Oleg Andreev

Software designer with focus on user experience and security.

Author of Gitbox version control app.

Author of CoreBitcoin, an implementation of Bitcoin in Objective-C.

Lead developer of FunGolf GPS, golfer's personal assistant on iOS.

If you want to learn about Bitcoin, start with my Bitcoin FAQ or guide for journalists. I can give you an interview or provide technical and long-term economical consulting.
I am not interested in trading, mining or building fiat-to-btc exchanges.

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Why Bitcoin grows unusually faster than normal businesses

When people see that Bitcoin grows 300% in a couple of months, they do not believe there is a real reason for it. It must be a speculative bubble, things normally do not grow that fast.

When you invest in a company, it takes time to produce something. The value cannot simply jump through the roof because there are humans working, everything is hard and no one knows if the final product will be appreciated by the consumers.

Except, in case of Bitcoin this analogy does not apply. First, Bitcoin in a sense, is already a product available for everyone. It is already produced and proved to work, so you do not really invest in something that does not yet exist. Secondly, when investing in Bitcoin you do not invest in some particular business with a group of people managed by a single CEO. You invest in a huge variety of businesses in multiple countries with different business models, different risks and legal environments. So even if one of the businesses makes a big mistake, Bitcoin is still in demand by many others.

Of course, it does not prove that Bitcoin is inherently less risky. Even if the number of global risks is lower than in a private company, one single risk can outweigh all benefits and destroy your investment. But you should understand the fundamental difference between individual stocks and Bitcoin: investing in Bitcoin is like investing in the whole stock market 100% filled with startups and hot new ideas, not some portfolio of relatively stable stocks with the proven business models and moderate revenue streams. Of course, many startups fail. But when some succeed, they succeed spectacularly and cover all the losses. Buying Bitcoin is being a venture capitalist yourself on a worldwide scale.