Finance fads are called bubbles, as far as I understand, and yes, there is a Bitcoin bubble. I don't think anyone's going to argue that point.
But I think it's a bad idea to dismiss Bitcoin because of the bubble. The specific value of a bitcoin is kind of irrelevant to the things you can do with bitcoin. Obviously you have to care how much a bitcoin is worth, and the fluctuations make it hard to take seriously as a currency, but the utility of bitcoin isn't really tied to its value.
Funny how the volatility of gold prevents it from being a currency (see egold, etc). But the volatility of bitcoin is magic rainbow-spewing miracle of portents.
> Finance fads are called bubbles, as far as I understand, and yes, there is a Bitcoin bubble. I don't think anyone's going to argue that point.
You have to be more careful with your wording for these statements to be testable and therefore meaningful. When you say "there is a Bitcoin bubble," what exactly do you mean? Do you mean that the USD price will go down to x in the next y months (and you have to fill in x and y for it to be testable)?
I don't want to discourage that, by any means. I just am not sure "knowing it is a bubble" necessarily means knowing much about how it is going to burst.
Well, if it never bursts (for some definition of "never"), then it's not really a bubble, right? If the claim that something is a bubble isn't testable in some bounded time period, then it's not a meaningful claim.
Let's say we have a bag of devices of two types. Both kinds of devices, you push a button and a light turns on. One type of device (type A), the light stays on forever (we're ignoring physics for now). The other type of device (type B), the device has a mechanism to randomly turn itself off, calibrated such that over any 10 minute span of time where the device starts "on" there is a 10% chance it turns the light off.
You pull a device out of the bag. You push the button. The light turns on.
"This is a type B device" has more meaning than "Bitcoin is a bubble" because "type B device" is well-defined whereas "bubble" isn't. Of course, since the well-defined attributes of type B devices involves probability, the testability is also limited to probabilistic negative conclusions, i.e. we cannot conclude with 100% confidence that a light which remains lit is not a type B device.
This probabilistic nature is the key difference between your analogy and Bitcoin. For the analogy to be perfect, we would have to create a well-defined notion of what a "bubble" is that involves probability.
My claim was not specifically that Bitcoin is experiencing a bubble, but really more that not many people would argue that Bitcoin is experiencing a bubble.
I did also say Bitcoin is experiencing a bubble, but for reasons you're suggesting, I won't defend that claim. It's a belief, and while somewhat justified, it's not necessarily true and not fully justified.
I think he means: "there is an intense, relatively widespread, sudden, superficial interest in bitcoin that will eventually be followed by a sudden loss of interest in bitcoin." Bubbles are only identifiable after they have popped.
We already see the "intense, relatively widespread, sudden, superficial interest in bitcoin", so what remains to be seen is if it "will eventually be followed by a sudden loss of interest in bitcoin." Since we already have the first half of the bubble phenomenon, it is not unreasonable (or BS) to suspect the second half will follow. Especially since we are seeing lots of bubbles these days.
Remember, a bubble doesn't mean something is worthless, but only overvalued, e.g. the housing bubble didn't mean that housing was worthless, but it was overvalued.
Not really. Your role is to tease out the real issue for discussion, rather than shutting down the conversation with demands of testable hypotheses. Offer the other guy a chance to save face or explain himself. Being utterly contrarian is pointless.
When I said "call BS," I didn't mean literally just saying that, I just meant denying the claim and perhaps asking for a definition of "bubble" or a testable prediction, much like I originally did in this thread.
One of the defining traits of a bubble is that it continues to exist partly because people convinced there is a bubble are unwilling to bet on when it will burst. "The market can stay irrational longer than you can stay solvent".
(BTC and pre-IPO tech companies also have the added advantage of being impossible to short)
But here's a testable hypothesis for you: ten years from now a Bitcoin will not be convertible into more than $10, if it's reliably convertible into currency at all.
BTC and pre-IPO tech companies also have the added advantage of being impossible to short
Is it impossible? Couldn't you essentially short by borrowing bitcoins? (e.g. I will borrow 10 bitcoins today, immediately sell them, paying back say 12 bitcoins in three months. That sort of deal). I seriously contemplated such notions during the recent upswing.
Fair point, you technically can short it, but given there's no mature infrastructure to support and regulate this sort of trade (and Bitcoin is very volatile and illiquid, and a legal grey area), I'm not sure you'd find anyone to do the deal, especially since I think you'd need to short for a very long period to be on the safe side.
