Dumb economists ignore human action and incentives. Just want to model everything. You have to look at social effects, too, because Bitcoin is a community. Even if the selfish miner attack did somehow work, people would just boycott it and/or move to a new fork. Social behavior isn't in this man-child's model.

Hell yeah the BIT is in overdrive! They started with $2-3 million in seed funding as I recall, so they've brought in more than $12 million in less than 6 weeks. That's $12 million that would likely not have been invested at all, given the nature of the BIT. And likely to grow greatly after such a rocket start.

And yes they do buy from miners, large holders, and other dark (off-exchange) sources. They are probably making a killing, and their investors are going to be ecstatic and telling their rich friends.

If for some reason the Chinese government decides to put some of its trillions of dollars in T-bonds into Bitcoin... Seem ridiculous only because it's probably a bunch of old men, but some of those old men have to be approving the official news coverage. They have to have some understanding on some level.

And continuing with this wet dream, I could further speculate that unlike gold, which the Chinese government is encouraging its citizens to hoard partly probably because they could confiscate it later if needed, they can't confiscate bitcoins, so they may come to the conclusion that they have to buy them directly.

Few people understand this, even though it's crucial in order to understand the price movements and trends.

China busts through 1600! Restraint? Ha!

1609!

The perks of being in Japan, mwahahahaha

I leave for a few hours and like 20 new pages of posts. I could spend all my time just reading and posting in the Spec forum at this rate.

I always imagine Bitstamp as an old codger, always cynical and the last to approve anything. It'd be nice to see Bitstamp lead a stellar rally for once.

Remember this next time people complain about wealth being overconcentrated with the early adopters. This is how wealth gets redistributed.

This is the dynamic I predicted a few weeks ago, which looks like it's playing out:


China doesn't care about MtGox ATH that much, and the rest of the world doesn't care about 1600 round number of yuan much, etc. So we should see less stickiness at round numbers with this nice balance between the 3+ exchanges.

As for the huge wall, it's to be expected at an ATH where so many people have bad memories of failing to sell or not being able to sell. It could also be Roger Ver or another Bitcoin saint throwing their weight around a bit in an effort to keep the rally at a sustainable pace.

Fair enough, but you should add a "utility" category as well. Right now Bitcoin is only for advanced users (or highly motivated ones...but wealth and security are quite motivating).

And it's not going to fall that far when it corrects. It's vaulting much higher, as expected, and will correct somewhere higher than $200 when it does, probably much higher.

Voluntarism doesn't aim at a society without force, only a society without "unjustified" force. That is governance.

The key difference isn't lack of force, but lack of centralized (monopoly) control of force. The axis that matters isn't voluntary vs. involuntary, which is just a word game as everyone will define "voluntary" and "coercive" differently, but instead centralized vs. decentralized. The fact that decentralized systems end up comporting more with libertarian ideals is not a result of people arguing for libertarian ideals, but instead a testament to the sensibility and workability of those ideals. 

Rape has a negative connotation, but government (the word itself, meaning a system of laws) doesn't. Rape is always bad; government - or if you prefer, governance - is only bad if it is centralized.

I used the term government deliberately here, both to maximize the contrasts at play and to be more accessible to those not famliar with ancap-style arguments.

Interesting points, miscreanity.

One thing that occured to me recently is that Bitcoin is a government. Not a coercive central monopoly government, but a system of laws. These laws are not just strictly enforced, they are absolutely unbreakable. You cannot commit a "crime" in Bitcoinland, so no criminal justice system - no police or courts - are needed. No legislature is needed because the laws never change.

What you can do is leave Bitcoinland, by not participating, by not accepting BTC as payment, by not putting your savings in BTC or using bitcoins to buy things. Unlike nation-states, though, you can opt out of Bitcoinland's governance without moving away from your current location. You can "exit in place."

Bitcoin is therefore a non-territorial government, also known as a panarchy or civil association - a "club"-style government where you can opt in and out as you please, to the extent you please, and you can be in more than one such "club." While and insofar as you participate in Bitcoin, you are bound by the laws of the protocol (the Constitution, as it were).

