. Only Zimbabwe-like hyperinflation that increase the money supply by 10 fold in a month will cause a currency to fail

[AlexGR]

Why bitcoin will appreciate forever

1. Fiat supply (debt-backed money) is required to be inflated to infinity to support itself, otherwise the system will crumble. If there is 100 trillion debt, 100 trillion money and 5% interest, you need another 5% of the money supply (5 trillion extra) to repay the debt = new money needs to be created to keep the debt serviced. Compound interest effect has a "compound" effect in the fiat money supply. The ratio of fiat supply:btc supply is ensuring the long-term appreciation of BTC, but it'll take a while longer in order for BTC's inflation to slow down a bit.

2. Gold/silver output is also getting inflated by new mining output. While it may be better compared to fiat, it still has uncertainties in its inflation model like "what if a large gold deposit is found that is a game changer" or what happens if new mining techniques increase the output dramatically.

In light of the above two, I believe it's hardly relevant whether people cash out or not as the existing maximum supply is fixed for BTC. Sure, if someone cashes out a million coins it can have a bearish effect on price, but in the long run it won't matter that much.

[eternalgloom]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

[Erdogan]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

There are some hard statistics from the blockchain, like number of transactions and the number of unspent outputs. Currently unspent outputs is at 32 million. That could mean the number of users are somewhere between 1 and 10 million. But it turns out that some people never redraw coins from the exchange where they bought them. Maybe it is too difficult or risky, or they just don't know it is possible, living with a fiat/stockbroker mindset.

[funkenstein]

but with money you can exchange anything,

However there is no -guarantee- of a willing exchanger for any good, no matter whether you choose to call that good money or not.  How is this not obvious?  

Each fiat money is a guarantee of exchanging any good in that specific country, I would like to see the future where people refuse to accept their domestic fiat money because it is created out of nothing, but that is not the case right now, 99% of people (including many famous entrepreneurs) have zero knowledge about fiat money, they are all playing the bank's fiat money game without understanding how the game is designed

Thanks for your reply. 
OK then, 20$ for your daughter.  Guaranteed you said.  JK of course.  First of all whether the cost of production of the currency is zero (definition of fiat) or not doesn't matter.  There is NEVER a guarantee that anybody will trade you anything for anything else.  Even legal tender laws only disincentivise folks to accept a given tender as repayment of debts, not as trade for whatever thing you might be interested in.   

the liquidity preference is different. If you produce 5x more iron ore, most likely the price will crash to 1/5, but FED has proved that printing 5x more USD will not affect its value

??  I'm not sure I follow you here.  We don't know how much USD has been issued, nobody does.  All we know is since the FED took over the value of a USD has dropped to well under 1% of its previous value vs. gold or oil or housing or food or clothing.  

Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times, so the value does not drop enough fast with the supply. 99% of people are short sighted, if a currency drops in value by even 5% per year, most of the people just don't care, as long as their income is enough to deal with the living expense. They maybe complain the rising living cost, but they won't take any action. Only Zimbabwe-like hyperinflation that increase the money supply by 10 fold in a month will cause a currency to fail

I'm curious why you are so confident that the USD supply has increased so much more than it's market value would imply.  For me, I have no information about the USD supply other than what markets tell me.  Yes I am aware that markets are delayed in their reaction to printing events, so in general your hypothesis is in the right direction, but as to the factor concerned - I am ignorant. 

 

[Erdogan]

[...]
Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times,
[...]

(I had to crop the quote, I wanted to address only this point)

I have no idea if your numbers are correct, but if they are:

We know that the consequence of increasing the money quantity has effect on prices, more money means higher prices, but there is a delay. When money is printed and are still in the basement of the central bank, and it is unknown to the public, there is no price rise, but when the money is distributed, it will rise prices, first on the products that are bought by the state, then the products that are bought by the vendors to the state and so on, until they are evenly spread out, which can take ten years or more.

So when he money quantity have risen 1000 times, but prices only 100 times (your numbers), the prices may rise in the future, eventually up to 1000 times, or 10 times more than today, don't you think? How long time will it take, will it be quicker? Money printing is still going on, not?

[HarHarHar9965]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

Determining such a number is not yet so easy, limiting us to work with very few options. Even with the help of statistics, its accuracy is still something which we need to figure out from every individual. The best way to know how many people are using bitcoins is having at he mass survey, or ask them personally about a vote-down, etc. So what is your final choice anyway?

[Erdogan]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

Determining such a number is not yet so easy, limiting us to work with very few options. Even with the help of statistics, its accuracy is still something which we need to figure out from every individual. The best way to know how many people are using bitcoins is having at he mass survey, or ask them personally about a vote-down, etc. So what is your final choice anyway?

A mass survey would be good, but I eye methodical problems, because there are differences in adoption per country, line of business (IT), social rong, and political (the statists are eagerly uninterested). Even asking everyone, could pose problems, since there would be communication problems.

[Miracal]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

Determining such a number is not yet so easy, limiting us to work with very few options. Even with the help of statistics, its accuracy is still something which we need to figure out from every individual. The best way to know how many people are using bitcoins is having at he mass survey, or ask them personally about a vote-down, etc. So what is your final choice anyway?

A mass survey would be good, but I eye methodical problems, because there are differences in adoption per country, line of business (IT), social rong, and political (the statists are eagerly uninterested). Even asking everyone, could pose problems, since there would be communication problems.

So do you think there is any way right now or maybe in future to know how many people currently use bitcoin? Knowing their value and their possession or even their identity is not the motive, finding out the true number of users is the only motive. I was thinking of a poll which collaborates with wallet providing websites but I don't think anybody will care to fill, and we can't force users. Also, who knows they might put false data too.

[Erdogan]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

Determining such a number is not yet so easy, limiting us to work with very few options. Even with the help of statistics, its accuracy is still something which we need to figure out from every individual. The best way to know how many people are using bitcoins is having at he mass survey, or ask them personally about a vote-down, etc. So what is your final choice anyway?

A mass survey would be good, but I eye methodical problems, because there are differences in adoption per country, line of business (IT), social rong, and political (the statists are eagerly uninterested). Even asking everyone, could pose problems, since there would be communication problems.

So do you think there is any way right now or maybe in future to know how many people currently use bitcoin? Knowing their value and their possession or even their identity is not the motive, finding out the true number of users is the only motive. I was thinking of a poll which collaborates with wallet providing websites but I don't think anybody will care to fill, and we can't force users. Also, who knows they might put false data too.

I think the price reveals the combination of number of users and their eagerness to hold. Maybe that is the number you want to predict, so that doesn't work.

[greBit]

I was wondering if there actually is a good source to 'measure' Bitcoin popularity and to figure out at what kind of rate new users are coming in approximately?
Have not yet seen any figures that I would trust.

Determining such a number is not yet so easy, limiting us to work with very few options. Even with the help of statistics, its accuracy is still something which we need to figure out from every individual. The best way to know how many people are using bitcoins is having at he mass survey, or ask them personally about a vote-down, etc. So what is your final choice anyway?

A mass survey would be good, but I eye methodical problems, because there are differences in adoption per country, line of business (IT), social rong, and political (the statists are eagerly uninterested). Even asking everyone, could pose problems, since there would be communication problems.

So do you think there is any way right now or maybe in future to know how many people currently use bitcoin? Knowing their value and their possession or even their identity is not the motive, finding out the true number of users is the only motive. I was thinking of a poll which collaborates with wallet providing websites but I don't think anybody will care to fill, and we can't force users. Also, who knows they might put false data too.

I think the price reveals the combination of number of users and their eagerness to hold. Maybe that is the number you want to predict, so that doesn't work.

Maybe there is a technology advancement in bitcoins which lets the market know how many individuals are actively using bitcoins, on a regular basis. If we try calculating it by the price of bitcoin, we will never know the answer. If we know the total amount of bitcoins till now, then we might narrow down perspectives but it would still be a long and horrifying task  and possibly leave unverified answers.

[qiwoman2]

I think Bitcoin might start appreciating more once it can no longer be mined, or the buyers per mined coins increases..so as more and more people invest in bitcoin and less and less coins are being mined then we may see another big trending upwards. I don't know but that's how my little logical brain would put it. Just my 2 bits.. 

[Xxmodded]

Nothing lasts forever and many are waiting for BTC to take off again.

[johnyj]

[...]
Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times,
[...]

(I had to crop the quote, I wanted to address only this point)

I have no idea if your numbers are correct, but if they are:

We know that the consequence of increasing the money quantity has effect on prices, more money means higher prices, but there is a delay. When money is printed and are still in the basement of the central bank, and it is unknown to the public, there is no price rise, but when the money is distributed, it will rise prices, first on the products that are bought by the state, then the products that are bought by the vendors to the state and so on, until they are evenly spread out, which can take ten years or more.

So when he money quantity have risen 1000 times, but prices only 100 times (your numbers), the prices may rise in the future, eventually up to 1000 times, or 10 times more than today, don't you think? How long time will it take, will it be quicker? Money printing is still going on, not?

http://www.tradingeconomics.com/united-states/money-supply-m2
You can google some numbers for US money supply. M2 is around 16 billion at 1913, and at 2013 it is around 12 trillion, so close to 1000 times increase, but if USD only becomes 1/100 of its initial value, that means for each 10x more money created, price level only increase by 1x.

The reason is: Although the money supply increases, the demand for money for trading goods/services also increased, so the goods and services production and consumption increased by about 10x. In one century, the industry output increased by 10x, banks printed 1000x more money and devalued those money by 100x in the process

Since the change in M2 and price level is just several percent each year, I don't think you will see a significant Cantillon effect any time. That's the rule that inflation should never increase by more than 5-10% per year, so that average people will ignore that change. However, the increase in base money supply becomes too dramatic since 2008, so what will happen now is uncertain

But my guess is, as long as those money are in the hands of banks, they can control the money in circulation, thus create inflation or deflation at will. Those rules in economy books are only a small subset of the giant central bank game, they can make things works like those books described, but they can also change it at will. At central bank's level, it is all about market manipulation, but they do it with certain risk

[americanpegasus]

A better coin is possible, better privacy and microtransactions, otherwise just as good as bitcoin. An altcoin that good could take good slice of the market, but I have not seen such altcoin yet, and hopefully I shall be able to see it coming in time before the mob sees it.

