I think Bitcoin will at best remain a niche currency. Because of exchange costs and exchange rate risk it can never compete directly against fiat-denominated e-payment schemes (credit cards etcetera).
However, if the block size limit issue can be solved (I was surprised there seems to be a significant group of people who want to keep the 1M limit for ever) bitcoin could be a relatively succesful niche currency. In that case 1BTC would be worth at least several hundred dollars.
How is a maximum of 0.6% exchange fee too high compared to credit cards? Have you ever had a credit card merchant account? Exchange rate risk will always be there, but merchants don't have to care since there are plenty of services that provide instant conversion. Even with these services the fess are less than CC merchant fees. However, if history is any indication, the exchange rate risk will continue to be less of a factor with time. 0.6% exchange fee means 1.2% round-trip (fiat to fiat). 1.2% is more than what most credit card processors take where I'm from. Debit cards are even cheaper at around 0.3% (Of course there are also subscription fees but they're peanuts if you have any kind of volume.) First, that's worst case. I always use limit orders on bitfloor.com, so I actually get paid when my order is filled. Second, the merchant only has to convert once. Third, there are no subscription fees, but if you have any kind of volume you can get the fee for market orders down to 0.25%. Finally, those types of fees may be available for brick and mortar stores in low-risk businesses, but any type of CC processing online will be closer to 3-4% for low risk businesses, and 5-15% for high risk businesses. |
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For these type of technical analyses what difference does it make that bitcoin is a 24/7 market vs. other markets that have set trading hours (e.g. FTSE is 8 to 16:30 GMT). I'm guessing this has an impact on the daily candlestick.
Also I'm guessing you are using the bitcoin charts to determine the candlestick, so on the UTC timezone, but if the timezone was EST (East Coast US) for example the daily candlestick could be different?
why should you use any time zone except UTC ? everything is in UTC and everyone use UTC using other time zone is pointless since few or none use that and wont get the market sentiment/move Because I'm guessing most traders live in time zones other than UTC. I imagine the majority are more US based. An analysis of market activity by time could show when most trading occurs. So the "trading day" so to speak probably doesn't coincide with UTC. The "trading day" is 24/7. There may be periods where there has been more volume historically, but I expect you would find several such volume peaks if you were to look at the data. The US is likely the largest minority but I'm not so sure about majority. For these type of technical analyses what difference does it make that bitcoin is a 24/7 market vs. other markets that have set trading hours (e.g. FTSE is 8 to 16:30 GMT). I'm guessing this has an impact on the daily candlestick.
Also I'm guessing you are using the bitcoin charts to determine the candlestick, so on the UTC timezone, but if the timezone was EST (East Coast US) for example the daily candlestick could be different?
why should you use any time zone except UTC ? everything is in UTC and everyone use UTC using other time zone is pointless since few or none use that and wont get the market sentiment/move Right. You can use whatever you want, but if you want to read the candles and trade off of them you should use the same candles others are using so you make the same call. So it works based on some sort of self fulfilling prophecy effect rather than the candles reflecting more underlying market sentiments and movements. To a certain extent, yes. Candles alone are invalidated all the time, but other indicators can help identify when that is more or less likely to happen. But, in the end, technical traders rely on others seeing the same thing as them, but after they do. Sometimes they can catch a news event before it is announced (insiders give it away with their activity), but again, candles are just one very small part of the picture. Some indicators do depend on the definition of the day, but others are more continuous. |
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Don't people realize that there are trolls on this forum that want Bitcoin to fail wait for them to establish their position and just post here to spreadch FUD?
FTFY |
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I think Bitcoin will at best remain a niche currency. Because of exchange costs and exchange rate risk it can never compete directly against fiat-denominated e-payment schemes (credit cards etcetera).
However, if the block size limit issue can be solved (I was surprised there seems to be a significant group of people who want to keep the 1M limit for ever) bitcoin could be a relatively succesful niche currency. In that case 1BTC would be worth at least several hundred dollars.
How is a maximum of 0.6% exchange fee too high compared to credit cards? Have you ever had a credit card merchant account? Exchange rate risk will always be there, but merchants don't have to care since there are plenty of services that provide instant conversion. Even with these services the fess are less than CC merchant fees. However, if history is any indication, the exchange rate risk will continue to be less of a factor with time. |
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I welcome some downward movement, since I am slowly buying bitcoins right now, and I would prefer the price stays low until I get to the position I want to hold. Then the price can jump.
