That's a pretty big assumption, that bitcoin will return to $15-$20.  The trend over the past 3 months has been nothing but down.  Do you feel confident that enough new adopters will be found for bitcoin to drive the price up?  What do you see as the catalyst for this happening, aside from difficulty rate which is irrelevant to bitcoin's value?

People continuously talking up the market are guilty as well.  There was a chorus of miners on this forum who stated prices wouldn't fall below $20 after reaching the bubble peak of $30.  Miners have a vested interest in talking up the market regardless or whether anyone has a real use for bitcoins or not.


That's pretty harsh.  The same could be said for keeping money or bitcoins on any bitcoin bank or trading site.  MtGox could fold tomorrow and run.  There's nothing to stop that happening.  Bitcoin is unregulated, which is an advantage sometimes, but if a site chooses to cut and run there's precious little you can do. 


Known by who?  Have they contacted the police to provide information to make an arrest?

There are many ways bitcoin can fail, or at least be so crippled to be essentially considered a failure.

1. The major exchanges pretend to be banks, and governments crack down through anti money laundering and tax laws.  Has Mt Gox and Tradehill got the funds to fight drawn out legal cases, and can they exist without the support of banks?
2. The value of bitcoins keeps falling.  Speculators who got burned and miners write off bitcoin as another get rich quick scheme that failed.
3. Bitcoin fails to find a real use.  There's Silk Road, and not much else.  A currency that swings 10%+ on a daily basis isn't much good for use as a currency.
4. Bitcoin fails to get mass mind share.  People simply don't 'understand' it and fail to adopt it.  It remains the current niche player.
5. Something better comes along.  Maybe a system where confirmations don't take hours.  Bitcoin wouldn't scale if we suddenly threw a million transactions a day at it.
6. 50% attack.  If I was rich and powerful and didn't want to see Bitcoin succeed, I would buy up enough GPU power to gain 50% hashing capability and deny transactions for long enough to make others give up.  This scenario is unlikely, as the rich and powerful just don't care about bitcoin.  Maybe a hacker with a botnet could do it for lulz.

Collisions being found in SHA-256 would be the most unlikely failure scenario.

Mmm, this very much reminds me of investors in shares who are seeing the value of their shares going down.  "Idiots! Stop selling! The stock would go up if they all did what I say"  The problem is, each person acts on their own and in their own interests.  The tragedy of the commons, if you will.

If you truly believe people are artificially driving down the price of bitcoins through panic and fear, then I suggest loading up your MtGox account with Euros or dollars and buying as many bitcoins as you can.  You'll either be rich, or eating baked beans for the next few years.  Either way, if things don't turn out your way you can blame everyone else :-)

There is that feeling that ever perma-bulls can't deny.  The feeling of "If this thing is going down to zero, why not sell at $9.... $8.... $7...."  Grab some money before there is none left.

7200 bitcoins are created per day.  That's US$75k to buy them from miners if the miners choose to sell to cover their costs.  That's a lot of new money that must be found every single day.  If the coins are not sold today they are still a liability as they compete for a limited pool of cash.  Investors know to look at the total number of bitcoins out there, and not just what is traded day to day.  Those unsold bitcoins could be dumped onto the market if panic strikes.

I wouldn't sell a bitcoin for $5 either.  It costs more in electricity to produce at the current difficulty rate.  The problem is no one really knows how many people are out there with bitcoins mined when difficulty was 1/10th what it is today, or speculators/investors who bought in at 50c a bitcoin.  They would be quite happy to sell a bitcoin at $5 if they thought the price wasn't going to go higher.

You sound a little desperate.  Bold text and capitalised.  Have you paid off your mining rigs yet?  I think we know the answer to that question.

Miners do not control bitcoin's value.  The market does.  Bitcoins could fall to $5 tomorrow and there's nothing miners could do about it.  There are already more than enough bitcoins out there for investors and speculators to play with.  Even if every miner pulled out tomorrow there would be no upward change in value.  If anything, value would suddenly plummet as transactions would take days to process.  It's a fundamental point that's often lost on these forums.  People thinking mining activity and difficulty drive price upwards.

I have a transaction coming in from DeepBit at the moment.  6 hours and zero confirmations.  Imagine running a business this way.  "Thank you for your payment sir, please wait a day at the checkout"

Indeed.  I bet merchants are lining up to adopt bitcoins after they've just seen the USD$ exchange rate drop by 20% in a day.  I saw a recent post on these forums that suggested merchants should charge a 25% premium for their products denominated in bitcoins.  Well, 25% doesn't seem to be enough any more, and further more, why would anyone pay 25% more for a product when they can use a credit card or PayPal and pay maybe 2% in fees?

