Bitcoin Forum

This is a serious problem and I sincerely hope you are able to read this post as objectively as you possibly can.


First let me define what successful Bitcoin means to me: It means Bitcoin is used on a daily bases and on a large scale to facilitate trade between people.

It does not mean Bitcoins have to be worth a specific amount of something else, it does not mean the price needs to keep rising, it does not mean people aren't losing money speculating about their value.

Now that I've cleared that up I will get to the point of this post. I think we all already understand that one of the main factors that will play a huge role in Bitcoins success (as I defined it) is if merchants adopt it as a payment method. This is one of the biggest obstacles we face and even though we're still in it's infancy and we already have quite a few merchants accepting it I think we have a problem.

The problem lies in what is happening with the spot price this weekend. These huge horrendous fluctuations aren't problematic because speculators are losing money, no! they are a problem because merchants can't possibly trust Bitcoin to keep it's value if they accept it for their goods and services. And yes I know there's options trading going on where they can insure themselves but I just believe that's too much of a hurdle and also wipes out any profits they gain by not paying fees to traditional online payment service providers.

Simply put Bitcoin absolutely needs some semblance of price stability in order to be considered by merchants as a viable option.

So what does that have to do with mtgox? Well I believe they create an environment where people are making a bunch of bad decisions based on incomplete information. First big problem are the dark pool orders that hide a potentially huge chunks of oversupply or over-demand from us. Then they have this ridiculous 0.73/1.73 depth table rule where they don't even show all the orders placed and active. That's right, they only show bids with a price from spot to 27% below and asks with a price from spot to 73% above.

Essentially everyone gets to see a partial picture of supply and demand with 3 times as much asks as they see bids, and that's even if we could see the hidden dark orders.

How are people suppose to know what is a good price in such an environmental? How is the price suppose to remain stable if all everyone ever does is at best educated guessing about what their Bitcoins are worth? The answer is obviously they can't. Hence the horrendous volatility of the past 60hours or so.

If we want stable prices, the market needs to have all the information in order to make educated decisions.


In conclusion: I wrote this post with the intention of raising this issue and making a plea to everyone who shares my hopes of success for Bitcoin. I don't care what mtgox does, they can do whatever the hell they want. But please listen to me and please strongly consider switching over to tradehill.com where there are none of these shenanigans and we can all see everything and make educated decisions about what our Bitcoins are worth and maybe just maybe maintain a more stable price, stable enough for merchants to see it as a viable option and adopt it.

Thank you.


tl;dr: mtgox creates an environment of imperfect information which causes crazy volatility which then hurts Bitcoin's credibility and chances of merchants picking it up as a viable payment option and ultimately it's success. Please switch to an exchange that offers full transparency, like tradehill.com for example does!

p.s.: I'm not in anyway affiliated with tradehill, I do have an account that I created today but I wont even give you my referral code because I don't care where we move our trades, as long as we can see all the information like we can on tradehill.

p.s.2: I have more Bitcoins right now then I had before the volatility started so you can't attribute this post to any sort of rage or anger on my part.

It's tl;dr and even that looked too long

tl;dr : make your own exchange

Don't believe me about the depth table rule?:

I'd say having both exchanges encourages price stability. The more traders you have participating in price, the deeper the combined order books. More orders == less variance when price moves, on a percentage basis. In short, you would want dark pools, regular traders, and as many exchanges functioning at any given time. Shifting everyone over to one exchange or another shouldn't be done on an artificial basis, but up to the traders themselves.

There's enough volume to have many more exchanges than we do now, and I'm sure we'll see that in the future.

Bitcoin is going to be highly volatile for a long time no mater what exchage is used. The way for merchants to accept bitcoin is to give the customer their price using the current exchange rate and then instantly convert when receiving the BTC. This way the merchant has no exposure to BTC rate changes.
Mtgox is working on something to make this process easy.

The clipping of the depth chart was a hack I threw in there to make the graph legible. I'm sure magicaltux will show the whole thing when the new backend is rolled out.

Bitcoin is tiny, and will be for a while yet.

That means, necessarily, that one bored VC or trader can create a major move in the market.

Volatility is a given when it's young.

Hear, hear!

