Bitcoin Forum

Gotta admit, pretty smart - Didn't see that coming, did we?

If you're a central bank, or a government feeling threatened by the rise of a paradigm such as bitcoin, how do you kill it?

Make it illegal? Make it difficult to use? Ostracize the theory's proponents?

Or just simply remove the underlying utility of the invention in question - in this case, bitcoin's use as either a transactional currency, or a useful store of value.

Other than the speculators, who in their right mind would store their worth in something that has no steady, definite value?

Forget the people hurrying to buy bitcoin today (because tomorrow it'll be 25% more!) - Who would dare use bitcoin to purchase a good or service from someone in another country, or at a retail counter?

If you're a central bank, or a government, with massive resources at your disposal, you don't care if you make a few people wealthy in the beginning (or destroy a few fortunes in the end) you've accomplished what you set out to do: "Bitcoin? That was a crazy ride. Who'd ever trust that thing again?"

It's a shame, really - there was so much potential, and yet it's proven so easy to destroy.

The destruction was just not conducted the way that any of us thought it would be done.

I would like also to remind some people that in 2011 bitcoin price already crashed. And if it would be that easy to just crash price, bitcoin would be dead in 2011 and nobody would use it anymore. But look at todays price. It only means, that if it will someday crash (i doubt in it honestly) then it will go back again and again like phoenix from ashes hehe ;) Because it has real value for people but some fail to understand it.

Yes, the speculation around BTC is one of the major threats for BTC, but not really a long term one. Prices will plummet, or even out.

Other threats are:

- The blockchain. You can insert data in it, and at the moment it contains wikileaks stuff but also CP. This will give BTC a negative connotation with the general public, and they will lose all interest.

- ASICs. Instead of the general public mining, it will be a few hundred(?) miners buying huge ASIC racks. They have the power to kill off competing cryptocurrencies (TRC anyone?) and control the blockchain.

Crashed when fewer people knew about it.

We have how many more people investing into BitCoin now? Don't think we'll see a crash that hard again. Maybe below $100 but not down to 1 cent.

I'm sorry - too much Jethro Tull, I guess.  I must be thick as a brick...

Didn't see what coming?

If Bitcoins crash, I’m going to buy. Seriously, the so call “real” economy has tangible benefits in using Bitcoins. Bitcoins are here to stay…

Regards, Inge

I will also buy extra if it crashes... Im here for the "world changing" perspective.... If i get a bit rich in the process, then im sorry

I'm definitely going to buy a ton of BTC if it ever crashes. I'd love to buy 10,000 BTC plz :)

/***/ oh damn I was not supposed to say that.  :-X
All that is happening right now is just making some people very happy  ;D

Edit: removed the part I was not supposed to say. <_<

It's funny how you do not actually state how they will do it. :P
"so THIS is how you kill bitcoin", "didn't see THAT coming."

What are you talking about dude???!!

Sorry, I did not see not one sentence in there that told me how you kill it. You just blurt random questions. Where is exactly your statement, the fact?

Don't see anyone using gold to buy bread.

I don't get it either. The OP sounded like a lot of vague nothingness!

yeah the op is just talking gibberish

a non-believer shill is what we bitcoiners call them

That would be good, because next bubble could be much bigger. If it goes down to 1 cent, I'll get a large loan to buy millions of bitcoins. At the next bubble I'll be a billionaire.  :D ;)

me too :D ;) ;) ;) ;)

I think the OP is implying that "THEY" (government/central banks etc) are bidding up the price of BTC to destabilize its value such that it becomes terrible as a currency.  While I agree with him on the effect this is having, I doubt it's actually being orchestrated by any outside entity, it may be entirely the internal community doing it.

