I am predicting a spike above $3

[Dan The Man]

Since the price plummeted through $3 a few days ago, everyone buying has been scared and looking for some stability before they go back in. As confidence in stability rises it's going to lead to a lot of buyers jumping back onto the wagon in the next 24 hours, spiking up to something like $3.5, right where the price would have been if it continued falling at the steady rate it has all month. Then it'll settle in by Sunday and stay above $3 for a few days.

Same thing happened Sep 12 and Aug 18.

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[S3052]

thats entirely possible. people buying at current levels have a -10% to -15% tight stop loss at 2$ and higher return opportunities towards 3.5-5 $.

It just needs a trigger.

[mjcmurfy]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil.
You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

[Edward50]

thats entirely possible. people buying at current levels have a -10% to -15% tight stop loss at 2$ and higher return opportunities towards 3.5-5 $.

It just needs a trigger.

Your assuming that the $2.00 bid wall will hold up. As history has shown, once this bidwalls takes some selling pressure it will be pulled out and set lower. You will then have a far lager downside than $2.00.

[ineededausername]

The bid wall means that we aren't going to see a spike.  Relax, everyone.

[Crypt_Current]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil. You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

I'll bet the price will DEFINITELY move within the next day, week or month.

[Crypt_Current]

The bid wall means that we aren't going to see a spike.  Relax, everyone.

Unless it magically evaporates, which LOL could NEVER happen...

[johnj]

thats entirely possible. people buying at current levels have a -10% to -15% tight stop loss at 2$ and higher return opportunities towards 3.5-5 $.

It just needs a trigger.

Your assuming that the $2.00 bid wall will hold up. As history has shown, once this bidwalls takes some selling pressure it will be pulled out and set lower. You will then have a far lager downside than $2.00.

From watching it last night, even when it spiked down to 2.05, the wall didn't move.  Infact it got a little bigger.  Just an observation.

[imsaguy]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil. You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

 +1

[adamstgBit]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil. You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

 +1

... he clicked on  Speculation, and he doesn't want to see anyone Speculate. hmmmm..... interesting NOT

[Crypt_Current]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil. You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

 +1

... he clicked on  Speculation, and he doesn't want to see anyone Speculate. hmmmm..... interesting NOT

Right; sort of like walking into a tavern and asking everyone to please stop drinking and get a life... lol

[imsaguy]

Uggh. Why do people never learn???
 
Will it happen, won't it happen? Will it go up, will it go down? Maybe it will go sideways, then diagonally for a while, and bounce off these funky little lines I have drawn on this colorful log chart. Surely this is inevitable! I mean, it's a LOG CHART!! I'll just post about it and give some tentative circumstantial evidence to support my claim. Oh wait, there's a manipulator in the market, we're all fucked! It's all over people, just sell sell sell. NO, wait!!! BUY BUY BUY... now sell. Yep, it's fucked, it's a giant ponzi scheme. Or is it? Hmmm....

Just STOP will you?! PLEASE, I am literally begging. All you traders and speculators make my blood boil. You can't predict shit, so stop deluding yourselves. I'm avoiding this subforum from now on.

Go and do some real work for once in your bloody lives!

 +1

... he clicked on  Speculation, and he doesn't want to see anyone Speculate. hmmmm..... interesting NOT

Right; sort of like walking into a tavern and asking everyone to please stop drinking and get a life... lol

If you're going to speculate though, speculate.  Don't sit on the fence and say 'it could do this or it could do that'.  Which is it?  Pick something and defend it.

[Technomage]

$2 has been a very strong support level so far. I also think that it's fairly likely we'll see a short term bounce soon.

[ineededausername]

$2 has been a very strong support level so far. I also think that it's fairly likely we'll see a short term bounce soon.

We've had these strong support levels at any psychological number.  Every single one breaks because someone sells out into it, or is cancelled. 
It'll be going down today, I can feel it.

[Litt]

$2 has been a very strong support level so far. I also think that it's fairly likely we'll see a short term bounce soon.

We've had these strong support levels at any psychological number.  Every single one breaks because someone sells out into it, or is cancelled. 
It'll be going down today, I can feel it.

I want to see a rally because I support bitcoin, but if this is the capitulation part of the correction then I think there is much more way down to go before we come back up for air.

People know price of bitcoin does not effect bitcoin's functionality as a currency in any way. They can still do everything they were doing with bitcoin regardless if the prices were at $32 or $1. Just means it's too volatile to put your money in it as an investment right now which is exactly why people are and have been pulling out for a long time. Why would anyone invest in bitcoins on a downtrend when you can put the same money into something with the trend in your favor? Only if you need to use bitcoin as a form of currency to do something with it in the near terms, would someone buy some at current volatile downward climate.
 
Your observation of every tiny rally getting killed is very true because more and more people are realizing the very same thing and adding to it.

If this drop is to be the opposite of the rise to $32 then we haven't even started sadly. It doesn't mean we won't come back to $2 to stabilize after it's over, but I would suspect we will go down below the actually bottom before coming back up to finding it as the bitcoin economy demands push the price back up where it belongs.

[mjcmurfy]

Your "speculation" is destroying the long term feasibility of bitcoin. We are just coming out of a massive speculative bubble and you all just keep going without batting an eyelid. How many times do you have to get burned before you learn that speculation is not going to get you anywhere? It contributes ABSOLUTELY NOTHING to the bitcoin economy, it is a simple matter of spinning numbers around all day, and getting lucky when you serendipitously manage to spin your numbers that little bit better than others. And for what? A measly 0.5% or thereabouts? It's a joke.

I have the right to come in here and point out how stupid your behavior is, because you are ruining this project for the rest of us with your greed and short term profit motives. You have no idea what you are talking about, yet still manage to spew an endless supply of bullshit and misinformation.

Forget MtGox, forget tradehill. Get your bitcoins by mining them or providing goods/services in return for them. That is the only productive way to grow the bitcoin economy. Speculation is a zero sum game, and taking money from unsuspecting, gullible people is not morally justifiable. Therefore, I have ZERO time for speculators, except of course to lambast them.

The sad thing is, I see very little evidence of anybody here making decent returns from it. Why are you all so willing to hand your money over to people who are much smarter than you? These people couldn't even be bothered to post here and thank all you all for being such good lemmings.

You people contribute absolutely nothing. All you want is short term gains, and you don't give a shit how you get there.
If it means you take the whole bitcoin project down with you, so be it.

I need to get a life? Take a long hard look in the mirror.

[johnj]

Your "speculation" is destroying the long term feasibility of bitcoin.

How the fuck is talking about "Hey, how much you guys think x will be worth by y" destroying bitcoin?

Speculation is the name of the game for anything.  Guessing what is gonna happen tomorrow is what everyone bases their lives around - and plan accordingly. Sometimes they work out - sometimes they don't.  But 'lambasting' people for doing what any other rational or curious person does is silly.

[wormbog]

Forget MtGox, forget tradehill. Get your bitcoins by mining them or providing goods/services in return for them. That is the only productive way to grow the bitcoin economy. Speculation is a zero sum game, and taking money from unsuspecting, gullible people is not morally justifiable. Therefore, I have ZERO time for speculators, except of course to lambast them.

I stopped mining recently when the price dropped below $3. I'm interested in the price speculation thread because I want to gain whatever insight I can into when price/difficulty will make mining feasible again. It's not about making a quick buck, it's about not wasting electricity for me.

Also, if the bitcoin economy can be fatally damaged by speculation it has no hope of widespread adoption in the future. There's no moral issue here, so settle down.

[mjcmurfy]

Also, if the bitcoin economy can be fatally damaged by speculation it has no hope of widespread adoption in the future. There's no moral issue here, so settle down.

Look at the housing market in the US, the dot-com crash in the 90's, see what is happening in Europe, just open your eyes a bit. Speculative asset bubbles destroy markets and bankrupt nations. We patch over the problems, and create new bubbles so the speculators can make more profit without anyone realizing the devastation left in their wake.

You think bitcoin is so special that it cannot be harmed by the same processes? The PR damage caused by the deflating bubble alone could be enough to set the project back for years. I had hope that bitcoin was going to save us from this global speculative madness, but it seems like the exact same irrational psychology dominates. There has been no shift in people's mindset, no elevation of their thinking, just the same old bullshit. We certainly have a ways to go before people get it in their thick skulls.

No moral issue? Whatever helps you sleep at night my friend.
If you put a blindfold on then punch a child in the face, is it ok as long as you can't see what you are doing?

Maybe I am over-reacting, but there is just so much nonsense touted around it's hard to keep a cool composure.
Anyway, like I said, I am done with this subforum. There is nothing worth reading in here.

[Dan The Man]

So you are saying that individuals should not pursue personal gain, but rather they should refuse to exchange money for other valued items at a variable exchange rate because it hurts the market.

Ok, you have convinced me that I should no longer speculate on the value of bitcoin. Since I have no other use for a virtual currency, I will be getting out of bitcoins alltogether. I will continue to buy my groceries with dollars because that's what I'm paid in and that's what the supermarket accepts.

[mjcmurfy]

So you are saying that individuals should not pursue personal gain, but rather they should refuse to exchange money for other valued items at a variable exchange rate because it hurts the market.

What I am saying is people should stop trying to speculate on the future price of a currency in order to realize profit. Speculate all you want on assets for all I care, because I won't buy any of your over-inflated assets. But when you inflate and deflate the actual currency with speculation, it pisses me off, because I have to conduct business with the stuff. You don't have that issue to worry about.

Speculation is not productive, causes boom-bust cycles, and detracts from the real purpose of the bitcoin project. I.e an alternative monetary system. NOT the same one again, packaged slightly differently with a techno-ribbon perched on top.

Ok, you have convinced me that I should no longer speculate on the value of bitcoin. Since I have no other use for a virtual currency, I will be getting out of bitcoins alltogether. I will continue to buy my groceries with dollars because that's what I'm paid in and that's what the supermarket accepts.

I'm glad I have convinced you. We don't need people who have no use for bitcoin other than speculation. Now I can go to sleep happy.

If you realize in the future that there are many purposes for bitcoin other than speculation, remember that you can still earn those coins in a productive way by providing goods or services in exchange for them without breaking your promise not to speculate any more.

[worldinacoin]

I hope your predictions come through, but till now no signs of it

[Dan The Man]

I said 24 hours. Give me at least 12 before you start calling me wrong. And just in case it was unclear, I was being sarcastic to Mcjmurfy. I hope it is clear at least to others how ironic it is that he claims to have insight into the "true" purpose of bitcoin and advocates regulation over how it is traded, all within the context of a web forum called "speculation".

[fivebells]

Well, there was a huge purchase a little while ago, so who knows?  You could be right.

[mjcmurfy]

And just in case it was unclear, I was being sarcastic to Mcjmurfy.

If you have to point out your sarcasm, you didn't do it properly.

[cypherdoc]

thats entirely possible. people buying at current levels have a -10% to -15% tight stop loss at 2$ and higher return opportunities towards 3.5-5 $.

It just needs a trigger.

BOOM!  the gun just went off!

[carlos]

2.7  ... seems like the guy was right... but where is the support now?

[Nagle]

We might see $3.  After each big drop, there's been some recovery. But each top was lower than the last, and each recovery lasted no more than three days.

[fivebells]

Yeah, Dan.  How'd you do it.  Even if we don't reach $3, that was a remarkably specific and accurate prediction.

[carlos]

strange...

Buy 10000 BTC for 28448.97 USD

Can't fill complete order!
Sell 9007.01 BTC for 22337.85 USD

[Dan The Man]

Yeah, Dan.  How'd you do it.  Even if we don't reach $3, that was a remarkably specific and accurate prediction.

