WOW! why all the completely unrelated posts in this thread?? this is a thread on the dangers/downside of mt. gox. If you want to talk about something new then make a new goddam thread! read the subject line, you make it seem like you are trying to drown this thread in unrelated BS for some reason...
not on difficulty/price relationships, or start-ups, or articles, or wall street. come on guys, pop some Ritalin if you gotta and try and to focus here.
Topic: mtgox might just kill Bitcoin's chances of success (Read 11024 times)
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Does anyone have any view on why there would be a *healthy* relationship between difficulty and price? I see difficulty as a reaction to price. Price increases cause more miners which raises the difficulty. So April - present has been a GPU arms race for everyone to acquire the highest possible portion of the total network hash rate. This has also driven up the hardware prices as a result, and in many cases caused outages. I think last week and this week are when the arms race stops, and there will still be 2-3 weeks lag as those systems come online.
The only question mark is the price itself. The best explanation is simply influx of outside interests due to the media coverage. The price now is just due to flow of cash. The flow has stopped, and eventually, and probably in the near term, that cash will flow away to some other location as people lose interest. This might be prolonged or prevented if there continued to be more interesting services and uses for Bitcoins that kept interest alive. Which is pretty cool and I think people realize this because there is practically a whole forum full of people scrambling to be the first to set up Bitcoin related operations. So far none of them have gotten to be Bitcoin "killer apps". I think the best thing that could actually happen at this point, is for a robust startup vehicle (like a BTC stock exchange) to fund well organized operations. This is sort of happening on a small scale with things like bounties, but that's not big enough. The closest thing I see to this is that one guy who set up a mining company and managed to get at least a few investors. More mainstream folks would continue to stream in and out of this community, and stay longer if they could invest in stuff. I think the average person would see this as a fun, and approachable bunch of pet projects surrounding a micro-economy. People are more willing to participate because the Wall Street vampire squids haven't haven't gotten their shady & corrupt tentacles onto it yet. So it's like a democratization of an economy (albeit more of a toy, or mock economy still, at this stage).
As a side note, I'd like to add that there really has only been 2-3 unique pieces of news in the past 2 weeks, yet over a dozen different articles released just rehashing the same stuff. Our media in this country sucks. They just copy stories from each other. I would like it if someone came up with a system to analyze news stories/content to trace them back to original source. Which website would get identified as the one generating the most original content?
I think you're correct. Full information is needed in order to proceed acordingly.
Anyway, I think that the price will eventually reach a stable growth, which should be somewhat proportional with difficulty increases, in order to keep miners producing and the market stable.
Anyway, I think that the price will eventually reach a stable growth, which should be somewhat proportional with difficulty increases, in order to keep miners producing and the market stable.
Does anyone have any view on why there would be a *healthy* relationship between difficulty and price? I see difficulty as a reaction to price. Price increases cause more miners which raises the difficulty. So April - present has been a GPU arms race for everyone to acquire the highest possible portion of the total network hash rate. This has also driven up the hardware prices as a result, and in many cases caused outages. I think last week and this week are when the arms race stops, and there will still be 2-3 weeks lag as those systems come online.
The only question mark is the price itself. The best explanation is simply influx of outside interests due to the media coverage. The price now is just due to flow of cash. The flow has stopped, and eventually, and probably in the near term, that cash will flow away to some other location as people lose interest. This might be prolonged or prevented if there continued to be more interesting services and uses for Bitcoins that kept interest alive. Which is pretty cool and I think people realize this because there is practically a whole forum full of people scrambling to be the first to set up Bitcoin related operations. So far none of them have gotten to be Bitcoin "killer apps". I think the best thing that could actually happen at this point, is for a robust startup vehicle (like a BTC stock exchange) to fund well organized operations. This is sort of happening on a small scale with things like bounties, but that's not big enough. The closest thing I see to this is that one guy who set up a mining company and managed to get at least a few investors. More mainstream folks would continue to stream in and out of this community, and stay longer if they could invest in stuff. I think the average person would see this as a fun, and approachable bunch of pet projects surrounding a micro-economy. People are more willing to participate because the Wall Street vampire squids haven't haven't gotten their shady & corrupt tentacles onto it yet. So it's like a democratization of an economy (albeit more of a toy, or mock economy still, at this stage).
