Don't quite agree, bubble brought loads of publicity bitcoin wouldn't get otherwise so it was good thing. Some got burned, some came to stay.
And crash is not problem or correction or whatever we call it, I'm talking about people being happy and pushing for it. Like Blitz for example - moderator on main bitcoin forum, just look at his posts since he sold. He was nowhere to be seen here but last few days can't stop posting same stuff.. If crash is something that is supposed to happen, I really don't think long time Bitcoin backers should publicly be happy about it, it's an awful thing to read by some noob who's considering going into cryptocurrency.
Kinda lame but I guess that's how it is..
First, if you are "happy" or "unhappy" about price going up or down, you are probably being too emotional. You are not happy or unhappy because its 3AM and there is no sun, it is what it is and its not under your control - full stop. Secondly, what you wrote about a downtrend "being bad for the n00bs" is utter bullshit, I hope you don't really believe that crap. When I first learnt about Bitcoin, I read about it. I learnt about previous history, previous bubble, and one of the very first things I understood about Bitcoin is that it is scarce by design, is a commodity-like asset and thus is prone to speculation and wild volatility, especially at this early stage. If you are thinking about investing in Bitcoin and didn't understood that, you should stop and read more before you spend a penny on it. Because if you don't like to invest in such an unstable asset, you should really invest in a different, risk-averse asset, or in a coin with demurrage built in it like frecoin or the likes. People should learn this: BITCOIN IS PRONE TO BOOM AND BUST CYCLES. Especially at this stage. Its one of its core characteristics. That's why you could buy it for $13 in January, and it was traded at $266 in April. You do not need to be a genius to see that, while au contraire you need to be a delusional fool to believe in the delusional "singularity" crap. Thirdly, since I was a n00b and entered the Bitcoin market for the first time, I was happy about dips, because they are expected and are just a buy opportunity, because fundamentals remain the same regardless of the exchange rate. Thus, this is an excellent time to learn about the market. I had money in the exchange when the crash from $266 started... And that was very good for me, because I was able to buy much cheaper coins. About Blitz: he has provided both well reasoned and experienced insights, you are not paying attention if you are just reading the occasional "trolling". Which, I have to admit I also enjoy, because I find it has an entertaining sense of humour. I admit I also enjoy Adam's "bullish trolling", but I guess this is a more popular statement, as what people seems to not tolerate well is bearish analysis, that seems to trigger massive amounts of butthurt. Bingo. Key word here is ANALYSIS. I find random pictures of rocket ships and cats jumping off walls to be equally useless. Mature investors are willing to discuss both sides of coin as long as see thoughtful analysis put in front of them. There is money to be made moving up and down for the savy trader. Only a cheerleader just wants to hear things that make them feel better. |
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Currency is an investment, why else have it?
Currency is a tool to make transactions replacing the old Barter system. This is why all currencies moved off of the gold standard a long time ago. The more I watch these swings, the more I realize we need inflation. I think you are confusing inflation with volatility. My point is that inflation reduces volatility because it keeps the price of the currency at its lowest economically driven price. It gets rid of speculators and allows the real economy enjoy price stability. |
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Currency is an investment, why else have it?
Currency is a tool to make transactions replacing the old Barter system. This is why all currencies moved off of the gold standard a long time ago. The more I watch these swings, the more I realize we need inflation. |
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Well, I understand we all want to make our bitcoin positions better but it's still sad to see what we've became.. we supposedly want bitcoin to be mass adapted yet we are happy it's crashing and people losing belief in it.. Greed is some bad bastard, it could break our heads at some time  The problem is that since there is a fixed amount of BTC, it incentivizes people to hoard it. Which then causes them to panic dump it when the price falls. What we need is a cryptocurrency with enough inflation to deincentive saving (hording). Go buy Freicoin then. I won't be joining you since I don't like to buy depriciating assets... Well, that's the point. You're not supposed to want to buy a currency as an investment - that defeats the point of a currency. That's why BTC being "more like a commodity" is exactly why it has these giant swings. The point of a currency is to facilitate transactions, not to provide a return to speculators. No one should be hoarding them, they should be investing / spending them. A truly functional cryptocurrency would have a definite rate of inflation to make sure people aren't just sitting on them. |
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Don't quite agree, bubble brought loads of publicity bitcoin wouldn't get otherwise so it was good thing. Some got burned, some came to stay.
And crash is not problem or correction or whatever we call it, I'm talking about people being happy and pushing for it. Like Blitz for example - moderator on main bitcoin forum, just look at his posts since he sold. He was nowhere to be seen here but last few days can't stop posting same stuff..
Kinda lame but I guess that's how it is..
