z

[znort987]

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[Litt]

Don't hate the player. Hate the game.

The way to stable price is having a bunch more gamblers gambling and placing bets against each other.

Bitcoin by nature not being backed by anything is what's causing such volatility during it's adoption phase while bitcoins are being released.

There is no way to find the correct worth of bitcoin without people trading and speculating on it's value at any given time.

[RyNinDaCleM]

I can spot a zero-sum game! This is one.
My sum keeps growing. So, I'm alright with that.

[casascius]

I do spot a zero sum game, but I think you're overlooking one thing: the real value of Bitcoin itself.  Something has to offset that, and that's where the real gain comes from.  A technology was created out of nothing but ingenuity.

A zero sum is all the winners minus all the losers.  But everyone is "winning" something of real value: a revolutionary technology, a way to bank without banks.

Imagine if we called Apple a zero-sum game: the value of all of the iMacs and iPhones, minus the price people paid for them, equals zero.  It ignores the fact that iMacs and iPhones are intrinsically useful.

[dree12]

I believe this is a bubble. I have believed this is a bubble. I have always believed there will be another bubble. But just because its value is a bubble does not mean it is not useful. Many internet stocks crashed big-time back then in the 2000-2003 bubble-popping crisis. Some of these drive the backend of your everyday applications today.

Stability is not as important as you make it seem. Nobody would argue gold is stable, for example. That does not mean gold traders are damn fools.

[Crypt_Current]

In the end (when this new bubble explodes), lots of money will have
changed hands, a few lucky guys will have made a nice chunk, the
exchange will have profited greatly (bookies always do) and the vast
majority of the dumbasses who think they can "beat the market" will
have gotten shafted.

So which are you going to be?  Choose now and choose wisely.  If you don't, your choice will be made for you.

[SgtSpike]

I do spot a zero sum game, but I think you're overlooking one thing: the real value of Bitcoin itself.  Something has to offset that, and that's where the real gain comes from.  A technology was created out of nothing but ingenuity.

A zero sum is all the winners minus all the losers.  But everyone is "winning" something of real value: a revolutionary technology, a way to bank without banks.

Imagine if we called Apple a zero-sum game: the value of all of the iMacs and iPhones, minus the price people paid for them, equals zero.  It ignores the fact that iMacs and iPhones are intrinsically useful.

I didn't mean to imply that bitcoin had no value, far from it.

I meant to say that anyone who has a "trading strategy" is a damn fool.

In the end (when this new bubble explodes), lots of money will have
changed hands, a few lucky guys will have made a nice chunk, the
exchange will have profited greatly (bookies always do) and the vast
majority of the dumbasses who think they can "beat the market" will
have gotten shafted.

What I was trying to say is that I don't care what the BTC/USD exchange
rate is, as long as it remains either stable, or at the very least, predictable:
my bet is that over the last 6 months, the exchange rate stability around $2
has done as much if not more for bitcoin's actual acceptance than all the combined
excitement of the first half of 2011.

It really doesn't matter what you care about.  The market doesn't care.  Traders don't care.  Lament all you want, but it won't change anything, and it won't help stabilize the price no matter how much you want it.

[evoorhees]

BTC just hit $7 ...   

What's going to be the undoing of bitcoin is not goverments,
not technical issues, not hackers, but simple lack of adoption
because of exchange rate volatility caused by people who can't
spot a zero-sum game when they see one. Sad.

LOL Bitcoin can't get a break. When it rises in price "hording" will destroy it. When it falls, "it's dying".

People think they can have a world-changing technology AND have it be calm and stable and predictable in its early years? Oil and water.

Bitcoin is more resilient that people think. Volatility wont' hurt it. It's okay to realize that Bitcoin might actually work and change the world.

[kjj]

What I was trying to say is that I don't care what the BTC/USD exchange
rate is, as long as it remains either stable, or at the very least, predictable:
my bet is that over the last 6 months, the exchange rate stability around $2
has done as much if not more for bitcoin's actual acceptance than all the combined
excitement of the first half of 2011.

I find it extremely unlikely that you actually desire a stable exchange rate.  What you really want is something else, and you think that a stable exchange rate gives you that something else.  So, what do you really want?

[RyNinDaCleM]

I can spot a zero-sum game! This is one.
My sum keeps growing. So, I'm alright with that.

