
 Winklevoss twin says Bitcoin valuation will top $40k - ibsathish
http://thenextweb.com/insider/2013/12/15/winklevoss-twin-says-bitcoin-valuation-will-top-40k-plays-down-silk-road-closure/#!pZeI0
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cstrat
In other news, the majority shareholder in <insert company here> says their
share price will sky rocket by 300% in the next six months... you should buy
shares immediately.

Since the twins are so heavily invested, there is no way they would ever
support any evidence contrary to the title of this post...

~~~
damian2000
I think they own about 1% - a fair bit less than Satoshi Nakamoto, but yeah
agreed on your point ... totally useless story.

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tagawa
They're also trying to launch a fund - Winklevoss Bitcoin Trust [1] - so
they're (potentially) more invested in Bitcoin than what they directly own.

[1]
[http://www.bbc.co.uk/news/business-23140904](http://www.bbc.co.uk/news/business-23140904)

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klochner
To put things in perspective: taking the (presumably) wildly optimistic
forecast of the Wilklevii, the total future bitcoin appreciation will be
approximately equal to the year-to-date performance.

So in an optimistic scenario, the bulk of any appreciation is behind us, and
the fortunes made to-date won't be made by the current batch of speculators.

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sillysaurus2
I don't understand. If Bitcoin appreciates to $40k like the Winklebosses are
saying, then I stand to 40x my money. How does that equal the year to date
performance, or mean that the bulk of the appreciation is behind us?

(I think appreciation to $40k is delusional, but that's what they're
claiming.)

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exit
according to this wikipedia article, the price in december 2012 was $13:

[http://en.wikipedia.org/wiki/History_of_Bitcoin#Prices_and_v...](http://en.wikipedia.org/wiki/History_of_Bitcoin#Prices_and_value_history)

the average today is $827, 827 / 13 = 63.6153846154

~~~
sillysaurus2
_user "laszlo" did first transaction – bought 2 pizzas for 10,000 BTC.[67][68]
User "SmokeTooMuch" auctioned 10,000 BTC for $50 (cumulatively), but no buyer
was found.[69][70]_

EDIT: I know, it was just a funny event.

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msie
Sigh, I'm losing productivity thinking about what if...

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cstrat
I am pretty confident that stuff like this does more harm to the bitcoin
community than good. It further encourages anyone remotely involved to sit on
their coins and not use them.

The only way something like bitcoin can flourish is if the majority of users
are spending them (trading them)... if 90% of people buy bitcoin in the hope
they will go to $40K then they are supporting all the things that the
naysayers are claiming (ponzi scheme and what not).

~~~
ekianjo
I don't agree. Optimistic view on bitcoin -> Media Attention -> User Attention
-> Bitcoin value goes up -> User Pool Increase -> Merchants' attention
increase -> more merchant support, resulting in more utility for bitcoin and
more confidence in the viability of the currency.

Of course, I'm simplifying stuff on purpose here, but more people talking
about Bitcoin in a positive light is good for Bitcoin. Apart from the
valuation they throw in here, them investing in Bitcoin will breed further
options on the market.

~~~
cstrat
it is true that more attention is good, however it is getting attention for
the wrong reasons. It isn't getting attention because people are using bitcoin
as a currency, rather an investment hoping for the capital gains.

I have seen countless threads on forums where people are saying they accept
bitcoin and are surprised that no one has used BTC yet. I'm confident at using
bitcoins, but it makes more sense to just pay for something with cash if I
have it... obviously if there were some incentive to use BTC (discount or
whatnot) I might reconsider.

~~~
ekianjo
> obviously if there were some incentive to use BTC (discount or whatnot) I
> might reconsider.

You are already getting a discount if you use BTC to buy stuff online, since
you don't need to use a credit card for such services. Credit cards are not
free, you need to purchase them from your bank on a yearly basis.

There is a very valid use of Bitcoin already: transferring money from one
point in the world to another, without commission and fees. And this is also
one of the key uses of Bitcoin, currently.

> however it is getting attention for the wrong reasons

There's not _wrong reason_. Whatever make people come to own Bitcoin does not
mean they will stay for the same reason. As the utility curve ramps up,
hoarders will progressively use it to buy goods and services. And even if it's
a tiny portion of users, it will still push for additional Bitcoin growth.

~~~
aianus
I don't know where you're from, but credit cards in the US and Canada are not
only free, but they pay me a 1% bribe to pay by credit whenever I have a
choice. And because of their oligopoly on electronic payments, they're able to
force merchants to sign contracts stating they're not allowed to charge an
additional fee to consumers who pay by credit.

Therefore it's almost always cheaper for me to pay by credit than any other
form of payment.

~~~
ekianjo
Ok, maybe that's the case in the US/Canada only then. But try travelling
around the world with your credit card, and you will be charged commissions
when using your card abroad.

By the way, there's nothing _free_ even if it's free for you. Merchants have
to pay the cost of providing Mastercard / visa payments and that cost makes it
to the price of goods they sell. So you are paying the cost no matter what.

~~~
aianus
I'm well aware that credit card payments are not free for the merchant, and I
ask if there's a cash discount whenever possible (gas stations and family
owned businesses).

