For Those Wondering Why The Current Rally

[sunnankar]

Just want to draw everyone's attention to a post I made on 9 June 2012. Keep in mind that with the latest rally the 50dma is now at $6.46 and 200dma at $5.546. While bitcoins are moving into extremely strong hands right now; I would caution others not to overpay for bitcoins.

I think you would be surprised at just how forward thinking, creative and risk taking some people are.

Today I had lunch with two of my friends who are both estate planning attorneys for high-net worth individuals. The topic of conversation centered on political risk, expatriation, second citizenships, FACTA, tax implications and how they could use BitCoin as part of their client's asset protection and estate plan. They found the alienable nature of BitCoin extremely attractive.

The bulk of their client's, at least in the $5-10m net worth range, are first generation creative entrepreneur's who made their wealth solving some market need. If just a fraction of the 80,000 HNWIs in the United States alone moved less than 0.10% of their net worth into BitCoin then it would send the price through the roof. Keep in mind, in the US alone there is $10T+ in money market type funds yielding 0%.

I have had a few HNWIs and UHNWIs whose only reservation with moving $500k or $1m into BitCoin is the lack of liquidity and scalability of investment so they settle with puny amounts like $25k or $50k, etc.

In my opinion, there is huge pent up market demand for the type of utility BitCoin offers and the longer it stays around the more confidence it will garner resulting in more people allocating capital towards it.

FYI, one of the attorneys has extensive experience in securitization and mentioned he would like to do some BitCoin securitizations. So if anyone is looking at a way to use their portfolio of cars, houses, airplanes, etc. as collateral for BitCoin related loans or offerings then I can put you in touch with him.

[cypherdoc]

I would caution others not to overpay for bitcoins.

just what is this supposed to mean?  how do you define overpay?  i don't think we're anywhere near the true market value of one Bitcoin but mine is just an educated opinion based on a year and a half's in depth experience with Bitcoin and an abundance of overall market experience.  i've already put my money where my mouth is.

[adamstgBit]

I would caution others not to overpay for bitcoins.

just what is this supposed to mean?  how do you define overpay?  i don't think we're anywhere near the true market value of one Bitcoin but mine is just an educated opinion based on a year and a half's in depth experience with Bitcoin and an abundance of overall market experience.  i've already put my money where my mouth is.

over pay for bitcoin

as in

do not buy coins right after a rally from 8 to 9,  wait till we hit 10 and there's no doubt in your mind its going to keep on going up   

[John (John K.)]

I would caution others not to overpay for bitcoins.

just what is this supposed to mean?  how do you define overpay?  i don't think we're anywhere near the true market value of one Bitcoin but mine is just an educated opinion based on a year and a half's in depth experience with Bitcoin and an abundance of overall market experience.  i've already put my money where my mouth is.

Shh, he's trying to get more coins.  

[vokain]

I would caution others not to overpay for bitcoins.

just what is this supposed to mean?  how do you define overpay?  i don't think we're anywhere near the true market value of one Bitcoin but mine is just an educated opinion based on a year and a half's in depth experience with Bitcoin and an abundance of overall market experience.  i've already put my money where my mouth is.

Shh, he's trying to get more coins.  

I think we just found the real manipulator

[Vandroiy]

From market movements, this sounds credible. From motivation, given the current political chaos, it also sounds credible.

The rallies from 5.6 looked like they got some support from few, fairly large buyers moving in. It was often big orders, slightly above market price, placed such to get filled quickly but not spike the price too much. Sane, but determined buying.

Of course, this doesn't mean it must be true. But it is a viable explanation to the rally going as fast and steadily as it did.

[Technomage]

This does support my general thoughts on Bitcoin's situation. There is very likely a lot of rich people who have heard of Bitcoin last year and this year. Some of them are surely interested. The main problem is the liquidity of the market and our puny market cap.

It is likely that increases in liquidity will be met by more liquidity later.

[SaintFlow]

It is likely that increases in liquidity will be met by more liquidity later.

+1

This is basically the wisdom of the ages. As the bitcoiners themself get more wealthy they cannot help
but attract more wealth from arround them.

[jimbobway]

I remember when casascius told me when $2.99 was too expensive and told me not to buy.

[casascius]

I remember when casascius told me when $2.99 was too expensive and told me not to buy.

That served me well - I just needed that much longer to get my money in!

Now $9 is really expensive!  Sell, sell, sell!

