The ‘mania’ is a problem, many guess a 4th(?) crash is coming. It is a risky project, perhaps the riskiest. But it’s alive because many of us ‘nerdy’ types believe crypto-currencies will be the currencies of the future; whether that’s BTC or not remains to be seen.
To some degree, others believe the current fiat currencies will eventually collapse. Hence a crypto may well be the last-man-standing. It would be hard to argue its legitimacy then.
TL; Valid points, though explaining everything away as ‘mania’ might be shortsighted.
i’m watching it since it was at 30 cents and made a solid amount of money with my bitcoins.
none the less i think its doomed. the argument of scarcity that the whole scheme is build upon is just not valid: the cost of creating a currency with the exact same properties is close to zero. on the long run there will be no trust in such a system. the real cryptocurrencies that everybody is waiting for will be smaller marketplaces and “money” will be backed by goods.
The problem with North’s assessment is that he seems to base his argument on an inherent-value theory of value, rather than the laws of supply and demand. Most of the price of gold, for example, is not due to its inherent usefulness or its use in jewelry, but the fact that people want it as a store of value. Why do people want it? Because they know that other people will almost certainly want it in the future – its historical strength as an investment is what makes it a strong investment.
Bitcoin, similarly, has no intrinsic demand outside of economic utility, so many people, including North, assume it must therefore have no value whatsoever. That doesn’t follow, though: the ability to store wealth digitally and anonymously, to transfer it over the internet without requiring a middleman or intrinsic transfer costs, to store wealth as information that you can make impossible to steal – these are economic utilities, but they add real value, and that’s where Bitcoin’s strengths lie and why people buy it.
also a good read: