And why the bitcoin value is entirely dependent on the black market.
It is simple supply and demand. Lets look at each side.
Supply:
Supplied by miners. Any serious operation NEEDS to sell to pay utilities. That creates a steady supply of bitcoins offered at market price on a regular basis.
It is simple supply and demand. Lets look at each side.
Supply:
Supplied by miners. Any serious operation NEEDS to sell to pay utilities. That creates a steady supply of bitcoins offered at market price on a regular basis.
That alone is what kills it at this point. Everyone is still using this a profit making game, which means all mined coins are getting sold off for market price.
Bottom line: almost no one wants Bitcoins for Bitcoin's sake. People want Bitcoins to sell for dollars now or later, or they want them to purchase illegal items. That's really all they're used for right now and it's unfortunate.
Welcome to deflationary economics 101.
A system in which he who can afford to sit the longest on their pile of money wins. A system that resembles a bunch of hens sitting on eggs rather than the exchange of goods and services and economic growth through production and investment. A system in which if a person was able to take a time machine into the future they would have become richer simply through the 'virtue of saving'.