Why the value of bitcoin is on an absolute tear

The digital currency, which has registered a series of records over the past several days, marked a fresh high Wednesday, when it surpassed $490 for the first time since September 2014, according to data from Coindesk, a bitcoin price index.

Bitcoin, which was at $491.77, according to Coindesk early in New York, has soared more than 22% so far on Wednesday and has climbed 72% over the past three months, as the chart below illustrates:

"Perhaps a more important question is what dollars will be worth in a year, or ten years...in terms of dollars today."

This shows an incredible lack of understanding basic economics. What you are describing is simple "denominationalism". It doesn't matter what next years dollars are worth compared to today's.

Proof: Suppose everything is 10X the price of today. Your payroll is 10X, a car is 10X, a house is 10X. Are you worse off? No. No change. Fixed income folks are going to suffer, but actually there are really very few of those any more. Most COLA clauses take care of that. Look at the Social Security payments of today compared to those of 1960. Much better today with all the changes in the dollar.

Notice, if a car is 5X and a house is 10X, now we have real estate inflation. But, bitcoin is subject to this change as much as a dollar is. And, with the whims of the nerds it is probably more subject that dollar. Notice its high level of fluctuation.

After all, when the hackers begin to raid the icebox, watch bitcoins disappear and every geekoid will be scratching their scraggly beards wondering "wah happind?"

“This shows an incredible lack of understanding basic economics. What you are describing is simple “denominationalism”. It doesn’t matter what next years dollars are worth compared to today’s.”

No, what I’m describing is “inflation”. With dollars it’s intentional, to discourage you from holding them and encouraging economic activity. BTC, on the other hand, is designed to be a stable currency which imposes no penalty on those holding it.

I hope that cleared things up for you. :-)

Ouch. Sorry.

Don't be. I like to think of it this way. I'M THE REASON FOR BITCOIN'S RISE. I sold it, it rose. If I sell a stock, buy it quickly because it's about to go up. If I buy a stock, sell. I could make a living advising clients to do the exact opposite of me. They would be rich indeed.

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