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notme
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January 27, 2012, 10:56:32 PM
 #61

Probably the most important factor in the adoption of Bitcoins: a stable trading price. And when
is that going to happen?

Not until people grow a pair and accept losses.  As it is now, everyone panics and runs in one direction when there is a strong move.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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January 27, 2012, 11:05:54 PM
 #62

Probably the most important factor in the adoption of Bitcoins: a stable trading price. And when
is that going to happen?

Not until people grow a pair and accept losses.  As it is now, everyone panics and runs in one direction when there is a strong move.

Exactly.

Revolutionary currency/technology meets immature trading exchange.
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January 27, 2012, 11:07:24 PM
 #63

Not until people grow a pair and accept losses.  As it is now, everyone panics and runs in one direction when there is a strong move.
I agree.  However, this is sort of a Catch-22 because people will not keep their money in Bitcoins unless they know it's stable.

There was a time when USD wasn't stable at all until they tied it to gold.  Once it gained stability, everyone started using it (other countries tying their currency to the dollar) they were able to keep it stable without anything backing it.  Even with inflation as it is USD is still a reliable currency.
notme
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January 27, 2012, 11:09:57 PM
 #64

Not until people grow a pair and accept losses.  As it is now, everyone panics and runs in one direction when there is a strong move.
I agree.  However, this is sort of a Catch-22 because people will not keep their money in Bitcoins unless they know it's stable.

There was a time when USD wasn't stable at all until they tied it to gold.  Once it gained stability, everyone started using it (other countries tying their currency to the dollar) they were able to keep it stable without anything backing it.  Even with inflation as it is USD is still a reliable currency.

At what time (before 1913) was the USD not tied to gold?  I'm a little fuzzy on the pre-fed history of the dollar.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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StewartJ
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January 27, 2012, 11:11:26 PM
 #65

Quote from: StewartJ

Probably the most important factor in the adoption of Bitcoins: a stable trading price. And when
is that going to happen?
Probably never. It's simply not in the nature of BTC to have a "stable" price.
 
Will the volatility and swings decrease in the future?

Sure, but the price will never be "stable" like the USD is to the Euro and so on...

Those currencies are only "stable", because they are kept that way artificially..


What a shame.  How can I sell the concept of Bitcoins to my friends when I honestly tell them
they could lose their USD value overnight?

It either needs to be traded on such a large scale the trading price is smoothed out, or a huge
adopter (facebook, amazon, google) implements it.


Edit:  I had been day-trading in Bitcoins like most everyone else. Now working on looking for
longer trends and actually investing in it. Need to appreciate the long traders a little more,
who are inBTC for the longer haul.
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January 27, 2012, 11:22:35 PM
 #66


What a shame.  How can I sell the concept of Bitcoins to my friends when I honestly tell them
they could lose their USD value overnight?

You say: "Either you lose a couple $100, or you get potentially humungous returns."
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January 27, 2012, 11:24:22 PM
 #67


What a shame.  How can I sell the concept of Bitcoins to my friends when I honestly tell them
they could lose their USD value overnight?

You say: "Either you lose a couple $100, or you get potentially humungous returns."

Sold !!??
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January 27, 2012, 11:26:29 PM
 #68

Gold standard for the USD was implemented in 1900.  Before that there was a bimetallic backing for the dollar.  This might sound silly but I'd like to think of this as the various currencies you can cash out for with Bitcoin.  As gold and silver prices fluctuated the ratio was always different for how much silver or how much gold you could get.  Once they fixed the standard amount of gold a dollar was worth it remained stable (of course, until 1913, when they ran out of gold to back it and it again entered bitcoin-like instability)

If, for example, Mt. Gox promised you could get $6USD for every bitcoin and (no other currency, no arbitrage possible) it would certainly fix the problem of these huge up and downswings.  Of course they would have no reason to do this because they make money on volatility as does almost everyone in the market.  Bitcoin does not have stability in mind - unlike the US government did when creating the dollar.  This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin. They will never be as fun, or as profitable to trade, though.
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January 27, 2012, 11:33:15 PM
 #69

Still waiting for the value to drop way more. Wanna buy me a whole load of them Smiley
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January 27, 2012, 11:36:05 PM
 #70

I think it would suffice if there weren't people trying to hype the price up to whatever the next USD value target is moments after they buy BTC.

