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Title: Something's Got to Give Post by: Razick on April 03, 2013, 01:21:18 PM First of all, I am a huge Bitcoin fan, and while I don't think it will replace the US Dollar, I do think it could replace PayPal, and maybe even credit cards for some purposes. I think it may even become a common sight at the local convenience stores, and be widely used for international money transfers as well.
However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago. Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous. There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so. First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not. Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image. Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble. http://ubuntuone.com/38TK2ylI45ec01L58QKfpb Title: Re: Something's Got to Give Post by: Razick on April 03, 2013, 01:29:24 PM Fixed the notepad-induced formatting error! ;D
Title: Re: Something's Got to Give Post by: RodeoX on April 03, 2013, 01:30:08 PM Something has given. It is the mainstream resistance to bitcoin. :-*
Title: Re: Something's Got to Give Post by: Razick on April 03, 2013, 01:33:09 PM Something has given. It is the mainstream resistance to bitcoin. :-* That's true, but-- back to the post with you! ;) Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 01:39:06 PM First of all, I am a huge Bitcoin fan, and while I don't think it will replace the US Dollar, I do think it could replace PayPal, and maybe even credit cards for some purposes. I think it may even become a common sight at the local convenience stores, and be widely used for international money transfers as well. tl;dr: Use a payment processor and let them worry about the exchange rate risk. BitPay is signing up new merchants every day and, even though the use of Bitcoin for commerce is lagging far behind the speculative growth in the exchange rate, the actual economic economic activity which will support Bitcoin's purchasing power in the long term is growing.However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago. Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous. There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so. First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not. Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image. Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble. Title: Re: Something's Got to Give Post by: Razick on April 03, 2013, 01:41:23 PM First of all, I am a huge Bitcoin fan, and while I don't think it will replace the US Dollar, I do think it could replace PayPal, and maybe even credit cards for some purposes. I think it may even become a common sight at the local convenience stores, and be widely used for international money transfers as well. tl;dr: Use a payment processor and let them worry about the exchange rate risk. BitPay is signing up new merchants every day and, even though the use of Bitcoin for commerce is lagging far behind the speculative growth in the exchange rate, the actual economic economic activity which will support Bitcoin's purchasing power in the long term is growing.However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago. Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous. There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so. First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not. Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image. Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble. +1, we do use BitPay, but prefer to skip the banking side of things so we just exchange via Mt Gox. Long term, I agree, but right now, it's overpriced to the point of obscenity. Title: Re: Something's Got to Give Post by: Snowfire on April 03, 2013, 01:48:27 PM Something has given. It is the mainstream resistance to bitcoin. :-* Not. This will, if anything, stiffen mainstream resistance to acceptance as a currency. The current rush is all speculators piling into the game, not anyone who seriously contemplates using BTC as money. Mainstream acceptance will come with stability. Title: Re: Something's Got to Give Post by: the founder on April 03, 2013, 02:09:00 PM IT'S NOT MONEY!
Bitcoin is not "money" as currently defined. It's not a currency.. it's a store of wealth. The offline world equals would be Gold and Silver. Think of it this way.. you have 1500 dollars, you put it in a gold coin... its value appreciates over time... a few years from now you go there and cash it out for 2000 (just an example). That gold coin stored your wealth for that period of time and increased it's value... that's an old school version of bitcoin. Now countries trade in gold, central banks trade in gold, but you don't walk into walmart and hand over a gold coin for your massive christmas shopping. You know why you don't hand over that Gold coin for shopping at Walmart, because you can buy more at walmart next month with it. Hence why Bitcoin is not currency as normally defined.. it's a store of wealth. You want to go shopping at walmart, you cash .003 of your bitcoin and get your money and use that... just as if you sold 1/10th of your gold coin to go shopping there.. Title: Re: Something's Got to Give Post by: RodeoX on April 03, 2013, 02:23:20 PM To my fellow peers who posted above, I have to disagree. I use bitcoin as money all the time. It is money. Here is how to do it.
