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Generally, huge demand and limited supply are necessary for any bubble to get going. I can see no way that the Bitcoin price is not a bubble. It's rise in pric
by b1daly 9y ago
Generally, huge demand and limited supply are necessary for any bubble to get going. I can see no way that the Bitcoin price is not a bubble.
It's rise in price is none-the-less astonishing, and is somewhat a testament to the soundness of the security model.
The whole system does require new money coming in all the time to maintain current price levels, as miners need to sell their bitcoin to get paid. It's less than a zero sum situation, as some of that money coming in goes directly to paying for the mining costs.
Since the overall awareness of Bitcoin is relatively low, in terms of actually knowing what it is, and how to get some, this bubble could run a long time, as there is a lot of money in the world, in need of investing.
- bonestamp2 9y ago> huge demand and limited supply are necessary for any bubble to get going Does that mean gold is in a bubble? I mean, who are we to say either way? Bitcoin is arguably more useful than gold and it's supply is known with great precision. You could say that Gold is more speculative in a way since somebody could be sitting on a stockpile that is equal to half of the known supply. > The whole system does require new money coming in all the time to maintain current price levels That's only true for the next few years, then no new coins are created. You can't see how it's not a bubble but frankly, I have trouble seeing how we can say it's in a bubble. Maybe it is, but I don't think anybody knows how to evaluate bitcoin... it's not like anything we've seen before. When IBM started selling computers, their roadmap didn't include home computers because they didn't think that anyone would ever want a computer in their home. We understand the implications of bitcoin now about as much as IBM understood the impact of computers back then.