If one were to buy 11.6 million USD worth of BTC at market on MtGox today the price of 1 BTC would rise to 1 million USD. As crazy as this may sound it is indicative of how minuscule the Bitcoin economy is today.
lol! this would be the most epic bubble from 1mill pre coin to 100$ If past history is any indication more like a drop from 1,000,000 USD to say 65,000 USD in a six month bear market. I dont know about you but I'd like to be a millionaire 300 times over! Oh OK ill take for 1 million for 300coins OK fine ill take 1/2 million for 300coin 65,0000USD for each of my 300coin... hmmm let me think about that... ya ok DEAL! ... 11.6 million USD invested wisely ( not bought up all at once like some crazy person) would bring us to (pulls a number out of his ass) 20-30$ and the guy would have about 1/2 million coins What I mentioned is an extreme that would have yielded our buyer over 126728 BTC at an average cost per bitcoin under $100. At the other extreme a very slow approach also runs the danger of setting off a buying panic and could end up yielding less bitcoin. There is likely some in between optimal strategy to maximize the amount of bitcoin for the 11.6 million USD over a period of time. |
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If one were to buy 11.6 million USD worth of BTC at market on MtGox today the price of 1 BTC would rise to 1 million USD. As crazy as this may sound it is indicative of how minuscule the Bitcoin economy is today.
lol! this would be the most epic bubble from 1mill pre coin to 100$ If past history is any indication more like a drop from 1,000,000 USD to say 65,000 USD in a six month bear market. |
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If one were to buy 11.6 million USD worth of BTC at market on MtGox today the price of 1 BTC would rise to 1 million USD. As crazy as this may sound it is indicative of how minuscule the Bitcoin economy is today.
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When you banking with a debit card, you have two options: 1. rollback payments, and headache for issuer, and increased fees as result, and this is not Bitcoin. 2. non rollback payments. And anyone who have or has access to you debit card can stole your money. why not let your phone present a partial private key and your rsa fob the other part? My grandma can't do that. Many people (in Africa, or India for example) don't have a mobile phone, or have a phone that can't do that job. But if you can, obviously you can use your phone instead of hardware RSA token. This can be an effective way to send Bitcoin by postal mail to a trusted person for example a grandma. 1) Cut the note in half 2) Send the private key. 3) Verify receipt 4) Send the public key |
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All manipulation moves cost money if other traders notice them. They'll just hold against you for the heck of it and profit.
So it really depends on how many people at what point in the "food chain" are around. If it's all sheep who follow active trends, the method wins. If it's all people trading on fundamentals and ignoring you, the method loses.
+1 There are many profitable methods to trade somebody else's market manipulation and better still unlike the market manipulation itself these methods are perfectly legal. In some regulated markets, its illegal http://en.wikipedia.org/wiki/Layering_%28finance%29Layering is a form of market manipulation and in many markets is in fact illegal. It is also a very good example. So I am a long term investor and I am looking to build a long term position in an illiquid market. I sit and wait and when an ask wall shows up I buy it at market. How is this illegal? Now if this ask wall was part of a layering market market manipulation there is a good chance that the manipulator can get caught in a nasty short squeeze and provide me with additional profit. |
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All manipulation moves cost money if other traders notice them. They'll just hold against you for the heck of it and profit.
So it really depends on how many people at what point in the "food chain" are around. If it's all sheep who follow active trends, the method wins. If it's all people trading on fundamentals and ignoring you, the method loses.
+1 There are many profitable methods to trade somebody else's market manipulation and better still unlike the market manipulation itself these methods are perfectly legal. |
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It is a legitimate topic of discussion for the speculation board because if pirateat40 does get caught up in a short squeeze, he is a big enough player that it will have an impact on the price at least in the short term.