Today I have to pay my VPN service bill. What I will do is buy about $6USD worth of bitcoin. I will then send about that in BTC much to my provider. Because I put $12 in the first month I started this service I am a month ahead. So, really I am spending the money from last month. Last month I bought that bitcoin for about say $2.10. That means I receive my service for a third of the cost, AND I get to keep the balance of the coins. BTCTry doing that with any other kind of money. Title: Re: Something's Got to Give Post by: wopwop on April 03, 2013, 02:23:58 PM correction:
someone's got to give as in the last one holding bitcoins Title: Re: Something's Got to Give Post by: mindtomatter on April 03, 2013, 02:33:22 PM First of all, I am a huge Bitcoin fan, and while I don't think it will replace the US Dollar, I do think it could replace PayPal, and maybe even credit cards for some purposes. I think it may even become a common sight at the local convenience stores, and be widely used for international money transfers as well. However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago. Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous. There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so. First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not. Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image. Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble. http://ubuntuone.com/38TK2ylI45ec01L58QKfpb I think all of your concerns are valid in a normal market, but we have such constricted supply relative to an exploding demand. The process is self feeding, I wrote about this last night http://mindtomatterblog.tumblr.com/post/47008643037/the-perpetual-skeptic-going-bullish-on-the-no-crash Also as the price increases, people are less and less likely to spend or sell their bitcoins instead opting to hold and see where the price stabilizes. I also have liked to spend my bitcoins over time, but this latest price spike has suddenly made everything I've ever purchased with bitcoin a horribly bad value for my BTC spent. Take BFL for example, if you pre-orderd a jalepeno back in August, that same amount of bitcoins could now buy you two-three of their 60GHz units. What did you gain by pre-ordering? Well... A place in line? But then, electronics are hard to make the first of, much easier to make the 100,000th of - So how valuable even is that place in line? The point is, I'm a MAJOR proponant of spending your bitcoins - but at the rate of increases here it seems stupid to even think about doing that now lest you find yourself paying several hundred dollars for a year of netflix. Title: Re: Something's Got to Give Post by: the founder on April 03, 2013, 02:49:50 PM To my fellow peers who posted above, I have to disagree. I use bitcoin as money all the time. It is money. Here is how to do it. Today I have to pay my VPN service bill. What I will do is buy about $6USD worth of bitcoin. I will then send about that in BTC much to my provider. Because I put $12 in the first month I started this service I am a month ahead. So, really I am spending the money from last month. Last month I bought that bitcoin for about say $2.10. That means I receive my service for a third of the cost, AND I get to keep the balance of the coins. BTCTry doing that with any other kind of money. Thank you for proving my point. You can't price stuff in bitcoins... hence why it's not a currency.. it's more like gold. Title: Re: Something's Got to Give Post by: DeathAndTaxes on April 03, 2013, 02:57:19 PM To the OP BTC-E isn't used by the experienced traders. It lacks sufficiently good methods to move large amounts of fiat (our company has needs to clear $200K+ per week off exchanges and I am sure a company like bitpay needs double that or more).
