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Tril
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October 08, 2011, 04:50:39 PM
 #1

I really enjoy the speculation board.  I've lurked here a few weeks and haven't seen my theory spoken of so here it is.

There are some of early adopters who earned a lot of bitcoins.  10s of thousands of bitcoins.  They have invested in mining and have huge mining operations.  They made trading bots and learned trading strategies.  Sure, they have sold some coin and bought houses or cars.  But primarily these early adopters are bullish on bitcoin and they want more bitcoins.  They're extremely intelligent.  Through a planned strategy of well-placed ask orders, bot algorithms, and backed by a vast amount of bitcoins, these folks have driven the price down to what we see now.  And most of you have followed - selling bitcoins because you see a trend.  You want to buy in lower.  I believe there are a vast amount of USD waiting on mtgox to buy in.  What you don't realize is that the huge tail of ask orders that were created by miners, thieves, and bears, led on by the early adopters, isn't going to hold the price down- it's interspersed with vast amounts of fake ask orders.  I believe the entire drop from $24 down to $4 is a ploy to get lots of bitcoins to be put up for sale at various prices along the way - bitcoins not controlled by the early adopters who led the decline.  These are the bitcoins they want to buy. I also believe that when the price goes up, it's not going to stop.  There won't be a 1 USD/BTC increase daily, maybe not even 4 USD/BTC increase daily.  I expect 500k-1million bitcoins will be bought in one swoop.  Negative sentiment and small exchanges being hacked and lack of news articles are not really driving this decline, nor will they matter once this starts.  This theory is why I haven't sold any bitcoins except to close friends as a favor: the sense that the price could jump upwards at any moment.  And yes, I'm USD-poor and would have bought more bitcoins if I could afford it, so I'm not one who can change the price much.  However, this entire time since $20 I've just seen as an amusement ride.  It's funny watching you all sell because of what will happen.  I can imagine the look on your faces as you scramble to click that buy button, but mtgox will be lagging so bad the price will jump $10.  This decline will probably not happen again, since if my theory is correct, it will be clear it was all a joke to begin with.  It's been great fun though.

Disclaimer. I own some bitcoins and would like this to be true.  However, this theory is backed primarily by intuition and logic, not greed.  Feel free to provide evidence of flaws in the theory!
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October 08, 2011, 04:57:55 PM
 #2

 Shocked
That's a nice conspiracy theory, man.

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grod
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October 08, 2011, 04:58:01 PM
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If your theory is correct and the omniscient, rich manipulators are doing the price manipulation what's to stop them at $3.50?  Why not $1?  Why not $.1?

It's not in the best interest of anyone with a current large holding of BTC to drive the price down in order to own the whole network.  That has the effect of reducing the potential audience, adoption and total value of the pie.  It's far more useful to have 4 new people getting on board bitcoin than it is getting 4 bitcoins at an artificially depressed low.

No, what we've had is a few of the early adopters struggling very hard to prop up the pyramid.  Most couldn't cash out, they were only rich on paper.  Still are, really, just to a much lower degree.

Our price movement simply reflects people not depositing enough fresh funds.   This pyramid is fueled completely by new investment, and simply that's tapered off since the highs.  Bulls are talking up a storm, just not depositing enough fresh money.

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October 08, 2011, 05:01:49 PM
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You want to buy in lower.  I believe there are a vast amount of USD waiting on mtgox to buy in.  What you don't realize is that the huge tail of ask orders that were created by miners, thieves, and bears, led on by the early adopters, isn't going to hold the price down- it's interspersed with vast amounts of fake ask orders.  I believe the entire drop from $24 down to $4 is a ploy to get lots of bitcoins to be put up for sale at various prices along the way - bitcoins not controlled by the early adopters who led the decline.  These are the bitcoins they want to buy. I also believe that when the price goes up, it's not going to stop.

This post is mirroring a few others that have appeared on this forum.  

It all sounds a little like a conspiracy theory.  Someone big and powerful is deliberately running the value of bitcoins down just so they can buy them at a much lower cost.  

Hey, anything could happen and be happening.  But I would caution people against putting too much trust into this world view and acting on it.  They could lose a large amount of money chasing the bitcoin price on the way down.  It's possible bitcoin has had its moment in the sun.  Bubbles rarely reinflate.

For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

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October 08, 2011, 05:09:17 PM
 #5

For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

That is EXACTLY what happened here mate. Satoshi = mark karpeles = sac = bitcoinexpress = artforz = lolcust = tycho = Huh

We all got fooled. Price is falling. Bitcoin is dying. Time to cut your losses and move on ( that's what I am doing ).
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October 08, 2011, 05:19:16 PM
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For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

That is EXACTLY what happened here mate. Satoshi = mark karpeles = sac = bitcoinexpress = artforz = lolcust = tycho = Huh

We all got fooled. Price is falling. Bitcoin is dying. Time to cut your losses and move on ( that's what I am doing ).

What if I don't have any losses, only a 200% realized ROI, two free crappy graphcs cards and free PSU?  That would imply I should invest more. 

And to that I say, "OH HELL NO.  Pay me a lot more for my currently being mined coins first."

In all seriousness, I'll move on when there's no more entertainment value here.  Until then the importance of being right on the Internet outweighs only making a few pennies a month on this pyramid.

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October 08, 2011, 05:38:02 PM
 #7

It's possible bitcoin has had its moment in the sun.  Bubbles rarely reinflate.
Right.

Quote
For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

That's a reasonable idea. But why didn't he sell out before the price tanked?
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October 08, 2011, 06:47:56 PM
 #8

It's possible bitcoin has had its moment in the sun.  Bubbles rarely reinflate.
Right.