[TraderTimm]

It is a common trading mistake to let price level influence buying and selling decisions. I look at the relative move - if we have a exponential blowoff-top, I'd do something differently than a steady fill-and-grind upward.

Recent price action looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Again, if I repeat this analysis at price levels of 10's for support and 12's for recent action, the level really doesn't matter - just the market action.

[ElectricMucus]

ction looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Breakout suggest breaking out of something. What did we break out of?

There certainly wasn't a present downtrend.

[notme]

ction looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Breakout suggest breaking out of something. What did we break out of?

There certainly wasn't a present downtrend.

We broke out of the slow and steady uptrend channel.  Now we're in crazy batshit insane uptrend mode.

[ElectricMucus]

ction looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Breakout suggest breaking out of something. What did we break out of?

There certainly wasn't a present downtrend.

We broke out of the slow and steady uptrend channel.  Now we're in crazy batshit insane uptrend mode.

So in other words you too think this is not sustainable?

[notme]

ction looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Breakout suggest breaking out of something. What did we break out of?

There certainly wasn't a present downtrend.

We broke out of the slow and steady uptrend channel.  Now we're in crazy batshit insane uptrend mode.

So in other words you too think this is not sustainable?

It could go on for a long time, but not forever.  As that bastard Keynes said "Markets can remain irrational longer than you can remain solvent.".

[casascius]

What I think we broke out of was many people's indifference to owning bitcoins and their fear that it was just a fad that would soon fail.

Most of these people don't have the expertise with cryptography and computer systems to know for themselves just by reading the whitepaper and playing with the coins.

Months of price stability, the lack of a total crash to zero, and a general understanding that you don't keep your bitcoins online if you want to keep them safe are all major contributors to why the same people who left it for dead are now taking another hard look.

Many more are on the sidelines.

The people who think Bitcoin is a hot technology and who want to own a few BTC's for their own personal understanding and trading are far more valuable than the ones who want to flip some BTC, and I expect more people from the first group are now coming out of the woodwork.

[thezerg]

I also think that a lot of you old timers mis-estimate the time and effort it takes for a noobie to bootstrap.  It goes something like this:

1. Read about it, overcome the negative stigma that comes with SR, gambling, etc.
2. Make a small investment using bitinstant
3. Learn a ton about the banking system, chargebacks, how FED creates $.
4. Ask all the noobie questions "why can't someone just [print more bitcoins, steal your wallet, turn off the network, make it illegal]".  What's it backed by anyway? :-)
5. Read enough about it to stress about all the scammers hacked wallets and failed exchanges, etc.
6. Start the KYC process with an exchange that has about 5000 totally obscure and difficult to use ways to deposit money.
7. Tortuously move small chunks of fiat into the exchange
8. start buying
9. freak out about failed exchanges, possibility of USB stick failure, etc
10. start looking at paper/brain wallets
11. Get your head around the idea of actually holding your own money somewhere
12. Create isolated new install VM to make a paper wallet.  You can't outsource this to some client-side web script (if you really want a secure wallet)!
13. TEST the paper wallet concept (requires an entire blockchain sync from scratch).
14. KYC finally comes through!
15. DAMMIT price has doubled :-)

This was my path anyway...

For HNWIs its got to happen with both them AND their advisor (who's gonna do all the work).

So people who might have gotten interested in bitcoin during the Euro financial uncertainty may just now be starting to move from a few hundred BTC trial investment to an actual acquisition strategy.

[BrightAnarchist]

I just buy some coins every month, regsrdless of the price. It's too much stress worrying abousomething you cannot predict, so that's why I'm slowly dollr cost averaging. I'm getting for the long haul with bitcoin, for all of its stated benefits, not for the price potential (although that would be nice too.)

Speaking on that point, someone told me that if the illegal drug trade moved to btc exclusively, then each coins would be $15000. I didn't check his math or sources thougl but it sounds believable.

(blame my ipad for the typos)

[Raize]

I can't speak on the black market number because most measurements of the black market are very difficult to verify. However we can measure worldwide GDP and the supply and demand for currencies presently, and can represent them in USD.

If all 21 million Bitcoins were in circulation (which they are not, and over a million may simply be "lost") today, and only 1% of the World's GDP transferred through Bitcoin, the value of a single Bitcoin would be ~$2200/coin. These are using all the most conservative estimates, because we're obviously not at 21 million Bitcoin, and we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year, and, given the success of Silk Road, could be attainable within one year, we just can't measure it as legitimate world trade.