Also not sure where you got $99 from (maybe looking at EUR price). BTC-E shows $130 now. It hit a peak of $149 and has been trading downward since MtGox closed. I am not saying Bitcoin hasn't come too far too fast (it may have) but your BTC-E angle is just a red herring. A correction won't kill Bitcoin it has momentum way beyond the current exchange rate. In time more sophisticated methods will be developed that allow merchants to hedge themselves (partially or fully) in real time while remaining completely in the crypto world. Still a higher exchange rate is important. It means the value of the money supply is worth more, it means the market is deeper, it means larger players can enter without splashing all the water out of the pool. For any significant commerce to happen (i.e. > $1B in goods & services exchanged for BTC daily) the price would need to be much higher (say >$1000 per BTC). Slower is probably better but nobody can control the market and between any two points it is essentially a random walk. Title: Re: Something's Got to Give Post by: oleganza on April 03, 2013, 04:03:19 PM tl;dr: Use a payment processor and let them worry about the exchange rate risk. BitPay is signing up new merchants every day and, even though the use of Bitcoin for commerce is lagging far behind the speculative growth in the exchange rate, the actual economic economic activity which will support Bitcoin's purchasing power in the long term is growing. BitPay grows *faster* than BTC price. Bitcoin: 300% in last month, BitPay transactions: 750%. http://www.marketwatch.com/story/bitpay-eclipses-silk-road-in-bitcoin-sales-with-explosive-52m-march-2013-04-02 Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 04:07:40 PM BitPay grows *faster* than BTC price. Bitcoin: 300% in last month, BitPay transactions: 750%. That's good, but they still have a lot of catching up to do.The Bitcoin economy would need approximately $1 billion in monthly commerce to justify an exchange rate of $140 with no speculative premium. Title: Re: Something's Got to Give Post by: nobbynobbynoob on April 03, 2013, 04:11:49 PM The Bitcoin economy would need approximately $1 billion in monthly commerce to justify an exchange rate of $140 with no speculative premium. This may be true, but all currencies and commodities, including PMs, have a significant "speculative premium". Yet their value doesn't just crash (very often). Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 04:14:52 PM This may be true, but all currencies and commodities, including PMs, have a significant "speculative premium". Yet their value doesn't just crash (very often). The calculation I did takes that into account. If the ratio of economic activity/purchasing power for Bitcoin was the same as the USD, it would require $1 billion of commerce every month to justify $140.Title: Re: Something's Got to Give Post by: JimiQ84 on April 03, 2013, 04:16:55 PM This may be true, but all currencies and commodities, including PMs, have a significant "speculative premium". Yet their value doesn't just crash (very often). The calculation I did takes that into account. If the ratio of economic activity/purchasing power for Bitcoin was the same as the USD, it would require $1 billion of commerce every month to justify $140.But Bitcoin is more similar to gold than USD, isn't it? What is economic activity of gold? Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 04:19:16 PM But Bitcoin is more similar to gold than USD, isn't it? What is economic activity of gold? Gold is a central banker's toy. What would the market price be if they weren't storing large quantities of it?Title: Re: Something's Got to Give Post by: nobbynobbynoob on April 03, 2013, 04:20:30 PM But Bitcoin is more similar to gold than USD, isn't it? What is economic activity of gold? Very significant, I imagine, given how it is stealthily replacing the USD as a means of exchange, especially between Asian giants. (The US cannot very well go and bomb Russia or China into submission!) In India, gold is very widely used as jewellery and money. Title: Re: Something's Got to Give Post by: solomon on April 03, 2013, 05:34:19 PM If you are concerned about holding bitcoin, don't hold bitcoin. Let Bitpay convert for you and relax
Title: Re: Something's Got to Give Post by: DeathAndTaxes on April 03, 2013, 05:36:47 PM The Bitcoin economy would need approximately $1 billion in monthly commerce to justify an exchange rate of $140 with no speculative premium. Based on what. That would be a velocity of 8.5 which is simply unheard of in any economy. Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 05:49:59 PM Based on prior estimates which put the upper limit of the exchange rate as $1 million equivalent if it saw universal adoption, and a simple ratio of world monthly economic output.
Title: Re: Something's Got to Give Post by: dg2010 on April 03, 2013, 05:59:49 PM Apparently the value of bitcoin has NOTHING to do with goods/services.
