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Nicely written Nefario. Concise and to the point.
The other reason I see the whole deflationary issue as a big distraction is because it conflates Macroeconomics with Microeconomics. Deflation is a concern when running an entire national economy. That bitcoin is deflationary might be a relevant concern if the discussion is about the future ability of bitcoin to displace national currencies.
But currently, bitcoin is still a Microeconomy. As a microeconomy, its economic health is dominated by the microeconomic principles of supply and demand.
This is also related to the argument that without more merchant accepting bitcoin, it is doomed to failure. That argument is nonsense. As long as bitcoin remains liquid, and can still be traded for dollars etc., it will be successful. The ability to purchase goods with bitcoin directly may be a little more convenient, but it is not necessary in the least.
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Does the success of gold or silver depend on the success of major retailers accepting gold and silver? Well, yes. Because governments came out and said our currency is backed by gold and/or silver, so you can always exchange the money for that. It's slightly different, I know, but if you cant buy goods in BTC, the currency is worthless. Nonsense. It doesn't matter if you can't buy goods in BTC. If you can buy dollars with BTC, then BTC is worth exactly however many dollars you can buy with it. Simple stuff really. EDIT: Back to the topic. Agreed. My mom just invested. Started telling my cousin to invest when it was around $5.. he dragged his heels until it was $8.70. He already nearly doubled his investment and is thrilled. My dad and sister have said they would but haven't gotten around to it. They regret having waited more every time I inform them of the new price I always tell them its not guaranteed, and not to invest more than they can afford lose. |
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Ultimately the success or failure of Bitcoin will be the success or failure to get major retailers to take it, particularly online retailers.
Nope. Does the success of gold or silver depend on the success of major retailers accepting gold and silver? The success or failure of bitcoin is will be the extent of ability to trade bitcoin for dollars etc.. which are already accepted by online retailers. |
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FNIB is not affiliated with Mt Gox. FNIB does not accept Paypal/Moneybookers but Bitcoin will be accepted directly. How does it work? Open your trading account with a Bitcoin payment. Your account will be credited in USD at publicly available Bitcoin exchange rates on that day. Trade FX. When you want to cash out, Bitcoin will be sent back to you at that day's exchange rate. Note that Bitcoin itself is not traded on the platform. www.fnib.coCongrats! I was wondering when this would be available.. Been wanting to dabble in Forex for a while.. However, I'd rather my BTC deposit stay as BTC until the moment I decide to open a position, otherwise I risk losing the BTC upside in the meantime. What's the margin? Couldn't find it on the site.. |
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Cool! How about an option to use a chosen string instead of a random encoding?
And why not use the shortened version of your own address in your sig and on the site?
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How about a way to choose which address to send coins from, when there are multiple addresses (each with received coins) in a wallet?
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+10 for mesh networking. We are paying ISPs (/wireless providers) because they own the license to the spectrum, and .gov enforces that ownership. Mesh networking + pirate radio + bitcoin = ultimate solution. I had not heard of the Serval Project. The site seems light on info. Maybe someone can ask them to accept bitcoin donations.. EDIT: 4G Mesh Tech |
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BUMP You continue to outdo yourself tcatm. 0.256 BTC Sent. Lit up the map from my geoip. First tip from me. Long overdue for bitcoincharts.com |
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We need all the miners we can get, whenever we can get them. If we don't need more atm, how about two weeks from now if bitcoin is at $18?
That price is only sustainable with a matching increase in difficulty. Only a rising difficulty can support the rise in price.
My worry is that the difficulty won't be able rise accordingly (in the short term) because all the good GPUs are sold out. How long until the GPU vendors fullfil the back-orders? Access to reasonably-priced GPUs is the main bottleneck to continued price increases in the near future, IMO.
Hopefully AMD/ATI and its vendors can keep up with the demand.
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I've said it before (so have others), and I'll say it again.
The speculation on MtGox is the actual economic activity.
It does not matter one bit if you can buy goods directly with bitcoin.
The only thing that matters is that bitcoin is liquid, that you can sell it.
If you can convert it back to fiat in order to buy gas, pizzas, and footwear, then its as good as dollars.
Take gold for example. Does it matter that you can't walk into Footlocker and buy the latest sneaks with gold coins? No. It only matters that you can sell gold coins for dollars with which you can buy your sneakers.
Does the value of gold come from industrial use? No. If that were the case, it would still be worth only $300/oz.
The value of gold comes from willing gold buyers.
The value of bitcoin comes from willing bitcoin buyers.
