Excellent article. I believe the recent rally is primarily due to the asymmetric opportunity currently facing us. If the SEC approves the COIN EFT, the price probably at least doubles in the coming months, and perhaps much more than doubles. If it rejects the EFT, there will be a dip, perhaps as large as 50%, but there is little reason to suspect that Bitcoin will stay down long. Most analysts are predicting 25-50% odds of approval of this EFT, but there are two more proposed EFTs in the pipeline, and most analysts think the odds are at least 50% that one of the three will be approved this year.

So someone who invests $1000 today risks losing $500, but probably recovering that loss within a year, so the downside risk is low. However, if the COIN EFT is approved, they have the opportunity of gaining at least $1000, and perhaps MUCH more, in the coming months. The potential gain is quite high.

Most people would be surprised to learn that Bitcoin has been the best-performing currency in the world in 7 out of the past 8 years. It's price has rapidly, but certainly NOT steadily, risen from a fraction of a penny to over $1300 each, and there's no reason to suspect that that growth will falter any time soon.

Bottom line: Bitcoin is a better form of money. You can send it across the internet, fast, cheap, 24x7, with permission from, or paying fees to, any bank, payment processor, or government. It may take decades, but this better form of money is as sure to replace our current fiat system as the automobile was destined to replace the horse.

This "better form of money"need not be Bitcoin even if we accept what you suggest.

If one EFT is rejected does that not make it more likely others will also be rejected because a precedent has been set ?

There is every reason to believe growth of the Bitcoin price will falter. Historically it has. It has only recently recovered to the price it got to in 2014.

Overall I think you throw probability about with little to justify it.

People probably shouldn't listen to advice from those that call it EFT. It's ETF!!!!!!

"If one EFT is rejected does that not make it more likely others will also be rejected because a precedent has been set?"

One could argue that it doesn't actually. The preceding ETF's rejection would come with a justification/reason. Then subsequent ETFs would thereby have a baseline to study and research what the powers that be at the SEC are looking for in order to gain approval.

Excellent article. I think the current surge in bitcoin price is simply a matter of supply and demand. There are currently only about 16 million bitcoins in existence, and probably 1 million of those have been lost. The supply of bitcoin is fixed. That is not true for any physical commodity. If silver prices reach $30/ounce, then mining will increase to offset the demand, and the price will drop. The same is true with gold. There is an exponetially-increasing interest in bitcoin, but the supply is absolutely fixed. Add to this the probable approval by the SEC of a bitcoin ETF, and you will see institutional investors flocking to bitcoin, especially right now when the price trajectory is going up so dramatically. I think it's significant the Coinbase, which hosts 6 million bitcoin accounts, has set a strict limit on how many bitcoins each account can purchase per week, but the sell limit is higher. A few months ago I could purchase $10,000 worth of bitcoins in a given day. Now the limit is $5,000 per week. I know two people who have wanted to buy bitcoins and were limited in their ability to do so. This means that the actual demand for bitcoin is being artificially suppressed. it seems to me that the price of bitcoin has nowhere to go but up.

Anything that makes China's Communist thugs nervous is something I want to be a part of.

The main difference between Bitcoin and Beany Babies, is tha when the Beany Baby market tanked, at least you had your Beany Babies.
Bitcoin is, purely, a Ponzi scheme, which has been deliberately set up to allow you no recourse when it evaporates. It is spun from the same fiber used to make The Emperor's New Clothes.

It's always amazing to me that people like you still exist lol

Sounds like someone lost out on Bitcoin profits and now is bitter. Better go look up the definition of, ponzi scheme, because you clearly have no clue what it means. What do you think will happen to the dollar when it is no longer traded for oil, dummy......

Better go buy your Bitcoin before the moon!

US dollar: Heavily leveraged, but backed by gold reserves.
Bitcoin: All leverage, no backing.
Yeah, gimme some of that!

If you think the US dollar is backed by gold reserves, you can safely be dismissed as misinformed.

That is reason enough to institute a viable currency alternative, as worst irreversible inevitable consequences steadily portend worst outcomes.

http://www.tradingeconomics...
But why bother even making the attempt?

https://www.federalreserve....
To educate the uninformed masses such as yourself.

it's not gold backed since 1971 , uncuck your-self ! :D

Lol. Tell that to the people of Venezuela, who depend on Bitcoin for their daily needs because their national currency is facing hyperinflation.

Beenie babies are toys. Bitcoin has utility. Although, spin off blockchain technologies like Ethereum have much greater utility. You're looking at the future infrustructure for not only finance, but distributed computing, distributed cloud storage, the internet of things and perhaps even the internet itself.

Agree. Bitcoin is nothing more than an unverified line of credit in some ways. Plus it was launched by an Australian criminal, so you have to wonder what was and is the endgame with this stupid idea. The same people who think gold is a great investment pile on here.

LOL Mary thinks Craig Wright is Satoshi, the bottom line here is if you can't move Satoshi's coins or can't produce Satoshi's PGP signature, you are not Satoshi.

Clearly you have no business trading or owning Bitcoin. Unverified line of credit???? What are you talking about?

While good stabilizing soundly funded governance is esswential; with global issues and dangers everywhere internationally still compounding like droughts, flooding wildfires quakes etc and others even of celestial derivation like potenhtially hazardous objects including space junk, endangering more than localized property rights and business continuity; it's apparent humanity is not equipped to alone meet and equal its essentials and demands.