Quote
For all we know, bitcoin was designed as a very clever get-rich-medium-quick scheme and thousands of geeks just got played.  Has anyone ever met Satoshi?  Maybe he or she is the grand manipulator (cue scary music).

That's a reasonable idea. But why didn't he sell out before the price tanked?

Because he couldn't.  I estimate less than 3 million dollars have been put up for grabs by speculators.  More has been put up by miners through hardware and power investment, but that's irrelevant.  Plenty of the cash has already been taken -- you can see many 10k+ blocks being sold all the way down. 

But had Satoshi tried to cash in for the whole enchilada you'd now see bitcoin back at pennies/BTC and zero chance for mass adoption.

Or maybe just because someone is a math, modeling and crypto wiz doesn't mean they're a trading genius.
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October 09, 2011, 01:26:02 AM
 #9

People make way to much out of the early adopter thing. There isn't that much about it really.

Alot of people have discovered bitcoins a while ago (including myself) but didn't mine any back then because lack of interest and doubts "lets see where this is going first"
The popularity wasn't that much lower, just the hashrate was, GPU mining was first led by pioneers with their secret sauce (like artforz) later GPU mining software was sold and only then open source version showed up. In retrospect I probably could have made a lot of coins if I would have bought such a software and some GPUs. But the expectations were lower back then and I was skeptical of the whole thing so I didn't.

So I am a latecomer by today's standards, so what Smiley

Point is not as many early adopters are that prominent in writing software, economics, trading or whatever, some of them are but only a few of them. Those of them who are are now involved with the project and deserve it. Some might have gotten lucky but alot probably have sold out.
In short, the wealth pyramid of bitcoin probably is shorter than you think.
I don't think it is beyond 1:1000 probably even around 1:100.

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October 09, 2011, 05:15:27 AM
 #10

I estimate less than 3 million dollars have been put up for grabs by speculators.
Interesting.  Probably realistic. How do you calculate that?

There are about 7 million Bitcoins outstanding, and no way is enough cash coming into the Bitcoin world to liquidate all those at anything like the current price.
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October 09, 2011, 05:23:16 AM
 #11

I think it is reasonable to presume that a group of well financed people (including the person(s) dubbed the manipulator) want to make sure that miners do not make any return on their investment or lose money.

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October 09, 2011, 05:26:56 AM
 #12

I think it is reasonable to presume that a group of well financed people (including the person(s) dubbed the manipulator) want to make sure that miners do not make any return on their investment or lose money.
That it, they purchase lots of mining power and sell earning outright ?

There are about 7 million Bitcoins outstanding, and no way is enough cash coming into the Bitcoin world to liquidate all those at anything like the current price.
How is this relevant ? ... a very small portion of BTC are available for sale. (less than 10%)
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October 09, 2011, 05:34:26 AM
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I estimate less than 3 million dollars have been put up for grabs by speculators.
Interesting.  Probably realistic. How do you calculate that?

There are about 7 million Bitcoins outstanding, and no way is enough cash coming into the Bitcoin world to liquidate all those at anything like the current price.

To say this number has a massive error margin would be an understatement.  It's completely pulled out of my ass.  My model is based on 75% joining the bitcoin community w/ BTC at the high all choosing to build mining rigs rather than buy (rational choice with cost to produce of $1 vs cost to buy of $32), the number of 5830 cards it would take to supply current hash rate (the most popular card at the time, selling for $100) and a supposition that less money would be used to direct buy than re-create the entire current network.

The real number may be lower, higher, or about that.  I will state with 100% confidence it's not 30 million.

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October 09, 2011, 06:22:55 AM
 #14

I think it is reasonable to presume that a group of well financed people (including the person(s) dubbed the manipulator) want to make sure that miners do not make any return on their investment or lose money.
That it, they purchase lots of mining power and sell earning outright ?

No, they make sure miners only make a small fraction of what they invested in hardware and the market price they unload at.

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October 09, 2011, 06:53:31 AM
 #15

Ummm, my 2 cents is:

As soon as bitcoin becomes a legal something (and no it doesn't really matter what token/digital comodity/currency/currency overlay etc) it'll be adopted very quickly by small-medium sized businesses and possibly the odd small bank as a means of payment processing.

The savings on that alone compared with the slow butt-ugly cow that is SWIFT will add an insane amount of value to the entire network. Given that we could even see businesses or banks preparing for such by doing exactly what the op suggested heck they might even invest in a bit of hashing power to keep network speed high if miners start to leave after once returns start diminishing next year.

This will lead to proper globalization for anyone using it and governments that don't like it are basically just going to have to fall into line or become laughing stocks of A the internet B most of the civilized world. I mean who'd be dumb enough to pay 20-30USD for a bank wire and wait 2-5 business days for "processing" if it's costing them to wait on both ends. (I know 1 day wires are possible but they're extremely expensive often costing 100+USD and bitcoin is still a hell of a lot faster.)

If you take these more or less facts and compare them with what the op says then to a large extent it makes perfect sense. Atm I see bitcoin as being in a waiting phase where price fluctuations are really just expressions of interest in/ preperation of this new market.

It's still a gamble but the second we get (if we do) even a shred of legality, as in being mentioned in an applicable law or just legal circulation (as in tax office circulation) then the sky is the limit as far a my logic goes.

We might actually have that to some extent in the UK with the government there treating this as a digital commodity. However this is only how they're treating things atm without any of the "official paperwork" once this has been firmed up somehow this rocket is going to take off.

Citi is SCARED SHITLESS of bitcoin as they're one of the largest back bone transfer providers worldwide and their business it the one that's going to be hit the hardest. If Citi weren't so scared then they wouldn't have felt the need to start attempting to slam bitcoin at that recent convention.

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