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Question: When will Bitcoin reach dollar parity?  (when will 1 USD = 1 BTC)  (Voting closed: January 15, 2011, 10:17:16 AM)
Before March 30, 2011 - 6 (9.1%)
Before July 31, 2011 - 13 (19.7%)
Before December 31, 2011 - 27 (40.9%)
After January 1, 2012 - 18 (27.3%)
Never - 2 (3%)
Total Voters: 65

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Author Topic: Bitcoin parity.  (Read 9142 times)
Vinnie
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January 15, 2011, 07:38:18 AM
 #41

One more thought regarding velocity. Bitcoin, with some point of sale development, could become the standard medium of transaction displacing credit/debit cards and perhaps cash. This doesn't mean that BTC will be the ideal store of value. That may very well lay in some other form. So while the "till" and your "wallet" will hold BTC, the shop keepers safe and your bank account could hold gold, digital or physical, or it could hold some other store of wealth. Currency specialization of this sort could allow a much lower value for 1 BTC.

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January 15, 2011, 08:35:09 AM
 #42

In a hyper efficient market I would assume that you could get a better deal on goods for paying earlier and/or taking delivery later. Obviously we already see this in shipping. Overnight costs more than standard. And we see what happens if you want to pay months or years after you take delivery, you pay more (interest). This really isn't different than a discount for paying before you get the item. It is valuable to a producer to know in advance who needs what when and where and prepaying is the surest way to prove your future demand for an item. There's no reason a producer wouldn't pay to get this info.

I could imagine buying a Pepsi and paying with bitcoin and the store instantly forwarding part or all of that payment to their Pepsi supplier as prepayment for the next shipment. It could be in the very same block! Demand information passed on virtually instantly. It doesn't stop there, Pepsi uses the payment to 'notify' their corn syrup supplier, their plastic bottle supplier, etc. This is not necessarily caused by bitcoin though, it's just a conjecture I have about future efficiency. It could conceivable happen with a central currency too.

This all comes to mind because obviously it increases velocity. I guess the big question is whether there is good reason to be a bitcoin holder or whether it makes the most sense to trade in and out of some other store of wealth on some short cycle. 

I know right now that I'm willing to hold a decent amount of crappy money because it's super liquid and my expenses are somewhat uncertain. As bitcoin to dollar trade because quicker and easier I will hold fewer and fewer dollars. Beyond a certain point though I want an appreciating asset over liquidity, once bitcoin has reached saturation in terms of breadth and velocity is increasing it might not be as attractive to hold bitcoins as it is to me now.

On the other hand I feel like a good currency pays you for deferring consumption. I suppose that would be true in a stable bitcoin velocity economy that was growing. Ah, maybe what you get paid the most for is announcing (by paying) what you'll be needing immediately after you produce (and get paid) but waiting as long as reasonable to actually take the thing.

I hope some of that is clear, I'm not really sure of any of it.

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Babylon
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January 15, 2011, 12:16:17 PM
 #43

In a hyper efficient market I would assume that you could get a better deal on goods for paying earlier and/or taking delivery later. Obviously we already see this in shipping. Overnight costs more than standard. And we see what happens if you want to pay months or years after you take delivery, you pay more (interest). This really isn't different than a discount for paying before you get the item. It is valuable to a producer to know in advance who needs what when and where and prepaying is the surest way to prove your future demand for an item. There's no reason a producer wouldn't pay to get this info.

I could imagine buying a Pepsi and paying with bitcoin and the store instantly forwarding part or all of that payment to their Pepsi supplier as prepayment for the next shipment. It could be in the very same block! Demand information passed on virtually instantly. It doesn't stop there, Pepsi uses the payment to 'notify' their corn syrup supplier, their plastic bottle supplier, etc. This is not necessarily caused by bitcoin though, it's just a conjecture I have about future efficiency. It could conceivable happen with a central currency too.

