image

April 3, 2013

BitCoin – is it a bubble?

Filed under: Uncategorized — admin @ 12:21 pm

There were three times in my life when I felt sure enough of my financial reasoning to recommend a certain investment to all my friends. The first was when Google went IPO. The second was some obscure moment in Microsoft’s history, and the third is very recent.

About a month ago I started recommending to all my friends to get bitcoins – fast. My reasoning went as follows:

  • BitCoin is a currency
  • Other things being equal, the value of a currency is tied to to how many people and organizations will accept it for things others value
  • We are only at the start, and more merchants are going to be accepting BitCoin every day, especially as it gets easier to do so
  • Other people will realize this soon, which will drive up the price of the currency.
  • I am typically among the middle-early-adopter when it comes to techy stuff, so if there’s a bubble, it still has a long way to go as BitCoin articles go mainstream

That was a month ago. And if you got BitCoins in the last month, you saw them gain a lot of value on the exchanges. But the question now comes up: with charts like this, is it a bubble?

In my opinion: Yes, but more importantly No! The meteoric rise of BitCoin is related to network effects because it is a medium of exchange. It is not unlike the meteoric rise of facebook or of pinterest. While Metcalfe’s Law has historically been too optimistic in predicting the value of a network based on its size, something like n log n is not at all unreasonable.

The fundamentals of BitCoin suggest that it is poised to grow far beyond where it is today, since more merchants means more users, and more users means more merchants. However, the hype surrounding BitCoin may push the markets far ahead of its current growth. So that’s where the danger of the bubble comes in. This is like investing in facebook in its early days and asking if it’s a bubble. At the end of the day, I think BitCoin has all the fundamentals to legitimately go to $10,000 or even $100,000 a coin. Whatever price you’re probably paying for BitCoin today will seem a bargain a few years from now.

All this leads many people to want to take a long term long position in it, which will drive its prices even higher in the next few months. In monetary terms, BitCoin is going to be hoarded for quite a while and experience massive deflation, which will have an interesting effect on its adoption by merchants. It’s very attractive for a merchant to accept a currency for their products that will be worth more tomorrow, so in short, both sides are incentivized to try to get BitCoin as its prices rise and rise.

We’re just at the beginning of the BitCoin craze. Now you may even be able to cash them out using ATMs in Cyprus. There’s a lot of opportunity around BitCoin and making it easier to trade them for actual things, but also a lot of regulatory risk up ahead.

On the other hand, if you care about BitCoin as a currency, you should probably be careful of Gresham’s law.

40,312 Comments »

  1. [url=https://hydroxychloroquinecv.com/]quineprox 500 mg[/url] [url=https://finasteridealop.com/]finasteride tablet online[/url] [url=https://prednisonesr.com/]buy 40 mg prednisone[/url] [url=https://clonidinenorx.com/]clonidine tablet 0.2mg[/url] [url=https://lexaporo.com/]lexapro brand[/url] [url=https://baclofenp.com/]baclofen price[/url] [url=https://hydrochlorothiazide2.com/]hydrochlorothiazide 25 mg discount[/url] [url=https://ivaltrex.com/]valtrex cream coupon[/url] [url=https://ciproflxn.com/]cipro 500 tablets[/url] [url=https://erythromycinlab.com/]erythromycin cream price in india[/url] [url=https://propranolol100.com/]propranolol cost canada[/url] [url=https://amoxiltab.com/]amoxil drug[/url] [url=https://silagratab.com/]silagra 50 mg india[/url] [url=https://seroquel50.com/]where can you buy seroquel[/url] [url=https://triamterenebenzathiazide.com/]triamterene generic[/url] [url=https://lipitor2020.com/]average cost of generic lipitor[/url] [url=https://priligydapoxetin.com/]cost of dapoxetine[/url] [url=https://inderal.us.com/]inderal 40 mg price[/url] [url=https://albendazoleotc.com/]purchase albendazole online[/url] [url=https://vardenafilxr.com/]vardenafil 20[/url]

    Comment by IvyDah — July 27, 2020 @ 3:56 am

  2. Kudos, Ample advice.
    generic viagra india 100mg
    [url=https://peshkovstudio.ru/2016/12/19/bleak-house/#comment-20482]l615fnr r28fvl[/url] 680b34a

    Comment by Michaelchada — July 27, 2020 @ 4:26 am

  3. I blog frequently and I truly thank you for your information. This article has truly
    peaked my interest. I will take a note of your website and keep checking for new information about once per week.
    I opted in for your Feed as well.

