Well, but it is backed by a pool of ever-increasing fiat funds. With a rising pool comes a rising value. In a way it would more resemble a stock than a fiat as the profits of the pool (raised through bid/ask spreads), would slowly raise the value of the money. Also, people could eventually buy themselves into the pool, thus further raising the wealth of the ecosystem (at minimally growing amount of coins in circulation). This isn't the same as fiat at all, that's the whole point.

I don't have the time right now to do it myself (hence me throwing it out here to maybe spark some collaboration), but perhaps eventually I will. Unlike your perception I am very much interested in the success of a cryptocurrency that can both be used as a tool for store-of-wealth as well as a means to facilitate monetary transactions - something that Bitcoin fails to achieve (and in my eyes due to aforementioned issues always will fail to achieve).

So yeah, nobody has to contribute to anything, but if you do feel like you should or could then I am still waiting for arguments as to why such a system would fail.

I beg your pardon? My proposed system would not create new coins simply due to lack of economic activity (aka stimulus packages), but correlate to a certainly finite amount of users participating in the system. Furthermore, it could most certainly also be coupled with restrictions to prevent over-growth.

The point of such a system would be to prevent too many coins to fall into the hands of a few, while still accounting for inflation in its value (the bigger the $-pool, the higher the wealth/backed value of the coins within the system.

Would you be willing to specify why such a system doesn't work?

edit: Also, the faucet would not be meant as a welfare instrument at all - it simply be a tool to help promote initial distribution.

When? It would make sense for them to buy up small amounts here and there to maintain the image of high value for other investors to follow suit with their price expectation, but I doubt they have nearly enough money to catch a falling knife - that would be very stupid on their terms.

Then again, this is clearly an obvious problem with such high price-fluctuations: the power of early adopters to screw everyone over is simply too high.

I proposed this in a different thread before, but maybe we actually need a completely new Bitcoin system with the following attributes:

- no early adopters, the amount of coins in circulation is directly proportional to the amount of transactions/users
- early coin distribution could be similar in form to the original Bitcoin faucet (perhaps coupled with some randomness to prevent exploitation)
- some form of Bitcoin central bank, that pledges to buy up coins once under-valued, and sells them in times of higher-demand. This job could be divided into groups of many individuals (much like present day mining pools), with profits going into proof-of-transaction costs and in parts inflation increase of total monetary pool handled by the system + personal profit of participating/pledging individuals
- big money dumps are to be handled OTC, via auctions so not to destroy the Bitcoin ecosystem. What amounts a large dump is to be defined as percentage of the size of the ecosystem.

optional:

- no central exchanges
- ?

I believe this would make a lot more sense for a long-term successful crypto-currency system than the humbug we have now. Nobody knows how much coins are even still in circulation/destroyed/waiting to wipe out the next big wave.

Also, it doesn't have to happen tomorrow - a system like this would be a lot fairer to all market participants, regardless of their time of market entry. It could also run alongside the present day system, so people can choose whether or not they prefer gamble or stability.

The dimensions are bigger for sure. Back then, all people knew was up-up-up.

This time it's different:

- They already know the market can easily crash, so maybe patience is wearing thinner.
- There is more money involved - meaning if the backers of a certain price-level step aside, it is practically impossible to stop the momentum.
- We are still in No Man's Land. $50+ is not cheap for something that is not backed by much other than the hopes of future wealth.

The remaining factors are still the same though. Illiquid markets, weak infrastructure, no stabilizing forces in place to prevent over-speculation/mass-panic; and what good does a store of value do you, if it doesn't pay you back the stored value when you need it the most?

I expect to see single digits again. You simply can't do shit with your Bitcoins yet other than hold and/or sell back to fiat - and sooner or later a lot of people will come to terms with that, at which point we will see a price-normalization.

Interestingly enough, even if mass-adaption was to take place - I believe the forces of cashing-out will outweight the forces of buying in. You would need a massive amount of automatic buyers that are willing to take all those coins streaming back into the markets from $-priced goods/services. Those merchants won't wanna hold, that is not their business.

So how much $ really is in the BTC system per available coin. I'm not talking about recently traded coin, but available coin. Since people are certainly also withdrawing fiat, I doubt the answer is more than $10.

Find someone/something willing to buy up ALL remaining coins for a certain price (without actually doing so), and you have your fair price. The rest is just circle-jerking.

Gib' auf, du hast keine Chance! Lass' es uns beenden! Es ist einfacher für dich, viel einfacher. Du wirst sehen, es ist gleich vorbei.


Reminds me of the old $13 resistance back in 2011. Those of us around long enough to still remember know how that went...

This may not be a very popular question around here, especially with all the BOOM/DOOM posts of late, but perhaps a very necessary one for all of us to ask at one point in time.

What would happen if the Bitcoin system (as is) was so fundamentally/socially flawed that it would simply make more sense to start anew?

