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Author Topic: Nobody takes bitcoin seriously: rises 10x in month drops 50% in 10 days? I do.  (Read 3691 times)
AntiVigilante
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June 06, 2011, 01:26:17 AM
 #1

Bitcoin is behaving exactly as it should. Everyone is beginning to feel the heel in their backs.

We are failing. Not bitcoin. There's the problem.

As a result, I'm loaning my bitcoins to traders and miners with good ratings and turning to coding enough trend quaking software to justify the market cap. And I'm not the best. All I have is sheer fury.

So there it is. As long as the value goes up, we should be covering the gains by being able to reap what we sow. If I have to do it all by myself so be it. But I know everybody from cuddlefish to Xenland are also putting in the hours.

My motto is if Silk Road is full of Mafia Wars wannabes then an invasion by soccer moms should do the trick. In fact, I'd say what makes Silk Road vulnerable is the limitation of categories of products. Of course some self-hating conflationary minds would rather have nothing to do with it while hating the fact that it is what it is.

We ain't started yet, gentlemen.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
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Rob P.
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June 06, 2011, 02:10:27 AM
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The problem is people are hoarding coins.

The TOTAL volume at mtg today was 681 coins.  681.

There are over 6.4M coins in the market (not counting lost coins).

Because the prices are rising, people are holding them.  Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating.  No one is USING them.

Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).

If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.

Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?

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June 06, 2011, 02:20:43 AM
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I have a feeling that any future exchange needs to be in Tor hidden service.

Like what I posted?

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June 06, 2011, 02:26:40 AM
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The problem is people are hoarding coins.

The TOTAL volume at mtg today was 681 coins.  681.

There are over 6.4M coins in the market (not counting lost coins).

Because the prices are rising, people are holding them.  Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating.  No one is USING them.

Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).

If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.

Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?


Reminds me of the Yogi Berra quote "Nobody goes to that restaurant, its too crowded"

Prices are rising to flush out the hoarders. Where do you get 681 coins? I see volume of 21,000+ at mtgox according to the ticker. Is there a volume number I don't see?

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June 06, 2011, 02:27:59 AM
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The TOTAL volume at mtg today was 681 coins.  681.



andes
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June 06, 2011, 02:29:25 AM
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The problem is people are hoarding coins.

...

Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?

I dont see this as a problem. I think people are not selling bitcoins because the demand is making the price go up, and naturally no body wants to sell something that will be twice as valuable a week from now.

There is no problem to get bitcoins if you pay the current price to get them. The current problem for the bitcoin economy right now is not the availability of bitcoins, but the current volatiliy. Prices of goods and services expressed in bitcoins must be adjusted daily, which is inconvenient, but I think as time passes and more people get into the bitcoin economy, the volatility should not be an issue.
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June 06, 2011, 02:30:04 AM
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The problem is people are hoarding coins.

The TOTAL volume at mtg today was 681 coins.  681.


mtg must not be MtGox, because there are single trades that exceed that number.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

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June 06, 2011, 02:32:02 AM
 #8

The problem is people are hoarding coins.

Or freaked out so they switch to being committed and holding.

Wish they'd realize that loaning, buying with BTCs, and exchanging for services is the same as holding.

Quote
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).

So invade that market place. I once went to a computer fair where people had other things on sale. On one side were people selling virgin Mary figurines. The other had penis shaped cigarette lighters. I'm not joking.

Quote
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.

I loaned 3.9 (full loan 10) BTC today. 20% over two weeks. Priced in bitcoins. No USD exchange or anything.

Quote
Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?

We call that a reboot. I'll restart bitcoin all by myself if it happens. Phenomenal power, itty bitty living space.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
justusranvier
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June 06, 2011, 02:32:08 AM
 #9

If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Exactly. It's an unrealized gain until you spend them.
dust
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June 06, 2011, 02:33:11 AM
 #10

The problem is people are hoarding coins.

