
Bitcoin – How high can it go? - flippyhead
http://simonwinder.com/2013/11/bitcoin-how-high-can-it-go/
======
cheesylard
Please, someone, get this trash off of the front page. Not only is this entire
article completely content-less, but the number of fallacies in it is
palpable.

I wasn't going to waste my time on this, but after skimming for 20 seconds I
came to this:

> In many ways, Litecoin is looking like a better investment. For Litecoin it
> is still early days because the infrastructure is not quite there. However,
> it looks to be a more promising currency from the technical standpoint,
> e.g., allowing faster transactions and a longer time until the end of the
> mining cycle.

Faster confirmations _DON 'T MEAN SHIT_. Just because it takes 2.5 minutes for
a Litecoin confirmation doesn't mean it is any better. Yeah, a Litecoin
confirmation is 4x faster than a Bitcoin confirmation, but all that means is
that a Litecoin confirmation is 1/4 as secure as a Bitcoin confirmation. Which
is actually _worse_ , when you think about it because the blockchain is more
bloated.

>Its current market capitalization is $215 million, giving a factor of 45
potential growth to simply catch up with Bitcoin.

Are you fucking _serious_?

~~~
jafaku
Just to clarify, the transactions are actually instant in Bitcoin. What takes
~10min are the confirmations, which like you said, take time for a reason:
security.

Litecoin adds nothing to the table.

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VexXtreme
Great analysis.

Although, I have to chuckle when I hear about people buying fractions of a
Bitcoin, expecting to become multi-millionaires in a few years. Bitcoin has
had a great run and the exponential growth it has experienced is extremely
unlikely to repeat again. It's an issue of scalability and you don't just go
from $1K to $1M the way you did from $1 to $1K, simply because the large scale
implications are different. The implications of $1 to $1K were pretty
insignificant, whereas to get to one million, entire governments would have to
abandon their currencies in favor of Bitcoin or something else really drastic
would have to happen.

I personally own BTC and hope to see it succeed, but some of these people are
delusional, plain and simple.

~~~
rallison
Indeed. If bitcoin were to go from $1K to $1M in the near future, we would be
talking a 12 trillion USD market cap - roughly on par with the US GDP. Not to
say it is an impossible scenario, but like you said, the implications are much
greater.

The other interesting aspect is the existence of other alt currencies. For
example, the so called "silver" Litecoin (as compared to the "gold" bitcoin),
has increased almost 1000% in the last two weeks. Litecoin itself is up to a
$1 billion market cap. Basically, we now have an alt currency at 10% of
bitcoin's already impressive market cap.

I do wonder if some of these alt currencies will be where some of the big
gains will next be seen. If crypto currencies become widely established, I
imagine the environment would support multiple currencies.

~~~
judk
Wow. I haven't seen one news item or mention of anyone using litecoin, except
comments like this that mention the existence of litecoin when folks discuss
bitcoin.

As always, though, market cap isn't really the current share price times
number number of shares. It is the accumulated sum of all the buy offers over
the top N share bids (N = number of shares in existence), not all of which are
max price.

~~~
rallison
It seems the media is just starting to notice the non-bitcoin crypto
currencies:

[http://finance.yahoo.com/news/litecoin-heres-everything-
know...](http://finance.yahoo.com/news/litecoin-heres-everything-know-
digital-193238685.html)

Although, to be fair, Wired noticed it back in June:

[http://www.wired.co.uk/news/archive/2013-06/16/litecoin](http://www.wired.co.uk/news/archive/2013-06/16/litecoin)

Litecoin is still minor news, but with more exchanges starting to support it
[1], it _might_ actually amount to something.

As for my own bias: I own a very trivial number of litecoins and bitcoins
(most from a small amount of mining), so I wouldn't mind these increasing even
more. That said, I am still skeptical, but I am enjoying watching this all
play out.