Introducion:

Bitcoin itself is nothing but a protocol - people trading Bitcoin as a currency/commodity often forget that the price they are willing to pay is just for the few Bitcoin (or fractions thereof) they are purchasing at that time. Once that transaction is done, the inherent value of those purchased Bitcoin is again 0 until someone else is willing to then AGAIN pay some Fiat X for it.

The willingness to pay any amount X however is directly correlating with the degree of trust users of the system are willing to put into the trading system as a whole. That does not only mean trust to the technical aspects, but also to the underlying (utilizing) society in general.

One could say that the success of any crypto-currency is directly correlated to the amount of acceptance and adaptation amongst its peers (this could mean hundreds of thousands of micro-traders, or perhaps only a few reputable big-name market participants). If, due to trust issues, that acceptance was to falter, the system as a whole may be prone to fail.

Problem:

The main point of concern of non-Bitcoin users to the Bitcoin system (apart from technical issues that may or may not occur at one point in time), is that that the distribution of Bitcoin unfairly favours early adaptors to the point that they could wait indefinitely to then dump their share and cause ridiculous amounts of price drops (either directly or indirectly by initiation). We all hear the term PONZI-scheme floating around frequently - and maybe not unjustifiably so.

I would be willing to wager that high levels of price fluctuations do not contribute to a more steady/widespread distribution, meaning a system of high volatility favours an outcome of even more volatility. Some people say this is a good thing, and that "those with a steady hand ought to profit from stupid/short-term oriented 'speculators'" - but I think they are failing to grasp that every time we see high levels of price fluctuation, we have a lot of people either already involved or on the sideline questioning the validity of the price attached to a Bitcoin in general. So in short: when if comes to social adaptation (and ultimately the success of a P2P crypto-currency system) high volatility is neither good nor healthy, and for the sake of system credibility, "early adaptors" should in fact not be rewarded to the degree that they may or may not think they should be (for possibly doing little more to the system but to sit on their coins indefinitely). Hoarding is not good when it comes to the PONZI-scheme debate, which in return inflicts heavy damages to the reputation and therefore level of social acceptance of Bitcoin in general. The system grows with people utilizing coins, creating businesses around coins in circulation, not just piggyback-riding on a wave of speculation for a golden future to come.

So, assuming that we are able to overcome all the other technical and social/economical problems that may come at one point in time (e.g. at the time and level of mass adaptation), here is my question:

Would you be willing to accept the fact that Bitcoin in its present state may perhaps be nothing more but an early experiment (doomed to fail or not); however one that may eventually lead to a more advanced decentralized crypto-currency, one which were to enjoy maybe higher levels of trust?

Conclusion

I think Bitcoin did a lot in terms of raising awareness for the fundamental necessity of an inexpensive, decentralized P2P wealth transfer system, and we should be more than thankful for it, but to treat it as the holy grail that ought not to be questioned may not contribute to our cause. In the eye of the public, the damage already inflicted to the name Bitcoin (mainly due to heavy price swings, but also frequent technical failures, and a certain amount of un-intuitiveness) may be too large for it to regain enough trust in time.

Considering that we now have a more wide-spread user-base fighting for our cause than ever, it could be easier than ever before to quickly reach a critical mass of acceptance without the disadvantages of having to deal with some of our present issues (e.g. the whole early adaptors/PONZI-scheme debate).

Perhaps we could redesign some parts of the current Bitcoin system and come up with a new one, where the amount of coins grow more closely correlated with the total amounts of users in the system, effectively eliminating most of the hoarding and perhaps also work on other present issues along the lines of de-centralization, technical/transfer efficiency, public trust into the system in general).

The time may come where we may have to role out with Bitcoin 2.0 instead of just patch Bitcoin 1.xxxxx to overcome some of the apparent issues of our time (soon to be past). Due to social mistrust, we may even have to end up renaming the new Bitcoin in general. That time may very well not be now, but I would just like to remind everyone here that the Bitcoin system is still nothing but a social experiment and technical infant at best. It is not a guaranteed-to-succeed investment vehicle, and it would (IMHO) be extremely unwise to put more assets (life savings, cars, houses, etc) into it than you can bear to lose.

I know this may be a shock to some who went all in, but hopefully we can learn from past mistakes and make the most of it.

---

Thank you very much for reading and your consideration - may we all live long and prosper!

Your mother is the attack.

hihi...

to OP:

I was making a joke. Hence the

As cunicula put so eloquently... it is ludacrous to try and use quantitative/technical analysis in such a thinly traded and highly manipulated market with high intervention tendency. And dude, believe me, I know charts and how much they tend to say shit about what is going to happen at later on to be dubbed 'black swan events'. A chart is a chart, the rest is what you read into it - all the more so at a commodity with no actual underlying value.

Also, I'm basically the guy that says bitcoins are overpriced because manipulator ruins both price stability and attraction of more investors. So yeah...

But, but, but... the manipulator!   

