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So who are the people willing to give Bitcoinica free money?
Trading an extremely volatile asset on leverage is quite a clever idea, really.
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The last time FlipPro has been in this state was at the $12 peak.
Time to panic?
Yes indeed, FlipPro is a perfect contrarian indicator. Buy high, sell low.  |
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The last time FlipPro has been in this state was at the $12 peak.
Time to panic?
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This time it will be easier. We’ve already done this crap before. Let’s get to the point and have new alltime highs. |
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And before someone brings up the precious metal argument:
The early miners are not comparable at all, because they got the standard maximum inflation rate we enjoy now as well due to a 4 yr inelastic reward. Basically they could carry home the same amount of gold per day, alone and maybe with a pickaxe, as people would be able to now with hi-tech and millions of people all over the world.
I simply do not think that donating a bit of computer time should be classified the same as an investment in a startup like Google. Call me old-fashioned.
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Don’t you get it? Running your CPU a bit is not comparable to a $5000 investment in a startup. People do that everyday for free for folding@home etc., it’s just a ridiculous "risk" to lose the CPU time or energy expenditure in comparison to the possible gains. So yes, I think the risk/reward ratio was way higher, along with a lower barrier to entry, and I’m not at all using hindsight. Here, perhaps this statement from Hal will help: http://www.mailarchive.com/cryptography@metzdowd.com/msg10152.htmlAs an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world. Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.
So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about... |
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… once people begin to realize that not the rise, but the fall was manipulated?
fixed: ...once people begin to realize that manipulation is normal market moving? Really? MtGox hack, Mybitcoin, allinvain and all the other shit was normal market behaviour? I even think the MtGox hack could have been initiated by entities who aren’t very fond of Bitcoin … +1 if they were so smart to crack the database and the pw's, why couldn't they have changed the $1000 limit withdrawal? my own limit withdrawal was way above that amount. why go to all the trouble to alert everyone by initiating a 30 min (whatever it was) takedown to $0.001? Indeed. This was not done for personal enrichment, it was done to produce charts like this one: http://leanback.eu/bitcoin/plots/20110619195756-mtgox.png |
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… once people begin to realize that not the rise, but the fall was manipulated?
fixed: ...once people begin to realize that manipulation is normal market moving? Really? MtGox hack, Mybitcoin, allinvain and all the other shit was normal market behaviour? I even think the MtGox hack could have been initiated by entities who aren’t very fond of Bitcoin … |
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People seem to think that because the cost of mining bitcoins was lower in the old days, it was lower risk. But that's not the way I do the math. If you were mining (or working on the bitcoin software or writing exchange software) in 2009 it was highly likely that you would lose everything. All of your investment. Everything you contributed would be wasted if bitcoin simply failed, which was highly likely in the early days.
The early miner had a better risk/reward ratio, because the investment and barrier to entry with just a CPU running a few months for a few tens of thousands of BTC is ridiculous. So yes, it was lower risk because there was less investment (hell, I wouldn’t even call it an investment, only in a very strict technical sense) to risk. Thanks for your valid points, casascius. I think you are right. |
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Surely $100. Remember the $100 by Christmas people  ? Nah. 64. |
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It's unfair that those investing their time and money in the success of a startup company (an open source project called bitcoin) should earn any reward if it's successful.  Yeah right, all this mining with a CPU at difficulty 1 should clearly be rewarded with 5 digit Bitcoin sums, AT LEAST! And then those poor folks are at risk of losing their money. Man, that sucks. |
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Also, bubbles never reinflate (at least not that quickly), so surely a rally now to new alltime highs would be impossible?
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But what about the people who bought when the price was way higher than it is now? They absolutely got raped by the fact that the coins were poorly distributed. They got raped by the collapse of a speculative bubble. I'm not sure how you're connecting that to "poor distribution" (or, for that matter, what you mean by that phrase). The poor distribution becomes apparent when you have a look at this chart: http://bitcoin.sipa.be/speed-ever.png It shows difficulty 1 for a whole year. The market has never been distributing those coins properly, as there haven’t been huge panic sells like this. The early miners have been enjoying an unfairly high price AND unfairly low risks to accumulate Bitcoins. Also, how can a free market void of government influence even produce a bubble? I thought you libertarians believe that bubbles are only due to the expansion and contraction of credit? |
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And your Bitcoin wages are your main source of income? Do you not convert the majority of them to fiat money to sustain yourself?
If so, there may be a tiny Bitcoin economy.
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Exponential government debt is not in nature, and is not sustainable without serious currency devaluation.
well, i'd argue that it is "in the nature" of human beings. and who the heck cares about currency devaluation anyway?  I love currency devaluation if it’s good for Bitcoin’s valuation. |
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Are people beginning to realize? I think it will take a bit longer. 1-2 doublings from here. Then, we’ll start seeing the media go crazy again.
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I once complained regularly about early adopter unfairness, but now that prices have touched all the way down to $2 and stayed there long enough to be well within reach of anyone with vision, I don't think the complaint has merit anymore. I’m feeling the same way now. 2.x Dollar Bitcoins are a joke in relation to what has been achieved, and how mature the project is now. Anyone who didn’t buy there and doesn’t buy here despite all media attention we had and are still having cannot complain about putting down the opportunity to become an "early adopter". But what about the people who bought when the price was way higher than it is now? They absolutely got raped by the fact that the coins were poorly distributed. |
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