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Author Topic: Why bitcoins are hovering around $14  (Read 5621 times)
Elwar
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July 14, 2011, 12:01:52 PM
 #1

I figured that this would happen when they announced the commissions on trades would be 0% for those who had an mtGox account before the hack.

People are buying in small price swings and selling at small price swings. They can make a few dollars and pay no commission. So the swings have become smaller and smaller and smaller until now it has just been wavering by less than ten cents.

I predict that the 26th, when commissions go back up to full price, the price will start to rise again as people hold longer and the traders set up larger swings for trading.

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July 14, 2011, 12:17:25 PM
 #2

That's an interesting point; however, I don't think that's all there is to it. The interest in Bitcoin has capped at the moment. Check out Google trends, you'll notice that the number of searches has dropped drastically. Maybe the price stagnation is also a symptom of this. If the interest in Bitcoin keeps dropping I expect the price to erode further.

Still, you have a point, we'll see what happens in a couple of weeks.
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July 14, 2011, 12:39:19 PM
 #3

http://bitcoinweekly.com/articles/the-calm-after-the-storm

You might wanna read that article. It gave a variety of reasons as to why price stabilized.

Jack of Diamonds
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July 14, 2011, 12:52:47 PM
 #4

The Euro and USD currencies are on the brink of collapse if their issuers don't stop defaulting on their loans.
There will be much bigger worries by then, but I'd put any significant cash reserves into gold, platinum, silver and bitcoin at the moment.

In the current economic climate I wont be surprised to wake up one morning and see the US dollar value plummet dozens of % in a day

Bitcoin and other scarce commodities will skyrocket in value if that happens, people will attempt getting ahold of anything which isn't fiat currency or unlimited paper money

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hello_good_sir
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July 14, 2011, 02:11:05 PM
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Bitcoin has stagnated because the decimal point wasn't moved.  We need to move it 2-3 places.  Normal people might be willing to throw $10-20 into bitcoin.  For that they get.... 1 coin?  If they could get 100 or 1000 it would seem like a better deal.  The psychological barrier is far, far, more important than most people on these forums realize.  Believe it or not, most people in the world aren't mathematically adept libertarian engineers.  We need to go after the humanities people, the liberals, the people who don't understand fractions or decimals.  We need to move to a "points" model, like xbox points or credit card rewards points.

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July 14, 2011, 02:23:16 PM
 #6

Absolutely NOT.  This is intended to be a serious medium of exchange, not some sort of "point" system designed to obfuscate value. 

As a counter example I present Berkshire-Hathaway.  That stock has never had a split, never paid a dividend, was never gussied up to look pretty for the "common Joe."  Result?  $115,000 per share, and returns well above market.

People absolutely understand fractions.  And if they don't, well.  Too bad.
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July 14, 2011, 02:44:32 PM
 #7

Absolutely NOT.  This is intended to be a serious medium of exchange, not some sort of "point" system designed to obfuscate value.  

As a counter example I present Berkshire-Hathaway.  That stock has never had a split, never paid a dividend, was never gussied up to look pretty for the "common Joe."  Result?  $115,000 per share, and returns well above market.

People absolutely understand fractions.  And if they don't, well.  Too bad.


I thought the reason that shares often had to be split was not because of any "people don't understand fractions" nonsense, but rather because it's not possible to sell a fraction of share?

How would I, a nobody, invest in this Berkshire-Hathaway company?  I can't get the money to buy even one share.  If they split the stock by 100,000; I could, and so could a lot more people.

As to shifting the decimal place.  It's not a problem, it requires nothing other than a UI change.  I really don't see what the problem would be.  Boot up vim and  ":bufdo %s/100000000/100000/g" then ":bufdo %s/BTC/mBTC/g" and job done.


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Elwar
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July 14, 2011, 03:16:43 PM
 #8

Bitcoin has stagnated because the decimal point wasn't moved.  We need to move it 2-3 places.  Normal people might be willing to throw $10-20 into bitcoin.  For that they get.... 1 coin?  If they could get 100 or 1000 it would seem like a better deal.  The psychological barrier is far, far, more important than most people on these forums realize.  Believe it or not, most people in the world aren't mathematically adept libertarian engineers.  We need to go after the humanities people, the liberals, the people who don't understand fractions or decimals.  We need to move to a "points" model, like xbox points or credit card rewards points.

