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Author Topic: This bubble reminds me of something..  (Read 4157 times)
Muis
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April 02, 2013, 11:49:34 PM
 #1

I just saw someone posting on IRC:

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<damari> at current rate of change (+4% a day) it will take 231days until BC is at 1M USD

And I had an immediate flashback to the whole Pirate ponzi.

Everyone on this forum realised 1% interest per day was completely unsustainable, but still we were all excited, and most of us invested huge sums. Those who didn't were the critics that told us everyday that 1% per day is impossible. Now everyone earns even more than that just by holding coins, and suddenly they act like its a completely natural growth. Just because Pirate was a ponzi and Bitcoin is a coin?

I'm not saying I'm expecting the same kind of dramatic collapse, but all those people opening up topics about triple digits, should tamper their enthousiasm and realise this growth is unsustainable before they advice all their family and friends to put their life savings into BTC.
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twolifeinexile
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April 02, 2013, 11:55:18 PM
 #2

I just saw someone posting on IRC:

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<damari> at current rate of change (+4% a day) it will take 231days until BC is at 1M USD

And I had an immediate flashback to the whole Pirate ponzi.

Everyone on this forum realised 1% interest per day was completely unsustainable, but still we were all excited, and most of us invested huge sums. Those who didn't were the critics that told us everyday that 1% per day is impossible. Now everyone earns even more than that just by holding coins, and suddenly they act like its a completely natural growth. Just because Pirate was a ponzi and Bitcoin is a coin?
This is a current exchange price, no entity guarantee its rise that way. In the ponzi case, the entity guarantee that. Both can not sustain for ever, but ponzi is a scam, this is purely "hope"
Muis
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April 03, 2013, 12:09:24 AM
 #3

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This is a current exchange price, no entity guarantee its rise that way. In the ponzi case, the entity guarantee that. Both can not sustain for ever, but ponzi is a scam, this is purely "hope"

To be specific Pirate also never guaranteed anything about the interest rates, he even announced changes in advance. And ofcourse I understand that Bitcoin is totally different from a ponzi, but I just wanted to make the comparison anyway Smiley There was a lot of excitement and profit those days, just like there is now, and it seems people tend to forget this growth rate will soon be over.
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April 03, 2013, 12:20:08 AM
 #4

zeroday
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April 03, 2013, 12:31:15 AM
 #5

It's not a ponzi scheme, it's classical bubble like dot com or real estate.

Starting from March 16 crowds of greedy inexperienced people (zombies) rush for bitcoin because of "As Seen on TV" factor.
They don't realize what bitcoin is and how does it work, the only thing they believe is that it is everlastingly deflating and profitable.

But every bubble has its peak and then crash.

To start the crash it's only necessary to make a prime time TV show telling a horror story, something like
"poor single mother sold everything to buy BTC at $200 and then committed suicide after it dropped to $150".
Bump! And hordes of greedy zombies are running to sell sell sell in panic.

However, bitcoin will not die. Just a year later the bubble will happen again, then again, and again. I'd say Perpetum Bubble  Grin

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April 03, 2013, 01:39:12 AM
 #6

It's not a ponzi scheme, it's classical bubble like dot com or real estate.



both of which lasted for years and made many people very rich.

Sig This
zeroday
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April 03, 2013, 01:44:21 AM
 #7

It's not a ponzi scheme, it's classical bubble like dot com or real estate.



both of which lasted for years and made many people very rich.

True, if you know when to stop.

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April 03, 2013, 02:42:49 AM
 #8

It's not a ponzi scheme, it's classical bubble like dot com or real estate.



both of which lasted for years and made many people very rich.

True, if you know when to stop.

and that sums up what the starry eyed, the naive, the greedy, and the downright pig headed people who collectively seem to be in the majority on this forum, need to realise.

The dotcom bubble lasted years, as did the housing bubble. But if you take the value of Bitcoin back in November, you will realise that Bitcoin has outstripped the gains in both these bubbles in less than 6 months!

