Someone just panic-market-sold c.200 coins on Gox to bring the price down to $900. Who does that with such low volume?
I guess some people see it as a last resort to get a "decent" price. They forget that it's hard to get the money out. |
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what is this by the way? This isn't like the usual bubble I see graphed. It's double peaked and seems to be coming down in a series of bear traps.  This is what happens if people come here and use the terminology they learn in this echo chamber without knowing what it means.  I lol'ed |
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Where did this video show up? I'd like to know how old it is.. The pumping is now being directed to the dumb masses.. Further into the video they show that bitcoin is trading at $500, so it can't be that old. |
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Where did this video show up? I'd like to know how old it is.. The pumping is now being directed to the dumb masses.. |
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Why on earth would you store your value in any but the most scrutinized, monitored, long-running, stress-tested, brilliant dev-backed blockchain? I could see diversifying into a few alt-ledgers, but not more than a few, and only in proportion to their excellence in terms of dev team and track record. The rest would be speculation based on future promise, but that is even more limited. The marginal utility of each additional alt-ledger very quickly drops off.
The fundamental value in parallel blockchains each having a different hashing algorithm is that it mitigates some of the risk of one of the hashing algorithms getting broken. Altcoin software with such trivial tweaks can be effortlessly kept in sync with the latest bitcoin developments through build scripts, so I disagree with your dev-team and track record argument. This argument is self-contradictory. If the tweaks are trivial, there's only trivial value (and unknown risk of harm) in using them. If they aren't trivial, dev team and track record matter. If the tweaks are useless or of unknown value/harm, there is no reason to switch no matter how easy it is (just puts your wealth at risk needlessly). If the tweaks are useful, known to be harmless, and can be effortlessly kept in sync with Bitcoin, they will soon be incorporated into Bitcoin. Also scrutiny and stress-testing and overall moment-to-moment monitoring will naturally gravitate toward the main blockchain.d Perhaps my use of the word trivial is confusing. By a trivial tweak I mean for example replacing SHA256 by SCrypt as in litecoin, because bitcoin's design is modular in the actual hashing algorithm, i.e. it will work no matter what hashing algorithm is being used. The method in the source code that calculates the hash can be directly replaced by another without affecting anything else in the code. It is undeniable by now that there is some form of value in such tweaks as witnessed by the litecoin price, which is not equal to 0. If it were not the case, why not just re-release Bitcoin 2 - exactly the same as Bitcoin, but launched today? Then you could really instantly incorporate all development changes from Bitcoin. And people would have a chance to be an early adopter all over again. That's all most of the altcoins are. They just offer a trivial tweak as a gimmick to get people to switch, since "there's a chance!" it might prove superior and become king.
To me this is actually not unreasonable at all. As long as the scalability issue with bitcoin is not addressed and the network keeps growing at its current pace, transaction fees will have to go up (and I've seen a bit of complaining about transaction fees already here and there). This creates incentive for an alternative blockchains with cheaper fees. Add to this the early adaptor dream and it might actually gain a foothold (again, I'm thinking of litecoin). On the other hand, bitcoin miners have an incentive to kill off new chains, and so the market will have to find a balance. If bitcoin-only payment processors will not accept the most popular altcoins, I foresee the creation of portals that will do the exchange from altcoin XYZ into bitcoin under the hood for a commission, just like we can buy Amazon giftcards now with bitcoin to enable us to spend out bitcoins at Amazon. So the merchant adoption argument is also moot. Eventually payment processors will be forced to adopt altcoins, because these exchange portals eat their potential profit. I would like to make clear that I have no stake in any altcoin whatsoever, I'm merely speculating about the future of the cryptocurrencies space, and I'm extremely excited about the next chapter of it. It's rather ironic that decentralization is a bitcoin keyword yet people find it very difficult to accept that we may have to decentralize away from one blockchain. Is it because their beloved currency won't become worth millions because of it? |
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BitcoinTraderFX, goomboo wrote a detailed plan on how to develop profitable bots for bitcoin trading in this thread: https://bitcointalk.org/index.php?topic=60501.0I've never tried it, but he's reporting huge gains. As for very short-term scalping, I have serious doubts about whether that will pay off in the long run. I can tell you however that 1-2 hour scalps have worked very well for me. |
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An 80 BTC or so ask seems to keep popping up just below 1000 on bitstamp. It gets bought up, a minute later there's another. Stealth wall?
