Bitcoin - asset bubble comparison

[kaysersoze]

Does anyone have any data or report on bitcoins vs other historic bubbles like tulipe, housing, internettstocks etc on RELATIVE basis? I mean in terms of relative valuation, % of population using/knowning , % av asset class vs others etc etc any relevant data to compare?

My sense is that EVEN if bitcoin is a bubble and will go to zero one day, (I'm bullish) it's still very very early days compared to other bubbles on a relative basis, even though everyone here feels like you read about it everywhere, just pick up the phone and call your random cousins, friends, parents whoever outside the ecosystem and ask if they know what bc is let alone  if they OWN one then you realize its early days , where in other bubbles you had everyone you knew and their moms and pops talking/owning/hyping the underlying asset (dotcomboom internet stocks, housing, tulipe? etc )

I think we all can agree upon that history will repeat is self, basic human psychology such as greed (building the asset) and fear (when it collapses) has not and will never change, and that bitcoin COULD potentially
become the biggest global bubble in history. I just think that if that is the case,  it will be 100 or 1000x bigger then we are realizing based on a few things:

1. The world will soon have 7b connected devices and people sharing and connecting content
2. Therefore, The absolute rate of early adopters in any field/sector/product specially in such asset as a global digital currency can be in 10s if not 100s of millions of users and still be very tiny proportion of the pie
3. So The market cap /valuation/total circulation of the underlying asset in absolute terms could become so much much bigger then we are realizing before it bursts

It's mentally difficult and intimidating to think of hundreds of billions or trillion with T on anything because we never seen heard of T, just like billions of dollars or users in facebooks case were 10y+ ago for internetcompanies/valuations before skype,google,facebook etc came. Now the the new millions are hundreds of millions and the new billions will become trillions, again  in relative basis its actually not that much of total trade of goods,currency etc ( and will keep growing) I'm mainly a public market investor but just an example,  in public markets people are very intimidated by the fact that apple has a very legitimate chance of becoming a Trillion dollar company, it's just a mental barrier. Look at snapchat,  nobody has barely heard of it outside teens and valley geeks and its valued 4b, with 30 employees and who knows it could grow
10x more before it collapses. In bcs case we are talking about a GLOBAL DIGITAL CURRENCY so even if it's a bubble it might get to 500b in mkt cap before it bursts, that is my bet.

Love to hear comments/thoughts but more importantly  flaws/criticism of this thought, although with all bulls here maybe not the right forum.

[WompRat]

Personally I have decided to stop using the term 'bubble'   It is a short hand that implies that the market is behaving irrationally and liable to pop without waning or reason, just as there was little reason for it to inflate in the first place.  At best it just describes a pattern on a graph which we can't see until after the event and so is of little use to anyone in it.  So my question to you is do you think the market is experiencing an 'irrational exuberance' or is the rapid price increase justified?

I am much more skeptical than you.  I believe the types of transactions that are best suited to Bitcoin, especially in a highly volatile market, are quite limited and niche.  You say that a great many people have barely heard of Bitcoin, which is probably true, but just how many of them would have any need for Bitcoin?  What is the utility that a Bitcoin transaction gives over one that is conducted in the same currency as the one you are paid in and hence has no odd exchange variations.

Satoshi provided some answers here,  but I am often surprised at how many people think the inability to charge a transaction back in case of fraud or any other dispute is an advantage to a purchaser except in small personal transactions where the risk is negligible. 

If Bitcoin is to become instead a generally accepted store of wealth akin to gold rather than just a means of payment then I guess all bets are off, but that will take a lot of time and I remain to be convinced.

[kaysersoze]

you are not getting the whole picture of BC as a technology and paying mechanism, see it as programmable cash or the best comparison maybe is,  if you go back to very very early days of tje internet, http and tc/ip it was just a messaging service and now look where we are, all the OTT services built on that protocol the last 20y. Every third party that today is just a middle man between a transaction can essentially potentially be eliminated. As example the biggest up­front costs for consumers trying to buy a home are the closing costs, which include fees for deeds, titles, stamps, title insurance, and other redundant tasks to record the sale in different record books. Bitcoin can replace thousands of dollars in closing costs with a single transaction that costs 5 cents. By reporting deeds and titles on the block chain, the information would be public record forever, for pennies, and eliminate the need for title insurance.

I believe we could be in a inflection point right now because of following

1. The senate hearings were very positive
2. China has basically given it free hands by having educational info on state television. Bauidu is closer to chinas government than monica was to bill clinton so they would never ever get involved without green light.
3. I think that there political/economical factors at stake here, China would love for anything to potentially become a competitor or at least global alternative to USD/EUR ( I understand the sickness of bc in those terms yes) They certainty wouldn't loose anything on it
and nobody wants to loose any innovation epicenter if it really takes off,  which clearly could be understood reading between the lines of the hearings in senate.
4. Vcs and investors generally have said that under 10b mkt cap it doesnt make sense to start building underlying infrastructure supporting and building the ecosystem, we are that point right now
5. Very prominent vcs such as jim breyer (facebook, walmart, accel partners) ar getting into the game and ligtspeed ventures just put 5m into worlds biggest exchange in china. These guys job is to take this to average joe and make it mainstream