Price impact: Dramatically up

But not right away. Consider what will happen:

1) It will take X days, weeks, or months for the initial few million $ worth to be bought up. Those purchases have no effect on the exchange price, or maybe even a mild negative effect if some who were buying coins steadily via the exchanges switch over to BIT.

2) Once the initial few million in seed is bought up, Second Market will start to purchase more, maybe $5-10 million worth. If they do part or all of this on an exchange, the price impact will of course be strongly positive. However, given how many contacts they have for private placement, they'll likely acquire part or all of those coins from dark, non-exchange sources. If they purchase very few of those coins on exchanges, the immediate price impact will be negligible, but the medium-term effect will be dramatic.  

The reason why is a bit subtle but very real: Insofar as the people Second Market buys the coins from would have sold those coins on exchanges if it weren't for SM giving them the wonderful opportunity to sell without slippage, that much less BTC is going to be available on the exchanges. The same amount of money chasing fewer BTC means a higher price per coin. But there will be a time delay, perhaps days or weeks, maybe in some cases months.

The fun part is that those who understand the time delay get to make money off those who are fooled by the time delay. Translation: Buy before the price rises and get in on the ground floor of the next stage of the bitcoin rocket.

Yeah, oops. Not factors of a prime, of course, but the factors of a large number that is the product of two large, unknown primes (for instance).

Suppose you want to put a bounty on a problem that has a hard-to-find but easy-to-verify (computer-verifiable) solution, such as the factors of a certain prime large number. Would it be possible to create an oracle that would sign a transaction paying the bounty to the first person to send it the solution followed by a (the solver's) Bitcoin address, without enabling anyone else - even those with access to the oracle's code - to steal the funds in the originating wallet? In other words, a piece of code that maintains the ability to sign a transaction to an arbitrary recipient (only those meeting a certain very difficult criterion - this part I assume is possible) while not enabling even people who inspect the code to know the private key.

If this could somehow be done, you could have verifiably guaranteed payouts for certain types of bounties.  

Whether power can centralize in a given environment depends on "environmental factors," in this case the awareness level of individual acters, their ability to communicate, the level of education and free time (affluence), and other things. These aspects have changed notably with the advent of the Internet, and again with Bitcoin. Centralization of power to some degree is inevitable, but that degree can change whenever the underlying factors change.

I'll admit that gmaxwell brought up some potential issues I hadn't considered. Most of the centralization alarmists have painted a less nuanced picture, leading me to think economics and incentives were being ignored. With that consideration understood, becoin is correct in saying that despite this natural order or free market being able to adapt, the time frame for adaptation matters. If miners don't detect a problem in a matter of minutes, Bitcoin could possibly suffer a major setback and PR fiasco. The market would adapt, but its solution might put a damper on Bitcoin growth for a few years, or the market's solution might even be a (good) protocol change or a new coin.

Nevertheless, the question remains: why would bad acters refuse to take advantage of vulnerabilities as the ongoing centralization makes them available? Why would they hold off their attacks until Bitcoin is so centralized that they could do extreme damage, especially given only one criminal gets only one shot? Every incentive seems to point to being the first to exploit a centralization weakness, which should lead to a smaller issue, or at worst a series of smaller issues that would make miners steadily more wary of large mining pools. Why aren't these supposed weaknesses being exploited right now? Hackers don't seem to generally shy away from taking free money, even if the stakes aren't yet as high as they could be.

Ultimately there needs to be a reason why a bad acter would choose not to "get while the getting's good," and in so doing actually do Bitcoin a favor by waking people up to any actual vulnerabilities as they arise. Centralization is a gradual process, so why wouldn't vulnerabilities open up (and be exploited) gradually rather than suddenly and catastrophically? Only a government or other entity wishing to do damage to Bitcoin (a competing system or altcoin, etc.) would have the right incentives to wait.

Self-correcting problem.

More than that, I'm not sure how anyone who understands Bitcoin (the ecosystem, not just the protocol) can fail to see that this is self-correcting. Obviously there are more coders here than free-marketeers. Does coding predispose people to see other humans as automatons dead-set on their course, unable to react to change? If not, how is it that no one is talking about the only thing that matters here: the way incentives will change for all parties as various trends progress?

So six guys operate the mining pools. So what? Paint me a scenario. The most damning one I can imagine is if a majority of the six (or all six) insanely decided to destroy their own business and credibility by doing a 51% attack or breaking the 21M coin limit. Immediately everyone sees what's happening, immediately there is easy consensus by everyone to do the obvious thing and roll back that block or two (a consensus that is unattainable except in such extenuating circumstances). Damage to Bitcoin's rep is temporary even for this extremely low-probability scenario, while damage to the mining pool operators' reps is permanent. Moreover, we'd instantly have a new social norm of avoiding (or maybe even boycotting) any mining pool that got remotely too big.

Any other scenario seems even less of a concern.

Bitcoin is just a community of people with free access. Its power is highly decentralized, and its mining is as decentralized as most people think it needs to be. If they are wrong, the damage is temporary and subsequent damage of similar type is prevented for all eternity afterward. Bitcoin (the mining/node community, a group of humans) is not held together by the protocol or blockchain as it is propagateda at the whims of 6 mining pool operators, but rather by their agreement on the rules that constitute the Bitcoin protocol. The bottom line is that the mining pool operators don't have the power to change THAT. The power to change that is the only thing that ultimately matters, and that power is radically decentralized.

$166

I think it's been camping out at sub-$150 for just long enough. If it breaks through it will go a fair ways above $150, so a random guess around there is $166.

