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Thanks, that’s the clearest explanation I’ve received of a plausible mechanism for bitcoin having any intrinsic value. I’m not convinced that justifies it’s va

by graeme 9y ago

Thanks, that’s the clearest explanation I’ve received of a plausible mechanism for bitcoin having any intrinsic value. I’m not convinced that justifies it’s value, but I’ll mull this theory over when bitcoin articles come up. Based on your theory, would it be fair to say the following: 1. Like gold, bitcoin won’t be a long run value producing asset. (Unlike stocks) 2. Like gold, bitcoin may settle on some value relative to non-bitcoin 3. People investing in bitcoin are betting it has not yet reached that value, and are thus hoping it will increase in price to a future equilibrium. Obviously gold fluctuates based on market conditions, but it has rough parameters of value. Are people assuming btc has some similar level of value and will rise to it?

panarky 9y ago
That's a pretty good way to describe how I think about it. Like many innovations, usage probably looks like an S-curve -- slow in the beginning, then a period of rapid growth, followed by a plateau. It's unclear where we are in the cycle, and it's definitely possible that valuations have over-shot. But it seems to me that there's something real going on in addition to the hype, and that potential could be worth a hell of a lot more than $100b globally.