Winklevoss twin says Bitcoin valuation will top $40k
thenextweb.com
thenextweb.com
Since the twins are so heavily invested, there is no way they would ever support any evidence contrary to the title of this post...
So in an optimistic scenario, the bulk of any appreciation is behind us, and the fortunes made to-date won't be made by the current batch of speculators.
(I think appreciation to $40k is delusional, but that's what they're claiming.)
http://en.wikipedia.org/wiki/History_of_Bitcoin#Prices_and_v...
the average today is $827, 827 / 13 = 63.6153846154
EDIT: I know, it was just a funny event.
Yes they will. Under what you're saying, if earlier speculators made 40x then those who get in now also make 40x.
The only way something like bitcoin can flourish is if the majority of users are spending them (trading them)... if 90% of people buy bitcoin in the hope they will go to $40K then they are supporting all the things that the naysayers are claiming (ponzi scheme and what not).
The problem with Bitcoin isn't so much the price volatility. It's that spending them is difficult. That is changing rapidly. If a merchant offers a bitcoin discount that reflects the lower costs of doing business with Bitcoin, why wouldn't consumers spend them?
as long as i have $$$ and can spend them, why would I used BTC if the value of BTC is going up X% each month... I am better off using fiat. at a purely commercial level, it makes sense to buy bitcoins for capital gains, and use $$$ for life.
Of course, I'm simplifying stuff on purpose here, but more people talking about Bitcoin in a positive light is good for Bitcoin. Apart from the valuation they throw in here, them investing in Bitcoin will breed further options on the market.
I have seen countless threads on forums where people are saying they accept bitcoin and are surprised that no one has used BTC yet. I'm confident at using bitcoins, but it makes more sense to just pay for something with cash if I have it... obviously if there were some incentive to use BTC (discount or whatnot) I might reconsider.
You are already getting a discount if you use BTC to buy stuff online, since you don't need to use a credit card for such services. Credit cards are not free, you need to purchase them from your bank on a yearly basis.
There is a very valid use of Bitcoin already: transferring money from one point in the world to another, without commission and fees. And this is also one of the key uses of Bitcoin, currently.
> however it is getting attention for the wrong reasons
There's not wrong reason. Whatever make people come to own Bitcoin does not mean they will stay for the same reason. As the utility curve ramps up, hoarders will progressively use it to buy goods and services. And even if it's a tiny portion of users, it will still push for additional Bitcoin growth.
Therefore it's almost always cheaper for me to pay by credit than any other form of payment.
By the way, there's nothing free even if it's free for you. Merchants have to pay the cost of providing Mastercard / visa payments and that cost makes it to the price of goods they sell. So you are paying the cost no matter what.
That said, the alternative of using cash has its own costs in the form of more robberies and accounting and transportation and security. Those costs are also passed onto the consumer eventually.
You are right that the international transfer of bitcoin is very useful - but to say there are no commission or fees is not true.
If you start with Australian dollars and you want BTC, you pay fees and commission when you buy/sell BTC. Then you pay mining fees (if you want to support the ideals of BTC), and then to transfer back into Euros you would pay fees/commission with whatever exchange you're using.
Granted, it is going to equate to less than the % you would pay if you did it with your bank. However I still feel having a fixed exchange rate is worth something.
(I am not affiliated with gyft.com, I just love bitcoin)
And in any case, this claim won't really do much to increase bitcoin valuations. Perhaps rather the opposite, given the source.
So you are presenting a false dichotomy.
I can spend bitcoins by buying them and spending them, without decreasing my actual long-term bitcoin investment.
http://cryptome.org/2013/12/boa-bitcoin.pdf
They look at comparables such as gold, silver, PayPal market cap, etc and then deduced where BTC would fit in.
They dismissed any use for illicit transactions out of hand because they "don't have any informed view on this subject".
They ignore B2B transactions after saying "we cannot rule out that Bitcoin can become a dominant medium of exchange for B2B transactions". Their total upside is calculated without even trying to make any assumptions about B2B usage.
They've just hand-waved the storage of value bit with a comparison to silver eagles and the relative value of gold vs silver on the basis of long term reputation and volatility, making up a "roof" of 300bn, and then scaling that down to 1/60th based on the difference between gold and silver. Part of this they justify with the volatility, without considering whether or not volatility will flatten out if Bitcoin starts hitting a valuation roof. Partly they ignore the other possible upsides for storage, such as ability to more easily hide funds (e.g. they themselves pointed out a large swing up in Bitcoin value after the threat of the Cypriot "haircut"; they've also not considered the extensive use of e.g. strips of plated gold as a medium of short to medium term storage in high risk areas).
I don't have any better assessment, but this one reads like an attempt to justify pre-existing opinion rather than an attempt to be thorough.
No, wait, I think I get it:
1. Lots of demand. Price spikes.
2. Supply increases,
3. Mining difficulty ratchets up.
Because mining difficulty is a function of mined bitcoins (and not a function of time) this price estimate isn't a refutation of Moore's law. It basically means that the demand for bitcoin, quantified I-don't-know-how, is going to double quite a bit faster than dollar-normalised processing power.
(Can anyone tell me whether increases in mining difficulty happen smoothly or sharply? I wonder whether the current market is smart enough to price a cliff in the rate.)
Also, since we're in the age where only asics can effectively mine, and they are output by small shops that have limited capacity, the hardware supply is more of a limiter to mining than demand. Generally, more interest in mining simply drives up the price of mining equipment, rather than immediately driving up mining rates.
Of course, over time, more demand leads to more companies wanting to build asics, so more of them do. However, that's a very slow response, since making mining equipment that works well is non-trivial.
It's interesting, for sure, but I think it probably affects ebay a lot more directly than difficulty ;)
Also, the price will feed into mining activity, but mining activity won't especially feed into the price. It will some, but the giant size of the network means that mining power won't increase so much that it will substantially impact the ongoing supply (so the new coins should mostly be factored into the current market).
Mining difficulty is a function of both mined coins and time, the adjustment tries to make the time between new blocks 10 minutes.
Could someone possibly clue me in. I'm at a total loss.
FTFY