No, they are not accountable.  What you describe is simply good customer service.  If MtGox ran or allowed an advantaged trade bot and made that fact public you'd see outrage and fleeing, I guarantee it.  That's the advantage of NOT being accountable.  As long as nobody can prove anything no backlash, just additional profit.

Think of it as front running evolved.

How about that, we're on the same wavelength.  I'm interested in BTC because of the utility it offers me.

But I'm also interested in its exchange rate vs. the $ because I've been getting a massive amount of entertainment out of the technerd casino.  Plus some pocket change.

I've been hearing so much about why bitcoin should be valued at the market cap it has because of its potential to go mainstream and increase in value by several orders of magnitude that I assume *everyone* has that mindset.  My bad.

Plenty evidence that mtgox or a favored client run one or more tradebots at a greatly reduced or zero commission.  If they were, we would never know.  And armed with the knowledge of how much money is entering and exiting the exchange with 90% trade volume as well as seeing "dark pools" such a bot could vastly outperform humans and other bots both.

There's a reason real life exchanges are regulated to keep such a conflict of interest from happening.   MtGox is ... a magic the gathering exchange.  They can do whatever they wish.  They are accountable to nobody.

Why do you assume everyone has your exact strategy and position?  It's just as valid to dump, cause a panic, and re-accumulate later.  Not everyone is long bitcoin at the same price as you.  That's why it's called "trading."

Some of the bitcoin early adopters are perfectly cavalier about losing hundreds of thousands of dollars they could have otherwise had and diversified with.  It's nice to be a multi-millionaire before getting lucky in bitcoin.  Others may not have that luxury -- we're in the middle of a rough economic time, and an extra half million dollars may be the difference between having a bad time and clear sailing for many people.

Satoshi is worth over 10 million dollars at the current "buy buy buy it'll go to the moon" sale price.

All it takes is one early adopter to figure out that taking a huge dump on the market means they can wind up with MORE dollars and MORE coins than when they started.  And a lower difficulty to mine more.  And a purge of speculators. 

And that's part two of the problem.  Reliability.  100% reliability is impossible.  And if it was, cost approaches infinity as reliability approaches 100%.  So you bring in redundancy to reduce your odds of total loss.  But redundancy increases the odds of theft or error.

USB drives fail.  DVDs fail.  Magnetic media?  Consumer grade electronics?  Laughable.  About the only way to secure your private key is to etch it on several pieces of stainless steel and lock them in separate vaults.  But then usability rears its ugly head again.  And there is the possibility of someone taking a photo of it while you access it yourself...

It takes no effort to become a lol-punctuating script kiddie, just spend lots of time in the right IRC channels.  The guys finding the exploits are brilliant, I have nothing but respect for them.  The skids infesting grandma's machine with botnet malware not so much.

And you utterly missed my point.   If a successful IT pro is "doing it wrong" what hope does Mr. Joe Average have?  It's interesting that you accuse Shinobi of being a woman with the implication that women are too stupid to use computers and by extension bitcoin.  There goes 55% of your target market if not more.

Anyay, back to my personal anecdote.  Between the two of us we've delivered everything from ICU hardware (ventillators, cardiac monitors, etc) to Mars mission planning software to phone switches to brokerage middleware.  I'm going out on a limb to say our ability to learn and understand things programmable is a bit more advanced than most.  And yet, in spite of taking *reasonable* precautions we still got 'pwned' by skids.

There's a spectrum between perfect security and perfect convenience.  The problem with providing the extreme level of security needed to feel good about keeping more than a trivial amount of money in bitcoins the coinvenience is waaaaaay outside what your average scrub like myself will put up with.

Until user friendly front ends complete with *reversible transactions* to deal with people's mistakes as well as fraud you won't have mainstream dogpiling on this.  And without mainstream it'll remain a fun and quirky niche product -- not that there's anything wrong with that.  Just saying you may wish to temper your expectation of explosive price growth just yet.

And it has.  It's created a few hundred dollars for me out of thin air.  For that I thank Satoshi.  That's the very first time ever my computing hobby has directly paid for itself.

Seriously, our hardware and software stack is so tall now it's impossible to guarantee security.  With closed source hardware and software it's near impossible to prove there are no back doors installed for use by various gov't agencies or even the vendor.  Are you absolutely sure your camera drivers don't have a call home function for "support" and that feature won't be discovered and used by black hat guys?

My wife is an IT person.   She's been a computer geek and slinging code since she was six on an Atari 800.  We have a hardware firewall, she doesn't surf dodgy sites or install anything from the net and yet - her machine was pwned into being a botnet member.  Twice over 8 months.  One more incident for me, twice more at *work*, and another for my parents all over 3 years.

We've all been virus free for 18 months since then due to running 100% Linux instead of Windows, but that's not because Linux was written by gods.  But because it's less than 1% of the installed userbase.  We'd be getting 'pwned' all day long if Linux was 95%.  Back in 2000 I put a freshly installed copy of Red Hat on the net before I had a chance to lock down services and went to dinner.  By the time I came back it was already 'pwned' and running 'kokainekit.'

These are very personal anecdotes, but if you think your hardware and software solution is 100% secure and are willing to trust your entire financial wellbeing on that assumption -- well, you're just starting your voyage on the unsinkable Titanic.

Way too many bulls thinking this is a bottom, not a top.  This isn't the "all is lost" point, this is the "omfg I've made 20% in a day and I'll make another 300% in a few more days!" bubble mania.  $5.80 resistance did indeed hold, kudos to everyone who had the courage to buy in at that level and the wisdom to sell into the following rally.

