How to avoid BTC booming too fast? (like the housing bubble?)

[Interized]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

[laowai80]

Bitcoin wont be the only game in town, but its still the best game, when someone (Zynga, Overstock) wants to begin accepting a digital currency, they dont use dogecoin, they will start with BTC, LTC probably transacts a tiny fraction of what bitcoin does, the media knows BTC, it has a brand value now

Yes, brand and network effect always seem like the 'strongest' arguments. I agree to some extent, but not fully agree. Some altcoins are better technically than bitcoin. The better they are, the more market share they will gain. Most will die though. Only a few will survive, most likely those that offer some innovation. Litecoin is sort of backup for bitcoin, in case sha-256 is ever broken, which cannot be ruled out.

So there'll always be at least people diversifying on the basis of a different than sha-256 algo. It's simply not wise to keep all eggs in one basket. There are many encryption algos, and that's for a reason. No reason to believe sha-256 is the best one, just because it's not been broken yet.

Besides, Bitcoin is becoming less and less suited for micropayments, which can be a big market, especially if more merchants start accepting it. Something else has to take over that niche.

[Interized]

Bitcoin wont be the only game in town, but its still the best game, when someone (Zynga, Overstock) wants to begin accepting a digital currency, they dont use dogecoin, they will start with BTC, LTC probably transacts a tiny fraction of what bitcoin does, the media knows BTC, it has a brand value now

Yes, brand and network effect always seem like the 'strongest' arguments. I agree to some extent, but not fully agree. Some altcoins are better technically than bitcoin. The better they are, the more market share they will gain. Most will die though. Only a few will survive, most likely those that offer some innovation. Litecoin is sort of backup for bitcoin, in case sha-256 is ever broken, which cannot be ruled out.

So there'll always be at least people diversifying on the basis of a different than sha-256 algo. It's simply not wise to keep all eggs in one basket. There are many encryption algos, and that's for a reason. No reason to believe sha-256 is the best one, just because it's not been broken yet.

Besides, Bitcoin is becoming less and less suited for micropayments, which can be a big market, especially if more merchants start accepting it. Something else has to take over that niche.

Micro transactions is just a short-term problem for Bitcoin.

It will be solved in the future by Bitcoin processors.

Bitcoin is always way more universal than most people believe, it can and will always keep up with any "Alt currency" -- forever.

Alt coins will all die out, along with government/banking currency.

[jr3951]

Bitcoin wont be the only game in town, but its still the best game, when someone (Zynga, Overstock) wants to begin accepting a digital currency, they dont use dogecoin, they will start with BTC, LTC probably transacts a tiny fraction of what bitcoin does, the media knows BTC, it has a brand value now

Yes, brand and network effect always seem like the 'strongest' arguments. I agree to some extent, but not fully agree. Some altcoins are better technically than bitcoin. The better they are, the more market share they will gain. Most will die though. Only a few will survive, most likely those that offer some innovation. Litecoin is sort of backup for bitcoin, in case sha-256 is ever broken, which cannot be ruled out.

So there'll always be at least people diversifying on the basis of a different than sha-256 algo. It's simply not wise to keep all eggs in one basket. There are many encryption algos, and that's for a reason. No reason to believe sha-256 is the best one, just because it's not been broken yet.

Besides, Bitcoin is becoming less and less suited for micropayments, which can be a big market, especially if more merchants start accepting it. Something else has to take over that niche.

Some Alt coins are slightly better technically in some ways but more often they are just different, or their advantages also pose disadvantages aswell, SHA-256 could be broken, but so could Scrypt, given enough of a warning it might be possible to switch the community to a different algorithm, but certainly if SHA-256 is cracked not only bitcoin but all Alt coins will suffer horrible PR and marketplace distrust

A niche for micropayments could also certainly open up, Id say it just depends on future fee price progression, how the bitcoin infrastructure is built and how 3rd party service learn to implement functions within those structures, but if a more serious and ready contender for micropayments was currently around we would probably be talking about them and not BTC

[Interized]

Bitcoin wont be the only game in town, but its still the best game, when someone (Zynga, Overstock) wants to begin accepting a digital currency, they dont use dogecoin, they will start with BTC, LTC probably transacts a tiny fraction of what bitcoin does, the media knows BTC, it has a brand value now

Yes, brand and network effect always seem like the 'strongest' arguments. I agree to some extent, but not fully agree. Some altcoins are better technically than bitcoin. The better they are, the more market share they will gain. Most will die though. Only a few will survive, most likely those that offer some innovation. Litecoin is sort of backup for bitcoin, in case sha-256 is ever broken, which cannot be ruled out.