Best thing for a currency is stability. |
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Well, I understand we all want to make our bitcoin positions better but it's still sad to see what we've became.. we supposedly want bitcoin to be mass adapted yet we are happy it's crashing and people losing belief in it.. Greed is some bad bastard, it could break our heads at some time The problem is that since there is a fixed amount of BTC, it incentivizes people to hoard it. Which then causes them to panic dump it when the price falls. What we need is a cryptocurrency with enough inflation to deincentive saving (hording). |
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Surely Gox put large sums of money aside for times like these. It is not as if they were completely unaware the price might drop again one day. Also, they should be able to downscale their operations easily when needed.
It's not so much the price decline that's killing them. It's the volume decline. They make all their money on commissions and at 20K BTC trades per day, compared to 120K/day, that is a pretty unexpected decline in revenue. Generally speaking, startups are not very good about keeping safety money in their accounts when they're under so much pressure to scale up. |
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Employee Costs = 150,000 * 20
Legal = 200,000
ISP / DDOS servivers = 120,000
Rent / Security = 120,000
Servers & Utilities = 100,000
= ~ 3.5 MM per year
150k for their "stellar" employees? Wow... do you own a business? I want to work for you! That 150k per employee figure is way off, but still its true that a low btc/usd exchange rate has an enormous impact on Gox's financials. Taking into account their history of honesty but profound amateurism, I also wonder how good they scaled during the "success", and how well are they going to handle this rough moments (because for them these are rough moments, that's for sure). 150K is the total employee cost - I should have made that clear. Where I work, employees cost about 2x their salary in taxes, benefits, equipement, etc... Think about it. With their new infrastructure and crap volume, they could start losing 50K per day if the price keeps dropping. Hell, they may already be bankrupt for all we know. The fact that they only accept bank transfers in and not out, is definitely a red flag. I have $100 that says they'll "unfortunately need to extend" their USD hiatus. So according to your calculations, Gox didn't exist before March of this year (when we crossed through $65). Imagine how much they must have been running in the red when bitcoin was $5 or$12! Of course not, that would be stupid  Last year MtGox was a TINY operation. They had a handful of employees, no DOS protection to speak of, no offline storage, small retail space, and only a couple of servers. At the beginning of this year they have needed to seriously scale up. A new AML team for verifications, many more servers, new developers, new DDOS services, new facilities, lawyers, accountants, etc... There is no doubt that they made money in the first quarter of this year, but they have obviously needed to SPEND lots of money as well. My point is that they very likely SPENT money in proportionate to the much higher income they were generating then. An income they've been largely cut-off from for the last month. But you know, costs don't go away as easily as profits. They are still spending horrendous money. If they haven't been keeping good accounting practices, it's entirely possible they're in financial trouble. ...and you know what would be a obvious sign of financial problems? Turning off fiat withdrawals. |
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Money supply is not capped. Scarcity is ensured by Moore's Law similar to ppcoin's design. This doesn't necessarily mean it's high inflation compared to other coins. See d5000's excellent study on inflation speed in cryptocurrency: https://bitcointalk.org/index.php?topic=227395.0Even though ppcoin does not have cap, it's inflation speed is currently lowest among all altcoins. Money supply is scaled at similar level to ppcoin and litecoin. I take it, it's forked? same as others
also any indication how many coins will be minted?
80 million? 320 million? unlimited?(unlimited always bad imo)
will it be capped?
will it be opensource?
thanks
Can you be more specific on the rate of inflation (coin minting)? PPC inflation is about 10% per year, which is pretty outrageous. It's not fair comparing it to BTC, since BTC has a fixed cap. If your time horizon is extended by a few years (like a 30yr t-bill would be) then BTC inflation rate is 0. |
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Employee Costs = 150,000 * 20
Legal = 200,000
ISP / DDOS servivers = 120,000
Rent / Security = 120,000
Servers & Utilities = 100,000
= ~ 3.5 MM per year
150k for their "stellar" employees? Wow... do you own a business? I want to work for you! That 150k per employee figure is way off, but still its true that a low btc/usd exchange rate has an enormous impact on Gox's financials. Taking into account their history of honesty but profound amateurism, I also wonder how good they scaled during the "success", and how well are they going to handle this rough moments (because for them these are rough moments, that's for sure). 150K is the total employee cost - I should have made that clear. Where I work, employees cost about 2x their salary in taxes, benefits, equipement, etc... Think about it. With their new infrastructure and crap volume, they could start losing 50K per day if the price keeps dropping. Hell, they may already be bankrupt for all we know. The fact that they only accept bank transfers in and not out, is definitely a red flag. I have $100 that says they'll "unfortunately need to extend" their USD hiatus. |
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Employee Costs = 150,000 * 20
Legal = 200,000
ISP / DDOS servivers = 120,000
Rent / Security = 120,000
Servers & Utilities = 100,000
= ~ 3.5 MM per year
150k for their "stellar" employees? Wow... do you own a business? I want to work for you! This is total cost to the company - not just salary. I would guess average salary is ~78-120, but the total cost is closer to 150. Plug in your own numbers, though - it's still the same conclusion. The real number to be worried about is their low transaction volume. |
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I've been doing some calculations... and there is a BTC price point which, if sustained, will drive MtGox bankrupt, imo.