As the OP highlighted, at the current rate of growth, 1 Bitcoin = 1 millions USD in less than 1 year. Does anyone seriously believe that this will be the case? If not, then you would have to assume that this Bitcoin bubble has less considerably less than 231 days to run. If it is to be the case, then thousands of mainstream real world uses of Bitcoins would have to spring up pretty soon. And by that I am talking, paying utility bills, buying electrical goods, booking flights etc. Of course, with the current volatility in Bitcoin, no established business in their right mind is going to get heavily involved with the coin, so I am afraid that when the crash comes, it will just be us Silk Road punters who are their to offer a few pennies for the absolute glut of coin on the exchanges.

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April 03, 2013, 03:09:02 AM
 #9

Pirate sold his coin at $15 or something?

Tonko
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April 03, 2013, 04:11:51 AM
 #10

Even at $200 per coin it is affordable to a few thousand kids per day, or rather, to their mom or dad, who don't necessarily know where is kid putting his money.

A bit more adult people, who maybe even have a job, can afford $1,000 to $5,000, just to see what happens. Heck, a few extra grands in a week, even if only in Mt.Gox or other exchange electronic 'paper', is not such a bad deal!

All that in about 20, max 30 countries in the world.

Most of these people won't be able to spend $10,000 or $100,000 per coin, much less one mil, because they simply don't earn that much.

That much is for sure.

The dark cloud of about 60% of all BTCs that will ever exist, all in old, dormant coins, waiting out there to possibly be dumped on the market anytime, remains.

It is like a secondary offering after an IPO. Suddenly a lot of investors, after a nice IPO run up, discover that there are truckloads of more shares coming onto the market.
Happily, most of Bitcoiners know nothing about all that stuff so it, along with a balanced profit-taking by a few big entities, who can eat yearly Mt.Gox volume, may save this market from crash.
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April 03, 2013, 04:42:42 AM
 #11

To highlight the absurdity, at the current rate, the "market cap" of BTC would exceed the total aggregate wealth of the entire planet in a year. But that amount of wealth is not, obviously, available. And LTC may not be far behind. Something must give, sooner or later.

A cryptocurrency is what the community chooses to make of it. There emerges a tug of war between those who wish to have a digital currency and those who want digital tulips. Currently, the tulip faction is firmly in command. Most who are jumping on the bandwagon now have no intention of exchanging their bitcoins for anything but conventional currency (down the road, when their bitcoins are hopefully worth more.) It is seen as a get-rich-quick scheme, just as tulips were of old. Only when this has run its course can Bitcoin become functional as an actual currency rather than a mere speculative commodity.


BTC:1Ca1YU6rCqCHniNj6BvypHbaHYp32t2ubp XRP: rpVbjBotUFCoi9xPu3BqYXZhTLpgZbQpoZ
LTC:LRNTGhyymtNQ7uWeMQXdoEfP5Mryx2c62i :FC: 6qzaJCrowtyepN5LgdpQaTy94JuxmKmdF7
twolifeinexile
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April 03, 2013, 04:55:27 AM
 #12

To highlight the absurdity, at the current rate, the "market cap" of BTC would exceed the total aggregate wealth of the entire planet in a year. But that amount of wealth is not, obviously, available. And LTC may not be far behind. Something must give, sooner or later.

A cryptocurrency is what the community chooses to make of it. There emerges a tug of war between those who wish to have a digital currency and those who want digital tulips. Currently, the tulip faction is firmly in command. Most who are jumping on the bandwagon now have no intention of exchanging their bitcoins for anything but conventional currency (down the road, when their bitcoins are hopefully worth more.) It is seen as a get-rich-quick scheme, just as tulips were of old. Only when this has run its course can Bitcoin become functional as an actual currency rather than a mere speculative commodity.


could you give the number?

BTW, people buy just because they believe ther would be a higher equilibrium price. Not because the speed of the increase. And like stock market, it is now seems "discounting" a full success (which may not be, of course)
But that is market action
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April 03, 2013, 04:58:53 AM
 #13

To highlight the absurdity, at the current rate, the "market cap" of BTC would exceed the total aggregate wealth of the entire planet in a year. But that amount of wealth is not, obviously, available. And LTC may not be far behind. Something must give, sooner or later.

A cryptocurrency is what the community chooses to make of it. There emerges a tug of war between those who wish to have a digital currency and those who want digital tulips. Currently, the tulip faction is firmly in command. Most who are jumping on the bandwagon now have no intention of exchanging their bitcoins for anything but conventional currency (down the road, when their bitcoins are hopefully worth more.) It is seen as a get-rich-quick scheme, just as tulips were of old. Only when this has run its course can Bitcoin become functional as an actual currency rather than a mere speculative commodity.