Here is a helpful tip: 1. Withdraw your money and profits with him (if you have any with him) ASAP. 2. Don't sell below $10 in the short term. lol, indeed appears as a valid "squeeeze the pirate" strategy. Withdraw all from pirate, list for sale at 10.12345$ (or better yet in cold storage for a decade). I very much doubt 10.12345 USD will break pirateat40. The rest can work. Taking delivery is one sure way to push a short to the wall. a bank run on pirate's bank would defiantly break him ATM he would need to convert his usd into bitcoin to satisfy everyone's bitcoin requests and since the recent rise in bitcoin value, and the fact the he needs to buy more to could easily push us over 12-15$ and maybe he wouldn't be able to afford to buy back EVERYONE's bitcoin at this time his only hope ATM is that everyone stick with him and hope he can once again use the huge funds to make profit and recover... In a bull market yes. pirateat40 can be very much at risk. In a bear market no. In fact in a bear market his profits go up. One must keep in mind that a lot of his reputation was built with regular payments during a bear market or a least a market that was stable or rising very slowly. |
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It is a legitimate topic of discussion for the speculation board because if pirateat40 does get caught up in a short squeeze, he is a big enough player that it will have an impact on the price at least in the short term.
Here is a helpful tip: 1. Withdraw your money and profits with him (if you have any with him) ASAP. 2. Don't sell below $10 in the short term. lol, indeed appears as a valid "squeeeze the pirate" strategy. Withdraw all from pirate, list for sale at 10.12345$ (or better yet in cold storage for a decade). I very much doubt 10.12345 USD will break pirateat40. The rest can work. Taking delivery is one sure way to push a short to the wall. |
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It is a legitimate topic of discussion for the speculation board because if pirateat40 does get caught up in a short squeeze, he is a big enough player that it will have an impact on the price at least in the short term.
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... to the tune of $18 - $39 billion a year Hold your horses, ArticMine, I made NO such claim. They could easily launder via the traditional method too. But Bitcoin absolutely can be used to launder a few million every couple weeks. First lets do some math here: BTC per block 50 BTC Blocks per hour 6.17 Hours is a day 24 Days in a month 31 (I will be generous here) BTC mined in a month total 50x6.17x24x31 = 229524 BTC Now for the exchange rate. I will be generous and take say 1 BTC = 10 USD. We have not reached this recently but we could soon. This gives me 2295240 USD a month in the USD value of all the freshly mined BTC. Now according to your flow chart the mined Bitcoin is the source of clean cash for our "major drug cartel"? So my questions are: 1) A few million every couple of weeks in which currency? 2) What percentage of the BTC network hashrate does pirateat40 control in order to clean a "few million" of said currency every two weeks? Seriously if one wants to make a money laundering theory behind what pirateat40 is doing it can be a plausible theory (It is not however my theory at this point); however it would have to be on behalf some very small player, not some major drug cartel. The numbers otherwise simply do not add up. |
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It is either money laundering (for Sinaloa or Zetas cartels most likely) or it's a Ponzi. If it's money laundering, this is how it is happening:  I think I'd be willing to pay 1 BTC to see someone take this flow chart and make it more suitable for a magazine or info-graphic. PM me if you would be willing to do this. Let me get this straight. pirateat40 is alleged to be laundering money to the tune of $18 - $39 billion a year using a currency that has a total capitalization of $85 million? I do not think so. www.nytimes.com/2012/06/17/magazine/how-a-mexican-drug-cartel-makes-its-billions.html |
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How do you reach the conclusion that Bitcoin meets the definition of money under the legislation: (n) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. Which government, intergovernmental organization, or agreement between two or more governments has authorized or adopted Bitcoin as a medium of exchange? What does authorized or adopted here mean? For example if Bitcoin meets the definition of "money" under the laws of any country, even if not explicit, then the case can be made that that country authorized its use as a medium of exchange. It is a huge negative to try to prove in court in order to make the case that Bitcoin is not money. By the way most countries levy a VAT or GST and those countries have a huge incentive to treat Bitcoin as money in order to avoid the avoidance and evasion of the VAT or GST. |
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IANAL Here is the link to the actual source http://dfi.ca.gov/licensees/moneytransmitters/. It does not make Bitcoin illegal in California far from it. As far as I can see Bitcoin does not meet the definition of "payment instrument" or "stored value" under the legislation. It very likely does however meet the definition of money under the legislation. The definition of "money transmission is very interesting (o) "Money transmission" means any of the following:
(1) Selling or issuing payment instruments.
