Bitcoin Forum

So I remember people saying that Bitcoins will be worth $40,000 per Bitcoin in 2014 ... HA! Looks more like they will be worth $40

Actually this brings up an issue. What happens when mining becomes pointless? No mining, no blockchain verification.

Difficulty will be lowered, if hashrate drops.

It seems that people will never quite be able to wrap their heads around the fact that BTC is very volatile. Perhaps that is the reason itself why that is the case.

I can't believe that the bitcoin went from £500 to £278 in two weeks.

Gox is irrelevant.

It is only February.  ::)

Check back December 31st.

Sentiment on these forums certainly has the feeling of "capitulation" these days. If you know what this means... buying opportunity.

We had a bubble driven by the use of Bitcoin to get around China's exchange controls. That's over.

The problems at Mt. Gox inflated the price when nobody could get dollars out, and deflated the price when nobody could get Bitcoins out. While nobody who reads these forums has taken Gox prices seriously for months, there were a lot of suckers people that did.

Remember, the price was around $100/BTC for most of 2013.

I think that it should go back up.

I'm thinking that you need some education on the subject of mining and its economics in general, but be more specific - how are you defining "pointless"?

I think that will be 40k until december 2014 :)

Up around 10% since you posted and

Think of all the people laughing at you that bought in below current prices. Seriously what point are you making?

And you are making this out to be all about profit, what about the other 6 billion people? Stop being so selfish
and try to wrap your little mind around what this really is...

Then, get back to us.

What I mean by "pointless" is that when you LOOSE money by mining.


Hate much?

You'll probably buy back in when we get back to around  $1100 cause it will be obvious the all time high will be smashed again soon

So true. Every time price crashes loads of new waves of buyers come in.

I hate it when my money gets LOOSE.. I try to round it up quickly so I don't LOSE it.  ;D

If mining wasn't profitable for me I'd stop mining (which would reduce the hashrate a tiny amount). If enough miners felt the same then...


(This is hypothetical, since I'm no longer a miner - I've stopped twice: once when it was no longer practical to mine with my CPU, and a second time when it was no longer profitable to mine with a GPU.)

ASICs aside, new models of GPUs (videocards) should somehow fix the matters in the long run (since they are not tied with bitcoin, and their performance should increase no matter what). So it should all come to a balance somewhere in the future...

$40k per coin is BS and the $40 per coin is also BS. You lower yourself like them with there BS post, you dont understand youre own writing what that contains.

Happy troll day.

This.

Both numbers have less than 5% probability of happening.
Realistically, 2-3k is possible in 2014, 5k if very lucky.

Though both probabilities can be lower than 5% (how do you know actually?), I still think that the probability of bitcoin going down to $40 is much higher than going to $40k per coin, lol...

Nobody knows the future, but a trader must have some sort of trading strategy and allocate resources according to probabilities.


I agree.
But if bitcoin goes to $40, it'll get there on its way to $0, as it'd mean something major had happened (sha-256 broken?), which would render it not able to recover at all, ever.

If it's more of the same FUD we have witnessed over the past 1-2 months, the chance of $40 is 0.1% or less. Now, that's 2014. I wouldn't bet or make probabilities on what can happened in 2015, it's too far away to try to predict in the crypto world.

And we're talking here about closing daily price. Any kind of spike down is possible, like the one we saw at btc-e down to $102, but that's just a spike due to too few buy orders at that very moment on that particular exchange, the closing daily price of course was very different.

Fees will go up.

I nominate you to the idiot of the year. Don't worry it's a long time left of the year and it's just a nomination.

it's already in UK the bitcoin cost only £70 not even £200 any more!!

That's MtGox, though - and the exchange has been closed for over three days, has applied for bankruptcy protection, etc.

OTC, not exchange, but on LocalBitcoins the cheapest BTC is 346.37 GBP: https://localbitcoins.com/ (https://localbitcoins.com/)

Forget about MtGox, the noise it makes and the fluctuations it creates will subside in the nearest time...

The problem with bitcoin is, that it follows no standard normal distribution as of now. Many fat-tail events/outcomes make a lot of noise. So it is very difficult to pin probabilities to certain outcomes.

After all what's happened this year and looking back though all those threads about MtGox exchange and bitcoin at all I am surprised how it turned out. And there are a lot of surprises in future.

This is not a problem, but a natural course of events. Any asset in the free market tends to concentrate in the strong hands in the end, who are less likely to panic sell, which results in less volatility. That is why we see higher volatility percentage wise in the initial stages of an asset trading, and lower and lower volatility as the asset matures. That's exactly what is happening to bitcoin, and that's why it's getting easier to predict the future.

Of course, black swan events (sha256 broken?) cannot be predicted, but FUD is a normal thing in markets and strong hands don't tend to panic sell when they hear/read FUD, whereas weak hands do panic sell, that's why assets go to strong hands who understand and follow fundamentals of an asset, and no even distribution is ever possible. If you took all bitcoins in circulation and distributed them equally among all the population, after a year or two you would see about the same distribution as now, only less than 5% of traders or wanna-be-traders do not become net losers. So forget about even distribution, it never existed in the history of mankind for anything and never will.

Another great thing about bitcoin, making it easier to predict the future is that it cannot be sold naked short (yet?). Any commodity can be sold short because traders cannot easily take delivery. Bitcoin doesn't suffer from this issue, which makes it about the only true free market left in the world economy. True free market is very hard to manipulate, because you can only sell as many items of asset as you actually own, you cannot sell what you don't own. In any other commodity you can sell what you don't own, and if you have a lot of cash (blns), you can easily manipulate the market by trading on leverage. In bitcoin you'd first have to buy those bitcoins and possess them to be able to sell them. In other words, these actions are trackable through price charts and future price action can be predicted more or less. Enjoy the only true free market of crypto currencies on the planet while it lasts, it may not be forever.

Well said

I can't agree with that. Money as such doesn't make you the owner of anything (save for the money itself). I don't think bitcoin is any different in this aspect. I think you are unintentionally confusing bitcoin as money and bitcoin as a commodity here. If the latter, I don't see how you can't fix its price now for future delivery just like you do with a foreign currency (which can be easily shorted though it obviously doesn't have the delivery problem)...

$10k by 2015, no more than $3-5k in 2014

No confusion here. Bitcoin is a commodity at this point, digital commodity. It does act as money too, but not many merchants and limited liquidity, so I wouldn't refer to it as money yet.

You can't manipulate its price a lot, because you can't issue paper derivatives against it. You either own bitcoins and sell them or you don't own them and can't sell them. Other commodities have storage and transporation issues, thus making possible the practise of trading paper contracts only (which exactly is what 95% or more traders do at commodity exchanges), which in turn opens possibilities for naked short sales, which is used for price manipulation.

With bitcoin you can take immediate delivery to your local wallet, you don't need to store bitcoins on an exchange. An exchange never knows how many bitcoins would be requested to be withdrawn at any time, so it can't risk allowing to sell bitcoins naked short if it wants to remain solvent. Any exchange that requires you to wait to withdraw your purchased bitcoins is a huge red flag.

I think you have missed Mpex where you can trade bitcoin derivatives as well as Bitfinex and BTC-E to go short. Not too sure why you claim that the price cannot be manipulated. The order book is very thin and with only a couple of millions you can manipulate quite easily. Just look at the recent jump. This was not natural demand. It was one guy with a couple of millions in hand.

Please see the definition of naked short selling.

If any bitcoin exchange allows limited short selling, they are making sure these trades do not exceed the number of bitcoins the exchange stores for their customers and only allow limited leverage. They can't allow short selling to the extent other physical commodity exchanges allow short selling - naked - that is, not having the actual commodity in its reserves.

I don't know what you mean by 'recent jump'. If you have cash and you buy a lot of something and move the market - this is not price manipulation per se. People use the word 'price manipulation' a lot without actually understanding what it means. I tend to understand 'price manipulation' term only when referred to markets with paper contracts only prevailing. Per this definition price manipulation in bitcoin market is not possible or has only very limited extent.

Bitcoins are scarce like many physical commodities, but unlike physical commodities bitcoins are very easy to be taken delivery of, which makes price manipulation of bitcoins very hard, next to impossible.