Bitfinex allows shorting, and icbit.se lets you sell futures for a similar effect. It's actually very cheap to borrow bitcoins on bitfinex last I checked due to so many people holding them. I consider both exchanges to be risky, though, compared to mtgox or bitstamp (and naked short sell of bitcoins is extremely risky, think about the margin you'd need if it goes up to $5000 before popping).
As you've pretty much acknowledged, nobody bearish on the long-term outlook for BTC is going to consider an anonymous overseas Bitcoin startup in beta to be "mature infrastructure" they can rely on to pay out if Bitcoin drops dramatically...
> Couldn't you essentially short by borrowing bitcoins?
In theory, sure. In practice, if no one is lending bitcoins based on the promise to repay more bitcoins later, then, no, you can't short them.
And the fact that one of the selling points of bitcoin is that it doesn't rely on trust might explain why even with a fair amount of money from enthusiasts chasing present bitcoins, there might not be lots of people with bitcoins lending them against a promise of future bitcoins.
In practice people do lend bitcoins. Of course they do, and the entire system does not demand anonymity or non-accountability. If someone actually wanted to short bitcoin in such a way, they can do it right now.
Shorting is, as in the normal securities market, a dangerous gambit because the downside is infinitely larger than the upside. But if someone wanted to do it they could.
> But here's a testable hypothesis for you: ten years from now a Bitcoin will not be convertible into more than $10, if it's reliably convertible into currency at all.
Indeed that is a testable hypothesis, and one I think will be false.
If a cart that can ride only on two metal rods laid on the ground and needs to burn coal to move will become mainstream mode of transportation alongside walking and horse buggy then there's no bubble. If not... you'll have a lots of useless metal rots rusting in the desert.
I have tubes of mint condition pogs back at home. Some of them were ads for movies like Jurassic Park. I wonder if they'll ever be worth anything... I wonder if I could trade them for bitcoin?
I don't think Bitcoins are a fad. I think bitcoins are the first of 'designed currencies'.
Bitcoins have certain advantages (and disadvantages) that emerge based on the design characteristics of the Bitcoin system. They are hard to forge, they are hard to steal (at least if you plan on spending them), and they are easy to transfer (among other things).
These are valuable characteristics. These characteristics (among others) differentiate bitcoins from traditional currency and make them very well suited for certain types of transactions. They also have characteristics that make them less than ideal for other types of transactions...transactions that the parties don't want logged, for example.
The currencies we have right now, (more or less accidents of history rather than based on designs with defined goals) government backed notes and precious commodities, have their own advantages and disadvantages, too.
Now that we have a counterpoint, I have a feeling we will see more currencies designed around different principles and goals. MintChip, the Canadian government backed cryptocurrency, will be interesting to watch since it will be a blend of traditional currencies and cryptocurrencies. What niche will it fill in the market? It is all very exciting.
Just to echo your point; I saw an article where the author likened Bitcoin to investing in IBM before Microsoft or Apple were ever companies. There will surely come something else which improves upon the currency and its algorithms, security, and ecosystem, but until then we still have a functioning cryptocurrency which is well understood and trusted by a select community.
Yes, they are. The fundamental problem of Bitcoin is the massive number that were accumulated when they were cheap. It's a problem more-so than any of the technical problems that have been discovered to date or even a moral preference for derivatives that permit greater anonymity.
The problem with Bitcoin being a major currency is that the early miners have accumulated large portions of the total share of Bitcoin wealth. That's a fundamental problem that does not exist with fiat currency like money, and while many consider it an asset that Bitcoin's inflation is highly regulated, very few individuals would be comfortable with the idea that certain individuals would own billions or trillions of USD worth of them in the future. And that is what will happen if Bitcoin maintains its upward trajectory in value and more and more people use Bitcoins as a form of wealth.
What banks would feel vastly more comfortable with would be certain technological abuses of the Bitcoin protocol to make it a substitute for real money. For example, using the transactions to create cryptographic, trusted proofs of USD transfers with negligible amounts of BTC actually involved.
Yes, Bitcoins are the New Pogs, and some folks early on bought out the first few production runs of them hoping that people would eventually replace currency with their New Pogs. That notion should be deeply disconcerting to anyone who invests in BTC (either in mining or with money) because at some point those people that have a large portion of the total amount of BTC that can ever exist might decide to cash out or abuse the market.
> The fundamental problem of Bitcoin is the massive number that were accumulated when they were cheap. [...] The problem with Bitcoin being a major currency is that the early miners have accumulated large portions of the total share of Bitcoin wealth.
