Do view my thread on the theory whether BC are a pyramid-ponzi or not. But the USD is certainly not. It is constantly printed and is directly correlating in the best case scenario to increase in economic output. BC mining is not remotely correlating to any real world event and are mined out of thin air. But if this service becomes the "only viable" service in its market say by gaining monopoly status (60% market share) in the anon-currency world and maintaining it then as a service it can be valued at this price or even higher. That's the only question. Those investing in a "deflationary currency" are greedy individuals (we all got it a bit) trying to make money out of no produce and are thus contributing to a bubble which the actual users do not want. Frankly all you folk into this and gold and silver and so on aren't doing anyone any good. You're basically storing up funds instead of investing them back into the economy more or less hoping that everything else goes to hell. You're hurting america  The difference is that since BC depends on commerce things aren't quite the same. USD is printed without any effort, so essentially it worth nothing when the gold backing has been removed since 1971. Before, you can always exchange USD for gold at central bank so it has value. This is a critical point that most people do not understand or don't know Since then, the value of USD is purely decided by people's consensus (like: if everyone believe it worth a cup of milk, then it worth a cup of milk), this also showed how a consensus can hold value for something for decades, even the fundamental support of value is removed But the biggest question is: If that USD cost nothing to produce, how come central bank could use that nothing to buy something that has real value  This against any trading/bartering principle in the world. Again, the consensus (people's trust) are utilized by central bank BTC on the other hand, is created by using modern processor and electricity, and that cost basically decided its base value, so each BTC worth something from the beginning. This is a fundamental difference It's just BTC is new and people have not reached a consensus about how much a BTC should worth, it takes time to do this price discovery In some people's opinion, you should totally forget about fiat scam and start to trade real goods and services for bitcoin, in this way you give it a value BTW, it is not always a good thing to invest, all the investing is just a waste of resource when effective demand is low |
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In one day it lost all the gain from last 2 years, now people will understand why bitcoin is better than gold  The gold production increased, there are huge amount of gold mined out from china during the last year. But for bitcoin production rate is always fixed |
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Someone is cashing out to buy bitcoin  |
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It's interesting MtGox claimed that they try NOT to implement some circuit break system, showing they are really free market believer, not like FED at all
Bitcoin is not for the faint-hearted
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This is the century of over production, we don't need more investment, we just need a store of value to store all those excessive production. Unfortunately today's debt based fiat money can not work as such a store of value, the more you save in fiat currency, the more debt you will incur in the system. People are in urgent need of some medium of saving which can not be inflated by central banks or execessive production power
That is bitcoin
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I said in another post, people's mindset have not been adjusted to bitcoin https://bitcointalk.org/index.php?topic=176230.msg1834909Most of the people are basically conservative, so when they first see a new thing like bitcoin goes mainstream and price rise in amazing speed, the very first thought will be: This is a scam, a ponzi scheme, or in the best case a bubble It will take long time to change their mindset due to the deep learning curve of bitcoin. In order to understand why bitcoin is superb, people must be able to understand why today's financial system has some fatal flaw (It is not possible to save money without causing someone else's debt) It takes some time to increase people's general knowledge of bitcoin, especially economy wise |
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If a person want to get bitcoin, he have 2 choices: Mine or buy. If difficulty is high, he will buy, which will push the exchange price up. If difficulty is low, he will mine, which reduce the support for the exchange price
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Basically this. When people start using it to buy goods instead of buy/sell that's when we will see the platform level out. The problem now is people are over valuing their bitcoin and are starting to hoard them.
If everyone is hoarding their coins now, there will be no sell pressure, only buying order, the price will go to infinite |
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Well, no. A bubble is defined by the fact that most people do not really want the asset (bitcoin, or tulips, or whatever), but rather just hope to sell for a higher price at some point. So it is bound to collapse anyway, whatever the asset is.