This. |
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For these type of technical analyses what difference does it make that bitcoin is a 24/7 market vs. other markets that have set trading hours (e.g. FTSE is 8 to 16:30 GMT). I'm guessing this has an impact on the daily candlestick.
Also I'm guessing you are using the bitcoin charts to determine the candlestick, so on the UTC timezone, but if the timezone was EST (East Coast US) for example the daily candlestick could be different?
why should you use any time zone except UTC ? everything is in UTC and everyone use UTC using other time zone is pointless since few or none use that and wont get the market sentiment/move Right. You can use whatever you want, but if you want to read the candles and trade off of them you should use the same candles others are using so you make the same call. |
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Implicitly, this increases the value of all the others because now there are BTC that can never be spent
You must see that as being a problem. Please explain. It's a problem because I sent a few bitcents to an address I no longer have a key for  (no it's not easy to do, I was just doing some tricky things and got sloppy). But no, it's not a problem for bitcoin as a whole. |
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If you think the purchasing power of Bitcoins will go up substantially and you are worried about paying capital gains tax then just purchase them by mailing cash in an envelope. Keep them for a few years and then see what happens. If Bitcoin catches on most people will accept them as payment and therefore it won't be necessary to convert them back to fiat and be taxable. Because you paid cash you are anonymous and there's no way for anyone to know how much the value appreciated.
So how should I deal with taxes if I did buy them on an exchange and the spent them after they gained value? |
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I would suggest this podcast from Goldmoney ROBERT BLUMEN DEBUNKS GOLD SUPPLY & DEMAND MISCONCEPTIONS http://www.goldmoney.com/podcast/robert-blumen-debunks-gold-supply-demand-misconceptions.htmlThe concept of Demand to Hold is important to understand the dynamics of the price of gold and bitcoin. If the Demand to Hold change (people start thinking bitcoin value is 25$ instead of 15$ and are unwilling to sell for less than 25$), the price will follow whatever be the supply and the request. Mining is a part so small over the total of the supply available (of gold and bitcoin) that if someone want buy must exchange something with someone that bough them, not from someone that produced them. If gold mined in a year is 2% of the total gold supply available, the price will be determined by the Demand to Hold of the people holding gold and the Demand of people wanting exchange other stuff for gold, not from the quantity sold by the miners. I think this is saying two conflicting things. One the one hand it is saying the price of bitcoins is a result of what people think they are worth. On the other hand it is saying that since the supply from mining is a certain percent it can't affect the price significantly. But what if the increase difficulty in mining causes a change in what people think a bitcoin is mentally worth since it's now twice as "hard" to mine? mathematically it shouldn't affect the price much but much of the price is mental. If everyone that had bitcoins suddenly felt they were worth a thousand dollars each and wouldn't sell for less........ that is how much they would be. I don't see how those statements conflict. Sure, the miners' mental valuation will change with difficulty, but since we are not the majority of supply, we can not control price, only have a very small influence. Most non miners don't pay attention to difficulty, even though it is one of the primary factors indicating health of the network. |
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Bitcoin mining is the opposite of fiat inflation.
How is this the case? Mining generates new Bitcoin. Printing FRNs (or creating FRN denominated loans electronically) creates new fiat. How is that 'the opposite'? If my theory holds, the market cap isn't the cause of any trading, it's an effect, but it does tend to prove that bitcoin mining increases the value of each bitcoin – that wouldn't happen if mining were the same as fiat inflation.