Overseen the "naked" part, apologies. However, I still believe that manipulation is possible. I do refer to the jump from 580 to 710. This was just one guy buying up all the coins forcing a lot of short margin calls in the 580 to 620 area and drive the market further to spark a buying panic. The guy should have had an average price of roughly 600-610 and I would not be surprised if he already sold his position in the buying panic in the 700 to 720 area. This was in my view a classic cornering of the market and would have triggered alarm bells on a regulated exchange.

I won't sell you my bitcoins sir!  :D

 UP UP UP UP UP, oh hey.. the price is $650.

I need $5k thank you!  ;D

oh hey, it's like a MONTH later. ::)

Well there is difference between mining rate and its cost and speculation that happens right now. Bitcoin will slowly move up, but when it reaches certain price, we shall never know. We probably will be able to mine until around 2100 sooo... yeah. Still it is just past few days. If you bought bitcoin as investment instead of payment vassal , you need to accept there always will be some kind of risk.

In general it shall go up, it depends when.

A buying opportunity for those with strong hands and convictions.

Okay then. So, if bitcoin is a commodity, why do you think you can't really enter a contract "between two parties to buy or sell a specified asset (bitcoin) of standardized quantity and quality for a price agreed upon today with delivery and payment occurring at a specified future date, the delivery date"?

This futures contract (the definition of which is given above) is just one among many other possible types of paper derivatives

I never said this cannot be done. But because bitcoin is so easy to deliver, there is no practical sense in doing that. There is always a risk of non-delivery if delivery is delayed to the delivery date as is the case with physical commodities, so it makes more sense to buy bitcoin at spot price and withdraw from the exchange to your local wallet, and only deposit to the exchange when you want to sell. No point in storing bitcoins at the exchange while you're waiting to profit from the price appreciation, unless of course you're a day trader.

Physical commodities cannot be shuffled back and forth as easily as bitcoin, that's why future contracts in physical commodities are popular. It's a side effect that most people don't take delivery and just trade paper.

Okay, what about currency futures then? Should I explain to you the purpose of them (it will be the same for bitcoin, and even more for bitcoin, for that matter, lol)?

Currency futures exist and are popular. They are popular exactly because central banks can print as much fiat as they want and banks can receive that fiat at low cost and do all kinds of funny business with them on big leverage. This has limited application to bitcoin.

Bitcoin exchanges need to have all (or almost all) deposited bitcoins ready to be withdrawn or at least in cold storage and available at short notice. If a bitcoin exchange introduces bitcoin future contracts, and they get popular and then lends customers' bitcoins to someone for promise that they are returned by the date of the future contract expiry or use those bitcoins to fund some other project, and for some reason most customers decide to sell their future contracts before the bitcoins the exchange lent are returned and to withdraw their bitcoins, the exchange is f*cked, because it can't quickly borrow bitcoins same as a bank could borrow fiat from a central bank.

See the difference with currency futures? Physical commodity exchanges can do future contracts too, because most customers trade paper contracts only and don't ask for delivery, so they would only withdraw cash, not actual commodities. It doesn't work same way with bitcoins. If they withdraw, the exchange has to deliver bitcoins digital commodity to all customers, not just to 1-2% of customers who ask for actual delivery, or declare bankruptcy.

Under those circumstances what's the point of having future contracts in bitcoin from the customer's point of view if they could as well just by at spot, withdraw and wait to sell, and not risk being f*cked by the exchange in 1-2 month when a future contract is due for delivery/expiry?

Please, be concise. Bitcoin futures would exist just for the same reasons that currency futures and commodity futures exist. The primary aim of futures is hedging against price volatility whether it is currency or commodity. And yes, there are even futures for commodities that don't even exist yet (consider crops)...

Can you explain to me what would be the advantage of buying a bitcoin futures contract instead of just buying bitcoins at spot? How would that advantage outweight the risk of losing bitcoins due to the bitcoin exchange bankruptcy? Can you really afford the risk of keeping your bitcoins at the exchange for 1-2 months? Why and who would do that, if bitcoins are available to withdraw now/deposit back within 1 hour if needed, compared to those crops that will be available only when harvested and that most traders just trade paper contracts of anyway?

Bitcoin futures can exist, but noone would use them, because it makes no sense to.
Bitcoin exchanges don't have incentives to introduce futures contracts, because they cannot be bailed out if they screw up.