[proudhon]

I can't speak on the black market number because most measurements of the black market are very difficult to verify. However we can measure worldwide GDP and the supply and demand for currencies presently, and can represent them in USD.

If all 21 million Bitcoins were in circulation (which they are not, and over a million may simply be "lost") today, and only 1% of the World's GDP transferred through Bitcoin, the value of a single Bitcoin would be ~$2200/coin. These are using all the most conservative estimates, because we're obviously not at 21 million Bitcoin, and we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year, and, given the success of Silk Road, could be attainable within one year, we just can't measure it as legitimate world trade.

Wow.  If you sincerely believe that's attainable and likely, then I hope you're the one buying lots of bitcoins right now.  Also, I'll sell you all my bitcoins right now for $100/BTC so you can still make an absurd profit.

[capsqrl]

we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year

That is probably the most deluded thing I've read around these parts. 1% of world GDP is 700 billion US dollars.

[sunnankar]

Speaking on that point, someone told me that if the illegal drug trade moved to btc exclusively, then each coins would be $15000. I didn't check his math or sources thougl but it sounds believable.

I seriously doubt $15,000 per bitcoin.

Skype started in 2003 and sold to eBay for $2b and Microsoft for $8.5b. If Bitcoin had an $8.5b market cap in 2016, 7 years after starting just like Skype sold to Microsoft about 8 years after starting, then that would translate into about $540 per bitcoin.

[Technomage]

One step at a time. If Bitcoin becomes an universal currency at some point, it could truly be worth tens of thousands per bitcoin. We're nowhere close anything like that though. Getting to double digits and staying there is the next step. Getting to triple digits and staying there is another step, probably one of the biggest steps Bitcoin will ever make. Thinking any further than that at this point is pointless.

[smoothie]

I can't speak on the black market number because most measurements of the black market are very difficult to verify. However we can measure worldwide GDP and the supply and demand for currencies presently, and can represent them in USD.

If all 21 million Bitcoins were in circulation (which they are not, and over a million may simply be "lost") today, and only 1% of the World's GDP transferred through Bitcoin, the value of a single Bitcoin would be ~$2200/coin. These are using all the most conservative estimates, because we're obviously not at 21 million Bitcoin, and we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year, and, given the success of Silk Road, could be attainable within one year, we just can't measure it as legitimate world trade.

Wow.  If you sincerely believe that's attainable and likely, then I hope you're the one buying lots of bitcoins right now.  Also, I'll sell you all my bitcoins right now for $100/BTC so you can still make an absurd profit.

Just because he says that for the future doesnt mean he wants to buy now at a future predicted price.

I'm buying 50btc on halloween from a guy (cant remember his name) on October 31st, 2012. The deal is set. But I'm not going to give him anything until that day. Just like he isn't going to give me anything until then.

Call it "bitcoin futures" lol  

Edit: the price is at $11 per btc. But only on that day.

[evoorhees]

If all 21 million Bitcoins were in circulation (which they are not, and over a million may simply be "lost") today, and only 1% of the World's GDP transferred through Bitcoin, the value of a single Bitcoin would be ~$2200/coin. These are using all the most conservative estimates, because we're obviously not at 21 million Bitcoin, and we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year, and, given the success of Silk Road, could be attainable within one year, we just can't measure it as legitimate world trade.

Would 1% global GDP via Bitcoin justify a price of $2,200 per coin? Absolutely.

Could this happen some day? Absolutely.

Will it happen next year, or even the year after that? No way in hell.

Of course, if Bitcoin is utilized even in .001% of global trade, then Bitcoin has won, and will probably conquer the world shortly thereafter.

[evoorhees]

One step at a time. If Bitcoin becomes an universal currency at some point, it could truly be worth tens of thousands per bitcoin. We're nowhere close anything like that though. Getting to double digits and staying there is the next step. Getting to triple digits and staying there is another step, probably one of the biggest steps Bitcoin will ever make. Thinking any further than that at this point is pointless.

+1

[sunnankar]

Would 1% global GDP via Bitcoin justify a price of $2,200 per coin? Absolutely.

Actually, GDP is a fairly useless number; particularly for attempting to value a bitcoin.

Frank Shostak explains, "The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption."

As Ludwig von Mises wrote, "The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops."

[genuise]

Would 1% global GDP via Bitcoin justify a price of $2,200 per coin? Absolutely.

Actually, GDP is a fairly useless number; particularly for attempting to value a bitcoin.

Frank Shostak explains, "The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption."

As Ludwig von Mises wrote, "The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops."

