How to spot people who are talking out of their armpit? They're engaging in prophecy about the future, that's how.<p>Nobody has any clue what the future holds, let alone the one of bitcoin. Everybody has a guess of course, but that's it, a guess.<p>Now some guesses are more educated, and others are less so, but that doesn't make them any less or more likely to come to pass.<p>But somebody will incidentially be right. Now it could be this guy, or it could be not. Nobody really knows.<p>As to when it comes to guesses about bitcoin, it'd be particularly important not to play the blind & elephant game (it's a commodity! No, it's a currency! No, it's a payment system! No it's a store of value! No it's an accounting ledger! No, it's a p2p network! No, it's a protocol! etc.). That is, you can't comment on an aspect of bitcoin and derive your entire guess from that, while ignoring all other aspects of bitcoin. You're free to base your guess upon that basis, but it's quite likely that in this case, your guess does indeed have a lower likelyhood to hit the mark.
Quote: <i>Optionality [Bitcoin could drop to zero]. I view that there's always a chance that a Bitcoin could be adopted. Could be used potentially as a basis for virtual currency. And so that would have some upside. An option premium of $5, $7, $10 seems reasonable.</i><p>This guy is a quack. There's no way he could define where is the "reasonable" point for Bitcoin to be in terms of value vs the Dollar. If he were indeed an expert in Finance, he should know that the value is driven by demand and supply, and not by what one guy thinks it's reasonable.<p>There's many ways Bitcoin may fall and drop in value, but just saying that <i>it's because it's backed by nothing but confidence</i> is really a wrong argument. Confidence is everything, and this is valid for both Bitcoin and fiat currencies alike. The key difference is that the supply of Bitcoin is limited, and that, inherently, ensures a better long lasting value vs fiat currencies on the long term as long as the utility/confidence remains there.
Everything is speculation. I am not sure why "finance experts" bother stating their opinion on bitcoin. It is still too early to tell whether it will succeed or fail. If it ever stabliizes it opens huge possibilities to dramatically change banking as we know it.
"Initially Bitcoin was supposed to be a very democratic process. We could just open our laptop and start mining Bitcoins. Now to mine Bitcoins after 11 million have been mined, you have to have super computing power."<p>For the record, it's not the quantity of the already mined Bitcoins that determines the further mining requirements, it's the mining competition. If back then there would have been so much mining activity as there is today, a laptop would have been as useless as it is today.