Do you mean bitcoin miners would sell their future bitcoin production? That'd be interesting, but that requires much heavier levels of regulation than now, having them registered as companies, etc. In that case, yeah, futures contracts might have a chance.

A big problem with Bitcoin futures, options, and derivatives is that there is no counter-party in the Bitcoin community which can be relied upon to pay up when they lose. The Bitcoin community can't even run a reliable remote wallet or exchange. Those are businesses which have zero speculative risk, yet most of them either fuck up or steal. Often both.

Blockchain.info and Coinbase.

It's going down but it doesn't have to, the longer it takes for the missing money to be found the faster and more permanent the injury will be to btc infrastructure and most of the cryptocurrencies that have mirrored their protocol on btc's protocol.


https://bitcointalk.org/index.php?topic=492776.0;all


If you want to improve things I'm suggesting the following:

1) help find the money
2) encourage the various exchanges to adopt higher standards of security, responsibility, transparency, and accountability.  They should be community certified, be bonded, have insurance, provide performance guarantees, provide better customer service, provide signed proof of solvency via the blockchain, provide regular audited statements, and the like
3) help develop a program that can search the blockchain for critical info
4) ask others to help the cryptocurrency industry in any of these 4 ways

as it stands right now, the situation that occurred at Mt Gox could happen at any other exchange, which places the whole cryptocurrency in a downward pointing spiral.  Essentially, btc holders are slowly cashing in their coins in hopes that something material changes.  But as time passes the realization of the btc protocol flaw (inability to find the money, resulting in unreasonably high risk) becomes painfully clear.

The blockchain is a perfect witness, it sees everything but if humans are unable to use it then it's useless large scale roll-out.

If you take time to find out why people buy futures in the first place at all (and this is not for speculation, to begin with), this question will be a trifle for you. People buy currency futures since they don't need currency right now, but in the future (when they actually need it), the price may change disadvantageously... I guess you just don't know that the futures price is not the same as the price it allows (gives a right) to sell or buy the underlying currency (commodity) at... ;D

I know what hedging is. I also know that there is a) nothing to hedge in bitcoin compared to forex exchange risks, b) no bailout of bitcoin exchanges makes any future disadvantageous price fluctuation not such a big risk compared to the case when bitcoin exchanges goes under, which is not so rare.

In practise it means that nobody in their right mind will buy a bitcoin futures contract with one exception:


and even this wouldn't be practical or popular as miners would have to offer a very attractive discount to entice someone to risk losing money due to the exchange bankruptcy.

a) would effectively mean that bitcoin volatility is next to nothing (which is obviously not the case), b) is not relevant to the idea futures are about... 8)

Oh, now you make exceptions... ;D

Speculation is quite pointless at this point. It's far from 40 dollars, but far from 1000 as well.
Whatever, for all we know it'll crash or rise again.

It is not that far from $1000 as it is from $40. And I don't mean just figures... 8)

Good point)) in addition I can say that after all Bitcoin will never fall down to 60$ except the governments will help bitcoin to fall down

Of course. I'm quite sure it'll rise rather than fall, although it seems to be quite unstable at the moment, and the price has varied with a 90-100 dollar difference the last couple days. Hopefully we'll see a steady rise towards the 900 again pretty soon.

the thing is we have intelligence to substantiate why it will fall to $40 but very little to support a rise to $1000

I elaborate earlier on in the thread

Yet you don't know before it happens, now do you? :)

 btc will most likely be about 1000$ in the mid or end of April so hope for the best and fingers crossed !!

I'm quite bearish on Bitcoin's short-term price.

Admit it, the current media coverage is quite negative. And there is no outsight of this changing. Quite the contrary, it's only a matter of time until another exchange gets hacked and BTC makes another dive.

Furthermore, we're on the brink of more regulations. And what do you think will happen when, as rumored, part of Mt. Gox coins are released and everyone jumps to the exit?

If there was a valid way to short BTC, buy put options or even buy a CDS on a BTC index, I'd be all over it right now.

Sure, there was a guy that started a thread last week that btc will be $1000 by Friday.  I told him that there was no evidence to support it, and to please indicated how he came to that conclusion.   He chose to stay silent on that part until the day before the deadline then admitted to receiving inside info that someone was supposed to purchase 50K btc. 

Ignorance (not knowing) is the opposite of intelligence (knowing), so that critical piece of data would have changed the end result.  Based on the 'knowns', 'the evidence', and 'the facts' btc is going down and will continue to do so even after media hype spikes, and any other temporary market manipulation spikes, until such time that the btc infrastructure is made safe and secure for mass implementation. 

That Mt Gox thing revealed a major flaw and I'm not talking about the malleability (see my earlier statement for evidence and solution).

anyone watched this interview? know anything about blockchain.info's methods of doing business? sounds like they solved the "taking your bitcoins and running" problem.  What are their downfalls as opposed to transferring your coins to a site and them being held in a wallet that you only see, but do not control?

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

any reason why. I have a theory as to why all coins will spike mid april or possibly a little before or after. just like to hear your reason first. Then I can drop my wisdom and if correct maybe I can start another one of those {pay for advice} things ;) lol.

you see that 'finger's crossed' thing, that's his reason it's called hope, wish, and/or prayer, it's obvious

what's your reasoning, hopefully it has some foundation in logic

Tax refund money coming into play?

Nope.  Gonna drop.  You can see it with the crapcoins.  Faith in crypto has been shaken by sticky fingers and greed.

You can feel it in the air, can't you?  The newness, the energy of hope, draining.  With each hack job, a huge spigot releasing the life out of BTC the idea.

It will end up having the most value to people of low moral character, and also to those with nothing to lose.

Is Bitfinex too risky for your tastes? Although I'm not going to vouch for the exchange, they seem to be one of the better ones out there when it comes to customer service and being around for a long time without major screw ups.

Why not, volatility can help.

Noobsters like myself want Bitcoin to drop as low as possible.  I guess if it drops to double digits, then it is likely crashing for good?  It couldn't drop THAT low and bounce back up could it?  But 400 range?  God, I hope so.  By 2015, a lot more infrastructure is going to be in place and it'll take off.  In the meantime, I want it to keep dropping!

Sorry mate you just seem to be another contrarian who has nothing better to do than to tell people they're wrong on an internet forum, otherwise it's hard for you to feel like the smartest person in the room. I've so far not seen any convincing evidence from your part.
Speculation is speculation, whether you're hoping for btc prices to drop, or rise, it's not in the hands of you to decide. Time will tell, not
some random guy on a forum.

Peace.

I support NotoriousBIT, I wish it will drop a lit and I could be able to buy a lot of bitcoins and since that time I wish it would grow up again  ;D

hahhahaaa, you do know we are in a thread titled "Down, down, down, down, down ..."?    I support the OP with evidence and logical speculation for the future, and you call ME the contrarian? hahahahahahahaa

Yes, speculation is speculation however guessing is not speculation, nor is hope speculation;
An educated guess is not simply a guess, and critical thinking is not ordinary thinking, the vital difference with both is some logical consideration of relevant information.

That's a good constructive encouragement.  Thanks.


Mt.Gox is not the blockchain.  It is good for Bitcoin if people remove their coins from exchanges.  It is only bad for speculators.  The counter-party risk inherent in current exchanges does not in any way detract from the value of Bitcoin or the Bitcoin blockchain, which is quite secure.

Yes, a troll thread started by an idiot who didn't even know the difficulty goes down when fewer people are mining.

Let's say everyone removes their coins from exchanges, in fact let's remove exchanges from the example altogether, what is the up and down side?

1) all new crypto becomes forever unheard of.
2) all cryptocurrencies including btc no longer have 'common' market values, presently there is the bitstamp value, the coinbase value, the btc-e value, and you have various values on localbitcoin.  without the exchanges then there are literally thousands of values (none right and none wrong)
3) so now with all of the different values who will get into the business of dealing with btc?  if it has no stability or reliability or standard  how do you set your prices
4) why would you buy any more than you actually need for immediate use?
5) if you only buy what you immediately need, and the quantity of new btc is always increasing, it will result in oversupply of btc


The only reason btc scaled to where it is now is because of the exchanges, if they are removed or can't be trusted to operate properly, the whole btc community suffers.
 

The answer isn't "NO EXCHANGES", instead it's "MORE GOOD EXCHANGES".

You don't need to be a btc genius to recognize a falling btc price, he got that right and that's the one that count. 

I'd be interested in seeing at least one good exchange.  I suppose one is more than zero.

By that, I mean one run like an actual currency exchange.  I'd welcome an exchange run by people with actual experience running real currency exchanges.  So far, pretty much everything out there is amateur hour bullshit. 

I'd like to see an existing currency exchange with a proven track record pick up BTC, but the current lengthy spate of scandal after scandal and swindle after swindle is increasingly giving BTC a bad name.  A dangerously naive community like the BTC community, that would willingly put money into Gox as it was obviously floundering, is going to contribute to similar swindles in the future, as they don't seem to learn a damn thing.  The same idiots defending pirateat40's Ponzi scam were also attacking people pointing out Gox's obvious insolvency.  They'll probably be lining up to defend the next crook, while lining up to line his pockets.

In any event, it isn't exactly helping BTC's claim to be trying to provide an alternative to the corrupt banking system when most of its "institutions" are already as corrupt right out of the gate.

This isn't attacking BTC.  The protocol is rock solid.

It's the people that are fucked.

Why?  What prevents people from buying and selling without exchanges?  localbitcoin.com is a wonderful example of a channel for exchange which is not an exchange, but a non-dealing broker.
Do people stop communicating when facebook goes down?  No, they use email or phones or sms or face to face or skype or whatever.  Speculators depend on exchanges.  Users don't need them.
Speculators don't matter.  Users matter.


That's no worse than today.  If you can't arb without excessive friction and risk, there will always be variance in the local bbo.  It's a business opportunity for those who do the arb, and thus make the market more efficient.  Business opportunities are good for Bitcoin.


There will never be "stability" in bitcoin until it stops growing.  So give up on that right now.  You set your prices in accordance with your interests under present market conditions. Typically prices will be set in local fiat, and a service provider will lock-in exchange rates for the buyer and seller.  Pricing in BTC is relatively rare and usually very dynamic.  That wouldn't change in any way.


Because it's a good investment.  You don't need an exchange to sell it.


No, because the volume of transactions in BTC is growing faster.


Here we can agree.  I am not claiming that exchanges are not useful.  I don't think the lack of exchanges would much impact the value, the utility, and hence the price of bitcoin.

They are not "prevented" from buying and selling, but the scale of the market in which buying and selling is vastly reduced without it.  

Your facebook analogy is way off, a more appropriate one would be if there was no long-distance or regional calling or mail service, that would not stop communications would it, and the answer is no but you can clearly see that global business would take a real beating.

Speculators are users too, why would you break them out of the mix for exchanges but include them in the mix for localbitcoin, 99% of the sellers there are speculators.





Trustworthy business opportunities are good for bitcoin, not untrustworthy businesses





You can't set your price under "present market conditions" because that implies major markets, not a 1000 unfederated minor markets.    

Even worse, you choose to tie or set your btc to local fiat, so if my local fiat is stronger than your local fiat I could buy your local fiat for next to nothing, buy up your btc for next to nothing, then resell the btc for my (big) local fiat.  Oh, then I'll tell others that I could do it for them too ... exchange is formed





If it can be purchased btc immediately P2P, if the prices are always vastly different one from another, and if I always have the option to use fiat, why INVEST in btc?  That is not a "good investment" if anything the good investment is in the fiat that could buy the btc at anytime, that's the stable and reliable standard in the picture.
 




Get out the charts my friend, btc volume average have been going down across the board.    
http://www.bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv





Each and every cryptocurrency that I know of wants to be on an exchange, in fact for most of them the more the better.   I don't know of one that thinks their currency would fair better NOT being on an exchange.   That validation is real and substantial, when it comes from a good exchange it is actually better. 

That is so wrong.  You're looking at exchange volumes which have nothing to do with the value of BTC.  Those only relate to the exchange price, which is almost always deviating from value.

The only transactions that matter are the ones on the blockchain, where actual goods and services are transacted.  Exchanges are just parasitic speculation vehicles.

As for the aspirations of other crypto to be on exchanges, other crypto are pretty worthless in the real economy, so it doesn't surprise me that they seek valuation via speculation. What else have they got going for them?