Why not buy tomatoes at the current price?  Because even if the price is going to go up in the long term, in the short term the price is likely to fluctuate, and if you're patient, you can probably buy them cheaper on sale.

Same with bitcoins, if you're not in a hurry to buy, you may be able to buy them cheaper from someone who is in a hurry to sell.

Consider gascoins / anti-gascoins.  The problem with pegging a gascoin to a gallon of gas like a futures contract is that the holder of the anti-gascoin (the person who is short one gascoin) has unlimited liability, and he can't place an infinite number of bitcoins into escrow.  (The price of gas can't go below zero, but there's no limit to how high it can go.)  There would have to be some way to manage risk, issue margin calls, etc.

An Intrade-style prediction contract might work better.  For example, a contract might settle at 1 BTC if the price of gas is $5 or greater at the end of the year, or settle at 0 BTC otherwise.  Contracts are created out of nothing whenever a buyer (long) and seller (short) agree on a price.  Maximum escrow is 1 BTC for the short.  Contracts are destroyed whenever a short buys back a contract, or at the time of expiration when all contracts are settled at 1 BTC or 0 BTC.

A small fee on each transaction could keep the miners going.

Libertarianism is a model, an over-simplification.  It assumes that one can tell the difference between a competent, consenting adult and someone who is not a competent, consenting adult.  In the real world, there is no such abrupt transition.  This means, for example, that there can be no coherent libertarian theory of children's rights.  This doesn't mean that libertarianism is useless; it's still a good model for voluntary transactions between competent adults.  It just means that if you try to apply libertarianism outside its natural domain, the model breaks down.

Bitcoins are still being mined, and some fraction of those are sold to pay for electricity.  There's enough new capital coming in every day to pay for the electricity.

For your existing clients, probably not.  Will accepting bitcoins attract new clients?  Again, probably not, but this is the right question to ask.

For me, trading a few bitcoins back and forth makes me part of the drama while I wait for the bitcoin economy to mature to the point where there is something that I want to do that is more conveniently done with bitcoins.

No, no, no!  You can trick a bot with a convex strategy (chasing momentum, for example).  You can't trick a bot with a concave strategy (rebalancing, for example).

I suggest that you are making this way more complicated than it needs to be.  You've put 100 times as much effort into the algorithm as I did.  No doubt your algorithm is better than mine, but I rather doubt it's 100 times better. 

I was working on a trading bot before the Mt. Gox disaster.  My biggest problem was error handling and recovery... timeouts, partial fills, etc.  If you do a toolkit, that would be the most valuable part.

The Mt. Gox API, the trading algorithm... relatively easy compared to error handling.

(Since Mt. Gox came back online, prices have been relatively flat and my algorithm doesn't make many trades, so I haven't resumed work on the bot.)

BB, if you tweak your strategy just a bit, your account will increase in both dollars and bitcoins.  On each round trip, sell a fraction fewer bitcoins than you bought.  There is no shame in providing liquidity to an exchange.  It's a valuable service and you deserve to profit from it.

Thanks.  If it's 2, 3 or 4, I'd be more inclined to give bitcoin7 the benefit of the doubt.  Not knowing, I'm very wary.

A scam on whose part?

A couple of days ago, there was a post by Nz3r0 (?) offering 1 BTC to anyone who signed up at bitcoin7.com.  Today, it seems that the topic was deleted, as well as user Nz3r0.  What happened?  Did anyone receive their 1 BTC? 

If this was a scam, either on N3zr0's part or that of bitcoin7, the bitcoin community needs to know that.  Conversely, if it wasn't as scam, we need to know that too.  Deleting the whole discussion and pretending it never happened does not serve the community.

It depends on the bots' strategy.  You're thinking of strategies that provide negative feedback and help stabilize the market.  However, if the bots chase momentum, you get positive feedback and booms and busts are more likely.  No doubt strategies of both kinds will be implemented, so the net effect of bots is not clear.

Bitcoin is like catnip for computer nerds.

I looked into mining, decided not to compete against people who don't amortize their hardware.  I finally got some funds into Mt Gox, and I've been trading the last day or so.  I'm placing orders manually, and using the Bitcoin Exchange Watcher program to alert me on executions.  I'm actually a bit ahead of the game, having made more trading that I lost from the general decline. 

Meanwhile, I experiment with the Mt Gox API, with the idea of writing a bot to trade for me.

I disagree.  There is plenty of volatility, and trading can turn volatility into profit.  Low volume is only a problem if the volume is low relative to your trading capital and frequency of trading.  People have suggested dollar-cost averaging and buying the dips... that's already half a trading strategy.  Use the corresponding techniques on the sell side and you're a trader.   

We should be encouraging traders, as they will provide liquidity and smooth out some of the volatility.  Exactly what the bitcoin economy needs.

Nice sound effects, but the two different alerts should give different sounds.  Duhhh!

Bid = buying at, Ask = selling at.  The bid goes on the left.  People read left to right, and the smaller number goes on the left.  Might as well use the standard trading terminology and lay out the screen in the way people expect.

The screen should be much smaller, so it doesn't waste screen real estate.

Sorry to keep harping on user interface issues, but if you want people to use the program, good UI is more important than good programming.  If you have good code and a bad UI, they'll use your code and write their own UI.

I was looking at the API... looks like it would be easy enough to add a settings screen for a user ID and password, and display the user's current BTC and dollar balances.  Then you could sound an alert when the balance changes.  That would tell the user when one of his open orders executed.  Heh, this is starting to look like a framework for a trading bot.

Thanks for this.  Suggestion: put the bid on the left, ask on the right.

Also, it is quite feasible to have AutoIt run tasks in parallel, or rather to simulate running them in parallel.  You put each task in its own subroutine.  Then you call all the tasks from a master dispatcher loop.  Each task checks its own timer and executes if it's time to execute, and otherwise just returns.  This is a "round-robin non-pre-emptive task scheduler".  (My experience writing bots to play Evony finally pays off!)

rabbitcoin, I am thinking along similar lines.  The utility of Bitcoin is independent of the exchange rate.  There are no fundamentals. This is a purely psychological speculative bubble.

As a first pass at a trading strategy, consider asset allocation plus rebalancing.  Convert 50% of your trading capital to Bitcoins.  Put in a buy order and a sell order at prices and quantities such that, if executed, either order will still leave you at 50%.  Every time an order is executed, cancel the opposite order and put in two new orders.  (The mathematical details are left as an exercise for the reader.)  This strategy leaves you some exposure to the underlying trend, and captures some of the volatility along the way.  The amount of volatility that can be captured is limited by trading costs.

Some tweaking is needed, as this strategy will ride Bitcoins all the way down to zero, wiping out all your capital.  So instead of Bitcoins = .5 * Capital, use Bitcoins = .5 * (Capital - Reserve).  Start with Reserve = 0, and increase it gradually over time.  Now if the exchange rate goes to zero, you exit with Reserve.