This is an issue of adaptation. The gold market is the gold market because it has both enough buyers willing to stabilize prices, and not enough big sellers (as the central banks need gold as means to put value to their own little fiat currencies) to destroy faith in the maintenance of its wealth. Anyone selling a house for gold either (A) intended to acquire gold in the first place to begin with, or (B) has enough faith into it that the gold will maintain its value long enough for him/her to exchange it back into fiat with no questions asked where his or her gold came from.

Without solid foundation and wide-spread adaptation/circulation, bitcoin has neither one of these attributes. It is a dream that at least I have stopped believing into.

So let me get this straight. You think anyone wants to buy a house with a commodity that is known for price volatility, market manipulation and a few thousand users at best? It's not done with a few BTC-paid-for sold items, you either have to have a constant inflow of USD or a constant inflow of items. The latter will only be happening IF the fiat currencies are going to bust and the general public will revert to trading with non-Government issued currencies with bitcoin first becoming a tool of FX and then, eventually, the tool of exchange itself. Then again... in such a doomsday scenario - who is assuring the validity of the blockchains again?

Frankly speaking, I neither see that happening nor enough confidence into bitcoins for them to make it big on its own. My hopes were high and my heart bleeds, but to me it becomes more and more obvious now that this experiment has failed, and once market valuation drops below costs of network operation it will collapse. And I say this without holding any grudge against anyone of you guys.

This being said, I wish you all Good luck. Maybe there is a small chance that bitcoins are able to maintain some value by serving as means of wealth transaction... but yeah, the rest is a bubble built on dreams rather unfit for reality.

FTFY

How does my condescending tone ring to you right now? But at least you still believe in your "wisdom of post count" theory or S03052's 3rd Wave theorem for which people pay solid money for... Karma is a bitch.

Don't say the indications were not there and don't say I didn't warn you guys - you've been stripped out of your money just like I was. Trading in such obviously manipulated markets is dangerous to plain dumb at best.  One person with malicious intentions (PWMI, formerly known as "the manipulator") is not only no ground for a rally, it's a counter-argument for any serious investors - without which bitcoin value will remain below $10 for a loong time. Some people have to learn it the hard way.

Btw - did it ever occur to anyone of you guys that people have to refill their USD deposits even in times of inflation to make the value of bitcoin increase with inflation and stable enough to cover any bigger dump? Anyone of you believe that people will put more money into bitcoins when they have to pay more for food and housing? Egh.

Expressing your opinion in a speculation forum can hardly be considered manipulation. And it is in no way nearly as manipulative as those on and off bid-walls - in fact, me disclosing my position probably makes me more honest and non-manipulative than most people around. Besides, telling people to stay out is exactly that. I could also suggest them to think about joining me in my shorts anywhere near $6 and above if they are willing to take the risk of being Zhoutonged at a short-term spike-up if that sounds more preferable to you? Either way, with me advising them to stay out I ultimately believe in a lack of substantial upward buying pressure which will inevitably make prices go South again - hence my short position. So no worries, I got my story and leverage straight.



The difference between you and me is that I don't tag along "people" who believe a post count is a valid indication of market experience and prediction accuracy. Looking at the "arguments" you provided I choose to just drastically maintain my position. And believe me when I say that I have better and more important things to do than to wrap my head around what you think would be most appropriate behavior for anyone without a 500+ post count or not - apart from the initial lulz of exposing your so obviously flawed paradigms.

And the greatest thing about financial markets is that I don't have to convince you or anyone of my opinion, I can just let my money do the talking... so in fact, my particular advice to you would be - less talk, more injections.

And as for S03052... well, if he charges for his opinion, he certainly must be a true genius, eh? There is always a 3rd wave - it will go up to $3 for sure! Cheers.

That's fairly inaccurate. You actually have to buy through most of these ask 'walls'. However, even if they were fake, they are substantially dwarfed in significance by what is going on with those several 10k BTCs worth of will-disappear-anytime-once-you-bought-enough-of-my-overpriced coins. You and your proud 600+ posts, which btw prove nothing of an argument other than that you got too much time on your hands and obviously no pretty gf to keep you from it, will see -  but I sure as hell don't make the same mistakes twice. My advice to anyone willing to listen would be to stay out of this blatantly manipulated market. I for one will keep up my shorts.

I don't trust those 50k walls at all... they are obviously the same ones that disappeared at 6.4 and 6.6 2-3 days ago when we were at 7.19 with practically nothing to go to 9. Without them, there wouldn't be any real support above 5.20/40.

You fools are being played again.

Glad your ASCII penis wasn't directed at me.

I could be wrong though, but I don't see why professional traders couldn't just add bitcoins to their list of traded securities even during work hours. In fact, for some it may even be the one thing they could legally trade without having to ask for approval.

It's imho probably more likely that bank transfers simply get approved and released after 4pm on Bitcoinica's MtGox account, which then causes their asterix to disappear for an hour or two.