So what is your suggestion?

a cup of coffee?

[Hobo66]

I'm with you all in this one, but I tell you I will sell all $200,000 bitcoins when it hits $10

[mb300sd]

I'm with you all in this one, but I tell you I will sell all $200,000 bitcoins when it hits $10

And you'll regret it big time when it hits $100

[smoothie]

I'm with you all in this one, but I tell you I will sell all $200,000 bitcoins when it hits $10

And you'll regret it big time when it hits $100

If he is profitable when he sells he won. Doesn't matter that he didn;'t pick the absolute top.

[sunnankar]

So what is your suggestion?

a cup of coffee?

Bitcoins are sterile assets just like gold but have less price support because they do not have industrial uses. As such any increase in the price of a bitcoin is simply a transfer of wealth from some other asset's value to holders of bitcoins. I like to view fiat currency as the common stock of issuing entities and value it accordingly. A similar approach may work for valuing bitcoins. Keep in mind that value and price are discrete.

[mp420]

As of now, BTC can't rise much above $100, sustainably. The 1MB block size limit must be lifted first.

I am slightly sceptical about the scalability issues even in the long term. Storage space or IO throughput aren't even the most crucial limits, network bandwidth is going to be the first real bottleneck Bitcoin is going to hit.

[capsqrl]

I am slightly sceptical about the scalability issues even in the long term. Storage space or IO throughput aren't even the most crucial limits, network bandwidth is going to be the first real bottleneck Bitcoin is going to hit.

Yeah, seriously. Each node must be able to handle 8Gbps if bitcoin ever operates at VISA levels. Even at the levels they speculate about optimizing it down to would be way above even what most companies can afford. Not that we will be going at VISA levels any time soon, but these issues may start to show way before that.

[aq]

I am slightly sceptical about the scalability issues even in the long term. Storage space or IO throughput aren't even the most crucial limits, network bandwidth is going to be the first real bottleneck Bitcoin is going to hit.

Yeah, seriously. Each node must be able to handle 8Gbps if bitcoin ever operates at VISA levels. Even at the levels they speculate about optimizing it down to would be way above even what most companies can afford. Not that we will be going at VISA levels any time soon, but these issues may start to show way before that.

And we are all connected to the internet with one of these...
Once Bitcoin reaches VISA levels, the technology will be there - it is as easy as that.

[capsqrl]

Once Bitcoin reaches VISA levels, the technology will be there - it is as easy as that.

I think that's a too simplistic attitude. Bandwidth doesn't follow Moore's law; instead it often regresses to where many people now suffer severe bandwidth limitations, peering partners start arguing about money, and powerful companies fight network neutrality. Instead of sitting back and waiting for bandwidth to become ubiquitous and limitless, Bitcoin development must be focused on scaleability.

[caveden]

I am slightly sceptical about the scalability issues even in the long term. Storage space or IO throughput aren't even the most crucial limits, network bandwidth is going to be the first real bottleneck Bitcoin is going to hit.

Yeah, seriously. Each node must be able to handle 8Gbps if bitcoin ever operates at VISA levels.

Every full node. Only pool operators and solo miners need to be full nodes.

[cryptoanarchist]

As Ludwig von Mises wrote, "The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops."

+1  I like that he called it "childish"...cause it really is.

[notme]

Once Bitcoin reaches VISA levels, the technology will be there - it is as easy as that.

I think that's a too simplistic attitude. Bandwidth doesn't follow Moore's law; instead it often regresses to where many people now suffer severe bandwidth limitations, peering partners start arguing about money, and powerful companies fight network neutrality. Instead of sitting back and waiting for bandwidth to become ubiquitous and limitless, Bitcoin development must be focused on scaleability.

Well before we reach VISA levels, bitcoin will hit $100 a piece and there will be much more incentive to tackle the issue.  The closer we get to the scaling problems the more resources we will have to tackle them.  I'm not worried.

[Fjordbit]

I seriously doubt $15,000 per bitcoin.

Skype started in 2003 and sold to eBay for $2b and Microsoft for $8.5b. If Bitcoin had an $8.5b market cap in 2016, 7 years after starting just like Skype sold to Microsoft about 8 years after starting, then that would translate into about $540 per bitcoin.

This isn't a good comparison because BitCoin isn't a single business, it is a monetary platform that can be used by all businesses. If the United States government had to run on the market cap of Skype, it would grind to a halt. The order that these things operate in are the Trillions, not billions.

