I'm not a currency trader, but Bitcoin seems like a nice currency to be trading right now as there so much volatility at. From following the price recently if it spikes up its almost certainly spiking down again sometime soon, if it bombs it's almost certainly rebounding soon, so for those who can get the timing right and trade reasonable volume there has to be some decent money to be made.

I know nothing is certain but there's been some nice spots to buy / sell recently, and I expect there will be more in the coming days and weeks/months.

As others have said the longer term future is less clear, but having big investment in Coinbase / Bitpay and so many startups with VC funding coming onto the market can only be a good thing for utility. They will find ways to get people spending Bitcoin and more mainstream coverage of people holding it.

I've only recently started buying and holding coins and haven't sold or spent any yet, and will probably keep buying for now as I think prices will be rising as the year progresses. )$276 right now, seems low)

Long term I have no idea, and if I can get some volume of coins bought at today's prices I would probably be very happy to sell if price reaches 500USD later this year (I think this is realistic)

This is only a temporary increase in demand. And it will 99.9% of the time coincide with an equal sell. Over time, the holding time should trend toward 0 as well.

And in a model between sender A, receiver B, exchanges C + D, we can include the overall increase in demand that this causes as ~= to the amount of bitcoins the exchanges C+D hold to provide the liquidity (coins purchased with fiat and held). Sender A and B should not cause any increase or decrease on bitcoins demanded.

I feel like there's a least a few years between now and "once there's a large infrastructure". But user adoption is a different topic.

Most people are missing this when it comes from Bitcoin's value. The initial remittance action will be minimally meaningful. The real action happens when people realize it's cheaper to just keep the coins on the other end and spend them themselves. Or someone in the local receiving end buys the coins to buy inventory online. But you need baby steps.


I wouldn't be surprised if it was a decade away for serious infrastructure.

More like $1k. Check here:
https://en.bitcoin.it/wiki/Mining_hardware_comparison

A and B individually won't create additional demand. But the overall volume of remittance could have a substantial effect--if remittances involving bitcoin goes from 1 billion a year to 10 billion a year for instance. As you said, it will take the form of exchanges all over the world needing to hold bitcoin for liquidity.

Well remittances won't start to happen in bitcoin until there is a relatively large infrastructure of bitcoin usage. Would need very liquid exchanges between bitcoin and most currencies.

http://www.reddit.com/r/Bitcoin/comm...ctive_and_ama/

Seems like electricity cost is the big factor. If you thought btc was going to go up so much that you're willing to spend $50K on mining equipment, why not just spend $50K on btc?

If you have cheap access to electricity your breakeven point for mining might be say $100/btc so you make money as long as bitcoin prices stays above $100. This is not the case if you just buy bitcoins. You will only make money if bitcoin value rises from the current value you bought in at.

At this difficulty and price, even with free electricity, there doesn't seem to be any hardware you could buy that will pay for itself in a reasonable amount of time, if at all.

Latest data points for that guy who said most people have already heard about bitcoin:

http://coincenter.org/survey/

I often work with or around IT proffesionals. I usually ask them if they've ever heard of bitcoin, most of the time they never have and if they have they have no idea what it is. One guy said it was the money for the internet but was different from normal money because it wasn't backed by gold. I realize it's a small sample size, but you'd think if most people know what bitcoin is then IT proffesionals certainly would.

One thing I realized when researching those #s is that tehre is a big difference between

1- have you heard about bitcoin
2- do you know what bitcoin is


you can get a lot of people who answer yes to #1, but if you follow up with #2, that basically cuts down another huge % of people who responded yes.


What this demonstrates is that 100% y/y growth as seen here is nice, and there is a legitimate foundation of people with an enormous amount of diversity that are ready to use bitcoin everyday. What's stopping them is a lack of application, or use. People and corporations are still stuck in the dogma of using traditional payment methods. 100% y/y growth seems very sustainable given the vastness of the internet and improving connectivity around the world, but it would be nice if a catalyst emerged to push digital currencies into a necessity.

I looked at google trends for bitcoin and I think 100% y/y growth is a reasonable estimate. I don't think it's just going to explode with 1,000% growth every year like some people think and it may well take 10 years like TomCollins suggested for it to really go mainstream.

Bitcoin (bubbles with flatline gradually getting bigger)
http://www.google.com/trends/explore#q=bitcoin

Facebook (clear s curve) this is what people think bitcoin is going to be like but I don't think it will be
http://www.google.com/trends/explore#q=facebook

It's more like
T-pain (a couple bubbles and then trends down)
http://www.google.com/trends/explore#q=tpain

or Game of Thrones (series of bubbles)
http://www.google.com/trends/explore...20of%20thrones

or for a technology analogy
Tablets
http://www.google.com/trends/explore#q=tablets

interesting research. I'm not sure what to make of the comparisons to other searches, but it does give some perspective to other searches. Its nice that after each bubble in search you see a new established baseline for bitcoin that was higher than the previous prebubble baseline.

