rpietila Calling the Bottom

[rpietila]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

[1715021108]

1715021108

[JimboToronto]

Well said. +1

[spazzdla]

A good read, a lot of the people I know that know of bitcoin do not like it.  However... they think some hacker will hack all of the coins in existance.. the CEO will sell them all...  and other idiotic fears.  Once these fears are proven to the idiots(there are a lot) to be moronic they will go panic buy mode.

[Newscastix]

This is spot on!

It took me 2 weeks from hearing about bitcoin to owning it.

[JimboToronto]

It took me 2 weeks from hearing about bitcoin to owning it.

2 months for me... one to research it thoroughly to find out it wasn't a scam, and another to figure out how to actually obtain some, watching helplessly as the price went from $15 to over $60.

[Miz4r]

I have a large short position on plus500 with leverage of 1:17 since august 12th. I'm currently on game with 81000 coins, which I don't own. Yes that's right 81000. Will it make a dent? 

It will if someone else takes a 1:20 long position with 100k coins before you can close your shorts. But not in the direction you are looking for.

[nope491]

I hope that your prediction will come true, anyway I'm holding my coins without any fear of the current downtrend.

[Yololintian]

I also think its bottom. For the first time (I have only been trading bitcoin for 8 months), I have witnessed a significant amount of speculators turn from bull to bear for more than a few hours. Everyone on tradingview thinks we are going lower. Its like a huge change in sentiment from a few days ago, where everyone was sure 560 would hold. Other times, bad news would bring the price down but people weren't forecasting moving into the 200s and below. The general sentiment just feels like it should during capitulation.

[johnyj]

Pictures of your castle? 

[fonzie]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

I have a large short position on plus500 with leverage of 1:17 since august 12th. I'm currently on game with 81000 coins, which I don't own. Yes that's right 81000. Will it make a dent?  

Ps. Also have shorts on gold and silver with leverage of 1:152.

Mallax 6 times by now

Pics or it didn´t happen. AFAIK Plus500 would not allow you to open a position up to 81000BTC. During the last time when i had open positions about 200-300BTC and were in the profit zone, they cut down available  leverage day by day from 1:17 to1:10 to 1:4 and finally 1:2 after 2-3 weeks. Largest single positions that can be opened right now is 185BTC. Also your starting capital would have to be around 1,2 mio. dollars.... I doubt that you would trust a company like Plus500 with that sum, they have no effective security measures at all.

BTW: You´re gonna get short squeezed anyway in the next 72h if you really have any positions right now. 

[Paashaas]

That was a fine read and a good start of the weekend!

[dyland]

Pictures of your castle? 

Castle of who? Who's castle?

http://bitcoinmagazine.com/10625/cryptocurrency-castle/

Risto's. The OP.

[windjc]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

I have a large short position on plus500 with leverage of 1:17 since august 12th. I'm currently on game with 81000 coins, which I don't own. Yes that's right 81000. Will it make a dent?  

Ps. Also have shorts on gold and silver with leverage of 1:152.

Mallax 6 times by now

Pics or it didn´t happen. AFAIK Plus500 would not allow you to open a position up to 81000BTC. During the last time when i had open positions about 200-300BTC and were in the profit zone, they cut down available  leverage day by day from 1:17 to1:10 to 1:4 and finally 1:2 after 2-3 weeks. Largest single positions that can be opened right now is 185BTC. Also your starting capital would have to be around 1,2 mio. dollars.... I doubt that you would trust a company like Plus500 with that sum, they have no effective security measures at all.

BTW: You´re gonna get short squeezed anyway in the next 72h if you really have any positions right now. 

Thank you Fonzie for smacking down this teenagers bullshit

[fonzie]

You´re welcome. Obvious talking bullshit  is is obvious.

[fonzie]

Who the fuck you think your fucking with?
If you only knew who I am 

[GrandMasterB]

The big thing is regulation. Once you factor in govt taxes adoption rate by large merch will slow. I hear Ebay is poised to accept. The question is if these companies are looking at a shirt run bypass on taxes or if they are serious about this. The govt has a whiff and they carry a double edge sword.

[Schickeria]

Who the fuck you think your fucking with?
If you only knew who I am  

Jimmy Buffet?

[segeln]

@rpietila
great writing!
hope your predictions come true!
Thanks !

[InwardContour]

I always follow rpietila predictions and until now I have never been disappointed by them,
I'm hodling hard for the next months no matter what will happen.

[Lauda]

Very nicely written indeed. One of the problems in the Crypto world is impatience.
The next explosion might be very huge indeed, I'm just waiting for that long promised ETF to launch.

[cbeast]

It took me until my day off from my slave job to go buy a mining rig.

[adamstgBit]

+1

The logic is sound, the facts seem to fit, and I agree.

so why is price not performing as it should be?

as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues.

yes, that seems to be the case, I would go one step further and add that the deep-pocket investors are playing with the market, dropping price, leverage hunting, down playing their willingness to buy, all in the hope of adding to that anxiety resulting more bitcoin available on the market for them.

no one drops large sums of bitcoin when news is gr8, unless they want to manipulate, and we saw just how effective a well placed large market sell can be, with last nights long squeeze.

do you believe there is some manipulation is taking place? how long can they keep this up?  how low will they make us go? are their tricks working for you, are you scared, are you selling!?

[cbeast]

+1

The logic is sound, the facts seem to fit, and I agree.

so why is price not performing as it should be?

as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues.

yes, that seems to be the case, I would go one step further and add that the deep-pocket investors are playing with the market, dropping price, leverage hunting, down playing their willingness to buy, all in the hope of adding to that anxiety resulting more bitcoin available on the market for them.

no one drops large sums of bitcoin when news is gr8, unless they want to manipulate, and we saw just how effective a well placed large market sell can be, with last nights long squeeze.

do you believe there is some manipulation is taking place? how long can they keep this up?  how low will they make us go? are their tricks working for you, are you scared, are you selling!?

It's a new land, like the Wild West. There are unwritten rules that yet need to be written.

[cypherdoc]

It took me 2 weeks from hearing about bitcoin to owning it.

2 months for me... one to research it thoroughly to find out it wasn't a scam, and another to figure out how to actually obtain some, watching helplessly as the price went from $15 to over $60.

Yeah, 2 months is about average to thoroughly research Bitcoin. In fact, I'm still learning tidbits here and there.

I remember calling Gavin and theymos at least a couple of times to ask questions. Then wasting another month throwing out low ball bids on OTC that were laughable (embarrassingly low). Finally I said fuck it and plowed into mtgox.

[adamstgBit]

+1

The logic is sound, the facts seem to fit, and I agree.

so why is price not performing as it should be?

as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues.

yes, that seems to be the case, I would go one step further and add that the deep-pocket investors are playing with the market, dropping price, leverage hunting, down playing their willingness to buy, all in the hope of adding to that anxiety resulting more bitcoin available on the market for them.

no one drops large sums of bitcoin when news is gr8, unless they want to manipulate, and we saw just how effective a well placed large market sell can be, with last nights long squeeze.

do you believe there is some manipulation is taking place? how long can they keep this up?  how low will they make us go? are their tricks working for you, are you scared, are you selling!?

It's a new land, like the Wild West. There are unwritten rules that yet need to be written.

honestly i think this manipulation should be allowed. theres nothing stopping anyone from trading against them...

as long as there is no nake shorts, i'm ok with it really, i don't like it, but i see no good reason to put rules where none are needed. the market will take care of this itself.

[adamstgBit]

It took me 2 weeks from hearing about bitcoin to owning it.

2 months for me... one to research it thoroughly to find out it wasn't a scam, and another to figure out how to actually obtain some, watching helplessly as the price went from $15 to over $60.

Yeah, 2 months is about average to thoroughly research Bitcoin. In fact, I'm still learning tidbits here and there.

I remember calling Gavin and theymos at least a couple of times to ask questions. Then wasting another month throwing out low ball bids on OTC that were laughable (embarrassingly low). Finally I said fuck it and plowed into mtgox.

it took me ~2-3 weeks as well, is this typical? probably not,

most poeple will first be aware of it but not put much thought into it, one day they will hear about it again, do some recreash, think about buying in, forget about it, repeat, actually start saving money to buy, watch market for weeks or months ( everyone thinks they can buy the low if they only sit there long enough ) and then finally buy when its clear that "its going UP!", these poeple comes in waves and they all buy at pretty much the same time, they can't help it, its in there nature, sheeple.

[blatchcorn]

A day too early with the thread it seems 

[bassclef]

+1

The logic is sound, the facts seem to fit, and I agree.

so why is price not performing as it should be?

as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues.

yes, that seems to be the case, I would go one step further and add that the deep-pocket investors are playing with the market, dropping price, leverage hunting, down playing their willingness to buy, all in the hope of adding to that anxiety resulting more bitcoin available on the market for them.

no one drops large sums of bitcoin when news is gr8, unless they want to manipulate, and we saw just how effective a well placed large market sell can be, with last nights long squeeze.

do you believe there is some manipulation is taking place? how long can they keep this up?  how low will they make us go? are their tricks working for you, are you scared, are you selling!?

It's a new land, like the Wild West. There are unwritten rules that yet need to be written.

honestly i think this manipulation should be allowed. theres nothing stopping anyone from trading against them...

as long as there is no nake shorts, i'm ok with it really, i don't like it, but i see no good reason to put rules where none are needed. the market will take care of this itself.

I agree. Once we know these algorithms/tactics exist there is nothing stopping us from profiting. "Wall Street" needs to watch its back--there are no regulations in place to protect them this time and the big whales who have been in this market for years and hold a large percentage of coin are certainly not dumb and won't give it up easily.

That said everyone in this game has a vested interest in seeing bitcoin succeed, so I don't think they'll knock down the price enough to garner negative media attention.

[BitChick]

It took me 2 weeks from hearing about bitcoin to owning it.

2 months for me... one to research it thoroughly to find out it wasn't a scam, and another to figure out how to actually obtain some, watching helplessly as the price went from $15 to over $60.

Yeah, 2 months is about average to thoroughly research Bitcoin. In fact, I'm still learning tidbits here and there.

I remember calling Gavin and theymos at least a couple of times to ask questions. Then wasting another month throwing out low ball bids on OTC that were laughable (embarrassingly low). Finally I said fuck it and plowed into mtgox.

it took me ~2-3 weeks as well, is this typical? probably not,

most poeple will first be aware of it but not put much thought into it, one day they will hear about it again, do some recreash, think about buying in, forget about it, repeat, actually start saving money to buy, watch market for weeks or months ( everyone thinks they can buy the low if they only sit there long enough ) and then finally buy when its clear that "its going UP!", these poeple comes in waves and they all buy at pretty much the same time, they can't help it, its in there nature, sheeple.

From when my husband told me about Bitcoin to when we invested was about a year.  Granted there was some crazy things going on in 2012 when we first heard about it and we really did not know how legal it was.  I initially thought it would be a good idea just to throw a few hundred in for "fun." But the greatest fear was not just throwing a little cash in, it was being associated with something that could cause us some legal harm.  Once we heard that there was going to be money laundering laws put into place we purchased then.  Of course we had more time to think about it and see the value in it by then.  It was still a risk buying in 2013 though.  The exchanges were not terribly secure and seemed rather "shady" in some ways.  

All that said, Risto is most likely right that this is the "bottom."  He is generally right.  Glad to hear that this is the bottom for now.  I just hope that we do not have to wait too long for the next run up in price.  There are several things that hubby and I have delayed a little waiting for this next rally and I have a mission trip scheduled in a few months that I will need to spend some coins on.  But pulling any funds out of BTC seems a foolish thing to do knowing we are on the brink of another rally.  Oh well, I guess that is just the way it goes sometimes.  

[oda.krell]

(Preliminary remark: I usually avoid posting in self-moderated topics, but I'll make an exception this time. Let's see how this turns out.)

Not going to argue with the body of your post. Several valid points, though I continue to believe that predicting future price levels by simple extrapolation from the all-time price regression is extremely optimistic, and in all likelihood: too optimistic. Which doesn't change the main point you seem to make, similar to Devin Chow's point in his thread yesterday - that if you believed in the long-term potential of Bitcoin a week ago at $590, there's no need to panic sell now at $490.

That said, your title bears no causal (or even just argumentative) relation to the body of the post. And, non-surprisingly, it is proven wrong already, less than 24 hours later. Sometimes, technical causes take over in a market, and the fundamentals are on the backburner for a while. Now seems to be such a time, and it is perhaps best to prepare yourself for the (likely) effects of that.

[warpio]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

why do you ignore the very valid theory that the willybot manipulation was the main cause of most of the explosive growth up to $1200? And everything since then has been from people HODLing... it's very possible that the true price of BTC without manipulation should be still much lower than it currently is... I wouldn't bet the farm on it either way, I'm just saying...

[dropt]

why do you ignore the very valid theory that the willybot manipulation was the main cause of most of the explosive growth up to $1200? And everything since then has been from people HODLing... it's very possible that the true price of BTC without manipulation should be still much lower than it currently is... I wouldn't bet the farm on it either way, I'm just saying...

Because it's not a "very valid" theory.

[seljo]

I don't trust bold dudes with pink rolls...

[windpath]

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

I'm calling triplets at least...

[Capt Drake]

I agree with the OP, but unfortunatly for me, I first heard of bitcoin in late 2012 and I didn't look up for more information or anything.
I remeber when the price was 300 BRL(+-150USD) and then I thought with myself, "oh, this is too expensive, and I need to deposit my money in the exchange? Too much work for this..."

Yeah, that's too bad ahahaha

I recover my concernment about bitcoin when the price exploded in november 2013, and then I started to read everything about it, but just started to invest in june.

[njcarlos]

rpietila still making stupid calls I see. And still, stuck on $10k+ (perhaps you've let your dream of $100k back in 2013 go?)

You're a delusional troll, and I'm not quite sure how people still give credence to your statements. You got lucky as an early adopter. Don't confuse that with thinking you actually know what the hell you're talking about.

[An amorous cow-herder]

Definately isnt sinking.

[BuildTheFuture]

There is some interesting fundamental data going on recently with the blockchain.info chart of Number of transactions excluding popular:

https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=false&timespan=2year&show_header=true&daysAverageString=7&scale=0&address=

Getting real close to taking out the March high. So it would seem usage/adoption is now solidly in a new upswing phase. Possibly due to Circle (WHEN am I getting my invite !?), and of course there are many other things springing up lately from ATMs, much new merchant adoption, etc.

Well so anyway, if this continues then price is going up.

[Newbie1022]

This has to be the most illogical post I've ever read. It says nothing about deriving a bottom through technical analysis -- supposedly this guy's thing. Additionally, a further drop occurred in China below 2900 after he wrote it. Finally, there was some nonsense about "Bitcoin pregnancies"

I am going to go out on a limb and say that this isn't the bottom (unless people just seeing the title give it more credence then it deserves based on the utter lack of analysis).

[bucktotal]

This has to be the most illogical post I've ever read. It says nothing about deriving a bottom through technical analysis -- supposedly this guy's thing. Additionally, a further drop occurred in China below 2900 after he wrote it. Finally, there was some nonsense about "Bitcoin pregnancies"

I am going to go out on a limb and say that this isn't the bottom (unless people just seeing the title give it more credence then it deserves based on the utter lack of analysis).

to the confused posters (eg, above,, and oka.krell)

the argument is that the bottom was on Apr 11,2014...

if that was not the bottom, then the price will have to go below the price on Apr 11, 2014.

[btcxyzzz]

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

• All the geeks and early adopters are in. Who is still left-out is ignorant mass which can't comprehend Bitcoin incentives over Paypal, nor they can see it actually heals the worldwide economy. Yes, we're waiting for a big investors too, but I doubt they will enter such unregulated market which is public enemy nr. 1 of states and banking system. Finally, billionares are billionares just because of the corrupted fiat money system, and actually they kind of chopping off the branch they're sitting on.
• Price of Bitcoin: new Bitcoins are released every day and we need about 1.5mil$/day just to keep the price stagnant. It's really not the same like Bitcoin was 100$ before the previous bubble. Much more fiat is needed to fuel the rise. You can see it as 5x more people is needed to be aware of it all. I doubt there is 5x more people in cryptos now than there were in October 2013.
• Remember, previous Bitcoin bubble was fuelled mostly by Mt.Gox failure (someone artificially made USD credit on their site and was constantly buying) + "China is coming" effect. Those were 2 big (positive) circumstances, and it was pure luck for Bitcoin's price, so it wasn't too much about the real demand, it was about stealing and speculator's game.
• Too many altcoin parasites which are dispersing energy (and money). Actually I realised maybe even it would be better for worldwide economy that Bitcoin stayed closed source, forged in honest very small community of most advanced developers.
• Big holders may decide that they exit the game and effectively kill the price to the ground. Specially, I am affraid of 1 mil BTC owned by Satoshi. Would be good for Bitcoin if he is not among us anymore so the private keys are lost

Sadly, I realize Bitcoin is "liberalist wet dream", but can easiliy failed one. Combination of ignorant mass which is easily manipulated + interests of elite that is state and banksters, and I see it may really stay on the margin of worldwide economy, say it takes only about 10-20% of electronic payments and money transfers worldwide. That's not a win, that is huge fail compared to what we were thinking it may become.

So I played the Devil's advocate this time, and ask me what do I think about alts? Right now, they're fuckin' dead, including "silver to bitcoin's gold". Only chance for them is to rise along with Bitcoin. Astronomic rise of Darkcoin was not the healthy demand by the masses for spending it, it was speculator's game. After the initial boom and crash, we will see a slow decline, every fairly successful altcoin has the same history and future: One bubble and then the second one purely dependent on Bitcoin.

That was just my analysis and discussion is welcome. I just don't wanna hear I'm trolling or fudding, believe me I'm the one who was tirelessly promoting the whole story from the early days of 2012, and I made quite bucks out from it, but I'm starting to think the "golden age" of cryptos is over.

Community is not focused and I doubt we can heal the economy and win the war this way.

[cbeast]

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

You made all very good points. But you forget one important thing: Cryptocurrency is a new fundamental technology. Those don't get forgotten. Somebody will do something with it. Bitcoin is philosophically the best and most useful version. There were several attempts beforehand with parts of the technology. Even our current banking system is a distant ancestor. Bitcoin has evolved to fit an important need. It will die someday as all technologies eventually become antiquated. But that time is not now.

[exocytosis]

The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

It should? Says who? You?

So the "trendline" needs to follow your wishes?

Face it. Bitcoin is failing. The average person is smart enough to stay away from this speculative ponzi scheme.

[bigtimespaghetti]

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

You made all very good points. But you forget one important thing: Cryptocurrency is a new fundamental technology. Those don't get forgotten. Somebody will do something with it. Bitcoin is philosophically the best and most useful version. There were several attempts beforehand with parts of the technology. Even our current banking system is a distant ancestor. Bitcoin has evolved to fit an important need. It will die someday as all technologies eventually become antiquated. But that time is not now.

Couldn't agree more. Interesting times ahead.

[Ibian]

I think the price will go straight to 1k in one day when it starts to go up. Yes, that would be the start, the very first day of a new order of magnitude in price.

Big money want in as cheap as possible. When they can no longer push the price down (past whatever psychological level they think is safe) and there are no more coins to be had outside the exchanges, they will pump the price just enough for the masses who are waiting on the sideline to panic panic panic buy.

Could happen tomorrow. Could happen in a year. But the law of supply and demand is absolute.

And to the guy calling for the death of Satoshi, I hope you lose all your coins.

[giveBTCpls]

Rpietila, wouldnt you agree that we need ebay in the game to reach 10k+ tier prices? Without it, most people will remain ignorant about Bitcoin. Once we see "pay with bitcoin" in ebay, then that's it, shit gets real the next day.

[kireinaha]

Rpietila, wouldnt you agree that we need ebay in the game to reach 10k+ tier prices? Without it, most people will remain ignorant about Bitcoin. Once we see "pay with bitcoin" in ebay, then that's it, shit gets real the next day.

And why exactly would ebay undercut its Paypal cash cow by allowing users to pay with bitcoin?

And even if they did, they would still act as the clearing house and arbitrator for transactions on their site. You think they'll just provide this service for free out of the kindness of their hearts?

[Ibian]

Rpietila, wouldnt you agree that we need ebay in the game to reach 10k+ tier prices? Without it, most people will remain ignorant about Bitcoin. Once we see "pay with bitcoin" in ebay, then that's it, shit gets real the next day.

Current drop seems to be due to a number of things. Ebay, Winletf and <random bullish event> will probably happen all at once too to give us a proper start to the rally. It won't be any one thing.

[exocytosis]

Bitcoin rallies died when Willy went out of service.

[damnek]

Bitcoin rallies died when Willy went out of service.

We had a rally in the 2nd half of May

[ArticMine]

amen

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

45220 XBT/USD on 2015-09-11 

[bclcjunkie]

Risto,

i'd love to hear your thoughts on the following valid points:

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

why do you ignore the very valid theory that the willybot manipulation was the main cause of most of the explosive growth up to $1200? And everything since then has been from people HODLing... it's very possible that the true price of BTC without manipulation should be still much lower than it currently is... I wouldn't bet the farm on it either way, I'm just saying...

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

• Remember, previous Bitcoin bubble was fuelled mostly by Mt.Gox failure (someone artificially made USD credit on their site and was constantly buying) + "China is coming" effect. Those were 2 big (positive) circumstances, and it was pure luck for Bitcoin's price, so it wasn't too much about the real demand, it was about stealing and speculator's game.

just wanted to chime in... yes we had rallies and they were so pathetic compared to what willy managed to pull off... which only proves the above, that you need shit ton of real fiat to get there unless you have another mtgox fraud where a bot can spend imaginary dollars.. also adoption rate will take years for all those hoarded coins to get diluted..

Bitcoin rallies died when Willy went out of service.

We had a rally in the 2nd half of May

[johnyj]

Those who are holding the coins will not get affected, they hold it at least for years, only those short term speculators cares

I'm not sure where is the bottom but I have buying order every $30 apart, all the way down to zero, just some fiat earned by trading bitcoins, so even it drops to zero I still lose nothing

[danielW]

I thought the price to $1000 was all because Chinese were using Bitcoin to get money out of China. Now its supposed to be because of a willybot.

I did not believe the first and I dont believe the second now. I dont believe the theories have solid foundations.  

[Melbustus]

Rpietila, wouldnt you agree that we need ebay in the game to reach 10k+ tier prices? Without it, most people will remain ignorant about Bitcoin. Once we see "pay with bitcoin" in ebay, then that's it, shit gets real the next day.

And why exactly would ebay undercut its Paypal cash cow by allowing users to pay with bitcoin?

And even if they did, they would still act as the clearing house and arbitrator for transactions on their site. You think they'll just provide this service for free out of the kindness of their hearts?

Don't be such a nit. PayPal is not evil or particularly myopic. They deal in a line of business that has MANY regulatory and fraud risks, and they're not perfect. Hence their actions can be very unfortunate/aggressive for people from time to time. I used to sell on eBay and have been screwed by PayPal more than once, but I understand the business.

To directly answer your two questions given the above understanding:
1) Because they're not stupid and recognize that they'll eventually have to. They'll figure out a way to make money on bitcoin (not as much as on CC's, but not zero), and they don't want to be Kodak or Blockbuster.
2) Yes, they would indeed still act as arbiter. So what? They'd be a centralized bitcoin processor. The net result is that more people would end up being bitcoin holders. For transactions that didn't go bad (ie, the vast majority), people would be able to move their bitcoin off of PayPal no problem. On-blockchain bitcoin distributed more widely is what adoption is all about. PayPal can single-handedly juice that trend more than most other orgs.

[btcxyzzz]

Face it. Bitcoin is failing. The average person is smart enough to stay away from this speculative ponzi scheme.

Still speculative, but not Ponzi at all! Read about Ponzi.

[btcxyzzz]

And to the guy calling for the death of Satoshi, I hope you lose all your coins.

Chillout I was kidding and even I put some smileys...

[freedomno1]

Always good for a nice speculative analysis Rpietila

In alignment with your speculation this is since its backed with trendlines.
Anyways from interested to adopter for me was a day while I did my research from that point of initial information to purchasing took 5 days but it was when wire transfers were still processed through bitcoin related services.
Then a few more days to join the forums.
Now with all the damn verification procedures it would take much longer.

Let Bitcoin grow.

[segeln]

to the confused posters (eg, above,, and oka.krell)
the argument is that the bottom was on Apr 11,2014...
if that was not the bottom, then the price will have to go below the price on Apr 11, 2014.

good Observation!

[bryant.coleman]

When I first bought my coins (for $15 per coin) I never thought that they will give me more than 100% returns. But right now, they have given me returns of more than 3,000%. I have cashed out a small part of my stash, but will continue to hold on to the remaining coins for at least 5 years more.

[spiderbrain]

Great thread, guys, thanks, almost no idiots!

[RAJSALLIN]

My bitcoin pregnancy was 1 year

[KarmaShark]

A lot of pessimism here. The bottom is coming at this rate, once you have been through a few 'bubble' cycles with Bitcoin you start to see the same emotions in people emanating out, over and over and over again. The usernames change, the fear is worded slightly differently each time, but the underlying emotions are the same.

[GreekGeek]

A lot of pessimism here. The bottom is coming at this rate, once you have been through a few 'bubble' cycles with Bitcoin you start to see the same emotions in people emanating out, over and over and over again. The usernames change, the fear is worded slightly differently each time, but the underlying emotions are the same.

+1

[iourzzz]

Thank you, Risto and everybody. Very interesting thoughts.

The adoption is definitely going on, may be not so fast as it could be at the moment but fast enough.

Surely not everybody from new people believe in Bitcoin to invest now taking into account the recent behavior of the market and all the uncertainty with possible harsh regulations but they are quite ready to use it as a currency at least for transferring the value quite easy and cheap. Just few days ago an old friend from totally different world asked me an advice how to convert some bitcoins into fiat as she was payed with it.

Even without ETFs and wall street money there are chances for a new bubble mode any time soon and it can happen suddenly. All we need is patience.

[giveBTCpls]

Im talking about eBay. How is PayPal required? Couldn't the seller just put a BTC address to deposit on there and hire a 3rd party escrow with it or something?

[kutaka]

We won't see more than 5k until next halving. Too much new fiat is needed everyday to support bigger price.

[molecular]

This is spot on!

It took me 2 weeks from hearing about bitcoin to owning it.

I'm sorry, but if your case (2 weeks "incubation") was the norm than OP would not be "spot on": The whole story is based on a very long incubation time of 2 years. I'm not saying rpietila is wrong, just that your "2 weeks" don't fit his story.

[TheJuice]

When I first bought my coins (for $15 per coin) I never thought that they will give me more than 100% returns. But right now, they have given me returns of more than 3,000%. I have cashed out a small part of my stash, but will continue to hold on to the remaining coins for at least 5 years more.

When I bought at $2 a coin I was ecstatic when I quadrupled my investment. I cashed out 50%...

Now I only HOLD and buy. I have a series of predefined small cash out spots as we go up.

[molecular]

We won't see more than 5k until next halving. Too much new fiat is needed everyday to support bigger price.

I don't agree with that. A flood of newbs could easily provide enough fiat.

[vuduchyld]

Even without ETFs and wall street money there are chances for a new bubble mode any time soon and it can happen suddenly. All we need is patience.

I agree with this.  Patience is your best friend, here.  

Speaking of wall street, when I see posts like this one:

Transactions excluding popular addresses 7 day average is surging now, around 20% growth in past 4 weeks:

https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=false&timespan=2year&show_header=true&daysAverageString=7&scale=0&address=

Looks like it is at the highest level now since December. Perhaps a similar setup to August 2013 when it also started to break out upwards and regain levels last seen in the April 2013 growth phase. Well, we'll see if it continues upwards into the end of the year...

it makes me pretty willing to believe in a manipulation scenario.  Don't we have GABI that opened up on 8/1 and plans to start trading 9/1?  Wouldn't it be best for them to manipulate the price down throughout August, so that they can have a big run starting September 1?  Global Advisors hedgies predicted that they could see $200mm invested in the fund.  But just a quick glance would tell you that they currently invest about ten times that in a variety of other vehicles.  They would certainly have enough money to engage in some practices that would influence downward movement.  

Wouldn't it be best for them to start trading 9/1 with BTC at a low price, show potential investors their outsized returns for the first 30 days, and then use those returns to convince others to throw money at them?

Throw in a little Etherium-related dump (shit, those guys probably all golf together), and here we are.

For me, this last couple of weeks has been nothing but a buying opportunity.  I should really thank them.

As for whether or not this is the bottom:
--typical fundamental analysis (earnings, assets, etc...) don't really apply
--analysis of the value of the network (Metcalfe's Law-related pricing theory) would indicate we are likely getting damn close
--technical analysis is not my bailiwick, but I'm trying to be open-minded in the absence of tools that I might normally use.  Looking at the work done by some of the people who are, if nothing else, capable of explaining it to a dummy like me (RyaninDaClem (sorry, screwed up the caps), CryptoWaves) indicates that we may not be at THE bottom, but we might be pretty close on some indicators

rpietila may be off by a period of a few days or a couple of weeks.  He may be off by some factor of 5-10%.  But I'd strongly suspect that anybody who bought when this thread hit the board is really unlikely to get a big, long-term dent in their portfolio because of it.  Somebody might be tempted to cry and wail if the price drops to $460 next Monday or Tuesday (I can hear the wailing now--"Risto was wrong!"), but if you look at it more like a swing trader, 6-8 weeks from now, or if you look at it in March of 2016, I'd suspect this bottom call is actually going to look pretty good!

[pandacoin]

We are close to bottom again. I think these times are last buy opportunity before next bubble starts. I try to expand my BTC stash, if it goes around at <600 for 2 months I'll be glad. I still don't have enough BTC. It's never enough.

[Newscastix]

This is spot on!

It took me 2 weeks from hearing about bitcoin to owning it.

I'm sorry, but if your case (2 weeks "incubation") was the norm than OP would not be "spot on": The whole story is based on a very long incubation time of 2 years. I'm not saying rpietila is wrong, just that your "2 weeks" don't fit his story.

I didn't say my case was the norm. It took me two weeks to know "i should get at least a coin or two" and then i only got a small amount. Research continued thereafter. I still see ristos explanation as the norm.

[Peter R]

Don't we have GABI that opened up on 8/1 and plans to start trading 9/1?  Wouldn't it be best for them to manipulate the price down throughout August, so that they can have a big run starting September 1?...Throw in a little Etherium-related dump (shit, those guys probably all golf together), and here we are.

When I read your post I imagined Vitalik on the golf course with Blythe conspiring to drop the price and found the mental image quite hilarious.  If only I knew photoshop….

[Bitcopia]

Don't we have GABI that opened up on 8/1 and plans to start trading 9/1?  Wouldn't it be best for them to manipulate the price down throughout August, so that they can have a big run starting September 1?...Throw in a little Etherium-related dump (shit, those guys probably all golf together), and here we are.

When I read your post I imagined Vitalik on the golf course with Blythe conspiring to drop the price and found the mental image quite hilarious.  If only I knew photoshop….

  Thanks for the image.

It makes sense for a fund to make every effort to launch at the bottom, and between GABI and the COIN ETF, I don't think it's outside of the realm of possibility that there is an attempt to hold the market back for a little while longer. GABI trying to convince Etherium to do this for them seems rather unlikely though. And I'm pretty sure Vitalik has never swung a golf club in his life. 

[bitrider]

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

Community is not focused and I doubt we can heal the economy and win the war this way.

While I understand and respect the issues you raise, it seems like a very strange time for someone who understands bitcoin to be "pessimistic about it all". 

Three years ago, when I bought my first bitcoin - if you had told me that in 2014 we would see BTC listed on bloomberg and CNBC, front page articles in the WSJ (serious articles at that), 100's of millions of VC money pouring into start-ups, famous gold bugs endorsing bitcoin, every student at MIT about to receive $100 of bitcoin, 8000 bitcoin locations to buy BTC in Argentina, ATMs    locations rapidly growing, 1/2 dozen serious btc exchange sites getting geared up, hedge funds and ETF's on the horizon, not to mention serious, large retailers accepting bitcoin around the world, and a BTC price between $500 and $1200, I would been very skeptical, and would have thought "bitcoin has far exceeded my expectations, and is moving toward success - and quickly". All the boxes I would have wanted to see checked, are being checked.

"And now I come to camp to hear the waters called muddy and the current quickened, though I see no change in the creek.  And the Hooples, certain sure that flood crest fast approaches, have begun to think keenly, I’ll get ahead of the event.  Maybe I’ll sell my claim at discount. Anything to unharness so they can head for the higher ground.  Myself, Maam, I’d be bettin that the levy’ll hold."

http://youtu.be/Y_v6f_PNf5I   

Deadwood 2X4

[Hunyadi]

I'm starting to be pessimistic about it all, and I even think we may not witness next Bitcoin bubble in near future... Here's why:

Community is not focused and I doubt we can heal the economy and win the war this way.

While I understand and respect the issues you raise, it seems like a very strange time for someone who understands bitcoin to be "pessimistic about it all". 

Three years ago, when I bought my first bitcoin - if you had told me that in 2014 we would see BTC listed on bloomberg and CNBC, front page articles in the WSJ (serious articles at that), 100's of millions of VC money pouring into start-ups, famous gold bugs endorsing bitcoin, every student at MIT about to receive $100 of bitcoin, 8000 bitcoin locations to buy BTC in Argentina, ATMs    locations rapidly growing, 1/2 dozen serious btc exchange sites getting geared up, hedge funds and ETF's on the horizon, not to mention serious, large retailers accepting bitcoin around the world, and a BTC price between $500 and $1200, I would been very skeptical, and would have thought "bitcoin has far exceeded my expectations, and is moving toward success - and quickly". All the boxes I would have wanted to see checked, are being checked.

"And now I come to camp to hear the waters called muddy and the current quickened, though I see no change in the creek.  And the Hooples, certain sure that flood crest fast approaches, have begun to think keenly, I’ll get ahead of the event.  Maybe I’ll sell my claim at discount. Anything to unharness so they can head for the higher ground.  Myself, Maam, I’d be bettin that the levy’ll hold."

http://youtu.be/Y_v6f_PNf5I   

Deadwood 2X4

+1 Very well put!

[elebit]

Looks like you could come out right on this.

Dunno what scares me most, rpietila being right or me losing money. Repeatedly punching myself in the head doesn't seem to help.

[KarmaShark]

Risto, this will go down as quite the bold call if we are now embarking on a long and joyful ride up. Wouldn't be the first good call he has made folks...

[hd060053]

We won't see more than 5k until next halving. Too much new fiat is needed everyday to support bigger price.

there is enough fiat, millions are printed by banks every day.

whales have enough useless fiat, they just have to understand how bitcoin works.

[BitChick]

Risto, this will go down as quite the bold call if we are now embarking on a long and joyful ride up. Wouldn't be the first good call he has made folks...

There is a reason I am unashamedly a huge fan of Risto.  He is usually right and it is impressive to me!  I feel a bit sorry for his wife though.  It is hard saying, "you were right" over and over again, especially to someone you are married to. 

The only time I have questioned Risto has been when he said we would drop back down to $350 or so after the last rally.  I never want to believe that we will capitulate so low so I like to bury my head and the sand.  It is much more fun to listen to him when he makes comments about how high we are going to go though. 

[Rampion]

The bottom is near, excellent time to buy. 'Nuff said

[Chuckee]

When you pick a bottom, all you come away with is a stinky finger. I read this topic in length and all I see are more of the same mendacious ramblings by Mr. Pietila. We both know that bitcoin reached its apex last year and is now in the burn off phase. Why don't you break the act and stop misleading these impressionable people?

You already have a castle and a Rolls Royce. These people need their money to pay their mortgages and put food on their supper tables!

[twiifm]

When you pick a bottom, all you come away with is a stinky finger. I read this topic in length and all I see are more of the same mendacious ramblings by Mr. Pietila. We both know that bitcoin reached its apex last year and is now in the burn off phase. Why don't you break the act and stop misleading these impressionable people?

You already have a castle and a Rolls Royce. These people need their money to pay their mortgages and put food on their supper tables!

He needs greater fools to unload the rest of his stash

[farfiman]

When you pick a bottom, all you come away with is a stinky finger. I read this topic in length and all I see are more of the same mendacious ramblings by Mr. Pietila. We both know that bitcoin reached its apex last year and is now in the burn off phase. Why don't you break the act and stop misleading these impressionable people?

