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Author Topic: Today 1 BTC=1.3 USD  (Read 3858 times)
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January 08, 2011, 03:02:31 PM

Wobber I have to say that with your post you have created a great example of how a free market economy works.  With all information being equal and a profit to be made there will always be someone willing to undercut the market to make a profit no matter how many people are at the current price.  This will continually drive the price down until eventually there is no great profit to be made by undercutting the market.

This currency is still way too young to be at a break even or stable price.  Too many people out there have bought currency they picked up for very cheap (maybe free) relative to current price.  When more time has passed and more people have sold for a profit and repurchased coins for higher (closer to market price) then we can see more stability in the currency as there will be fewer massive sell offs and stronger support levels going in either direction.

I agree with those that say that demand is greater that supply.  That is not necessarily bad.  It creates the ability to make a profit in the intermediate as well as long term scenarios; be it by exchange trading or merely picking up cheaper currency for future purchases.

The original proposal of 1.3 if adopted by most of the community would merely create a short term bubble that would quickly work its way back to close to current market price.  It would however create a great many happy and sad people (depending on what side of the equation you were on).

Sorry for the lengthy tangent.  I have been following Bitcoins for a while now but I am not much of a poster (yet).  Thank you again Wobber for creating this interesting example.
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January 18, 2011, 04:49:07 PM

What if we all say: from today, one bitcoin is 1.3 PPUSD? Will it's value be that? I guess so, since it's worth what we all want it to. What stops us to do so? Can we call this "speculation"?

I'm very curious about that.

If everyone decided that 1 BTC was worth $1.3 USD, then yes, the exchange rate would be just that.

However, not everyone is going to decide that. People who want Bitcoins are not going to pay $1.30 (or sell $1.30 worth of merchandise) for them because they are not confident that other people will, in turn, give them $1.30 worth of goods/services for that Bitcoin they just bought. 

The reason, simplistically, is that there are too many bitcoins compared with too few goods/services being sold for Bitcoins. The amount of goods and services being sold for Bitcoins would have to greatly increase in order to bring people's expectations closer to $1.3/BTC

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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