[1] [https://www.okpay.com/en/company/news/okpay-now-supports-
lit...](https://www.okpay.com/en/company/news/okpay-now-supports-litecoin-
currency.html)

 _Edit_ : And yes, agreed on your mark cap point. Still a useful benchmark,
but not without some caveats.

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ericb
Litecoin is just a me-too bitcoin clone. I see it as analogous to PhpOnTrax,
Groovy on Grails, or Castle vs. Ruby on Rails. Although, it is actually worse
than that as it is mostly a fork stealing the original codebase and
repurposing it for spurious reasons, I believe.

For some reason, with open source projects like this, the real innovations
usually continue to flow from the original project, not the clones.

~~~
randartie
I think litecoin will do better in the long run because of faster transaction
times. I can't buy a soda with bitcoin because I would have to stand around
for too long.

If people opt to pay with a digital currency, it will be LTC.

~~~
jafaku
It doesn't have faster transaction times, only confirmations. Do you even know
why confirmations take time? Security.

Anyone who understands this new technology knows that Litecoin doesn't have
any significant improvements over Bitcoin.

Besides, you wouldn't wait 10 minutes, but you would wait 2.5 in average? I
know I wouldn't, nobody would. That's what 0 confirmation trades are for, and
you can do that with Bitcoin just fine.

If you want to gamble you should as well put money on Tenebrix, Infinitecoin,
and Vaginacoin. I've heard they are great.

~~~
runn1ng
Why is longer wajting time for a block more secure? Isn't the security given
more by the number of miners?

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jquery
Article was a transparent attempt to pump Litecoin.

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ashray
Great write up! Only fools think that a $100 investment in bitcoin today will
turn them into millionaires. This has to do with risk vs reward. A $100
investment in 2009 may have turned people into millionaires but at that time
the chances of losing $100 were quite high. Now, with a lower risk than back
in 2009 you're going to have to have greater skin in the game. $10,000 may see
you with some good returns. You may still lose it but the chances are lower
than back in 2009.

How high can it go? While your analysis based on market cap is mostly correct,
unfortunately it's just a good guess. Bitcoin has the potential to replace
currencies, MasterCard, Visa, Paypal, and more! Which of these will it do (if
any)? Nobody knows. But if it replaced stuff, it's market cap would be way
higher than the conservative 1% of X niche that you've estimated.

Personally, I'm optimistic for $10k. That's 10x now vs the 10,000x gain
already seen since '09.

I have no clue whether it will go to 10k, 100k, or 1MM per bit coin. I'm on
for the ride though and it's been pretty fun so far. I'm excited to see which
problems bitcoin will solve and which industries it will disrupt.

~~~
alandarev
In 2009 it would be an investment. Now, it solely is speculation.

Nobody is going to be surprised, if next day the Bitcoin will evaluate at $100
a unit.

Though I am just as you excited on what is going to happen. Sadly, my
ignorance and scepticism were a result of not invseting into Bitcoin in 2010,
moreover I feel it is being too late to invest now.

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ivanca
Digital currencies will eventually be the only kind of currency there are;
"plastic money" (AKA credit cards) were created to ease the handling of
personal and business finances; digital currencies are one step further, were
we don't depend on a piece of plastic but paying via web or by proximity and
confirming on your personal phone (similar to the way two-factor
authentication works).

"Real" money is just a piece of paper that represents value supported by the
government behind it; so representing it on bytes supported by the open-source
cryptography behind it is less dramatic than most people would assume.

~~~
fat0wl
i don't think many people expect to use plastic money forever -- they are
already comfortable buying things by scanning an iPhone. And I don't think the
lack of government endorsement is so much the issue with Bitcoin either,
though it certainly will be if things don't go smoothly.

i think it really comes down to the crazy hyper-distorted-redistribution-of-
wealth-dispersement/adoption scheme (early adopters have wild fortunes for
pennies compared to those spending thousands today), liquidity issues, extreme
market volatility, not a ton of evidence of use in transactions aside from
being siphoned immediately back to traders via 3rd party processors

describing its problems in a way that can be summarized as "its so
revolutionary its blowin minds too quickly and needs time to settle in" is
really sugarcoating it to an extreme degree