You already have a castle and a Rolls Royce. These people need their money to pay their mortgages and put food on their supper tables!

go away.

[lyth0s]

When you pick a bottom, all you come away with is a stinky finger. I read this topic in length and all I see are more of the same mendacious ramblings by Mr. Pietila. We both know that bitcoin reached its apex last year and is now in the burn off phase. Why don't you break the act and stop misleading these impressionable people?

You already have a castle and a Rolls Royce. These people need their money to pay their mortgages and put food on their supper tables!

Why join this community of people and participate in it when you believe bitcoin is going to become non-existent? There surely has to be something better to do with your time than talk about this foolish bitcoin stuff....right?

[Markos]

I agree with almost everything. But I allow myself a small digression

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom will be when the volume of sales will be huge and the price will stop falling for an extender period of time, e.g. two weeks. So probably not 340 USD, but 200 USD or may even 100 USD. But I'm not sure. But I'm sure that the five-digit value will come after the bottom.
Oh, and congratulations on the buying of the castle I just bought an apartment for gains from trade (not for real bitcoins, but bitcoin's CFDs). It is good to live without any debt, especially housing debt.

[mambamanagement]

When you pick a bottom, all you come away with is a stinky finger. I read this topic in length and all I see are more of the same mendacious ramblings by Mr. Pietila. We both know that bitcoin reached its apex last year and is now in the burn off phase. Why don't you break the act and stop misleading these impressionable people?

You already have a castle and a Rolls Royce. These people need their money to pay their mortgages and put food on their supper tables!

you sound like a total moron
I have been reading risto for a little over a year now and recently have been wondering if he isn't the modern day Warren Buffet. we need a new power circle!

[ajareselde]

The bottom is near, excellent time to buy. 'Nuff said

I actualy agree that we reached bottom on this point, this whold drop smells of a trap all along.
There is too much good news lately for bitcoin not to jump a bit closer to the 550 - 600 range by end of this month

[findftp]

+1

The logic is sound, the facts seem to fit, and I agree.

so why is price not performing as it should be?

as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues.

yes, that seems to be the case, I would go one step further and add that the deep-pocket investors are playing with the market, dropping price, leverage hunting, down playing their willingness to buy, all in the hope of adding to that anxiety resulting more bitcoin available on the market for them.

no one drops large sums of bitcoin when news is gr8, unless they want to manipulate, and we saw just how effective a well placed large market sell can be, with last nights long squeeze.

do you believe there is some manipulation is taking place? how long can they keep this up?  how low will they make us go? are their tricks working for you, are you scared, are you selling!?

It's a new land, like the Wild West. There are unwritten rules that yet need to be written.

honestly i think this manipulation should be allowed. theres nothing stopping anyone from trading against them...

as long as there is no nake shorts, i'm ok with it really, i don't like it, but i see no good reason to put rules where none are needed. the market will take care of this itself.

I think naked shorts are not really possible in bitcoin land or are they?
With dollar markets they can go naked short by printing new dollars, with bitcoin that's not possible.

[wachtwoord]

Risto, this will go down as quite the bold call if we are now embarking on a long and joyful ride up. Wouldn't be the first good call he has made folks...

There is a reason I am unashamedly a huge fan of Risto.  He is usually right and it is impressive to me!  I feel a bit sorry for his wife though.  It is hard saying, "you were right" over and over again, especially to someone you are married to. 

The only time I have questioned Risto has been when he said we would drop back down to $350 or so after the last rally.  I never want to believe that we will capitulate so low so I like to bury my head and the sand.  It is much more fun to listen to him when he makes comments about how high we are going to go though. 

I'm sure he's wrong often enough, especially on non-business related subjects. Anyway, even she can always giggle over his $300k per BTC prediction by the fall of 2013

[counter]

Yeah I personally don't think we will go very much lower and I agree that things really have no reason to go lower.  The Birth analogy was spot on and now we wait is how I feel about it.  I personally appreciate you sharing your thoughts and opinions on the issue because you clearly give it some thought.  I don't expect you'll be 100% correct but like I said I agree with many of the points you presented on the topic.

[NotLambchop]

...People can only learn more about Bitcoin Hula Hoop, unlearning is not possible...

Go to the first post of this thread.  Substitute "Hula Hoop" for every instance of "Bitcoin/blockchain."  See if the argument remains compelling.
If it does [remain compelling], why are there toys other than Hula Hoops?
If not, why not?

[BitcoinDN.com]

Love the article, but you never called the bottom.

What is the bottom ? 340 ? Will we return to 341 still on the most recent tumble ?

[Torque]

Love the article, but you never called the bottom.

What is the bottom ? 340 ? Will we return to 341 still on the most recent tumble ?

This

[Gyrsur]

Love the article, but you never called the bottom.

What is the bottom ? 340 ? Will we return to 341 still on the most recent tumble ?

This

it seems to come true.

[painlord2k]

This is the bottom or we are at spitting distance from it:

my charts ( https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# not TA but FA) show we are near a turning point:


host immagini

What matter here is the blue line approaching zero: it is the difference between M1 inflation in the past 52 weeks and the BTC supply inflation in the past 52 weeks.

Or the Fed stomp on the brakes of the printing press (and collapse the economy in a apocalyptic credit crunch and dominoes defaults) or the M1 inflation will remain well north 10-12% year (and I don't talk about the Base Money inflation - violet/indigo dots - because it is just pornographic).
BTC, instead, will proceed to have a 10%-12% inflation in the next 52 weeks (depending on how much the hashrate will grow).

When the blue line touch zero and go down, bitcoins hold in cold storage will, per se, increase in value compared to the USD.
Why hold 1% Bonds (with associated risks) when you could hold a cold wallet increasing his value in USD at least 1% in a year (and probably more if adoption increase).

In the next few weeks (four, eight, probably not more than twelve and surely before year's end) we will inflate less than the USD and this will attract adoption increasing  the value faster and attracting more adoption.

[vuduchyld]

That is a thoughtful take! Thank you for sharing.

[Wary]

(Preliminary remark: I usually avoid posting in self-moderated topics, but I'll make an exception this time. Let's see how this turns out.)

Not going to argue with the body of your post. Several valid points, though I continue to believe that predicting future price levels by simple extrapolation from the all-time price regression is extremely optimistic, and in all likelihood: too optimistic. Which doesn't change the main point you seem to make, similar to Devin Chow's point in his thread yesterday - that if you believed in the long-term potential of Bitcoin a week ago at $590, there's no need to panic sell now at $490.

That said, your title bears no causal (or even just argumentative) relation to the body of the post. And, non-surprisingly, it is proven wrong already, less than 24 hours later. Sometimes, technical causes take over in a market, and the fundamentals are on the backburner for a while. Now seems to be such a time, and it is perhaps best to prepare yourself for the (likely) effects of that.

I agree, this part (why it's the bottom now) is completely missing. But I've found the missing link! https://bitcointalk.org/index.php?topic=717215.0  hacknoid have discovered a 670-day (=22 month) cycle, which is close to the 2 years Risto is talking about. So now we have both the facts (hacknoid) and the theory that explains them (risto). Even better, we had a testable prediction which was successfully tested since the post: there was a dip at the end of hacknoid's blue line, and now we have a deep at the red line, exactly 670 days since the bottom of 10 October 2012. And finally, it was indeed a bottom, $2.22. After that prices went up.

Of course, such precision is just a coincidence. However, such a graph gives more credibility to the "2-year-pregnancy" theory and "it's the bottom" statement.

[Xiaoxiao]

rpietila you've been wrong so many times in the past and your analysis is sketchy.  i really don't know bro.

[serje]

I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I've read this from your castle

[SlipperySlope]

Planning to make another bitcoin purchase today, and maybe some litecoin too. Feels like a final capitulation in altcoins.

[frienemy]

I drew some lines in my purse, fundamental TA stuff and such. The analysis was disastrous: There's simply no more fiat left to be spent on Bitcoin except the tiny bit that I'm not willing to spend due to nostalgic reasons

My lines on graphs tell me we won't go further down than 420, but even if we go further south, I might have several heart attacks, but no selling attacks, cause now is the time for the return of the HODLER!

[BitChick]

I drew some lines in my purse, fundamental TA stuff and such. The analysis was disastrous: There's simply no more fiat left to be spent on Bitcoin except the tiny bit that I'm not willing to spend due to nostalgic reasons

My lines on graphs tell me we won't go further down than 420, but even if we go further south, I might have several heart attacks, but no selling attacks, cause now is the time for the return of the HODLER!

Right there with you my "frienemy." 

In fact, I am just going to go on a vacation this week and ignore the price. (Or try to anyways) It does get a bit painful waking up every morning to see a lower price per coin but I remember what it was like to wake up to crazy increases in price too.  I guess we have to take the bad with the good.  When it is good, it is VERY good!   

[bitteractor]

Planning to make another bitcoin purchase today, and maybe some litecoin too. Feels like a final capitulation in altcoins.

In the name of humanity, please do not buy litecoin.

[Jutarul]

rpietila you've been wrong so many times in the past and your analysis is sketchy.  i really don't know bro.

It's not about a particular analysis. It's about a frame of mind. To understand this watch e.g. Peter Schiff here and replace "gold" with "bitcoin":
https://www.youtube.com/watch?v=6oQSSS2yGK0&index=3&list=UUG-G8LLr38fQUNZU8K0t-EA&t=260

As long as markets are dominated by paper clowns it's hard for the bitcoin price - or any other price for that matter - to break free from liquidity traders. This is especially true if the price for liquidity is zero. The only backstop against this kind of collective manipulation is the scarcity of the resource in question (bitcoin) and the fact that a heavy disconnect between the paper price and the real demand accelerates the accumulation of the resource by buy-and-hold players and becomes unavailable for the floating supply. What follows is a violent upswing, such as outlined by rpietila. The bigger the disconnect, the more violent it will be.

The value proposition of bitcoin has never been stronger. With borders closing all around the world, the need for a counterfeit proof global payment system is bigger than ever. The stage is set and global elites will makes sure the next crisis will induce a paradigm shift towards cryptocurrencies. Failure to understand this is to miss out on the biggest wealth transfer in the history of humankind.

The call for the bottom should be interpreted as a statement of disbelief that the current price reflects true demand and the suspicion that the market is still dominated by players who have an interest in low BTC prices.

[oda.krell]

rpietila you've been wrong so many times in the past and your analysis is sketchy.  i really don't know bro.

It's not about a particular analysis. It's about a frame of mind. To understand this watch e.g. Peter Schiff here and replace "gold" with "bitcoin":
https://www.youtube.com/watch?v=6oQSSS2yGK0&index=3&list=UUG-G8LLr38fQUNZU8K0t-EA&t=260

As long as markets are dominated by paper clowns it's hard for the bitcoin price - or any other price for that matter - to break free from liquidity traders. This is especially true if the price for liquidity is zero. The only backstop against this kind of collective manipulation is the scarcity of the resource in question (bitcoin) and the fact that a heavy disconnect between the paper price and the real demand accelerates the accumulation of the resource by buy-and-hold players and becomes unavailable for the floating supply. What follows is a violent upswing, such as outlined by rpietila. The bigger the disconnect, the more violent it will be.

The value proposition of bitcoin has never been stronger. With borders closing all around the world, the need for a counterfeit proof global payment system is bigger than ever. The stage is set and global elites will makes sure the next crisis will induce a paradigm shift towards cryptocurrencies. Failure to understand this is to miss out on the biggest wealth transfer in the history of humankind.

The call for the bottom should be interpreted as a statement of disbelief that the current price reflects true demand and the suspicion that the market is still dominated by players who have an interest in low BTC prices.

Cool. Distributed manipulation for a distributed currency. Sounds good to me.

(Seriously, this is beyond pathetic. Price doesn't go where it *must* go, according to autism logic, hence: manpiluationz!!!)

[Jutarul]

...

Cool. Distributed manipulation for a distributed currency. Sounds good to me.

(Seriously, this is beyond pathetic. Price doesn't go where it *must* go, according to autism logic, hence: manpiluationz!!!)

Indeed.

You shouldn't be too judgemental as the word manipulation can stretch a wide variety of phenomena. The complaint here is that the price discovery mechanism is broken, as the price action doesn't support the narrative drawn by the fundamentals. What classical economists fail to understand is that price is more a function of the properties of the marketplace than the traded asset. And I guess we all agree that the marketplace for bitcoin trading could use some more developing.

[oda.krell]

...

Cool. Distributed manipulation for a distributed currency. Sounds good to me.

(Seriously, this is beyond pathetic. Price doesn't go where it *must* go, according to autism logic, hence: manpiluationz!!!)

Indeed.

You shouldn't be too judgemental as the word manipulation can stretch a wide variety of phenomena. The complaint here is that the price discovery mechanism is broken, as the price action doesn't support the narrative drawn by the fundamentals. What classical economists fail to understand is that price is more a function of the properties of the marketplace than the traded asset. And I guess we all agree that the marketplace for bitcoin trading could use some more developing.

Agreed, if "manipulation" is used in a rather relaxed sense, more or less meaning: price moves based on technical reasons more than on fundamentals. And sorry for the confrontative phrasing of my post, I'm just starting to get allergic to the overuse of the word "manipulation". I blame the Wall Observer thread :/

[JorgeStolfi]

The original post is a valiant and well-argued defense of bitcoin, but it falls short in several points:

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life. [ ... ] People can only learn more about Bitcoin, unlearning is not possible.

Indeed technological ideas are "indestructible", but that also includes the slide rule, the solar-powered car, the backyard trash incinerator,  ...

People understanding a technology is largely independent of them adopting it. See the solar-powered car.

Governments cannot kill a technological idea, but can effectively ban its relevant use. See the trash incinerator.  (Or Bitcoin in China.)

Technological ideas that were widely adopted and understood at one time may go completely out of use, sometimes in a matter of months.  See the slide rule.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. [ ... ] The trendline shows how much behind we are currently.

There is a contradiction there, isn't there?  The trendline is supposed to be inferred from the data, but then the data is claimed to be below the trendline.  Shouldn't it be more logical to say that the data no longer fits an exponential trendline?

The following price plot (apologies if some have seen it already) shows five straight years of steady exponential growth, with the log of share price fitting a straight line with much better R than bitcoin's.   But then the share price simply stopped following the trendline, and did not even apologize for it.



In that plot, what was the difference between Jan/1998 and Jan/2000?

In bitcoin's history, is the present situation like WorldCom's in Jan/1998, or in Jan/2000?

The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

That is just a statement of faith, not supported by argument.  "It is not right. It is not even wrong."

As the poster himself wrote in another thread, it is not the current 1-2 million owners who will push the price up by another 1000%.  For that to happen, bitcoin needs the opening of another market, with a BTC demand 10x bigger than China's.  Where will that be?

Some people have claimed that the approval of COIN trading on NASDAQ will create such a demand, including in the US.  Perhaps. But COIN will probably start using the private hoards of the Winklevosses and other backing investors.  Moreover, investing in COIN will be attractive only if people believe that the price will rise.  So the demand for COIN may just ride the eventual next bubble, rather than lead it.  (SMBIT has stopped selling shares since the price stopped rising.  While some early investors made a profit, real or on paper, by my estimates it has been a bad investment so far on the average -- that is, the set of all outstanding shares are worth less than the total money clients paid for them.)

Bitcoin's "intrinsic value" is supposed to be its utility as a payment medium.  All predictions that the price will eventually rise "to the moon"  are based entirely on the assumption that there will be substantial and increasing demand for that use.  In particular, its value as an investment depends entirely on that premise.   

So, how is that demand going?  Unfortunately there seems to be no reliable data about use of bitcoin for e-payments (and the top bitcoin promoters do not seem to be interested in obtaining it).   AFAIK, Bitpay and Coinbase do not regularly post their processing volume.  Bitpay claimed to have processed 100 million USD in 2013,  but it is not clear how much was really payments for goods and services.  On the other hand, there are hints that the use of bitcoin for payments is much smaller than the volume traded at the exchanges.

Moreover, considering the costs and hassle of acquiring bitcoin, it seems likely that most of the payments processed by Bitpay and Coinbase is generated by people who already owned bitcoins, rather than people who bought bitcoins specifically for payment.  Therefore, instead of generating increased demand for payment use, those processors are only encouraging the moving of old hoards to the market.

Thus, as many have pointed out, bitcoin's price is sustained only by the vague hope of it "catching" for e-commerce in the future, and by speculative trade, at various time scales (from the day trader who expects to sell in a few hours, to the "old owners" who do not believe in lasting success but are holding in the hope for another bubble or two).  And the eventual listing of COIN will not affect its use in commerce, immediately or in the distants future.

I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

It reminds me of this old joke:

  A guy is standing at a bus stop, when an expensive car goes by, brakes, and pulls back.

  'Mick, is that you?', says the driver to the man on the sidewalk. 'Do you remember me? Jeff, from high school?'

  'Why... yes, of course! Nice to see you, Jeff!'

  'Nice to see you too! How have you been doing? You were the brightest in our class, you must have gone far...'

  'Well, I did OK... I went to university, then got a PhD in math, now I'm teaching a public college... Not a great salary, but it's enough for a decent living, can't complain... But what about you? Look at your car, you must be doing very well.'

  'Oh, I'm doing OK too, I would say. As you remember, math was not my thing at all, so after high school I went into commerce. I don't really know much about business, all I do is the basic: buy for 10 bucks, sell for 20 -- and that 10% profit is good enough for me.'

[rpietila]

Bitcoin's "intrinsic value" is supposed to be its utility as a payment medium.  All predictions that the price will eventually rise "to the moon"  are based entirely on the assumption that there will be substantial and increasing demand for that use.  In particular, its value as an investment depends entirely on that premise.

Wrong (x3).

Transaction use accounts for about 1-5% of Bitcoin's value. Most important reason why it has value is that it has value (value storage). This accounts for the rest, 95-99%.

Another barbarous relic, gold, has even lower transactional utility: unlike Bitcoin it is not even free, instant, and verifiable. Despite this, gold's market cap is the highest of non-fiat moneys, about $6,000,000,000,000. Bitcoin is still 1000 times behind gold and Monero is 1000 times behind Bitcoin.

[JorgeStolfi]

Bitcoin's "intrinsic value" is supposed to be its utility as a payment medium.  All predictions that the price will eventually rise "to the moon"  are based entirely on the assumption that there will be substantial and increasing demand for that use.  In particular, its value as an investment depends entirely on that premise.

Wrong (x3).

Transaction use accounts for about 1-5% of Bitcoin's value. Most important reason why it has value is that it has value (value storage). This accounts for the rest, 95-99%.

Wait, if e-payment use is not what gives value to bitcoin, why is it different from litecoin or any other altcoin?  

To be a store-of-value, it does not matter whether the coin is accepted by merchants, it matters only (like gold) that it has no inflation and that there is some market somewhere that provides liquid conversion to some currency.   Problem is that its vaue (like gold's) will be sustained only by the general consensus that it has value.  Such "faith-backed" value could pop at any moment (like gold's).

All this time, bitcoiners have been saying that bitcoin will "go to the moon"  one day because of its demand as a means of e-payment.   Is the discourse changing now?

[NotLambchop]

The original post is a valiant and well-argued defense of bitcoin, but it falls short in several points:

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life. [ ... ] People can only learn more about Bitcoin, unlearning is not possible.

...

If this argument proves anything, it proves too much (kinda like Pascal's Wager).  If it proves that if Bitcoin is logically locked in on success, it proves that *all the clone coins* will be similarly successful.

We know that could not be the case, since [total] mass adoption by one coin precludes [total] mass adoption by all the others.
Without total mass adoption, the argument quickly loses its luster--we need Bitcoin to represent world's total wealth--not just be "one of a billion SHA256 coins."
We need that [almost] infinite upside that makes Pascal's Wager seem convincing.  A bit of a tangent, i know, but...

[SlipperySlope]

Not God Exists, but rather Your God Exists. Cuts the odds a bit, and introduces the dilemma of choosing the right religion/faction for those who Believe.

[Torque]

Bitcoin's "intrinsic value" is supposed to be its utility as a payment medium.  All predictions that the price will eventually rise "to the moon"  are based entirely on the assumption that there will be substantial and increasing demand for that use.  In particular, its value as an investment depends entirely on that premise.

Wrong (x3).

Transaction use accounts for about 1-5% of Bitcoin's value. Most important reason why it has value is that it has value (value storage). This accounts for the rest, 95-99%.

Wait, if e-payment use is not what gives value to bitcoin, why is it different from litecoin or any other altcoin?  

To be a store-of-value, it does not matter whether the coin is accepted by merchants, it matters only (like gold) that it has no inflation and that there is some market somewhere that provides liquid conversion to some currency.   Problem is that its vaue (like gold's) will be sustained only by the general consensus that it has value.  Such "faith-backed" value could pop at any moment (like gold's).

All this time, bitcoiners have been saying that bitcoin will "go to the moon"  one day because of its demand as a means of e-payment.   Is the discourse changing now?

I think it is a bit premature to call bitcoin's failure as an e-payment system, since bitcoin only really came out of complete obscurity just last year.  Payment processors like Coinbase and BitPay have barely gotten started signing up merchants, and those they have signed on represent a small fraction of merchants that exist worldwide.

In another 5 years if we are still only sitting on 1-5% of bitcoin usage as e-payment, then I'll begin to believe your argument that bitcoin demand as a superior form of e-payment is low or has failed completely.

Otherwise Risto is correct, the other major attribute of bitcoin is as a long-term deflationary store of value.  So why does your argument suppose an either-or scenario for success ?

[NotLambchop]

Not God Exists, but rather Your God Exists. Cuts the odds a bit, and introduces the dilemma of choosing the right religion/faction for those who Believe.

Not Bitcoin succeeds, but cryptocurrency succeeds.  Cuts the odds a bit, and introduces the dilemma of the right coin to invest in.

See my point?

[SlipperySlope]

All this time, bitcoiners have been saying that bitcoin will "go to the moon"  one day because of its demand as a means of e-payment.   Is the discourse changing now?

Here is the log chart of adjusted number of bitcoin transactions as calculated by Blockchain.info. Note that the most recent value is above any previous except for a few weeks at the bubble peak in 2013. Bitcoin transactions are growing in number and bodes well for the potential growth of bitcoin prices.

[SlipperySlope]

Not God Exists, but rather Your God Exists. Cuts the odds a bit, and introduces the dilemma of choosing the right religion/faction for those who Believe.

Not Bitcoin succeeds, but cryptocurrency succeeds.  Cuts the odds a bit, and introduces the dilemma of the right coin to invest in.

See my point?

Ahh ... but where are the network effects in religion with respect to Pascal's Wager? Do more believers make a certain God more likely to exist?

Unlike religions which for the most part have immutable doctrine, Bitcoin is defined by software which can be changed a large consensus of its community. I am hoping my altcoin under development has such an effect on Bitcoin, by demonstrating that certain alternative technology is better.

[NotLambchop]

...
Ahh ... but where are the network effects in religion with respect to Pascal's Wager? Do more believers make a certain God more likely to exist?

I used Pascal's wager as an illustration of an argument that appears reasonable until examined.  I hope I didn't accidently suggest that Bitcoin is God.  The network effect is at work in every mass-adoption scenario.  It does, indeed, tend towards exponential growth.  Until it doesn't.
The network effect is not a law of nature, it is a way of explaining exponential growth when it happens.  There was an 80s TV ad for Faberge Organics shampoo:

"When I first tried Faberge Organics Shampoo with pure wheat germ oil and honey, it was so good I told two friends about it.  And they told two friends.  And so on, and so on…"

Network effect in action.
Now the whole world is using nothing but Faberge Organics shampoo.  Couldn't have ended any other way.
You use Faberge Organics?

[Roy Badami]

I drew some lines in my purse, fundamental TA stuff and such. The analysis was disastrous: There's simply no more fiat left to be spent on Bitcoin except the tiny bit that I'm not willing to spend due to nostalgic reasons

My lines on graphs tell me we won't go further down than 420, but even if we go further south, I might have several heart attacks, but no selling attacks, cause now is the time for the return of the HODLER!

It doesn't seem like we've managed to sustain any kind of rally since the 18 August low of 442, so I'm pretty much expecting a retest of 442.  Actually, I wouldn't be at all surprised if 442 doesn't hold and we have to go all the way down to retest the 11 April low of 339 - or at least come close to it.

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

[SlipperySlope]

... The network effect is at work in every mass-adoption scenario.  It does, indeed, tend towards exponential growth.  Until it doesn't.
The network effect is not a law of nature, it is a way of explaining exponential growth when it happens.  There was an 80s TV ad for Faberge Organics shampoo:

"When I first tried Faberge Organics Shampoo with pure wheat germ oil and honey, it was so good I told two friends about it.  And they told two friends.  And so on, and so on…"

Network effect in action.
Now the whole world is using nothing but Faberge Organics shampoo.  Couldn't have ended any other way.
You use Faberge Organics?

I understand your argument, as I maintain a logistical, e.g. S-curve model, of bitcoin price data presuming that the price is correlated with the population of adopting bitcoin speculators. I use $1 million for the arbitrary, guessed-at maximum price. Likewise I hand-fit the logistic function in November 2013, and will re-fit the function sometime next year given more data.

https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c

[SlipperySlope]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember holding fiat at Mt Gox waiting for $45-50, then prices reversed at $66. I bought back in the rally. Ugh.

[Roy Badami]

Another barbarous relic, gold, has even lower transactional utility [...]

I can't resist the urge to point out that Keynes never called gold a barbarous relic; it was the gold standard - the practice of linking the value of currency to the value of gold - that he so described.

[An amorous cow-herder]

I understand your argument, as I maintain a logistical, e.g. S-curve model, of bitcoin price data presuming that the price is correlated with the population of adopting bitcoin speculators. I use $1 million for the arbitrary, guessed-at maximum price. Likewise I hand-fit the logistic function in November 2013, and will re-fit the function sometime next year given more data.

https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c

So, all of 2011 has well above predicted price, and since those intervalls havent been longer than a couple of months. Hmm, maybe reality doesnt have to bend and instead you need to revise the model?

[Biodom]

... The network effect is at work in every mass-adoption scenario.  It does, indeed, tend towards exponential growth.  Until it doesn't.
The network effect is not a law of nature, it is a way of explaining exponential growth when it happens.  There was an 80s TV ad for Faberge Organics shampoo:

"When I first tried Faberge Organics Shampoo with pure wheat germ oil and honey, it was so good I told two friends about it.  And they told two friends.  And so on, and so on…"

Network effect in action.
Now the whole world is using nothing but Faberge Organics shampoo.  Couldn't have ended any other way.
You use Faberge Organics?

I understand your argument, as I maintain a logistical, e.g. S-curve model, of bitcoin price data presuming that the price is correlated with the population of adopting bitcoin speculators. I use $1 million for the arbitrary, guessed-at maximum price. Likewise I hand-fit the logistic function in November 2013, and will re-fit the function sometime next year given more data.

https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c

the deviation from the curve is such that , perhaps, new fit is needed or it is not log-logistic.

[rpietila]

Another barbarous relic, gold, has even lower transactional utility [...]

I can't resist the urge to point out that Keynes never called gold a barbarous relic; it was the gold standard - the practice of linking the value of currency to the value of gold - that he so described.

Good point indeed. Gold standard truly is a laughable practice, similar to - just imagine - that somebody would tie his shitcoin's value to Bitcoin! Sooner or even sooner it is found out that Bitcoin still has value but the shitcoin is sinking just as the dollar did when defaulted from the gold standard.

Let gold be gold, and Bitcoin be Bitcoin. And people use whatever they wish.

[molecular]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember well. I even panic-sold some coins.

I don't feel that panic yet at all, I'm quite calm in fact. So I agree: we're not there yet.

On the other hand: I haven't been an observer of markets for long enough to acknowledge as fact the necessity of blood on the streets for a bull market to start up.

[molecular]

Let gold be gold, and Bitcoin be Bitcoin. And people use whatever they wish.

epic! will use.

[Torque]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember well. I even panic-sold some coins.

I don't feel that panic yet at all, I'm quite calm in fact. So I agree: we're not there yet.

On the other hand: I haven't been an observer of markets for long enough to acknowledge as fact the necessity of blood on the streets for a bull market to start up.

Where the hell were you guys when Mt Gox imploded, despair hit rock bottom, and the market dive bombed to $389?  Not enough blood in the streets for ya?  Need two "bottoms" to be satisfied, eh?

[Roy Badami]

Another barbarous relic, gold, has even lower transactional utility [...]

I can't resist the urge to point out that Keynes never called gold a barbarous relic; it was the gold standard - the practice of linking the value of currency to the value of gold - that he so described.

Good point indeed. Gold standard truly is a laughable practice, similar to - just imagine - that somebody would tie his shitcoin's value to Bitcoin! Sooner or even sooner it is found out that Bitcoin still has value but the shitcoin is sinking just as the dollar did when defaulted from the gold standard.

Let gold be gold, and Bitcoin be Bitcoin. And people use whatever they wish.

Actually, I disagree.  The classical gold standard involved issuing paper that was 100% backed with gold and freely exchangeable for gold. It was a device to make it more convenient to do business in gold than it otherwise would have been had it involved lumps of metal.  I don't find this practice laughable at all; these were true promisary notes, and the holder of a one pound note could quite literally withdraw the metal from the Bank of England.  British notes, to this day, still carry the words "I promise to pay the bearer on demand the sum of X pounds", which dates back to the gold standard (although now has no meaning).

Bretton Woods, which followed it, was a very different beast and rather more dubious: the US dollar, as the reserve currency, was priced at a fixed rate in terms of gold but not 100% backed by it and not freely exchangeable for it (except by other central banks).  Other central banks in turn priced their currencies in terms of US dollars, and therefore, indirectly in terms of gold, and held dollars (and/or gold) as their reserves.  This is sometimes also refered to as a gold standard, but it is really rather different from the classical gold standard; I'd be more willing to dismiss this later form than I would the true classical gold standard.

roy

[NotLambchop]

I understand your argument, as I maintain a logistical, e.g. S-curve model, of bitcoin price data presuming that the price is correlated with the population of adopting bitcoin speculators. I use $1 million for the arbitrary, guessed-at maximum price. Likewise I hand-fit the logistic function in November 2013, and will re-fit the function sometime next year given more data.

https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c

So, all of 2011 has well above predicted price, and since those intervalls havent been longer than a couple of months. Hmm, maybe reality doesnt have to bend and instead you need to revise the model?

That's where the twin disruptive technologies of curve-fitting and kludge factors come in--integral to our scientifistic method!
The wonderful thing about the scientifistic method is it's nowhere as uptight as that obsolete scientific method that Old People use.

Groundbreaking scientifistic method gives us the tools to validate any theory, or, at least, give it a lovely sheen of credibility.
Our revolutionary scientifistic theories need be neither descriptive (we can ignore the data that doesn't fit) nor prescriptive (ahm... I mean they's super prescriptive but in, like, well... you can't extrapolate from...  Granularity.).
Scientifistic theories are never wrong because they're unfalsifiable by design.

In conclusion, Libya is a land of contrast.  Thank you!

[Roy Badami]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember well. I even panic-sold some coins.

I don't feel that panic yet at all, I'm quite calm in fact. So I agree: we're not there yet.

On the other hand: I haven't been an observer of markets for long enough to acknowledge as fact the necessity of blood on the streets for a bull market to start up.

Where the hell were you guys when Mt Gox imploded, despair hit rock bottom, and the market dive bombed to $389?  Not enough blood in the streets for ya?  Need two "bottoms" to be satisfied, eh?

That was then.  I'm talking about the bear market that we're in now.  Turnarounds are often accompanied by maximally pessimal sentiment (aka 'blood in the streets').  I don't think we're there yet (although I can't imagine we're that far off).

But another way.  There are, broadly speaking, two types of bullish money: money that's already invested, and money that's sitting on the sidelines, waiting to buy in at the best price.  That money is happy to wait the market out, until all the weak hands have been shaken out.  We're close, but I'm not sure we're there yet.  I'd be surprised if the turnaround doesn't happen in the next few months, though...

EDIT: And it's my guess that there's enough money on the sidelines, that when this market turns, it will turn very quickly, as people scamble to get (back) in...

[rpietila]

Another barbarous relic, gold, has even lower transactional utility [...]

I can't resist the urge to point out that Keynes never called gold a barbarous relic; it was the gold standard - the practice of linking the value of currency to the value of gold - that he so described.

Good point indeed. Gold standard truly is a laughable practice, similar to - just imagine - that somebody would tie his shitcoin's value to Bitcoin! Sooner or even sooner it is found out that Bitcoin still has value but the shitcoin is sinking just as the dollar did when defaulted from the gold standard.

Let gold be gold, and Bitcoin be Bitcoin. And people use whatever they wish.

Actually, I disagree.  The classical gold standard involved issuing paper that was 100% backed with gold and freely exchangeable for gold. It was a device to make it more convenient to do business in gold than it otherwise would have been had it involved lumps of metal.  I don't find this practice laughable at all; these were true promisary notes, and the holder of a one pound note could quite literally withdraw the metal from the Bank of England.  British notes, to this day, still carry the words "I promise to pay the bearer on demand the sum of X pounds", which dates back to the gold standard (although now has no meaning).

Bretton Woods, which followed it, was a very different beast and rather more dubious: the US dollar, as the reserve currency, was priced at a fixed rate in terms of gold but not 100% backed by it and not freely exchangeable for it (except by other central banks).  Other central banks in turn priced their currencies in terms of US dollars, and therefore, indirectly in terms of gold, and held dollars (and/or gold) as their reserves.  This is sometimes also refered to as a gold standard, but it is really rather different from the classical gold standard; I'd be more willing to dismiss this later form than I would the true classical gold standard.

roy

If the gold standard Keynes was criticizing did not mean credit expansion, what was he criticizing then?

If the standard was just that gold = money, and may be circulated as 100% backed notes, then I'd say that it is equal to calling gold the relic, and not only the standard, considering that gold and standard are the same thing!

Please make your concluding remarks, I'll turn the discussion back to OP.

I bought a castle because I understood the content of the OP last year. Now, even though there is much more evidence that it is true, and this is a Bitcoin forum, and the text is freely available for all, still many people not only refuse to believe it, but actually ridicule me!

[Roy Badami]

If the gold standard Keynes was criticizing did not mean credit expansion, what was he criticizing then?

If the standard was just that gold = money, and may be circulated as 100% backed notes, then I'd say that it is equal to calling gold the relic, and not only the standard, considering that gold and standard are the same thing!

Yes, that thought did occur to me, too.  I think I'm going to have to search a little more as to the context of this famous quote from Keynes.  Anyway, sorry for the distraction.... :-)

roy

[NotLambchop]

...
I bought a castle because I understood the content of the OP last year. Now, even though there is much more evidence that it is true, and this is a Bitcoin forum, and the text is freely available for all, still many people not only refuse to believe it, but actually ridicule me!

Please.
You made money just like the rest of us who were lucky enough to buy low and sold during the bubble--nothing to do with your first post.
Winning the lottery entitles neither one of us to lecture on economics.
Also: humility.

[WhatTheGox]

sounds good, need more coins

[minerpumpkin]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember well. I even panic-sold some coins.

I don't feel that panic yet at all, I'm quite calm in fact. So I agree: we're not there yet.

On the other hand: I haven't been an observer of markets for long enough to acknowledge as fact the necessity of blood on the streets for a bull market to start up.

I think we really don't know where we are at the moment and what's still ahead of us! We could go either way now. But I really believe we could go well into the $300s, and maybe even be driven below that - due to panic. And that's why I decreased my position moderately, just to be able to buy back if coins should become super cheap, or to not loose my whole investment.

[Roy Badami]

or to not loose my whole investment.

Oh, I really don't think that will happen.  The fundamentals haven't change - but bottoms are notoriously difficult to call...

EDIT: To quote Keynes again: "Markets can remain irrational a lot longer than you and I can remain solvent."

[minerpumpkin]

or to not loose my whole investment.

Oh, I really don't think that will happen.  The fundamentals haven't change - but bottoms are notoriously difficult to call...

EDIT: To quote Keynes again: "Markets can remain irrational a lot longer than you and I can remain solvent."