This is the proper response to every Bitcoin rally / crash thread in existence!

dark pools favor the rich, because an order has to be above a certain level to be a dark pool order. solution? MAKE AN TRANSPARENT EXCHANGE

SOMEBODY DO IT, K?

You saw yesterday what happens when someone puts up an open sell order...

Also I didn't see any mention of dark pools on Tradehill so far, try them maybe.

This is like blaming the mirror for your face.

No. It's like a girl blaming a crooked mirror for messing up her make-up i.e. completely justified.

I think you're correct. Full information is needed in order to proceed acordingly.

Anyway, I think that the price will eventually reach a stable growth, which should be somewhat proportional with difficulty increases, in order to keep miners producing and the market stable.

that was because the BUY side wasn't revealed.

Agreed the exchanges and lack of transparency are major setbacks to the progress of BTC.  I would also say that having a floating value is a killer for BTC to actually be used as a medium of exchange. The fluctuation is way too insane, something like 5,000% more volatile than the USD.   A currency cannot be this volatile, its not functional. As a specualtion vehicle, the volitility is a decapitator, and as a storage of wealth highly risky at best. Lots of issues, for sure.  will these issues be worked out? or more correctly asked, can these issues be worked out? ???

Volatility will go down with adoption. Having two big exchanges is a big step in this direction.

They will be worked when more people spend their Bitcoins on products and services so that the actual economy is larger than the speculative economy.

Wrong. We will first have to have stability before we can have more products and services offered for Bitcoins. This kind of was my whole point in the OP.

For this to happen market needs transparency.

In the past 48hours we had: trades: 28,004 for 346,324.23btc or $5,920,117.86usd

Whoever thinks we still need to grow to achieve stability is kidding themselves. I've experienced way smaller and stable markets in online games where pure supply and demand ruled and it all had to do with full transparency of all the trades.

We don't need to grow, we just need all the information available so everyone can make better decisions.


Oh and again, I'm not asking mtgox to change how they do business, I'm asking you, their clients to reconsider and switch to a different exchange, one that reveals all the available information, like tradehill for example does.

I think we need more quality exchanges, Mt.Gox is good and well but no monopoly is a good thing ... there are enormous money in exchanges obviously, why nobody else creates kickass exchange I can not understand ... I'm trying the TradeHill, we'll see if it lives up to the challenge. In the meantime it's better to diversify ...

So who's the clown on TradeHill that's asking $999.99 for his two bitcoins?
He's ruined their plots!

I was totally with you on the need for stability, how can you price an item in BTC when the value fluctuates so wildly?  But I don't understand how seeing the data from the lowballers or the starry-eyed/disruptive miners impacts the true value of the BTC.  I don't know if you're wanting the API for Mt. Gox to show that info, or if it does now, but that doesn't seem relevant to the value of the currency.  Dark pools... maybe.  Then again, I'm no financial guy, either, it could be easy to change my mind, perhaps.  I mostly just wanted to talk about the guy screwing up the chart at TradeHill with his $999.99 ask price!

Drawing charts is one thing, providing the full depth table with all the orders no matter the volume is another. Right now mtgox does not give out the full depth table, even via the API.

People can't be expected to make good decisions with incomplete information, all they can do is make educated guesses at best which eventually lead to mistakes and when mistakes clump up we get a crash which then hurts Bitcoin's credibility.

Transparency is the only way to success, so please, find a different exchange that has full transparency.

mtgox going down with mysql errors and saying nothing about it except to 7 people on IRC is reason enough to pull all your money out. 

heres my website with depth of recent trades

usd depth
http://bitklein.com/usdtrade.php
btc depth
http://bitklein.com/bctrade.php

As for me, I put in orders, watch the market, cancel, make new orders, repeat...   If you were to watch my orders you likely wouldn't learn my future trading price, that is to say when I finally decide to make a trade.  I bet data beyond .75/1.75 range means very little.

But, whatever caused the fiasco this weekend had made me not want to buy nor sell using bitcoins.  I am right now putting away all my coins.  I plan to only keep half of what I mine for spending.  (which isn't much)  The rest goes into my secure wallet. 

I am glad to have gotten the chance to buy at $12 but this is just crazy.

dayfall, (everybody) spending a portion is the only way to guarantee the remaining ones have value.

I will seriously consider using Tradehill instead of MtGox. I have never understood the point of "Dark pools." (I have no BTC yet). I don't like the referral system Tradehill uses. I am considering using a random referral number.

