I talked to Erik a few days ago, I contacted James and he gave me the list for FZB to give to Erik  So it's now in his hands! Why did he give the list to you instead of Erik? That seems like a breach of security? (You seem a trustworthy enough guy, buy why take the risk instead of just handing it to Erik several months ago?) |
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I know this might be hard to estimate, and the numbers are skewed by the small history of bitcoins, and the choices are rather granular, but I thought this might be useful.
What I am looking for is the velocity of bitcoins through us. By knowing the velocity of a typical user, we can then estimate what effect adding more users will have.
Think of your entire history with bitcoins, try to roughly estimate the length you held an average bitcoin from the time you received it to the time you spent it.
For example:
- if you send all your bitcoins immediately to an exchange to sell or when you buy something with bitcoins you buy just enough for that purchase, then you would pick "1 hour"
- if you mine bitcoins and once a week send all your earnings to an exchange and cash out, then you would pick "1 week".
- if you bought 2 bitcoins a couple months ago, spent one immediately and are still holding the other, then you would pick "1 month"
- if you have a huge stash from a couple years ago, and you buy small amounts and spend small amounts then you would pick "1 year" since the bulk of your holdings is longer term.
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Users != price
However, more users implies more utility for those who use it; the network effect, bitcoin is more useful to me when my business partner accepts it than when he does not. It depends on how they are using it. If they are using it to replace paypal for sending transactions, and they only buy bitcoins right when they need them and cash out the bitcoins as soon as they get them, then it is true the number of users has a small effect on the price. But if they are using bitcoins to replace their savings accounts, then absolutely the number of users will affect the price, since each added person adds their own amount of savings to the money supply. How long on average do you hold your bitcoins before selling/using them? |
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Yes the house bet a great feature, this was one of the reasons that made me move from betsofbitco.in to bitbet (fast resolution was the other reason).
But as a shareholder of s.bbet, I feel the house take percentage is a bit low. Compare with betsofbitco.in's 5% house take, I feel you are leaving money on the table. I think it is in the interest of the shareholders to gradually increase the percentage to at least 2% or more.
Betsofbitco.in is a very poor comparison for anything, unless it's fraud or something. It's nice to see the reverse argument, last month there was a rash of "you should charge even less". I guess things balance out in time. Is there anywhere to compare the volume of bitbet and betsofbitcoin? |
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The rate the price is jumping is starting to look ridiculous. 50% in one day, there is no way that will continue very long. Looks like we will see the top soon.
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Bubbles do not pop when something bad happens, they pop when there is no more money pouring in to hold up the price.
Why would there ever be a lack of money coming in, in the absence of something terrible occurring? If price drops naturally, it just makes the long term enthusiasts more likely to buy up coin. It is people who think like this who wonder why they are left holding an empty bag. |
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How can you accurately predict it will not take several months? I don't think you can. I was worried this might be a bubble too, but if the bubble didn't "pop" when the blockchain forked, what is going to take to cause it to break?
I don't think a mere lack of inflation will cause it to burst, it's going to take some serious negative event, something huge and difficult to fix. I'm not sure such a thing even exists, bitcoin seems to be a lot more resilient now.
Bubbles do not pop when something bad happens, they pop when there is no more money pouring in to hold up the price. |
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So the psychological barrier has been breached.
I've been following another price, EUR/mBTC, closely and expect it to follow suit in the near future (currently at 12.21). I'm not sure if it will be as big news as this one, though.
And this is why I do not think there is as much to the whole "psychological barrier" argument as people believe there is. While the USD is hitting a nice round number like 10 mB, the EUR is at a non-round 12.2 mB. Each local currency will have their own points of round numbers, and so the market will just ignore silly things like numbers. Even though people make a big deal about the price going under 10, or when the price of an ounce of silver was 1000 mB, or when a gram of gold was 1000 mB, I do not think those points are so notable for the overall market. What will be notable is when the monetary base of bitcoins is the same as the monetary base of silver, or gold. Looking back, we have come a long way from when somebody paid 10000000 mB for two pizzas. Now those two pizzas would be about 200 mB or so. |
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I recall BS&T being just about BTC500k. (Although that's coming purely from memory and I wouldn't be able to cite a source  ) I think it was estimated at 500k btc of account balances after compounding at 7% for several weeks, not that he actually had that much. Not that I would know, I never invested in that (or any of the things invested in it). |
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Nice increase of profit over the previous month. Hopefully we will continue to see the profit increase by 10x each month |
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I think it's reached the point where it would be good to start measuring in mBTC rather than BTC generally, around the web.
Sure, go ahead and price things in mB instead of BTC, just be sure that it is obvious which one you are using until everybody picks up on it. The price of a US dollar is just under 10 mB right now. |
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This is good wall street isn't involved.
