4x from it's lowest point ? Yah, about 50:50. You never know when another bubble is due, and this here bubble poped rather abruptly so there is enough momentum for another one.



Back to 250 ? Not this year, the trauma is to recent.

That can't be, efficient market and all. If bitcoin looks like it's on track for major adoption, fools will throw their money at it treating it as a "store of value". Therefore causing volatility, therefore breaking bitcoin as a currency. It's a self defeating prophecy caused by the hard limit on supply.

Money should not be a "store of value", especially high risk internet money. You should have a guaranteed inflation of 3-5% a year so that you don't keep more than you are willing to spend in the short run. The inflation tax should go to a charity you select.

If you lost the chance to sell high relative to the purchase price, then you incur an opportunity cost. If you bought high you have a capital loss. Even if you tuck your head in the sand and mumble "aaaabaaabababaaaa my bitcoins are all I need aaaaa..." you are still losing money during price swings.


They don't call it "resistance" for nothing.

Are we talking about bears trapped with a heluvalot fiat in unverified gox accounts ? Ya... it's a sad state of affairs...
Here's to hopping they don't get raided by the Japanese police before we can extract the loot.


People like to have their decision validated and appreciated by others. Once the "predicted" event happens, even by sheer luck, they like to gloat and think it was their superior intellect at play. And it feels so good to be right !

So much for the "$100 is the new ..." theory.

A past graph would be nice, to put things in context. Maybe add some distinguished points with important news stories, like google does in trends.

Where is a liquid shorting market ?

Yeah, but it's the perfect crime. If they manage to buy back at lower prices, there's not even any basis for a criminal complaint, you have your coins back. If questioned they will tell the police they covered the coins "that the hackers stole" out of their own pocket. Maybe some civil liability for not being able to access your coins for an extended period of time is it's not already covered in the TOS.

I don't get it, what's so hard about keeping track of the unfunded orders ? They don't come into play until the price reaches their level, at which point you can check the account balance before commiting the trade. As for updating the visual state of the order in the browser, you can do that by scanning all orders every few seconds, not at each and every trade.

On the face of it, this seems like a problem that a single InnoDB transactional engine could do at a few orders of magnitude faster than mtgox is moving. You only need a few tables to handle the users and orderbook, and simple queries. Binary logging for backtraking, battery backup for the main storage for instant commits and you are NASDAQ. It's really not that of a complex problem.

The only contention point is at the market server, all else can be load balanced and parallelized. If you DDoS the front end there's absolutely no reason for the market server to lag - it's sits on a separate firewalled machine for layered security, as does the withdrawal bot holding the hot wallets and bank passwords. Don't waste my time with captchas, stick a minimal fee on each trade and HFT is impossible. All other bots are good and provide liquidity.

This could have been a "from the desk of Tom Williams" classic stunt: sell the coins on the bubble and buy them back later during the claims process. There's zero liability since they will eventually return the coins, they were indeed 'hacked' (the Google link disclosure) and they don't need to raid more than 1% top worth wallets to make millions. It's almost dumb not to seize such an opportunity.

Yeah, but why not play the market like a boss and earn 20-30x your money in a few months span ? Before you burn me at the stake as an evil speculator, realize that such actions help stabilize the price, buy when it's cheap and sell on the tip of bubble. People playing the bubble are preventing it from happening.

So it's not the cold blooded speculators that ruin the bitcoin market, looking for a short time profit. It's the greed of long term bulls: "there's a limited amount of bitcoins so if I get in early I will be RICHER THAN GEORGE FUCKING SOROS !". Such stupidity attracts sharks like a bloody fresh kill, and they stabilize the market back by feasting on the dumb money. Without the long bulls and the "store of wealth" promise (an economic impossibility), there would be no speculation and BTC price will stay rock solid.

No you couldn't. Just admit it for your own sake. You would have continued until bankrupt. The higher you peak, the more powerful the impetus to go back in and "win it all back". You need to get hit hard, like be thrown out in the street, to really drive the point home.

There is no such thing as luck and gambling is a waste of money. Do something productive with your life.

That's an interesting theory Impaler, but I don't believe it can be more than a butterfly effect, the initial trigger of the speculative mania. When bubbles hit Bitcoin the trading volume increases 10x relative to the mining revenue. Even if miners dump all production and stock at that time, it's too late to stop the greed and mania, the demand is simply too large.

C'mmon people, try to keep up.

Fact A. Mining difficulty follows price, at a certain delay needed to provision hardware, etc.
Fact B. Cost of mining is directly proportional to difficulty
Fact C. The majority of miners are not long in Bitcoins and seek short term guaranteed profit

Put A, B and C together and you should see a stable high price for more than a few months will force miners to sell most of their inventory to stay in business.

Regarding C, even if you cover mining expenses out of your own pocket, that's still a capital inflow that enters Bitcoin. You just bypass the market, that's all. The miners simply can't do that long term for any arbitrary price. Say you cover the price of rig today, and it's wonderfully profitable. 6 months from now the cost of running your rig is the same but the share of hashing power and corresponding btc revenue has dropped to the point where you can just break even. But the rest of hashing power growth is in the hands of miners who aren't long and will hit the exchange every day.

When it dipped the second time, I had various buy orders at 30 ... 60. I couldn't get 100% back in and I lost the 120 secondary peak (sold all at about 100), but still, it's almost double money for free.

