How many of you guys have lost faith in Bitcoin and sold almost all of yours?
I wouldn't say I've "lost faith", but I do believe the market is terribly overvalued based on fundamentals, so I keep almost all my money in USD instead of BTC. My goal from the start was to have a payment network, not a speculative investment asset, so I can't say I'm torn up about it. To those looking to get rich quick, good luck, but I wouldn't bet my net worth on it. |
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Got the same e-mail from the a**-holes at AT&T. The only option that they give me in their email is to acknowledge an "infection" and that I will deal with it. Reply: "Thank you for your concern. I have taken care of the problem." It's not even lying, really. -noirc takes care of the problem.  I know bitcoin isnt illegal, I just wanted to be as discrete as possible. You may want to run bitcoin through TOR or another encrypting proxy if you don't want AT&T nosing around in your affairs. |
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Price volatility.
Yeah, the dumps will eventually stop, but I'm afraid that the deflationary nature of BitCoin means we'll never be rid of speculation, and wild optimism is easily able to overwhelm market fundamentals. It's chicken and the egg: this won't be as big a problem if the BC is widely adopted (the market will eventually overwhelm the relatively small pool of starry-eyed speculators), but we'll never get there if merchants are too afraid to enter because of volatility.
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No one is going to pay $10.00 local fiat to convert money into another format to buy M&Ms at a store that already accepts local fiat. Simulating them at a fixed value isn't fine, since the value of BitCoins isn't fixed. Exhibit 1: Goods priced at a fixed USD value, sold in BTC, that can be purchased locally in fiat; yet somehow people choose to shop there. It's mostly for novelty, but so is most of the bitcoin economy right now. http://bitmunchies.com/product_info.php?cPath=29_27&products_id=202No, you miss my point. The market doesn't have one person with a monopoly on bid or ask prices. Not even close, actually. And the bot uses fiat, not Coins. Do I? I specifically said we'd trade it out to multiple players of each class until we have a functioning economy. If the bot is trading, by definition it's using both fiat and coins. At any given moment you'll have a fixed floor based on how much capital the bot has access to.
No, my model takes any amount of donations and uses them to determine the floor. Isn't that what I just said? The floor price is only fixed as long as no one in the market moves capital in or out of the bot. I'm not saying people should contribute a total of nearly the market cap for a theory - I'm saying that whatever fiat people put in to generate the floor will eventually cause the price to move towards that relatively stable value. No, I don't have the misconception that the bot has to be fully funded from the get-go. I understand your dynamic floor. What I'm saying is that the bot won't be relevant until the backing capital is a substantial portion of the market cap. If the capital pool is only 5% of the market cap, it's not going to prevent panic selloffs - someone with USD$100k invested in BTC isn't going to be reassured that your bot guarantees it won't fall below USD$5k value. An 85% guarantee would be wonderful! But that requires people donate 85% of the market cap. Only if these rational buyers take your asks offers. Without your asks being met, no transfer of Coins occurs, meaning the market price doesn't ever change at your whim alone. People are buying bitcoins at $8.5 right now. If I corner the BTC market,
A huge "if", I might add. For a single player? Sure. But I consider the market currently "cornered" by speculators and early adopters. They've locked up a large percentage of the commodity, so only a small percentage is in circulation, and anyone who wants to do business with it is doing so at a very high price/BTC. I would simulate that by having one guy buy up 90% of the coins and holding them forever. Don't get hung up on the market spike that causes; that's temporary, and the price will settle out when he's done. What I'm concerned about is if people are still using RC to do business, the coins are going to be used at a much higher value since the supply is limited to 10%. There are no forex guys in the market right now - only speculators. There's a difference? Yes, we'd clearly have to simulate a few of each class of player, all competing, if it's going to be at all realistic.
