Well the Chinese pushed the BTC to such level. What i am trying to understand is that can this effect the entire ecosystem of bitcoins around the world.
Besides the growth in value of BTC i see these as a bad side effect .
1. hoarding the Bitcoins creates a supply problem.
2. artificial growth of the Coins
3. Loss of basic utility of Bitcoin being used as a currency
There is another problem i am trying to wrap my head around.
For some reason i see bitcoin's rapid growth as its own downfall. i say this looking at the economics relating to it.
If a price of a currency increases at such volatile rate, can it be effectively used as a mode of currency, because of the coin changing its value it becomes next to impossible for people to have any certainty on its true value during purchase. I guess i just repeated point 3. *aww well*
I like that Bitcoin is increasing in value day by day, but what i would have liked to see was a steady growth in value alowing people to stabilize transaction of goods and services. but what happens in reality is it jumps and falls rapidly.
What do you think should be the ideal growth rate and coin supply, so that it is easy for vendors to do business?
1. Hoarding is most logical thing a person can do with Bitcoin. How dare you expect them to spend Bitcoin?
Comminity has already seen people crying due to past experiences of lofty Bitcoin spending. And this crazy price ride is sure to refrain them from spending. Other unwanted consequences of this price surge in small Bitcoin economy i.e India is- halt in trade.
2. Artificial growth of coin? Can you please elaborate more on this. I thought, fate of coin generation is sealed in maths.
3. No matter.. how much people
shout it to be currency. What I think is
Bitcoin is math asset with super portability. Although, it can be used as currency but never a currency as prime. Yeah! One day it will become currency when, it market cap will reach large enough so that players won't be able to play with it price but injecting or drawing money out of Bitcoin economy.
Beware! $ 500000.. something something dollar raised by Chinese exchange is being used for insider trading. Enough vomited!
Artificial Growth, was in relation to the hoarding effect. (I should have mentioned it), Well when hording occurs the inflation of growth is artifical induced by people wanting to pump up the prices to such a level that it can be dropped later on. the basic economics of supply and demand becomes influenced by individual forces not market forces.
3. No matter.. how much people shout it to be currency. What I think is Bitcoin is math asset with super portability. Although, it can be used as currency but never a currency as prime. Yeah! One day it will become currency when, it market cap will reach large enough so that players won't be able to play with it price but injecting or drawing money out of Bitcoin economy.
The statement you made is a woring trend, as an object will only hold value if that object has
utility, if bitcoin loses its basic utility of being a instrument for purchase and sale then it also looses its asset value. the two is intertwined like lovers.
