Topic: Before the next big rise, I just wanted to get my two cents in (Read 6361 times)

Yup, good call.


Yea same here.  Any mid to large financial institutions can reach me via email or via PM.  Also, will accept BTC on retainer or for consultation.

I like this post, its a very reasoned argument.

The idea of promoting Bitcoins to everyone is a good one. In my own way through these forums, through buying/selling on the BTC exchanges, investing in my shares of a BTC Mining Company (TyGrr), and telling everyone I know about this currency, it helps develop this currency just a little more and helps Bitcoin grow in stature as a serious alternative/compliment to fiat currency.

But it's hard to fathom the concept of asking Bitcoin users to be involved in governmental acceptance of Bitcoin.

This crypto-currency was designed to avoid government oversight: decentralized, anonymous, unregulated.  These are not exactly government-friendly attributes... especially now, in light of our government's paranoia of "home-made" currencies and the Patriot Act with monitoring of all financial transactions and the signing of NDAA unlawful detention bill by Obama and Congress.

My 2 BTCs

SJ

It is now one month later and I was correct, it is evident among the community that $2/coin will never be seen again and it is becoming increasingly apparent that even $3/coin is unlikely. The price has risen big especially in the last couple of days and I was accurate about this being the case within a month.

If there are any large financial institutions reading this that would like to hire me on retainer I can be reached via email. I am in the process of providing technical Bitcoin support and ROI estimation for two smaller investors, but I would be willing to work exclusively with you if you desired. Thanks for your consideration.

 Omg, Omg, what's happening?!  *looks for the panic sell buy ZOMG button*

Here we are in the weekend! 

This is why the Bitcoin market may be the most rational one on the planet at the moment. Yes, it is affected by capital flows from contemporary markets, but it reacts the way a free and open market would - overall, market participants learn and adopt mostly reasonable practices (nothing is perfectly efficient or rational).

The size of the market and the stock to flow ratio are the major factors to consider for the long-term. As the stock to flow ratio increases, fluctuations should stabilize without external flow as there will be reduced incentive for miners to dump newly-found coins. Any external flow (USD->BTC, etc) will cause exchange rate price movements, but larger pools of wealth tend to leave increasing traces of themselves in the smaller ones, just like fiat->gold - it's a gradual transition.

I would say general adoption of Bitcoin could easily bring the BTC/USD rate to the mid $60s along a gradual rise within four years (assuming no further QE... ha!). However, I doubt things will be very gradual. It's more likely than not there will be more exogenous shocks that cause volatile foreign exchange prices.

the problem is that markets are irrational.  this is a direct result of the CB's creating moral hazard via pumping of fiat.  they literally WANT us to speculate to drive risk assets higher.  thats all they have at this point and its going to work.  otherwise watch your USD's devalue.  the pendulum swung up to 32, down to 2, and now...

Reverse psychology eh?  

(I for one would be fine if prices would stay in the 2.X range for a long time, and you're right this probably will not happen... but I can still hope)

You're pretty loud.

No it's just the observation that we haven't had higher highs for a time now plus the weekend is coming up.

The statement about 'declaring victory' may be a bit provocative but each time one specific group was screaming the loudest we were heading for the opposite direction. That was the case when we did hit 2 and people were trumpeting for 1.X and I think the same thing will be the case now.

I prefer the irrational - I play Minecraft - I'm not sure why, or even the point.

The rational thing for me is to play some Batman: Arkham City for a bit. Wheee!   

That's also a sentiment - all we have is sentiment. There's nothing rational here (otherwise we'd all do the rational thing if we knew what it was)

A silent tip for the rational types: The sentimental bulls have declared victory, this is a great time to short.

I thought the consensus (such as it were) was that the giant bid wall was to try to support the price. There really hasn't been a giant sell wall, which is what would typically drive the price down in my opinion. And if you look at MtGox, there's now >70K BTC willing to be purchased for anything over $2.50, so if it's one person putting up staggered bids (which would make sense considering the history of the past couple months where there's a big sell off between the 7th and 15th of the month), moving your bid wall down is a safe bet. The real question -- the the thing we can't answer -- is whether the person who put up the large bid wall has sold off some of those coins at a profit, or if they're just holding them waiting for the prices to go higher. Either is possible, depending on whether the owner(s) are day trading or playing a longer term game.