Of course, the fundamentals are still there, the cryptography is holding strong, the adoption is still going up, new and useful services go live every day. But that doesn't guarantee that there actually isn't a flaw in the cryptography or all western countries should decide to ban Bitcoin or whatever. It simply may happen. It's merely some hedging after we've entered a rather erratic (in my eyes) pattern now.

[randomguy7]

It doesn't feel to me that we really have 'blood in the streets' yet.  Remember what it was like after the rally to 266 when in early July we were trading in the 60's?  I don't think there's anywhere near as much despair here now as their was then....

I remember well. I even panic-sold some coins.

I don't feel that panic yet at all, I'm quite calm in fact. So I agree: we're not there yet.

...

+1, despair's still missing (if my guts can be trusted), but personally I don't feel too comfortable after breaking below 500. I wouldn't be surprised if after some further continuous decline we find the bottom in a flash crash down to those low mid 300s some people are predicting.
As a hardcore hodler you know the market is in despair when your mental attitude switches from "*hark* *hark* all those cheap coins, come to daddy!" to "oh crap better sell some now this thing could actually go down, better safe than sorry".  

edit: typo

[Adrian-x]

As a hardcore hodler you know the market is in despair when your mental attitude switches from "*hark* *hark* all those cheap coins, come to daddy!" to "oh crap better sell some now this thing could actually go down, better save than sorry".  

This is going to be the longest down trend in history, those private keys will have to be pried from my cold dead hands.

I had my "oh crap" moment at the end of 2012, and I can't imagine any futurist investors investing big thinking it may be a good idea to be overextended to Bitcoin, my bet is they're in it to the end.

I'm watching Silbert, when he gets squirmish, I'll know the tide is about to turn.

[SlipperySlope]

I bought some fractional bitcoin today from my local gunshop's ATM. Feels good.

[JorgeStolfi]

I bought a castle because I understood the content of the OP last year. Now, even though there is much more evidence that it is true, and this is a Bitcoin forum, and the text is freely available for all, still many people not only refuse to believe it, but actually ridicule me!

I don't know whether that comment is directed a me and that old "10%" joke, but assuming it is:

I did not intend to ridicule your person (ahem, even though you wrote some nasty things about my person on another thread  ). But I did intend to ridicule your logic, "my method works because I got rich following it".

You got rich because you bought a lot of BTC at 3$ each and held most of them until now.  Period.   Your decision was certainly very profitable, but it cannot be assumed that is was wise, rather than just lucky.  Just because you used one particular reasoning to decide to hold, it does not follow that the reasoning was sound, much less that the method will give the right decision for the next year or two.  If you had used tarot cards and they told you to hold, you would be just as rich, but the method would be just as invalid, and any future predictions from them would be just as irrelevant.

You saw the WorldCom plot.  After five years of nearly perfect exponential growth, by your reasoning there should have been at least two more years of the same.  Well, there weren't.   In mid-2000, when the price was visibly below that trend, by your reasoning there should have been a sharp rise, to bring it back to the trend.   Well, there wasn't.

Will there be another Bitcoin bubble?  Analysis of past prices cannot tell you that.  The past bubbles were not caused by some mysterious Price Extrapolation Force, but by specific events that suddenly expanded the demand.  So one should ask whether similar events will occur in the future.   We just cannot tell that at this time.

[Bitcopia]

I bought a castle because I understood the content of the OP last year. Now, even though there is much more evidence that it is true, and this is a Bitcoin forum, and the text is freely available for all, still many people not only refuse to believe it, but actually ridicule me!

I don't know whether that comment is directed a me and that old "10%" joke, but assuming it is:

I did not intend to ridicule your person (ahem, even though you wrote some nasty things about my person on another thread  ). But I did intend to ridicule your logic, "my method works because I got rich following it".

You got rich because you bought a lot of BTC at 3$ each and held most of them until now.  Period.   Your decision was certainly very profitable, but it cannot be assumed that is was wise, rather than just lucky.  Just because you used one particular reasoning to decide to hold, it does not follow that the reasoning was sound, much less that the method will give the right decision for the next year or two.  If you had used tarot cards and they told you to hold, you would be just as rich, but the method would be just as invalid, and any future predictions from them would be just as irrelevant.

You saw the WorldCom plot.  After five years of nearly perfect exponential growth, by your reasoning there should have been at least two more years of the same.  Well, there weren't.   In mid-2000, when the price was visibly below that trend, by your reasoning there should have been a sharp rise, to bring it back to the trend.   Well, there wasn't.

Will there be another Bitcoin bubble?  Analysis of past prices cannot tell you that.  The past bubbles were not caused by some mysterious Price Extrapolation Force, but by specific events that suddenly expanded the demand.  So one should ask whether similar events will occur in the future.   We just cannot tell that at this time.

Did WorldCom create one of the most innovative and useful platforms of this generation? Did WorldCom have an arena of venture capitalists investing into different businesses built on its protocol? No. In fact:

WorldCom, plagued by the rapid erosion of its profits and an accounting scandal that created billions in illusory earnings, last night submitted the largest bankruptcy filing in United States history.

http://www.nytimes.com/2002/07/22/us/worldcom-s-collapse-the-overview-worldcom-files-for-bankruptcy-largest-us-case.html

This kind of situation you are correlating as a potential near-term future for Bitcoin is exactly one of many situations the Bitcoin protocol is quite capable of preventing. Prevention of fraudulent accounting. Absolute transparency for public companies, officials, records, governments, etc. Anyway, that's off topic.

The point is, WorldCom and Bitcoin have absolutely nothing in common. WorldCom bubbled and collapsed because they were fudging their books. You can stop correlating it to Bitcoin now.

[JorgeStolfi]

The point is, WorldCom and Bitcoin have absolutely nothing in common.

The argument that some bitcoiners use to "prove" that a new Bitcoin bubble is due "very soon now" is solely that the price in log scale seems to fit a straight line.   They claim that we do not need to look for the reasons of past bubbles, the plot alone is "proof" enough that they must occur regularly, because that is how the exponential trend has been created.  And the next bubble is overdue, they say, because the price plot is falling below that straight line.

Well, the WorldCom share price too fit a straight line in log scale, even better than bitcon's.   By the extrapolators' logic, it should not matter why WorldCom stopped following the trend.

That is why WorldCom is a totally pertinent example: it shows that the past history of the price is irrelevant for predicting the future.  One must look for the causes of that past growth, and try to figure out whether those causes will prevail in the future, and be aware that  unpredictable events (like the WorldCom managers' fraud) may spoil the trend at any moment.

Did WorldCom create one of the most innovative and useful platforms of this generation?

Did Bitcoin?  We still have to see how useful it will be.

You seem to be confusing "bitcoin" with "distributed cryptocurrency".  Note that "the" Bitcoin is to distributed cryptocurrency as WorldCom was to long-distance communications.    Even if an innovative service turns out to be terribly useful, it does not follow that a particular entreprise that provides it will be a success.

Did WorldCom have an arena of venture capitalists investing into different businesses built on its protocol? 

I see many shrewd businessmen investing in different ways of getting money from people who believe in bitcoin, yes.

By the way, WoldCom's market cap was in the tens of billions at its highest.  As a long-distance communications company, you can bet that there were many companies building their businesses around its services.

This kind of situation you are correlating as a potential near-term future for Bitcoin is exactly one of many situations the Bitcoin protocol is quite capable of preventing. Prevention of fraudulent accounting. Absolute transparency for public companies, officials, records, governments, etc.

How can you say that, after MtGOX and the hundreds of thefts and scams that have already occurred in Bitcoin's short history, almost all made possible -- and almost all still unsolved -- because of bitcoin's alleged "qualities"?  Bitcoin attracts and facilitates scams, theft, and embezzlement like no other payment method ever.  Indeed, these "qualities" are one of several reasons why I am quite skeptical about its longterm success.

[2weiX]

Doesn't look too good.
If we go break out of the triangle on the downside, we're good for another crash.
If we reverse and break out on the upsid, 580 is the next resistance.

[rpietila]

I bought a castle because I understood the content of the OP last year. Now, even though there is much more evidence that it is true, and this is a Bitcoin forum, and the text is freely available for all, still many people not only refuse to believe it, but actually ridicule me!

You saw the WorldCom plot.  After five years of nearly perfect exponential growth, by your reasoning
...

Did you actually read the OP?   Please revisit my reasoning. Hint: "pregnant with WorldCom" never existed.

Will there be another Bitcoin bubble?  Analysis of past prices cannot tell you that. - -  We just cannot tell that at this time.

I could tell last time. I can tell this time (within the bounds of realistic +EV such as 50/50 chance of winning 1000%, in which Kelly suggests to invest 50% of your holdings, which I have done, and you should too). Analysis is not luck. Finding mechanism for past price developments and applying them to the future is not luck. Following sound concepts from other brands of mathematics is not luck.

That a professor is trying to label my investing over the past 21 years when I started using other than saving accounts for risk management, "luck", is lamentable. It is not an indication of his very good capability in this area.

[BitCoinNutJob]

Thanks OP for bringing some sense to speculation.  If BTC is $40k? in 17 months like you suggest i will be buying a castle of my own.  

Im a believer.

[falllling]

Doesn't look too good.
If we go break out of the triangle on the downside, we're good for another crash.
If we reverse and break out on the upsid, 580 is the next resistance.

of cause bitcoin is going down!

[Zarathustra]

of cause bitcoin is going down!

Of cause?
The more such illiterate fools we find in the bear camp, unable to deliver any kind of analysis, the better for bitcoin.

[Newbie1022]

of cause bitcoin is going down!

Of cause?
The more such illiterate fools we find in the bear camp, unable to deliver any kind of analysis, the better for bitcoin.

Says the hodlers?

[mmortal03]

...
Ahh ... but where are the network effects in religion with respect to Pascal's Wager? Do more believers make a certain God more likely to exist?

I used Pascal's wager as an illustration of an argument that appears reasonable until examined.  I hope I didn't accidently suggest that Bitcoin is God.  The network effect is at work in every mass-adoption scenario.  It does, indeed, tend towards exponential growth.  Until it doesn't.
The network effect is not a law of nature, it is a way of explaining exponential growth when it happens.  There was an 80s TV ad for Faberge Organics shampoo:

"When I first tried Faberge Organics Shampoo with pure wheat germ oil and honey, it was so good I told two friends about it.  And they told two friends.  And so on, and so on…"

Network effect in action.
Now the whole world is using nothing but Faberge Organics shampoo.  Couldn't have ended any other way.
You use Faberge Organics?

lol: https://www.youtube.com/watch?v=tL2r5dEUKac

[mmortal03]

As a hardcore hodler you know the market is in despair when your mental attitude switches from "*hark* *hark* all those cheap coins, come to daddy!" to "oh crap better sell some now this thing could actually go down, better save than sorry".  

This is going to be the longest down trend in history, those private keys will have to be pried from my cold dead hands.

I had my "oh crap" moment at the end of 2012, and I can't imagine any futurist investors investing big thinking it may be a good idea to be overextended to Bitcoin, my bet is they're in it to the end.

I'm watching Silbert, when he gets squirmish, I'll know the tide is about to turn.

It'd definitely be nice to see some libertarian, futurist billionaires invest large amounts into it because they are supportive of the concept.

[rpietila]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

[mmortal03]

How can you say that, after MtGOX and the hundreds of thefts and scams that have already occurred in Bitcoin's short history, almost all made possible -- and almost all still unsolved -- because of bitcoin's alleged "qualities"?  Bitcoin attracts and facilitates scams, theft, and embezzlement like no other payment method ever.  Indeed, these "qualities" are one of several reasons why I am quite skeptical about its longterm success.

Cash still has it beat on those terms by a large margin.

[JorgeStolfi]

How can you say that, after MtGOX and the hundreds of thefts and scams that have already occurred in Bitcoin's short history, almost all made possible -- and almost all still unsolved -- because of bitcoin's alleged "qualities"?  Bitcoin attracts and facilitates scams, theft, and embezzlement like no other payment method ever.  Indeed, these "qualities" are one of several reasons why I am quite skeptical about its longterm success.

Cash still has it beat on those terms by a large margin.

NO. 

MtGOX's "theft" was about 5% of the total BTC in existence.  Tell me of a cash heist or theft that has taken 5% of all the dollars in existence at the time. 

I will be generous and even let you quote heists whose author was eventually identified and/or the cash was recovered.

What chances do you give for the MtGOX thief being one day caught, and the stolen coins being returned to their legitimate owners?

[NotLambchop]

JorgeStolfi:
Your logic is old-fashioned and totally obsolete.  We developed an exciting new formal system, with unique grammar and inference ruleset, for today's fast-paced and competitive financial modeling.  

Behold the descriptive and prescriptive powers of Teh Scientifistic Method!



*While the pony~ and the annotations are mine, the chart isn't.  It's meant to be taken seriously, not even kidding.  Here.

[mmortal03]

How can you say that, after MtGOX and the hundreds of thefts and scams that have already occurred in Bitcoin's short history, almost all made possible -- and almost all still unsolved -- because of bitcoin's alleged "qualities"?  Bitcoin attracts and facilitates scams, theft, and embezzlement like no other payment method ever.  Indeed, these "qualities" are one of several reasons why I am quite skeptical about its longterm success.

Cash still has it beat on those terms by a large margin.

NO. 

MtGOX's "theft" was about 5% of the total BTC in existence.  Tell me of a cash heist or theft that has taken 5% of all the dollars in existence at the time. 

I will be generous and even let you quote heists whose author was eventually identified and/or the cash was recovered.

What chances do you give for the MtGOX thief being one day caught, and the stolen coins being returned to their legitimate owners?

The value of the theft proportional to ALL value in existence is what you should be focusing on, not its percentage of total BTC. Much higher dollar values have been stolen, and will continue to be.

[mmortal03]

JorgeStolfi:
Your logic is old-fashioned and totally obsolete.  We developed an exciting new formal system, with unique grammar and inference ruleset, for today's fast-paced and competitive financial modeling.  

Behold the descriptive and prescriptive powers of Teh Scientifistic Method!



*While the pony~ and the annotations are mine, the chart isn't.  It's meant to be taken seriously, not even kidding.  Here.

You must not understand how regression works. Mind you, if he's hand fitting that, it's not the best example of a fitted regression line, but it's not THAT far off.

[NotLambchop]

...but it's not THAT far off.

That's the beauty of Scientifisism--"not THAT far off" is always a boolean 1.
In the Scientifistic ruleset, this is derived from the Law of Almost Universal Noncontradiction: ^Almost~(A & ~A).
Powerful stuff...

[mmortal03]

...but it's not THAT far off.

That's the beauty of Scientifisism--"not THAT far off" is always a boolean 1.
In the Scientifistic ruleset, this is derived from the Law of Almost Universal Noncontradiction: ^Almost~(A & ~A).
Powerful stuff...

Homeslice, I'd be down with him fitting it mathematically.

[zimmah]

speculation is not science, no matter how you put it, but you can make a prediction based on the past and hope your predictions are close to reality.

It's still saver than gambling.

[NotLambchop]

...
Homeslice, I'd be down with him fitting it mathematically.

Not sure what you're saying?  Depending on how much deviation is "good enough" for U, *everything* fits.  
I'm saying that the graph is neither descriptive nor prescriptive enough to be interesting.

To be interesting, a theory needs to be:
  1.  Sufficiently descriptive to be convincing:  "Look, Bob!  A billion data points with zero sigma!"
  2.  Sufficiently predictive to act as a guide:  "You know it Ted!  Which means tomorrow's price is $1,000.  I'm all in!"
  3.  Verifiable/falsifiable:  "Shit...  But Reptilia predicted the price would be $10,000 by now, and it's not.  Which means his theory is ass."

TL;DR:  Yeah, an S-curve could be fitted to any mass adoption scenario at some point in time.  The trick is knowing where on that curve you are, and if you're still on that curve (see JorgeStolfi's slide ruler example.  There are fewer American households with slide rulers today than in the 50s.).

[SlipperySlope]

TL;DR:  Yeah, an S-curve could be fitted to any mass adoption scenario at some point in time.  The trick is knowing where on that curve you are, and if you're still on that curve (see JorgeStolfi's slide ruler example.  There are fewer American households with slide rulers today than in the 50s.).

Indeed.

As I said above, I plan to refit the model next year or sooner if we get another bubble peak before the end of this year. The logistic assumption anchors the origin of the graph at the first reported bitcoin price on the left. The right hand side, namely the most current prices, is most important when hand fitting the function.

The important idea that this model brings to the analysis of bitcoin price data is that exponential growth of bitcoin prices will end.

Here is a logistic model applied to the adoption of smartphones ...



Considering, how small the relative number of bitcoin transactions is compared to the number of credit card transactions, I suppose that we are currently in the Innovators stage, or at the beginning of the Early Adopters stage.

[twiifm]

TL;DR:  Yeah, an S-curve could be fitted to any mass adoption scenario at some point in time.  The trick is knowing where on that curve you are, and if you're still on that curve (see JorgeStolfi's slide ruler example.  There are fewer American households with slide rulers today than in the 50s.).

Indeed.

As I said above, I plan to refit the model next year or sooner if we get another bubble peak before the end of this year. The logistic assumption anchors the origin of the graph at the first reported bitcoin price on the left. The right hand side, namely the most current prices, is most important when hand fitting the function.

The important idea that this model brings to the analysis of bitcoin price data is that exponential growth of bitcoin prices will end.

Here is a logistic model applied to the adoption of smartphones ...



Considering, how small the relative number of bitcoin transactions is compared to the number of credit card transactions, I suppose that we are currently in the Innovators stage, or at the beginning of the Early Adopters stage.

So that means a few more crypto coins will come in the future and replace bitcoin?

[Dabs]

Nothing is going to replace bitcoin. I'm a fan of some alt-coins, but none of them hold a candle to the original.

[SlipperySlope]

So that means a few more crypto coins will come in the future and replace bitcoin?

I suppose that one can examine the smartphone industry and observe that the first movers are not today's champions.

Regarding cryptocurrencies, I think that they have value primarily because some people consider them valuable, in particular valuable for transactions. In the collapse from the bubble peak of November 2013, blockchain altcoins available back then, e.g. Litecoin, Dogecoin, Peercoin, Namecoin, etc. have collapsed to a greater extent than bitcoin.

What is interesting is the change in the relative market capitalization of altcoins in the last few months as various innovations are put on the market in the midst of a flood of me-too altcoins. Suppose, in some possible world, that Ecuador mandates its digital currency by making an altcoin. Its M2 is about $36 billion right now, much greater than bitcoin at $6 billion.

------

My own coin under development is meant to demonstrate a technology that I hope will one day be incorporated into Bitcoin to replace mining proof-of-work.

[NotLambchop]

...
The important idea that this model brings to the analysis of bitcoin price data is that exponential growth of bitcoin prices will end.

If we accept as axiomatic that world's total wealth can not continue to increase exponentially, it logically follows that the value of bitcoin can not continue to increase exponentially.¹  So yeah, that works for me.  We're good.

...Considering, how small the relative number of bitcoin transactions is compared to the number of credit card transactions, I suppose that we are currently in the Innovators stage, or at the beginning of the Early Adopters stage.

That's where you lose me.
What makes you think we're in the early adopters phase, and not the on-the-road-to-oblivion phase?  And how does the number of CC transactions figure into this?

  By your reasoning, the Litecoiners are also in the early adopter stage.
  And the Dodgecoiners.
  And the [__]coiners.

  Can you fit s-curves to those, assuming (as you did with Bitcoin), that each one of those is on its way up, and not out?
  Can you compare the number of Dodgecoin transactions to CC transaction, and guestimate where Dodgecoiners are on their S-curve ascent to world domination?

I agree (as I'm sure almost everyone does) that accepting your premise, "Bitcoin will become THE currency of the future," guarantees that BTC price will skyrocket.  That's almost begging the question.
The problem is with the premise itself.  I don't know if Bitcoin is on its way to universal acceptance or to obscurity.  If I knew one way or the other, I could hand out trading advice without giggling even a little.
1.  Assuming by "price" you mean "value," since the $, by definition, must become totally worthless if Bitcoin becomes the only currency.

[oda.krell]

...
Homeslice, I'd be down with him fitting it mathematically.

Not sure what you're saying?  Depending on how much deviation is "good enough" for U, *everything* fits.  
I'm saying that the graph is neither descriptive nor prescriptive enough to be interesting.

To be interesting, a theory needs to be:
  1.  Sufficiently descriptive to be convincing:  "Look, Bob!  A billion data points with zero sigma!"
  2.  Sufficiently predictive to act as a guide:  "You know it Ted!  Which means tomorrow's price is $1,000.  I'm all in!"
  3.  Verifiable/falsifiable:  "Shit...  But Reptilia predicted the price would be $10,000 by now, and it's not.  Which means his theory is ass."

TL;DR:  Yeah, an S-curve could be fitted to any mass adoption scenario at some point in time.  The trick is knowing where on that curve you are, and if you're still on that curve (see JorgeStolfi's slide ruler example.  There are fewer American households with slide rulers today than in the 50s.).

Spot on.

I will however say this much: I consider SlipperySlope's S-curve model superior to most of the loglinear alternatives that are posted here because at least he doesn't extrapolate to infinity, as the others do (or, in SS's words: exponential growth ends eventually, which is rather clear to me).

On the other hand, this only shifts the problem: the maximum value SS uses ($1M) is of course pure speculation. If, say, the final valuation would be $2000 (which I don't think, but let's stipulate it), then fitting the S-curve to this max value would probably mean we're now in the "flat" part of the S (please correct me if I'm wrong, SS).

Which is of course precisely what we want to find out with a model like this anyway: will growth continue like before, or are we going to stagnate. Since this central question is answered by an assumption of the model, not the data itself, the model doesn't really help us to decide that question.

[mmortal03]

...
Homeslice, I'd be down with him fitting it mathematically.

Not sure what you're saying?  Depending on how much deviation is "good enough" for U, *everything* fits.  
I'm saying that the graph is neither descriptive nor prescriptive enough to be interesting.

To be interesting, a theory needs to be:
  1.  Sufficiently descriptive to be convincing:  "Look, Bob!  A billion data points with zero sigma!"
  2.  Sufficiently predictive to act as a guide:  "You know it Ted!  Which means tomorrow's price is $1,000.  I'm all in!"
  3.  Verifiable/falsifiable:  "Shit...  But Reptilia predicted the price would be $10,000 by now, and it's not.  Which means his theory is ass."

TL;DR:  Yeah, an S-curve could be fitted to any mass adoption scenario at some point in time.  The trick is knowing where on that curve you are, and if you're still on that curve (see JorgeStolfi's slide ruler example.  There are fewer American households with slide rulers today than in the 50s.).

I don't disagree with that, or the following (from https://en.wikipedia.org/wiki/Curve_fitting):

Extrapolation refers to the use of a fitted curve beyond the range of the observed data, and is subject to a degree of uncertainty since it may reflect the method used to construct the curve as much as it reflects the observed data.

Extrapolation isn't useless. You just need to properly classify what you're dealing with.

[Torque]

That's where you lose me.
What makes you think we're in the early adopters phase, and not the on-the-road-to-oblivion phase?  And how does the number of CC transactions figure into this?

  By your reasoning, the Litecoiners are also in the early adopter stage.
  And the Dodgecoiners.
  And the [__]coiners.

  Can you fit s-curves to those, assuming (as you did with Bitcoin), that each one of those is on its way up, and not out?
  Can you compare the number of Dodgecoin transactions to CC transaction, and guestimate where Dodgecoiners are on their S-curve ascent to world domination?

I agree (as I'm sure almost everyone does) that accepting your premise, "Bitcoin will become THE currency of the future," guarantees that BTC price will skyrocket.  That's almost begging the question.
The problem is with the premise itself.  I don't know if Bitcoin is on its way to universal acceptance or to obscurity.  If I knew one way or the other, I could hand out trading advice without giggling even a little.

In SS's smartphone example above, the iPhone (iOS) was first to take over the largest % of the next-gen smartphone market.  Seven years later, it's still with us today.  Android was the second next-gen smartphone OS with apps to garner a large market.  It's still with us too, and managed to supplant iOS in overall market share.

Sure there were other smartphone OS's before these two juggernauts above came along (e.g., Symbian, Palm, Blackberry, etc.) and others still trying to come after (Firefox OS, Windows Phone, FB phone, etc.).  But what the iPhone and Android do they do it well enough for the masses, and thus eventually dominated the smartphone market by garnering the largest network effect.

So the bottom line is this:

1. Could either iOS or Android be supplanted by something better in the future?  Sure, it's completely possible.
2. But would you want to bet against either of them in the first few years of their existence after seeing their explosive growth worldwide?  NO.  I wouldn't.
3. If BTC and LTC continue to dominate the crypto market for the next several years, will a likely third crypto option come out of nowhere and overtake either of those two in worldwide mindshare and thus marketcap?  Not likely.  Especially if a dominant portion of the financial world has consolidated on either of them for eCommerce payments transactions.

[MNDan]

It's nice to compare Bitcoin to things like smart phones and the internet, but in the case of Bitcoin I just don't see that strong of an incentive to adopt it. Not saying it won't grow, but to compare it to the 100% adoption of things that people love and make their lives better, the incentive just isn't there.

[NotLambchop]

...
1. Could either iOS or Android be supplanted by something better in the future?  Sure, it's completely possible.
2. But would you want to bet against either of them in the first few years of their existence after seeing their explosive growth worldwide?  NO.  I wouldn't.
3. If BTC and LTC continue to dominate the crypto market for the next several years, will a likely third crypto option come out of nowhere and overtake either of those two in worldwide mindshare and thus marketcap?  Not likely.  Especially if a dominant portion of the financial world has consolidated on either of them for eCommerce payments transactions.

Don't get me wrong.  I'm a Bitcoiner, I'm interested in Bitcoin and what it can do, just have a problem with "it can't fail because science!"
Also, won't lie, for a while it was a great way of making money--even for me.  Now the sandbox's full of new, smarter, tougher kids.  
I'm pretty much lost...
 

As far as smartphone analogy, I simply don't think we're anywhere near iOS/Android phase.  Don't know enough about smartphones, but if crypto was microcomputers, Bitcoin would be CP/M on S-100 bus
*Who would have thought the Gates character would come along, take it, and make billions

[Torque]

It's nice to compare Bitcoin to things like smart phones and the internet, but in the case of Bitcoin I just don't see that strong of an incentive to adopt it. Not saying it won't grow, but to compare it to the 100% adoption of things that people love and make their lives better, the incentive just isn't there.

"...I just don't see that strong of an incentive to adopt it. Not saying it won't grow, but to compare it to the 100% adoption of things that people love and make their lives better, the incentive just isn't there... "

People were saying the same thing about so called "smartphones" when I was carrying around my Palm Treo in 2001.  Most people said that they were only for geeks, and could have cared less about them.  Most women then thought smartphones were only for geeks and too big/clunky to be practical.  They were a turn off.  Which is hilarious today when I see a pretty woman with a 5" smartphone glued to her ear, gabbing away.  The whole world now embraces smartphones, the bigger and clunkier the better.

Amazing how people's views can do a complete 180 given enough time, eh?

[SlipperySlope]

...
The important idea that this model brings to the analysis of bitcoin price data is that exponential growth of bitcoin prices will end.

If we accept as axiomatic that world's total wealth can not continue to increase exponentially, it logically follows that the value of bitcoin can not continue to increase exponentially.¹  So yeah, that works for me.  We're good.

I do not mean that the world's total wealth cannot continue to increase exponentially, because I believe it will. Rather I am referring to the 10x average annual growth of bitcoin prices. That enormous rate of growth must end. How? Logistic models of population growth have been applied to the adoption of technology, and this is my attempt to put values into the variables of the formula. Upon full adoption, bitcoin price would move up or down in relationship to the overall economy.

...Considering, how small the relative number of bitcoin transactions is compared to the number of credit card transactions, I suppose that we are currently in the Innovators stage, or at the beginning of the Early Adopters stage.

That's where you lose me.
What makes you think we're in the early adopters phase, and not the on-the-road-to-oblivion phase?  And how does the number of CC transactions figure into this?

  By your reasoning, the Litecoiners are also in the early adopter stage.
  And the Dodgecoiners.
  And the [__]coiners.

  Can you fit s-curves to those, assuming (as you did with Bitcoin), that each one of those is on its way up, and not out?
  Can you compare the number of Dodgecoin transactions to CC transaction, and guestimate where Dodgecoiners are on their S-curve ascent to world domination?

I agree (as I'm sure almost everyone does) that accepting your premise, "Bitcoin will become THE currency of the future," guarantees that BTC price will skyrocket.  That's almost begging the question. [FTFY- SS]
The problem is with the premise itself.  I don't know if Bitcoin is on its way to universal acceptance or to obscurity.  If I knew one way or the other, I could hand out trading advice without giggling even a little.

On this forum, trading advice is often handed out on the basis of the author's trading position. "To the moon" Bitcoiners are presumed to hold bitcoin, and sceptics are presumed to be short or perhaps just waiting for lower prices. I hold bitcoin, and attempt to post my interpretation of facts - most of my posts are charts with some lines drawn on them.

If the logistic model is a good fit to the situation, eventually the curve will flatten out. Indeed a case could be made that is what is happening now, with the price at full adoption say  between $1000 - $3000. But the arguments in favor a higher price were made years ago by Rick Falkvinge, which I linked to on my logistic model thread ...

Some Plausible Estimates of Maximum Bitcoin Value

What is the $100.000,- target based on? Wishfull thinking? Very well possible that 10k is the limit right?

Indeed wishful thinking, but also an acceptance of the most plausible estimates, such as those of Rick Falkvinge circa. 2011, when bitcoin transaction volume was one tenth of today's. . . .

     Bitcoins Four Drivers: Part One - Unlawful Trade - estimates $60 Billion of bitcoin capitalization

     Bitcoins Four Drivers: Part Two - International Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration

     Bitcoins Four Drivers: Part Three - Merchant Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration

     Bitcoins Four Drivers: Part Four - Investment - estimates another $600 Billion of bitcoin capitalization assuming 0.1% market penetration

     An estimated total $2 Trillion market capitalization, implies $95 thousand valuation per bitcoin.

Falkvinge shows how bitcoin is superior with regard to current financial practice in four realms, and estimates bitcoin valuation at a 10% penetration rate. He sidesteps the role of bitcoin as a deflating store of value.

I also accept another widely held point of view that bitcoin will either fall to a relatively very low value, or totally disrupt the current financial infrastructure. Thus I extend the probability distribution of maximum bitcoin price to well over one million, covering cases where bitcoin achieves 80 - 100% market penetration.

Regarding altcoins, I accept the widely held view that they will become valueless unless they offer some innovation that makes some people believe that they have value, in particular transaction value. When and if bitcoin rallies again to another bubble, it will probably lift all speculative altcoins as did the November 2013 bubble.

Perhaps the logistic model is better applied to the sum of all cryptocurrency market caps rather than to bitcoin alone, to account for the issues you have raised. But I will leave the model as is for at least another year on the belief that bitcoin will merely incorporate into itself, any particular innovation that would otherwise surpass it.

[NotLambchop]

...Palm Treo in 2001...

Remember PDAs?

[Adrian-x]

...Palm Treo in 2001...

Remember PDAs?

Lol, the one thing those two have in common is ignoring my advice and moving away from there narrative (usability)

Bitcoin's narrative is still secure (finite and PoW) but that said I am leaning to the idea we've only just started the down trend.
Holders go'n hold and we're going to see a test of faith for the rest.

[MNDan]

Then perhaps we should talk about what Bitcoin can do to "drop the stylus" and become the sexy, new color touchscreen of money! We are a long ways away from that right now, unfortunately.

[zimmah]

...
The important idea that this model brings to the analysis of bitcoin price data is that exponential growth of bitcoin prices will end.

If we accept as axiomatic that world's total wealth can not continue to increase exponentially, it logically follows that the value of bitcoin can not continue to increase exponentially.¹  So yeah, that works for me.  We're good.

I do not mean that the world's total wealth cannot continue to increase exponentially, because I believe it will. Rather I am referring to the 10x average annual growth of bitcoin prices. That enormous rate of growth must end. How? Logistic models of population growth have been applied to the adoption of technology, and this is my attempt to put values into the variables of the formula. Upon full adoption, bitcoin price would move up or down in relationship to the overall economy.

...Considering, how small the relative number of bitcoin transactions is compared to the number of credit card transactions, I suppose that we are currently in the Innovators stage, or at the beginning of the Early Adopters stage.

That's where you lose me.
What makes you think we're in the early adopters phase, and not the on-the-road-to-oblivion phase?  And how does the number of CC transactions figure into this?

  By your reasoning, the Litecoiners are also in the early adopter stage.
  And the Dodgecoiners.
  And the [__]coiners.

  Can you fit s-curves to those, assuming (as you did with Bitcoin), that each one of those is on its way up, and not out?
  Can you compare the number of Dodgecoin transactions to CC transaction, and guestimate where Dodgecoiners are on their S-curve ascent to world domination?

I agree (as I'm sure almost everyone does) that accepting your premise, "Bitcoin will become THE currency of the future," guarantees that BTC price will skyrocket.  That's almost begging the question. [FTFY- SS]
The problem is with the premise itself.  I don't know if Bitcoin is on its way to universal acceptance or to obscurity.  If I knew one way or the other, I could hand out trading advice without giggling even a little.

On this forum, trading advice is often handed out on the basis of the author's trading position. "To the moon" Bitcoiners are presumed to hold bitcoin, and sceptics are presumed to be short or perhaps just waiting for lower prices. I hold bitcoin, and attempt to post my interpretation of facts - most of my posts are charts with some lines drawn on them.

If the logistic model is a good fit to the situation, eventually the curve will flatten out. Indeed a case could be made that is what is happening now, with the price at full adoption say  between $1000 - $3000. But the arguments in favor a higher price were made years ago by Rick Falkvinge, which I linked to on my logistic model thread ...

Some Plausible Estimates of Maximum Bitcoin Value

What is the $100.000,- target based on? Wishfull thinking? Very well possible that 10k is the limit right?

Indeed wishful thinking, but also an acceptance of the most plausible estimates, such as those of Rick Falkvinge circa. 2011, when bitcoin transaction volume was one tenth of today's. . . .

     Bitcoins Four Drivers: Part One - Unlawful Trade - estimates $60 Billion of bitcoin capitalization

     Bitcoins Four Drivers: Part Two - International Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration

     Bitcoins Four Drivers: Part Three - Merchant Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration

     Bitcoins Four Drivers: Part Four - Investment - estimates another $600 Billion of bitcoin capitalization assuming 0.1% market penetration

     An estimated total $2 Trillion market capitalization, implies $95 thousand valuation per bitcoin.

Falkvinge shows how bitcoin is superior with regard to current financial practice in four realms, and estimates bitcoin valuation at a 10% penetration rate. He sidesteps the role of bitcoin as a deflating store of value.

I also accept another widely held point of view that bitcoin will either fall to a relatively very low value, or totally disrupt the current financial infrastructure. Thus I extend the probability distribution of maximum bitcoin price to well over one million, covering cases where bitcoin achieves 80 - 100% market penetration.

Regarding altcoins, I accept the widely held view that they will become valueless unless they offer some innovation that makes some people believe that they have value, in particular transaction value. When and if bitcoin rallies again to another bubble, it will probably lift all speculative altcoins as did the November 2013 bubble.

Perhaps the logistic model is better applied to the sum of all cryptocurrency market caps rather than to bitcoin alone, to account for the issues you have raised. But I will leave the model as is for at least another year on the belief that bitcoin will merely incorporate into itself, any particular innovation that would otherwise surpass it.

this is the reason i don't believe in altcoins, bitcoin can just adapt and make altcoins obsolete.

[An amorous cow-herder]

this is the reason i don't believe in altcoins, bitcoin can just adapt and make altcoins obsolete.

No, and i´ve given some thought to this.
The blockchain gives a provable accountability to people who choose so. Obviously that completely contradicts anonymity. However that may be very usefull.
And yes, i´ve been trying to advocate that, but it really seems creating an alternate chain for "restricted" purchases is the better way to go.
Do you think it actually matters how much a "coin" is worth if that "coin" is the aquivalent of "allow one purchase" of "restricted good" (be it a weapon, medicament, whatever).
That coin can be signed by the transmitter. Geez, it doesnt even matter if its premined. If it just allows you to purchase things online you usually couldnt.