I played a little game called spot the pattern. Add to that the fact that things seem to always jump or drop near the start of the weekend and I felt good that it would move by Friday. I also lost a bunch when the bottom dropped out so I kind of understand how people are skittish right now. They want to buy back in, but need a bit of time to see that the big fall is over and things will be a little more predictable.

[cypherdoc]

We might see $3.  After each big drop, there's been some recovery. But each top was lower than the last, and each recovery lasted no more than three days.

no one's listening to you.

[fivebells]

Thanks for the explanation,Dan.

[S3052]

we also predicted this move in our subscriber service and issued a short term alert about this opportunity, and confirmed this rally potential in our weekly newsletter. the pattern was clear

[fivebells]

Yes but you only ever predict ralliies in the near-term, sometimes with amusing inaccuracy.  So you predictions are not very informative.

[Are-you-a-wizard?]

http://bitcoinstatus.rowit.co.uk/

Looks normal at first glance but we can actually expect another big drop in price within the next 24 hours if my theory is correct.

I say we will be <$2 by this time tomorrow, feel free to quote me on that.

[Dan The Man]

Ok, now you can start calling me wrong, but at least it was kind of close. I'll have to remember to keep my predictions more vague in the future.

[Mousepotato]

Looks like it's gradually increasing, but I'd hardly call that a "spike".  Sucks too, I was hoping to pick some up for $1.5-1.6X.

[worldinacoin]

It is not really a prediction, more of a guess work. 

[neptop]

We need a Bitcoin betting website where speculators can actually bet on prices and link their bets.

[Dan The Man]

It is not really a prediction, more of a guess work. 

what's the difference?

[Nagle]

We might see $3.  After each big drop, there's been some recovery. But each top was lower than the last, and each recovery lasted no more than three days.

no one's listening to you.

Actually, I've received several private messages recently thanking me for keeping them from making a big financial mistake.

Now let's have a look at "cypherdoc"'s track record:

• September 3, 2011: "while the falloff has been dramatic, it appears to be stabilizing around this 8-10 range.  i keep accumulating on the way down.  just give it time.  they can't stop it."
• August 4, 2011: "Re: $10,000 Bet that Bitcoins will outperform Gold, Silver by 100X !!! --- i happen to agree and i've staked my money on it!!!!"
• July 9, 2011: "i will also bet any or all of you btc bears/trolls in this thread 100 BTC each to be held in escrow that the USD price of 1 BTC will exceed $20 in one year."

If he's telling the truth, he's lost a lot of money in Bitcoin. Anybody fool enough to listen to him did, too.

[blueadept]

We need a Bitcoin betting website where speculators can actually bet on prices and link their bets.

You mean like a currency futures market? That'd be nice. It would actually help stabilize bitcoin prices.

[bitfoo]

We need a Bitcoin betting website where speculators can actually bet on prices and link their bets.

Have you seen http://www.spaculator.com/ ?

[Nagle]

You mean like a currency futures market? That'd be nice. It would actually help stabilize bitcoin prices.

A futures market requires counterparties you can find and trust, or at least apply pressure upon, when it's time for them to pay up. The Bitcoin community doesn't have such institutions.

[johnj]

Nagle, genuine question which I believe others have, but I'll frame it respectably:

Are you 100% bear, ie the bitcoin project will fall to pennies and will never regain stature, or are you just suggesting that for the mid-term?

If it's the former option, why do you continue to spend your time posting?  Your tone doesn't ring of altruistic intent, so what else can it be attributed to?

[cypherdoc]

We might see $3.  After each big drop, there's been some recovery. But each top was lower than the last, and each recovery lasted no more than three days.

no one's listening to you.

Actually, I've received several private messages recently thanking me for keeping them from making a big financial mistake.

Now let's have a look at "cypherdoc"'s track record:

• September 3, 2011: "while the falloff has been dramatic, it appears to be stabilizing around this 8-10 range.  i keep accumulating on the way down.  just give it time.  they can't stop it."
• August 4, 2011: "Re: $10,000 Bet that Bitcoins will outperform Gold, Silver by 100X !!! --- i happen to agree and i've staked my money on it!!!!"
• July 9, 2011: "i will also bet any or all of you btc bears/trolls in this thread 100 BTC each to be held in escrow that the USD price of 1 BTC will exceed $20 in one year."

If he's telling the truth, he's lost a lot of money in Bitcoin. Anybody fool enough to listen to him did, too.

is Bitcoin dead yet?  oh yeah; still functioning.  yes i believe in Bitcoin.  when it goes to zero or when i sell, then i will have lost.  i've always said i'm giving it 10 yrs.

[Nagle]

Nagle, genuine question which I believe others have, but I'll frame it respectably:

Are you 100% bear, ie the bitcoin project will fall to pennies and will never regain stature, or are you just suggesting that for the mid-term?

If it's the former option, why do you continue to spend your time posting?  Your tone doesn't ring of altruistic intent, so what else can it be attributed to?

OK, I'll give a real answer.  I think Bitcoin is an interesting concept, and I want to see how it plays out. I also strongly dislike scams.

If someone could come up with something good enough to replace PayPal or debit cards, that would be a win. Bitcoin, as currently designed, isn't it.

Bitcoin, the software, provides a means for unidirectional, irrevocable money transfer between anonymous parties. This is the scammer's dream. There's almost no risk of the mark coming back with cops or a baseball bat. With no revocation mechanism, no dispute resolution mechanism, no reputation mechanism, and  no enforcement mechanism, the Bitcoin world has been able to replicate, in only a few months, almost every classic financial scam of the 19th century, from John Law's bank to tulipomania to the South Sea Bubble.  That's the biggest problem with Bitcoin on the currency side.

It's worth watching Bitcoin to see how not to do it. Technically, I think the revocation problem could be fixed.  I've suggested using a two-phased commit, where a money transfer takes place with an "authorize" and a "capture" phase. I've described that elsewhere. This thing needs something so that scammers can't scam without consequences. 

The speculation market is a straight pump and dump.  That's why I'm down on the "pumpers".  This is a zero sum game. Bitcoin generates no revenue. Frantic efforts to recruit more investors to pay off the old ones make it a pyramid scheme.  I'm thus suspicious of the "BUY BUY BUY crowd".

Now I'm waiting to see how the endgame plays out.

[Dan The Man]

Two phase contracts are possible with current bitcoins, just something that isn't implemented into the program. Gavin Anderson put up some talks about smart contracts and various ways that money can be tied up in limbo with or without a third party. For example, you could send payment to someone whereby you lock up the funds but payment is not completed until the payer agrees that the transaction is completed, or the receiver agrees on a refund or both parties agree to send the money to a third party.

[teek]

Nagle, genuine question which I believe others have, but I'll frame it respectably:

Are you 100% bear, ie the bitcoin project will fall to pennies and will never regain stature, or are you just suggesting that for the mid-term?

If it's the former option, why do you continue to spend your time posting?  Your tone doesn't ring of altruistic intent, so what else can it be attributed to?

OK, I'll give a real answer.  I think Bitcoin is an interesting concept, and I want to see how it plays out. I also strongly dislike scams.

If someone could come up with something good enough to replace PayPal or debit cards, that would be a win. Bitcoin, as currently designed, isn't it.

Bitcoin, the software, provides a means for unidirectional, irrevocable money transfer between anonymous parties. This is the scammer's dream. There's almost no risk of the mark coming back with cops or a baseball bat. With no revocation mechanism, no dispute resolution mechanism, no reputation mechanism, and  no enforcement mechanism, the Bitcoin world has been able to replicate, in only a few months, almost every classic financial scam of the 19th century, from John Law's bank to tulipomania to the South Sea Bubble.  That's the biggest problem with Bitcoin on the currency side.

It's worth watching Bitcoin to see how not to do it. Technically, I think the revocation problem could be fixed.  I've suggested using a two-phased commit, where a money transfer takes place with an "authorize" and a "capture" phase. I've described that elsewhere. This thing needs something so that scammers can't scam without consequences. 

The speculation market is a straight pump and dump.  That's why I'm down on the "pumpers".  This is a zero sum game. Bitcoin generates no revenue. Frantic efforts to recruit more investors to pay off the old ones make it a pyramid scheme.  I'm thus suspicious of the "BUY BUY BUY crowd".

Now I'm waiting to see how the endgame plays out.

I was kind of interested to see how you would respond to this..  The network / protocol in and of itself may not solve the scam problem you mention..  but I don't see that as a shortcoming OR it's responsibility at all.  The protocol was built with a purpose, it serves that purpose very well.   Protocols may be revised / updated for functionality, security, etc.. we all know this.  What's usually more important than the protocol itself is the implementation of said protocol, how it is used in the real world.  Just because the core protocol itself does not support revocation (in my opinion it shouldn't), that does not mean that entities that use this back-end protocol in their systems / applications can't support such things, it is up to the people / businesses that build on top of this protocol to make this happen. 

What we have here is a very experimental time where people are playing with a very powerful low-level protocol that just happens to have a fairly easy gui attached to it.  How often are people exposed to such technology and such a low-level?  The events you have mentioned are bound to happen in this type of scenario.  Just as crazy data breaches of the 80's and 90's and even recently happened with early versions of protocols that are now in dominant use today. 

People should be wary of all kinds of pump and dumps, this is not unique to bitcoin.  Is it going "to the moon"?  Probably not anytime soon.  Are people going to be "running a node" and using this back-end protocol to buy a pack of gum?  I sure hope not.  I don't think you're going to get to see the endgame, because you won't live that long.  The concept is too powerful to be abandoned, one way or another, even if it isn't specifically bitcoin (I still think it could be), this idea isn't going away.  The scam problem is really just because people are attempting to use this low-level beta protocol without fully understanding the implications.  Obviously the argument has been made a bunch of times, but I'll say it again, the same thing could be said with cash, it is non-revocable, there are many other services that build on-top of cash to try to provide (badly) the same thing bitcoin does, western union for example.  Try sending a WU, having it accepted on the other side, and getting that money back..

 

[Dan The Man]

Well looks like it finally happened. The funny thing is that I was playing with the small roller coaster and missed the big jump

[svojoe]

About the spike, you just got it...

[cypherdoc]

nice call.  i'll take some credit.

[ArsenShnurkov]

Well looks like it finally happened

Looks like it was inspired by your prognosis.

The funny thing is that the price will not go above

[Dan The Man]

It will soon enough.

[ArsenShnurkov]

It will soon enough.

But there is no fundamental factors to support this rise.
Number of nodes is decreasing and the inflation rate is constant.

[cypherdoc]

It will soon enough.

But there is no fundamental factors to support this rise.
Number of nodes is decreasing and the inflation rate is constant.

there was nothing fundamental about the long fall.

[Dan The Man]

I am going to make a short term position here and say that the first spike tonight was the product of a massive buy by some big hitters. The second spike was just a reaction to the first spike. The third drive up will push through with some real momentum behind it.

[worldinacoin]

Looks like a bit late, but the bitcoin is going up quite well, maybe $3 is really within reach.

[Cluster2k]

It hit $3 bang on, but now there's an evil bid 'wall' in the way.  Cry havoc, and let slip the dogs of war.  Tear it down! :-)

[S3052]

compared to previous walls, the ask wall at 3$ is quite small

[ArsenShnurkov]

compared to previous walls, the ask wall at 3$ is quite small

You was always too bullish in your predictions...

[S3052]

that is not true. i predicted the decline from the 32$ high, then predicted the decline to 5$ and below, giving many sell signals to subscribers.
you can chose to subscribe to get all signals, or not. it is up to you./color]

[P4man]

If enough people believe your predictions, it becomes a self full fulling prophecy no matter what you predict. Just about the *only* thing determining BTC price currently is short term speculation, so what you are really predicting is the behavior of short term speculators. It makes no sense, and frankly, its undermining bitcoin's usefulness as a trade tool I wish Satoshi had implemented a "tobin tax".