This all comes to mind because obviously it increases velocity. I guess the big question is whether there is good reason to be a bitcoin holder or whether it makes the most sense to trade in and out of some other store of wealth on some short cycle. 

I know right now that I'm willing to hold a decent amount of crappy money because it's super liquid and my expenses are somewhat uncertain. As bitcoin to dollar trade because quicker and easier I will hold fewer and fewer dollars. Beyond a certain point though I want an appreciating asset over liquidity, once bitcoin has reached saturation in terms of breadth and velocity is increasing it might not be as attractive to hold bitcoins as it is to me now.

On the other hand I feel like a good currency pays you for deferring consumption. I suppose that would be true in a stable bitcoin velocity economy that was growing. Ah, maybe what you get paid the most for is announcing (by paying) what you'll be needing immediately after you produce (and get paid) but waiting as long as reasonable to actually take the thing.

I hope some of that is clear, I'm not really sure of any of it.

Rather than money earning interest money simply appreciates.  Paying early is always better, no matter what, so we could certainly prepay for certain things.  The problem is when they start extending credit.  owning interest, on bitcoins, could turn out to be prohibitively expensive.  Either that or create inflation.

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January 15, 2011, 01:14:22 PM
 #44


Rather than money earning interest money simply appreciates.  Paying early is always better, no matter what, so we could certainly prepay for certain things.  The problem is when they start extending credit.  owning interest, on bitcoins, could turn out to be prohibitively expensive.  Either that or create inflation.

If money is appreciating on average then you are better off paying suppliers at the last second, if they can run their operation more efficiently with more warning on orders then they'll pay more than they expected appreciation over the prepay period.

Most things are prohibitively expensive, it's no problem, we just don't do them. It actually makes a lot of sense that using things that haven't been created is hard, you have to find someone who has created things and doesn't want to use them now, you'd expect this guy would want to get back more than just what he originally created. A system that acknowledges this gives incentive to make or trade for the things you want to use.

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Babylon
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January 15, 2011, 01:16:37 PM
 #45


Rather than money earning interest money simply appreciates.  Paying early is always better, no matter what, so we could certainly prepay for certain things.  The problem is when they start extending credit.  owning interest, on bitcoins, could turn out to be prohibitively expensive.  Either that or create inflation.

If money is appreciating on average then you are better off paying suppliers at the last second, if they can run their operation more efficiently with more warning on orders then they'll pay more than they expected appreciation over the prepay period.

Most things are prohibitively expensive, it's no problem, we just don't do them. It actually makes a lot of sense that using things that haven't been created is hard, you have to find someone who has created things and doesn't want to use them now, you'd expect this guy would want to get back more than just what he originally created. A system that acknowledges this gives incentive to make or trade for the things you want to use.

True, time is valuable, one way or another, it is just valued in different ways.

It's an opportunity cost.

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January 29, 2011, 12:26:51 AM
 #46

When will Bitcoin reach dollar parity?  (when will 1 USD = 1 BTC)


Still months and months off, if these two are related:



Difficulty (blue) on log scale from http://i.imgur.com/d6HFi.png
overlaid on BTC/USD on Mt. Gox chart from BitcoinCharts.com (Oct 01, 2010 to Jan 29, 2011): http://bitcoincharts.com/charts/mtgoxUSD#czsg2010-10-01zeg2011-01-29ztgSzm1g10zm2g25

Matched up Dates to Blocks using: http://nullvoid.org/bitcoin/difficultiez.php

ribuck
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January 29, 2011, 12:15:19 PM
 #47

Still months and months off, if these two are related
As you hinted, it doesn't really make sense to overlay a log graph onto a linear graph.
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January 31, 2011, 12:00:58 PM
 #48

Still months and months off, if these two are related
As you hinted, it doesn't really make sense to overlay a log graph onto a linear graph.
Sure it does; it shows a non-linear correlation.
ShadowOfHarbringer
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January 31, 2011, 11:12:49 PM
 #49

On MTGOX, we almost hit 1 USD = 1 BTC today on MTGOX, but that was probably overspeculation.

