Poll: According to you how much the value of bitcoin will be after 6 months?
Within few weeks we have seen value of a bitcoin first reach $500 and now it is approaching $1000. So, according to you what will be the value of bitcoin after 6 months? Do you see it going up or down? Why?
43 comments
At this point, I think that only catastrophic technological failure can drive it below $100. It's hard for me to think through the socio-economic dynamic that leads there otherwise.
I can certainly imagine it going to $300-$500, but there are just so many people that want to buy at that range, I think the walls are too steep to go further.
I can certainly imagine it going to $300-$500, but there are just so many people that want to buy at that range, I think the walls are too steep to go further.
I think the big question is when and where the "natural dynamics" of the coin will stabilize. It's been widely discussed that bitcoin will cause massive hoarding and appreciation for a long time, causing massive deflation and ultimately limiting practical utility, which at some point will cause massive inflation, and so it goes -- what's the equilibrium of this?
I'd say we're still far from saturation, probably 1/5 of market cap for medium term (long term depends on more widespread adoption). And the practical utility which would determine it's target market is debatable -- will bitcoin settle for being a kinda-useful method of transferring money among nations using exchanges/locals as intermediaries (which already has a lot of competition), laundering money and buying illegal things or will it become a widely adopted worldwide currency?
I'd say we're still far from saturation, probably 1/5 of market cap for medium term (long term depends on more widespread adoption). And the practical utility which would determine it's target market is debatable -- will bitcoin settle for being a kinda-useful method of transferring money among nations using exchanges/locals as intermediaries (which already has a lot of competition), laundering money and buying illegal things or will it become a widely adopted worldwide currency?
Never say never :)
A bubble bursting could certainly drive it way down, sub-$100. Don't forget that less than two months ago, it was hovering around $200. 2 months does not a trend make.
A bubble bursting could certainly drive it way down, sub-$100. Don't forget that less than two months ago, it was hovering around $200. 2 months does not a trend make.
I personally know 5 people who are telling me they will buy the second it hits $300-$500ish.
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In case you haven't noticed, the price is already now at $900.
I think he means crashing back down to that amount
I wonder if a poll is the best forecasting device; it seems almost axiomatic that a prediction market [1] would be a superior solution.
On the other hand; I'm guessing that you might stir a bit of controversy if you were to set up a futures market where you offered people the chance to make an offer of how much they would pay for a bitcoin delivered a year from now; and others to post offers for how much they would need to be paid to _guarantee_ delivery of a bitcoin a year from now...
Just remember that it's all fun and games until the government [2] steps in.
1. http://en.wikipedia.org/wiki/Prediction_markets
2. http://www.cftc.gov/index.htm
On the other hand; I'm guessing that you might stir a bit of controversy if you were to set up a futures market where you offered people the chance to make an offer of how much they would pay for a bitcoin delivered a year from now; and others to post offers for how much they would need to be paid to _guarantee_ delivery of a bitcoin a year from now...
Just remember that it's all fun and games until the government [2] steps in.
1. http://en.wikipedia.org/wiki/Prediction_markets
2. http://www.cftc.gov/index.htm
We could use bitcoins to set up an anonymous prediction market that the government can't shut down. Oh wait.
https://www.predictious.com
I'm not recommending it, just pointing out that it exists, and that is exactly the sort of thing people are making predictions on. I looks a little expensive to participate (fees seem high for what the site does, to me).
I'm not recommending it, just pointing out that it exists, and that is exactly the sort of thing people are making predictions on. I looks a little expensive to participate (fees seem high for what the site does, to me).
That's awesome. People never cease to amaze.
To be clear, I was suggesting that someone setup a full-blown futures market; not a prediction market ( which is the most neutered form of a derivative market, as near as I can tell ).
If you denominated the contracts entirely in BTC it might even be legal...
And if you had some enforcement mechanism (anything from shaming to gangsters giving amateur dental work to defectors), it might even work.
The question of whether a Bitcoin futures market would be more volatile if denominated in dollars or BTC is left as an exercise for the reader.
To be clear, I was suggesting that someone setup a full-blown futures market; not a prediction market ( which is the most neutered form of a derivative market, as near as I can tell ).
If you denominated the contracts entirely in BTC it might even be legal...
And if you had some enforcement mechanism (anything from shaming to gangsters giving amateur dental work to defectors), it might even work.
The question of whether a Bitcoin futures market would be more volatile if denominated in dollars or BTC is left as an exercise for the reader.
I've put a small amount of money into Predictious to play with it, and they resolve the problem of contracts by locking your funds when you buy into a particular prediction.
So, if you short shares, it locks up the full amount you would owe if your prediction is wrong. Going long only takes the amount of the bet (since that's all you can lose). It's kinda confusing and difficult for me to wrap my head around it, honestly, so I probably won't be doing a lot of that sort of thing.
But, it is a necessary part of the economy, I think. Having markets for all sorts of risk provides the ability to hedge against volatility. I don't think Predictious is really doing that, right now...it's sort of a thinking mans gambling site, as far as I can tell. Which is, as you note, less exciting and interesting than a proper futures and derivatives market.
But, legality is definitely up in the air. Americans can't participate in Intrade, for example, so I guess futures markets aren't legal in the US. I'm gonna guess that once Bitcoin looks like a currency to the US government there might be a stink about Predictious, too. I'm sure I'll be bored of the concept before then.
So, if you short shares, it locks up the full amount you would owe if your prediction is wrong. Going long only takes the amount of the bet (since that's all you can lose). It's kinda confusing and difficult for me to wrap my head around it, honestly, so I probably won't be doing a lot of that sort of thing.
