My take on the future of Bitcoin

[adpinbr]

I saw Bitcoin in late 2011 on Silk Road for the first time. I am not technical, but when I saw that there was a form of payment that could buy drugs online I was fascinated. After reading up on Bitcoin, and realizing its very strong/superior "properties of money", I knew that it would blow up when people heard about it. I invested in Bitcoin due to it BEING MONEY not due to it being a payment system.

NEWS BUBBLE (ALREADY HAPPENED)
Basically, if you invested in 2011-2012 you were betting that WHEN people find out about Bitcoin the price will go up.
Bulls where taking advantage of a market inefficiency, that they had INFORMATION THAT OTHERS DID NOT. ie you knew about Bitcoin.
The April and November bubbles were the result of people hearing about bitcoin, which is why there was such a strong correlation between news and price.

FUNDAMENTALS BUBBLE
Will be the result of Bitcoin fulfilling its promise as a payment system.
This process could take years(think 2017), if ever, and IMHO the risk-reward proposition is not as good as the bet I made in 2012.

CRISIS BUBBLE
Will occur when Bitcoin fulfills its promise as an asset/currency. This should happen when some sort of financial crash happens, the more developed Bitcoin is when this happens the better. The more legitimacy and liquidity Bitcoin has the higher the price will rise. If people think it may actually replace/compete as a reserve currency, we may see some really astronomical prices (10-100K). Being able to spend it at your local supermarket when crisis strikes is another reason to liquidate your stocks rather than your coins to put food on the table.

REASONS TO BE BEARISH

1) There is a lot of talk/bullishness on these forums about Bitcoin being a superior payment system. However I never thought Bitcoin would be a successful payment system, I felt that the blockchain had to merely be "good enough" to allow transactions without a counter-party to allow bitcoin to be the "honeybadger of money". I view a future where most transactions are done off chain. However the ability to do transactions and smart contracts on-chain, will force centralized, more efficeint, competitors to maintain a certain standard.
With this being said, as Apple Pay and CO. eat up the transactions market, price should drop.

2) The market has adapted to the news=price model. Which is why a lot of people are confused that all the "good news" has not resulted in upwards price movement. As these individuals realize that the correlation has subsided they will liquidate their holdings and invest their funds elsewhere, as they are short term thinkers.

REASONS TO BE BULLISH

1) High probability of ETF/increased liquidity. Just as people made money from knowing about Bitcoin when others did not in 2011, people who went through the effort of opening an account with bitstamp will make money from having early access to take exposure with bitcoins while others are to lazy to open up an account and do it.

[bitebits]

Thanks for sharing the insights!

I invested in Bitcoin due to it BEING MONEY not due to it being a payment system.

That is every newbie's mistake, only knowing about bitcoin the currency and not about Bitcoin the payment network.

But even some main stream media is now getting that Bitcoin is actually a decentralized payment network, with LOTS of uninvented potential. I think when this snowball gets rolling, we get at least one more 'news bubble'. Hopefully this bubble will be supported by the currently build fundamentals, so it won't deflate that much.

[kwukduck]

"With this being said, as Apple Pay and CO. eat up the transactions market, price should drop."

Ow man i almost took you serious, until ApplePay... Gosh that was a good one man! Thanks for the abs workout.

In case it wasn't meant to be funny, we already have a lot of ApplePay and CO, it's still playing the old money game and doesn't innovate or change anything.

[Mieehayii]

Maybe I should learn from you about my future plans

[bazar165g]

Fuck Adam, scammer! When you send me my bitcoins?

User adpinbr scammer

[BitCoinNutJob]

REASONS TO BE BULLISH

1) High probability of ETF/increased liquidity. Just as people made money from knowing about Bitcoin when others did not in 2011, people who went through the effort of opening an account with bitstamp will make money from having early access to take exposure with bitcoins while others are to lazy to open up an account and do it.

ETF coming in November from second market could spark the next bubble, lets hope so.

[AtheistAKASaneBrain]

Fuck Adam, scammer! When you send me my bitcoins?