The TOTAL volume at mtg today was 681 coins.  681.


mtg must not be MtGox, because there are single trades that exceed that number.
He was probably looking at bitcoincharts.com immediately after the market "close" and daily stats reset.

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Vladimir
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June 06, 2011, 02:33:47 AM
 #11

pickerin,

Quote
Damn hoarders do not sell me coins for 15$, bastards!!! This is why bitcoin is doomed!

Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.

P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.

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June 06, 2011, 02:43:21 AM
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pickerin,

Quote
Damn hoarders do not sell me coins for 15$, bastards!!! This is why bitcoin is doomed!

Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.

P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.


The dynamic is however a legit concern. As I said above, I'm lending out my coins now.

I agree with you. All this is is a failure to evolve.

Lend out your coins. Help people pay bills. Get your coins back.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
Bazil
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June 06, 2011, 02:43:39 AM
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People hoard gold all the time too.  I don't see a bunch of people complaining about that, everyone wants gold.

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June 06, 2011, 03:26:57 AM
 #14

Lend out your coins. Help people pay bills. Get your coins back.
how can you be sure you will get your coins back, considering its rapid appreciation, and the high interest rate (20% in 2weeks, 520% annualized simple rate)?
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June 06, 2011, 06:09:47 AM
 #15

Lend out your coins. Help people pay bills. Get your coins back.
how can you be sure you will get your coins back, considering its rapid appreciation, and the high interest rate (20% in 2weeks, 520% annualized simple rate)?

Lend out to traders you already know. How can you be sure you are getting your product?

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
broker11
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June 06, 2011, 06:18:31 AM
 #16

There does seem to be hoarding.  Perhaps more selling to reduce volatility and additional exchanges like Mt Gox would reduce volatility and increase credibility.

"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."

http://www.youtube.com/watch?v=9q3UtmhR9G8
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June 06, 2011, 06:31:56 AM
 #17

There does seem to be hoarding.  Perhaps more selling to reduce volatility and additional exchanges like Mt Gox would reduce volatility and increase credibility.

"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."

http://www.youtube.com/watch?v=9q3UtmhR9G8

I swear I'm not hoarding any coins. All the ones I haven't spent yet are being saved.

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Rob P.
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June 06, 2011, 12:12:06 PM
 #18

The TOTAL volume at mtg today was 681 coins.  681.

There are over 6.4M coins in the market (not counting lost coins).

Because the prices are rising, people are holding them.  Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating.  No one is USING them.

Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).

If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.

Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?


My apologies, I in fact was misled by the mtg graph of volume.  I expected an end-of-day graph to be volume for the previous day, when in fact it "reset" and was volume for the new day.  My bad.

However, the point is still the same.  22,000 BTC volume for a day against a population of 6.4M coins is 0.3% of the available coins. 
By comparison the trade volume of ONLY the US Dollar and the AUS Dollar amount to 25% of the total circulating dollars per day (http://www.businessinsider.com/chart-of-the-day-trading-currencies-2010-10).  The total US Currency Population is approximately $930 Billion ( http://www.freerepublic.com/focus/f-news/2697687/posts and http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/).  We need to see trading volumes in the Bitcoin market approach 1.6M coins, per day, to see the same type of "stability" the US Dollar has.  Will that drive the price of BTC down?  Absolutely.  But guess what, that price will be much more stable and much closer to the realistic value of a single BTC.  Right now the prices are due to hoarding, and that's not sustainable, it WILL crash.

I'm not a naysayer of Bitcoins.  I believe in them.  But if we as a community want them to succeed, you have to use them.  Otherwise, BTC aren't going to be a currency, they're going to be an asset.  I have assets, my MacBook Pro is an asset.

Put it this way.  There are people with WAY over 21,000 BTC in their combined Wallets.  What would happen if they decided to sell all of them right now at the "peak" of the market? 

Only ONE person gets to sell at the peak.  Once they've sold, it pushes the prices down.  If that sale is large enough, it will devalue the current BTC market itself significantly.  Once people start seeing BTC drop significantly in value, guess what will happen?  More people will jump to sell because they're seeing the investment they thought was worth X quickly become X-Y, while Y continues to grow.

