Bitcoin Forum

Wow, what is going on. I thought considering there are have so many new businesses and services shown up (or are about to soon) we could gain a little traction again after BTC conference....but now..? If today is doomsday then this won't happen.

What do you think?

If everyone pulled their sell orders, it would definitely go up.


But alas, that isn't going to happen.

Lots of panic selling going on today. Get your bargain basement bitcoins while you can!

definitely, I wish I had some money sitting in Dwolla right now, I'd buy it up in a second. 

Yeah, I would buy as well if Dwolla wasn't giving me the run-a-round with this gay photo crap.

I also like how bitcoincharts are down for "maintenance" at the most crucial time.

I, too, find it ironic that BitcoinCharts is down. But you'll be thanking Dwolla tomorrow. Sit back and watch how this plays out.

try these charts: http://bitcoinity.org/markets?exchange=mtgox

Thanks :)

Prolly doesn't matter much.  MtGox server(s?) seem to be to swamped to support feeds anyway.  Tradehill also from time to time, but less so.  Either that, or bitcoinity is not always getting them for some other reason.

  http://bitcoinity.org/markets?exchange=all

I went to MtGox.com recently out of frustration.  Took a loooong time, but I did get a plot in the end (and it was delightfully ugly (to my presently accumulating soul.))

I am wondering how much of this has to do with people's overall debt and their feeling that if the price dips too much that they won't get anything from it?

There is that feeling that ever perma-bulls can't deny.  The feeling of "If this thing is going down to zero, why not sell at $9.... $8.... $7...."  Grab some money before there is none left.

7200 bitcoins are created per day.  That's US$75k to buy them from miners if the miners choose to sell to cover their costs.  That's a lot of new money that must be found every single day.  If the coins are not sold today they are still a liability as they compete for a limited pool of cash.  Investors know to look at the total number of bitcoins out there, and not just what is traded day to day.  Those unsold bitcoins could be dumped onto the market if panic strikes.

but most of them dont realize, that if the price goes over 20 bux, it'll attract many more investors, more positive media! and gives the bitcoin copmmunity an enormous push...
they cant sell everything, because BTC would get worthless and most of them won't get in the cost for their rigs! they have to think longterm and hold these Bitcoins until it's used by many more people!

MINERS! YOU CAN MAKE MUCH MORE MONEY BY HOLDING

Also, once the price goes above 20-30 USD, any attempt at manipulating the market becomes a much more expensive proposition.

Thanks.

These are much cooler than BTC Watch...................

DKN

Thank you for the charts - much nicer than Bitcoin Charts. (and hopefully not down anytime disaster strikes).

Agreed. It's easy to panic; But I can honestly say I sold 0 coins recently, just collecting and waiting for the time to liquidate a few north of $15.

As I keep saying, this is the long, slow slide after a bubble popped.

http://bitcoincharts.com/charts/chart.png?m=mtgoxUSD&t=S&height=329&width=750&r=180
$/BTC, Mt. Gox, last 6 months.

That is an absolutely classic speculative bubble. And when bubbles pop, they pop all the way.  Because there is no intrinsic value to Bitcoins (unlike, say, houses), "all the way" means down to zero.

Bitcoin was an interesting idea as a medium of exchange for micropayments. But it turned into a pyramid scheme. Once it did, it was doomed to repeat the pattern of all pyramid schemes.

Read the FTC's history of pyramid schemes in the last 30 years. (http://www.ftc.gov/speeches/other/dvimf16.shtm).

Oh, and for those people who keep yelling "Troll":

"Beware of any plan that delays meeting its commitments while asking members to "keep the faith." Many pyramid schemes advertise that they are in the "pre-launch" stage, yet they never can and never do launch. By definition pyramid schemes can never fulfill their obligations to a majority of their participants. To survive, pyramids need to keep and attract as many members as possible. Thus, promoters try to appeal to a sense of community or solidarity, while chastising outsiders or skeptics. Often the government is the target of the pyramid's collective wrath, particularly when the scheme is about to be dismantled. Commission attorneys now know to expect picketers and a packed courtroom when they file suit to halt a pyramid scheme. Half of the pyramid's recruits may see themselves as victims of a scam that we took too long to stop; the other half may view themselves as victims of government meddling that ruined their chance to make millions." - FTC general counsel, 1998.