Probably a bot slowly selling off without trying to scare the market. I'm wondering if it's the same player who bought the 900+ BTC on the way to breaking 1000 USD on stamp. Pave the way past a resistance, sell what you can over 1000, sell the rest to cover whatever you didn't manage to sell yet. If this is the case we shouldn't see much more than 900 sold this way. Otherwise, who knows. This sounds like a trading strategy that can be used in late stages of a rally to keep the downside risk to a minimum, while still grabbing some juicy profits. If enough people do this at the same time it would definitely amplify the drop as the short-timeframers all want out at the slightest distortion of that cycle. |
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Except of course that the teams/infrastructure/systems behind the alt-coins pale in comparison to that behind bitcoin. For example- Facebook is the dominate social network- by an enormous margin. But there are other social networks out there as well. Does facebook have to stay nimble to stay ahead? Of course it does- and so will Bitcoin. But that doesn't mean the alt-coins won't be valuable in their own right.
This is exactly the argument that is often used which I'm arguing against, this comparison with facebook. My point is that moving value from altcoin to altcoin will be nearly frictionless in the future, whereas moving your personal profile and friends between social networks is of course not. |
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The way this is managed in the stock/futures markets is by hedging with options (think insurance policy).
So if there were such a thing, for every $1000 bitcoin, I would pay say $10 for a Put Option. Then if bitcoin crashed to $800, the Put Option would pay out $200 or so, covering my losses. Sounds like an insurance policy, right!
If bitcoin kept climbing, the $10 Put Option would be worthless, and I just look at like I paid an insurance premium.
Unfortunately, I don't see an analog to bitcoin where this can be done. Gold has been suggested, but the correlation is not secure enough. If Gold were correlated, then you could just BUY a Call Option on Gold for $10 (as an example). Then if bitcoin crashed, and gold went up, your Call Option would pay you.
For a market maker to step in an create such an option, they would need a place to lay off their risk.
But it will come soon. Until then, as always, stay vigilant.
: )
cj
mpex.co offers trading of bitcoin options. However, those markets are highly illiquid.. |
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Here's something controversial:
It is well known that bubbles need a signal to pop. For example, in 2012 we had the news that pirateat40 would terminate BS&T, and in april this year we had the mtgox DDOS which ignited a selloff. I think that bitcoin is primed for a correction and I think the catalyst this time could be the dramatic growth of LTC/BTC (and other altcoins) over the last few days.
The market is slowly waking up to the idea that in the future, conversion between altcoins (and bitcoin) will become nearly frictionless, removing any barrier for value to shift between altcoins. Due to open source, any improvement to the bitcoin software can instantly be adopted by the altcoins. Moreover, this could be a solution to bitcoin's deflation problem: Altcoins can absorb new money that is seeking to enter the space of virtual currencies, as we have already been witnessing with litecoin.
I like to compare this paradigm shift to the exchange decentralization which we've seen after all the pain caused by mtgox since April. This time, the pain is caused by the extreme valuation of bitcoin and the perceived unfairness of the early adaptor advantage.
i agree. only ONE thing where i differ. why do you suggest that the altcoin-rise could spark a crash like 2011/2012/April? i mean those were more corrections in terms a longterm approach not crashes. but given your thought process altcoins could possibly KILL the value of bitcoin completly and not just a correction. Good point, I should have been more careful using the terms correction (e.g. April) and crash (e.g. 2011). I'm speculating that both scenarios are possible at this point. If it becomes widely accepted that bitcoin is losing value to litecoin, then this will have a reinforcing effect, and a crash is definitely in the cards and might kill the speculative appeal of cryptocurrencies for a long time. At that point we can hopefully start actually using them as money instead of an investment. |
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The logic of litecoin advocates is self-defeating: for litecoin to prosper, it must wrest its market share from bitcoin (remember it is almost a carbon copy with minimal changes). - If this is not possible, then litecoin is worthless.
- If, on the other hand, this is possible, then litecoin is also worthless (along with all other cryptocurrencies), because hundreds of new altcoins will appear every year, diluting the market share of bitcoins, litecoins and all other altcoins.
In other words, Litecoin is an interesting experiment on indirectly bypassing the Bitcoin emission limits. If this experiment succeeds, this means that emission cannot be meaningfully controlled in a decentralized way and all cryptocurrencies are therefore worthless. Since there is a fundamental demand for virtual currencies, I think the second point is not likely. I believe that the truth is somewhere in the middle, as I tried to explain in my first post. |
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This could be how the altcoin bootstrapping cycle will work (as observed from litecoin):
1) CPU/GPU miners move on to a new altcoin due to miner saturation of their current favourite altcoin (possibly due to ASICs)
2) security of new altcoin increases due to computation power
3) valuation of new altcoin rises and warrants the development of ASICs
4) repeat
So the trick would be to follow the CPU/GPU miners.
