There's very little short volume right now for whatever reason. There's plenty of offers to loan out BTC on Bitfinex right now, but nobody is biting.

A possible interpretation.

I suppose we'll find out soon enough - as soon as Bitcoin deposits are re-enabled at the major exchanges, even.

A wave of panic selling due to the 0.8 accidental blockchain fork.

Then the permabulls hauled the price back into place.

The nice thing about all this Gox instability is that it's giving me a chance to really iron out the corner cases in my trading algorithm. Already caught a couple nasty cases where the program would have flubbed the math if I hadn't been watching.

Stick to the plan.

BTC may look like it's on its way to the moon, but we're still in the zone where anything can happen. Unless you're a wizard, the only way to win in a volatile, emotional market is to decide on a strategy and follow it relentlessly, no matter what your gut says.

Let's not get ahead of ourselves.

Heh. Sorry I ran out - only got so many dollars on hand to pass out to starry-eyed dreamers. Hard to get more into Bitfinex without either eating wire fees or taking the slow boat through Dwolla and Gox.

I'll see if I can get more money in before the current optimism dries up, eh?

As far as I know, there's no equivalent. There's no Bitcoin asset that's in such demand, with such low supply, that the volume has to come from shorts in order to exist. Of course, that might just be because, in the current buildout of the Bitcoin economy, options are about the most exotic financial instrument available.

I got into Bitcoin in December of 2011 - just around the time the price was at its nadir. Since then, I've mined, speculated, and bought and sold BTC-denominated goods.

And now, I'm finding myself filling out my tax return for 2012, and having to manually go through all these transactions so that TurboTax can calculate everything properly and send it off to the IRS.

I know the basics - translate BTC income to the dollar value from when you got the coins, and then when you spend it, count the price gap as capital gains/loss. But to do so is... quite a chore.

Has anyone written any tools to automatically generate this information from the transaction history on a list of addresses? Or, alternatively, found any other ways to make the process easier and less painful? It'd be a big help, if so.

Not really "confiscation". Promissory notes were made invalid, but it didn't change anything for people who actually held physical gold.

I think everyone's too worried about the potential badness of a hard fork.

Whenever we've had to do it before (e.g. for P2SH), there was a huge sunrise period, with the new rule only coming into place if, by block height X, Y% of the most recent Z blocks indicated in their coinbase that they would support the new rule.

At that point, miners have already agreed, so when the fork arrives, the old behavior's blockchain won't be able to compete. Voila! The new rule has been adopted and the "original behavior" fork dies in obscurity.

We've already done this at least once, when P2SH went in. The behavior will only change if the blockchain shows it'll be a smooth transition.

Bitcoin transactions take 6 confirmations to clear; thus, bitcoins cannot move faster on average than 1 hour per transaction. Thus, at the busiest moment of the year, the total value of all BTC in circulation is guaranteed to be at least equal to the total value of all transactions that were submitted in the previous hour.

I'm estimating "the busiest hour" by multiplying the busiest second by 3600. Admittedly, that's going to be inaccurately large (and thus imply an inaccurately large BTC price). But other than that, all the assumptions I'm making are maximally conservative (for instance, that every bitcoin in existence is moving during peak transaction volume - as mentioned, any BTC that are not would increase the given minimums), so I'm comfortable with these calculations as a "minimum price" in the given scenarios.

Paypal's peak transaction processing is about 100 transactions per second. Assuming that their average transaction size is still $57 (the 2005 number), that's $5700 per second, or $20.5 million per hour. To process the same amount of exchanged value as Paypal processes today, 1BTC would have to equal $2 today, or $1 once all 21M are minted.

Visa's transaction volume in 2011 was $6 trillion, their average TPS is 2500, and their peak TPS is 10K. So at peak they process $2.74 billion per hour. To represent the same amount of exchanged value as the Visa network represents today, 1BTC would have to equal $260.93 today, or $130.46 once all 21M are minted.

Of course, these assume that every bitcoin in existence is being constantly exchanged - that there are no cold wallets or savings accounts. Any BTC held as store of value will reduce the effective BTC in circulation and drive up the minimum necessary price further.

Putting aside for the moment the validity or invalidity of the deflationary spiral in the real world, there are a lot of people who believe in it, and we're discussing a proposed advertisement that those people are going to read. Are we going to spend infographic space reassuring people that the deflationary spiral is a load of hokum?

It's opening a can of worms that we don't even need to open. And, worse, the flowchart insinuates that "hoarding" is the sole price driver, which, for a functioning currency, is just plain incorrect!

I assume it means "if the Bitcoin market cap equaled that of these companies".

I feel like a better comparison would be "if Bitcoin processed the same velocity of money as these companies", but that's a harder number to calculate because "peak money transfer traffic" of these companies isn't publicly released to my knowledge.

I really really dislike this image.

For one thing, it acts as though "hoarding" is the only thing that will drive up the price, which says bad stuff about BTC as a currency. If we have a functioning, growing economy, what will drive up the price will be that there aren't enough BTC in circulation to keep up with the Bitcoin economy's value velocity. If "hoarding" is the primary price driver, we have something that looks suspiciously similar to a Keynesian deflationary spiral.

But on a more fundamental level, the whole chart acts like the investment upside is the big argument for BTC, which is awful for the Bitcoin community because it attracts HYIP idiots and con-men, while raising all the red flags that would keep serious investors away.

I'm offering the Bundle of Holding, an eBook collection of novels by a group of well-known RPG writers.

The titles offered include:

• Hard Times in Dragon City, by Matt Forbeck (Brave New World)
• Irregular Creatures, by Chuck Wendig (Hunter: The Vigil)
• Fable of the Swan, Jenna Moran (Nobilis, Exalted)
• Tournament of Death, Stephen D. Sullivan (D&D/AD&D, Chill)
• Hexcommunicated, by Rafael Chandler (Scorn, Spite)
• Playing for Keeps, by Mur Lafferty (the Warcraft and WoW tabletop RPGs)
• Mindjammer, by Sarah Newton (Mindjammer, Legends of Anglerre)
• Hero Worship, by Derek Pearcy (In Nomine)
• Birth of the Dread Remora, by Aaron Rosenberg (Asylum, Spookshow)
• Stay Alert, by Allen Varney (PARANOIA)

Bought separately on Amazon, the above eBooks would cost nearly $30. But when bought in this bundle, they're about $16. And I'm willing to throw in a small discount of my own, and charge only 0.35 BTC!

I've offered indie bundles on this forum previously, which I hope speaks to my reliability as a peddler of digital goods. But if you don't trust me, and have a good reputation of your own, I'm definitely willing to send first.

Two problems with that:

• Miners in countries where internet access is poor (or bitcoin is outlawed so they have to use Tor) become unable to mine, because they'll never download the big block in time (= 100% stale).
• If the block size limit is so large as to be effectively limitless, a big part of the design for the 0-reward endgame gets ruined (since no scarcity of slots for transaction inclusion in block = no incentive to outbid other transactions' fees).

I was really excited about those guys, and was considering moving there.

Then they got hacked and were down for months.

How do I know it won't happen again?

Heh. Looks like the ridiculous little thing ended up buying three times when it should have only bought once.

Ah well, easy enough to correct. Need to make a note to fix the bug, though. 

When we were going up, I was open about the fact that I was taking profits on the way.

Now that the rocket is in the middle of a messy re-entry, I am watching with amusement as my auto-trade software repeatedly tries to buy 20BTC, and gets increasingly confused that Mt. Gox isn't returning its calls.

Interesting times.