You absolutely can price in future constant payments. This is obvious. Otherwise you wouldn't have mortgage companies buying peoples mortgages for a fixed price.

LOL @ ponzi, you might want to research what that term means before you use it. You might be thinking of pyramid, which is closer.

Not sure how you can detect #2 effect, though. I remember thinking the same thing. I think you are missing a huge factor which is protection of wealth from powerful states with bad currencies. Ruble failures, China, Argentina, etc... lots of room to grow there where people would love 8% inflation or a way to hide wealth.

And yes, if people expected the price to drop, they'd sell now and have a dramatic selloff down to next to nothing.

So people will attack just because. At an extreme cost, both real and opportunistically.

Yes, everyone here is dumb and no one prices anything in, but stock market isn't. LOL.

It's not an extreme cost.. they would have warehouses full of shutdown miners just sitting there.

You think ripple is overvalued? I mean.. it's "priced in" that the owners hold 70 bil xrp.

Mortgages are completely different. They're a wealth producing asset, as well as having tight bounds and predictable returns. On wealth producing assets with inherent value (i.e. the opposite of bitcoin), a fair value can be roughly agreed, and big money adjusts/prices in changes to that fair value quite efficiently.

I think you're not quite understanding what happens in something like bitcoin. Price movements are caused by daily sell/buy pressure. It's not like people with wealth are going "the fair price including inflation is $350, I'll buy if it drops below". That's the mechanism that's needed, and it exists in the market (due to things like P/E ratios, dividend returns, etc), but it doesn't exist in bitcoin. Something like bitcoin (and many other instruments) are determined by daily buy/sell pressure. A sell pressure (inflation) needs to be met by the influx of new money from sources outside the ecosystem, or the value declines relative to other instruments (say, the USD). You can see this with currencies and QE. The market never priced in USD trending to zero over decades. It simply did. That's inflation, and it's a real time thing that can't be "priced in" except in wealth producing assets. That's why the USD continues to go down relative to tangible things. If the market "priced in" inflation, it wouldn't move. The market doesn't price in inflation (at least, small/mediumish inflation) in currencies, which is what bitcoin is.

Why would anyone choose bitcoin over stocks (of 30+ countries), gold, a foreign currency bank account, or something else? I simply don't see it happening. Russia and Argentina are going nuts and the bitcoin price is declining. Russians are technically sophisticated and have lots of wealth to hide/protect against currency decline. bitcoin hasn't moved in the last few months except down. Simarly for Japan, when the yen has been sliding like crazy with QE. Yet money flows into bitcoin are negligible and less than the cashouts/inflation. No one seems to be using bitcoin for what you think they are/will.

bitcoin is fascinating as pure speculation (thanks for the correction). That's the only thing I see moving it apart from illegality, and why I'll likely buy if an ETF comes out. Fresh money is needed and growth in illegal activity (probably the only thing propping bitcoin up these days) seems insufficient at this market cap.

"pricing in" should be changed to "speculating" when it comes to bitcoin. People have their own beliefs when it comes to BTC and if everything was "priced in correct" it wouldn't be on a landslide. Why would it be going down if everything is "priced in" with no new news. Or were they pricing in that there would be news so that must be it.

One comment in an article about the Russian economy made me smile. The only currency that has performed worse than the ruble this year is bitcoin. Not even sure if it is true but it does put a hole in the argument that people in these type of economies should use bitcoin as an alternative.

Wanna put your money where your mouth is? I'll bet any amount you want that a global financial crisis will absolutely not "launch" bitcoin into the stratosphere. It's absolute madness how wrong some of the posters in this thread are, and yet the overwhelming stubbornness completely blocks their ability to actually learn and understand why they are so wrong. Really wish people would take a step back and think logically about what mainstream consumers and corporations are going to do with what little money they have during a global financial crisis. They are certainly not going to think to themselves "now is the time to buy bitcoin".

Operating miners is expensive. That's your entire premise, it's too expensive to operate them than mine.

lol.. I really think aggo may be some sort of sick troll.

How can anyone claim they know what people will do in a catastrophic global crisis?

Yes, there are differences. The idea is you can account for something that takes place in the future, you discount the future value, and you have a price now.
With Bitcoin, it's a bit different in that you have time horizons you care about, end game scenarios, and can look at how many coins will be around then (you know the schedule), and roughly work out value, discounting for future value and risk. But yes, there's a ton more unknowns.

People who are holding coins know those future coins are coming and have accounted for it. They aren't surprised by this. Currencies with QE are different, in that you don't know what future monetary policy will be. People price in expected future QE and not, and when things different, you see big swings.

Why would they choose it? Because it's something that's in the early adoption phase (or earlier), and has the potential to be much more valuable in the future. Why aren't people going into it? Because it's not easy, it's still unknown, and is primarily speculative now. Those other use cases aren't built because it takes time and money to build them. I'm not at all shocked these use cases aren't there yet.

A lot of the price now being "down" is that it bubbled up due to the fake money on Gox bidding up the price, and the subsequent crash, and returning to a normal level.

Black market is still extremely low in Bitcoin right now and has huge potential. Even capturing 1% of that would be huge.

The one thing that's missing is how Bitcoin can be used in unexpected ways. Really Bitcoin's true value comes from two main use cases - solving problems of trust and solving problems of censorship. These will be the basis of creating use cases that simply don't exist now, rather than replacing an existing use case.

Ya when you operate them 24 hours a day for months on end. How expensive would it be to just turn them on and take over 50% of the network and start ****ing **** up. It wouldn't take long for things to goto ****. It would almost be like the DDos attacks the poker sites are getting now. Only a ddos attack just causes a loss of connection on the poker sites. A 50% attack would be much worse.

So rather than mine at a loss, but at least get something, they mine at a loss to just watch the world burn?

lol.. wtf do you get if your mining at a loss?

you still get bitcoins

That is when it's logical to buy them instead of spend $1000 in electricity to get .5 BTC

Apparently the miners don't really want the BTC, they just wanna make USD, because they sure as hell aren't stepping in to buy when it becomes unprofitable.

Step 1) Turn on miners at a loss, but don't mine Bitcoins
Step 2) ???
Step 3) Profit

Invest in other things (coins) that will benefit from the collapse of bitcoin.
SHORT bitcoin

Crush bitcoin.. Profit

And they don't do this now, why? Bitcoin has a higher value now, more to gain by shorting.

Jesus man.. you don't follow anything.

Right now the only way it's possible is if the hashrate drops alot due to price slide and reward halving.

But the rewards are so much greater now, if we wait until the price drops to nothing, shorting wont get us any value.

Maybe it's not lack of me following anything but your lack of ability to explain anything clearly other than THE SKY IS FALLING! MINERS GOING TO ATTACK! To be honest, your whole scenario is hard as hell to follow because it makes no sense.

short at $1000 or short at $10.. when it goes to 0 you make the same.

Ah, you are making an absurd assumption that it goes to 0, along with the assumption that you could short a huge amount at $10 as easily as $1000.

TC, you're arguing with someone who thinks a 51% attack would make things "go to ****" and creams his pants when the price of Ripple rises

haha... yes I like making easy money