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Author Topic: Big inflation opportunity  (Read 6609 times)
S3052
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September 27, 2010, 07:59:19 PM
 #21

Yes, there are risks to both, upside and downside.

To buy all BTC or a huge chunk anyway the price will rise a lot , probably 0.5 $ per BTC is not too far fetched

To avoid this, some trading rules would make sense, i.e. limiting BTC possession to a certain percentage of all BTC available. Otherwise someone can easily corner the market.

I could even do it.

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September 27, 2010, 08:02:41 PM
 #22

I will bet you 10,000 USD that you can't own 60% of the bitcoin market by November 2011
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September 27, 2010, 08:03:01 PM
 #23

Yes, there are risks to both, upside and downside.

To buy all BTC or a huge chunk anyway the price will rise a lot , probably 0.5 $ per BTC is not too far fetched

To avoid this, some trading rules would make sense, i.e. limiting BTC possession to a certain percentage of all BTC available. Otherwise someone can easily corner the market.

I could even do it.


Are you talking about market regulation on a site level or globally. The latter, to be possible, would imply changes to the protocol and frankly changes that would remove some of the benefits of bitcoins, like the pseudo-anonymity.
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September 27, 2010, 08:04:16 PM
 #24

Yes, there are risks to both, upside and downside.

To buy all BTC or a huge chunk anyway the price will rise a lot , probably 0.5 $ per BTC is not too far fetched

To avoid this, some trading rules would make sense, i.e. limiting BTC possession to a certain percentage of all BTC available. Otherwise someone can easily corner the market.

I could even do it.


Lol, even if it was a good idea how would you do it? ID everyone? Make them register an account. Oh, don't forget that people might reach the max, send them to their mybitcoin account and then earn more. You are going to have to make everyone report the balance and ownership of accounts on their site, including the anonymous lotto, poker site, biddingpond, etc...

If you think running the price up gives you some advantage please go for it.

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September 27, 2010, 08:06:58 PM
 #25

I will bet you 10,000 USD that you can't own 60% of the bitcoin market by November 2011

Why November 2011? What is your expectation for in 13 months time?
I could start tomorrow slowly buying BTC.

There is a dude putting every day 20,000 and more BTC bids into the market around 0.06. He probably has accumulates A LOT already.

Therefore, I agree with you, 60% is unrealistic now.

But 10-25% in the next 8 weeks is possible.

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mpkomara
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September 27, 2010, 08:10:11 PM
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I will bet you 5,000 USD that you can't own 25% of the Bitcoin market in 8 weeks time
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September 27, 2010, 08:11:12 PM
 #27

I will bet you 10,000 USD that you can't own 60% of the bitcoin market by November 2011

Why November 2011? What is your expectation for in 13 months time?
I could start tomorrow slowly buying BTC.

There is a dude putting every day 20,000 and more BTC bids into the market around 0.06. He probably has accumulates A LOT already.


He's just moving his order around. There hasn't been a day with volume >20k for a while. Even if his trades were going off you couldn't tell if he was just buying and selling back, either at the same site or different.

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September 27, 2010, 08:13:03 PM
 #28

well,... if I really wanted to do that I better don't write about it in a forum :-)

so.. I give in..

especially if you happen to buy as well :-)

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September 27, 2010, 08:39:54 PM
 #29

34k in asks on MtGox. Those are guaranteed and your have 3% of your goal.


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September 27, 2010, 08:51:52 PM
 #30

not too bad for a start..
at an attractive average price

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September 27, 2010, 09:21:26 PM
 #31

Think about chinese government :   it owns about G$ 2,500.

Does it try to sell it ASAP ??

No :  it tries to keep it and support the value of the dollar.  Of course, at some point it will try to get rid of it, but it will do this slowly.

What you say is true, but it's the same for almost all commodities.  After all the Hunt brothers tried to corner silver once.

Nobody could prevent a corner on BTC.

A monetary corner exposes population to possible arbitrary inflation.  But it's a one-time shot.  Once the money is put back in market, it's not easy to get it back.  So imo it's short-term pain, but good for long term, since we'd got rid of the corner.


I'd even add this :  somehow the fact that a corner is "possible" gives some value to the money.  As people try to corner the market, they spend other money and efforts to do so.  By doing so, they give some value to what they are buying.  It's just the same for gold.  Some gold buyers (most of them actually) dream of owning "all the gold in the world", which is an amount that, as a recall, holds in a 20meters sided cube.   As long as people will dream of that, however crazy it is, it will keep value to gold.
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September 28, 2010, 06:43:22 AM
 #32

That's all true for regular currencies but not for bitcoin phenomenon. Bitcoin is a threat to banks because it provides bypass of them. For now it's harmless but think about the future. Banks or govs can generate lots of coins using fast and big clusters and then slowly dump exchange rate as they want for months making panic and serious inflation.
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September 28, 2010, 10:43:20 AM
 #33

To avoid this, some trading rules would make sense, i.e. limiting BTC possession to a certain percentage of all BTC available. Otherwise someone can easily corner the market.

Wouldn't work.

