The One Percent controls Bitcoin

[cbeast]

The price of Bitcoin is set by Mt Gox. There is no dispute about that. The fact that the sell off of about one hundred thousand bitcoins has dropped the price nearly 50%. One hundred thousand bitcoins is about one percent of the total mined so far. Ninety-nine percent of the bitcoins lose half of their value because of the holdings of one person dumping them and causing people to panic. The opposite can also happen where one person can drive the price up, though panic buying is usually very short-lived as seen by the sharp upward spikes and long-term valleys.

These wild fluctuations are the biggest deterrent to widespread acceptance, yet we allow it to continue. Either the largest bitcoin holders do not really believe in the future of this technology, or they do not know how to fix the problem of wild fluctuation. Perhaps it's because it is an insignificant holding to them or they want to kill it. Either way, large Bitcoin holders do not seem to care about the future of Bitcoin or they would do something about the panic markets.

Some folks might say that Bitcoin price is just fine wherever it is, but the fact is that it cannot be taken seriously until certain technical problems are dealt with. The protocol is developing well, but price is not being addressed by any developers. Why not? The centralized market is a single point of failure for a decentralized currency. This should be addressed by developers, else we allow bullies to control the adaption of Bitcoin.

[Itcher]

I think its natural ... the largest bitcoin-holders want to earn something, and with the actual price, they earn good. So they sell sometimes some thousands of bitcoins. Who would not do? Is this process not what blitz calls "the great dollar extraction"? I think they would do more harm to btc if they just hold 'em. But it wont go in this direction for infinity, everytime the big holders drop the price they give away a bit of controll over Bitcoins, and when it's over, btc is more decentralized again.

[cbeast]

I think its natural ... the largest bitcoin-holders want to earn something, and with the actual price, they earn good. So they sell sometimes some thousands of bitcoins. Who would not do? Is this process not what blitz calls "the great dollar extraction"? I think they would do more harm to btc if they just hold 'em. But it wont go in this direction for infinity, everytime the big holders drop the price they give away a bit of controll over Bitcoins, and when it's over, btc is more decentralized again.

Yes it is natural for commodities to act this way. Comparing Bitcoin to pork bellies or wheat does not help define what the Bitcoin experiment is about.

I am starting to think that humans are not ready for economic freedom and prefer the security of the "natural order" of aristocracy. This may be the death knell of Bitcoin until the experiment is tried again one day by less fearful creatures that evolve from our ashes.

[ElectricMucus]

The easiest way to correct this: Stop buying Bitcoins with money out of your paycheck.

[rm187]

The easiest way to correct this: Stop buying Bitcoins with money out of your paycheck.

Yeah but the only real thing BTC has going for it is a payment service gateway. Yet if you planned to buy and spend BTC this week, you had better done it less then a hour turn around or else you get fk'ed. Fluctuation like this is bad for everyone, even if your bear making money. The essential utility of BTC is broken.

[kokjo]

The price of Bitcoin is set by Mt Gox. There is no dispute about that.

yes there is. bitstamp is gaining big time! its only a matter of time.

[vokain]

It'll stop once all the bitcoins gets out of the hands of the dumping speculators and into the hands of the hoarders.

[Itcher]

this was what I meant: time will probably fix it ... you just have to realize what's going on and make your conclusion.

I am not in for much longer than a month (didn't experience the bubble, but I am very fascinated of what's actually going on). My conclusion changes almost every day, and it's remarkable unfounded, but I imagine it like a "hunger game": Some have a lot of BTC, but nothing equivalent in Fiat, and they dump it to make them a good living. Maybe they need it to continue the business they are involved. So this process will come to his end, and when it's over there will be no "aristocratic order" and noone able to manipulate ... maybe we are not in the stage of dollar extraction but of bitcoin extraction.

[glendall]

Everyone should do their part then: just don't use GOX.

There are more and more alternatives, many of them are good, and a few more will be opening up soon.

So ya , it is pretty simple, use a different exchange.

[vokain]

Everyone should do their part then: just don't use GOX.

There are more and more alternatives, many of them are good, and a few more will be opening up soon.

So ya , it is pretty simple, use a different exchange.

opening soon
https://www.kraken.com/
http://www.coinsetter.com/

https://www.bitstamp.net/
https://campbx.com/main.php
https://bitfinex.com/

https://vircurex.com/ for those in Canada

[benjamindees]

I can't find the quote right now, but it was something along the lines of "the biggest problem with mercantilists is that there's nothing they want more than gold."  That's the biggest problem with Bitcoiners, and the reason the largest holders will never sell into rallies in order to stabilize the price.