Which sane merchant would want to receive such a volatile commodity in return for his goods and services? Are people around here forgetting that merchants aren't being merchants just for fun, it's their fking bread and butter and we better have stable prices if we want them to trust Bitcoin not to fk them over out of their bread and butter.

I strongly believe that what happened this weekend had everything to do with lack of transparency and information required to make good decisions on what to charge and what to pay for Bitcoins. We are big enough, it's time we end these shenanigans and switch to an exchange more transparent. I know I have.

In principle I agree with OP, but most likely the fundamental problem is that MtGox has such a huge market share of public exchanges, maybe 90-95% or so.  The dark pools on MtGox can only be damaging as long as MtGox has this large market share.  All holders of bitcoins who do not want to see a repeat of the bust of last weekend, would do well to trade elsewhere.

Let me try to explain better: the dark pools on MtGox only offer an advantage to wealthy bitcoiners *AS LONG AS* there is a large list of public asks and bids on MtGox to draw from.

1. If you don't like the advantages dark pools offer to large traders, then take your BTCs elsewhere.
2. If you want price stability, then don't trade on any exchange that has an excessively large market share.

Information is always imperfect in the real world. Even if Mt Gox was absolutely perfect, people can always trade outside of it, in other exchanges, over the counter, etc. That's why true free markets never exist. It's just a fact of life, you have to accept it.

You are wrong stakhanov.

Mtgox can either be completely transparent or not. It can either give out all the available information or they can withhold information. This might not be of crucial importance in a particular moment but a market that doesn't get to see the full supply/demand picture is bound to swing in the wrong direction to far which then causes massive corrections and price volatility which is something we absolutely do not want.

I'm not saying that if mtgox was completely transparent we wouldn't have had the correction from the $31 top all the way down to almost $10, but what I am saying is that if mtgox was completely transparent we wouldn't have even reached so high and needed a correction in the first place.

And if enough people understand this and there is an exchange that offers complete transparency, and there is, people will switch and mtgox will have to adopt or lose it's customers. And that, sir, is a fact of life.


EDIT: Oh and I find you are being hilariously ironic with your false statements in your post about there being no perfect information in the real world and your signature under it offer a gadget with perfect information for your desktop. Good job.

Tradehill needs to sort that kind of rubbish out quickly. I would argue that any ask or bid price simply not be accepted if it is too far off the current price. This is what happens on online share trading. Try putting in a bid price for google at $1 or an ask at $100,000... aint gonna happen.

Speaking someone who is trying to get a business owner to take BTC I find it totally bizarre that an exchange trading in USD will not settle to a USD checking account. Once my friend saw Liberty Reserve listed he said "what the F*** is that ? Why dont that just use a normal bank - is this stuff legal?" and I have to admit I was at a bit of a loss to explain it myself.

I am pleased that Tradehill simply has a US bank account and Dwolla. I would say that something like that looks a lot more legit.

Tim

Stop being a control freak, and put your two little hands at work where your mouth is.

I already did so. I withdrew everything from mtgox before I wrote the OP and deposited in tradehill.

Oh and ty for proving my logic is correct seeing as you have to attack my character ("a control freak") instead of my arguments.

Perfect information does not exists, but there is better and worst information distribution. Talking about perfect information is just derailing the topic.

Also, free markets does not imply the existance of perfect information. That would be silly. Free market can exist and have existed.

After what I saw this weekend I will be recommending that my friend offer the intraday low for staying in his hostel. If you as a customer think this is just a wobble in the price you can always wait a day for it to go up.

That is irrelevant. It doesn't matter what they draw on a graph, they can change that all they want. I don't care if mtgox shows only 10% under spot bids and 10% over spot asks if they at the same time have the entire depth table available. But that's not the case, not only they do not draw all the bids and asks they don't even provide the depth table.

Plus if you look at the depth of tradehill on bitcoincharts instead you can see a perfect picture of how the supply and demand looks like.

I mean, go make your own exchange

Control freaks are people who say "everyone needs to do this now because blah blah blah" instead of "i'm doing this because i think it's smarter", and I don't usually lose time with control freaks.

