I'm going to laugh my ass off if the price continues to rise after that ~30k sell order...

Buy high, sell low? Maybe with long-dated, far OTM puts

Possible? Yes.

Viable? Initially.

In order to suppress the price, the pressure must be applied continuously. With this the case, money would flow from USD to BTC. Since BTCs cannot be destroyed, buyers could pick them up at $0.01 until all currently existing ~7 million have been bought at a total market value of ~USD$70,000.

As the number of Bitcoins continue to rise, if the value were to continue being suppressed, the total market value could be kept at ~USD$210,000.

However, consider the issues currently facing the US and its currency. Debasement raises the cost of suppression.

Also, there is a maximum amount of BTCs that can be bought. They have to be subsequently mined. Unless the US is going to set up a mining farm to maintain control of all the BTCs generated, sellers will be unlikely to settle for $0.01/BTC. If the lowest price accepted per Bitcoin were to be $1,000 and a block of 50 were being sold, that's $50,000 that the US gov't would have to part with. Taking into consideration the likelihood that people will wise up to this game, the price may very well escalate much higher.

Imagine the minimum asking price at $100,000/BTC or greater. Is the US gov't going to blow $5mm every 10 minutes on this, or will that money wind up in the pockets of cronies and other criminals as they raid the treasury while the nation burns?

If you really want to take this for a spin, let's assume all 8 digits of expansion have been utilized. That comes to about 700 trillion Satoshis. If each one were to sell for $0.01, the grand total would be USD$7 TRILLION! If you buy in now at $0.01 and the suppression continues to the final conclusion, your end asset would be 100 million Bitcoins or $1,000,000 in fairly worthless USD.

In conclusion, if politicians and bankers were to truly be so stupid, I would be first in line to accept what amounts to free money. Hey, this is effectively what they're doing with the banks, only with them it's debt instead of Satoshis.

Yes, BTC oriented business could easily become defunct.

Mining is the perfect situation to take as an example, as it is purely Bitcoin related and depends upon currency conversion to cover operating costs. It becomes unprofitable around the $2-6 range if electricity costs are incurred and depending on efficiency. If the hardware costs haven't been recouped yet and the price drops below operating costs, the "business" either shuts down or runs at a deficit until all supporting funds are depleted. Either that or the currency price rises.

A Minskian collapse is a possibility. However, I think the difference between Bitcoin and contemporary currencies controlled by a central authority preclude complete failure. My thinking is that the decentralization coupled with self-regulatory aspects and the Satoshi unit being effectively indestructible (a la gold) mean that the decline is limited in a similar manner to stock liquidation.

Even if a company's stock goes to zero, the corporate assets still retain some value. Likewise, even if Bitcoin goes to zero on a foreign exchange basis, it will still retain some value within the Bitcoin economy. Granted, that would be extremely limited, but it simply refuses to die.

The intriguing prospect for this is that with such a reduction in perceived value, the participants will be thinned out heavily. That will make changes to the system much easier to propagate. Whether that involves adjusting the base inflation rate, raising the cumulative total or other modifications. It becomes a phoenix - reborn, as many times as needed... and the BTCs held continue to exist.


True, but the underlying currency used is the issue here, not so much the particular business. Typical fiat currencies can experience complete loss of confidence and no longer have use. Bitcoin can experience the same, but it still doesn't cease to exist; it just temporarily goes to zero in relative valuation so long as the system integrity remains.

Think of a machine tooling company that goes out of business because the currency has gone into hyperinflation. It may have had to close its doors because of the situation, but a lathe or ceramic saw is still useful. Bitcoin's value could go to zero, but the system itself is still sound.

Or a car with a dead engine - the gas is still good...

Who knows, maybe Bitcoin is just a few years too early in trying to fill a void that hasn't fully presented itself yet.

They all still require subjective valuation in order to attach any value whatsoever.


I think "really screwed up" is an understatement

Which of those contracts currently have any legal applicability to the Bitcoin economy? I have difficulty believing any court would even acknowledge the legitimacy of Bitcoin. If it were acknowledged, that action would very likely provide an unbelievable boost in interest and value. Can you imagine official channels effectively stating that Bitcoin is money?

