Does not it bother anyone that BTC value increasing too fast?

[Zangelbert Bingledack]

This rise is the same speed as early March.

Unskilled speculation is bad, but skilled speculation is GOOD.

Requird reading: http://www.reddit.com/r/Bitcoin/comments/1mb27q/bitcoins_vast_overvaluation_appears_caused_by/cc7i6y8

[JTrain_51]

Ya , I still think everyone will be happy the price is rising this fast I mean I know there could be a drop in price but still everyone should be happy

[descarte]

i actually wish the price doesnt rise that fast. government will intervene if it rises too fast.

[DeathAndTaxes]

i actually wish the price doesnt rise that fast. government will intervene if it rises too fast.

The government will "intervene" for a lot of stupid reasons but that isn't one of them.

[windjc]

Bailouts via new money that devalues existing money can't happen in bitcoin. Fractional reserve would still happen, obviously, but leverage would be a lot less because there's no implicit lender of last resort. Consumers would cause bank-runs MUCH sooner than 100:1 leverage. The system would be less susceptible to long-run extreme tail-risk and moral hazard.

Less susceptible is still a system that will fail, just at a slower rate.  Which will force bailouts or it will all come tumbling down.  Why?  Because Bitcoin does not prevent banks from creating new money, since the money is just numbers on the banks balance sheet.  Just as if everyone used gold as currency, it wouldn't matter.  Fractional reserve banking can "print" as much money as it wants.  Run on the banks won't happen as long as people keep borrowing, which they are sure to do.

It's hard for people to think outside of the plane on which they've lived their entire lives. We've all grown up under a monetary system where supply expands by mandate (ie, the Fed's long-run 2% inflation target). In that context, deflation is bad, yes. But it's bad primarily because it's not the norm; it's unexpected when it happens, people *continue* to know that overall the economy is INflationary, so they hoard *while* it's deflationary due to their future expectations of the return to the mean.

That's very different than an economy where there currency is credibly *guaranteed* to be deflationary in the long-run and where the *exact curve* of money supply dynamics is perfectly known to all economic participants. In such case, people's core demand/supply curves take over and they can allocate capital optimally according to their own preferences, without having to worry about whether the *current* money supply dynamics are out-of-whack wrt long-term expectations. That entire calculus just goes away. Thus no harmful "hoarding".

Again, it's tough for people to intuit this, given the monetary norms of the past century. Thus I'll cut "every other economist" some slack for another few years.

I've read countless arguments for and against deflationary currency like Bitcoin.  Maybe what you say will prove to be true and maybe not.  One thing is for sure, it's merely an untested theory.  Beyond that, it's the bigger problem that concerns me and if there is not a 100% solution to that, the system will fail, regardless if what you believe, proves to be true or not.  I'm not against Bitcoin, I just don't think it solves the problems, so while you're talking about thinking outside the box, maybe someone would like to deal with the global banking cartel, because just creating a currency free from government, isn't going to accomplish that.

My main issue is not that you question bitcoin as a/the major world currency. Or that you question a deflationary currency.

My main issue is you seem to paint the subject of bitcions success or failure as black or white, a be all or be nothing. There are so many things bitcoin can be - a means of frictionless money transfer, a real store of wealth, a niche currency, a country's currency, etc. etc. etc. etc. etc.

So to just run around calling bitcoin nothing more than a speculative bubble is disingenious by you, imo. Especially if you read as much as you said you have.

I personally believe bitcoins can have a 100 billion dollar market cap and be a niche currency at best. That's not failure. That's not a bubble. That's a small part of a global financial system.