If you're playing the market, let's see how long said sum keeps on growing.
Everyone always thinks they're smarter than the crowd.
By definition, they're not.

I lose some once in a while. I'm okay with that as well. The way I play, I have a great chance of changing positions before I'm stuck. The main thing that I fear is someone dumping 50k-100k coins. Moving the price straight through and far past my buy orders, leaving me with a bunch of overpriced coins. But hey, shit happens, and that is something I was fully aware of coming into this.

[Serge]

these so called 'gamblers' provide liquidity plus beta-testing the system, if they able to go home with gains - more power to them. the network will balance itself out anyway

[FlipPro]

What I was trying to say is that I don't care what the BTC/USD exchange
rate is, as long as it remains either stable, or at the very least, predictable:
my bet is that over the last 6 months, the exchange rate stability around $2
has done as much if not more for bitcoin's actual acceptance than all the combined
excitement of the first half of 2011.

I find it extremely unlikely that you actually desire a stable exchange rate. 

Wrong. I want a stable exchange rate for long enough so mainstream merchants
can start accepting bitcoins without being exposed to extreme exchange rate volatility
risk.

I want to get to the point where I can buy a house, a car, my coffee at starbucks with
bitcoins.

Once that happens, I want fiat currencies to die a horrible death, by which time the
exchange rate against that giant scam known as the us dollar won't matter.

Stop trying to artificially manipulate the market or the price. This is the INTERNET, and the SKY'S the limit. Bitcoin was never meant to be a "stable" currency anyways. It just is, and if you can't except it for what it "is", then I suggest you continue to do your research, and try to understand BTC a bit better.

[Crypt_Current]

I can spot a zero-sum game! This is one.
My sum keeps growing. So, I'm alright with that.

If you're playing the market, let's see how long said sum keeps on growing.
Everyone always thinks they're smarter than the crowd.
By definition, they're not.

I lose some once in a while. I'm okay with that as well. The way I play, I have a great chance of changing positions before I'm stuck. The main thing that I fear is someone dumping 50k-100k coins. Moving the price straight through and far past my buy orders, leaving me with a bunch of overpriced coins. But hey, shit happens, and that is something I was fully aware of coming into this.

I had an aunt like you.

Just like you, she always mentioned how much she won in casinos,
but rarely mentioned her losses. When asked about losing, she would
say, "yeah, I lose once in a while", but was quickly back at telling us
all about her latest big win.

She died without a penny to her name, her relatives had to pay for her
burial.

Know what the number one cause of death is?  Life.
You can play life safe, sit around and do nothing and you won't have anything to show for how you lived.
What does it matter anyway? -- you can't take any of it with you.  I see that point.
But I'd rather live with some degree of excitement.

[kjj]

What I was trying to say is that I don't care what the BTC/USD exchange
rate is, as long as it remains either stable, or at the very least, predictable:
my bet is that over the last 6 months, the exchange rate stability around $2
has done as much if not more for bitcoin's actual acceptance than all the combined
excitement of the first half of 2011.

I find it extremely unlikely that you actually desire a stable exchange rate.   What you really want is something else, and you think that a stable exchange rate gives you that something else.  So, what do you really want?

Wrong. I want a stable exchange rate for long enough so mainstream merchants
can start accepting bitcoins without being exposed to extreme exchange rate volatility
risk.

I want to get to the point where I can buy a house, a car, my coffee at starbucks with
bitcoins.

Once that happens, I want fiat currencies to die a horrible death, by which time the
exchange rate against that giant scam known as the us dollar won't matter.

Funny.  You say that I'm wrong, but then you edit out part of my post, and the part that you actually respond to is the part that you cut.  I put it back, so you can see where you went wrong.

Your immediate goal is to reduce exchange volatility risk.  Already done.  There are like a half dozen services that will do this for you, or you can do it yourself using any exchange with a half-decent API.

[Serge]

these so called 'gamblers' provide liquidity plus beta-testing the system, if they able to go home with gains - more power to them. the network will balance itself out anyway

First decent idea I've heard so far.

But doesn't address my main beef : how do we get
Joe six-pack to use BTC if it keeps doing the crazy dance ?

i think we're far from that to worry about it yet.
best thing Joe six-pack can do right now buy some and hold for a few decades

when we'll have huge depth and volume  things will be more 'stable'

[Hunterbunter]

There goes that misconception again. In the end, nothing is "backed" by anything.
Not gold, not food, not housing, not dollars: It all boils down to supply and demand.

