Sure, buy Bitcoins.  But why do you want it that high?

If it's to be able to sell Bitcoins, you're going to have a hard time convincing people that they should buy against market sentiment (IE, they lose money) so you can make a profit.

If it's because you think that Bitcoin will be perceived better if the people who bought high make their money back, feel free to bid it up, but understand that you're going to be losing money the whole time you do it.  It's a nice enough cause, but IMO a foolish one - I think the market is healthiest when supported by fundamentals, which I believe is currently well under a buck.



1) I do not want to reward the foolish speculators who have run the price up without any regard to economic reality.

2) I believe Bitcoin will be more stable when supported by fundamentals rather than price manipulation.

3) We collectively pay miners 7200 BTC per day to secure the network.  At $3, that's over $20,000 per day.  At $30, that's $200,000 per day.  That money has to come from somewhere - and if you're the one manipulating the market to keep it that high, you're the one who ends up paying for it.  Unless you have a really good reason why the price needs to be that high, that's wasted money.  (A price boom creates a mining boom, which creates a hashrate boom until mining profits reach about current levels; once it settles out most of that $200,000/day gets spent on electricity.)  The current level of economic activity does not justify that level of blockchain security.

It's my own software.  I wrote it a while back while training a bot.

I see.  I'm much too lazy to bother with that kind of eye candy.  It'd look great if someone did it, though. 

It is an actual 3d chart!  Mine just switches the axes:  mtgoxlive has time in Z (fading), whereas I put depth in Z, and the history is off to the left (one hour per tick).  My way makes time easier to see at the expense of being fuzzier on depth.


No argument; I'm very bearish based on fundamentals.  "Cheap" is just relative to the short term.

This is the way I like to view market depth.

x: 1min/px
y: $0.01/px
z: log(price)

Tick marks on top are at the top of each hour.

Edit: The bidwalls are very cleanly visible on this one (the bright red pixels).  I'd say that this is the first time I've seen a wall this large in control of a single person.  IMO it's not manipulation; someone is just buying up cheap coins.  But they sure have a lot of fiat on hand!

I care about having a stable value store.  If I spend a good part of this year earning 10,000 BTC I'm going to be very unhappy if it only buys me a pizza later.

USD's value is orders of magnitude more stable than BTC right now.  As such, the exchange rate is a pretty good measure of BTC's value.

I talk a lot about price stability, but I really don't care about price - I care about the stored value in my wallet.  That tracks with price only if the number of coins in my wallet stays the same.  If you destroy 20% of all coins in all wallets in response to a price drop you'll bump the price back up, but you won't restore the value of my wallet.  Therefore #1 and #2 don't really help.

#3 is interesting.  I've had a somewhat similar idea.  I called it a "Decentral Bank".    I haven't fully fleshed out that idea, so run with it a bit and see if you can get my mind going.


My idea is to mine it into the block chain.  We had a lot of interesting back-and-forth about it over here:
https://bitcointalk.org/index.php?topic=49959.msg600953#msg600953

http://www.memtest.org/

It's a much more thorough test.


It doesn't hurt to try, but I'm betting on a bad CPU or RAM.

We're talking about currency that tends to grow in value - the price for a typical product will be lower next year than it is now.  Call that whatever you want, but we're trying to discuss the relative merits of such a thing.  You're just sidetracking into silly semantics arguments.

When I say "deflation" here, I'm talking in the sense that "Bitcoin is a deflationary currency": that the money supply is limited and therefore prone to value growth, not that the money supply decreases.

The client pre-generates 100 addresses.  If you click "new address" 100 times or perform more than 100 transactions (or any combination of those), you'll start getting addresses that weren't backed up.  You should be fine.

Here's the link to download the blockchain: http://eu1.bitcoincharts.com/blockchain/

Start with a real memory diagnostic.  Run memtest86+ overnight and see what you get.  If you have 2+ memory sticks, pull all but one and see if that fixes it; then try a different one.

Try a different GPU if you have one.

After that it's the CPU or board.

I don't mind speculation when it's pricing in the future.  I do mind uninformed, wild-eyed speculation.

Futures are great to mitigate price risk, but how much do you see of businesses planning a quarter in advance to make a large purchase in BTC?  I don't think that's a very large part of the current economy.  In fact, I don't think it exists at all.  Shorts are much more useful for those who just want to hedge day-to-day currency risk.

In any case, none of that helps the guy who just wants to store some money in his wallet without being whipped around by volatility.


Does your electricity price move 10x in under 6 months?

In any case, I'm not arguing for pegging the price (which can't work).  I'm saying we should look at ways to mitigate destabilizing factors - like deflation - which make the market fluctuate by 10x in such a short time period.

Not exactly.  When you're market-making you don't focus on where you bought in.  You keep repricing your orders to keep them at your preferred point above the spread, regardless of how much you originally paid for your BTCs.  My algorithm sells at more aggressive prices when the market's headed down to try to reduce my losses, but it never places market orders to liquidate my position.  That would be foolish!  I'd lose all my inventory and therefore my ability to capitalize on the next uptick.  (Note, right now I actually have liquidated and I'm not market-making, for unrelated reasons.)  Doing it right, the profits you're making on volatility outweigh your losses due to price shifts.