And more importantly with the correct number of players it wouldn't resemble your example in the slightest way. The market would compete and people would get a better price than the artificially high one you set your ask at. That's what I just said. Read those two quotes again. You can only force the price to any amount higher than the current high bid if you control all the BitCoins, and refuse to compromise to make a sale indefinitely. This is also not the way the free market works. No? I think you're really not listening to anything I'm saying. This is exactly what I address in this next quote: What if I just waited for your price to approach the backed value, which is less than $1.00? If I'm forcing the price high by limiting supply, the buyers will eventually buy at that price so they can complete their transactions. Sure, I'd love to hold out for $0.10 bitcoins to buy bitmunchies... But if I want my bitmunchies today, I have no choice but to pay $8.50/BTC. And I will, since it doesn't affect the cost to me, which remains the same in USD. The people trying to buy M&Ms still have the option to just buy in fiat. why would they jump through additional hoops and transaction fees to buy a grossly overpriced commodity and try to use that as a currency when they have a valid currency in their hands? Indeed, why should people use BitCoins for anything at all, since they have perfectly good fiat currency? They do it because it's an easier way to send money over distance, because Paypal sucks, for novelty, for speed, for anonymity, and who knows what else. They do it because BitCoin's properties are different from cash, and sometimes people prefer BitCoin's properties for a transaction. Eventually we might have a native economy in BitCoins, but for the foreseeable future BTC is mostly a proxy for fiat currency. This is what I mean about not understanding the theory. The bot doesn't require a fund of any amount - it just becomes a more powerful market force as that fund approaches the market cap. The market price will move towards the backing floor, and the closer the floor is to current the market price, the less distance it has to move.
By "More powerful market force", do you mean it will raise the floor? If so, yes, I get it. If you mean you're trying to maintain a soft floor that's higher than the (total donations / total BTC in circulation), your bot is going to be trampled by smarter bots; if you're really unlucky it will be actively exploited by other bots. Once BitCoin is adopted as a currency it gains real value outside of the backing fund, negating it's need for stabilization, and therefore freeing up the funds, should users wish to remove them. The purpose is to back the BitCoin until it becomes stable enough to be treated as a currency. Why does no one get this? I get it! Really! I think the reason you don't think I get it is because I'm drawing different conclusions than you do, and so you think I must not understand. The "continual funding" problem I'm talking about is a short-term one, not a long-term one. If you got $7M in donations, you'd be able to back at $1... Which won't have an appreciable effect on the market. If you get $30M, you'll have a credible backing at about 50% of market cap. It'll boost confidence a fair bit. Then the market trades up to $25. At that point, your backing has become essentially irrelevant again, but it's still way too early for BC to be considered a stable, established currency. So what do you do? Either your bot remains irrelevant, or you have to seek out more donations. And it'll take a whole lot of these cycles before BC becomes so established that it's no longer necessary. |
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Sounds interesting! Where are we going to get enough hands to simulate a market of thousands of people though? We can each simulate a handful of people. Clearly me playing a single forex trader would be silly, since I could refuse to sell anything below an absurd price. I'd do it by playing perhaps three traders who are making reasonable, competitive moves. This is not the way shopping works - The market tries to buy M&M's for the cheapest price they can reasonably get in a window of time short enough to satisfy their craving for chocolate candy.
Their price is sticky enough that we can assume that it'll stay constant over the amount of time we'd simulate (which would only be a few days). The goal of the buyers would be to start with USD and buy M&Ms through RC within 10% of the USD-equivalent. For this game, simulating them at a fixed USD value would work fine. This is not the way the bot or the market works.
That's just the starting conditions. From there we'd trade it out to a few players until the market's functioning and those players have seeded your bot with enough RC to get it running. Yes, that is correct. But the bot's goal is not to set a fixed floor price - it's to aggregate spare change from users into a democratically priced backing floor, regardless of what the price at the floor is.
