[oleganza]

Ah, sorry. Bitcoin is a collective bet that more and more people will be using it. Like a pyramid scheme, but without a fraudulent promise from anyone that you will buy a share in some particular activity. More people make this bet — more valuable Bitcoin becomes. If one day everyone decides that it's not a worthy bet, the value will collapse to zero.

Pyramid lottery schemes can work the same way, but they always collapse because the only use of such scheme is to sell everything to later coming people. Because otherwise the tokens you bought are useless. Bitcoin has interesting fundamentals that allow your tokens to be incredibly useful without ever "cashing out". Thus it can theoretically be stable money like gold. Fundamentals ("programmable", "secure" etc.) are important because without them people either would not make such bet, or those who will try, will only play like in a good old pyramid: selling out before others.

Bitcoin as an investment today is a combination of long-term believers with short-term players. Each run-up in price has both groups there and short-term players sell off when they feel the top is reached. Then other, less lucky short-term players are selling in panic, thinking that pyramid has collapsed. All the long-term investors ("believers") simply put their coins under the mattress to be slowly spent on various goods in the future. Without fundamentals, there wouldn't be any long-term believers, only a single bubble and a single crash.

http://blog.oleganza.com/post/69887761276/bitcoin-value-prop...