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Originally Posted by MattTuck
While there will only ever be 21 million bitcoins, each bitcoin is divisible into much smaller parts. Something like 0.0000001 bitcoins.
There are clearly speculators currently chasing a hot asset. There is no question about that. However, the value of the coins and network is much more than just a pyramid scheme. Unlike a bubble like the tulips in Holland, this technology has some real advantages over current money. You can transfer money around the world in a matter of 10 or so minutes, at relatively low cost. Consider an ACH transfer that takes multiple days. Or, consider the billions of people on this planet that have a phone but don't have a bank account. This technology gives them a way to send, receive and store money. These are real use cases that exist today.
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Hey Matt. I get where you're comin' from even if I don't get where it's at as far as bitcoin is concerned.
Looking at it from the outside as I do, it is easy to understand why a certain investment bank that shall not be named would look into bitcoin as a way-outta-left-field segment of their speculative book: Variables are a exploitable attribute. Anything you can figure out better and faster than the competition or the market means you can take something outta it while the getting is good. Or even better, become a part of the infrastructure and maintain the vig advantage inherent to making yourself part of the framework.
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Now, don't get me wrong. A lot of the value is predicated upon assumptions about the cryptography, and thus computing power. Major technological changes could undermine the actual system. Certainly, you look at gold which has been used as a store of value for many thousands of years. It is based on certain physical properties of an element that cannot be changed, and is durable over millions of years.
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Sure. But between dynamic pricing of the synthetic currency coupled with the variable curves associated to technology progression, cryptology and all the other variables I don't even know about there is just way too many variables, These variables crucially left not to the market but to implementation and rollout schedules of the bitcoin infrastructure that downstream effect the pricing and volatility of the bitcoin and hence any potential investment.
Bottom line: I know not to mess with stuff I can't get my head around. You know more than I do about this so I'd be delighted if you made a killing in this market.