Then we agree. The subjective reality applied to an item (tangible or otherwise) gives rise to a perception of value.

This is the same dilemma Bitcoin faces. If society were to cease functioning (disease, war, etc. - a complete breakdown of structure somehow), currency (dollars, gold, etc.) loses all value. If the Bitcoin network were to lose all participants, Bitcoin would lose all value.

Everything and nothing.

Here's a question: if society ceases to function, but the infrastructure that supports the internet and thus Bitcoin continues working (hypothetically assuming the infrastructure is sufficiently decentralized so as to provide necessary power for an indefinite span of time), does Bitcoin lose all value as well?

This kind of turmoil is prevalent with any emerging idea. Early capitalization is preyed upon by fraud and theft. With the rapid pace of development today as compared to a century ago, I'd expect Bitcoin or its successor(s) to achieve firm establishment or even dominance within a decade. A fairly long time at first glance, but fast historically.

This screams of panic selling. Little different from what's going on in major equity markets around the world right now. It reflects an amateur trading mentality that will sell at the worst price possible.

Bears and bulls make money - pigs and sheep get slaughtered.

I am waiting for these short-sighted panic sellers to drop Bitcoin to USD$0.01 so I can buy several thousand BTC and mine at marginal difficulty.

1. Advertise payment for running software with the stipulation that the owner must have a Radeon 5xxx or 6xxx video card.

2. Once the user has been set up, make use of CPU processing in addition to GPU.

3. Pay users 30-50% of what you gain per BTC generated.

4. User-authorized Botnet.

There are more details, but that's the gist of it.

There are some very good insights in this thread as to why Bitcoin's exchange rate is tumbling. I think the most prevalent issues are, in order of influence:

1. Lack of significant perceived relation to real value from tangible goods and/or services.
2. Difficulties in maintaining liquidity among diverse currencies and other conventional financial instruments.
3. Relatively inflexible expansion due to arbitrary base inflation, leading to a hard currency problem of meeting demand with stable price levels.
4. Liquidation by a substantial holder or holders which triggered large-scale breakdown at the $10-12/BTC level.
5. Confidence deterioration exacerbated by 4, periodic internal market disturbances (Mt. Gox, MyBitcoin, etc.) and global turmoil in established markets.

It is important to note that a BTC itself has little, if any objective or subjective value. The system is what is valuable. Until widespread understanding of that system takes root, the Bitcoin economy will be very fragile.



I also think the similarity to equity markets is strong, as suggested here. Bitcoin isn't tied to the dollar so much as correlated with it - a float, not a peg.

Currently, the USD is rising along with gov't debt in the form of treasuries. The same thing is happening to the Bitcoin economy as that of the rest of the world in that the markets have been propped up for far too long and are correcting. As several here have pointed out, assets are sold to cover margin calls (or pay bills), so funds flow out of many asset classes into bonds and cash (and increasingly gold/silver, other real assets).

Since Bitcoin is not viewed as a "safe haven" for assets by a significant percentage of the world's population, it will experience outflows during such times as these. However, I strongly suspect that Bitcoin will become much more desirable in the near future as capital controls tighten and restrict the flow of funds between markets globally.

With Bitcoin, there is no such restriction possible without completely shutting down the digital telecommunications infrastructure, and that is potentially fatal to any developed nation. Bitcoin is better than dollars or even gold in this respect because there is no physical medium to transport and central authority to prevent transfer.


You're on the right track, but to the contrary. Similar to silver, Bitcoin is so small of a market that it is heavily affected by external market forces. It cannot absorb inflows and outflows of capital while remaining stable, so volatility will be extreme.

The bucket analogy applies here: a 1 liter bucket (Bitcoin) cannot fill a swimming pool (USD) even if fully emptied (value -> 0), whereas a very small amount of the swimming pool volume can completely fill the bucket without a budge in its valuation. Meanwhile, the bucket is overflowing and becomes overvalued until it can be increased in size to accommodate the inflow or be emptied again.