As a side note, I'd like to add that there really has only been 2-3 unique pieces of news in the past 2 weeks, yet over a dozen different articles released just rehashing the same stuff. Our media in this country sucks. They just copy stories from each other. I would like it if someone came up with a system to analyze news stories/content to trace them back to original source. Which website would get identified as the one generating the most original content?
One way to minimize the problem of price stability is a system integrated into a web application that instantly exchanges BTC for USD at the given rate at the major trading houses. OMEGA is investing in startups attempting to accomplish this. The great thing about the economy is that entrepreneurs always rise to meet the demand for new services. As more and more early adapters cash out, prices will adjust predictably to the increasing BTC supply as more is mined and we will get a better sense for final BTC demand. The problem will solve itself in time. The economy is very self correcting. For now we need instant conversions from BTC to USD.
So as a general appeal to all: some people just don't want to do everything, and prefer to rely on others.
Then he needs to accept that certain changes don't past the threshold. Besides bitcoin is reacting as it should. We are failing to evolve.
Stop being a control freak, and put your two little hands at work where your mouth is.
I have to say, and it's a little irrelevant to this thread, but common to many threads, that this argument "If you don't like X, then do it yourself", really irritates me. It's like as though if there anything I don't like I should get up and do it myself. As in:"Hey stewardess, the seat in this aeroplane is too skinny for me"
"Well then, why don't you just run along and build your own aeroplane"
It's ridiculous to suggest that everybody has time to do everything themselves. That's a feature of human society called "specialisation of labour", and it's been with us, ohh, I dunno, ever since we first started to plant crops I suppose.
Hazek doesn't like some aspect of MtGox, but that doesn't make him a programmer with sufficient skills to make his own site, nor does it give him enough spare time to do it, even though there is no law or de facto standard that would prevent him.
So as a general appeal to all: some people just don't want to do everything, and prefer to rely on others.
It's possible to make use of the Mt Gox API to immediately (within transfer time) sell all Bitcoins received (or the portion thereof for which USD is needed) for USD after they're received. Anyone too retarded to figure this out shouldn't be running an online business anyway. They should go start one of those stupid convenience stores, with a sticky floor, which doesn't take credit cards for purchases under $5. 
The change in value during that sort of time period ought to be proportional to interchange fees anyway. If they're really worried about volatility they can store some Bitcoin up front and sell it while the transfer is taking place. Thereby allowing more sales to occur as soon as the reserve is replenished and the transfer has gone through.
The change in value during that sort of time period ought to be proportional to interchange fees anyway. If they're really worried about volatility they can store some Bitcoin up front and sell it while the transfer is taking place. Thereby allowing more sales to occur as soon as the reserve is replenished and the transfer has gone through.
I'm sorry, I'm failing to see the relevance of this post to this thread, I'm left to assume it was accidentally posted here. Or maybe I am missing something? Do you mind quoting who you are responding to?
It's possible to make use of the Mt Gox API to immediately (within transfer time) sell all Bitcoins received (or the portion thereof for which USD is needed) for USD after they're received. Anyone too retarded to figure this out shouldn't be running an online business anyway. They should go start one of those stupid convenience stores, with a sticky floor, which doesn't take credit cards for purchases under $5.
The change in value during that sort of time period ought to be proportional to interchange fees anyway. If they're really worried about volatility they can store some Bitcoin up front and sell it while the transfer is taking place. Thereby allowing more sales to occur as soon as the reserve is replenished and the transfer has gone through.
