Re:A Prediction: Bitcoin Is Doomed to Fail
by notdrunkatall on Thursday November 28, 2013 @01:34AM
(#6813344)
So profound a concept, yet so simple, and often at the root of so much fallacious thinking. Thanks for taking the time to educate our economically challenged friends.
The only reasons it is different with houses is because people are emotionally invested in them, not all houses are equivalent (and thus their value is unique per house), and liquidity is hence really low, and market prices adjust slowly.
Bitcoins are worth a thousand dollars because people who own them are not willing to part with them for less, and people who are buying them are willing to pay that much. This is economics 101. You can always cash out at the market price, unless liquidity is low; the only time that happens is in a teeny market or a crash.