Perhaps we could update the tulip bubble meme to... garlic.

http://www.guardian.co.uk/world/2010/jul/30/garlic-chinese-commodity-bubble

"One broker, Li Chunting, told the Global Times newspaper: "Garlic beats any other kind of investment, including stocks and real estate. I just need to wait for several months to enjoy the price difference.""

About a year later...

http://www.chinadaily.com.cn/china/2011-06/19/content_12730878.htm

"Garlic prices have tumbled more than 35 percent over the past three months"

Tulips, dotcoms, garlic, bitcoins.  The market sometimes turns manic and investors pile in for the simple reason that others are piling in.  Soon enough, there's a feedback loop and the price rise becomes exponential.  Inevitably (and it always does) the bubble bursts and prices revert to their long term trend.

There are the usual 'but this time it's different' and 'the market is supported by fundamental X and won't fall because of Y' arguments.

Humanity has been documenting economic bubbles for almost 400 years yet it seems we haven't learned the lesson yet.  We probably never will.

Garlic hasn't failed as such.  It's still tasty in many dishes and there will always be demand.  But that doesn't mean the bubble hasn't failed thousands of speculators who joined the garlic gold rush and invested their savings in it (or worse, borrowed money to invest). 

In some ways the garlic bubble mimicked what we saw with bitcoins.  Early 2011 the price starts to rise.  Speculators eye the gains and invest either directly in buying bitcoins or in hardware to create them.  Supply inevitably massively exceeds demand, people who got in early start to cash out, and the price collapses.  Ipso facto, a classic economic bubble.

To the question of "what I'd do now", I would encourage bitcointalk.org users to remove gambling, lottery, pyramid and ponzi scheme ads from their signatures (the latter even if it's a joke).  This forum is the premiere forum to discuss all matters bitcoin.  As a new user, if I saw people advertising more unsavoury uses for bitcoins I would instantly approach the whole matter with even more caution.

How does your service get around money laundering and anti terrorism legislation in the USA and other countries?  Do people who want to transfer money have to identify themselves with sufficient ID?  This is more a follow up to the original question of transferring money between countries, and bitcashretail.com was cited as the answer to that.

Also you have at least 2 spelling errors on your front page.  "onvert" and "BitCashRetai.com"

"BitCashRetail.com is designed for Merchants and Sellers to get the maximum rate of return on what they have to sell at no cost*"

"* Some fees apply, please read the Terms Of Service"

Aren't these two statements directly contradictory?

I have investments in various companies too, in resources and service sectors.  I don't have anything invested in Australian dollars directly, but all the companies are Australian and that has a direct effect on the currency's value through exports, etc.


There is an interesting debate on various investment forums at the moment, that the value of gold, silver, and other commodities that are traditional hedges against inflation will get crushed in the coming years due to credit deflation.  The idea is that no matter how low interest rates go, and how much central banks intervene, if people aren't willing to borrow there is less credit therefore less money in the economy.  A prime example is Japan: effectively 0% interest rates for a decade yet precious little growth.


One of these is not like the other ones, one of these is just not the same.  Maybe we can email Satoshi and arrange an interview for his opinions.  Anyone know where we can contact him?

None of the above.  Gold, silver, Australian dollars, and paying off mortgage debt.

"The fundamentals of bitcoins as digital currency make it indisputable that they will replace paper currency --- backed or unbacked --- in the near future"

I'll eat my PC when the USA gives up the US dollar, or the Japanese abandon the Yen, or the Chinese decide the Yuan is no good and decide to use bitcoins.

Bull = bull
Bear = bull in disguise
Someone yet to hear of bitcoins = bull waiting to happen

Would some people like to talk down the value of bitcoins so they can get in cheaper?  Sure.  But bitcoin is a big boy now.  It has been around for a relatively long time (Internet time) and shouldn't be affected by the jawboning of a few people.  The only way one should reduce the value of bitcoins is to sell them off and depress the market.  But that means they already have a bunch if bitcoins to sell, so why would they want to drive down the price of something they already own?  It doesn't make sense.

The comparison with tulips is a little flawed, but it does highlight the maina which people can fall into as they attribute great value to something that essentially has none.  Sure, tulips were never viewed as a serious currency.  They didn't require electricity or run on the internet.  But they did show the trap people can fall into when they think 'it can only go higher from here!' and 'it's different this time!'.  Tulips, dotcoms, houses, bitcoins.  It doesn't matter what it is, people can turn manic.

