Quote from: BTCtrader71 on April 17, 2014, 02:32:39 PM

Quote from: rpietila on April 14, 2014, 08:05:35 PM

And I am quite sure I know the reason for that. It is the extreme information asymmetry between Bitcoin owners and non-owners.

This is a great point. As I was trying to explain information asymmetry to a newbie as a rationale for a heavily bitcoin-weighted investment portfolio (as opposed to a more traditional diversified portfolio), it occurred to me that there are two implications. Assuming that I am a long-term bitcoin bull, a hodl'er, who follows the space very closely and understands the fundamentals very well (all of which I believe to be true):

1) I am in a very GOOD position to profit from long term price RISES due to continued favorable fundamentals. This is because I am competing against the bitcoin non-owners of the world who will eventually appreciate how great bitcoin is, but they will be very slow on the uptake.

2) I am in a BAD position, relatively speaking, to benefit from price FALLS secondary to unfavorable fundamentals. This is because I am competing against the bitcoin owners of the world who will be able to digest bad news extremely quickly.

In my mind, the greatest threat to bitcoin as an investment is if something significantly better comes along. I have been following "bitcoin 2.0" projects (Ethereum, sidechains, etc) very closely and so far, I have not seen anything so far that appears likely to replace bitcoin. Indeed, things like sidechains will only strengthen bitcoin's fundamentals. But suppose something better did come along, and caused the value to bitcoin to plummet. Would I anticipate it faster than the market? Maybe -- after all, I follow this space VERY closely -- but then again maybe not, according to my above reasoning.

Thoughts?

Hey, I am glad someone else mentioned ethereum, will you or anyone else reading this buy the ether coins when they come out? 1 btc/1000 eth I think. Would this be a smart investment?