At any given moment you'll have a fixed floor based on how much capital the bot has access to. Regardless, your model requires that people donate the full value of the floor, at whatever level. The problem is that if that floor is anywhere near the current trading price, the amount of donations required would be about the BTC market cap. That's asking for an awful lot of donations, and it's not something we can just do once: we'd have to do it on an ongoing basis to keep up if the BTC grows. You can make the ask price fluctuate wildly. If I suddenly decide to spend $90.00 on a Coin, I'm being a fool. If I suddenly decide to spend $50.00 on a Coin, I'm being a fool. If I decide to set my bid within +15% of the floor, you have no choice but to meet me around that range if you want to sell.
Nope. I can make the market price fluctuate wildly, even with rational buyers just trying to do commerce. If I corner the BTC market, I can force it to $10 per coin by limiting supply. The M&M buyers will buy 0.2RC, purchase their M&Ms, the merchant will sell back to USD; and it can continue on in this fashion indefinitely until I release some more RC and let the price fall. Even if the forex guys get out of the market for a bit, the M&M buyers can't trade the price down to USD$0.1, because they need to hold some value in RC at least for a little while (since wiring money to the exchange is slow so people do it well ahead of time, transactions have to confirm, the merchant may not immediately dump the coins when he receives them, etc; figure it's a 3 day cycle at minimum.), and the next buyer still needs to get his transaction going. My three forex guys won't net any aggregate money doing this, though individuals may come out ahead or behind. Now consider: This isn't a contrived scenario, because this exactly what's occurring in the BTC market right now. The majority of coins are buried somewhere and not moving. The ones that are are circling around at high prices, mostly between forex guys, but a little bit to people who're buying high-value coins to complete their transactions. Sure, assuming the bot locked at a stable price of $1.00 apiece. In practice, the bot would actually end up not being sold to, and the market would move towards the stabilized floor price. Sure, the market will settle out at some price... If it's above $1, your bot is irrelevant. If it starts to drift down, your bot will act as a floor, it'll buy up some of the excess, and the market will take over again. Unfortunately, if the market keeps wanting to drift down, you'll keep buying up more and more BTC/RC until you basically have lost most of your USD and are holding most of the BTC/RC. If the few remaining players at that stage decide they want out, they dump the remainder of their holdings in exchange for the remainder of your USD. You could sell all your Coins to me, but likely I would be unwilling to pay 1:1 for them when the rest of the market clearly values them at a lower price. Really, you would end up with no coins and maybe $20-30 USD, $60 tops. If I was the only buyer (very little demand for RevCoins) then I would be a fool to set the bid at $1.00 when I could easily set it at $0.10. Then you get $10.00, but I get all 100 Coins. What if I set my bid at $0.01? $0.001? What if the floor is set at $0.00001? What if buy 20 Coins at $1.00 and sell them at $0.75 to the rest of the market, lowering the speculative perceived value? Then when you lower your price below $0.75 for the remaining Coins (since you're trying to sell them), and I buy your Coins then?
Yes, we'd clearly have to simulate a few of each class of player, all competing, if it's going to be at all realistic. That's why I'm a little reluctant to actually do this. It'd require a whole lot of paper pushing. If they take prices near your wildly fluctuating ask price, yes. If they take prices near the bot's comparatively stable bid floor (at any value less than $1.00, for instance), then no.
They can't if I've forced the price up to $10. What if I just waited for your price to approach the backed value, which is less than $1.00? If I'm forcing the price high by limiting supply, the buyers will eventually buy at that price so they can complete their transactions. Sure, I'd love to hold out for $0.10 bitcoins to buy bitmunchies... But if I want my bitmunchies today, I have no choice but to pay $8.50/BTC. And I will, since it doesn't affect the cost to me, which remains the same in USD. Right now the majority of the problems with the idea come from the potential user base not understanding the concept or the execution because they'd rather jump to their own idea of the way it operates than read the incredibly detailed description in this thread.