If there wasn't a demand for gold based on a combination of aesthetics and deeply
ingrained cultural traditions, it wouldn't be worth squat. The only thing that "backs"
gold is people's desire for it.

If you take this to the long term conclusion, bitcoins are not currently in the position where they can offer much other than speculative demand. For it to be a trading tool, you're right that it needs to be stable - no one wants to accept 1BTC for a house, when tomorrow it could be worth half a house before they can offload it.

There are tons of businesses now willing to accept bitcoins, but it's superficial acceptance. How many of them trade only in bitcoins? If the only way to access a good is via bitcoins, then the value of bitcoins is in being the only way to access this or that. Same thing that makes the USD valuable.

I know the superficial will grow until it's possible to live only on bitcoins, but that takes a long ass time, and there are tons of challenges before it gets to that. For now, the pioneers are here, and speculation is concomitant with them.

[StewartJ]

these so called 'gamblers' provide liquidity plus beta-testing the system, if they able to go home with gains - more power to them. the network will balance itself out anyway

First decent idea I've heard so far.

But doesn't address my main beef : how do we get
Joe six-pack to use BTC if it keeps doing the crazy dance ?

Znort I feel your pain, but if you look at the 1 month Bitcoin chart, we have had decent stability up until the New Year

I suspect we will retrace back within a week. Things will stabilize, we will learn from our last bubble to $30, fingers crossed.

[bitcoinBull]

You're right about it being like gambling.  But you're wrong about it being zero-sum.  It's only zero-sum if the price of bitcoin goes back to zero (or the market stagnates and dies).

Granted, it is pyramid-style funny money.  But so is everything else.  Companies on wall street generate profits, fine.  But that doesn't mean their shares aren't overvalued and can come crashing down at any time.  And have the gamblers on wall street ever learned their lesson?

Investments are a spectrum ranging from blatant con, to pump n dump, tulipmania or overhyped dot coms, unsustainability masked  by complexity (global financial crisis), bad ideas and good ideas, and unfortunate business ventures.  Humans aren't perfect and prescient, there's no way to know with absolute certainty what will transpire.  That's what makes markets as unpredictable as the future.

I see no reason to hold bitcoin "investors" to higher standards than any other capitalists.  Bitcoin and its market is as close to genuine generation (or preservation) of virtual wealth as one can get.  People have spent far more money on Farmville than they have on bitcoin.  Mark Cuban (to take one example) is only a billionaire because he traded a dot com for yahoo stock options and then sold them at the peak of the tech bubble.  Are these commonly respected norms equally disappointing to your righteous ethical principles?

[FlipPro]

these so called 'gamblers' provide liquidity plus beta-testing the system, if they able to go home with gains - more power to them. the network will balance itself out anyway

First decent idea I've heard so far.

But doesn't address my main beef : how do we get
Joe six-pack to use BTC if it keeps doing the crazy dance ?

Znort I feel your pain, but if you look at the 1 month Bitcoin chart, we have had decent stability up until the New Year

I suspect we will retrace back within a week. Things will stabilize, we will learn from our last bubble to $30, fingers crossed.

Things are so much different now than they were on the first bubble.

1st. There is at-least triple times the users now holding BTC. Because of all the dumping, Bitcoins are now more evenly spread out, making the market much harder to manipulate.
2nd. There are multiple exchanges now, and Mtgox has really come a long way from the hacking (which was one of the triggers that sparked the great decline)
3rd.  Bitcoin is much better understood by the general population.

I actually think the best thing that could happen to us right now is a rally to $100, simply because the amount of users/attention it would generate, would help negate any possibility of a mass pump and dump.

[kjj]

Your immediate goal is to reduce exchange volatility risk.  Already done.  There are like a half dozen services that will do this for you, or you can do it yourself using any exchange with a half-decent API.

There, making sure not a comma of your precious
prose gets lost lest I get accused of scheming.

What you say is true, but not something particularly easy to use
for your local grocery store ... exchange stability would be a lot easier.

Which systems have you tried that aren't easy to use?  Because the ones that I've seen accept bitcoins over the network and deposit dollars into your bank account automatically.  I can't really imagine anything being easier than that.