The cornerer would simply generate thousands of new bitcoin addresses and distribute her wealth eavenly among them. How do you prove whether a bitcoin address belongs to a certain person? How do you prove whether physical  person X has access to private key Y? You can't.

A better idea would be a damping of the trading volume built into the bitcoin algorithm.  For example, you could have a rule of thumb that no more than 10% of bitcoins in existence may be traded each hour.

The algorithm could use floating transaction fees that increase as a function of all bitcoins traded the last 60 minutes. As the trading volume approaches 10%, the transaction fees approach 100%.

This would not prevent someone from cornering the market, but it would prevent panic selling.

Someone who owns more than 10% of bitcoins could of course clog the whole system by sending large volumes of coins to himself, but he couldn't do it for long, and he could only do it once. He would leak massive amounts of coins as transaction fees are paid out to those generating blocks.

Rather than permanently crashing the bitcoin price, such an attack would simply make the market unusable for a few hours.


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September 28, 2010, 12:35:17 PM
 #34

That's all true for regular currencies but not for bitcoin phenomenon. Bitcoin is a threat to banks because it provides bypass of them. For now it's harmless but think about the future. Banks or govs can generate lots of coins using fast and big clusters and then slowly dump exchange rate as they want for months making panic and serious inflation.

Banks and governments are unlikely to take serious action against bitcoin until it's already large and successful, at which point destabilising it would be incredibly difficult.

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September 28, 2010, 02:39:27 PM
 #35

I will bet you 5,000 USD that you can't own 25% of the Bitcoin market in 8 weeks time

Asking him to collect over a million bitcoins?

Even 10% at 400,000 would be unlikely. You would push the price up dramatically in the course and it were publicly known, everyone would be raising their prices to get a nice slice of the increased pie.


And all these bids for 1 million coins at 0.02. You guys really have $20,000 cash sitting around to buy bitcoins with? Then what do you do with them for now while the market is still so small?

I'm not asking him to do it, he said he could do it.  he already declined the bet and put the issue to bed.

And yes, i am .03 bid for 1,000,000 bitcoins.
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September 28, 2010, 06:12:48 PM
 #36

Correct I don't pursue the idea to buy 10% of all BTCs, and the reason why is:

I am not confident enough that the risk is manageable, there may be some uncontrollable factors.

You are also right that the price would move through the roof, probably breaking the 0.1 USD mark and even much higher on any attempt to buy that much.

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eurekafag
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September 28, 2010, 08:22:50 PM
 #37

Hey, bidders! You didn't get the idea. No one will sell you all his bitcoins at once. And HE will bid some coins for dollars not asking you and beating the current rate by a little bit. So you will buy from him only and others will be left with bitcoins without even a little possibility to exchange them to some other currency. No one will buy their coins for X dollars if anyone can buy them for Y dollars from that bad guy and Y < X. So people would lower the rate further losing money and eventually stop using bitcoin because they won't exchange it.

I personally don't want it to happen but it MAY happen and everyone should be aware. Just like with any other currency of course but this one is pretty young and weak comparing to countries currency.
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September 28, 2010, 08:25:21 PM
 #38

Seriously,

it would be beneficial to drive up the value of bitcoins via

1. make them usable more broadly (this factor is slowly increasing, there are daily new websites accepting btc)
2. make them attractive as an alternative investment (this does not appear to happen)
3. reduce the rate of new btc generation (this is currently responsible for too much selling , keeping prices flat). if the difficulty would be increased , this would change.

the longer the btc exchange rate stays flat, the less interesting it is: investors will leave and interested individuals will not be attracted. I contrast, rising prices will quickly make btc broadly recognized.

to be clear, no one is interested in a btc bubble, but if you compare it with some other markets, the longer sth moves sideways, the less interesting it is leading to sluggish demand (see silver prices from 1980's to 2000, technology shares from 2000-2009, etc.)

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Always do your own due diligence & consult your financial advisor. Never invest unless you can afford to lose your entire investment.

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S3052
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September 28, 2010, 08:28:33 PM
 #39

Hey, bidders! You didn't get the idea. No one will sell you all his bitcoins at once. And HE will bid some coins for dollars not asking you and beating the current rate by a little bit. So you will buy from him only and others will be left with bitcoins without even a little possibility to exchange them to some other currency. No one will buy their coins for X dollars if anyone can buy them for Y dollars from that bad guy and Y < X. So people would lower the rate further losing money and eventually stop using bitcoin because they won't exchange it.

sorry, can you explain a bit better?

Do you mean if someone tries to buy a LOT btcs prices will rise: Clearly: YES
Do you mean if someone will sell a whole LOT btc prices will fall: YES

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September 28, 2010, 08:59:42 PM
 #40

Seriously,

 
2. make them attractive as an alternative investment (this does not appear to happen)
 

Only bad investors are more interested because something costs more. Is corn a better buy at twice the price? APPL? silver? a heater?

Bitcoin is as good an investment as it'll ever be right now imo. It looks like site developers and coders are serious and able, but coins are still very cheap compared to say, the size of the whole economy.

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