My theory is that the price run up is being driven by ASICs, my logic is as follows.  After reward halfing all existing miners were squeezed hard and many were forced to shutdown, the remainder were only just keeping their heads above water after a combination of reduced difficulty and increased value which took about a month to work out, these miners had to fund themselves by immediately selling newly mined coins.  Then in February the ASICs started up and despite large capitol investments their low electric costs and the fact that difficulty was chasing them meant they has nearly complete freedom to liquidate their new coins or NOT based on the current price (effectively its a sellers market).  Naturally many of them did hoard their coins and as they take a larger and larger share of the networks hash-rate they have more and more of the total daily supply of new coins which they offer at higher and higher prices creating a self-reinforcing loop ware fewer and fewer new coins need to be offered to cover running costs.  Older miners may still be hanging in their for now as valuation rises have been considerably greater then difficulty increases, but should we see and value crash I suspect the ASICs can just keep on running profitably which would keep difficulty high, that would put the entire legacy non-ASIC mining fleet out of business in one swoop and leave mining even more centralized then before.

This theory could be validated by a deep block-chain analysis, new coin generation are easily identified as are Mt.Gox transactions ware we would expect a miner to sell coins, determine to what degree miners liquidate new coins and see if that percentage is in decline recently.

It's easy to build a "competing" cryptocurrency that uses a different mining algo. It would be unaffected by your ASICs.

He's saying the central banks are promoting it to create a speculative bubble on purpose so when the bubble crashes people will lose faith in cryptocurrencies in general. It's a pretty ridiculous theory.

If they ARE trying to buy every bitcoin to pump up the price, then crash it, and start all over to repeat a loop of speculation bubbles to make the currency unstable, then the only way for us to fight against this is to stop selling our BTC for USD. Eventually, it will get easier to buy everything in BTC, and so these pumps and dumps will start looking like fluctuations in the USD rather than fluctuations in BTC... they will be exposing their ponzi scheme for what it is.

Like LTC for instance?

ASIC mining is a bit of an obstacle, true. Once everyone starts mining on ASICs, it will require a higher difficulty to remain secure. Then as bitcoin's value crashes, and difficulty goes back to pre-ASIC levels because mining isn't worth it anymore, that will make it vulnerable to a 51% attack.

In other words, a crash in BTC's value right now could mean a complete failure of the system... if my logic is correct at least

the government couldnt even prevent us from buying and selling drugs, or alchohol for that matter. the government is not really as powerful as people think it is. if there is sufficient demand, the thing will exist. doesent matter wether its bitcoin, cannabis or whatever... so GOOD LUCK GOVERNMENT if you want to fight bitcoin

Easy, but temporary.

Spend $1 billion to build a datacenter filled with custom built ASIC chips. Crank through 1 PH/s on your own and control nearly the entire network. Double spend like crazy and watch as the value plummets into nothing. Everyone leaves Bitcoin and you're stuck with $1 billion worth in equipment that is suddenly worthless.

However, that's only for this rendition of Bitcoin. If the developers work to change the code (or we switch to Litecoin, or whatnot), it would make the currently deployed ASICs obsolete since they wouldn't be able to work properly anymore.

Bitcoin is an idea based on the principles of mathematics. That's not something you can permanently rid the world of. Destroying Bitcoin would only bring about another coin [or version] to replace it.

Wait, what? You been smokin' son?

The only purpose of those ASICs is to mine Bitcoins. They are more power-efficient than GPUs & PFGAs.

Why would anyone ever stop the mining with them? How would the difficulty ever go back to pre-ASIC level?

Cool story bro.

They said the exact same thing about

myspace
livejournal
greenbucks
egold
stormpay
etc
etc
etc

The defense of bitcoin from a 51% attack has never been that it's impossible/impractical to do.  It's that, once a person is in a position capable of spoofing the blockchain, there is absolutely more money in supporting the network rather than attacking it.

Sitting on a park bench
eyeing little girls with bad intent.

can't never have too much tull bro

Who would dare? Me. I've bought lots of stuff with Bitcoin, though I believe it'll be worth far more in the future.

Does the appreciation make people more careful about what they spend BTC on? Yes. And this is a good thing. Does it stop all purchases entirely? Not a chance.