As for your logic, remove dark pools and people will use trading bots (and then you'll probably start complaining about how 'unfair' they are, and about how they leave you with 'incomplete' information, and how the world is going to collapse if people don't listen to your insightful rants).

I'm not sure if you are serious. If you are I suggest you ask 20 merchants if they'd want to use a currency that can have 40% daily swings and see how many you find. My bet is not one would.

Don't need to, there already is an exchange that offers perfect transparency.


Ah yes, I'm such a control freak, real nazi, right?  ::)


Wrong. Anyone can write a trade bot. No one can see dark pool orders except the owner. You continue to amaze me with your "sound" logic.

If there is no possibility to place a dark order, then people will make their big orders look small by placing them using a bot, therefore you will never have the information detail level you want. Is it that hard that to understand ?

This has been discussed countless times on the forums, lurk a little more.

I am serious. I think it would do his business good to accept BTC.  I am NOT suddenly suggesting to him that he takes BTC *because* it is swinging so wildly, rather I am suggesting he takes BTC in general and needs a way of not getting burnt in the short term until things settle down.

I agree with you totally something swinging so wildly is deeply unattractive to any merchant. That is why my suggestion is that he only takes the days minimum rate. The customers can take it or leave it. If they think the rate is unusually low they can wait till it rises.

He would need to move it to an exchange and transfer it to dollars pronto. He is unlikely to lose on a sustained basis by doing this (ie the rate may rise or fall on any given day from the time he quotes a price to the time he converts to dollars)

Forgive me if I am bit off topic. It is less about Mt Gox and more about how a volatile BTC is making it hard for me to make a case for a "real merchant" to accept them.
Tim

My point was that 90% of all trade being concentrated on mtgox and them providing a skewed picture of supply and demand is the cause of this crazy volatility.

And davout one more time, no one but the person who placed a dark pool order knows about it. Anyone can use a trade bot and everyone can see their bot working. I really really don't understand what is so hard to get about this? I also don't care what this forum has had endless dabates on and the conclusions you drew from those debates if they are wrong.

Btw what makes you think people aren't using trade bots already? (In case it's not clear, this is a rhetorical question)

There's absolutely no way to know from mtgox's public info that there is a bot hiding the amount of a big order by placing small orders at chosen moments.
There's usually no way to tell there's a bot at all.

I never said people weren't already.

Mtgox has its flaws (I for one think the trade is much too large for its capacity to handle it) but the volatility has nothing to do with mtgox. Dark pools can more or less emulated with bots and you will never know what is the market. Moreover, anybody can have gazillion dollar/BTC deposited and just waiting for a good moment to trade. Let me repeat it: you never know the true demand and supply.

The volatility is inherent to Bitcoin. I think one of the biggest reason of it is that we don't know the ownership structure of bitcoins. For publicly traded shares, we know how much is free float, how much belongs to the major stockholders. The major stockholders have no incentive to dump the shares all at once on the market. Instead, they negotiate deals outside of market. Bitcoin price should stabilize when there will be more bitcoin "free float". However, I'm afraid bitcoin will never be as stable as currencies. It might be only as stable as major stocks at best.

So what's your god damn point about no dark pool orders then? Are we done with these childish posts and are you going to finally admit that the market has less info with dark pools then they would have without? Actually don't bother answering.

Raulo, yes small volatility sure, but not 40 or 50% swings in price in a mater of hours. Please realize that these swings happened because the market was getting incomplete information for a longer period of time, especially because we can only see up to 27% under spot bids and 73% over spot asks and just because dark pool orders.

No, it had nothing to do with that. The swings were a result of an impatient seller who dumped about 100,000 BTC (my educated guess) in a few pieces triggering some additional selloff from others. There is really nothing you could do about it.

At best, you could have mitigated it and slowed it down. Mtgox Saturday problem was that the database couldn't handle the load and for instance I tried several times to pickup these dumped BTCs without success. The system made me wait until the trading is over.  And when the mysterious seller stopped his dumping for a moment, the price rocketed because it was the first chance anybody could put some buy orders. So, yes, Mtgox is guilty of some of the swings but the drop to a bit over 10 BTC would have probably happened anyway (may be it have had stopped a bit higher). Because it was the point where the mysterious seller lost his motivation to sell or run out of BTCs.

quote author=hazek link=topic=16032.msg211912#msg211912 date=1307959401]
Raulo, yes small volatility sure, but not 40 or 50% swings in price in a mater of hours. Please realize that these swings happened because the market was getting incomplete information for a longer period of time, especially because we can only see up to 27% under spot bids and 73% over spot asks and just because dark pool orders.
[/quote]

Hahahahaaha.