Should (yet another) digital currency be created to address this issue? Imagine if every person on earth was assigned an equal amount of such a digital currency (ignore the infeasibility). Would that be a healthier market?
I'm not an economist, I don't see why this is a deal breaking issue. Could you please elaborate?
If they spend or trade the coins, then they are distributed, if they do not, then its just cash under a mattress.
Additionally, it seems to me that a trillion USD "worth" of bitcoin is only a theoretical trillion seeing as there aren't any institutions capable of (or willing to) cash such a sum.
People who are wealthy today but don't own bitcoins have little incentive to welcome the bitcoin nouveau riche to their ranks. Typically when you swap out old pesos for new pesos, you have a fixed exchange rate such that the rich stay rich and the poor stay poor.
If it weren't for the early miners, who believed in the currency enough to invest time and money in machines to mine them, I don't think there would be Bitcoin wealth to distribute...
If this is your belief, there are plenty of Altcoins trading for < $0.25 that you can buy up now and have this theory work to your advantage.
The problem is nobody wants to be the first to leap(it's very human to avoid risk); they wait first for social confirmation but in doing so, lose their advantage.
I suggest you read about coin coloring and take a closer look at the altcoins.
> The problem with Bitcoin being a major currency is that the early miners have accumulated large portions [...] That's a fundamental problem that does not exist with fiat currency like money
You have identified this as a problem without explaining why it is a problem. Can you elaborate?
If it is true that a large proportion of bitcoins belong to s a small number of people it has some pretty extreme consequences. It puts the effective monetary policy of bitcoin in the hands of random individuals. If they want the value to go down they can sell more, if they want it to go up they can sell less. Controlling that amount of the market makes them a defacto mint. That is a worrying scenario. It also is a complete opposite of the decentralization that bitcoin is supposed to represent.
Could I transfer my Pogs anywhere in the world, in a matter of minutes, for an incredibly small fee? Were Pogs also a distributed public ledger? Was there any reason to use Pogs over the dollar?
If the answer is 'No', maybe you should re-think your position.
The amazing thing about Bitcoin is the network. Saying it's "the new pogs" shows a huge lack of understanding of what Bitcoin is.
I think the real question now is, whether Bitcoin can be stopped.
For example, banks are "not feeling comfortable", since more fiat money are being extracted from their money network and put into BTC network. For example, I took about half of my savings and bought bitcoins - all my bank can see is, that the money "vanished", and they can't collect any more fees from services they could offer me handling those money. Actually, no bank knows where the value now is, since I made a lot of BTC transactions since then.
It's same with the wealthy people - yes, they will not feel comfortable about the idea that other individuals will own most wealth in the future. But what can they do about it? It's like today: most people are not comfortable with the fact that just a few individuals or their families control 90% of the total wealth, but that is about all they can do, feel uncomfortable about it.
With bitcoin it's similar, it's not that bitcoin will succeed only by making banks and rich people comfortable, bitcoin might succeed despite that.
Also, I realized an interesting property about the BTC network, which is not talked about much. Namely, people who invested into BTC, do not have much incentive to do damage to the network, since that would only cause the BTC value to go down, and they would incur loses to themselves - they will realize, that by behaving "properly" they can gain more.
It's more possible that some hostile government or other entity will try to sink bitcoin, but it might be hard to achieve. And if their attack will not be very quick, the BTC owners can detect that something is wrong, and could quickly transfer the money to alternative cryptocurrency.
> For example, I took about half of my savings and bought bitcoins - all my bank can see is, that the money "vanished"
Nope. Your bank can see that that money was transferred out of your bank account and where it went -- quite likely, to another bank account (possibly, even, at the same bank -- so many of them being global institutions).
Currency isn't consumed when its used to buy things, whether its a car or a bitcoin.
I don't think banks are at all uncomfortable about the decision of a few people to buy Bitcoins.
You could have bought the entire stock of BTC ever produced at the highest rate ever paid for a Bitcoin on an exchange, for less than 0.5% of the excess reserves held by banks in the US alone. That's the reserves the banks don't need to be legally compliant and solvent, and those reserves are themselves a tiny fraction of the banks' outstanding loans which is where they actually earn their money. So the banks don't exactly see BTC as a threat, especially since retail banking operations aren't exactly a major profit centre for them.
And, as someone has correctly pointed out, your hard-earned savings that you're risking went into the bank account of the person you bought Bitcoins from, therefore staying in the banking system anyway.
