Post
Topic
Board Economics
Re: [CHART] Why bitcoin is in a speculative bubble
by
kallekoll
on 03/12/2013, 20:05:38 UTC
You are wrong for one reason.  You assume that bitcoin's only use is for point of sale transactions.  It serves many other purposes.  Why bother with bank wires anymore?  Or traditional banks for that matter?

Sure, bitcoin can be useful as a replacement for bank wire transfers. But after the transfer the reciever will probably sell the bitcoins on an exchange for a more well established currency, and so then the bitcoin market price would drop back to where it was before the sender bought the coins. That kind of use would not cause the market price to go up.

The reciever could keep the coins, but what for? Either hoarding (speculation), or for actually using it as a currency.

A currency is "used as a way to pay for goods and services and to pay people for their work" (Merriam-Webster definition). We would see these transactions for goods and services in the blockchain, but we dont.