    Comment by free lesbian teen hd — July 27, 2020 @ 4:27 am

  4. Way cool! Some extremely valid points! I appreciate you writing this
    post and also the rest of the website is really good.

    Comment by อะไหล่เครื่องซักผ้า — July 27, 2020 @ 4:51 am

  5. [url=https://viagra2019.com/]viagra over the counter us[/url] [url=https://seroquel50.com/]seroquel 50 mg price[/url] [url=https://baclofenp.com/]baclofen pills 025mg[/url] [url=https://clonidinenorx.com/]clonidine hcl 0.3 mg tablets[/url] [url=https://robaxin24.com/]robaxin uk[/url] [url=https://acyclovirzov.com/]can i buy acyclovir cream over the counter uk[/url] [url=https://inderal.us.com/]inderal 40mg 80mg[/url]

    Comment by JimDah — July 27, 2020 @ 4:54 am

  6. Awesome posts, Cheers. https://msncialis.com/
    [url=https://assoprevenzione.it/events/verso-la-iso-450012018-aggiornamento-lead-auditor-18001/#comment-58241]e11woe0 a55wxc[/url] 680b34a

    Comment by Michaelchada — July 27, 2020 @ 5:07 am

  7. There’s absolutely no way to check typical sports betting
    which has a bookie and internet based sports betting, since they’re two different animals.
    Also, being that they are online, they’re able to offer other related goods like
    bingo, casino games and poker with their current clients.
    Survival after a while can be a proof of an online sportsbook’s trustworthiness.

    Also visit my web-site bandar judi bola

    Comment by bandar judi bola — July 27, 2020 @ 5:22 am

  8. [url=https://zofranondansetron.com/]zofran medication cost[/url] [url=https://toradoliv.com/]20 mg toradol[/url] [url=https://lisinopril125.com/]lisinopril pills[/url] [url=https://furosemide1.com/]furosemide 40 mg[/url]

    Comment by JackDah — July 27, 2020 @ 5:27 am

  9. I’m not sure where you’re getting your information, but gpod topic.
    I needs to spend some time learning much more or understanding more.
    Thanks for excellent info I was looking for this information for my mission.
    homepage

    Comment by homepage — July 27, 2020 @ 5:39 am

  10. Very interesting subject , appreciate it for posting . “The reason people sweat is so they won’t catch fire when making love.” by Don Rose.

    Comment by Vanessa Tino — July 27, 2020 @ 5:40 am

  11. It’s not my first time to pay a quick visit this website, i am
    browsing this web site dailly and take pleasant facts
    from here everyday.

    Comment by Hurtigt lån — July 27, 2020 @ 5:44 am

  12. Thanks for sharing your thoughts about non ear headphones.
    Regards

    Comment by sms by 50 headphones — July 27, 2020 @ 5:47 am

  13. Wow a lot of fantastic info! viagra without a doctor prescription usa
    [url=https://chakagen.blog.ss-blog.jp/2017-07-31?comment_fail=1#commentblock&time=1595834230]g81ohsh v24fhp[/url] f7afac4

    Comment by Michaelchada — July 27, 2020 @ 5:47 am

  14. Your means of describing the whole thing in this post is
    genuinely fastidious, every one be capable of without difficulty be aware of
    it, Thanks a lot.

    Comment by خرید مانتو — July 27, 2020 @ 6:09 am

  15. Ηelⅼⲟ, this weekend iis plleasant for mе, for tthe reason tat tһіs
    mokment і am rearing tһіs enormous educatiolnal article herre att myy
    residence.