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

[oda.krell]

this is the reason i don't believe in altcoins, bitcoin can just adapt and make altcoins obsolete.

No, and i´ve given some thought to this.
The blockchain gives a provable accountability to people who choose so. Obviously that completely contradicts anonymity. However that may be very usefull.
And yes, i´ve been trying to advocate that, but it really seems creating an alternate chain for "restricted" purchases is the better way to go.
Do you think it actually matters how much a "coin" is worth if that "coin" is the aquivalent of "allow one purchase" of "restricted good" (be it a weapon, medicament, whatever).
That coin can be signed by the transmitter. Geez, it doesnt even matter if its premined. If it just allows you to purchase things online you usually couldnt.

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent), and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

[vuduchyld]

this is the reason i don't believe in altcoins, bitcoin can just adapt and make altcoins obsolete.

No, and i´ve given some thought to this.
The blockchain gives a provable accountability to people who choose so. Obviously that completely contradicts anonymity. However that may be very usefull.
And yes, i´ve been trying to advocate that, but it really seems creating an alternate chain for "restricted" purchases is the better way to go.
Do you think it actually matters how much a "coin" is worth if that "coin" is the aquivalent of "allow one purchase" of "restricted good" (be it a weapon, medicament, whatever).
That coin can be signed by the transmitter. Geez, it doesnt even matter if its premined. If it just allows you to purchase things online you usually couldnt.

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent), and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

Which is why I have been thinking a lot about the use case of buying gasoline with bitcoin.  I don't mean using Qora or CoinFueled or some other card that a merchant processes at 3.75%, I mean actually buying gas using my bitcoin wallet and a QR code or some other native-to-the-gas-pump bitcoin technology.

I've done quite a bit of consulting with c-stores and I can assure you that gas is a super low-margin item for them.  There is motivation for them to save 3% (or sometimes more) off of processing costs.  It is real money to these store owners.

It's a real win-win.  If I could buy gas with bitcoin, most of the time, I'd most likely just replenish my bitcoin stock with a purchase matching what I just spent.  Merchants could, theoretically, offer some discount that would allow me to share in the savings they realize.  Great for adoption, great for consumers, great for merchants, great for the community, even if the merchants are using bitpay and converting to fiat at purchase time.

There are some technical details that make this tough.  Confirmation times.  Native infrastructure.  When we can realistically solve these problems, bitcoin will have won.  Right now, it works for NewEgg, Dell, or Expedia.  I'm placing an order online and I don't expect the product to be delivered immediately.  But when I can pay at the pump in bitcoin, what do you think that does for transaction numbers?  Adoption?  Price?

Gas is a perfect use case.  I want this to happen.

[SlipperySlope]

. . .

Which is why I have been thinking a lot about the use case of buying gasoline with bitcoin.  I don't mean using Qora or CoinFueled or some other card that a merchant processes at 3.75%, I mean actually buying gas using my bitcoin wallet and a QR code or some other native-to-the-gas-pump bitcoin technology.

I've done quite a bit of consulting with c-stores and I can assure you that gas is a super low-margin item for them.  There is motivation for them to save 3% (or sometimes more) off of processing costs.  It is real money to these store owners.

It's a real win-win.  If I could buy gas with bitcoin, most of the time, I'd most likely just replenish my bitcoin stock with a purchase matching what I just spent.  Merchants could, theoretically, offer some discount that would allow me to share in the savings they realize.  Great for adoption, great for consumers, great for merchants, great for the community, even if the merchants are using bitpay and converting to fiat at purchase time.

There are some technical details that make this tough.  Confirmation times.  Native infrastructure.  When we can realistically solve these problems, bitcoin will have won.  Right now, it works for NewEgg, Dell, or Expedia.  I'm placing an order online and I don't expect the product to be delivered immediately.  But when I can pay at the pump in bitcoin, what do you think that does for transaction numbers?  Adoption?  Price?

Gas is a perfect use case.  I want this to happen.

Suppose that your idea gets adopted by certain countries which are the recipients of remittances, then bitcoin sent home from say the USA, could be used for another transaction before needing to be exchanged. As more and more vendors accept bitcoin, then perhaps a tipping point will be reached beyond which the need to exchange into fiat will diminish.

[vuduchyld]

. . .

Which is why I have been thinking a lot about the use case of buying gasoline with bitcoin.  I don't mean using Qora or CoinFueled or some other card that a merchant processes at 3.75%, I mean actually buying gas using my bitcoin wallet and a QR code or some other native-to-the-gas-pump bitcoin technology.

I've done quite a bit of consulting with c-stores and I can assure you that gas is a super low-margin item for them.  There is motivation for them to save 3% (or sometimes more) off of processing costs.  It is real money to these store owners.

It's a real win-win.  If I could buy gas with bitcoin, most of the time, I'd most likely just replenish my bitcoin stock with a purchase matching what I just spent.  Merchants could, theoretically, offer some discount that would allow me to share in the savings they realize.  Great for adoption, great for consumers, great for merchants, great for the community, even if the merchants are using bitpay and converting to fiat at purchase time.

There are some technical details that make this tough.  Confirmation times.  Native infrastructure.  When we can realistically solve these problems, bitcoin will have won.  Right now, it works for NewEgg, Dell, or Expedia.  I'm placing an order online and I don't expect the product to be delivered immediately.  But when I can pay at the pump in bitcoin, what do you think that does for transaction numbers?  Adoption?  Price?

Gas is a perfect use case.  I want this to happen.

Suppose that your idea gets adopted by certain countries which are the recipients of remittances, then bitcoin sent home from say the USA, could be used for another transaction before needing to be exchanged. As more and more vendors accept bitcoin, then perhaps a tipping point will be reached beyond which the need to exchange into fiat will diminish.

Awesomeness.  Now all we need to do is design the pump or figure out how to make an add-on.

Of course, it's a chicken-and-egg question.  Merchants would have to believe that there would be enough adoption to pay for the capital cost of the improvement.  If they felt the demand would be there and the savings from processing costs would pay for it, there would be some percentage that would do it.

I wonder how we could find geographic hot spots with bitcoin user density to serve as a testing ground?

[RAJSALLIN]

this is the reason i don't believe in altcoins, bitcoin can just adapt and make altcoins obsolete.

No, and i´ve given some thought to this.
The blockchain gives a provable accountability to people who choose so. Obviously that completely contradicts anonymity. However that may be very usefull.
And yes, i´ve been trying to advocate that, but it really seems creating an alternate chain for "restricted" purchases is the better way to go.
Do you think it actually matters how much a "coin" is worth if that "coin" is the aquivalent of "allow one purchase" of "restricted good" (be it a weapon, medicament, whatever).
That coin can be signed by the transmitter. Geez, it doesnt even matter if its premined. If it just allows you to purchase things online you usually couldnt.

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent), and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

Which is why I have been thinking a lot about the use case of buying gasoline with bitcoin.  I don't mean using Qora or CoinFueled or some other card that a merchant processes at 3.75%, I mean actually buying gas using my bitcoin wallet and a QR code or some other native-to-the-gas-pump bitcoin technology.

I've done quite a bit of consulting with c-stores and I can assure you that gas is a super low-margin item for them.  There is motivation for them to save 3% (or sometimes more) off of processing costs.  It is real money to these store owners.

It's a real win-win.  If I could buy gas with bitcoin, most of the time, I'd most likely just replenish my bitcoin stock with a purchase matching what I just spent.  Merchants could, theoretically, offer some discount that would allow me to share in the savings they realize.  Great for adoption, great for consumers, great for merchants, great for the community, even if the merchants are using bitpay and converting to fiat at purchase time.

There are some technical details that make this tough.  Confirmation times.  Native infrastructure.  When we can realistically solve these problems, bitcoin will have won.  Right now, it works for NewEgg, Dell, or Expedia.  I'm placing an order online and I don't expect the product to be delivered immediately.  But when I can pay at the pump in bitcoin, what do you think that does for transaction numbers?  Adoption?  Price?

Gas is a perfect use case.  I want this to happen.

I'd like paying with bitcoins if it was cheaper to use and if it was easier to use. Think the second point is key here. If it could be used with say NFC or some other form of near field communication preferably automatic  which didn't even make me take my phone up that would be a system I could see really catch on. Automation is the future and bitcoin needs to be more automated than credit cards or cash.

[Ruthful]

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent), and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

As it stands it actually cost more to purchase online using bitcoin for me  due to the additional coat of getting the bitcoins in the first place.  Forget about offline purchase , no vendors here accept crypto-currencies. Accompanied by the the hassle of setting up a new system for bitcoin and it isn't exactly  dummie friendly (I'm not tech savvy) ,its current  uselessness for very small transaction(especially for ones within the same country)  and the lack of buyer protection( I'm mainly a consumer not a merchant) ,I don't see myself using bitcoin any time soon.

*snip*

That's might be actually actually a good  application for bitcoin. Sort out the technical issues(someone mentioned pump POS systems?) and convince the station operators the benefits and you set to go..Pity if won't work where fuel prized is heavily regulated (heavily subsidised I my country)

[Wexlike]

If a gas station would offer gas 1cent cheaper for bitcoins, i assume people would get crazy about it in a good way. My friends drive up to 5 km just to find a gas station, that is a bit cheaper than the one at the next corner. 

[oda.krell]

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent), and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

As it stands it actually cost more to purchase online using bitcoin for me  due to the additional coat of getting the bitcoins in the first place.  Forget about offline purchase , no vendors here accept crypto-currencies. Accompanied by the the hassle of setting up a new system for bitcoin and it isn't exactly  dummie friendly (I'm not tech savvy) ,its current  uselessness for very small transaction(especially for ones within the same country)  and the lack of buyer protection( I'm mainly a consumer not a merchant) ,I don't see myself using bitcoin any time soon.

That's a valid point. I will add that I think it's not 100% accurate (see my remarks at the end of this post), but in principle, I see what you mean and agree.

Note however that I talked about "transaction costs", which for traditional payment systems are carried by the vendor/merchant. And from their side, it does stand as 3% + 30 cent (Paypal), 2% (Visa, but only if you're big enough) vs. 0 cost (if Bitcoin is used natively and the sender pays the tx fee).

From that I conclude that there is a strong incentive to the merchant to encourage use of Bitcoin for payments. I think we will see more and more that merchants will offer some benefits to customers paying in BTC (rebate, additional service free of charge, etc.). Basically, sharing some of the 3% they save, to increase the share of their payments coming in through Bitcoin.

As for the costs of acquiring Bitcoins for the consumer: I agree, it's far from ideal currently. However, you can send money to Bitstamp (free of charge, SEPA), buy coins at market for a fee of between 0.2% and 0.5%, and withdraw those coins free of charge.

I said "far from ideal" because I realize that for the average consumer, using an exchange is not a "comfortable enough" option yet, with all the verification issues, counterparty risk, etc. I mention it however because it is possible, right now, to buy Bitcoins at market price and pay at most .5% premium on top of the price.

[NotLambchop]

...
Note however that I talked about "transaction costs", which for traditional payment systems are carried by the vendor/merchant. And from their side, it does stand as 3% + 30 cent (Paypal), 2% (Visa, but only if you're big enough) vs. 0 cost (if Bitcoin is used natively and the sender pays the tx fee).
...

This is a bit of a tangent, but might be interesting.  Was interesting to me when I first read it, wish I could give credit, but can't remember who pointed this out.[/sheepish disclaimer]

Bitcoin transaction costs are currently sponsored by Bitcoin inflation, which [now] is quite a bit higher than 3%.  Once all the coins are mined, and miners no longer profit through mining coin, I think it's reasonable to assume that tx fees would go up substantially (along with a bunch of other untidiness that I don't like to think about )

[JorgeStolfi]

As for the costs of acquiring Bitcoins for the consumer: I agree, it's far from ideal currently. However, you can send money to Bitstamp (free of charge, SEPA), buy coins at market for a fee of between 0.2% and 0.5%, and withdraw those coins free of charge.

Can't he use SEPA to pay the merchant? (Honest question, I don't know the answer.)

I understood that Dell accepts payment by check or bank transfer for orders placed by mobile or e-mail.  Not clear why this restriction, or whether it is a restriction: do they say that because no client would use those slow means if they can pay "instantaneously" by credit card?

[rebuilder]

This is a bit of a tangent, but might be interesting.  Was interesting to me when I first read it, wish I could give credit, but can't remember who pointed this out.[/sheepish disclaimer]

Bitcoin transaction costs are currently sponsored by Bitcoin inflation, which [now] is quite a bit higher than 3%.  Once all the coins are mined, and miners no longer profit through mining coin, I think it's reasonable to assume that tx fees would go up substantially (along with a bunch of other untidiness that I don't like to think about )

Perhaps, or miners will shut off for lack of profits until the transaction fees are sufficient to sustain the hashrate. Whether that hashrate will then remain resilient against attack is an open question. IIRC, Satoshi's vision had institutions with vested interest in BTC providing hashing power to secure their investment, not to gain profits from transaction fees directly.

[oda.krell]

As for the costs of acquiring Bitcoins for the consumer: I agree, it's far from ideal currently. However, you can send money to Bitstamp (free of charge, SEPA), buy coins at market for a fee of between 0.2% and 0.5%, and withdraw those coins free of charge.

Can't he use SEPA to pay the merchant? (Honest question, I don't know the answer.)

I understood that Dell accepts payment by check or bank transfer for orders placed by mobile or e-mail.  Not clear why this restriction, or whether it is a restriction: do they say that because no client would use those slow means if they can pay "instantaneously" by credit card?

Some companies allow this (at least in Europe), some prefer other payment providers, probably because of conflict resolution / protection from charge backs. Don't underestimate how much merchants are willing to pay to be protected from the hassle of having to deal with (fraudulent or justified, doesn't matter) reversal of payments. Visa has charge back as well of course, but in my experience, they're rather thorough and don't automatically side with the payer against the payee.

Bitcoin transfers turn it around, the merchant is now firmly favored: no costs, no way to reverse the transaction. Which means that, a) the merchant hopes to get some "easy" revenue from old coin holders / early adopters, at little cost and risk (your hypothesis, as far as I know), or b) the merchant eventually will have to offer additional benefits to customers paying in Bitcoin to compensate for the loss of customer protection that customers enjoy using traditional payment methods.

[oda.krell]

...
Note however that I talked about "transaction costs", which for traditional payment systems are carried by the vendor/merchant. And from their side, it does stand as 3% + 30 cent (Paypal), 2% (Visa, but only if you're big enough) vs. 0 cost (if Bitcoin is used natively and the sender pays the tx fee).
...

This is a bit of a tangent, but might be interesting.  Was interesting to me when I first read it, wish I could give credit, but can't remember who pointed this out.[/sheepish disclaimer]

Bitcoin transaction costs are currently sponsored by Bitcoin inflation, which [now] is quite a bit higher than 3%.  Once all the coins are mined, and miners no longer profit through mining coin, I think it's reasonable to assume that tx fees would go up substantially (along with a bunch of other untidiness that I don't like to think about )

Right. I'm highly skeptical towards statements made today that claim that tx fees will always be negligible.

I will however also note the following: together with the "OMG, a deflationary currency can NEVER work!" argument, the 'tx fees after emission is over' concern is placed pretty far into the future (~2140 to be precise).

You can call my reference to this short-sighted, but I think it is just another example of Satoshi's economic brilliance: some of the less palatable elements from a perspective of current economical orthodoxy are coming into existence only far enough into the future that the orthodoxy has a chance to change by then.

A bit more technical, a bit less flippant: ultimately, tx fees after emission is done will gravitate towards: total cost of running network * share of current transaction of total transactions on network, plus a small premium to make it worth miners time and effort. I don't see this as ever being more costly than current commercial payment providers, similarly to how there is no cheaper operating system than, say, Linux.

[NotLambchop]

...
Perhaps, or miners will shut off for lack of profits until the transaction fees are sufficient to sustain the hashrate. Whether that hashrate will then remain resilient against attack is an open question. IIRC, Satoshi's vision had institutions with vested interest in BTC providing hashing power to secure their investment, not to gain profits from transaction fees directly.

What sort of institutions?



Kidding, but if you mean "invisible to the end user (consumer)," credit cards do that.

[NotLambchop]

..."OMG, a deflationary currency can NEVER work!" argument...

I don't think you're presenting the argument against deflationary currencies in the best light [smiley].  It is an argument that predates Bitcoin by at least a century, and one at the root of *every economy on Earth.*  Not just the orthodoxy.  At least what I know of it has nothing to do with tx fees.

...tx fees after emission is done will gravitate towards: total cost of running network * share of current transaction of total transactions on network, plus a small premium to make it worth miners time and effort. I don't see this as ever being more costly than current commercial payment providers, similarly to how there is no cheaper operating system than, say, Linux.

Considering that today's cost of running the network is around the value of all the coins mined, I see no reason to make this assumption.

Re. "no cheaper operating system than, say, Linux":  Why do you suppose major corporations use Windoze?  Stupid?  Like Bill?  Don't care about profits?

[Ruthful]

However, you can send money to Bitstamp (free of charge, SEPA).

Unfortunately SEPA don't cover South East Asian countries (I'm in one) so there goes that  option.So yeah, still not seeing any benefit of doing transaction in bitcoin for me at this point .Lets hope there'll be  improvements that will change my mind in the future.

[oda.krell]

..."OMG, a deflationary currency can NEVER work!" argument...

I don't think you're presenting the argument against deflationary currencies in the best light [smiley].  It is an argument that predates Bitcoin by at least a century, and one at the root of *every economy on Earth.*  Not just the orthodoxy.  At least what I know of it has nothing to do with tx fees.

...tx fees after emission is done will gravitate towards: total cost of running network * share of current transaction of total transactions on network, plus a small premium to make it worth miners time and effort. I don't see this as ever being more costly than current commercial payment providers, similarly to how there is no cheaper operating system than, say, Linux.

Considering that today's cost of running the network is around the value of all the coins mined, I see no reason to make this assumption.

Re. "no cheaper operating system than, say, Linux":  Why do you suppose major corporations use Windoze?  Stupid?  Like Bill?  Don't care about profits?

Maybe I didn't phrase that all too clear: I lumped together those two issues (tx fees post-emission, deflationary currency) to make the point that several contentious issues will only arise in reality well into the future, potentially giving us time to adapt / get used to them.

re: deflationary currency. Don't be mistaken, I'm not brushing aside the complexities of the issue. I do however claim that, current economical orthodoxy considers central bank guided inflationary currencies the de facto optimum. Agreed with that statement? Not that they're optimal, but that the vast majority of economists seem to consider fixed supply currencies broken beyond repair.

My point is not that a deflationary currency is necessarily better (sorry PMers), but that it will be an interesting experiment in about 100 years from now to see if modern economical development is really impossible with a deflationary currency (if Bitcoin does indeed become a major factor in global finance in the future).

re: Linux. Wasn't the point who is using it. We were talking price. (and I'm sure you know this, but while consumers barely use Linux, the Internet infrastructure relies heavily on it.)

[mmortal03]

..."OMG, a deflationary currency can NEVER work!" argument...

I don't think you're presenting the argument against deflationary currencies in the best light [smiley].  It is an argument that predates Bitcoin by at least a century, and one at the root of *every economy on Earth.*  Not just the orthodoxy.  At least what I know of it has nothing to do with tx fees.

...tx fees after emission is done will gravitate towards: total cost of running network * share of current transaction of total transactions on network, plus a small premium to make it worth miners time and effort. I don't see this as ever being more costly than current commercial payment providers, similarly to how there is no cheaper operating system than, say, Linux.

Considering that today's cost of running the network is around the value of all the coins mined, I see no reason to make this assumption.

Re. "no cheaper operating system than, say, Linux":  Why do you suppose major corporations use Windoze?  Stupid?  Like Bill?  Don't care about profits?

Maybe I didn't phrase that all too clear: I lumped together those two issues (tx fees post-emission, deflationary currency) to make the point that several contentious issues will only arise in reality well into the future, potentially giving us time to adapt / get used to them.

re: deflationary currency. Don't be mistaken, I'm not brushing aside the complexities of the issue. I do however claim that, current economical orthodoxy considers central bank guided inflationary currencies the de facto optimum. Agreed with that statement? Not that they're optimal, but that the vast majority of economists seem to consider fixed supply currencies broken beyond repair.

My point is not that a deflationary currency is necessarily better (sorry PMers), but that it will be an interesting experiment in about 100 years from now to see if modern economical development is really impossible with a deflationary currency (if Bitcoin does indeed become a major factor in global finance in the future).

re: Linux. Wasn't the point who is using it. We were talking price. (and I'm sure you know this, but while consumers barely use Linux, the Internet infrastructure relies heavily on it.)

Not to mention that, in terms of divisibility, until digital currencies came along, with decimal places that could be extended out, a deflationary currency wasn't practically implementable past a certain point. Physical currencies can only be split so much into smaller units, printed, and distributed, to maintain liquidity.

[oda.krell]

Not to mention that, in terms of divisibility, until digital currencies came along, with decimal places that could be extended out, a deflationary currency wasn't practically implementable past a certain point. Physical currencies can only be split so much into smaller units, printed, and distributed, to maintain liquidity.

Excellent point. This might not capture 100% of the "hoarding" / deferred spending problem economists like Krugman like to throw at fixed supply models, but it probably accounts for a substantial part of it. If you can spend an appropriately small fraction of something extremely valuable you are at the very least more likely to do so than someone who fears overspending, because of insufficient (and possibly intransparent) divisibility.

[zimmah]

it's pretty funny how many people talk about the hypothetical problem of deflationary currency, even though we have never really used deflationary currency.

While at the same time you never hear anyone complain about the problems of an economy based on exponential inflation. Like the earth can sustain exponential growth.

[rpietila]

it's pretty funny how many people talk about the hypothetical problem of deflationary currency, even though we have never really used deflationary currency.

While at the same time you never hear anyone complain about the problems of an economy based on exponential inflation. Like the earth can sustain exponential growth.

Especially as there cannot even be such a thing as a "deflationary currency". If nobody would work due to it being "more profitable to hoard", the amount of goods produced in the economy would be reduced and the "problem" would correct itself. People have decided they get richer by hoarding and not producing, so the money just gets more valuable every year despite there soon being nothing to buy.

Oh Keynes - I know you were a smart guy, but your followers don't seem to find a contradiction in the italicized part, which I regard as a pretty grave mistake...

[NotLambchop]

...
re: deflationary currency. Don't be mistaken, I'm not brushing aside the complexities of the issue. I do however claim that, current economical orthodoxy considers central bank guided inflationary currencies the de facto optimum. Agreed with that statement? Not that they're optimal, but that the vast majority of economists seem to consider fixed supply currencies broken beyond repair.

I agree that most economists consider inflationary currency optimal.  I suppose, in a sense, that makes them the orthodoxy.  "Orthodoxy" sounds a bit odd to me.  In my mind the word is linked with religious orthodoxy--inflexibility, unwillingness to adapt, resistance to new ideas--"crusty."
Your usage makes Evolutionary biology today's orthodoxy, and Creationism ...what?  More of a feelsy peeve than an objection.

My point is not that a deflationary currency is necessarily better (sorry PMers), but that it will be an interesting experiment in about 100 years from now to see if modern economical development is really impossible with a deflationary currency (if Bitcoin does indeed become a major factor in global finance in the future).

Bitcoin is already an amazing experiment.  No way to overstate this.
Re. "[is] economical development ... impossible with a deflationary currency":  It's not a binary thing (just stressing this, I doubt you meant to say it was).
Better questions:
Is deflationary currency optimal for economic growth?
Is the type of economic growth likely to happen with deflationary currency optimal for society?
Is economic growth a prerequisite or even a measure of society's worth/wellbeing?

re: Linux. Wasn't the point who is using it. We were talking price. (and I'm sure you know this, but while consumers barely use Linux, the Internet infrastructure relies heavily on it.)

The point is for many companies, initial savings of going with *nix (initial cost being nothing) are countered by higher overheads of using it.
If I'm paying my guy $70/hr to do X, and it takes him a few minutes less to do it on a winbox, I recoup the licence cost in a day.  This does not mean that my company won't be using Linux, but it won't replace Windows.  I'd love to maximize profit, but going with freeware/shareware to the exclusion of rapeware isn't the way to do it.*

This is relevant to Bitcoin and fiat because OMG the parallels.

*Hypothetical, I'm not paying anyone to do X.

Edit:

...
Not to mention that, in terms of divisibility, until digital currencies came along, with decimal places that could be extended out, a deflationary currency wasn't practically implementable past a certain point. Physical currencies can only be split so much into smaller units, printed, and distributed, to maintain liquidity.

You know that old money is destroyed, and new printed/coined regularly, right?
Here's how we deal with divisibility in fiat:
For every dollar bill we destroy, we print 10 decidollars.  For every penny we destroy, we mint 10 decicents(I know, but it sounds right:)).  And sneak in a few extras because baker's dozen and inflation.
Problem solved!

[NotLambchop]

it's pretty funny how many people talk about the hypothetical problem of deflationary currency, even though we have never really used deflationary currency.
While at the same time you never hear anyone complain about the problems of an economy based on exponential inflation. Like the earth can sustain exponential growth.

We never used deflationary money for the same reason we didn't colonize Mars in hot air balloons:  It doesn't work.
And yes, many do complain about inflationary money.  Heck, you are are doing it now

[rpietila]

The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

[NotLambchop]

The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

Wrong and wrong.
By "deflationary money" I, and the people I am talking with, mean "supply-side deflation." http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation
Bitcoin will be such a currency once the last coin is mined and the first paper wallet is lost.

Price deflation (and inflation) arises from many factors, see http://en.wikipedia.org/wiki/Deflation .  If the economy is doing well, prices can rise if more money is introduced.  If yesterday you were able to buy one pig, and today you're able to buy two, you're doing better regardless of how many tokens the pigs cost you.
This is basic and shouldn't need to be explained.

TL;DR: Rising prices != failing economy; falling prices != thriving economy.

[oda.krell]

I agree that most economists consider inflationary currency optimal.  I suppose, in a sense, that makes them the orthodoxy.  "Orthodoxy" sounds a bit odd to me.  In my mind the word is linked with religious orthodoxy--inflexibility, unwillingness to adapt, resistance to new ideas--"crusty."
Your usage makes Evolutionary biology today's orthodoxy, and Creationism ...what?  More of a feelsy peeve than an objection.

If economics ("economics" here being the field that guides - some of - a state's decisions on how to optimize its economic output) is ever pursued with the same rigor as biology, I will share that feelsy peeve :D (sorry, potshot, I know.)

Bitcoin is already an amazing experiment.  No way to overstate this.
Re. "[is] economical development ... impossible with a deflationary currency":  It's not a binary thing (just stressing this, I doubt you meant to say it was).
Better questions:
Is deflationary currency optimal for economic growth?
Is the type of economic growth likely to happen with deflationary currency optimal for society?
Is economic growth a prerequisite or even a measure of society's worth/wellbeing?

You're asking exactly the questions that I want to see answered as well. No disagreement here. Just that I'm happy to have them empirically answered, even if there's a risk that the outcome will be negative.

The point is for many companies, initial savings of going with *nix (initial cost being nothing) are countered by higher overheads of using it.
If I'm paying my guy $70/hr to do X, and it takes him a few minutes less to do it on a winbox, I recoup the licence cost in a day.  This does not mean that my company won't be using Linux, but it won't replace Windows.  I'd love to maximize profit, but going with freeware/shareware to the exclusion of rapeware isn't the way to do it.*

True. Which is why I consider it a completely plausible scenario that Bitcoin will never reach the "end user" in scale (like Linux in the OS market), but will be the/a backbone of our entire financial infrastructure (like Linux is for servers).

[NotLambchop]

^Then we pretty much agree on everything, but it was fun thinking that we didn't
*had too many tabs open, bitcoinwisdom somehow switched to Huobi (usually never do).  Noticed "30" next to the favicon and almost...  Gah!

[oda.krell]

^ this was a strangely satisfying (and educating, for me at least) discussion, I'm surprised. That happens rather rarely on here

[rpietila]

The fact that I don't care to argue about economics with almost anyone, does not magically mean that notlambchop was right, nor that I agreed with him.

And I am still at a loss to understand how this all relates to the thread...

[An amorous cow-herder]

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent),

Actually i would argue it costs PayPal less, but they charge more.
Bitpay basicly has the same expenses as Paypal. While the transactions cost less with BTC all the other expenses need to be covered as well, just like Paypal that includes servers, staff etc..
Paypal is highly profitable, Bitpay, who knows. Maybe they are still burning though venture capital.
And thats excluding the other costs, fees to aquire BTC, miners not actually getting payed for signing the transaction instead getting the lions share from block rewards. Sure, its still a long while to go until block rewards are so low that the hashing power securing the network gets so low a 51% attack is almost trivial. My guess would be that miners will revolt and demand higher transaction fees long before than.

and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

And thats excactly the reason why customers arent adopting BTC on a large scale. Why would you want to give up customer protection?

[zimmah]

The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

Wrong and wrong.
By "deflationary money" I, and the people I am talking with, mean "supply-side deflation." http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation
Bitcoin will be such a currency once the last coin is mined and the first paper wallet is lost.

Price deflation (and inflation) arises from many factors, see http://en.wikipedia.org/wiki/Deflation .  If the economy is doing well, prices can rise if more money is introduced.  If yesterday you were able to buy one pig, and today you're able to buy two, you're doing better regardless of how many tokens the pigs cost you.
This is basic and shouldn't need to be explained.

TL;DR: Rising prices != failing economy; falling prices != thriving economy.

indeed, what i meant is that inflation (of the money supply), in other words more money entering circulation will ensure that every dollar (or other currency) will lose value unless the economy itself grows at the same rate.

Since the money supply is increasing exponentially, the value of the dollar will go down because the economy can not keep up, simply because the earth can only produce so much.

On the other hand when the number of dollars in circulation decrease, each dollar would be worth more assuming the output is the same.

[oda.krell]

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent),

Actually i would argue it costs PayPal less, but they charge more.
Bitpay basicly has the same expenses as Paypal. While the transactions cost less with BTC all the other expenses need to be covered as well, just like Paypal that includes servers, staff etc..
Paypal is highly profitable, Bitpay, who knows. Maybe they are still burning though venture capital.
And thats excluding the other costs, fees to aquire BTC, miners not actually getting payed for signing the transaction instead getting the lions share from block rewards. Sure, its still a long while to go until block rewards are so low that the hashing power securing the network gets so low a 51% attack is almost trivial. My guess would be that miners will revolt and demand higher transaction fees long before than.

and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

And thats excactly the reason why customers arent adopting BTC on a large scale. Why would you want to give up customer protection?

I answered that in the posts afterwards: because merchants have a strong incentive to convince customers to pay in BTC. So most likely: they will give rebates / other benefits to BTC paying customers to encourage a payment vector that increases their margin by ~3% (or maybe closer to 2% after the rebates).

EDIT: Up to OP to decide if the off-topicness should end here. I enjoy the tangentials, but understand also the desire to keep the discussion centered around the original post.

[An amorous cow-herder]

And I am still at a loss to understand how this all relates to the thread...

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

[Odalv]

And I am still at a loss to understand how this all relates to the thread...

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B  * 100% = 0,18%  not event 1%

[An amorous cow-herder]

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B  * 100% = 0,18%  not event 1%

And, what exactly is the rationale to invest $1000?
The hope that it goes to $100k?
I mean, only 1.8% of the population would need to invest another $1000 to keep that price afloot every year..
And those? Oh right, cause its gonna be worth $1M soon after.
Well, by that time we should have another block halving, so we only gonna need like 9% of the world population joining every year.

[Odalv]

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B  * 100% = 0,18%  not event 1%

And, what exactly is the rationale to invest $1000?
The hope that it goes to $100k?
I mean, only 1.8% of the population would need to invest another $1000 to keep that price afloot every year..
And those? Oh right, cause its gonna be worth $1M soon after.
Well, by that time we should have another block halving, so we only gonna need like 9% of the world population joining every year.

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

[An amorous cow-herder]

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.
Bitcoin has to become an actually currency sooner or later. As the block rewards dwindle transaction fees have to take over, otherwise the hashing power "protecting" the network will dwindle as well.
And what good is "stored value" if you cant move it because someone decided to block all transactions just for giggles because its cheap fun?

[Odalv]

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.
Bitcoin has to become an actually currency sooner or later. As the block rewards dwindle transaction fees have to take over, otherwise the hashing power "protecting" the network will dwindle as well.
And what good is "stored value" if you cant move it because someone decided to block all transactions just for giggles because its cheap fun?

https://www.bitstamp.net/help/what-is-bitcoin/

Credit card companies charge gas stations a 2% transaction fee. The US consumes 65 billion gallons of gasoline per year. At $3.60 per gallon, this could be a $234 billion dollars.

Big numbers and hard to imagine. :-)  How much cost breakfast for 7B people every day ?

[Dusty]

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.

At the rate the Fed is pumping out dollars, I think we'll all see which currency will have a limited life span, if dollar or bitcoin...

[Odalv]

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.

1. ASICS consumes 0,6 W / GHash - so I can sacrifice few watts and run miner in my USB.
2. I can also heat my water with bitcoin miner (and keep my money safe). I'm sure that this products will be available in next decade.
... and so on

[flipperfish]

And I am still at a loss to understand how this all relates to the thread...

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

You should consider, that it's only $12B+ per year for the next 2 years. This get's us to $24B+ over the next 2 years. From then on it's $24B+ over the next 4 years. And then it's $24B+ over the next 8 years. There's an exponential trend in this, too!

[SlipperySlope]

Edit: Nearly forgot the oblig. extrapolating image.

I have a silly favorite too, but exactly why does mine seem more convincing? It is because the logic of induction in this context has a sound connection to fundamental principles, and there is a reasonable upper bound on the scope, i.e. 100% dead, not 200% dead.

[pikabit]

I see a bottom at 430, does this look accurate?

[SlipperySlope]

I see a bottom at 430, does this look accurate?

Here is a close up view of a three-day resolution chart using Bitstamp prices. The top resistance line goes back to the November 2013 peak. The bottom support line touches only two candles in that same period. I am watching this pattern unfold. I hope that prices reverse and break through the resistance, e.g. a price above $560 now, or a price above $500 at the end of October. I am buying bitcoin only once a month now, conserving petty cash for infrastructure when I launch my coin.

[SlipperySlope]

I see a bottom at 430, does this look accurate?

Here is the adjusted number of daily transactions, smoothed with a 7-day moving average as calculated by Blockchain.info. Note that recent volume is above March levels, which suggests the bottom is behind us. I am closely watching this data series.

[SlipperySlope]

I see a bottom at 430, does this look accurate?

Here is the Blockchain.info chart for the number of daily unique addresses appearing in transactions, smoothed with a 7-day moving average. It also suggests, given that recent numbers are similar to those in March, that the bottom is behind us. I do not watch this data series as much, as perhaps gambling transactions are not filtered out.

[An amorous cow-herder]

https://www.bitstamp.net/help/what-is-bitcoin/

Credit card companies charge gas stations a 2% transaction fee. The US consumes 65 billion gallons of gasoline per year. At $3.60 per gallon, this could be a $234 billion dollars.

Big numbers and hard to imagine. :-)  How much cost breakfast for 7B people every day ?

Lets go for the complete the complete quote, if you dont mind.

Credit card companies charge gas stations a 2% transaction fee. By eliminating credit card transaction fees, gas station owners could double their profits. The US consumes 65 billion gallons of gasoline per year. At $3.60 per gallon, this could be a $234 billion dollars going through the Bitcoin economy per year. If the market cap for Bitcoin was $234 billion, each Bitcoin would be worth $34,400 dollars.

You know what this reminds me off?

V: Tell me... what do you do with witches?
P3: Burn'em! Burn them up! (burn burn burn)
V: What do you burn apart from witches?
P1: More witches! (P2 nudge P1)
(pause)
P3: Wood!
V: So, why do witches burn?
(long pause)
P2: Cuz they're made of... wood?
V: Gooood.
(crowd congratulates P2)
V: So, how do we tell if she is made of wood?
P1: Build a bridge out of her!
V: Ahh, but can you not also make bridges out of stone?
P1: Oh yeah...
V: Does wood sink in water?
P1: No
P3: No. It floats!
P1: Let's throw her into the bog! (yeah yeah ya!)
V: What also floats in water?
P1: Bread
P3: Apples
P2: Very small rocks
(V looks annoyed)
P1: Cider
P3: Grape gravy
P1: Cherries
P3: Mud
King: A Duck!
(all look and stare at king)
V: Exactly! So, logically...
P1(thinking): If she ways the same as a duck... she's made of wood!
V: And therefore,
(pause & think)
P3: A witch! (P1: a witch)(P2: a witch)(all: a witch!)
V: We shall use my largest scales.