In fact, let's look at this anecdote. I recently sold a few coins to buy a new LCD TV. I know (or think I know) two things:  1) the BTC will be worth far more in the future and 2) the TV will be worth far less in the future (or I could get far better one for the same amount if I wait).

Even though BOTH parts of the transaction are encouraging me to not spend, I still spend. This utterly disproves the argument that deflation causes all spending to stop. It's a ludicrous theory. Appreciating currency simply makes people more careful with their money. They will still eat. They will still buy televisions.

OP is both absolutely right and absolutely wrong.

Absolutely right in that price fluctuations will make bitcoin difficult to use for normal commerce for the foreseeable future. Absolutely wrong in that he assumes this problem will kill bitcoin.

Additional protocol layers will be built on top of bitcoin which will provide stable currencies pegged to dollars, gold, oil, or anything else your heart desires. Think about how HTTP is built on top of TCP/IP. That is how we will build new, stable currencies on top of bitcoin.

I wrote a paper about it, and if you are going to the bitcoin conference in San Jose in May, you can come to the "Bitcoin in the Future" panel and hear me talk about it and ask questions.

The take-away is that buying bitcoins now is the best way to bet on the success of those "child currencies"

Voorhees,
What the hell are you talking about! According to Bloomberg, only like one of the most important and legitimate finance sources on the planet, an appreciating currency will cause the economy to grind to a halt secondary to massive hoarding. People will be starving in the streets, dying, as they cling to their Bitcoin laden USB drives while the exchange rate moves from $500 to $1000. A true hyper-deflationary death spiral! People will never spend again. The end is nigh!

/sarc

funny, i had the same thought as LoweryCBS this morning.
at the current bitcoin value, the central bank can theoretically buy and hold on to the majority of bitcoins existing.
then by trading them fluctuate the market price, make the market jump between 200 and zero or better yet simulate a crush every time the coin starts to rise over a certain price in the foreseeable future.
would that kill bitcoin?
probably not, bitcoin is an idea.
but look at what happened to socialism...

Anecdotal evidence is a scientific oxymoron.

Speak for yourself.

I have not bought a computer since 1995 when I paid $3,000 for a 66MHz speed machine.

I will wait until the price of computers gets more stable so I do not kick myself for not waiting to buy a faster machine at a lower price.

Somebody bought up the idea of Socialism and ended up bankrupt. Every time. Bitcoin is the nemesis of Socialism.

How much money do I need to get 50% of the hash rate power? Hardware + a few nerds who implement a harm to the network.

Spend 5 minutes and do the calculation for yourself. At current hashrate/difficulty, those costs are astronomical to everyone but the traditional multi-/national financial systems (governments, banks, large corporations, etc).

+1 - I think this is maybe right too. Many people site deflation as a bad thing but I've not seen any evidence to back this up, but we do have evidence of the problems of inflationary currencies.

Huuu?  Your delusional if you think mere 'protocols' by which I take it you mean software can peg an exchange rate between between a digital commodity (BTC) and a physical commodity.  It dose not matter how much security you have over the digital side when you have zero control over the physical side of the peg.  You would need a physical repository with physical access and physical reserves to maintain a peg.

Further more it would be doubly impossible to do this if BTC is still floating against the dollar because you would creating a triangle, lets assume you want to maintain a BTC/Gold peg you now have 3 exchange rates, BTC/Dollar, Gold/Dollar which float and BTC/Gold which is pegged.  This immediately creates potential for an arbitrage if either of the floating rates shifts without a commensurate change in the other.  Take the present massive rise in BTC/Dollar, Gold/Dollar hasn't shifted at all and if your BTC/Gold peg had been in balance before it is now totally out of which and a person can profit hugely by converting BTC->Dollar->Gold->BTC and they will have multiplied their wealth hugely while draining the wealth of the peg maintaining entity.  This is why the original gold standard failed.

My God! You're right! Why didn't I think of this before?

It is obviously a brilliant and nefarious plan devised by an evil mastermind: Destroy bitcoin by making it succeed faster than we ever dreamed possible!