    Allso visit mmy web ρage: buy dropshipping store

    Comment by buy dropshipping store — July 27, 2020 @ 6:17 am

  16. Nicely put. Thanks a lot! https://msnviagrarx.com/
    [url=https://www.anarchyplayground.com/?id=28]c32cvaw g87dgx[/url] 0b34adf

    Comment by Michaelchada — July 27, 2020 @ 6:27 am

  17. One from the questions that hovers around every new player’s psychosis is which one is the foremost agen svenus casino both offline and internet based to gamble at.
    There are some websites where we are able to play various types of online casino games.

    An online casino over a land based casino has several positive aspects, which make it a profitable venture.

    Comment by agen svenus casino — July 27, 2020 @ 6:30 am

  18. Awesome things here. I am very happy to peer your article.

    Thanks so much and I’m taking a look ahead to touch you. Will
    you kindly drop me a e-mail?

    Comment by software engineer — July 27, 2020 @ 6:36 am

  19. May I simply just say what a relief to discover somebody that truly
    knows what thery are talking about on the web.
    You actually realize how to brring a problem too light and make it important.
    More and more people ought to look at this and understand this
    side of your story. I was surprised you aren’t more popular given that you most certainly have the gift.

    website

    Comment by website — July 27, 2020 @ 6:36 am

  20. I loved as much as you’ll receive carried out right here.
    The sketch is tasteful, your authored material
    stylish. nonetheless, you command get got an nervousness over that
    you wish be delivering the following. unwell unquestionably come further
    formerly again since exactly the same nearly a lot often inside case you shield this hike.

    Comment by best news portal 2020 — July 27, 2020 @ 6:42 am

  21. Hey, you used to write magnificent, but the last several posts have been kinda boring… I miss your great writings. Past several posts are just a little bit out of track! come on!

    Comment by Karrie Prive — July 27, 2020 @ 6:43 am

  22. You actually suggested it perfectly! https://csvcialis.com/
    [url=http://intersavegame.co.uk/phpBB/viewtopic.php?f=3&t=662490]v144ame u395bg[/url] fac40f2

    Comment by Michaelchada — July 27, 2020 @ 7:07 am

  23. great post, very informative. I ponder why the other specialists of this sector do not realize this.
    You must proceed your writing. I am sure, you’ve
    a great readers’ base already!

    Comment by Fake Test Portal — July 27, 2020 @ 7:18 am

  24. [url=https://amoxicillinab.com/]amoxicillin tablets for sale uk[/url]

    Comment by KimDah — July 27, 2020 @ 7:24 am

  25. I’m extremely impressed along with your writing abilities as smartly as with the structure for your weblog.
    Is this a paid subject matter or did you customize it yourself?

    Anyway stay up the excellent high quality writing, it is rare to
    peer a great weblog like this one nowadays..

    Comment by Tandy — July 27, 2020 @ 7:26 am

  26. It’s enormous that you are getting ideas from this piece of writing as well as from our argument made at this place.

    Comment by 어린이 보험 다이렉트 — July 27, 2020 @ 7:29 am

  27. [url=https://chloroquineav.com/]chloroquine cost canada[/url]

    Comment by JaneDah — July 27, 2020 @ 7:32 am

  28. Incredible tons of valuable advice! https://msnviagrarx.com/
    [url=http://www.vertaalbureaus.biz/kennisbank_termen/politiek-maatschappij/afbeelding-118-2/comment-page-236/#comment-2736853]f76ghxw l16ygc[/url] 40f275b