If people would keep the future-huge-value speculation low and speculate on a more reasonable scale, we could get this stable in no time. But noooo, "Next stop, $8!" "No way we'll stay in single digits" "pah, single or double, triple digits is the future!!!1"

Nice to be enthusiastic, but calm down, there's a very long and very bumpy road ahead.
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January 27, 2012, 11:38:14 PM
 #71

Gold standard for the USD was implemented in 1900.  Before that there was a bimetallic backing for the dollar.  This might sound silly but I'd like to think of this as the various currencies you can cash out for with Bitcoin.  As gold and silver prices fluctuated the ratio was always different for how much silver or how much gold you could get.  Once they fixed the standard amount of gold a dollar was worth it remained stable (of course, until 1913, when they ran out of gold to back it and it again entered bitcoin-like instability)

If, for example, Mt. Gox promised you could get $6USD for every bitcoin and (no other currency, no arbitrage possible) it would certainly fix the problem of these huge up and downswings.  Of course they would have no reason to do this because they make money on volatility as does almost everyone in the market.  Bitcoin does not have stability in mind - unlike the US government did when creating the dollar.  This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin. They will never be as fun, or as profitable to trade, though.

Thanks for the info... as for a MtGox peg, eventually the market would run them out of funds on one side, then the market would move past them and they'd be on the losing side.  You can't peg, even the US government "ran out of gold to back it".

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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January 27, 2012, 11:47:08 PM
 #72

Gold standard for the USD was implemented in 1900.  Before that there was a bimetallic backing for the dollar.  This might sound silly but I'd like to think of this as the various currencies you can cash out for with Bitcoin.  As gold and silver prices fluctuated the ratio was always different for how much silver or how much gold you could get.  Once they fixed the standard amount of gold a dollar was worth it remained stable (of course, until 1913, when they ran out of gold to back it and it again entered bitcoin-like instability)

If, for example, Mt. Gox promised you could get $6USD for every bitcoin and (no other currency, no arbitrage possible) it would certainly fix the problem of these huge up and downswings.  Of course they would have no reason to do this because they make money on volatility as does almost everyone in the market.  Bitcoin does not have stability in mind - unlike the US government did when creating the dollar.  This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin. They will never be as fun, or as profitable to trade, though.

Thanks for the info... as for a MtGox peg, eventually the market would run them out of funds on one side, then the market would move past them and they'd be on the losing side.  You can't peg, even the US government "ran out of gold to back it".
...unless they had $21M and said they'd back it at $1.  Wink
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January 27, 2012, 11:47:45 PM
 #73

When you "invest" in Bitcoins you are entering a world of unregulated if not somewhat nefarious
manipulators, out-of-control margin "gamblers', and over-exuberant traders who are speculating
Bitcoin out of existence with parabolic rallies, pump-n-dump crashes, and Bitcoinica starfish nonsense.
Yes, I believe you have correctly identified the reason why Bitcoin is trading at 1/100th of it's most established legitimate competitor in spite of being far superior.

I had been day-trading in Bitcoins like most everyone else. Now working on looking for
longer trends and actually investing in it. Need to appreciate the long traders a little more,
who are inBTC for the longer haul.
You can do both.  Spread your BTC around.  Gamble, trade, invest, donate, spend...  Do it all.  

This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin.
We have something better than banks and governments.  We have a community of people who are working together to see Bitcoin succeed.  Eventually the real bitcoin holders will outnumber the margin gamblers, you just have to be patient.

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notme
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January 27, 2012, 11:50:14 PM
 #74

Gold standard for the USD was implemented in 1900.  Before that there was a bimetallic backing for the dollar.  This might sound silly but I'd like to think of this as the various currencies you can cash out for with Bitcoin.  As gold and silver prices fluctuated the ratio was always different for how much silver or how much gold you could get.  Once they fixed the standard amount of gold a dollar was worth it remained stable (of course, until 1913, when they ran out of gold to back it and it again entered bitcoin-like instability)

If, for example, Mt. Gox promised you could get $6USD for every bitcoin and (no other currency, no arbitrage possible) it would certainly fix the problem of these huge up and downswings.  Of course they would have no reason to do this because they make money on volatility as does almost everyone in the market.  Bitcoin does not have stability in mind - unlike the US government did when creating the dollar.  This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin. They will never be as fun, or as profitable to trade, though.

