How and why Bitcoin will plummet in price

[Tamis]

I doubt he is right... I sure hope he isn't !

http://www.dailydot.com/opinion/how-why-bitcoin-will-fail/

[Tamis]

From the first two paragraphs, I would have guessed the author is a seventh-grader.

It is strangely written indeed

[bizmar]

Network Effect.

[bitpop]

This guy is retarded or something

[DieJohnny]

I doubt he is right... I sure hope he isn't !

http://www.dailydot.com/opinion/how-why-bitcoin-will-fail/

Has to be the dumbest article i have ever read. I am now more stupid than I was 10 minutes ago.

[pjviitas]

He actually makes a good point however, his analysis is flawed.

One of the strengths of crypto-currencies is that if someone tries to corner the market on one of them people can simply change to a different one...no different than what currency traders do with fiat.

Where his analysis is flawed is assuming the value will go to zero...the value of the crypto-currency under attack will simply transfer to a different one.

[BitchicksHusband]

"Professor of Economics"

That's everything you need to know about his analysis of actual economics in the real world.

[EvilDave]

He seems to have completely missed the point that Bitcoins utility and thus value lies in its use as a method of currency transfer.

As far as I can figure out, he sees Bitcoin as a simple commodity whose price in a competitive market will fall to cover the cost of manufacture + a small profit margin. Just like cars or toilet seats.

Miss the point much ?

(And he's got tenure, I don't bloody believe it.)

[ljudotina]

He has no idea what bitcoin is and what's driving it. It's like me writing about ballet or something like that.

[cryptonikus]

interesting article, but the guy seems to not be able to think about value in other than dogmatic view. He is wrong btw. 

[odolvlobo]

Let's say you have a car rental company named "Hertz" and it is willing to rent you a car for $100. Then suppose that another car rental company named "Avis" comes along and is willing to rent you a car for $90. And then yet another car rental company named "Enterprise" comes along and is willing to rent you a  car for $80. And to make matters worse, there are now hundreds of other car rental companies.

That guy is saying that "Hertz" should have gone bankrupt decades ago.

[Fachten]

yeah that works in a perfect model word at the university and even there you know the theory has weak spots....nobody can tell you wheater the btc prices will rise or fall. the world is just to irrational to understand it. in addition to that you cannot think of an transparent world where information is shared perfectly.

interesting article but way to theoretical

[pening]

Funny thing is people immediately reject this argument because it works against Bitcoin, yet many use the same principle to predict increase costs of mining and rigs pushes up Bitcoin value.  I dont buy it myself, but you cant simply reject the premise that the value of Bitcoin could be reduced by supply side pressure.

[aminorex]

Funny thing is people immediately reject this argument because it works against Bitcoin, yet many use the same principle to predict increase costs of mining and rigs pushes up Bitcoin value.  I dont buy it myself, but you cant simply reject the premise that the value of Bitcoin could be reduced by supply side pressure.

I can certainly reject the idea that any altcoin can supply the same need.  How are you going to acquire an altcoin?  There's only one way that is practical for 99.9% of the people:  Buy it with bitcoin.  Given that you already bought bitcoin, why would you pay with a different coin?  Bitcoin already met your need.  It's not like you want more slippage, and less security, and less people willing to accept your money, and the risk of using some fly-by-night pump-n-dump, and much more volatility, and massive inflation -- in short the things that always come with altcoins.

[BitOnyx]

"But then the QuitCoin company comes along, with its algorithm, offering to sell you QuitCoin for $400. Will you ever accept such an offer? " no, I probably wont. This dude has no point at his theory.

[AnonyMint]

The article is well written and he makes a strong point.

This is why I believe the open source code base for a successful crypto-currency needs the commit control given to a Benevolent Dictator, and all users should run the official client, so that the currency can be continually innovated to keep interest in competitors weak.

With constant innovation, the market will favor the one with the most developers contributing.

Please note, the author wasn't dismissing network effects. His point is that the natural desire for profit, will drive interest to invest in the undervalued thing. This will pull Bitcoin down if there aren't more novices coming in that are afraid of the altcoins. I believe there is sufficient supply of newcomers who will buy Bitcoin before any altcoin, thus his scenario isn't entirely valid.

[tabnloz]

Article makes a point but it isn't necessarily on point.

Perhaps I like Coca Cola more than Bobs Cola.

I like the taste. I am influenced by the 'brand'. Bobs Cola may be cheaper but Coca Cola is what I drink.

Many of these new cola drinks, I don't trust them. Not many people stock them, but they are cheaper.

Maybe when the market accepts them and they are branded better it will appeal to me more.

Maybe when they are more mainstream their price will rise to meet that of Coca Cola because Coca Cola is a market leader for cola drinks.

Why would Coca Cola drop their price because their is more competition?

Why isn't Pepsi priced lower than Coca Cola?

[arepo]

I doubt he is right... I sure hope he isn't !

http://www.dailydot.com/opinion/how-why-bitcoin-will-fail/

unfortunately for the author, he seems to assume that the attractiveness of a cryptocurrency is tied in a major way to the value in traditional currencies of its base unit. the selling point for all cryptos is its utility, regardless of its market value...

[Blinken]

It is fundamentally true that multiple competing coins will divide the total capitalization of the market.

But, it would be a mistake to think that all the coins will have the same value, or that someone would value say, a dogecoin the same as a bitcoin.

The different coins will take on different values, exponentially different values, in fact.

The dominant coins can be expected to command the lion's share of the capital and capital growth.

[leopard2]

I doubt he is right... I sure hope he isn't !

http://www.dailydot.com/opinion/how-why-bitcoin-will-fail/

Has to be the dumbest article i have ever read. I am now more stupid than I was 10 minutes ago.

hehe, just felt the same way

the fact that altcoin market cap is much lower than bitcoin market cap is proof that it doesn't work that way

if this guy was right, ltc would be 0.25 btc, and so on, but BTC is a major, senior coin and the others are copycats. Owning the altcoins like in the article, is risky because they are more likely to vanish than BTC and thus BTC has more value than others. Why should a coin that has less purchase power but more risk, be preferred?

The article assumes that coins are ONLY for payment NEVER a store of value.

In fact why are people not using Zimbabwe dollars? They are much cheaper so any reasonable person would swap USD into Zimbabwe dollars right? Wow such nonsense!!

http://en.wikipedia.org/wiki/Zimbabwean_dollar

The 0.1 Satoshi currency