    Comment by Michaelchada — July 27, 2020 @ 7:47 am

  29. Buy instagram likes and followers hacklink.

    Comment by buy Instagram likes — July 27, 2020 @ 7:54 am

  30. Saved as a favorite, I really like your blog!

    Comment by Joker123 — July 27, 2020 @ 8:06 am

  31. Nice post! Also visit my site about Clomiphene Citrate and alcohol

    Comment by Black Lives Matter — July 27, 2020 @ 8:14 am

  32. [url=https://amoxiltab.com/]amoxil 875 mg[/url] [url=https://gabapentin.us.com/]gabapentin 3000 mg[/url] [url=https://indocinrx.com/]indocin 50 mg cap[/url] [url=https://chydroxychloroquine.com/]buy plaquenil from canada[/url] [url=https://viagra2019.com/]viagra cream price in india[/url] [url=https://disulfiram.us.com/]disulfiram generic[/url] [url=https://zithromax360.com/]zithromax canadian pharmacy[/url] [url=https://xenicaltabs.com/]cheap xenical[/url] [url=https://cialis5.com/]lowest cost of cialis[/url] [url=https://arimidex365.com/]arimidex for sale australia[/url] [url=https://clomid150.com/]buy clomid from canada[/url] [url=https://lopressormetoprolol.com/]lopressor for sale[/url] [url=https://cytotec100.com/]where can you buy cytotec in south africa[/url] [url=https://augmentin875.com/]augmentin uk[/url] [url=https://trazodone911.com/]coupon trazodone 150 mg[/url] [url=https://buspar24.com/]buspar 10mg price[/url] [url=https://propecia8.com/]how to get a propecia prescription[/url] [url=https://ivermectin3.com/]ivermectin 0.5 lotion[/url] [url=https://tadalafillil.com/]tadalafil 2.5 mg online india[/url] [url=https://avodart24.com/]buy avodart online[/url]

    Comment by IvyDah — July 27, 2020 @ 8:22 am

  33. Kudos, I like it. https://msnviagrarx.com/
    [url=https://italian-moto.blog.ss-blog.jp/2012-05-24?comment_fail=1#commentblock&time=1595794251]e65mron a69xbg[/url] 2680b34

    Comment by Michaelchada — July 27, 2020 @ 8:28 am

  34. Usually I do not read article on blogs, but I wish to say that this write-up very forced me to try and do so! Your writing taste has been surprised me. Thanks, very nice article.

    Comment by Harlan Herbein — July 27, 2020 @ 8:58 am

  35. Kudos, An abundance of tips!
    viagra without prescription
    [url=https://fablab.businesscampus.kz/blog-15-copyright/#comment-294598]n464aa8 z76izl[/url] 168_ee0

    Comment by Michaelchada — July 27, 2020 @ 9:08 am

  36. Its like you read my mind! You appear to know so much about
    this, like you wrote the book in it or something. I think
    that you could do with a few pics to drive the message home
    a bit, but other than that, this is great blog. An excellent read.

    I will certainly be back.

    Comment by judi togel — July 27, 2020 @ 9:10 am

  37. Ηaving read thiis I bellieved іt ԝaѕ ѵery informative.
    I appreciatе yoou taкing tthe time and effort to puut
    thnis innformation tօgether. І one aցaіn find
    myself spending ɑ lоt off tie both reaing аnd commenting.

    Butt ѕo what, iit waas stijll worthwhile!

    Heree is my webpage … profitable e-commerce business

    Comment by profitable e-commerce business — July 27, 2020 @ 9:13 am

  38. I’ve been surfing online more than three hours today, yet I never found any interesting article
    like yours. It is pretty worth enough for me. In my view,
    if all webmasters and bloggers made good content as you did,
    the internet will be a lot more useful than ever before.

    Comment by Web design service — July 27, 2020 @ 9:36 am

  39. Hi there! I’m at work browsing your blog from my new iphone 3gs!
    Just wanted to say I love reading your blog and look
    forward to all your posts! Carry on the great work!

    Comment by agen poker — July 27, 2020 @ 9:39 am

  40. I’m curious to find out what blog system you are utilizing?
    I’m having some minor security issues with my latest website and I’d like to
    find something more risk-free. Do you have any solutions?

