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tutkarz
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April 12, 2013, 08:41:17 AM
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Before i will begin my rambling i write some analogy.

Lets assume we are tired of governments and banksters that are using us basically as slaves . We decided to create a free state in random country. It is a place where anybody can do what they want. No one is forcing you to do anything and no one is looking at your hands. It is nice place to live in so we are inviting friends to join us. But other states see this and they are simply sending people to us and they are poking some of us with a stick laughing. We promised that our state will be free so we cant stop them because it would be breaking our rules. The problem is that other non-free states will be pointing at us and telling other people that its stupid to live there because everybody can simply push you around and you wont do anything about it. And because people dont like to be pushed and feared they will agree with them and stay with they slave role because at last they are left alone as long as they obey orders.

Sooner or later people will start leaving this place and whole idea will collapse. The mistake we did here was assumption that other non-free states will leave us alone and people will slowly come to us making us more and more popular. No. It will never happend. Because if people will start leaving other states to join you, then governments and banksters will loose their power and money and they wont allow this to happend.

In order to not let that happend we created militia. People eventually learned that we cant be pushed about and feared easilly. To counter this governments will stop laughing at us and bring tanks and artillery and spread all over the world that we are terrorists and have nuclear weapons ready to kill others. Ofcourse that is not true but who slaves with washed brains will belive?

It is the case with bitcoin. We created tool - free for everybody perfect banking system, where you can save money, transfer value and buy stuff. But now nothing works as it should. There is one simple reason why it is not working. And it is not central exchange. Its bitcoin price.

We already know that to transfer value using bitcoin we have value bitcoin itself because as long as there is fiat money around $0 = 1btc will not work (simple math).
We decided to set bitcoin price using free market. But it will not work also. No matter how much exchanges you have. It will simply not work!

We as community have to setup minimum price for bitcoin. It has to be healthy for it and include whole world market. For a start i would say that $1 should be equal to 1000 satoshi. This means that 1 bitcoin should be worth:

1 btc = 100 000 000 / 1000 = $100 000
(amount of satoshi in bitcoin divided by satoshi price)

This is minimum healthy price for bitcoin (its not set in stone we can decide to raise it but not lower). And here is explanation why.

As long as price for bitcoin is regulated by free market it will always be low. Because everybod with huge amounts of fiat he just printed, can just come, buy alot of bitcoins and dump them next day. People will fear as now, they will panic and sell below its minimum. They will start to doubt and leave. Press will be laughing at us and no serious business will ever come and look at bitcoin because he will know that its not worth the trouble.

This is why we have to setup our militia. From now on every person who belives in the bitcoin future have to become its central bank. You have to accept your job and take full responsibility for it to fail or to succeed. Yes you might be rich in the process but its not the whole point. You as central bank manager have to buy every bitcoin that is priced below value we agreed is healthy for bitcoin. And thats why you have to own alot of fiat money. It is not going to be easy job and you may loose money in the process. But every new business is risky. Especially if it is revolutionary.

Now why the price have to be set that high? Answer is simple.
1. it prevents from buying and dumping easilly. Now you would have to own much more money to do this.
2. it is healthy because now everybody can transfer any amount of money and not crashing price at the same time. Consider this. Now there is 11 000 000 coins at the market. At one exchange you have (lets assume) 1% of coins available. You can buy 110 000 coins at any given exchange. And now what if price is equal to:
  a. $50 you can buy and transfer $5 500 000 which in global market is laughable and if you buy that amount of coins to transfer value and sell it next day you will crash the market even if you didnt wanted to. This will lead to huge price differences on each market too.
  b. $100 000 it gives $11 000 000 000 000 which sounds better if we would like to transfer large amounts of money and not destabilise market. Which means more reasonable and bigger institutions might start to consider bitcoin as item they want to use.
3. Higher price means the market is way less volatile and people can save they money without worring that next day they will have nothing. And price increase would equal usuall fiat inflation.

To sum it up there are two choices. One is to set minimum price for bitcoin, accept your new role as bitcoin central bank and stabilise price at healthy for bitcoin values. Allow free market as long as price is higher than minimum.
Or leave it on its own hoping banks will leave it alone (which will NEVER happend) so you can expand without problems. If you choose second option then you can simply close this business because people will learn they can only loose money with bitcoins, that its a tool for gamblers and speculants. And the longer we will wait with this the worse reputation will stick to bitcoin and the harder will be to recover it.

Centralised or decentralised exchanges are not that big problem as long as we allow free market to decide for us if bitcoin will succeed or fail. And it will fail if price will be low because low valued bitcoin is simply useless and function only as geek niche tool. Relying on free market its like saing that its not my responsibility for this. And its wrong assumption. Bitcoin future depends 100% on our community and nobody else. Banks wont do that. Governments either.

Im not promising you easy money. Its responsible job and you can loose all your investments because IF we manage to call our militia who will be defending us and stabilise price that way, then governments WILL bring guns and tanks on us and the real battle will begin. Now they are only playing with us having fun. Decide.

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cosurgi
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April 12, 2013, 08:56:56 AM
 #2

We as community have to setup minimum price for bitcoin. It has to be healthy for it and include whole world market. For a start i would say that $1 should be equal to 1000 satoshi. This means that 1 bitcoin should be worth:

1 btc = 100 000 000 / 1000 = $100 000
(amount of satoshi in bitcoin divided by satoshi price)

great idea. You should put your money where your mouth is. I will sell you 10 BTC for $100 000 each.

tutkarz
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April 12, 2013, 10:04:38 AM
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We as community have to setup minimum price for bitcoin. It has to be healthy for it and include whole world market. For a start i would say that $1 should be equal to 1000 satoshi. This means that 1 bitcoin should be worth:

1 btc = 100 000 000 / 1000 = $100 000
(amount of satoshi in bitcoin divided by satoshi price)

great idea. You should put your money where your mouth is. I will sell you 10 BTC for $100 000 each.

you dont understand, dont you? I said buy everything below that price and dont sell below either. People have to be convinced that bitcoin has value. Because right now you are waiting for banksters who may or may not raise bitcoin price with their fiat. And i said dont do this. Count on yourselves.

This is closed circle. You are waiting for bitcoin to gain value because then price will stabilise and more people will start using it. But it wont gain value if it will not be stable. Thats why i said if you are going to simply wait, you may as well just shut it down.

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