I'm leaving Bitcoin

[Boussac]

To the "expert": margin trading = selling something you do not own

So why the losses that can occur are yours?

Because speculation simply displaces value from the real economy to the financial sector. Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility.

[muyuu]

Markets are not a zero-sum game but bitcoinica certainly was.

Don't over-do it peeps. Actually it was a zero-sum-minus-cut game, just like any (honest) poker site.

[unclescrooge]

So why the losses that can occur are yours?

Because speculation simply displaces value from the real economy to the financial sector.

What is value? Who define what has value and what hasn't? if something has no value why do some people try to get it (or to engage in it)?

And also, what the heck does it have to do with "trading money that you don't own"? margin trading is trading money that you borrow, covered by money you already have.

Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility.

That's why since bitcoinica came in the bitcoin world, volatility has increased... oh wait.

[ribuck]

Good luck-- I share your view that coming up with better ways of playing zero-sum games is not the way to make the world a better place.

Um, Gavin, you do realise that your Bitcoin Faucet is a zero-sum game?

The fact that this statement is coming from the 'lead developer' of Bitcoin does NOT make me feel good about the future of the Bitcoin project. Shows a complete ignorance of markets and economics.

Gavin is very smart, dedicated, trustworthy, and hard-working. I don't think he is wise yet, but give him time.

[Boussac]

So why the losses that can occur are yours?

Because speculation simply displaces value from the real economy to the financial sector.

What is value? Who define what has value and what hasn't? if something has no value why do some people try to get it (or to engage in it)?

And also, what the heck does it have to do with "trading money that you don't own"? margin trading is trading money that you borrow, covered by money you already have.

Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility.

That's why since bitcoinica came in the bitcoin world, volatility has increased... oh wait.

Do you really believe bitcoinica is helping reduce volatility ??
Don't you think is has something to do with volume ? Volume resulting from margin trading is not real: it can evaporate overnight.
Volume resulting from real trade is stabilizing.

[muyuu]

That's why since bitcoinica came in the bitcoin world, volatility has increased... oh wait.

Looks like Bitcoinica will be offline for a while. We will see how much more or less stable the market is during this period (once the dust settles from all this fiasco, give it a couple days more for them to reimburse users).

[muyuu]

I failed at one thing though, that is generating value for the society. Bitcoinica did create a place for people to trade more efficiently and provide liquidity to the market. However, speculation is a zero-sum game (or negative-sum, strictly saying). I know there can be many justifications for Bitcoinica's value, but all of them are against my intuition and values.

Don't feel bad, Zhou. I guess you were Zhoutonging a third of your customers every time you felt like moving the exchange rate, like taking candy from a baby ... But then they come into this thread and complain that you didn't understand your own project, or that you didn't understand how great Bitcoinica was/is for the economy. Can you really feel that bad for taking their money? At least now the profits are in the hands of a smart, moral person with ambitions (you)... who has better things to do than gamble.

I saved a screenshot of this masterpiece worried that the admins might delete it... they're on a roll lately.

[Cluster2k]

Still nothing up at bitconica.com.  Is the demise of the site terminal?  Three days without even a splash page on the web site telling users there's a problem.  Unless every Bitcoinica user reads this forum (or Slashdot et al), they'd think the site's operators took the money and ran.  Not a good look.

[World]

Because speculation simply displaces value from the real economy to the financial sector. Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility.

Good luck and best wishes zhoutong,your name will stay in bitcoin Metric forever

[WhatsHappening]

Still nothing up at bitconica.com.  Is the demise of the site terminal?  Three days without even a splash page on the web site telling users there's a problem.  Unless every Bitcoinica user reads this forum (or Slashdot et al), they'd think the site's operators took the money and ran.  Not a good look.

Try http://www.bitcoinica.com (not https) there's some info since yesterday.
Addres redirects to a blog on blogger.com (http://www.blogger.com/profile/01830718100003055247).

[rjk]

Anyone that wishes to continue the discussion about "Zero-sum games", please do so in this thread started by Gavin: https://bitcointalk.org/index.php?topic=81671.0

[giszmo]

Two BTWs:

1. Besides the 1,000 BTC coin, I'm also keeping 130 shares of GIGAMINING and 160 shares of BITBOND on GLBSE to support Bitcoin mining. I'm not planning to cash out any time soon.

2. I'm still waiting for my Bitcoin magazine.

@1: A wise man said "I'm all in on bitcoin with all I have and all I can borrow" to claim weeks later he has nothing in bitcoins anymore. I suggest you claim the latter at some point, too or at least move your coins once so you can claim it easily. At 100$/BTC taxes might trouble you. At 1000$/BTC weird people (I heard you can hire them for bitcoin) will find a way to make you send them a little tip

@2: When should we try to get a vaporware award for them?

[phorensic]

I'm gonna miss getting zhoutonged....not, hehehe.

[acoindr]

I failed at one thing though, that is generating value for the society. Bitcoinica did create a place for people to trade more efficiently and provide liquidity to the market. However, speculation is a zero-sum game (or negative-sum, strictly saying). I know there can be many justifications for Bitcoinica's value, but all of them are against my intuition and values.

Good luck-- I share your view that coming up with better ways of playing zero-sum games is not the way to make the world a better place.

I have to say, this really is total fail.