Those two quotes are very similiar. Since not anyone without a basic understanding of ecomics may realise that, i will break it down into fragments.

Credit card companies charge gas stations a 2% transaction fee.

Fact. (Didnt check but will assume it is correct). Wood burns.

The US consumes 65 billion gallons of gasoline per year.

Fact. (Didnt check but sounds reasonable). Ducks float on water.

At $3.60 per gallon, this could be a $234 billion dollars going through the Bitcoin economy per year. If the market cap for Bitcoin was $234 billion, each Bitcoin would be worth $34,400 dollars.

Suggestion. Bitcoin is a witch (or its worth whatever).
The timeframe (year) is arbitraly chosen. This completely ignores a very fundamental factor, namely velocity.
Most people dont buy gasoline once a year, probably, on average, closer to once a week.
In other words, the same BTC spent on gasoline would be available again next week. So it would be reasonable to divide those 234B$ by 52 and get something like 661$ per bitcoin.

You know what that kind of advertisement you linked is called. Suggestive. It combines facts with implied results that dont follow commonly accepted (in the relative field) theories. And would probably even be illegal in quite a few EU states.

And i´m not even starting a discussion about those 100% could even reasonably be achieved. I mean, several CC companies would like a share of transaction values. PayPal, Apple, "good ol" fiat, whatever.
I mean, seriously, how do you expect this 100% to happen?
Guy goes to gas station, knocks his smartphone at the nfc chip, coinbase (or whoever) automaticly deducts the fiat value from his account after typing a pin and transfers the btc to whomever? Now BitPay (or whoever accepts zero conf transfers) sends a message to the gas station that everything is ok?

Hmm, actually, in that case velocity may be much higher. I mean, if people just transfer fiat to their personal favorite exchange (coinbase, whatever) and just buy auto-buy BTC for transfers (you avoid price fluctuations after all) those BTC are only "bound" by the network until enough confirmation have been recieved to sell them again on market (thats what pament processors do).
Lets consider a safety period of 60 confirmations (thats a lot more than is resonable, but hey, arbitrage bots will transfer from exchanges etc.. so lets go with this figure for now).
That would be like 10h on average. So lets see what $234B/year actually amounts to when we consider the payment is "bound" for 10h. Thats just 380M. A market cap of 380M would be sufficent to facilitate all gasoline purchases if the velocity is high enough. And considering BTC value as a pure payment system that would hold true. In that case a BTC value of $40 would be sufficient to accomondate all gasoline purchases in the US.


Edit:Several typos.

[ensurance982]

So, analyzing the current situation... Who thinks we've reached a bottom and are now back on our way up? I think it is much too early to tell and we may very well re-test the $350s I hope we don't go below that, though...

[bigtimespaghetti]

My vote is for a bottom at either 440 or 400... I think it's lookout below if those are breached on volume.

[CMMPro]

Bottom was $340...exactly as Risto said it was.

We won't go lower than $340.

[jaberwock]

So, analyzing the current situation... Who thinks we've reached a bottom and are now back on our way up? I think it is much too early to tell and we may very well re-test the $350s I hope we don't go below that, though...

We won't know wether we are on bottom or not until we re-rise to the same level before the fall, or we fall to another botTOM.

That 350 on btc-e was not a bottom, it was some whale panic dump. Say otherwise would be the same to say we tested the 100's due to the Mr102

[KLD]

I see a bottom at 430, does this look accurate?

Here is the Blockchain.info chart for the number of daily unique addresses appearing in transactions, smoothed with a 7-day moving average. It also suggests, given that recent numbers are similar to those in March, that the bottom is behind us. I do not watch this data series as much, as perhaps gambling transactions are not filtered out.

A higher number of new addresses being used isn't a measurement of new money coming in...

[cypherdoc]

bottom was last April @339

[SlipperySlope]

I see a bottom at 430, does this look accurate?

Here is the Blockchain.info chart for the number of daily unique addresses appearing in transactions, smoothed with a 7-day moving average. It also suggests, given that recent numbers are similar to those in March, that the bottom is behind us. I do not watch this data series as much, as perhaps gambling transactions are not filtered out.

A higher number of new addresses being used isn't a measurement of new money coming in...

The number of unique daily addresses used does measure a degree of economic activity, making it a fundamental measurement rather than a technical trading measurement. The amount of new money coming in is unfortunately proprietary information kept by exchanges.

The importance of the two fundamental indicators of adjusted transaction quantity and daily unique addresses, as calculated by Blockchain.info, is that there is a good fit between the square of these fundamental indicators and the bitcoin price. We may be witnessing Metcalfe's Law of network effects unfolding before us. Thanks to Peter R whose charts appear here.

And by the way, you might explain whether you are serious about your byline "Sell your house to short BTC". Short position margin calls at Bitfinex could be ruinous if you are all-in.

[KLD]

The rise in popularity of SPV clients with hierarchical deterministic wallets using change addresses has nothing to do with it?

And by the way, you might explain whether you are serious about your byline "Sell your house to short BTC". Short position margin calls at Bitfinex could be ruinous if you are all-in.

Or it could be very profitable as well too and has nothing to do with this discussion.

[SlipperySlope]

The rise in popularity of SPV clients with hierarchical deterministic wallets using change addresses has nothing to do with it?

Correct me if I am wrong, but unique change addresses have been used for a while with the bitcoin-qt wallet to help preserve anonymity. The rise in popularity of a particular wallet indicates some sort of economic progress, minimally an improvement in ease of use.

Metcalfe's Law, as interpreted in the context of the Bitcoin network, says that the network is more valuable to each user as more nodes are added. Accordingly, the network now with more SPV client users is more valuable to bitcoin purchasers than was the same network back in April at $339 on Bitstamp.

Do you rent your lodging now? Just curious.

[KLD]

Whilst I agree with you that there is greater value in a network with an expanding the user base, you are making assumptions to the extent of its growth through circumstantial abstraction and could possibly be existing users moving funds around, creating more wallets, spending through greater merchant adoption, change addresses and tumbling coins.  I feel (not backed by data yes hypocritical of me   ) that alot of people have wised about about reusing adresses and think this will continue to increase as SPV clients are implementing HD wallets for smart phones...

[JorgeStolfi]

The number of unique daily addresses used does measure a degree of economic activity, making it a fundamental measurement rather than a technical trading measurement. The amount of new money coming in is unfortunately proprietary information kept by exchanges.  The importance of the two fundamental indicators of adjusted transaction quantity and daily unique addresses, as calculated by Blockchain.info [ ... ]

However, since both new addresses and transactions are free, users and programmers have no reason to use them sparingly.  A substantial and variable fraction of those counts could be "fake" transactions, between addresses owned by the same person -- such as tumbling, hotwallet/coldwallet motion, software testing, etc..  Bitcoin deposits and withdrawals at the exchanges should also be counted as "fake" in this sense.  The blockchain traffic may also include testing of new altcoins or services built on top of bitcoin. 

Unfortunately there is practically no reliable and meaningful data on the bitcoin economy.

[jaberwock]

The number of unique daily addresses used does measure a degree of economic activity, making it a fundamental measurement rather than a technical trading measurement. The amount of new money coming in is unfortunately proprietary information kept by exchanges.  The importance of the two fundamental indicators of adjusted transaction quantity and daily unique addresses, as calculated by Blockchain.info [ ... ]

However, since both new addresses and transactions are free, users and programmers have no reason to use them sparingly.  A substantial and variable fraction of those counts could be "fake" transactions, between addresses owned by the same person -- such as tumbling, hotwallet/coldwallet motion, software testing, etc..  Bitcoin deposits and withdrawals at the exchanges should also be counted as "fake" in this sense.  The blockchain traffic may also include testing of new altcoins or services built on top of bitcoin. 

Unfortunately there is practically no reliable and meaningful data on the bitcoin economy.

Transactions aren't free, they cost 0.0001 or more. Plus the time you balance won't be avaliable. Exchanges may also have withdraw or deposit fees on top of transactions fees. I don't think people would send money to themselves just for the lulz.

And I don't know altcoins that use Bitcoins transfer to test themselves. Might be my ignorance, because I'm not an altcoin developer.

[JorgeStolfi]

Transactions aren't free, they cost 0.0001 or more. Plus the time you balance won't be avaliable.

Suppose that the MtGOX thief has 500'000 BTC divided into 150'000 addresses (3.33 BTC per address on average).  Each day he issues 75'000 transactions (one every 1.15 seconds).  Each transaction combines two of those parcels and sends them out to two new addresses.

He divides the addresses into two groups, A and B, 75'000 addresses each.  The two groups are alternated, so that for the first 12 hours each day the two inputs are chosen randomly from the current A group, and the outputs are added to the new A group, until the current A group is exhausted.  In the next 12 hours he does the same with the B group.  Thus the bitcoins that are input to each transaction are at least 12h (80 blocks) old.

Assuming that each transaction pays a fee of 0.00013 BTC, here is what he contributes:

  Number of transactions per day: 75'000

  Total transaction output BTC per day: 500'000

  New addresses used per day: 150'000

  Total fees (in BTC) paid per day: 10

These numbers match the current blockchain statistics.  Note that 10 BTC/day of fees is a small price to pay for tumbling the MtGOX stolen coins.  

Is this correct?  The point is that the current blockchain traffic is small enough to be "faked" by a small group, even a single person.

Anyway, those blockchain.info plots are rather strange.  They don't show increasing adoption.  I don't know what they are showing.

[Adrian-x]

The number of unique daily addresses used does measure a degree of economic activity, making it a fundamental measurement rather than a technical trading measurement. The amount of new money coming in is unfortunately proprietary information kept by exchanges.  The importance of the two fundamental indicators of adjusted transaction quantity and daily unique addresses, as calculated by Blockchain.info [ ... ]

However, since both new addresses and transactions are free, users and programmers have no reason to use them sparingly.  A substantial and variable fraction of those counts could be "fake" transactions, between addresses owned by the same person -- such as tumbling, hotwallet/coldwallet motion, software testing, etc..  Bitcoin deposits and withdrawals at the exchanges should also be counted as "fake" in this sense.  The blockchain traffic may also include testing of new altcoins or services built on top of bitcoin. 

Unfortunately there is practically no reliable and meaningful data on the bitcoin economy.

To correct a few assumptions: there is a small transaction cost as well as a management cost in handling many private keys and an escalating risk in dealing with more keys than one can comfortably secure. (If this is happening and I'm sure it is on a small scale, it is a practical case of big wallets subdividing, to represent growth that has already happened)

Tumbling addresses as I understand are not part of the final count as they end up empty. And deposits at an exchange are most often pooled often in identified address, and wouldn't add a significant count. (I've done a few purchase lately with bitpay and found they even reuse address that end up empty so that doesn't add either. I think exchange withdrawals are a legitimate addition to the total as those are the final unique address holding coins that are counted.  

While the measurements may not be accurate I feel confident they are magnitudes more accurate than the tools to manage existing monetary policies.

As things stand this metric is waiting validation, and manipulation doesn't prove anything or give anyone a quantitative competitive advantage just yet.

[rpietila]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

[seventhgear]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

Would be nosense selling at this low price, maybe we won't see a bubble in few weeks like the last year, but I don't think we are going to hit lower values.

[ensurance982]

So, analyzing the current situation... Who thinks we've reached a bottom and are now back on our way up? I think it is much too early to tell and we may very well re-test the $350s I hope we don't go below that, though...

We won't know wether we are on bottom or not until we re-rise to the same level before the fall, or we fall to another botTOM.

That 350 on btc-e was not a bottom, it was some whale panic dump. Say otherwise would be the same to say we tested the 100's due to the Mr102

But we've been to $370 or something back in April. I think it was April 13 or so... Don't recall that exactly! But a strong bear market could push us below that. I hope though that we'll stay above that forever and start to climb again.

[JorgeStolfi]

Tumbling addresses as I understand are not part of the final count as they end up empty.

I am assuming that this graph counts addresses that appear in the blockchain (as output addresses) for the first time on each day, and does not subtract addresses that have become empty on that day.  Is this second assumption incorrect?

(Sigh, blockchain.info should have explained more precisely what is being shown in each chart...)

In the extreme tumbling scenario I just described, there would be 150'000 new addresses created every day, and all would be non-empty at the end of the day.

deposits at an exchange are most often pooled often in identified address, and wouldn't add a significant count. (I've done a few purchase lately with bitpay and found they even reuse address that end up empty so that doesn't add either. I think exchange withdrawals are a legitimate addition to the total as those are the final unique address holding coins that are counted.

Exchange deposits and withdrawals may contribute little to the new address count, but they may be a substantial part of the <transactions per day> and <total output volume per day> plots.  After MtGOX, exchange clients are advised to keep their balances to a minimum.

It does not seem right to count those BTC transfers as real use: although the input and output addresses have distinct owners, the coins in the exchange logically belong to the clients, so they are not "payment" for anything.  It would be like counting cash deposits and withdrawals at banks as part of the GDP.

The blockchain traffic from Chinese bitcoiners, for example, must be almost 100% exchange deposits and withdrawals; its use for e-payments is probably very small.

While the measurements may not be accurate I feel confident they are magnitudes more accurate than the tools to manage existing monetary policies.

Banks and businesses are required to report their activity to their government, for tax and other purposes, and there are many thousands of people whose full-fime job is to extract useful statistics from that raw data.  For example, the published numbers on credit card usage are probably accurate to 2 digits, at least; and we know the subtotals by country and purpose.  Ditto for total salaries, total company income, etc.

There is no such data for bitcoin.  We don't know how much of the traffic shown in the blockchain.info plots are payments for goods and services.  It could be 10% or 90% -- and the fraction could vary substantially from month to month.

In fact, the shape of those plots over the last couple of years suggests that most of that traffic is NOT commercial payments.

manipulation doesn't prove anything or give anyone a quantitative competitive advantage just yet.

Inflation of the blockchain traffic would obviously benefit all bitcoin enterprises, especially bitcoin invstment funds.  For example, I have seen a couple of articles recently claiming that bitcoin has already passed PayPal in volume of payments --- using the blockchain.info <total output volume> as the bitcoin number.

[oda.krell]

[...]
Anyway, those blockchain.info plots are rather strange.  They don't show increasing adoption.  I don't know what they are showing.

1) Transactions cost money. There is a hypothetical incentive for a hypothetical manipulator to "pad" the growth (e.g. a miner intending to sell at inflated prices), but the cost of faking those transactions is substantial, and would probably require a concerted effort that no evidence exists for, to my knowledge. Hence, the conclusion based on the least assumptions is that the data is not fake, until evidence to the contrary is presented. (and, "the data doesn't look like commercial adoption" is no such evidence).

2) The no. of transaction graph roughly matches total USD volume transferred roughly matches the no of addresses graph roughly matches the hash rate graph. If the data suggests (even though it is no guarantee for) exponential growth along several dimensions, the most likely conclusion, in the absence of contrary evidence, is that some underlying variable does undergo such growth in fact.


Myself, I'm skeptical towards extrapolation from such data (a point that you made yourself often enough, citing Worldcom stock price as an example, IIRC), but that's a different point: the question whether exponential growth is going to continue or not. Looking at the blockchain data however and questioning whether there was exponential growth until now is a stretch.


EDIT: Added the most pertinent graph. From 100 transactions a day to almost 100k transactions a day, over the course of 5 years.

[nicepumper]

Incredible graph! but no matter how many graphs you have, all these fuds like fallling will not shut the fuck up 

[An amorous cow-herder]

1) Transactions cost money.

Well, if you dont mind the transaction taking longer setting the fee to zero works as well.

[RoadStress]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

Please sell so we can have another liftoff! Please sell so we can have another liftoff! Please sell so we can have another liftoff!

Why not sacrifice 2k BTC for a bigger wealth? I would If I had at least 4k BTC!

[JayJuanGee]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

Please sell so we can have another liftoff! Please sell so we can have another liftoff! Please sell so we can have another liftoff!

Why not sacrifice 2k BTC for a bigger wealth? I would If I had at least 4k BTC!

One of the ONLY reasons to sell 2k BTC at this time, for a large BTC holder, would be to attempt to manipulate BTC prices downward, which should NOT be something that some one like Rpietilla should be suggesting as a possibility..   In this case, his aspiration would likely be to buy in at a lower price and then to have 2400 BTC rather than 2000 BTC... good for him (if it works) , but NOT good for the many smaller time holders who do NOT have such manipulation abilities..

Some may suggest that 2000BTC is NOT enough to downwardly manipulate the market, and that could be correct - except to the extent that there may be some coordinating with other dumps or dumpers.

[dakota neat]

Who is that rpietila guy anyway?

[RoadStress]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

Please sell so we can have another liftoff! Please sell so we can have another liftoff! Please sell so we can have another liftoff!

Why not sacrifice 2k BTC for a bigger wealth? I would If I had at least 4k BTC!

One of the ONLY reasons to sell 2k BTC at this time, for a large BTC holder, would be to attempt to manipulate BTC prices downward, which should NOT be something that some one like Rpietilla should be suggesting as a possibility..   In this case, his aspiration would likely be to buy in at a lower price and then to have 2400 BTC rather than 2000 BTC... good for him (if it works) , but NOT good for the many smaller time holders who do NOT have such manipulation abilities..

Some may suggest that 2000BTC is NOT enough to downwardly manipulate the market, and that could be correct - except to the extent that there may be some coordinating with other dumps or dumpers.

You didn't get it. When he sold 2kBTC last year the price went to the moon. I want to repeat the same experience this year too.

Who is that rpietila guy anyway?

A guy that bought a castle with money from bitcoin.

[JayJuanGee]

This is September. Last September I sold BTC2000+. Now,

"I will not sell 2000 BTC this month. I will not sell 2000 BTC this month. I will not sell 2000 BTC this month."

 

Please sell so we can have another liftoff! Please sell so we can have another liftoff! Please sell so we can have another liftoff!

Why not sacrifice 2k BTC for a bigger wealth? I would If I had at least 4k BTC!

One of the ONLY reasons to sell 2k BTC at this time, for a large BTC holder, would be to attempt to manipulate BTC prices downward, which should NOT be something that some one like Rpietilla should be suggesting as a possibility..   In this case, his aspiration would likely be to buy in at a lower price and then to have 2400 BTC rather than 2000 BTC... good for him (if it works) , but NOT good for the many smaller time holders who do NOT have such manipulation abilities..

Some may suggest that 2000BTC is NOT enough to downwardly manipulate the market, and that could be correct - except to the extent that there may be some coordinating with other dumps or dumpers.

You didn't get it. When he sold 2kBTC last year the price went to the moon. I want to repeat the same experience this year too.

If that is what you want to believe that he meant, then that is your choice.    I do recognize that as a possible reading, and maybe that was his intent...

I sufficiently understand the circumstances around Rpietila's sale last year.... Prices had been hovering around $100 all summer, and then he sold 2K btc at $600-ish... half way to the top rather than at the top.

I think that it would be fair if he was suggesting that BTC prices could skyrocket at any moment but that he was exercise additional self-restraint to make sure that he does  NOT sell too early... I actually have NO real problem with big holders taking profits as the price raises and attempting to find the top.. those are signs of a healthy market and healthy investor behaviors... just that different people are going to conclude differently regarding their estimates of the top.

[rpietila]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

[JayJuanGee]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

I agree with you about the "not half-way" comment, but I believe that I was otherwise fairly accurate in my description..... because half way was a mere vague referent.. rather than an absolute technical term.. and maybe even describing that BTC prices nearly doubled after $660 (at least they went up approximately another 75% thereafter).


O.k... now, you seem to be misapplying this year's scenario, a little bit because "half way" in the rocket this year, is NOT going to be around $660 but instead somewhere around $2000 to $5000 - b/c likely the next all time high is likely to be quite northward of $3k...

The question still remains when to sell, exactly and if to sell and has the rocket come to a close?  and in what proportions of our BTC portfolios are we gonna sell and each of us will come to differing conclusions in this regard.... some of us will sell some BTC in the mid-$600s... or some other point that we determine to be the top, but it ends up being somewhere "half-way" or some other percentage of the way.

[BitChick]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

I agree.

However, I remember being worried when the price hit the ATH at around $266 last November thinking everyone would panic and sell off but we just kept on going up without any hesitations.

I would like to think that would happen again on the next run up.  Will we stall at $1200 or just keep on going?  That is the bigger question I have.

So if the price rises to $1200 and you are tempted to sell,  DON't!  

(of course I say all this knowing that I have a trip to India to finish paying for very soon here.  So I am actually praying for a price increase soon.  It is way too painful selling coins at this low of a price, even the coins that have been so generously donated by a kindhearted benefactor!  I have even put things on a no interest credit card this past month so I haven't had to sell any.  Crazy I know. But selling at this price seems even crazier!!)

[JorgeStolfi]

Incredible graph! but no matter how many graphs you have, all these fuds like fallling will not shut the fuck up  

Noblesse oblige...  

[...]
Anyway, those blockchain.info plots are rather strange.  They don't show increasing adoption.  I don't know what they are showing.

Transactions cost money. There is a hypothetical incentive for a hypothetical manipulator to "pad" the growth (e.g. a miner intending to sell at inflated prices), but the cost of faking those transactions is substantial,

The total fees being paid now are only ~10 BTC/day (~5000 USD/day), which divided by 70000 tx/day gives only 0.00014 BTC/tx, or little more than the minimum fee.  If one is tumbling 680'000 stolen MtGOX coins, a loss of 10 BTC/day is nothing.  If one is expecting to sell 200'000'000 USD of fund shares, one may be willing to spend 1% of that to simulate a vigorous bitcoin economy for a year.

The no. of transaction graph roughly matches total USD volume transferred roughly matches the no of addresses graph roughly matches the hash rate graph. If the data suggests (even though it is no guarantee for) exponential growth along several dimensions, the most likely conclusion, in the absence of contrary evidence, is that some underlying variable does undergo such growth in fact. [ ...]  Looking at the blockchain data however and questioning whether there was exponential growth until now is a stretch. [ ... ] the most pertinent graph. From 100 transactions a day to almost 100k transactions a day, over the course of 5 years.

All bitcoin indicators grew enormously over those five years.  I would question whether it is appropriate to call it 'exponential growth' and then extrapolate to the future, but that is not the point.

Hence, the conclusion based on the least assumptions is that the data is not fake, until evidence to the contrary is presented. (and, "the data doesn't look like commercial adoption" is no such evidence).

Like the Metcalfe Law plot that others have posted, the above plot squeezes the data for the last year into a tiny corner region of 3 by 0.2 cm at normal resolution.  One must look closely at that corner to notice that the number of transactions has not increased substantially over the last year.  One must look even closer to notice that the tiny wiggles in that plot are swings by 40% or more.

Now look at this plot of the estimated USD transaction volume per day, for the last year:


"Estimated" here apparently means "excluding the return-change outputs" as identified by some heuristic.
Note that the daily transaction volume in USD mostly decreased from ~Jan/01 to ~Mar/07, and was approximately constant from ~Mar/23 to now, apart from a couple of peaks/bumps (~Mar/07--Mar/23, ~May/22--Jun/20) and a depression (~Apr/27--May/21).  This is quite at odds with the "increasing adoption" that was supposed to be happening during this time, which should result in steadily increasing USD volume.

The plot of  the estimated BTC transaction volume per day is perhaps more revealing:


Note that the daily transaction volume in BTC was even more constant, arount 100'000 BTC/day, from Jan/01 to this day.  (While the March peak is more striking in this plot, the other bumps and dips are somewhat smaller.)  It is puzzling, for example, that the BTC volume on Jan/01 was almost the same as on May/01, even though the price dropped by 50% in the meantime.  I take this fact as evidence that most of the traffic is not payments, but activities for which the price is irrelevant -- such as tumbling.

The plot of number of transactions per day is also strange:


Note that this quantity too is fairly constant, between ~60'000 and ~70'000 tx/day, from ~Feb/10 to this day.  (The vertical scale of this plot starts at 40'000 tx/day, so the relative variations are smaller than what they appear.)  The March peak of the other plots is here an inconspicuous bump of about 8%.  (Therfore, that peak was the result of larger transactions, rather than more transactions.)   While the increase of ~20% in January could signify increased adoption, the stagnation since then again contradicts it. (Increased adoption should cause more transactions as well as more USD volume.)

[Adrian-x]

Tumbling addresses as I understand are not part of the final count as they end up empty.

I am assuming that this graph counts addresses that appear in the blockchain (as output addresses) for the first time on each day, and does not subtract addresses that have become empty on that day.  Is this second assumption incorrect?

(Sigh, blockchain.info should have explained more precisely what is being shown in each chart...)

In the extreme tumbling scenario I just described, there're would be 150'000 new addresses created every day, and all would be non-empty at the end of the day.

I've possibly misunderstood the data I assumed it reflected the number of unique address used, as in, in use, as opposed to used up.

I think more over the network effect adds value to bitcoin, if there is no way to measure it so be it, it's my opinion this graph reflects that growth. Now that it can me manipulated because we have related it to Metcalfe's law does little to prove otherwise

While the measurements may not be accurate I feel confident they are magnitudes more accurate than the tools to manage existing monetary policies.

Banks and businesses are required to report their activity to their government, for tax and other purposes, and there are many thousands of people whose full-fime job is to extract useful statistics from that raw data.  For example, the published numbers on credit card usage are probably accurate to 2 digits, at least; and we know the subtotals by country and purpose.  Ditto for total salaries, total company income, etc.

With regards to the above accounting accuracy of reported numbers Bitcoin is more accurate.
The metrics that I was referring to are the ones used in economic calculations like the GDP, and the CPI, the former is more favorable when we make ill use of our natural resources and create sick unhappy people, we measure that and say wow we're growing fast lets inflate the money supply. And the latter is manipulate to excluded the things the money inflation effects, mainly housing and energy, so politicians can say look we do a good job if you're unhappy it's because you're part of the 38.4 percent not taking your antidepressants we fort so hard to secure in Afghanistan.

In Bitcoin manipulating the data makes ill use of excess investment capital but it has no effect on the consumers ability to save, and has no impact on entrepreneurs who find more effective ways to distribute resources equitably.

Macroeconomics is for central planning, Bitcoin is for distributed planning, Austrian heavyweights have elegantly expected the futility in using the data to measure economic success, they give a great framework for why Bitcoin will make a more effective money. The quantitative analysis of the Bitcoin data just identifies market need more acutely, and gives one a competitive advantage in business, not in how to manipulate a centralized system.  

[twiifm]

Tumbling addresses as I understand are not part of the final count as they end up empty.

I am assuming that this graph counts addresses that appear in the blockchain (as output addresses) for the first time on each day, and does not subtract addresses that have become empty on that day.  Is this second assumption incorrect?

(Sigh, blockchain.info should have explained more precisely what is being shown in each chart...)

In the extreme tumbling scenario I just described, there're would be 150'000 new addresses created every day, and all would be non-empty at the end of the day.

I've possibly misunderstood the data I assumed it reflected the number of unique address used, as in, in use, as opposed to used up.

I think more over the network effect adds value to bitcoin, if there is no way to measure it so be it, it's my opinion this graph reflects that growth. Now that it can me manipulated because we have related it to Metcalfe's law does little to prove otherwise

While the measurements may not be accurate I feel confident they are magnitudes more accurate than the tools to manage existing monetary policies.

Banks and businesses are required to report their activity to their government, for tax and other purposes, and there are many thousands of people whose full-fime job is to extract useful statistics from that raw data.  For example, the published numbers on credit card usage are probably accurate to 2 digits, at least; and we know the subtotals by country and purpose.  Ditto for total salaries, total company income, etc.

With regards to the above accounting accuracy of reported numbers Bitcoin is more accurate.
The metrics that I was referring to are the ones used in economic calculations like the GDP, and the CPI, the former is more favorable when we make ill use of our natural resources and create sick unhappy people, we measure that and say wow we're growing fast lets inflate the money supply. And the latter is manipulate to excluded the things the money inflation effects, mainly housing and energy, so politicians can say look we do a good job if you're unhappy it's because you're part of the 38.4 percent not taking your antidepressants we fort so hard to secure in Afghanistan.

In Bitcoin manipulating the data makes ill use of excess investment capital but it has no effect on the consumers ability to save, and has no impact on entrepreneurs who find more effective ways to distribute resources equitably.

Macroeconomics is for central planning, Bitcoin is for distributed planning, Austrian heavyweights have elegantly expected the futility in using the data to measure economic success, they give a great framework for why Bitcoin will make a more effective money. The quantitative analysis of the Bitcoin data just identifies market need more acutely, and gives one a competitive advantage in business, not in how to manipulate a centralized system.  

Network effects (Metcalf's Law) has nothing to do with price.  Its only describes user adoption.  Bitcoin price is purely speculative.  It can be $1000 or $50 and still be used for for the same amount of transactions.  You have to consider velocity.

I'm not sure if I agree Austrians are proponents of bitcoin.  I was reading some bitcoin articles on Mises.org and it seems like the guys who comment who knew what they are talking about were opponents of bitcoin.  I only see more bitcoiners claiming to be Austrian & the Austrians response was that bitcoiners don't understand Austrian Economics

[twiifm]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

Obvious pump here.  Do people take this guy seriously?  Obvious that he was a bag that he want to dump so he needs greater fools to drive the price up so he can have profit

I see this game in penny stock land all the time

[JayJuanGee]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

I agree.

However, I remember being worried when the price hit the ATH at around $266 last November thinking everyone would panic and sell off but we just kept on going up without any hesitations.

I would like to think that would happen again on the next run up.  Will we stall at $1200 or just keep on going?  That is the bigger question I have.

So if the price rises to $1200 and you are tempted to sell,  DON't!  

(of course I say all this knowing that I have a trip to India to finish paying for very soon here.  So I am actually praying for a price increase soon.  It is way too painful selling coins at this low of a price, even the coins that have been so generously donated by a kindhearted benefactor!  I have even put things on a no interest credit card this past month so I haven't had to sell any.  Crazy I know. But selling at this price seems even crazier!!)

that was more or less the point that I was attempting to make about the $1200  issue.. that we should expect prices to go quite a bit beyond $1200; however, a question remains regarding how far, and at what point one should be tempted to sell?  $1800?  $2200? $3000?  $3900?   $5500?  $8101?   Each of us will determine the sell point at a different price point, and some will be more correct than others and some will be more emotionally driven than others.

[JayJuanGee]

 
Network effects (Metcalf's Law) has nothing to do with price.  Its only describes user adoption. 

You are sounding like the latest troll - with your simplistic and inaccurate statements. 

You may need to go back and reread metcalf's law and then consider how it would apply to BTC....   You may even need to use some imagination about what greater networking effects would cause for BTC prices.

 Bitcoin price is purely speculative.  It can be $1000 or $50 and still be used for for the same amount of transactions.  You have to consider velocity.

If Bitcoin's price were $50, then the market cap would be around $650million.    You would NOT be able to perform very large or very many transactions without creating considerable volatility.  Even with a $1000 price, BTC's market cap is around $14 billion, which is certainly more functional than  $50, but if anyone were to attempt any billion dollar transactions, the price would likely be too heavily affected.  BTC's price in the $10k plus arena brings more utility and $100k would bring even more utility with a $1.4 trillion market cap (about 1/5 of Gold's market cap).

  I'm not sure if I agree Austrians are proponents of bitcoin.  I was reading some bitcoin articles on Mises.org and it seems like the guys who comment who knew what they are talking about were opponents of bitcoin.  I only see more bitcoiners claiming to be Austrian & the Austrians response was that bitcoiners don't understand Austrian Economics

What you are saying here makes NO sense because it lacks specifics, and appears to serve as pure mudslinging...

[BitCoinNutJob]

How does someone even transfer say.... 25mil in BTC and cash out without crashing the market atm, is that size even possible?

[rpietila]

How does someone even transfer say.... 25mil in BTC and cash out without crashing the market atm, is that size even possible?

Not without knowing the right people. And this is one requirement too much.

"cash out" is a little bit undefined though. If you had $25million in cash, or in bank, and wanted to "cash out", you could only do it quickly to instruments with very similar attributes, such as bonds, or funds. If you wanted unencumbered RE for instance, a quick cash out would "crash the market" for dollars and you would pay much more than the midrate for your RE.

Similarly if I would need to "cash out" my castle in a week, it would be a horrible loss. But if someone would need to buy a castle with same attributes in a week - well then it ain't no cheap

The case for a person holding bitcoins and needing $25M in cash does not exist. That sort of sum is always needed for some further purpose. And the explanation goes on and on...

[oda.krell]

Agree with OP on this one. The 'cashing out a huge lump sum' scenario isn't really worth following. To few plausible cases where it would make sense, and the effect is overshadowed by the phenomenon below anyway...

What is quite possibly going on right now is a more natural, stretched out over time "cashing out" by large mining farms selling most (if not all) of their coins (by my argument that professionalization of the mining industry leads to short-term opportunism, i.e. "if I don't sell my new coins now for a low-ish price, some other other miner will, and I will lose even that low-ish profit opportunity").

That's not a real problem longer-term though: once buying pressure is sufficiently high again (for any external reason, like block reward halving, or market internal reason, like change of perception of price), miners will adapt their strategy, and presumably increase their amount of longer-term held coins, thus further fueling the price increase.

The tricky part is realizing when this change in sentiment and market dynamics takes place. I do believe it is possible to trade the periods before it happens, and act accordingly, but I also appreciate the recommendation to sit the in between period out with a full BTC position, to avoid the risk of taking a big hit to your position once the dynamics change.

[inca]

Agree with OP on this one. The 'cashing out a huge lump sum' scenario isn't really worth following. To few plausible cases where it would make sense, and the effect is overshadowed by the phenomenon below anyway...

What is quite possibly going on right now is a more natural, stretched out over time "cashing out" by large mining farms selling most (if not all) of their coins (by my argument that professionalization of the mining industry leads to short-term opportunism, i.e. "if I don't sell my new coins now for a low-ish price, some other other miner will, and I will lose even that low-ish profit opportunity").

That's not a real problem longer-term though: once buying pressure is sufficiently high again (for any external reason, like block reward halving, or market internal reason, like change of perception of price), miners will adapt their strategy, and presumably increase their amount of longer-term held coins, thus further fueling the price increase.

The tricky part is realizing when this change in sentiment and market dynamics takes place. I do believe it is possible to trade the periods before it happens, and act accordingly, but I also appreciate the recommendation to sit the in between period out with a full BTC position, to avoid the risk of taking a big hit to your position once the dynamics change.

That is an interesting point. Miners have some control over supply of coins coming to the market. If they acted in concert presumably they could engineer a bubble by constraining or starving supply to the market very easily. Or during a rapid price rise they could magnify a bubble by exerting the same effect.

The moment where the equilibrium changes from miners as a group selling on the market, to hoarding in expectation of price rises is interesting. Inside information could be key here?

[CMMPro]

I don't believe they have to work together to manipulate the market at all.

The mechanism that will do this is difficulty vs price.

All we need to do is figure out at what difficulty point even the "manufacturer miners" are no longer profitable.

I believe that right now all publicly available mining equipment is underwater. (Correct me if I'm wrong.)
If you take into consideration:

Maximum 6 month depreciation of the equipment costs (I'd guess based on my experience designing hardware perhaps <=20% of retail cost or ~$160/TH)

Energy costs per kw/hr (for both running the mining equip and cooling the building)

Rent

Labor to run the mine(1-3 people 24/7?)

Internet bandwidth (commercial service)

Other utility costs(LAN/networking, phone etc.)


If we can estimate the COGS for a block or a single bitcoin it is easy to know if they are profitable based on the market price and the off-exchange price. Many of these variables we cannot know precisely but we can apply an uncertainty statistic to them and determine a median price with a bandwidth of uncertainty. When the calculation is complete we can see a low/median/high band for the mining cost of a single bitcoin.

This band should give us something to work with in terms of knowing what percentage of miners are holding/selling/selling at a loss/selling at a premium to the exchange price.