That is if you subscribe to many of the wackos on this forum. If you live in the real world you understand that the value of Bitcoin must be grounded in reality. Thus it is currently overvalued as the trade does not support such a price. Title: Re: Something's Got to Give Post by: RodeoX on April 03, 2013, 06:04:27 PM To my fellow peers who posted above, I have to disagree. I use bitcoin as money all the time. It is money. Here is how to do it. Today I have to pay my VPN service bill. What I will do is buy about $6USD worth of bitcoin. I will then send about that in BTC much to my provider. Because I put $12 in the first month I started this service I am a month ahead. So, really I am spending the money from last month. Last month I bought that bitcoin for about say $2.10. That means I receive my service for a third of the cost, AND I get to keep the balance of the coins. BTCTry doing that with any other kind of money. Thank you for proving my point. You can't price stuff in bitcoins... hence why it's not a currency.. it's more like gold. Title: Re: Something's Got to Give Post by: justusranvier on April 03, 2013, 06:06:45 PM Thus it is currently overvalued as the trade does not support such a price. The current price factors in the probability that this will continue:BitPay grows *faster* than BTC price. Bitcoin: 300% in last month, BitPay transactions: 750%. Buying Bitcoins at this price is a bet that trade will eventually catch up with and overtake speculation. Title: Re: Something's Got to Give Post by: Razick on April 03, 2013, 06:18:22 PM To the OP BTC-E isn't used by the experienced traders. It lacks sufficiently good methods to move large amounts of fiat (our company has needs to clear $200K+ per week off exchanges and I am sure a company like bitpay needs double that or more). Also not sure where you got $99 from (maybe looking at EUR price). BTC-E shows $130 now. It hit a peak of $149 and has been trading downward since MtGox closed. I am not saying Bitcoin hasn't come too far too fast (it may have) but your BTC-E angle is just a red herring. A correction won't kill Bitcoin it has momentum way beyond the current exchange rate. In time more sophisticated methods will be developed that allow merchants to hedge themselves (partially or fully) in real time while remaining completely in the crypto world. Still a higher exchange rate is important. It means the value of the money supply is worth more, it means the market is deeper, it means larger players can enter without splashing all the water out of the pool. For any significant commerce to happen (i.e. > $1B in goods & services exchanged for BTC daily) the price would need to be much higher (say >$1000 per BTC). Slower is probably better but nobody can control the market and between any two points it is essentially a random walk. You may be right about me reading euros but I think it has just climbed since this morning. By the way, I never suggested this would kill the currency; my hopes for Bitcoin are high. Title: Re: Something's Got to Give Post by: the founder on April 03, 2013, 06:20:58 PM Apparently the value of bitcoin has NOTHING to do with goods/services. That is if you subscribe to many of the wackos on this forum. If you live in the real world you understand that the value of Bitcoin must be grounded in reality. Thus it is currently overvalued as the trade does not support such a price. I don't think so.. I think there is large international transactions taking place in bitcoin more than you know... how else is Iran going to sell their sanctioned oil ? Title: Re: Something's Got to Give Post by: DeathAndTaxes on April 03, 2013, 06:27:28 PM Based on prior estimates which put the upper limit of the exchange rate as $1 million equivalent if it saw universal adoption, and a simple ratio of world monthly economic output. Like I said a velocity of 8.5 is unheard of in any economy anywhere on the planet ... ever. So either you forgot to carry a one or your something is wrong with your analysis. For example the US money supply (M2) is roughly $10T and US annual GDP is ~$15T. That is a velocity of 1.5. If the Bitcoin economy had a similar velocity of money to support current price (~$135 * 11M BTC * 1.5 = $2.3B) $2.3B in commerce annually. Of course Bitcoin also has a store of value component so it is likely that Bitcoin velocity would be lower. At $1B per month I would expect (based on economic theory) for BTC:USD exchange rate to be north of $1,000. GDP is a measure of commerce over time. Money Supply is a timeless value. Velocity is the conversion factor. A Velocity of 1 means an economy with x monetary units engaged in x transactions annually (i.e. each unit was used once). http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=M2V&scale=Left&range=Max&cosd=1959-01-01&coed=2012-10-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=lin&vintage_date=2013-04-03&revision_date=2013-04-03 Title: Re: Something's Got to Give Post by: keystroke on April 04, 2013, 03:27:20 AM Based on prior estimates which put the upper limit of the exchange rate as $1 million equivalent if it saw universal adoption, and a simple ratio of world monthly economic output. Like I said a velocity of 8.5 is unheard of in any economy anywhere on the planet ... ever. So either you forgot to carry a one or your something is wrong with your analysis. For example the US money supply (M2) is roughly $10T and US annual GDP is ~$15T. That is a velocity of 1.5. If the Bitcoin economy had a similar velocity of money to support current price (~$135 * 11M BTC * 1.5 = $2.3B) $2.3B in commerce annually. Of course Bitcoin also has a store of value component so it is likely that Bitcoin velocity would be lower. At $1B per month I would expect (based on economic theory) for BTC:USD exchange rate to be north of $1,000. GDP is a measure of commerce over time. Money Supply is a timeless value. Velocity is the conversion factor. A Velocity of 1 means an economy with x monetary units engaged in x transactions annually (i.e. each unit was used once). http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=M2V&scale=Left&range=Max&cosd=1959-01-01&coed=2012-10-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=lin&vintage_date=2013-04-03&revision_date=2013-04-03 Title: Re: Something's Got to Give Post by: MatTheCat on April 04, 2013, 04:24:06 AM LOL!
