Joe Weisenthal said “there’s a lot of debate about what Bitcoin is. People go ’round and ’round in circles about whether Bitcoin is a currency or a commodity or a platform or a protocol or an equity or whatever. These squabbles frequently get semantic (What is a currency? Must it be a stable store of value?) and usually they suffer from an inclination to plug Bitcoin into a category where it never quite fits. I think Bitcoin is a hybrid of three things with which we’re all pretty familiar: a currency, an equity, and a social network.” He explains why bitcoin is a currency and an equity. I would like to expand on what Weisenthal says about bitcoin as a social network to explain its value today and why its future price can be stunning.
Antonis Polemitis in “bitcoin series 7” indeed concludes that “if people stop using bitcoin, its intrinsic value is zero. Its value is 100% derived from the fact that it is a network (aka other people and other businesses will accept bitcoin)”.
Bitcoin and all crypto currencies are based on the network of people who use the coin. This follows from the economic principle that demand applies upward pressure on the asset especially when scarcity is part of the equation. The Bitcoin network total number of unique addresses used on the Bitcoin blockchain(fig1) and the number of daily confirmed Bitcoin transactions(Fig2) can be used as an indication of the current size and growth of bitcoin use and by extension bitcoin users. As is clear; the chart is reminiscent of the price of bitcoin for the simple reason that the main influencing factor behind bitcoin’s price is the ‘social network’ behind it.
That being the case, with the ever-increasing number of news articles and exposure that bitcoin gets among the general public and the exposure altcoins get among the bitcoin community leads an inescapable conclusion; that bitcoin’s price should increase as well as a select number of altcoins.
How High Can Bitcoin go?
Some say 2000 by end of year some say 10,000. Who has a crystal ball?
The crystal ball is of less value here (if I had one I would use it ) as the growth of cryptos, bitcoin and blockchain technology has already fallen over the precipice. Cryptos are here to stay and Bitcoin is akin to Microsoft in the 1970`s.
Let`s be honest the older generation are pretty much clueless about crypto-currencies and are highly suspicious of Bitcoin, Ethereum and other altcoins. The same was true in the 70`s or 80`s or even 90`s with PC`s.
Bitcoin growth is by word of mouth each day. Friends speak with friends and family and they speak with their cats and dogs. The community expands daily and this expansion pushes economic technical analysis out the window making way for a bullish as all hell asset based on emotion and pure demand side growth.
Article By Thomas Johansson