So there'll always be at least people diversifying on the basis of a different than sha-256 algo. It's simply not wise to keep all eggs in one basket. There are many encryption algos, and that's for a reason. No reason to believe sha-256 is the best one, just because it's not been broken yet.

Besides, Bitcoin is becoming less and less suited for micropayments, which can be a big market, especially if more merchants start accepting it. Something else has to take over that niche.

Some Alt coins are slightly better technically in some ways but more often they are just different, or their advantages also pose disadvantages aswell, SHA-256 could be broken, but so could Scrypt, given enough of a warning it might be possible to switch the community to a different algorithm, but certainly if SHA-256 is cracked not only bitcoin but all Alt coins will suffer horrible PR and marketplace distrust

A niche for micropayments could also certainly open up, Id say it just depends on future fee price progression, how the bitcoin infrastructure is built and how 3rd party service learn to implement functions within those structures, but if a more serious and ready contender for micropayments was currently around we would probably be talking about them and not BTC

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

[jr3951]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

the lower we can get the fees, the better and more useful microtransactions are as a medium, and the more value that particular coin has, its the market that decides what is needed, and it usually chooses the most efficient route

[freedomno1]

Not a bubble development is consistent with the creation of the digital economy if anything the stability is just increasing as more people use it.

Of course this is not inconsistent with rapid price pops and crashes
I'm arguing about the underlying infrastructure being built to support the network and utility of the asset class  ;
Growing developing tech has adoption curves and growth spurts and for now this is to be expected from a developing system so expect pops till we stabilize

[Interized]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

the lower we can get the fees, the better and more useful microtransactions are as a medium, and the more value that particular coin has, its the market that decides what is needed, and it usually chooses the most efficient route

Exactly, Bitcoin needs to avoid huge booms and busts.

[jr3951]

Exactly, Bitcoin needs to avoid huge booms and busts.

How would you propose steady growth? through a regulation that forces people to adopt bitcoin at a steady rate? that would cause a boom because people would want to be the first to get in while the price is low, and subsequent bust

your asking the impossible, its the nature of this type of growth, core transactors and enthusiasts increase the value, outside forces see a ridiculously quick rising store of value with almost limitless potential, jump in, hyper inflate price, market goes to unstable value, bad news of some sort hits, market crashes and investors panic sell, left with core transactors, enthusiasts and steely nerved investors, market re stabilizes, rinse and repeat

but the booms and busts are in some ways a GOOD thing, better that than a drawn out stagnation

[tinus42]

The whole world can't start using BTC tomorrow.

What is the solution?

There is no a solution. The scalability issue can't be fixed without a hard fork.

A hard fork already happened in March last year. Didn't cause too much problems.

http://bitcoin.org/en/alert/2013-03-11-chain-fork

[empoweoqwj]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

the lower we can get the fees, the better and more useful microtransactions are as a medium, and the more value that particular coin has, its the market that decides what is needed, and it usually chooses the most efficient route

Exactly, Bitcoin needs to avoid huge booms and busts.

Bitcoin doesn't have huge booms and busts. It has huge booms, followed by "profit taking". The thing is going to $10K. Its not going to get there in a straight line, this is a market we are talking about here folks - people play markets

[Interized]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

the lower we can get the fees, the better and more useful microtransactions are as a medium, and the more value that particular coin has, its the market that decides what is needed, and it usually chooses the most efficient route

Exactly, Bitcoin needs to avoid huge booms and busts.

Bitcoin doesn't have huge booms and busts. It has huge booms, followed by "profit taking". The thing is going to $10K. Its not going to get there in a straight line, this is a market we are talking about here folks - people play markets

Exactly, Bitcoin needs to avoid huge booms and busts.

