The proper version:
http://www.youtube.com/watch?v=gGY1QFEmyQk&feature=related

For those that don't know (probably most forum users) this is a really irritating ad for Coles supermarkets in Australia.

But the big red hand going down down is very apt for bitcoin.

People having been watching the price of bitcoins fall for weeks now.  If they truly believed in it they would have added funds to MtGox long ago.  The 'it's the weekend, people can't add funds' excuse pops up almost every single weekend.  Even when it's not the weekend, or public holiday.  Most of the world doesn't have a public holiday on Monday, and it's already well into Tuesday here and bitcoins are still plummeting.


People doing 'dirty' things with bitcoins (money laundering, illicit drug purchasing) are some of bitcoin's best users.

Negative growth is still growth! :-)

Have you ever traded shares?  All markets behave the same way with so-called manipulated fake bid walls.  Bids are placed by market participants and if the price of a share is collapsing the bids are retracted in anticipation of much lower prices very soon.  It would be silly and downright stupid to leave high bids that get gobbled in a falling market when the anticipated price is expected to be much lower.  I don't think there is a trading rule that bids, once placed, must be left and never changed.

Bitcoins have lost 30% of their value in the last month.  The market is not being manipulated.  It's a clear sign that bitcoins, right now, have very few actual uses apart from speculation.  If the speculators leave expect bitcoins to be sub $5 very soon.   If wealthy speculators take a bath on bitcoins then so be it (as long as they don't ask for a bailout like Wall Street does, year after year).  It concerns me however that unsophisticated and unexperienced traders are going to lose their shirts over bitcoins.

Bitcoin miners are quite wealthy.  Show me a poor person who can spend thousands of dollars on computer hardware to mine bitcoins.  *crickets*

If anyone is living pay cheque to pay cheque while mining bitcoins, they really need to have a serious look at their finances.

Anyone who disagrees with me = troll
Anyone who agrees = rational, normal forum member

The best use of money right now is not buying more mining hardware.  Depending on power costs, it takes 6+ months to pay for itself.  Lame.  Buying more hardware increases difficulty and makes it even harder to acquire bitcoins.  Lame++.  The better approach is to simply buy bitcoins on the exchanges.  You'll be helping to support the price (you do want to sell at a profit, right?) and also not actively increasing the supply of bitcoins (thus competing against yourself).  Now go forth and purchase... I have bitcoins to sell :-)

If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.

Perhaps we could ask someone who has bought up a lot of Bitcoins as to what they think and why people should continue to pile money into bitcoins today.

http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/

He allegedly (no one can check) put all his savings into bitcoins on 29 May 2011, at presumably $8.30 per bitcoin.  The price just happens to be $8.25 right now, and bitcoin has been as high as $32 and as low as $0.01 (due to a hack, but still, the guy must have been packing his pants).  He's been in for one heck of a wild ride over the past three and a bit months.  I wonder if he's still as bullish now as he was back then.

He was rather excited about the exponential growth in price back then.  "And there’s no indication it’s slowing down or saturating. Quite to the contrary: interest is picking up."  Thousandfold growth in a little over a year, and no signs of it letting up.  I wonder if he feels the same way today.

That has already happened.  A number of Hong Kong gold dealers were fooled into buying fake gold bars last year.  The forgeries were clever alloys of metals such as osmium, tungsten, silver and coated with gold to have the same density, size and weight as a real gold bar.  The bars can be made at less than half the cost of real gold.  Older forgeries consisted of tungsten coated with gold, but this new approach is harder to detect.

Truly synthetic gold can be made in particle accelerators and nuclear reactors from mercury, but it's more expensive than natural gold and also radioactive.  Not very useful and easy to detect.

Could bitcoins suffer a fatal security flaw that makes them useless?  Possibly.  It's all open source and apparently secure, but how many forum participants have downloaded and analysed the source code?  Not many, I'm willing to bet.