This post is mirroring a few others that have appeared on this forum.  

It all sounds a little like a conspiracy theory.  Someone big and powerful is deliberately running the value of bitcoins down just so they can buy them at a much lower cost.  

Hey, anything could happen and be happening.  But I would caution people against putting too much trust into this world view and acting on it.  They could lose a large amount of money chasing the bitcoin price on the way down.  It's possible bitcoin has had its moment in the sun.  Bubbles rarely reinflate.

For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

Indeed.  "Free" just means paid for by someone else.  That someone may be awfully pissed when they find out who has been chewing the kilowatts.

There's another model of "free" too: solar power.  I have just had 1.5kw of panels installed on my house.  Of course, they only work during the day time, but even then I wouldn't mine with the generated power even when it's free.  The power is worth more as an offset to my electricity bill than it is fed through the bitcoin sausage machine.  Worse still, I get a feed in tariff bonus which means the power is worth even more not being used on bitcoin mining.

I had a 'mine and sell' mentality from day one.  Who could know what the future value of a bitcoin could be?  I originally sold some at $7.  Was a bit painful watching them go to $15, then $20, and upwards through $25.  To the moon, and beyond, was the general feeling of bitcoin's value on this forum.

I kept mining and selling, progressively through the 20s, high teens, and dumped the rest at $12.  Looks like a pretty damn good decision right now.


By mining and not monetizing their bitcoins, miners took on a considerable amount of risk.  I maintained bitcoins were a high risk, highly speculative investment.  Many disagreed.  I hope not too many people were burned on the way down.

The funny thing is, bitcoin does its 'government free, bank free' currency model just as well whether it's valued at $1 or $100.  Bitcoin hasn't intrinsically changed in nature.  It's still the same libertarian commodity it was in January 2011.  It's just that it's worth a lot less fiat currency units now than it was a few months ago.  If we value bitcoin as a commodity based on its fiat currency value, doesn't that devalue bitcoin as a whole?

The interesting thing for me is, who exactly is doing the mass selling?  Are newly 'mined' bitcoins being dumped?  Are people who bought into the bubble and started catching falling knives in June/July/August cutting their losses?  Or are we seeing early adopters who maybe bought bitcoins at 10c each thinking 'well, if I don't cash in my 10,000 bitcoins now they'll be worth $1 each by the end of the year'?

I don't buy the bitcoin bull excuse that only stolen bitcoins are driving down the market.  The market has been falling since June, so unless we're seeing mass theft every couple of weeks one would think we're fresh out of stolen bitcoins to monetize.

Since every bitcoin transfer can be traced, I wonder if someone has genuine statistics on who (as a early/mid/late adopter group) sold on the way from $20 to $10, and $10 to $5.

People people, it's all okay.  I've just plotted bitcoin's price on a log graph and it shows we're still in a massive bull boom right now.  Everybody buy! Buy!

Or Panic! Sheer blind panic!   

The 'wall' is being slowly chipped away.  It all depends on the resolve of the people who put it up whether they choose to pull the bids or not.  Do they think bitcoin is heading lower anyway?  It would be silly not to remove the bids in that case.  Do they think they can stop hundreds of sellers who may panic at any moment?  Good luck.

Let me guess, bought 300 at substantially more than $4.70?

That mountain of bids at $4.47 and $4.45 right now looks rather impressive.  Someone with a lot of cash doesn't want bitcoins to fall much further (than they already have).  They really put a floor underneath the falling market.  Will it hold?

Seems like the perfect crime: steal something that's valuable, easily transportable and easily traded for money.  If the victims go complaining to police in their country nothing can be done.  "Lol wat? Bitcoins?" would be the police response, followed by the difficulty in chasing someone down from the other side of the planet.

It's a shame that a distributed, controlled by no one currency has a real Achille's Heal in the exchanges.  Every time an exchange gets hacked and its coins stolen we see a mass sell off of bitcoins and a hit to investor confidence.  If someone would manage to gain access to MtGox's stash then it's all over red rover, the thief would have enough bitcoins to keep the price depressed for years.  They've tried before, I'm sure they'll try again.  It's only a matter of time.

Bitcoin is currently rallying to $4.60 from about $4.90.  Seems to have found some support for the time being.

That was clearly typed with just one hand.  The other hand was, well, very busy! 

That's what he wants you to think that he wants you to think...