It's 'bitcrazy': People are mortgaging their homes to buy bitcoin

Brunilde Fioravanti
Dicembre 13, 2017

It's possible that the creator of Bitcoin is a group of people. The Bitcoin Foundation now manages Bitcoin.

In a recorded daily economics briefing, he added that the rollout of new Bitcoin-tied futures contracts has "fueled the hysteria, but this was a bubble at $6,000 and it's a bubble at $16,000". Over the next week it went up $12,000.

Talking about the possibilities of a bubble, bitcoin entrepreneur William Mook told RT that could happen but won't be fatal as the cryptocurrency's value "could not be permanently lost". Seven months later, it's now worth more than eight times that amount. While the price fluctuated after this spike, the overall trend has been rising prices. TO put it in perspective, the value of Bitcoin is up more than 1,500% since January of this year. The ledger shows a series of numbers in place of a name.

Where can you buy and trade bitcoin?

"A 20-fold increase in bitcoin prices in just two years, and an absence of any fundamental economic backing, cryptocurrency prices are nearly certainly a bubble", he wrote. Listen to bitcoin's biggest fans and they will tell you how cryptocurrencies are the future of money and a better alternative to centralized banking, as the funds can be transferred directly from one person to another - or from one person to a business, supplier or retailer. 39% of the world population does not have bank accounts; Bitcoin gives them access to currency that they would not otherwise have.

Ironically, bitcoin's current boom is making it very hard to use as a currency. Read this feature about Bitcoin risks and possible gains first.

Bitcoin has no pricing model. One can not reason these prices at such times.

We believe blockchains will start to realize their full potential for serious enterprise use in 2018, as new architectures come online that are more scalable and robust for high-volume use.

Bitcoin was initially created in 2008 by someone under the pseudonym, Satoshi Nakamoto, who left the project in 2010 and disappeared. Most investors are timid about taking care of their own private keys for bitcoin or Ethereum.

"Humans are incredibly influenced by other people in their environment", says De Martino. People, like UBS analyst Paul Donovan, expect the bitcoin bubble to burst with "destructive" consequences in the long term. "The social phenomenon is kind of an avalanche; it's a self-fulfilling prophecy", he says. "To date, using cryptocurrencies requires (effectively) a simultaneous asset sale and purchase of goods or services". De Martino co-authored a study that looked at why certain people are more likely to get involved in a bubble market while others stay away.

"Twenty years ago, if you wanted to explain email to most people, the question that would arise is "why bother, we have phones, mail and fax machines".

The reason for the link, De Martino says, is to do with something called theory of mind. In the new year, the need for more stable digital currencies will become increasingly important for commercial use. And as an incentive to do that, they get a service fee - a fraction of a Bitcoin. "After all, movements in the price of the cryptocurrency seem unrelated to movements in other asset prices".

For example, if North Korea were to actually launch a nuclear warhead tomorrow, there would be no reason for a non-yielding asset like gold to be trading at $1,600 per ounce.

Here's a list of bubble that came in and hampered various global markets. People who mine Bitcoin can also just hold onto it and wait for the value to go up or down before selling it. But there's no telling if, or when, the bubble will pop. "We are now having to start to think about what's going to be the economic effect when this bubble bursts". Now bitcoin is worth in excess of $16,500, as 2017 draws to a close.

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