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I've very rarely seen something with a > 1 Billion market cap and millions of users simply disappear. (To use an unrelated example, even MySpace still exists :
by Aqueous 14y ago
I've very rarely seen something with a > 1 Billion market cap and millions of users simply disappear. (To use an unrelated example, even MySpace still exists :)
Very simply, the more users are in Bitcoin the more vendors there will be who accept BitCoin. The more goods and services can be bought in Bitcoin during the relatively smooth periods the greater the proportion of people who like to have the currency for currency purposes, because it can be used to buy goods and services. There will be 'induced traffic', a network effect - more roads into Bitcoin will pop up because there's an incentive to start an exchange (you make money off of each transaction, after all!). More roads = greater demand for more BitCoin. It is the fact that some buying power of BitCoin still exists even given the boom/bust cycles that will support the currency in the long run, and that this buying power will on average be higher on every contraction than the previous contraction. The fact that an anonymous, decentralized currency that prevents double-spending is desirable (i.e. has inherent value) to a lot of people will also support this buying power, and support the currency in the long run.
- InclinedPlane 14y agoGeocities, lycos, CompuServe, Excite@Home, so many others. Those were all companies which sold at a billion dollars or many billions of dollars and have sense been shut down or are worth a tiny fraction of that amount today. And those are just examples from the last 20 years, we could go back to nearly countless examples of other speculative bubbles going back centuries.
- zenocon 14y agoIf ever there were a textbook example of apples/oranges, this would be it.
- Aqueous 14y agoThe example is helpful, though. In each of those cases something very much better came along to replace it. The same thing could very well happen with BitCoin. Someone mentioned forking BitCoin and tweaking the algorithm to remove the artificial ceiling of 21 million units, and replace it with an algorithm which monitors all the transactions taking pace and adjusts monetary policy in response to them, in order to produce a steady inflation rate. Such a currency might very well be more desirable than one with deflationary tendencies. Bottom line - unless someone figures out a way to replace BitCoin with something better, I see no reason to believe BitCoin is going away anytime soon.
- jebeng 14y agoOh, the memories seeing those names bring back. So happy to have been there for the through the 90's.
- dragontamer 14y agoThe Zimbabwe M1 was worth $2.4 billion in 2001, and millions of users are forced to use it. (Zimbabwe professors, teachers, etc. etc.). And of course, that entire money chain is practically worthless today. There is no guarantee that BTC will survive. Larger currencies have fallen before it.