Let's stop and appreciate the amazing advantages of Bitcoin law compared with traditional types of law:

1) Bitcoin law is non-coercive; it is entirely opt-in
2) Bitcoin law is unbreakable and requires no enforcement or adjudication or prison system
3) Bitcoin law is truly democratic in the original sense of "power to the people," not by the power of voice (voting) but by the power of exit (forking, or non-participation)
4) 1+3 means there is no such thing as "tyranny of the majority" in Bitcoin, unlike in a classical democracy

Yet Bitcoin is only one aspect of our lives; it (so far) only covers the financial sphere. It is a government in that it governs our financial dealings to whatever extent we want it to, but it is not a complete government because there is much it doesn't cover: physical harm, fraud, contract law, torts, etc. There are some things that can and are being built on top of the Bitcoin protocol, like colored coins and Mastercoin (additional opt-in governments that you can freely participate in in addition to your participation in Bitcoin), that can handle some of these things.

It will be up to us to devise other intelligent systems that utilize social incentives to attract people into effective and favorable legal structures - of which Bitcoin is one example. Perhaps private courts operating through reputational structures that have yet to be designed. Perhaps even criminal law could be handled by such courts, but for that I leave the argument to Hasnas, Friedman, Rothbard, and others (see The Enterprise of Law, edited by Bruce Benson).

But there is something of still more immediate relevance: not just building the essential features of decentralized governance, which will be a great challenge and take many years, but providing avenues to opt out of centrally monopolized aspects of society that are now still largely central-government-controlled: information/news, education, scientific funding, assistance for the less fortunate, standards, banking, and of course money itself.

Central government doesn't need to provide education, but it does (even private schools are heavily influenced by government funding, etc.). Now the Internet is providing a VASTLY superior alternative, in every conceivable way: veracity, efficacy, cost, accessibility, lack of bias, and encouragement of actual critical thinking rather than status games.

Central government doesn't need to provide information, but it does (even independent news networks develop close ties with government and know who butters their bread, not to mention government regulations raising the barrier to entry for media organizations, inducing a centralizing effect). Now the Internet is providing a VASTLY superior alternative, in every conceivable way: veracity, speed, presence of debate, lack of bias (because many sources), cost, and accessibility.

Central government doesn't need to give money to the less fortunate, but it does (even private charities are heavily influenced by tax breaks and people's biases and economic ignorance due to centralized education and media). Now the Internet and Bitcoin are enabling a VASTLY superior alternative, in every conceivable way: fairness (not coerced from others), efficacy, cost (not mostly lost in a bloated bureaucracy), speed, focus, and degree of actual betterment of circumstances. Here I speak not only of crowdsourced donations and private charities, but also of the lightning efficiency of a free market at bringing down price levels, thereby making people way less poor. Not to mention that everyone who participates gets wealthier each year by leaps and bounds.

Bitcoin is a vastly superior alternative government, and there already are other such alternatives with more coming, and I contend that the future of how to effect social change will be largely about creating systems like Bitcoin that change the groundrules that are available for people to work within.  

Just as climbing to a higher summit lets you see more of the landscape, if something major needs to happen in the world for Bitcoin to continue growing exponentially, it will happen.

When Bitcoin reached $1, it seemed impossible for it to go to $10 so soon. When Bitcoin reaches $1000, the monumental changes needed for it to reach $10,000 won't seem so monumental. At $10 the BIT would never have been established, but the BIT is the only way for institutional investors to buy.

Higher prices enable higher prices. What once was fantasy soon becomes yesterday's news. This is how exponential growth presents itself in the eyes of linear human thinking.

"Usability F+" !?!?

Bitcoin is working at A+++ level as a store of value that is hideable and can't be confiscated (and rises in value...rapidly). There is no asset in the world that can even come close. As a currency it might be F+ but who cares? Gold 2.0 now, Currency 2.0 in a few years.

"belief they're be worth more in the future" isn't a bad reason to buy unless there's reason to believe they won't be worth more in the future. The next reason you gave is "technology is immature," which can and likely will be remedied in the future, making it good to buy now.

Transactions don't matter yet because Bitcoin is more Gold 2.0 than Currency 2.0 right now. Not a problem; Gold 2.0 is worth an incredible amount to the people of the world, so that alone could drive the price up 1000 times.

Once we are above $10,000/BTC we can start to worry about transaction volume and merchant adoption.

^ Golden post.