I don't think that $15,000 per bitcoin will happen within the year (barring the outside chance of some hyperinflationary event), but it is easily attainable in the long term.

[sunnankar]

This isn't a good comparison because BitCoin isn't a single business, it is a monetary platform that can be used by all businesses. If the United States government had to run on the market cap of Skype, it would grind to a halt. The order that these things operate in are the Trillions, not billions.

I don't think that $15,000 per bitcoin will happen within the year (barring the outside chance of some hyperinflationary event), but it is easily attainable in the long term.

Well, I see your point as currency markets are like the ocean and not the fish. But what percentage of cash balances do you think world population will keep in BTC? Why? What is your 'long term' horizon?

If Bitcoin had 663m users like Skype and if each user kept $700 in cash balances and it were 2016 with 15m bitcoins then that would result in $31,000 per bitcoin. And that does not factor in the bitcoins in circulation that have been destroyed (private keys lost, sent to unrecoverable addresses, etc.).

[Mageant]

I am slightly sceptical about the scalability issues even in the long term. Storage space or IO throughput aren't even the most crucial limits, network bandwidth is going to be the first real bottleneck Bitcoin is going to hit.

Yeah, seriously. Each node must be able to handle 8Gbps if bitcoin ever operates at VISA levels.

Every full node. Only pool operators and solo miners need to be full nodes.

Running a full node will eventually become specialized service/business.

Everyone else will be using light clients or online wallets.

[mem]

This isn't a good comparison because BitCoin isn't a single business, it is a monetary platform that can be used by all businesses. If the United States government had to run on the market cap of Skype, it would grind to a halt. The order that these things operate in are the Trillions, not billions.

I don't think that $15,000 per bitcoin will happen within the year (barring the outside chance of some hyperinflationary event), but it is easily attainable in the long term.

Well, I see your point as currency markets are like the ocean and not the fish. But what percentage of cash balances do you think world population will keep in BTC? Why? What is your 'long term' horizon?

If Bitcoin had 663m users like Skype and if each user kept $700 in cash balances and it were 2016 with 15m bitcoins then that would result in $31,000 per bitcoin. And that does not factor in the bitcoins in circulation that have been destroyed (private keys lost, sent to unrecoverable addresses, etc.).

I liked your idea so much I made a spreadsheet for it

https://docs.google.com/spreadsheet/ccc?key=0AknBnFOyxhcRdDBuczBWZTBaekY0N0d0cjR6X29kbEE

I guessed each user would keep maybe $100 in their wallet (very conservative).

[istar]

I'm with you all in this one, but I tell you I will sell all $200,000 bitcoins when it hits $10

And you'll regret it big time when it hits $100

Never sell all.

Thats a noob misstake.

When you look back half year later and they are at $40 you will not be a happy man despite all your new money.

You will be happy if price tanks.
Take a profit and keep some, you will be happy in both cases.

[caveden]

If Bitcoin had 663m users like Skype and if each user kept $700 in cash balances

I consider myself an optimist concerning Bitcoin. But this is too optimistic even for me. You can't compare with Skype like that. It's pretty easy to create a Skype account, and most important, there's no commitment in doing so: you don't have to spend a penny.
Putting ~$700 on this "weird new technology" though, it's a whole different thing.

[proudhon]

If Bitcoin had 663m users like Skype and if each user kept $700 in cash balances

I consider myself an optimist concerning Bitcoin. But this is too optimistic even for me. You can't compare with Skype like that. It's pretty easy to create a Skype account, and most important, there's no commitment in doing so: you don't have to spend a penny.
Putting ~$700 on this "weird new technology" though, it's a whole different thing.

It would probably take more than a decade to get that kind of penetration with bitcoin, and I think that's being overly optimistic.  Also, I expect by that time the bitcoin idea will have evolved a better system.

[thezerg]

Rather then think that BTC is going to outcompete all these technologies with their advertising dollars I think you futurists should really ask yourselves what markets BTC offers a clear advantage in.

With international wire transfer fees at about $45 bucks (BOA), and currency conversion on top, BTC provides a clear advantage for small international business.  Small is where it really shines because its possible to hold foreign currency either by carrying a $1M balance in a swiss act or opening foreign bank accounts in the country whose currency you need to hold.  The BTC advantage is especially large if the business is international in both the supply and sales side.  For example, getting components made in China, adding some kind of value in Europe (even just a brand name), and then reselling to the USA.  The full money cycle in one supply cycle involves 2 currency conversions: USD->Euros (sale)  Euros->Yuan (rebuy inventory).  And of course if you are doing this via paypal, the full cycle is 2 paypal txns or 6% -- add currency conversion on top of that and I'll bet it pushes 10%!  That's a LOT of overhead compared to what BTC can offer.

