The Bitcoin Bubble (economist.com)

A reader shares an Economist article: More people will trade in Bitcoin and that means more demand, and thus the price should go up. But what is the appeal of Bitcoin? There are really three strands; the limited nature of supply; fears about the long-term value of fiat currencies in an era of quantitative easing; and the appeal of anonymity. The last factor makes Bitcoin appealing to criminals creating this ingenious valuation method for the currency of around $570. These three factors explain why there is some demand for Bitcoin but not the recent surge. The supply details have if anything deteriorated (rival cryptocurrencies are emerging); the criminal community hasn't suddenly risen in size; and there is no sign of general inflation. A possible explanation is the belief that blockchain, the technology that underlines Bitcoin, will be used across the finance industry. But you can create blockchains without having anything to do with Bitcoin; the success of the two aren't inextricably linked. A much more plausible reason for the demand for Bitcoin is that the price is going up rapidly. People are not buying Bitcoin because they intend to use it in their daily lives (Editor's note: the link could be paywalled; alternative source). People are buying Bitcoin because they expect other people to buy it from them at a higher price; the definition of the greater fool theory.

Comments

Re:Did you really just link to goo.gl?

[Mitreya]

Haha! a spam link to a product completely unrelated to the supposed story.

"Supposed" story is right. Even for /. story, this was impressively incoherent blabber. Do we have to copy TFA even when it barely makes any sense? Gems such as:

A lunchtime BBC news report visited a conference where the excitement about Bitcoins (and blockchain) was palpable.

But there is nothing like the same excitement about shares as there was in the dotcom bubble of 1999-2000. That excitement has shifted to the world of cryptocurrencies like Bitcoin and Ethereum.

Remarkably, as many as 600 ICOs are planned or have been launched.

This enthusiasm is both the result, and the cause, of the sharp rise in the Bitcoin chart in recent months.

the appeal of anonymity. The last factor makes Bitcoin appealing to criminals (although this is even more true of cash)

The supply details have if anything deteriorated

the criminal community hasn't suddenly risen in size

When the crash comes, and it cannot be too far away, it will be dramatic.

Wow...

Redirects [Re:Did you really just link to goo.gl?]

[Geoffrey.landis]

Yes, I really just link to goo.gl. Why? Because it's an Economist article, which sits behind a paywall.

The conventional way to post such a link is to post the link to the actual article, and then put in parentheses the alternate source.

So I instead funnelled the article through Pocket service -- a common way to break paywall -- so that most readers see an unpaywalled version of the story. Now, getpocket [dot] com wouldn't make much sense to others, but goo [dot] gl will make it clear to people that the link has been shortened.

I clicked the link and it sent me to a redirect to getpocket which sent me to a redirect to the Economist article https://www.economist.com/blog... .
So the article is still behind a paywall, but the click got there via two redirects, instead of linking there directly. I'm not sure what the advantage was.