For the record, I wouldn't be necessarily against a merger of the group buys. I do however think that the shipment should initially go to the *largest* group, who will then resend it to the others.

AFAIK, that is already the case, there is technically no such thing as a bitcoin in the block chain. And where to set the decimal point is up to the users of the currency (and the bitcoin client they're using). That said, currently we trade and think in bitcoins. To change that, we would need a major "campaign" to convince everyone otherwise.

Alright. I see you're being serious, and not trying to troll, so I'm getting out of smartass mode as well:

what you describe ("speculators help stabilize the price by buying at bottoms and selling at tops.") is not speculation, at least not in any established sense of the word. You describe something that could perhaps be called semi-altruistic market participation. There can be no such thing in a (so far) tiny market like bitcoin: if we want to make it big, we have to play by the rules of a real market situation. And the only motive for trading in such a market is, well, self interest. (I'm not using the rather dumb "greed is good" meme here because in many cases, greed actually loses you money).

Anyway, my point is pretty simple: you can be enthusiastic about bitcoin and wish for it to be adopted widely in the future and trade out of no other motive than maximizing your own profits. And in that case, riding every wave (up or down) that promises easy money is simply a given.

Thanks.

People complaining about the effects of speculation on, wait for it, the speculation forum. Seriously.

Looks like we're in agreement then.

Also, your post gave me an idea: I am wondering now if there is a detailed comparison between trade volume in USD and bitcoin price. The bitcoinchart rendering doesn't give me what I want, and a quick Google search didn't help either. So I downloaded the raw data from bitcoincharts and will see if I can run a correlation test on it.

Have to agree with evolve there. If we were perfectly rational beings, there would be no difference. If we were perfectly rational beings however we wouldn't need a market to determine price in the first place :P

I'm sure you agree that the relevant volume here is USD (since that's the ressource we need enough of to maintain or raise btc price). Hence: "Volume in currency" in the following chart:




Looks good to me. Between 2 and 5 times as high as in March (when the price approached 40), and 10? 20? as high as in January, February. Maybe not the volume to support a price in the multiple 100s, but enough to support 100, 150? Why yes, looks like it to me.

Dude, what the hell. Just yesterday I added you to my list of commenters I keep track of, because you tend to make good points, and now you're simply acting like a dick.

The point that started it all was: should one use a log chart. You said, with heavy sarcasm, obviously not, as eventually all exponential growth must come crashing down.

Which might be true, in the long run, but until then the correct way to model a certain behavior is still to describe it via an expoential function.

To come back to the bacteria example: just because their growth will eventually cease to be expoential doesn't mean a biologist would not use an expoential function to describe their growth during the time were it does.

Applied to our case: there is nothing wrong with using a log chart. In fact, looking over the price development since 2010, it actually looks strongly like exponential growth took place. You only need to be cautious if you start drawing some long ass line in a log chart and expect it to continue into the next year... then you set yourself up for failure. But using a log chart to begin with is probably the right thing to do at the moment.

I love that quote. Some mathematical truisms, applied to a poorly understood model of reality.

To use your own words, "I'll give you a clue": Exponential growth happens everywhere. You disagree? Go argue with the bacteria then.

What you actually mean is: exponential growth at the same rate will eventually become unsustainable. Big difference.

Whether the growth of btc price is already unsustainable or not is up for debate. The kneejerk answer "u can never haz exponential growth!" however is utterly pointless.

His argument, if I understood it correctly, was not the overall lack of volume, but that volume did not correspond with a positive price development, e.g. when price went up, volume was low, and the only times when volume was comparably high, the price went down.

Agreed. Like I said, I read your posts with a lot of interest, and if the next corrections do indeed point downwards, I'm inclined to agree with you. But for that to be the case we do not only need to stay below the previous highs, we also need to at least seriously retest towards 50 again. We will see.

Hourly updates.

Appreciate the analysis, OP. I think you're reading maybe a bit too much into the 'volume doesn't support price action' bit... you have a point there, but it looks relatively minor to me, but the conclusion you draw is rather drastic (selling your entire btc position, if I understood you correctly). Nonetheless, I see things similar to you: we'll probably see another drop soon, but not much below 100, if at all.

@SlipperySlope:

You keep invoking the 2011 bubble, and how you expect a similar protracted slide downwards in this one as well. I'm not going to take the cheap shot and say "past performance is no guarantee of future results", in fact, I'm not even ruling out that you are right and that we have a correction of about 3 months ahead of us, bringing us all the way down to the 20-50 USD range, but there is one thing you seem to keep ignoring:

The smaller corrections (or capitulations) in 2011 followed a decidedly different pattern than those of the current bubble. What I drew in as "corrections" in 2011 and 2103 (see charts below) is to a degree debatable, but one trend seems to hold: the corrections of 2011 followed a very obvious, steady downward trend, each time reaching a lower high, and, more or less, going to lower lows with each correction.

The 2013 corrections so far however look quite different. True, we didn't reach a new ATH, but at the same time, the low points of the last two corrections are both higher than the lows of the first two corrections. If anything, I would say the corrections so far seem to indicate a (very cautious) consolidation pattern, trying to converge at a price somewhere between 100 and 130, while the 2011 pattern could perhaps be described as "reluctantly going downwards".

I appreciate your insights a lot, and I follow your posts closely, but I'm not buying your by-the-book comparison to the 2011 price decline, if the first month after this crash already looks so much different than the month after the crash two years ago.

... you're still there, aren't you?

This wall @110 is making me nervous.... just sitting there, doing nothing... silently judging me... mocking me.

I know what you're up to wall, I'm onto you. You can't fool me, wall. Nobody can fool me. Not after what happened last time.

Just do something already, wall, don't just sit there!!!!

'k. Time to go to bed.

Not sure if it's of any interest, but I am seriously considering joining the group buy for about 40btc, only problem is that a) I have nearly 0 understanding of how to build a system with those chips, and b) I didn't have the time yet to read up on this topic to determine if it makes sense for me to buy them.

3000 btc ask wall @ ~111 partially eaten, then pulled I think. Gone now, anyway

Extremely interesting read (your long answer to wobber). Thanks. And if you ever turn bull again, let us know.

That said, I find the statement below unlikely. A bigger market cap probably doesn't entirely suppress volatility, but it's quite unintuitive to think the two would be completely unrelated: two big factors in today's violent price swings are, in my opinion, individual traders with large amounts of fiat and btc playing the market, and fresh-faced newbies, trying to get in at all costs. Both factors will have less impact on the price if large, institutional investors would enter the market.