MtGox is having a few problems handling the action.  Some sporadic database errors, and now I can't log into my account.  Using the web browser's saved details (which I have always used) just gets me sent back to the front page.  No error messages about wrong username/password either.  Hang in there Gox, more trading is coming if you just let users do it.

Trying to get btc to MtGox to sell into the juicy rally before the price falls again.

MtGox says: "Database access error, please retry later"

Fail.

Some people say the current mass panic selling was sparked by Pirate liquidating his operation.  If so, he has a whole bunch of bitcoins to sell for which he obviously wants the best price.  The observation has also been made that he's allegedly liquidating on a weekend, when people can't get money into MtGox through their banks to buy up all the cheap bitcoins on offer.

So why does Pirate liquidate on a weekend if he would know banks are closed and there's less dollars around to soak up his sells?  It doesn't make sense from a financial point of view.  Anyone can transfer bitcoins 24/7 to sell, but the same cannot be said for dollars to buy.  It becomes a race between him and others to get all the dollars on offer.

Why liquidate at the worst possible time to sell?

Economy / Speculation / Re: WE HIT $14.00!!!!
Cluster2k:  "I'm surprised by this rally, but then again, I remember June 2011.  Let's hope we're not headed there again."

We're returning to more natural valuations for bitcoin.  50% rally in a few weeks and some people were proclaiming it was inevitable and logical.  Unbelievable.  

If we stop at $7 it'll be good news.  Hopefully people can wait around for the next bout of hubris and profit again.

It's difficult to imagine the price going up so high, so fast, without someone pulling the trigger.  How do we know Pirate wasn't responsible for the surge upwards, trying to sucker people in to buying at the top and then dumping?  

Hopefully this is just a correction.

Both.  The party was brief, the hangover was painful.  In June 2011 some posters on this forum stated they'd be surprised if we finished 2011 under $100/btc.  When prices are going up it's easy to keep drawing the line up and of course they just have to keep climbing.

There's a moment in every rally when more than a few people say 'great profit, I'm out of here' and we run out of 'I'll buy in now, it'll double within a month' people.  That's when the bubble bursts.

I'm surprised by this rally, but then again, I remember June 2011.  Let's hope we're not headed there again.

In the next period of time Pirate's scheme will collapse, or the interest payout will be slashed, or Pirate will get hacked and the bitcoins will disappear.  How long the period of time is is the only question here.

Many have stood up for Pirate and said a 7% weekly return is quite reasonable for a skilled trader like he.  I just hope those people aren't invested in the scheme, for they may well learn a very valuable lesson in mathematics.  Over the years countless people have claimed 'this time it's different' when claiming returns of several thousand percent per annum (compounded) are quite achievable.

Seems like an ideal, if legally questionable, use for Bitcoins.


http://www.smh.com.au/world/nose-for-money--labradors-hone-in-on-hidden-fortunes-20120813-244at.html

Police cracking down on tax dodgers smuggling cash out of Italy in their shoes, underwear and even cigarettes have announced a steep increase in seizures, thanks in part to the use of labradors trained to sniff out bank notes.

In the first seven months of 2012, police at ports, airports and border crossings seized 41 million euros ($47 million) - up 78 per cent year on year - from travellers trying to avoid creeping austerity taxes in Italy.

The best way to prevent Bitcoin being declared illegal in the USA or other jurisdiction is to make it broadly useful.  Quite often people point to Silk Road as a successful use of bitcoins.  That's a great example, but it's also a highly destructive one.  Imagine standing up in court and saying bitcoin is great because it allows users to trade highly illegal substances with much lower chances of being caught.

Bitcoin needs to move beyond being a method to pay for drugs, highly speculative investment, a means to gamble, and launder money.  Yes, people use it to buy snacks and trinkets, but the high value uses for bitcoin also tend to be illegal in many countries around the world.

Possibly.  But you should be aware it can blow up at any moment.  One scenario: it becomes too popular and is outlawed by the USA due to tax evasion/money laundering.  NSA directs its massive computing resources towards hashing and gains 51% control of the network, invalidating everyone else's transactions as they see fit.  It's a very long shot, but all it requires is the USA federal government to declare bitcoin the currency of drug dealers/terrorists/pedophiles/insert enemy group here.  Is any other government likely to object?  Probably not, as there's no state sponsorship of bitcoin.

Or bitcoin's value goes down, wiping out a portion of your savings.  Those that bought in at $32/btc last year are still sitting on a world of hurt (assuming they didn't sell just above $2 late last year).

For long term saving independent of state interference nothing beats gold and silver.  Only problem is they are difficult to move and easy to steal.

The grammar is incorrect in the title.  It should be "What happens to Bitcoin IF free energy is available?"  The premise that it's going to happen and is inevitable is inherently flawed, as no one has shown it works or is even possible.

If free energy becomes available then what happens to bitcoin is pretty much irrelevant: all of humanity will experience a revolution in living standards.

The best case scenario for Pirate's creditors is Pirate greatly lowers his payout.  7% per week or whatever people were mentioning last week is unsustainable.  It simply cannot be done.  Anyone believing a 7% weekly return is possible from any investment will quickly be parted from their money by get rich quick schemes.

Just a few days.  The super bubble coincided with a bitcoin article in Wired.com and the first popular media mentions of Silk Road.  My bet is many people took the new media interest as a strong buy signal, but as we saw it lasted only a few days.  At the time of the super bubble there were people claiming they would be surprised if we ended 2011 below $100/btc.  We barely stayed above $2 towards the end of the year. 

Enjoy $10+.  Hope it lasts.  Be prepared to dump everything if the price shows a significant downwards trend.  You don't want to sell in angst at $2 again.

This was going to happen sooner rather than later.  People see one large trader's tendencies and start betting against them, reaping a nice return.  Let's face it, when the market is stagnant and moving up or down in 1 cent increments every hour no one is really making any money.  Now that someone has come in who is willing to pump the price up by 50c instantly it's just a case of setting range trades and reaping the rewards.

The main question now is will pirate change his tactics or continue on?

Like I said a few days ago, the rally had nothing behind it (apart from rampant speculation by a few individuals) and we could end up at low $7s in an instant.

If history is any guide then one of three things is likely to happen:

1) Interest decreases to a sustainable level as the market adjusts and reacts to the trader with all the coins.  This is the best case scenario.

2) The market moves against the trader in a way the trader didn't anticipate, realising a large loss of customer bitcoins.  Not everyone can be paid out.

3) The trader disappears / gets hacked / whatever and the customers lose their bitcoins.

If it sounds too good to be true, it probably is.  It's not really different this time.  It's not a new paradigm where all the old rules no longer apply.

Watching the market action with interest.

People panic buy to cover shorts, or if there's a shortage of an essential commodity.  With Bitcoinica gone and bitcoins not an essential commodity it seems both requirements cannot be met. 

If the price starts going exponential again there may be fever pitch buying like in June 2011, but it's a race to see who can buy and cash out before the bubble pops.  The panic starts on the way down.

You're assuming his scheme will last 4 months...  Are people seriously expecting a 7% return on their investment per week?  LOL