[S3052]

we are predicting long term, mid term and short term trends. you can chose to not read them.

there are many people wanting this service

[Bigpiggy01]

If enough people believe your predictions, it becomes a self full fulling prophecy no matter what you predict. Just about the *only* thing determining BTC price currently is short term speculation, so what you are really predicting is the behavior of short term speculators. It makes no sense, and frankly, its undermining bitcoin's usefulness as a trade tool I wish Satoshi had implemented a "tobin tax".

Ummm some of us have actually made quite a few good decisions based on this analysis

[P4man]

Ummm some of us have actually made quite a few good decisions based on this analysis

And just as many of you will have made just as many bad decisions. Thats not the point, the point is that bitcoin as a whole is losing badly from the volatility caused by this kind of short term trading gambling.

[worldinacoin]

It hasn't been able to break $3, but the gains are quite encouraging and bitcoins appear to be able to hold on to the gains.

[Dan The Man]

And just as many of you will have made just as many bad decisions. Thats not the point, the point is that bitcoin as a whole is losing badly from the volatility caused by this kind of short term trading gambling.

Who is this Bitcoin you speak of and how do price changes hurt its feelings? What you mean to say is that YOU don't like volatility. Speculators that lose money are the ones who increase volatility. Speculators who are making money are like a tax on fluctuation. They are friction in the system. Anyways, you might as well go join a gun forums to tell them that guns are ruining America, or go to a car forum and espouse the benefits of public transport. Good luck on your quest to define and control exactly what Bitcoin is and should be.

[P4man]

What you mean to say is that YOU don't like volatility.

No; what I mean is anyone wanting to use bitcoin as a currency and trade tool, rather than a lottery doesnt like this volatility.  Its one of the major factors holding bitcoin from gaining more widespread acceptance (and thereby also, from increased price stability, nice catch 22).

Anyway, im not naive enough to expect posting will make anyone stop playing the lottery, but Im gonna voice my opinion whether you like it or not.

[cypherdoc]

If enough people believe your predictions, it becomes a self full fulling prophecy no matter what you predict. Just about the *only* thing determining BTC price currently is short term speculation, so what you are really predicting is the behavior of short term speculators. It makes no sense, and frankly, its undermining bitcoin's usefulness as a trade tool I wish Satoshi had implemented a "tobin tax".

thats just not true.  look at all the recent developments and improvements:  encrypted wallets, better DDoS protection, improved blockchain download times, Android apps, BitPay, Casascius's POS system, Casascius's Physical Bitcoins, increased mtgox security with direct cash deposits services, death of the altchain competitors, etc, etc, etc.

bears have blinders on.

[cypherdoc]

What you mean to say is that YOU don't like volatility.

No; what I mean is anyone wanting to use bitcoin as a currency and trade tool, rather than a lottery doesnt like this volatility.  Its one of the major factors holding bitcoin from gaining more widespread acceptance (and thereby also, from increased price stability, nice catch 22).

Anyway, im not naive enough to expect posting will make anyone stop playing the lottery, but Im gonna voice my opinion whether you like it or not.

this is just your opinion of things which could easily be wrong.  i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today.  thats my opinion.

[P4man]

i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today.  thats my opinion.

Spoken like a true gambler. A merchant has to pay for his stuff in $/EURO/Yen whatever. Gambling on the rise of "foreign" currencies is not what a merchant does, its what a speculator does. A merchant will want to protect himself from currency swings through hedging, even for swings as minor as what have between dollar and euro's etc. The volatility of bitcoin makes that a complete joke.

[cypherdoc]

i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today.  thats my opinion.

Spoken like a true gambler. A merchant has to pay for his stuff in $/EURO/Yen whatever. Gambling on the rise of "foreign" currencies is not what a merchant does, its what a speculator does. A merchant will want to protect himself from currency swings through hedging, even for swings as minor as what have between dollar and euro's etc. The volatility of bitcoin makes that a complete joke.

spoken like a linear thinking, uncreative, narrow-minded conservative.  but thats ok.  you act like Bitcoin has had many decades to prove itself but failed.  the market is thin b/c its so new.  of course theres volatility.  do you think gold is a bad investment given its volatility over the last decade despite it being close to the best investment over that period of time? 

IMO, the easiest or safest way to "gamble" on the future of Bitcoin is to offer services or goods for it, put them away for safe keeping, then wait.  of course he can't do this for 100% of his income but if he has a profitable USD business and he believes in Bitcoin, why not do it this way?

[teukon]

i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today.  thats my opinion.

Spoken like a true gambler. A merchant has to pay for his stuff in $/EURO/Yen whatever. Gambling on the rise of "foreign" currencies is not what a merchant does, its what a speculator does. A merchant will want to protect himself from currency swings through hedging, even for swings as minor as what have between dollar and euro's etc. The volatility of bitcoin makes that a complete joke.

Agreed.  One cannot expect all merchants to also be speculators/gamblers.  This is very much like expecting all miners to mine solo.  Some merchants will only use Bitcoin if they are able to enjoy its benefits without taking on the risks.

However, speculators and traders colluding to create an artifical stable Bitcoin price is not a solution; this would be akin to building a house upon sand.  Instead, Bitcoin has to go through this phase of wild speculation where some win big and others lose big.  This will kill off the day traders who don't know what they are doing and leave those that profit and create drag on the price.  This process will take a long time but it is an essential step toward a healthy kind of stability.  I believe it is unlikely that a level of stability that is acceptable to most merchants can be reached in the next 10 years and so I expect a series of competing companies offering options to merchants (basically taking the sting of market volatility out of the equation for a fee) will arise.

Of course, this all assumes that Bitcoin manages to dodge various devastating scenarios such as being hacked past the point of recovery or being declared illegal to trade in most countries.

[P4man]

do you think gold is a bad investment given its volatility over the last decade despite it being close to the best investment over that period of time? 

Again you seem utterly unable to see the difference between investing/gambling and the usefulness of a currency as a facilitator for conducting trade. Yes, I think gold is a bad way to conduct trade, no one uses gold to pay for their bread.

but if he has a profitable USD business and he believes in Bitcoin, why not do it this way?

Why on earth would he risk his profitable business on the moodswings of a bunch of daytraders? Clearly you have never done any actual business.

[cypherdoc]

do you think gold is a bad investment given its volatility over the last decade despite it being close to the best investment over that period of time?  

Again you seem utterly unable to see the difference between investing/gambling and the usefulness of a currency as a facilitator for conducting trade. Yes, I think gold is a bad way to conduct trade, no one uses gold to pay for their bread.

but if he has a profitable USD business and he believes in Bitcoin, why not do it this way?

Why on earth would he risk his profitable business on the moodswings of a bunch of daytraders? Clearly you have never done any actual business.

of course for the average business a currency which has zero fluctuation would be ideal.  yes, i own my own business thank you.

you seem totally incapable of admitting that Bitcoin volatility has been only 6 months old in a currency that has only been around since Jan 2009.  

[P4man]

you seem totally incapable of admitting that Bitcoin volatility has been only 6 months old in a currency that has only been around since Jan 2009.  

Volatility =! decreasing prices. Perhaps you think a 100x increase in price in mere months was somehow stable?
Bitcoin exchange rates have been extremely volatile since day 1. And yes, thats to be expected from something new and unknown, but as long as it remains this volatile, its going to have a damn hard time gaining any sort of traction aside from gamblers and allowing bitcoin to achieve an exchange rate that is more reflective of its performance as a currency rather than purely the combined panic/hype sentiments and self fulfilling prophecies of gamblers.

[imsaguy]

we are predicting long term, mid term and short term trends. you can chose to not read them.

there are many people wanting this service

If there are as many as you say there are, you wouldn't be pushing subscriptions.  You wouldn't have to.  Everyone would be suggesting it to their friends.

[cypherdoc]

you seem totally incapable of admitting that Bitcoin volatility has been only 6 months old in a currency that has only been around since Jan 2009.  

Volatility =! decreasing prices. Perhaps you think a 100x increase in price in mere months was somehow stable?
Bitcoin exchange rates have been extremely volatile since day 1. And yes, thats to be expected from something new and unknown, but as long as it remains this volatile, its going to have a damn hard time gaining any sort of traction aside from gamblers and allowing bitcoin to achieve an exchange rate that is more reflective of its performance as a currency rather than purely the combined panic/hype sentiments and self fulfilling prophecies of gamblers.

if you're so against gambling why are you hanging out in the Speculation Board?

[Inedible]

if you're so against gambling why are you hanging out in the Speculation Board?

Not sure he's against gambling.

Looks like to me he's saying that traders are having a hard time accepting Bitcoin for trading due to the wild fluctuations and if Bitcoin doesn't get traction as a currency then it'll never succeed.

I can see why merchants would have a problem with the volatility.

I can see why speculators want to speculate.

In the grand scheme of things I'd say if you let the merchants do their thing first, Bitcoin gains traction as a currency, everyone wins. If you let the speculators do their thing first, there might not be anything left.

[cypherdoc]

if you're so against gambling why are you hanging out in the Speculation Board?

Not sure he's against gambling.

Looks like to me he's saying that traders are having a hard time accepting Bitcoin for trading due to the wild fluctuations and if Bitcoin doesn't get traction as a currency then it'll never succeed.

I can see why merchants would have a problem with the volatility.

I can see why speculators want to speculate.

In the grand scheme of things I'd say if you let the merchants do their thing first, Bitcoin gains traction as a currency, everyone wins. If you let the speculators do their thing first, there might not be anything left.

i think you have it backwards.  first of all traders love volatility.  second no one can control speculators or the markets so no sense knocking them.  third if speculators are successful at driving the price of Bitcoin higher, this encourages merchants to jump in with innovative businesses related to Bitcoin.  we saw this excitement in the Spring.  so i don't begrudge speculators at all.  this is how markets work.

[P4man]

if speculators are successful at driving the price of Bitcoin higher, this encourages merchants to jump in

Ahm. No.

[Inedible]

i think you have it backwards.  first of all traders love volatility.  second no one can control speculators or the markets so no sense knocking them.  third if speculators are successful at driving the price of Bitcoin higher, this encourages merchants to jump in with innovative businesses related to Bitcoin.  we saw this excitement in the Spring.  so i don't begrudge speculators at all.  this is how markets work.

Ooops - my first use of 'traders' I meant merchants. I used merchants afterwards because I realised using traders would be confusing but forgot to change it there.

I agree though, 'day traders' love volatility.

I also agree that no one can (or ought to) control speculators.

I disagree that speculators driving up the price of Bitcoin will encourage merchants to use it. I would agree if I thought merchants felt the price would be stable or only go up but we all know this isn't true.

I don't begrudge speculators at all either but I do understand that speculation is going to slow down Bitcoin adoption for traditional merchant transactions and if adoption for the sale of services/goods is the primary basis for the value of Bitcoin, I can understand from that, that Bitcoin will never have value (or so limited that it'll be irrelevant).

[P4man]

In the grand scheme of things I'd say if you let the merchants do their thing first, Bitcoin gains traction as a currency, everyone wins. If you let the speculators do their thing first, there might not be anything left.

This.
Services like bitpay may help mitigate the volatility to a large extent, but its definitely not helpful to see BTC value fluctuate more then thermometer in the Siberian spring. It does huge damage to its image, it prevents non dynamic setting  of prices and basically makes a bitcoin economy almost impossible. The only way to use it is buy the bitcoins before your purchase, with the merchant selling them for dollars instantly with bitcoins never remaining in the economy. Thats not entirely useless, but really not what it could be.

