A currency gaining that purchasing power that quickly stops becoming a currency, though. If you can predict something will rise, no one will sell it (or only very few will). This drives the price up even higher, which is a positive feedback loop. The loop breaks when those with the asset want to cash in on the gains finally are content with the rise. You have a slightly unnatural amount of hoarding because a lot of people are holding on just hoping it will go up, rather than using it as a currency. If there is a lack of trust that it will continue going up, you'll see a bunch of people dump to try to get in at the peak, or at least protect their investment before it drops. That creates another positive feedback loop where everyone wants to sell and no one wants to buy. Without stability, either no one wants to spend (it will go up a ton in the future!) or no one wants to accept it (it's going down in value, why do I want this?). So it's value as a currency diminishes quite a bit.
BTC has extremely thin markets which is making the prices rise and fall. Even though there are > 6 million BTCs in existence, a lot are held by true believers. They won't sell until it hits $1000 or some crazy amount. They got them for free or cheap, so there is no loss mentality (someone who starts gambling with $5, goes up to $1000, then loses it all will think he only lost $5). So the supply is quite small. The hoarded coins represent a huge threat to stability. If they get sold off in a controlled manner, the price doesn't fluctuate too much. If there is ever a panic, there is such a huge supply of them, it would be equivalent to hyper-inflation.
While not terribly exciting (but still way more volatile) as an investment, as a currency it's a big problem. Having a more gradual rise in value would make it much more useful as a currency than speculation. I feel that this is the biggest flaw in the BTC system, although it might have been intentional - such a huge number of coins were initially distributed to such a few number of people. The mining curve where half are mined in the first 4 years seems very flawed to me and very much drives the problem we see with wild fluctuations. It would be better to have distributed them more gradually over a longer period of time (perhaps start out small, ramp up, then slow down after a while), much similar to the expected user-base of the currency. It's hard to predict what that might be, but it's certainly not the pattern we have now where 1/4 were released before even .0001% of the population even has heard of the currency.
It's a problem we can live with, but the result is that we have a speculators market and not a currency. Eventually it should stabilize near some equilibriums when the value either goes up high enough or crashes completely.
I think you're broadly right, but I'm not too concerned. I see bitcoin as a long-term project, and right now we're at the very start of it. There aren't many goods or services priced in bitcoins (I know, this is a perennial complaint, and there are good people always working to address it, but right now - and, I suspect, for some time to come - that part of the bitcoin economy will lag behind the rest of the economy). Regarding instability, again I'm not too concerned at this stage of the project's existence, and I see it continuing for some time yet. We saw it back in February, when we hit USD parity (and even hit the dizzy heights of $1.10!) and then watched as the rate declined to 0.56 USD. And you're quite right - this is due to the market being extremely thinly traded - forex has trillions of dollars being traded daily: there's no way bitcoin is going to even approach that for the foreseeable future. I draw a different conclusion from you as regards the initial distribution: I see it as trying to get to a stable position as quickly as possible, and accepting instability as a means to that end. It's counter-intuitive, but I can't see the reverse (or a bell-shaped distribution of coins) as working better. Better to frontload the instability hit than risk instability just when the bitcoin economy seemed to be maturing. tl;dr: Boot-strapping a disruptive technology is going to involve instability in the short- to medium-term. Edit: sorry, I wanted to give a few example of the bitcoin economy's immaturity, and how I see it developing. Someone mentioned earlier today that forex markets shut up shop for the weekend. I totally see why MtGox and other exchanges don't do this, but I think as the bitcoin economy develops it needs to move in line with the wider financial system. Right now we're seeing dips at weekends (or rises that are less steep than they might be!), because it's not easy to get money in, but it is easy to get bitcoins out. That's not something that comes as a surprise to many forum regulars, but it is scary to someone watching from a newbie perspective. The other "example" (OK, not so much an example as a theory) is Gavin's "we just can't predict what uses people are going to come up with" belief (which I share). I think right now we're trying to fit bitcoin around what we know - the familiar. I think that the real value for bitcoin is going to come when someone starts using bitcoin in ways we never considered before. Right now the userbase is tiny - as it develops, and particularly as it develops in the developing world, people are going to innovate like nothing we've seen before. |
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Find me a currency that is not broken that will fluctuate 600% within 2 weeks.