Another niche is non-local purchases for people who do not qualify for debt-based instruments (i.e. paypal, credit card). 

[notme]

Once Bitcoin reaches VISA levels, the technology will be there - it is as easy as that.

I think that's a too simplistic attitude. Bandwidth doesn't follow Moore's law; instead it often regresses to where many people now suffer severe bandwidth limitations, peering partners start arguing about money, and powerful companies fight network neutrality. Instead of sitting back and waiting for bandwidth to become ubiquitous and limitless, Bitcoin development must be focused on scaleability.

Well before we reach VISA levels, bitcoin will hit $100 a piece and there will be much more incentive to tackle the issue.  The closer we get to the scaling problems the more resources we will have to tackle them.  I'm not worried.

Do the Dev's have an actual plan? You know -- with projected growth estimates, and various deadlines and coding milestones to achieve based on that? And where can I dig around for such info?

There is not plan of that detail that I'm aware of.  If you're so worried, make one.  That's how open source works.  We have a wiki and a mailing list.  Lay out a basic schedule and ask the bitcoin-dev list for feedback.

[tvbcof]

It would probably take more than a decade to get that kind of penetration with bitcoin, and I think that's being overly optimistic.  Also, I expect by that time the bitcoin idea will have evolved a better system.

It will probably take a long time before a 'better' system takes over as long as the recognized primary dev team remains composed of people who are several cuts above the mid-tier user base in terms of their motivations and engineering effectiveness.  I conjecture that Bitcoin will _be capable of_ evolving to overcome most of the problems that could crop up although it will lose some of the features that were enjoyed in it's early existence.

[sunnankar]

the recognized primary dev team remains composed of people who are several cuts above the mid-tier user base in terms of their motivations and engineering effectiveness.

The Bitcoin development team is awesome!

[molecular]

I have had a few HNWIs and UHNWIs whose only reservation with moving $500k or $1m into BitCoin is the lack of liquidity and scalability of investment so they settle with puny amounts like $25k or $50k, etc.

It's funny: some types of investor won't invest into bitcoin because the market is too thin to suck up their currency. They will probably invest their millions of USD when bitcoin trades around $100 saying: "finally this market has matured enough so we can invest, even using our comfy brokerage account". Had they just invested $100,000 now and blown $900,000 on drugs and women.. they would have the same amount of coins in the end.

[cypherdoc]

I have had a few HNWIs and UHNWIs whose only reservation with moving $500k or $1m into BitCoin is the lack of liquidity and scalability of investment so they settle with puny amounts like $25k or $50k, etc.

It's funny: some types of investor won't invest into bitcoin because the market is too thin to suck up their currency. They will probably invest their millions of USD when bitcoin trades around $100 saying: "finally this market has matured enough so we can invest, even using our comfy brokerage account". Had they just invested $100,000 now and blown $900,000 on drugs and women.. they would have the same amount of coins in the end.

this is actually a good point.  for that however, one requires visionary thinking.  not everyone has that even when they are a UHNWI.

[Raize]

That is probably the most deluded thing I've read around these parts. 1% of world GDP is 700 billion US dollars.

Sorry, I mistyped and put the decimal point in the wrong place. I believe .01% of GWP within a year is possible. This is still $7 Billion.

Bitcoin seems to be be one of the "stickiest" of World GDP currencies, ie, the kind that doesn't strengthen in value the more it is used (as others would expect it to). Basically, to put it in economic terms, our M3 is too high, no one trusts the currency enough to leave any significant value in it, especially the black market dealers which probably make up more of Bitcoin than we are willing to admit. I do think we could represent .01% of World GDP, but it will be with a currency that has such a high turn-over rate that we wouldn't enjoy the price we'd expect from it. Volume-wise I think the network can handle $7 billion per year's worth of transactions, though.

[Mike Jones]

That is probably the most deluded thing I've read around these parts. 1% of world GDP is 700 billion US dollars.

Sorry, I mistyped and put the decimal point in the wrong place. I believe .01% of GWP within a year is possible. This is still $7 Billion.

