So.. what the hell happened today?

[dropt]

This time it actually wasn't all fake, but caused by people who are migrating their fiat to western exhanges through BTC. Right now most of the fiat has piled up to BTC, but it's pretty fragile and will start to fall as soon as the volatility slows down.
You can see it by Huobi leading the rises, but BTC-E leading the drops. People are buying coins in China and selling them in the western exhanges.

Most of your ramblings are striaght out of the twilight zone, but I support this theory.

[devphp]

BTC would never be world currency, it would be stopped long before that due to its design flaws. It's too tiny now and not worth squashing, but be sure, the 3-5 top mining pools will be taken over when bitcoin becomes something more or less significant. That's why Proof-of-Stake is the future if any of these decentralized currencies are to have any real footing in the financial matters a few years down the road. Bitcoin is just too easy of a target to kill, no gubermint will stand that competition if it can be nipped in the bud with very little efforts.

[Mervyn_Pumpkinhead]

Buyer confidence has been restored as April 15 is upon us and Chinese exchanges are still operating, hence the small rally.

The Chinese whales are gradually dumping the coins, while China is gradually banning BTC.

No connection there whatsoever!

Bears get to gloat, Bulls get to gloat, but in the long run, only those who are loading the dice actually get to win.

China is fucking with Bitcoin big style. This rally was all instigated on fake China volume on Chinese exchanges, and the crash will come with real Chinese volume on the USD exchanges.

So you think the Chinese are going to mass dump on the USD exchanges? Why would they do that if they can sell on the Chinese exchanges and withdraw locally?

For several reasons. One being that a lot of the Chinese markets were actually played by westerners, who migrated there through BTC.
Second reason would be that not all of that money on the exchanges is exactly clean and would create trouble if one would try to withdraw it through a Chinese bank. If I would be investigating financial crimes, then I sure would be extra thorough when investigating the transactions that take place between bitcoin exchanges.
Third to consider here, is that some of the Chinese buyers actually valued BTC for moving funds outside China.

I didn't also think that this percentage of fiat at the Chinese exhanges would be this big, that it would spike the price over 500. So, I was suprised when it did.
Right now the ones who have migrated are still holding coins, because there still is a possibility that the price could rise even more with following Huobi. And Huobi is rising because people need to buy coins to migrate with.
They will start dumping if the price goes flat and the volume to non-existant again. Because, remember, there hasn't been any news that would attract new fiat to enter the market. And without new fiat entering, the price won't be able to sustain itself for long.

[dropt]

The whole way crypto mining is done is idiotic in my opinion. We have this massive amount of computation power doing basically nothing and fighting over a rapidly diminishing resource. The resource "BTC" happens to be totally worthless. At least a dollar bill is worth the paper it is printed on but BTC isn't even that. So we keep building ASICs which are more sophisticated; more powerful but no more productive because of the increased difficulty. It would make more sense if we had a network that sold real computation power. We could still get paid in crypto currency. Basically use the pools to sell computation power in return for payment in terms of BTC or other crypto currency. Might need to go beyond highly specialized ASICs but at least we'd be doing something useful and not require this arms race as you correctly noted.

Worth the paper it's printed on?  Guy, I throw dollar sized pieces of paper into the recycling bin all day.  By that measure it's worthless too.  That aside, the massive amount of computational power is what makes Bitcoin and the blockchain work.  It is what backs bitcoin.  Further, your thoughts about selling "real computation power" shows you have no idea what the fuck you are talking about.  

[Einewton]

[dropt]

<snipped out the whining>

Isn't this the second time in one month that you've "had it" with Bitcoin?

• Speculators (currently getting royally fucked with by Chinese Bitcoin Bandits)

Bandits? What are you on about? They're just "speculators" like yourself.  Maybe they've got bigger pockets, or enjoy a little more risk than you, but they're just the same.  How do you think all the people who aren't traders feel when people like you take out leveraged positions and fuck the market sideways for your own personal gain?  

• Silk Road

This is such a ridiculously small part of the market now that the original Silk Road is done and gone, the successors have fucked their customers, and the market has fragmented into multiple sketchy sites.