The change in value during that sort of time period ought to be proportional to interchange fees anyway. If they're really worried about volatility they can store some Bitcoin up front and sell it while the transfer is taking place. Thereby allowing more sales to occur as soon as the reserve is replenished and the transfer has gone through.
Lots of issues, for sure. will these issues be worked out? or more correctly asked, can these issues be worked out? 
They will be worked when more people spend their Bitcoins on products and services so that the actual economy is larger than the speculative economy.Wrong. We will first have to have stability before we can have more products and services offered for Bitcoins. This kind of was my whole point in the OP.
For this to happen market needs transparency.
Supply side again. The demand side needs to start producing what it wants. Linux didn't get big because it beat the competition. It got big because there was a community already serving its own interests.
Transparency won't change the fact that the market is thin and people don't know what THEIR value for a product is. Forget dollars. If a video card produces 1 coin a day and you are going to upgrade every month then it's not going to be worth buying for more than 30 coins now is it? Regardless of street price. There's enough video cards being bought that at least a couple dozen people should already be trading them on this forum and viciously.
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We don't need to grow, we just need all the information available so everyone can make better decisions.
Oh and again, I'm not asking mtgox to change how they do business, I'm asking you, their clients to reconsider and switch to a different exchange, one that reveals all the available information, like tradehill for example does.
Oh and again, I'm not asking mtgox to change how they do business, I'm asking you, their clients to reconsider and switch to a different exchange, one that reveals all the available information, like tradehill for example does.
Stop blaming mtgox for not knowing what you want. Would you give up your bitcoins in the market if you had a use for them? We don't need to grow. We need to evolve. And everyone either blames lack of information or lack of controls in the client.
It's ridiculous. More information will lead to more precise confusion.
/signed. Either Mt. Gox deletes the dark pool functionality entirely or I jump ship to Trade Hill as soon as it gets big enough to be a main trading hub.
Thats fine, i'll stick with what i know works. I don't care if there is a 'required' tip since this is a tip of knowledge(knowledge of the dark pools that i use) and does not come solely out of my pocket, but rather out of the pocket of every individual who is buying and selling bitcoins, and thus effects each of us very little, but for him, hopefully, it is quite substantial.
/signed. Either Mt. Gox deletes the dark pool functionality entirely or I jump ship to Trade Hill as soon as it gets big enough to be a main trading hub.
the 'guy i am refering to here is the guy who runs mt. gox. the knowledge i am refering to is knowledge of the dark pools which he surely has. the personal gain i am referring to is the gain that he can get from having said knowledge by using it while trading in the bitcoin market.
If he is not using this knowledge to his gain, then in my view he is dumb.
If you do not want him to have this knowledge and use it to create personal wealth for himself, then it is unwise to provide him with it. if you do want him to have this knowledge and use it to create personal wealth then do give it to him.
I've reread your post and my best guess is that you want it to be proven that he is not using this information to aide him in his quest for wealth, I am saying if he is not then he is stupid, why would he not? Either way, it does not matter to me, I willingly give him this information, knowing he can use it to make an easy buck because i like what he does. No big conspiracy, no fancy metal hats, just a simple case of a guy with information using it to make some money.
If he is not using this knowledge to his gain, then in my view he is dumb.
If you do not want him to have this knowledge and use it to create personal wealth for himself, then it is unwise to provide him with it. if you do want him to have this knowledge and use it to create personal wealth then do give it to him.
I've reread your post and my best guess is that you want it to be proven that he is not using this information to aide him in his quest for wealth, I am saying if he is not then he is stupid, why would he not? Either way, it does not matter to me, I willingly give him this information, knowing he can use it to make an easy buck because i like what he does. No big conspiracy, no fancy metal hats, just a simple case of a guy with information using it to make some money.
tl;dr: mtgox creates an environment of imperfect information which causes crazy volatility
The volatility is adequately explained by:
- Bitcoin being new
- (Which leads to) Uncertainty
- New traders
- Delays in getting USD into an exchange
As people start to get bored of trading them for profit, the price will settle.
