[ExI] "Crypto Coin Law" vs "Law of the Crypto Coin"?

[Mirco Romanato]

Il 08/08/2013 22:35, Brent Allsop ha scritto:

I'm long Bitcoin, so I'm optimistic about its future exchange rate, but


>             "Many things could disrupt that trend."

> I don't by this at all.  Nothing could disrupt it, certainly not
> anything you've said here.

It doesn't matter what he said, what I said, what someone else said.
It could be something we didn't know, expect, foresee.
The probability could be low, but will not be zero.

For example, if sanity would hit all the governments together in the
same time (now) and they moved from the current pure fiat money system
to a precious metal backed money system, they started spending less than
their income and so on, the trend supporting bitcoin would be a lot less
strong and the reasons to adopt  it a lot less cogent.

>             "We still don't know if Bitcoin will become widely accepted
> as a currency, for example."

> There is too many people that want some kind of crypto currency to work,
> for obvious rational reasons, and the number of people in this camp is
> growing.  There are just way too many good things about it,
> necessitating this growth in popularity in some kind of crypto currency.

In fact, I believe this.
But this cause a trend, not show a law.
People wants can change, laws can not change.

>             "If you look at the sales of hula hoops in the 60s"

> I can't believe you think Bitcoins is anything close to Hula Hoops. 
> They are night and day different.

Fundamentally, they are not.
They are acquired for the perceived future benefit they will deliver.

> All things like Hula Hoops spike and
> pop just once.  Finally, everyone learning from their mistake - never
> wanting to do that again.  But Bitcoin had its spike 2 years ago, at
> around $30.  Then it had its tulip bulb like crash, most everyone, and
> me, wrote it off as having missed that boat.  But of course, 2 years
> later, it's spiking again, at 10 time its previous spike value, continue
> the law like exponential growth.  Nothing else has done that.  That is
> when I realized this was something way more than Hula Hoops.  So, again,
> how many of these hula hoop like spikes, each one at 10 time the
> previous value, will be required before you accept that Bitcoins are way
> different?

Bitcoin is different, but not in the way you think.
Its value depend on the number of participants and their economic activity.
As the number of participants is not infinite or increasing in any
exponential way, it is impossible the value of bitcoin grow
exponentially forever.
The growth is more similar to a logistic curve, where the initial part
is exponential-like. But after bitcoin is adopted by the majority, the
curve will slow down asymptotically.

This is because the optimist believe Bitcoin exchange rate could be
around 1 M US$. It could be more, but not a lot more, because if it grow
too much, you could buy the entire Earth with one bitcoin and then what
would do people with the other 21M-1 bitcoin?

Everything compared with any other thing is trapped inside a channel of
evaluation, where they move compared to each other from overvaluation to
undervaluation and back.
It could be a little more or less or a lot more or less.

So, there will be a time where bitcoin will be overvalued and a time
where it will be undervalued and it will must correct this unbalance.

Mirco