[yen223]

Exponential curves are to be expected for any value whose growth rate is positively correlated with its value - essentially, when you have positive feedback loops where the more you have of x, the faster x grows, which causes you to have more of x, and so on.

In this case, Bitcoin price growth made it more popular, which caused more people to start investing in Bitcoin, which further increased its price. The exponential shape of Bitcoin's price curve is entirely normal.

The real question is, does Bitcoin's current price match its "true" value? I personally believe the answer is "no", but that's like, my opinion, man.

[Jackmc1047]

You say that "Bitcoin['s] price growth made it more popular."

I guess my issue is what you mean by that. When people see Bitcoin's price shoot through the ceiling, I totally agree that it attracts them to speculating on the currency, further exacerbating the increase in price, causing an exponential shape.

It is not clear that its price increase would attract people to using Bitcoin as a currency and not speculation though. I consistently hear about the importance of a currency having a relatively stable value so I wonder if large, rapid price changes actually discourage using Bitcoin as an actual currency while encouraging its use for speculation (or at least not encouraging its use as a currency).

It would not make sense for anything that has independent utilitarian value to have anything but a growth rate that is correlated with that value. It would seem that exponential deviations from such a growth rate could only be due to speculative mania. If people are only or mostly buying Bitcoin because its price has increased, hoping for a further price increase, then there is only so high the price can go before collapsing.

Rereading your comment, maybe we're actually saying the same thing here.

[yen223]

I definitely agree with you. In a nutshell, Bitcoin's exponential growth is a result of hype. This isn't necessarily a bad thing - Facebook's initial user growth was also exponential, and that eventually stabilized. The question is, what happens when the hype behind Bitcoin dies.

I believe that, like you mentioned, it depends on Bitcoin's utilitarian value as a currency. If it turns out Bitcoin is more useful than, say, Paypal for facilitating actual transactions (as opposed to being a pure investment vehicle like it's being used now), then its price should encounter steady growth. If not, then things will get interesting.

[cryptos]

Bitcoins don't have a "true" value by definition. The value is the belief of the Bitcoin crowd.

[atom-morgan]

Value is subjective. Nothing has "true" value. Everything has value because people give it value including, since so many people use it as a counter, water. Water is definitely the closest thing we have to "true" value today but looking into the future I can definitely see technology eliminating our dependence on it.