Quote from: sgbett on December 11, 2013, 12:28:52 AM

Me again!

How convinced are you btc will fail? How can you be sure?

If there is a nonzero chance if something happening then it is possible for you to figure out ev (which you can adjust to fit your bias)

I'm not sure what set of circumstances gives you an outcome where the best (most rational) action us not to buy any btc? How do you come to the conclusion that there is zero risk holding no btc?

I never said I'm certain Btc will fail (although it might).

But the conclusion of my argument would be something along these lines: There's less risk of not owning any Bitcoin, then to do, when the price of each Btc is close to 1,000$. Given all the reasons I have mentioned. Actually this statement might not be true for me at all time. But it's true for me today.

Also might not have been the case when the price was 10 or 20$ a piece.

Problem is that if the price now goes back down to 10 or 20$ a Bitcoin, it might not be as attractive an investment as when it first happened (on its way up, couple of months ago). Again there's a full analysis as to why this might be the case (in my own POV, not based on any economic theory but based on my own analysis).

Quote from: Chalkbot on December 11, 2013, 12:51:27 AM

Quote from: JayB on December 10, 2013, 10:56:39 PM

Sure from an economic POV if the total number of Bitcoins to be ever made are limited to 21 million units, then it's easy to imagine that couple of years down the line when its enough spread over the world the market cap of Bitcoins would easily reach 10 - 11 trillion dollars, making each Bitcoin worth 500K dollars (equilibrium when demand = supply). But I don't see this happening for a couple of reasons:

1- If competition enters the market (and it surely started to), and if cryptocurrency always existed couple of years from now (big IF), then the number of total cryptocurrencies in circulation will be much more than 21 million units. So even if total value of those become a couple trillion dollars (to satisfy total market demand), it will be spread over a much wider number of units and so the value of an average unit will be much lower than 500K $.

So you think there's a good chance that a bitcoin will be worth somewhere between $1000 (current value) and $500,000 in the future (that being the best case where it's the dominant cryptocurrency), and you can't justify investing $10 because of the "risk"?

Interesting thought process. For me personally, assuming I thought bitcoin had a 99% chance of total failure (i.e. crash to 0), this would still be a worthwhile investment. $10 is not a significant sum of money for me, and if the potential upside (by my own estimation) was 50,000% gains, it seems like a no-brainer. If they sold lottery tickets with those odds, I'd quit my job.

No I never said it might be anywhere between 1 and 500K...but rather 0 and 500K.

And if you look at it from a probability distribution POV, I'd say much higher probability for it to be between 0 and 1K than for it to be between 1K and 500K.

That's my point. In my head, the probability distribution of it's future value would give a present value lower than it's current value + transaction costs + opportunity costs...I got a bit technical, if you need more explanation lemi know