Hey, I wouldnt let deathcode see such scurilous comments!

He will come in here and call you a complete ignorant idiot who doesn't have a clue about Bitcoin, if you are not careful!

Kraken Account, Robbed/Emptied. Kraken say "Fuck you, its your loss": https://bitcointalk.org/index.php?topic=1559553.msg15656643#msg15656643

Bitfinex victims. DO NOT TOUCH THE BFX TOKEN! Start moving it around, or trading it, and you will be construed as having accepted it as an alternative means of payment to your USD, BTC, etc.
zeroday
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April 03, 2013, 05:45:21 AM
 #14

"Tulip fraction", especially its latest followers, risks to face significant losses after the correction, which may happen very soon. Their panic can initiate a snowball effect, in other words - bubble burst.
They will become victims of own greed.

I've just sold a part of my coins @ $123 to fully recover USD amount I previously spent to buy all of my btc. Now I can afford to relax and be a spectator.

Ares
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April 03, 2013, 06:08:25 AM
 #15

Even at $200 per coin it is affordable to a few thousand kids per day, or rather, to their mom or dad, who don't necessarily know where is kid putting his money.

A bit more adult people, who maybe even have a job, can afford $1,000 to $5,000, just to see what happens. Heck, a few extra grands in a week, even if only in Mt.Gox or other exchange electronic 'paper', is not such a bad deal!

All that in about 20, max 30 countries in the world.

Most of these people won't be able to spend $10,000 or $100,000 per coin, much less one mil, because they simply don't earn that much.

That much is for sure.


The dark cloud of about 60% of all BTCs that will ever exist, all in old, dormant coins, waiting out there to possibly be dumped on the market anytime, remains.

It is like a secondary offering after an IPO. Suddenly a lot of investors, after a nice IPO run up, discover that there are truckloads of more shares coming onto the market.
Happily, most of Bitcoiners know nothing about all that stuff so it, along with a balanced profit-taking by a few big entities, who can eat yearly Mt.Gox volume, may save this market from crash.
None of that matters because you can buy any fraction of a bitcoin. A 12 year old with $10 could still get in on bitcoins when they're priced at $1000/BTC
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April 03, 2013, 06:36:51 AM
 #16

None of that matters because you can buy any fraction of a bitcoin. A 12 year old with $10 could still get in on bitcoins when they're priced at $1000/BTC

And how do the transaction fees, and other fees that exchanges/brokerages/banks charge to 'bother with you' figure out in your equations?

How is Mt.Gox going to handle hundreds of thousands of kids wanting to invest $10 when they have a hard time handling 8000 users willing to spend hundreds to thousands of $?

You don't see kids buying, say, 1/60th of a Google share and there is a reason for that.
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April 03, 2013, 07:04:27 AM
 #17

This growth is not sustainable in my opinion, I definitely think things could go either way though in the short term. Have been flip flopping between buying more coins and cashing out.

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dyseac
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April 03, 2013, 11:26:02 AM
 #18

I doubt there would be a market at $1m per coin... I think it will flatline at $1000 max... but then my guess is as good as an others.. right?  Wink
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April 03, 2013, 12:18:01 PM
 #19

I doubt there would be a market at $1m per coin... I think it will flatline at $1000 max...
It depends on what fraction of the world's commerce is being denominated in BTC.
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April 03, 2013, 01:15:21 PM
 #20

To highlight the absurdity, at the current rate, the "market cap" of BTC would exceed the total aggregate wealth of the entire planet in a year. But that amount of wealth is not, obviously, available. And LTC may not be far behind. Something must give, sooner or later.


Fictional wealth can be magnitudes higher than real wealth, this is totally normal. For example, gold have 10 trillion market cap, but it does not mean that there are 10 trillion worth of goods available for purchase if all these gold are poured out. Actually if everyone is selling gold, its price will crash hard since there are not so many cash ready to purchase

Same, if everyone sell their bitcoin, the price will crash to single digits, but just like gold, people have incentive to hold many of their coins and spend only a little, have a deep reserve can give you lots of safety and freedom




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