Throwing in the towel

[gewure]

Gewure, no offense, but you do realise you are contributing to the bitcoin price going more up and down, when your leveraged long get liquided. Luckily people like me stopped the fall at 4.2 - 4.4. If everyone did like you, the price would be a lot lower now. ( And gone up a lot more before the fall).  I am impressed at how stable the bitcoin price has been lately thought compared to how unknown the price really is.

posted that before, sure my zhoutongisation had an effect on volatility

i call stable prices something different, but lol, ok.. -40% STABLE PRICES! rejoice!

[1714130241]

1714130241

[phelix]

Nothing serious has happened from the perspective of Bitcoin's long term future. Absolutely nothing. I've never seen such overreaction that we have seen now, not even in the Bitcoin market. I agree that the worst damage from this is the price volatility itself but everyone involved with Bitcoin right now should know what to expect. I also tell everyone that I mention Bitcoin to, that they keep this in mind if they want to buy bitcoins.

I think the worst about this is people using Bitcoinica who should not be using Bitcoinica. Don't use it unless you know what you're doing and/or are prepared to take a total loss at any time without regret.

I can admit that I hold a fairly significant BTC position and it's worth less now, but I haven't sold anything nor am I planning to sell anything. Nothing has happened that would really worry me from a long term perspective. My position is not a leveraged position of course, it's a traditional one. I will never touch Bitcoinica.

+1

moar cheeep bitcoinzeees

also I have finally found the real satoshi: http://www.youtube.com/watch?v=7YkbgvRMpW0   

[Technomage]

nothing serious? Tradehill decided to shut down because of banking troubles. What is not to say Mtgox would suffer the safe fate? If Mtgox, went down that would pretty much cause bitcoin price to crash.

Tradehill shutting down and Mt. Gox shutting down are two very different scenarios. Neither event kills Bitcoin but the latter would cause a total crash in price and Bitcoin adoption would take a huge step back. However there is absolutely no reason to assume that Mt. Gox is having any trouble. It's important to remember that Tradehill was an US exchange, what is common between Mt. Gox, Intersango and Cryptoxchange? None of them operate in the US.

Mt. Gox has been handling its regulation related issues very nicely and has not had any trouble with its most important bank accounts and it has even had functioning SEPA deposits for a good while now. Intersango has functioning SEPA both ways and they have basically solved the issues related to their UK account and as far as I know Cryptoxchange is also running a very solid business.

Remember that Tradehill was only slightly bigger than Intersango and Cryptoxchange, the difference was not huge. Mt. Gox is on a totally different level. I see a promising future for Intersango and Cryptoxchange though, they are providing a great service especially for European Bitcoin users for which Tradehill was a MUCH crappier exchange overall.

Tradehill was clearly a declining exchange and nobody lost money in this process thanks to the admirable business practices of Tradehill. I can actually think of a good number of ways to look at this whole situation from a "glass half full" perspective.

1) We are seeing the emergence of solid, ethical business practices. The way Tradehill handled everything is admirable.

2) Even though the 2nd biggest exchange in the Bitcoin economy shut down, it didn't really change anything. We have come a long way and there are plenty of good alternatives to choose from.

3) Paxum ending their support for Bitcoin can be seen from a positive light as well, it seems like banks might be starting to think of Bitcoin as a threat. That means we might be making the transition from nothing to something. From usability perspective this doesn't change anything, Paxum isn't very relevant in the big picture. It's just one payment processor.

4) Combined these events, just like the MyBitcoin scam and the Mt. Gox hack back in the day (although these were MUCH more severe events), will add pressure to innovate. MyBitcoin's demise lead to more robust wallets which are both convenient and much safer. Mt. Gox hack lead to Mt. Gox taking their security seriously and other major exchanges have don so as well, with Tradehill and Intersango having clear security records.

With the announcement of p2pool and its huge success, the only part in the whole Bitcoin equation that is still too centralized is the exchanges. I think these recent issues will add further pressure to develop convenient p2p exchanges and convenient services of real life exchanging. I believe all of this will lead to good things eventually.

[gewure]

nevertheless the midterm and the longterm look much more like 10$ than like 40$ now.

[Technomage]

nevertheless the midterm and the longterm look much more like 10$ than like 40$ now.