If they did get involved, they would buy up 5 million bitcoins and start a stock exchanged commodity fund on NYSE, which would dictate the price of bitcoins like they do gold/silver now, and we would all be at the mercy of bankers and hedge fund speculators
If they did lock up half the bitcoins in a known location, and allowed the institutional investors to invest in them, then for one thing the price would skyrocket, but I think the price would also be more stable after the initial jump? Would it cut down on the volatility, or would it amplify the volatility? |
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This is the logic I used to reach that conclusion, please state which part is incorrect if you disagree: My additions in bold:
1) Bitcoin’s main technological and paradigm breakthrough – and the main source of its value is as a fluid currency that allows fairly quick, partially anonymous, and nearly free transactions anywhere in the world with access to the internet.
2) Currently Bitcoin is not being used as a currency – you would be crazy to spend it when its rising so much in value and when you could much more wisely sell it at a huge premium on a local bitcoin marketplace and buy the product in USD instead. Unless you think this might be a bubble, so you might as well spend them now while they are worth extra. Or if you just bought the btc so you could use them as money right now.
3) Bitcoin is rising because people expect it to be a major currency of be worth more in the future and that there will be huge flows from fiat money into bitcoin as financial crisis panic in Europe spreads.
4) Bitcoin will keep rising as long as this assumption gains ground or other reasons arise for using bitcoins.
5) If this assumption fails, and Europe is ‘saved’ (or can is kicked down the road) as it has countless times, new money will stop to come in, speculators will cash out feeling the party is over and price will drop. Unless people really are cashing out of the failing bank system and have no plan to return no matter how much the Banksters try to say they have changed their ways.
6) How low will it drop? Based on its intrinsic value as a currency that it had built over the past couple of years with perhaps an added premium thanks to the extra coverage it got over the past few weeks and new ‘believers’ added to the mix. Huh? I don't think this is a complete thought?
7) Therefore, the true value of a Bitcoin, if financial armageddon doesn’t unfold before our very eyes, should be the value that it had before this whole Cyprus thing + some additional worth based on drawing more loyal users.
The main assumption here is that a lot of the new investors over the past 2 weeks are speculators hoping to make a nice profit, instead of people who swear by Bitcoin as a practical currency. BY the way I’m one to hope that there is some kind of financial Armageddon so don’t shoot me for hypothesizing an alternate scenario.
I think your assumption has some merit, that much of the rise is induced by speculators. But Some of the rise has been because of people who really beleive in bitcoin putting more money into it. You could say the price rises (or drops) quickly based mostly on speculation and equilibrates slowly based on what people are saving in bitcoin and how much it is used for transactions. Whether the price drops depends on whether the users of bitcoin are able to offset the amount taken out by the speculators. If they do not, and the price starts falling, we could see the price overshoot downward and users of bitcoins will get a discount again (like anybody who boutght below 5 USD). |
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Maybe you can give an example.
Say you have a water dispute between two geographically close regions. Group A doesn't have enough water to give to its people and the only economically viable source is group B.
Group B has plenty of water and because of that, they also have plenty of food and are basically self sufficient.
Group C also has water but they live so far away that acquiring that water becomes financially impossible for group A.
In a free world the clear solution is to have people move from group A to group B and C. Either move the resources to the people or move the people to the resources. Without the artificial boundaries created by governments we would not have the problem you are describing. |
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I don't think just because something goes up in value very fast, it is mature... well on the contrary... anyway, time will tell.
Right. I think bitcoins will be mature when the change in price against the USD is about the same as the change in price of XAU vs USD and USD vs EUR etc. When the volatility is small enough and the price steady enough that when the BTC price vs USD goes up you can say that the dollar is losing value without having people laugh at you. |
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Finally, sure, this all seems very exciting, and it may seem like the egg is on my face, but I still think we're around the top of a giant bubble and that the price will crash very hard soon. It's just difficult to say exactly when, but I can't imagine the price staying above $100 for very long, and once it moves definitively back under $100, I expect a very long correction.
The overall price of bitcoins depends on its use. I have seen a few different analysis that put the price supported by transactions (buying/selling goods and services, simple remittances, etc) at around 10 USD. Speculation without any actual backing economy would have the price bubble up and go back down to under 0.01 USD. People using BTC as long-term savings, however, the price just depends on how much people want to save in bitcoin, so the total money supply could go up at least another couple orders of magnitude. I suspect that most of the current rise has been driven by speculation, however, there have been people putting their capital into bitcoin, and people running bitcoin based business leaving their earnings in bitcoin. So while I believe the price can go down quite a bit from where it is at, it does not have to go down. It just depends on if the savers and earners can get their money into bitcoin as fast as the speculators are pulling out. |
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Down into single digits now, just hit 9.97.
We haven't seen the bottom. We leveled off for a few days at about 20, then the Cyprus news hit and we dipped down to where it is now, about 10. I suspect we will we the price stay level between about 9 and 11 for a few days or weeks unless another major news hits. |
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Down into single digits now, just hit 9.97.
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Today you can trade a bitcoin for a slip of green paper with Benjamin Franklin on it (USD 100).
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Just saying.
Thanks for posting a mathematical equivalency, what is your point? Why is this in speculation and not off-topic? 2009+5=2014 |
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