The one thing I have left off that list is 'Capital Flight' from non USD hegemony compliant economies. Mark my fucking words, it will be from these situations that Bitcoin will experience real future inflations in value (after the Chinese are done playing their games), which was exactly the reason why the NSA floated Bitcoin out into the public arena through a libertarian back door in the first place. Bitcoin is not 'against The Man', it is by The Man and for The Man. If folks are thinking that the USD dominated fiat currency system is vaporous, they aint seen nothing yet!

I will take a much longer break from Bitcoin than 6 months. I have been against Bitcoin philosophically for some time but was addicted to trading it cos I was winning. Now that I am losing, I have no further interest in it. I will be back here to indulge in some empty gloating when Bitcoin hits $200 range like I said it would....and it will.

Uh-huh.  Don't let the door hit you on the way out.

[dropt]

\ Because, remember, there hasn't been any news that would attract new fiat to enter the market. And without new fiat entering, the price won't be able to sustain itself for long.

Get out of this subreddit and start following the news channels.  There is a lot of positive progress going on and has been for some time. You're just caught up in the China noise.

[rabii]

Bitcoin mining is risking becoming unprofitable using any of the upcoming technologies by this summer. That means a drop in ASIC sales; a drop in mining and a drop in liquidity. One way to keep it going is to pump the Bitcoin price. Therefore it makes sense for big players to do what they can to pump up the price. It doesn't take much to do this as a relatively small increase in demand will push up the prices. As prices go up people will hold on to their BTC hoping it will go up even higher and that will spiral the prices for a while. In return projected profitability of new ASIC devices improves as will their sales for now.

No.  Cost per coin is hovering around $100.  The feedback loop is broken and there are a lot of pre-orders yet to be delivered.  Even if everyone stopped ordering new hardware today, hardware would continue shipping and the difficulty would continue rising.  Further, mining only produces a finite amount of coins per day, of which only a percentage make it to an exchange.  Those that make it to an exchange make up a ridiculously small percentage of the daily trade volume. 

I don't see how you say it is around 100 $. Are you adding the price of an ASIC or is it just the energy cost. I am talking about the cost of a new ASIC and the energy required to break even.

You are right about the difficulty going up which just proves my point. BTC mining is going to get even less profitable with the current parameters. Either the price has to go way up or ASIC and energy costs way down. Energy is not going to go down in cost. ASIC costs may but the pre-orders are already sold out so I don't see the prices going down soon. Therefore there is just one variable left and that is BTC price. If it goes up it will remain profitable; if not then any new ASIC purchase will be questionable at best.

[dropt]

I don't see how you say it is around 100 $. Are you adding the price of an ASIC or is it just the energy cost. I am talking about the cost of a new ASIC and the energy required to break even.

That's not a smart position to take as one should not include sunk costs in determining the cost per coin.  Cost per coin is tied to the difficulty, average power consumption of a mining machine, and the average power cost.

You are right about the difficulty going up which just proves my point. BTC mining is going to get even less profitable with the current parameters. Either the price has to go way up or ASIC and energy costs way down. Energy is not going to go down in cost. ASIC costs may but the pre-orders are already sold out so I don't see the prices going down soon. Therefore there is just one variable left and that is BTC price. If it goes up it will remain profitable; if not then any new ASIC purchase will be questionable at best.

Bitcoin mining profits have always trended towards zero, that's what they are supposed to do.  ASICS made mining insanely profitable.  As example, I had a fairly sizeable GPU farm that made $35 a day at its peak.  When I got my first ASIC I was mining $500 a day.  It's now in a gradual decline back to the end of the GPU days.  As to your last point, the purchase of mining hardware has been questionable for a number of months, but that won't stop the greed, and it won't stop the noob idiots.

Ultimately, the bottom line is that mining follows price, price does not follow mining.  Ask any longtime Bitcoiner and they'll tell you the same thing.

[rabii]

The whole way crypto mining is done is idiotic in my opinion. We have this massive amount of computation power doing basically nothing and fighting over a rapidly diminishing resource. The resource "BTC" happens to be totally worthless. At least a dollar bill is worth the paper it is printed on but BTC isn't even that. So we keep building ASICs which are more sophisticated; more powerful but no more productive because of the increased difficulty. It would make more sense if we had a network that sold real computation power. We could still get paid in crypto currency. Basically use the pools to sell computation power in return for payment in terms of BTC or other crypto currency. Might need to go beyond highly specialized ASICs but at least we'd be doing something useful and not require this arms race as you correctly noted.