Mid-term and long-term are very different animals. I agree that $10 is a sane target for the mid-term but from a long-term perspective that is a very low target. Remember where the price was one year from now and also remember that every downtrend has bottomed higher than the one before that.

I agree with you that if the price went below $3 it would be a very serious issue. The long-term picture would be disrupted. But if it doesn't, we could definitely make a new all-time high within the next 12 months and we could test $100 within 24 months. In 5 years, how about the moon ($1000+)?

I also believe that the price is based on fundamentals in the end. Technicals and the way published technical analysis manipulates people into buying and selling only accelerates what is already there. I honestly can't see anything there right now that could lead to below $3 prices. Those prices are not realistic unless people seriously lose faith in Bitcoin at the same time.

Only what I call a serious event could cause this and make even people like me doubt the long-term picture. This would undoubtedly cause a price drop to below $3. An event like this would need to be very serious though, the stuff that has happened recently are very insignificant.

[Transisto]

If MtGox was to offer much a lower fees on much higher volume of transaction that could stimulate the creation of other exchanges.

Exchanges like Bitcoinica but with actual reserve and USD processing.

[GeniuSxBoY]

I'm sorry guys, but this is going down to $2-$3 again, just like the first time.


The only reason it skyrocketed (both times) was because of some stupid conference, some stupid tv show, and some stupid national news segment.

There's nothing to look forward to except the collapse of civilization.


When there's a collapse of civilization, you can't buy power with bitcoins to access your bitcoins.

[Transisto]

...
The only reason it skyrocketed (both times) was because of some stupid conference, some stupid tv show, and some stupid national news segment.
....

There is nothing stupid about new people learning about bitcoin. Of course 95% of people who watched the TV shows are not crypto literate in the slightest.

http://stats.grok.se/en/latest90/bitcoin

What give me more hope is Bartydt's upcoming TED talk.   I guess the average person attending TED have greater vision and deeper pocket than all of "The good wife" auditory combined.

Oh and BTW : It did not skyrocket, unless going from 5 to 7 is a rocket worthy move to you.

[GeniuSxBoY]

Oh and BTW : It did not skyrocket, unless going from 5 to 7 is a rocket worthy move to you.

try $2 to $7. 

[Phinnaeus Gage]

Nothing serious has happened from the perspective of Bitcoin's long term future. Absolutely nothing. I've never seen such overreaction that we have seen now, not even in the Bitcoin market. I agree that the worst damage from this is the price volatility itself but everyone involved with Bitcoin right now should know what to expect. I also tell everyone that I mention Bitcoin to, that they keep this in mind if they want to buy bitcoins.

I think the worst about this is people using Bitcoinica who should not be using Bitcoinica. Don't use it unless you know what you're doing and/or are prepared to take a total loss at any time without regret.

I can admit that I hold a fairly significant BTC position and it's worth less now, but I haven't sold anything nor am I planning to sell anything. Nothing has happened that would really worry me from a long term perspective. My position is not a leveraged position of course, it's a traditional one. I will never touch Bitcoinica.

on my longterm strategy, to which i stick, a drop bellow $3 in this state of progress of bitcoin would be the first serious warning sign of the longterm strategy beeing invalid. so it changes something in my system, cause this possibility has just been enabled.

so i lower my longterm(4 years) goal from 23$ to 12$

prices may rise in future - sure. but abandon the skyrocket, 7.2 is mid-term(half year) goal for now, 23$ longterm goal.

Simple math:

In approximately 4 years, there'll be approximately 15,000,000 bitcoins generated. At $23 USD, there would only be a market cap of $345,000,000. For sake of argument, say that in 4 years there will only be 2,000,000 loyal users of Bitcoin. On average, they each will have only $172.50 between them.

Now, I'm not a rocket scientist, but there should be a hell of lot more than 2M users within 4 years. If that is not the case, than somebody in the towel business is going to make a killing. Again, for sake of argument, I'll concede to there only be 2M Bitcoiners in 4 years. These Bitcoiners are not going to be spending on average $172.50 USD per year. Many will spend that in a week--or less. But I'll give the benefit of the doubt and say that that's what they'll spend in a month. Follow closely, for the math is going to get harder. There are 12 months in a year. With me so far? 12 X $172.50 = $2,070. $2,070 X 2M users = a market cap of $4,140,000,000. $4,140,000,000 USD/15,000,000 bitcoins = $276 per Bitcoin.