Both participating markets must achieve similar magnitude in order to maintain relative price stability. A perfect example is the difference between the delta in the AUD/USD and EUR/USD percentage changes. The former has had in excess of 5% variability over the past week while the latter has held within 3% difference.


Most likely, especially during the run-up to $30 or so. I doubt many of those new participants are experienced in trading currencies or any other markets. As soon as a drop occurs, anxiety and panic ensue.

If value can't be stored, how is gold still valued at a consistent amount? Gold is primarily money, not currency. In other words: a store of value, not a means of exchange (although it can be used as such when there are no viable alternatives). Of course, agreed-upon definitions are important here.


Delay in funds transfer time doesn't delineate a free market. Transferring funds to/from a typical brokerage can take several days depending on the method of transfer.

In order to prevent fraud, there are time buffers to ensure that funds are actually in an account. For instance: I make an overnight deposit at my bank branch for $1,000 (assume total balance to be the deposited amount). Immediately after that, I initiate a transfer for $1,000 to XYZ business from the account I just made a deposit in. The business initiates a transfer request from my bank.

If the fund transfer were to be honored by my bank, then the bank is taking the risk that there may not be the full $1,000 as I claimed on deposit. Thus, the bank holds the funds until it can verify the $1,000. That may take a day. Then, the business has to trust the bank enough to accept the its backing of the $1,000 transfer. In allowing verification for that to clear, another day can pass.

When allowing for charge-backs, this delay can become even longer as the accepting party takes on magnified risk of the funds being denied even after initial approval. Spurious claims of fraud used as a way of getting something for nothing are taking on epidemic proportions as people realize they can order goods or services and then claim not to have ever done so.

Bitcoin transfer between BTC holders is accelerated without the need for such extensive delays or harmful charge-back potential. On the other hand, it requires greater responsibility when handling one's own assets because once you pay, the money is gone.


Exactly, and with increasing difficulty in creating profitable business, the entire Ponzi scheme falls apart. The human control aspect undermines any system, no matter how well-designed. There are ways even Bitcoin can be undermined through human factors (no need to control >50% of the processing power). For now, though, yes - Bitcoin is a huge shift toward a self-regulating system that doesn't rely on human control.


Bitcoin exists so long as there is even one participant in the network with a viable blockchain. Because of this, it will be extremely difficult to eradicate its existence. Since Bitcoins can be lost but not destroyed, their perceived value can only rise over time with increased adoption. Those growing pains will be incredibly painful, though.

Also, the current incarnation of Bitcoin might not be the dominant crypt-currency. Integration with Open Transactions, anyone? That would mostly solve points 1 and 2 listed at the top of this post.

Personally, I hope Bitcoin goes to $0.01 - I'll be buying a few thousand BTC and mining like a rabid ferret in heat at that point...

Bingo. Whatever acts as a reserve does so. A medium of exchange can then function as a CFD, somewhat similar to how fiat currencies work today in usage (exchanging fractions of net assets for fractions of net worth while maintaining reserves of both).

Bitcoin works both ways and in a more flexible manner than gold - once the majority of Bitcoins have been mined, your share of the BTC pool will effectively remain constant. You can either store the value or transact it.

Gold still has its purpose as a final fail-safe should the network that Bitcoin relies up on actually be compromised sufficiently.

I don't know about you, but I think this subtle shift is as game-changing as industrial manufacturing.

Good to know! I've noticed that economic-types can get pretty heated when their views are threatened instead of agreeing to disagree without further hard evidence.


Yes, and Armstrong's work elaborates on the cyclical nature of markets. It's similar to the additive effect of wavelengths, but imagine this multiplied many times over.



Exactly - using the currency for monetization of debt (promise of return/work) without value (the return/work) kicks back valueless currency. Not conspicuous, but still outright theft.

If you haven't read FOFOA, the perspective presented is biased toward the Euro and its ties to gold. My concern is the human control element of the currency as opposed to Bitcoin's decentralized and near-instantaneously self-correcting mechanisms.

Being up 15% after a 30% drop is still down 20%.