Bulls like error are incredibly valuable.  We'll know it's the definite no argument bottom when he throws in the towel.  Until then it's still a bit too bullish in here for my short term comfort.

A few key words are missing from the "too many miners" theory.  3/4 of mining capacity is new, as in less than 2 months new.  While mine & hoard releasing less than 20% to the market was the winning strategy previously that is not a winning strategy for the "new" miners.  So in effect, too many of the "wrong" kind of miners are having an effect on bitcoin.

I'm not the only one estimating the BTC mined vs sold went up from a historical 20% to 50% or even higher.  That money is leaving the trading pool and winding up as fresh hardware, booze, hookers, credit card payments to finance previous hardware purchase, whatever.  And as prices (in $) fall, the less attractive a buy & hold strategy appears.  The new winning strategy becomes dump and buy more at a lower price.

While not a primary driver I don't think you can deny mining can have a negative impact on price.

Or, listen to the noise, trade, and turn that 1 BTC into several over that time period, no matter what the valuation in 2014.  Heck, if you're into 0 or 10,000, you could get that out of your system faster with a trip to Vegas.

Buy & hold strategy as sucked a bunch of money out of people's accounts during the last decade.  I was happy to hold dollars from 2000 until 2009, and content to hold income producing real estate since then. 

You're welcome to subscribe to the bagholder credo, of course, but you must pardon me if I don't.

Therein being the big difference.  All of those are currencies.  Entire economies accept them as a medium of exchange.  You can run a business without ever involving a different currency.

The current bitcoin ecosystem is nascent, you can hardly operate anything but a self-sufficient business and accept bitcoin as your sole compensation.  Anything more involved than than that will *require* converting bitcoin into a currency first by your definition increasing the value of that currency and decreasing that of bitcoin.  There are also conversion costs and fees.

Another way to look at it: a "pyramid" tied to expected sustainable growth is not a pyramid at all.  That's why many currencies have not become defunct, and most pyramids have.

Yet another way of looking at things: as of right this moment bitcoin is a value subtract.  Transactions using bitcoin cost more and increase overall risk.  Yes, shifting the chargeback risk from merchants to customers is valuable -- but only for merchants.  Customers should see it as a negative, so the end result is a wash.  Since nobody is lining up to pay for this service that I can see the valuation is purely through influx of fresh meat.


All of this is a potential long term.  It takes more effort to use bitcoin, negating the service aspect.  Irreversible fraud is just as harmful as simply creating counterfeit coins.  Decentralized has advantages and disadvatages.  While deflationary long term it's currently inflating at 7200/7000000 every 10 days.

Plus the mtgox order book has always looked like that.   Asks always dwarf bids.   The bids come flooding back as soon as it looks like the selloff is over -- not during.

Volume is rather light.  Everyone is moving into position, we're done with the big move for now.

Would you still be willing to buy if the difficulty was e.g., 20,000?  How about 200,000?  Is your decision based on a 2 million difficulty and monthly growth of 20+%?

At what difficulty would you consider $.50 a good vs bad investment?   Would the rate of network growth or shrinkage influence your decision, or did you not even consider difficulty in your "definitely buy" decision?

Bitcoin PRICING in DOLLARS has been a pyramid scheme dependent completely on the influx of dollars.  Bitcoin ecosystem itself generates roughly zero dollars in revenue, so any increase in price is based entirely on expecting an increase in fresh dollars.  Doubly so when you consider the BTC supply a slightly increasing constant.  

Faith in current and expectation of future price is most of the valuation, in other words.  It doesn't get more pyramid than this.

Bitcoin as a service and a commodity is not a pyramid scheme, but that has little to do with its current valuation in dollars.  I absolutely believe the bitcoin network will survive and provide ever increasing value long term (and by that I mean 10+ years), but I have far less confidence about the short term speculative $/BTC outlook.

Washout?  Money laundering?  The drug lords are getting back in?  BUY BUY BUY!

I have been and will continue playing with less than pocket change.  When my wife suggested I take some of my high risk gambling funds out of my brokerage to invest in bitcoin I looked at her like she had 6 heads.  No derivatives?  No margin trading?  No market depth?  Little to no liquidity for more than a few thousand $?  No accountability or transparency for exchanges?  Hard to deposit and withdraw funds?  80% of existing coins not part of the float?  Exchange failure leading to 100% loss a clear and recently demonstrated possibility?

I may be nuts but I'm not completely insane.

Whatever happens this has been and will continue to be purely entertainment and practice for me.  Being right or wrong on the short term direction of bitcoin boils down to less than I will spend on beer tonight.

Long term is a big question mark.

The readership of this forum is small enough that even if I did have a material interest in bitcoin I wouldn't be afraid to reveal my cards.

We have a consensus then?  I'm already calling $5.80 as a support level, where we go from there IMO depends on the difficulty increase delta.  If by this time next week we're seeing ~4 BTC/hour and less than 4 gigahash on deepbit I'm pronouncing the Bitocalypse beginning.

And just to second guess my butt, I put in a sell order at $9.49.  I was going to wait for the Tuesday effect to eject my remaining 2 coins, but hey.  If you're right and I'm wrong that much the better.

Not yet.  I need to see people willing to risk additional money as opposed to being content as bagholders.  I want to see difficulty rocketing back up.  Until then I know I can buy cheaper later -- if I care to.

Get back to me when you're afraid of missing the rocket ride up.