 
 
When you wrote this, we didn't have such a coin.  Now we do. 
 
Monero is destined to be the global private ledger to bitcoin's public ledger: 
 

[Erdogan]

[...]
Yes, USD has dropped 99% of its value since 100 years ago, but the USD supply has increased much more than 1000 times,
[...]

(I had to crop the quote, I wanted to address only this point)

I have no idea if your numbers are correct, but if they are:

We know that the consequence of increasing the money quantity has effect on prices, more money means higher prices, but there is a delay. When money is printed and are still in the basement of the central bank, and it is unknown to the public, there is no price rise, but when the money is distributed, it will rise prices, first on the products that are bought by the state, then the products that are bought by the vendors to the state and so on, until they are evenly spread out, which can take ten years or more.

So when he money quantity have risen 1000 times, but prices only 100 times (your numbers), the prices may rise in the future, eventually up to 1000 times, or 10 times more than today, don't you think? How long time will it take, will it be quicker? Money printing is still going on, not?

http://www.tradingeconomics.com/united-states/money-supply-m2
You can google some numbers for US money supply. M2 is around 16 billion at 1913, and at 2013 it is around 12 trillion, so close to 1000 times increase, but if USD only becomes 1/100 of its initial value, that means for each 10x more money created, price level only increase by 1x.

The reason is: Although the money supply increases, the demand for money for trading goods/services also increased, so the goods and services production and consumption increased by about 10x. In one century, the industry output increased by 10x, banks printed 1000x more money and devalued those money by 100x in the process

Since the change in M2 and price level is just several percent each year, I don't think you will see a significant Cantillon effect any time. That's the rule that inflation should never increase by more than 5-10% per year, so that average people will ignore that change. However, the increase in base money supply becomes too dramatic since 2008, so what will happen now is uncertain

But my guess is, as long as those money are in the hands of banks, they can control the money in circulation, thus create inflation or deflation at will. Those rules in economy books are only a small subset of the giant central bank game, they can make things works like those books described, but they can also change it at will. At central bank's level, it is all about market manipulation, but they do it with certain risk

Well I think the demand to hold, not the demand to trade, is the source of the money value, so the danger of price inflation is high. But there is also the debt money, which can contract.

[johnyj]

Well I think the demand to hold, not the demand to trade, is the source of the money value, so the danger of price inflation is high. But there is also the debt money, which can contract.

True, both holding and transaction will have the same effect on money supply: Make some amount of money occupied from other's access. But holding have a much larger effect. You must spend $2000 every month to make those money occupied, while you only need to hold them to make them disappear from circulation for a long time. Normal people seldom spend $10K every month, but having a saving of $10K is not so difficult

But following this path, you will see that banks printed 1000x more money, where 90% of those are being hold in long term storage, and the rest 100x USD depreciated 100 times, so that the economy does not grow at all. Maybe this is the truth, because the time for anyone is always the same, and most of the people born with nothing and die with nothing, what they did during their life time is irrelevant

[BillyBobZorton]

A better coin is possible, better privacy and microtransactions, otherwise just as good as bitcoin. An altcoin that good could take good slice of the market, but I have not seen such altcoin yet, and hopefully I shall be able to see it coming in time before the mob sees it.

 
 
When you wrote this, we didn't have such a coin.  Now we do. 
 
Monero is destined to be the global private ledger to bitcoin's public ledger: 
 

Monero will always remain an underground currency. Now this doesn't mean it cannot be a big success, underground economies are huge specially in poorer countries where people simply cannot afford paying taxes. The problem is unless you get paid in Monero directly it stops being as anonymous.

[americanpegasus]

That's the same problem with any currency; we can't help that other currencies aren't anonymous.   Ideally a Monero economy will eventually emerge so that people *do* get paid in Monero and spend it too. 
  
And financial privacy is not "underground".   Bitcoin is inherently flawed as a currency.    
  
Consider this: if the original bitcoin had truly private transactions built in, by way of cryptographic ring signatures...  Would anyone ever consider it an upgrade to remove that feature?  
  
Of course not.

[ummina]

well.. as we know... if we get many BTC we can get money too....
as much as we can. and we can be billion people if we get more than 5000BTC..
everyone who not want to get money with make some post,,, and maybe some half of around people want to leave their job to focus in bitcoin..
caus if we really seriousely here, we can get much money more than but absolutely is an subjektif with we are effort. more than we work more than we get btc and more han we get the money.... so thats is my opinion wy bitcoin will appreciate forever.

[johnyj]

The problem I see with altcoins is that they all cause inflation in cryptocurrency world, thus people lacks long term incentive to hold them: If today I start to inject part of my capital towards Monero, then those added Moneros will dilute the value of bitcoin, and what will happen to my monero's value if tomorrow there are even better coin Monexo, Moneyo, Monezo, etc... So it is better we just upgrade the bitcoin protocol to include the best features of Monero if they really are appreciated by most of the community members, and refuse any monetary inflation in crypto currency world

[alva5763]

Why do you want bitcoin to keep appreciating as it will cost more to purchase them?

[johnyj]

Why do you want bitcoin to keep appreciating as it will cost more to purchase them?

You never hold something that has a long term depreciating future as a store of value (like fiat money). If it is always appreciating long term wise, then you can buy it any time and be assured your savings are safe in future

[mrhelpful]

Taking everything that I know, it`ll appreciate forever due to the hard code.

Also the fact it serves multiple areas so it has more chances to appreciate more then one direction. Some people see it as a priceless money transmitter like I do and can see it used by the poorest countries to do commerce.

Others also see it as "commodity" aspect and that this will traded as some form of foreign debt as well.

[Amph]

Why do you want bitcoin to keep appreciating as it will cost more to purchase them?

you can simply buy less, which will have the same value as the same amount you are willing to buy now, the ratio will always be the same if you want, unless something stupid and unrealistic happens, like for example 1 satoshi = $1k...

[techgeek]

That's the same problem with any currency; we can't help that other currencies aren't anonymous.   Ideally a Monero economy will eventually emerge so that people *do* get paid in Monero and spend it too.  
  
And financial privacy is not "underground".   Bitcoin is inherently flawed as a currency.    
  
Consider this: if the original bitcoin had truly private transactions built in, by way of cryptographic ring signatures...  Would anyone ever consider it an upgrade to remove that feature?  
  
Of course not.

Bitcoin is not a private currency true, but it should be looked as a money transmitter.

The blockchain is a public ledger obviously, but you can do services like bitmixer or any other mixing services that removes all those transactions to harder to follow making "underground" becoming a financial privacy.

[lissandra]

well.. as we know... if we get many BTC we can get money too....
as much as we can. and we can be billion people if we get more than 5000BTC..
everyone who not want to get money with make some post,,, and maybe some half of around people want to leave their job to focus in bitcoin..
caus if we really seriousely here, we can get much money more than but absolutely is an subjektif with we are effort. more than we work more than we get btc and more han we get the money.... so thats is my opinion wy bitcoin will appreciate forever.

umm, so youre saying the existing people who hold bitcoin, go buy an extra coin?

this is what day traders do, if they make profit in trades and buy back in cheap. But, as for the focus part of leaving their jobs most are relied on paying the bills with fiat form so focusing on bitcoin entirely must mean that person is financially already secure.

bitcoin is to volatile to leave a job for it.

[americanpegasus]

The problem I see with altcoins is that they all cause inflation in cryptocurrency world, thus people lacks long term incentive to hold them: If today I start to inject part of my capital towards Monero, then those added Moneros will dilute the value of bitcoin, and what will happen to my monero's value if tomorrow there are even better coin Monexo, Moneyo, Monezo, etc... So it is better we just upgrade the bitcoin protocol to include the best features of Monero if they really are appreciated by most of the community members, and refuse any monetary inflation in crypto currency world

You have a good point, that minor features should not restart a block-chain. 
 
However the improvements to Monero make it a fundamentally different instrument that bitcoin.  It would be impossible to transfer bitcoin over to the standards that Monero uses for cryptography because the entire point of those standards is privacy and anonymity.  Every Monero has had those guarantees of privacy since inception whereas bitcoins have not. 
 
Now, I'm not saying that bitcoin needs to be replaced, in fact, we need a public and a private ledger.  Both serve an important role. 
 
But the old adage of, "just incorporate that technology into bitcoin" doesn't apply here.  In the future, I will agree with you: just incorporate that technology into Bitcoin/Monero where applicable, but sometimes radically different concepts require a new blockchain.

[johnyj]

The problem I see with altcoins is that they all cause inflation in cryptocurrency world, thus people lacks long term incentive to hold them: If today I start to inject part of my capital towards Monero, then those added Moneros will dilute the value of bitcoin, and what will happen to my monero's value if tomorrow there are even better coin Monexo, Moneyo, Monezo, etc... So it is better we just upgrade the bitcoin protocol to include the best features of Monero if they really are appreciated by most of the community members, and refuse any monetary inflation in crypto currency world

You have a good point, that minor features should not restart a block-chain. 
 
However the improvements to Monero make it a fundamentally different instrument that bitcoin.  It would be impossible to transfer bitcoin over to the standards that Monero uses for cryptography because the entire point of those standards is privacy and anonymity.  Every Monero has had those guarantees of privacy since inception whereas bitcoins have not. 
 
Now, I'm not saying that bitcoin needs to be replaced, in fact, we need a public and a private ledger.  Both serve an important role. 
 
But the old adage of, "just incorporate that technology into bitcoin" doesn't apply here.  In the future, I will agree with you: just incorporate that technology into Bitcoin/Monero where applicable, but sometimes radically different concepts require a new blockchain.

What if something better than Monero pops up? Should people constantly change to a new currency because of new feature and introduce more inflation every a few years?

The biggest advantage for bitcoin over fiat currency is its inflation resistance, and that's the fundamental support for its value. The consensus among cryptocurrency users is: Select one currency with limited supply and keep building its infrastructure and user base, you will get many anti-inflation benefits in the long run. However, if every a few years we introduce a new currency with new features and start to rebuild the infrastructure and rebuild the value and community from ground up, you can guess who will be participating this kind of cycle

Finance is about long term perspective, that's the reason bitcoin worth almost nothing in the first 2 years, you need time to prove a concept's value. If Monero can reach bitcoin's status after another 5 years, maybe people will start to take it seriously

[americanpegasus]

What if something better than Monero pops up? Should people constantly change to a new currency because of new feature and introduce more inflation every a few years?