Bitcoin seems to be be one of the "stickiest" of World GDP currencies, ie, the kind that doesn't strengthen in value the more it is used (as others would expect it to). Basically, to put it in economic terms, our M3 is too high, no one trusts the currency enough to leave any significant value in it, especially the black market dealers which probably make up more of Bitcoin than we are willing to admit. I do think we could represent .01% of World GDP, but it will be with a currency that has such a high turn-over rate that we wouldn't enjoy the price we'd expect from it. Volume-wise I think the network can handle $7 billion per year's worth of transactions, though.

I am very new to Bitcoin and I am already seeing this thing as the new gold. I couldn't trust anything more than a currency backed by the internet. Ever since the 90s Dotcom bubble, I knew things were changing and money is only next in line.

So what's not to trust?

Many people my age don't trust new technology. They like things to be traditional. People should be free to go backwards but I am moving forward. Go Bitcoin!

[Bitcoin Oz]

Once Bitcoin reaches VISA levels, the technology will be there - it is as easy as that.

I think that's a too simplistic attitude. Bandwidth doesn't follow Moore's law; instead it often regresses to where many people now suffer severe bandwidth limitations, peering partners start arguing about money, and powerful companies fight network neutrality. Instead of sitting back and waiting for bandwidth to become ubiquitous and limitless, Bitcoin development must be focused on scaleability.

Well before we reach VISA levels, bitcoin will hit $100 a piece and there will be much more incentive to tackle the issue.  The closer we get to the scaling problems the more resources we will have to tackle them.  I'm not worried.

Do the Dev's have an actual plan? You know -- with projected growth estimates, and various deadlines and coding milestones to achieve based on that? And where can I dig around for such info?

There is not plan of that detail that I'm aware of.  If you're so worried, make one.  That's how open source works.  We have a wiki and a mailing list.  Lay out a basic schedule and ask the bitcoin-dev list for feedback.

https://bitcointalk.org/index.php?topic=80019.0   this is worth supporting.

[sunnankar]

this is actually a good point.  for that however, one requires visionary thinking.  not everyone has that even when they are a UHNWI.

But in most cases they did not get or stay there by accident. They often have visionary thinking and willingness to take prudent risk.

Bitcoin seems to be be one of the "stickiest" of World GDP currencies, ie, the kind that doesn't strengthen in value the more it is used (as others would expect it to). Basically, to put it in economic terms, our M3 is too high

GDP is a worthless number. From Mises:

But of course putting numbers and measurements to these subjective values is nonsense. As Ludwig von Mises wrote, "The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops."

I am very new to Bitcoin and I am already seeing this thing as the new gold. I couldn't trust anything more than a currency backed by the internet. Ever since the 90s Dotcom bubble, I knew things were changing and money is only next in line.

So what's not to trust?

Many people my age don't trust new technology. They like things to be traditional. People should be free to go backwards but I am moving forward. Go Bitcoin!

Mike, you seem to get it. Gold, like the FRN or Euros, is merely the blood while banks, credit cards, Paypal, etc. are the veins. Bitcoin is both the blood and the veins. This makes Bitcoin, in several ways, the ultimate offshore account.

One thing we know for sure is that the stuff we use as currency, like FRN, Euros, Yen, etc. are not going to be used as currency much longer. The system is completely FUBARed. What replaces it remains to be seen. Will it be Bitcoin? Perhaps. Perhaps not.

But you are right that monetary evolution is coming and it doesn't matter what anyone tries to do to stop it. Change is not mandatory; you can go extinct.

[Raize]

GDP is a worthless number.

Eh, I used to think so too. And being from the Austrian school-of-thought I would agree with what Mises says, but when considering the productive output of the world, it is (at the very least) a measure of transactions. This can be handy when you have a government that provides a currency that gets inflated, but it becomes kind of useless when said government quits recording M3 so you can see its impact, so I digress.

[sunnankar]

This can be handy when you have a government that provides a currency that gets inflated

Actually GDP is often just a mirror, although delayed, for the creation of new currency by the State.

[sunnankar]

I am very new to Bitcoin and I am already seeing this thing as the new gold. I couldn't trust anything more than a currency backed by the internet. Ever since the 90s Dotcom bubble, I knew things were changing and money is only next in line.

So what's not to trust?

Many people my age don't trust new technology. They like things to be traditional. People should be free to go backwards but I am moving forward. Go Bitcoin!

Yes, not trusting new technology can be problematic because it puts one at a competitive disadvantage to those who do trust new technology. Digging holes with shovels instead of backhoes.

The wealth transfer from holders of other stuff to holders of bitcoins is accelerating.