That is why prior originated far longer derived over-arching administrations of 'The Most Highs" and The Ancients of Days" and 'Kingdom of the heavens" are also introduced biblically along with references to the culminating 'Administration of the fullness of time" being now inclusive of and coordinating all things having celestial. and also global/planetary origins. While such widely reaching forms of governance require no funding, Bitcoins could be accepted as honoraria and to fund announcing agencies overhead.

Short term price corrections are not simply "always possible" when it comes to any currency, they are a permanent feature.

The issue for most people is what their return will be if they hold Bitcoin.

$1300 of Bitcoin today could very easily be worth $700 tomorrow.

That might as well be a bubble for someone that is investing with money they may need in the short term.

LOL

Do eight bitcoins make a bytcoin? What is the value of a twobitcoin?

Totally shocked. I almost didn't read this because I saw PBS and thought, here we go again the group think smart guys are going to bash bitcoin again as being stupid and tell us about Mt. Gox. We're 7 days away from, if the regulators don't say anything, having a bitcoin ETF. And that's one more brick away from bitcoin becoming too valuable and containing too much wealth for governments to step in and ban it. Yes BTC has a unbelievable long way to go but it's benefits to an internet payment system and international commerce can benefit the whole world. No country's currency needs to dominate and countries will not gain trade advantages from currency manipulation if bitcoin is used.

I think it will drop about 10%-15% in the short term, but I think it will increase from then on. The price that it's at at the moment has a lot of buyer support, so i don't think it would fall more than 15%.

It has grown 30% in a month largely off the speculation that an EFT will be granted.

Of course it can fall more than 15%.

It could fall 30 % in ten minutes when people take profits ahead of any announcement of the EFT.

$10 of Bitcoin on top of your buy,
https://www.coinbase.com/jo...

Does "digital gold" really make any sense? Does it make sense if someone invented some other kind of "digital gold"?

Gold can and is counterfeited. There are dozens of chinese companies selling gold plated tungsten coins and bars. Even the FED has gold with tungsten in it. It's a serious problem. Bitcoin on the other hand does not have this problem.

You are correct though, there's little point in having bitcoin with finite supply, if you are just going to create trillions of alt coins. Alt coins, should be boycotted, not because they are a bad idea, but they effectively quantitative easing bitcoin, by pulling fiscal value out of it.

I guess my question is whether there is really digital "anything" which can take on a type of role similar to how gold has been a long-term storehouse for value or wealth. You are correct that gold has its modern drawbacks but it has so far lasted thousands of years.
Is there digital "anything" that could even go a hundred years without being rendered useless one way or another?

No one can tell you if a digital asset can stand the test of time in the free market over a hundred years. As you said the concept is simply too new. So far bitcoin is making its own case for legitimacy. Watch the market, learn its fundamentals and decide for yourself.

If your major hangup is it's non-material, "digital" nature, you can think of bitcoins as "rare numbers". So rare in fact that every time you create a new bitcoin address in your wallet software you are the first person to EVER find that number, and unless you show someone, you will be the only person that ever finds that number. You can write it on a piece of paper. It is real.

Bitcoins themselves do not even exist in the bitcoin protocol, they are just an easier way to visualize the unspent transaction outputs (UTXO) of the network. Chains of addresses linking outputs to inputs make up the blockchain. Not a spreadsheet-like database that displays the bitcoin balances of every address. This is where that "rare number" you found attains value. You link your address to a chain in the blockchain when you receive "coins". That "rare number" only you know now allows you to dictate what the next link in the chain will be. Creating a new transaction, or link, in the chain clears all unspent outputs from your address to new inputs. As a result of addresses working from linking outputs to inputs in a chain and not from balances that can be added to or subtracted from, you can't have an address with 1 bitcoin, spend 0.5 bitcoin and have the remaining 0.5 bitcoin stay at that address. The total of the unspent outputs in your address must be used (1 bitcoin), whatever remainder not being sent to your recipient must be sent to another address you create called a "change address".

As you can see more technical explanations get very wordy - very abstract, very quickly. My point is bitcoin is mathematical proof of ownership, this math is done on computers making it digital, but "2+2" in the digital world is still "4".

Bitcoin is more than just digital gold. It is programmable money and the ways you can change the economy, in a society where self driving cars and robotics make leaps every year, with programmable money is staggering. Others have already invented 100's of copycats of bitcoin. Some are original and offer interesting features, but most are simply a copy and paste of bitcoin's code with arbitrary changes. None of them are anywhere near bitcoin's value.

I wouldn't say Ethereum is a copy/paste of Bitcoin and it is 1/10th the price which is very respectable for a young project to achieve that. Of course people will come running and say, "Well Bitcoin can do smart contracts, what about sidechains yadayada!" well all i've seen from such people is talk for the last few years and no action.

I'm not hating on Ethereum here. Ethereum is very different from a copy/paste of Bitcoin code and would be even higher in price had the DAO been coded more carefully and the community never split. In a general sense ETH favors flexibility in its programmability over immutability in its transactions, while BTC favors immutability in its transactions with less flexibility in its programmability.

Analogies are helpful. That's all that needs to make sense.