lol, proof? proof of what? proof that a guy who is known to have knowledge nobody else in the world has about a rapidly increasing market is using it to his own personal gain? why would he not, and why should he not? If he is not, then he is just as dumb as the sites that don't have dark pools, and doesn't deserve the extra income anyway. I'm seeing nothing here that needs proven. If you don't want mt gox to be tipped your information then don't friggin tip him it, some will and some won't and life goes on. It would be like complaining that other people are sending him donations. We are all free to do what we wish with our money and knowledge, and people who complain about it are probably just jealous that nobody tips them, and in time hopefully they will grow up and accept it.
If posts were food, that paragraph would be a greasy unidentifiable deep-fried mass of ... something.
But since I don't specialize in dubious deep-fry 'cuisine' found at state fairs and unlicensed traveling carnivals, I'll let my original post stand. If you do make it long enough to pound your keyboard in a convincing way to construct an argument that can be parsed by an actual english-speaking native, please let me know.
bitcoin is growing by leaps and bounds while coupled with uncertainty, how can you ever expect price stability at these growth rates? wait a couple of years, and THEN we will start talking about price stability.
If I sell Bitcoins to my neighbor, isn't that a dark pool of sorts? Why should that effect anyone else?
.... Most of the rambling comments on this forum are of the "OH NOES MANIPULATION" variety, which of course are never backed up with any kind of proof. (The verifiable kind, not the tinfoil-pulled-it-from-my-ass-kind.)lol, proof? proof of what? proof that a guy who is known to have knowledge nobody else in the world has about a rapidly increasing market is using it to his own personal gain? why would he not, and why should he not? If he is not, then he is just as dumb as the sites that don't have dark pools, and doesn't deserve the extra income anyway. I'm seeing nothing here that needs proven. If you don't want mt gox to be tipped your information then don't friggin tip him it, some will and some won't and life goes on. It would be like complaining that other people are sending him donations. We are all free to do what we wish with our money and knowledge, and people who complain about it are probably just jealous that nobody tips them, and in time hopefully they will grow up and accept it.
If I sell Bitcoins to my neighbor, isn't that a dark pool of sorts? Why should that effect anyone else?
I think the difference that the nitpickers would claim is that it would be like every time you sell coins to your neighbor you call up mt gox and tell them the specifics of that transaction and then they keep that information for just themselves, along with all the other neighborly deals in the world, and make their own personal buy and sell decisions based on that. But like I said in my post up there ^, just look at it as if this information you are giving mt gox is a tip(since they can use it to make money off the market), and it is fine, they don't charge much in the way of fees, and by tipping them this way we are making it more likely that it will be worth it for them to stay in business, which is what we all want. Other sites, such as TradeHitt or whatever, are just too stupid to think of this clever little tip jar idea.
Knowledge of the market is key to profiting from the market, we are just giving mt gox a little extra knowledge so they can get a little extra profit. No harm, no foul. Now can we end this thread or what?
If I sell Bitcoins to my neighbor, isn't that a dark pool of sorts? Why should that effect anyone else?
Quite right. We already have 'dark pools' happening in the blockchain. I've seen large sums change hands, (unless it was for some odd reason - a transfer to a wallet under the originators control), and I have to say they dwarf what lies in the pools on the exchanges.
I don't quite understand the fury and noise of people railing against the pools. They provide depth to the market and actually reduce volatility. Most of the rambling comments on this forum are of the "OH NOES MANIPULATION" variety, which of course are never backed up with any kind of proof. (The verifiable kind, not the tinfoil-pulled-it-from-my-ass-kind.)
I'll just keep on trading, like usual.
If I sell Bitcoins to my neighbor, isn't that a dark pool of sorts? Why should that effect anyone else?
