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In the view of many HN members, Bitcoin is a Ponzi scheme. In the view of other HN members, Bitcoin is an experimental crypto currency, the use of which is unl

by cs702 14y ago

In the view of many HN members, Bitcoin is a Ponzi scheme. In the view of other HN members, Bitcoin is an experimental crypto currency, the use of which is unlikely ever to expand beyond idealistic hackers, online gamblers, and underground characters. In my view, Bitcoin is likely to gain wide adoption worldwide over the long haul -- that is, over a period of many years or even decades. Its price is therefore bound to rise far above current levels over time. I've laid out my reasoning here: http://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/ http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...

moonchrome 14y ago
Many people don't realize how small Bitcoin is. It's trading in the $1M range. That's like few hundred people playing with their savings - low liquidity = high volatility - talking about this as something significant/newsworthy is silly.
- ewillbefull 14y ago
  Bitcoin trading volume over a 30 day period is more than $20 million dollars, which is incredibly notable for an open-source currency which isn't managed or operated by anybody. The technology involved and the implications of its growth are very significant/newsworthy. The fact that it's trading at $10 again is also very significant to the Bitcoin community, it hasn't done that in more than a year. And it'll probably reach 12 by the end of the year before it stabilizes again.
  - moonchrome 14y ago
    >trading volume over a 30 day period is more than $20 million dollars Again - as a currency this is insignificant. I agree that bitcoin is a great technical accomplishment but talking about it's price as it has any meaning outside of a few hackers playing traders is not realistic.
    - Unoeufisenough 14y ago
      @moonchrome is right. One of the world's large credit card networks processes on the order half a trillion dollars in a typical 30 day period. So bitcoin has a way to go yet before it's volume is significant compared to other ubiquitous electronic payment methods. Consider that they need to grow by a great many orders of magnitude to become globally economically significant, yet consider that the supply of bitcoins is relatively fixed. How smoothly do you think that is going to work? If you believe in the future bitcoins, you also have to believe that their value will have to eventually sky rocket by several orders of magnitude. If you believe this you should hoard every bitcoin. So if you actually believe in bitcoins, why would you ever spend one? If you don't believe in bitcoins, why would you ever accept one? do you see the problem yet?
      - ewillbefull 14y ago
        If you don't think we should be discussing bitcoin -- which is very different from any other currency out there -- simply because it hasn't reached the trading volume of Visa... I don't know what to tell you. Demonstrates pretty clearly the narrow window of information you're willing to consider. (This on a website for hackers and startups. Pfft.)
        385668 14y ago
        I'll agree with you on that, but I think a good point was raised. As an inherently deflationary currency, particularly once the maximum number of bitcoins are created, wouldn't the natural thing for people believe it will eventually be incredibly valuable be to hoard them? I'm not saying that a deflationary currency cannot ever work, but with an inflationary currency, there is greater worth in spending one's money on goods or investments that will accrue worth at a greater rate than the inflation, no?
        Unoeufisenough 14y ago
        Exactly. This is the point I am trying to make.
- cs702 14y ago
  Bitcoin looks pretty liquid to me in relation to its float. According to the latest stats at http://www.bitcoinwatch.com http://www.bitcoinwatch.com, the market value of all bitcoins currently in existence is just under $100 million; so, trading volume of $1 million per day means that around 1% of Bitcoin's entire float turns over every day, around 30% of the float turns over every month, and the entire float turns over about once every three to four months. That's more liquid than a lot of publicly traded stocks with similar float. PS. moonchrome, I'm not sure how your comment relates to my post, which is about trends over the long run ("many years or even decades"). Why are you responding with a comment about current trading volumes?

by cs702 14y ago

moonchrome 14y ago

Many people don't realize how small Bitcoin is. It's trading in the $1M range. That's like few hundred people playing with their savings - low liquidity = high volatility - talking about this as something significant/newsworthy is silly.

ewillbefull 14y ago
Bitcoin trading volume over a 30 day period is more than $20 million dollars, which is incredibly notable for an open-source currency which isn't managed or operated by anybody. The technology involved and the implications of its growth are very significant/newsworthy. The fact that it's trading at $10 again is also very significant to the Bitcoin community, it hasn't done that in more than a year. And it'll probably reach 12 by the end of the year before it stabilizes again.
- moonchrome 14y ago
  >trading volume over a 30 day period is more than $20 million dollars Again - as a currency this is insignificant. I agree that bitcoin is a great technical accomplishment but talking about it's price as it has any meaning outside of a few hackers playing traders is not realistic.
  - Unoeufisenough 14y ago
    @moonchrome is right. One of the world's large credit card networks processes on the order half a trillion dollars in a typical 30 day period. So bitcoin has a way to go yet before it's volume is significant compared to other ubiquitous electronic payment methods. Consider that they need to grow by a great many orders of magnitude to become globally economically significant, yet consider that the supply of bitcoins is relatively fixed. How smoothly do you think that is going to work? If you believe in the future bitcoins, you also have to believe that their value will have to eventually sky rocket by several orders of magnitude. If you believe this you should hoard every bitcoin. So if you actually believe in bitcoins, why would you ever spend one? If you don't believe in bitcoins, why would you ever accept one? do you see the problem yet?
    - ewillbefull 14y ago
      If you don't think we should be discussing bitcoin -- which is very different from any other currency out there -- simply because it hasn't reached the trading volume of Visa... I don't know what to tell you. Demonstrates pretty clearly the narrow window of information you're willing to consider. (This on a website for hackers and startups. Pfft.)
      - 385668 14y ago
        I'll agree with you on that, but I think a good point was raised. As an inherently deflationary currency, particularly once the maximum number of bitcoins are created, wouldn't the natural thing for people believe it will eventually be incredibly valuable be to hoard them? I'm not saying that a deflationary currency cannot ever work, but with an inflationary currency, there is greater worth in spending one's money on goods or investments that will accrue worth at a greater rate than the inflation, no?
        Unoeufisenough 14y ago
        Exactly. This is the point I am trying to make.
cs702 14y ago
Bitcoin looks pretty liquid to me in relation to its float. According to the latest stats at http://www.bitcoinwatch.com http://www.bitcoinwatch.com, the market value of all bitcoins currently in existence is just under $100 million; so, trading volume of $1 million per day means that around 1% of Bitcoin's entire float turns over every day, around 30% of the float turns over every month, and the entire float turns over about once every three to four months. That's more liquid than a lot of publicly traded stocks with similar float. PS. moonchrome, I'm not sure how your comment relates to my post, which is about trends over the long run ("many years or even decades"). Why are you responding with a comment about current trading volumes?