Anyway, I dont hate speculators, I do hate stupid speculation, and honestly, this is what we are seeing. There is nothing going on in bitcoin land that warrants the swings we have seen. No real increase in commerce, no real threats or opportunities. Whatever you thought in may bitcoin might achieve over time, all that is still valid today. Why price would go up and down by an order of magnitude makes no sense. This daily buying and selling makes no sense, it is a lottery. Its literally a zero sum game. If you want to speculate, at least take the long view.

[mjcmurfy]

In the grand scheme of things I'd say if you let the merchants do their thing first, Bitcoin gains traction as a currency, everyone wins. If you let the speculators do their thing first, there might not be anything left.

+1

... [price volatility] basically makes a bitcoin economy almost impossible. The only way to use it is buy the bitcoins before your purchase, with the merchant selling them for dollars instantly with bitcoins never remaining in the economy. Thats not entirely useless, but really not what it could be.

.. This daily buying and selling makes no sense, it is a lottery. Its literally a zero sum game. If you want to speculate, at least take the long view.

+1

I agree. From a merchant's perspective, volatility makes bitcoin a nightmare to do business in. Some speculation is necessary, to ensure that hardware, goods and services required for the bitcoin economy (but cannot as yet purchased with bitcoin) can be obtained with fiat currency. But when nobody wants to leave any capital within the bitcoin economy, it is extremely difficult to operate a business under these conditions.

It's hopeless to expect speculators to only take the long view, and since there is no defined floor for the price of bitcoin, any merchant who adopts it is taking a huge risk. As a bitcoin merchant, you have no option but to force yourself to assume an overly optimistic and bullish outlook, whether you believe it or not. So the only merchants who will adopt the system are those who can successfully delude themselves. Do we want to entrust the development of the early bitcoin economy to irrational people?

With speculators buying and selling schizophrenically, sending the exchange rate wild, rational entrepreneurs naturally find it difficult to maintain this optimistic outlook when they see such bearish signals coming from the markets and then feel their balance sheets squeeze and expand within no defined range.

It is going to take some time still for all those irrational speculators out there to get bored of their zero sum game and realize that it is a pointless exercise before we get any kind of economically viable environment for businesses to operate in.

[P4man]

It is going to take some time still for all those irrational speculators out there to get bored of their zero sum game and realize that it is a pointless exercise

I dont think that will ever happen. People dont stop playing the lottery no matter how often they lose. As long as there is volatility it will attract daytraders, as long as there are daytraders and they are setting the price based on nothing but mood, there will be endless bubbles and bursts.

If anything, I have more hopes that Mt Gox' legal issues and the consequences of that will put a brake on wild speculation. If they are going to be forced to comply to financial regulations, its going to cost them a pretty penny, which I *hope* they will pass on to traders. Not unlike a tobin tax, it wont prevent anyone from taking a long term position, particularly considering the near limitless potential up and down of bitcoin, but it could, and hopefully will kill most of the daytrading casino.

[mjcmurfy]

I have more hopes that Mt Gox' legal issues and the consequences of that will put a brake on wild speculation.

I hope this happens. But do you think that bitcoin could withstand the loss of MtGox, which has managed to establish itself as a crucial cog in the bitcoin economy? I think negative PR on that scale would trigger a massive outflow of goodwill and capital from the system. It may end up being a devastating blow.

Though, with no way of easily cashing out bitcoin for fiat, speculators would then be forced also to take as bullish an outlook for bitcoin as they are currently forcing bitcoin merchants to do. I don't know what the outcome of all that would be, but I think it probably would result in a much better economic environment for everyone involved.

[P4man]

I have more hopes that Mt Gox' legal issues and the consequences of that will put a brake on wild speculation.

I hope this happens. But do you think that bitcoin could withstand the loss of MtGox, which has managed to establish itself as a crucial cog in the bitcoin economy? I think negative PR on that scale would trigger a massive outflow of goodwill and capital from the system. It may end up being a devastating blow.

Though, with no way of easily cashing out bitcoin for fiat, speculators would then be forced also to take as bullish an outlook for bitcoin as they are currently forcing bitcoin merchants to do. I don't know what the outcome of all that would be, but I think it probably would result in a much better economic environment for everyone involved.

If bitcoin cant survive the loss of Mt Gox, it doesnt deserve to survive. Sure there will be a PR blowback, but I think it would be one the best things that could happen for bitcoin to not have an easy way to cash in or out, for a while at least. That would really force everyone to use it as banter, as the only way to obtain bitcoins would be mining or conducting trade. The only way to unload your bitcoins would be buying stuff with bitcoins. Circulation of bitcoins would drop dramatically, but actual trade would likely spike and me thinks thats precisely what bitcoin needs.

[Cluster2k]

If bitcoin cant survive the loss of Mt Gox, it doesnt deserve to survive. Sure there will be a PR blowback, but I think it would be one the best things that could happen for bitcoin to not have an easy way to cash in or out, for a while at least. That would really force everyone to use it as banter, as the only way to obtain bitcoins would be mining or conducting trade. The only way to unload your bitcoins would be buying stuff with bitcoins. Circulation of bitcoins would drop dramatically, but actual trade would likely spike and me thinks thats precisely what bitcoin needs.

If the only way to use bitcoins would be to trade them for good or services, how do those goods and service get purchased to make the trade?  There is one, perhaps two degrees of separation at all points in the chain between bitcoins and your national currency.

Then there is the question of why anyone would want to use bitcoins if that were the case.  Why trade in a market with a few hundred, possibly a few thousand participants, where using a conventional currency means you can trade with many millions?

Merchants love the no charge back feature of bitcoins, but customers hate it.  On another BitcoinTalk forum there's debate on whether a very cheap FPGA miner solution for US$499 is actually legit.  Those people who have signed up and paid the money all say 'if it's not legit, I'll get my money back through my card/PayPal'.  I wonder if they would be so keen if they had to pay up in bitcoins.

[P4man]

If the only way to use bitcoins would be to trade them for good or services, how do those goods and service get purchased to make the trade?  There is one, perhaps two degrees of separation at all points in the chain between bitcoins and your national currency.

Oh no doubt, its use would be limited for quite some time, and BTC wouldnt be an option for amazon&co. But its not like amazon is accepting bitcoins now.

What Im pretty sure off, is that it would spur a slow, but more organic growth, like trade between individuals, "ebay" kind of stuff. Right now even on this forum, most things that are put up for sale are denominated in dollar, and can mostly be bought with dollars. If you no longer have an exchange to buy bitcoins, Im pretty sure a lot of people would sell stuff for bitcoins exclusively in order to get some. Likewise  people with "too many" bitcoins, be it miners, pool operators, merchants, would be more eager to spend them on whatever the bitcoin economy has to offer, even if its just second hand hardware or alpaca socks.  Right now there is very little incentive to do so. You might as well use dollars since everyone just converts the price from btc to dollar and back,  even though the exchange rate is utterly artificial and purely driven by daytraders. I would also guess most of the btc trade (however little it is), is also converted to dollars almost instantly.

Its like the global future markets for oil, commodities, even food; they used to serve a purpose in facilitating trade, future markets, like exchanges are essentially a good thing, helping  trade by protecting producers from price swings etc. But then the gamblers took over and turned it in to a casino, driving up global prices and actually hindering trade. Most economist will tell you you need some speculation, to act as "grease", but more than 25% speculation is a recipe for bubbles and bursts, which hinder the economy, and for instance farmers now no longer use future markets, as it has lost its purpose and has become purely a casino.  In our bitcoin economy its far far worse than that, its more like 99% speculation and 1% trade.  So anything that gets that ratio down, even if only temporarily, I can only see as a good thing.

[Cluster2k]

What Im pretty sure off, is that it would spur a slow, but more organic growth, like trade between individuals, "ebay" kind of stuff. Right now even on this forum, most things that are put up for sale are denominated in dollar, and can mostly be bought with dollars.

I remember buying a PCIE 1x to 16x adapter on eBay to use for mining (using USD$) and trying to sell it (unsuccessfully) on these forums for bitcoins.  Back then I wanted 1.6btc to cover costs.  Now I would need to ask for 8.  If I bought the adapter in bitcoins it's quite possible I would have sold it for the original number of BTC, plus whatever the postage cost would be in my currency.  It's virtually impossible to divorce one's self from every day money.  Postage in $3 bitcoins costs a whole lot more than it used to.

But then the gamblers took over and turned it in to a casino, driving up global prices and actually hindering trade. Most economist will tell you you need some speculation, to act as "grease", but more than 25% speculation is a recipe for bubbles and bursts, which hinder the economy, and for instance farmers now no longer use future markets, as it has lost its purpose and has become purely a casino.  In our bitcoin economy its far far worse than that, its more like 99% speculation and 1% trade.  So anything that gets that ratio down, even if only temporarily, I can only see as a good thing.

It does very much seem like we're replacing one semi regulated casino (share markets) with a completely unregulated casino. 

[P4man]

It does very much seem like we're replacing one semi regulated casino (share markets) with a completely unregulated casino.  

Thats the irony of it. On another forum someone asked me what solution I was suggesting. I was not suggesting any, frankly, I dont have any.  The only raison d'etre of a currency is facilitating trade. If a currency ends up hurting trade, and only encouraging lottery play, you are doing something wrong.

If people following their instincts leads to a less than desirable outcome, you have to change the system, you cant change human nature, nor can you expect people to go against their nature voluntarily. In this case, the only "fix" I can think off is what most people on this forum consider blasphemy: regulation and taxation.  If anyone can think of a different way to discourage short term speculation, Im all ears, but Im not holding my breath. Even if Mt Gox could and would somehow impose a "tax" on people that convert from dollars to btc and back without there being a real world trade associated with it, all that would do is move everyone to other exchanges. Oh the wonders of a decentralized, deregulated free "currency".

Maybe someone more clever than me will come up with a solution in bitcoin 2.0, but for this attempt, I think we're basically screwed and I will be quite impressed if bitcoin overcomes this catch 22.

[old_engineer]

In our bitcoin economy its far far worse than that, its more like 99% speculation and 1% trade.  So anything that gets that ratio down, even if only temporarily, I can only see as a good thing.

Since no one knows what the heck bitcoins are worth, I think speculation is actually the most important activity for bitcoin right now as we go through the slow process of price discovery.  Once a price range is settled on, THEN commerce can start.

Seems to me that almost all speculators think they're worth between $0.50 and $10.  That's a smaller range than April-June, where it went from $0.60 to $30.  It's slowly getting better, though I think too slowly for everyone's tastes.  Bitcoin is new by any standard, with the first significant press was in June, and we just need to give things time to settle down.

[P4man]

Since no one knows what the heck bitcoins are worth, I think speculation is actually the most important activity for bitcoin right now as we go through the slow process of price discovery.  Once a price range is settled on, THEN commerce can start.

I couldnt disagree more. If you see bitcoin as a currency,  like I do, its only reason to exist is to allow trade; and if there is no commerce associated with it, it has no value. All speculation does is anticipate on future economic activity that may or may not happen, and in this case, the speculation itself is preventing the economic activity from happening. That will never stabilize, its inherently unstable.

Assume it stays around $3 for a few months now, and merchants start to believe in its stability and start adopting it. What do you think will happen? As BTC adoption finally begins, its price will skyrocket, a bubble will inflate, merchants will get second thoughts, the bubble bursts and we are back at square one.

[cypherdoc]

Anyway, I dont hate speculators, I do hate stupid speculation, and honestly, this is what we are seeing.

why can't you accept the fact that this is all in the eyes of the beholder?  honestly, if investing was so easy, everyone would see the potential and the price would skyrocket w/o any speculator being able to make a profit.  successful investing means spotting an opportunity when no one else sees it.  sure, we bulls, could be wrong but we just as sure could be right based on an intuition you're just not seeing.

