Why has bear sentiment gone up again?

[Revalin]

This video does a good job explaining how it works.  0:20 through 2:55:

http://www.youtube.com/watch?v=mzJmTCYmo9g

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[grod]

Sentiment shmentiment.  There's no fresh meat dumping massive amounts of cash in, and we keep draining what the last batch has provided.   I've personally sucked a few hundred dollars out of the system, and if even a tiny percentage of people pay for the power they use to generate bitcoin by selling then we've extracted quite a bit of value.  MtGox and tradehill &c all have to pay their bills, so they're also running on that influx of cash.   

We need new suckers, and we need them NOW.

[Revalin]

"Sentiment" and "the sucker supply" are roughly the same thing. 

[Nagle]

We need new suckers, and we need them NOW.

There's one born every minute.

Unfortunately for the Bitcoin enthusiasts, they're off doing something else.

[Cluster2k]

We need new suckers, and we need them NOW.

There's one born every minute.

Unfortunately for the Bitcoin enthusiasts, they're off doing something else.

There's a steady supply of suckers, but unfortunately they need to come furnished with a large supply of cash too.  A poor sucker isn't much good to us.

[Cluster2k]

BOOM.  Someone just fired more than 3000 bitcoins into the Bid 'wall' of $4.80, and it comes crashing down.  Rather interesting to see.

[NamelessOne]

Yes indeed, watched it happen as well. How far will we go? Will 4.50 hold? hmmmmmm

[johnj]

Well, for the last 4 months or so it's been a win to bet against bitcoin.  I think it'll take some massive momentum to get things swinging the other way.

[grod]

Well, for the last 4 months or so it's been a win to bet against bitcoin.  I think it'll take some massive momentum to get things swinging the other way.

Or capitulation.  I don't think it'll be long now.  Continued slow pain until thanksgiving, then some brutality over the long weekend.  More shock and awe continued over xmas and newyears.  After people are done running around on fire and screaming we can base and start the uptrend. 

That, or stick a fork in it.

[fivebells]

That, or stick a fork in it.

  I think it would be great if the exchange rate of bitcoin crashed to zero, and only the true believers were left.  If that happens, it means that bitcoin as it is today (basically a simple replacement for conventional currency, conceived of and used as a medium of exchange in essentialy the same way) was a failed experment, but there are many modifications to it which would be very exciting, and much easier to establish with a small user base.

[Gerken]

That, or stick a fork in it.

  I think it would be great if the exchange rate of bitcoin crashed to zero, and only the true believers were left.  If that happens, it means that bitcoin as it is today (basically a simple replacement for conventional currency, conceived of and used as a medium of exchange in essentialy the same way) was a failed experment, but there are many modifications to it which would be very exciting, and much easier to establish with a small user base.

So basically, you are jealous you didn't get in early enough to get rich and hope you get a second chance?

[fivebells]

So basically, you are jealous you didn't get in early enough to get rich and hope you get a second chance?

So basically, on the basis of no evidence that you've deigned to share with us whatsoever, you're dismissing my opinion as motivated by pecuniary and deceitful purposes?

Yeah.  Your bitcoinz.  I can haz them?

[Gerken]

So basically, you are jealous you didn't get in early enough to get rich and hope you get a second chance?

So basically, on the basis of no evidence that you've deigned to share with us whatsoever, you're dismissing my opinion as motivated by pecuniary and deceitful purposes?

Yeah.  Your bitcoinz.  I can haz them?

Perhaps I'm wrong.  I can't really think of any reason why someone would want value and interest to drop to nothing, besides greed.  There's nothing wrong with that, I've made my fair share of cash on the more predictable swings in the past couple months.  What makes you think that it would ever recover, or that someone else wouldn't take the opportunity to make a better bitcoin?  What changes can only be made with a small userbase?

[Etlase2]

Perhaps I'm wrong.  I can't really think of any reason why someone would want value and interest to drop to nothing, besides greed.

I can't really think of any reason why someone would want value and interest to stay stable or increase, besides greed.

Of course that's not true, I am capable of seeing both positions. But bitcoin is either primarily a currency or primarily a way to transfer wealth; it will never be a happy medium because its design leans heavily towards the latter. Pretending the latter does not exist is essentially describing bitcoin in a fraudulent way.