(2) Selling or issuing stored value.
(3) Receiving money for transmission. In the case of Bitcoin sending bitcoins one owns is not regulated, but receiving bitcoins from someone else for the purpose of sending those bitcoins to a third party is regulated. |
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It will reach $100 when the demand is sufficient. So the better question is "When will bitcoin become mainstream?"
Bitcoin trading for 1 BTC to 100 USD and bitcoin becoming mainstream are two very different things. I would not consider bitcoin "mainstream" until 1 BTC purchases 100 onces of gold not just a mere 100 USD. |
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Thanks
To me a good short candidate is something that has some value in the marketplace and also has really lousy fundamentals. Most of what is listed on the GLBSE on the other hand falls in the area of very high risk and also very high potential return. Sure some can and will fail, but others can also skyrocket in value and the latter will kill a short in no time. I will keep my eyes open though
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Shorting Solidcoin / Microcash could be interesting. I am not sure how profitable it could be.
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Yes it will but only as a result of a significant rise in the BTC price. In fact any significant increase in the use of Bitcoin as a payment method will result, by itself, in a substantial increase in the BTC price with no speculation involved. One needs to consider the size of the float in BTC needed between the customers of the business, the suppliers of the business and the business it self. We are not even considering that any of the players involved will keep some funds in BTC simply for convenience to avoid exchange fees and spreads. You're ignoring the velocity component of MV=PQ. Suppose Megaupload customers are using Bitinstant to buy bitcoins and Megaupload is using Bit-Pay to instantly convert them to USD. The payment could conceivably spend less than an hour as bitcoins before being recycled into other transactions. Depending on the specific values of V and Q involved a massive increase in bitcoin use as a payment system could initially reduce the exchange rate instead of increasing it. No I am not ignoring M=PQ/V. It is just that I consider your value for V=8760 (24*365) completely unrealistic. The form of the equation you should be looking at is P=M(V/Q), and I'm not assuming V=8760. M is set by protocol so the factors to consider are P, V and Q. P is the price of goods in BTC. People who want the value of bitcoins to increase want a lower P. If a large business started accepting payments in bitcoin Q would certainly increase. If immediately spending, or converting the bitcoins to another currency, tends to increase velocity depending on where it was to start with. Holding on to the bitcoins tends to reduce velocity. Which effect dominates depends on the relative change of both P and Q. If Megaupload increased V more than it increased Q the exchange rate (USD/ BTC) would go down. Right now my best guess is that velocity today is such that anything Kim Dotcom is likely to do would increase the exchange rate, but that's not the same as a guarantee, and certainly it's not true to say any significant increase of bitcoin as a payment method will make the price go up. The velocity (V) of the M1 (Cash and Chequing accounts) money supply in the United States is 6.958 on a turn over every 52 days. I have two questions: 1) What is the justification for a different velocity V for Bitcoin? 2) How high a value of V for Bitcoin do you propose is the maximum it reach to allow for an increase in Q while keeping P constant or even allowing P to rise? |
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Yes it will but only as a result of a significant rise in the BTC price. In fact any significant increase in the use of Bitcoin as a payment method will result, by itself, in a substantial increase in the BTC price with no speculation involved. One needs to consider the size of the float in BTC needed between the customers of the business, the suppliers of the business and the business it self. We are not even considering that any of the players involved will keep some funds in BTC simply for convenience to avoid exchange fees and spreads. You're ignoring the velocity component of MV=PQ. Suppose Megaupload customers are using Bitinstant to buy bitcoins and Megaupload is using Bit-Pay to instantly convert them to USD. The payment could conceivably spend less than an hour as bitcoins before being recycled into other transactions. Depending on the specific values of V and Q involved a massive increase in bitcoin use as a payment system could initially reduce the exchange rate instead of increasing it. No I am not ignoring M=PQ/V. It is just that I consider your value for V=8760 (24*365) completely unrealistic. |
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