Bitcoin, on the other hand, lacks the solvency guarantees the banking system does: if people decide they want to leave en masse, the price crashes. Even if BTC owners will be able to "quickly transfer the money to alternative cryptocurrency", if their government (or the US government) decides to effectively ban Bitcoin transfers, it's certain they will end up able to purchase less than they were prior to the attack.
May I politely suggest you reconsider your decision to put half your savings into BTC before it's too late.
You whole argument is based on the premise that these early miners have not already sold Bitcoin and still hold it. Besides, even if they were holding it, the market could not absorb them selling it all at once so those miners would be very wise to sell slowly over time and at the demand.
In my opinion I think most of the early miners have already cashed out and what we are seeing now is the exchange of already "used" bitcoins.
> Understanding the trend towards Bitcoin usage is less in
understanding the caveats developer Amir Takki employs:
i.e. “a pure form of money with a mathematical basis,” and
more about the social behaviours of those playing the
system, those employing the mechanics of scarcity for
leverage.
Ugh, I hate these sort of comments. It's as if bitcoin is only an exercise in speculate supply and demand. People, there is a huge network and protocol that's behind this thing! It's not just about the currency everyone's trading, it's about the underlying network! There's a distributed registry that anyone can look up. There's a source of truth for every single bitcoin (and future uses thereof) in existence. There's a reason network difficulty trends with price.
No, bitcoin is NOT just a bunch of traders trading and no, that's not what's going to give you an understanding bitcoin. That's like saying that understanding how a computer works is just by watching the monitor. There's an underlying fundamental, dare I say, intrinsic value to bitcoin that gets ignored by almost everyone fixated on bitcoin the currency's price when the real interesting thing is in bitcoin the protocol.
Bitocoin protocol is just a tool for guaranteeing scarcity and transferability. Better tool than ever existed. Better tool than government assurances that are basis of the value of fiat currencies.
I wouldn't say "just a tool". It's an enormously powerful tool that has backups everywhere, is not corruptible without at least 50% of the hashing power on the network, and has a consistent, decodable, verifiable format.
No registry of deeds by the government, no bank vault and certainly no website has this level of security around transactions.
Your comment seems to be saying, essentially, "You are talking about X, but I would prefer it if you talked about Y, because I think that is more interesting."
Another example would be, "You are talking about how to seamlessly add someone to a photo in Photoshop, but I would rather hear about how to optimize image algorithms for efficient cache usage, because I think that is more interesting."
This article is talking about Bitcoin as a commodity and a currency, which are actual use cases for it. I agree that the Bitcoin protocol is interesting, but to demand that people only talk about the protocol and not Bitcoins themselves seems a bit restrictive to me.
The author specifically claims that to understand bitcoin usage, you only need to look at the trading activity. That is what I'm disputing. No, you can't understand bitcoin usage without actually understanding the protocol.
In your analogy, it would be someone saying that you can understand Photoshop by looking at how people use the resulting pictures. It's nonsense and that's what I'm disputing.
I actually think what he meant is that Bitcoin is valuable from the network that stands behind it and all the tools, websites, and services that have sprung up around it. In addition to all of that you also have the actual rules of the bitcoin system ("protocol"), which of course is interesting from a technical / mathematical standpoint, but also setup a structure and ecosystem that may (or may not) have long term staying power until the next and more sophisticated cryptocurrency comes along.
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[ 0.22 ms ] story [ 114 ms ] threadBut I think it's a bad idea to dismiss Bitcoin because of the bubble. The specific value of a bitcoin is kind of irrelevant to the things you can do with bitcoin. Obviously you have to care how much a bitcoin is worth, and the fluctuations make it hard to take seriously as a currency, but the utility of bitcoin isn't really tied to its value.
For instance, arbitration transactions would be great, except they carry something like 20% currency risk over periods as short as a day.
You have to be more careful with your wording for these statements to be testable and therefore meaningful. When you say "there is a Bitcoin bubble," what exactly do you mean? Do you mean that the USD price will go down to x in the next y months (and you have to fill in x and y for it to be testable)?
Let's simplify our model a bit.
Let's say we have a bag of devices of two types. Both kinds of devices, you push a button and a light turns on. One type of device (type A), the light stays on forever (we're ignoring physics for now). The other type of device (type B), the device has a mechanism to randomly turn itself off, calibrated such that over any 10 minute span of time where the device starts "on" there is a 10% chance it turns the light off.
You pull a device out of the bag. You push the button. The light turns on.
Is "this is a type B device" a meaningful claim?
