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Author Topic: Hey you, with the bitcoins, mind the bubble.  (Read 5524 times)
FooDSt4mP
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May 13, 2011, 06:19:12 PM
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First off, I'm not saying we're in a bubble about to pop.  However, we could easily arrive at such a situation if we aren't careful.  It is the early adopters and other wealthy bitcoiners who must let off a little pressure every now and then.  We want confidence in bitcoin to remain high, so keep the supply reasonable to keep prices sane.  Traders don't mind volatility, but merchants often need more stability.  Sure, they can do moving averages, but it's just another detail to be considered by someone wanting to accept bitcoins for payment, and lag during big rallies, making prices high.  Thankfully, there are already several very successful businesses taking bitcoins as payment, so there is a merchant economy.  And that in itself brings more stability to the overall economy, but there is a lot of room for more players.  If you really believe in bitcoin, operating a business and selling bitcoins as needed to cover costs is really the best way to ensure the future value.  So to those of you manning the release valves, thanks for your time and please keep things in check.  These are exciting times for bitcoin, but we must be vigilant to not get carried away.

As we slide down the banister of life, this is just another splinter in our ass.
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kiba
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May 13, 2011, 06:22:13 PM
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Asking stability in a currency that's probably going to dominate the world economy or fall apart in ten years time is nut.

dissipate
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May 13, 2011, 06:22:48 PM
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We just need a futures and short market. Those will smooth things out in my opinion.
deadlizard
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May 13, 2011, 06:27:01 PM
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We just need a futures and short market. Those will smooth things out in my opinion.
We have a futures market, and unless your talking about naked shorts we have that too (it's called borrowing to sell)

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May 13, 2011, 06:28:09 PM
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We just need a futures and short market. Those will smooth things out in my opinion.
We have a futures market, and unless your talking about naked shorts we have that too (it's called borrowing to sell)

They have futures and shorts on margin? Where?
unk
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May 13, 2011, 06:37:32 PM
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fatwallet has the best bubble analysis i have seen
http://www.fatwallet.com/forums/finance/1090435/?start=192
FooDSt4mP
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May 13, 2011, 06:46:29 PM
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Asking stability in a currency that's probably going to dominate the world economy or fall apart in ten years time is nut.

There are different levels of stability, and every new merchant adds to the stability of the economy.  Stable growth is still stable.  Unstable growth is harder to work with.

As we slide down the banister of life, this is just another splinter in our ass.
dissipate
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May 13, 2011, 06:50:58 PM
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fatwallet has the best bubble analysis i have seen
http://www.fatwallet.com/forums/finance/1090435/?start=192

There were some legitimate points in there. Too bad the analysis was tainted with the author's ideological slant.
ribuck
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May 13, 2011, 07:02:42 PM
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fatwallet has the best bubble analysis i have seen
http://www.fatwallet.com/forums/finance/1090435/?start=192
He doesn't really analyse the bubble at all. He doesn't provide any insight as to what he thinks the value of a bitcoin should be. He just makes a lot of derogatory comments about things he is not comfortable with (such as unregulated exchanges).
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May 13, 2011, 07:29:01 PM
 #10

Here's my conception of a normal bubble.

Something moves up fast, maybe for legitimate reasons or maybe from government interference, doesn't really matter. Lots of people who don't know why the price moved up jump in and buy, others don't want to be left out and buy even more. All this demand can hold price up in the short term, but eventually the high price draws in more production. The price cannot remain much above costs of production for very long.

A high bitcoin price does not increase the production of bitcoins. Demand could shrivel away, but that's not how bubbles usually pop. Once the bandwaggoning by normal people who don't get it or care to begins there is no stopping.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
Enky1974
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May 13, 2011, 08:31:05 PM
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A high bitcoin price does not increase the production of bitcoins. Demand could shrivel away, but that's not how bubbles usually pop. Once the bandwaggoning by normal people who don't get it or care to begins there is no stopping.
I agree 100%, aniway i've had a sell signal and for now i'm happy, sold at 7.72$, i day trade with an hourly chart, waiting next buy signal, do any of you guys daytrade or just holding bitcoins for long term?

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dissipate
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May 13, 2011, 08:39:11 PM
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A high bitcoin price does not increase the production of bitcoins. Demand could shrivel away, but that's not how bubbles usually pop. Once the bandwaggoning by normal people who don't get it or care to begins there is no stopping.
I agree 100%, aniway i've had a sell signal and for now i'm happy, sold at 7.72$, i day trade with an hourly chart, waiting next buy signal, do any of you guys daytrade or just holding bitcoins for long term?

Long term. I'm 27 and Bitcoin is an integral part of my retirement plan.
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May 13, 2011, 08:51:30 PM
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A high bitcoin price does not increase the production of bitcoins. Demand could shrivel away, but that's not how bubbles usually pop. Once the bandwaggoning by normal people who don't get it or care to begins there is no stopping.
I agree 100%, aniway i've had a sell signal and for now i'm happy, sold at 7.72$, i day trade with an hourly chart, waiting next buy signal, do any of you guys daytrade or just holding bitcoins for long term?