You sound to me like someone who had the opportunity to buy bitcoins cheap and did not. Now you complain about potential future bitcoin millionaires. That's not geniune, imo. Because you are justifying not owning bitcoins because of some idealistic belief that bitcoin isn't the answer to the worlds financial problems. You know, it probably isnt THE answer to the world's financial problems. But that doesn't mean it isn't going to carve out a nice little niche for itself in the world. (ie 100 billion market cap+)

[zeetubes]

I wonder what would have happened back in April if MtCox hadn't imploded. It just may have reached $500+ back then. And on that note, how much capacity do the major exchanges have right now? could they handle an extra 50-100% of trades? Barring any exchange collapses, the bubble could still be in a very early stage. if that is the case then there will be glitches when major holders decide they have enough to sell. But any wise trader would offload slowly so as not to upset the market in order to maximize their profits. Unlike when the Fed decides to bomb the gold price by dumping massive paper sell orders on gold they don't have. At the moment, BTC price is largely determined by there being more buyers than sellers. If we see someone dumping 1000+ bitcoins onto the market in one hit, and at a quiet trading time, then it is probably someone trying to deliberately crash the market. And they would probably succeed, for a short while at least. At the moment this bubble seems healthy. After it hits $500 the next phase could get very interesting.

[zeetubes]

"last year pick any day and MTGox had over 130k-150k of sale orders..
now there is 13k.. "

Is that based on number of trades, or $value of the trades?

[Gerto]

Bothers me as well. I think many people are coming in who don't care about Bitcoin at all and who just want in because it's going up.

2 days ago I was trying to convince a colleague about the benefits of Bitcoin. I did the entire pitch and explained the concept to him and he was mildly interested, but I don't think he'd have taken any action. After that I quickly mentioned at what price I bought it and what the current price is and BAM, suddenly I had all his attention .

Now, anything that gets people interested in Bitcoin can be good, but still, if people get in only because it's going up (but don't care about the fact that it's Bitcoin, it could just as well have been a random new company with prices looking like BTC charts) , then that's very worrying to me because these people will want to get out again immediately when it crashes and will probably tell everyone how it's a "scam" they should stay away from.

Slow and steady wins the race

[mateo]

Rise in value is welcome as masses adopt the currency, but that rise has to be no more than 5% per year.

There is no way to control the rise in value and second a rise of 5% per year with no speculation would mean the underlying economy is growing at 5% over the rate of monetary inflation per year.  For something as small as Bitcoin that would be a death sentance.  It would take decades for the userbase to grow even into the millions.

If you want slow steady rises in value wait a decade or two.  Bitcoin will either be gone or it will be magnitudes larger and the rate of growth will have been reduced significantly.

Yes, obviously. Which means that BTC is currently in it's infancy and needs it's user base to grow, before it can be ready to be adopted by big companies. On the other hand, how can it have it's user base grow if it's not adopted by anyone but speculators?

[mateo]

Bothers me as well. I think many people are coming in who don't care about Bitcoin at all and who just want in because it's going up.

2 days ago I was trying to convince a colleague about the benefits of Bitcoin. I did the entire pitch and explained the concept to him and he was mildly interested, but I don't think he'd have taken any action. After that I quickly mentioned at what price I bought it and what the current price is and BAM, suddenly I had all his attention .

Now, anything that gets people interested in Bitcoin can be good, but still, if people get in only because it's going up (but don't care about the fact that it's Bitcoin, it could just as well have been a random new company with prices looking like BTC charts) , then that's very worrying to me because these people will want to get out again immediately when it crashes and will probably tell everyone how it's a "scam" they should stay away from.

Slow and steady wins the race

Exactly. If this rise is caused by new users coming in because of price rise, it's a house of cards. All it would take is one user selling off a 1000 BTC, or a couple hundred even, at once, everyone will start panicking and then.. pop. Hoarders here only seem to be thinking about short-term gains, not realizing or wanting to realize that it's only bad for Bitcoin long-term.

[ixne]

What bothers me more is that with every bubble comes people new to bitcoin who think they reinvented the wheel, such as OP who registered on October 28, 2013.

Having lived through the 2 prior "big bubbles," I say just enjoy it while it lasts. These are the happy times: everyone is making money and talking about million-dollar bitcoins and retirement and look like geniuses to all their uninitiated friends and colleagues.