 

[CMMPro]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

[zimmah]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

Obvious pump here.  Do people take this guy seriously?  Obvious that he was a bag that he want to dump so he needs greater fools to drive the price up so he can have profit

I see this game in penny stock land all the time

Sure, please sell all you bitcoins at $660, bug don't cry when we reach $5000 a few months later.

[yokosan]

People need to remember that following the death of Gox volume is much lower and most of what remains is now in China. The rules of the game have changed.

[painlord2k]

I see the hashing power of the network continue to grow and this reflect on the inflation rate.
Last number was a 30%  increase compared to the previous week.
These are serious numbers and a part a single point this summer, all inflation data was between 10-30% than design, so the hash rate grow 30-50% every two weeks.
So, there is some serious money investing in mining and they are professionals sure to get their investment back plus profits.

This could be explained in two ways:
First
1) Large professional miners (LPMs) are able to get HW at a large discount compared to private end users (large as >50%) so they are able to pay back the HW very fast (less than a month).
2) LPMs are able to secure very energy efficient HW (because they can afford professional HW and not retail stuff), so they can continue profit
3) LPM can get fiscal and accountability advantages private users can not exploit, so their costs are pretty different compared to a private miner.

Second
1) They are mining at a loss (today) because they believe (or know) there will be a large increase in the exchange rate in the "near" future and are keeping a share of the mined coins and using mining as a way to "buy" bitcoins without buying them directly on the market (and affecting the prices). They could compensate the coins they don't sell on the market with some subsides to large vendors to sell goods at a discount and exchange immediately the coins on the markets for fiat. This would, also, explain the "BUY THE DIPS" we see when the price go down enough and become more convenient to buy than mine.

[painlord2k]

My opinion is we saw a saucer shaped downturn after the top in November and we are seeing a saucer shaped upturn from May until now and will not see large increases before November.
Obviously there was a number of spikes up and down on saucer.

[JorgeStolfi]

1) Large professional miners (LPMs) are able to get HW at a large discount compared to private end users (large as >50%) so they are able to pay back the HW very fast (less than a month).

One way to get harware at a 100% discount:

* Advertise high-performance, low-consumption mining rig to be built and delivered in 2-3 months.
* Collect thousands of pre-orders at >5000 USD unit price.
* Build or buy those machines in record time.
* Move those machines to a massive "testing facility"
* "Test" the machines for months, and keep all the bitcoins that they mine.
* When the machines become uneconomical, ship them to the customers.

One can repeat this with several generations of mining equipment.

This method has been tested, and works!

[BitCoinNutJob]

People need to remember that following the death of Gox volume is much lower and most of what remains is now in China. The rules of the game have changed.

Actually gox were losing their business a few months before it closed. Bitstamp & BTC-e had caught up.  If gox were still alive they wouldnt be way ahead vs stamp finex & btc-e volume imo even if they sorted out their banking.

[oda.krell]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Here's my response (and calculation) in the other thread.

[molecular]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

Obvious pump here.  Do people take this guy seriously?  Obvious that he was a bag that he want to dump so he needs greater fools to drive the price up so he can have profit

I see this game in penny stock land all the time

Bitcoin is not some penny stock.

What (I think) rpietila is saying: yes, we've been agonized for 10 or so months now and it's tempting to sell when we reach that dreded $680 level again. But: there's another possible 10-bagger waiting. If we pass $680 it's quite possible we'll see those crazy times again when people (fresh blood) will be falling over each other, scrambling to get some Bitcoin: "What?!? Bitcoin has survived again? I thought the CEO was in jail?!? That's some tough honey badger right there, anti-fragile shit mofo. choochooo!".

Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)

Selling at $660 is like selliing at $120 last year. Rpietila has experienced the consequences of doing that. This is why I think is advice is sincere. Sure, he's talking his portfolio (but ones honest opinion should match ones portfolio anyways), but I highly doubt he'll sell at $660.

[molecular]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Then what's the explanation for the continuation of the hashrates exponential growth? Inertia?

[ensurance982]

People need to remember that following the death of Gox volume is much lower and most of what remains is now in China. The rules of the game have changed.

Not true! The volume across all exchanges is still strong and continuing to even go up slightly: http://data.bitcoinity.org/markets/volume/2y?c=e&r=week&t=a&volume_unit=btc

[yokosan]

September was not half-way. Price was about $120 then.

If it now rises to $660, many are tempted to sell.

DON'T.

Obvious pump here.  Do people take this guy seriously?  Obvious that he was a bag that he want to dump so he needs greater fools to drive the price up so he can have profit

I see this game in penny stock land all the time

Bitcoin is not some penny stock.

What (I think) rpietila is saying: yes, we've been agonized for 10 or so months now and it's tempting to sell when we reach that dreded $680 level again. But: there's another possible 10-bagger waiting. If we pass $680 it's quite possible we'll see those crazy times again when people (fresh blood) will be falling over each other, scrambling to get some Bitcoin: "What?!? Bitcoin has survived again? I thought the CEO was in jail?!? That's some tough honey badger right there, anti-fragile shit mofo. choochooo!".

Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)

Selling at $660 is like selliing at $120 last year. Rpietila has experienced the consequences of doing that. This is why I think is advice is sincere. Sure, he's talking his portfolio (but ones honest opinion should match ones portfolio anyways), but I highly doubt he'll sell at $660.

Agree 100%. Anybody that's been around BTC for at least a couple of years has likely been there.

[minerpumpkin]

Agree 100%. Anybody that's been around BTC for at least a couple of years has likely been there.

We're simply in an especially rough patch right now. There's no bubble which people have been promised and a lot of people who got into Bitcoin back in November 2013 are now panicking. They're the so-called lambs in this case. They need to work on their perseverance!

[JayJuanGee]

Agree 100%. Anybody that's been around BTC for at least a couple of years has likely been there.

We're simply in an especially rough patch right now. There's no bubble which people have been promised and a lot of people who got into Bitcoin back in November 2013 are now panicking. They're the so-called lambs in this case. They need to work on their perseverance!

Would it NOT be a fairly rare scenario for someone to have gotten into BTC in November 2013 and maintained a $1100-ish average cost per BTC?  

I started in November 2013 with my first purchase of 1.24 BTC at $1200 per BTC; however currently my average cost per BTC is about $605 (including transaction costs).

I knew when I was getting into BTC that the price had gone up considerably in the months preceding my first purchase.  Accordingly, I only initially bought $1,500 worth of BTC which was only 5% of what I could have done, and I projected the remainder $28,500 over the next 6 months with rough dollar cost averaging.

Even though I had $30k at my disposal to get started, I would have been way too scared to plop down $30k at any $1000 + price point during that period, and maybe the smarter thing would have been to wait a month or two before getting started - but  few people really seemed to have any real clue about how high the upward momentum was going to go or last, so I wanted to get some skin in the game and to get started (even though the price seemed a bit inflated at the moment at $1200 per BTC).

(edited above to clarify and add a couple of details)

[molecular]

I would have been way too scared to plop down $30k at any $1000 + price point during that period, and maybe the smarter thing would have been to wait a month or two before getting started - but  few people really seemed to have any real clue about how high the upward momentum was going to go or last.

Noone knew how high it would go... you did pretty well I'd say.

[Melbustus]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

For example, let's say there's a 20% of 10x, and 80% chance of complete failure:

( 0.20 )( 10 * 660 ) + ( 0.8 )( 0 ) = $1320 + 0 = $1320

That obviously doesn't include opportunity cost or time-value-of-money considerations, but the guts of the bitcoin investment thesis (like many investment theses with longish time-horizons) has always been, and still is, a simple weighted-avg expectation calc on the possible outcomes.

[molecular]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

[Melbustus]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

[molecular]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

Hmm... I miss the newbies

[CMMPro]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Then what's the explanation for the continuation of the hashrates exponential growth? Inertia?

I would say there is some "inertia", hardware that was ordered months ago, produced recently and coming online in the future of today where it's (non) profitability wasn't predicted...there is a sunk cost of hardware that they have no option to try to get back because a total loss of capital is not acceptable. Look to ASICMiner's latest chips for evidence of this. They fizzled because by the time they were released they had no financial incentive left in them. They literally can't produce new chips that are efficient enough, fast enough to stay ahead of the increase in difficulty.  

There is also a silent war of attrition going on...the mining group that has the newest hardware can hold out the longest and will hopefully extend profitability as the competitors shut down old hardware that is losing way too much.

There is also a race to try to produce something more and more efficient...but we are running out in that arena as well.
The most efficient miners on the market are only about twice as efficient as my KNC was last October, the difficulty increase though has gone up a lot more than double.

It is the law of diminishing returns kicking the mining industry in the ass...racing each other to bankruptcy.

[rfcdejong]

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

Hmm... I miss the newbies

Hi   (not that new being a Senior Member thru)

[pork pie]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

[rfcdejong]

Somewhere i did read that bitcoin (or crypto at least) is the perfect transfer coin (replacing fiat) into "Third Worlds" like Africa. Transfering fiat to those poor nations is done by using big banks like Westurn Union, they take too much advantage. Imagen how easy crypto coins will set a role in there. All what is needed is a way to turn crypto into fiat over there. People will pick up bitcoins, transfer them, keep a small amount, etc.. if millions will do that then a value like rpietila wrote will be possible, if just the evil twin brothers will sell first.

[Erdogan]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

[molecular]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

If you have a botnet you'll mine something other than a sha256 coin. Not even scrypt, probably some obscure "asic/gpu-proof" coin like ethereum, lol .

Bitcoin botnet mining is not going to net anything substantial even if you don't compare to the other options you have with a botnet. Difficulty is just too insanely high for this to make sense, even if you have access to gpu.

[Chuckee]

Risto wrong yet again. Does anyone actually take this guy seriously?

[btcpokerface]

Risto wrong yet again. Does anyone actually take this guy seriously?

Usually I trust him, but no one can be perfect except falliiiing.





joking!

[inca]

Risto wrong yet again. Does anyone actually take this guy seriously?

Obvious trolls like you certainly aren't.

[Bitcopia]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

[wachtwoord]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

Yeah, I also agree with this opinion.

[zimmah]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

If you have a botnet you'll mine something other than a sha256 coin. Not even scrypt, probably some obscure "asic/gpu-proof" coin like ethereum, lol .

Bitcoin botnet mining is not going to net anything substantial even if you don't compare to the other options you have with a botnet. Difficulty is just too insanely high for this to make sense, even if you have access to gpu.

yes, you're about 2 years late for that.

it would have been profitable 2 or 3 years ago, but right now, even if you hack into all supercomputers simultaneously, you'd barely even make a dent compared to the global hashrate.

[twiifm]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

He called it at $500 and changed the thread title.  Lame

Just look at the date of OP aug 15 and look what happened on that date.  Big drop to 500 and bounce.

Flash crash didnt happen til aug 18

[JayJuanGee]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

He called it at $500 and changed the thread title.  Lame

Just look at the date of OP aug 15 and look what happened on that date.  Big drop to 500 and bounce.

Flash crash didnt happen til aug 18

Actually, this is a fairly decent point.  

I have NO problem with people (or Bots, if Risto were a Bot, which I tend to doubt  ) making BTC predictions and communicating their predictions on this forum and even getting their predictions wrong - b/c who really fucking knows what is going to happen with bitcoin prices, except for perhaps some Whale manipulator(s), and even probably Whale manipulators have some considerable difficulties knowing whether their attempts at manipulation BTC prices are going to be successful.

Regarding calling the bottom, we gotta go by the date of the OP and the prices on that date, yet I remain quite uncertain whether Risto changed the contents of OP.  Personally, I believe this is a problem with this forum that allows the editing of previous posts, b/c it is much more difficult to pinpoint historically what people said b/c they may have changed the contents of their post(s).  OP  does seem to talk about $340 as a 10x bouncing point, so maybe it remains a little unclear whether Risto was calling $340 as the bottom or the prices on August 15?  

I do NOT really give a flying fuck if Risto got his prediction wrong, but I would be concerned if Risto were to change the contents of his post or the title of this thread  in order to weasle out of his original prediction.  To date, I do NOT really have evidence to establish with any level of confidence that Risto engaged in any such weasling conduct in connection with this calling the bottom prediction or this thread.

[NotLambchop]

He didn't change the content.  The original could be seen HERE.  If a post is edited, the date gets underlined (see pic):



If you hover the mouse pointer over the date, you will see the date of the last edit.  Handy.

[mmortal03]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

He called it at $500 and changed the thread title.  Lame

Just look at the date of OP aug 15 and look what happened on that date.  Big drop to 500 and bounce.

Flash crash didnt happen til aug 18

Homeslice, on my calendar, April 10th/11th of 2014 occurred before August 15th, 2014.  On August 15th he said that the April low would turn out to be the bottom. That's it. We still haven't gone lower.

[Bitcopia]

He didn't change the content.  The original could be seen HERE.  If a post is edited, the date gets underlined (see pic):



If you hover the mouse pointer over the date, you will see the date of the last edit.  Handy.

Thanks.

[Beliathon]

420 is the basement, we're there. Nowhere to go but up.

[JayJuanGee]

He didn't change the content.  The original could be seen HERE.  If a post is edited, the date gets underlined (see pic):



If you hover the mouse pointer over the date, you will see the date of the last edit.  Handy.

I am going to have to watch out for that editing more - b/c, as far as I can see, it seems to be a little inconsistent.  I see that there is a little dotted line under the date if the post has been edited; however, I have edited a few of my posts, and the little dotted line does NOT show up on all of my edited posts.

Additionally, if the name of the thread is changed, then would we be able to easily verify whether that has happened or NOT? 

[JayJuanGee]

420 is the basement, we're there. Nowhere to go but up.

I have only seen a low of $431.11, so far, and how do you arrive at such a conclusion?

[N12]

He didn't change the content.  The original could be seen HERE.  If a post is edited, the date gets underlined (see pic):



If you hover the mouse pointer over the date, you will see the date of the last edit.  Handy.

I am going to have to watch out for that editing more - b/c, as far as I can see, it seems to be a little inconsistent.  I see that there is a little dotted line under the date if the post has been edited; however, I have edited a few of my posts, and the little dotted line does NOT show up on all of my edited posts.

There is a 5 minute grace period.

[JayJuanGee]

He didn't change the content.  The original could be seen HERE.  If a post is edited, the date gets underlined (see pic):



If you hover the mouse pointer over the date, you will see the date of the last edit.  Handy.

I am going to have to watch out for that editing more - b/c, as far as I can see, it seems to be a little inconsistent.  I see that there is a little dotted line under the date if the post has been edited; however, I have edited a few of my posts, and the little dotted line does NOT show up on all of my edited posts.

There is a 5 minute grace period.

Ok.. thanks... that may explain some of the inconsistencies that I was witnessing in attempting to verify the extent to which that edit verification feature exists.

[abercrombie]

sitting at 390's, low thus far 386.  thread got owned. 

[Sevvero]

OP is an idiot. Proof is in the numbers.

[Bagatell]

OP called 340. Read it again.

[cdooer]

OP is an idiot. Proof is in the numbers.

Why are you even here you fucking moron?

[Bios Optimus]

Just put him on ignore. I did and reading posts is so much better.  I don't mind a contrarian view point if it has thought and merit behind it but he has nothing intellectual to add.

[NotLambchop]

OP called 340. Read it again.

No, I'm afraid you fell for the oldest trick in the book, known to every mentalist, psychic, fortune-teller and medium since the first soothsayer conned coin from the first idiot.
OP never called the bottom, leaving you to riddle out just what it is he meant to say.

Oh, and if you took him seriously?  You're either broke already or soon to be. <==my prognostication

 

[JayJuanGee]

OP called 340. Read it again.

No, I'm afraid you fell for the oldest trick in the book, known to every mentalist, psychic, fortune-teller and medium since the first soothsayer conned coin from the first idiot.
OP never called the bottom, leaving you to riddle out just what it is he meant to say.

Oh, and if you took him seriously?  You're either broke already or soon to be. <==my prognostication

 

Harder to take serious any potential points that you have when you embed your post with such harsh name-calling.

[srgkrgkj]

i would call the bottom ~ 360

[Xiaoxiao]

rpietila, make a new thread calling the bottom.    you'll be right one of these days!

[rpietila]

Why do you (almost all) comment without even reading the OP? 

If anything in the post is incorrect, please correct me.

[Xiaoxiao]

Why do you (almost all) comment without even reading the OP? 

If anything in the post is incorrect, please correct me.

I only read the title, you're right.  I thought the title would have been the thesis of your post.

[Newbie1022]

Why do you (almost all) comment without even reading the OP? 

If anything in the post is incorrect, please correct me.

Says the magical $100,000 BTC guy. Magic beans, anyone? Magic beans.

"Monorail!!! Monorail!! Monorail!!!"

[Chuckee]

This guy is so full of shit. You don't retroactively "call the bottom" five months after it's in at $339...

OP was clearly attempting to state that the fall on August 15 would be the bottom of the current trend and we would start moving up again. Why can't he just admit that he's wrong by $100+ and move on?

In all likelihood, we are going to break through the $339 April low on Stamp and then what is he going to change this to?

"No guys, I was calling the $63 bottom from summer 2013!"

Just admit when you're wrong instead of trying to wish wash your way around your bold predictions, and maybe people here will take you more seriously.

[JayJuanGee]

Why do you (almost all) comment without even reading the OP? 

If anything in the post is incorrect, please correct me.

I only read the title, you're right.  I thought the title would have been the thesis of your post.

Better that you do NOT think, then.   ;

[lyth0s]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

[Erdogan]

Why do you (almost all) comment without even reading the OP? 

If anything in the post is incorrect, please correct me.

Says the magical $100,000 BTC guy. Magic beans, anyone? Magic beans.

"Monorail!!! Monorail!! Monorail!!!"

The OP is spot on in all regards, what can not be known is soundly estimated. Can not be said better. Except one small thing: We don't know the parameters of the exponential growth (a point on the line plus the rate of yearly increase).

[Eastwind]

The longer BTC is consolidated and get more used, the better.

[MiningAtlas]

In all likelihood, we are going to break through the $339 April low on Stamp and then what is he going to change this to?

Well lets wait and see that would still take a huge drop to actually get through that price.

[Hunyadi]

In all likelihood, we are going to break through the $339 April low on Stamp and then what is he going to change this to?

Well lets wait and see that would still take a huge drop to actually get through that price.

No way 

[Eastwind]

In all likelihood, we are going to break through the $339 April low on Stamp and then what is he going to change this to?

Well lets wait and see that would still take a huge drop to actually get through that price.

No way 

Only when there is a forced sell by margin call and the order book is thin.

[abercrombie]

This guy is so full of shit. You don't retroactively "call the bottom" five months after it's in at $339...

OP was clearly attempting to state that the fall on August 15 would be the bottom of the current trend and we would start moving up again. Why can't he just admit that he's wrong by $100+ and move on?

This ^

Correct, Bitcoin was 590's early August then on the 15th (date this thread was created) Bitcoin crashed to 450ish.

Thus, this thread was born to stamp that as the bottom.

[Wilhelm]

Would it be safe to say that $400 is the bottom as in where support is?
We seem to gravitate back to $400 if we go below.

This would mean that $400 would be a good entry point for anyone wanting to buying bitcoin.

[bigtimespaghetti]

Would it be safe to say that $400 is the bottom as in where support is?
We seem to gravitate back to $400 if we go below.

This would mean that $400 would be a good entry point for anyone wanting to buying bitcoin.

I think there is a chance of hitting 350 or there abouts,  maybe lower. This consolidation feels like what silver went through prior to the capitulation that appears to be forming now.

[tabnloz]

This guy is so full of shit. You don't retroactively "call the bottom" five months after it's in at $339...

OP was clearly attempting to state that the fall on August 15 would be the bottom of the current trend and we would start moving up again. Why can't he just admit that he's wrong by $100+ and move on?

This ^

Correct, Bitcoin was 590's early August then on the 15th (date this thread was created) Bitcoin crashed to 450ish.

Thus, this thread was born to stamp that as the bottom.

here is the OP quote

'The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.'

[tarmi]

This guy is so full of shit. You don't retroactively "call the bottom" five months after it's in at $339...

OP was clearly attempting to state that the fall on August 15 would be the bottom of the current trend and we would start moving up again. Why can't he just admit that he's wrong by $100+ and move on?

This ^

Correct, Bitcoin was 590's early August then on the 15th (date this thread was created) Bitcoin crashed to 450ish.

Thus, this thread was born to stamp that as the bottom.

here is the OP quote

'The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.'

very stupid to extrapolate like that.

[yokosan]

This guy is so full of shit. You don't retroactively "call the bottom" five months after it's in at $339...

OP was clearly attempting to state that the fall on August 15 would be the bottom of the current trend and we would start moving up again. Why can't he just admit that he's wrong by $100+ and move on?

This ^

Correct, Bitcoin was 590's early August then on the 15th (date this thread was created) Bitcoin crashed to 450ish.

Thus, this thread was born to stamp that as the bottom.

here is the OP quote

'The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.'

very stupid to extrapolate like that.

We gon be rich.

[NotLambchop]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

Lol, OK.  He asks you to extrapolate from 4/11/14.  At no point does he call that date the bottom he's calling.  No more so than he explicitly calls $2 [from the same quote] the bottom.
Perhaps he meant $2?

As others have mentioned, rpietila asks you to think like this:  pick two points on the chart that I chose, and extrapolate from there.
That makes as much sense as me saying "Bitcoin exchange rate went down from $1153 to $339 in just a few months.  If we extrapolate from that, with the starting point of $400..."

So yeah

[molecular]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

Lol, OK.  He asks you to extrapolate from 4/11/14.  At no point does he call that date the bottom he's calling.  

It's very strongly implied.

If we're going to start splitting hairs, we could as well say that "rpietila calling the bottom" is not a statement of fact. Just like "Risto flying to Mars" is just a hypothetical.

So let's do away with the crap. The way I see it he called $340 the bottom. If it goes substantially below that for a non-negligible amount of time in most markets, his call was wrong. No big deal (unless you switched off your own brain and blindly followed what he said. In that case I can understand why some people here are angrily discussing this subject, although it's not merited). Risto also called 300,000 USD/BTC in 2013. He was wrong. We all had our fun, the price is payed. He's also been right many times and his thoughts are usually very valuable, sometimes intriguing and always interesting.

[NotLambchop]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

Lol, OK.  He asks you to extrapolate from 4/11/14.  At no point does he call that date the bottom he's calling.  

It's very strongly implied.

If we're going to start splitting hairs, we could as well say that "rpietila calling the bottom" is not a statement of fact. Just like "Risto flying to Mars" is just a hypothetical.

So let's do away with the crap. The way I see it he called $340 the bottom...

There is nothing nitpicking in what I said.
The quoted line gives us two bottoms, $2 and $340.  He asks you to do something patently insane:  To extrapolate from $340 (the low which happened three months before his post was made, AKA "current low") and to assume that price is going to behave as it did during $2 -> $266 climb.

You can chose to believe anything, that's how cold readings work

Edit:  The entire first post is nothing but similar nonsense.  The whole "can't be unlearned" tripe.

"And they told two friends, and they told two friends, and they told two friends."

[rebuilder]

.
There is nothing nitpicking in what I said.
The quoted line gives us two bottoms, $2 and $340.  He asks you to do something patently insane:  To extrapolate from $340 (the low which happened three months before his post was made, AKA "current low") and to assume that price is going to behave as it did during $2 -> $266 climb.

You can chose to believe anything, that's how cold readings work

What is being discussed here, now - whether rpietila's call was for a bottom at 340, or whether his implied prediction for future prices makes sense? You appear to be conflating the two.

[NotLambchop]

.
There is nothing nitpicking in what I said.
The quoted line gives us two bottoms, $2 and $340.  He asks you to do something patently insane:  To extrapolate from $340 (the low which happened three months before his post was made, AKA "current low") and to assume that price is going to behave as it did during $2 -> $266 climb.

You can chose to believe anything, that's how cold readings work

What is being discussed here, now - whether rpietila's call was for a bottom at 340, or whether his implied prediction for future prices makes sense? You appear to be conflating the two.

No.  I'm saying:

1.  He did not call 340.
2.  On top of not calling 340, he asked you to do something nonsensical, for extra lulz.

[RoadStress]

No.  I'm saying:

1.  He did not call 340.
2.  On top of not calling 340, he asked you to do something nonsensical, for extra lulz.

For me OP called the bottom at $340!

[zimmah]

.
There is nothing nitpicking in what I said.
The quoted line gives us two bottoms, $2 and $340.  He asks you to do something patently insane:  To extrapolate from $340 (the low which happened three months before his post was made, AKA "current low") and to assume that price is going to behave as it did during $2 -> $266 climb.

You can chose to believe anything, that's how cold readings work

What is being discussed here, now - whether rpietila's call was for a bottom at 340, or whether his implied prediction for future prices makes sense? You appear to be conflating the two.

No.  I'm saying:

1.  He did not call 340.
2.  On top of not calling 340, he asked you to do something nonsensical, for extra lulz.

Are you serious?

......

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

emphasis added

[NotLambchop]

^Read more than the last post FTW!

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

Lol, OK.  He asks you to extrapolate from 4/11/14.  At no point does he call that date the bottom he's calling.  No more so than he explicitly calls $2 [from the same quote] the bottom.
Perhaps he meant $2?

As others have mentioned, rpietila asks you to think like this:  pick two points on the chart that I chose, and extrapolate from there.
That makes as much sense as me saying "Bitcoin exchange rate went down from $1153 to $339 in just a few months.  If we extrapolate from that, with the starting point of $400..."

So yeah

[RoadStress]

^Read more than the last post FTW!

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called.

Lol, OK.  He asks you to extrapolate from 4/11/14.  At no point does he call that date the bottom he's calling.  No more so than he explicitly calls $2 [from the same quote] the bottom.
Perhaps he meant $2?

As others have mentioned, rpietila asks you to think like this:  pick two points on the chart that I chose, and extrapolate from there.
That makes as much sense as me saying "Bitcoin exchange rate went down from $1153 to $339 in just a few months.  If we extrapolate from that, with the starting point of $400..."

So yeah

I know that you are not scammer Josh Zerlan from BFL, but you sound very much like him...

[NotLambchop]

...
I know that you are not scammer Josh Zerlan from BFL, but you sound very much like him...

Your point?  The local tinfoilhatters have insisted I'm every bogeyman under the sun, from Mircea Popescu to Eduardo De Castro.

[JayJuanGee]

...
I know that you are not scammer Josh Zerlan from BFL, but you sound very much like him...

Your point?  The local tinfoilhatters have insisted I'm every bogeyman under the sun, from Mircea Popescu to Eduardo De Castro.

Don't be so self-important -because it really does NOT matter too much who you are... generally, your points are NOT very well substantiated, and you spend quite a bit of time mud-slinging and attempting to distract us from the main topic(s) by your various side tangents and technical irrelevancies

[NotLambchop]

Lol, listen to yourself.
Roadstress tries to discredit me by saying I sound like some d00d he doesn't like, and you complain about MY mudslinging and MY ill-reasoned arguments?

[JayJuanGee]

Lol, listen to yourself.
Roadstress tries to discredit me by saying I sound like some d00d he doesn't like, and you complain about MY mudslinging and MY ill-reasoned arguments?

I know but why does it matter if Roadstress believes that you sound like someone else or that you have similar arguments and/or style as someone else.. ?  So what?  Why is there a need to get into a self reflective mode.. and instead wouldn't it be possible to stick to the various topics at hand..

Of course, you can respond however you like, but I stand by my comment about your seeming glory in striving to side-track by exploring in detail some only minorly relevant point...

Anyhow, just seems to me to be the life of a troll-like.. with moments of humor.. some of your cartoons are cute...

Just for me to attempt to stay somewhat on point with a moment of reflection on Rptiela's calling the bottom.  I do understand some aggravation that people may have with his sometimes seeming self-absorption and seemingly wanting to be right and calling BTC price directions in terms of black and white math... I understand that can be aggravating, but ultimately, we do NOT need to believe all the details of his predictions or to get caught up in his sometimes flamboyance in order to still find some value in his analysis .. and maybe even to conclude that he is wrong in various ways.

[Chuckee]

[Xiaoxiao]

Well said. +1

jimbo, when you're a beggar on the streets one day, i'll don'te to you some worthless bitcoins so you can buy yourself a pizza and vodka.  have a great time under the bridge, loser!

[Xiaoxiao]

rpietila says he didn't call the bottom.  the point of this post was that block chain is indestructable.  rpiet let me ask you, why did you put that as the title than?  if your main point is that the block chain is indestructable, you'd write something about that in the title.

[abercrombie]

Moments away from testing 340!!  

Possible double bottom or do we go right threw the floor???   

[N12]

Good call!

[robinwilliams]

bitstamp < 340 ...

[mmitech]

[Xiaoxiao]

Moments away from testing 340!!  

Possible double bottom or do we go right threw the floor???   

Did it go right thru the floor?  does 325 count as going thru 339?  albeit momentarily.

[riiiiising]

How could Risto have known that Manbearpigwhale would be manipulating the market for this long? He gave you good advice. For bitcoin, it is always good time to buy!

Price does not matter, because we know that it will be worth a million dollars in a few years. Load up, gentlemen, you don't get a chance to buy cheap coins like these often.

[mmitech]

[rpietila]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

Starting point is now invalidated. But is the post still valid otherwise?

[Xiaoxiao]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

Starting point is now invalidated. But is the post still valid otherwise?

I agree with some of your points.  But the thing is this unbreakable technology can be duplicated and improved endlessly.  

Also, come on bro, this thing is so bearish right now how could it NOT stabilize around 100-200$ ?  With the scums gone such as MTGOX and China, it has to stabilize around there or a bit lower.

Remember last autumn, every little good news of a potential good news saw a spike of $100. AND every bad news saw a huge drop.  Remember when rumors came out that China might ban bitcoin, price dropped like $500 in one night.  All that was obviously manipulation and not the real market.  

[NotLambchop]

...People can only learn more about Bitcoin, unlearning is not possible...

The word you were looking for is "forgetting."  Forgetting, moving on, superseding--not only possible but happens all the time.

[mmortal03]

Starting point is now invalidated. But is the post still valid otherwise?

rpietila, you must be doing something right, as I can't read half this thread.  All I see is "This user is currently ignored." We're still trading within the range. No one can accurately call the exact price of a bottom months ahead of time, anyway.

[NotLambchop]

... No one can accurately call the exact price of a bottom months ahead of time, anyway.

Yeah, only a lunatic would try to do that.


ohwait...

[Trolololo]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

Starting point is now invalidated. But is the post still valid otherwise?

Absolutely!!

[exocytosis]

So what did you say the bottom was, rpietila? 340? 

[mmortal03]

So what did you say the bottom was, rpietila? 340? 

We're still hovering around that range. You can take this as me just moving the goalposts for the sake of rpietila, but this stuff is not an exact science.

[Chuckee]

So what did you say the bottom was, rpietila? 340? 

We're still hovering around that range. You can take this as me just moving the goalposts for the sake of rpietila, but this stuff is not an exact science.

Risto apologist to the rescue!

He called bottom at ~$500 in August when this thread was created, and it was clear when it was originally posted that he believed we would trend back up from that price point. He was prompted to call it on August 15 because we had just experienced a large drop, but he determined that we had bottomed out. If you read his older posts, it's pretty clear that he thought we would be back over the ATH again at this point.

Sorry, but I'm not going to let anyone wishy wash their way out of their bold predictions. Anyone is free to make any prediction they want here, but you've got to face up to it when you're wrong.

[robinwilliams]

predictions are a lot like impossible.  and those who call them have great insights sometimes more than the rest of us - but even in movies where they can predict the future - the future is depending on small events that can go one way or another.

so rpietila was wrong ... so what    doesn't mean you quit making predictions with as much knowledge and wisdom as you can muster

[wobber]

Strong possibility?

[exocytosis]

so rpietila was wrong ... so what  

rpietila and other cultists/bulltards are very influential. Newbs see their posts and get the impression that we'll be above 10k soon, when in fact we won't. Thus the newbs make bad investment decisions. They lose a lot of money.

These forums are spammed with a lot of bulltard gibberish about 10k coins, "exponential trend lines", "support" and "to da moon". Perhaps it's time the cultists and bulltards are exposed.

[phoenix1]

predictions are a lot like impossible.  and those who call them have great insights sometimes more than the rest of us - but even in movies where they can predict the future - the future is depending on small events that can go one way or another.

so rpietila was wrong ... so what    doesn't mean you quit making predictions with as much knowledge and wisdom as you can muster

So what ?? He has built up a cult-like following through his brash predictions, and many a newb is now underwater through following them.
Recently he seems to preoccupied with the XMR pump mess to address his disciples, but I am sure he will be back soon to take responsibility and guide them onto a new path ...

[mmortal03]

So what did you say the bottom was, rpietila? 340? 

We're still hovering around that range. You can take this as me just moving the goalposts for the sake of rpietila, but this stuff is not an exact science.

Risto apologist to the rescue!

He called bottom at ~$500 in August when this thread was created

No he didn't.

[Wandererfromthenorth]

Calling the bottom a little bit at the wrong time...

[JayJuanGee]

So what did you say the bottom was, rpietila? 340? 

We're still hovering around that range. You can take this as me just moving the goalposts for the sake of rpietila, but this stuff is not an exact science.

Risto apologist to the rescue!

He called bottom at ~$500 in August when this thread was created, and it was clear when it was originally posted that he believed we would trend back up from that price point. He was prompted to call it on August 15 because we had just experienced a large drop, but he determined that we had bottomed out. If you read his older posts, it's pretty clear that he thought we would be back over the ATH again at this point.

Sorry, but I'm not going to let anyone wishy wash their way out of their bold predictions. Anyone is free to make any prediction they want here, but you've got to face up to it when you're wrong.

Chuckee,

Even though you are a fucking troll, and rarely do you lend any value within any of your posts; however, here you seem to be largely correct. 

Risto made a prediction, and largely he was predicting upward BTC price direction from mid-August onward. and he should take responsibility for such, especially when he (Risto) makes such predictions with such arrogance.

On the other hand, Risto made a lot of valuable contributions including in his post describing the bitcoin price situation at the time of OP.

I suspect that if Risto toned down some of his arrogance within his posts and sometimes made concessions regarding his getting things wrong (or overstating matters), he would NOT cause himself to be such a target for being told that he is wrong... .which NONE of us should expect to really be able to foretell specifics regarding BTC prices.. except for just providing and estimating probabilities.

[JayJuanGee]

so rpietila was wrong ... so what  

rpietila and other cultists/bulltards are very influential. Newbs see their posts and get the impression that we'll be above 10k soon, when in fact we won't. Thus the newbs make bad investment decisions. They lose a lot of money.

These forums are spammed with a lot of bulltard gibberish about 10k coins, "exponential trend lines", "support" and "to da moon". Perhaps it's time the cultists and bulltards are exposed.

Anyone taking advice from the internet needs to take such advice with a grain of salt, to do their own research and to weigh their own risks, timeline, finances, etc.

people talk bullish and they talk bearish, but there really is NO reason to generalize them into a group and label them as either bulltards or beartards.  That kind of name calling, labeling and categorizing does NOT meaningfully contribute to better understanding the substance of the various arguments that are being made by any of these posters.

[NotLambchop]

So what did you say the bottom was, rpietila? 340? 

We're still hovering around that range...

Nah.  ~312.  Good morning!

[abercrombie]

Buenos dias...

Oct 5, 2014 $275 Bitstamp Low (so far)  

[abercrombie]

$245 as we speak... 

[twiifm]

I hope nobody followed his advice.  Boy was he WRONG

[a fool and his money ...]

hahaha this retarded bull-idiots bitcoin worshippers

Your coin is an inflationary MESS and will never see a new ATH

It's not half as advanced as most alts. It's image is tarnished. Get out now people!

You have been falling for the hype of these bulltards people and handed your money to them. But they are all full of shit and will continue to tell you to buy their shit from them.

[God Donut]

hahaha this retarded bull-idiots bitcoin worshippers

Your coin is an inflationary MESS and will never see a new ATH

It's not half as advanced as most alts. It's image is tarnished. Get out now people!

You have been falling for the hype of these bulltards people and handed your money to them. But they are all full of shit and will continue to tell you to buy their shit from them.

its a bitcoin forum. If you don't like bitcoin then why don't you just GTFO?

[Chef Ramsay]

hahaha this retarded bull-idiots bitcoin worshippers

Your coin is an inflationary MESS and will never see a new ATH

It's not half as advanced as most alts. It's image is tarnished. Get out now people!

