I have a couple of Jalapenos on order, but put the order in quite late (September).  With orders from June to August to fill I don't expect to get mine until well into next year.  May be a bit too late by then as difficulty will skyrocket and we'll be back to square one in terms of bitcoins per kWh.

I also have a bet on Bets of Bitcoin that no BFL ASIC products will ship to end users before 1 December. 

The only reason to panic buy bitcoins is to cover large open short positions when the price starts to rise.  Obviously people aren't shorting today through Bitcoinica, so where else are they shorting, and how many short positions are there?  Without crucial additional information, any statements like 'we're booming tomorrow!' or 'we're crashing tomorrow' are automatically assigned to market pumping and dumping category.

One 'killer use' might be Greek and Argentinian citizens smuggling money out of the country after a currency devaluation.  This requires them to buy bitcoins before the collapse however, which no one really knows the date of.  Value of bitcoin goes up.  Greeks buying ASICs and mining doesn't help the value of bitcoin, as they would look to sell ASAP to pay for the hardware purchases.

A negative side effect of this however would be Europe and possibly its allies (USA, etc) putting pressure on bitcoin exchanges to not take 'illegal' funds from nations where currency controls are present.  MtGox et al are near useless without integration into the global banking system (how else does one transfer money to MtGox?).  Does MtGox being in Japan make it more immune to outside influence?  No, as the USA just needs to remind Japan who it is that provides security guarantees for the nation.

If that's the cost of making a bitcoin then people are insane to buy them for $10+ right now.


The first people with ASICs are going to make a killing.  Anyone receiving their ASIC a week or so later is going to spend many months paying it off.  The window for fat profits is literally only a few days before the hash rate skyrockets.  BFL sending orders out will be a true popcorn moment for bitcoin. 

Pressure to sell bitcoins to recover ASIC costs will be intense.  Graphics cards can be used for gaming, scientific computing or sold on eBay for someone else to do the same.  Bitcoin ASICs have only one use and it'll be a huge race to the bottom to recover costs.

How much demand is there, and where is it?  More data is required to support your statement.

The price is stable as there's just not that much demand for bitcoins at the moment.  Trading activity is dominated by bots throwing bitcoins at one another and possibly extracting a small profit.  The larger swing traders aren't interested as there aren't any swings to be had.  It's a game of 'you go first' at the moment.

This idea reminds me of emails that do the rounds every time petrol prices spike.  It goes something like this:

1. We all refuse to buy petrol on a given week.

2. Petrol stations become desperate to sell and will dump prices.

3. We refill next week and get cheaper prices overall.

All this and the bitcoin manipulation idea misses the key fact that if there's demand in the overall market then just delaying it for a little bit won't have an effect overall.  Also you'll find people acting against the trend in their own best interests.  Bitcoin price collapsing because we refuse to buy?  I'm sure more than a few people will start buying at a price point much higher than any arbitrary set price.

And I'm pretty sure people using Silk Road also use the Internet, and know what Google is.  They can find this forum pretty easily.

Don't under estimate the important of this.  Bitcoin scams and thefts (MtGox, Bitconica multiple times, Bitomat, Pirate, on and on) make the news.  Block reward halving doesn't.  A pseudo anonymous currency naturally attracts crime.  It's the perfect vehicle.  Instantly movable between borders, readily convertible into cash, and when it's stolen the police pay as much attention to the theft as someone making off with a collection of Pokemon cards.

When I mentioned the Pirate scam to a very computer literate friend his first reaction was 'yeah, I knew that Bitcoin thing was a scam, yet you were so excited by it last year'.  It took patient explaining that Bitcoin was just the vehicle for the scam.

There will be plenty of opportunity for the 'sheeple' to dump coins to you.  Enjoy.

You'll know bitcoin's boat has sailed when we're struggling to find uses for bitcoin beyond narcotics trading, gambling, and buying bitcoins simply because of the belief they are going to be worth more in the future without a concrete reason as to why.

I'm not sure about the 'crying to mommy and daddy' business in seeking justice through official channels.  What other ways are there?  Giving someone a 'scammer' tag on a forum?  Scary.  Not trading with them any more?  They'll open a new account and scam away.

The alternative is vigilante justice and settling scores like less savoury sections of society. 