Here's a related thread I posted a while back:
https://bitcointalk.org/index.php?topic=101712.0

[vokain]

I can't find the quote right now, but it was something along the lines of "the biggest problem with mercantilists is that there's nothing they want more than gold."  That's the biggest problem with Bitcoiners, and the reason the largest holders will never sell into rallies in order to stabilize the price.

Here's a related thread I posted a while back:
https://bitcointalk.org/index.php?topic=101712.0

What's the big deal if we never sell into rallies? That's just like if we had 2million BTC vs 11M circulating. There's really no difference as far as I can tell. We stabilize the price, it's the panic buyers and flash dumpers  that destabilize the price.

[jinni]

The easiest way to correct this: Stop buying Bitcoins with money out of your paycheck.

Could you explain this please. I buy and hold Bitcoin out of my paycheck except I sometimes donate a little or buy something. Mostly I'm just building up savings and when I don't trust fiat any price for Bitcoin is super low at the moment. Small timers buying and keeping Bitcoin is what will make Bitcoin the awesomest (yes, I just wrote 'awesomest') currency ever - precisely because the people who are searching for cool stuff and willing to read enough to bet some of their tiny savings on Bitcoin are the kind of people who should have more wealth in an information society. Bitcoin is facilitating a redistribution of wealth from the have-it-alls to the know-it-at-least-somewhats. That makes the Bitcoin economy a powerful potential locomotive in getting the world into a new economic path that is fuelled by innovation rather than by stealing (financial innovation).

[tokeweed]

"The One Percent controls Bitcoin"

kinda like the real world?  1% controls all the wealth.

[johnyj]

This is coin redistribution that increase the degree of decentralization

[cbeast]

Propaganda: The science of manipulating the psychology of ignorant followers. This is the tool that has always been used. Bitcoin is being manipulated this way. We need to change the psychology of Bitcoin users so it resists the tools of manipulators on these fragile exchanges. The tools of psychology are statistics. Statistics is based on the fundamental keystone of Bitcoin. Math is what creates and maintains the integrity of Bitcoin. Math can fortify clarify and resolve its valuation to make it resistant to wild fluctuation and ensure honest price discovery. There needs to be a way to throw out statistically insignificant price fluctuations that aggregate into panic inducing patterns. The nature of trends are clearer when we use better tools, but limiting ourselves to Mt Gox as the primary source of price discovery allows propaganda to take hold.

[Rival]

The issue is a simple one: Bitcoins exchanges currently do not have sufficient market depth to handle the sizes of trades being processed. A simple example should suffice. Suppose i purchased 10000 shares of ASICminer at 0.01 nine months ago. I hold them today valued at 4.5 each. I decide to take some profit off of the table, so I sell 1000 shares. I cash out through Gox for fiat to the tune of nearly a half a million USD. I do this because I was a poor college student when I bought those ASICminer shares, and now I want to pay off my student loan, buy my girl an engagement ring, and then buy a jaguar XK8 convertible. I still have 9000 shares of ASICminer as an investment. But pulling .5 million USD out of Gox is very disruptive to the price of BTC. The market breath just is not there yet. It is overwhelming, and BTC plummets. This is not manipulation, just a case where someone decides they want to cash out.

If one could pay off the student loan, and buy the ring and the Jaguar with BTC, it would not be so disruptive to prices in fiat. Currently, BTC is still trapped by the majority of the world accepting only fiat, and so long as this is the case large cash-outs will continue to occur. As BTC increases adoption as a payment method (assuming it does) and fewer conversions to fiat are required for purchases, the effects described above will be eliminated.

What we are witnessing are simply growing pains, and not endemic of system flaw or a lack of investor confidence.

[vokain]

We need an exchange for exchanges

[cbeast]

We need an exchange for exchanges

That's not far from the right idea.

[naphto]

Even if the currency is decentralized, it should have the same value ...
If you can buy 1 piece of cake with 1 btc in Europe, and 1 city for the same btc in America, it is not a currency.


Not to mention that the market is not centralized:
https://localbitcoins.com/
https://btc-e.com/
https://mtgox.com/
https://www.bitstamp.net/
...