Well, as best I understand it, you could provide something of a floor on the BTC, but it would require an unreasonably large investment: your bot would need a fund that's a majority of the market cap. I can't imagine that you're ever going to get that much donation, short of someone very rich doing a very nice thing. Even then it'd become irrelevant if BTC is more widely adopted, since the price will go up (you really can't prevent that), and you'd need more donations unless your floor is to become an ever-diminshing fraction of the BTC's price. We just did it right here on a public notepad. It turned out your theory was incorrect. But this was a very fun game! Let's play again some time!
I don't agree that my theory's wrong. I think it's clear that one of us misunderstands the other, and I do not concede that the error is on my side. |
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I think the $8-10 range is probably the true value of bitcoin at the moment.
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(chart)
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Sure, for the short-term, it's leveled off at 8.5. But I'm a long-term player, so here's how I see it:  It's leveled off, but that's a hell of a long slide for you to be saying it's stable at its "true value" now. |
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let people do their math all they want. like the guys who are so smart and say silver and gold are bad investments. This isn't a gold forum, so I'm gonna keep this short:  I don't have to do any math to see what's going on there. Holy fucking parabola. Intrinsic value has been left in the dust, and people are gonna get screwed. |
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Proper numerology never struck me as their strong suit after the whole "storing balances as floats" thing. I've never been able to take them seriously.
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It's a noble enough idea, IdeaMan, but it won't work. I don't think I can explain it better than others have already tried. So how about we play a game? We can pen & paper a small bitcoin economy with an exchange. You play the bot, I play a forex trader, someone else plays the rest of the market which is trying to buy M&Ms for a price that's roughly equivalent to USD$2/pack. I'll start with 100 RevCoins, you'll start with $100 USD. You try to hold a floor of $1/RC. We take turns issuing market orders.
In the end, I guarantee that:
You can prevent the price from going under $1, as long as you don't try to do anything else.
I can make the price fluctuate wildly (several orders of magnitude).
I will end up with all your USD.
You probably won't even end up holding all the RevCoins unless you stick to a straight $1/RC exchange rate.
Some M&M buyers will get screwed for a notable percentage of their money.
I'm not sure I actually am up to really doing this (it'd involve a few hundred trades to show you all the ways the market will slap you around and achieve all my goals above), but I'm hoping just thinking about how you'd approach it will make you think about where the problems are. It's an exercise you should certainly try doing on your own notepad, though.
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Eventually, Bitcoin will go back up. Its fundamentals are too strong not to.
The question is when.
What fundamentals? I consider the fundamental price to be the amount of value that needs to be stored for a few days in the (buy @ exchange > sit in wallet a few days > buy goods > merchant sells @ exchange) cycle. That will raise the price considerably if BC becomes much more widely adopted. But I don't think we're there yet. The vast majority of the current price is speculation. I believe some e-currency will eventually become extremely popular, but it might not be BitCoin. The deflationary nature makes it very prone to fluctuating value due to speculation, and that (along with the "damned early adopters" effect) might be enough to drive the mass market to another currency (perhaps another cryptocurrency which hasn't been invented yet) which they think will be a safer store of value. |
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What is needed to stabilize the value of bitcoin(beyond a larger market)
Less speculators. It's my opinion that speculation is 99% of the current price. I consider this to be a serious downside to BC being a deflationary currency: it encourages speculation and hoarding, which cause the price to fluctuate as speculators flip-flop between "up up up the value will be huge when BC gets adopted for everything!" overoptimism and the current "I'm losing everything but maybe I can hold on a little longer and it'll come back... maybe I'll sell a little so I can eat" foolishness. (No, you'll lose it all if you keep that up. It's frustrating watching people who've never experienced a speculative asset before.) There really isn't a floor on the price until actual commerce takes control back from the traders, and there's no guarantee that will ever happen: while I believe there's a future for distributed e-currency, it might not the the BC. Something else could replace it. I'm giving serious thought to how to create a currency that allows some inflation to keep the value stable. That part's easy to do through a number of mechanisms: the obvious one to me is to hand out more coins per mined block whenever the price goes too high. I have a lot of thoughts on how to do that fairly and rationally, but it really doesn't matter unless there's a way to solve the harder problem: how to inject some deflation whenever the price goes too low. You can't do the reciprocal of extra mining rewards easily. You can't just tax everyone's wallets and destroy those coins. (That would keep the price stable, but my goal is to keep a wallet's value stable.) I'm not sure there IS a way to solve that problem. For now, I'm encouraging everyone I do business with to use BitCoins. I want a stable BitCoin, and with the current design, a real commerce base is by far the greatest source of long-term stability. |