This probabilistic nature is the key difference between your analogy and Bitcoin. For the analogy to be perfect, we would have to create a well-defined notion of what a "bubble" is that involves probability.
I did also say Bitcoin is experiencing a bubble, but for reasons you're suggesting, I won't defend that claim. It's a belief, and while somewhat justified, it's not necessarily true and not fully justified.
Then it is reasonable for me to call BS when people identify Bitcoin as a bubble.
Remember, a bubble doesn't mean something is worthless, but only overvalued, e.g. the housing bubble didn't mean that housing was worthless, but it was overvalued.
Here, the next time someone calls bitcoin a bubble, give him this link (http://www.ft.com/intl/cms/s/2/0ca06172-bfe9-11de-aed2-00144...) to Soros's Theory of Reflexivity and ask him to provide a hypothesis within the framework Soros provides.
But here's a testable hypothesis for you: ten years from now a Bitcoin will not be convertible into more than $10, if it's reliably convertible into currency at all.
Is it impossible? Couldn't you essentially short by borrowing bitcoins? (e.g. I will borrow 10 bitcoins today, immediately sell them, paying back say 12 bitcoins in three months. That sort of deal). I seriously contemplated such notions during the recent upswing.
I have zero experience with them so that isn't a recommendation, just someone who does it.
In theory, sure. In practice, if no one is lending bitcoins based on the promise to repay more bitcoins later, then, no, you can't short them.
And the fact that one of the selling points of bitcoin is that it doesn't rely on trust might explain why even with a fair amount of money from enthusiasts chasing present bitcoins, there might not be lots of people with bitcoins lending them against a promise of future bitcoins.
Shorting is, as in the normal securities market, a dangerous gambit because the downside is infinitely larger than the upside. But if someone wanted to do it they could.
Indeed that is a testable hypothesis, and one I think will be false.
Apparently lots of people are willing to argue that point by putting their money where their mouth is.
You probably won't be able to convert them to bitcoins directly though.
Bitcoins have certain advantages (and disadvantages) that emerge based on the design characteristics of the Bitcoin system. They are hard to forge, they are hard to steal (at least if you plan on spending them), and they are easy to transfer (among other things).
These are valuable characteristics. These characteristics (among others) differentiate bitcoins from traditional currency and make them very well suited for certain types of transactions. They also have characteristics that make them less than ideal for other types of transactions...transactions that the parties don't want logged, for example.
The currencies we have right now, (more or less accidents of history rather than based on designs with defined goals) government backed notes and precious commodities, have their own advantages and disadvantages, too.
Now that we have a counterpoint, I have a feeling we will see more currencies designed around different principles and goals. MintChip, the Canadian government backed cryptocurrency, will be interesting to watch since it will be a blend of traditional currencies and cryptocurrencies. What niche will it fill in the market? It is all very exciting.
The problem with Bitcoin being a major currency is that the early miners have accumulated large portions of the total share of Bitcoin wealth. That's a fundamental problem that does not exist with fiat currency like money, and while many consider it an asset that Bitcoin's inflation is highly regulated, very few individuals would be comfortable with the idea that certain individuals would own billions or trillions of USD worth of them in the future. And that is what will happen if Bitcoin maintains its upward trajectory in value and more and more people use Bitcoins as a form of wealth.
What banks would feel vastly more comfortable with would be certain technological abuses of the Bitcoin protocol to make it a substitute for real money. For example, using the transactions to create cryptographic, trusted proofs of USD transfers with negligible amounts of BTC actually involved.
Yes, Bitcoins are the New Pogs, and some folks early on bought out the first few production runs of them hoping that people would eventually replace currency with their New Pogs. That notion should be deeply disconcerting to anyone who invests in BTC (either in mining or with money) because at some point those people that have a large portion of the total amount of BTC that can ever exist might decide to cash out or abuse the market.
Should (yet another) digital currency be created to address this issue? Imagine if every person on earth was assigned an equal amount of such a digital currency (ignore the infeasibility). Would that be a healthier market?
If they spend or trade the coins, then they are distributed, if they do not, then its just cash under a mattress.
Additionally, it seems to me that a trillion USD "worth" of bitcoin is only a theoretical trillion seeing as there aren't any institutions capable of (or willing to) cash such a sum.
If this is your belief, there are plenty of Altcoins trading for < $0.25 that you can buy up now and have this theory work to your advantage.
The problem is nobody wants to be the first to leap(it's very human to avoid risk); they wait first for social confirmation but in doing so, lose their advantage.
I suggest you read about coin coloring and take a closer look at the altcoins.