You have been falling for the hype of these bulltards people and handed your money to them. But they are all full of shit and will continue to tell you to buy their shit from them.

its a bitcoin forum. If you don't like bitcoin then why don't you just GTFO?

LOL, the trolls sound like progressive butter balls w/ their mushy talking points from their fountain of knowledge or paid propaganda outlet. It's so funny to think that broke asses sign up for accounts to spit shit we see all the time thinking that is going to do anything besides make them suspect from the beginning and inevitably forcing them vanish. Tiring but not surprising nor overwhelming. Just a quicker scroll down the screen from my perspective.

[smoothie]

hahaha this retarded bull-idiots bitcoin worshippers

Your coin is an inflationary MESS and will never see a new ATH

It's not half as advanced as most alts. It's image is tarnished. Get out now people!

You have been falling for the hype of these bulltards people and handed your money to them. But they are all full of shit and will continue to tell you to buy their shit from them.

1. "will never see a new ATH" has been claimed in so many other instances prior to 2013... lol

2. Since when does bitcoin need to be "advanced" to be successful? The bitcoin protocol is secure.

"THE BITCOIN PROTOCOL IS SECURE. GET OUT NOW PEOPLE!" lol

3. You forget that everyone gets price predictions wrong from time to time, even me. Trust me buddy you will be proven wrong as well.

Just wait...  

[riiiiising]

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

[rpietila]

I haven't changed my mind, nor my actions.

[JayJuanGee]

I haven't changed my mind, nor my actions.

Wouldn't you believe that it would be better to give more specific updates.

For example, I am largely doing the same thing, which is holding and continuing to buy, and even experiencing other kinds of adjustments and rethinking... NONETHELESS, i remain confident that it is good to continue to buy and accumulate.

However, my thinking may be different if I had begun buying BTC at a lower price  (and my BTC portfolio were in the black) or if I had accumulated thousands of BTC.

Also, I remain hesitant to sell; however, if I were certain that the price were going to go down at least 5 or 10%, then I would sell and rebuy.. but I am never that confident about the price going down and I believe at any time some big player can come in and reverse the direction to cause BTC prices to move upward at a fairly incredible speed.

[rpietila]

I haven't changed my mind, nor my actions.

Wouldn't you believe that it would be better to give more specific updates.

For example, I am largely doing the same thing, which is holding and continuing to buy, and even experiencing other kinds of adjustments and rethinking... NONETHELESS, i remain confident that it is good to continue to buy and accumulate.

However, my thinking may be different if I had begun buying BTC at a lower price  (and my BTC portfolio were in the black) or if I had accumulated thousands of BTC.

Also, I remain hesitant to sell; however, if I were certain that the price were going to go down at least 5 or 10%, then I would sell and rebuy.. but I am never that confident about the price going down and I believe at any time some big player can come in and reverse the direction to cause BTC prices to move upward at a fairly incredible speed.

+1

(Show me a person who has ever profited from a "strategy" of "buying back lower". Over as short a timeframe as 5 years, it's likely to underperform significantly to simple buy/hold good stuff.)

[mmitech]

hahaha this retarded bull-idiots bitcoin worshippers

Your coin is an inflationary MESS and will never see a new ATH

It's not half as advanced as most alts. It's image is tarnished. Get out now people!

You have been falling for the hype of these bulltards people and handed your money to them. But they are all full of shit and will continue to tell you to buy their shit from them.

1. "will never see a new ATH" has been claimed in so many other instances prior to 2013... lol

2. Since when does bitcoin need to be "advanced" to be successful? The bitcoin protocol is secure.

"THE BITCOIN PROTOCOL IS SECURE. GET OUT NOW PEOPLE!" lol

3. You forget that everyone gets price predictions wrong from time to time, even me. Trust me buddy you will be proven wrong as well.

Just wait...  

Smothie, at this point I thought you would already have some wisdom, the possibility of hitting lower double digits is really huge, and the bubble cycle has just came to an end, after we hit a bottom, Bitcoin will become mature and will experience slow growth, people will start using it as they suppose to, instead of hoarding the shit of it, which will bring huge liquidity that will keep the price really kind of stable.

It may take years to get to what we were at before.

[inca]

Smothie, at this point I thought you would already have some wisdom, the possibility of hitting lower double digits is really huge, and the bubble cycle has just came to an end, after we hit a bottom, Bitcoin will become mature and will experience slow growth, people will start using it as they suppose to, instead of hoarding the shit of it, which will bring huge liquidity that will keep the price really kind of stable.

It may take years to get to what we were at before.

The problem with that of course, is that it is complete baloney. What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

[mmitech]

Smothie, at this point I thought you would already have some wisdom, the possibility of hitting lower double digits is really huge, and the bubble cycle has just came to an end, after we hit a bottom, Bitcoin will become mature and will experience slow growth, people will start using it as they suppose to, instead of hoarding the shit of it, which will bring huge liquidity that will keep the price really kind of stable.

It may take years to get to what we were at before.

The problem with that of course, is that it is complete baloney. What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

Well, I could try explaining it for 100th time, but the fact that you are asking me "again" means that no one gives a fuck about what I was trying to express for almost a year now... so my only response is " time will tell my friend".

[BitCoinNutJob]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

[NotLambchop]

Rpietila promised me $10k coin by last Christmas.  Are we still on track?

[podyx]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

The blatant fact that bitcoin CAN fail has never occured to you?

[mmitech]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

The blatant fact that bitcoin CAN fail has never occured to you?

You seem to be a desperate person, you change your sentiment 20 times a day, and the fact that you seek comfort in this forum about your shitty investment is just worrying.

[podyx]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

The blatant fact that bitcoin CAN fail has never occured to you?

You seem to be a desperate person, you change your sentiment 20 times a day, and the fact that you seek comfort in this forum about your shitty investment is just worrying.

I've never changed sentiment. I'm only rational unlike many people here

[cbeast]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

The blatant fact that bitcoin CAN fail has never occured to you?

You seem to be a desperate person, you change your sentiment 20 times a day, and the fact that you seek comfort in this forum about your shitty investment is just worrying.

I've never changed sentiment. I'm only rational unlike many people here

I'm sorry I must have missed something. Can you please point out a scenario and cause for Bitcoin's failure?

[podyx]

I haven't changed my mind, nor my actions.

Agreed, nothing has changed, we've been here before, this time we at $200 and not $2.  People think its over

The blatant fact that bitcoin CAN fail has never occured to you?

You seem to be a desperate person, you change your sentiment 20 times a day, and the fact that you seek comfort in this forum about your shitty investment is just worrying.

I've never changed sentiment. I'm only rational unlike many people here

I'm sorry I must have missed something. Can you please point out a scenario and cause for Bitcoin's failure?

I don't think it will but so many people here seem to think bitcoin is unstoppable and will succeed.
It's far from guaranteed so I don't know why you're questioning me. Maybe you're a genius and have already taken as many loans as you can though? I mean, why wouldn't you if it's guaranteed to succeed?

[JorgeStolfi]

What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

The white paper does not mention that, does it?  The declared purpose of bitcoin was to be a currency for e-payments, not a get-rich-by-sittng-on-it instrument.  Given that goal, making the supply fixed probably was a mistake, as economists keep saying (after all, "Satoshi" was a computer scientist, not an economist.)

Besides perhaps the mistaken notion that the inflation of national currencies is a bad thing, the fixed money supply is something that a computer scientist would have chosen for ease of implementation.  An unbounded money supply would have been a pain to program; he could not have used a fixed block and transition layout with 64-bit long ints, he would have needed a variable-length multiword integer, in the layout and in the implementation.

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.  Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

[NotLambchop]

... Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

Actually thought same myself, not kidding.

[nanobrain]

What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

The white paper does not mention that, does it?  The declared purpose of bitcoin was to be a currency for e-payments, not a get-rich-by-sittng-on-it instrument.  Given that goal, making the supply fixed probably was a mistake, as economists keep saying (after all, "Satoshi" was a computer scientist, not an economist.)

Besides perhaps the mistaken notion that the inflation of national currencies is a bad thing, the fixed money supply is something that a computer scientist would have chosen for ease of implementation.  An unbounded money supply would have been a pain to program; he could not have used a fixed block and transition layout with 64-bit long ints, he would have needed a variable-length multiword integer, in the layout and in the implementation.

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.  Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

Oh Jorge....this sort of stuff is the equivalent of drawing a cartoon of Muhammad with coke and hookers: criticising Satoshi will have the cultists calling Fatwah on you

"All hail Satoshi"

[Ultros]

Oh Jorge....this sort of stuff is the equivalent of drawing a cartoon of Muhammad with coke and hookers.

That's way too low even for Jorge. He's often wrong but he can't be that dumb. You need hard work to equal such level of obnoxious stupidity.

[spazzdla]

64-65, 2016 will be the bottom IMO.

[cbeast]

64-65, 2016 will be the bottom IMO.

That's a pretty wide spread there. You want to narrow it down a bit?

[nanobrain]

Oh Jorge....this sort of stuff is the equivalent of drawing a cartoon of Muhammad with coke and hookers.

That's way too low even for Jorge. He's often wrong but he can't be that dumb. You need hard work to equal such level of obnoxious stupidity.

I'm a big fan of Jorge's, he doesn't hide behind a pseudonym, he actually has credentials in the field and (most importantly) he has been proved correct more often than wrong in this forum.

My post was mocking the cultists and of course people like you, who resort to adhoms as the first line of defence when their views are challenged.

As Shroomsy would say, "welcome to ignore"

[Feri22]

64-65, 2016 will be the bottom IMO.

That's a pretty wide spread there. You want to narrow it down a bit?

LOL, this is really hilarious  

But if we will go sub 100 in the year of reward halving, then i think we really failed

[N12]

Rpietila promised me $10k coin by last Christmas.  Are we still on track?

You remember wrong.

It was 300k USD. Not even kidding.

What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

The white paper does not mention that, does it?  The declared purpose of bitcoin was to be a currency for e-payments, not a get-rich-by-sittng-on-it instrument.  Given that goal, making the supply fixed probably was a mistake, as economists keep saying (after all, "Satoshi" was a computer scientist, not an economist.)

Besides perhaps the mistaken notion that the inflation of national currencies is a bad thing, the fixed money supply is something that a computer scientist would have chosen for ease of implementation.  An unbounded money supply would have been a pain to program; he could not have used a fixed block and transition layout with 64-bit long ints, he would have needed a variable-length multiword integer, in the layout and in the implementation.

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.  Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

Oh Jorge....this sort of stuff is the equivalent of drawing a cartoon of Muhammad with coke and hookers: criticising Satoshi will have the cultists calling Fatwah on you

"All hail Satoshi"

Je suis Jorge Stolfi.

[JorgeStolfi]

often wrong but he can't be that dumb. You need hard work to equal such level of obnoxious stupidity.

Indeed, my apologies.  The long int size cannot be the explanation for the 21 million BTC limit.  

21 million BTC times 10^8 satoshis per BTC is 2'100'000'000'000'000 sat, much less than 2^64.  

It is just a little less than 2^51 = 2'251'799'813'685'248.  

A double-precision float in 64-bit IEEE format can represent exactly all unsigned integers up to 2^53.
Some languages (e.g. GNU Awk) use IEEE doubles as the default (or only) numeric format.  

It is good practice to leave a couple of extra bits in the representation of a quantity, to reduce the risk of overflow during computations,
e.g. in 'x = 3*amount/4'.

If the maximum number of satoshis had been set to exactly 2^51 (or 2^51 - 1), the initial block reward would have had to be a
fractional number of BTC, even if the halving period was set to a funny number like 225179 intead of the round 210000.

In other words, 50 BTC/block and halving every 210000 blocks are two round numbers that happen to result in a total number of satoshis just under 2^51.

EDIT: The exact number of satoshis that will ever be created is claimed to be 2'099'999'997'690'000, but I haven't checked that.

[mmortal03]

Besides perhaps the mistaken notion that the inflation of national currencies is a bad thing,

Can we not have both? National currencies without a fixed supply, and Bitcoin with?

the fixed money supply is something that a computer scientist would have chosen for ease of implementation.  An unbounded money supply would have been a pain to program; he could not have used a fixed block and transition layout with 64-bit long ints, he would have needed a variable-length multiword integer, in the layout and in the implementation.

I don't buy it. I haven't read all the old correspondences, so correct me if I'm wrong, but isn't having a fixed money supply something that was discussed in moneypunk/cypherpunk circles?

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

 
This is disingenuous. Many ideas aren't meant to be more than an experiment, until they work.

Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

http://www.reddit.com/r/Bitcoin/comments/2in8fv/why_did_satoshi_implement_drastic_halving/

[JorgeStolfi]

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

 
This is disingenuous. Many ideas aren't meant to be more than an experiment, until they work.

But bitcoin is not an idea, it is a specific implementation of an idea (albeit with some flexibility).  

"A heavier-than-air vehicle with internal combustion engine, propellers, and fixed wings can be made to fly" -- that was an idea.

The Wright Brothers' Flyer One was an implementation of that idea.

That idea was indeed the basis of modern air transport and warfare.  

The Wrights Brothers' implementation was just a technical experiment, that aimed to show that the idea could work.  

Many more experiments, lots of incremental improvements, and a couple of revolutionary inventions were still needed before that idea could become a commercial product.

[Wandererfromthenorth]

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

Very interesting. Thanks for the analysis. That is precisely my thinking too (that "it was never meant to be more than a computer experiment").

[bitcoin_bagholder]

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

 
This is disingenuous. Many ideas aren't meant to be more than an experiment, until they work.

But bitcoin is not an idea, it is a specific implementation of an idea (albeit with some flexibility).  

"A heavier-than-air vehicle with internal combustion engine, propellers, and fixed wings can be made to fly" -- that was an idea.

The Wright Brothers' Flyer One was an implementation of that idea.

That idea was indeed the basis of modern air transport and warfare.  

The Wrights Brothers' implementation was just a technical experiment, that aimed to show that the idea could work.  

Many more experiments, lots of incremental improvements, and a couple of revolutionary inventions were still needed before that idea could become a commercial product.

However bitcoin isn't the first cryptocurrency experiment.

[cbeast]

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

 
This is disingenuous. Many ideas aren't meant to be more than an experiment, until they work.

But bitcoin is not an idea, it is a specific implementation of an idea (albeit with some flexibility).  

"A heavier-than-air vehicle with internal combustion engine, propellers, and fixed wings can be made to fly" -- that was an idea.

The Wright Brothers' Flyer One was an implementation of that idea.

That idea was indeed the basis of modern air transport and warfare.  

The Wrights Brothers' implementation was just a technical experiment, that aimed to show that the idea could work.  

Many more experiments, lots of incremental improvements, and a couple of revolutionary inventions were still needed before that idea could become a commercial product.

However bitcoin isn't the first cryptocurrency experiment.

internal combustion engine, propellers, and fixed wings

And each of these hasn't changed much in the last hundred years.

[JorgeStolfi]

However bitcoin isn't the first cryptocurrency experiment.

But the Flyer One wasn't the first heavier-than-air experiment either.

It may have been only the first to fly for a non-trivial amount of time.  

Just like bitcoin was the first cryptocurrency protocol that could actually run in a self-sustained way.

internal combustion engine, propellers, and fixed wings

And each of these hasn't changed much in the last hundred years.

Even the simplest crop duster has many essential improvements over the Flyer One, and would not be viable without them.  

I can't think of one real application that the Flyer One could have been good enough for.

[cbeast]

However bitcoin isn't the first cryptocurrency experiment.

But the Flyer One wasn't the first heavier-than-air experiment either.

It may have been only the first to fly for a non-trivial amount of time.  

Just like bitcoin was the first cryptocurrency protocol that could actually run in a self-sustained way.

internal combustion engine, propellers, and fixed wings

And each of these hasn't changed much in the last hundred years.

Even the simplest crop duster has many essential improvements over the Flyer One, and would not be viable without them.  

I can't think of one real application that the Flyer One could have been good enough for.

You can push an analogy only so far. Bitcoin has been making incremental improvements for 6 years. It now has armor plating, fly-by-wire, and a Rolls-Royce turboprop. All it needs is a decentralized market for navigation and it will fly through any kind of turbulence.

[nanobrain]

Rpietila promised me $10k coin by last Christmas.  Are we still on track?

You remember wrong.

It was 300k USD. Not even kidding.

What possible reason will there be for no more speculation or hoarding in a currency that is designed specifically for that?

The white paper does not mention that, does it?  The declared purpose of bitcoin was to be a currency for e-payments, not a get-rich-by-sittng-on-it instrument.  Given that goal, making the supply fixed probably was a mistake, as economists keep saying (after all, "Satoshi" was a computer scientist, not an economist.)

Besides perhaps the mistaken notion that the inflation of national currencies is a bad thing, the fixed money supply is something that a computer scientist would have chosen for ease of implementation.  An unbounded money supply would have been a pain to program; he could not have used a fixed block and transition layout with 64-bit long ints, he would have needed a variable-length multiword integer, in the layout and in the implementation.

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.  Take, for example, the abrupt halving of the reward every 4 years: it is a source of instability and uncertainty, the 2016 halving is already having people worried now.  Why didn't he specify a more gradual decrease, that would give the same 0.5 factor in 4 years but in small monthly steps? The only reason I can think of is that it would have required another page or two of source code, and a table of 48 steps, properly rounded, and another paragraph in the white paper...

Oh Jorge....this sort of stuff is the equivalent of drawing a cartoon of Muhammad with coke and hookers: criticising Satoshi will have the cultists calling Fatwah on you

"All hail Satoshi"

Je suis Jorge Stolfi.

Brilliant Blitz, you've still got it

I'm having that one!! 
       |
       |
       |
       V

[mmortal03]

That is only one of many details in the protocol that suggest that it was never meant to be more than a computer experiment.

 
This is disingenuous. Many ideas aren't meant to be more than an experiment, until they work.

But bitcoin is not an idea, it is a specific implementation of an idea (albeit with some flexibility).  

"A heavier-than-air vehicle with internal combustion engine, propellers, and fixed wings can be made to fly" -- that was an idea.

The Wright Brothers' Flyer One was an implementation of that idea.

That idea was indeed the basis of modern air transport and warfare.  

The Wrights Brothers' implementation was just a technical experiment, that aimed to show that the idea could work.  

Many more experiments, lots of incremental improvements, and a couple of revolutionary inventions were still needed before that idea could become a commercial product.

Two things:

1.) It's like you're arbitrarily defining some kind of universal limitation on the success of Bitcoin because of, or due to the lack of, perfection in some quality that doesn't require perfection to function. (see the perfectionist fallacy: http://www.mhhe.com/mayfieldpub/ct/ch06/glossary.htm )

2.) This also reminds me of the intentional fallacy: http://www.britannica.com/EBchecked/topic/289889/intentional-fallacy

[JorgeStolfi]

It's like you're arbitrarily defining some kind of universal limitation on the success of Bitcoin because of, or due to the lack of, perfection in some quality that doesn't require perfection to function. (see the perfectionist fallacy: http://www.mhhe.com/mayfieldpub/ct/ch06/glossary.htm )

No, nothing that abstract.  I belive that bitcoin cannot be more than a great technical experiment, because:

* The protocol has one fatal flaw: it inevitably leads to centralization of mining in a few large corporations, who then have nearly unlimited power over the system, and must be trusted not to abuse of their power.  It is a fatal flaw because it negates the very goal of the protocol ("decentralized trustless"), and no one knows how to fix it.  It seems that another genial invention will be needed to fix that flaw.

* The protocol has many defects that make it unsuitable or uncompetitive for the applications that have been (retroactively) proposed for it.  For example, the bounded supply led to expectations of astronomical value increases,  which induced extreme hoarding of the coin, which made its speculative price rise to 100x its utilitarian value, which caused mining to become 100x more expensive than it should be, which meant 15$ cost per transaction, ... Also, I do not consider the "pay to script" feature worth the complexity that it adds to the blockchain.  The cost structure is such that it invites spamming of the blockchain with bogus transactions and messages that have nothing to do with its payment function.   The distributed organization limits its response time.  The block reward should decrease gradually, instead of being abruptly cut by half every 4 years.  The transaction fees should perhaps be required from the start.   The organization of the ledger as a linear chain means very long 'sync' times for low-end clients. And many more.  These flaws are not fatal, because they do not invalidate the goal stated in the white paper, and could be fixed in a new iteration.  But they cannot all be fixed now in the current blockchain.

* Finally, it is not clear to me that the world really needs a payment system like bitcoin.  Its expected virtues, of liberating people from oppressive regimes and from excessive bank fees, have yet to be demonstrated (or have already been debunked).  On the other hand, bitcoin has been eagerly adopted by criminals and scammers, precisely for those features  that were supposed to be virtues.  Perhaps the invention of crypto-currencies was not so much like the invention of electricty or the internet, but more like the invention of firearms, or of crack cocaine.

[cbeast]

It's like you're arbitrarily defining some kind of universal limitation on the success of Bitcoin because of, or due to the lack of, perfection in some quality that doesn't require perfection to function. (see the perfectionist fallacy: http://www.mhhe.com/mayfieldpub/ct/ch06/glossary.htm )

No, nothing that abstract.  I belive that bitcoin cannot be more than a great technical experiment, because:

You are such a dualist.

[windpath]

...

* The protocol has many defects that make it unsuitable or uncompetitive for the applications that have been (retroactively) proposed for it.  For example, the bounded supply led to expectations of astronomical value increases,  which induced extreme hoarding of the coin, which made its speculative price rise to 100x its utilitarian value, which caused mining to become 100x more expensive than it should be, which meant 15$ cost per transaction, ... Also, I do not consider the "pay to script" feature worth the complexity that it adds to the blockchain.  The cost structure is such that it invites spamming of the blockchain with bogus transactions and messages that have nothing to do with its payment function.   The distributed organization limits its response time.  The block reward should decrease gradually, instead of being abruptly cut by half every 4 years.  The transaction fees should perhaps be required from the start.   The organization of the ledger as a linear chain means very long 'sync' times for low-end clients. And many more.  These flaws are not fatal, because they do not invalidate the goal stated in the white paper, and could be fixed in a new iteration.  But they cannot all be fixed now in the current blockchain.
...

There was nothing retroactive above the proposals for escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc. I'll just quote the rest:

The design supports a tremendous variety of possible transaction types that I designed years ago.  Escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc.  If Bitcoin catches on in a big way, these are things we'll want to explore in the future, but they all had to be designed at the beginning to make sure they would be possible later.

[JorgeStolfi]

There was nothing retroactive above the proposals for escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc.

Ok, sorry, by "applications" I meant replacing cash, bank transfers, credit cards, Paypal, Western Union, contracts, land registries, ...  Not to mention vaporizing governments, evading taxes, liberating illegal trade and online gambling, financing dissidents, ...

[mmortal03]

* The protocol has one fatal flaw: it inevitably leads to centralization of mining in a few large corporations, who then have nearly unlimited power over the system, and must be trusted not to abuse of their power.  It is a fatal flaw because it negates the very goal of the protocol ("decentralized trustless"), and no one knows how to fix it.  It seems that another genial invention will be needed to fix that flaw.

Except, it's not even fatal. Sure, it's an ideal feature, but it may even still be solved, or even play out differently than you predict, and, at the very least, Bitcoin provides incentive to people to solve it.

The protocol has many defects that make it unsuitable or uncompetitive for the applications that have been (retroactively) proposed for it.  For example, the bounded supply led to expectations of astronomical value increases,  which induced extreme hoarding of the coin, which made its speculative price rise to 100x its utilitarian value, which caused mining to become 100x more expensive than it should be, which meant 15$ cost per transaction, ... Also, I do not consider the "pay to script" feature worth the complexity that it adds to the blockchain.  The cost structure is such that it invites spamming of the blockchain with bogus transactions and messages that have nothing to do with its payment function.   The distributed organization limits its response time.

This stuff is covered elsewhere. I don't have the time to go point by point on these.

The block reward should decrease gradually, instead of being abruptly cut by half every 4 years.  The transaction fees should perhaps be required from the start.   The organization of the ledger as a linear chain means very long 'sync' times for low-end clients. And many more.  These flaws are not fatal, because they do not invalidate the goal stated in the white paper, and could be fixed in a new iteration.  But they cannot all be fixed now in the current blockchain.

Did you read the differing opinions at the Reddit link I posted?

*Finally, it is not clear to me that the world really needs a payment system like bitcoin.  Its expected virtues, of liberating people from oppressive regimes and from excessive bank fees, have yet to be demonstrated (or have already been debunked).

 

Links? Evidence?

On the other hand, bitcoin has been eagerly adopted by criminals and scammers, precisely for those features  that were supposed to be virtues.  Perhaps the invention of crypto-currencies was not so much like the invention of electricty or the internet, but more like the invention of firearms, or of crack cocaine.

Please do elaborate.

[rpietila]

* Finally, it is not clear to me that the world really needs a payment system like bitcoin.  Its expected virtues, of liberating people from oppressive regimes and from excessive bank fees, have yet to be demonstrated (or have already been debunked).

The world is composed of 7+ billion people currently. Of these, ~100,000 people at present currently do need bitcoin, and its value is supported by this group. An additional group of a small few million use it but don't need it.

Every day, there is more freedom from oppressive governments because of Bitcoin. You don't see it because your government is your all-inclusive udder. But look at the people from whom the money to feed you is coming. They need it.

Oh please, Jorge, don't shut it down! 

[cbeast]

JorgeStoffli's arguments are textbook examples of Platonic dualism. Educators typically use these arguments because they are constrained to a curriculum and become inculcated with facts as presented by their textbook publishing firms. They are incapable of their own critical thought. Again, no disrespect intended, but he is typical of many bored tenured educators and venturing way outside his field of expertise and pretending to wield some authority. Add to that he has never offered any constructive criticism beyond his pass/fail mindset. In fact, he hasn't even mentioned that he has even thought about how cryptcurrencies will affect his field. That to me indicates he is just plain bored with his work and probably needs a hobby rather than obsess over something he has no interest in providing any meaningful contributions. As long as you keep quoting him, I'll see hist posts, but until he has anything interesting to say he will go back on ignore.

[JorgeStolfi]

* Finally, it is not clear to me that the world really needs a payment system like bitcoin.  Its expected virtues, of liberating people from oppressive regimes and from excessive bank fees, have yet to be demonstrated (or have already been debunked).  

The world is composed of 7+ billion people currently. Of these, ~100,000 people at present currently do need bitcoin, and its value is supported by this group. [ ... ] Every day, there is more freedom from oppressive governments because of Bitcoin.

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

The number may be exaggerated, but can you dispute it?  If you add MtGOX and all the other bitcoin scams and thefts, add the use of bitcoin in financing crime, all the people who had their life ruined for believing in the fantastic price predictions or gambling in online casinos -- you will get easily a billion dollars of damages inflicted on mankind.  Even if you subtract the cases of thieves stealing from other thieves, crooks scamming other crooks, and scumbags profiting at the expense of other scumbags, you are still left witha balance of hundreds of millions transferred from those who worked for that money to those who did nothing to deserve it, by the force of misleading claims and impossible promises.

And what good has bitcoin brought to mankind?  Savings of a few % in the purchases of trinkets from Newegg and Overstock?

Bitcoin is mostly a Chinese thing now: they make the most ASICs, they have the most miners, their exchanges have most of the volume.  But hwat has bitcoin done for human rights in China?  Or in any part of the world?

Perhaps bitcoin will one day make good on its promise to bring freedom and productivity.  But so far its score is not good at all.

You don't see it because your government is your all-inclusive udder. But look at the people from whom the money to feed you is coming. They need it.  Oh please, Jorge, don't shut it down!  

It is precisely the "people who feed me" that are most in danger of losing money to this "industry".  Aren't first world bitcoiners looking at the people of Latin America as the possible next market for bitcoin investment -- i.e., as the "greater fools" whose money will ensure their profits?

Of course I don't have the power to "shut bitcoin down", or to pop its speculative bubble (that is collapsing on its own).  All I can do is to advise those who would pay attention to me; but they are not that many either, and my powers of persuasion are no match for those of the Vers and Antonopouloses, alas.

[rpietila]

Every day, there is more freedom from oppressive governments because of Bitcoin.

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

It is maybe the same as other bogus enemies, like drugs, (child) porn, tax evasion, using a mobile when you drive, ...

Their only reason of existence in the legal code is to:
1) keep people anxious and depressed due to the sheer number of regulations that they must adhere to, and the incomprehensibility of them
2) provide skeletons in the closet for all people, so that if they reach a position of power, yet start to think and act independently, they can be replaced by using this "new" "scandal" information that just surfaced from NSA servers.

My position in this debate is:
- A government that claims the right to regulate what people do to themselves, or adults between themselves, is a tyrannical government based on this alone. There is no need to claim a media label of being such. Also just because you own the media, does not make you a non-tyrant if you engage in tyranny, ie. suppression.
- People do not need to apply for permission for anything, from the government. Liberty means you are free to do stuff, and if the others are infringed in their rightful rights to life, liberty or property, then they, or the government, make you pay, or gouge your eye, or put you to jail, or death (according to the crime). But not before.

[mmortal03]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

What a loaded question.

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

The number may be exaggerated, but can you dispute it?  If you add MtGOX and all the other bitcoin scams and thefts, add the use of bitcoin in financing crime, all the people who had their life ruined for believing in the fantastic price predictions or gambling in online casinos -- you will get easily a billion dollars of damages inflicted on mankind.  Even if you subtract the cases of thieves stealing from other thieves, crooks scamming other crooks, and scumbags profiting at the expense of other scumbags, you are still left witha balance of hundreds of millions transferred from those who worked for that money to those who did nothing to deserve it, by the force of misleading claims and impossible promises.

Such hysterics. Any detrimental side of this Wild West is short term and can be tamed by technological advancement. This isn't some pie in the sky prediction. Stuff is getting solved.

And what good has bitcoin brought to mankind?  Savings of a few % in the purchases of trinkets from Newegg and Overstock?

A complete distortion.

Bitcoin is mostly a Chinese thing now: they make the most ASICs, they have the most miners, their exchanges have most of the volume.  But hwat has bitcoin done for human rights in China?  Or in any part of the world? Perhaps bitcoin will one day make good on its promise to bring freedom and productivity.  But so far its score is not good at all.

At least you give it some chance to do so. We must me making progress here.

[cbeast]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

What a loaded question.

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

The number may be exaggerated, but can you dispute it?  If you add MtGOX and all the other bitcoin scams and thefts, add the use of bitcoin in financing crime, all the people who had their life ruined for believing in the fantastic price predictions or gambling in online casinos -- you will get easily a billion dollars of damages inflicted on mankind.  Even if you subtract the cases of thieves stealing from other thieves, crooks scamming other crooks, and scumbags profiting at the expense of other scumbags, you are still left witha balance of hundreds of millions transferred from those who worked for that money to those who did nothing to deserve it, by the force of misleading claims and impossible promises.

Such hysterics. Any detrimental side of this Wild West is short term and can be tamed by technological advancement. This isn't some pie in the sky prediction. Stuff is getting solved.

And what good has bitcoin brought to mankind?  Savings of a few % in the purchases of trinkets from Newegg and Overstock?

A complete distortion.

Bitcoin is mostly a Chinese thing now: they make the most ASICs, they have the most miners, their exchanges have most of the volume.  But hwat has bitcoin done for human rights in China?  Or in any part of the world? Perhaps bitcoin will one day make good on its promise to bring freedom and productivity.  But so far its score is not good at all.

At least you give it some chance to do so. We must me making progress here.

At least some of us appreciate your efforts and/or troll baiting. 

[twiifm]

OMG my replies are removed?  Mr. Freedom is in to censorship like the hypocrite he is!!!

[BTCtrader71]

Perhaps bitcoin will one day make good on its promise to bring freedom and productivity.  But so far its score is not good at all.

For blockchain technology to live up to its full potential, it is going to take multiple steps and it's going to take time. Lots of time. The internet did not spring into existence fully formed and neither will the bitcoin economy. Jorge, I think you simply do not appreciate this fact. Some people cannot envision something until after it is already built and perhaps you are just one of those people.

Let me try to break down just a few of these steps for you. Right now, merchants are adopting bitcoin because 1) it's cheap and easy so there's little reason not to try it out and see how it goes, 2) they get their money faster compared to CC transactions and 3) they save on CC fees (which is a big deal for low margin businesses). But most of them are just dipping their toes in the water. They don't want lots of customers using it because they (the business owner) haven't yet figured out how this whole thing works. It will take some time before Joe the Store Owner becomes comfortable enough with bitcoin to decide to incentivize customers to use it instead of CCs. And once that starts to happen, we will start to see consumer adoption rise. But this process will take time. Just because it didn't happen yesterday doesn't mean it's never going to happen.

[rpietila]

Just because it didn't happen yesterday doesn't mean it's never going to happen.

And the corollary: if there's a mechanism that makes it happen, and yet it has not happened yet,

=> IT WILL SURELY HAPPEN.

This is the whole point of the whole thread. Elsewhere I'm talking about probabilities and stuff, and that's where I really excel. This thread is simple: if it grows by design, and you cannot kill it, it will take over the world, and the question is only about that of timing. Or altering the premises. Many critics cannot go that far though, or generally to anything else except USD/BTC.

[nanobrain]

I'm just dying to hear what Risto makes of this (Stamp 155 and falling).

[JorgeStolfi]

I'm just dying to hear what Risto makes of this (Stamp 155 and falling).

Haven't you heard of the latest technical improvement to the protocol? The development team determined that price does not matter.

[rpietila]

I'm just dying to hear what Risto makes of this (Stamp 155 and falling).

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

You read it, right?

You understood it?

You can say that something in the last 5 months has disproven something that I have claimed in it?

If the answer is NO, NO, NO, please do not post again. This is a self-moderated thread for a reason.

Before replying, read it once again. It is one of the good posts among my 1000+ existing.

PS. I have seen both of the other big exchanges hitting lower values. It only happens when you are in risk of losing your money (which happened re: MtGox). Don't want to go there again. Even if Stamp hits $0, I am only buying OTC.

[rpietila]

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

You can say that something in the last 5 months has disproven something that I have claimed in it?

Well, this was easy. It is pretty clear now that the starting point and value have changed. If you can make that the main point of the posting and make fun of it, please do it elsewhere.

[Jesus Coin]

Matthew 7:15
Beware of false prophets, who come to you in sheep's clothing but inwardly are ravenous wolves.

[cbeast]

Matthew 7:15
Beware of false prophets, who come to you in sheep's clothing but inwardly are ravenous wolves.

Bitcoin 2:15 Beware of false profits who come to you in cryptographic format but inwardly are inflationary fiat.

[abercrombie]

[nanobrain]

I'm just dying to hear what Risto makes of this (Stamp 155 and falling).

Haven't you heard of the latest technical improvement to the protocol? The development team determined that price does not matter.

"For the time being, certainly, it had been found necessary to make a readjustment of rations (Squealer always spoke of it as a "readjustment," never as a "reduction"), but in comparison with the days of Jones, the improvement was enormous. Reading out the figures in a shrill, rapid voice, he proved to them in detail that they had more oats, more hay, more turnips than they had had in Jones's day, that they worked shorter hours, that their drinking water was of better quality, that they lived longer, that a larger proportion of their young ones survived infancy, and that they had more straw in their stalls and suffered less from fleas. The animals believed every word of it. Truth to tell, Jones and all he stood for had almost faded out of their memories. They knew that life nowadays was harsh and bare, that they were often hungry and often cold, and that they were usually working when they were not asleep. But doubtless it had been worse in the old days. They were glad to believe so. Besides, in those days they had been slaves and now they were free, and that made all the difference, as Squealer did not fail to point out."

Animal Farm, Chapter 9

(although pretty much the whole book is fast becoming a parallel to BTC).

[nanobrain]

I'm just dying to hear what Risto makes of this (Stamp 155 and falling).

Blockchain, as a technology, is indestructible. A reasonable starting point is to understand that crypto is here to stay, and no laws or wars can stop it. Any individual cryptocoin, Bitcoin included, has challenges particular to it, and local laws and wars may prove detrimental to individuals' wealth, as well as life.

People can only learn more about Bitcoin, unlearning is not possible. With any technology, invention or innovation, there is an adoption curve that is the aggregate of all the people's individual propensities of learning about a new thing, deciding to use it, trying it, and amplifying their usage to significant levels. On average, the process from first hearing about something, to trying it, takes 2 years. From trying to actual adoption, we might add 1 more year.

