[jerguismi]

> Hoping that it will mis-count your wealth in your favor is speculation, which is a bad, dangerous role for currency.

Speculation is rampant also with traditional currencies - I remember seeing reports where 80-90% of trades in traditional forex markets were classified as speculative.

I personally think there is a lot benefits from speculators. Speculators create pricing signals, help price things more effectively and create better liquidity. All market participants benefit from better pricing and liquidity. The more we have speculators on the market, the better priced things we have on the market and that in the long term means stability and predictability.

[friendzis]

> Speculators create pricing signals, help price things more effectively and create better liquidity.

Care to elaborate on the liquidity part? I fully agree that forex speculators play significant role in price (exchange rate in this case) discovery. Although, the money used for speculation is essentially locked up in the price discovery mechanism and if anything that reduces liquidity available to actual economy.

[jerguismi]

One speculator enters the market = one more buyer and seller. If you go to a stock exchange, you see the bids and asks. The more there is those, the better the liquidity. Each speculator adds either bids or asks or demand for them.

[ForHackernews]

The difference is that speculative traders in a normal market are making bets about an actual real underlying value. A share in a company represents some productive asset, a USD can be used to pay tax obligations, even gold has industrial applications.

What is driving the value of a bitcoin?

[jerguismi]

> What is driving the value of a bitcoin?

No one knows, maybe some have same theory of value and that's why there is speculation? I see nothing special in bitcoin, it is just one of the numerous things that the market tries to value. If the market is only speculation the value should go to zero in the long term. If there is some value in addition to speculation, the value should be non-zero - and it is left to the markets to decide, what the actual value is.

[dragonwriter]

> The difference is that speculative traders in a normal market are making bets about an actual real underlying value.

No, they are making bets about future market value. Ideas about “underlying” value are just a subset of the potential inputs to such a bet, but they are not what the bet is fundamentally on.