The biggest advantage for bitcoin over fiat currency is its inflation resistance, and that's the fundamental support for its value. The consensus among cryptocurrency users is: Select one currency with limited supply and keep building its infrastructure and user base, you will get many anti-inflation benefits in the long run. However, if every a few years we introduce a new currency with new features and start to rebuild the infrastructure and rebuild the value and community from ground up, you can guess who will be participating this kind of cycle

Finance is about long term perspective, that's the reason bitcoin worth almost nothing in the first 2 years, you need time to prove a concept's value. If Monero can reach bitcoin's status after another 5 years, maybe people will start to take it seriously

 
 
Now that we have a public blockchain and a private blockchain, you would be hard pressed to find something as fundamental to upgrade.  Someone suggested a blockchain that was capable of zero-second confirmations but I have yet to see one like that so far. 
 
Your argument is to just keep building off of bitcoin, but you are missing the bigger point: it is unsuitable as a global currency.  Blockchain analysis is only going to get more and more sophisticated as we go forward and the idea of everyone being able to see everyone else's transactions is absurd on a global scale.  Privacy is essential, and not privacy that depends on a centralized source: true privacy. 
 
Very rarely have we ever had "one" of anything; there has always been competition, especially with money involved.  Multiple blockchains are an inevitability.  The key is to ensure they have drastically different features and aren't just a clone (which is why I think litecoin has no future).

[Insertion]

I think Bitcoin might start appreciating more once it can no longer be mined, or the buyers per mined coins increases..so as more and more people invest in bitcoin and less and less coins are being mined then we may see another big trending upwards. I don't know but that's how my little logical brain would put it. Just my 2 bits.. 

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

[LMGTFY]

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

(My emphasis)

Are you sure? Because I'd be willing to bet that there a lot more Forex traders trading non-BTC USD currency pairs than are trading BTC/USD. If I had to guess I'd say USD/EUR, GBP/USD, GBP/EUR and USD/JPY dwarf most other currency pairs. I seriously doubt BTC/USD is even in the top 50 currency pairs at this stage (I'd be very happy to be proven wrong). In general people assume that the more actively traded a currency pair (or stock, commodity, etc), then the more stable it'll be.

I agree that mining follows price, however.

[johnyj]

What if something better than Monero pops up? Should people constantly change to a new currency because of new feature and introduce more inflation every a few years?

The biggest advantage for bitcoin over fiat currency is its inflation resistance, and that's the fundamental support for its value. The consensus among cryptocurrency users is: Select one currency with limited supply and keep building its infrastructure and user base, you will get many anti-inflation benefits in the long run. However, if every a few years we introduce a new currency with new features and start to rebuild the infrastructure and rebuild the value and community from ground up, you can guess who will be participating this kind of cycle

Finance is about long term perspective, that's the reason bitcoin worth almost nothing in the first 2 years, you need time to prove a concept's value. If Monero can reach bitcoin's status after another 5 years, maybe people will start to take it seriously

 
 
Now that we have a public blockchain and a private blockchain, you would be hard pressed to find something as fundamental to upgrade.  Someone suggested a blockchain that was capable of zero-second confirmations but I have yet to see one like that so far. 
 
Your argument is to just keep building off of bitcoin, but you are missing the bigger point: it is unsuitable as a global currency.  Blockchain analysis is only going to get more and more sophisticated as we go forward and the idea of everyone being able to see everyone else's transactions is absurd on a global scale.  Privacy is essential, and not privacy that depends on a centralized source: true privacy. 
 
Very rarely have we ever had "one" of anything; there has always been competition, especially with money involved.  Multiple blockchains are an inevitability.  The key is to ensure they have drastically different features and aren't just a clone (which is why I think litecoin has no future).

Why does gold suitable as a world currency for thousands of years given its many inconvenient properties? Because it is most widely accepted. Transparency makes bitcoin much easier to be widely accepted by general public

[MinerHQ]

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

(My emphasis)

Are you sure? Because I'd be willing to bet that there a lot more Forex traders trading non-BTC USD currency pairs than are trading BTC/USD. If I had to guess I'd say USD/EUR, GBP/USD, GBP/EUR and USD/JPY dwarf most other currency pairs. I seriously doubt BTC/USD is even in the top 50 currency pairs at this stage (I'd be very happy to be proven wrong). In general people assume that the more actively traded a currency pair (or stock, commodity, etc), then the more stable it'll be.

I agree that mining follows price, however.

Because the other currency markets are very bigger than bitcoin market size hence by daily trading other currencies demand and supply will not change so faster compared to very tiny bitcoin market.

[LMGTFY]

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

(My emphasis)

Are you sure? Because I'd be willing to bet that there a lot more Forex traders trading non-BTC USD currency pairs than are trading BTC/USD. If I had to guess I'd say USD/EUR, GBP/USD, GBP/EUR and USD/JPY dwarf most other currency pairs. I seriously doubt BTC/USD is even in the top 50 currency pairs at this stage (I'd be very happy to be proven wrong). In general people assume that the more actively traded a currency pair (or stock, commodity, etc), then the more stable it'll be.

I agree that mining follows price, however.

Because the other currency markets are very bigger than bitcoin market size hence by daily trading other currencies demand and supply will not change so faster compared to very tiny bitcoin market.

So... if the BTC/USD market grew - i.e. there were more traders - it would become more stable? (Rhetorical question - obviously I believe it would).

[johnyj]

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

(My emphasis)

Are you sure? Because I'd be willing to bet that there a lot more Forex traders trading non-BTC USD currency pairs than are trading BTC/USD. If I had to guess I'd say USD/EUR, GBP/USD, GBP/EUR and USD/JPY dwarf most other currency pairs. I seriously doubt BTC/USD is even in the top 50 currency pairs at this stage (I'd be very happy to be proven wrong). In general people assume that the more actively traded a currency pair (or stock, commodity, etc), then the more stable it'll be.

I agree that mining follows price, however.

Because the other currency markets are very bigger than bitcoin market size hence by daily trading other currencies demand and supply will not change so faster compared to very tiny bitcoin market.

So... if the BTC/USD market grew - i.e. there were more traders - it would become more stable? (Rhetorical question - obviously I believe it would).

Even a currency as large as Ruble can lose majority of its value against USD in a couple of years. Currency exchange rate is a highly guarded secret since the forex interbank market are decentralized and not regulated, I guess there are large whales behind the scene and manipulate the prices. Soros is just one small freelancer, but already enough to cause large damage to small countries

[MinerHQ]

I think your thinking in wrong direction, if more and more businesses accept bitcoins and create a natural demand for coins then we may need to mine more to meet the demand right? Also as of now lot of coins are with traders hand hence they will trade every day to make some profit with those coins, it makes it more unstable. When more businesses and normal people holds these coins then it will appreciate and it will more more stable price.

(My emphasis)

Are you sure? Because I'd be willing to bet that there a lot more Forex traders trading non-BTC USD currency pairs than are trading BTC/USD. If I had to guess I'd say USD/EUR, GBP/USD, GBP/EUR and USD/JPY dwarf most other currency pairs. I seriously doubt BTC/USD is even in the top 50 currency pairs at this stage (I'd be very happy to be proven wrong). In general people assume that the more actively traded a currency pair (or stock, commodity, etc), then the more stable it'll be.

I agree that mining follows price, however.

Because the other currency markets are very bigger than bitcoin market size hence by daily trading other currencies demand and supply will not change so faster compared to very tiny bitcoin market.

So... if the BTC/USD market grew - i.e. there were more traders - it would become more stable? (Rhetorical question - obviously I believe it would).

Even a currency as large as Ruble can lose majority of its value against USD in a couple of years. Currency exchange rate is a highly guarded secret since the forex interbank market are decentralized and not regulated, I guess there are large whales behind the scene and manipulate the prices. Soros is just one small freelancer, but already enough to cause large damage to small countries

Yes precisely what I'm trying to explain. Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

[LMGTFY]

Even a currency as large as Ruble can lose majority of its value against USD in a couple of years. Currency exchange rate is a highly guarded secret since the forex interbank market are decentralized and not regulated, I guess there are large whales behind the scene and manipulate the prices. Soros is just one small freelancer, but already enough to cause large damage to small countries

Yes precisely what I'm trying to explain. Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

Sure, but there's a huge difference between a couple of years and a couple of months. Non-BTC currency pairs obviously have a degree of volatility. My point is that that volatility tends to decrease as a currency pair becomes more actively traded. I'm not saying that USD/RUB is static - I'm saying that because it is more heavily traded than BTC/USD it is more stable/less volatile than BTC/USD. Two years to go from ~30 rubles to the dollar to ~60 rubles/$ isn't quite the same as two months for BTC to go from USD 166 to USD 300.

[johnyj]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

You can't compare a small community based economy like bitcoin with the biggest nation in world (land wise), in fact it proved that how stable bitcoin is

No matter how large an economy is, there will always be large whales manipulating the market. In Ruble's case, the FED is such manipulator, they printed trillions of money, those money went to middle east and sent the oil price above $120, and then they stopped printing, crashed oil price and dragged down Ruble

So you can anticipate that exchange rate manipulation will always happen regardless how large the economy is, since the fiat money can be created at will. But in bitcoin's case, since no one can create coin out of thin air, if it is widely used, the degree of market manipulation will be magnitudes lower

[winguard]

Bitcoin is a "dumb network". This means it doesn't care how much money you have, how old you are, what color you are, where you live, or how old you are. Are you a citizen of the country you are in right now? Bitcoin doesn't care, and it doesn't discriminate. If you have a wallet, you can use Bitcoin, anywhere, anytime, for anyone. It is truly technology for The People.

[StevenLiang]

Bitcoin is a "dumb network". This means it doesn't care how much money you have, how old you are, what color you are, where you live, or how old you are. Are you a citizen of the country you are in right now? Bitcoin doesn't care, and it doesn't discriminate. If you have a wallet, you can use Bitcoin, anywhere, anytime, for anyone. It is truly technology for The People.

And it goes same with money. Money cannot choose people. People use them for their "activities".
Why people always say big about btc like btc already help them a lot, while in fact they selves who help them selves.

BTC is currency. and people use their currency for their own decision.