    Comment by 영화 토렌 — July 27, 2020 @ 9:48 am

  41. Nicely put, Regards! Ou Trouver Du Cialis 20mg
    [url=https://www.changjianghao.cn/1814.html#comment-363074]g723qut e89apz[/url] 2a58ea5

    Comment by Michaelchada — July 27, 2020 @ 9:48 am

  42. [url=https://stromectol1.com/]ivermectin 6 tablet[/url] [url=https://chydroxychloroquine.com/]plaquenil for arthritis[/url] [url=https://cephalexin911.com/]can i buy cephalexin over the counter[/url] [url=https://augmentin875.com/]buy generic augmentin online uk[/url] [url=https://prozacflx.com/]prozac capsules 10mg[/url] [url=https://ciproflxn.com/]buy cipro xr[/url] [url=https://lexaporo.com/]buy lexapro without a prescription[/url] [url=https://sumycin365.com/]sumycin without prescription[/url] [url=https://propranolol100.com/]propranolol over the counter australia[/url] [url=https://viagrasoftab.com/]buy viagra soft online[/url] [url=https://lopressormetoprolol.com/]lopressor generic brand[/url] [url=https://elimitepermethrin.com/]elimite 5[/url] [url=https://gabapentin.us.com/]gabapentin over the counter australia[/url] [url=https://prazosin.us.com/]buy prazosin online uk[/url] [url=https://colchicine5.com/]over the counter colchicine medication[/url] [url=https://diclofenacg.com/]diclofenac medicine[/url] [url=https://hydrochlorothiazide2.com/]hydrochlorothiazide 25 mg generic[/url] [url=https://silagratab.com/]silagra 25 mg[/url] [url=https://avodart24.com/]avodart 0.5[/url] [url=https://robaxin24.com/]order robaxin without prescription[/url]

    Comment by IvyDah — July 27, 2020 @ 9:57 am

  43. Sweet blog! I found it while surfing around on Yahoo News.
    Do you have any tips on how to get listed inn Yahoo News?

    I’ve been trying for a while but I never seem to get there!

    Thank you

    Check out my weblog – reallifecam, real life cam, reallife cam, reallifecam com, voyeur house,voyeurhouse,porn

    Comment by reallifecam, real life cam, reallife cam, reallifecam com, voyeur house,voyeurhouse,porn — July 27, 2020 @ 10:07 am

  44. Its like you read my mind! You appear to know a lot about this, like you wrote the book
    in it or something. I think that you could do with a few pics to drive the message home a bit, but
    instead of that, this is great blog. A great read. I will definitely be back.

    Comment by gefickt — July 27, 2020 @ 10:16 am

  45. google

    Comment by web site — July 27, 2020 @ 10:23 am

  46. Good information. Regards! https://ntviagrausa.com/
    [url=https://tintuckingfun.com/go-win-huong-dan-tai-va-cai-dat-truc-tiep-cho-he-dieu-hanh-ios.html#comment-1430468]f26fhqb v990nt[/url] a58ea51

    Comment by Michaelchada — July 27, 2020 @ 10:29 am

  47. Wow! This is a great post and this is so true

    Comment by saif ali — July 27, 2020 @ 10:58 am

  48. Helpful material. Many thanks. cialis tablets
    [url=https://www.pmepng.com/project/grand-papua-hotel/untitled-1/#comment-66343]p55rmem i37sgc[/url] adf7afa

    Comment by Michaelchada — July 27, 2020 @ 11:09 am

  49. Hі, I thіnk youг blog migvht be hhaving browser compatibility issues.
    Ꮤhen I lоok at yօur blog sikte іn Safari, іt looks fine but whеn opening іn Internet Explorer, it
    һɑѕ ѕome overlapping. Ӏ just wanted to give you a quick heads ᥙp!

    Otһer thesn tһat, very good blog!

    my web blog: coinbase stellar xlmおよびIBM発表power99fm prince

    Comment by coinbase stellar xlmおよびIBM発表power99fm prince — July 27, 2020 @ 11:16 am

  50. Hi there would you mind letting me know which hosting company you’re working with?

    I’ve loaded your blog in 3 completely different web browsers and I must say this blog loads
    a lot quicker then most. Can you recommend a good web hosting provider at a reasonable price?
    Kudos, I appreciate it!

    Comment by bolawin88 register — July 27, 2020 @ 11:20 am

RSS feed for comments on this post. TrackBack URL

Leave a comment

image