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This article really just tells the story that when there is a fixed supply of something, and demand increases, price increases of that thing. In some cases peop
by kitcar 13y ago
This article really just tells the story that when there is a fixed supply of something, and demand increases, price increases of that thing. In some cases people have that thing stored in their attic and forget about it, in which case they get a pleasant surprise that they now can trade it for a greater value than they first purchased it for (assuming there is liquidity in the market).
Granted - the speed of the price increase of Bitcoin is very impressive - other examples from history:
- Man buys $27 of Gold Coins, finds they're now worth $886K
- Man buys $27 of Tulips, finds they're now worth $886K
- Man buys $27 of Railroad shares, finds they're now worth
$887K
- Man buys $27 of (insert .com boom company) Shares, finds they're now worth $886K
- Man buy $27 of Beanie Babies, finds they're now worth $886K
- oleganza 13y agoExcept there are many more people who earned a lot on Bitcoin purposefully, not by accident.
- kitcar 13y agoI think what you're suggesting is there are more people speculating on bitcoin's value than the value of some of these other examples - that is probably accurate, as in many ways the barriers to entry to start speculating on the value of bitcoin are low.
- cruise02 13y agoSmart money's on Railroad shares. Buy, Buy, BUY!
- bunderbunder 13y agoYup. But the reason this is such a big problem for Bitcoin is that Bitcoin has greater aspirations than just being the next tulip or Beanie Baby. It wants to be a real currency. And as long as its price is fluctuating like this, you've got to be kind of crazy to be using it as anything but a novel currency. Buyers have every reason to be hesitant to buy things using Bitcoins because of the possibility that the pizza's worth of BTC they could spend today might be worth enough to buy a house in another couple years. If you had a lottery ticket that you had good reason to believe might be a winner, would you trade it for a pizza? I sure wouldn't. On the other side of things, sellers have rational reasons to not accept BTC out of fear that the company's bank account might rapidly diminish in value. The (non-speculative) Bitcoin community is this fascinating caricature of currency situation in old Soviet bloc countries. Practically speaking, dollars are more valuable because of their greater stability. But people go on using the other currency anyway because of politics.