Topic: An insider's opinion on the crazy Bitcoin market (Read 5688 times)

Why are the number 7 group "in it for the wrong reason", but 2, 3, and 4 are not? What are the practical differences between any of these? All of these can be made to be very right if the price goes up significantly, or made to be very wrong if the price goes down significantly. Their individual "reasons" for buying bitcoins doesn't seem to matter at all, at least from how I see it.

Yeah. Before this happens we need a better deterministic brain wallet generator.

Thanks Erik for an excellent summary, one that every bitcoin holder / potential investor should read.

One thought on the above (5) however: If the gov't ever considers bitcoin a threat to the 'real' economy, or a 'clear and present danger' to US interests at home or abroad, for whatever reason (i.e. funding enemies of the state, etc.) could this change very quickly and without warning?

Nobody saw US gold confiscation coming in the 1930's, for example.

Bitcoins may be safe on a PC or thumb drive, but I'd guess that a very large percentage are stored with trusted parties (US or soon-to-be US based) like Mt.Gox and others. Needless to say that 'bitcoin funds can never be frozen' does NOT apply in that case. Just ask any (former) e-gold account holder.

In addition, such sites have reasonably low daily withdrawal limits for security reasons.


 

States are getting more and more desperate for money..... this is not going to end well.

It would be a good thing if everything were to collapse the soonest possible, so that they have the political excuse to default on these monstrous debts for once and for good.

The latest news, sorry but I didn't found in English but you can translate with Google:
http://www.profil.at/articles/1315/560/356308/bankgeheimnis-auf-posten
http://www.heute.at/news/politik/art23660,866455
As I understood it seems that Austria and Switzerland almost agreed to share all data with the US authorities about accounts of US citizens in 2 years.
What percentage of this money will be transferred in bitcoin in the next 2 years ?

It would be great if the algorithm can set to control the bitcoin price increase so that they could be more affordable.

As long as I can still go on localbitcoins.com in any major city I travel to in the world and buy/sell with cash avoiding all government verification bullshit, limits, data mining and centralized exchange authorities seizing funds like they are paypal or something then I'm happy with bitcoin. MtGox monopoly will self destruct soon, esp when p2p exchanging starts growing. I traded my first coins in 2010 with a guy on IRC for Pecunix

Nicely played. I like your some what unbiased approach. Thanks

The info around that is sketchy. Apparently $5.2m worth of transactions during March which consist of 5100 completed invoices? So that's an average of $980 per transactions. Seems rather high if you ask me.

How much of that was actual money and how much of that was just bitcoins moving around? If they paid out $5.2m in USD they would be at massive risk of losing lots of money at least until they could sell $5.2m worth of bitcoins on the markets to recoup thei payouts which as far as I know would take a little while and would create negative pressure on the price.

I forgot something.
Hollywood will make a great film about the dictators lost treasure in the blockchain and everybody will search his passphrase.
The increased interest will make again the bitcoin prices to grow.

The next Kaddafi will put most of his money in a bitcoin brain wallet and other bitcoin child currencies when he will be in danger and when he will be shut in his head the privat keys cannot be any more recovered. So will remain less bitcoins and they will be more valorous. But Mt Gox will not be impressed just will continue trading.

Erik, Why Dubai, and did you like it there?

Nobody never like my questions ))

I was talking about the NYC company, you are talking about Memphis company.

Are you sure? Because you clearly didn't even read my post, in which I posted a link to a property management company with a page that does accept bitcoin payment online, and made sure to point it out.

I did read the story before posting. I still call bullshit. Half-baked. Their Website clearly states they accept MasterCard, e-check, and debit. There is no bitcoin. Why not? Why the manual setup? Why not even the mention of it on the payment page? It is hard to take this seriously.
Don't hate me for being this harsh. Bitcoin deserves better than half-baked PR statements and "contact the manager for manual processing". If and when their payment page actually includes bitcoin, I'll be happy to change my attitude and welcome the effort. The same goes to gogreensolar and the likes.

I'd appreciate it if you would actually read the story before you call it "hype" and "bullshit" - their press release clearly says that current tenants need to contact them and manually set up a Bitcoin payment. And I KNOW this one isn't false: https://www.aepropertymanage.com/ - they announced last week and their announcement is on the front page. I talked to them, they already have the payment button hooked to Coinbase. Any of their current tenants can pay their rent immediately with BTC through the webpage.

I find it interesting that in none of the multitude of mainstream press reports on this latest "bitcoin bubble" nor in this excellent "insider's opinion" (from one of Bitcoin's finest spokespeople) have I seen mentioned what I believe is one of the most important drivers of the recent massive jump in the fundamental value of a bitcoin: the transition to the fourth generation of mining technology, ASIC chips.

While I agree all of Erik's points help explain the short-term influx of new buyers, I believe the long-term fundamental value of each bitcoin is best explained by the MARGINAL COST to mine each new bitcoin.

If the number of bitcoins was forever fixed, every new dollar or euro that entered the market would simply go to paying off someone selling that bitcoin, who then removes that dollar or euro from bitcoin's market capitalization.

But since (on average, currently) 3,600 new BTCs are created and enter the market every day, I believe what is paid to mine these new, marginal coins is the most important factor in the long-term, equilibrium value of all bitcoins.

Anyone who has been following the developments from Avalon, ASICMINER, BFLabs (and perhaps others?) can see the massive expected jumps in network hash rate and mining difficulty that are already in progress as this technological transition unfolds.  The increase between third gen and fourth gen hash rates is orders of magnitude greater than all previous jumps, and the transition will probably happen faster as well.

Just as the first generation of CPU miners are no longer viable, second generation GPU miners will soon be swept away, and perhaps lower spec third generation FPGA devices may as well.

All of the thousands of small miners all over the world who have grown used to receiving (and perhaps selling) their newly minted coins will soon need to now buy their new coins at market prices, or make large investments in new ASIC equipment to keep pace with large (now mostly semi-professional) competing mining farms.


That's why when friends or family members ask ME about bitcoin's recent price explosion, I don't use the word "bubble" at all, but tell them it is a completely rational pricing shock reacting to a massive and imminent change in market fundamentals.

And I'm not selling (many of) my coins yet either.

Or they don't want to withdraw now, but want to be able to do it fast in the future.

Second that..
Just like Bitpay's CEO announcing transactions of $5 million last month, IS THERE PROOF TO BACK THAT STATEMENT?