I don't think so.. I think there is large international transactions taking place in bitcoin more than you know... how else is Iran going to sell their sanctioned oil ? He said: Apparently the value of bitcoin has NOTHING to do with goods/services. That is if you subscribe to many of the wackos on this forum. If you live in the real world you understand that the value of Bitcoin must be grounded in reality. Thus it is currently overvalued as the trade does not support such a price. If Iran were to to be doing oil deals in Bitcoin, that would be the equivalent of them designing thier economic defence mechanism with a great big shiny 'weak spot' that glows red. Iran is not an end of level baddie on a computer game! Now back to the real world with you P.S. The wackos will have their delusions spelled out to them soon enough. And you know what, the sort of volatility that has come to be taken as 'normal' will mean that most of them won't even suspect a thing when the day of reckoning comes. Bitcoin went from $147 to $108 today. That is like a 40% drop! In any other market that would be running out of skyscraper windows time. I personally am looking forward to hearing from deathcode when the day inevitably comes. I am sure he will have some phantastical conspiracy theory as to why things never went quite the way, he, in his mighty all knowing wisdom, predicted that they would. He will then call anyone who doubts his sophisticated all-knowing prognosis, an 'idiot', who doesn't understand what Bitcoin is all about. Title: Re: Something's Got to Give Post by: MonkeyBear68 on April 04, 2013, 07:28:03 AM What most seem to miss is that the BTC/dollar ratio is irrelevant in terms of Bitcoins ability to act as a means of transferring value across the internet.
If I wish to buy something for $100 then I can go to an exchange and if Bitcoin is at $100/BTC then I buy a single BTC and send it. If Bitcoin was at $1/BTC then I would go to an exchange and buy 100 BTC and send them. No matter what if I immediately use the BTC to buy the product, then the BTC/dollar ratio is irrelevant. Speculator's and investor's are necessary in order to have a supply of BTC available on the exchanges. If more businesses accept BTC then obviously more Bitcoins are taken out of circulation (at least temporarily) by being held in the daily transactions of those businesses. Thus the value of a BTC will need to go up as more businesses utilize it. Since the Bitcoin supply is limited to 21 million the value could indeed rise quickly with both speculators and users buying it. The biggest problem I see is the fact that Mt Gox has been going down so much. They need to be running 24/7 so that BTC and Dollars can trade freely. A crucial part of Bitcoins acceptance in the general public will be the easy conversion to Dollars. Mt Gox fills a crucial roll providing this. Think of how you feel when Debit/Credit is down and you are at the till. Since goods in society are priced in dollars the exchanges need to be up and available to provide the link!! Title: Re: Something's Got to Give Post by: Lethn on April 04, 2013, 09:51:45 AM There are two possible outcomes that I'm going with in regards to this price rise that I think will be the main explanations for what's happening with Bitcoin at the moment:
. Because Bitcoins are a deflationary currency, like gold being deflationary, they are merely pricing themselves based on the amount of inflation paper money is going through right now, which as we all know is ridiculous amounts, I think that particularly because Bitcoins are unregulated prices are going to go through the roof for them because of how much of our conventional currencies are being printed every day so the central banks can't manipulate the prices as much as they do with gold and silver. I don't think Bitcoins or Bitcoin hoarders are the problem and this is just a reflection of what a shit storm we're in currently and we need to stop trying to price things in paper money . Assuming that paper money isn't being inflated ( personally I'm loling at the possibility but what the hell ) eventually the Bitcoin 'hoarders' will have to sell and as they keep selling the currency will break apart as more and more people