As to why I have never purchased a bitcoin (apart from trading and using proceeds of mining to buy bitcoins), the answer is pretty clear.  I have yet to find a product that cannot be purchased easier, faster, and most importantly cheaper in bitcoins than with a conventional currency.  Merchants automatically have to incorporate a large price cushion into their products to help counter the massive volatility of the exchange rate.  Since the products they source are purchased in conventional currencies there is no current way to insulate bitcoins from the real world.

Bitcoins are currently at $8.27 and falling.  My purchase orders at $7.1 look like they'll be filled soon.  Not to use bitcoins, but to trade them on an up tick.

I did a bit of trading.  Buy in and wait until the market rises 10% before selling.  Not sure about the percentage, but I made some money.  I am not buying any bitcoins at the moment however.  Whatever I mined was sold in the $20s and teens.  Ah, good times.  Fondly remembered.

There is a large amount of bitcoin volume not associated with MtGox/TH/etc trade traffic, but how much of that is from mining pools doling out rewards and people moving coins between PCs they own?  Does anyone have reliable statistics on what proportion of transfers are used to buy goods or services?

Mining is only really profitable if you don't have to pay for power (directly or indirectly).  Children living at home may read this and think 'sweet, dad pays the bills not me', but dad is likely to notice a few hundred dollars of extra power use on the quarterly bill.

Don't forget to factor in the cost of air conditioning, hardware and opportunity cost too.  If you would not be setting up the mining PC and taking care of it, could you be doing something more useful?  If bitcoin is fun for you then great, but don't expect to learn a lot from it.  Downloading free command line software and getting it running isn't exactly highly educational.

The BTC exchange rate is hovering just over $8 and is on a downward trend.  Unless something makes bitcoins very attractive I don't see that changing in the medium term future.  Others may disagree and think we'll return to the party days of $30 bitcoins.  If so, mine away.

And no, I don't have dozens of mining PCs therefore I would be trying to turn away new miners from mining.  I sold off most of my PCs a month ago and turned the last one off a week ago.

If MtGox was manipulating the price as suggested, wouldn't they manipulate it to go higher?  They make a cut from every trade, and it seems obvious they would let the public bots play at a higher price as that delivers higher income.

If there truly is one manipulator pulling and pushing the market then it's even more alarming than I would have imagined.  The market would essentially be paper thin with no support against a complete collapse due to a lack of natural price support.

Whenever the market moves in a way that displeases bitcoin traders, they shout about The Manipulator.  He's everywhere, and controls every market move.  Clever fellow.


It seems many have.  Bitcoins are 75% off their highs.  At the time of the bubble there was a 'to the moon, and beyond!' price crowd that could see no problems in the exponential price growth curve.  I got out, and sold most of my coins in the 20s and high teens.


Unfortunately those basing their decisions purely on emotion always have far more money than you do :-)

Calculations please.  Include hardware costs, electricity, cooling, etc.  That "ton" of cash existed when bitcoins were worth in the mid teens.  That was a very long time ago in Internet time terms.


You may just get your wish.  That would mean bitcoins are almost 90% off their highs.  Try finding another investment 90% off and recommending it as a hot buy.

That can, by definition, never happen.  What is the value of gold?  It's priced in US dollars, or Euros, or Yen or whatever.  What is the value of a US dollar?  It's always compared to other currencies.  Even if the entire economy of a country was running on bitcoins they still need to be exchanged for other currencies when exporting or importing.

No one has free electricity.  It's 'free' to the user but someone, somewhere pays.  If it's a flat fee or part of a rental agreement it'll get reset when someone notices thousands of extra kilowatt hours being consumed.

My magic number is $9.  Anything under that means it's not profitable to mine (high power costs, 6 series cards instead of 5 (not available for 6+ months here), currency conversion costs, very weak US dollar, etc).

Depends which hemisphere you're in.  Winter is about to end here.

Probably not much of nothing.  The price will continue to hover around $9.  But I'm waiting for the excuses as to why the price is once again in single digits.  Maybe someone will mention Hurricane Irene, and how all those New Yorkers are without power and/or Internet, therefore they can't feast on the ridiculously cheap bitcoins on offer.  It's a bank holiday in England too, so they can't get money into exchanges either.  If only they could, the price would go up...  There's always the time honoured weekend reasoning too.