User adpinbr scammer

Really'? What proof do you have? you can't acuse people without proof.

[Febo]

Fuck Adam, scammer! When you send me my bitcoins?

User adpinbr scammer

Really'? What proof do you have? you can't acuse people without proof.

Agree. You need to place proves and at least write about it in his trust.

[adpinbr]

Fuck Adam, scammer! When you send me my bitcoins?

User adpinbr scammer

Really'? What proof do you have? you can't acuse people without proof.

Agree. You need to place proves and at least write about it in his trust.

Thank You guys for the support. What happened between me and this unidentified person is that I made a public request for information in regards to a hacker, the above person said he found  information and asked for coins in return for it, he was not willing to hand over any significant piece of information, or use escrow, he just wanted me to send him coins for what is most likely (still giving him benefit of the doubt which he doesnt deserve) nothing more but an attempt to fraud me.

Bazar if you are willing to use an escrow than by all means I will generously compensate you for any work you did, if you are not than please stop attacking me publicly. Thank You

[hayabusa911]

Fuck Adam, scammer! When you send me my bitcoins?

User adpinbr scammer

Really? 

[BittBurger]

Fuck Adam, scammer! When you send me my bitcoins?

Why do theives and scammers always seem to have broken english?  Gives me some renewed hope in America.  Just a tiny bit though.

-B-

[BTCjust]

I can not see the future of Bitcoin.
Now only the bubble to make me excited.

[bazar165g]

Adam,
1)i accept escrow forum
2)I fulfilled my part of the job, but you just lost. you stopped answering my messages. although then you appeared on the forum every day. i send messages to PM, emails, skype, phone. 5 months later you decide to answer me!
perfect  

[Melbustus]

After reading up on Bitcoin, and realizing its very strong/superior "properties of money", I knew that it would blow up when people heard about it. I invested in Bitcoin due to it BEING MONEY not due to it being a payment system.

Likewise. People who think bitcoin is primarily a payments system miss the point entirely.

IMHO the risk-reward proposition is not as good as the bet I made in 2012.

Possibly true. I'd say there have been a few sweet-spots for risk-reward. May-July 2012 was one of them. Price was still low, but more than double the bubble-burst low, and had been stable for months. It had also become clear at that point that there was increasing interest and infrastructure build out happening, and that bitcoin's prospects and mindshare were MUCH better than they were a year prior during the runup to $32.

When I made my first purchases in the 2nd half of 2011, there was a much more material risk that people might just forget about bitcoin for many years. If we hadn't gotten the critical mass of tech geeks and entrepreneurs interested in bitcoin, it could've stagnated for a quite a while. But by Q2/Q3 2012, it was clear that that wasn't the case.

I'd say early 2013 was another sweet spot. We had a bunch of more mainstream interest, from tech VCs and previously-successful entrepreneurs, for example, and the price was still under $20. That was a pretty obvious buy.

We may be getting toward another sweet spot. 3-6 months or so of stability around this price point, with continued infrastructure development, would probably convince me. I remember saying to my wife in November last year that I would've preferred bitcoin consolidate in the $350 zone for a while before heading higher. Well, I'm getting my "wish", I guess.

1) There is a lot of talk/bullishness on these forums about Bitcoin being a superior payment system. However I never thought Bitcoin would be a successful payment system, I felt that the blockchain had to merely be "good enough" to allow transactions without a counter-party to allow bitcoin to be the "honeybadger of money".

Totally agree. It's always seemed obvious that the legacy payment system will improve dramatically, and catch up to bitcoin. But so what? Narrow payments was never the core point. As long as bitcoin has *some* moderate level of merchant acceptance, it can do its thing; ie, allowing anyone, anywhere, full control of their own wealth, with the bonus that it's an open system that can therefore support internet-scale innovation.

