4 ms·

>Value is determined by what others will pay Yes, assuming that others will pay for it. And perhaps an increasing number of productive individuals will. But th

>Value is determined by what others will pay Yes, assuming that others will pay for it. And perhaps an increasing number of productive individuals will. But that just pushes the question back one step. Why do those other people want to own Bitcoins? You see the infinite regress problem here? (With fiat currency, there's a finite regress. It terminates with specific facts like historical government actions, gold, taxes.)

mirimir 10y ago
As far as I know, there are no hard limits for Bitcoin value, in either direction. But with a large enough user base, regression to the mean guarantees some stability. Also, many traders have hard-coded buy/sell targets, and I gather that damps out large fluctuations. I don't speculate in Bitcoin. I just use it.
- aethertron 10y ago
  I don't see why the value couldn't just drop and keep dropping to zero, as users lose confidence. (I will investigate 'regression to the mean')
  - RandomInteger4 10y ago
    Bitcoin is has a supply limit, so that taken together with it's technical features such as a proof of transaction and digital-ness makes it highly valuable in an economy where more and more transactions take place in the digital rather than the physical space. I'm sure there's a better answer, but that's the best I can muster with my current knowledge on the matter. I think a better question is "given the rarity of bitcoin, why wouldn't people value it?" Also, as for the confidence thing, bitcoin is no different than anything else in our economy. Our economy is built on confidence.
    - aethertron 10y ago
      >"given the rarity of bitcoin, why wouldn't people value it?" Because rarity in and of itself doesn't confer value. Or every altcoin would be valuable. >Our economy is built on confidence. Yes, but not only that. Use of fiat currency is made legally compulsory. Maybe Bitcoin-demanding ransomware plays a useful role in the BTC economy, as it gives people a negative/fear-based reason to obtain BTC.
      - mirimir 10y ago
        I suspect that it was just that Bitcoin had a head start. Regarding drivers for using Bitcoin, consider that 99% of Bitcoin is now traded in CNY.[0] I doubt that ransomware plays a substantial role there. [0] https://www.bitcoincharts.com/charts/volumepie/ https://www.bitcoincharts.com/charts/volumepie/
  - mirimir 10y ago
    Yes, that could happen. By 'regression to the mean', I just meant that Bitcoin prices come to reflect average desirability. So even huge events like the pump/dump bubble that Mt Gox (or its infiltrator) created eventually damp out. Right now, I gather that it's largely Chinese investors who are pushing Bitcoin prices up.

mirimir 10y ago

As far as I know, there are no hard limits for Bitcoin value, in either direction. But with a large enough user base, regression to the mean guarantees some stability. Also, many traders have hard-coded buy/sell targets, and I gather that damps out large fluctuations. I don't speculate in Bitcoin. I just use it.

aethertron 10y ago
I don't see why the value couldn't just drop and keep dropping to zero, as users lose confidence. (I will investigate 'regression to the mean')
- RandomInteger4 10y ago
  Bitcoin is has a supply limit, so that taken together with it's technical features such as a proof of transaction and digital-ness makes it highly valuable in an economy where more and more transactions take place in the digital rather than the physical space. I'm sure there's a better answer, but that's the best I can muster with my current knowledge on the matter. I think a better question is "given the rarity of bitcoin, why wouldn't people value it?" Also, as for the confidence thing, bitcoin is no different than anything else in our economy. Our economy is built on confidence.
  - aethertron 10y ago
    >"given the rarity of bitcoin, why wouldn't people value it?" Because rarity in and of itself doesn't confer value. Or every altcoin would be valuable. >Our economy is built on confidence. Yes, but not only that. Use of fiat currency is made legally compulsory. Maybe Bitcoin-demanding ransomware plays a useful role in the BTC economy, as it gives people a negative/fear-based reason to obtain BTC.
    - mirimir 10y ago
      I suspect that it was just that Bitcoin had a head start. Regarding drivers for using Bitcoin, consider that 99% of Bitcoin is now traded in CNY.[0] I doubt that ransomware plays a substantial role there. [0] https://www.bitcoincharts.com/charts/volumepie/ https://www.bitcoincharts.com/charts/volumepie/
- mirimir 10y ago
  Yes, that could happen. By 'regression to the mean', I just meant that Bitcoin prices come to reflect average desirability. So even huge events like the pump/dump bubble that Mt Gox (or its infiltrator) created eventually damp out. Right now, I gather that it's largely Chinese investors who are pushing Bitcoin prices up.