[sunnankar]

The wealth transfer from holders of other stuff to holders of bitcoins is accelerating.

Figured I would let people know that the next 2-3 months are going to be extremely exciting with the bitcoin price. You may be tempted to sell but that may not be a very good idea and you will likely be regretting that decision six months from today. There is going to be a ton of funds flowing into Bitcoin.

Currently, there are a bunch of Silicon Valley VCs and Wall Streeters, at least 5-6 I am personally aware of, who are fighting over each other to establish multi-million dollar positions. But that amount of capital is going to look tiny compared to what is scheduled in about 2-3 months. The Bitcoin market, at current prices, is simply far far too small for these amounts of fund flows and why they are melting up the price by buying anything that appears for sale.

I really hope the Bitcoin community gets to benefit from this massive upcoming wealth transfer. To do so merely (1) hold onto your bitcoins, (2) restrict supply as much as you can (this is very important) and (3) make any of these newcomers pay dearly for whatever trickle of bitcoins you do choose to sell or spend.

So, who wants to be like the Litecoin trader with seller's remorse? One guy wrote a sad tale about how in January he bought 80,000 litecoins at $0.068 and sold them at $0.20. Litecoins are selling for about $5 today. So he took a 194% return, or $10,560, but missed out on a 7,250% return, or $394,560. and is feeling seller's remorse.

[Mageant]

A person who claims to be day-trader says that he has been seeing large buys recently and it appears to him also that big players are moving in:

http://www.reddit.com/r/Bitcoin/comments/1bkhj5/it_cant_be_daytraded/

[Crazy]

Well that's scary.

[tvbcof]

The wealth transfer from holders of other stuff to holders of bitcoins is accelerating.

Figured I would let people know that the next 2-3 months are going to be extremely exciting with the bitcoin price. You may be tempted to sell but that may not be a very good idea and you will likely be regretting that decision six months from today. There is going to be a ton of funds flowing into Bitcoin.

Currently, there are a bunch of Silicon Valley VCs and Wall Streeters, at least 5-6 I am personally aware of, who are fighting over each other to establish multi-million dollar positions. But that amount of capital is going to look tiny compared to what is scheduled in about 2-3 months. The Bitcoin market, at current prices, is simply far far too small for these amounts of fund flows and why they are melting up the price by buying anything that appears for sale.

Heh!  Nothing could be more exciting than a feeding frenzy of well capitalized sharks in a market as tight as Bitcoin.

I really hope the Bitcoin community gets to benefit from this massive upcoming wealth transfer. To do so merely (1) hold onto your bitcoins, (2) restrict supply as much as you can (this is very important) and (3) make any of these newcomers pay dearly for whatever trickle of bitcoins you do choose to sell or spend.

Like I've mentioned before, 'parity' being defined as 1BTC/KG-Au sounds about right to me

Thx for the heads-up.  Particularly if it is square and well founded.

[deeplink]

Figured I would let people know that the next 2-3 months are going to be extremely exciting with the bitcoin price. You may be tempted to sell but that may not be a very good idea and you will likely be regretting that decision six months from today. There is going to be a ton of funds flowing into Bitcoin.

Currently, there are a bunch of Silicon Valley VCs and Wall Streeters, at least 5-6 I am personally aware of, who are fighting over each other to establish multi-million dollar positions. But that amount of capital is going to look tiny compared to what is scheduled in about 2-3 months. The Bitcoin market, at current prices, is simply far far too small for these amounts of fund flows and why they are melting up the price by buying anything that appears for sale.

Checkmate! Thanks for the info.

[desper]

Take a look at the differential between the MtGox USD price and the price at BTCChina. The price at BTCChina has been about $15/BTC above the MtGox price in the last few days. It seems the buying in China is even more aggressive than at MtGox.

[deeplink]

Take a look at the differential between the MtGox USD price and the price at BTCChina. The price at BTCChina has been about $15/BTC above the MtGox price in the last few days. It seems the buying in China is even more aggressive than at MtGox.

And MtGox seems to be throttling the inflow of new funds (thanks to their "verification" process?) which is probably a good thing.

[BTC Books]

Heh!  Nothing could be more exciting than a feeding frenzy of well capitalized sharks in a market as tight as Bitcoin.

A perfect statement, that.

[sunnankar]

Heh!  Nothing could be more exciting than a feeding frenzy of well capitalized sharks in a market as tight as Bitcoin.

A perfect statement, that.

Is this fun or what? And being right makes it even sweeter!