Wow that pic even looks like a pyramid!!

Btw, I found this today on my trip back to the future:

https://i.imgur.com/2aazZ.jpg

Do you think its related?

 :o

Wrong.

INTRINSIC VALUE.
"The 'intrinsic value* of a thing is its true, inherent, and essential value, not depending on accident, place, or person, but the same everywhere and to every one." Bank of North Carolina v. Ford. 27 N. C. 092, 698. The terms "market value" and "intrinsic value" are not synonymous. Douglas v. Merceles, 25 N. J. Eq. (10 C. E. Green) 144, 146.


Bitcoins let you access a service you can not access otherwise. That service is continuous multiparty authentication and verification of a data transfer.

That is a valuable consideration by any standard. If it wasn't notary publics, registrars of deeds, clerk of courts and many other record keepers would be performing absolutely no service at all.

It is not a bubble.  It's a price spike.   

I am sorry you do not know the difference.

If you believe Bitcoin is a pyramid scheme, which is not true, the rest of your analysis is equally suspect.

I Laugh at this analysis.

You laugh heartily, or you hardly laugh?

http://www.youtube.com/watch?v=D1hC0nIagH4

Bitcoin PRICING in DOLLARS has been a pyramid scheme dependent completely on the influx of dollars.  Bitcoin ecosystem itself generates roughly zero dollars in revenue, so any increase in price is based entirely on expecting an increase in fresh dollars.  Doubly so when you consider the BTC supply a slightly increasing constant.  

Faith in current and expectation of future price is most of the valuation, in other words.  It doesn't get more pyramid than this.

Bitcoin as a service and a commodity is not a pyramid scheme, but that has little to do with its current valuation in dollars.  I absolutely believe the bitcoin network will survive and provide ever increasing value long term (and by that I mean 10+ years), but I have far less confidence about the short term speculative $/BTC outlook.

Yes, but you could say the same for the US dollar, Euro, Swiss Franc, Yen... Any currency is, at its most basic, a pyramid scheme whereby the greater and more general the agreement between the parties as to the value of the currency, the higher that value will be.

The service aspect of bitcoin takes this currency one step beyond those others. Its uncounterfeitability takes it another step. Its decentralized nature yet another... Its long-term deflationary nature yet another...

Oh noooo you guys oh nooooo

The US just got downgraded and bitcoin is being devaluated as much the as US stock indices, deal with it

Because the economy is so small, this artificial spike from speculation was massive.  Unless BTC goes under 3 dollars I'm really not expecting it to hit zero.   I am expecting it to balance out at 4-6 dollar range range because that is what I feel may have been a natural amount of growth without the speculative spike.  If it settles higher than that then I think Bitcoin will have earned a worthwhile amount of faithful adopters from this little fiasco.

Therein being the big difference.  All of those are currencies.  Entire economies accept them as a medium of exchange.  You can run a business without ever involving a different currency.

The current bitcoin ecosystem is nascent, you can hardly operate anything but a self-sufficient business and accept bitcoin as your sole compensation.  Anything more involved than than that will *require* converting bitcoin into a currency first by your definition increasing the value of that currency and decreasing that of bitcoin.  There are also conversion costs and fees.

Another way to look at it: a "pyramid" tied to expected sustainable growth is not a pyramid at all.  That's why many currencies have not become defunct, and most pyramids have.

Yet another way of looking at things: as of right this moment bitcoin is a value subtract.  Transactions using bitcoin cost more and increase overall risk.  Yes, shifting the chargeback risk from merchants to customers is valuable -- but only for merchants.  Customers should see it as a negative, so the end result is a wash.  Since nobody is lining up to pay for this service that I can see the valuation is purely through influx of fresh meat.