That said, the alternative of using cash has its own costs in the form of more
robberies and accounting and transportation and security. Those costs are also
passed onto the consumer eventually.

~~~
ekianjo
Yeah, and that's where Bitcoin can improve over both credit card and cash, by
providing a reliable service with way lower costs for the merchant.

~~~
aianus
But nobody (other than die-hard fans) will use it unless there's a personal
benefit. You have to offer at least enough of a discount over the credit card
price to cover the lost credit card rewards.

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logn
Bank of America's analysis of price made a lot of sense to me, and to the best
extent possible, they justified their valuation ($1300 max). This is just
mindless speculation like CNBC saying BUY BUY.

~~~
ekianjo
Justified the 1300 value how ? They have no real method to get to that number.

~~~
logn
You can read it here:

[http://cryptome.org/2013/12/boa-bitcoin.pdf](http://cryptome.org/2013/12/boa-
bitcoin.pdf)

They look at comparables such as gold, silver, PayPal market cap, etc and then
deduced where BTC would fit in.

~~~
vidarh
If by "deduced" you mean "guessed" based on assumptions they have not really
justified. _IF_ you agree with them that Bitcoin will be used as a medium of
exchange for about 10% of online transactions, and _IF_ you agree that it will
be used as a money transmission method and will compete as one of the top
three money transmitters for volume and that this will add to the Bitcoin
valuation according to the valuation of the top companies in this market, and
_IF_ you agree that since, "by the way, $5bn is not too far from the current
value of total US silver eagles minted", $5bn is the maximum market cap of
Bitcoins as a store of value, _THEN_ their estimate may make sense.

They dismissed any use for illicit transactions out of hand because they
"don't have any informed view on this subject".

They ignore B2B transactions after saying "we cannot rule out that Bitcoin can
become a dominant medium of exchange for B2B transactions". Their total upside
is calculated without even trying to make any assumptions about B2B usage.

They've just hand-waved the storage of value bit with a comparison to silver
eagles and the relative value of gold vs silver on the basis of long term
reputation and volatility, making up a "roof" of 300bn, and then scaling that
down to 1/60th based on the difference between gold and silver. Part of this
they justify with the volatility, without considering whether or not
volatility will flatten out if Bitcoin starts hitting a valuation roof. Partly
they ignore the other possible upsides for storage, such as ability to more
easily hide funds (e.g. they themselves pointed out a large swing up in
Bitcoin value after the threat of the Cypriot "haircut"; they've also not
considered the extensive use of e.g. strips of plated gold as a medium of
short to medium term storage in high risk areas).

I don't have any better assessment, but this one reads like an attempt to
justify pre-existing opinion rather than an attempt to be thorough.

~~~
EGreg
I think they justified their assumptions. Maybe you disagree with their
justification?

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repsilat
Isn't the price (softly) bounded above by the mining cost? I guess there's a
demand/supply time-lag.

No, wait, I think I get it:

1\. Lots of demand. Price spikes.

2\. Supply increases,

3\. Mining difficulty ratchets up.

Because mining difficulty is a function of mined bitcoins (and not a function
of time) this price estimate isn't a refutation of Moore's law. It basically
means that the demand for bitcoin, quantified I-don't-know-how, is going to
double quite a bit faster than dollar-normalised processing power.

(Can anyone tell me whether increases in mining difficulty happen smoothly or
sharply? I wonder whether the current market is smart enough to price a cliff
in the rate.)

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shit_parade
[http://bitcoin.sipa.be/](http://bitcoin.sipa.be/)

[http://bitcoinwisdom.com/bitcoin/difficulty](http://bitcoinwisdom.com/bitcoin/difficulty)

~~~
repsilat
Very interesting. Now to try to corellate it with price swings...

~~~
NateDad
It's tricky, because mining is also affected by hardware efficiency. So, if
some new hotness arrives on the scene, difficulty can jump dramatically, with
no corresponding price increase.

Also, since we're in the age where only asics can effectively mine, and they
are output by small shops that have limited capacity, the hardware supply is
more of a limiter to mining than demand. Generally, more interest in mining
simply drives up the price of mining equipment, rather than immediately
driving up mining rates.

Of course, over time, more demand leads to more companies wanting to build
asics, so more of them do. However, that's a very slow response, since making
mining equipment that works well is non-trivial.

It's interesting, for sure, but I think it probably affects ebay a lot more
directly than difficulty ;)

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neil1
How is that news? It's in their self interest(being large bitcoin investors)
to try to raise expectations and make the price go up.

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confluence
Hmmm, this reminds me of Carl Ichan, but I can't quite put my finger on why
that is?

Could someone possibly clue me in. I'm at a total loss.

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enko
> Winklevoss twin hopes Bitcoin valuation will top $40k

FTFY

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n00b101
On Wall Street, this kind of rhetoric is called "talking your book."

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gmays
Never trust a doppelgänger.

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EGreg
What does the other twin say?

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ars_technician
In other news, pumpers in a pump and dump scheme continue to pump. I can't
believe this is even on the front page. What's next? A note from Tim Cook
bullish on Apple?