[fivebells]

What makes you think that it would ever recover, or that someone else wouldn't take the opportunity to make a better bitcoin?  What changes can only be made with a small userbase?

  Making a better bitcoin is precisely why I think it would be good.  Fresh start, do something more innovative next time.  Innovation would be easier from a small user-base (less concern for backwards-compatibility, etc.)

[grod]

Making a better bitcoin is precisely why I think it would be good.  Fresh start, do something more innovative next time.  Innovation would be easier from a small user-base (less concern for backwards-compatibility, etc.)

And with less dollars on the line there's less motivation for attack.  One of the many reasons the various shitcoins (aside from their lack of merits) are problematic is they're very vulnerable to a double spend attack from any bitcoin pool that decides to squash them.  If a promising new alternative to the current bitcoin chain does come along it'll also be likewise vulnerable from people with a vested interest in the current chain.

[zby]

Making a better bitcoin is precisely why I think it would be good.  Fresh start, do something more innovative next time.  Innovation would be easier from a small user-base (less concern for backwards-compatibility, etc.)

And with less dollars on the line there's less motivation for attack.  One of the many reasons the various shitcoins (aside from their lack of merits) are problematic is they're very vulnerable to a double spend attack from any bitcoin pool that decides to squash them.  If a promising new alternative to the current bitcoin chain does come along it'll also be likewise vulnerable from people with a vested interest in the current chain.

I am waiting for a currency without that wasteful mining.

[grod]

And I'm waiting for a chain based on a memory-intensive as opposed to computation expensive verification mechanism.  That'll open bitcoin up to a much larger audience.  Until you have tried bitcoin (including mining) it's hard to appreciate why it has value.  And right now the barrier to joining the club is pretty high.

Bonus points for any solution designed for a longer separation from "early adopters" from "late adopters."  Six months separating the haves from the have nots IMO is one of the reasons normal people (including myself) see the current bitcoin chain as simply a pyramid with the only way for a latecomer to win is to cash out earlier than the others.

[Revalin]

And I'm waiting for a chain based on a memory-intensive as opposed to computation expensive verification mechanism.  That'll open bitcoin up to a much larger audience.  Until you have tried bitcoin (including mining) it's hard to appreciate why it has value.  And right now the barrier to joining the club is pretty high.

The barrier to mining is pretty high, but you don't need a hash monster to have a wallet and play with the system.

Bonus points for any solution designed for a longer separation from "early adopters" from "late adopters."  Six months separating the haves from the have nots IMO is one of the reasons normal people (including myself) see the current bitcoin chain as simply a pyramid with the only way for a latecomer to win is to cash out earlier than the others.

I floated an idea for this a few days ago:  https://bitcointalk.org/index.php?topic=45830.msg547015#msg547015 (it's in a few pieces in that thread.)

It's been turning over in my mind for a while.  I think it might solve the early adopter / rampant pyramiding problems of BC.  I'd love to have some critique on it.

[Revalin]

There have been quite a few people propose a similar variable inflation scheme. The problem is, it only works one way, once a little bit of over-inflation happens it takes a long time to recover from it, that is you enter a period during which the controls do not actually work. In order for it to work both ways you would have to have mechanisms to remove money from the system at a regulated rate as well as to introduce it at a regulated rate.

So to prevent the kind of bearish 'it's just a pyramid scheme' sentiment with currency controls that go one way you would just end up replacing it with a bearish 'my money can randomly go away' sentiment by introducing currency controls that go the other way.

Sure, I'm aware of that limitation; I don't have a solution to devaluation in an unbacked currency.

I'm not worried about devaluation generally: it's a fact of life in currency.  I'm just trying to prevent massive bubble-popping devaluation like we have now by preventing bubbles from forming in the first place.

It wouldn't be perfect, but wouldn't it be better than the crazy speculation cycle we have now, which has resulted in a widespread "OMFG it's a pyramid scheme! stay away!" sentiment?

And another thing, by having currency throttling in place you would end up effectively enforcing a correlation with the 'basket' of currencies. Right now one to the things that helps to give Bitcoin its value is that it is non-correlated, making it useful for risk diversity.

This is absolutely true (at least at first; my variant would let it float after the initial growth period), but my goal is to have a useful transaction currency, not an investment vehicle.