What are the advantages to dark pools over bots as far as the user is concerned? It seems to me dark pools give mt gox trading information that the general public is unable to have, while a bot would accomplish the same goal for the user, just not give extra information to mt gox. I guess it doesn't matter assuming mt gox wouldn't use this information for their own personal gains or share it with anyone who is(after all, they are in place to help bitcoiners, not rip them off!), so I guess there really is no difference. Besides, it's a pain to make bots or switch exchangers so might as well just leave well enough alone.
As far as the volatility goes, the market is clearly unpredictably volatile, so any effort to make it less so by providing the public with all the information that the main exchanger has would at most decrease the volatility some amount that no one will ever know anyway.
So, in conclusion, I say don't bother taking the time to change something that is working just in exchange for little transparency and the hope for an unidentifiable amount of decreased volatility. There are more important things to do, after all, whats the problem with a little trust. I'll continue to support mt gox until they give me a solid reason why I should not to trust them with a little extra information, I just think of it like a little tip for all the good work they are doing!
and Hazek, I appreciate your concern, but man don't worry so much, everything will work itself out, it has so far!
As far as the volatility goes, the market is clearly unpredictably volatile, so any effort to make it less so by providing the public with all the information that the main exchanger has would at most decrease the volatility some amount that no one will ever know anyway.
So, in conclusion, I say don't bother taking the time to change something that is working just in exchange for little transparency and the hope for an unidentifiable amount of decreased volatility. There are more important things to do, after all, whats the problem with a little trust. I'll continue to support mt gox until they give me a solid reason why I should not to trust them with a little extra information, I just think of it like a little tip for all the good work they are doing!
and Hazek, I appreciate your concern, but man don't worry so much, everything will work itself out, it has so far!
hazek: You are actually totally wrong about all your points. This volatility has nothing to do with clipping the orders way outside of the normal price range or darkpools.
1) The market was this volatile or even more before darkpools and before I clipped the order book.
2) You can't see the complete orderbook for any currency pair. There are dark pools for every currency pair. There is so much more hidden info for every other currency pair on earth. Yet all have less volatility.
3) The merchant problem is easily solved by not holding BTC like I explain above.
4) Multiple exchanges will only increase volatility since each market will be thinner. The only thing that will decrease volatility is liquidity. It may seem like there is a lot traded a day but it is really nothing compared to any other currency pair.
5) The recent crash had been building for days since the peak. It was predicted by many people. It was greatly exacerbated by one person dumping a ton of coins. If they had used a dark pool instead there wouldn't have been such a huge drop. So actually use of the dark pool would have decreased volatility.
6) Look at this chart: http://mtgoxlive.com/orders <- see all those straight lines in price. Those are dark pool orders being hit. They are reducing volatility as you can plainly see. If they weren't there there would be spikes instead of straight lines.
I should have used a different word for it other than "dark pool". I guess "dark" scares people and they don't understand it. So when something happens... "The market crashed. It must have been that evil dark pool that confuses me!"
1) The market was this volatile or even more before darkpools and before I clipped the order book.
2) You can't see the complete orderbook for any currency pair. There are dark pools for every currency pair. There is so much more hidden info for every other currency pair on earth. Yet all have less volatility.
3) The merchant problem is easily solved by not holding BTC like I explain above.
4) Multiple exchanges will only increase volatility since each market will be thinner. The only thing that will decrease volatility is liquidity. It may seem like there is a lot traded a day but it is really nothing compared to any other currency pair.
5) The recent crash had been building for days since the peak. It was predicted by many people. It was greatly exacerbated by one person dumping a ton of coins. If they had used a dark pool instead there wouldn't have been such a huge drop. So actually use of the dark pool would have decreased volatility.
6) Look at this chart: http://mtgoxlive.com/orders <- see all those straight lines in price. Those are dark pool orders being hit. They are reducing volatility as you can plainly see. If they weren't there there would be spikes instead of straight lines.
I should have used a different word for it other than "dark pool". I guess "dark" scares people and they don't understand it. So when something happens... "The market crashed. It must have been that evil dark pool that confuses me!"
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