Perhaps "yes", perhaps "no". I'm guessing (and I can only guess, like everyone else) that more people are convinced of the benefits of bitcoin than at the point of the previous bubble, so it probably wouldn't crash AS MUCH as before.

I think it's more likely though, even if it does end up being a bubble, that it'll shoot higher first before crashing this time around.

I've been considering this over the past few days, I have a vested interest (early adopter) and I don't think the current performance is a bubble. It took some months for online properties to build the code needed to facilitate bitcoin, since they are now coming to fruit the growth pattern is organic. Bitcoin started with a tech savvy crowd, and as we know, the ones who can understand a system early are the first to benefit from it. I found the comparison of Bitcoin to a Tech startup to be particularly interesting, in the article it is estimated that Bitcoin is understated by two orders of magnitude. http://vincesamios.com/bitcoins/bitcoins-are-a-tech-stock

The first ASICs started shipping recently. This made bitcoins harder to mine (for anyone who doesn't have those ASICs, which is most people). This also demonstrated that bitcoins are here to stay, since people have made large investments in hardware that basically doesn't do anything but mine bitcoins. So the perceived future value has skyrocketed.

Some people believe in the success of bitcoins. They bought custom hardware. This proves bitcoins are going to be a success.

Circular logic at it's finest!

That's true of all commodities and currencies.

Some people believe in the success of gold. They invested heavily in the future of gold. This proves gold is going to be a success.

Some people believe in the success of US dollars. They invested heavily in the future of US dollars. This proves US dollars are going to be valuable.

Edit: ok so to be clear, it's not just wishful thinking at work, but the fact that people are working toward making bitcoins successful and stable that makes them successful and stable.

> Some people believe in the success of US dollars. They invested heavily in the future of US dollars. This proves US dollars are going to be valuable.

You realize that you're sorta making his point? US Dollars are not going to be successful because some people have "invested heavily in the future of dollars." But that's the reasoning given 2 posts up that was poked-fun at in your parent.

The difference is that with gold, there's an actual intrinsic demand backing it. There's a cultural demand (indian weddings) but also a real industrial use for gold. There is zero use for bitcoin outside of the financial context.

The US Dollar is backed by the united states government and economy, and enough people have faith in both to confer present value and future value.

There was a massive effort to introduce a new currency backed by physical silver (by the Hunt brothers), which never gained much traction despite the cash thrown at it.

Right now the people investing in bitcoins are speculating that they will stay. For them to stay, there needs to be confidence that it will retain some sort of value, and the early people are at best described as speculators (no one is betting the farm on BTC).