Thanks for the info... as for a MtGox peg, eventually the market would run them out of funds on one side, then the market would move past them and they'd be on the losing side.  You can't peg, even the US government "ran out of gold to back it".
...unless they had $21M and said they'd back it at $1.  Wink

Backed at $1  != pegged at $1

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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January 27, 2012, 11:53:44 PM
 #75

We have something better than banks and governments.  We have a community of people who are working together to see Bitcoin succeed.  Eventually the real bitcoin holders will outnumber the margin gamblers, you just have to be patient.
+1

This is something that always helps me think on the positive side of things, it's undoubtedly true that things will get better as Bitcoin gets bigger and more widely used. I also agree with Vandroiy that it's important to be a bit more conservative. People in this forum tend to heavily overhype at times and then at other times they do the exact opposite and give an overdose of FUD. I admit I've been guilty of the former at times but never of the latter Wink

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January 27, 2012, 11:59:23 PM
 #76

Gold standard for the USD was implemented in 1900.  Before that there was a bimetallic backing for the dollar.  This might sound silly but I'd like to think of this as the various currencies you can cash out for with Bitcoin.  As gold and silver prices fluctuated the ratio was always different for how much silver or how much gold you could get.  Once they fixed the standard amount of gold a dollar was worth it remained stable (of course, until 1913, when they ran out of gold to back it and it again entered bitcoin-like instability)

If, for example, Mt. Gox promised you could get $6USD for every bitcoin and (no other currency, no arbitrage possible) it would certainly fix the problem of these huge up and downswings.  Of course they would have no reason to do this because they make money on volatility as does almost everyone in the market.  Bitcoin does not have stability in mind - unlike the US government did when creating the dollar.  This is one of the problems with having an international currency with no banks or government to protect it.  Sure, there are benefits, but there are also many flaws and there is a reason why most currencies are and will always be safer than bitcoin. They will never be as fun, or as profitable to trade, though.

Thanks for the info... as for a MtGox peg, eventually the market would run them out of funds on one side, then the market would move past them and they'd be on the losing side.  You can't peg, even the US government "ran out of gold to back it".
...unless they had $21M and said they'd back it at $1.  Wink

Backed at $1  != pegged at $1
Yes, this is true.  I kind of misread that part of the conversation.
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January 28, 2012, 12:04:26 AM
 #77


What a shame.  How can I sell the concept of Bitcoins to my friends when I honestly tell them
they could lose their USD value overnight?

You say: "Either you lose a couple $100, or you get potentially humungous returns."
This is exactly it.

Bitcoin can only go one of two ways.

Either it goes huge, and the dream is a reality ($100,000 coins). - This is entirely possible based on simple mathematics, and (again) full adoption becoming a "reality".

OR

It goes bust, and turns out to be nothing more than a clever ponzi scheme.

One thing never changes.

Bitcoin is only useful, because people choose to use it.

Now based on your perception of life and own self value.

This can be one of the most empowering things you've ever heard, or the most demotivating reason to ever get into BTC.

That's why Bitcoin really is so beautiful. It really is up to YOU whether we embark on this beautiful dream, or we crash land right back to "reality".

YOU back Bitcoin.. That's probably the main reason the exchange rate is so unstable right now..

People are on the fence and I don't blame them...

Mix that in with a bunch of newb traders and a few well-funded sharks, and you got the most one of the most volatile games I have ever seen in my life.

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January 28, 2012, 12:23:14 AM
 #78

YOU back Bitcoin.. That's probably the main reason the exchange rate is so unstable right now..

People are on the fence and I don't blame them...

Mix that in with a bunch of newb traders and a few sharks, and you got the most one of the most volatile games I have ever seen in my life.

+1

"Check yo self before you wreck yo self"

https://www.bitcoin.org/bitcoin.pdf
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January 28, 2012, 12:23:53 AM
 #79

Yes the value in bitcoins is mostly driven by speculation and hope, but those dreams have the potential to transform into reality.

Just think about how the price of a coin is currently determined. People just place bids and asks according to information about where other people are placing their bids and asks

That means the price of bitcoins is non zero as a result of dependent origination (a Buddhist might say). The bids and asks support each other like the two sides of an arch bridge, essentially creating a stable structure out of two opposing forces. This kind of interaction is why it is possible for value in bitcoins to arise out of nothing. Without being backed so to speak.
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January 28, 2012, 12:32:49 AM
 #80

Yes the value in bitcoins is mostly driven by speculation and hope, but those dreams have the potential to transform into reality.

Just think about how the price of a coin is currently determined. People just place bids and asks according to information about where other people are placing their bids and asks

That means the price of bitcoins is non zero as a result of dependent origination (a Buddhist might say). The bids and asks support each other like the two sides of an arch bridge, essentially creating a stable structure out of two opposing forces. This kind of interaction is why it is possible for value in bitcoins to arise out of nothing. Without being backed so to speak.

Pratītyasamutpāda

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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