The bad times come after the crash. Then you'll see these forums filled with people crying about Ponzi schemes, how Bitcoin is dead and Litecoin/Ripple/[insert]coin is the natural pretender to the cryptocurrency throne, how the US government/CIA/bankers conspired to destroy Bitcoin and finally won, and all the Bitcoin haters who tore their hair out for months then come back to declare victory.

I say "bad," but really I prefer those times. Much easier to buy more bitcoins and there's more focus on what I consider the more interesting bitcoin-related investments.

[mateo]

I wonder what would have happened back in April if MtCox hadn't imploded. It just may have reached $500+ back then. And on that note, how much capacity do the major exchanges have right now? could they handle an extra 50-100% of trades? Barring any exchange collapses, the bubble could still be in a very early stage. if that is the case then there will be glitches when major holders decide they have enough to sell. But any wise trader would offload slowly so as not to upset the market in order to maximize their profits. Unlike when the Fed decides to bomb the gold price by dumping massive paper sell orders on gold they don't have. At the moment, BTC price is largely determined by there being more buyers than sellers. If we see someone dumping 1000+ bitcoins onto the market in one hit, and at a quiet trading time, then it is probably someone trying to deliberately crash the market. And they would probably succeed, for a short while at least. At the moment this bubble seems healthy. After it hits $500 the next phase could get very interesting.

Doesn't US government has like a couple of thousand BTC after Silk Road etc.? I mean if Uncle Sam really doesn't like Bitcoin, then now would be the perfect time to crash it. Unless it would be illegal for police to sell confiscated Bitcoin, but it shouldn't be different than auctioning confiscated cars or guns, no?

[ixne]

I wonder what would have happened back in April if MtCox hadn't imploded. It just may have reached $500+ back then. And on that note, how much capacity do the major exchanges have right now? could they handle an extra 50-100% of trades? Barring any exchange collapses, the bubble could still be in a very early stage. if that is the case then there will be glitches when major holders decide they have enough to sell. But any wise trader would offload slowly so as not to upset the market in order to maximize their profits. Unlike when the Fed decides to bomb the gold price by dumping massive paper sell orders on gold they don't have. At the moment, BTC price is largely determined by there being more buyers than sellers. If we see someone dumping 1000+ bitcoins onto the market in one hit, and at a quiet trading time, then it is probably someone trying to deliberately crash the market. And they would probably succeed, for a short while at least. At the moment this bubble seems healthy. After it hits $500 the next phase could get very interesting.

Doesn't US government has like a couple of thousand BTC after Silk Road etc.? I mean if Uncle Sam really doesn't like Bitcoin, then now would be the perfect time to crash it. Unless it would be illegal for police to sell confiscated Bitcoin, but it shouldn't be different than auctioning confiscated cars or guns, no?

Nothing will happen with those coins until after the trial, which will be years from now, guaranteed. How they get rid of the bitcoins is anyone's guess, although auction is a good one.  Tearing up the private key is another.  In either case, the people in charge of that decision are just as interested in maximizing their wealth as anyone. If they "crashed" the market while trying to unload their coins, I suspect someone would get fired.

[xinzark]

offcoz you wont when its raising : )

[maz]

What bothers me more is that with every bubble comes people new to bitcoin who think they reinvented the wheel, such as OP who registered on October 28, 2013.

Having lived through the 2 prior "big bubbles," I say just enjoy it while it lasts. These are the happy times: everyone is making money and talking about million-dollar bitcoins and retirement and look like geniuses to all their uninitiated friends and colleagues.

The bad times come after the crash. Then you'll see these forums filled with people crying about Ponzi schemes, how Bitcoin is dead and Litecoin/Ripple/[insert]coin is the natural pretender to the cryptocurrency throne, how the US government/CIA/bankers conspired to destroy Bitcoin and finally won, and all the Bitcoin haters who tore their hair out for months then come back to declare victory.

I say "bad," but really I prefer those times. Much easier to buy more bitcoins and there's more focus on what I consider the more interesting bitcoin-related investments.

Nice and clear headed, how refreshing round here!

[bitteriest]

What jumps high fast , drops down fast.
Timing is the question...

[Kouye]

Many people will loose their thrust after that big fall.