But, it is a necessary part of the economy, I think. Having markets for all sorts of risk provides the ability to hedge against volatility. I don't think Predictious is really doing that, right now...it's sort of a thinking mans gambling site, as far as I can tell. Which is, as you note, less exciting and interesting than a proper futures and derivatives market.
But, legality is definitely up in the air. Americans can't participate in Intrade, for example, so I guess futures markets aren't legal in the US. I'm gonna guess that once Bitcoin looks like a currency to the US government there might be a stink about Predictious, too. I'm sure I'll be bored of the concept before then.
a poll should NOT be a forecasting device. do not go out and buy bitcoins because people on average hit the 1000-2000 option. unless of course, you mark one of the 1000+ options independently of the results of the poll, then you should go speculate in them (hell, if you were one of the several that marked 10k+, you should buy a ton!)
imo, bitcoin is very speculative and volatile, its a crazy market and these posts don't help that fact...
imo, bitcoin is very speculative and volatile, its a crazy market and these posts don't help that fact...
If there's no cost to storing a good, then the price today is the best predictor of the price in six months. There is no difference between a market and prediction market in this case.
6 months, not sure. Probably less than 100. Bitcoin is certainly interesting, but there's absolutely nothing backing it. Doesn't seem much different to me than pokemon/baseball cards/pet rocks. Once the novelty wears off, or one of the big players cashes out, we'll see it crash.
None of (pokemon/baseball cards/pet rocks) have all of (fungible, non-produceable/counterfeitable). I see bitcoin as quite different from these, at a fundamental level.
Bitcoin is closer to gold. After all, gold's intrinsic value is negligible in the face of its market price since:
"[gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” - Warren Buffet.
Bitcoin is closer to gold. After all, gold's intrinsic value is negligible in the face of its market price since:
"[gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” - Warren Buffet.
You really see no difference between bitcoin and baseball cards? The lack of vision embodied by such statements is quite tiresome.
You can't make as many Bitcoins as you can pokemon/baseball cards/pet rocks. That's one thing backing it. There will only ever be 21 million bitcoins in existence. Ever.
I see your point, but from my perspective it means little. There will only in history be x number of hairs on my head, but that doesn't make them worth anything.
You hairs lack the ability to be transfered quickly and globally and it wouldn't be hard to find hair of a similar color one could substitute for it.
Your hair can be easily counterfeited (it is prohibitively expensive to invalidate a fake). Your hair cannot be used as currency; bitcoin can.
The supply of first edition Charizards (a pokemon card) is also fixed. Any future printings will be a later edition. By your logic, is there a reason we shouldn't use first edition Charizards as currency, since the supply is fixed? (Counterfeiting is the only good argument I see.)
Counterfeiting is a good argument, and also instantaneous transfer anywhere in the world at any time without any extra security necessary.
Not really true.
We could fork the software and call it something else. Maybe change the hashing algorithm and the hard limit on the maximum number of coins, like Litecoin did. Trivial to do. There is no intrinsic difference between a Bitcoin or a Litecoin except they are used on different networks and have a different name.
By contrast, precious metals have inherent properties determined by nature. Gold is inert, it has never been recreated by man synthetically, which is what makes it so precious.
We could fork the software and call it something else. Maybe change the hashing algorithm and the hard limit on the maximum number of coins, like Litecoin did. Trivial to do. There is no intrinsic difference between a Bitcoin or a Litecoin except they are used on different networks and have a different name.
By contrast, precious metals have inherent properties determined by nature. Gold is inert, it has never been recreated by man synthetically, which is what makes it so precious.
That's already happened. The bitcoin software has been forked thousands of times and there are hundreds of alt coins out there currently.
The nothing backing bitcoin is exactly the same nothing backing every currency in the world today. Hooray for fiat currencies.
you should short it obviously - it'd be free money for you!
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I have a fundamental issue with bitcoins that I have not seen anyone address. Sooner or later a better bitcoin will be invented. One that can perform transactions faster, or is more anonymous or where mining for the coin helps some nice project (SETI@home, math proofs, protein folding, etc), or something completely different. When an alternative better currency catches on, at some point it will become obvious that bitcoins will be obsolete and the value should suddenly be 0 again.
It is the nature of technology that bitcoins will someday become MySpace.
I am open to be convinced otherwise by someone knowledgeable.
It is the nature of technology that bitcoins will someday become MySpace.
I am open to be convinced otherwise by someone knowledgeable.
Not always the best technology is the one which success. If that better bitcoin is invented too late, bitcoin can have a large infrastructure and accepted by a large proportion of merchant to be switched. Just think about VHS and Beta or OS/2
A few months ago, before the current wave of hype started, I got the historical price data on bitcoin and ran Eureqa on it, which is a program that tries to find the simplest possible equation that fits the data. Not for any practical reason, I was just testing the software. I extrapolated the result forward in time a few months ahead to see what it predicted, and it showed it increasing in price exponentially.
I was disappointed because I thought that was ridiculous and that I must have overfit somehow.
I was disappointed because I thought that was ridiculous and that I must have overfit somehow.
You didn't overfit. You fell in to the trap of assuming that past performance dictates future performance. It does not.
> I must have overfit
You did overfit.
You did overfit.
I don't think it was overfit, though just historical data isn't anywhere near enough information to make accurate predictions about things. I just find it funny that it wasn't as far off as I thought it would be.
Unless the US government decides to shut it down it will only go up in value with increased adoption and deflationary property.
There's many reasons these polls are unscientific, but I think one of the most glaring issues that could be easily corrected is it tells you the results before you vote which naturally influences how people think about their answer.
I think 'lil Wayne got the answer predicted out: http://www.youtube.com/watch?v=f5G4hZOJSng