I consider Bitcoin equal in functionality and superior to gold in many ways. The only thing that would bring Bitcoin down is widespread devastation of the telecommunications network. Even still, today gold is the asset that's established. It will take time for Bitcoin to become truly entrenched.

So pop the corks when new highs have been reached. Until then, exercise caution and realism.

It's the revised Julian calendar where August is part of, and comes before July

A major waterfall drop in BTC exchange rates yesterday followed by a massive decline in global equity markets today. Is Bitcoin already acting as a more effective and efficient financial structure than established markets? Does its decentralized nature allow for more accurate price discovery? I haven't seen anything here discussing this reverse association.

I've suggested that the Bitcoin price correlates well with equities, though that observation isn't backed by hard empirical data yet. It's also been noted that Google Trends has an interesting relationship to the rate of Bitcoin adoption and valuation.

How closely tied to other markets is the Bitcoin system? Thoughts, ideas, inferences?

It'd be great to pull GPU info similar to GPU-Z and edit it, but radeonvolt only supports reference 5xxx series cards currently. Until the lack of more diverse I2C code is expanded upon, its utility is virtually nil for 6xxx and non-reference cards in general.

Not really a critical app, but damn cool. And kudos to Mt. Gox.

Maybe game developers in general could be persuaded to adopt BTC payment? All it'd take is one niche to gain hold...

Even with the introduction of ASICs, the transition will be an incremental process, not an instantaneous event. Ramping up manufacturing, distribution and installation of custom boards will take time. Return on investment from them is delayed and scales with parallelism, just as it has with GPU mining. There is still a reasonable horizon for current miners to break even and accumulate a moderate sum of Bitcoins. In this respect, cicada is absolutely correct.

Getting too caught up in the ASIC/CPU/GPU debate can lead you to miss the big picture. It's practically irrelevant, as the natural progression is obviously CPU->GPU->ASIC->&Beyond! Bitcoin can still fail or be indefinitely relegated to niche usage regardless of which method dominates mining. The current stage of adoption is tenuous and its monetary expansion method may well prove to be too rigid.

There is also the possibility of transaction processing building as an alternative to block discovery. While this is assumed to be the end result wheEven with the introduction of ASICs, the transition will be an incremental process, not an instantaneous event. Ramping up manufacturing, distribution and installation of custom boards will take time. Return on investment from them is delayed and scales with parallelism, just as it has with GPU mining. There is still a reasonable horizon for current miners to break even and accumulate a moderate sum of Bitcoins. In this respect, cicada is absolutely correct.

Getting too caught up in the ASIC/CPU/GPU debate can lead you to miss the big picture. It's practically irrelevant, as the natural progression is obviously CPU->GPU->ASIC->&Beyond! Bitcoin can still fail or be indefinitely relegated to niche usage regardless of which method dominates mining. The current stage of adoption is tenuous and its monetary expansion method may well prove to be too rigid.

There is also the possibility of transaction processing building as an alternative to block discovery. While this is assumed to be the end result when there are very few blocks remaining to be found, there may be points where transaction fees offer greater return than mining in the very near future. Again, this is largely independent of the underlying technology.

The rate of block discovery will remain steady on average no matter what technology is used, so the pressure from that is gradual. Price pressure will remain dependent much more on external factors until prices are denominated in Bitcoins. Subjective perception is critical, as is increasing adoption and utilization.
n there are very few blocks remaining to be found, there may be points where transaction fees offer greater return than mining in the very near future. Again, this is largely independent of the underlying technology.

The rate of block discovery will remain steady on average no matter what technology is used, so the pressure from that is gradual. Price pressure will remain dependent much more on external factors until prices are denominated in Bitcoins. Subjective perception is critical, as is increasing adoption and utilization.

Not to disrupt a good conversation, but a public posting begs for additional discourse and general labels of inflation or deflation can be dangerous assumptions. Some aspects of economies will be inflating while others will be deflating, according to definitions based on price.

There is more to this whole tale than debt. The world has a two-tier economy: the one we're familiar with that is accessible to all and has its base in fiat currencies and the relative valuation applied with their denominations, and the real wealth production level that primarily involves gold and oil which is restricted to those entities large enough to engage it.

