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The increasing price is a reflection of an increasing reservation demand for bitcoin - which is another way of saying bitcoin is increasing in "moneyness". Bitc

The increasing price is a reflection of an increasing reservation demand for bitcoin - which is another way of saying bitcoin is increasing in "moneyness". Bitcoin's market capitalization is about 5B right now. Gold's is about 7trillion. On a technical level bitcoin is superior as a money to gold, so I wouldn't be surprised if bitcoin attained some large fraction of gold's market capitalization, eventually. E.g., it would not surprise me if bitcoin, or some other digital currency, increased in market cap to, say, 500B over the long term (i.e., less than 10% of gold's market cap, but 100x higher than it is today), giving it a price of approximately $50,000 per bitcoin.

exit 13y ago
how long is "long term"? 30 years?
- Oculus 13y ago
  I'd imagine hundreds. Financial institutions are some of the slowest moving things out there.
  - SwellJoe 13y ago
    Which is what makes BTC so disruptive. You don't need traditional financial institutions, once there is a market for goods and services. It's only the smallness of the BTC market right now that makes it necessary to buy in from and cash out into state-sponsored money.
- vijayboyapati 13y ago
  I honestly don't know. The world is changing so fast now that it wouldn't surprise me if this happened in 10 years, or even 5 years. As context, just 6 years ago there was no iphone. 8 years ago there was no Youtube. 9 years ago there was no Google maps. 10 years ago there was no Facebook. I like to think how much these things have already changed the world, and my life, and how none of them were around just a decade ago. I'm very excited to see what the world will look like 10 years hence. edit: a word
  - themusicgod1 13y ago
    The good news that whatever comes next is probably going to be easily purchasable via bitcoin since bitcoin makes purchasing things online so damn easy. Even if you are forced to take something of a haircut you'll still probably wind up ahead if you choose to take that haircut in a modern currency like bitcoin than a legacy one like USD.
davidjohnstone 13y ago
"it would not surprise me if bitcoin, or some other digital currency" This is what makes me pessimistic about Bitcoin as long term value store. If a new digital currency that was a significant improvement on Bitcoin was developed (a Bitcoin v2, if you like), I'd expect most of the money to shift over to the new currency eventually. The fact that there is a lot of infrastructure for Bitcoin built already would mean Bitcoin would continue to be used for sometime, but its value would drop dramatically if people see the new currency as the future of digital currencies. (Tip: if you want to do this, you need to make big technical improvements, not just tweaking Bitcoin like Litecoin and all the others do, and you need to do a big marketing effort to make people believe in it.)

exit 13y ago

how long is "long term"? 30 years?

Oculus 13y ago
I'd imagine hundreds. Financial institutions are some of the slowest moving things out there.
- SwellJoe 13y ago
  Which is what makes BTC so disruptive. You don't need traditional financial institutions, once there is a market for goods and services. It's only the smallness of the BTC market right now that makes it necessary to buy in from and cash out into state-sponsored money.
vijayboyapati 13y ago
I honestly don't know. The world is changing so fast now that it wouldn't surprise me if this happened in 10 years, or even 5 years. As context, just 6 years ago there was no iphone. 8 years ago there was no Youtube. 9 years ago there was no Google maps. 10 years ago there was no Facebook. I like to think how much these things have already changed the world, and my life, and how none of them were around just a decade ago. I'm very excited to see what the world will look like 10 years hence. edit: a word
- themusicgod1 13y ago
  The good news that whatever comes next is probably going to be easily purchasable via bitcoin since bitcoin makes purchasing things online so damn easy. Even if you are forced to take something of a haircut you'll still probably wind up ahead if you choose to take that haircut in a modern currency like bitcoin than a legacy one like USD.

davidjohnstone 13y ago

"it would not surprise me if bitcoin, or some other digital currency" This is what makes me pessimistic about Bitcoin as long term value store. If a new digital currency that was a significant improvement on Bitcoin was developed (a Bitcoin v2, if you like), I'd expect most of the money to shift over to the new currency eventually. The fact that there is a lot of infrastructure for Bitcoin built already would mean Bitcoin would continue to be used for sometime, but its value would drop dramatically if people see the new currency as the future of digital currencies. (Tip: if you want to do this, you need to make big technical improvements, not just tweaking Bitcoin like Litecoin and all the others do, and you need to do a big marketing effort to make people believe in it.)