If conditions are too bearish (like now), hedge your positions!  Sell short to cover your average BTC inventory.  A faster SMA reduces currency risk; a slower one reduces your excess trades and improves your profits.  Pick the level of risk you enjoy and go back to trading the spread!

You can't fix the price. 100% agreed there.

However you CAN create stability.  Specifically, you can reduce factors that cause instability.

Bitcoin's design has inherent economic properties that create speculation cycles.  Etlase2's proposal (EnCoin) tries to improve these problems one way; my proposal (RevCoin or whatever) uses a different mechanism; Red's (GEM) is broadly similar; plenty of other systems with varying levels of practicality have been suggested.

Perfect stability isn't possible, but we can do a lot better than what we have now.

Just something to think about:  as long as the price is at $3, we're paying $21,600 per day to miners.  Do the fundamentals support that price?  If not, the OBPS will have to shoulder a large portion of that $21,600/day in order to keep the price propped up.

Price manipulation takes more than collusion: it also requires money.

I agree with the market flooding effect.  I partly agree about deflation helping by discouraging unnecessary consumption: that's certainly true, but it equally discourages investing in high quality goods.  If the apparent cost of both doubles, what's improved?  It decreases resource consumption, but it also increases the cost of non-constrained resources; this dilutes the incentive to use the limited resources efficiently.

Ideally you only want to increase the cost of the limited resources; your last paragraph hits it square on the head.

It all depends on the price/quality ratios.  When I can get a product that's twice as good for 50% more cost, I'll take it every time.  The trouble is it's often not nearly so clear-cut.

http://www.amazon.com/Ingersoll-Rand-2135TiMAX-2-Inch-Impact-Wrench/dp/B000WMN2GU
http://www.amazon.com/Campbell-Hausfeld-TL1302-2-Inch-Impact/dp/B000TA4BDI

I've used both.  The Ingersoll is a quality tool, clearly made to last a lifetime, and it's a real pleasure to use.  The C-H is disposable; it performs as promised, but I'd expect to replace it frequently since it's not nearly as well made and it's too cheap to bother fixing.

The environmental impact (materials and energy) that go into each are comparable.  The difference is in the extra manufacturing costs to produce the finer-quality, better-engineered product.  It's basically all labor.

Is the Ingersoll worth 10x more?  Is it worth 20x more with the time-value considered?  Is it worth 30x once you start adding deflation?  Deflation's encouraging us to buy the disposable one.

If you price in the externalities (environmental damage from metals mining, carbon remediation costs for the power generation) into the materials (eg, make the metal more expensive), it will drive up the cost of each by, say, $25.  That's negligible for the Ingersoll, but suddenly the C-H becomes a lot less appealing at twice the cost.  That creates a market incentive to allocate those resources efficiently instead of just telling us to buy less stuff.

http://www.amazon.com/HP-Deskjet-Printer-C8970A-B1H/dp/B000CO9ZMI
http://www.amazon.com/HP-CP3525N-Color-LaserJet-Printer/dp/B001FWG8DU

Pretty similar performance:  around 30PPM, color, networked...  Is the latter worth 6x more?  Even its toner cartridges are worth several times the purchase price of the cheap one!  The operating costs are much lower, and the latter will last 20 years in a home office while the former will get tossed out every couple years.  The overall price/quality tradeoff is OK: pay 6x for something that lasts 10x longer and saves you money on refills in the future.  Once you add deflation in, you start having a really big incentive to buy the one that only costs 1/6th.

I wish it was just a 50% premium to get the good stuff, but cheap disposable goods have flooded the market because they're dramatically cheaper.  Making people reluctant to spend their money will encourage that trend.

I certainly agree that economic growth is not good when it's at the expense of resource depletion and environmental damage.  I am absolutely in favor of economic incentives to produce durable, long-life goods, and discouraging the use of disposable products and wasting resources.

Limiting economic growth to achieve those goals has several problems:

While it encourages you to continue using an old product for as long as possible, when a replacement becomes necessary it doesn't provide a strong incentive to replace it with a high-quality one.  Because deflation increases the time-value of money, you have an economic incentive to spend as little as possible now even if it means buying a second replacement sooner.  Since your money will be worth more in the future, that second replacement will cost you less.

Not all economic activity has nonrenewable resource costs.  Paying for telephone service, food, sex, etc, does not directly deplete resources.  There may be secondary effects (oil for mechanized farming, coal to power the telephone company), but economy-wide deflation doesn't create an incentive to buy your food from a more efficient farm; it just encourages eating less.

It also discourages investments that conserve resources: rooftop solar that would have paid off in 10 years now becomes much less rewarding if spending that money now hurts more and buying coal-power for the next ten years becomes effectively cheaper to you.

Economic incentives that are targeted directly at the externalities are much more effective and have far fewer unintended consequences.  I don't mind slowing economic growth when it's driven by those incentives, but limiting economic growth to try to achieve those goals is backwards and often counterproductive.

Disagree.  The inflation rate from new coins is about 0.1% per day.  The devaluation from the blowoff is much higher than that.