If you aren't familiar with them:

Martin Armstrong - long-term cycle analysis, projection and timing
Eric De Groot - in-depth capital flow analysis
Antal Fekete - deep financial/economic history
Jim Sinclair - master gold trader/investor
FOFOA - explanation of contemporary monetary system

The current drop certainly has a panic sell feel to it. If this were simply due to oversupply, I'd expect a continuing gradual decline similar to what we were seeing from ~$15/BTC to ~$12/BTC. This doesn't seem to be a typical mass sell-off, though. It's more like an individual or small group of sellers with a lot of capital to dump on the markets, possibly using algorithm trading. Too much rapid probing action for me to think otherwise.

With the recent issues at MyBitcoin, I have to say that I am suspicious. However, proving this isn't my priority, nor would it matter as the damage has already been done; a waterfall was triggered. As long as the exchange remains above the $5-6/BTC level, mining remains profitable in major currencies and I wouldn't be too concerned about these growing pains. I think it is unlikely that Bitcoin will go to zero - it requires actual work to produce and cannot realistically be destroyed, much like gold. In fact, I find that BTC/NMC are very similar to gold/silver, respectively.

From loose personal observation, the Bitcoin exchange rate seems to presage major equity markets, which isn't too surprising. I imagine there are a good number of savvy financial-types taking part in this, easily capable of sophisticated technical analysis. Dabbling in the Bitcoin markets could be a form of front-running established ones.

As for the whipsaw action today, limitations of information available on overall holdings (market cap) and volume, in addition to dark pools, make it very difficult to gauge where the demand/supply will settle. Sure, lines on charts can help but they don't tell the whole story. There isn't really enough of a pattern history to determine reasonable swing ranges either. Of course, as the markets mature, these patterns will become more clear.

My view mirrors what has been suggested by others - the Bitcoin environment absolutely requires universal accessibility without needing highly technical skill, and a level of security that overcomes concerns about hacking and unscrupulous custodial services. Ideally, this would include a means of utilizing mobile devices to run the client and periodic backup of the wallet to an encrypted online location; the wallet encryption using either strong password encouragement of at least 12 characters or separate storage of the key.

Cryptography isn't my specialty, although the principle seems straightforward enough. With this ruling on identity theft, it is becoming apparent that people will need to keep their online personas and digital information much more secure than in the past. The overall cultural mood is certainly shifting toward that, so acceptance and understanding of encrypted Bitcoin wallets should be a minor hurdle.

Automation is the key. If I can install a Bitcoin client app on my Android or iPhone with the ability to make transactions (QR codes would work perfectly), check my balance and seamlessly backup/restore (even to Dropbox as long as the wallet is heavily encrypted before upload), then it's ready for prime-time. I'd even pay a few USD for the privilege - not everything Bitcoin related has to be paid for with Bitcoins until the system is mature enough to stand on its own.

To sum: hold onto your BTCs and mind the speed bump.

I had the same issue with the 69xx series. There can't be >125 Mhz difference between core and memory clock speeds. It wasn't exactly elegant, but the solution that seems to work consistently can be found here:

http://forums.extremeoverclocking.com/showthread.php?t=355592

Basically, use a FreeDOS USB stick loaded with atiflash.exe to boot and extract the GPU BIOS. Then either use a Windows XP/Vista/7 system or a virtual session to run TechPowerUp's Radeon BIOS Editor. With it, you can set the memory clock speeds and save the updated BIOS. Reboot with the USB stick, flash the GPU BIOS and reboot a final time.

After that relatively painless process, I was able to use any method to underclock memory. It was well worth it, as my cards are running at the same Mh rate but ~7C cooler with memory underclocked and all other settings the same as before. I was even able to reliably raise my core speeds a bit past where they used to fail.



Dummy plugs aren't necessary with Linux. If atitweak doesn't see both cards (assuming they both support CL and work with another OS), try aticonfig. Re-seat the cards, try swapping slots, install one card on the board at a time, etc... it could be a hardware or power problem. I haven't used Windows outside of virtual sessions for years, so I don't know if it's still more tolerant (read: lax) about hardware issues than Linux.