1) So Bitcoin is broken because the value is determined by supply and demand, and because you can’t control demand? 2) When did it fluctuate 600% within two weeks? Over 18 days or so it increased from 1.5 USD to a peak of 9 USD (approx). It then fell back 33.3% from 9 USD to around 6 USD. I'm not quibbling over the 18 days, I'll grant 600% in (almost) two weeks, but I won't call it a 600% fluctuation, only a rise. For a fluctuation I'd want to see an actual fluctuation - a rise then a similar fall (say, to 2 - 2.5 USD). Otherwise this all seems fairly pedestrian - a dramatic rise, followed by a less than dramatic correction. |
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A case is also nice to have if you don't like short circuiting the power pins on the MB with a screw driver to start it.
True, that's one luxury I'd quite like to keep. I think if I was building a multi-GPU rig on the cheap I'd try and use a desktop case with the top removed. Though, to be honest, I'm sufficiently paranoid about small animals etc that I'd probably avoid doing it completely on the cheap and settle for a cheap case with decent fans. |
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A case?
And if you run windows you'll need some dummy plugs for your video outputs or windows will shut the cards off.
COOLER MASTER HAF X (Will this keep my pc cooled?) Is my case. I'm not entirely sure, but I think the implication may have been that a case isn't entirely necessary. I have one but I only have the one GPU, running quite cool. Miners with pets, small children etc may also regard a case as essential! |
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is the bubble bursting? i have sold my btc. have you?
No, I'd say it's the market correcting. I tend to be contrarian; while folk were suggesting that now (now being a few days ago) was an excellent time to invest in mining, I was suggesting caution (the last time people were saying that was when bitcoin was approaching 1.1 USD - it then stagnated for six weeks, declining to just above 0.5 USD). I see a similar thing happening now - the market corrects after a big peak, and a some point it'll pick up again. Sucks to be a miner right now, particularly if you've just invested heavily in hardware, but things will almost certainly improve. Sold my BTC? Well, I did sell some today (before prices started falling) but it was down to sheer dumb luck and had nothing to do with believing the market was peaking. In the long term I believe bitcoin will go much higher - and I'm in it for the long haul. |
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Heading out now, but quick replies and I'll reply in depth later... Oh, for goodness sake. Many, many people here "promote" this. It's humorous. It's a joke. It's not a get-rich-quick scheme, and no one (well, mostly no one) takes it seriously. I don't personally bother with it, but for those that do it's a bit of harmless fun.
Is that what Madoff said, too?  No, but seriously - when people promote it, they are lending it life/credence, and the bottom line is that it's a classic ponzi scheme. How you FEEL about it is up to anyone(chuckle lulul), but it is what it is. My point was: it's a Ponzi scheme. Yours is that that's great fun. Some might disagree. Fine, it's a ponzi scheme. It promises a tiny return for a tiny "investment". I'm not worried it's going to bankrupt anyone; my sole concern is that sooner or later someone was bound to see it and think "oh noes! Ponzi! Run away! Warn the world!" Which has just happened here. So, thanks for your warning, I hope no one views it as any reflection on bitcoin or on any of the people who participate in it. Yeah, right. Try looking around the web and see how many people give away trading analysis. Most charge for it all, some give you "teasers" to encourage you to pay for the whole thing. In any event, trading experience does not equate to "multi-millionaire". I have trading experience (not nearly as much) and I can assure you I'm in no way wealthy.
I know sites, blogs, twitters that would take more time to read than there is time in the day, all "analysing the market". It's not as if they are hard to find, but the use is disputeable with all of them. As for 'trading experience does not equate to "multi-millionaire"' - I did not claim that, but anyone who knows how to trade either goes into obscurity and money eventually(and past just double digits) or gets attention. I know, because I know people thus concerned..and none of them ever, ever, EVER asked anyone for money for anything unless they decided to run active tutelage(which I understand when pricey, simply because you have to weigh it against your own opportunity cost and time investment). What you did was take the claim "12+ years experience" and say: "Anyone who has enough funds and experience to be in the trading game for a decade, trading with real money, has literally got it made." So, apologies, my assumption of "got it made" was "multi-millionaire", but that was purely my assumption. Just like you assumed that experience translates into "got it made". Right... because until we had margin trading technical analysis was impossible. That was not my point. My point was simply that with barely a chart history it's rather tough to chart out s/r levels, and without proper market depth(liquidity), reliability of price levels in general becomes questionable. If you can create no-bid/-ask situations much more easily, then prices can go wonky much more easily. Now that is approaching a valid criticism. Remember, however, that price depth transcends one exchange. There are valid criticisms of technical analysis of bitcoin. But these are not them.