Meh, I have a small order with BFL and still expect delivery within the next few months.  I won't be declaring it a scam if I don't have my order by the end of October.  I'm a programmer and realise deadlines do often slip.

Do these revelations about the CEO's past concern me?  You bet.  But BFL does have a track record of delivering products so I think it's premature to call BFL an elaborate scam.

I paid for my order by credit card through PayPal.  If on the off chance BFL decides to take the money and run I have two avenues of legal recourse.  The much hyped lack of charge backs when paying via bitcoin would be a definite disadvantage here.

The biggest unknown here is how quickly the ASICs ship.  If the majority of preorders (up until the end of October) can be filled within a few weeks then you have a fighting chance of recouping your investment.  Otherwise it's anyone's guess (and the odds aren't great).

Butterfly Labs says in its FAQ they're in the hardware business therefore don't keep the ASICs and mine for themselves.  Complete nonsense.  They're just following the age old example of gold rushes where the only people guaranteed to make a lot of money were the ones selling shovels, and other mining related hardware.  Most prospectors went away empty handed.

We're the miners and BFL is selling the shovels.

When will the drama end?  Hopefully those that speculated with Pirate can get some justice, hopefully through courts.  He's taken a lot of money from people and he shouldn't expect them to just shrug their shoulders, say 'oh well' and keep quiet.  As for Mathew, well, I had no bets with him as it was pointless.  Some guy on the internet was going to pay out hundreds of thousands of dollars over a ponzi theft bet.  Seriously?  He gets a scammer tag on the forums.  Fine.  He'll just open a new account tomorrow and carry on.

Maybe we can all learn from these experiences and in the future know there is no 'it's different this time' and 'I'm breaking the laws of finance and mathematics because it's bitcoin' when investing.

It's a bit like playing in a rigged poker game.  Eventually the honest players realise what's going on and leave the table, leaving the stunned co-conspirators aghast that no one wants to play with them any more.  Bitcoin tends to hit the popular media for all the wrong reasons (drugs / hacks / scams).  People wanting to use it for something else may wonder if there's any point.  We don't want to head down that road.

Whatever happens, it will be fascinating.  Popcorn at hand, waiting for the outcome.

A small exchange being hacked isn't going to have a huge impact on bitcoin.  Bitfloor wasn't 'too big to fail'.  I can sympathize with the owners who have been the targets of theft, but ultimately if someone is running an exchange with more than a few bitcoins there they know they are a fat, juicy target for theft.  No one can claim to be surprised after the many previous exchange hacks.  Proper security measures had better be in place or it's just not worth running the exchange.  Having an unencrypted wallet on the server doesn't sound like good practice to me.

Sending more bitcoins to some guys on the internet because they requested them sounds like one of the worst things that can be done right now.

The truth hurts.  Some are still trying to deny it.

Sounds like stealing bitcoins IS the perfect crime.  Difficult to track the attacker, commodity is easily convertible into the currency of the attacker's choice, and the police (in every country) don't care.  If it's an inside job then even better.  Just declare the hax0rz got the goodies and close up shop.

Interesting.  After we saw hacks and/or incompetent management from MtGox, Bitomat, Bitconica (x2), etc, exchanges are still getting hacked.  Probably best to leave matters to the professionals with 24/7 monitoring of both hardware and software involved in the project.

Anyone else running an exchange without 24/7 surveillance and independent auditing?  Best to own up now so users can proactively flee.

People fall for Ponzi schemes all the time.  Here's a recent one from meatspace in Poland:

http://www.ft.com/cms/s/0/0c6e25e4-e553-11e1-b758-00144feab49a.html#axzz25PQZ8bGS

Poland’s Amber Gold to liquidate

At a time when banks are paying only about 6 per cent a year on deposits (backed by state guarantees), which also face a 19 per cent capital gains tax, Amber Gold was promising an untaxed guaranteed return of up to 16.5 per cent for investments in gold – a metal that has seen its price stagnate in recent months.

Some are easier to spot than others.  The above case was paying up to 16.5%pa which is well above prevailing interest rates, yet it touted itself as a guaranteed place to invest (according to ads posted by the company).  Pirate was offering 3400%pa.  Not hard to work that one out.