The article makes decent points but these things are known to most people who understand anything about money, whether that money is Bitcoin or USD.<p>I have to say though that the opening line of the article is absolutely <i>terrible</i>:<p><pre><code> Bitcoin is based on the idea that money gets its intrinsic value from its scarcity..
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That is a terrible thing to say. Bitcoin is not based on that. Bitcoin is currently overvalued due to speculation. It's current value far surpasses it's utility (because we don't need $15 Billion transactions in BTC right now..). This is due to speculation, and yes, that is helped along due to it's scarcity.<p>But even with greater speculation, if the value starts going up, it becomes much harder to swing the market. Studying history is important. Bitcoin went from $30 to $2, then from $266 to $70. $1200 to $600 isn't even close. (there is of course the chance that it will go lower, much lower, but we'll see if/when it does..)<p>Volatility decreases with adoption. Adoption may decrease with volatility but so far, the crazy volatility has favored adoption and awareness. Volatility will truly become a problem if mainstream adoption takes place and it continues. However, it's harder to swing a bigger market, mainstream adoption is what will protect bitcoin from volatility (speculative, or otherwse). It's much easier for a person or a group of people to swing a $1MM market, vs. a $15 Billion, vs. a $1 Trillion market.<p>So far, every huge volatility event has helped bitcoin become less volatile and gain value/adoption/mindshare.<p>I can see how someone who just found out about bitcoin is going to focus on it's volatility. This has been true of every single media agency on the planet in the last few weeks. However, anyone who has been in this long enough or has studied it will recognize that volatility is actually decreasing as the market expands (an expected result). Somehow the other HN post about people not liking creativity/alternate solutions seems to come to mind [1]. (not an attack on the author but on the general sentiment, "BITCOIN WILL FAIL EVEN THOUGH I HAVEN'T STUDIED IT AND KNOW NOTHING ABOUT IT!!!! IT'S PONZI, OR ILLEGAL, OR DRUGS, OR SOMETHING!")<p>TLDR; Bitcoin is way less volatile than it used to be. Bigger numbers ($1000 vs $10) don't mean more volatility.<p>[1] - <a href="http://www.slate.com/articles/health_and_science/science/2013/12/creativity_is_rejected_teachers_and_bosses_don_t_value_out_of_the_box_thinking.html" rel="nofollow">http://www.slate.com/articles/health_and_science/science/201...</a>