Never underestimate the foolishness of the average gullible misguided fool, I bet if bitcoin wouldn't gain momentum rapidly and the economy would expand over time instead they would paint the whole practice in propoganda instead and wage a prohibition era against bitcoin fueled by the fear of the masses.

Just sayin'

So OP is talking about price correction to $80-100? Gimme a break.

Volatility.

There are three primary needs and uses that bitcoin can address:

(1) A store of value.
(2) A transactional currency.
(3) Speculation.

But...

(1) If you've got a quantity of wealth you need to safely store somewhere, you're sure as hell not going to pick bitcoin.
(2) If you're a merchant, you're not the least bit interested in swings that will either triple or decimate your margin.
(3) So all we're left with is people buying bitcoin today because tomorrow it'll be double, then selling at a loss this afternoon because by morning it'll be worth half. Basically: tulip bulbs.

Where do we go from here? What do we do to fix these problems?

I don't know. I wish I did.

You're making great points. I think it's early days though, and that solutions will come. It's not about how to keep a 2 billion dollar market from crumbling to a 1 billion dollar market overnight. It's about appealing to bitcoin buyers through innovative applications of the technology.

We need people to buy and hold coins and this is why I like proof of stake (ppcoin white paper http://www.ppcoin.org/static/ppcoin-paper.pdf (http://www.ppcoin.org/static/ppcoin-paper.pdf)).

Bitcoin is too often being framed by the media as a "boom or bust" wild wild west quasi-criminal purely speculative trifling absurdity. Bitcoin needs more buyers to think about owning a small amount of coin and holding, and thinking about them as an investment/contribution as well as a trading tool.

Proof of stake would be a great incentive to hold your coins because no matter how high or low the price goes against the dollar, so long as you hold your coin, you end up with more of them.

Further, I think a lot of early adopters who mined a mint or bought in for $0.14-$15 (and geez, I sure wish I was one of them) are now over-exposed. Can you blame them for dropping their positions during a parabolic rise in price? That will all shake out before too long.

That's obviously the weakest point of BTC. The FED can definitely perform such an attack.

I'm sure (and I always was) that this is the real threat. If they want to fuck BTC, they will exploit its high sensitivity to speculation.

me too :D ;) ;) ;) ;)
[/quote]
I hope you guys aren't serious.

This is finally the conversation I wanted to see here at bitcointalk.

Help me figure this out: So what if you peg BTC to an index? Call it BTC/Sht, that is, pegged to the price of all the sh*t you can buy with it.

You take the price of gold, the price of gold, food, gasoline, potatoes, dollars, yen, everything.. and take into account fluctuations, so that if one item starts varying, it has less influence on the index, to avoid manipulation.

Then you make the process of entering data and participating in the calculation of this index a new way to mine (that way ASICs miners aren't the only ones who get to participate in the process of generation of new bitcoins).

This way
a) You make a stable foundation that people can use to trade and save in
b) You provide a way for more people to participate in the generation of new coins, possibly letting new players in. In third world countries with strong currency control, its just as hard to get your hands on bitcoins as it is to get your hands on any other currency, because who wants your fiat, right?
c) You protect bitcoin and users from manipulation

This additional protocol layer could serve this function.

I think Ripple is going to be used for decentralized exchange.

Do you know if they have even figured out how they are going to distribute Ripples? Or even how one can purchase one?

The price is already 60$ at bitstamp and btce. IT might drop down to 10$ when MtGox opens again.

BRING IT ON!!!!

Well, you can't peg BTC, but rather something built on top of BTC. But yes, you could peg these "child currencies" to anything you want, including an index. I suspect just about any set of rules you can dream up could be implemented.

If that is the plan, then fucking capitalize on it.

Put in low buy orders
don't have ANY market price sell orders (that could get pulled down in a drop)
buy on the dip
DO NOT FUCKING PANIC SELL

Then if the day traders panic, they can get their asses kicked and we can take their coins on sale and send them running home to mommy crying.

 

3 pages into this idiot thread and bitcoin still hasn't been "killed"