[cypherdoc]

Since no one knows what the heck bitcoins are worth, I think speculation is actually the most important activity for bitcoin right now as we go through the slow process of price discovery.  Once a price range is settled on, THEN commerce can start.

I couldnt disagree more. If you see bitcoin as a currency,  like I do, its only reason to exist is to allow trade; and if there is no commerce associated with it, it has no value. All speculation does is anticipate on future economic activity that may or may not happen, and in this case, the speculation itself is preventing the economic activity from happening. That will never stabilize, its inherently unstable.

Assume it stays around $3 for a few months now, and merchants start to believe in its stability and start adopting it. What do you think will happen? As BTC adoption finally begins, its price will skyrocket, a bubble will inflate, merchants will get second thoughts, the bubble bursts and we are back at square one.

i said i agree with you that in an ideal world a currency should be rock steady with no fluctuation in value.  but that has to be some positive number thats above zero.  but because that number is above zero, how does the market determine what that specific number is?

i submit that if Bitcoin becomes successful it will stabilize at some number reflective of its useful value as a currency.  b/c its so young, the market is trying, wildly, to determine what that number is.  my opinion, and its just my opinion based on what i know of the technology, is that its way above its current number.  nevermind the volatility which is expected at this nascent stage.

edit:  btw, we don't live in an ideal world.  we live in a world with the corrupt Fed injecting USD's into the system everytime their buddies get into trouble.  this is in part why we have volatility.

[Crypt_Current]

Since no one knows what the heck bitcoins are worth, I think speculation is actually the most important activity for bitcoin right now as we go through the slow process of price discovery.  Once a price range is settled on, THEN commerce can start.

price != value

[P4man]

why can't you accept the fact that this is all in the eyes of the beholder?  honestly, if investing was so easy, everyone would see the potential and the price would skyrocket w/o any speculator being able to make a profit.  successful investing means spotting an opportunity when no one else sees it.  sure, we bulls, could be wrong but we just as sure could be right based on an intuition you're just not seeing.

Here is the thing, Ill try to explain so maybe even you can understand. Speculating on future prices or value of things in the real economy is good. It helps establish a "true" price, it helps trade, it makes things more predictable, it can hedge risks etc.

However at some point, if speculation becomes bigger than the real world economy thats being speculated on, then you have a  BIG problem, because speculators are no longer trying to predict real world changes in economy or finance, but are trying to predict what other speculators will predict. It doesnt take a genius to understand how this creates huge bubbles and bursts. This is precisely whats happening in the real world commodity markets (*), and bitcoin is a caricature of this, with speculation FAR FAR outpacing any realworld trade.

(*) Just saw this:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7492
Interesting parts start at 4 minutes.

[cypherdoc]

However at some point, if speculation becomes bigger than the real world economy thats being speculated on, then you have a  BIG problem, because speculators are no longer trying trying to predict real world changes in economy or finance, but are trying to predict what other speculators will predict. It doesnt take a genius to understand how this creates huge bubbles and bursts. This is precisely whats happening in the real world commodity markets (*), and bitcoin is a caricature of this, with speculation FAR FAR outpacing any realworld trade.

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

you're once again claiming your world view is the correct one when it could in fact be wrong.

[P4man]

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

If you honestly think changes in underlying fundamentals explain even a tiny % of  the price swings in BTC exchanges, I can only LOL.

[cypherdoc]

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

If you honestly think changes in underlying fundamentals explain even a tiny % of  the price swings in BTC exchanges, I can only LOL.

your lack of understanding how markets, speculation, and investing work are starting to betray you.

[P4man]

Touché. University never prepared me for this, I am indeed clueless to understand how bitcoinporn's revamped website caused a 100x increase in BTC exchange rates or what other "fundementals" caused the 90% drop over the last months. Since you seem to think its fundamentals driving these fluctuations, maybe you want to share your in depth knowledge with us?

[P4man]

I would not be so fast to discount the belief in the fundamentals of the Bitcoin economic plan. But I agree, price swings on a shorter time scale will tend to completely swamp out any trend based on those fundamentals. And that will remain the case until a.) the Bitcoin exchange market becomes correlated, or b.) the Bitcoin exchange market becomes large.

Absolute size has nothing to do with it. Look the oil market and other commodity markets. They are certainly big enough, but that doesnt prevent speculation from driving prices opposite of underlying fundamentals and create huge price swings. What matters is the % of pure speculation versus actual trade. In most commodity markets this used to be around 25% but over the past decades this has grown to 50-70% or more through derivative trading, with the known results of huge price swings in things like oil, corn, metals etc, which are more often than not uncorrelated with (expectations of) supply or demand. In bitcoin this ratio is like 99%.  

Bitcoin prices can only stabilize if trade becomes a bigger part of the bitcoin economy than the exchanges and bitcoinica's. As long as demand is primarily created by speculation, price is set by speculation; and so even if you wanted to accurately predict a future price, you simply have to look at the other speculators rather than the 1% that is (what I consider) the fundamentals.

[mjcmurfy]

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

This is a ridiculous statement for any speculator to come out with, and highlights the level of delusional thinking I have come to expect from these people.

So you have never used a financial chart, or any form of technical analysis then? You don't consider support and resistance levels to be significant in your trading decisions? You don't look at trade volume or any other kind of financial metrics? You don't buy when you see large upward price movement or sell when you see large downward price movement? Did you sell any coin after the CosbyCoin incident or MtGox hack?

You must be a highly unique type of speculator, because all of these things directly reflect what other speculators are doing. Especially when it comes to the exchange rate of bitcoin, which is more directly associated with investor sentiment than any other speculative vehicle currently available. If you don't base your speculative decisions on what other speculators are doing, then why do you even bother visiting the speculation subforum?

What exactly is it you are basing your speculative decisions on then?
Lets hear it... this is going to be good.

[cypherdoc]

Touché. University never prepared me for this, I am indeed clueless to understand how bitcoinporn's revamped website caused a 100x increase in BTC exchange rates or what other "fundementals" caused the 90% drop over the last months. Since you seem to think its fundamentals driving these fluctuations, maybe you want to share your in depth knowledge with us?

i think we're just talking past each other.  the market price of Bitcoin encompasses its fundamentals, speculation, prudent investing, shorting, gambling, etc.  no sense trying to parse each component apart b/c its impossible.

either you see the underlying potentials of Bitcoin technology or you don't.  i never cease to be amazed at how two people look at the same thing but see it so differently.  thats all this is.

[ElectricMucus]

Well even if 99% of all speculators only watch each other 1% does look at the fundamentals and the 99% are looking on them too.  

[cypherdoc]

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

This is a ridiculous statement for any speculator to come out with, and highlights the level of delusional thinking I have come to expect from these people.

So you have never used a financial chart, or any form of technical analysis then? You don't consider support and resistance levels to be significant in your trading decisions? You don't look at trade volume or any other kind of financial metrics? You don't buy when you see large upward price movement or sell when you see large downward price movement? Did you sell any coin after the CosbyCoin incident or MtGox hack?

You must be a highly unique type of speculator, because all of these things directly reflect what other speculators are doing. Especially when it comes to the exchange rate of bitcoin, which is more directly associated with investor sentiment than any other speculative vehicle currently available. If you don't base your speculative decisions on what other speculators are doing, then why do you even bother visiting the speculation subforum.

What exactly is it you basing your speculative decisions on then?
Lets hear it... this is going to be good.

don't make assumptions about my level of knowledge.  if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

careful, it will take you a week to get through.

[mjcmurfy]

don't make assumptions about my level of knowledge.  if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

I will make whatever assumptions I like, based on the things that you are saying and the points you are arguing. My post was in direct response to a statement that you made claiming that you "don't speculate on what other speculators will do". This is just bullshit, and you have been called out. Feel free to prove me wrong, the onus is on you to refute my assumptions, not on me to read through a week-long thread. I am still waiting for the answer to my previous question, so my assumptions will remain until you answer it, and will be reinforced if you fail to answer it adequately.

[cypherdoc]

don't make assumptions about my level of knowledge.  if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

I will make whatever assumptions I like, based on the things that you are saying and the points you are arguing. My post was in direct response to a statement that you made claiming that you "don't speculate on what other speculators will do". This is just bullshit, and you have been called out. Feel free to prove me wrong, but I am still waiting for the answer to my previous question, so my assumptions will remain until otherwise proven.

how hard is it to respond to that question?  sometimes it pays to follow the speculators, sometimes not.  this is a personal judgment based on what each individual feels they know about the underlying technology.

you can choose to be a momentum follower for Bitcoin or not.  i can choose not to be and be a contrarian to the recent price fall.  if the price starts to ramp up again, then yes, i'll become a momentum follower as i believe the fundamentals of Bitcoin support a further price rise. 

stop acting like you're so smart.

[mjcmurfy]

how hard is it to respond to that question?  sometimes it pays to follow the speculators, sometimes not.  this is a personal judgment based on what each individual feels they know about the underlying technology.

you can choose to be a momentum follower for Bitcoin or not.  i can choose not to be and be a contrarian to the recent price fall.  if the price starts to ramp up again, then yes, i'll become a momentum follower as i believe the fundamentals of Bitcoin support a further price rise.  

stop acting like you're so smart.

cypherdoc: I don't speculate on what other speculators will do.
mjcmurfy: that's bullshit. what do you speculate on then?
cypherdoc: how can i possibly answer that? stop acting so smart.

It's quite easy. Just tell me what it is you are speculating on if you aren't speculating on metrics that are directly related to the decisions of other speculators? It's only difficult to answer if you were lying, or didn't fully understand what you were saying, and now realize that you cannot answer the question without invalidating your original statement.

Either way, this only highlights and reinforces the assumptions I already have.
So, keep trying, or else stfu.

[P4man]

stop acting like you're so smart.

That just made my day If only you could act as if you were smart.
Anyway, Ive made my point, unsubscribing and pulling out. Good luck with your lottery trading. Im sure your ability to discern trends and changes in fundamentals that simply arent there in a market as volatile as this, will make you rich beyond belief.

[fivebells]

if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

Thanks for the pointer to this interesting post, which I had ignored until now because I'm mostly paying attention to bitcoin.  It sounds as though you were actually thinking about gold's potential, and had thoughtful, substantial arguments behind your assertions.  I wish your posts about bitcoin were as thoughtful and thought-provoking.

[cypherdoc]

how hard is it to respond to that question?  sometimes it pays to follow the speculators, sometimes not.  this is a personal judgment based on what each individual feels they know about the underlying technology.

you can choose to be a momentum follower for Bitcoin or not.  i can choose not to be and be a contrarian to the recent price fall.  if the price starts to ramp up again, then yes, i'll become a momentum follower as i believe the fundamentals of Bitcoin support a further price rise.  

stop acting like you're so smart.

cypherdoc: I don't speculate on what other speculators will do.
mjcmurfy: that's bullshit. what do you speculate on then?
cypherdoc: how can i possibly answer that? stop acting so smart.

It's quite easy. Just tell me what it is you are speculating on if you aren't speculating on metrics that are directly related to the decisions of other speculators? It's only difficult to answer if you were lying, or didn't fully understand what you were saying, and now realize that you cannot answer the question without invalidating your original statement.

