Investment principles remain the same. Bitcoin does not rewrite them. All of these arguments against are still valid
I'm not going to go so far as to disagree 'strongly' with any of you guys. I don't come from an investing backround. I've never dabbled in that. The concept of bitcoin appealed to me back in 2013 and I invested on that basis.
I won't trawl through the web. However, I agree that there is a volume of naysayers - naysayers who are significant figures in wall street, establishment banking, etc. Having said that, there are also former hedge fund managers and other significant people who are of the opposite opinion.
Whose right...only time will tell. Can there be a correction - resulting in consolidation and bitcoin starting back up the way again? - I believe that's plausible (in my unqualified opinion).
Furthermore, there are valid concerns that digital currency assets can be hacked or stolen."
Yes, that's quite right. But if someone dabbles in Crypto, the first thing they learn is that you do NOT hold significant funds on a bitcoin exchange for any longer than is necessary. Funds can be held in cold storage - very, very securely. If you're prudent and responsible, this is a non-argument.
It's a fair point though. The last bubble that comes to mind was the dot.com bubble where, thanks for the advent of the internet, all sorts of companies sprung up, such as Pets.com. In fact, anything with the .com after its name seemed to join the share price rocket. People then had no idea idea what these companies were worth but we driven by the expectation that the companies would one day make lots of money once the whole e-commerce thing took off.
That analogy has been made ad-nauseum - over the past few weeks. It may well be right. A different type of 'investor' has gotten involved in BTC in recent months. Not sure if it's a good thing....I was quite happy with steady organic growth.
I'm stumped with Bitcoin though. Even if it used by more people for purchasing more things, how is its price increase justified on any level?
It was designed to be of a finite amount. Currently 16 million bitcoin in circulation (aside from those that have been lost) - although of those 16 million, many 'hodl' (they're keeping them and using them as a store of value). BTC has 8 places of decimal. There's still enough to go around - but with a finite amount (the maximum 21 million will only be realised by 2040), the price must go up.
I'm stumped with Bitcoin though. Even if it used by more people for purchasing more things, how is its price increase justified on any level?
Currently, it's being used as a 'store of value' - to compete with gold and such. When I first got involved (and I believe this was the mindset of many others), I was thinking in terms of it being the currency of the internet. However, it's been hit by teething problems;
1. Volatiliy
2. Issues with confirming transactions (delays, etc. - and also higher transaction costs than were ever envisaged).
3. It's still hard for ordinary people to get to grips with
Having said all that, it's a young and developing 'currency'. Work is being done by a very talented pool of developers. When 'lightening network' comes on stream, that's going to change things drastically. It *may* bring microtransactions back into the mix once more.
Governance is also an issue. Everything in bitcoin is done by consensus. However, due to vested interests between the varying groups (developers, miners, end users, etc.), this has led to very cumbersome decision making. I like the consensus based approach and I don't know what the solution is - but decision making has to be more agile to advance the project.
It seems like someone has invented something which people may use to a greater degree in the future (but who knows) but that very few people use today. The only redeeming feature is that it is in limited supply, but so what?
See above.