All of this is a potential long term.  It takes more effort to use bitcoin, negating the service aspect.  Irreversible fraud is just as harmful as simply creating counterfeit coins.  Decentralized has advantages and disadvatages.  While deflationary long term it's currently inflating at 7200/7000000 every 10 days.

No, that's 7200/7000000 every day. That's about 38% per year.

Shifting the risk is valuable for the customer as well. If one party to a contract is afraid the other party will default, that makes them more reluctant to enter into the contract. To induce them to enter against the reluctance, the other party must make a greater offer.

Imagine you want bitcoins and you have PayPal. By your logic, the fact that PayPal lets you reverse the transaction, putting all the risk on the other party, should be great for you. But in fact, it's awful for you. Because you can easily cheat the other party, there won't be any other party. You would have to offer someone a massive inducement to take that risk, that is, you would have to pay extra for the extra risk you present.

Because bitcoins remove the chargeback risk, the customer need not pay the merchant to take that risk, saving the customer money.

As a general rule, anything that makes an agreement more beneficial to either party benefits both parties. The party that doesn't benefit directly can make a slightly worse offer and the other party will still benefit from the contract, thus forcing a split of the benefit.

In the end, the price decline may be what saves Bitcoin.  When I first arrived on these forums some of the claims were absolutely ridiculous.  1 Bitcoin would eventually buy a car, be worth X times the amount of gold, be worth $100,000+ PER COIN.  I wish I were exaggerating, but I'm not.  Basically there were too many people who thought Bitcoin was their get rich quick scheme because of the massive appreciation.

This price decline should help return a lot of those people to reality.  Not to say there is no profitability in Bitcoin but I think profits are in building the infrastructure, not hording coins and crossing your fingers.  But building an infrastructure takes effort.  Bitcoin isn't going anywhere if you just sit on your hands, at least that lesson is being echoed in the markets now.

True. Bitcoin needs more commerce, not more day traders.

And I still stand by my prediction of $1,000,000+ for a BTC in 10 to 50 years. ;D

If I had the money I would start an online business selling cars for bitcoins and I'd sell them cheap too to generate interest.

Why wouldn't you use your own currency (USD$ or whatever country you live in) to buy and sell cars?  Cars are not sold as anonymous or pseudo anonymous goods.

Well I'd take normal selling cars on the internet and do it in a bitcoin only website.  I'd do it entirely to promote bitcoins.

My in-depth knowledge of economics is quite lacking, but I don't think the foretold bitcoin doomsday will emerge any time soon.

Yes, bitcoin seems to have experienced a significant bubble, but what is happening now - to me at least, seems more like a market correction rather than an inevitable crash. $30 per btc was insane, and people who bought at that level deserve to have lost money as they should have done some basic math and realized that the cost of production was far far lower than what they were paying.

The price is falling, yes. Am I worried? No! In fact I am glad. Because bitcoin will not be acceptable for use as a currency until it's true value is known by the markets and stabilizes. Until then, it is hugely overbought, and that is good for nobody except n00b miners who spent all their money on mining gear.

Well, this is a reality check, and the way I see it is that the price will continue to fall until it drops below the mining cost level. After that it should go up again due to reduced supply (i.e. a reduction in the number of miners, or the hoarding of coin). Once all the strike-it-rich kiddies throw their failed mining rigs in the trash, it will only be professional miners left who have large resources available to them and are able to cut-costs and still remain profitable.

The true value of bitcoin will become established over the long term. It's dollar-value should stay pretty much static, with small volatility, after this... pegged of course to the cost of mining, which is proportional to the cost of electricity and computer components. It's value as a currency in it's own regard should hopefully increase as more and more people learn about it and begin to understand and adopt it.

Of course, the bitcoin software will need some future renovation, but with the level of expertise I have seen at this forum, that won't be a problem.