Therefore, $276 USD is the bear minimum Bitcoin must be trading at within 4 years, otherwise WE ARE ALL JUST WASTING OUR TIME HERE.

There is no way in hell that a market cap of $180,000,000 ($12 USD X 15,000,000 bitcoins) in four years is going to sustain the Bitcoin community.

~Bruno~

[notme]

Simple math:

In approximately 4 years, there'll be approximately 15,000,000 bitcoins generated. At $23 USD, there would only be a market cap of $345,000,000. For sake of argument, say that in 4 years there will only be 2,000,000 loyal users of Bitcoin. On average, they each will have only $172.50 between them.

Now, I'm not a rocket scientist, but there should be a hell of lot more than 2M users within 4 years. If that is not the case, than somebody in the towel business is going to make a killing. Again, for sake of argument, I'll concede to there only be 2M Bitcoiners in 4 years. These Bitcoiners are not going to be spending on average $172.50 USD per year. Many will spend that in a week--or less. But I'll give the benefit of the doubt and say that that's what they'll spend in a month. Follow closely, for the math is going to get harder. There are 12 months in a year. With me so far? 12 X $172.50 = $2,070. $2,070 X 2M users = a market cap of $4,140,000,000. $4,140,000,000 USD/15,000,000 bitcoins = $276 per Bitcoin.

Therefore, $276 USD is the bear minimum Bitcoin must be trading at within 4 years, otherwise WE ARE ALL JUST WASTING OUR TIME HERE.

~Bruno~

Um... no.
http://en.wikipedia.org/wiki/Velocity_of_money

[cbeast]

Um... no.
http://en.wikipedia.org/wiki/Velocity_of_money

How does that even apply? I can go to nearly any country in the world without any money, just VISA. There are no rules anymore that apply to money, that's why the world economy is in the mess it is in. Bitcoin offers discipline and new rules, but we haven't figured out what they are yet. There are new economic relationships to be described with math that we haven't yet discovered. Bitcoin is still a big unknown.

[Phinnaeus Gage]

Um... no.
http://en.wikipedia.org/wiki/Velocity_of_money

How does that even apply? I can go to nearly any country in the world without any money, just VISA. There are no rules anymore that apply to money, that's why the world economy is in the mess it is in. Bitcoin offers discipline and new rules, but we haven't figured out what they are yet. There are new economic relationships to be described with math that we haven't yet discovered. Bitcoin is still a big unknown.

I like this post. I'm giving it a +1.5.

Bitcoin offers discipline and new rules, but we haven't figured out what they are yet.

I believe countries fear the discipline aspect of Bitcoin, but won't slow them down in trying to stop it, yet at the same time embrace it if they can figure out a way to profit from that position. I can envision them using it as an adjunct currency to fiat, thus perpetuating their doom currency as long as possible, reaping the awards as it fails, all the while setting in place a defense mechanism to manipulate Bitcoin with the hope of filling their next generation's coffers.

~Bruno~

[nrd525]

If a bitcoin circulated once per week, we'd have a velocity of 52. And we'd be able to support an economy worth 52 times the total value of bitcoins (so if we have 50 million dollars worth of bitcoins - we could support an annual trade of 2.6 billion).

That said, I think a velocity of 3 to 10 is more realistic.

[chsados]

There's nothing to look forward to except the collapse of civilization.


When there's a collapse of civilization, you can't buy power with bitcoins to access your bitcoins.

who is this guy?!

[muyuu]

Nothing serious has happened from the perspective of Bitcoin's long term future. Absolutely nothing. I've never seen such overreaction that we have seen now, not even in the Bitcoin market. I agree that the worst damage from this is the price volatility itself but everyone involved with Bitcoin right now should know what to expect. I also tell everyone that I mention Bitcoin to, that they keep this in mind if they want to buy bitcoins.

I think the worst about this is people using Bitcoinica who should not be using Bitcoinica. Don't use it unless you know what you're doing and/or are prepared to take a total loss at any time without regret.

I can admit that I hold a fairly significant BTC position and it's worth less now, but I haven't sold anything nor am I planning to sell anything. Nothing has happened that would really worry me from a long term perspective. My position is not a leveraged position of course, it's a traditional one. I will never touch Bitcoinica.

on my longterm strategy, to which i stick, a drop bellow $3 in this state of progress of bitcoin would be the first serious warning sign of the longterm strategy beeing invalid. so it changes something in my system, cause this possibility has just been enabled.

so i lower my longterm(4 years) goal from 23$ to 12$

prices may rise in future - sure. but abandon the skyrocket, 7.2 is mid-term(half year) goal for now, 23$ longterm goal.

