The human tendency to paint retrospective narratives on events, that we didn’t understand at the time is well explored in the book The Black Swan. Therefore predictions, and experiments that have the potential to disprove them, is a better way to review the past.
It’s now common on Twitter to point back to incorrect articles if they were critical of something, and laugh. But in fact predictors put exact terms on what they thought would happen, providing a useful reference to learn from. A more common, self-preserving strategy is to make vague predictions that have no useful purpose. Bitcoin has disappointed people in the last two years and so it's tempting to laugh at overly optimistic predictions.
Its worth considering the potential effect of this 'trough of disillusionment'. Fred Wilson touches on it here. http://avc.com/2014/09/the-bitcoin-hype-cycle/ . Total transactions are up on last year and anecdotally developer activity is strong (although this provides a counterpoint) but it hasn't translated yet to new optimisim. The popular exicitment around a rally hasn’t existed for a long while and this lag may be an opportunity. Arguably that started a year ago but hasn't hit the wider population outside the bitcoin community yet. Tuur Demeester has been a vocal proponent of this.
Potential problems for the currency stil include: A 51% attack. The rise of another currency. Adoption of blockchain tech without bitcoin. Reversion to gold in a crisis. Government clamp down. Core developer infighting around block size. Some unknown bug or other unkown unknowns.
The total value of remittances are 583 billion dollars worldwide . The total value of gold is 7.8 trillion dollars. Global debt in 2007 at the height of the crisis was 149 trillion. Its is now about 200 trillion. The nationalist movement has pushed more countries and areas towards secession. These are all possible factors that people speculate could help the growth of bitcoin or simply serve as a good hedge against sudden changes in these markets.
One of the less discussed factors around the long term strength of bitcoin is the consensus, among 'correct contrarians’ that it will be a mainstream technology in the future. By 'correct contrarians', I mean someone who has bet their time and money on a what seemed like long shot technology at the time, and been right about its success. I have listed them in a separate article. The only other time I have seen this is when Stripe was launched. It was not an investable theory but I did predict that would be big when they had 20 employees. I think the same applies to Bitcoin.
For all these reasons I think that:
Bitcoin may be worth more than $10,000 before December 2021 - I give this a 60% weighting in Dec 2016.
I would put the weighting of $3000 before December 2019 at 70%
If I'm wrong I'll have something useful to reframe or dismmis my previous assumptions. And something for people to laugh at.
It’s now common on Twitter to point back to incorrect articles if they were critical of something, and laugh. But in fact predictors put exact terms on what they thought would happen, providing a useful reference to learn from. A more common, self-preserving strategy is to make vague predictions that have no useful purpose. Bitcoin has disappointed people in the last two years and so it's tempting to laugh at overly optimistic predictions.
Its worth considering the potential effect of this 'trough of disillusionment'. Fred Wilson touches on it here. http://avc.com/2014/09/the-bitcoin-hype-cycle/ . Total transactions are up on last year and anecdotally developer activity is strong (although this provides a counterpoint) but it hasn't translated yet to new optimisim. The popular exicitment around a rally hasn’t existed for a long while and this lag may be an opportunity. Arguably that started a year ago but hasn't hit the wider population outside the bitcoin community yet. Tuur Demeester has been a vocal proponent of this.
Potential problems for the currency stil include: A 51% attack. The rise of another currency. Adoption of blockchain tech without bitcoin. Reversion to gold in a crisis. Government clamp down. Core developer infighting around block size. Some unknown bug or other unkown unknowns.
The total value of remittances are 583 billion dollars worldwide . The total value of gold is 7.8 trillion dollars. Global debt in 2007 at the height of the crisis was 149 trillion. Its is now about 200 trillion. The nationalist movement has pushed more countries and areas towards secession. These are all possible factors that people speculate could help the growth of bitcoin or simply serve as a good hedge against sudden changes in these markets.
One of the less discussed factors around the long term strength of bitcoin is the consensus, among 'correct contrarians’ that it will be a mainstream technology in the future. By 'correct contrarians', I mean someone who has bet their time and money on a what seemed like long shot technology at the time, and been right about its success. I have listed them in a separate article. The only other time I have seen this is when Stripe was launched. It was not an investable theory but I did predict that would be big when they had 20 employees. I think the same applies to Bitcoin.
For all these reasons I think that:
Bitcoin may be worth more than $10,000 before December 2021 - I give this a 60% weighting in Dec 2016.
I would put the weighting of $3000 before December 2019 at 70%
If I'm wrong I'll have something useful to reframe or dismmis my previous assumptions. And something for people to laugh at.
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