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Comment by xoail | Hacker News Reader

Bitcoin definitely has potential. I doubt if it's in a bubble. Its a right mix of need and want for the global economy. It is also getting a lot of traction. As more enterprises adopt, the more its potential for disruption. [Disclaimer: I have bitcoins in my wallet]

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The thing that makes me apprehensive about Bitcoin is that the majority of people that are buying in are buying in as speculators (edit: the people I've seen discuss Bitcoin), they're buying in because they think in a year or so the coins will be worth $1,000 each and they'll get to cash out, reddit is full of people labelling themselves Bitcoin millionaires. There's a disincentive to spend Bitcoins at the moment while the price is rising so much, if I spent 1 Bitcoin today buying something that costs $90 and in a week Bitcoins are worth $150 each, haven't I just wasted earning potential?

I haven't seen a single discussion of Bitcoin as a currency, it's always an investment. I asked someone a few days ago about how much is actually being spent and they linked me to a list of transactions but they all seemed to be either SatoshiDice or really low amounts, are there any statistics on who is actually spending Bitcoins on products and/or services unrelated to Bitcoins? I saw reddit mentioned that the volume of Bitcoin transactions they have (on reddit gold) is so low they're losing money and that's a site that has a big community of Bitcoin users / supporters.

That is indeed an interesting look. Although I think as more merchants start accepting bitcoins (especially on international websites), a whole new wave of opportunity will open up.

A lot of merchants are giving 25% or more discounts when paying with bitcoin. That's a way to factor the appreciation of the currency into the price and encourage spending.

But that itself is only there because the bubble is expanding right now.

What happens when a government decides enough is enough and buys then dumps BTC? It wouldn't take much capital to cause a bank run type of inflation attack.

The exchange rate in USD has quintupled since mid January. I can't see how this is not a bubble.

Bitcoin is not some promise of a future product. It is already here, it works, it survived hackers, viruses, bugs in core software, it is not attacked by anyone (FinCEN guidelines suggest you can do whatever you want with BTC unless you exchange for cash), number of services and merchants accepting BTC grows. Why shouldn't it grow exponentially after the fact it is proven to work?

Why should it grow exponentially after the fact it is proven to work?

Fixed that for you. Those reasons are all much older than this sudden jump in value. Even if they weren't old, there's no way they're pumping the value of Bitcoin by 500%. If something's too good to be true, it probably is.

Bubbles will pop and tend to revert to mean. The question for Bitcoin is, what's the mean? $1B is small potatoes in today's global economy. If the total market value for BTC is closer to $100B or more, then this is only the beginning of the upslope.

At the same time I am seeing a lot of adoption. Especially in international markets.

Oh for sure. That doesn't speak to its huge rice in price, though. People aren't going to switch to Bitcoins simply to buy things they would've just bought outright with real world currency, anyway. That's a hassle.

For what it's worth, I think bitcoin has potential and I also own a couple, but I think it's bubbly as hell right now.

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