"If you have a wallet, you can use Bitcoin, anywhere, anytime, for anyone. It is truly technology for The People.".

I can use my money anywhere, anytime and for anyone without wallet.

Bitcoin is great currency for online payment, but that's not mean BTC is everything.

Same like gold, gold doesn't care how much money you have, how old you are, what color you are, where you live, or how old you are. Are you a citizen of the country you are in right now? Bitcoin doesn't care, and it doesn't discriminate. *facepalm

[addy boy]

Bitcoins will always be remembered for long time because of their simplicity and amazing advantages, some of them are as follows:
Accessible anywhere - It's not that 10 rupee note which you will forget on the table, It's with you anytime, anywhere!
 Security and ptivacy - Security and privacy which it provides is remarkable.
Portable - It's more portable than your desktop actually! ! Can be transferred in seconds!
Easy and convenient mode of payment - It's more easy than physical cash payment method and there's no "middle-man" in your purchase

[RealBitcoin]

In the long term, unquestionably, yes.

But still there can be new bubbles and busts in bitcoin that could temporarly distrupt the uptrend, but no question it has an uptrend for long term, if the demand remains (which it pretty much does, as membership is increasing)

[designerusa]

It is sure there will be continuous rise in bitcoin's price in future. If we can keep demands in high, supplies will always go down because there are limited amount of bitcoins. So its' price will rise and rise.

[MinerHQ]

It is sure there will be continuous rise in bitcoin's price in future. If we can keep demands in high, supplies will always go down because there are limited amount of bitcoins. So its' price will rise and rise.

As long as many businesses start accepting it as a currency for their business then bitcoin demand will grow and prices will go up.

[n2004al]

It is sure there will be continuous rise in bitcoin's price in future. If we can keep demands in high, supplies will always go down because there are limited amount of bitcoins. So its' price will rise and rise.

In which way can be controlled the demand? In which way can be increased? In which way can be keep high? Can you show some ways or methods how to realize that? I'm curious to learn about this.

[Slark]

Bitcoin might be stable and be called cryptocurrency king now. But don't forget that ideas and solutions change very fast in the blink of an eye.
Remember Yahoo? It once was the greatest company of modern Internet and then Google came. With bitcoin could be the same.

[Laketear]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

[RealBitcoin]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

[pitham1]

Bitcoin might be stable and be called cryptocurrency king now. But don't forget that ideas and solutions change very fast in the blink of an eye.
Remember Yahoo? It once was the greatest company of modern Internet and then Google came. With bitcoin could be the same.

Bitcoin is stable now?
Its volatility is as high as ever.

[danel]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

[OROBTC]

Bitcoin might be stable and be called cryptocurrency king now. But don't forget that ideas and solutions change very fast in the blink of an eye.
Remember Yahoo? It once was the greatest company of modern Internet and then Google came. With bitcoin could be the same.

Yes, do include JDS Uniphase and Cisco Systems as well, both companies were thought to be on the path to becoming the largest companies (by market cap) in the world...

Where is Microsoft now?  Not Number One.  Apple may seem invincible now, but we will see what the future brings.

[Amph]

Bitcoin might be stable and be called cryptocurrency king now. But don't forget that ideas and solutions change very fast in the blink of an eye.
Remember Yahoo? It once was the greatest company of modern Internet and then Google came. With bitcoin could be the same.

Bitcoin is stable now?
Its volatility is as high as ever.

it depend how you look at it, we are always in the same value, and in the same range with the same pump

so by this point of view, i consider it stable, because the price is predictable

[Mickeyb]

Bitcoin might be stable and be called cryptocurrency king now. But don't forget that ideas and solutions change very fast in the blink of an eye.
Remember Yahoo? It once was the greatest company of modern Internet and then Google came. With bitcoin could be the same.

Bitcoin is stable now?
Its volatility is as high as ever.

Bitcoin is much more stable this year than ever. It's been in a $200 - $300 range all year long. But Bitcoin is not stable because it grew up. Bitcoin is stable because the bubble deflated and we are actually seeing normal prices this year.

For Bitcoin to become stable and even less volatile, Bitcoin needs to grow and grow a lot. We have only a $4B marketcap. That's nothing. Like someone said on this forum, Uber is worth $56B. When Bitcoin will be worth $400B, trust me, it will be very stable.

[LMGTFY]

Bitcoin is stable now?
Its volatility is as high as ever.

How are you measuring volatility? This site uses a pretty standard method (standard deviation of returns over a 30-day period) and its results are about what you'd expect after 9 months of range-trading - BTC/USD volatility is lower than it has been historically.

[Laketear]

How are you measuring volatility? This site uses a pretty standard method (standard deviation of returns over a 30-day period) and its results are about what you'd expect after 9 months of range-trading - BTC/USD volatility is lower than it has been historically.

The volatility of bitcoin has been low recently compared to the price fluctuation in 2010-2014. The price is picking up steadily.

[neurotypical]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

Don't be so sure about it. Once big whales with different motives join the game, there will be a war of whales. Big capital vs big capital makes the manipulation way harder than it is now. Big capital, vs big capital, vs millions of small time investors, make it even harder. In the future, the majority of Bitcoin accounts will have less than 1 BTC, all of this market noise and constant worldwide transactions will make manipulation harder. Of course we are still on the early days, by then most people here will be retired if they held a decent amount.

[RealBitcoin]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

Don't be so sure about it. Once big whales with different motives join the game, there will be a war of whales. Big capital vs big capital makes the manipulation way harder than it is now. Big capital, vs big capital, vs millions of small time investors, make it even harder. In the future, the majority of Bitcoin accounts will have less than 1 BTC, all of this market noise and constant worldwide transactions will make manipulation harder. Of course we are still on the early days, by then most people here will be retired if they held a decent amount.

Exactly, competition = decentralization.

The true art of capitalism

Its only when you have a keynesianist printed money market that is distorted, where you have market manipulation.

A true free market will bring competition, and competititon brings decentralization.

[zimmah]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

Eventually even their supplies will run dry if they don't have any source of income.

It might take years, decades or centuries, but if they don't contribute anything in exchange for bitcoin, they will eventually run out of Bitcoin.

[TTMNewsMJ]

Because it helps us in many ways.
Bitcoin is very useful to us.
So we need to appreciate it before it's too late.

[RealBitcoin]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

Eventually even their supplies will run dry if they don't have any source of income.

It might take years, decades or centuries, but if they don't contribute anything in exchange for bitcoin, they will eventually run out of Bitcoin.

Or they get richer.

Look I dont care who hold bitcoin, it can be a 70 year old grandmother that discovered mining in 2009, or a wealthy wallstreet-er who invested in 2012.

The point is that no matter who owns it, the mere matter that they own it, makes them superior in financial circles. All the other dumb people will hold bonds and stocks and their money will be gone. The bitcoin wont be.

[TastyChillySauce00]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

i dont think a big whale or what ever who's can control/manipulate the market are really exist,if they do,then why the price didn't dumped/pumped fastly?

[Q7]

I think the main driver or factor that will ensure bitcoin will continue to appreciate in value would be that the next generation of people I presume will be more competent and skilled in network and computers and that is where there will be continuation. And furthermore world population is increasing the amount of bitcoin available will not be enough for all. I assume that is also one of the factors.

[thejaytiesto]

I think the main driver or factor that will ensure bitcoin will continue to appreciate in value would be that the next generation of people I presume will be more competent and skilled in network and computers and that is where there will be continuation. And furthermore world population is increasing the amount of bitcoin available will not be enough for all. I assume that is also one of the factors.

Indeed, there are teens now that are 14 or so and that means that Bitcoin has existed for half of their life. Those people will be the first generation of people that grow up on a Bitcoin world. They will be the ones that will see it as second nature. But as a way to compensate for us being older, we will be ahead of them and we'll hold bigger amounts. Ironically, the older people will also be stuck on their old ways and will not make it, they will never understand it. The guys that are middle aged right now are the ones that will get richer from Bitcoin.

[Laketear]

i dont think a big whale or what ever who's can control/manipulate the market are really exist,if they do,then why the price didn't dumped/pumped fastly?

The big whale is not a single entity. It can be a collection of wealth groups. When bitcoin is universally accepted, it cannot be controlled or manipulated by a few whales. The competition will be high.

[uki]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

[zimmah]

Ruble need a couple of years to loose it majority of his value against dollar but have you checked the BTC price it can go upto 1000+ and can come back to 100 within a couple of months.

The market capitalization of bitcoin is still too small. It is still early stage of bitcoin. When bitcoin reaches the market capitalization of 1000 bn, the value will be very stable.

It will be stable even at 100 billion, or when more people will use it. Right now the big players are manipulating the market, once the distributioni s more even, it will have less volatility.

Distribution will never be more even because big time whales will not allow that. Market manipulation will never end.

Eventually even their supplies will run dry if they don't have any source of income.

It might take years, decades or centuries, but if they don't contribute anything in exchange for bitcoin, they will eventually run out of Bitcoin.

Or they get richer.

Look I dont care who hold bitcoin, it can be a 70 year old grandmother that discovered mining in 2009, or a wealthy wallstreet-er who invested in 2012.

The point is that no matter who owns it, the mere matter that they own it, makes them superior in financial circles. All the other dumb people will hold bonds and stocks and their money will be gone. The bitcoin wont be.

how do they get richer?

if you're just spending bitcoin, not producing anything, nto mining anything, how do you gain more bitcoins? Especially if you already hold a majority of bitcoins?

The rich get richer in fiat just because they are the only ones who can lend money they don't even have, and than charge interest on it. That's why they are so unbelievably rich.

With bitcoin, this scam isn't possible.

[zimmah]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

bitcoin is programmable, why move on to the next coin if you can simply upgrade bitcoin?

That's like saying "we have used the internet since the 90's, but in 2020 we will move on to another thing because the internet is outdated technology" No! While we get new browsers and new websites all the time, the internet is evolving, but we don't stop using the internet.

So while we get new apps and new underlying technology all the time, we will still continue using bitcoin!

[uki]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

bitcoin is programmable, why move on to the next coin if you can simply upgrade bitcoin?

That's like saying "we have used the internet since the 90's, but in 2020 we will move on to another thing because the internet is outdated technology" No! While we get new browsers and new websites all the time, the internet is evolving, but we don't stop using the internet.