Cool, list me some. Well, you could always search for them rather than ask someone who doesn't necessarily have any criticisms of technical analysis of bitcoin? There have been some recent posts on this, which I found thought-provoking, though I disagreed with them. You'll need to do the searching, however, unless you're prepared to wait until I get back. |
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I consider it as one half of a currency pair.
Could you explain what this means or where I can read about what a "currency pair" is ? Perhaps in another thread if it will hijack s3052's analysis thread Never mind, I googled it. reading now Sure, a currency pair is something like "GBP/USD" (trading US dollars and British pounds) or "JPY/CHF" (trading Japanese yen and Swiss francs). When you buy one currency you're using another currency to purchase it, hence "pairs". Edit: oops, now realise you'd found the answer. Hopefully the Wikipedia link will still be useful to someone, however. |
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1. Advocating and promoting a ponzi / pyramid scheme openly on his twitter: http://twitter.com/#!/BitcoinAnalyst/status/69174383633117184 Oh, for goodness sake. Many, many people here "promote" this. It's humorous. It's a joke. It's not a get-rich-quick scheme, and no one (well, mostly no one) takes it seriously. I don't personally bother with it, but for those that do it's a bit of harmless fun. 2. Claiming that he has "12+ years of trading experience", yet asks for donations to his bitcoin address. Anyone who has enough funds and experience to be in the trading game for a decade, trading with real money, has literally got it made. You would not be asking for donations nor selling anything.
Yeah, right. Try looking around the web and see how many people give away trading analysis. Most charge for it all, some give you "teasers" to encourage you to pay for the whole thing. In any event, trading experience does not equate to "multi-millionaire". I have trading experience (not nearly as much) and I can assure you I'm in no way wealthy. 3. BTC does not have margin trading, established historical price levels or trustworthy market depth for any amount of "real" orders. Analysing it is aking to trying to do it with penny stocks..though I do admit if you try hard enough, you can generate areas of support and resistance on literally any chart that has price levels. Dito with formations, trendlines etc.
What I am trying to say is - what the guy is doing is trying to read tea leaves at the current stage of BTC evolution.
Right... because until we had margin trading technical analysis was impossible. There are valid criticisms of technical analysis of bitcoin. But these are not them. |
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Maybe I have my head up my rectum, can anyone tell me why it *should* be considered to be "just another stock" and be expected to follow traditional stock pattens of the past ?
I don't think anyone is considering it as "just another stock". I consider it as one half of a currency pair. Comparing it with stock is less obvious, to me, than comparing it with currencies. |
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The link doesn't seem to work. Hmm, try again. It does seem to go down occasionally, but I tried earlier and again just now and it works just fine. It's only the website, anyway - actual trades take place over IRC. I believe mtgox is fee free for any transfers of the same unit.
Cool, thanks for the info! |
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Don't forget the dram, the manat, the taka, the pula, the kuna, the nakfa, the birr, the lari, the tenge, the kip.......
Also never heard of (most of) them! However... the euro is supposed to use singular forms, e.g. 5 euro, 50 cent. That's the theory, anyway. In practice I believe English speakers tend to pluralise (e.g. 5 euros, 50 cents). That said, I live outside the Eurozone so my only practical experience is talking to Irish people, mostly, and a few English speakers from mainland Europe. |
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What is the best way to deposit money on mtgox with a 1:1 ratio and also it would be instant?
I am skeptical to do trades on forums unless it is with highly reputable/commercial members. I think we all are.
I will update this thread when i find a way to put $ on mtgox at a 1:1 ratio. I feel like not getting a 1:1 ratio for USD is unreasonable considering trades are raked .65%.