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When the difficulty looked like it was going to dip back below 400,000 over the weekend, after peaking at 500,000, I started feeling bearish on the price.
Now it looks like the difficulty might be recovering, and could head towards 600,000. That, plus all the media, has me leaning bullish again.
At 600,000, a drop to $6 would put us at the historic low of around 1:1. I don't see that happening, with the explosion of media attention and trade volume.
On the other hand, if the price goes over $10 the pop to $18 is almost certain (an almost flat ask depth beyond $10). Even at $18 the ratio would still only be 3:1, which was just reached during the first rally to $8.
By a ratio analysis, $18 in the next week or two is in the cards.
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This entity would be able to recover all lost bitcoins!
oh my. now that is interesting. Unless the network subsequently upgraded to a post-quantum version without backwards-compatibility, which would render all coins not re-sent by then as obsolete. I don't know the technicals well enough to say with confidence that this is the only scenario. But if the upgrade to post-quantum is compatible with the current blockchain, it seems this would be how. |
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Creighto says here that the ECDSA in bitcoin is modular enough to be swapped out. I'm guessing the upgrade would be a version which uses post-quantum private keys, but is backwards-compatible with the current ECDSA private keys. Bitcoins received with the new version would have a post-quantum wallet file. Any bitcoins not re-sent to a new address with the new version would be vulnerable to theft by a quantum computer. Therefore, the first entity with access to a quantum computer could steal any coins which have not been re-sent. This entity would be able to recover all lost bitcoins! |
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D-Wave is smoke and mirrors. It is more like 128 1-bit analog computers, as the qubits are not entangled. Without entanglement, there is no quantum speedup over classical computation. Even the 8-bit system they published in Nature is not entangled. The highest number of qubits which have demonstrated entanglement is 3. Still, not too soon to examine plans for switching bitcoin from ECDSA to something post-quantum. Remember, when "true" quantum computers become a reality, far more than bitcoin is defeated. HTTPS (which uses RSA) is defeated. So basically all internet traffic (passwords, credit card numbers, etc) will be readable by anyone on the same wifi, by an employee at your ISP, or someone at your ISP's ISP, etc. |
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hi bitcoinBull,
great charts. Would it be better to use the actual difficulty for a particular 2016 blocks rather than the difficulty implied by the calculated hashing rate for 504 blocks?
Nah. We're trying measure the size/power of the network at the time, so we want to take the average hash rate over as small a window as possible. We want to see intra-week fluctuations but not random fluctuations. A 2014 block estimate would smooth things out more than necessary. Doing 144-blocks (representing 6x24 hours, but more often a 12-hour estimate) is too small, producing a messy a graph of random fluctuations: https://i.imgur.com/unGHI.pngI was thinking to use the actual difficulty from each 2016 blocks (not a moving average of 2016 blocks, the actual difficulty) because that's the difficulty when people are doing the mining - the difficult is not constantly adjusting on a 504 block moving average . So if you are looking at the price/difficulty to decide the relative merits of buying over mining then would price/actual difficulty not be better? Ah, good point. Thanks for the graph! It actually doesn't look much different On the left up until October the ratio drops in about five steps. I wonder if those are difficulty readjustments upward. Could plot this as a shadow line against the ratio using estimated difficulty (or vise-versa). |
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hi bitcoinBull,
great charts. Would it be better to use the actual difficulty for a particular 2016 blocks rather than the difficulty implied by the calculated hashing rate for 504 blocks?
Nah. We're trying measure the size/power of the network at the time, so we want to take the average hash rate over as small a window as possible. We want to see intra-week fluctuations but not random fluctuations. A 2014 block estimate would smooth things out more than necessary. Doing 144-blocks (representing 6x24 hours, but more often a 12-hour estimate) is too small, producing a messy a graph of random fluctuations: https://i.imgur.com/unGHI.png |
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Why should we expect price to go up if difficulty increases? Isn't it the other way around?
Price goes up when difficulty increases because as they become harder to get from mining, people buy. Difficulty increases when price goes up because higher prices offset the increase in difficulty, making mining attractive again. The question here is which is the leading indicator and which is the lagging. Pretty obvious to me that price drives difficulty. If it's super profitable to mine, then people start rigs. That increases difficulty. I don't see too many miners in the buying bitcoin arena (otherwise they would have never started mining, since it's less profitable). Indeed, obviously price drives difficulty. Less obvious other way around: difficulty driving the price. They are correlated, which isn't necessarily a causal relationship, but could be. I think its causal in both directions (Two-Way Causality). |
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