But i'm thinking we're going to hit parity soon.

Babylon
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February 01, 2011, 02:47:36 AM
 #50

On MTGOX, we almost hit 1 USD = 1 BTC today on MTGOX, but that was probably overspeculation.

But i'm thinking we're going to hit parity soon.

I think it was a hack.  Someone unloading stolen MTgox dollars.

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February 01, 2011, 09:10:18 AM
 #51

I think it was a hack.  Someone unloading stolen MTgox dollars.

That's an interesting thought, but wouldn't it make more sense to just transfer the USD to LR instead? Or is it too hard to cover your tracks that way?

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ribuck
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February 01, 2011, 10:33:45 AM
 #52

Maybe someone had been short selling BTC, and had an end-of-the-month deadline by which they needed to deliver the BTC.

In any case, BTC is now trading significantly above $0.50, so although the $0.95 was presumably due to a single anomalous trader, I think there's also a genuine underlying upwards trend.
JohnDoe
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February 01, 2011, 04:26:55 PM
 #53

either way (speculation or just more interest in bitcoin pushing prices up)
i think it will cause troubles to the real economy (exchange of goods & services; not financial transactions)
value of bitcoin changing too fast, bat sign imo

nice rally, btw

Merchants could always fix their prices to dollars and let the value in btc change automatically using the mtgox ticker.
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February 01, 2011, 05:26:54 PM
 #54

On noes, the price looks like falling. D:

Are you sure we won't get back to around 0.55?

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February 01, 2011, 05:32:39 PM
 #55

Are you sure we won't get back to around 0.55?
Even if the price did return to 0.55 (and it doesn't look like it will), that's still 10% higher than 24 hours ago, a big daily rise by any measure.
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February 01, 2011, 05:36:48 PM
 #56

Dunno, I feel it is coming down to 0.55(near the open for the day) if that is the case I would still be happy except for the hoarders. xD
Time to sell your bitcoins or buy merchandise? xD

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February 01, 2011, 08:34:38 PM
 #57

I'm (only half-jokingly) claiming that I caused the bitcoin rally:

http://bitcointalk.org/index.php?topic=2555.80

After my post yesterday, the price jumped hard to 0.95, then dropped. Since then, it has been headed up rapidly.

It sucks though because I wasn't done buying my bitcoins!

If the rally made you happy (and you agree that I might have caused it), you can always thank me with a tip: 19hMEAaRMbEhfSkeU4GT8mgSuyR4t4M6TH

kiba
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February 01, 2011, 08:36:08 PM
 #58

Dunno, I feel it is coming down to 0.55(near the open for the day) if that is the case I would still be happy except for the hoarders. xD
Time to sell your bitcoins or buy merchandise? xD

Hoarders will just be "less happy", but they will still be happy.

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February 01, 2011, 08:37:52 PM
 #59

This messes up auctions terribly.

Lesson: Acquire necessary bitcoins before bidding.
nelisky
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February 01, 2011, 08:49:53 PM
 #60

This messes up auctions terribly.

Lesson: Acquire necessary bitcoins before bidding.

I wish we could use bitcoins as a full currency, without needing to compare, but that is not (yet) the case, so a good plan would be to extend what TTBit did on http://www.taters.net/cgi-bin/btc/matrix.pl?axisinc=0.01 with the 24h weighted price data, and add 7 days and 30 days to it, as well as BitcoinCentral following on top of the existing mtgox.

With that we could have a good 'unit measure', and we could open actions with 'coins pegged to the mtgox 7 day weighted average @ 0.55', and adjust the final price accordingly. Of course this only works if both buyer and seller agree to adjust, as in 100 coins final price would mean;

100.00 coins @ 0.55 7 day average
 73.33 coins @ 0.75
157.14 coins @ 0.35

It would at least provide some protection to both parties.
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