Rik Bitter wrote:Thanks , that was an interesting talk. I actually do believe bitcoin will recover and probably surpass it's previous highs at some point but I also believe it will also crash again and and repeat that cycle over and over. For now at least, It's a curiosity for tech savvy speculators.
You've nailed it Rik. The average Joe doesn't trust Bitcoin for all of the reasons that you've outlined.
However, the number of new users continues to increase, despite the difficulties involved with Bitcoin. All of these difficulties are going to be addressed as the amount of adoption increases. The future "growth" rate is going to be phenomenal. Bitcoin adoption over next 10 years will far exceed the past 10 years, despite the 329 times that the media has declared Bitcoin to be dead. https://99bitcoins.com/bitcoinobituaries/
Bitcoin is like the Energizer Bunny. It keeps going and going.
RikBitter wrote: The reason I think this is because I don't believe it will ever be trusted by your average Joe.
Bitcoin does not have a "marketing department", but it will be here before you know it. "Educational marketing" will begin by the brokerage houses once ETFs become available for them to sell to their clients. Actually, the client demand already exists.
The adoption of the metric system in the USA failed because of a lack of education (marketing). Most "averages Joes" are unable to convert Miles into Kilometers, or Kilograms into Ounces off the top of their head.
Trust is lacking because of a lack of understanding. This will change through education.
RikBitter wrote:There have been too many bitcoin thefts from the exchanges, the technical hurdles and expense to get in are too high.
The exchange thefts that have occurred are "growing pains" in the adoption of Bitcoin, and are, for the most part, no longer a threat. The major exchanges like CoinBase and Gemini have insurance to cover future losses, and any ETF will undoubtedly require insurance for SEC approval or market acceptance.
The nature of the exchange business requires 2 classes of wallets, known as "hot" or "cold". The hot wallet is used for daily trading purposes, and the cold wallet is "air-gapped" from the Internet.
To further illustrate the safety of using exchanges, Coinbase holds less than 2% of digital assets in their hot wallet. Furthermore, any dollar-denominated holdings are insured by the FDIC for a maximum of $250,000.
Despite the safely, it is still recommended that you personally hold your Bitcoins (private keys) on a secure storage device. DO NOT STORE LARGE QUANTITIES OF BITCOIN ON YOUR COMPUTER OR ESPECIALLY YOUR CELLPHONE.
The expense fees to buy or sell Bitcoin are pricey. Those fees are very negligible if you use a "market-maker" or "market-taker" order to facilitate your transaction.
RikBitter wrote:Add to that the volatility which keeps it from ever being taken serious for commerce and I don't see how it will ever really penetrate the popular zeitgeist.
The volatility of Bitcoin has decreased yearly, but the perception of massive volatility still exists. Greater adoption should further decrease volatility. The recent ability to easily hedge small physical positions (5 BTC) using Futures will go a long way to facilitate commerce.
One last comment on volatility. The price swings are very large because (1) they are, and (2) are quoted is BTC/USD. Assuming that Bitcoin continues its' historical growth patterns, the next run should see prices of $40-$80K per Bitcoin.
At some point, Bitcoin will be quoted as a Statoshi/USD pair, because owning 1 Bitcoin is beyond the means of the world's population.
You've mentioned that, at best, Bitcoin is a "tech-savvy" speculation. I strongly disagree that Bitcoin is a speculation.
Over 85% of Bitcoin is held by HOLDers, not speculators. Because of the public ledger, any wallet transaction can be seen by anybody. Very little Bitcoin actually trades, and the majority of these trades occur on exchanges, and are small in nature.
It is pretty easy to manipulate the price of Bitcoin, given the size of the "active" markets. The real whales trade "under-the-counter" via 3rd party partners in order to minimize volatility, or contract directly with mining pools using a purchase agreement.