Quote from: aminorex on April 08, 2014, 04:06:37 AM

Because of the various and specialized senses of the term "value" I think it is helpfully clarifying to say instead that you consider btc to be overbought in the near term. In this way I hope to avoid confusion between distinct concepts with differing relationships to price.

Regarding a 1.000.000 usd exponential trend price in 2017, I think our intuitions are a poor guide, having been trained in radically different domains. In the past people, notably including Risto, have rationalized the possibilty of such valuations in terms of supplies and the subsumption of pre-existing value into the value of bitcoin. But what if we instead consider marginal flows, and admit the possibility that bitcoin may create novel economic value - value the magnitude of which we can not presently estimate and therefore can not rationally limit or circumscribe.

Bitcoin ETP would trade against perhaps as much as 1 mm btc of float. The market cap of a single exchange traded company may range as high as 1 tn usd. Btc represents not just a single company but an entire economy. 1 marginal dollar of moneyflow can easily move price enough to result in 10 additional dollars of market cap. If ETPs on 1 mm float were to attract 1 tn in investor funds ( and there exist single investors each capable of investing about that much, such as Norway and PIMCO), which resulted in a market cap float of 10 tn, then each bitcoin would be trading for 10 mm usd.

The scenario is perhaps unlikely, but it is entirely conceivable and I know of no credible or principled way to rule it out. I could rationalize an additional factor of 10 if pressed -- after all, you can never have too much overkill.

If btc is replaced by another crypto, whatever value would have accrued in btc will just accrue in newcoin instead - even more , in as much as newcoin will only be able to displace btc by offering an order of magnitude improvement in utility.

I don't see why bitcoin would absorb the whole value of the economy "it" supports in its market cap. The main reason that I see is altcoins like AnonyMint mentions. The situation is that the infrastructure that is being built around bitcoin requires very little update to start accepting an altcoin. I don't think an altcoin would offer an order of magnitude improvement over bitcoin (unless AnonyMint convinces me otherwise), but it might offer some forms of specialisations and localisations that we probably didn't think about yet.
When the regulations are made thanks to bitcoin opening the way, the path will be wide open for all kinds of entities to launch their own crypto-currency. Local or national governments, big companies, and many other big and small entities.
Let's give an exemple : reward points from retail chains. Instead of giving reward points, why not to give some units of that new WallMart crypto currency ? You can then use it to pay your future purchases - or trade it on an exchange that accepts WallMart crypto.
Now if WallMart can create a crypto-currency with its own branding and specificities that are aiming at improving the shopping experience of its customers, why would it use bitcoin instead of its own ? I just don't see the logic there.
It is likely that the services and infrastructure that are now being built around bitcoin, will end up accepting all crypto-currencies once there is an exchange that does and that can link to that service/infrastructure. Updating them for that will be trivial.

If an entity is able to draw a crowd to use its own crypto, giving value to its own crypto, that crypto will be traded against bitcoin and then what is the incentive of an entity who has such capacity to choose bitcoin ? Someone please explain.

It doesn't mean that bitcoin would be dropped and die, it could stay at the top and remain the main unit of exchange of the whole crypto world. Or not.