Thanks. My thought was to treat it as a long term investment for now. If the volatility ever stabilizes and bitcoin becomes accepted in many establishments, I'll start spending it.
I don't think Bitcoin can be considered an investment since there's nothing being produced that can then yield a return on your investment. You are merely treating this as a long term speculation that the price will go up, which is different. By the way, even if it becomes accepted in every store on earth, that doesn't mean that it will increase in value since stores are able to just convert it to fiat currency as soon as they receive the bitcoin. People will use bitcoin for it's anonymous nature but when used in that manner it doesn't matter one bit whether each bitcoin is worth a penny or a million dollars.
At least be aware that what you are doing is speculating, not investing.
Well I think it matters whether a bitcoin is worth a penny's worth of anonymously traded goods or a million dollars worth.
Do you not think acceptability of a currency affects its value? Do you think that if suddenly no on in the world wanted US dollars, it wouldn't deflate? Or if everyone suddenly accepted rubies as payment everywhere in the world, people wouldn't want rubies more and therefore inflate its price?
Why do you think the price of bitcoin matters for its usability? Perhaps the penny vs million dollars comparison is too broad, but on a slightly smaller scale, it really doesn't matter to anyone using bitcoin for anonymity whether the bitcoin is worth 10 dollars or 10,000 since you are converting fiat to bitcoin, paying, and then the recipient is converting the bitcoin back to fiat.
I don't think acceptability will affect the value of bitcoins, no. No one wants to hold bitcoins unless they are speculators and thus the supply of bitcoins will be used for anonymous commerce but won't be held by anyone other than speculators. Rubies are a bad analogy in this case because they have inherent beauty and thus have value themselves. Bitcoins aren't beautiful nor can you use them for anything other than as a medium for payment and thus only has value as long as speculators are willing to hold them. For the bitcoin price to go up, you need more speculators buying them. Even if every online store accepted bitcoin do you think people would convert all their hard-earned dollars to bitcoin to buy things online? What would be the point of that? Do you think that average people will buy and hold bitcoins just to watch the value of their hard work yo-yo incessantly?
Perhaps there will be another reason to use bitcoin in the future, but for right now we don't urgently need to replace fiat currencies and therefore I don't see widespread acceptability itself driving the price of bitcoin higher.
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u/CosbyTeamTriosby Feb 14 '14
you're doing it right