For most of a century people were paid in pennies.

A penny for your thoughts, pinch a penny, the $5 per day job at Ford considered high wages...

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grod
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July 14, 2011, 03:17:29 PM
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How would I, a nobody, invest in this Berkshire-Hathaway company?  I can't get the money to buy even one share.  If they split the stock by 100,000; I could, and so could a lot more people.

The exact same way you, as a solo miner, would aquire a bitcoin with a difficulty in the tens of millions.  By joining a pool.  You buy into a mutual fund, and the fund buys the shares.  Along with shares in other companies for good measure.

Quote
As to shifting the decimal place.  It's not a problem, it requires nothing other than a UI change.  I really don't see what the problem would be.  Boot up vim and  ":bufdo %s/100000000/100000/g" then ":bufdo %s/BTC/mBTC/g" and job done.

1,$s/1000/1/g is not the solution, it's a technical implementation.  Exchanges could also implement this with no changes to the client.  It would also be bad in the sense of "we're changing our currency to NEW bitcoins" sort of bad, even though it's a simple rename and decimal point shift.
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July 14, 2011, 04:35:45 PM
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How would I, a nobody, invest in this Berkshire-Hathaway company?  I can't get the money to buy even one share.  If they split the stock by 100,000; I could, and so could a lot more people.

The exact same way you, as a solo miner, would aquire a bitcoin with a difficulty in the tens of millions.  By joining a pool.  You buy into a mutual fund, and the fund buys the shares.  Along with shares in other companies for good measure.

Buying shares in the share pool is splitting the stock.  Why not just split it?

Quote
As to shifting the decimal place.  It's not a problem, it requires nothing other than a UI change.  I really don't see what the problem would be.  Boot up vim and  ":bufdo %s/100000000/100000/g" then ":bufdo %s/BTC/mBTC/g" and job done.

1,$s/1000/1/g is not the solution, it's a technical implementation.  Exchanges could also implement this with no changes to the client.  It would also be bad in the sense of "we're changing our currency to NEW bitcoins" sort of bad, even though it's a simple rename and decimal point shift.

I wasn't literally suggesting those commands (I shouldn't have written them); and if you note I was careful to change the units.  I was trying to say that when we say "print x/100000000" it is pretty easy to make that "print x/100000" 1 BTC would remain 1 BTC  there would be no "new bitcoins".  We simply switch to showing millicoins instead of coins.  It's a user interface issue; nothing more.

You're right that exchanges could do the same, but ... who cares?

As I said, it's not a problem worth worrying about, other than perhaps providing people a nice interface to specify in the units they prefer, it will take care of itself when the greengrocer changes his "0.005 BTC per Apple" sign to "5 mBTC per Apple", which he is free to do at his option; and requires no help from the bitcoin system.

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hugolp
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July 14, 2011, 04:44:49 PM
 #11

That's an interesting point; however, I don't think that's all there is to it. The interest in Bitcoin has capped at the moment. Check out Google trends, you'll notice that the number of searches has dropped drastically. Maybe the price stagnation is also a symptom of this. If the interest in Bitcoin keeps dropping I expect the price to erode further.

Still, you have a point, we'll see what happens in a couple of weeks.

But there are still 50 bitcoins created every ten minutes (roughly) that means 6000 bitcoins a day, 42000 bitcoins a week, ... you get the idea. Thats a big increase in the money supply and there are a number of miners that sell what they produce, so there has to be people buying, otherwise with the new supply of bitcoins the price would plummet.
hello_good_sir
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July 14, 2011, 08:37:44 PM
 #12

People absolutely understand fractions.  And if they don't, well.  Too bad.

Yes, too bad for us.  We (those of us who have bitcoins) could be millionaires if it weren't for people like you wanting to keep the bitcoin economy exclusive.




