How can you tell this isn't a speculative bubble? It has all the hallmarks of one - exuberance without strong fundamentals is a classic sign.
I've used Bitcoin to buy medication from India. When ppl say shit like this, I get confused. Literally sit there & use it whilst ppl say it can't work. Really odd.
It works. I've used it. It works. I'm not sure exactly what it takes to get through. A functioning system doesn't seem to suffice.
A global payment system which is faster than a wire transfer. An uncorrelated hedge for assets. P2P payment. Things like that?
For comparison, the "fundamental" value of USD is a trust in the US Government to maintain its value. Comparing that to the fundamental value of Bitcoin would be a fun discussion to have, but the fact remains that the US has done it for 225 years and Bitcoin has done it for less than 9 years.
Actually, by that reasoning, I guess the fundamental value of Bitcoin is the distributed self-interest and capability of Bitcoin holders to maintain Bitcoin's value, which is obviously a powerful force.
Can you make money speculating in Bitcoin? Obviously. But it is not fundamentally backed by something that people have long-term trust in -- it is only worth what you can trade it for at that moment.
People always underestimate the power of network effects. People have been predicting the demise of facebook for the last decade. Surely something better will come along at eat its lunch, right? Wrong. Network effects are and always will be king.
The USD was backed by gold until Nixon, you can only count the last 40 something years against Bitcoin's 9.
Mind blown, right? :)
The value of a Bitcoin itself is only indirectly linked to this -- it is very possible that another cryptocurrency will prove more useful (cf. ETH), and people will switch to using that other currency for their cryptocurrency needs.
Yes, Bitcoin is great and enables new things. Bitcoin "investment" / speculation is another thing entirely.
I've been asking for positive examples for years, and I still see no signs that Bitcoin is poised for more than niche adoption. Sure, if you want to do something modestly illegal, like buying gray market prescription drugs, Bitcoin may fill a niche. But it hasn't caught on for legal transactions, and its traceability makes it bad for seriously illegal activities. And even if you're only doing something modestly illegal, you have to be pretty technical and pretty dedicated to make it work. For most people it's way easier to give cash to their friendly local drug dealer.
So yes, it doesn't have strong fundamentals. The underlying commodity, long integers, is freely available. Despite years of "Bitcoin will be widespread soon" puffery, the use value is very weak compared with alternatives. At least you could plant tulip bulbs.
P2P payment is a big one. I think kids may use it, since they can't get PayPal et al(?). Thought of that yesterday. That's a generation growing up with crypto.
Investing in startups around the world is new (via token sales).
Investing in uncorrelated assets is valuable. Eat gold.
Browser micropayments could get big (Brave browser). Ppl may even get paid for attention in the future.
Iota for the internet of thing (haven't looked into that much).
Hedge against fiat inflation.
Internet ported to decentralised infra if Trump etc start pulling 1984 bs.
Self-driving cars paying toll road via crypto (just made that up).
Solar panels off-setting their cost via crypto-mining. Then ppl have crypto to spend.
Decentralised file systems.
Decentralised storage.
That's a few whilst I whale on my legs.
& A few other anti-inflammatory medications. & Other bits & bobs.
I've given a list of other use cases.
I've bought modafinil before. That's legal, also. I try & be open about things. Helps against cunts who try & attack me.
Edit: bought the Moda with a CC, I think. Not from a pharmacy.
And that's my big problem with Bitcoin advocates. I ask, "How is Bitcoin creating value today?" And 98% of the answers I get are, "Tomorrow will be amazing!!1!" I have received that consistently for eight years.
Strong fundamentals don't include "might be amazing one day". I too enjoy science fiction, but...
Edit: you seem to not know they are real, because you haven't looked into it. Because you don't think it's real. Maybe someone else told you when you asked, but you didn't listen?
Edit2: Howard Marks -- the investor -- recently said bitcoin wasn't real. So you're not alone in thinking x-real-thing isn't real!
I'm probably going to be holding some of the assets for a decade. Something like that. Unless the whole thing tanks.
Good investment opportunities don't come around vary often. By the next one I should have made the money back (& more).
The entire crypto-economy is worth something like 70B. Way smaller than Facebook/Goog/aapl. If you want a sure thing, crypto ain't it! I do think it's a good bet, though (asymmetric).
I've used Bitcoin again instead of a wire. Wires don't go on the weekend.
To review, gray-area suggested Bitcoin could be a speculative bubble because there's strong exuberance and weak fundamentals. You objected to that phrase, claiming that "it works". I said that "works" is too low a standard for strong fundamentals; for that you need significant use driven by a user value proposition stronger than the alternatives.
You claimed, as best I can tell, that significant use is occurring. I am asking you for data demonstrating that. I have been asking Bitcoin advocates for that for years and never received any. You haven't given me any either. Do you have it?
1 is yes. 2, I believe it will be. We haven't seen 2 much yet b/c time hasn't occured.
A) wires are better, as far as I can tell. For speed.
B) traditional VCs are investing in token sales, today.
C) crypto hedge funds are open today.
I never claimed there was significant use. I would argue it's a functioning system & there are strong value props (better than alts).
You know there isn't significant use. You want to wait? Wait. I'm fast follower. I like to benefit from new technology. Startups/hackers. That sort of thing. I think other ppl can benefit if they have a look. 99/100 hype is bs. Sometimes though.
It's good to be sceptical. I was.