Winklevoss twin says Bitcoin valuation will top $40k(thenextweb.com)
thenextweb.com
Winklevoss twin says Bitcoin valuation will top $40k
http://thenextweb.com/insider/2013/12/15/winklevoss-twin-says-bitcoin-valuation-will-top-40k-plays-down-silk-road-closure/#!pZeI0
13 comments
This behaviour is known as "talking one's book".
I think they own about 1% - a fair bit less than Satoshi Nakamoto, but yeah agreed on your point ... totally useless story.
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
[1] http://www.bbc.co.uk/news/business-23140904
"Winklevoss twin says value of Bitcoin will remain stable and find its place as a useful form of currency in the current global marketplace" ... said no Winklevii ever..
This should really be made illegal. Some poor soul is going to think they are serious and actually put money into it. The Winklevoss are barely a step above Madoff here.
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.
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.
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.)
(I think appreciation to $40k is delusional, but that's what they're claiming.)
according to this wikipedia article, the price in december 2012 was $13:
http://en.wikipedia.org/wiki/History_of_Bitcoin#Prices_and_v...
the average today is $827, 827 / 13 = 63.6153846154
http://en.wikipedia.org/wiki/History_of_Bitcoin#Prices_and_v...
the average today is $827, 827 / 13 = 63.6153846154
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.
EDIT: I know, it was just a funny event.
> the fortunes made to-date won't be made by the current batch of speculators
Yes they will. Under what you're saying, if earlier speculators made 40x then those who get in now also make 40x.
Yes they will. Under what you're saying, if earlier speculators made 40x then those who get in now also make 40x.
Definitely true, although I do believe they've been invested in bitcoins for quite a while now and have profited big time from the recent bitcoin boom.
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).
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).
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.
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.
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.
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.
> 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.
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.
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.
Therefore it's almost always cheaper for me to pay by credit than any other form of payment.
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.
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.
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.
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.
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.
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.
As aianus said, credit cards can easily be free! (pretty sure merchants are the ones who pick up the bill for that privilege)
You are right that the international transfer of bitcoin is very useful - but to say there are no commission or fees is not true.
If you start with Australian dollars and you want BTC, you pay fees and commission when you buy/sell BTC. Then you pay mining fees (if you want to support the ideals of BTC), and then to transfer back into Euros you would pay fees/commission with whatever exchange you're using.
Granted, it is going to equate to less than the % you would pay if you did it with your bank. However I still feel having a fixed exchange rate is worth something.
You are right that the international transfer of bitcoin is very useful - but to say there are no commission or fees is not true.
If you start with Australian dollars and you want BTC, you pay fees and commission when you buy/sell BTC. Then you pay mining fees (if you want to support the ideals of BTC), and then to transfer back into Euros you would pay fees/commission with whatever exchange you're using.
Granted, it is going to equate to less than the % you would pay if you did it with your bank. However I still feel having a fixed exchange rate is worth something.
Gyft.com gives 3% cashback at a variety of retailers including Amazon.com
(I am not affiliated with gyft.com, I just love bitcoin)
(I am not affiliated with gyft.com, I just love bitcoin)
This isn't true. If it becomes easier to spend bitcoins than dollars, why wouldn't you just spend bitcoins and convert your earnings to bitcoins as they come in?
The problem with Bitcoin isn't so much the price volatility. It's that spending them is difficult. That is changing rapidly. If a merchant offers a bitcoin discount that reflects the lower costs of doing business with Bitcoin, why wouldn't consumers spend them?
The problem with Bitcoin isn't so much the price volatility. It's that spending them is difficult. That is changing rapidly. If a merchant offers a bitcoin discount that reflects the lower costs of doing business with Bitcoin, why wouldn't consumers spend them?
i agree with you in principle, however i still think there is a flawed economy behind all this.
as long as i have $$$ and can spend them, why would I used BTC if the value of BTC is going up X% each month... I am better off using fiat. at a purely commercial level, it makes sense to buy bitcoins for capital gains, and use $$$ for life.
as long as i have $$$ and can spend them, why would I used BTC if the value of BTC is going up X% each month... I am better off using fiat. at a purely commercial level, it makes sense to buy bitcoins for capital gains, and use $$$ for life.
Every buyer needs a seller. So if this encourages people to buy, there will be sellers.
And in any case, this claim won't really do much to increase bitcoin valuations. Perhaps rather the opposite, given the source.
And in any case, this claim won't really do much to increase bitcoin valuations. Perhaps rather the opposite, given the source.
To help bitcoin, people need to spend bitcoins and hold onto bitcoins.
So you are presenting a false dichotomy.
I can spend bitcoins by buying them and spending them, without decreasing my actual long-term bitcoin investment.
So you are presenting a false dichotomy.
I can spend bitcoins by buying them and spending them, without decreasing my actual long-term bitcoin investment.
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.
Justified the 1300 value how ? They have no real method to get to that number.
You can read it here:
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.
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.
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.
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.
I think they justified their assumptions. Maybe you disagree with their justification?
You can draw comparisons, but in the end Bitcoin is like nothing else you mentioned here. Even if you compared it to Gold, it has several advantages over it. It's like an electronic Gold currency that can be transferred faster and cheaper than Paypal. You cannot deduce the value of Bitcoin in this way, because its value exceeds the sum of its properties.
You should try reading it... It's actually very well thought out.
I just read it, and it has huge, gaping holes and tons of hand-waving. E.g. ignoring all B2B usage; ignoring all illicit usage; estimates of market penetration they've just pulled out of their ass.
It poses a real threat to the speculation value currently hoarded in Gold. It is not unreasonable to expect bitcoins to eventually replace a substantial part of that value.
I am sorry buy BOA's analysis was just as much mindless speculation as the comments by the Winklevii (if not more)..
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.)
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.)
The difficulty changes every 2 weeks. So it happens sharply.
Also, the price will feed into mining activity, but mining activity won't especially feed into the price. It will some, but the giant size of the network means that mining power won't increase so much that it will substantially impact the ongoing supply (so the new coins should mostly be factored into the current market).
Mining difficulty is a function of both mined coins and time, the adjustment tries to make the time between new blocks 10 minutes.
Also, the price will feed into mining activity, but mining activity won't especially feed into the price. It will some, but the giant size of the network means that mining power won't increase so much that it will substantially impact the ongoing supply (so the new coins should mostly be factored into the current market).
Mining difficulty is a function of both mined coins and time, the adjustment tries to make the time between new blocks 10 minutes.
Very interesting. Now to try to corellate it with price swings...
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 ;)
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 ;)
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.
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.
Could someone possibly clue me in. I'm at a total loss.
> Winklevoss twin hopes Bitcoin valuation will top $40k
FTFY
FTFY
On Wall Street, this kind of rhetoric is called "talking your book."
Never trust a doppelgänger.
What does the other twin say?
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?
Since the twins are so heavily invested, there is no way they would ever support any evidence contrary to the title of this post...