Simple math:

In approximately 4 years, there'll be approximately 15,000,000 bitcoins generated. At $23 USD, there would only be a market cap of $345,000,000. For sake of argument, say that in 4 years there will only be 2,000,000 loyal users of Bitcoin. On average, they each will have only $172.50 between them.

Now, I'm not a rocket scientist, but there should be a hell of lot more than 2M users within 4 years. If that is not the case, than somebody in the towel business is going to make a killing. Again, for sake of argument, I'll concede to there only be 2M Bitcoiners in 4 years. These Bitcoiners are not going to be spending on average $172.50 USD per year. Many will spend that in a week--or less. But I'll give the benefit of the doubt and say that that's what they'll spend in a month. Follow closely, for the math is going to get harder. There are 12 months in a year. With me so far? 12 X $172.50 = $2,070. $2,070 X 2M users = a market cap of $4,140,000,000. $4,140,000,000 USD/15,000,000 bitcoins = $276 per Bitcoin.

Therefore, $276 USD is the bear minimum Bitcoin must be trading at within 4 years, otherwise WE ARE ALL JUST WASTING OUR TIME HERE.

There is no way in hell that a market cap of $180,000,000 ($12 USD X 15,000,000 bitcoins) in four years is going to sustain the Bitcoin community.

~Bruno~

Do you seriously believe any of that? 2M users spending hundreds of dollars worth of bitcoins in a month? within 4 years?

If these are your expectations, or else "you are wasting your time here"... I think you are in for a big disappointment.

[Transisto]

...
Do you seriously believe any of that? 2M users spending hundreds of dollars worth of bitcoins in a month? within 4 years?

If these are your expectations, or else "you are wasting your time here"... I think you are in for a big disappointment.

What are your predictions for state of Bitcoin in 4 years ?

[muyuu]

...
Do you seriously believe any of that? 2M users spending hundreds of dollars worth of bitcoins in a month? within 4 years?

If these are your expectations, or else "you are wasting your time here"... I think you are in for a big disappointment.

What are your predictions for state of Bitcoin in 4 years ?

I'd say having half a million users doing business with Bitcoin on a daily basis would already be huge success. Like in, I'd be rich success. Not going to happen, but I expect it will steadily gain support in different markets and I will try to do my bit.

[Technomage]

I don't think Bruno's expectation is at all unrealistic, in fact I'd say anything less is very pessimistic. Asking for 100 million users in 4 years is insane, even 10 million is pushing it, but 2 million? You have to be kidding me. Let's go through the numbers again shall we.

Bitcoin has around 100 000 users these days. In February 2011 we probably had only 10% of that, maybe 10 000 users. Which means there has been a 900% percentage increase in users in just 1 year. These numbers are thrown out there, they could be off but not way off.

Next we have to take into account the fact that Bitcoin is not going to grow at a yearly 900% forever. Let's say the growth rate halves every year, which is very conservative. So for the next 12 months we can expect a 450% growth rate, next 12 after that will be 225% and so on. What we come up with is this:

February 2011: 10k users (start of calculation)
February 2012: 100k users (900% increase from 2011)
February 2013: 550k users (450% increase from 2012)
February 2014: 1,79m users (225% increase from 2013)
February 2015: 3,8m users (112,5% increase from 2014)
February 2016: 5,94m users (56,25% increase from 2015) <- target date

Conclusion is that even with a fairly conservative growth pattern we can actually surpass 5 million users within 4 years. There is plenty of room for even more conservative calculations that still get us to over 2 million users. It can also be assumed that during this 4 year period the Bitcoin merchant market is on a whole other level, making it actually possible for Bitcoin users to spend a good amount of bitcoins each month.

I'd say we should aim for 10 million and be very happy if we reach 5 million by February 2016. We should look in the mirror and not be too happy if we only achieve 2 million. If muyuu's super conservative prediction holds true or if we don't even reach that, then we can be very disappointed.

[racerguy]

I'm no trader on forex, have no experience in these things, but isn't it normal for shallow markets to bounce around this much?