~~~
yen223
The way I see it, the technical aspect of Bitcoin is fascinating; the economic
aspect, less so.

~~~
fat0wl
Yes, that I can live with. If the tech were implemented within a more sane
economic system I would be very intrigued indeed, but I think it would bore
the open-source world.

I'm slowly beginning to believe that this is part of a movement where open-
source is becoming like.... well like the software equivalent of Videodrome
snuff films or something. Closed source & corporate is just too "traditional",
even though it's likely a more solid A-to-B solution could be created with
expert help. Especially since Bitcoin has tech allure (layman can't use it)
without being prohibitively difficult (you don't actually have to know how to
code), it's the perfect balance of intrigue versus commitment with a bit of an
ego boost on the way.

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kilovoltaire

        9. Bitcoin has a mining system that produces a maximum
           number of 21 million coins at the end. Its really not
           clear what the long term viability of this exponential
           drop in mining activity will be and whether it will
           cause problems in time.
    

This last point is completely wrong I think.

There won't be an "exponential drop" in mining activity, because mining
rewards exponentially decay anyway, so the system involves no sudden changes
at all.

~~~
iamjustin
There may not be any sudden changes in the rewards, but that doesn't change
the fact that the rewards are decreasing, and with more people involved, the
competition is increasing.

It's also pretty much impossible to CPU mine anymore, and with the addition of
ASICs to the mining pool, even running a GPU miner is no longer profitable
after calculating electricity costs.

I understand that you don't have to be mining to assist in verifying
transactions, as simply running the bitcoin-qt client aids processing of
transaction, but there no longer is a financial motivation to do so.

With an increase in the rate of transactions as the Bitcoin market continues
to grow, it seems that the transaction speed will certainly slow down, and the
security of the network will decrease.

If there is anyone here that can explain to me why I shouldn't be worried
about this situation, I'd absolutely love to hear it. I'm bullish on Bitcoin,
and I think there is still a good future for the currency, but I'm worried...

~~~
sfjailbird
Miners will make money from transaction fees. As with everything else in the
bitcoin protocol, this is a beautiful self-regulating mechanism: Transactions
attach a fee of any size (or no fee), to motivate miners to process the
transaction.

If there were to be fewer miners to the extent that transaction time becomes a
problem, people will attach higher fees to transactions to get them to
complete quicker, which increases the profit from mining, which makes more
people want to mine, etc. etc.

~~~
iamjustin
The transaction fees go to the miner who originally created the block, not
just any miner who processes the transaction, and with increased difficulty to
find new blocks, it's less likely for new miners (without paying for some
really nice hardware) to ever see a cut of the transaction fees.

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b1daly
Can anyone comment on the implications of the sub-divisibilty of bitcoins? Is
it practically infinite? This would seem to be totally new territory for
"currency."

It does seem to be a near perfect vehicle for pure speculation right now, and
I see no reason an alternate like Litecoin couldn't join the party. It
obviously already has!

~~~
corysama
Bitcoins are divisible to 0.00000001

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anupshinde
Bitcoin will come down to near 250 by Jan (end)/Fed(mid), if we go by the
patterns shown in forex/stock markets. I'm not very sure if the patterns for
Bitcoin/USD can be compared to the forex markets or stock markets.

~~~
anupshinde
On a second thought – I think a significant crash like this can be destructive
to bitcoin and make it slide much further – considering that the sentiment
towards bitcoins is still that of a “bubble” or a “ponzi scheme”

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im3w1l
While I love bitcoin and have some myself, I think the number of stories is
approaching spammy. Not complaining about this story in particular.

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GigabyteCoin
coinrx.com - this domain is parked..?

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ddon
in theory there is no limit!