Granted, these are based on some pretty rough assumptions, so let me know if you see any flaws. Obviously, MtGox is a private company so they won't release their financials...
Yearly Costs:
Employee Costs = 150,000 * 20
Legal = 200,000
ISP / DDOS servivers = 120,000
Rent / Security = 120,000
Servers & Utilities = 100,000
= ~ 3.5 MM per year
Revenues:
25,000K BTC average volume post Dwolla / USD Hiatus
Average of 0.5% commissions (most trades are algo or whale at 0.25% comm on each side)
= ~300K per month
At these values, any BTC price below 65$ USD will not sustain them financially. Now, if you factor in any money seized in the Dwolla raid, and any money they may have prepaid, that pain point might be sooner. Of course, the reverse is possible as well, and they might have stockpiled money from the boom/bust. It's hard to say, but the point is that it is not negligible risk (hence the spread between them and other exchanges). MtGox scaled up considerably when the boom started earlier this year and likely invested a lot in servers, people, services - after the Dwolla and USD hiatus, they may no longer be making enough in commissions to keep paying their bills / employees.
Just food for thought. The BTC economy is putting a lot of faith in MtGox's ability to do proper/honest financial accounting / planning.
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Anyone want to play devil's advocate? What are the down-sides?
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Wouldn't it be better to look for any prime? Why restrict it to Mersenne primes? |
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Looks interesting. Maybe something like the SETI project could use some "hashing" power from this coin.
Find Aliens, get all the money! Or it could connect with BOINC - cure cancer drug - get money! ...but in all seriousness, I do wonder if some sort of protein folding calculations can be done instead of the primes calculations. Protein folding is in serious need of computing, and can save lives. I guess the problem is that the calculations are not unpredictable.  |
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A bear doesn't talk big bear words on the forums if he hasn't already sold.
A lot of bear talk lately => a lot of people are short => ...
And inversely a lot of bull talk, a lot of people are in long positions; all in. And so you might think that this place is an counter-indicator. But the reality is that the market makers are not here at all, and this forum is right exactly 50% of the time. The big whales we're so fond of talking about aren't wasting their time in an internet forum. |
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Volumeless rally. Gee, I feel so confident.
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MtGox willfully coming under regulations is extremely bullish news. Anything that brings the Bitcoin economy under US regulations is extremely positive for Bitcoins future. If this trend continues, I will have to dump my bear claws for bull horns. Yes, I think it's that significant and of course the news is, soooo anti-Libertarian, I can't hardly control my laughter.  This news does not seem to have hit mainstream media in the US yet. Could be because it came out in a Friday news dump. I wouldn't expect some crazy panic buy but I would expect sentiment to begin to shift in a positive way toward Bitcoin. The more Bitcoin can shed it's "anti-regulation", "criminal sponsor" image, the better chance it has to be successful. All they've done is APPLY. The application hasn't even been reviewed yet by FINCEN, and, let me tell you, it's going to get a lot of scrutiny. But the application itself isn't news at all. Of course they applied - if anything, just to get the money in their seized Dwolla account back. Did people really expect them to remain shut-off from the US market? |
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People are realizing that they should probably clean up the bids on the order book and gather their fiat millions while the slippage is good.
Exactly, it'll be a desperate situation when a 1K sell drives the price down $10, but when that happens... it's a looong way down. Of course, MtGox will probably put a hold no trading again. And if they do that, I think it means they have a financial interest in the price, which would make me even more worried. |
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i'd be really suprised for any of the 3 biggest exchanges to go out of business...the profitability of running a popular bitcoin exchange must be enormous considering the steep trading fees they charge.
You're assuming they maintain 100% capital reserves. All that money.... It's hard to imagine they would just leave it in customer accounts and not "invest" any of it in new servers, hosting, employees, software, security consulting, DDOS protection, legal services, physical security, or hell, even 30 day t-bills. The costs of running a major BTC exchange have skyrocketed along with the price & volume. High on their own success it's not hard to imagine they aren't thinking really big and trying to scale faster than their commissions can drive them. It's a race the top, after all. No one wants to trade on the #2 exchange. It would take an organization with considerable discipline and integrity to resist the temptation to borrow customer funds to scale the business when the alternative is failure. I mean hell, it's LEGAL for banks to do it - why shouldn't a BTC exchange, right? ...then boom, 50% price drop, and oops, customers try to pull out their USD/EUR, and hmm.... well, we're a little short on fiat today... Let's just put a hold on fiat transfers and let the market calm down for a couple weeks, and we'll pay everybody then. We're not bankrupt, we're just low on cash TODAY, after all. ...Then the volatility continues, some more bills come in, a few more customers cash out, and BAM liquidity crunch - Bankruptcy. ...and the first 21st century crypto-currency "run-on-the-bank" happens. Standard banks went through this in the 17/1800's and now they must PROVE their capital reserves every night to the Fed. With BTC, this is just waiting to happen. |
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