Worth the paper it's printed on?  Guy, I throw dollar sized pieces of paper into the recycling bin all day.  By that measure it's worthless too.  That aside, the massive amount of computational power is what makes Bitcoin and the blockchain work.  It is what backs bitcoin.  Further, your thoughts about selling "real computation power" shows you have no idea what the fuck you are talking about.  

There is no reason to get emotional and start using swear words. Bitcoins are not backed by massive computation power; they are backed by demand. If people decided to pay nothing for them they will lose their value no matter how much computation power there is in all the ASICs in the world.

My idea for selling computation power on the other hand is to sell something with real value. There is a real need for generalized computation power and there will always be customers.

[Tzupy]

At this stage of the market, in August 2011, there was a rebound from about 6$ to 12$, so 100%, not just 50% like now.
Two months later (October 2011) it still dropped down to 2$. Let's wait and see where the price will be two months from now.

[gsupp]

The whole way crypto mining is done is idiotic in my opinion. We have this massive amount of computation power doing basically nothing and fighting over a rapidly diminishing resource. The resource "BTC" happens to be totally worthless. At least a dollar bill is worth the paper it is printed on but BTC isn't even that. So we keep building ASICs which are more sophisticated; more powerful but no more productive because of the increased difficulty. It would make more sense if we had a network that sold real computation power. We could still get paid in crypto currency. Basically use the pools to sell computation power in return for payment in terms of BTC or other crypto currency. Might need to go beyond highly specialized ASICs but at least we'd be doing something useful and not require this arms race as you correctly noted.

Worth the paper it's printed on?  Guy, I throw dollar sized pieces of paper into the recycling bin all day.  By that measure it's worthless too.  That aside, the massive amount of computational power is what makes Bitcoin and the blockchain work.  It is what backs bitcoin.  Further, your thoughts about selling "real computation power" shows you have no idea what the fuck you are talking about.  

There is no reason to get emotional and start using swear words. Bitcoins are not backed by massive computation power; they are backed by demand. If people decided to pay nothing for them they will lose their value no matter how much computation power there is in all the ASICs in the world.

My idea for selling computation power on the other hand is to sell something with real value. There is a real need for generalized computation power and there will always be customers.

generalized computation power =/= ASICs, so while your idea has merit, it would never work. There's Folding@home and SETI@home projects if you want to donate your CPU cycles for something "good". They don't pay out though, which wouldn't interest most people here.

By the same reasoning, USD is backed by demand. If foreign countries and US citizens suddenly decided to not accept them for trade, they would lose their value no matter how much the government tries to bully everyone.

[akujin]

wait til china announce another FUD within two weeks... ehhe 

[gsupp]

As far as what happened today, I've seen these articles:

http://www.pcworld.com/article/2143760/chinese-bitcoin-exchange-focuses-on-cash-transactions-to-keep-cryptocurrency-in-play.html

http://www.theguardian.com/technology/2014/apr/15/australias-first-bitcoin-automatic-teller-opens-for-business-in-sydney

[MatTheCat]

<snipped out the whining>

Isn't this the second time in one month that you've "had it" with Bitcoin?

• Speculators (currently getting royally fucked with by Chinese Bitcoin Bandits)

Bandits? What are you on about? They're just "speculators" like yourself.  Maybe they've got bigger pockets, or enjoy a little more risk than you, but they're just the same.  How do you think all the people who aren't traders feel when people like you take out leveraged positions and fuck the market sideways for your own personal gain?  

• Silk Road

This is such a ridiculously small part of the market now that the original Silk Road is done and gone, the successors have fucked their customers, and the market has fragmented into multiple sketchy sites.

The one thing I have left off that list is 'Capital Flight' from non USD hegemony compliant economies. Mark my fucking words, it will be from these situations that Bitcoin will experience real future inflations in value (after the Chinese are done playing their games), which was exactly the reason why the NSA floated Bitcoin out into the public arena through a libertarian back door in the first place. Bitcoin is not 'against The Man', it is by The Man and for The Man. If folks are thinking that the USD dominated fiat currency system is vaporous, they aint seen nothing yet!

I will take a much longer break from Bitcoin than 6 months. I have been against Bitcoin philosophically for some time but was addicted to trading it cos I was winning. Now that I am losing, I have no further interest in it. I will be back here to indulge in some empty gloating when Bitcoin hits $200 range like I said it would....and it will.