It doesn't completely answer your question (I think the answer may be that it's not possible, due to fees charged by Liberty Reserve, but it's not something I've ever needed to do) but... What about buying bitcoins over-the-counter, using bitcoin-otc? That way you negotiate a price you're happy with, there's the Web of Trust tool to assess how trustworthy the counter-party is, and the only fees are any bank charges - there's no 0.65% trading fee. If you're interested in speculating on MtGox (or any other exchange), once you've bought your bitcoins you could deposit them at the exchange (which is, IIRC, fee-free at MtGox) then speculate away! When it comes to cashing out, simply withdraw your bitcoins to your own bitcoin address, and sell them using bitcoin-otc. |
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His analysis is pretty good, although his last point is overly-paranoid and negative: you can steganographically hide data in *anything*. Even your daily newpaper might contain steganographically encrypted state secrets...
Just before D-day, a British crossword compiler was suspected of precisely that! (He managed to convince the authorities that he was innocent). |
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My bitcoin client with my wallet has been showing 0/unconfirmed for 30 minutes now (not the pool payout) where I used to have 5 confirmations before an hour was up. Could just be luck - except for one block a few minutes ago the rest were all over 30 minutes ago. Do you have 1 confirmation now? |
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Is there any kind of "matching" picture search, where the search will attempt to find out if the same image exists anywhere else on the web? That'd be a pretty slick website, actually....
TinEye.com! |
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I understand the need for the difficulty to increase to keep the target amount of bitcoins being mined up to a set level but is waiting 4 hours to generate a block and get confirmations going to start hurting the economy? The present round is taking forever and transactions that took 30 minutes two weeks ago now could reach the 8hr mark to be confirmed.
Hope this is a temporary situation.
Bitcoinmonitor is showing at least four blocks in the past hour. Bitcoincharts is showing an average of 7.2 blocks per hour. I assume from your comment about "the present round" that you're looking at one mining pool in isolation, and not the entire network? |
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and the question is where do all the blocks, coins take value from ?
From people believing coins have value. If people are prepared to pay, say, $5 per bitcoin then the value of one bitcoin is $5. If people are not prepared to pay anything for a bitcoin, then bitcoins have zero value. If people are prepared to pay more than $5 for one bitcoin, then the price rises. There are a few sections on value on the wiki. Not sure they necessarily answer your question, but they're a useful read. |
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But you won't be paying higher fees just for security - you'll be paying higher fees so that your transactions are processed speedily. Security will just be a pleasant side-effect. Higher fees won't be "enforced": they'll come about through the natural operation of a free market.
There is perfect competition between miners, so I think transactions will be payed at their real (hardware processing) cost. No more than that. (If transaction capacity is voluntarily limited, it won't be the case, but see my second point). All this is very unclear to me. But bitcoin's security has a very big cost. And it seems nobody knows who will/should pay for it. People here mostly consider bitcoins advantages and tend to forget about everything else. You say this is very unclear to you. That's fair enough. But you then assume that "nobody knows who will/should pay for it" - that's not correct. For those of us for whom this isn't very unclear, we have a pretty clear idea who will pay for security: people making transactions. If transaction fees decrease, so will transaction speed. This incentivises people to pay higher transaction fees, ensuring that miners continue/start/resume mining, and improving both transaction speed and network security. I don't think that there will be perfect competition between miners: it will be cheaper for miners to continue mining than it will be for ex-miners to restart mining, and it will be cheaper to re-start mining than it will be to start from scratch. However, even assuming perfect competition, transaction fees will move towards but not reach real cost - there has to be a profit element or miners simply won't bother. But I'm not worried about that, because if miners stop mining the profit for those that remain will increase. And there will be incentive for ex-miners to restart, or for new miners to start from scratch. |
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From #bitcoin-otc on 2011-05-08: (10:18:45 PM) MagicalTux: btw, people who live in europe and have nationality of a country located in europe can have their daily withdrawal limit (both in EUR and BTC) increased up to 50k$ by providing the required proofs, more infos at info@mtgox.comNo love for legally-resident-in-Europe stateless persons, refugees or asylees, but it's a start! Or foreign nationals legally resident in Europe, which affects non-European expatriates - Commonwealth citizens (e.g. Canadians, Australians), South Africans, etc, in Europe on working visas. I'd imagine the City of London, for example, is full of non-Europeans (apparently London-proper is the second-largest "New Zealand" city in terms of population - with more New Zealanders in it than the capital of New Zealand!) |
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