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Topic: Gold collapsing. Bitcoin UP. - page 1205. (Read 2032266 times)

KFR
hero member
Activity: 560
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Per ardua ad luna
December 05, 2013, 01:33:47 AM
legendary
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First 100% Liquid Stablecoin Backed by Gold
December 05, 2013, 01:26:01 AM
It takes a little while to understand the various interconnected things in bitcoin.  When new people first come into contact with bitcoin it's the draw of easy money and mining seems just that.
sr. member
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♫ the AM bear who cares ♫
December 05, 2013, 01:24:41 AM
CD, you are one of the very few who saw that price follows difficult, very cool Smiley


every time i say that people tell me im a witch!

Yeah it took me a while to realize it, because at first it looks like a typical economic fallacy, maybe like the Labor Theory of Value sneaking in. But cypher is exactly right, people are trying to get BTC and they see two ways: buy or mine. If everyone is piling into mining, that will push the price lower than it otherwise would have been. That means, for instance, in the summer when the price was range-bound and everyone was jumping into mining, the price should have been continuing its exponential growth with no slowdown. All that happened was some of that growth was siphoned off into the mining sector even as the network effects continued and Bitcoin kept mushrooming. That excess started to slosh back into Bitcoin in October.

yeah i know, i assumed it was the other way around, but when you read the charts, no way to deny it.


just wait until this next round of asics (jan to mark) makes the rate go crazy again!  next sumer we will see $5,000 easy

I'd noticed it but dismissed it as a great example of "(time-lagged) correlation is not causation". OOPS.

It's interesting to note that based on this theory, as soon as electricity becomes the dominant factor instead of hardware cost, hashrate will cease to lead price.
legendary
Activity: 1036
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December 05, 2013, 01:20:24 AM
CD, you are one of the very few who saw that price follows difficult, very cool Smiley


every time i say that people tell me im a witch!

Yeah it took me a while to realize it, because at first it looks like a typical economic fallacy, maybe like the Labor Theory of Value sneaking in. But cypher is exactly right, people are trying to get BTC and they see two ways: buy or mine. If everyone is piling into mining, that will push the price lower than it otherwise would have been, because those would-be buyers end up mining instead. That means, for instance, in the summer when the price was range-bound and everyone was jumping into mining, the price should have been continuing its exponential growth with no slowdown. All that happened was some of that growth was temporarily siphoned off into the mining sector even as the network effects continued and Bitcoin kept mushrooming. That excess started to slosh back into Bitcoin in October.

Back in spring I was always pounding the table about my pet theory that the steady exponential growth that started in January would continue for much longer, reaching $10,000 by Christmas. If the price goes much higher, that starts to look viable again.
sr. member
Activity: 336
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♫ the AM bear who cares ♫
December 05, 2013, 01:18:37 AM
legendary
Activity: 1764
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December 05, 2013, 01:12:13 AM
you see, miners are a unique form of rabid, dog eat dog, bunch of m*therf*ckers.  they will eat their mothers if it means getting a few more GH/s.  you really need to understand this.  it's critical for Bitcoin's long term success.

in a way though, it's a beautiful form of unbridled capitalism.  for the first time in many of these guys lifetimes, they have a chance to gain control of their own lives.  if you're good at mining and can be first in an order, you can make some good money.  and even if not, you still stand a chance to do pretty well b/c of price appreciation.  those guys always do their calculations based on today's price as if it were static.  they forget that the long term trend of the price will be up so they can get unnecessarily negative and aggressive towards competitive miners or their companies.

i remember quite clearly back in the early days that one of the most important things that convinced me that Bitcoin had great potential was this grassroot movement of insane miners.  and i mean insane.  watching all those early videos of young guys with GPU's strewn all over their basements and living rooms was impressive.  cords everywhere, fans, monitors, and that whirring sound.  what a kick!  and for justification they'll use arguments that at the very least, these things will heat your house.  lol!   only one thing drives ppl like that and that is money.  and when you see hundreds of guys in YouTube videos willing to do anything to get involved you know things will go viral.  there are literally legions and legions of them and is one of the prime reasons for the still parabolically growing HR.

and then you realize that there is no way that gubmint will ever be able to shut this thing down.  it's the people speaking.
legendary
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December 05, 2013, 01:00:52 AM
... I just didn't expect the government lovefest.  They just don't seem to see the threat.  Perhaps it's the same reasoning as lots of regular business people I've talked to.  Most think bitcoin is just a big scam.


No, regulators are (mostly) just normal people doing their jobs, and aren't coordinating to form some semi-sentient government hive-beast. Hence, regulators are just looking at their mandates, and deciding how to meet them with regard to bitcoin. Consensus seems to be "AML/KYC, duh!", which makes sense. That said, there was indeed less fear-mongering and grand-standing than I generally expect from anything congress-related, and that was obviously nice.

So, no, I don't think they see "the threat" (to gov-issued fiat currency, I assume you mean) in any sort of conscious way. Nor do they think it's an irrelevant scam; it's clear that they've looked into bitcoin extensively and roughly understand it.

