More like (nearly) thirded, it's gone from $1215 down to $425.
When a couple of my friends started posting "now is a great time to buy into BitCoin" messages on my Facebook feed a couple of weeks ago, I had a feeling the BTC price was about to take a strong downward turn. It is never a good sign when the "true believers" begin actively recruiting new buyers into a price bubble.
The collapse of BitCoin as a speculative investment is inevitable, and its own success will be its downfall. The speculative frenzy over BTC is based strictly on artificial scarcity. The problem is that there are an infinite possible number of cryptographically signed digital currencies. If only X amount of gold exists in the world, there is no replacement for it, assuming you desire the exact physical qualities of gold. But if only Y digital coins exist, it is trivial to create another digital coinage with a slightly different protocol that behaves exactly the same way as far as a user is concerned.
The boom in BTC has led to several new competitors, with similar frenzies growing around some of them. And given the low barrier to entry, you can expect more and more competing digital currencies to appear. It is only a matter of time before people realize that they're fighting over a particular set of tulip bulbs while standing in an infinitely large field of tulips. Once that happens, the speculative bubble will pop for good for all digital currencies. In the long run, this is a good thing, because once the speculators are gone, some digital currencies may actually prove useful as a real medium of exchange, with values that don't fluctuate wildly from one day to the next.
The ultimate irony is that even if Mr. Kim had taken the exam, and failed it, he still would have earned an 'A-' in the class.
Now he will suffer the ultimate punishment for a Harvard student: he'll get a 'B'.
In any case, the party who made BitCoin is filthy rich, and will only get more so by an exponential margin as time progresses, BitCoins get lost forever, and no new ones are mined.
The time window in which the person or party who created BitCoin can get filthy rich is finite, and may already be starting to close.
The speculative frenzy over BTC is based strictly on artificial scarcity, and scarcity over a bunch of digital bits, at that. (I find it amusing how some of the same people who condemn the enforced artificial scarcity of digital media via DRM have embraced BTC while remaining completely oblivious of their cognitive dissonance.) But BitCoin's success will be its downfall.
There are an infinite possible number of cryptographically signed digital currencies. If only X amount of gold exists in the world, there is no replacement for it, assuming you desire the exact physical qualities of gold. But if only Y digital coins exist, it is trivial to create another digital coin with a slightly different protocol that behaves exactly the same way as far as a user is concerned.
The boom in BTC has led to several new competitors. Already you see similar frenzies growing around some of them. And given the low barrier to entry, you can expect more and more competing digital currencies to appear. It is only a matter of time before people realize that they're fighting over a particular set of tulip bulbs while standing in an infinitely large field of tulips. Once that happens, the speculative bubble will pop for all digital currencies. In the long run, this is a good thing, because once the speculators are gone, digital currencies may actually be useful as money, with values that don't fluctuate wildly from one day to the next.
But I do think the BTC bubble may be popping soon based on one observation: I have seen some of my friends who are BTC "true believers" now posting on Facebook and advising everyone to buy into BTC. When the believers start actively searching for more buyers, you can see the writing on the wall.
Isn't capitalist theory that competition will drive prices down towards the cost of production level?
Yes... but it's wrong.
If capitalism doesn't work as advertised, then just index everything.
I'm not sure I get your argument. It seems to be "\forall y . !capitolism => y". You seem to be saying "well if *this* won't work, then clearly we can reduce all other systems to absurdity". Have I misunderstood?
That's an interesting idea actually... Subsidise LED Bulbs by $14 each (which effectively makes them free), then tax electricity at an extra 4 per 1000 kWh. The tax will register as near nothing for most people, they'll get "free" bulbs, and the taxation will pay for them exactly.
Of course, our friends opposing "big government" would not like this solution, and the reality is that all this would result in is the LED bulb producers charging $28 for them instead of $14.
Well, just for the sake of argument, lets assume that electricity is $0.01/kWh...
Even at these rates (which are *way* below what anyone pays) the LED comes out cheaper than the incandescent. At only $0.04, the LED overtakes the CFL too.