adopt it and prices will go back to more 'acceptable' levels but again I find this very unlikely because how much paper money is being printed I really do think these massive price rises and volatility is a symptom of money printing, the amount of overall Bitcoins as far as we all know has stayed exactly the same so I think we need to start thinking of Bitcoin more as a currency and less as a commodity to be priced in paper, that I think is where the true problem is with selling Bitcoins for the paper currencies, I think eventually the central banks aren't going to be able to stop other products and commodities going up in price and they will follow Bitcoins' pricing of paper money, the question is when of course, but I don't think anyone will be able to answer that. Title: Re: Something's Got to Give Post by: justusranvier on April 04, 2013, 11:28:14 AM Like I said a velocity of 8.5 is unheard of in any economy anywhere on the planet ... ever. So either you forgot to carry a one or your something is wrong with your analysis. I'm aiming for +/- one order of magnitude so if the actual number is $100 million monthly instead of $1 billion monthly that's close enough. It would imply a theoretical maximum exchange rate of 1 BTC = $10 million.Title: Re: Something's Got to Give Post by: Razick on April 04, 2013, 12:28:28 PM There are two possible outcomes that I'm going with in regards to this price rise that I think will be the main explanations for what's happening with Bitcoin at the moment: . Because Bitcoins are a deflationary currency, like gold being deflationary, they are merely pricing themselves based on the amount of inflation paper money is going through right now, which as we all know is ridiculous amounts, I think that particularly because Bitcoins are unregulated prices are going to go through the roof for them because of how much of our conventional currencies are being printed every day so the central banks can't manipulate the prices as much as they do with gold and silver. I don't think Bitcoins or Bitcoin hoarders are the problem and this is just a reflection of what a shit storm we're in currently and we need to stop trying to price things in paper money . Assuming that paper money isn't being inflated ( personally I'm loling at the possibility but what the hell ) eventually the Bitcoin 'hoarders' will have to sell and as they keep selling the currency will break apart as more and more people adopt it and prices will go back to more 'acceptable' levels but again I find this very unlikely because how much paper money is being printed I really do think these massive price rises and volatility is a symptom of money printing, the amount of overall Bitcoins as far as we all know has stayed exactly the same so I think we need to start thinking of Bitcoin more as a currency and less as a commodity to be priced in paper, that I think is where the true problem is with selling Bitcoins for the paper currencies, I think eventually the central banks aren't going to be able to stop other products and commodities going up in price and they will follow Bitcoins' pricing of paper money, the question is when of course, but I don't think anyone will be able to answer that. Inflation is high, but don't you think it's closer to upper single digits rather than 4 figure? Title: Re: Something's Got to Give Post by: mobodick on April 04, 2013, 12:45:33 PM Apparently the value of bitcoin has NOTHING to do with goods/services. That is if you subscribe to many of the wackos on this forum. If you live in the real world you understand that the value of Bitcoin must be grounded in reality. Thus it is currently overvalued as the trade does not support such a price. I don't think so.. I think there is large international transactions taking place in bitcoin more than you know... how else is Iran going to sell their sanctioned oil ? AAAHAHAHAHAHAHAHAHAHAHAHAHAHAHA LOL, seriously, have you seen the market cap of bitcoin? There are not enough transactions of value to justify the coverage of even a small part of the oil market. Iran produces a whole bitcoin economy per day. They would have to move all the bitcoins in existance per day to move those barrels. (hint: they can only do that once). So