Bitcoin Forum

What exactly does this mean? a manual fix in price.. or lowering the exchange rate by lowering the units of BTC? (mBTC..uBTC etc)

ive seen the term "the correction" and people mentioning preparing for it but i have no idea what it really means.

Corrections are changes in BTC price in terms of $.  The 'correction' is the price changing down or up, to a more 'accurate' price.  Price Discovery is always going on, corrections are a term for large changes in that price.

I think.  Please correct me if I'm wrong.  :)

A correction is usually a drop or rise in price to where everyone thinks the price 'should' be but the problem with this logic is of course everyone has different opinions, the housing market is a perfect example of this because the prices were driven up and continue to be driven up through lots of speculative buying rather than people buying them to live in. If we were to look at the prices of houses to find out the expected cost it would be things like how much it was cost to make, how much the materials are worth. Anything added to that is of course going to be the profit someone makes.

So in short, this is how these 'bubbles' and 'corrections' happen, it's because people out there are charging and selling for far more than the products or material is actually worth.

isnt that one of the things that makes bitcoin a community driven market?  as long as someone is willing to buy at a certain price, i dont think anyone should be able to come in and make you charge less just because.     look at the medical field.. costs $200 to rent a hospital gown that you can buy for $20 and no one is trying to correct that

What people usually mean when they use the term "correction" ( not "the correction" ) is a sharp downturn in the midst of an overall bull market.

It depends on how you look at it, if you are talking about actual Bitcoins or the price of Bitcoin in paper money I think people confuse the two quite a lot, the number of Bitcoins is fixed, if anyone tries to change it or mess with it in any way then people are going to find out about it. As for the BTC/USD price, not only is the USD being inflated constantly driving up the prices of everything ( not just Bitcoins ) the supply of it is also not limited in any fashion. Regardless of this in the end no one person can dictate the value of anything which is why no matter what governments or central banks do people are going to be forced to pay more because it costs more to buy things if the volume increases and so on.

The kind of questions I think you're asking say to me that you're going to need to go do some research into economics, don't just look at the stuff that schools bring out, you need to look at all sorts of schools of thought like Austrian, Marxist. Keynesian and Hayek, these people all have different beliefs on how an economy should be run. What established western governments and central banks believe in is a form of neo-Keynesian and what happened to the Keynesian kind of movement is it got hijacked much like the conservative movement did in Americe. Regardless yeah, it looks like you need to go do some research because if I talk about it on here I'll spam the forum :P.

When I looked at all this stuff it blew my mind, especially when I consider how over-simplified and outright lying the school textbooks were when I learned about what happened to governments in the economic crisis and so on.

so basically if there is a correction, coins will be forcibly knocked down in price?  i admit i have a lot of learning about economics to do.

Correction is used to refer to a reversal of recent (usally large) price movement, typically used in reference to tradeable asset prices (stocks, bonds, commodities etc, and yes currency exchange rates).  So from todays price of $93 per bitcoin, a fall back to say $80, or less, might be considered a correction if it were to last more than a few hours/days.

Any investable asset class experiencing the price appreciation we have seen with bitcoin (>500% in 3 months) will have people declaring an imminent price "correction", and they may well be right - but nobody can be 100% sure, that is the nature of investment and risk.

to go back to a straight line log trend from parabolic

Say you have a town somewhere where prices are stable and have been stable for a long time. All of a sudden the circus comes to town. With it come all the people who work at the circus, as well as people from neighboring towns that want to see the circus. Prices will suddenly skyrocket because demand will go up from having all these new costumers around. After the circus leaves, the price cannot remain as high because there aren't that many people around, demand has decreased. So the price has to return to its natural, or correct, levels otherwise economic turmoil will follow. The correction is what happens when a price-point that is too high returns to its normal level.

No no no! You are a bit confused about that!

When people speak about the correction they mean that the current price is so high that eventually people will sell a lot of btc and the price will drop. And that is a correction  :)

Seems to be one of these going down right now, no?  If so, no surprise at all, price shot up to $95 all too fast, even for bitcoin!

Probably around three fifty.

seems as though this is becoming a bigger issue with the more publicity btc receives....

I may have caused this correction:

https://bitcointalk.org/index.php?topic=159597.msg1695189#msg1695189

I have no position short or long in BTC.

but a correction would mean that BTC are overvalued but i cant see how they are if people are still wanting to buy them and its also counterintuitive for people who own BTC to sell.

Who says people want to buy them? If the price (of anything) drops, it should be because either supply increased (not possible in the case of Bitcoin) or demand decreased. If the prices are dropping due to lower demand, then that's exactly what's happening, that people don't want to buy them at that price point.

Likewise if prices are dropping, then people who bought low want to sell them asap as high as possible before the price goes even lower.

fair enough, the price is dropping