Seriously.


Hahahahahaha.

Think that does not happen in the real financial markets?

It did not. It does now. Well, the trades then get cancelled. Nanex (also my financial data provider) is really nice investigating them. We talk of stocks going from 100 USD to cents in seconds, then back up.

Some examples:

http://www.zerohedge.com/article/todays-flash-crash-690-009-two-seconds - yes, that is a crash

And this one the other way:

http://www.zerohedge.com/article/2880-2600-two-second-thank-you-skynet

The second is some whares going from 28.8 USD to 2600 (!) usd in two seconds thanks to robots and a thin market.

Thank heaven in a real world the exchange is primarily (!) responsible for an orderly market, nothing else, and thus cancels all the trades afterwards.

The volatility is not bbecause of incomplete information, it is beacuse of bad exchange rules at MtGox, a small illiquid market, no circiuit breakers and trade limits in place over weekends when money flow and attention is limited.

hazek: You are actually totally wrong about all your points. This volatility has nothing to do with clipping the orders way outside of the normal price range or darkpools.

1) The market was this volatile or even more before darkpools and before I clipped the order book.

2) You can't see the complete orderbook for any currency pair. There are dark pools for every currency pair. There is so much more hidden info for every other currency pair on earth. Yet all have less volatility.

3) The merchant problem is easily solved by not holding BTC like I explain above.

4) Multiple exchanges will only increase volatility since each market will be thinner. The only thing that will decrease volatility is liquidity. It may seem like there is a lot traded a day but it is really nothing compared to any other currency pair.

5) The recent crash had been building for days since the peak. It was predicted by many people. It was greatly exacerbated by one person dumping a ton of coins. If they had used a dark pool instead there wouldn't have been such a huge drop. So actually use of the dark pool would have decreased volatility.

6) Look at this chart: http://mtgoxlive.com/orders <- see all those straight lines in price. Those are dark pool orders being hit. They are reducing volatility as you can plainly see. If they weren't there there would be spikes instead of straight lines.


I should have used a different word for it other than "dark pool". I guess "dark" scares people and they don't understand it. So when something happens... "The market crashed. It must have been that evil dark pool that confuses me!"

What are the advantages to dark pools over bots as far as the user is concerned? It seems to me dark pools give mt gox trading information that the general public is unable to have, while a bot would accomplish the same goal for the user, just not give extra information to mt gox. I guess it doesn't matter assuming mt gox wouldn't use this information for their own personal gains or share it with anyone who is(after all, they are in place to help bitcoiners, not rip them off!), so I guess there really is no difference. Besides, it's a pain to make bots or switch exchangers so might as well just leave well enough alone.

As far as the volatility goes, the market is clearly unpredictably volatile, so any effort to make it less so by providing the public with all the information that the main exchanger has would at most decrease the volatility some amount that no one will ever know anyway.

So, in conclusion, I say don't bother taking the time to change something that is working just in exchange for little transparency and the hope for an unidentifiable amount of decreased volatility. There are more important things to do, after all, whats the problem with a little trust. I'll continue to support mt gox until they give me a solid reason why I should not to trust them with a little extra information, I just think of it like a little tip for all the good work they are doing!

and Hazek, I appreciate your concern, but man don't worry so much, everything will work itself out, it has so far!

If I sell Bitcoins to my neighbor, isn't that a dark pool of sorts?  Why should that effect anyone else?

Quite right. We already have 'dark pools' happening in the blockchain. I've seen large sums change hands, (unless it was for some odd reason - a transfer to a wallet under the originators control), and I have to say they dwarf what lies in the pools on the exchanges.

I don't quite understand the fury and noise of people railing against the pools. They provide depth to the market and actually reduce volatility. Most of the rambling comments on this forum are of the "OH NOES MANIPULATION" variety, which of course are never backed up with any kind of proof. (The verifiable kind, not the tinfoil-pulled-it-from-my-ass-kind.)