However, building techniques that build sealed houses with carefully controlled air flows (that extract the heat from the air before exchanging it with nice fresh stuff from outside) can lead to homes that are extremely energy efficient, even in these circumstances.
Uhh, I'm not sure "LED costs $144.49 over 30,000 hours, while incandescent costs $187.82" really backs up your claim that LEDs are more expensive
Your estimates are also based off $0.10 per kWh, which is cheaper than even the cheapest states in the US. You also vastly overestimate the power consumption, and cost of LED bulbs. I recently bought 4.5W LED bulbs that are as bright as 60W incandescents, for $13.99 each in safeway.
If you redo the sums for the cheapest $0.11 and sane price for LEDs, you get $205.82 for the incandescent, $47.55 for the CFL and $28.84 for LEDs.
If you do the sums for an average $0.14, you get $259.82 for the incandescent, $59.25 for the CFL and $32.89 for LEDs.
If you do them at the most expensive rates in the US ($0.18 per kWh), you get $331.82 for incandescent, $74.85 for CFL and $38.29 for LEDs.
That, for me, makes the choice pretty obvious.
The reason we care about the 40 and 60W lightbulbs is because for each 1000W computer being left on permanently there are 10000* 40 and 60W light bulbs being left on needlessly sucking power.
* Actual numbers made up on the spot, but honestly, I would expect that we're talking this order of magnitude or higher.
People who are treated like children behave like them. Give her the responsibility to sort it out when it goes wrong, and she'll quickly become an adult and learn how it works.
It's like one of those "build your own boat" magazines, first issue only $0.99 *
Each one comes with a tiny bit of source code that you must manually type in to lovingly craft your own linux distribution.
* Future issues $99.99
But its not bitcoin, and you can actually spend the money anywhere you want, because in the end it is delivering real money to real accounts from other real accounts.
But this will then become invalidated based on the fact that europe has had the concept of free bank transfers for decades.
GM isn't just an assembly line. It is the keystone in an entire supply chain. GM goes under and so does virtually every Tier 1 supplier as well as Ford and Chrysler. Even the CEO of Toyota admitted publicly that GM being liquidated would have hurt Toyota badly because they depend on many of the same suppliers. My company would have been out of business entirely and we are a Tier 3 supplier to GM. And we would have been just one of thousands of firms that would have collapsed. Even Tesla would likely have collapsed because the supply chain would have imploded. Tesla depends on many of the same suppliers who would now be bankrupt.
Your company hasn't really been saved - instead, the government pushed out the day of reckoning by about 10 years or so, but GM is doomed, regardless.
The Detroit business model depends on everyone buying a new car every 3 to 6 years or so, and on every family owning at least one automobile. Unfortunately, a tidal wave is headed in the direction of U.S. automakers, and it will start hitting them before the end of this decade.
That tidal wave is the autonomous vehicle. As self-driving cars become more commonplace, more and more people will realize they don't need to own a car when they can just as easily rent one on demand just by pulling out a smartphone. The result will be a much smaller auto fleet that is in almost continuous use, as opposed to a larger fleet that is only used occasionally by most drivers. Annual auto sales will plummet, and Detroit automakers that can not or will not adjust to this new market will once again find themselves facing bankruptcy.
And who can fill in the gap? Google, for one. Google's self-driving technology will need a vehicle. Why shouldn't Google build fleets of GoogleCars and deploy them in every metropolitan area? Without any vested need in maintaining a certain level of sales to support a unionized workforce, Google can become the new personal transportation company to replace the obsolete Detroit business model. If your company survives the transition, it will wind up selling parts and services to a entirely new breed of auto makers like Google. I doubt very much that the traditional Detroit automakers will be able to adapt.
What is left of GM, Ford, etc., will manufacture a much smaller number of luxury or specialized vehicles, in addition to their own brand of self-driving vehicles. But the current business model of "a car in every garage" will be a thing of the past.