Slashdot Mirror
The Case that Bitcoin Is a Bubble (economist.com)
An anonymous reader shares an excerpt from the Economist: It seems that every day, Bitcoin seems to hit a new high. But the reported price can move up and down by $1,000 or so within a few hours. This might have made it a great investment for those who got in at the right price and are nimble enough to get out in time. But it doesn't make it a useful means of exchange (Editor's note: the link could be paywalled; alternative source). When the price is rising fast, those who use bitcoin will be reluctant to part with it; when the price falls, those who sell goods will be reluctant to accept it.
You forgot that you can't tiptoe through bitcoins
All of that completely misses the point of the argument comparing the Bitcoin bubble to the tulip craze.
It is precisely not about the nature of the commodity being traded. It could be fidget spinners, beanie babies, futures contracts in mortage-backed securities, it doesn't matter.
What does matter is lots of ordinary investors with no understanding of what they are investing in believing that because others find this commodity desirable, it must be valuable and the price will continue to rise - and importantly, that they will be able to extract that value before the price crashes leaving them "holding the bag" of something now worth much less than they've invested in it.
That's hard because of the way Bitcoin stories work.
As Slashdot mines the news for more Bitcoin stories, they become more and more computationally expensive to find. While there may seem a lot right now, especially as more and more submitters join the craze, mining Twitter feeds, various libertarian blogs, and Reddit for undiscovered Bitcoin stories, there will eventually be an equilibrium where they just stop being profitable to find. At that point the number of stories posted to Slashdot will decrease.
Advocates of Slashdot covering Bitcoin claim that when this happens, the stories published will be more and more valuable, but many feel that the very act of reaching this equilibrium will mean that there just aren't any interesting posts left, resulting in a complete collapse of interest in this shitty "currency that's not a currency".
You are not alone. This is not normal. None of this is normal.