As a merchant, the only advantage for me to using bitcoins would be no chargebacks.  As a customer, that is a huge disadvantage.  Also I would have to pay a lot more.  Apart from Silk Road, I don't really see a point to using bitcoins.  Judging by the falling value of bitcoins, it seems a lot of other people agree with me. 

From my understanding of the situation, the Polish bitcoin exchange lost its coins through deletion of the wallet file by Amazon's virtual machines.  The coins weren't stolen and dumped into the market.  They are gone for good and not coming back.  This will be one of the fatal long term flaws of bitcoins and will ensure we can never see anywhere near 21 million created and active.

The question is, why should be artificially manipulate the market by heeding calls to pull our orders out?  If bitcoin is healthy it can withstand the panic of a few people and will thrive.  If not, nothing of real long term value was lost.  For all we know, those people dumping bitcoins at $10 today may look extremely clever in 2 weeks time when the price sits at $5.

Your advice is generally sound.  People paying more for electricity (25c/kwh) will get out much sooner than those paying 10c.  But ultimately, every miner will face a choice of continuing to mine with losses (in the hope of BTC's price rising in the future) or giving up.  We've already seen what happens when miners exit in droves from Namecoin.  Difficulty remains high for weeks as few miners can be bothered losing money to keep mining until the next reset.

The BTC market is already very well supplied.  We're creating thousands of new bitcoins per day that must find a buyer today, or a buyer tomorrow.  We could see a mad rush for the exits if people begin to think 'this is as good as it gets'. 

I scaled back a while ago and have only limited mining still churning away.  The hardware was sold off while it was still worth something.  It went for around 80% of new cost, which was pretty good. 

Looking at MtGox bids/asks at the moment, there's a reasonable number of bids, but at around $11.  Most asks are clustered around $13 and $13.50 with a long tail towards the current $11.60 strike price.  We could see some pretty dramatic moves in the next few days.  The only prediction I would make is that we won't be stuck at $11.50 in a couple of days.

That's one possible future.  The other (I think more probable) future is your grandchildren asking where bitcoin went, along with Flooz, Beanz, e-gold, Euros, and P2P currencies yet to be created.

7) Play music to your rigs.  Mozart slows down the mining rate, Wagner speeds it up.

Many traders don't care whether the price goes up or down.  They only care that the price moves, and that they can skim a little bit from every movement.

Probably.  We just don't know.  The Dow Jones index fell over 2% yesterday and erased all 2011 gains.  Many people are wary of a new recession in the USA.  All these bearish factors must weigh on bitcoin's value, especially for people who have bitcoins but need to pay bills and loans in real world currencies.

If stolen Mybitcoin and Bitomat bitcoins are being sold off en masse right now, buyers are doing the thief a favour by buying up his or her stash.

Interesting definition of 'taking off'.  Looks more like losing altitude and the ground proximity warning klaxon is sounding.

There's also the strong whiff of 'sell now, before it gets worse' going around.  Why not sell at $12.50 if BTC is heading towards $10?

Although I strongly believe BTC is heading much lower while it scrambles to find a real use (apart from Silk Road), I also think current events in the USA are having an impact on BTC's value.  Some people like to believe BTC is decoupled from the general economy and that it's the 'better' currency', but the recent US debt turmoil and last night's 2%+ DJI fall must be having a general confidence impact.

Mm, not "everyone" will keep on mining.  I cut back, and just have a very energy efficient PC running a 6950.  $350 of hardware creating about a dollar per day after electricity and taxes.  Why so little?  It's partly due to the weak US dollar (Australian 'monopoly money' buys $1.09 US dollars) and high electricity costs.

If difficulty reaches 2.5M, I and many other people will quit if bitcoin's price remains at $12 to $13.  Some people may get excited about spending a dollar per megahash and making under a dollar per day on it.  I don't.  Investing money in rigs to maybe recover mining and hardware costs after a year doesn't sound like a great investment, especially as bitcoin could fall to zero at any time.

$13.50 bid wall holding up, but for how long?

"Mr Gorbachev, tear down this wall!"

Well under $13 is where the action is at the moment.  Either way, I only care that the price moves.  Up or down, it doesn't matter.  It just has to keep moving.

If nothing else, this Mt Gox bug allowed me to sell bitcoins at way above the recent average price.  The trades were not wound back.  Bots reacted to the erroneous price and raised their bids, allowing human traders to take advantage.  Just one of the dangers of letting bots roam free.