dream on lol. Title: Re: Something's Got to Give Post by: Razick on April 04, 2013, 12:49:54 PM Apparently the value of bitcoin has NOTHING to do with goods/services. That is if you subscribe to many of the wackos on this forum. If you live in the real world you understand that the value of Bitcoin must be grounded in reality. Thus it is currently overvalued as the trade does not support such a price. I don't think so.. I think there is large international transactions taking place in bitcoin more than you know... how else is Iran going to sell their sanctioned oil ? AAAHAHAHAHAHAHAHAHAHAHAHAHAHAHA LOL, seriously, have you seen the market cap of bitcoin? There are not enough transactions of value to justify the coverage of even a small part of the oil market. Iran produces a whole bitcoin economy per day. They would have to move all the bitcoins in existence per day to move those barrels. (hint: they can only do that once). So dream on lol. +1, not to mention that Iran basically hates freedom. I know that sounds bigoted, but it's pretty much true. Title: Re: Something's Got to Give Post by: nobbynobbynoob on April 04, 2013, 12:55:18 PM Inflation is high, but don't you think it's closer to upper single digits rather than 4 figure? It's probably somewhere between 5 and 15% pa in the US and UK... but wait! Hasn't the Fed tripled the monetary base since 2008? So that doesn't quite compute. I won't be surprised if real inflation is 50+% pa in countries like Argentina, however. Title: Re: Something's Got to Give Post by: justusranvier on April 04, 2013, 01:15:09 PM It's probably somewhere between 5 and 15% pa in the US and UK... but wait! Hasn't the Fed tripled the monetary base since 2008? So that doesn't quite compute. Much of that money hasn't actually been spent yet. It's being used to cover up the holes in bank balance sheets. The inflation won't hit until it's no longer possible to hide the loss of cash flow created by the bad loans that are being ignored.Title: Re: Something's Got to Give Post by: WinVery.com on April 04, 2013, 02:08:42 PM The gauge of the value's supply is exponentially increasing.
Title: Re: Something's Got to Give Post by: Lethn on April 04, 2013, 09:56:57 PM Quote Inflation is high, but don't you think it's closer to upper single digits rather than 4 figure? No honestly, at the rate the central banks are printing it's going to be far greater than people realise, think Zimbabwe or Weimar Republic, I guarantee you if the central banks are printing anything close to what I have in mind we'll need shopping carts or wheelbarrows to bring our money to the supermarkets. Title: Re: Something's Got to Give Post by: dg2010 on April 04, 2013, 10:14:46 PM What most seem to miss is that the BTC/dollar ratio is irrelevant in terms of Bitcoins ability to act as a means of transferring value across the internet. You are correct but you are missing the major factor. The volatility of the price is the key point. It's impossible to run a business on the back of bitcoin based on the current market volatility. Sorry but that's the damn truth. Some people are going to win and some are going to get severely burned until the market stabilises and we start to see some real growth on the back of actual trade. So dream on lol. Seriously, the more time I spend on the Bitcoin forums the more I worry because there are so many deluded people it's not funny. It seems to be a magnet for crack pots living on cloud 9 and their bullshit is infectious, other less informed, but otherwise grounded people start to believe the bullshit and it's self perpetuating. Title: Re: Something's Got to Give Post by: alexeft on April 04, 2013, 10:24:27 PM Seriously, the more time I spend on the Bitcoin forums the more I worry because there are so many deluded people it's not funny. It seems to be a magnet for crack pots living on cloud 9 and their bullshit is infectious, other less informed, but otherwise grounded people start to believe the bullshit and it's self perpetuating. Do you really expect that as bitcoin grows, all its users will be able to understand it in depth? I don't think so. Yet, as time passes and bitcoin matures, all those people will be able to see its benefits first hand. |