So while we get new apps and new underlying technology all the time, we will still continue using bitcoin!

well, you didn't get my point. I am expecting new coin to substitute bitcoin for the same reason why you now use smartphones and tablets and you, probably, still remember how excited you were when you first saw an XT PC (at least I was). I already wrote in my previous post: the change has to be substantial (as substantial was the wide introduction of wireless technologies that enabled user mobility, despite the fixed binding of host-location that was initially devised by the IP protocol) - meaning, a new coin's code has to be written completely from scratch with new functionalities (and  possibly with new approaches in mind) in order not to share the faith of all the altcoins we have nowadays. Why moving and not upgrading? You may keep things backward-compatible, but at one stage the cost of that may become too high in order to stay feasible.

[RealBitcoin]

how do they get richer?

if you're just spending bitcoin, not producing anything, nto mining anything, how do you gain more bitcoins? Especially if you already hold a majority of bitcoins?

The rich get richer in fiat just because they are the only ones who can lend money they don't even have, and than charge interest on it. That's why they are so unbelievably rich.

With bitcoin, this scam isn't possible.

Trading is a service. You are providing liquidity to the market, and offering the best prices to sell/buy bitcoin, thus lowering the spread.

Traders also take risk for themselves, and lower the risk for the market, the smaller the volatility is the better for merchants and long term holders.

It is the most important service in bitcoin, after mining.

[mtnsaa]

That's the best case scenario. Another great scenario is that after the halving the current value will multiply many times or more. However there are many others cases where Bitcoin can either disappear or become obsolete like others have mentioned.

With Bitcoin we should also be aware that scandals and scams are around the corner, a tech flaw or huge cyber heist can make Bitcoin look very bad and expose it. I'm not saying it has flaws, but we can't really know what will happen in 2 or 3 years.

This can open the door for newer technology, faster, better, etc. Hopefully Bitcoin is like the internet and continues to lives on through the years as the standard digital currency.

[StevenLiang]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

And that's mean now we can make new coin, and be stronger from bitcoin.
I think there would be at least 2,000 coin alt coin in 10 years later.

Everyone want to be the next Satoshi Nakamoto. 

[anthonycamp]

the btc its very apreciated like its digital good a money trade coin like its forever well in my life time yes, will it be 300€ will it be 600 or 1200 we dont know but when you sell and when you buy its quick and very usefull for future trades some people just like to hold the coin im not im a investitor into goods i sell i buy but im very young in this as you can se by my activity the major issue here its will it stables per 2050 yes it holds but alt coins are not to be as good only doge and prob ltc will prevaill into good manners the other coins alt coins will be like a torbulent come and colapse because no one can trigger to a common value of better coin like it is now the btc its very usefull into markets and will be more after this faucet polutied opening of crime but the clean water will come and better and more investitors will come europe already acepts it and we will all see it even govs.

[StevenLiang]

the btc its very apreciated like its digital good a money trade coin like its forever well in my life time yes, will it be 300€ will it be 600 or 1200 we dont know but when you sell and when you buy its quick and very usefull for future trades some people just like to hold the coin im not im a investitor into goods i sell i buy but im very young in this as you can se by my activity the major issue here its will it stables per 2050 yes it holds but alt coins are not to be as good only doge and prob ltc will prevaill into good manners the other coins alt coins will be like a torbulent come and colapse because no one can trigger to a common value of better coin like it is now the btc its very usefull into markets and will be more after this faucet polutied opening of crime but the clean water will come and better and more investitors will come europe already acepts it and we will all see it even govs.

All people start to know how to make good coin.

• Make faucet
• Start a group or forum
• Marketing it globally
• Need to choose a nice CEO or founder of the coin

Many altcoin cannot go as far as LTC because the founder not show themselves.
It's hardeasy to start new coin.

By the way start new coin mean you start to create your own fiat money. Build your own country!
And at the end it will go complex as fiat money as well.

I think bitcoin or (creator of bitcoin) can start some 'digital goverment' to control the altcoin madness. IMO

[uki]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

And that's mean now we can make new coin, and be stronger from bitcoin.
I think there would be at least 2,000 coin alt coin in 10 years later.

Everyone want to be the next Satoshi Nakamoto. 

There will be probably many more than 2000 altcoin in a 10 year span. look at the last two years how many we had. It is not about their numbers however. it is about the changes that they introduce. Out of plethora of coins in the last two years, you can count on the fingers of just one hand these that were truly innovative over bitcoin.
The rest was simply clones, or clones of clones, etc. That does not bring the development much further and thus the position of bitcoin stays for now unchallenged.

[Laketear]

If bitcoin becomes a widely used currency, the world population is till growing, more things are produced, bitcoin will appreciate.

[JinxCoins]

Bitcoin will always be appreciated of bottom of my heart!  

[Coinminer11]

What about all the money daily that is put into btc? Wouldn't this make it appreciate for at least a long run?  It wouldn't make sense if it didn't appreciate, at least to me. Not counting GOX, since inception hasn't btc relatively been appreciating?

[Laketear]

Bitcoin will always be appreciated of bottom of my heart!  

The supply of bitcoin is limited, unlike US dollar or other currencies. So it will appreciate all the time.

[cellard]

the btc its very apreciated like its digital good a money trade coin like its forever well in my life time yes, will it be 300€ will it be 600 or 1200 we dont know but when you sell and when you buy its quick and very usefull for future trades some people just like to hold the coin im not im a investitor into goods i sell i buy but im very young in this as you can se by my activity the major issue here its will it stables per 2050 yes it holds but alt coins are not to be as good only doge and prob ltc will prevaill into good manners the other coins alt coins will be like a torbulent come and colapse because no one can trigger to a common value of better coin like it is now the btc its very usefull into markets and will be more after this faucet polutied opening of crime but the clean water will come and better and more investitors will come europe already acepts it and we will all see it even govs.

All people start to know how to make good coin.

• Make faucet
• Start a group or forum
• Marketing it globally
• Need to choose a nice CEO or founder of the coin

Many altcoin cannot go as far as LTC because the founder not show themselves.
It's hardeasy to start new coin.

By the way start new coin mean you start to create your own fiat money. Build your own country!
And at the end it will go complex as fiat money as well.

I think bitcoin or (creator of bitcoin) can start some 'digital goverment' to control the altcoin madness. IMO

That is nonsense lol. Why would satoshi nakamoto (which is an anonymous figure and wants to stay anonymous) come out to try to control altcoins? How would he even control altcoins? that's ridiculous. Cryptocurrencies are free markets, no one can control them, there are too many colluding forces for a single player to play a deciding factor on its own.

[frank26]

Bitcoin is appreciable as it has less fees while transfering larger or smaller amounts the same fees will be deducted.

[Laketear]

Bitcoin is appreciable as it has less fees while transfering larger or smaller amounts the same fees will be deducted.

There could be more fee if the block size does not increase. If you want fast transaction, you have to pay high fees.

[AtheistAKASaneBrain]

the btc its very apreciated like its digital good a money trade coin like its forever well in my life time yes, will it be 300€ will it be 600 or 1200 we dont know but when you sell and when you buy its quick and very usefull for future trades some people just like to hold the coin im not im a investitor into goods i sell i buy but im very young in this as you can se by my activity the major issue here its will it stables per 2050 yes it holds but alt coins are not to be as good only doge and prob ltc will prevaill into good manners the other coins alt coins will be like a torbulent come and colapse because no one can trigger to a common value of better coin like it is now the btc its very usefull into markets and will be more after this faucet polutied opening of crime but the clean water will come and better and more investitors will come europe already acepts it and we will all see it even govs.

All people start to know how to make good coin.

• Make faucet
• Start a group or forum
• Marketing it globally
• Need to choose a nice CEO or founder of the coin

Many altcoin cannot go as far as LTC because the founder not show themselves.
It's hardeasy to start new coin.

By the way start new coin mean you start to create your own fiat money. Build your own country!
And at the end it will go complex as fiat money as well.

I think bitcoin or (creator of bitcoin) can start some 'digital goverment' to control the altcoin madness. IMO

That is nonsense lol. Why would satoshi nakamoto (which is an anonymous figure and wants to stay anonymous) come out to try to control altcoins? How would he even control altcoins? that's ridiculous. Cryptocurrencies are free markets, no one can control them, there are too many colluding forces for a single player to play a deciding factor on its own.

It is not only ridiculous but goes against the very principles of a good crypto which should be open source and decentralized. By leaving altcoins fail by themselves, all that happens is it legitimizes Bitcoin even more. Every time an altcoin fails is yet another victory for Bitcoin and it just further proves that pretty much every crypto that isn't Bitcoin is not worth anyone's money.

[gentlemand]

It is not only ridiculous but goes against the very principles of a good crypto which should be open source and decentralized. By leaving altcoins fail by themselves, all that happens is it legitimizes Bitcoin even more. Every time an altcoin fails is yet another victory for Bitcoin and it just further proves that pretty much every crypto that isn't Bitcoin is not worth anyone's money.

I wonder whether that registered anywhere in Satoshi's vision. I would've thought he'd be rather pleased if the idea had spread far and wide into multiple nooks and crannies. I guess he didn't account for clueless scumbags piling in with cloned coins.

[americanpegasus]

I wonder whether that registered anywhere in Satoshi's vision. I would've thought he'd be rather pleased if the idea had spread far and wide into multiple nooks and crannies. I guess he didn't account for clueless scumbags piling in with cloned coins.

 
 
At every stage of a new technology's growth, you must try to anticipate how criminals and scammers will try to profit from it. 
 
This is why hollow clones of bitcoin are valueless and a new blockchain needs to offer significantly different/advanced features to try to legitimately compete with bitcoin proper.

[beepboopbeep]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

[MinerHQ]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

[Amph]

Bitcoin is appreciable as it has less fees while transfering larger or smaller amounts the same fees will be deducted.

There could be more fee if the block size does not increase. If you want fast transaction, you have to pay high fees.

but you can always choose at least, i may see the fee problem  with bitcoin, when the apprecciation will reach an enormous status, like trillion market cap, and fee will become relatively expensive

[Laketear]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

If the price stay here for a few weeks to consolidate, and then rises slowly, there will be no burst. But it is the human nature that we want the price rise very quickly.