Long term. I'm 27 and Bitcoin is an integral part of my retirement plan.

Me too. My retirement is going suck balls and come late or be really awesome and come soon.

Who am I kidding, I don't do anything resembling work now.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
SgtSpike
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May 13, 2011, 08:53:36 PM
 #14

A high bitcoin price does not increase the production of bitcoins. Demand could shrivel away, but that's not how bubbles usually pop. Once the bandwaggoning by normal people who don't get it or care to begins there is no stopping.
I agree 100%, aniway i've had a sell signal and for now i'm happy, sold at 7.72$, i day trade with an hourly chart, waiting next buy signal, do any of you guys daytrade or just holding bitcoins for long term?

Long term. I'm 27 and Bitcoin is an integral part of my retirement plan.
That's ballsy.
Explodicle
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May 13, 2011, 09:05:13 PM
 #15

fatwallet has the best bubble analysis i have seen
http://www.fatwallet.com/forums/finance/1090435/?start=192

From the post, people buying Bitcoins are criminals, speculators, or
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anarchist teenagers who want to promote the technology for ideological reasons

I have to admit I'm getting a little tired of being assumed a teenager on the internet because I'm an idealist. Should I expect my soul to be crushed sometime soon? Do I expose how foolish I am by openly caring about something far away? Please forgive my shortage of apathy, cynicism, and selfishness; my mind must not be fully developed yet.

I'll let you guys know if/when I grow up.  Roll Eyes
Drifter
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May 13, 2011, 09:07:58 PM
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According to Alexa, the highest counted age range is 25-34 for bitcoin.org, and we have a higher than average representation of people who went to graduate school. I'd hardly say that the main audience here is idealist teenagers.

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May 13, 2011, 09:13:28 PM
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According to Alexa, the highest counted age range is 25-34 for bitcoin.org, and we have a higher than average representation of people who went to graduate school. I'd hardly say that the main audience here is idealist teenagers.
Proof that it's not bad to be slightly non-anonymous.  We have stats like this because of it!

Also, last I checked, I was portrayed as a 45-50 year old male who had a degree in psychology.  I'm a male, but nothing close to those other two statistics.  So take webstats with a grain of salt.  Tongue
marcus_of_augustus
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May 14, 2011, 02:59:32 AM
 #18

According to Alexa, the highest counted age range is 25-34 for bitcoin.org, and we have a higher than average representation of people who went to graduate school. I'd hardly say that the main audience here is idealist teenagers.

Hey, if your were going into a war. Adult males, with high degree of technical training, aged between 25-34, i.e. good amount of work experience, is where I would draw be drawing my military reserves from ... these are the backbone of modern economy, they are who brings home the real bacon, they produce the stuff society actually needs ... right now it is monetary information technology.

Banksters, accountants, lawyers, lobbyists, administrators, public relations and all the other sundry parasitical and bullshit-artists can go blow for all I care. Technology has a way of catching up with, and purging such inefficiencies eventually.

To the victor, go the spoils.

Oh yeah, we get to write our own history too.

zby
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May 14, 2011, 08:13:56 AM
 #19

fatwallet has the best bubble analysis i have seen
http://www.fatwallet.com/forums/finance/1090435/?start=192
This is indeed a good analysis.  I do agree with him that there is a lot of group think going on here - but a project of this ambitions would not succeed if it did not mobilize crowds and some crowd thinking is needed for that.  Second he makes a list of potential threats to the project - it all looks pretty plausible, I agree with him that when the stakes become high there will be a lot of incentive to many kinds of attacks and that this possibility is perhaps too easily dismissed by the core devs (I don't know - but what he says sounds probable).  But take his own evaluation of possible bitcoin value - $190 - even if we assume a 1/10 chance that the system survives the attacks the current price has still some space to grow.  And I think we might have much more chances - a community can be more resilient then a company would be - I can imagine how a DDOS attack would mobilize many bitcoin owners to scan the net and localize the perpetrators (Anonymous have shown how effective this can be).
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May 14, 2011, 08:27:17 AM
 #20

His analysis is pretty good, although his last point is overly-paranoid and negative: you can steganographically hide data in *anything*. Even your daily newpaper might contain steganographically encrypted state secrets, or your MP3 collection, or your bank statements, and you'd never even notice. That's the purpose of steganography: encoding data so it is hard to find.

There are much less conspicuous places to hide data on the internets than in the block chain of a digital commodity that is in the spotlights and being monitored by hordes of smart people.

Bitcoin Core developer [PGP] Warning: For most, coin loss is a larger risk than coin theft. A disk can die any time. Regularly back up your wallet through FileBackup Wallet to an external storage or the (encrypted!) cloud. Use a separate offline wallet for storing larger amounts.
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