Its safe to say that nearly 100% of the price of these coins is derived from speculation.I wish I had gotten in back then before it was tooÂ late.â
Iâve been hearing these kinds of statements a lot so far in 2017.Over the years since then Iâve literally heard this kind of statement hundreds maybe thousands ofÂ times.
Thatâs not to say that there isnât potential profit to be made by investing in altcoins.As long as bitcoin remains a censorship-resistant store of value and medium of value transfer, it will remain useful.Many of them have very large supply schedules while others like Ripple(XRP) even have centrally controlled, flexible supplyÂ levels.[Welcome Trading On CEXIO QASH]âI heard about bitcoin years ago and I didnât take it seriously.Iâd rather that readers consider why bitcoin has become so valuable.I believe we can boil this down to one very simple statement:Bitcoin is so valuable because itâs very rare and veryÂ useful.
âI wish I had invested in bitcoin before it was too late...â was originally published in Bitcoin Brains Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.[Influencing To Price The USD BCH Factors]
In spite of increased transaction fees and network congestion, users around the globe are finding ways to solve real-world problems using bitcoin.Itâs a safe bet that anyone who decided not to buy bitcoin at $30 because it was âtoo lateâ would like to revisit thatÂ choice.
However, as of right now, there are no real-world problems being solved on any meaningful scale by any cryptocurrency or token other thanÂ bitcoin.[The Fabric Waves In Wirex Of]
The first time I can remember hearing this was in the summer of 2011.As you can see by this chart, many of them are doing really well latelyâââeven against the price ofÂ bitcoin.
Nearly everyone currently holding bitcoin can tell you a story about how they could have bought sooner but didnât get it immediately.[Are Top Bitcoin Right That True Now Predictions Coming]
Now that bitcoin is trading over $1900 CAD, its easy to view this as very expensive.
Another thing Iâve been hearing a lot lately is that people are buying altcoins because the prices are more attractive and they feel that theyâve missed the boat on bitcoin as an investment.Because we know the supply is fixed, we know they will continue to be rare.For people used to seeing bitcoin in the $1â3 range, $30 felt very expensive asÂ well.[EOS Smart Choose Do Ethereum Vs People What]
In fact, some altcoins are attempting to solve really interesting problems beyond those addressed by currency..The currency is still new and price swings can be dramatic.Many of these coins fail to solve any real world problems that are not already being solved by bitcoin.The price of bitcoin was in the middle of a spike, up to $30 at the top of bitcoinâs first big âbubbleâ.However, with use-cases beyond investment growing everyday, the underlying demand for bitcoin is very strong and likely growing faster than theÂ supply.[Register Bitcoin Proposal ETF VanEck Cboe In Registered Is The Federal]
That is to say, none of these coins are currently useful.As more users around the world find ways to solve problems using the irreversible nature of bitcoin transactions, bitcoin will become more and more useful.Speculation and investment definitely play a significant role in the current price of bitcoin as well.The top 20 altcoins by volume on Poloniex, April 30,Â 2017.[Explained Ethash]
Investing in bitcoin still has to be viewed as a risky bet.From a long term perspective though, investing in bitcoin is a far safer investment than putting money into any altcoin.However, for most altcoins, the long term value proposition is much less clear.The value proposition isÂ clear.[2019 January Dynamics ATM Market Bitcoin]
Now I donât mean to say that now is a good time to buy bitcoin, we might very well be in the middle(or at the top) of another bubble.Most of these coins are not nearly as rare as bitcoin either.Unless bitcoin loses its market dominance, there is no reason to suspect that this willÂ change.