The actual value of bitcoin and digital tulips
So i recently started investing in cryptocurrency :)
Just a very small amount, it's more because i find the currencies to be really interesting and ground breaking. I'll be buying up a little bit each month in order to add to my portfolio, and hold it for a long time. I am sure that day trading is not for me, as the stress would more likely than not give me either A) Chronic diarrhea B) Sleepless nights C) Both. So i am really not interested in that.
But i want to ask a question that must have been asked a thousand times before. What do you believe the actual value of bitcoin is? I must say, the explosive rise in value is pretty scary to me. I would prefer if it took a beating now, and fell by a lot, in order to see stable growth over the future.
If the value by bitcoin is determined by the fact that it is a currency, and not just a digital tulip bulb, it is right now a really shitty currency.
Who wants to use a currency to buy stuff, if the currency is worth double the price tomorrow? And who wants to accept it if the value is halved in an hour?
So what do you believe that the bitcoin should actually be worth right now? Considered how many people use it, how many shops accepts it etc.
Please note that i am not against crypto currency, i want it to succeed. But the meteoric rise in BTC value do have to worry about a speculative bubble, which i would like not to happen. The idea of decentralization, and freeing ourselves from banks is great. But would bitcoin benefit from a beatdown, and followed by a slow, steady rise, or what is your belief?
I also have become entranced by the world of cryptocurrency and have been devouring any information I find while spending way too much brain power thinking about when I should be doing other things.
I think Bitcoin is incredibly undervalued right now.
I personally think if you are expecting Bitcoin to stabilize anytime soon you are in for some disappointment. It may drop slightly and hold for short stretches but unlike tulips, Bitcoin's network effect makes it more valuable for each and every new person who joins the network and with less than 1% of the world owning any currently the real meteoric rise has only just begun. I too wish it would take a beating and drop, but just so I could buy some more! ;)
The issues with it being a shitty currency are very evident to people who have access to full banking, credit cards, apple pay and other such marvels.
To the majority of the world who does not have access to bank accounts at all or have very little banking access and people in places like Argentina or Zimbabwe being able to safely store their wealth in something that is actually going to go UP in value is a godsend. Not to mention being able to transact without needing a wheel-barrow full of cash and out of the sight of oppressive regimes.
I think a large misconception with Bitcoin is that its for us, the privileged world with full banking access and credit cards. When in fact its value even in its current state is so much higher for the unbanked and underbanked of the world.
As it becomes easier and easier for these people to access it then the value is going to really skyrocket with exponential adoption and only then will the current super rich banker kings of the world finally admit its NOT A BUBBLE but they will be paying an incredible premium to join in with the rest of the world which will result in a huge redistribution of wealth down to those who truly need it. A guy can dream right?
Its going to be a little while longer until you can buy a coffee with a wave of your phone and have a tiny transaction fee and be on your way. The work and progress is being made every day but just like the internet, Bitcoin is going to scale in jumps.
Or maybe it wont! Who the heck knows? but its certainly fun to think about and discuss!
That is actually a really good pointl Didn't even consider third world application, i guess you're right about privilege blindness. But doesn't bitcoin live quite highly on being the first? I mean, the cost of transactions can be quite high, and quite slow at the same time. At least compared to other, newer crypto's.
You don't think that it is possible to dethrone Bitcoin?
I think perhaps it's being the first and best known will help it weather new coins with better qualities, and those better qualities can be adopted by Bitcoin itself assuming there is consensus within the coding community.
There are a lot of advances just around the corner for Bitcoin in regards to inflated transaction cost(this is mostly caused by bad wallet software overpaying), there is also segwit adoption increasing everyday as well as lightning network which will make everything faster, cheaper and more anonymous. Just gonna take some time.
I think it's still too early to call it completely safe though.
In the end something will dominate and be the backbone currency of the crypto economy.
The main coin everyone trades through and uses to understand the value of everything else like USD now.
There will still be thousands of other coins though just like STEEM. They will be a part of self expression. I earn STEEM because I believe in community and rewarding creative people. I earn Gridcoin because I want to help and support scientific endeavours and so on.
True, i didn't think about the fact that bitcoin could advance themselves. There are still a lot of quirks to work out. It will be interesting to see who wins in the end, if any :)
Nice post! I upvoted and followed you. Can you check my last blog post about crypto: https://steemit.com/cryptocurrency/@cryptoizotx/crypto-market-sentiment-update-december-3-2017 ?
It's definitely not a tulip bulb. The problems with tulips, and gold for that matter, is that they're finite natural resources with unpredictable growth in supply. The uncontrollable growth recently is pretty crazy however. My guess is that there was either someone buying in at a massive scale, or someone's pumping the price up by buying in at a massive scale. If they hold it, the price will stabilize. What it will stabilize at though, I'm not sure. If they dump it though, bitcoin will crash, and possibly to a point lower than it's been in quite a while. Pump and dump as they say.
John McAfee, who founded the anti-virus company, is so confident of it's growth, that he's said he's going to cut off his own dick and eat it if it doesn't reach $1 million by 2020 though. So...gross, but he seems pretty confident.
Damn, such a promise makes it even more interesting! Do you think that there is any cryptocurrency that will survive a bitcoin crash? It'd be interesting to have a crypto to throw your money into, if the bitcoin ever crashes
All of them should I think. It's easier to get out into another crypto than back to USD. I would think, should it happen, the other cryptos would rise at least a bit. Probably ETH, and LTC.
Good point. Guess it is just about having a solid portfolio, and not putting all of your eggs into one basket :)