Why it is bound to collapse? Given enough money supply, a bubble can last for decades, everyone can sell at a higher price, as long as they can get new loan to finance their purchase Based on your logic, there are plenty of fiat money available out there, the bitcoin price should not crash |
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ad 2: the problem with large holders is that they can by sheer volume influence the price at the exchange. So they drop coins, earn $, reduce BTC price and then buy them back at discount. So they have in fact taken $ from small investors that took flight, they themselves however retain their BTC positions. I'm not sure that this is in fact happening but I'm very suspicious... There is lot's regulation governing stock exchanges, none of which are applicable to say mtgox which opens opportunity for price manipulation. How would have thought I would one day argue for regulation Essentially everything have certain degree of speculation due to supply and demand variance, there are bubbles from time to time. But bitcoin are still in the early stages of adoption, people's mindset have not changed, exchanges are not enough robust and distributed. When there are many powerful players in the bitcoin trading, the situation will be different, each player have a higher risk, someone might go broke because of shorting bitcoin |
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I heard that it's a hardware design flaw on the data controller, nothing can be done about it until you have another newer revision of the board. Anyway restart once a day is not that a big problem, it's a cost to be a first batch customer
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I say this again, the first day I registered on their website, I get an unautorized access atempt from a swedish IP to my online wallet. So for me it's highly likely this is a fishing site trying to collect people's login details using a ASIC ordering page
And possibly that is someone else use these people's contact infomation, these people (Sam and Andreas) might have no idea their information is utilized
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I just looked at the first 20 blocks, none of them has the same generation address, is it always generate a new address for each found block?
And as I understand, in early days of bitcoin client, there is no pre-generated addresses in wallet, how the coin generation payment is done at that time?
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To put is simply as I have in another thread. Would you rather have a 10'000 BTC or a $500k house for the next 10 years?
That depends on how rich you are. If you are still in the stage of buying your first or second house, house should worth more than bitcoin. But for those holding 10+ houses and wonder where to put their extra fiat, bitcoin is the way to go - then there is a problem of some early adopters who accumulated large holdings of BTC. Anecdotal stories tell of accounts with 100k+ BTC. These players can potentially wipe out the whole buy orderbook at mtgox. Since they cannot & should not be controlled, they are dangerous to the BTC. In fact my gut reaction on April 10th was that one of the whales have had enough, decided to get some hard cash and unloaded.
Totally fine, as more and more such people cash out their coin, some one else will become the new "early adopters" holding 100k+ bitcoin, bitcoins just changes from weaker hands to stronger hands - the only fundamental difference is that with BTC new currency issue is limited however with traditional currencies this power resides with a central bank who has the power to issue new currency at will.
If I'm a commercial bank, I will ensure price stability by only put money on those elements which are not included in CPI, for example house and bitcoin. By doing so I can endlessly get money from central bank without worrying they start a new round of tighten - Now if "committee" somehow allowed for these BTCs to be created don't they have the same powers as a central bank??? Who controls BTC protocol? Public vote? Committee? Who are these people?
The coins you received as a compensate are not created as will, they are tooken from slush's pocket, no one can create coin out of thin air So far there is no clear decision making process for bitcoin, mostly rely on IRC channel communication between pool operators and core developers, and the worst thing they can do is forking the chain. But even with a forked chain, existing coins will not be affected |
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I could play roulette 5 times putting my bet on red each time. This could win me a lot of money or lose me a lot of money or come close to even.
If I play roulette 5000 times putting my bet on red each time I will more closely get the result of being down 1-2% as the house advantage dictates.
If I buy and spend bitcoin every day/week for several years the result will be a slow climb as bitcoin is a depreciating currency.
So no, bitcoin is not only suitable as a store of value.
If half of the time you are holding no coin, you lose half of the appreciation potential, it means as soon as you spent, you must buy back, then why not just buy and hold bitcoin and spend fiat |
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Before money is partly backed by gold, and gold is a product of scarcity and labour. But from 1971 fiat money is backed by debt, and this debt has grown into a huge bubble by now
It is amazing how such a scheme has been played for more than 40 years without majority of people notice it. I could only say that banks are very good at manipulate people's trust, and most of the people are just ignorant
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People always raise the example of IT products (even you know you can buy same product with less money in the future, you will still buy it today) and claim there is no problem for a deflative currency to become a medium of exchange
That is the wrong way to look at the problem, since in this example you have no alternative payment method. If you have another inflative currency which lose its value as fast as IT products, you would definitely spend that currency to buy IT products and hold the deflative currency
And this is what will happen, people will spend fiat and hold bitcoin. Even if they ran out of fiat, they could possibly take a loan to spend, since the interest of the loan is much less than the value appreciation of bitcoin, they only need to sell small amount of the coin each year to pay back the loan when exchange price is favorable
But if the mindset of everyone is that bitcoin will only go up, it is the case for retailers and merchants as well. They would rather get paid in bitcoins than in fiat, and could offer better prices that correlates to the expected price rise of bitcoins. The world you are describing is a world where consumers expect Bitcoin to rise, but merchants don't. Good call, maybe merchants will provide some discount, but that is difficult due to high volatility, a merchant might not have so much freedom in timing |
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Merchants do not have the ability to pull currency away from people who wish to hoard it, the buyer determines the currency used in commerce because they make decisions on what money to spend (if any) before being presented with products. In BTC economics their is only one thing a merchant could be selling that is attractive enough to part with the hyper-deflating money for anything that's not a drug, MORE MINING HARDWARE.
