The same as every other bubble - market action. Most people act in reaction to price movement - the price is going up so they buy, or it's going down so they sell. Lacking heavy liquidity, the market swings violently and usually overreaches in both directions, only to correct back to something perhaps resembling fundamental value, or perhaps a longer-term speculative cycle not yet fully visible.

Those fees are set by the lenders, right? Or are you talking about something other than interest?

Ask yourself: How is this any different from pirateat40's Bitcoin savings &trust?

Please, please stop quoting content-free trolling.

I have to say, ever since I started ignoring not just the trolls, but the people who insist on quoting the trolls, reading this thread got a lot quicker!

round 2 - fight!

If there is no further drop, but we go up, the last significant drop will be labeled 'capitulation'. The determination is made after the fact, after all.

Perhaps, or miners will shut off for lack of profits until the transaction fees are sufficient to sustain the hashrate. Whether that hashrate will then remain resilient against attack is an open question. IIRC, Satoshi's vision had institutions with vested interest in BTC providing hashing power to secure their investment, not to gain profits from transaction fees directly.

I didn't even read your second example... What is that, how would a global price for goods, or services, or anything, ever happen?

A card as you describe would have the exact opposite result, since you can't deduct any amount of cryptocurrency from an address without having the private keys. No-one in their right mind would give a merchant their keys. The workaround would then be to have the card linked to an account provided by some "trusted" 3rd party. This means off-chain transactions, and giving these account providers the opportunity to issue more cryptocurrency-denominated IOUs than they actually have currency to back.

Frankly, I'm not aware of anything to prevent the exchanges front running the market. It would be profitable and very hard to prove, therefore it is probably happening.

From what I read elsewhere, to burn coins  you send them to a Bitcoin address with no known private key, like http://blockexplorer.com/address/1BitcoinEaterAddressDontSendf59kuE. No-one gets them, unless they're able to brute-force the private key. That's unlikely to say the least.


I'm not really convinced this is such a great idea, though. It seems like burning would only increase trust if the trades relying on it were smaller than the amount burned, and any potential scam were of the kind that could only be performed once. So, useful for gaining a foothold, but hardly for long term trust, especially as the coins burned are lost whether the burner later on acts well or not.

A lot of scams seem to involve people building up trust as honest traders, often with no initial intention of scamming anyone. Later on, as the business grows as do the sums involved, pulling a one-off disappearance act and running with the money becomes much more tempting than when they were dealing with pocket money. I don't see how burning coins addresses any serious problems.

I guess we're due to see some volume, whichever way it goes.

Deleted a couple of off-topic posts.

So, summing up so far:

-Remittances and offshore banking are niches where Bitcoin may be better suited than the alternatives
-Retailer acceptance is of dubious value short-to-midterm
-Price volatility is offputting for new users.

Regarding the first, I'm not convinced Bitcoin is likely to gain traction for money transfers or store of value uses without other large-scale adoption. Those are big niches in the traditional finance world, but don't they essentially piggyback on stability generated by other mechanisms, including wide consumer adoption? This is essentially the ledger use case of bitcoin, which it does well, but can people be convinced to count their wealth in an unit not in widespread commercial use?

As for retailers, I think that was addressed before. If Bitcoin enables commerce that is otherwise impossible, or can be used to achieve significant savings in commerce, that's a good use case. Bitcoin does enable certain forms of commerce, see Silk Road etc. that many dislike. How likely is it to compete with credit cards where those are already working payment methods, though? Not very, IMO, without significant reduction of the risks involved in buying and holding BTC.

-Volatility... A bit of a chicken-and-egg problem. You have to increase adoption to increase price inertia and lock-in effects, but it's hard to sell people on the idea of buying BTC if they just want to buy things and are risk-averse, which most people not yet using BTC are IMO.

What I'm getting at here is that to succeed, Bitcoin has to live up to its original promise of being revolutionary. We've established that it has been game-changing in certain fields where for legal reasons other payment methods are difficult or impossible to use. Are there other niches left undiscovered? Or am I wrong about the difficulty of competing as just another payment method for the things people buy with their usual means anyway? Or are we going to see a real boom in gray and black market trade, enabled by Bitcoin?

Let's ponder a question: what kind of news is good news for the price?

Lately there's been a lot of good news of the "Expedia accepts Bitcoin" and "New bitcoin ETF coming" variety, yet  a rally is decidedly not underway. Why would this be?

Maybe it's relevant that while these new developments may increase Bitcoin's utility to existing holders, or provide avenues for new speculators, they bring little to the table to increase adoption of Bitcoin in the short to medium term. Competing as a payment method for traditional online commerce is a tough proposition for Bitcoin: Niche cases apart, credit cards work just fine for most consumers. Merchants would have to systematically offer high discounts for their customers to deal with the added hassle and high volatility of buying BTC just to pay for their purchases.

As for increased investor demand, that can't supplant fundamental growth of the ecosystem. New funds etc. may end up running the price up again, but if Bitcoin doesn't gather true utility for non-speculative demand to catch up, it's a bubble waiting to happen at best.

The most ambitious promise of Bitcoin, IMO, is to introduce sound money into commerce, reducing the deleterious effects of debt bubbles. It's an ambitious goal to say the least, but I don't see a noble idea driving consumer adoption. Most people do not voluntarily inconvenience themselves for the future greater good absent incentives in the here and now.

So, what are the incentives that will drive Bitcoin to true mainstream adoption? What is the pitch at this point?

P.S. This is a self-moderated thread - signal, not noise, please!

So if you had the idea of setting a sell wall at X, buying at X-profit margin, and rolling your sell wall down as your buy-back average lowered, would that look like this? Insufficient volume for that to be the explanation? Too high risk to make sense?

The coinsman article says the operation currently accounts for "perhaps 5 % of the total network". Taking that claim at face value, that's 180 BTC per day, or 5400 a month, 2,700,000 USD at current rates. Minus electricity, 1,700,000 USD is left to cover other costs and startup expenses if the price remains stable (ha!). Is that reasonable? I don't know.

Maybe stop quoting them? It's not like you need to read more than the username to see what the message is going to be.

I remember, back in the day, this subforum had a rule against "sell sell" or "buy buy" spamming...

So, about them walls... Is the Bitstamp one at 515 having chunks of 500 BTC added and removed all the time or is the datafeed buggy?

The market has to absorb newly minted coins - is this a surprise somehow?