Bitcoin – How high can it go?
simonwinder.com
simonwinder.com
I wasn't going to waste my time on this, but after skimming for 20 seconds I came to this:
> In many ways, Litecoin is looking like a better investment. For Litecoin it is still early days because the infrastructure is not quite there. However, it looks to be a more promising currency from the technical standpoint, e.g., allowing faster transactions and a longer time until the end of the mining cycle.
Faster confirmations DON'T MEAN SHIT. Just because it takes 2.5 minutes for a Litecoin confirmation doesn't mean it is any better. Yeah, a Litecoin confirmation is 4x faster than a Bitcoin confirmation, but all that means is that a Litecoin confirmation is 1/4 as secure as a Bitcoin confirmation. Which is actually worse, when you think about it because the blockchain is more bloated.
>Its current market capitalization is $215 million, giving a factor of 45 potential growth to simply catch up with Bitcoin.
Are you fucking serious?
Litecoin adds nothing to the table.
Although, I have to chuckle when I hear about people buying fractions of a Bitcoin, expecting to become multi-millionaires in a few years. Bitcoin has had a great run and the exponential growth it has experienced is extremely unlikely to repeat again. It's an issue of scalability and you don't just go from $1K to $1M the way you did from $1 to $1K, simply because the large scale implications are different. The implications of $1 to $1K were pretty insignificant, whereas to get to one million, entire governments would have to abandon their currencies in favor of Bitcoin or something else really drastic would have to happen.
I personally own BTC and hope to see it succeed, but some of these people are delusional, plain and simple.
The other interesting aspect is the existence of other alt currencies. For example, the so called "silver" Litecoin (as compared to the "gold" bitcoin), has increased almost 1000% in the last two weeks. Litecoin itself is up to a $1 billion market cap. Basically, we now have an alt currency at 10% of bitcoin's already impressive market cap.
I do wonder if some of these alt currencies will be where some of the big gains will next be seen. If crypto currencies become widely established, I imagine the environment would support multiple currencies.
As always, though, market cap isn't really the current share price times number number of shares. It is the accumulated sum of all the buy offers over the top N share bids (N = number of shares in existence), not all of which are max price.
http://finance.yahoo.com/news/litecoin-heres-everything-know...
Although, to be fair, Wired noticed it back in June:
http://www.wired.co.uk/news/archive/2013-06/16/litecoin
Litecoin is still minor news, but with more exchanges starting to support it [1], it might actually amount to something.
As for my own bias: I own a very trivial number of litecoins and bitcoins (most from a small amount of mining), so I wouldn't mind these increasing even more. That said, I am still skeptical, but I am enjoying watching this all play out.
[1] https://www.okpay.com/en/company/news/okpay-now-supports-lit...
Edit: And yes, agreed on your mark cap point. Still a useful benchmark, but not without some caveats.
For some reason, with open source projects like this, the real innovations usually continue to flow from the original project, not the clones.
One thing that litecoin definitely solves is the mysterious creator problem, which in a market so heavily driven by psychology is more important than bitcoiner's admit.
If people opt to pay with a digital currency, it will be LTC.
Anyone who understands this new technology knows that Litecoin doesn't have any significant improvements over Bitcoin.
Besides, you wouldn't wait 10 minutes, but you would wait 2.5 in average? I know I wouldn't, nobody would. That's what 0 confirmation trades are for, and you can do that with Bitcoin just fine.
If you want to gamble you should as well put money on Tenebrix, Infinitecoin, and Vaginacoin. I've heard they are great.
A better analogy is me downloading the ark source that runs Hacker News and launching mycombinator.com with "bigger upvote icons."
How high can it go? While your analysis based on market cap is mostly correct, unfortunately it's just a good guess. Bitcoin has the potential to replace currencies, MasterCard, Visa, Paypal, and more! Which of these will it do (if any)? Nobody knows. But if it replaced stuff, it's market cap would be way higher than the conservative 1% of X niche that you've estimated.
Personally, I'm optimistic for $10k. That's 10x now vs the 10,000x gain already seen since '09.
I have no clue whether it will go to 10k, 100k, or 1MM per bit coin. I'm on for the ride though and it's been pretty fun so far. I'm excited to see which problems bitcoin will solve and which industries it will disrupt.
Nobody is going to be surprised, if next day the Bitcoin will evaluate at $100 a unit.
Though I am just as you excited on what is going to happen. Sadly, my ignorance and scepticism were a result of not invseting into Bitcoin in 2010, moreover I feel it is being too late to invest now.
"Real" money is just a piece of paper that represents value supported by the government behind it; so representing it on bytes supported by the open-source cryptography behind it is less dramatic than most people would assume.
i think it really comes down to the crazy hyper-distorted-redistribution-of-wealth-dispersement/adoption scheme (early adopters have wild fortunes for pennies compared to those spending thousands today), liquidity issues, extreme market volatility, not a ton of evidence of use in transactions aside from being siphoned immediately back to traders via 3rd party processors
describing its problems in a way that can be summarized as "its so revolutionary its blowin minds too quickly and needs time to settle in" is really sugarcoating it to an extreme degree
I'm slowly beginning to believe that this is part of a movement where open-source is becoming like.... well like the software equivalent of Videodrome snuff films or something. Closed source & corporate is just too "traditional", even though it's likely a more solid A-to-B solution could be created with expert help. Especially since Bitcoin has tech allure (layman can't use it) without being prohibitively difficult (you don't actually have to know how to code), it's the perfect balance of intrigue versus commitment with a bit of an ego boost on the way.
9. Bitcoin has a mining system that produces a maximum
number of 21 million coins at the end. Its really not
clear what the long term viability of this exponential
drop in mining activity will be and whether it will
cause problems in time.
There won't be an "exponential drop" in mining activity, because mining rewards exponentially decay anyway, so the system involves no sudden changes at all.
It's also pretty much impossible to CPU mine anymore, and with the addition of ASICs to the mining pool, even running a GPU miner is no longer profitable after calculating electricity costs.
I understand that you don't have to be mining to assist in verifying transactions, as simply running the bitcoin-qt client aids processing of transaction, but there no longer is a financial motivation to do so.
With an increase in the rate of transactions as the Bitcoin market continues to grow, it seems that the transaction speed will certainly slow down, and the security of the network will decrease.
If there is anyone here that can explain to me why I shouldn't be worried about this situation, I'd absolutely love to hear it. I'm bullish on Bitcoin, and I think there is still a good future for the currency, but I'm worried...
If there were to be fewer miners to the extent that transaction time becomes a problem, people will attach higher fees to transactions to get them to complete quicker, which increases the profit from mining, which makes more people want to mine, etc. etc.
Indeed, what will happen if most of the people end up firing up their bitcoin-qt client only to do a transaction, and shut it down immediately after?
It does seem to be a near perfect vehicle for pure speculation right now, and I see no reason an alternate like Litecoin couldn't join the party. It obviously already has!