I'll just keep on trading, like usual. :)

I think the difference that the nitpickers would claim is that it would be like every time you sell coins to your neighbor you call up mt gox and tell them the specifics of that transaction and then they keep that information for just themselves, along with all the other neighborly deals in the world, and make their own personal buy and sell decisions based on that. But like I said in my post up there ^, just look at it as if this information you are giving mt gox is a tip(since they can use it to make money off the market), and it is fine, they don't charge much in the way of fees, and by tipping them this way we are making it more likely that it will be worth it for them to stay in business, which is what we all want. Other sites, such as TradeHitt or whatever, are just too stupid to think of this clever little tip jar idea.

Knowledge of the market is key to profiting from the market, we are just giving mt gox a little extra knowledge so they can get a little extra profit. No harm, no foul. Now can we end this thread or what?

lol, proof? proof of what? proof that a guy who is known to have knowledge nobody else in the world has about a rapidly increasing market is using it to his own personal gain? why would he not, and why should he not? If he is not, then he is just as dumb as the sites that don't have dark pools, and doesn't deserve the extra income anyway. I'm seeing nothing here that needs proven. If you don't want mt gox to be tipped your information then don't friggin tip him it, some will and some won't and life goes on. It would be like complaining that other people are sending him donations. We are all free to do what we wish with our money and knowledge, and people who complain about it are probably just jealous that nobody tips them, and in time hopefully they will grow up and accept it.

bitcoin is growing by leaps and bounds while coupled with uncertainty, how can you ever expect price stability at these growth rates? wait a couple of years, and THEN we will start talking about price stability.

If posts were food, that paragraph would be a greasy unidentifiable deep-fried mass of ... something.

But since I don't specialize in dubious deep-fry 'cuisine' found at state fairs and unlicensed traveling carnivals, I'll let my original post stand. If you do make it long enough to pound your keyboard in a convincing way to construct an argument that can be parsed by an actual english-speaking native, please let me know.

The volatility is adequately explained by:

• Bitcoin being new
• (Which leads to) Uncertainty
• New traders
• Delays in getting USD into an exchange

As people start to get bored of trading them for profit, the price will settle.

the 'guy i am refering to here is the guy who runs mt. gox. the knowledge i am refering to is knowledge of the dark pools which he surely has. the personal gain i am referring to is the gain that he can get from having said knowledge by using it while trading in the bitcoin market.


If he is not using this knowledge to his gain, then in my view he is dumb.


If you do not want him to have this knowledge and use it to create personal wealth for himself, then it is unwise to provide him with it. if you do want him to have this knowledge and use it to create personal wealth then do give it to him.


I've reread your post and my best guess is that you want it to be proven that he is not using this information to aide him in his quest for wealth, I am saying if he is not then he is stupid, why would he not? Either way, it does not matter to me, I willingly give him this information, knowing he can use it to make an easy buck because i like what he does. No big conspiracy, no fancy metal hats, just a simple case of a guy with information using it to make some money.

/signed. Either Mt. Gox deletes the dark pool functionality entirely or I jump ship to Trade Hill as soon as it gets big enough to be a main trading hub.

Thats fine, i'll stick with what i know works. I don't care if there is a 'required' tip since this is a tip of knowledge(knowledge of the dark pools that i use) and does not come solely out of my pocket, but rather out of the pocket of every individual who is buying and selling bitcoins, and thus effects each of us very little, but for him, hopefully, it is quite substantial.

Supply side again. The demand side needs to start producing what it wants. Linux didn't get big because it beat the competition. It got big because there was a community already serving its own interests.

Transparency won't change the fact that the market is thin and people don't know what THEIR value for a product is. Forget dollars. If a video card produces 1 coin a day and you are going to upgrade every month then it's not going to be worth buying for more than 30 coins now is it? Regardless of street price. There's enough video cards being bought that at least a couple dozen people should already be trading them on this forum and viciously.


Stop blaming mtgox for not knowing what you want. Would you give up your bitcoins in the market if you had a use for them? We don't need to grow. We need to evolve. And everyone either blames lack of information or lack of controls in the client.

It's ridiculous. More information will lead to more precise confusion.

