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A rising price does not imply long-term viability. A stable price does. For long term viability, people can't just be buying and selling it, they should be tr

by kjackson2012 14y ago

A rising price does not imply long-term viability. A stable price does. For long term viability, people can't just be buying and selling it, they should be transacting with it. It seems like the most active form of Bitcoin use that I've seen is trading. There's nothing wrong with that, but it's a double-edged sword, as people learned last year. Once more and more regular people actually start using it for real purchases, then I'd be more willing to say there is long-term viability.

downandout 14y ago
You are correct that a rising price does not necessarily imply long-term viability. It indicates a sharp increase in demand. In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. It enables new business models and transactions that would not have otherwise occurred (in many cases, for legal reasons). For this reason, I believe that demand (and resulting prices) will continue to rise.
- Jabbles 14y ago
  for legal reasons Oh come off it. You mean illegal reasons. You know you do. If you believe people should be free to buy any kind of drug they wish then say so, I don't think HN would view it as too radical a view. But your post sounds like typical corporate bullshit.
  - eurleif 14y ago
    "For legal reasons" doesn't mean "because what they're doing is legal", it means "for reasons related to the law" (i.e., what they're doing is against it). That wasn't doublespeak, it was pretty clear.
- mehwoot 14y ago
  > In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. So demand has increased 1000% since the low of $3 less than a year ago? I don't buy that reasoning. I think it is 90% speculation and 10% increased demand. Demand is increasing, but nowhere near the amount to explain the large price shifts. Disclaimer: I have a reasonably sized investment in bitcoins.
  - ankeshk 14y ago
    Yes. The demand has increased 10x. Last year, 6,000 bitcoin transactions occurred each day. Today, 60,000 transactions occur each day. Source: http://blockchain.info/charts/n-transactions http://blockchain.info/charts/n-transactions
celticninja 14y ago
it has to reach a plateau before it becomes stable, it does this by finding the market rate, which is what is hapenig with the price rise. eventually it will hit a point where daily demand and supply of BTC will match and at that point the price should become steady. Given the scarcity of the product it is not surpising the price is considered low at the moment.
- kjackson2012 14y ago
  That's not how a market works. First it overshoots its "true value" because of a buying frenzy and then falls back down, rinse and repeat. I can't speak to whether right now it is still on the rise, or if has overshot its "true value" and then it's going to drop. Some people believe the former, others believe the latter. Differing opinions is what makes a market. So far, momentum is on the upside, but don't think that it will just neatly and asymptotically reach its "true value". Expect a lot of volatility. The fact there isn't a lot of volatility here means that consensus is that prices will continue to rise.

downandout 14y ago

You are correct that a rising price does not necessarily imply long-term viability. It indicates a sharp increase in demand. In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. It enables new business models and transactions that would not have otherwise occurred (in many cases, for legal reasons). For this reason, I believe that demand (and resulting prices) will continue to rise.

Jabbles 14y ago
for legal reasons Oh come off it. You mean illegal reasons. You know you do. If you believe people should be free to buy any kind of drug they wish then say so, I don't think HN would view it as too radical a view. But your post sounds like typical corporate bullshit.
- eurleif 14y ago
  "For legal reasons" doesn't mean "because what they're doing is legal", it means "for reasons related to the law" (i.e., what they're doing is against it). That wasn't doublespeak, it was pretty clear.
mehwoot 14y ago
> In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. So demand has increased 1000% since the low of $3 less than a year ago? I don't buy that reasoning. I think it is 90% speculation and 10% increased demand. Demand is increasing, but nowhere near the amount to explain the large price shifts. Disclaimer: I have a reasonably sized investment in bitcoins.
- ankeshk 14y ago
  Yes. The demand has increased 10x. Last year, 6,000 bitcoin transactions occurred each day. Today, 60,000 transactions occur each day. Source: http://blockchain.info/charts/n-transactions http://blockchain.info/charts/n-transactions

celticninja 14y ago

it has to reach a plateau before it becomes stable, it does this by finding the market rate, which is what is hapenig with the price rise. eventually it will hit a point where daily demand and supply of BTC will match and at that point the price should become steady. Given the scarcity of the product it is not surpising the price is considered low at the moment.

kjackson2012 14y ago
That's not how a market works. First it overshoots its "true value" because of a buying frenzy and then falls back down, rinse and repeat. I can't speak to whether right now it is still on the rise, or if has overshot its "true value" and then it's going to drop. Some people believe the former, others believe the latter. Differing opinions is what makes a market. So far, momentum is on the upside, but don't think that it will just neatly and asymptotically reach its "true value". Expect a lot of volatility. The fact there isn't a lot of volatility here means that consensus is that prices will continue to rise.