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Why on earth would you store your value in any but the most scrutinized, monitored, long-running, stress-tested, brilliant dev-backed blockchain? I could see diversifying into a few alt-ledgers, but not more than a few, and only in proportion to their excellence in terms of dev team and track record. The rest would be speculation based on future promise, but that is even more limited. The marginal utility of each additional alt-ledger very quickly drops off.
The fundamental value in parallel blockchains each having a different hashing algorithm is that it mitigates some of the risk of one of the hashing algorithms getting broken. Altcoin software with such trivial tweaks can be effortlessly kept in sync with the latest bitcoin developments through build scripts, so I disagree with your dev-team and track record argument. I do however agree with the computation power argument, it is hard to bootstramp a new altcoin into existence without a powerful enough community of miners, and I guess that's where part of the value of bitcoin (and litecoin) stems from. This might be a clue on how to value new altcoins: Is the hashing algorithm different enough from the existing ones? By the way, as we're getting closer and closer to the (artificial) limit of 7 transactions per second on the bitcoin blockchain, spreading transactions over several blockchains can be a partial solution to the scalability issue. So at least they serve the (short-term) purpose of being a fallback mechanism. |
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Another thought: By decentralizing away from one hashing algorithm (SHA256 which was designed by the NSA), less confidence in the security one algorithm is needed.
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(1) it would be incredibly stupid for either of them to start using Litecoin, because if alt-coins start eating at Bitcoin's share and causing crashes & instability, all of crypto loses. Since they'd basically start competing with themselves if they started accepting Litecoin, they may as well continue with only Bitcoin.
So you're agreeing with me that part of bitcoin's high valuation is due to the (currently existing) friction to convert to altcoins? What if those barriers disappear? (2) Everyone knows that Bitcoin is the only crypto I can actually buy things with. The rest are like Bitcoin in that their speculation is high, but unlike Bitcoin there's nothing at all behind it.
From a technical point of view it is trivial for payment processors such as Bitpay to start accepting altcoins. |
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Litecoin doesn't yet have hedge funds buying into it, as far as I know. Much of the current growth of Bitcoin is being caused by institutional buyers and funds such as the Bitcoin Investment Trust on Second Market. If LTC can attract those kind of investors, then it could get a lot closer to parity with BTC. Until then, I suspect LTC is simply in a bubble. BTC's price increase can be sustained by continued institutional buying, whereas LTC doesn't have that type of buying to sustain its current rally.
True, but smart money moves before institutions do. One may be able to cut short Winklevoss' ETF plans by starting a cryptocurrency index fund. |
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Taking it a step further: If all the exchanges accepted both bitcoin and litecoin, their price in USD would have been a lot closer. Mtgox and bitstamp and others essentially act as gatekeepers.
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the rise of LTC and other alts is just a bubble. People wantto buy "more than 1 expensive coin" and buy 25 LTC instead.
It is just a psychological thing...
We saw in in april too: BTC/LTC went up very fast and then crashed t the "new mean".
This will happen again... (already sold 40% of my LTC this night)
I've seen this argument a few times by now, but I'm not convinced. The exact same can be applied to bitcoin vs. gold or bitcoin vs. fiat. In the end valuation is subjective, and the nature of cryptocurrencies (open source so easy to replicate) entirely levels the playing field. |
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Here's something controversial:
It is well known that bubbles need a signal to pop. For example, in 2012 we had the news that pirateat40 would terminate BS&T, and in april this year we had the mtgox DDOS which ignited a selloff. I think that bitcoin is primed for a correction and I think the catalyst this time could be the dramatic growth of LTC/BTC (and other altcoins) over the last few days.
The market is slowly waking up to the idea that in the future, conversion between altcoins (and bitcoin) will become nearly frictionless, removing any barrier for value to shift between altcoins. Due to open source, any improvement to the bitcoin software can instantly be adopted by the altcoins. Moreover, this could be a solution to bitcoin's deflation problem: Altcoins can absorb new money that is seeking to enter the space of virtual currencies, as we have already been witnessing with litecoin.
I like to compare this paradigm shift to the exchange decentralization which we've seen after all the pain caused by mtgox since April. This time, the pain is caused by the extreme valuation of bitcoin and the perceived unfairness of the early adaptor advantage.
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I think this should be the future of virtual currencies. At a technical level it is not difficult to develop a wallet that connects to numerous virtual currencies. Then your wealth will be expressed in terms of the altcoin index. I think the rise of altcoins will (to some extent) dilute the value of bitcoin and solve its deflation problem. I think the next big move in the cryptocurrencies space is that the market will rebalance the value of bitcoin with respect to the altcoins.
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