The real test of threat-awareness won't happen until bitcoin hits a market-cap in the hundreds of billions or more and looks to become *the* preferred global currency. That may never happen. If it does, only then will gov likely be sufficiently incented across many agencies to coordinate in a broad attack on non-gov currency.
legendary
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December 05, 2013, 12:46:01 AM
Hehe  Grin
In any case when I found bitcoin I had same experience with learning that mining is a suckers bet and I figured that most people from the April boom would eventually shift to straight buying.  The only reason I didn't believe cypherdoc much on this thread earlier is because I just didn't expect the government lovefest.  They just don't seem to see the threat.  Perhaps it's the same reasoning as lots of regular business people I've talked to.  Most think bitcoin is just a big scam.
legendary
Activity: 1764
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December 05, 2013, 12:40:30 AM
...
that is, until it became clear to me that we are in a logarithmic progression.


What necessitates the logarithmic progression? If anything, the underlying factor would have to be viral network adoption dynamics... Sounds like a graph theory problem.

i think Bitcoin going viral is an apropo description.
legendary
Activity: 1722
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December 05, 2013, 12:33:09 AM
...
that is, until it became clear to me that we are in a logarithmic progression.


What necessitates the logarithmic progression? If anything, the underlying factor would have to be viral network adoption dynamics... Sounds like a graph theory problem.
legendary
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December 05, 2013, 12:31:25 AM
Ok, I guess I just proved your point that speculation guys don't hang out in the miner forum a lot  Smiley .

probably a good thing.  they have their own special form of troll over there that is particularly nasty.
Now you are just making me curious   Smiley .
ask User705.  he's one of them.
Thanks, I'll check him out  Wink .
legendary
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December 05, 2013, 12:30:14 AM
Ok, I guess I just proved your point that speculation guys don't hang out in the miner forum a lot  Smiley .

probably a good thing.  they have their own special form of troll over there that is particularly nasty.
Now you are just making me curious   Smiley .

ask User705.  he's one of them.
legendary
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December 05, 2013, 12:29:45 AM
Does that portend a similar scenario now?  I keep seeing new people talking about which preorder is best and buying am cubes.  Feels oddly familiar.
Well you can hardly argue that the speculative direct buying of bitcoins isn't going on right now.
legendary
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₪``Campaign Manager´´₪
December 05, 2013, 12:28:47 AM
Ok, I guess I just proved your point that speculation guys don't hang out in the miner forum a lot  Smiley .

probably a good thing.  they have their own special form of troll over there that is particularly nasty.
Now you are just making me curious   Smiley .
legendary
Activity: 896
Merit: 1006
First 100% Liquid Stablecoin Backed by Gold
December 05, 2013, 12:28:00 AM
Does that portend a similar scenario now?  I keep seeing new people talking about which preorder is best and buying am cubes.  Feels oddly familiar.
legendary
Activity: 1764
Merit: 1002
December 05, 2013, 12:26:43 AM
Ok, I guess I just proved your point that speculation guys don't hang out in the miner forum a lot  Smiley .

probably a good thing.  they have their own special form of troll over there that is particularly nasty.
legendary
Activity: 1638
Merit: 1001
₪``Campaign Manager´´₪
December 05, 2013, 12:25:36 AM
Ok, I guess I just proved your point that speculation guys don't hang out in the miner forum a lot  Smiley .
legendary
Activity: 1764
Merit: 1002
December 05, 2013, 12:23:22 AM
legendary
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₪``Campaign Manager´´₪
December 05, 2013, 12:22:45 AM
legendary
Activity: 1764
Merit: 1002
December 05, 2013, 12:20:29 AM
...
seems like just yesterday when we passed silver.
...


Indeed, it does. I remember when we passed silver, thinking something like: "Well, that was fun. Next stop gold, but it'll be a few years.". Heh.
Yup, I wouldn't for the life of me have thought that we would catch up to gold this year already.

i didn't think so either back then.

but i started to get an inkling that we might back in the summer when the HR kept escalating, escalating, and then going parabolic while the price just stagnated in the last 6 mo consolidation.  i mine b/c i like to hang out in the Custom Hardware forum to get a feeling about how miners think and what they are doing.  most of them never venture over here to Speculation and vice versa.  they have their own community and compulsive way of thinking that help educate my speculation/investment mindset.  during the summer, we miners were undergoing our own form of breathtaking action in the HR while all the speculation guys were over here wringing their hands about a plunge back to 2.  i kept saying in my newsletter we were going to get a "snap UP" to catch the price back up to the HR.  guys like Frozenlock kept arguing with me saying that price always leads HR.  i even caught evoorhees making a case that mining was irrelevant to the price over on Reddit.  not in this case.  you could easily see that millions of fiat dollars were being poured into the new gold rush of Bitcoin mining by old and new miners alike somehow thinking they could easily get in on the groundfloor of the new asic mining machines.  there was a mentality going around that somehow mining would be more lucrative than outright BTC buying, especially after the price had gone to the "bubble high" of 266.  the different buckets of the Bitcoin economy were being filled by raining fiat in an asymmetric pattern with the mining bucket first overflowing.  i knew we were going to get that snap UP especially after we double bottomed at 65.  i said it more than once in my letter.  i could see the frustration and disgust creeping into the miners from the rising difficulty and you could start to pick out more and more comments about giving up mining and going to buy BTC directly around Aug/Sept.  and sure enough, we got that snap UP.  but i didn't think we'd come this far this fast. 

that is, until it became clear to me that we are in a logarithmic progression.
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