There are many paths to mass adoption, and while I think too many people are searching for the singular application that will catapult bitcoin into a necessity, bitcoin as a tehcnology seems malleable enough that a multipronged approach over time may just win out. I dont see why TC cant be right in that we just have a slower but consistent growth over the next 3-5-10 years while never discovering that single application; but rather bitcoin as a amalgamation eroding remittance, p2p money xfer, microtransactions, and credit cards for online purchases.

One thing that has hurt bitcoin, and will continue to until it is ultimately resolved, is that no one in the federal government knows what to do with it. Precisely, that no one knows under which agency it should ultimately fall under in terms of compliance, regulation, drafting etc. There are people in the sec, doj, cfpb, fincen, irs (insert other departments/committees) etc. who are *independently* very very aware of bitcoin, but collectively there is no precedent set as to who controls what, if anything. It's a major issue in the past year and I don't see or know of anything that will resolve it. It's why the sec is sitting on the etf while bumhunting all the illegal securities, and why all the businesses that sit right on the USD/BTC fence have such difficulty obtaining compliance in a timely manner, it's all just a slow erosion. The scariest and most costly outcome would the the DOJ weighing in negatively. That would automatically halt any and everything that all those other agencies are doing with bitcoin permanently until the executive office weighs in. And as many poker players already know, it would be an almost unbelievable feat to get the executive office to reverse anything the DOJ levies.


although many people scoff at the idea that the silk road trial has any meaningful impact moving forward, I really disagree. It's the DOJs foray into bitcoin, and as an office the trial will shape many opinions, that moving forward, we will need in order to get mass adoption (see SMbitcoin/etf).

That's just how transformative it is as a technology.

What you'll end up seeing is most of these companies move to friendly jurisdictions, or at least only those thrive, and on/off ramps restricted to the unfriendly places. Once you get your Bitcoins, they really can't stop you, barring a china-like policy on the internet. And even then, you'll see other forms of communication like Bitcoin via radio. It's not something that can be realistically stopped. The only thing that can be restricted is legally operated businesses in an area.

The world is bigger than the United States, and you either see them play ball or decide to give the rest of the world the dominance over this technology for years to come.

If you were GS, JPM, would you have any confidence putting money into a chinese exchange?

I mentioned on-ramps and off-ramps, but there are alternatives besides China.

But GS/JPM aren't going to be buying through exchanges.

You do realize that this makes my point, right?

35% have heard of it and of those 15% use it. It's reached the order of magnitude of the upper limit of awareness and the order of magnitude of possible growth based on new knowledge. This is 10s of millions of people.

Compare this situation where there were 1000 or 10,000 people who knew about bitcoin. Massive growth is possible - in fact 10,000 times - just by new people finding out about it/wanting to get in on illegality or gambling. And that growth is what you saw.

Now those things are now close to saturated. Where does the new big growth come from? Population knowledge growth potential is small. Illegal activity growth potential is small (it's already many billions/year). Similarly with gambling. You need an entirely new mechanism for major bitcoin appreciation, or it looks like it's going nowhere.

You don't know what order of magnitude means and it makes you sound like the opposite of what you imagine you are.

The above statements are factually correct, as is my usage of the term (I have a science degree and have used it hundreds of times and heard it used thousands), so a little education for you: "Within an order of magnitude" means within a factor of 10. "Reaching the order of magnitude" means reaching a level within a factor of 10.

It's (very) commonly used a useful metric for the approximate size of something relative to something else. Perhaps you're an English major so it's confusing for you, I don't know, but technical people use the term all the time.

Your critique of my usage is making you sound like the opposite of what you imagine you are, for what it's worth.

first, your argument seems flimsy to me because I dont see any data that indicates saturation. 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.

You must separate the "value" of bitcoin from the technology of it. The technology is demonstrably being used more and more every day.

But to simply entertain your argument, Ill provide this simple outcome: there are billions of people who are unbanked.

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.

I totally agree with you, and it wasnt so long ago that I was the one who proposed that bitcoin could succeed without the US because of the ubiquity of the internet; with you saying the exact same thing.

My position is simply that the infrastructure in the US provides the clearest path to adoption. If it is expressively allowed here, many many countries will follow.

It was interesting watching the Senate hearings almost 2 years ago how there seemed to be legitimate concern about being left behind. I think the politicians are not complete idiots and want to make sure they have a piece of some pie rather than nothing of someone else's pie. They aren't fools. And as much as they are married to the big interests, they'll slow things down until they realize they can't, and then change course to save their own ass.

I cannot see the US being completely stupid on this one. There will be a few stupid politicians, but most are smart enough to see the bigger picture and play to both sides until a clear winner is determined and then they can just choose then.

It won't be a smooth path, there will be some bumps along the way, and likely some overreactions, but in the end, things will move toward bigger, well-connected players, and you'll see some established players get involved as it actually becomes big enough, and the politicians will follow.

Well, complete flatlining of USD transaction volume isn't good.

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.

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.
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.

That's a little optimistic I think.

You're not very bright are you. You keep getting destroyed over and over and keep making these dumb arguments.

In 1995 how many people do you think were familiar with cell phones? Of those, how many people do you think used them?

Same question with the internet.

Same deal with bitcoin today. Lots of people know about it, a few have tried it, most people haven't gotten involved yet. The growth potential is limitless. It's the entire rest of the world other than the early adopters.