Bitcoin Forum

It would be interesting to get people's thoughts on what will lead to a more stable BTC price. Thoughts please.... Thanks, Madbanker.

We have to use other exchanges than mtgox. The crypto currency is decentralized, but the exchange isn't.

Circulation -- likely through people with bitcoins buying more stuff with them.

People (usually) devotes only their surplus capital to investment. There's a less liquid base of capital they need for recurrent expenses which they won't trade around. For people in the bottom, when they get more capital they usually raise their expenses, not their investment. So circulating hoarded bitcoins into more hands will make them less traded, and more tied to the supply and demand of goods.

This is not a "redistribution", as hoarders are getting some kind of good in exchange for circulating their coins. It's just, maybe they need a bit more motivation to spend.

Mtgox should buy more servers to protect against ddos attacks ;)

Will they ever do that?

People should use other exchanges than MtGox.

I don't have any bad experience with MtGox myself (other than their fees being way too high) but it's better if we have more diversion and competition. Bitcoin is decentralized, and it's better for all of us if the exchange market is decentralized as well.

Wider adoption, more goods and services available, and more liquidity/circulation.  Bitcoin price is currently primarily speculative.  It's loosely tied to difficulty and cost per hash to mine, but with limited real world uses these hoarding and dumping cycles will likely continue as circulation is restricted and miners need those spikes to entice them into releasing their investment out into the wild.  More circulation means more liquidity, less spikes, and a price that better represents bitcoins true market cap and usefulness as a currency.

Is exactly the right answer, Although I quite like the volatile market conditions tbh.

I think probably getting more of an acceptance from the general public and getting rid of the bad image that BTC seems to have attached to it.

In addition, more exchanges.

We also need more online services that accept bitcoins.

It's already stable. What caused the massive fluctuations was the press attention, but this is now over (http://www.google.com/trends/explore#q=bitcoin&date=today%203-m&cmpt=ql) and what's left is a much more valuable, but stable, currency.

I think we can expect the BTC price to stay in the range of $100-$130 for months to come. Until the next bubble that is :)

I'm in agreement with this - the price of bitcoins has only gently fluctuated over the last couple of weeks - with any luck it'll now stay put

Well the volatility is increasing if Mt.Gox goes down. Even if this isn't as strong anymore as last week. The market learns that panic sells are useless. :)

I just hope that there will be a decentralized exchange market.

Liquidity will help, but if bitcoin becomes used for transactions, and transactional demand fluctuates with economic activity, then wont having a rigid supply always mean that it will be highly volatile?

people will save bitcoins like cash but as demand to *use* bitcoins increases, the average price will increase and more miners will liquidate more of their holdings.  As the amount of circulating coins meets the demand the price will smooth with less spikes and "ringing".

MMmmm well that prediction didn't pan out - only true for about 3 hours. But then I can say that as I have hindsight on my side.

I think we just need more Bitcoin in circulation... Meaning just more people with Bitcoins, so that a large influx of people buying or selling wont have as big of an impact on the market.  That and I agree with the need of more quality exchanges. 

I don't see it happening anytime soon if the number of participants can move the market so much at this point even.

So here are my thoughts:

1)   Greater use of futures trading - I believe academics have shown that where shocks come from the demand side this helps
2)   High frequency trading => Provides liquidity
3)   People doing arbitrage between exchanges, or simply trying to buy on the troughs and sell on the spikes
4)   More exchange competition & Better exchanges
5)   More participants, more places that accept them etc

The good thing is that all these will come over time if BTC keeps its nose clean, and doesn't do anything nasty  in its underwear.

im a very big fan of btc. i think 300+ it will be

Thats exactly what i thought too.

I think the biggest problem at the moment are the exchanges.
Does anyone know the project Buttercoin? This could be a solution to the exchange problem ;-)

Never heard of Buttercoin - off to Google......

Not as highbrow as I was initially thinking when I started the thread, but I just saw something on Redit - which I will add to my list (5a) below:

1)   Greater use of futures trading - I believe academics have shown that where shocks come from the demand side this helps
2)   High frequency trading => Provides liquidity
3)   People doing arbitrage between exchanges, or simply trying to buy on the troughs and sell on the spikes
4)   More exchange competition & Better exchanges
5)   More participants, more places that accept them etc
    5a) Porn sites accepting it.


I'm not trying to be crass, but I am told by a reliable source that Porn is what got the internet video industry started, and BTC has unique value in this space - no awkward credit card statements etc. It is not a small industry.

http://en.reddit.com/r/Bitcoin/comments/1c9wz8/what_bitcoin_really_needs_porn_vendors_accepting/

Thanks to the media i think it is just a matter of time until the porn idustry will use BTC too.
The porn industry is like the gambling industry, those two have the potential to attract a lot of people which will then help to spread the use of BTC world wide.

Projects like buttercoin will be a huge help to smoother exchanges, which will go a long way towards promoting price stability.  However, even buttercoin won't protect against DDOS attacks, which people regularly use to drive the price of BTC down temporarily.  When we have 3 or 4 major exchanges that are rock solid, that will really help!

I think those two will definitely be the main early adopters
they always were in the history of the net and the anonymity angle

however theres still a lot holding bitcoin back from more general use
also i feel the price barrier is too high for the general public, psychologically

$140 currently, for a coin
don't worry, i get itm bitcoins and altcoins but the market is being manipulkated
the rxchanges and everything is not how it was designed to work
and ironically all the hoops people have to jump through and pay high fiat fees and processors to buy defeats the object

i'm all for competition to bitcoin
especially as it has attracted a lot of dark forces like bankers and winklevosses etc
who can all manipulate price, and are just doing that

...OK I'm back from Google. Buttercoin looks like a great idea. It is one more step in the right direction. The momentum is building at a un-imaginable rate. Solutions to problems are coming from every angle, and from all over the globe. Every time I see something like this, I am more convinced that BTC will be bigger, and more transformative than most of us can even imagine.

I wasn't around in 1943 when Thomas Watson (Chairman of IBM) excitedly predicted that there may be a worldwide market for as many as 5 computers, but it kind of feels like we could me in similar territory.

No way, it will never reach 300$

Of course it will. It was really close not long ago. It will before summer in my opinion.

Uh oh ;D

$1000 is the new $1 for BTC

Volatility suggests that the basis for fair value has not been established; but the widening both of uses and of speculative demand will tend to increase price in the longer term.  Unfortunately, there are going to be some big crashes too :(

more exchanges, bots, competition, wider use as an online currency, some outside factor that stabilizes it---things can change very quickly on the internet

The whole ddos thing is certainly a big issue. What's the deal with this? Isn't there better ddos protection somehow? out there?

Yeah, the more decentralized and spread out these exchanges become, the more stability BTC should enjoy.

It didn't even occur to me to start using bitcoins until one outlet where I bought digital goods online gave up on Paypal and started using bitcoins exclusively. As it's usage gets more widespread, it will help stabilize it, along with more that 1 exchange for it of course.

This is the way it will be as long as there are hardcore speculators about.  It's okay, just be sure to take their money!

What determines the price of one bitcoin?

The free market.  People who have bitcoin decide for themselves how much they are willing to sell them for.  People who want bitcoin decide for themselves how much they are willing to pay for them. Whenever the price that one person is willing to sell for and another person is willing to buy for overlap an exchange happens and the current price is determined.