Quote from: Dr Bloggood on January 06, 2014, 07:57:20 PM

Quote from: BlueNote on January 06, 2014, 06:11:52 PM

Bitcoin has provided an exciting challenge to those who think intently about economics and money, so I've had to wrestle with every pro and con argument that's out there relating to cryptocurrency.

Me too, I'm sure this is true for a lot of the smarter minds on this forum. Btw, the phrases westkybitcoins highlighted in your post above are exactly the key phrases for me as well. That's the whole point.

So what are your conclusions - how far can BTC go and what are the biggest dangers to it? How likely is it that it will still exist in 4 years from now?

How far can it go? We can only guess. The demand for this kind of currency is potentially huge and the supply of the standard Bitcoin unit is relatively small, so barring any insurmountable interventions by colluding governments or unforeseen bugs in the system, it seems to be on pace to take significant market share from fiat currencies and therefore rise in price indefinitely until it reaches the saturation point. The argument that its utility is the same regardless of the price and that this will keep the price down doesn't take into account the liquidity (in BTC) needed to provide that utility to a large number of people across the world on demand. As long as most holders are not selling, new buyers will have to outbid each other for the newly-created units coming from mining in order to gain that utility. Adoption and use of the currency must keep pace with the price increases in order to sustain them long term. It has to be used in commerce in an ever-increasing way, otherwise the price will be driven by mere speculation (which is not a demand for utility but profit).

I think it will be here in 4 years. It's very hard to kill.

What are the dangers? The shutting down of exchanges and/or merchant services is probably the main danger from governments. They are able to act swiftly and decisively on any part of the ecosystem exposed to them. So exchanges, merchant services, and other Bitcoin related businesses are at risk directly if they are out in the open and the government decides it wants to crack heads, but as long as this is not a worldwide coordinated effort, it will be limited in effect. Bitcoin should be highly resilient to bureaucratic attack due to is design.