Either way, this only highlights and reinforces the assumptions I already have.
So, keep trying, or else stfu.

ok, if you insist i'll trot out all the fundamental positives that many here on this forum have already elucidated a thousand times.  i speculate or invest in Bitcoin based on those fundamentals for the following reasons:

1.  the first sourcecode that prevents file copying while allowing public access.
2.  that same sourcecode that has created a blockchain of financial data that still exists 3 yr since its evolution and has resisted all forms of attack.
3.  a stable rate of inflation thats diminishes with time and eventually goes to zero.
4.  a protocol which could eventually be used as a currency if a Bitcoin is perceived as a stable store of value.
5.  a dedicated group of devs that work for free in supporting and advancing the innovations of this same code.
6.  a continuous appearance of new technologies and implementations surrounding Bitcoin.  i won't bother to list them all b/c there's alot.
7.  a sourcecode that could be used as a different form of gold standard for the USD.  that is, a fixed supply commodity/currency whatever you want to call it, that the existing USD fractional reserve system could be upon in a rigid 10:1 ratio.  PM's IMO are too difficult to fulfill that role.  this one will generate all sorts of howls i'm sure but this is how i see best Bitcoin being used.
8.  the fact that i think the Bears on this forum are wrong
9.  that fact that i do have Libertarian tendencies and wish to express that outlook by supporting at technology that will hopefully change the system for the better.
10. i believe in open source projects and the many examples of how well these have played out the last 10 years.

howl away.

[cypherdoc]

if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

Thanks for the pointer to this interesting post, which I had ignored until now because I'm mostly paying attention to bitcoin.  It sounds as though you were actually thinking about gold's potential, and had thoughtful, substantial arguments behind your assertions.  I wish your posts about bitcoin were as thoughtful and thought-provoking.

keep going through the thread. we do debate Bitcoin as well.

this Spec forum is the Wild West.  it's hard to maintain and put the time in needed for in depth thoughtful posts here when there are so many crazies hanging around.

[cypherdoc]

if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalk.org/index.php?topic=35956.0

Thanks for the pointer to this interesting post, which I had ignored until now because I'm mostly paying attention to bitcoin.  It sounds as though you were actually thinking about gold's potential, and had thoughtful, substantial arguments behind your assertions.  I wish your posts about bitcoin were as thoughtful and thought-provoking.

that thread encompasses not just gold btw.  its an incredibly in depth debate primarily btwn miscreanity and i about world economics, deflation vs inflation, investing, technical vs fundamental analysis, etc.  miscreanity knows way more than most of these clowns here too.  thats my baby and i've poured my heart into it while taking my time to post thoughtfully and with care. and i've have made some pretty damn good calls if i may so which is why its got so many views i think.

edit:  this board here.  yeah, they're right, its for children and i've never said i didn't have some of those tendencies.

[mjcmurfy]

Nobody is disputing your enthusiasm for bitcoin, it is admirable. I have already read some of your thread on Gold over the previous weeks, and I know that you are not a run of the mill lemming like so many of the others.

You clearly know what you are talking about when it comes to gold, but that is the crux. Bitcoin is not like any existing currency, commodity, equity or any financial instrument currently in existence, so the traditional ways of viewing these things have to be called into question.

You cannot rationally be a investing in the bitcoin market and basing decisions on fundamentals alone, because there is very little change in fundamental economic indicators. As others have said, 99% of the speculation that is going on is speculation on the speculation of others. It has no grounding in the growth of the real bitcoin economy, and actually discourages adoption of bitcoin by new merchants, thus ultimately dooming your own investment.

The level of speculation we are seeing is completely irrational until the bitcoin economy is able to post figures that can, at least somewhat, back up the wild delusions of these zero-sum cowboys.

[2112]

1.  the first sourcecode that prevents file copying while allowing public access.

I'm curious. What does the above sentence mean? Anyone?

[P4man]

1.  the first sourcecode that prevents file copying while allowing public access.

I'm curious. What does the above sentence mean? Anyone?

Ill bite.
Bitcoin source code is changed first on Gavin's computer, preventing copying but when he commits new code to github, it allows public access.  Its one of bitcoin's underlying fundamentals that changes every night, as the sourcecode is updated, thereby influencing BTC exchange rate.  Smart investors use that data to calculate and predict price swings.

See, that wasnt so hard?

 

[cypherdoc]

Nobody is disputing your enthusiasm for bitcoin, it is admirable. I have already read some of your thread on Gold over the previous weeks, and I know that you are not a run of the mill lemming like so many of the others.

You clearly know what you are talking about when it comes to gold, but that is the crux. Bitcoin is not like any existing currency, commodity, equity or any financial instrument currently in existence, so the traditional ways of viewing these things have to be called into question.

this is very true.  and if you have read my stuff on the gold thread you realize i don't view things traditionally too often. i prefer to think for myself acknowledging full heartedly that i could be incorrect.   but i just see too many similarities to gold in Bitcoin and i see the potential for a nexus btwn the power of the internet and a solution to our financial system problems. 

You cannot rationally be a investing in the bitcoin market and basing decisions on fundamentals alone, because there is very little change in fundamental economic indicators. As others have said, 99% of the speculation that is going on is speculation on the speculation of others. It has no grounding in the growth of the real bitcoin economy, and actually discourages adoption of bitcoin by new merchants, thus ultimately dooming your own investment.

you're right.  whatever you want to call it; speculating or investing i don't care.  lets just say i'm putting USD's into what i consider an undervalued asset that has the potential to become a competing worldwide currency to gold and other fiat.  call me foolish.  thats ok.  i'm sure Jobs and Wozniak were considered foolish when they started up in a garage and after several years when they had 1% market share next to Microsoft.  even i thought they were dead.

The level of speculation we are seeing is completely irrational until the bitcoin economy is able to post figures that can, at least somewhat, back up the wild delusions of these zero-sum cowboys.

its only irrational if you can predict the future and Bitcoin ends up destroyed.  none of us know for sure.  i just like the odds from what i see.

[cypherdoc]

1.  the first sourcecode that prevents file copying while allowing public access.

I'm curious. What does the above sentence mean? Anyone?

did i not say it right? how about the first p2p file sharing system that prevents copying?  how would you say it?

[cypherdoc]

maybe i should try to frame this differently.  

what i think has been the root cause of all our financial problems for the last decade or the last 100 years depending on your time frame is a "fiat currency crisis".  as central banks around the world print money to solve economic growth problems via sovereign currency devaluation as a means to increase exports, savers, elderly and financially prudent are punished greatly.

Bitcoin was designed as a poison arrow directed at the heart of the central banks of the world precisely to try and solve this problem.  whether it works or not remains to be seen and we can agree to disagree.

if we can't agree on these points then we should stop talking.

[mjcmurfy]

maybe i should try to frame this differently.  

what i think has been the root cause of all our financial problems for the last decade or the last 100 years depending on your time frame is a "fiat currency crisis".  as central banks around the world print money to solve economic growth problems via sovereign currency devaluation as a means to increase exports, savers, elderly and financially prudent are punished greatly.

Bitcoin was designed as a poison arrow directed at the heart of the central banks of the world precisely to try and solve this problem.  whether it works or not remains to be seen and we can agree to disagree.

if we can't agree on these points then we should stop talking.

I disagree that we should stop talking because we can't agree

I don't think it was fiat currency alone that is to blame. It is a huge part of it, but it's a deliberately complex situation that the banking elites have tried to obscure from us. In my opinion, it is more to do with the perfect storm of fiat currency, the lack of fiscal discipline in the central banks, the advent of derivative investment vehicles, and of course fractional reserve banking which resulted in swathes of investment capital flooding into virtually every market you can think of, causing massive speculative asset bubbles the likes of which have never been seen before.

If fiat currency was regulated properly and banks were held to account for excessive risk taking we wouldn't have the ability to pump money into these asset bubbles, and they would therefore not reach the levels we saw in 2008 with the housing market in the US and some european countries.

The problem as I see it is the lag in information dissemination between investment bankers and the general public. The bankers begin to inflate an asset with their large purchasing power, after which, lower rung investors begin to pile in. The bankers know they are triggering asset bubbles, and are ready to sell their holdings at the height of the bubble and then short all the way back down. They artificially create volatility so they can enrich themselves and their shareholders, taking money off everyone else.

And when their tactics fail, the government is there to bail them out with public money. They take massive risks on the behalf of the rest of society, and when they win they take all the rewards but when they lose, suffer none of the consequences. Since the 70's, and Regan's policies of abolishing financial regulation, they can do this with impunity. Nobody is held accountable, as they just conveniently blame the market when these bubbles burst claiming that 'nobody saw it coming'.

Anyone with a brain could have saw it coming, in fact, the worst part is that the people who tried to bring some sanity to the table were completely ignored or silenced, and the rest kept the information to themselves so they would have a competitive edge when the inevitable occurred. This thing resulted from a wide-ranging conspiracy between banks, governments, the media and wealthy elites to enrich themselves at the cost of everyone else.

I too love bitcoin because of what it is trying to achieve. Whether or not it is successful or not, what keeps me going is the thought that one day, bankers will wake up to find that poison arrow lodged squarely in their chests.

[cypherdoc]

maybe i should try to frame this differently.  

what i think has been the root cause of all our financial problems for the last decade or the last 100 years depending on your time frame is a "fiat currency crisis".  as central banks around the world print money to solve economic growth problems via sovereign currency devaluation as a means to increase exports, savers, elderly and financially prudent are punished greatly.

Bitcoin was designed as a poison arrow directed at the heart of the central banks of the world precisely to try and solve this problem.  whether it works or not remains to be seen and we can agree to disagree.

if we can't agree on these points then we should stop talking.

I disagree that we should stop talking because we can't agree

I don't think it was fiat currency alone that is to blame. It is a huge part of it, but it's a deliberately complex situation that the banking elites have tried to obscure from us. In my opinion, it is more to do with the perfect storm of fiat currency, the lack of fiscal discipline in the central banks, the advent of derivative investment vehicles, and of course fractional reserve banking which resulted in swathes of investment capital flooding into virtually every market you can think of, causing massive speculative asset bubbles the likes of which have never been seen before.

If fiat currency was regulated properly and banks were held to account for excessive risk taking we wouldn't have the ability to pump money into these asset bubbles, and they would therefore not reach the levels we saw in 2008 with the housing market in the US and some european countries.

The problem as I see it is the lag in information dissemination between investment bankers and the general public. The bankers begin to inflate an asset with their large purchasing power, after which, lower rung investors begin to pile in. The bankers know they are triggering asset bubbles, and are ready to sell their holdings at the height of the bubble and then short all the way back down. They artificially create volatility so they can enrich themselves and their shareholders, taking money off everyone else.

And when their tactics fail, the government is there to bail them out with public money. They take massive risks on the behalf of the rest of society, and when they win they take all the rewards but when they lose, suffer none of the consequences. Since the 70's, and Regan's policies of abolishing financial regulation, they can do this with impunity. Nobody is held accountable, as they just conveniently blame the market when these bubbles burst claiming that 'nobody saw it coming'.

Anyone with a brain could have saw it coming, in fact, the worst part is that the people who tried to bring some sanity to the table were completely ignored or silenced, and the rest kept the information to themselves so they would have a competitive edge when the inevitable occurred. This thing resulted from a wide-ranging conspiracy between banks, governments, the media and wealthy elites to enrich themselves at the cost of everyone else.

I too love bitcoin because of what it is trying to achieve. Whether or not it is successful or not, what keeps me going is the thought that one day, bankers will wake up to find that poison arrow lodged squarely in their chests.

Geezus, why are we getting mad at each other?  precisely correct.

ok, so at the very minimum, whether Bitcoin works or not, i am in it for the principle and you would seem to understand that.

fundamentally the code is working, as in the blockchain marches on.  from an economically fundamental point of view, yes the merchant economy is not there yet.  but i see it getting there slowly.  rather than pronouncing it dead at this early point, i say lets give it time.

[2112]

did i not say it right? how about the first p2p file sharing system that prevents copying?  how would you say it?

I really don't know what you are trying to convey.

I can say that I'm really interested in the perception of the Bitcoin project, both amongst those who can read the source code and those who wont understand it. For the project with about 25 thousand lines of hard-to-read code the amount of misunderstanding among the software professionals is within my expected boundaries.