[Mickeyb]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

[Coinminer11]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

[RealBitcoin]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

Possible, but I`m not sure if this is "it". You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

[Laketear]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

[pereira4]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

Possible, but I`m not sure if this is "it". You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The "it" bubble happened in a matter of days. It is simply impossible to try to predict a massive panic buying rally. I am all for it as long as the correction is not bad enough that it leaves us with the same (or worse) floor. I think this will not be teh case anymore because in near 2016 Bitcoin is way more consolidated than it was back then in the dodgy MTGox days. Once we reach 1K again people is not going to wait for 300 to get in hard, the correction will be small.

[Amph]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

it's always a bubble, i never seen a price increase that then does not go boom, and return even partially to the main, you should always expect a dump after a pump, no matter the entity of the pump

[RealBitcoin]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

it's always a bubble, i never seen a price increase that then does not go boom, and return even partially to the main, you should always expect a dump after a pump, no matter the entity of the pump

Not always, it can be a small retracement of 1-2% and then resume the uptrend.

I thnink this is waht the price is doing now, the increase retraced a few € today, but it could go back up later.

[1990BEARS]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

i do not think this will ever be possible. bitcoin have dev team better than any altcoin and is basis for most altcoins...it also achieve the best more than any altcoin can achieve without taking page from it book.
no altcoin that is same as bitcoin will beat bitcoin.

[Sir_lagsalot]

I've bought 10 bitcoins and have done this trading strategy. Although the whole bitcoin community isn't doing this, since bitcoin is on quite an uptrend, I can make alot. The problem is that if bitcoin suddenly drops, I lose everything. I guess that happens if you don't buy and sell too, I guess. It hurts everyone.

I do believe bitcoin will appreciate greatly, but some of my friends call me a lemming. If the community wants to hodl, I hodl. If they don't, I don't. But that's how I was late to bitcoin.

[RealBitcoin]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

[nerFohanzo]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

i do not think this will ever be possible. bitcoin have dev team better than any altcoin and is basis for most altcoins...it also achieve the best more than any altcoin can achieve without taking page from it book.
no altcoin that is same as bitcoin will beat bitcoin.

Exactly no other crypto currency can beat bitcoin as bitcoins is more popular then any other coins and people have more faith in bitcoins, and the adoption level of bitcoins is more as compared to altcoins, and investing in altcoins can be a risky decision to make and I generally prefer to convert my bitcoins to fiat currency which is very cheap time saving and reliable.

[Laketear]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

$150 will only happen when there is a disaster. The medium bottom is $250. If the price stays above $250 for another 3 month, the price could go to $600.

[n2004al]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

$150 will only happen when there is a disaster. The medium bottom is $250. If the price stays above $250 for another 3 month, the price could go to $600.

No one can know how it will be the price of bitcoin the next days or months. Maybe even after a year. All the predictions made have no basis because there are not data as it is needed to make reasonable prevision of its price in the future. There is only two secure and irreversible data: the limit of number of coins (bitcoins) entered in market in time and the limit of overall number of coins (bitcoins). These data theoretically testify and argues the high price of it in the times to come. But when or where are only suppositions without to much basis. No one can know the real demand (and its rate of increase) for bitcoin because no one can know the spread and the accept of bitcoin by the people in real time. There are not any institution which can measure such kind of data. Without this kind of data all the suppositions remain only words.

To not mention here other factors (such are the political ones) which can affect not less this price.

[johnyj]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

This is not very likely to happen. Software only provide utility, so users lose nothing by abandoning one and switch to another one with better utility. But bitcoin is capital. Once everyone have invested so much in this capital, they will incur a huge loss if they leave it, so it is more likely they will continuously injecting new investment to make sure their investment not losing value

Besides, there are other reasons prevent an alt-coin from replacing bitcoin:
Alt-coin is inflation, which against the basic rule of bitcoin
Any coin must be time tested to have enough recognition, and by the time a new coin get recognized, bitcoin's popularity is even higher, new coins can not break the barrier of time

[johnyj]

No one can know how it will be the price of bitcoin the next days or months. Maybe even after a year. All the predictions made have no basis because there are not data as it is needed to make reasonable prevision of its price in the future. There is only two secure and irreversible data: the limit of number of coins (bitcoins) entered in market in time and the limit of overall number of coins (bitcoins). These data theoretically testify and argues the high price of it in the times to come. But when or where are only suppositions without to much basis. No one can know the real demand (and its rate of increase) for bitcoin because no one can know the spread and the accept of bitcoin by the people in real time. There are not any institution which can measure such kind of data. Without this kind of data all the suppositions remain only words.

To not mention here other factors (such are the political ones) which can affect not less this price.

Simply put, since most of the investor money always first go to mining (the lowest cost of acquiring bitcoin), if the mining difficulty continuously climb, it means there is new capital inflow, price will get higher. Mining cost basically works as a baseline for bitcoin value, similar to other commodity

The demand however is not easy to evaluate, but you can guess, if the demand get lower, the first thing you will notice is that the mining difficulty going down, means smart capitals are not interested in acquiring bitcoin anymore

And we just had several difficulty jump, so I guess the demand is still rising fast 

[MyBTT]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

(Edit: added the simulation of daily coin supply for 1, 2 and 4 years investing period)

Good theory. I wonder if it is practically true though.

[johnyj]

Good theory. I wonder if it is practically true though.

I just had a thought today: If everyone read this theory and do exactly as it described voluntarily, e.g. long term holding and slowly cashing out, then the anticipated result will be guaranteed, it does not take more than ground school mathematics skill to verify this theory

What is this means? If every participants agree to join this pre-defined investment plan, then they can have a good retirement scheme or long term saving plan which defeat the return of all the retirement/mutal fund in the world. Bitcoin is just a tool to make this plan happen, it is user's behavior drive it to success

Currently this behavior is half unconscious, people have a feeling that holding it long term will be good since it is deflative, but they can not tell exactly why

[Blue_Tiger73]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

(Edit: added the simulation of daily coin supply for 1, 2 and 4 years investing period)

There are too many rules to make sure that Bitcoin always appreciates. So pretty much this will never happen as not everyone is going to do what you stated.

[avw1982]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

As per speculation There less opportunity to crash to below 200$. and Price will not constant It will be zigzag as it. But we can see and expect good market rate for bitcoin in the year 2016 and ahead. because increasing the adoption rate of bitcoin.

[LMGTFY]

There are too many rules to make sure that Bitcoin always appreciates. So pretty much this will never happen as not everyone is going to do what you stated.

But the beauty of it is that those rules are "baked into" the system - supply falls over time, regardless of the investment strategy Joe adopts. Note that whatever approach Joe takes, the graph still shows the daily supply of BTC decreasing over time.

[sishendaoye]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

As per speculation There less opportunity to crash to below 200$. and Price will not constant It will be zigzag as it. But we can see and expect good market rate for bitcoin in the year 2016 and ahead. because increasing the adoption rate of bitcoin.

Yeah lets just hope that in 2016 bicoin will just make more people happy and that more people will use it and more company's will adopt bitcoin. I wish that it 2016 there will be more atm for bitcoin, but I think is to expensive to build it.

[Rizky Aditya]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

[LMGTFY]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

What are those counters (or at least some of them)?

It's not necessary for everyone to "like" Bitcoin. What matters, and what the OP showed, is that a deflationary asset (like BTC, gold) has a "head start" over non-deflationary assets (like USD, CNY, EUR, etc) - even if demand is static, supply is still diminishing:

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

[Zaun]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

Maybe that bitcoin won't be appreciate it forever, but I think he means those people who use bitcoins that they wull appreciate it.
I like bitcoins and it will always be appreciate it for m, because I have make a lot of profit with it.

[Eric Cartman]

It will because we live in an economic model of eternal inflation.

Money will devaluate more and more every day, forever, so BTC price will have to increase or go straight to 0

[Rizky Aditya]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

What are those counters (or at least some of them)?

It's not necessary for everyone to "like" Bitcoin. What matters, and what the OP showed, is that a deflationary asset (like BTC, gold) has a "head start" over non-deflationary assets (like USD, CNY, EUR, etc) - even if demand is static, supply is still diminishing:

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

Sorry mate. When I read the topic, I misinterpreted "everyone". I think that he meant everyone that bought Bitcoin. I interpreted it as everyone in the world. Sorry about that.

[johnyj]

There are too many rules to make sure that Bitcoin always appreciates. So pretty much this will never happen as not everyone is going to do what you stated.

Just only 2 rules for participants:

1. Buy some coin and hold at least 4 years (until next reward halving)
2. Start to sell 10% of those coin each year

Then they will at least double the investment in 4 years and beyond

Of course, there will always be people don't follow this recommendation, for example when they saw their coin have doubled in value, they would immediately cash out every coin, thus cause a small crash of the price, but then if they want to enjoy this return year over year, decades over decades, they would eventually need to buy it back at some stage, and maybe they sold it too early, or too late, and have to buy it back at higher exchange rate later... Market timing is very difficult, so why don't follow the rule and get a secured investment return instead of against the rule? Furthermore, when lots of people are acting against the rule, they destroy the anticipated supply demand relation, and might get the price to crash hard, what is the benefit of that?

[johnyj]

Another interesting discussion: https://www.reddit.com/r/Bitcoin/comments/3zql53/bitcoin_isnt_supposed_to_be_backed_by_anything_it/

When people are talking about backing, they are afraid that a currency is going to lose its value, so they need some powerful organization to guarantee the value of their currency

However, even the value of fiat money fluctuate a lot in foreign currency exchanges. A fiat currency can be shorted to worth a little on FOREX if their central bank do not protect its rate. So eventually all the currencies' value is backed by the central bank's foreign currency reserve

Similarly, bitcoin's value is backed by millions of bitcoiner's fiat money reserve. When bitcoin exchange rate drops, they step in and buy bitcoin to raise its value. And this backing is purely driven by their trust and long term positive expectation of bitcoin

You can regard bitcoiner's fiat money as unlimited (comparing with bitcoin's relative small market capital), but they won't blindly buy at any price. Their support mostly come from two psychological level: The first is the mining cost, if coin value is much lower than mining cost, they will buy. The second is the reward halving every 4 years which approximate to an average 19% value increase per year, so if coin performance dropped below this level, they will consider buying

Eventually the mining coin supply will shrink to zero and the most significant daily coin supply will be replaced by the spending from existing holders, but that is another decade away. And because nothing can force the existing holder to spend their coins unless a super increase in its value, so I guess the coin supply will be less and less on market anyway

[johnyj]

Just check back today, after almost 7 years after my initial simulation, most of the theory and prediction still holds

The biggest uncertainty might come from the possibility that another coin might replace BTC as the main crypto. Currently Ethereum with its growth in defi might turn the table.

