> And yet Bitcoin value continue to raise. If history repeats itself, we should see 1 Bitcoin levels at around $2,000.
It's 2007 I have a house I bought for $300,000 which is now worth $600,000, would you like to buy my house and in two years you will make another $600,000? If there's one thing about real estate in the last 10 years it's that it's proven all those naysayers like Shiller wrong.
Isn't money a valuable good? Buying goods and providing liquidity to them helps everyone. If you dig well it's the same thing as every other (things you would call) investment.
It's not surprising that it's rising in value. People are holding on to ~12M coins (worth approx. $2.4B) and are hyping it up so that more people buy them.
The more people that buy them, the more the price will go up, the more that they'll be worth, the more that people will buy them....
2 million coins have changed hands in the last 30 days: http://bitcoinity.org/markets/list?currency=ALL&span=30d And that is just on these exchanges, not even counting other places of exchanges (coinbase which is probably the 2nd largest coins seller in the US), or purchases (Bitpay signed up 10 thousand vendors!), etc.
If this rate is kept, the entire existent volume of bitcoins, a bit less than 12 million, would change hands in the next 6 months.
It doesn't matter if it is 1 coin changing hands 12 million times, or 12 million coins changing hands one time each. Volume is volume. And it proves that not that many coins are being hoarded.
What you haven't shown is that the market is liquid when it comes to cashing out. Not too long ago someone dumped a bunch of coins at once and the market cratered in a matter of hours.
That's the only statistic that matters: how much USD-equivalent is being injected into/out of system. That tells you whether they're being hoarded.
"What you haven't shown is that the market is liquid when it comes to cashing out".
I showed it. When 2 million coins are changing hands per month, it means 2 millions coins are sold/"cashed out" (and 2 millions bought).
"That's the only statistic that matters: how much USD-equivalent is being injected into/out of system. That tells you whether they're being hoarded."
No. If the rate of transactions per user remains constant, and if the user base grows, you would see exactly that: more USD being injected in the system, than being taken out of it. This would not mean there is hoarding, but simply that the economy is growing (which is exactly what is happening). Again when you see a single Bitcoin payment processor like Bitpay reaching the "10 thousand vendors signed up" milestone, it is hard to reject the claim that the Bitcoin economy is growing...
This isn't quite right. The rate of production has increased, because the computing power is increasing at a very high rate between difficulty adjustments. Blocks are being solved faster than they are "supposed" to be, statistically.
It won't last, eventually the increase in computing power will taper off, but that's the state of things at the moment.
>the rate of production is fixed, so no one would have predicted that.
IIRC, the arguments actually went that GPU miners had their equipment already paid for, and so could afford to hoard their mined coins, but that ASIC miners, who were paying thousands of dollars for their equipment, would be forced to sell their coins immediately to pay for their equipment & electricity.
I'd dare say the majority of GPU miners did invest in new equipment. I'd venture that there were plenty of nerds who were interested in mining that didn't already have rigs with decent GPUs already.
* SilkRoad shutting down? Bitcoin is doomed.
* Mt.gox is not paying in time or at all? Bitcoin doesn't work.
* Asics? There will be a flood of new coins.
And yet Bitcoin value continue to raise. If history repeats itself, we should see 1 Bitcoin levels at around $2,000.
I think Bitcoin is an interesting phenomena to watch. Being too solid for the quakes that it got, means it's going to stay for a longer period.
I'll be just watching, meanwhile.