REASONS TO BE BULLISH

I'll add one. Every day bitcoin survives makes it more obvious to gold-bugs that it's not going away. Once they accept that, it's hard to not realize that bitcoin is a superior superset of gold, from a monetary perspective. They cling to what they perceive as "hard money" and an inflation hedge, but the actual direct link to the economy which supports those theses is broken. But not with bitcoin, since it really *can* serve as money in modern times. This is going to click with gold-bugs in a big way at some point. And that's a massive market.

[adpinbr]

After reading up on Bitcoin, and realizing its very strong/superior "properties of money", I knew that it would blow up when people heard about it. I invested in Bitcoin due to it BEING MONEY not due to it being a payment system.

Likewise. People who think bitcoin is primarily a payments system miss the point entirely.

IMHO the risk-reward proposition is not as good as the bet I made in 2012.

Possibly true. I'd say there have been a few sweet-spots for risk-reward. May-July 2012 was one of them. Price was still low, but more than double the bubble-burst low, and had been stable for months. It had also become clear at that point that there was increasing interest and infrastructure build out happening, and that bitcoin's prospects and mindshare were MUCH better than they were a year prior during the runup to $32.

When I made my first purchases in the 2nd half of 2011, there was a much more material risk that people might just forget about bitcoin for many years. If we hadn't gotten the critical mass of tech geeks and entrepreneurs interested in bitcoin, it could've stagnated for a quite a while. But by Q2/Q3 2012, it was clear that that wasn't the case.

I'd say early 2013 was another sweet spot. We had a bunch of more mainstream interest, from tech VCs and previously-successful entrepreneurs, for example, and the price was still under $20. That was a pretty obvious buy.

We may be getting toward another sweet spot. 3-6 months or so of stability around this price point, with continued infrastructure development, would probably convince me. I remember saying to my wife in November last year that I would've preferred bitcoin consolidate in the $350 zone for a while before heading higher. Well, I'm getting my "wish", I guess.

1) There is a lot of talk/bullishness on these forums about Bitcoin being a superior payment system. However I never thought Bitcoin would be a successful payment system, I felt that the blockchain had to merely be "good enough" to allow transactions without a counter-party to allow bitcoin to be the "honeybadger of money".

Totally agree. It's always seemed obvious that the legacy payment system will improve dramatically, and catch up to bitcoin. But so what? Narrow payments was never the core point. As long as bitcoin has *some* moderate level of merchant acceptance, it can do its thing; ie, allowing anyone, anywhere, full control of their own wealth, with the bonus that it's an open system that can therefore support internet-scale innovation.

REASONS TO BE BULLISH

I'll add one. Every day bitcoin survives makes it more obvious to gold-bugs that it's not going away. Once they accept that, it's hard to not realize that bitcoin is a superior superset of gold, from a monetary perspective. They cling to what they perceive as "hard money" and an inflation hedge, but the actual direct link to the economy which supports those theses is broken. But not with bitcoin, since it really *can* serve as money in modern times. This is going to click with gold-bugs in a big way at some point. And that's a massive market.

Gold is a good point, I agree.
Nice to hear someone else has a similar view as me:)
Still its kind of hard for me to see if what the next big bubble will be:( I am a long term believer, and long term holder, which is why I feel so stupid for not selling at the top, as I have past experience.
The 266 bubble was obvious it was coming, but tbh I didnt envision the 1200 bubble either (I thought the news bubble subsided), so maybe I am just over bearish and anxious about my position, if I did sell then the whole time price was going up I would be thinking it would go to the moon...

[Melbustus]

...

Gold is a good point, I agree.
Nice to hear someone else has a similar view as me:)
Still its kind of hard for me to see if what the next big bubble will be:( I am a long term believer, and long term holder, which is why I feel so stupid for not selling at the top, as I have past experience.
The 266 bubble was obvious it was coming, but tbh I didnt envision the 1200 bubble either (I thought the news bubble subsided), so maybe I am just over bearish and anxious about my position, if I did sell then the whole time price was going up I would be thinking it would go to the moon...

