Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

Re:Bitcoin’s Price Was Artificially Inflated Last Year, Rese... by cecilpl2 on Wednesday June 13, 2018 @04:59PM (#17306889)

Bigger diamonds are more desirable than larger diamonds, not because of the price, but because they look better and are sparklier and harder to lose and all sorts of other real-world metrics.

If I want $1000 of bitcoin, I don't care whether that value is in 1 BTC, 100BTC, or 0.0001BTC. They are otherwise identical to me.

Therefore, the fact that the total of all bitcoins in circulation can't exceed 23 million is irrelevant unless you care about the value of 1 BTC, which is only the case if you are trying to sell them for more than you paid.

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Re:Bitcoin’s Price Was Artificially Inflated Last Year, Rese... by tomkarlo on Wednesday June 13, 2018 @05:34PM (#17307166)

What he said above: unless you have a long or short position, you don't care whether you get a full unit or some fraction thereof.

There are some elements of behavior economics that counter this - people like to buy lower-priced coins and stocks because they get "more" of them, from a unit perspective. But rationally, there's no reason to consider 1 BTC @ $10 any different from 0.1 BTC @ $100, hence the number of "units" seems potentially irrelevant.

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Re:Bitcoin’s Price Was Artificially Inflated Last Year, Rese... by vokep on Wednesday June 13, 2018 @08:02PM (#17308126)

but is the same not true of trading USD for EUR? If I want $1000 of EUR, I don't care whether that is 1 EUR, 100, or .01. The value is in the ecosystem.

Bitcoin is still at the beginning of the beginning of any sort of ecosystem. Everyone expects way more from it than is possible. It is/will deliver on the things it is designed to.

You're correct that I don't care about the value of 1 BTC (or 1 EUR) unless I can sell it, but you imply only selling it for USD again. When it is widespread enough to be a currency, you can 'sell' it for goods and services.

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Re:Bitcoin’s Price Was Artificially Inflated Last Year, Rese... by tomkarlo on Friday June 15, 2018 @02:02PM (#17322002)

Yes, but people argue that the finite supply of Bitcoin is a fundamental advantage vs. currencies. The supply of a currency isn't really infinite, but it's quite flexible when you consider that giving credit effectively "creates" more currency and expands the monetary supply. (I'm not clear why BTC won't eventually have this issue as well if folks start lending / borrowing it.) All the BTC really avoid is increases in the monetary supply via the printing of additional currency, which is arguably a feature of traditional money, in that the central government can intentionally tighten or ease the monetary supply to help manage economic volatility.

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