Check the timing a little more carefully.  I'm pretty sure the sell-off had already started before the Schumer story, and was mostly finished by the time the story broke.  It actually started recovering around the time the story went to press.  cbw...

Thanks for the update S3052.  You were spot on, indeed.  I suppose you're telling your subscribers that since we're seeing resistance at the upper trendline, we may see a correction to the upper support line around $10.

It's interesting that I would predict something similar by analyzing the price to difficulty ratio.  We've previously seen the ratio pop to just over 3:1, which is about where we are now with price at $18 and a difficulty heading over 600,000.  The last time that happened (which was very recently), we saw decline in the ratio to just below 2:1.  The decline can take the form of a quick price correction, a price consolidation coupled with rise in difficulty, or somewhere in between.  I see the same possibilites in a projection of your price trend channel.

You tweeted that it may test $20.  A breakout above $20 would seem crazy, if we weren't becoming used to bitcoin's ever-surprising upside by now.

You wrote a while back that you've learned to be careful with trusting apparently correlated indicators, because they can often de-couple.  For that reason, its good to see a purely technical analysis as well.

This is a good point.

If they want to redeem themselves, they should make clear their where they stand regarding bitcoin.

I'll understand if they don't want to accept donations because of potential conflict of interest.  But they could state that they will defend the freedom of individuals to use bitcoin.  If they do, I'll be more than willing to donate some bitcoin profits to them in US dollars.

<sarcasm=off>

Its not too late for you change this prediction.. yet.

Of course potential profit is a big factor of bitcoin's appeal.  But that potential only comes from the decentralization and open source.. which is the basic appeal.  Why else would the early adopters have bought this virtual "funny money" back when it was $0.05 and $0.25 and decentralized among a couple dozen cryptonerds?

All those looking for a "currency" with a stable exchange rate need to look elsewhere.  Obviously, it is not going to be bitcoin.

As for the bitcoin bubble, you are more than welcome to back and do the "told you so" dance when it is 1 USD.

Let's put aside the issue that all websites on the internet are not under US jurisdiction (relevant since nobody knows from where SR is hosted), and that the trafficking of certain drugs IS LEGAL in certain states.

If you consider SR a threat to the bitcoin network, where do you stop?  Do you also want to exterminate all bitcoin poker and gambling websites, regardless of where they are hosted, since those are also illegal in the US?  If it wasn't SR, it would be online gambling.

County Police Net $470,000 in Online Gambling Seizure - June 2, 2011

And if it wasn't online gambling, it would be something else.  Schumer or any other rich and powerful man would have no shortage of justifications to criminalize bitcoins (money laundering, tax evasion, wire fraud, unlicensed securities yada yada, the list goes on and on).  If you want to exterminate every part of the bitcoin network the rich and powerful find threatening, what will be left is no bitcoin network at all.  "First they came..."

The way this will play out is that if they attempt to publicly display total control, until it is completely obvious to everyone that they in fact have none, they will lose all credibility.  To avoid that, they will stop short with ostensible displays of control.  Look at the way Cannabis legalization is playing out: it is bought and sold in plain daylight, in stores in the middle of strip malls, in states around the country.  But it is federally illegal. 

If "they" want to do the same to bitcoin (i.e. illegalize it with ostensible displays of enforcement), there is little chance we can prevent it.  But there is nothing they can do to stop us.

The only thing the bitcoin network has to fear.. is fear itself.

Wow you are so right.  Too bad nobody with your brilliant insight came here earlier to wake us all up before it was too late.

It actually doesn't have anything to do with being decentralized and open source.  How could we be so ignorant to trust something that isn't a closed-source corporate-backed dot com audited behind the curtain by a third party and insured by the federal government?  Everybody knows that only legal tender is "real money".

You just made me realize that bitcoin is nothing more than a thinly-veiled pyramid scheme propped up by buzzword marketing peddled to ignorant suckers.

Thanks for the enlightenment.  I almost lost my shirt.

OK, fine, you are right.  Bitcoin has failed as currency.  Good.  I'm glad.

Because I like bitcoin as a value storage.  I like bitcoin as an informal value transfer system.  I like bitcoin the way it is.

I've already seen the value stop climbing, several times, its true and I sold as soon as it did.

Then I watched it drop.  A lot.  Within minutes.  Then I bought right back in. 

I've done this more than once.  And you are right, each time was an excellent lesson in economics, and psychology.