Eh, to an extent, I feel the same way about the last top, but it's really quite arrogant to think you can pick tops. Unless you're *actually* a very skilled trader (and not a lucky hindsight or small-sample-set biased one, like most), you've just got to go with the fundamentals analysis and wait. The 2011 base-to-peak was something like 30x, and spring 2013 was 20x. The top of the last peak could've been >$2000, or it could've stopped well under $1000. Getting the top right is a matter of luck. Either way, the long term picture remains unchanged.

I think there are a few potential quick run-up catalysts out there as noted (and some we haven't noted: wall st, the right sort of financial crisis), but it doesn't really have to go in these bursts. Maybe it won't anymore. In any event, the market-cap of bitcoin in the $5B range is silly small compared to any relevant metric: various equities market caps, M2 money supplies of various nations and what level of GDP they support, precious metals markets, "off-shored" cash holdings, etc. I don't think we necessarily need to clearly see any bubble catalysts (these things are often unpredictable events anyway) to be content in long term positions, as long as bitcoin continues to garner interest and infrastructure development.

[cypherdoc]

...

Gold is a good point, I agree.
Nice to hear someone else has a similar view as me:)
Still its kind of hard for me to see if what the next big bubble will be:( I am a long term believer, and long term holder, which is why I feel so stupid for not selling at the top, as I have past experience.
The 266 bubble was obvious it was coming, but tbh I didnt envision the 1200 bubble either (I thought the news bubble subsided), so maybe I am just over bearish and anxious about my position, if I did sell then the whole time price was going up I would be thinking it would go to the moon...

Eh, to an extent, I feel the same way about the last top, but it's really quite arrogant to think you can pick tops. Unless you're *actually* a very skilled trader (and not a lucky hindsight or small-sample-set biased one, like most), you've just got to go with the fundamentals analysis and wait. The 2011 base-to-peak was something like 30x, and spring 2013 was 20x. The top of the last peak could've been >$2000, or it could've stopped well under $1000. Getting the top right is a matter of luck. Either way, the long term picture remains unchanged.

I think there are a few potential quick run-up catalysts out there as noted (and some we haven't noted: wall st, the right sort of financial crisis), but it doesn't really have to go in these bursts. Maybe it won't anymore. In any event, the market-cap of bitcoin in the $5B range is silly small compared to any relevant metric: various equities market caps, M2 money supplies of various nations and what level of GDP they support, precious metals markets, "off-shored" cash holdings, etc. I don't think we necessarily need to clearly see any bubble catalysts (these things are often unpredictable events anyway) to be content in long term positions, as long as bitcoin continues to garner interest and infrastructure development.

if i'd tried to sell at the top of $1200, it would've been at gox as that's where i was registered.  i also believed in Mark, which in retrospect, probably wasn't right.

if i'd sold at 1200, there's a very high likelihood i would've never gotten the fiat.  so in that sense, i don't feel bad at all.

[TwaiteTokyo]

good job
I even cant see my tomorrow, but you can plan your future, I think you will become a great person

[r0ach]

To expand on the ETF concept, the ETF is a method for people to short the dollar.  This is why those huge financial institutions say Bitcoin isn't big enough or have enough liquidity to bother with yet.  All they care about is increasing their net worth.  They might not understand, or don't even care how Bitcoin works, or have no interest in holding any at all, but they do know shorting the dollar can be profitable, so they will increase the market cap with those activities if an ETF ever occurs.

[Dafar]

I think there are a few potential quick run-up catalysts out there as noted (and some we haven't noted: wall st, the right sort of financial crisis), but it doesn't really have to go in these bursts. Maybe it won't anymore. In any event, the market-cap of bitcoin in the $5B range is silly small compared to any relevant metric: various equities market caps, M2 money supplies of various nations and what level of GDP they support, precious metals markets, "off-shored" cash holdings, etc. I don't think we necessarily need to clearly see any bubble catalysts (these things are often unpredictable events anyway) to be content in long term positions, as long as bitcoin continues to garner interest and infrastructure development.

Couldn't have said it better myself, this is the only reason I'm still buying... still a gamble, but no risk no reward