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I think there are two main drivers of price increase in 2018: - me-too buyers drawn by the huge 2017 increases - investors that have a mandate to seek out hig

I think there are two main drivers of price increase in 2018: - me-too buyers drawn by the huge 2017 increases - investors that have a mandate to seek out high-risk investments for a certain %age of their portfolio, and are gradually overcoming technical and regulatory barriers ( https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-exchange-wants-to-be-digital-safe-house-for-hedge-funds https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-e... ) For a decrease - MtGox style failure of a company holding a lot of coins - crypto-diversification as other projects get stronger

moosey 9y ago
Another possibility for a decrease: A major holder of bitcoins tries to pull more than can be converted into a national currency. This basically topples what I equate to a ponzi scheme when people find out that it doesn't convert so easily back and forth at current evaluation, and reduces the value enough that others fearful of loss start to try to convert as well. I think that this is probably the most likely scenario where people discover that bitcoin, as a currency, is a bad idea: deflationary currencies cannot succeed (the rate of creation goes down while population goes up, so it must be deflationary). Further, it shows that bitcoin as a commodity/investment doesn't work, because to be honest there is nothing backing it up. What recourse do you have when the bitcoins you bought at 10k are now worth 1k? What real gain/loss has occurred that the rest of the GDP need concern itself with? Philosophically, I believe that bitcoin has presented an interesting technological breakthrough, but the implementation of production is off. I do believe that in the future that we'll see national currencies using blockchain technology. In the meantime, I'm not going to worry about it, and I'm not getting involved. If some of my friends become wealthy for it, then great for them, but I'm not particularly keen on 'get rich quick' or market timing schemes.
- strong_silent_t 9y ago
  So for me, the most realistic price drop scenario is something that creates a big increase in supply and decrease in demand at the same time. For MtGox you have a crisis that lowers trust in brokers, decreasing demand, and huge hoard of stolen coins going to a criminal that wants to profit, increasing supply. Holders who bought bitcoin for a reason will sell for a reason, and they're heavily incentivized not to do a panic selloff, unless they think bitcoin is dying. I agree bitcoin is inadequate as a currency. (I think ETH is better as a currency, since it sort of has the "tax base" of executing contracts and enshrining the results on the blockchain.) I view it as a store of value. If your wealth is mostly represented as various numbers in various databases (mine is,) then bitcoin is a robust form of integer storage, or at least vulnerable in ways that are uncorrelated with my other wealth storage providers.

moosey 9y ago

Another possibility for a decrease: A major holder of bitcoins tries to pull more than can be converted into a national currency. This basically topples what I equate to a ponzi scheme when people find out that it doesn't convert so easily back and forth at current evaluation, and reduces the value enough that others fearful of loss start to try to convert as well. I think that this is probably the most likely scenario where people discover that bitcoin, as a currency, is a bad idea: deflationary currencies cannot succeed (the rate of creation goes down while population goes up, so it must be deflationary). Further, it shows that bitcoin as a commodity/investment doesn't work, because to be honest there is nothing backing it up. What recourse do you have when the bitcoins you bought at 10k are now worth 1k? What real gain/loss has occurred that the rest of the GDP need concern itself with? Philosophically, I believe that bitcoin has presented an interesting technological breakthrough, but the implementation of production is off. I do believe that in the future that we'll see national currencies using blockchain technology. In the meantime, I'm not going to worry about it, and I'm not getting involved. If some of my friends become wealthy for it, then great for them, but I'm not particularly keen on 'get rich quick' or market timing schemes.

strong_silent_t 9y ago
So for me, the most realistic price drop scenario is something that creates a big increase in supply and decrease in demand at the same time. For MtGox you have a crisis that lowers trust in brokers, decreasing demand, and huge hoard of stolen coins going to a criminal that wants to profit, increasing supply. Holders who bought bitcoin for a reason will sell for a reason, and they're heavily incentivized not to do a panic selloff, unless they think bitcoin is dying. I agree bitcoin is inadequate as a currency. (I think ETH is better as a currency, since it sort of has the "tax base" of executing contracts and enshrining the results on the blockchain.) I view it as a store of value. If your wealth is mostly represented as various numbers in various databases (mine is,) then bitcoin is a robust form of integer storage, or at least vulnerable in ways that are uncorrelated with my other wealth storage providers.