August 7th, 2017
The price of Bitcoin is going through the roof, with very little data out there determining if it is rational. In the latest episode, Neal & Nathan explore 4 factors that could determine if the price is overspeculated, or is perfectly priced. The 4 factors are: Macro-economic trends, Bitcoffee Index, Value of Trust and Mining Convenience. We will use these four factors in future episodes when comparing Bitcoin to other Cryptocurrencies that could rival it’s dominace in the future.
Macro-Economic trends are important since certain countries could be using Crypto-currencies such as Bitcoin as a havan. A sudden changes in governmental policies could see unexpected trend reversals.
The Bitcoffee Index highlights the mechanics of a currency, and how transaction costs and time to confirm payment could impede adoption.
Value of Trust is the hardest to determine, but each country has it’s own perception as to what that is. With 80% of mining pools for Bitcoin in the same country, does that impact it’s value of trust since one country could influence decision making more than others?
Mining convenience is probably an over-looked factor since Crypto-currency design could infuence mining adoption, network size and the vastness of decentralization.