I fear you are ascribing causality here where there is none. I have seen nothing to suggest mining (i.e creating new currency) 'increases the value of each bitcoin'. Indirectly of course the process of mining; the fact there is a mining network is what gives bitcoin value therefore it is fair to say without the process of mining the existing bitcoin would be of no value but that is not the same. The usd value of bitcoin is determined by the balance of supply and demand. Nothing else. If it's going up it's because demand is outstripping supply. Increasing coin production by more mining (if that were not restricted by the process) would increase supply and usd value would decrease. As I said above Bitcoin is currently out-inflating USD and most other currencies and the only reason that isn't putting people off Bitcoin is that we can know with full certainty it will eventually be a deflationary currency. It is far from one for the few years ahead. If the FRB were to find a way of encoding a promise to do the same (halve the introduction of new currency every x years) into the way they create new dollar Bitcoin would lose a substantial part of its advantage. However, apart from the logistical implications of that I can't see them or the US (or any other) government ever agreeing to yield the monetary control they currently wield. Increased mining does increase the value of each bitcoin since it makes it more expensive to attack the network. Sure, it's still supply and demand, but this effects the supply(willingness to hold from more security decreases supply) and demand(willingness to hold increases demand). The fact that the mining process automatically adjusts to keep the generation rate constant keeps the added security from increasing the supply other than the very short term. |
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Oh noes, a 10% correction that immediately recovered to $0.30 below where it started  . |
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If the past is any indicator of how this market works, that leveling off will occur by overshooting the level-off point by a large margin, then undershooting it by a large margin, then bouncing around a few times before quieting down.
+1 that; BTC finds actual market price via wild swings. Hopefully, these swings would get milder with time, but for now we'll definitely overshoot. All Data Log  No bubble here.. Look, swings already get a lot milder, I dont see an overshoot yet... I'm a bit desperate, when do the BTC community will understand that log (%) scale charts are much more appropriate ! o.O Been there, done that. Log charts were all the rage in 2011. |
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No, you idiot. You absolutely should NOT allocate all of your savings to Bitcoins.
In fact, don't put any amount into BTC that you can't afford to lose.
Good points. Also, don't hold any USD unless you're prepared to lose half of its value in the next decade or two. |
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FTFY width=800 is your friend, although your text is tiny |
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Yeah, that's the exact mentality people had at the last $30 bubble. Didn't work out well for a lot of people......
The 2011 bubble lasted a week. There wasn't time for people to acquire a mentality. So it's actually worse now or what? Volume traded was higher, but that's maybe only because Bitcoins were considered play money then? I feel uneasy about the current low volume, but maybe I've got it wrong. I can be that more are clinging to their coins, which suggest higher prices? The 0.5% Gox fee is now equivalent to $0.1 price difference, so if people were day trading as usual for profit, we would see larger swings at this price level. A lot of traders are long and won't trade out of fear of being left behind. Ok confirmed, it is worse. What do you think will those same traders do in a prolonged correction? I'm one of those traders holding instead of playing the swings. When the prolonged correction comes I will continue to buy a set USD amount with every paycheck as I've been doing for the last 6 months. What did you have in mind for me to do? |
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Adam, just hit the buy button!  no, I have absolute confidante in bitcoin ability to out of the blue crash down 10-30%  I had over BTC1000 the fist time we passed $2. Now I'm so happy to have over BTC100. I won't be making the same mistakes again. |
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Let's say that there are couple of semiconductor manufactures, they accept BTC payment, then ...
The thing is, there aren't any. If you think there are you are delusional. That won't stop anybody from pumping the price up though... delusion is part of the bubble so: buy buy buy! If you think you know there aren't any you are delusional. There is no way you know every payment method every semiconductor manufacturer takes. I'm not saying there is, but most businesses don't publicize the details of the deals they make with each other. |
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Tested bitcoin-0.7.1-353-g3afefd8-linux from scratch on a low-spec Ubuntu 12.04 w/ 0,9GHz Celeron M CPU & 1GB ram on ext4 on external USB2.0 HDD.
It took me 2 computer resets, because bitcoin-qt would gobble up all RAM bringing the machine to a non-responsive state.
Approximately 48 hours is what I needed to finish syncing from scratch. CPU was loaded @ 60% throughout.
I always had 8-9 connections on a fast internet link.
Datadir weighed in at 6,2 GB.
The bright side is that bitcoin-qt now shuts down in 3 secs. (the GUI still takes 2+ mins to show up when launching bitcoin-qt)
Dude, memory is way too cheap to put yourself through the torture of running a machine with 1 GB of ram. |
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ASICs wont come in all at once. There will be no crash. Even if they did came out at once, the two-time increase in mining (to ~7000 coins per day) until the difficulty adjusted would be completely dominated by the current demand for coins (daily buy volume at gox - 100k btc which is like 15 times higher than everything miners could sell).
So sorry, no ASIC-induced crash. Crash still possible, but for different reasons.
Besides, the miners will just buy more ASICs, which only take bitcoins anyway (at least the only one seen in the wild). |
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