I wasn't literally suggesting those commands (I shouldn't have written them); and if you note I was careful to change the units.  I was trying to say that when we say "print x/100000000" it is pretty easy to make that "print x/100000" 1 BTC would remain 1 BTC  there would be no "new bitcoins".  We simply switch to showing millicoins instead of coins.  It's a user interface issue; nothing more.

You're right that exchanges could do the same, but ... who cares?

As I said, it's not a problem worth worrying about, other than perhaps providing people a nice interface to specify in the units they prefer, it will take care of itself when the greengrocer changes his "0.005 BTC per Apple" sign to "5 mBTC per Apple", which he is free to do at his option; and requires no help from the bitcoin system.


You are incorrect.  Switching to mBTC is inferior to actually moving the decimal point.  Regular people do not understand SI prefixes.  People memorize the relationship between meters and kilometers.  You are kidding yourself if you think that normal people have the skills or desire to understand the concept of mBTC.  We need to actually move the decimal place.


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Leon
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July 14, 2011, 08:51:40 PM
 #13

I figured that this would happen when they announced the commissions on trades would be 0% for those who had an mtGox account before the hack.

People are buying in small price swings and selling at small price swings. They can make a few dollars and pay no commission. So the swings have become smaller and smaller and smaller until now it has just been wavering by less than ten cents.

I predict that the 26th, when commissions go back up to full price, the price will start to rise again as people hold longer and the traders set up larger swings for trading.

+1

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RandyFolds
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July 14, 2011, 08:52:52 PM
 #14

Well, they figured out bytes, kilobytes, megabytes and gigabytes and terabytes all right...

People will figure it out.

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July 14, 2011, 08:54:27 PM
 #15

You are incorrect.  Switching to mBTC is inferior to actually moving the decimal point.  Regular people do not understand SI prefixes.  People memorize the relationship between meters and kilometers.  You are kidding yourself if you think that normal people have the skills or desire to understand the concept of mBTC.  We need to actually move the decimal place.

Oh yes, because people will NEVER understand the change from $0.05 per apple to 5 cents per apple.

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July 14, 2011, 09:02:06 PM
 #16

Fractions? What fractions? We're not dealing with numbers like 1/2, 1/16, 1/5, 1/7, or whatever. Just decimals.

It's not much harder for me to understand 1.00100 than it is to understand 1,001.00

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July 14, 2011, 09:06:54 PM
 #17

Yes, too bad for us.  We (those of us who have bitcoins) could be millionaires if it weren't for people like you wanting to keep the bitcoin economy exclusive.

I think the real problem is people like you that think Bitcoin is some kind of get-rich-quick scheme rather than being a currency. It prevents outsiders from seeing the potential and focusing solely on "ZOMG PONZI SCHEME!" I'm glad the price is currently stabilized because that's what we need, not volatility.

Fractions? What fractions? We're not dealing with numbers like 1/2, 1/16, 1/5, 1/7, or whatever. Just decimals.

Since we're being pedantic, decimals are fractions. They were originally called "decimal fractions".
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July 14, 2011, 10:44:03 PM
 #18

I think the real problem is people like you that think Bitcoin is some kind of get-rich-quick scheme rather than being a currency.

There's no evidence to show otherwise. Bitcoins are either (1) hoarded or (2) sold on the exchanges. Nothing else is happening, man. Accept this!

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July 14, 2011, 10:45:44 PM
 #19

I think the real problem is people like you that think Bitcoin is some kind of get-rich-quick scheme rather than being a currency.

There's no evidence to show otherwise. Bitcoins are either (1) hoarded or (2) sold on the exchanges. Nothing else is happening, man. Accept this!


True that and really BTC has a huge ROI compared to any other investments right now.

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Shinobi
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July 14, 2011, 11:06:05 PM
 #20

Be careful. You make assumptions about the value of Bitcoin that hinge on its long term viability, something that your speculation works against.

I think the real problem is people like you that think Bitcoin is some kind of get-rich-quick scheme rather than being a currency.

There's no evidence to show otherwise. Bitcoins are either (1) hoarded or (2) sold on the exchanges. Nothing else is happening, man. Accept this!


True that and really BTC has a huge ROI compared to any other investments right now.

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