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I care very much about you too, and I'd sincerely love to provide you as much of this kind of help as you can afford: 1D4VSSSUhHJphgFk3QsHghtGm5jexk7oAH
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How is it a scam to try and help people save their homes? This is a great libertarian alternative to big government welfare solutions to the problem. It's sad that their business didn't work out, but that isn't criminal. The idea is a fine one. But if he was honest, he could have: a) turned down excess business because he couldn't handle it; b) held their check while he was backlogged; or c) refunded customers who were clearly too far down the list to help in a reasonable time. Instead, he took the money, then didn't provide the service he promised. The fact that he's only lost civil cases just means that the DA didn't think there was enough of a case to pursue fraud charges. And the DA's right: it'd be hard to prove criminal intent. It really could be that he's an incompetent douche who can't handle his money and business. I think before people trust him again, he should answer: 1) Why didn't he refuse business or offer refunds to customers he was clearly never going to help? 2) I can understand him not giving up all of his assets (it takes money to make money), but why hasn't he at least taken a slice of his profits to start repaying the people he owes? 3) Why is he unwilling to let people audit his involvement in MyBitcoin? 4) If the real story is he's incompetent managing money, why should anyone ever trust him in financial matters? |
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When will him(assume he is still alive) or other dictators discover Bitcoin?
How do you know they haven't? It'd be foolish for them to store a significant percentage of their wealth in BTC right now (and the market cap clearly shows they're not), but I wouldn't be at all surprised if there are a few dictators, kings, or other prominent characters who keep a hundred-k USD equivalent in BTC as an unfreezable slush fund in case they need to GTFO in a hurry. Realistically, though, keeping a roll of USD or EUR in their briefcase is probably easier and safer for these guys. It'd be inconvenient to find someone local to trade BTC to cash to buy airfare in the middle of a coup. |
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I think you pre-derailed this thread by labeling those negative values as "libertarian". (To restate the obvious: some assholes use libertarianism as a lame excuse for their behavior, but the reverse isn't true: few libertarians are going to claim those as virtues.)
Perhaps it's too late, but is it possible to just drop the word "libertarian" and discuss the push and pull between the scumballs who're using BC as a scam and the rest of us who're using it to improve the world?
Try this: Read the OP again, but substitute "scumball" for "libertarian", and "money" for "BitCoin".
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I see. I don't think that can be done with the API.
You could use the API to find the transaction ID and confirms, and then query blockexplorer for the transaction ID. You'd have to parse the HTML since I don't think their API does what you need either.
Note that a transaction can (and frequently will) have multiple "from" addresses. Also, if they're using a wallet service, the coins might come from the service's common pool - so if you send it back, the service wouldn't know which user to credit.
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  Bigger: http://bitcoin.sipa.be/speed-lin.pngMore: http://bitcoin.sipa.be/It's not in freefall, but I expect a gradual decline that will last several quarters or more. I don't expect the trend to change until the exchange rate rises, which I think will take a while (as discussed in other threads). In any case, we've had two difficulty decreases in a row. |
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Yes, this was in the Genesis Block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks".
It proves that the blockchain started on or after that date, and suggests that he disapproves of the current state of banking, but it's sort of a reach for anything else.
I'd love it if anyone could provide any more information. It's mostly for my curiosity, but I did put in some time reading through all his history, so I'm not asking just 'cause I'm too lazy to look for myself.
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