You have identified this as a problem without explaining why it is a problem. Can you elaborate?
If the answer is 'No', maybe you should re-think your position.
The amazing thing about Bitcoin is the network. Saying it's "the new pogs" shows a huge lack of understanding of what Bitcoin is.
For example, banks are "not feeling comfortable", since more fiat money are being extracted from their money network and put into BTC network. For example, I took about half of my savings and bought bitcoins - all my bank can see is, that the money "vanished", and they can't collect any more fees from services they could offer me handling those money. Actually, no bank knows where the value now is, since I made a lot of BTC transactions since then.
It's same with the wealthy people - yes, they will not feel comfortable about the idea that other individuals will own most wealth in the future. But what can they do about it? It's like today: most people are not comfortable with the fact that just a few individuals or their families control 90% of the total wealth, but that is about all they can do, feel uncomfortable about it.
With bitcoin it's similar, it's not that bitcoin will succeed only by making banks and rich people comfortable, bitcoin might succeed despite that.
Also, I realized an interesting property about the BTC network, which is not talked about much. Namely, people who invested into BTC, do not have much incentive to do damage to the network, since that would only cause the BTC value to go down, and they would incur loses to themselves - they will realize, that by behaving "properly" they can gain more.
It's more possible that some hostile government or other entity will try to sink bitcoin, but it might be hard to achieve. And if their attack will not be very quick, the BTC owners can detect that something is wrong, and could quickly transfer the money to alternative cryptocurrency.
Nope. Your bank can see that that money was transferred out of your bank account and where it went -- quite likely, to another bank account (possibly, even, at the same bank -- so many of them being global institutions).
Currency isn't consumed when its used to buy things, whether its a car or a bitcoin.
You could have bought the entire stock of BTC ever produced at the highest rate ever paid for a Bitcoin on an exchange, for less than 0.5% of the excess reserves held by banks in the US alone. That's the reserves the banks don't need to be legally compliant and solvent, and those reserves are themselves a tiny fraction of the banks' outstanding loans which is where they actually earn their money. So the banks don't exactly see BTC as a threat, especially since retail banking operations aren't exactly a major profit centre for them.
And, as someone has correctly pointed out, your hard-earned savings that you're risking went into the bank account of the person you bought Bitcoins from, therefore staying in the banking system anyway.
Bitcoin, on the other hand, lacks the solvency guarantees the banking system does: if people decide they want to leave en masse, the price crashes. Even if BTC owners will be able to "quickly transfer the money to alternative cryptocurrency", if their government (or the US government) decides to effectively ban Bitcoin transfers, it's certain they will end up able to purchase less than they were prior to the attack.
May I politely suggest you reconsider your decision to put half your savings into BTC before it's too late.
In my opinion I think most of the early miners have already cashed out and what we are seeing now is the exchange of already "used" bitcoins.
http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf
So in April of this year, 64% of bitcoin had never traded hands and there were about 4 million bitcoins circulating.
I also think it is fairly likely that there are people monitoring the 'Satoshi addresses'.
http://en.wikipedia.org/wiki/Coase_theorem
Ugh, I hate these sort of comments. It's as if bitcoin is only an exercise in speculate supply and demand. People, there is a huge network and protocol that's behind this thing! It's not just about the currency everyone's trading, it's about the underlying network! There's a distributed registry that anyone can look up. There's a source of truth for every single bitcoin (and future uses thereof) in existence. There's a reason network difficulty trends with price.
No, bitcoin is NOT just a bunch of traders trading and no, that's not what's going to give you an understanding bitcoin. That's like saying that understanding how a computer works is just by watching the monitor. There's an underlying fundamental, dare I say, intrinsic value to bitcoin that gets ignored by almost everyone fixated on bitcoin the currency's price when the real interesting thing is in bitcoin the protocol.
No registry of deeds by the government, no bank vault and certainly no website has this level of security around transactions.
Another example would be, "You are talking about how to seamlessly add someone to a photo in Photoshop, but I would rather hear about how to optimize image algorithms for efficient cache usage, because I think that is more interesting."
This article is talking about Bitcoin as a commodity and a currency, which are actual use cases for it. I agree that the Bitcoin protocol is interesting, but to demand that people only talk about the protocol and not Bitcoins themselves seems a bit restrictive to me.
In your analogy, it would be someone saying that you can understand Photoshop by looking at how people use the resulting pictures. It's nonsense and that's what I'm disputing.
Why is it necessary to understand the protocol to understand high-level trends like "More people are investing in Bitcoins"?