There are actually a lot of people that expect a crash so they can rack in more cheap coins, so if crash there is, it won't last long and won't go that deep.

The only negative side effect I see in bitcoin raising is... The ridiculous price to get VIP status here. 

[Coinseeker]

My main issue is not that you question bitcoin as a/the major world currency. Or that you question a deflationary currency.

My main issue is you seem to paint the subject of bitcions success or failure as black or white, a be all or be nothing. There are so many things bitcoin can be - a means of frictionless money transfer, a real store of wealth, a niche currency, a country's currency, etc. etc. etc. etc. etc.

So to just run around calling bitcoin nothing more than a speculative bubble is disingenious by you, imo. Especially if you read as much as you said you have.

I personally believe bitcoins can have a 100 billion dollar market cap and be a niche currency at best. That's not failure. That's not a bubble. That's a small part of a global financial system.

You sound to me like someone who had the opportunity to buy bitcoins cheap and did not. Now you complain about potential future bitcoin millionaires. That's not geniune, imo. Because you are justifying not owning bitcoins because of some idealistic belief that bitcoin isn't the answer to the worlds financial problems. You know, it probably isnt THE answer to the world's financial problems. But that doesn't mean it isn't going to carve out a nice little niche for itself in the world. (ie 100 billion market cap+)

First, it is black or white to me.  That may not jive with your thinking, but that doesn't make it wrong.  Simply put, Bitcoin can be a store of value and/or a transactional currency.  There's not much grey area there.  Second, it's not disingenuous for me to state as much.  It's called an opinion and for people who espouse "Freedom" there continues to be many who don't like anyone talking contradictory to Bitcoin "religion".  I'm not here for Bitcoin religion and I don't stay involved in the crypto space for such nonsense.  I'm here to solve our world monetary issues.  I don't honestly care if it's Bitcoin or something else.  The brand name means nothing to me.

I hold Bitcoin.  I had an opporutuinty to buy at around $70 right before the SatoshiDice sale, so again, more speculation from someone who obviously values speculation over facts.  Live in your delusions.  But IMO, this a bubble.  It is not due to increased spending of Bitcoins, it's pure speculative demand.  Now, maybe it will all smooth out when the hype is gone and people will begin spending over hoarding.  Maybe theoretical Austrian economic concepts will prove to be true.  But for now, it's just a simple gold rush.  Tulip manic and potentially, a soon to collapse pyramid. Everything economists have been saying would happen from the start.  And even if all that should work out perfectly, Bitcoin still fails to solve our REAL world monetary issues, as I've previously stated.  Now, those are MY opinions.  If that leaves you butthurt, "frankly my dear, I don't give a damn." 

[Abdussamad]

First, it is black or white to me..

Live in your delusions.  But IMO, this a bubble.  It is not due to increased spending of Bitcoins, it's pure speculative demand.  Now, maybe it will all smooth out when the hype is gone and people will begin spending over hoarding.  Maybe theoretical Austrian economic concepts will prove to be true.  But for now, it's just a simple gold rush.  Tulip manic and potentially, a soon to collapse pyramid. Everything economists have been saying would happen from the start.  And even if all that should work out perfectly, Bitcoin still fails to solve our REAL world monetary issues, as I've previously stated.  Now, those are MY opinions.  If that leaves you butthurt, "frankly my dear, I don't give a damn." 

You know I agree that it is speculative demand and that it may crash a little but I don't agree that you can dismiss Bitcoin like that and say it doesn't solve any real world issues. The speculative demand is there *because* it solves real world problems and people see it is limited in quantity and now is the time to get into it.

It is still very hard to send money to a lot of countries and also to send money from a lot of countries. Bitcoin does solve that problem because it is not regulated or dependent on a slow moving central authority (private sector or otherwise) to approve it's use in these various untapped markets. It makes it impossible to impose capital controls. That is huge!

[Rez]

The good news is that crashes generally happen when nobody is anticipating them.

I take reassurance in a sense of uneasiness.  Blind confidence is what's dangerous.

There will be rises and drops, and rises.