Where'd the bid-walls go?

All they have to do to prove this isn't the case is put up another 80k BTC bidwall.

It ain't going to happen. At least, not now...

What evidence of this is there? I don't think anyone is intentionally trying to drive down cost; I'd say the reverse may be more likely, but most likely is that there are simply people trying to make as much money as they can off of BTC. It's just like the "manipulator got sold into at $2.90" stuff. Sure he did, but then I've seen a pretty steady trickle of coins back out into the market at $3+ in the five days following that. Whoever bought at less than $2.90 could be selling at a profit. It's "only" a 3.5% increase, but many people would be pretty happy about a potential 3.5% per week increase in their savings (which would work out to 483% per year if you're interested).

This is exactly the sort of discussion I wanted to start.

I do think price drives difficulty, but I believe there is a small impact of difficulty on price.


I'm glad someone said this, because this is essentially the point I wanted to get to. Even if Bitcoin was unprofitable for everyone, there would still be people mining it. Just look at the alternate cryptocurrencies forum if you don't believe that people are willing to mine at a loss.

While I haven't mined at a loss, it has been clear to me that some people have. If demand for Bitcoin ever exceeds 7200 btc/day, the price has to increase, even if the people who are mining at profitability sell immediately.

Additionally, what would you, as a miner, do if Bitcoin was $.01 tomorrow?

I would and can buy every single Bitcoin at that price (and far higher). This is the miner's incentive, to get the coin at the rates that make his profitability worthwhile.

I'm going to stop responding now, but in addition to my purchase at $.85 prior to the latest increase, I recently made a 500+ Bitcoin purchase at exactly $2.01, compared to a several-month running low of $1.99 or whatever.

Ask yourself how the hell someone without a degree in economics does something like this? On November 14th, the person driving the price of Bitcoin down lost control. This is hugely significant, but no one talks about it. The new control-holder now seems have a surplus of BTC, and they need the price to increase. This is all a game of supply vs. demand, and risk vs. reward. In the future, when it is evident that $2.01 is never going to be seen again, people are going to be asking us, the early adopters, why it is that we knew what to do, and it is important that we learn that difficulty does, in fact, have a slight impact on price due to the conditions surrounding *why* the difficulty stabilizes, and that the impact these conditions have, *accumulates* the longer the price stays low and miners are mining unprofitably.

Anyway, I just wanted to end on a note that reiterates the point that we should help those individuals who want it within present leadership, because if we don't, they will probably start wars with each other. I'd really, really, like to avoid that. I think we can get the public to lend us their faith, and, in turn, so will the politicians and bankers. We just have to be cordial and supportive. We are technical geeks, after all, we don't really have any grand aspirations. We just want to see our fellow man, happy, right?

I'll admit, this post is going to make virtually no sense today, December 8th, 2011. But people looking back on this are going to seriously WTF over it. I have to believe that there are technical and econ nerds/geeks like myself that understand the nature of what is going on.

Interesting discussion here (since every thread in this board has random content, I hadn't actually noticed this). I have been thinking about how to predict difficulty, mainly because I might buy an FPGA and also because I want to add fancy charts to my calculator , but it is almost as hard to predict as Bitcoin price.

I agree with most of what has been written. I think that the average Mhash/J plays a very important factor here and, as soon as FPGAs come out, difficulty will rise a lot, regardless of the price. Every time new mining hardware comes out, difficulty will increase and electricity price will always be the bottleneck. So even if you buy a fancy new FPGA to save on electricity costs, the higher difficulty will make mining barely profitable again. Unless of course, we see price swings like we saw in June, but I highly doubt that.

Thank you. It didn't at all seem to me that that was implied.



Agreed.