Zangelbert Bingledack
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September 13, 2013, 02:35:47 PM


Re: the overvaluation contention, it means Falvinge doesn't understand investing very well. The whole point of investing is, in a sense, to figure out how much potential hard-to-ascertain value things have and boost the price accordingly. The rising price alerts others to what they weren't savvy enough to figure out themselves, then they herd in, of course always to excess, but leave the price in the end higher than it was. Investors do the hard work so others don't have to, smoothing out the volatility as well.

In other words, the price of Bitcoin is where it is in large part because people judge it to have a strong chance of being much more useful in the future. It seems like an amateur error by Falvinge to imagine that the BTC price should exactly match Bitcoin's present utility, rather than its present + potential future utility. By that logic, all venture capitalists are idiots.

Re: the price fixing accusation, it means Falvinge doesn't understand that only a government can fix prices for any significant length of time. If people are misled by painting the tape, they will lose money and wise up. "Fool me twice, shame on me." It's only a short-term effect.