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Originally Posted by aggo
first, your argument seems flimsy to me because I dont see any data that indicates saturation.
Well, complete flatlining of USD transaction volume isn't good.
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The google trends data that was just posted indicate the exact opposite of that; add the fact that the blockchain grew by 100% y/y in 2014, and the fact that there was about 200% y/y growth in online bitcoin wallets does not indicate any saturation to me.
I'm not saying saturation has been *reached*, I'm saying that it's reached the order of magnitude of the upper limit. Surely it's not difficult to understand.
If 10,000 of 300 million people know about bitcoin, a 10,000 bagger can happen just by growth in awareness. If 70 million of 300 million people know about bitcoin, that growth avenue is finito. Similarly for the other drivers of bitcoin growth (illegal activity and gambling). If illegal activity comprises $500K/year, a 10,000 bagger can happen just from growth in illegal activity (this is in fact what has happened and why bitcoin has appreciated). If illegal activity comprises billions/year (as it now does), a ten bagger is not even possible via this mechanism due to limitations it runs into. Similarly for gambling.
Thus bitcoin needs entirely new, as yet unproven usage cases. The mainstream seems to be rejecting bitcoin for legitimate activities, and why wouldn't they? As it currently stands and will for the next several years at least, it's highly inferior to fiat on nearly all metrics (stability of value, speed of transaction, merchant adoption, ATM network, reliability, ease of use, security). Highly, highly inferior.
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You must separate the "value" of bitcoin from the technology of it. The technology is demonstrably being used more and more every day.
I don't think this is in evidence. What matters is legitimate use for mainstream financial transactions (non drugs, non gambling, non wash trades as in China, which are huge volume). I don't see any evidence that it's being used more and more; in fact it seems to be declining.
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But to simply entertain your argument, Ill provide this simple outcome: there are billions of people who are unbanked.
Sure, but the vast majority of them are dirt poor and are unlikely to take up bitcoin. And the third world already has huge social payment networks that work very well. These guys aren't giving up their precious cash to put it in a trackable, volatile digital currency.
Bitcoin will live or die depending on what the top 10% with free cash decide to do. The poor will be irrelevant.
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Those people will leverage the ecosystem to incentivize banked people to transact in bitcoin; akin to the savings you incur when paying for gas with cash.
That's a little optimistic I think.