I sold 100 BTC when it was $6 because my bank account was running really low and I needed the cash to pay bills.

An article in the Chicago Tribune:
http://www.chicagotribune.com/news/politics/sns-rt-us-financial-bitcoitre7573t3-20110608,0,6328122.story

Some interesting bits:





This article simply confirms my thesis that Silk Road was not really the original target here, but merely a pretext to shut down bitcoin. I will not be surprised if in the near future they create child pornography sites that are also using bitcoins to further shift public opinion against bitcoins.

I agree. Plus, advertising it will make it look like a Ponzi scheme - as if early adopters are trying to sell their bitcoins to late adopters and profit.

I think leaving Bitcoin speak for itself, and let people do all the work discovering about it will make bitcoins more desirable.

This is exactly what I meant. I already recovered my initial investment into bitcoin, and I am currently holding most of what I have for the long term. However, once that becomes a significant portion of my wealth, I am planning to diversify into something else, while still retaining a fraction of my original holding of bitcoins as I too believe it is an idea which has a great potential.

Well, I found about bitcoin back when it was just 20 cents. Back then it was even harder to purchase it. You either had to go through liberty dollar, or cash in the mail.

The biggest risk to bitcoin comes from the US government, which may criminalize and ban it. In fact I am pretty sure they will do that once it gets into their radar.

According to this

http://bitcoincharts.com/markets/mtgoxUSD_trades.html

in the last hour alone people burned half a million US dollars buying bitcoins

Just in the last hour, bitcoins appreciated from $18 to $23.60. If that's not a buying mania fueling a bubble, what is?

I bought most of my bitcoin back when they were 90c. I never imagined that a few months later they would be worth 20 times more. I would have been satisfied with an appreciation of 10-20% - after all that is far more than what my bank pays.

How much higher does the price need to go for you to cash out of your bitcoins? What are the reasons why you are not selling now? Is it that you expect the currency to appreciate further? Or are there any other reasons why you are not cashing out?

I believe it applies to both USD and BTC.

Shifting the decimal point would be a very stupid thing to do. For one it would create confusion for the users. We wouldn't want someone to accidentally send someone else 1,000,000 when they just meant to send 1 BTC.

I know many previous false alarms for a bubble have been raised, but I'd like to discuss a possible explanation for the rapid appreciation in prices.

Currently Mt Gox has no limit on how much money can be deposited, but there is a limit on how much money can be withdrawn. This means that the inflow of funds is unrestricted, but the outflow is restricted. Could this assymetry be part of the reason why bitcoins are appreciating so wildly?If traders were allowed to withdraw large amounts from the exchange, wouldn't prices be more stable?

Does this sound plausible?

I like some of your suggestions, but I am not sure if the new transaction fee structure you propose will work. Also I am not really sure I understand how the new block-chain will work.

I don't think you are correct in claiming that

I don't see any significant shortcomings in bitcoin that will lead to its collapse. I think it suffers from the fact that the protocol is still not well defined and the implementation is overly complicated, but there are no major flaws that will lead to its collapse. The main idea behind it is very sound.

For any successor to bitcoin to actually have a following, I think it needs to provide some minimal backward compatibility with the current client. Even if a completely different protocol or a different blockchain is used, at the very least the current wealth distribution must be preserved, or there must be a smooth path to move current bitcoins into the new bitcoins. Lacking that, the new currency will probably have to start trading from zero and compete with the old implementation of bitcoin.

Has anyone seen this website yet?

http://buttcoin.org/

It is quite funny.

I think it is quite obvious that they are using Silk Road as an excuse to go after Bitcoin. The real target here is Bitcoin, and not Silk Road.

I am grateful for all the work that you are doing on bitcoin, and I didn't mean to say that you are power-hungry developer.

However, it is frustrating to see how the issue of separating the protocol version from the client version was rejected in this Github issue without any clear explanation.

This is what I have been trying to say all along.

It's not just that. The currency is also a store of value.

With the savings of early bitcoin hoarders appreciating wildly, the question is where does that value come from. Is somebody actually loosing in order for them to gain so much?

The issue as I understand it is that Satoshi's implementation in C++ is considered the reference implementation, and the protocol is defined by it, hence the coupling between the protocol version and client version. Besides, despite bitcoin now being a multi-million economy, the protocol is still not fully documented, and no production ready alternative implementations exist for that reason. Bitcoin is still considered beta software, and the protocol is supposedly still evolving. Additionally, Satoshi's code is so complex that nobody really knows if the current protocol covers all the code paths in his implementation.

I also think that a lot of the core developers are opposed to alternative implementations as that will dilute their power over the bitcoin network.  

I personally believe that we should have a simple and clearly defined protocol as soon as possible, and encourage a proliferation of alternative clients.

If it wasn't for Silk Road, they would have found another excuse to clamp down on Bitcoin. The true reason as to why they will be doing it is the threat that Bitcoin presents to the government monopoly on the issue of money. But of course they will never say that - instead they will look for excuses to shut it down such as money laundering, child pornography, and all kinds of other outrageous things that they will have no trouble convincing the general population to accept.