The smartest people in the Bitcoin market are selling coins every day.  Because if they can convert their current stash of coins into US Dollars and do it slowly enough to not impact the market, they'll win. 

Lesson:  If you aren't selling coins every day, you're running the SIGNIFICANT risk of rapidly losing a significant amount of money.

Your "gains" are unrealized until you have something else in your possession.  Doesn't matter what it is, a shiny new MacBook Pro, or an iPad, or Amazon gift cards, doesn't matter.  But until you have something ELSE of value that you've used Bitcoins to acquire, your gains are unrealized and you run the risk of never realizing them.

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June 06, 2011, 12:18:37 PM
 #19

I have a feeling that any future exchange needs to be in Tor hidden service.

This still leaves the question of how to add or withdraw USD into the service. A service dealing in USD, such as a BTC/USD exchange, can only be so secret.
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June 06, 2011, 03:07:25 PM
 #20

Dude, mtgox is not the only place that trades the coins, tons of coins are traded privately or on bitcoin-otc.

USD trade has significant volume because traders use extremely high level of leverage. I can trade several million of USD with just a few thousand dollars in the forex account. There's no leverage in BTC trade, therefore the volume is lower. If we were allowed to use 500x leverage like on forex. We'd see volume increase several hundred fold.

The TOTAL volume at mtg today was 681 coins.  681.

There are over 6.4M coins in the market (not counting lost coins).

Because the prices are rising, people are holding them.  Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating.  No one is USING them.

Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).

If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.

Guess what will happen eventually?  No one will WANT the coins, because they couldn't get any.  Guess how much the coins you're hoarding will be worth when no one want them?


My apologies, I in fact was misled by the mtg graph of volume.  I expected an end-of-day graph to be volume for the previous day, when in fact it "reset" and was volume for the new day.  My bad.

However, the point is still the same.  22,000 BTC volume for a day against a population of 6.4M coins is 0.3% of the available coins. 
By comparison the trade volume of ONLY the US Dollar and the AUS Dollar amount to 25% of the total circulating dollars per day (http://www.businessinsider.com/chart-of-the-day-trading-currencies-2010-10).  The total US Currency Population is approximately $930 Billion ( http://www.freerepublic.com/focus/f-news/2697687/posts and http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/).  We need to see trading volumes in the Bitcoin market approach 1.6M coins, per day, to see the same type of "stability" the US Dollar has.  Will that drive the price of BTC down?  Absolutely.  But guess what, that price will be much more stable and much closer to the realistic value of a single BTC.  Right now the prices are due to hoarding, and that's not sustainable, it WILL crash.

I'm not a naysayer of Bitcoins.  I believe in them.  But if we as a community want them to succeed, you have to use them.  Otherwise, BTC aren't going to be a currency, they're going to be an asset.  I have assets, my MacBook Pro is an asset.

Put it this way.  There are people with WAY over 21,000 BTC in their combined Wallets.  What would happen if they decided to sell all of them right now at the "peak" of the market? 

Only ONE person gets to sell at the peak.  Once they've sold, it pushes the prices down.  If that sale is large enough, it will devalue the current BTC market itself significantly.  Once people start seeing BTC drop significantly in value, guess what will happen?  More people will jump to sell because they're seeing the investment they thought was worth X quickly become X-Y, while Y continues to grow.

The smartest people in the Bitcoin market are selling coins every day.  Because if they can convert their current stash of coins into US Dollars and do it slowly enough to not impact the market, they'll win. 

Lesson:  If you aren't selling coins every day, you're running the SIGNIFICANT risk of rapidly losing a significant amount of money.

Your "gains" are unrealized until you have something else in your possession.  Doesn't matter what it is, a shiny new MacBook Pro, or an iPad, or Amazon gift cards, doesn't matter.  But until you have something ELSE of value that you've used Bitcoins to acquire, your gains are unrealized and you run the risk of never realizing them.

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