For non-practitioners in software I just don't have a frame of reference. I'm just trying to comprehend what they are imagining or believing as the features of Bitcoin. And if they believe then whom and in what claims. I find this very interesting and this is what is continuing to draw me to this forum.

Clearly you are an experienced investor, since you've quickly seen through the facade of Bitcoinica and Zhoutong's posts. Also clearly, you must rely on somebody's else opinions about the actual underlying technology.

[mjcmurfy]

Geezus, why are we getting mad at each other?  precisely correct.

ok, so at the very minimum, whether Bitcoin works or not, i am in it for the principle and you would seem to understand that.

fundamentally the code is working, as in the blockchain marches on.  from an economically fundamental point of view, yes the merchant economy is not there yet.  but i see it getting there slowly.  rather than pronouncing it dead at this early point, i say lets give it time.

I'm not getting mad, I just like a little heat in my discussions.

Part of why I am arguing so strongly against excessive speculation is because I see the same bullshit being dished out by "investors" who want to do the exact same thing with bitcoin as they have done with every other asset, i.e. create artificial volatility so they can skim profits off the top while contributing absolutely nothing and simultaneously making the economic environment of bitcoin incompatible with legitimate commerce. This is my biggest grievance with the speculators here.

Few seem to understand that what has been happening to bitcoin over the past couple of months is a result of the exact same mentality that caused all the other asset bubbles we have seen since the 70s, only since the value of bitcoin is solely determined by investor sentiment, and the system has even less regulation than our current monetary system, the opportunity for pulling off these scams is incredible.

The only way to counter this is to persecute speculators who are in it solely for short term profit. Doing this, you often end up tarring all investors with the same brush. But I have nothing but respect for people who invest and hold long positions because of their belief in the future success of bitcoin.

It is the people who buy and sell only to realize short term fiat profit that I have a problem with, because they are siphoning value out of the system, away from those who believe in the project, and making the whole thing as unstable as an elephant on a pogo stick.

[wobber]

[/quote]


Clearly you are an experienced investor, since you've quickly seen through the facade of Bitcoinica and Zhoutong's posts. Also clearly, you must rely on somebody's else opinions about the actual underlying technology.

[/quote]

What Bitcoinica facade? You call it a scam?

[2112]

What Bitcoinica facade? You call it a scam?

https://bitcointalk.org/index.php?topic=42267.msg517942#msg517942

[cypherdoc]

did i not say it right? how about the first p2p file sharing system that prevents copying?  how would you say it?

I really don't know what you are trying to convey.

first of all, even tho we had that one run in a while back, i've learned to respect your postings based on a technical perspective.  you understand the code better than most around here.  at first i just thought you were another shill based on following Nagle but i no longer see that to be the case.  i still think he's dangerous to follow.

second, what i mean by the above is that the Bitcoin sourcecode appears to be a first in that it allows a peer to peer public network the ability to prevent the copying of files (Bitcoins) for double spending.  perhaps better said, it prevents the rewriting of tx's in the blockchain ledger that are shared across the internet btwn multiple anonymous computers to prevent double spending through this same rewriting of transactions.  Satoshi has accomplished this primarily by the use of hashing, a one way complex mathematical function based on SHA-256 and ECDSA, that was necessary to introduce randomness to the production of a number anywhere btwn 0 and 2 ²⁵⁶ power when solving blocks.  each guess is based on hashing the block headers data consisting of the previous block hash, timestamp, current tx's, and a nonce,  with the only change btwn each guess coming from an incremental change in the nonce.  the solving of these blocks allows the reward of an ever decreasing number of Bitcoins (every 4 yrs) to the node that is forced to guess, as oppose to hack or find a shortcut, enough times (proof of work) to come up with a numerical result that is below a targeted numerical result to keep the number of blocks down to an introduction level of approx 10 minutes.  this target numerical result is adjusted every 2 wks to keep this 10 min interval intact.  this fixed introduction level allows a predictable amount of inflation that investors should respect, not criticize. once a block is solved, at least 50% of the other nodes in the Bitcoin network, that have a copy of the accepted (longest) blockchain have to verify that this node is not cheating by trying to rewrite tx's or double spend.  this is based on a majority of nodes >50% accepting this block.  b/c this proof of work is theoretically impractical to skirt, until perhaps a quantum computer is invented (even then this is disputed), the only way for a rational miner to pay off the costs of his hardware, electricity, and time involved in solving blocks is to go along with the program and generate as many Bitcoins as he can to pay for these expenses.  they are especially economically incentivized by an increase in the Bitcoin price in USD terms for as the higher the price goes, the more they will make.  in doing so he ends up supporting the network by verifying tx's, providing security for the network, and increasing the costs (computational power) associated with any attacker trying to undermine his work.  i know you know all this but you're testing my understanding here of whats going on.  correct anything i've got wrong.

now whether the sourcecode as written will allow this to continue i don't know but its been almost 3 yrs and guys like Dan Kaminsky who initially thought there were 9 holes to exploit have since apparently been convinced otherwise.  realize i'm not talking about scalability here.  i'm talking about as it is today and with current usage; everything seems to be progressing w/o a hitch.  i know you think its cumbersome given how its meshed various techniques together into a long complex code.  for me, since it hasn't failed despite what we know to be multiple attempts at bringing it down is very encouraging from an investment/speculative standpoint. and i know many brilliant people are working to make it more elegant.  and some think its a Mona Lisa as it is.  since this is a first for something distributed so openly on the internet, somewhere somehow it will find a purpose.

the distributed nature of Bitcoin is important as well since it is so disruptive to the current banking system.  i truly do believe the only way to shut it down is to shut down the internet.  that didn't work so well in Egypt did it now.  the ones who screamed the loudest were the banks who needed their tx's to go thru.  wasn't the internet designed to withstand a nuclear attack as well and is it not just in the US of A?

I can say that I'm really interested in the perception of the Bitcoin project, both amongst those who can read the source code and those who wont understand it. For the project with about 25 thousand lines of hard-to-read code the amount of misunderstanding among the software professionals is within my expected boundaries.

For non-practitioners in software I just don't have a frame of reference. I'm just trying to comprehend what they are imagining or believing as the features of Bitcoin. And if they believe then whom and in what claims. I find this very interesting and this is what is continuing to draw me to this forum.

Clearly you are an experienced investor, since you've quickly seen through the facade of Bitcoinica and Zhoutong's posts. Also clearly, you must rely on somebody's else opinions about the actual underlying technology.

i see what you're getting at in terms of trying to understand the investors perspective so let me try and help you and maybe you can help me from the technical end.  

first, you're right, i can't read code and wouldn't be able to see holes in it if they were present.  my confidence comes from directly talking with Gavin and theymos both whom are experienced coders as well as several of the other early adopters.  how they rate compared to you i don't know. also hanging out on these forums helps quite a bit despite all the bs.  but as an investor piecing together the puzzle there is some credibility that comes from Gavin being a Princeton graduate and i understand his personal position and circumstances as to why he donates his time towards this project. he really does believe in it.  these guys also seem to understand the basics of the financial crisis and economics which matches my own and helps assure me they are moving the technical aspects of Bitcoin in the right direction.  also i hang out in the Dev and Tech section from time to time to see what all you guys are talking about.  it seems to me, rightly or wrongly, that so many technical people discussing the ins and outs of a myriad of different technical aspects of Bitcoin can't all be wrong.  the amount of time and effort devoted to this project is astounding you must agree.

even though these are technical discussions clearly an understanding by these guys of the economic motivations of investors and of the financial system as we know it usually are interweaved into why this or that should be included in the code.  i continuously weight these in my analysis and usually finding myself agreeing with them.

[cypherdoc]

Geezus, why are we getting mad at each other?  precisely correct.

ok, so at the very minimum, whether Bitcoin works or not, i am in it for the principle and you would seem to understand that.

fundamentally the code is working, as in the blockchain marches on.  from an economically fundamental point of view, yes the merchant economy is not there yet.  but i see it getting there slowly.  rather than pronouncing it dead at this early point, i say lets give it time.

I'm not getting mad, I just like a little heat in my discussions.

Part of why I am arguing so strongly against excessive speculation is because I see the same bullshit being dished out by "investors" who want to do the exact same thing with bitcoin as they have done with every other asset, i.e. create artificial volatility so they can skim profits off the top while contributing absolutely nothing and simultaneously making the economic environment of bitcoin incompatible with legitimate commerce. This is my biggest grievance with the speculators here.

Few seem to understand that what has been happening to bitcoin over the past couple of months is a result of the exact same mentality that caused all the other asset bubbles we have seen since the 70s, only since the value of bitcoin is solely determined by investor sentiment, and the system has even less regulation than our current monetary system, the opportunity for pulling off these scams is incredible.

The only way to counter this is to persecute speculators who are in it solely for short term profit. Doing this, you often end up tarring all investors with the same brush. But I have nothing but respect for people who invest and hold long positions because of their belief in the future success of bitcoin.

It is the people who buy and sell only to realize short term fiat profit that I have a problem with, because they are siphoning value out of the system, away from those who believe in the project, and making the whole thing as unstable as an elephant on a pogo stick.

well i can assure you i am not one of these guys.  i have never sold a single Bitcoin and have been accumulating.

[cypherdoc]

did i not say it right? how about the first p2p file sharing system that prevents copying?  how would you say it?

I really don't know what you are trying to convey.

I can say that I'm really interested in the perception of the Bitcoin project, both amongst those who can read the source code and those who wont understand it. For the project with about 25 thousand lines of hard-to-read code the amount of misunderstanding among the software professionals is within my expected boundaries.

For non-practitioners in software I just don't have a frame of reference. I'm just trying to comprehend what they are imagining or believing as the features of Bitcoin. And if they believe then whom and in what claims. I find this very interesting and this is what is continuing to draw me to this forum.

Clearly you are an experienced investor, since you've quickly seen through the facade of Bitcoinica and Zhoutong's posts. Also clearly, you must rely on somebody's else opinions about the actual underlying technology.

i guess i left out the part of public key cryptography.  let me know if you want to test my understanding of how that works from an investor level as well.

[Crypt_Current]

This is an awesome thread with some really cohesive and thoughtful posts.

I just want to add my opinion that the concept that Bitcoin embodies is one that is so fervently necessary, as to exalt it to immortality.  There's really no need to worry so much as it might create more division.

[cypherdoc]

i think the randomness that the SHA 256 hashing algorithm introduces into the Bitcoin system is a big part of the economic wherewithal that will allow Bitcoin to survive and become a competing currency.  to reiterate, it forces computers to guess repeatedly to hit below the difficulty target.  it does not allow shortcuts via hacks.  this makes it an inherently democratic process.  anyone who can setup his computer and run the client has a chance to solve a block and get the reward even tho my laptop has a low chance of winning.  but the chance is not zero.  people buy lottery tickets all the time despite having extremely low odds of winning.  and if you're willing to setup and run a more computational powerful system you will mine Bitcoins at a significant rate.  everyone who climbs on board will make it that much more difficult for a non rational actor, like a bank, to attack the network.  they will be forced to guess as well which can be very expensive for them in the end.  they might as well just leave it alone.

[Crypt_Current]

i think the randomness that the SHA 256 hashing algorithm introduces into the Bitcoin system is a big part of the economic wherewithal that will allow Bitcoin to survive and become a competing currency.  to reiterate, it forces computers to guess repeatedly to hit below the difficulty target.  it does not allow shortcuts via hacks.  this makes it an inherently democratic process.  anyone who can setup his computer and run the client has a chance to solve a block and get the reward even tho my laptop has a low chance of winning.  but the chance is not zero.  people buy lottery tickets all the time despite having extremely low odds of winning.  and if you're willing to setup and run a more computational powerful system you will mine Bitcoins at a significant rate.  everyone who climbs on board will make it that much more difficult for a non rational actor, like a bank, to attack the network.  they will be forced to guess as well which can be very expensive for them in the end.  they might as well just leave it alone.