However, ehtereum does not have a limited supply, and its supply might get exponential increase in future, so the prediction might not work, and just because of this, eth is difficult to overtake BTC as long term investment candidate. It is possible that long term investement prediction of BTC still holds, but ETH become the new star because its full stack of financial magics

[Assface16678]

Just check back today, after almost 7 years after my initial simulation, most of the theory and prediction still holds

The biggest uncertainty might come from the possibility that another coin might replace BTC as the main crypto. Currently Ethereum with its growth in defi might turn the table.

However, ehtereum does not have a limited supply, and its supply might get exponential increase in future, so the prediction might not work, and just because of this, eth is difficult to overtake BTC as long term investment candidate. It is possible that long term investement prediction of BTC still holds, but ETH become the new star because its full stack of financial magics

The bitcoin before is just created because they want to make all the things digital and they did not expect that many people make a lot of investment and support this coin. Time by time the number of people increasing to make a lot of contribution to this coin and on the year of 2017, the price of the bitcoin shows it's largest market profit and there are a lot of people getting curious about what does the bitcoin can do more. By that people still support the use of bitcoin because they want to earn more. After the bitcoin give a profitable value it comes down again because of the law of supply and demand and also the halving is coming so they wait for the highest peak of the market again. As an investor, it is better if we always grab the opportunity to make more earnings.

[Ridwan Fauzi]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

Indeed, not everyone like bitcoin but it for those who didn't know bitcoin and cryptocurrencies as a whole.

For those who knows bitcoin and cryptocurrencies I think it will be hyptoricate to say that he doesn't like bitcoin.

As you may know, can you compare how the price bitcoin with anither altcoin? You can compare with the higher price altcoin as an example and its different will be much.

[Wintersoldier]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

Indeed, not everyone like bitcoin but it for those who didn't know bitcoin and cryptocurrencies as a whole.

For those who knows bitcoin and cryptocurrencies I think it will be hyptoricate to say that he doesn't like bitcoin.

As you may know, can you compare how the price bitcoin with anither altcoin? You can compare with the higher price altcoin as an example and its different will be much.

In my own opinion, we should not care about other people's opinion about bitcoin if they don't like it or don't want to use it for their daily lives because it really does not affect any of our income. But i think bitcoin will really be appreciated by the people who experienced bitcoin's greatness which it is one of my best experienced in my life that it really helps me to gain money that i didn't recieved from my job today.

[awik p]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

Indeed, not everyone like bitcoin but it for those who didn't know bitcoin and cryptocurrencies as a whole.

For those who knows bitcoin and cryptocurrencies I think it will be hyptoricate to say that he doesn't like bitcoin.

As you may know, can you compare how the price bitcoin with anither altcoin? You can compare with the higher price altcoin as an example and its different will be much.

In my own opinion, we should not care about other people's opinion about bitcoin if they don't like it or don't want to use it for their daily lives because it really does not affect any of our income. But i think bitcoin will really be appreciated by the people who experienced bitcoin's greatness which it is one of my best experienced in my life that it really helps me to gain money that i didn't recieved from my job today.

indeed if we already feel the benefits of bitcoin, then we will be able to appreciate bitcoin more. many people are glassy quickly in this business. so that it attracts others to invest, so if we want to get money, I think learning about the moment will be better, than we only bet expecting a lot of return

[Lecam]

Bitcoin will be appreciated forever because this is the big digital money that many people change their life. Bitcoin can give us hope and many people are getting rich because of bitcoin so many people appreciate bitcoin because this is the most popular crypto currency.

[wowz2010]

Bitcoin is not always going to appreciate. There are a lot of counters to what you said. Not everyone likes Bitcoin, you do realise that right?

I think OP meant that its only a matter of time when bitcoin will be appreciated worldwide by most of the people.
Even if bitcoin itself won't become next fiat currency, but it definitely will be one the cryptocurrencies anyway.
So in this case bitcoin will stay in history as first crypto no matter which crypto will be the most popular in the end of the day

[bitbunnny]

Just check back today, after almost 7 years after my initial simulation, most of the theory and prediction still holds

The biggest uncertainty might come from the possibility that another coin might replace BTC as the main crypto. Currently Ethereum with its growth in defi might turn the table.

However, ehtereum does not have a limited supply, and its supply might get exponential increase in future, so the prediction might not work, and just because of this, eth is difficult to overtake BTC as long term investment candidate. It is possible that long term investement prediction of BTC still holds, but ETH become the new star because its full stack of financial magics

To my opinion not ETH or any other coin will replace Bitcoin, at least not soon.
Due to different reasons new coin in order to replace Bitcoin should be more advanced, not just have better or bigger value. So, basicly it should be developed on a technology that could solve some issues that Bitcoin currently has and that is not easy. Also, it shouldwill have better adoption and implementation in real world.
So I guess Bitcoin will remain at the throne and that will not change, no matter the fact that new coins appear all the time.

[Janation]

Bitcoin will be appreciated forever because this is the big digital money that many people change their life. Bitcoin can give us hope and many people are getting rich because of bitcoin so many people appreciate bitcoin because this is the most popular crypto currency.

Not all of them though since there are some that just stop.

As there are a lot of people earning profits, taking advantage of the movements happening; there are also those people that are having a hard time with the volatility of this cryptocurrency. It will not always give hope and it will obviously not make people rich especially if you are just sitting on the wave not doing something to make an impact.

[STT]

Bitcoin relies on utility for its worth and its always possible some alternate does occur, an open free market is going to promote competitive and efficient innovation.   BTC might always be the best but just being the first wont always be enough, history shows that.    Saying that it could be 20 years as a standard, we dont know I just wont assume crypto is always going to mean BTC.    I generally agree alot of the alternatives dont compare now or some of the biggest arent even decentralised so are quite similar to digital money or FIAT.

[imstillthebest]

i think its too early to say this because we dont even know if what will happen soon to bitcoin   . im only basing my example to other things like for example the old games or the old site we have use and played before  . before they came out people appreciated them and we think that those stuffs will remain forever but the time come that one day those stuffs are not enjoyable anymore or they got shutdown  ,   but on the case of bitcoin, btc is not a game or a site but its a currency/asset  . it has a value but the value can decrease or be lost soon but then again , no one knows yet   if what faith are waiting  .

[hahay]

Because maybe the dominance and high popularity are likely to have an extraordinary effect for bitcoin itself, we realize that something that is outdated indeed, sooner or later will soon be replaced but for bitcoin I think there will be something different, there will be a long period for them to appreciate bitcoin and therefore at least there will be a time to end and will be replaced in the future, who knows because for now bitcoin is indeed highly valued and appreciated but any change will definitely happen whenever it is in the future.

[bhabygrim]

Bitcoin would forever be appreciated because it was the first crypto currency to be successful,
It is the King and it started the cryptocurrency era so it would always be part of the crypto industry.
Maybe in the future some crypto would replace it but it would forever stay in the history of cryptocurrency.

[bearexin]

I have believed this right from time and that’s why I see long term investment as a better option. The problem is, not everyone is able to invest in Bitcoin for a long term, majority of them are afraid they will lose or maybe be at loss at the time they may be needing the money; there are times you will invest and start having some issues that will force you to withdraw the money you have invested.

But, checking the chart from the first time to now, you will notice that it kept moving up. And that’s how it’s going to be, it will keep increasing just as you have said and won’t decrease for sure, because as time goes on the adoption of Bitcoin keeps improving.

[enhu]

I have believed this right from time and that’s why I see long term investment as a better option. The problem is, not everyone is able to invest in Bitcoin for a long term, majority of them are afraid they will lose or maybe be at loss at the time they may be needing the money; there are times you will invest and start having some issues that will force you to withdraw the money you have invested.

But, checking the chart from the first time to now, you will notice that it kept moving up. And that’s how it’s going to be, it will keep increasing just as you have said and won’t decrease for sure, because as time goes on the adoption of Bitcoin keeps improving.

Not that they are afraid to lose but they are traders, they need to take profit to invest again for more profit. They are not for long term investment since they are trying to get more by trading. This will keep suppressing the value til its all drained before we can see breakouts of another resistance for BTC 's uptrend.

[redsun114]

We can't really say "forever" because people think that bitcoin is the last improvement we have on money. Fortunately for the future people (no idea if we will see it) the technological improvements are going on every single day, literally every single day on earth something better version of something gets created, the humanity reached to a peak point where innovation is either small or big but constant.

So, bitcoin is definitely not the last currency, it will probably continue for decades more but we are reaching to a point where humanity will colonize other planets and at that point do you really think that we will still be using bitcoin? Or dollars for that matter? I think in 100+ years all of the currencies we are using today will be gone and something much better will come to terms.

[jonatha28]

We can't really say "forever" because people think that bitcoin is the last improvement we have on money. Fortunately for the future people (no idea if we will see it) the technological improvements are going on every single day, literally every single day on earth something better version of something gets created, the humanity reached to a peak point where innovation is either small or big but constant.

So, bitcoin is definitely not the last currency, it will probably continue for decades more but we are reaching to a point where humanity will colonize other planets and at that point do you really think that we will still be using bitcoin? Or dollars for that matter? I think in 100+ years all of the currencies we are using today will be gone and something much better will come to terms.

I mean we can say for sure that it will be appreciated forever because it already did a huge change so it won't be thrown away from history anyway.
And by that we can claim - bitcoin the first cryptocurrency impacted our payment system like almost nothing before.

[fiulpro]

At the same time it does depend on the person too , when he is gonna sell , if he sells when the price is lower than the whole yearly one , then it could cause a great deal of loss too for the person .

I have seen people loose money in bitcoins as fast as they earn .

It's a two way street and really depends on how you take care of your investment .

[Sanugarid]

I have believed this right from time and that’s why I see long term investment as a better option. The problem is, not everyone is able to invest in Bitcoin for a long term, majority of them are afraid they will lose or maybe be at loss at the time they may be needing the money; there are times you will invest and start having some issues that will force you to withdraw the money you have invested.