Call it a currency, call it deflationary, call it profits, or call it buttcoin. 

It will still have my appeal.

After a few minutes of reflection, I would expect Schumer to get some backlash from his colleagues for embarrassing them unnecessarily.  He will learn that its usually a bad idea to raise a stink over something about which little can be done.  He's just highlighting the fact that control is slipping from the grip of the State, and the State will not be happy about that.  Some stones are best left unturned.

Medical Marijuana is already legal in how many states?  And all the Feds can muster up is a few token busts here and there.  If they can't even control meatspace, there's no chance they can control cyberspace.

This "investigation" will continue and then it will be forgetten, and swept under the rug.  Yet another sign of the decline of state power, from which they have every reason to divert the public's attention.  They just shot themselves in the foot..

At best they might catch a few SR vendors dropping off the mail, or SR will be rebranded or replaced.

http://www.nbcnewyork.com/news/local/Schumer-Calls-on-Feds-to-Shut-Down-Online-Drug-Marketplace-123187958.html


This merits a thread of its own.

Just as we've been expecting, but I'm a bit surprised how quickly it happened.

Wow.. bitcoin is moving at the speed of.. bits!

http://buttcoin.org/

http://buttcoin.tumblr.com/

I love bitcoin as much as the next guy, but this even made me laugh.

It would help if all the deflation=death, bubble about to pop, and bitcoin is backed by nothing posts were consolidated onto a sub-forum.

Bitcoin.. love it or hate it.

This stereotype doesn't seem fair to me, and sounds like residual prejudice from the Cold War.  Perhaps scammers in Russia, Nigeria, etc. to turn to online crime more than Americans, because for petty American thieves the opportunities to steal offline are probably much better.

But more likely, the crime committed by Americans (against Americans and non-Americans alike) is simply overlooked (due to belief in exceptionalism and all that).  The examples are plenty.


Anyway, yes, I am curious to hear your explanation of this widespread perception.

The Wired article is on the Front Page of Google News:

Trades on exchanges don't have geoips.

A quick update.  Scenario 3 is has happened.

At a projected difficulty of ~600,000, the price popped over $18 so we're over the ratio of 3:1.

The question now is how high will this go in the very near-term?  With the critical mass and media explosion, we could see a return to the historic ratio highs from back in November, nearing 6:1.  That would be a doubling from $18 to $36. 

We'll see what happens over the coming weekdays when the banks open to start processing more transfers.

This is a fantastic time to be mining.  We need more miners, and fast.  Hopefully the vendors can deliver more GPUs soon.  I see the difficulty as a lagging indicator, so we need a matching rise in difficulty to support the rising price.  That is absolutely critical to avoid large corrections and instill confidence in bitcoin.

Historic trade data

Though it is each and every trade, not a series of the ticker.

The current rally is about on par with the past ones (double in price with each rally), thus far, tho it seems to be happening much quicker this time.  But because it seems the "critical mass" is being reached due to the extraordinary press coverage, this one has potential to be even more surprising IMO (doubling twice, from $10 to $20 and from $20 to $40).  If that happens, hard to say how low it will correct. (back to $20 or back to $10).

If you're hesitant to buy, maybe your SO would be more amenable to a small investment into a mining rig?  Most find it less risky to invest in hardware (which can be resold if bitcoin crashes and burns), and it could actually turn out to be a better investment, versus if you turned out to have bought in at a top right before a large correction.

Here is a good starter rig setup for ~$400.  Would be even less if you already have a desktop, you can simply add in a couple of video cards.  If you decide to do this, do it soon, because the video cards best for mining are selling out fast!

Do you mean a website as bitcoin bank?  In that case, all the thief needs is your bitcoin bank login and pw.  This wouldn't help, and could make it worse.

I prefer to think of the bitcoin P2P network as the bitcoin bank.  Any intermediaries would simply be centralized points of vulnerability.

No straightforward mechanism to prevent it.  Crimeware writers are definitely winning the arms race against the AV companies.

Growing opportunities to encourage it:  Zeus trojan source leaked - bitcoin wallet and mtgox pw stealing trojans coming soon

I believe it is.  These aren't confirmations of transactions (those are the red dots).  Just the initial broadcasts before they are confirmed by block inclusion.

That's not possible.  The ends between transactions are bitcoin addresses, which do not have gps coordinates.

This highlights the geoip's of nodes broadcasting and re-broadcasting transactions throughout the network.