+1

[Dan The Man]

Ok, so the first prediction was off by about a day and the peak was off by 20 cents or so, but pretty good.

Time for a new prediction, a bit less specific since. I am calling for the price to continue dropping for at least a day. This is a reaction to the jump above 3 dollars. Late joiners will be buying in as those with Bitcoins are still getting out. The time to buy will be when it sits below $2.70 and it doesn't fluctuate by more than 10 cents for at least 6 hours. That is when the critical mass will start feeling confident again, and the price starts going up to a peak of something around 40 cents above wherever the low point is. This may or may not be above $3. Since $3 is kind of a psychological mark, it seems like the price sticks there for a while and then jumps one way or the other depending on where the pressure is.

Think of the early October price as being too stable. There was pressure building for movement, like a stuck tectonic plate, or um.... a sticky spring or something. The price plummit was like an overreaction, and now we are riding the waves as it settles. Eventually it will stop again and freeze up, and then it just depends where the pressure is building from and how much will make it jump.

[Red]

Ok, so the first prediction was off by about a day and the peak was off by 20 cents or so, but pretty good.

Could you post an updated chart?
https://bitcointalk.org/index.php?topic=49159.msg586181#msg586181

I'd love to see one with an arrow of when you made your prediction. The pattern seems uncannily repeating. Nice job noticing!

[Dan The Man]

[Red]

Awesome! That little dip seems to match exactly the other two you pointed out.

Any speculation as to what is causing it? Margin calls or some such?

[Dan The Man]

Any speculation as to what is causing it? Margin calls or some such?

In my opinion, most people are just buying and selling. The problem is in figuring out mass psychology. People have some expectation of what they think a BTC "should" be worth and they have some expectation of how much it "should" fluctuate. In general they will buy when it is below this imaginary value and they will sell when it is above it. I think it is generally a linear extrapolation of some number of previous days or weeks or months. Some people are probably looking at the last hour. And then you have expected fluctuation. And they always want to buy and sell near the peak of the fluctuations, but being a bit conservative, they don't want to go too close. As an approximation, I would say that most people try to buy and sell at around the std dev.

But the big destabilizer is when the price jumps past the expected fluctation. People buy on the way down, and then it keeps going down, and now they are freaking out. They sell at a loss. I think this is a pretty simple model. I just kind of thought of it now, so I am sure there are holes here and there. I'll have to think more on the topic.

So you have this system that is stable on a local scale, but that stability region shrinks the longer that the price remains stable as people continuously expect the fluctuations to be small and try to buy within those fluctuations, they become smaller. On top of this, there are always some random noises. You have amount of money acting unpredictably. So as the stability region comes within the scale of random fluctuations, it is possible for the price to jump beyond the stable zone and suddenly everyone is in a buy or sell panic as their expectations are turned on ear. Then you get the reaction to the initial instability, and then you get the stability pattern bringing things back again with a few oscillations up and down as people learn to accept the new level of fluctuation and begin shrinking it again.

I am working on aeroelasticity in grad school, so I may be biased towards seeing everything as a mass/spring/damper system.

[Crypt_Current]

Any speculation as to what is causing it? Margin calls or some such?

In my opinion, most people are just buying and selling. The problem is in figuring out mass psychology. People have some expectation of what they think a BTC "should" be worth and they have some expectation of how much it "should" fluctuate. In general they will buy when it is below this imaginary value and they will sell when it is above it. I think it is generally a linear extrapolation of some number of previous days or weeks or months. Some people are probably looking at the last hour. And then you have expected fluctuation. And they always want to buy and sell near the peak of the fluctuations, but being a bit conservative, they don't want to go too close. As an approximation, I would say that most people try to buy and sell at around the std dev.

But the big destabilizer is when the price jumps past the expected fluctation. People buy on the way down, and then it keeps going down, and now they are freaking out. They sell at a loss. I think this is a pretty simple model. I just kind of thought of it now, so I am sure there are holes here and there. I'll have to think more on the topic.

So you have this system that is stable on a local scale, but that stability region shrinks the longer that the price remains stable as people continuously expect the fluctuations to be small and try to buy within those fluctuations, they become smaller. On top of this, there are always some random noises. You have amount of money acting unpredictably. So as the stability region comes within the scale of random fluctuations, it is possible for the price to jump beyond the stable zone and suddenly everyone is in a buy or sell panic as their expectations are turned on ear. Then you get the reaction to the initial instability, and then you get the stability pattern bringing things back again with a few oscillations up and down as people learn to accept the new level of fluctuation and begin shrinking it again.

I am working on aeroelasticity in grad school, so I may be biased towards seeing everything as a mass/spring/damper system.

Interesting... If anything, Bitcoin provides good data (in its current state -- until a substantial amount of goods and services are thrown into the mix) for what happens in a purely speculative market.

[Red]

I am working on aeroelasticity in grad school, so I may be biased towards seeing everything as a mass/spring/damper system.

Woot!

[ineededausername]

I am working on aeroelasticity in grad school, so I may be biased towards seeing everything as a mass/spring/damper system.

Woot!

I've always wondered whether these relatively shallow analogies can actually work out mathematically, because that would be VERY interesting.  The same principles are certainly at work; you can see parabolas all the time in mtgox.

[Dan The Man]

Mathematically I doubt it, these kinds of things are really what computers are good at solving. You could run a numerical simulation with a certain number of players each following a few simple rules about buying and selling. The distribution of players using what rules could be determined on historical data. Basically taking the model I put up there a few posts ago, each "player" would have a time scale that they buy and sell on. For some they look at days, some hours, some minutes. The die-hards would be on an infinite time scale, meaning that starting from 0, they are always optimists. Anyways, if you could distribute the concentration of money along these scales in discrete packets, and then throw in some certain amount of random fluxtuation you would have a model for the price movement. Whether that model would have any level of accuracy is doubtful, but it might be a fun exercise. Since there is a lot of data out there, you could try to model other psychological buying and selling queues and maybe throw in some data from Google Trends.

Can anyone out there describe what influences them buy and sell at certain times in simple logical terms? Is it mostly the price and history that you look at, or are you basing it on news stories, or forum posts?

 What about the long term movements though? What caused the $30 peak? I mean maybe it started with a news story, but it seemed like the momentum just built more momentum. Maybe there is some kind of word-of-mouth growth factor at can be modelled too.

Speaking of this stuff, does anybody know where bitcoinity and bitcoin charts and them get their databases? Are they building them from scratch since the start of bitcoin? Anybody have access to a downloadable price timeline?

[bitfoo]

Speaking of this stuff, does anybody know where bitcoinity and bitcoin charts and them get their databases? Are they building them from scratch since the start of bitcoin? Anybody have access to a downloadable price timeline?

You can download the historic data from the bitcoincharts API. It has mtgox trades from the time a bitcoin was 6 cents.

[cypherdoc]

did i not say it right? how about the first p2p file sharing system that prevents copying?  how would you say it?

I really don't know what you are trying to convey.

I can say that I'm really interested in the perception of the Bitcoin project, both amongst those who can read the source code and those who wont understand it. For the project with about 25 thousand lines of hard-to-read code the amount of misunderstanding among the software professionals is within my expected boundaries.

For non-practitioners in software I just don't have a frame of reference. I'm just trying to comprehend what they are imagining or believing as the features of Bitcoin. And if they believe then whom and in what claims. I find this very interesting and this is what is continuing to draw me to this forum.

Clearly you are an experienced investor, since you've quickly seen through the facade of Bitcoinica and Zhoutong's posts. Also clearly, you must rely on somebody's else opinions about the actual underlying technology.

so what do you think?  did i at least somewhat answer your question?

[Nagle]

1.  the first sourcecode that prevents file copying while allowing public access.

Bitcoin's innovation is not that it prevents double-spending.  That was invented by David Chaum in the 1990s and formed the basis of DigiCash. Nor is "mining" new; that's from Hashcash in the 1990s. Bitcoin combines the two concepts. The end result is a lot like Digicash, but distributed. 

[cypherdoc]

1.  the first sourcecode that prevents file copying while allowing public access.

Bitcoin's innovation is not that it prevents double-spending.  That was invented by David Chaum in the 1990s and formed the basis of DigiCash. Nor is "mining" new; that's from Hashcash in the 1990s. Bitcoin combines the two concepts. The end result is a lot like Digicash, but distributed. 

i actually re wrote that above in response to 2112.

part of the difficulty of Bitcoin is figuring out just what it is and how best to apply it.  i've been thinking about this all day and i think that Bitcoin is the first system that allows the public distribution of a file (blockchain) that only allows modification according to a predefined set of rules.  any attempt to modify this file outside of these rules will be rejected.

[2112]

so what do you think?  did i at least somewhat answer your question?

Sorry, it seems like my original reply had disappeared into the ether. You shouldn't use the phrase "prevents file copying", but something like "allows efficient detection of duplicate copy versus the original" or "detects and suppresses the attempts to multiple-spend the original value".

Other than the above it seems like what you wrote is correct or very close to correct. I will not attempt at nitpicking who was first and who was second. But your writeup reads like a pitch, not like a diligent analysis.

While I understand and somewhat share the goal of overthrowing the banking cartel, I cannot share their methods of doing that. I see absolutely no reason to dispense with the generally accepted principles of accounting like e.g. double-entry and utmost good faith. It is quite unfortunate that nobody in the core development team is familiar with accounting practice. Moreover they are quite proud of not understanding accounting, universally despise accountants and bankers (even the conscientious ones) and actually seem to cherish the opportunity to poke out their eyes and ridicule their needs.

It is my opinion that as an investor you shouldn't rely on the opinion of Internet experts like Gavin, theymos, Dan Kaminsky or 2112. You should sit with somebody whom you know well, with whom you worked with for many years, and who had deployed and integrated some financial software in a business that you understand. Only then you'll have a real knowledge of what will happen when the Bitcoin rubber will meet the dirty road of financial reality. You're saying that the Bitcoin withstood 3 years of attempted attacks. I'm asking: why during those 3 years nobody had attempted even a toy integration project and shown that the books balanced?

Since you've asked about my technical perspective, here are the three points that should become hard questions to ask the core developers:

1) Their reliance on a "gitian" build system that is pretty much a rehash of "secure Ada compilers" from the days of Uncle Ronnie fighting Star Wars using imaginary weapons. This is just pure pandering to paranoia, not a software security methodology. It is nothing more than a tar pit that actually makes serious integration work pretty much impossible.

2) Their reliance on the JSON-RPC communication protocol that is completely unsuitable to the needs of two-way communication. The band-aids of "long poll" (implemented) or "monitor" (not yet implemented) are showing lack of literacy in the available technology, eg. FIX protocol (in use by financial institutions for almost 20 years) or ZeroMQ or AMQP.

3) The overall project dynamic is completely strangulated by the vested interest of miners. Even a simple off-by-one bugs aren't getting fixed because fixing them may offend miners. Check out this post by ArtForz and the discussion on the preceding and the following page.

https://bitcointalk.org/index.php?topic=46498.msg555148#msg555148

This is completely unlike any other open-source project and worse than the majority of the closed-source ones.

I summed the "mining income" of the last 3 blocks: 150.0200. Of this 0.0200 was for the useful work of securing network transactions and 150 was the distribution lottery tickets that will decay exponentially to zero. If you feel that the current banking cartel is ripping you off then wait until the sole discretion at setting the transaction fees will be in the hands of the current mining cartel.

Bitcoin may be the solution to the current worldwide problems with fiscal management. But not in the present implementation and not with the present leadership.

Edit: Oh, and by "leadership", I don't mean Gavin Andresen personally.