I do hold bitcoins. The amount is on the order of what my rich friends would spend for a single social event; an amount unimportant to them.
I had a chart on my computer at the peak of the bubble near 256 BTC/USD. I thought the price looked soft, and a more important phone call came in. When I completed that, the price had already dropped an astonishing amount. I did sell some on the way down at a much lower price, maybe half of the peak.
I decline to document how many bitcoins I have. In a similar way I decline to tell the holdings in my bank account or retirement account. I will say that I have a wonderful wife, a daughter who has made me proud, and I consider my Ph.D. and experience to be a major element of my wealth.
I am not convinced that it was pump and dump. I watched the executed transactions log on bitfloor very, very closely in real time. There were some very large transactions involved. I thought, at the time, they were transactions for which traditional banks did not satisfy the parties. Anything beyond that is speculation. When I drove a Taxi, I learned that there are single mothers who just need a ride to work, there are rich party people who don't want to touch their car after they have had a drink, and there are people who pay cash and go to bad parts of town and want to avoid a document trail. I think that description is probably a fine starting point for the type of people who use bitcoin. Taxis aren't sensational or shady or innocent; they are totally democratic, available for whoever needs them next, rich or poor, careful or wild, old or young, honorable or shady: same with bitcoin.
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Beyond those questions, I bought and sold several times in the days after the crash from 256. I think I bought at 61 on bitfloor. I had a large order in, and about 90% of it was filled. That gives me satisfaction that I had anticipated the re-purchase point just about right.
I did place a buy order too low for the next dip, and so the next rally caught me strong in USD instead of BTC, and so I missed a strong buy/sell cycle.
Of course, I have those delusional thoughts where I buy and sell all in at the best of prices, and my wealth increased by $150,000 in 3 days. I don't think it is possible to every pull that off.
Before I was involved with bitcoins, I was active on Second Life, and eventually I traded Second Life Lindens (SLL) using a trading robot that I wrote myself. I executed about 35,000 trades. I don't think that buying and holding SLL is a way to build wealth, but I do think that trading can be. Those perceptions formed my initial view toward bitcoin.
In addition to bitcoins I have purchased an Avalon. This is a clear commitment to bitcoin that does not show up in the block chain. I think that block mining is a service that will produce income. When I explain this to friends, I don't say "I mine bitcoins" because that is all jargon that they don't understand. I tell them instead that I have a
special purpose computer that sells notary service for one very specific type of financial transaction. I assume that bitcoin mining is a detail intensive demanding job, not a magic money printing machine. Management of power costs will be important, access to sufficient bandwidth will be important. Acquisition and subsequent liquidation of high end technology will be important. Computer and physical security are important. I think the personalities that will succeed in the long haul will be those not unlike bankers or accountants.
This is not the current view that you read on bitcointalk. To use Texas imagery, we are in the Wildcatter days, but those days are ending and will give over to the small corporations, the suits, then the investors out East.