Voluntary trade is absolutely not a zero-sum game.  Everyone benefits.  And, in the real economy, efficient and complex trade requires price stability, something that Bitcoin didn't have before Bitcoinica.  Stabilizing the Bitcoin price is a huge accomplishment.  It builds a foundation for the creation of immense value going forward.  I have no doubt that this will become a textbook example of speculation working for the benefit of an entire economy, as it should in a truly free market.  I almost can't even imagine what would make you think otherwise.

It's amazing to me the number of people in this community who joined what Satoshi billed as a "decentralized currency," only to completely fail to understand what that meant.

This isn't an investment.  It isn't a payment processing network.  It isn't a ponzi scheme.  It's an economy.  And, granted, right now it's an economy built on drugs and knick-knacks and web services.  That's okay.  Rome wasn't built in a day.  Tides turn slowly.  There are milestones that must be reached before Bitcoin can become what it was intended to be.  And, granted, Bitcoin is different things to different people.  That's fine too.  But, really, I would expect a much broader view to be expressed by some of the people most responsible for Bitcoin's success.

Because that's what I see in the Bitcoin economy right now, success.  It might not feel like it.  The price isn't shooting up spectacularly.  Mining is more difficult than it used to be.  There is little innovative new software development.  Bitcoin services are under attack.  But believe me, it's there.  It's in the 10,000 BTC loan recently fulfilled.  It's in the solidly stable value despite 30%+ inflation.  It's in the immense network difficulty and the delivery of FPGA mining cards.  It's in the total resiliency of Bitcoin in the face of immense public and government scrutiny, while still challenging an immoral and corrupt fiat currency regime that has failed the world.

Bitcoin is clearly an idea whose time has come.  I know that backlash is growing.  I know that obstacles remain.  But don't give up before seeing it happen.  Every day that Bitcoin exists, it succeeds.

+1

[Boussac]

Quote from: Boussac on Today at 09:04:12 AM

Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility

Good luck and best wishes zhoutong,your name will stay in bitcoin Metric forever

Do you sincerely believe the relative price stability we are experiencing since mid february (about the same time as the Tradehill shut down) has something to do with bitcoinica margin trading feature ?

[DiabloD3]

For those who are stuck because of the Bitcoinica hack:

I am willing to pay for shares/bonds of major GLBSE mining operations with Diablo Mining Company shares to help offset the losses of Bitcoinica users.

https://bitcointalk.org/index.php?topic=77469.msg901042#msg901042

[disclaimer201]

Quote from: Boussac on Today at 09:04:12 AM

Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility

Good luck and best wishes zhoutong,your name will stay in bitcoin Metric forever

Do you sincerely believe the relative price stability we are experiencing since mid february (about the same time as the Tradehill shut down) has something to do with bitcoinica margin trading feature ?

If short selling has one major effect it is precisely that of reducing volatilty. Go and learn some basics from Khan Academy: http://www.youtube.com/watch?v=zAkMhEqWFF0

It's even entertaining. On the upside, I will enjoy the next (and b/c of stability long-overdue) bitcoin bubble, which will now definetely come back to us to sell my coins for $10 or more. The interest payment provided something really useful for all bitcoiners. In my wallet I receive no interest whatsoever and it can be hacked, too.

@ Tong Zhou - I think you are an honest person, please help as much as you can to get our bitcoins back from bitcoinica. Had 101 coins there!

After this is done, go to school and enjoy life. I doubt though you will come back with something more successful than bitcoinica. You already are famous. It isn't zero-sum, and people losing money in trading/gambling do at their own responsibilty. If one reason for you to leave is thinking they shouldn't lose money because it isn't good for society (i.e. all your customers as a whole), you should be aware that you are judging them and at the same time 'robbing' them of their liberty. So, this what a business is all about: You end up with money that isn't yours. Technically, this is what most/if not all businesses are and have to be -stealing. Morally, you could have used that money wisely to give back to the community. For things you consider important and things people urgently need. Perhaps this responsibilty would have been a bit much? :-)

[World]

yes,and i think this was the reason why somebody hack bitcoinica twice

[Boussac]

Quote from: Boussac on Today at 09:04:12 AM

Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility

Good luck and best wishes zhoutong,your name will stay in bitcoin Metric forever

Do you sincerely believe the relative price stability we are experiencing since mid february (about the same time as the Tradehill shut down) has something to do with bitcoinica margin trading feature ?

If short selling has one major effect it is precisely that of reducing volatilty. Go and learn some basics from Khan Academy: http://www.youtube.com/watch?v=zAkMhEqWFF0

I stopped watching your video after 2 minutes when I heard "borrowing the stock increases the supply of the stock".
This video falls in the same fallacy as so many academic papers sponsored by brokerage firms or investment banks trying to prove against common sense that shorting has no effect on volatility (for the more conservative papers).
Its sheer propaganda. Plus all this is considering stock trading (unknown future supply of stock) while bitcoin is in limited supply.

If bitcoin margin trading reduces  instantaneous volatility it's because it's attracting more volume, only of speculative trade: you then get major swings that are referred to as "market crashes" because the real trade is just not there. It's like squeezing a coil.

[DiabloD3]

"borrowing the stock increases the supply of the stock".

Excuse me while I run away screaming.