[freedomno1]

Well colored coins and mastercoins will come so we can deal with it for now
Mind you that improves over the Fiat system by adding a new level

[Interized]

Well colored coins and mastercoins will come so we can deal with it for now
Mind you that improves over the Fiat system by adding a new level

I think it will be interesting to see what the community starts to deem "clean" and "dirty" Bitcoin.

Seems like it will easily replace the current credit system the big bankers have in place.

The more "dirty" money you have the harder it becomes to spend.

[empoweoqwj]

the housing bubble was pure speculation and the increase of demand was artificial.. that's why it fizzled out, not because it boomed so fast.

Yes, it boomed too fast, bubbled.

Bitcoin can follow the same path/events.

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

We can already handle micro transactions using Bitcoin as the backbone, no ALT currency needed.

the lower we can get the fees, the better and more useful microtransactions are as a medium, and the more value that particular coin has, its the market that decides what is needed, and it usually chooses the most efficient route

Exactly, Bitcoin needs to avoid huge booms and busts.

Bitcoin doesn't have huge booms and busts. It has huge booms, followed by "profit taking". The thing is going to $10K. Its not going to get there in a straight line, this is a market we are talking about here folks - people play markets

Exactly, Bitcoin needs to avoid huge booms and busts.

Can't tell you whether you agree with me or not, but I'll guess yes

[jr3951]

Bitcoin needs to avoid huge booms and busts.

Not sure if you read my reply but,
Bottom line- Bitcoin needs to do whatever it will do, if its more fit than its competitors it will thrive, if not it will die, everything in between is natural order

[_Miracle]

Bubbles booms/busts happen to just about anything once you attach the word "investment" to it. Higher risks to rewards ect. Speculations: we don't even know how to do that properly with access to historical data? Crypto currencies are a wild card (and I personally like it that way at the moment).
"The housing bubble" has happened before, all around the globe in many forms and some of us may even experience several more in our lifetimes.
Housing is a much different type of "asset bubble"  than any other.

BTC and other crypto currencies are still becoming whatever it is that they "will be"; volatility will be part of this process.

If you consider it as an investment then treat it as such, risk what you can lose and learn how to protect the gains.
Strap in and enjoy the ride if you can stomach it ;-) stay on the sidelines if wild roller-coasters make you queasy because that's what this will likely be for some time.

Wishing you (and us all) much prosperity (and all the miners much 'luck' ;-)

[freedomno1]

Well colored coins and mastercoins will come so we can deal with it for now
Mind you that improves over the Fiat system by adding a new level

I think it will be interesting to see what the community starts to deem "clean" and "dirty" Bitcoin.

Seems like it will easily replace the current credit system the big bankers have in place.

The more "dirty" money you have the harder it becomes to spend.

Taint is always an issue that makes it quite interesting to address as those clean newly minted coins will not be considered dirty and in theory could have a greater value than older coins (Consider it some ethical premium)
Of course that brings up the issues of mixing that bring about discussion of how to remove taint and if it really concerns the system.
However pushing blacklists on the bitcoins is not the solution and we know by extension that cash can easily be tainted as well that still doesn't mean we don't use it
Probably why the higher protocols are being created as it addresses Problem A and B better than it does now.
https://bitcointalk.org/index.php?topic=333824.0

[CompNsci]

Right, but housing was also fueled by bad lending practices, and housing is apples and oranges compared to bitcoin, a more apt comparison is dutch tulips if you wanted to make it, of course BTC will bubble, its not the top you should look at for BTC health, its the floor, and the floor seems to be doing great by all accounts, the last crash saw the floor at 400+

Apparently even the famous "tulipomania" may have been driven to a large extent by the Dutch government changing laws governing such contracts (see http://en.wikipedia.org/wiki/Tulipomania#Modern_views). Most of these large historical bubbles are where the government had a hand in distorting the market, like the recent 2008 mortgage bubble.

Bitcoin is interesting in that the bubbles seem to reflect the bubbly enthusiasm, but without government driving it (so far as we know).

[Bobsurplus]

Ummmmm, Btc is booming!