But, checking the chart from the first time to now, you will notice that it kept moving up. And that’s how it’s going to be, it will keep increasing just as you have said and won’t decrease for sure, because as time goes on the adoption of Bitcoin keeps improving.

It is actually depending on people because there are actually some people who really good at short term trading or they call it day trading in which they are not holding it for a long time but they are selling it not to lose money but to earn. BItcoin investment is really a good investment in which you can do it anytime and anywhere, you just need a device and internet for you to access crypto. It is also not easy because investing must consider a lot of things to prevent losing money and to succeed and make profits like you need to study every project that you want to invest your money in.

At the same time it does depend on the person too , when he is gonna sell , if he sells when the price is lower than the whole yearly one , then it could cause a great deal of loss too for the person .

I have seen people loose money in bitcoins as fast as they earn .

It's a two way street and really depends on how you take care of your investment .

That is absolutely right, every person has different techniques and perspectives to investment so if they want long term investment, there's nothing wrong about it, it's his or her will to hold and the optimistic mind that they will earn in the future if they hold that particular token. I can say that whatever you do as long as you are good at it, you should stick to it. Exploring a new one is not a problem as long as you are studying very well so you are not losing money.

[Bohxz M4p4gm4h4l25]

Even though we have a beartrend today, we cannot deny how powerful bitcoin is. It was the pioneer of all cryptos out there that is why even though it was experiencing decrease of price a lot of people are still hoping and believing that someday all the sacrifices will be wortb it and they will be glad that they have some btc holdings .

[johnyj]

In fact, if you could use a smart contract to limit the cash out pace, and at the same time also limit the capital inflow, so that there are always people wait in the line, you could mathematically guarantee a fixed return like 50% per year, for decades to come. This is implementable on defi today

[Yatsan]

Even though we have a beartrend today, we cannot deny how powerful bitcoin is. It was the pioneer of all cryptos out there that is why even though it was experiencing decrease of price a lot of people are still hoping and believing that someday all the sacrifices will be wortb it and they will be glad that they have some btc holdings .

Bitcoin is based on supply and demand, so I think it's okay to be bearish today, as long as overtime the demand for bitcoin is going up then, the price of it will pump soon and we may set a new All Time High for bitcoin price. Bitcoin is for long term holders and not for people that have a small patience. Remember that, bitcoin price came from nothing and it's almost 10k now! Bitcoin is unpredictable so let's see what is the price of bitcoin in the future.

[johnyj]

It has been another year and I checked back, my prediction still holds.

During this year, the most common question I get from investors is: What is the use of this thing?

In fact, many things people don’t know their usage, as long as they can be sold for fiat money, they are useful

Hedge inflation is still the most easy to understand: Since fiat currency is issued exponentially, scarce assets that have wide acceptance will appreciate

The rise in the price of ordinary goods is a slow process. New QE money often need to change hands many times before reaching the supplier. More often, the supplier is worried that no one will buy his product

But cryptocurrencies are different, they can be exchanged for all those QE money without delay. According to my simulation earlier in this post (investors buy and hold for four years, and then sell 10% every year), the daily net selling of coins is less than 5,000 coins. If the market demand exceeds 5,000 coins, the price will rise.

The key is to understand that it is sustainable since constant fiat money inflow will digest those 5000 coins sell pressure every day

There are 385,000 new babies every day now. Assuming one-tenth of these people need to buy coins to get on this ship, that's 30,000. 30,000 people are competing for 5000 coins every day, and each person gets 1/6 of those coins. These coins are the total amount of all their investments in their lifetime, which can be assumed to be the amount of investment in their pension funds. If each person invests 10,000 USD, the price of Bitcoin can be maintained at 60,000. If they invest 100,000, the price can be maintained at 600K. If they invest 1 million, the price of Bitcoin can be maintained at 6 million.

So once ETF is mature and invested by pension funds, it will get a guaranteed support

[jaysabi]

It has been another year and I checked back, my prediction still holds.

During this year, the most common question I get from investors is: What is the use of this thing?

In fact, many things people don’t know their usage, as long as they can be sold for fiat money, they are useful

Hedge inflation is still the most easy to understand: Since fiat currency is issued exponentially, scarce assets that have wide acceptance will appreciate

The rise in the price of ordinary goods is a slow process. New QE money often need to change hands many times before reaching the supplier. More often, the supplier is worried that no one will buy his product

But cryptocurrencies are different, they can be exchanged for all those QE money without delay. According to my simulation earlier in this post (investors buy and hold for four years, and then sell 10% every year), the daily net selling of coins is less than 5,000 coins. If the market demand exceeds 5,000 coins, the price will rise.

The key is to understand that it is sustainable since constant fiat money inflow will digest those 5000 coins sell pressure every day

There are 385,000 new babies every day now. Assuming one-tenth of these people need to buy coins to get on this ship, that's 30,000. 30,000 people are competing for 5000 coins every day, and each person gets 1/6 of those coins. These coins are the total amount of all their investments in their lifetime, which can be assumed to be the amount of investment in their pension funds. If each person invests 10,000 USD, the price of Bitcoin can be maintained at 60,000. If they invest 100,000, the price can be maintained at 600K. If they invest 1 million, the price of Bitcoin can be maintained at 6 million.

So once ETF is mature and invested by pension funds, it will get a guaranteed support

Bit of a nit, but is money creation actually exponential?  It may accelerate over time, but I doubt exponentially.  Your larger point that increasing the money pool should create price appreciation for scarce assets though.  The amount of speculation though makes it volatile and risky, and nothing is guaranteed to go up forever; not even scarce assets.  The risk is that the volatility will have you at a loss when you need to cash out, and it's not an insignificant one.

[johnyj]

Bit of a nit, but is money creation actually exponential?  It may accelerate over time, but I doubt exponentially.  Your larger point that increasing the money pool should create price appreciation for scarce assets though.  The amount of speculation though makes it volatile and risky, and nothing is guaranteed to go up forever; not even scarce assets.  The risk is that the volatility will have you at a loss when you need to cash out, and it's not an insignificant one.

Since Bernanke invented helicopter money, money supply has not only increased exponentially, but doubled a few times


https://tradingeconomics.com/united-states/money-supply-m0

Volatility is irrelevant, you could go broke in one day if you all-in for USD/EUR trading with a 400x leverage. You could also have a lower-than-T-bond volatility for bitcoin if you use 0.01x leverage, it is all about the exposure. If you use leverage to adjust all investment products to same level of volatility, then bitcoin gives best return

[perryxi2]

Almost all cryptocurrencies today depend on the value of BTC a lot, it can be said that BTC is a leading coin in the cryptocurrency market, it is difficult to replace because BTC is a currency in development. A long-established and well-loved coin, with a strong community and long-standing background, this goes hand in hand with ever-increasing price growth. BTC has mostly won the trust as well as the long-term investment direction of BTC, anyone knows, so the price of BTC in the future will increase in value.

[mojun7982]

We can't really say "forever" because people think that bitcoin is the last improvement we have on money. Fortunately for the future people (no idea if we will see it) the technological improvements are going on every single day, literally every single day on earth something better version of something gets created, the humanity reached to a peak point where innovation is either small or big but constant.

So, bitcoin is definitely not the last currency, it will probably continue for decades more but we are reaching to a point where humanity will colonize other planets and at that point do you really think that we will still be using bitcoin? Or dollars for that matter? I think in 100+ years all of the currencies we are using today will be gone and something much better will come to terms.

I also think that there is no such thing as infinite value. It is not only because of the theory presented here, but because possible alternatives could appear and also provide alternative investment opportunities. I think that is the most likely reason why Bitcoin would not increase forever. For as long as there is no such thing as an alternative investment opportunity, who knows maybe bitcoin will indeed increase in value for the time being.

But there could also be a viable different cryptocurrency as well or simply dividend paying stocks which at some point make it more attractive to switch. People will be switching back and forth.

[Semar Mesem]

Almost all cryptocurrencies today depend on the value of BTC a lot, it can be said that BTC is a leading coin in the cryptocurrency market, it is difficult to replace because BTC is a currency in development. A long-established and well-loved coin, with a strong community and long-standing background, this goes hand in hand with ever-increasing price growth. BTC has mostly won the trust as well as the long-term investment direction of BTC, anyone knows, so the price of BTC in the future will increase in value.

Bitcoin has always been a measure of the price of altcoins, but I believe that what makes bitcoin big as it is today is altcoins, the support of thousands of altcoins and tokens makes bitcoin trading continue to increase, this is what makes bitcoin always the first choice over altcoins.

[AicecreaME]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

Unless bitcoin had some major technical problem, alt-coins will remain a small part of the bitcoin market value. When it comes to money, you need only one type, because money's universal equivalent property. Bitcoin's first mover advantage is very clear, people need one type of digital currency that has limited total supply and no central authority, as long as bitcoin works, this demand is fulfilled

Valid point. Bitcoin won't be easily dethroned IMO because it has properties that many altcoins do not have. It also has a high market demand making it the leading crypto. The people trust it so much because they've known its benefits and potential. Altcoins value is based upon Bitcoin's price movement. When bitcoin's value goes up, so does the value of altcoins in the market. This just means that it is still the superior among all coins.

I don't see any altcoin at the moment that can be of equal or even surpass bitcoin. As of now, it would be hard for them to establish such given the situation. Although there are numerous coins that also show potential value rise, the data I have analyzed aren't enough to tell if they could also stand the tests of time like what bitcoin did.

[xSkylarx]

Almost all cryptocurrencies today depend on the value of BTC a lot, it can be said that BTC is a leading coin in the cryptocurrency market, it is difficult to replace because BTC is a currency in development. A long-established and well-loved coin, with a strong community and long-standing background, this goes hand in hand with ever-increasing price growth. BTC has mostly won the trust as well as the long-term investment direction of BTC, anyone knows, so the price of BTC in the future will increase in value.

To be sure, most cryptos rely on the price of bitcoin, and we've seen that when the price of bitcoin rises, so does the price of altcoins. Not only will the price rise in the future, but it will also be used as a payment method soon, though we do not know if it will be able to replace fiat in the near future. The best thing to do right now is to invest and hold for a profit. Bitcoin will be remembered for a long time because people know they can profit from it.