The current number of Bitcoin owners is likely a paltry 1-2 million. Even smaller is the number of people who actively use Bitcoin in their life. The first number, at least, has not grown significantly in 2014. Enthusiasm has given way to apathy, evidenced by both price and volume of trades lagging far behind their highs.

Meanwhile, the 2 years average delay from first hearing to first trial, is slowly becoming fulfilled in hundreds of millions of people. There were millions who heard about the bubble in 2011, and their "2 years" started counting. Not enough of them were ready to buy in 2012, which was still a year of slow price appreciation. But in 2013, the great advances were made by the people who had had 2 years to ensure themselves that it was not a fly-by-night. In 2012, the global media coverage about Bitcoin was tiny, but in 2013 all changed. In two years, we are talking about 100x more people in the pipeline of becoming Bitcoin owners.

This gives rise to the exponential trendline. There is only one way to draw a trendline with the best R^2 fit (follows from the fact that goodness-of-fit is a universal criterion), and it is shown here. The number of Bitcoin users is so small at 1-2 million that the trendline should stay exponential 2 more orders of magnitude minimum.

An added reason is that because Bitcoin is money, and the exponential trendline means exponential gains for everyone involved, it makes sense to speculate and buy a large number of bitcoins instead of the fair share. (The fair share assuming worldwide adoption is BTC0.002 and assuming that only the elite of 3% world's richest and most connected buy it, BTC0.07.)

An increasing number of people are already ready to buy bitcoins. Banks, ETF's, private services, etc. have the infrastructure ready for launch. Both are waiting. Bitcoin holders are anxious, but as long as their anxiety results in them selling more bitcoins to the deep-pocket investors, the wait continues. In 2012 it continued quite long, with price going up only a little (more than 100% though).

Hearing about Bitcoin is the start of your Bitcoin pregnancy. Of these pregnancies, not all perhaps result in a healthy baby (adopting Bitcoin as your home currency), but luckily here, the time is not limited to 9 months. The average with those who currently are power users may have been 3 years (or less, since the delay is shorter with people with the early adopter mindset), but for others it may be 5 years. Miscarriages happen often, but the reverse-miscarriage is also a very typical occurrence.

We have a world-record number of Bitcoin pregnancies going on now, and hardly any births for several months already. I believe that the laws of nature and mathematics will take care that the babies will be seen in increasing numbers.

The trendline shows how much behind we are currently. The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.

You read it, right?

You understood it?

You can say that something in the last 5 months has disproven something that I have claimed in it?

If the answer is NO, NO, NO, please do not post again. This is a self-moderated thread for a reason.

Before replying, read it once again. It is one of the good posts among my 1000+ existing.

PS. I have seen both of the other big exchanges hitting lower values. It only happens when you are in risk of losing your money (which happened re: MtGox). Don't want to go there again. Even if Stamp hits $0, I am only buying OTC.

Risto,
Glad to see you managed to get the 'castle' into your response, although I think many here would argue it is actually a manor - castle's tend by definition to be built of stone and have turrets but I digress.

For all these pregnancies you speak of there has been some pretty high profile abortions, miscarriages, SIDS and infanticides, which unfortunately tend to hog headlines far more than pregnancies (which are, lets face it, ten a penny in the real world). 

So, we return to perceptions and Jorge's argument that 'new blood' ie new markets (new buyers) are needed.  China is falling away, the mainstream in the West thinks BTC is a bit of joke after the last 12 months after the (continuing) run of disasters, frauds and robberies.  So, where are these new buyers coming from?

Perhaps we could get the 'man in the street' interested?  But wait, you don't use exchanges, you buy OTC.  This sounds like the sort of privileged two tier system I thought BTC was going to eradicate. Reading this sort of attitude I can imagine the how the 'man in the street'  may feel.  (I posted the quote from Animal Farm above because I think you should reread it.)

And what of the miners, who are switching off and calling it a day -- doesn't that threaten the 'indestructible' network? 

I popped into the forum to see what was happening and saw that you were "calling the bottom" so assumed this involved some numbers, clearly not.  I recall 12 months back you were calling the next bull run as being in May (then Aug, Sept, Nov etc) in between which you unsuccessfully predicted a range of 'bottoms', so your record (I'm sure you are aware) is a bit tarnished at this point.  I really don't care, forgive you your mistakes and respect your right to make as many predictions as you want.

But please, if you love BTC so much, realise perhaps your behaviour may be actually causing some of the PR issues we encounter.

[rpietila]

We seem to have a different mindset, which makes responding to your amenable letter either a pleasant yet unfortunately pointless exercise, or a brief matter. I acknowledge that you may have a point, and will drop the word "may" when Bitcoin is no longer useful for me for its intended purpose(s), and assume you do likewise when the exchange rate appreciation to at least $3,000 per BTC proves my point to you in the realm that you are comfortable with. 

[Dusty]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

Bitcoin has given me hope to be one day free from the ideas that governs your way of thinking.

Thanks for continually remind me it with every post you make.

[Cassandra_PR]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

Bitcoin has given me hope to be one day free from the ideas that governs your way of thinking. Jews.

That's racist Dusty.  Don't be a racist.

[cbeast]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

Bitcoin has given me hope to be one day free from the ideas that governs your way of thinking.

Thanks for continually remind me it with every post you make.

There is a group of casinos near my property that has done 10000x more damage than Bitcoin. I've heard of so many families destroyed, homes lost, and gambling addiction leading to crime or worse. Casinos pay fines for cheating smaller than their take, so there is no incentive to do so. They cause drug cartels and organized crime to enter nearby towns and cities. Bitcoin could eliminate cheating casinos and replace them with provably fair ones. Silk Road already proved that Bitcoin prevents drug dealing and other crimes.

The biggest problem with JorgeStolfi is he thinks too small. Its people like him that prevent the needed help from getting to victims of government abuse.

[sporket]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

Bitcoin has given me hope to be one day free from the ideas that governs your way of thinking.

Thanks for continually remind me it with every post you make.

There is a group of casinos near my property that has done 10000x more damage than Bitcoin.

And WW2 had done more damage still, what's your point?   A broken leg isn't as bad as lung cancer, which doesn't even begin to imply that a broken leg's a *good* thing. 

I've heard of so many families destroyed, homes lost, and gambling addiction leading to crime or worse. Casinos pay fines for cheating smaller than their take, so there is no incentive to do so. They cause drug cartels and organized crime to enter nearby towns and cities. Bitcoin could eliminate cheating casinos and replace them with provably fair ones. Silk Road already proved that Bitcoin prevents drug dealing and other crimes.

1. Gambling addiction has nothing to do with casinos cheating or being "provably fair."
2. "Drug cartels" are no less likely to be attracted to "provably fair" casinos than ones that cheat.
3. SR was fail & aids, also http://www.wired.com/2015/02/read-transcript-silk-roads-boss-ordering-5-assassinations/ .

The biggest problem with JorgeStolfi is he thinks too small. Its people like him that prevent the needed help from getting to victims of government abuse.

The biggest problem lies not with Jorge, but with your tenuous, crude & uninformed grasp of economics.
Sure, even a cat may look at a king, though a cat judging a king is the height of arrogance.

[mmitech]

Really? Could you please explain how those 100'000 people get more "freedom from oppresive governments" by using bitcoin?  Is "freedom"  just evading taxes, or buying illegal drugs, weapons, child porn -- or is there something else?

Claim: in its 6 years of existence, bitcoin has caused 1000x more damage than benefits to the world.

Bitcoin has given me hope to be one day free from the ideas that governs your way of thinking.

Thanks for continually remind me it with every post you make.

There is a group of casinos near my property that has done 10000x more damage than Bitcoin. I've heard of so many families destroyed, homes lost, and gambling addiction leading to crime or worse. Casinos pay fines for cheating smaller than their take, so there is no incentive to do so. They cause drug cartels and organized crime to enter nearby towns and cities. Bitcoin could eliminate cheating casinos and replace them with provably fair ones. Silk Road already proved that Bitcoin prevents drug dealing and other crimes.

The biggest problem with JorgeStolfi is he thinks too small. Its people like him that prevent the needed help from getting to victims of government abuse.

I agree on the fact that gambling is a serious problem, but I don't get how is this related to Bitcoin risks.... in fact mix Bitcoin risks with gambling risks and you get a killer new risk that have never been introduced until Bitcoin inception.

- First funny fact, there is no such as "fair gambling".
- Second funny fact, gambling transactions makes a big piece of Bitcoin daily transactions volume, if not the biggest.... which really gives you a picture about how Bitcoin is used, and about the current user base. (excluding the hoarders and traders)
- Third Funny fact, Silkroad is one of the sites that destroyed so many lives, even the lives of those idiots who did run it, thanks to Bitcoin.

[cbeast]

And WW2 had done more damage

 
Godwin's Law makes you lose every argument.

A broken leg isn't as bad as lung cancer

Gambling addiction has nothing to do with casinos

SR was fail & aids

Sure, even a cat may look at a king

Wait two hours after doing drugs before posting.

http://www.wired.com/2015/02/read-transcript-silk-roads-boss-ordering-5-assassinations/ .

Quoting Wired? Hello, the 1990s are calling and want their relevancy back.

[sporket]

...
Godwin's Law makes you lose every argument.
[assorted faggotry]
Quoting Wired? Hello, the 1990s are calling and want their relevancy back.

>Wired is so totally 90s
>refs Godwin's Law
>still uses Bitcoin in 2015

[Warren Buffert]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

[manselr]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

It sucks that some people got filthy rich out of luck by being at the right time doing the right thing, but that doesn't change the value Bitcoin has and the technology itself, so like it or not, the early ristos out there are about to get a lot more richer in the next decade because this thing is never going away at this point. Let's just deal with the facts and try to profit from it as much as possible instead of crying about how unfair life is.

[rpietila]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

It sucks that some people got filthy rich out of luck by being at the right time doing the right thing

I understand that being at the right time doing the right thing makes you filthy rich, but how is that related to luck?? 

[dothebeats]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

It sucks that some people got filthy rich out of luck by being at the right time doing the right thing

I understand that being at the right time doing the right thing makes you filthy rich, but how is that related to luck?? 

Well, not all people experience doing the right thing at the right time i.e. me when bitcoin was in its infancy. If I only knew bitcoin back then, I would have been a millionaire now, but no. Also, no one knows for certain back then that bitcoins would be that big, so I think those who hopped the train early were very, very lucky to be doing the right thing at the right time, and that is before the ATH of Nov. 2013. Well, that was the first wave of luck that bitcoin brought to us so far. Who knows? Maybe there might be another lucky event that at this time, we are going to be included?

[rpietila]

I claim that being "lucky" is having a positive expected value in your projects. That makes some of them succeed greatly, and others perceive you as lucky.

Was it luck to buy Crypto Kingdom gold in December-2014?



I don't think so. I mentioned it to everybody that it is as cheap as it gets (with high risk) and bying is the right thing. Some bought, others not. My friend bought 60,000 CKG so is sitting on quite nice gains.

[dothebeats]

I claim that being "lucky" is having a positive expected value in your projects. That makes some of them succeed greatly, and others perceive you as lucky.

Was it luck to buy Crypto Kingdom gold in December-2014?



I don't think so. I mentioned it to everybody that it is as cheap as it gets (with high risk) and bying is the right thing. Some bought, others not. My friend bought 60,000 CKG so is sitting on quite nice gains.

Your friend isn't lucky, he already knows what he is doing back then. In the case of bitcoin, it is a completely new economy back then: no one knows for certain whether this is going to go big or go broke, whereas CKG was launched (2014) long after bitcoin was launched (2009). At this point in time, there are already people who knows how this works, and if you know what your actions will be, if it yields you a positive result, then it is no longer called luck, but rather skill. Bitcoin is different, because as I've said earlier, it is entirely new. No one knows what to do from point A to point B; they just hold it and luckily it gained traction because people noticed it.

[Erdogan]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

It sucks that some people got filthy rich out of luck by being at the right time doing the right thing

I understand that being at the right time doing the right thing makes you filthy rich, but how is that related to luck??  

Well, not all people experience doing the right thing at the right time i.e. me when bitcoin was in its infancy. If I only knew bitcoin back then, I would have been a millionaire now, but no. Also, no one knows for certain back then that bitcoins would be that big, so I think those who hopped the train early were very, very lucky to be doing the right thing at the right time, and that is before the ATH of Nov. 2013. Well, that was the first wave of luck that bitcoin brought to us so far. Who knows? Maybe there might be another lucky event that at this time, we are going to be included?

For some, it was not luck. If you have read rpietilas writings, you would know that for him it was certainly not a question of luck, and what he did was in conformance with the rights of all other beings.

You have the right to sulk and pout, and express it, no problems there, it is more of an advice that this is not in your self interest. You use time and effort, and it closes your mind, and if you had used that in stead to study bitcoin, you would have seen that it is not too late. You are unable to inform yourself and act. I usually don't bother, there are just too many of you.

[fisheater22]

... My friend bought 60,000 CKG so is sitting on quite nice gains.

Not sure I'm following you, are you saying that your friend was smart, because he made money on CKG?
Wold he be less smart if he bought 60k CKG and lost money?  

Is the guy who bought a winning lottery ticket smarter than the guy who bought a losing one?

Edit: Just did a quick search for CKG, and it seems to be an in-game currency, tokens, like WoW gold, correct?
More questions: In this post (https://bitcointalk.org/index.php?topic=966001.0), there's a claim stating "CKG has been actively traded in the ingame exchange and now is moving to a leading Crypto exchange."  May I ask which leading exchange?

[rpietila]

... My friend bought 60,000 CKG so is sitting on quite nice gains.

Not sure I'm following you, are you saying that your friend was smart, because he made money on CKG?
Wold he be less smart if he bought 60k CKG and lost money?  

Is the guy who bought a winning lottery ticket smarter than the guy who bought a losing one?

Edit: Just did a quick search for CKG, and it seems to be an in-game currency, tokens, like WoW gold, correct?

Yes, I think he was smart.

No, it is not about if a positive or a negative scenario unfolds that makes us smart. Buying silver before Bitcoin existed was extremely smart, even if it did not bring that much profits. Smartness is investing in projects that on average return positively. It is hard to detect, because the average is heavily dominated by the mooners - eg. I am smart, which consists of 19 projects that go to zero and 1 (BTC) that returned 200x.

Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited. The project was "backed" by me so everyone knowing me and doing the math should have realized that investing is a profitable proposition.

CKG is the dividend-paying share of the game, CK.

[fisheater22]

... My friend bought 60,000 CKG so is sitting on quite nice gains.

Not sure I'm following you, are you saying that your friend was smart, because he made money on CKG?
Wold he be less smart if he bought 60k CKG and lost money?  

Is the guy who bought a winning lottery ticket smarter than the guy who bought a losing one?

Edit: Just did a quick search for CKG, and it seems to be an in-game currency, tokens, like WoW gold, correct?

Yes, I think he was smart.

No, it is not about if a positive or a negative scenario unfolds that makes us smart.

In that case, why bring up that your friend made money, as if that somehow supported your claim of his intelligence?
If your friend has no inside information, how is he any smarter than those playing other "investment-based games" in the Investment Based Games" section of this forum?

Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited.

This is different from every investment in general, and every cryptocurrency in particular, exactly how?

[rpietila]

Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited.

This is different from every investment in general, and every cryptocurrency in particular, exactly how?

Explained in the sentence following the one quoted.

Are you willing to learn or not? I have a 17 year experience on online investing and while some may have more, it seems that most of the guys here have considerably less, to their detriment.

[fisheater22]

Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited.

This is different from every investment in general, and every cryptocurrency in particular, exactly how?

Explained in the sentence following the one quoted.

Are you willing to learn or not? I have a 17 year experience on online investing and while some may have more, it seems that most of the guys here have considerably less, to their detriment.

This sentence?
"The project was "backed" by me so everyone knowing me and doing the math should have realized that investing is a profitable proposition."
How does that address your claim of " ... it can only go to zero, but the upside is not limited"?
My question stands: What makes CKG different from other investments, in respect to " ... it can only go to zero, but the upside is not limited"?

Are you suggesting that your friend was smart because he thinks you're smart?  Also not sure what you mean by "doing the math," explain?

Also a second edit you may have missed:

...
More questions: In this post (https://bitcointalk.org/index.php?topic=966001.0), there's a claim stating "CKG has been actively traded in the ingame exchange and now is moving to a leading Crypto exchange."  May I ask which leading exchange?

[rjclarke2000]

Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited.

This is different from every investment in general, and every cryptocurrency in particular, exactly how?

Explained in the sentence following the one quoted.

Are you willing to learn or not? I have a 17 year experience on online investing and while some may have more, it seems that most of the guys here have considerably less, to their detriment.

I'll always listen to advice from successful people. They are successful for a reason. I believe some people could do with learning and being respectful.

Why is everyone being funny about this?

We all want to be successful right?

[fisheater22]

...
Why is everyone being funny about this?

We all want to be successful right?

In that case, you should take advice from every lotto winner and every hobo who finds a diamond tiara in the gutter.  They are, after all, successful, and worthy of emulation.

My post is addressing just that: Is Mr. rpietila's a person whose sound judgement made him wealthy, or was it something else?  Should his advice be considered valid without further questions, or did luck play a role in his success, as it did with the successful people described above?

Mr. rpietila seems to suggest that luck is not a factor here, I'm merely trying to understand his position.

[rjclarke2000]

...
Why is everyone being funny about this?

We all want to be successful right?

In that case, you should take advice from every lotto winner and every hobo who finds a diamond tiara in the gutter.  They are, after all, successful, and worthy of emulation.

My post is addressing just that: Is this a person whose judgement should be trusted, since his success was based solely on intelligence, or did luck play a role, as it did with the successful people described above?

Mr. rpietila seems to suggest that luck is not a factor here, I'm merely trying to understand his position.

Surely researching something such as Bitcoin and then after taking into consideration what it has to offer isn't luck.

i understand the luck bit by hearing about it before a lot of people but correct me if I am wrong, I believe Risto has had success investing in the past before Bitcoin.  He says 17 years experience so if he bought Bitcoin 5 years ago that means you are saying he has made no money investing in the 12 years prior.

I find this hard to believe.

[fisheater22]

...
Why is everyone being funny about this?

We all want to be successful right?

In that case, you should take advice from every lotto winner and every hobo who finds a diamond tiara in the gutter.  They are, after all, successful, and worthy of emulation.

My post is addressing just that: Is this a person whose judgement should be trusted, since his success was based solely on intelligence, or did luck play a role, as it did with the successful people described above?

Mr. rpietila seems to suggest that luck is not a factor here, I'm merely trying to understand his position.

Surely researching something such as Bitcoin and then after taking into consideration what it has to offer isn't luck.

i understand the luck bit by hearing about it before a lot of people but correct me if I am wrong, I believe Risto has had success investing in the past before Bitcoin.  He says 17 years experience so if he bought Bitcoin 5 years ago that means you are saying he has made no money investing in the 12 years prior.

I find this hard to believe.

Please read my previous posts.  I am not discussing Mr. rpietila's general credibility, but rather a different matter--Crypto Kingdom Gold, and whether luck played a part in his friend's investment in it.  His credibility only came into play with Mr. rpietila's claim which amounted to "i'm smart, thus my friend was smart by listening to me."

If that was the case, BTC would be way over $30k Mr. rpietila promised us a while back.

Also, claims such as "Buying CKG when it was depressed was smart, because it can only go to zero, but the upside is not limited." got my attention.

Regarding the "17 years [of internet trading] experience," same claim could be made by many gambling addicts in the Investment Based Games section of this forum.  I also have zero evidence of said [successful?] experience, and tend to take the things I read on the internet with a grain of salt.

[Erdogan]

...
Why is everyone being funny about this?

We all want to be successful right?

In that case, you should take advice from every lotto winner and every hobo who finds a diamond tiara in the gutter.  They are, after all, successful, and worthy of emulation.

My post is addressing just that: Is Mr. rpietila's a person whose sound judgement made him wealthy, or was it something else?  Should his advice be considered valid without further questions, or did luck play a role in his success, as it did with the successful people described above?

Mr. rpietila seems to suggest that luck is not a factor here, I'm merely trying to understand his position.

Question everything. His silver investment may or may not have been sound, I did not own silver at the time. But the bitcoin investment was a result of vision, knowledge and action, with a side look to the betterment of humanity. Luck was possibly a factor, because at the time the success of bitcoin was far from certain.

You should know that luck is often overemphasized, from the outside because people do not want to know that some other could have better skill, and from the inside, because the doer wants to appear humble or just conceal the reasons for his actions. In practise, an investor positions himself to take advantage of good things that may happen, and positions himself to avoid catastrophe. The appearant luck may be his knowledge and actions. And since the reasons may not be expressed or even rational, it could have been intuition, you can not decisively discern luck from well thought out action.

[fisheater22]

...
You should know that luck is often overemphasized, from the outside because people do not want to know that some other could have better skill, and from the inside, because the doer wants to appear humble or just conceal the reasons for his actions. In practise, an investor positions himself to take advantage of good things that may happen, and positions himself to avoid catastrophe. The appearant luck may be his knowledge and actions. And since the reasons may not be expressed or even rational, it could have been intuition, you can not decisively discern luck from well thought out action.

Conversely, you should know that luck is often underemphasized, because people wish to attribute their success to intelligence and skill.  As for excessive humility, I doubt that a man known for singing his own praises, posting pictures of self next to 70s Rollses and regaling us hoi polloi with tales of cigars he smokes, booze he drinks & castles he buys... I doubt he suffers from that.  Call it a hunch.

Regardless, none of this s relevant to his investor-based game, which I tried to address in this part of "rpietila [falsely] Calling the Bottom" thread.

Do you, perchance, have an answer to my Crypto Kingdom Gold question?

"In this post (https://bitcointalk.org/index.php?topic=966001.0), there's a claim stating 'CKG has been actively traded in the ingame exchange and now is moving to a leading Crypto exchange.'  May I ask which leading exchange?"

[rpietila]

Poloniex is the exchange that promised to list it. Now however they apparently changed that it will not be listed simultaneously with the game going online (to save their effort of course, if the game flops). Once I heard about this, we started our own trading system with market making, which enables speculation with small sums, max trade is 10,000 CKG (about BTC15), see more in the game thread.

[fisheater22]

Poloniex is the exchange that promised to list it. Now however they apparently changed that it will not be listed simultaneously with the game going online (to save their effort of course, if the game flops). Once I heard about this, we started our own trading system with market making, which enables speculation with small sums, max trade is 10,000 CKG (about BTC15), see more in the game thread.

Ah, thanks.  So Crypto Kingdom Gold is not traded on any exchange, and could be exchanged (on your website, with fees and, in case of non-trivial amounts, slippage) for Monero, another coin you yourself are promoting.

I can see why you think yourself savvy, credit where credit's due!

[rpietila]

Poloniex is the exchange that promised to list it. Now however they apparently changed that it will not be listed simultaneously with the game going online (to save their effort of course, if the game flops). Once I heard about this, we started our own trading system with market making, which enables speculation with small sums, max trade is 10,000 CKG (about BTC15), see more in the game thread.

Ah, thanks.  So Crypto Kingdom Gold is not traded on any exchange, and could be exchanged (on your website, with fees and, in case of non-trivial amounts, slippage) for Monero, another coin you yourself are promoting.

I can see why you think yourself savvy, credit where credit's due!

Yes I think it is quite remarkable that for a project <$1 million in size, there actually exists a 24/7 market for the shares, so that all except the 10 largest owners can enter or exit their whole position without needing to resort to any negotiation.

[fisheater22]

Poloniex is the exchange that promised to list it. Now however they apparently changed that it will not be listed simultaneously with the game going online (to save their effort of course, if the game flops). Once I heard about this, we started our own trading system with market making, which enables speculation with small sums, max trade is 10,000 CKG (about BTC15), see more in the game thread.

Ah, thanks.  So Crypto Kingdom Gold is not traded on any exchange, and could be exchanged (on your website, with fees and, in case of non-trivial amounts, slippage) for Monero, another coin you yourself are promoting.

I can see why you think yourself savvy, credit where credit's due!

Yes I think it is quite remarkable that for a project <$1 million in size, there actually exists a 24/7 market for the shares, so that all except the 10 largest owners can enter or exit their whole position without needing to resort to any negotiation.

And this is different from every ponzi currently running in the Investment Based Games subforum... how?
... other than fees and the fact that Crypto Kingdom Gold can not be exchanged for BTC, but another coin you have a stake in, I mean.

P.S. Please take this as a compliment, I am (unironically) impressed.

[rpietila]

A Ponzi is a scheme that takes investor money and pays out fixed returns until the payouts exceed the incoming funds and the perpetrator disappears with the money.

A pyramid is a scheme where people buy in in anticipation that "since the thing is so good, others will also join, and my share will be worth more". Almost all investing is based on pyramid. If the thing actually is good, or more people join in, then the value rises. Otherwise not.

The difference is whether there is a promised fixed payout.

[Erdogan]

...
You should know that luck is often overemphasized, from the outside because people do not want to know that some other could have better skill, and from the inside, because the doer wants to appear humble or just conceal the reasons for his actions. In practise, an investor positions himself to take advantage of good things that may happen, and positions himself to avoid catastrophe. The appearant luck may be his knowledge and actions. And since the reasons may not be expressed or even rational, it could have been intuition, you can not decisively discern luck from well thought out action.

Conversely, you should know that luck is often underemphasized, because people wish to attribute their success to intelligence and skill.  As for excessive humility, I doubt that a man known for singing his own praises, posting pictures of self next to 70s Rollses and regaling us hoi polloi with tales of cigars he smokes, booze he drinks & castles he buys... I doubt he suffers from that.  Call it a hunch.

Regardless, none of this s relevant to his investor-based game, which I tried to address in this part of "rpietila [falsely] Calling the Bottom" thread.

Do you, perchance, have an answer to my Crypto Kingdom Gold question?

"In this post (https://bitcointalk.org/index.php?topic=966001.0), there's a claim stating 'CKG has been actively traded in the ingame exchange and now is moving to a leading Crypto exchange.'  May I ask which leading exchange?"

No.

[mrhelpful]

just curious are you still calling bottom? since the twins have already been heavily invested into their projects, gemini exchange about to launch this coming year like 2016 i bet.

then we got their etf, and its a matter of when so once people see the exchange. I believe others will share the same faith for the etf as well.

[fisheater22]

A Ponzi is a scheme that takes investor money and pays out fixed returns until the payouts exceed the incoming funds and the perpetrator disappears with the money.

A pyramid is a scheme where people buy in in anticipation that "since the thing is so good, others will also join, and my share will be worth more". Almost all investing is based on pyramid. If the thing actually is good, or more people join in, then the value rises. Otherwise not.

The difference is whether there is a promised fixed payout.

from Wikipedia:
"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator."

Fits fine, let's not split hairs.

A Ponzi scheme needs not have a promised fixed return, merely a promoter who stands to gain without himself risking anything.

Anyhow, I'm glad that you, as a minimum, acknowledge that you have initiated a pyramid scheme, and that "your friend" wisely invested in it.

Edit: On second read, that came off sounding accusatory, not meant to be.  I am genuinely fascinated by this sort of thing, and am enjoying what you did, albeit from the bleachers.

[Erdogan]

A Ponzi is a scheme that takes investor money and pays out fixed returns until the payouts exceed the incoming funds and the perpetrator disappears with the money.

A pyramid is a scheme where people buy in in anticipation that "since the thing is so good, others will also join, and my share will be worth more". Almost all investing is based on pyramid. If the thing actually is good, or more people join in, then the value rises. Otherwise not.

The difference is whether there is a promised fixed payout.

from Wikipedia:
"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator."

Fits fine, let's not split hairs.

A Ponzi scheme needs not have a promised fixed return, merely a promoter who stands to gain without himself risking anything.

Anyhow, I'm glad that you, as a minimum, acknowledge that you have initiated a pyramid scheme, and that "your friend" wisely invested in it.

Edit: On second read, that came off sounding accusatory, not meant to be.  I am genuinely fascinated by this sort of thing, and am enjoying what you did, albeit from the bleachers.

It is a pyramid scheme, but note that all money are pyramid schemes. People want to have them, not for the money itself, but for the vision of being able to exchange them for something useful in the future. Fiat money could also set out to be appreciating for ever, that depends on the money manager. But at the incursion of a new fiat system, the value has to start from zero, and appreciate to the money managers preferred level using progaganda and prudent printing.

[fisheater22]

But at the incursion [inception?] of a new fiat system, the value has to start from zero, and appreciate to the money managers preferred level using progaganda and prudent printing.

And yet again I'm placed in a position of having to explain something so basic... nvrmnd.

No, money is not a pyramid scheme.  A nation state does not start out by printing money and hoping that someday, it will also have stuff (land, economy, factories, gold, cows, houses) for that money to buy.
Doesn't work like that.  "Stuff" will not magically appear just because someone decided to print some fiat.

There's already an initial pile of stuff [which is presumably] equal in value to the "printed" fiat.  If a disparity exists, the currency either grows in buying power, or is devalued.  If the disparity is too great, the economy collapses.
Caveat: But first, there must be stuff to buy.

That's why you or I can't start an economy by printing a bunch of fiat ourselves--it would be worth nothing.

Crypto Kingdom and other ponzi schemes capitalize on people's tenuous grasp of basic economics.  Let's be honest, most folks aren't even too swift when it comes to basic math, or, for that matter tying own shoes.  Forget fancy book-learnin' like "ex nihilo nihil fit."

[techgeek]

A Ponzi is a scheme that takes investor money and pays out fixed returns until the payouts exceed the incoming funds and the perpetrator disappears with the money.

A pyramid is a scheme where people buy in in anticipation that "since the thing is so good, others will also join, and my share will be worth more". Almost all investing is based on pyramid. If the thing actually is good, or more people join in, then the value rises. Otherwise not.

The difference is whether there is a promised fixed payout.

from Wikipedia:
"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator."

Fits fine, let's not split hairs.

A Ponzi scheme needs not have a promised fixed return, merely a promoter who stands to gain without himself risking anything.

Anyhow, I'm glad that you, as a minimum, acknowledge that you have initiated a pyramid scheme, and that "your friend" wisely invested in it.

Edit: On second read, that came off sounding accusatory, not meant to be.  I am genuinely fascinated by this sort of thing, and am enjoying what you did, albeit from the bleachers.

It is a pyramid scheme, but note that all money are pyramid schemes. People want to have them, not for the money itself, but for the vision of being able to exchange them for something useful in the future. Fiat money could also set out to be appreciating for ever, that depends on the money manager. But at the incursion of a new fiat system, the value has to start from zero, and appreciate to the money managers preferred level using progaganda and prudent printing.

Well then all schemes have a deadline some are longer to predict then others.

And the us dollar itself is then a pyramid scheme since its based off owing more money then it can actually issue out. The thing is, the scheme wont die unless people are educated knowing that its scheme.

If you ask someone on the street today, and ask them what fractional reserve lending was they would be clueless.. lol.

[Erdogan]

A pyramid scheme collapses when people outside the scheme does not want to add on it. The point with money, is that the pyramid can stand for a long time, as long as it is the best money.

So if there were no inhibitors to the transport and conversion of the different fiat types, legally, border control, legal tender stuff, state power requiring solely one type for payments and also pays out only in one type, cultural legacy, other people in the area having mostly one type (liquidity)...then the situation would be highly unstable, with the market converging into one type. All other types would then implode, making them indistinguishable from pyramid schemes. The last standing money type will still be a pyramid, but it will live for ever (or until a new, better, money type takes over).

[rpietila]

Well, CKG is actually quite little pyramidal, and more like a share. It receives dividends (from the Town surplus), same as every stock in existence. Every game company should pay dividends to its owners.

CK (the game) is pyramidal in the same way real world is - things only have value as long as someone is interested in buying them. The game has everything, and if all the people suddenly decide that they don't want to play any more, the prices collapse. This may happen in the real world as well.

[fisheater22]

Well, CKG is actually quite little pyramidal, and more like a share. It receives dividends (from the Town surplus), same as every stock in existence. Every game company should pay dividends to its owners.

CK (the game) is pyramidal in the same way real world is - things only have value as long as someone is interested in buying them. The game has everything, and if all the people suddenly decide that they don't want to play any more, the prices collapse. This may happen in the real world as well.

Let me see if I understand the gist of your argument. Is this, essentially, it?

1. My company prints money I call Crypto Kingdom Gold, promotes it, and sells it to smart people, who, in turn, also promote it. These smart people happen to hate fiat and bankers, which only adds to the fun.

2. These smart people (like my smart friend, who bought 60k's worth) can, in turn, buy imaginary items with this money, or convert it into another "coin" created by me and my friends, after paying me a fee for the privilege. I like to call this "a closed economy."

3. I freely admit that this is a pyramid scheme, since, while it produces nothing of value,* neither does a car factory,** or the world itself--a pitiful accident, flotsam and jetsam, illusory ripples in the wake of Maya's ridiculous dance (who Herself is but an illusion).

4. Life is meaningless, the world an illusion, nothing has value, neither do the imaginary castles I sell you, where's the problem? Got some issues with reductio ad absurdum?

The so-called "real castle" I bought with your money isn't any more "real" in the great scheme of things, read some Schopenhauer, buddy, and educate yourself. Nor are the overpriced cigars I smoke, or the exquisite-yet-equally-unreal booze I drink. Thanks for making my illusory life a bit posher tho.

*Excluding, of course, comedic value
**If no one wants cars, cars have no value

Again, I'm here as your admirer, with tremendous respect for what you do--punish people using their own greed and ignorance.  GG!

[farting_shot]

Admit it, rpietila got pwned.

[rpietila]

If the definition of "pwned" is that he is so puzzled about wth is the point of discussion, that he considers that spending the time in the important ongoing projects might be more important than this, yes you are correct.

Have a nice day!

[manselr]

The price shows the daily birth rate. I am writing this from a castle that I bought with money earned by trading Bitcoin based on the very premise I have explained to you here.

Don't lose the faith people. Taxes, maintenance, and utilities on these castles aren't cheap (they're very drafty, after all). Risto needs more bag holders to keep up on his payments!

It sucks that some people got filthy rich out of luck by being at the right time doing the right thing

I understand that being at the right time doing the right thing makes you filthy rich, but how is that related to luck??  

Well, not all people experience doing the right thing at the right time i.e. me when bitcoin was in its infancy. If I only knew bitcoin back then, I would have been a millionaire now, but no. Also, no one knows for certain back then that bitcoins would be that big, so I think those who hopped the train early were very, very lucky to be doing the right thing at the right time, and that is before the ATH of Nov. 2013. Well, that was the first wave of luck that bitcoin brought to us so far. Who knows? Maybe there might be another lucky event that at this time, we are going to be included?

For some, it was not luck. If you have read rpietilas writings, you would know that for him it was certainly not a question of luck, and what he did was in conformance with the rights of all other beings.

You have the right to sulk and pout, and express it, no problems there, it is more of an advice that this is not in your self interest. You use time and effort, and it closes your mind, and if you had used that in stead to study bitcoin, you would have seen that it is not too late. You are unable to inform yourself and act. I usually don't bother, there are just too many of you.

No one back in the day predicted Bitcoin to ever reach 1000 dollars per unit, literally no one... in fact most people that got rich did so by forgetting about their wallets and then seeing on Fox news how "Bitcoin the internet currency surpassed gold this morning" or something along the lines.
No one would have willingly held from 2009 to the biggest bubble we've seen yet because the thing was too new to properly put a price tag on.
Now we know Bitcoin is not going anywhere and the price will probably be way higher than the last ATH in 10 years, but back in the day it was too experimental. The code released by satoshi was a mess, sure the idea was there, but no one knew if this would scale up properly, in fact we still don't but at least things are different these days and are already on track with good traction. I just don't believe for a second someone would predict this to happen just like Warren Buffet didn't predict the stupid drink named CocaCola would deliver billions in gains years later. You just hold and see what happens, with more or less expectations. LUCK is always involved. Denying the importance of luck in everything = being in denial. The fact i've been here for a while way ahead of the pack = lucky me that I saw something related to Bitcoin somewhere on the internet and started researching on it. If I didn't stumble on some article mentioning Bitcoin I would have found out about it 10 years from now like most people will.