It's possible to make use of the Mt Gox API to immediately (within transfer time) sell all Bitcoins received (or the portion thereof for which USD is needed) for USD after they're received. Anyone too retarded to figure this out shouldn't be running an online business anyway. They should go start one of those stupid convenience stores, with a sticky floor, which doesn't take credit cards for purchases under $5.  ::)

The change in value during that sort of time period ought to be proportional to interchange fees anyway. If they're really worried about volatility they can store some Bitcoin up front and sell it while the transfer is taking place. Thereby allowing more sales to occur as soon as the reserve is replenished and the transfer has gone through.

I'm sorry, I'm failing to see the relevance of this post to this thread, I'm left to assume it was accidentally posted here. Or maybe I am missing something? Do you mind quoting who you are responding to?

I have to say, and it's a little irrelevant to this thread, but common to many threads, that this argument "If you don't like X, then do it yourself", really irritates me.  It's like as though if there anything I don't like I should get up and do it myself.   As in:

"Hey stewardess, the seat in this aeroplane is too skinny for me"
"Well then, why don't you just run along and build your own aeroplane"

It's ridiculous to suggest that everybody has time to do everything themselves.  That's a feature of human society called "specialisation of labour", and it's been with us, ohh, I dunno, ever since we first started to plant crops I suppose.

Hazek doesn't like some aspect of MtGox, but that doesn't make him a programmer with sufficient skills to make his own site, nor does it give him enough spare time to do it, even though there is no law or de facto standard that would prevent him.

So as a general appeal to all: some people just don't want to do everything, and prefer to rely on others.

Then he needs to accept that certain changes don't past the threshold. Besides bitcoin is reacting as it should. We are failing to evolve.

One way to minimize the problem of price stability is a system integrated into a web application that instantly exchanges BTC for USD at the given rate at the major trading houses. OMEGA is investing in startups attempting to accomplish this. The great thing about the economy is that entrepreneurs always rise to meet the demand for new services. As more and more early adapters cash out, prices will adjust predictably to the increasing BTC supply as more is mined and we will get a better sense for final BTC demand. The problem will solve itself in time. The economy is very self correcting. For now we need instant conversions from BTC to USD.

D
Does anyone have any view on why there would be a *healthy* relationship between difficulty and price? I see difficulty as a reaction to price. Price increases cause more miners which raises the difficulty. So April - present has been a GPU arms race for everyone to acquire the highest possible portion of the total network hash rate. This has also driven up the hardware prices as a result, and in many cases caused outages. I think last week and this week are when the arms race stops, and there will still be 2-3 weeks lag as those systems come online.

The only question mark is the price itself. The best explanation is simply influx of outside interests due to the media coverage. The price now is just due to flow of cash. The flow has stopped, and eventually, and probably in the near term, that cash will flow away to some other location as people lose interest. This might be prolonged or prevented if there continued to be more interesting services and uses for Bitcoins that kept interest alive. Which is pretty cool and I think people realize this because there is practically a whole forum full of people scrambling to be the first to set up Bitcoin related operations. So far none of them have gotten to be Bitcoin "killer apps". I think the best thing that could actually happen at this point, is for a robust startup vehicle (like a BTC stock exchange) to fund well organized operations. This is sort of happening on a small scale with things like bounties, but that's not big enough. The closest thing I see to this is that one guy who set up a mining company and managed to get at least a few investors. More mainstream folks would continue to stream in and out of this community, and stay longer if they could invest in stuff. I think the average person would see this as a fun, and approachable bunch of pet projects surrounding a micro-economy. People are more willing to participate because the Wall Street vampire squids haven't haven't gotten their shady & corrupt tentacles onto it yet. So it's like a democratization of an economy (albeit more of a toy, or mock economy still, at this stage).

As a side note, I'd like to add that there really has only been 2-3 unique pieces of news in the past 2 weeks, yet over a dozen different articles released just rehashing the same stuff. Our media in this country sucks. They just copy stories from each other. I would like it if someone came up with a system to analyze news stories/content to trace them back to original source. Which website would get identified as the one generating the most original content?

WOW! why all the completely unrelated posts in this thread?? this is a thread on the dangers/downside of mt. gox. If you want to talk about something new then make a new goddam thread! read the subject line, you make it seem like you are trying to drown this thread in unrelated BS for some reason...

not on difficulty/price relationships, or start-ups, or articles, or wall street.  come on guys, pop some Ritalin if you gotta and try and to focus here.