It's an economy that resembles a wild-west gold-rush boom-town. Miners hoard their gold and only spend it on Booze and Whores (SilkRoads), or buy more picks and Shovels (Avalon & ButterFly Labs) or try to play the commodity market (Mt.Gox). It's basically a big circle-jerk that's not actually producing any real surplus value and which is completely dependent on it's own continued growth.
The gold rush actually shifted the US economy center towards west coast, many companies growed out of it, even lasted until today, how is that of no real value |
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Bitcoin is worth at least $1000 a coin right now
If you can make that claim, then you can easily answer this question: Where is the daily $3.6 million coming from? It's from a tiny leaked part of those daily $2.8 billion USD that FED is printing now  |
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Hi Johnyj, just wanted to point out a few obvious things, some shortcoming in your argument. I would like to see this discussion develop and my response is by no means pissing contest...
ad 1. by in large you are correct.
ad 2. rules governing bitcoin production my be different than ones governing production of cars or tulips, but human nature is always the same. I still mine and own bitcoins myself, but after a while, if somebody offers high enough price I will sell. Why? Well since most goods are prices in other currencies, they come in handy. Secondly and most importantly like any miner I have a figure in my head which tells me how much $ I need to invest in electricity and computer hardware to mine 1 BTC. Let's say for the time being this is about $40 - $50 / BTC. As difficulty increases this figure will grow to $100-$120/BTC in the next two months and who knows what happens next. These figures are similar for other miners except for ones mining on ASIC chips or ones that have access to free electricity.
So what is someone offered to buy bitcoins from me for $1000? How about $10'000? I would sell immediately as my profit margin would be so huge I could not imagine making a better deal by waiting further. Sad fact about bitcoin is that there are some early adopters of this currency who sit in 100'000 + BTC accounts and hence every single one of them has the power to wipe out entire exchanges like mtgox. Should they be in a hurry to get some hard cash that is. Their entry price into BTC for them was sub $/BTC so... you fill in the blanks.
ad 3. value of anything is a function of supply & demand. As once one VP, from a company I shall not name here, told me: price is a balance between fear and greed. IMHO nothing sums up price psychology better. And it does not matter whether we talk about a price of a stock, bitcoin, sheep wool or whatever else.
ad 4. new technology? what do you mean by that? sure BTC has some very nice features, in face I like BTC. (So does BitTorrent.) Biggest feature of all is that it managed to survive to this point. I was very very impressed by the quick recovery after the crash two days ago. But... fundamentaly BTC trading is done by humans and there is no change there (yet).
I agree, the BTC price is kind of related to electricity cost. And that is a baseline, you normally get higher rate. There are 3600 coins generated per day and MtGox daily volume is at least 10x this amount, even all the mined coins are sold daily, it won't affect the exchange a lot. In a couple of months, when ASIC mining devices hit market at mass scale, difficulty will rise by at least 5x I noticed that you still evaluate profit in dollars term, because you think dollar is a standard unit of value, this is a mindset difference. If you dig a little into today's money issuering mechanism and compare USD with bitcoin, maybe you will get less certain which one is the real bubble: At least you have to buy equipment and consume electricity to mine bitcoin, but FED just write a number of 0s in their account to create USD A tricky question is: If someone just write some numbers in their account (say 10K USD) and transfer it to you in exchange for one bitcoin, will you give them your hard earned numbers in blockchain in exchange for these numbers created out of thin air? When bitcoin price crashed, at least 400K coins were bought at 70-120 range, who do you think were buying those coins? Those people who writing those numbers |
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