Put me on record: If OCRipple is fully open sourced with no catches or "gotchas" (such as it not really being decentralized) on Sept. 26, 2013, I'll eat my hat.

I put $1,000,000 because I figure if I had a million dollars in a world where Bitcoin went mainstream, the economy would be so efficient (very low prices, very high quality of goods and services thanks to the internationalization of the division of labor and the toppling of vast swaths of the regulatory state) that it'd be enough money to do just about anything I'd ever want to do.

I used to not get the point of blowjob porn. Why would I want to see a close-up of some guy's dick? Isn't that kind of gay? But then I realized it was like that guy's dick is your avatar, and you can enjoy it vicariously by pretending it's yours.

Meanwhile, I had a friend who couldn't get the point of lesbian porn, since there's no avatar to pretend is you, except one of the girls...which seems kind of gay. However, I liked it because there is a lot of female flesh to see and no dudes there marring the view. The avatar view never occured to me, I just liked all the T&A on display.

In the same way, I think guys who use female avatars think of their forum browsing experience more like a lesbian scene than a blowjob scene: they want everything to look attractive rather than taking on an identity. Or maybe they view avatars as showing off their sensibilities rather than their identities - a miscommunication of sorts between the two camps - where one sees guys who use female avatars as gay because they construe the avatar as obviously a representation of the poster, while the other sees guys who use male avatars as gay because they construe the avatar as obviously a representation of what the poster finds aesthetically pleasing.

Absolutely it helps!! I assume most people here already do this whenever they have an opportunity to make a credible comment. Even better, go to reddit and give people bitcoin tips using the tipping bot. (Look for new comments on popular links, especially those where people are like, "I regret that I have but one upvote to give.")

It's simple. Less than 0.1% of people know enough about Bitcoin to believe with high confidence that there is a 20% chance it will reach that price in ten years, let alone people with the capacity to risk substantial capital and the patience and time to set up a secure wallet and jump through exchange hoops. Heck, even on this forum few people are truly confident of this, if they believe it at all.

It takes an awful lot of knowledge, understanding, dedication, research, patience, thinking, vision, and even daringness regarding possible legal risks to fill the above prerequisites. On top of all that, most of the people who understand economics (Austrian economics, of course) well enough to get why Bitcoin will change the world are convinced by that same economics they learned that "Bitcoin cannot be money." Moreover, Bitcoin sounds really cheesy/scammy when people first hear about it, and it relies on many counterintuitive, "obviously impossible" facts, like how a private key can be used to sign a transaction without revealing the key when broadcasting it.

Re: the overvaluation contention, it means Falvinge doesn't understand investing very well. The whole point of investing is, in a sense, to figure out how much potential hard-to-ascertain value things have and boost the price accordingly. The rising price alerts others to what they weren't savvy enough to figure out themselves, then they herd in, of course always to excess, but leave the price in the end higher than it was. Investors do the hard work so others don't have to, smoothing out the volatility as well.

In other words, the price of Bitcoin is where it is in large part because people judge it to have a strong chance of being much more useful in the future. It seems like an amateur error by Falvinge to imagine that the BTC price should exactly match Bitcoin's present utility, rather than its present + potential future utility. By that logic, all venture capitalists are idiots.

Re: the price fixing accusation, it means Falvinge doesn't understand that only a government can fix prices for any significant length of time. If people are misled by painting the tape, they will lose money and wise up. "Fool me twice, shame on me." It's only a short-term effect.

I prefer the term "ploy." They are too clever to make it technically a scam, knowing how vigilant bitcoiners are to outright direct scamming. Instead it is misleadingly closed-source, centralized, and neutered by OpenCoin's cynical and transparent money grab - a crippled ripple.

It lures people in with glitzy marketing and strings them along with promises of "fair" distribution of "worthless" XRP, open-sourcing, and decentralization, but the tiniest bit of investigation reveals the contradictions, the carefully tuned deceptiveness, the straw-grasping in argumentation, the spin-doctoring of deal-breaking issues, and the emptiness and needlessness of OC's free-floating promises.

If OC actually fully open sources all the code within a year and it turns out to be decentralized, I'll be happy to eat my words, but I believe the chances of that happening are slim to none. They might open the code in some token way, but I suspect there will always be a catch. After a while you develop a nose for dodgy intentions, and OCripple reeks to high heaven.

Transferring $50,000 to Japan via BTC/MtGox is a snap if you have trusted status. The problem is local regulations in various countries, and the exchange infrastructure, not Bitcoin itself.

Given Satoshi's desire to stay anonymous, he wouldn't have wanted to out himself as a crypto expert, or any kind of expert - that would really narrow down the search field. His best move is to appear to be "just good enough" at everything and to make any choices informed by high-level expertise look like mere happenstance.

- Release of Trezor or other hardware wallets
- Various possible watershed events in the financial world
- The recognition of Bitcoin as the bedrock of the "financial internet" (adoption of the FI lens/paradigm)

I have a sneaking suspicion that the NSA's alleged superpowers are overrated. Maybe they once were way ahead of the curve back when crypto was a nerd curiosity. But now? In 2013, when the whole world understands the importance of crypto and scads of people are interested in it, including hackers who stand to become fabulously wealthy if they could find a flaw? I just don't buy it. More likely the government just wants people to think there's no point in using cryptography.

Last time I went to Citibank in Japan they had an option for dollar accounts where yen deposited to the account would be automatically converted to dollars. If they do this for euros, then you could just use your Citibank ATM card to withdraw euros in Europe. Fast and cheap!

This should be your mascot, with this as the background music.