Uh-huh.  Don't let the door hit you on the way out.

Precisely my point doughead. With increasing cracking down on Bitcoin transfers (money laundering, tax evasion) and Chinese Bandits (they are different from me in that they have means of cheating the market, I don't) wringing every last drop of blood out of naive speculators that they can get, Bitcoin has fuck all left going for it...except Silk Road which is next to nowt.

That leaves Capital Flight.

I will mind that door on the way out by I shall make a mental note to come and single you out for some brutal antagonism when Bitcoin is right down in that $200 range.

[dropt]

My idea for selling computation power on the other hand is to sell something with real value. There is a real need for generalized computation power and there will always be customers.

Thus my point, you don't know what you're talking about.  You don't fundamentally understand what mining is and why it's done the way it is.  You can't complete the task that mining currently provides through generalized computations. 

[CoinToTheMax]

As far as what happened today, I've seen these articles:

http://www.pcworld.com/article/2143760/chinese-bitcoin-exchange-focuses-on-cash-transactions-to-keep-cryptocurrency-in-play.html

http://www.theguardian.com/technology/2014/apr/15/australias-first-bitcoin-automatic-teller-opens-for-business-in-sydney

These are both very good news.

[akujin]

PBOC says "you cannot pass", while they guard the entrance,,,
Exchanges says "we will enter through the window"  

You guys think that would work? LOL

[dropt]

Precisely my point doughead. With increasing cracking down on Bitcoin transfers (money laundering, tax evasion) and Chinese Bandits (they are different from me in that they have means of cheating the market, I don't) wringing every last drop of blood out of naive speculators that they can get, Bitcoin has fuck all left going for it...except Silk Road which is next to nowt.

So a mechanic is a crook because he owns a tool box full of tools?   Bitcoin has a whole shit-tonne of things going for it, but you're too short sighted and blinded by greed to either a) be aware of it, or b) accept that there is more to bitcoin than this subreddits precious little exchange market.  You're acting like a child who fell down and scraped his knee.  Grow up.

That leaves Capital Flight.

One of many applications of bitcoin.

I will mind that door on the way out by I shall make a mental note to come and single you out for some brutal antagonism when Bitcoin is right down in that $200 range.

Please do, I welcome it.  

[bitrider]

Colleagues. If you want to be successful with bitcoin - at any level, I suggest you stop trying to think like a short term trader and start thinking like a VC investor. Real traders are making tons of cash on the bitcoin markets. They don't care if it is being "manipulated" (like the whiners in this thread complain) - every market is manipulated. Successful trading is a high-level skill that takes years to master, and a good trader can make money in any market with enough volatility and transparency (bitcoin has plenty of both). However, unless you are studying trading, have a proven system and have been very successful consistently in other markets, you will not be successful trading bitcoin.

People like MattheCat (he's just one of the loudest and most confused examples) who think they understand what is going on short-term and believe themselves smarter than the market, almost always lose - in any market. Do not follow this intelligent insanity. The market does not suffer fools and hubris gladly. From what I can tell from Mat's posts, he is losing consistently (despite his recent claims) and is very bitter. The market is teaching him lessons daily that he does not want to hear. This is the fate of all who do not trade a system that is proven over time and who do not respect the market.

The VC approach is much easier, and for most of us the better path. It is based on a simple ratio. Potential loss of 100% of your investment or potential gain of 120X your investment. Easy, even for those with no investing experience. Pick your risk capital amount, and let it ride. Or even pull some profits off the table and let the rest ride. Enjoy the journey, be part of a grand experiment and maybe end up richer. VCs don't try to figure out the daily fluctuations in moods and opinions of the masses - they certainly don't worry about evil "manipulators" stealing from them. They enjoy the adventure and the volatility is just entertaining noise to them. They only care about the long-term value potential. And they of course have other eggs in the basket.

None of us know what will happen with bitcoin tomorrow or next year or the year after, but something big is happening and it could be amazing. Has been so far. You would not be on this forum if you did not see this simple fact.  Most of us 3 years ago thought we had maybe a 20% chance to get where we are now. What do you think our chances are going forward? Don't let your arrogance and intelligence make this more complicated than it is.

Good hunting.