I think this is the best strategy when buying: buy on the long run, when market looks bear and "stable" and prepare ammo for the next bubble. Wait at least 6 months for the previous bubble to deflate before buying. OR, buy during panic moments and sell back after hours/days (higher risk).

I believe this is the worst market to buy in, an overheated "stable" high, with trigger happy people watching the price, ready to get out. It's a game of chicken with low potential upside and high risk.


That's not the correct way to think about it, if you observe the interes/price relation of previous events they are perfectly correlated, there's no delay between the two lumps. So you will never be able to milk the very last people who enter on the peak, the only way to get their money is to have an even higher news peak today or this week. And I'm just saying the news space is saturated and the message is no longer greed inducing, but caution inducing.

This just in:
http://www.google.com/trends/explore?hl=en-AU#q=bitcoin&date=today%201-m&cmpt=q





The low point's tooltip says 53 (47% drop). That's the biggest drop to date and given the news dynamic I don't see how interest can pick back up. I concur 100% with SlipperySlope, the news has changed dramatically: it no longer invites greed but caution. The Gox verification queue is probably just a myth.

Disclaimer: I'm a perennial bear that made a small fortune during this bubble and it's subsequent bull trap, so yeah, i'd like the satisfaction that I got out at the right time.

I'm saying that $100 will make miners put a cashflow pressure on the exchanges that they weren't historically able to fill without a media induced mania; in a regular day there's simply not enough fiat entering the bitcoin system to cover the expense of mining at $100. Yes, bitcoin's security costs an amount proportional to the price of bitcoins, and someone needs to foot that hardware and electricity bill.

Sure, for the short term, miners can play the market and hold those coins - after a sudden price increase the difficulty is still low. But on the medium term, due to the competitive nature of the mining market, the difficulty will go up and the effective price to mine will follow the BTC price. There's nothing miners can do about this, difficulty will eventually catch up and eat their large profit margin until only the most efficient miners survive which are forced by the laws of physics to sell.

Note, I'm not saying that $100 is a "wrong price", there's no such thing with Bitcoin. I've acquired at 5-10$, sold at various 100$+ points, got back in an 50$ and liquidated at 100$. It's all in the timing. $100 might be a great price if you are expecting a speculative upswing, but $100 long term ? I don't think so, not if something fundamental changes in the immediate future.

$100 means that 360.000 new dollars need to enter the market every day just to cover the mining revenues, never mind short term speculators cashing out. A typical day of Mtgox trading during Sept-Nov last year moved $500.000, before the media frenzy. That's total volume, including day traders or older depositors who shift back and forth. Let those figures sink in for a while.

The price will never follow the exact same pattern, the market will internalize any collective memory and will try to outsmart it. That being said, usually the downward slope of the bubble is long and drawn-out, as you can see in the "Post-bubble 1" chart above. This is basic psychology: on one hand people really want to believe the highs were based on fundamentals and they don't let go cheap of something that is "worth" 250$, on the other hand if they bought at $100+ the don't want to acknowledge their loss. I submit to you exhibits B and C, the Japanese real estate and stock bubbles:



The NIKKEY during the same period:


So no, I don't think were gonna see single digits for years to come.

There's one critical difference: Satoshi held no more coins than he mined himself, while Opencoin holds all coins in existence. Please follow this train of thought and, tell me where I'm wrong:

- Ripple becomes highly successful enabling huge internet trade, people love it and Opencoin valuation grows into the billions, has it's own NASDAQ IPO etc.
- Opencoin still owns the majority of coins in existence and plans to sell them for decades to come
- The US government/congress is concerned about the anonymity features of Ripple and asks Opencoin to backdoor it to make tracking easy, or face repercussion
- Since you can't make money as a US company by ignoring the law, the only way to realize your investment and sell the coins on the long run is to comply with the US demands; your board of directors will cave and if not the stockholders will force them
- There is an outcry in the community, people fork your public source and vouch not to upgrade to your trojanized version; a forked chain emerges that doesn't do tracking, in parallel with the official chain
- Since you are either the owner or the grandfather of all coins in existence, the forked chain has no idea what are the coins you still hold and what coins you have given away/sold in the past, thus the forkers can't purge your control form their chain
- You will therefore end-up holding the majority of coins in the alternate chain too and there's no way to prevent it, except the trivial case where you still keep the bulk of the funds in an easy identifiable private key
- You institute a free for all in the alternate chain (it doesn't cost you anything) and crash it's value, therefore killing it, or at least vaporizing 99% of the duplicated wealth there, so that it makes no sense for anyone to switch to it


You should not confuse ripple accounts holding the money with actual servers running the consensus algorithm. So you don't have to trust anyone to use XRP, except maybe the server you connect to if you have a thin client. When running a verifier node (for example a ripple gateway or large merchant), you need to carefully chose your peers so as to have a global and uncorrupted view of the network. Verifiers essentially form a darknet; you can freely connect as in a "whitenet", but you can't participate in consensus.

It's an intriguing idea that needs to be formally explored, but I can't fault it for the time being. I cannot but wonder if convergence is possible after a network split; in Bitcoin the most powerfull subnetwork will force it's world view, while here all subnets will have 100% consensus and it's not clear how the local views can be reconciled to form a global view.