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Bitcoin Hits $1 Billion

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Re: Bitcoin Hits $1 Billion

#31

Post by tocomment »

eric_bullington wrote: post #18
niggler wrote: post #5

Anyone have statistics on the total size of BTC transactions? Has BTC 1B in trade occurred yet?

If you're looking for a good metric for BTC transaction volume, I would suggest Bitcoin days destroyed: https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed Here's a chart of BDD per week (log scale is best in this case): http://blockchain.info/charts/bitcoin-days-destroyed?showDat... Here's an attempt to track transaction volume, minus change transactions (the Bitcoin client almost always performs a transaction to issu…

I'm not getting an intuitive grasp on what the days destroyed tells you? Is it how many people are holding bitcoins? What does a higher number mean, what does a lower number mean?

Re: Bitcoin Hits $1 Billion

#32

Post by chasing »

tvladeck wrote: post #23

Remember: "What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich." - Paul Krugman EDIT: To be clear - this quote is not intended (by me) to be a knock on BTC. It's just an elegant statement of my own opinion that the value of 1 BTC is not all that indicative of its value to the economy.

Unregulated currency seems like a way to do the former, not the latter.

Re: Bitcoin Hits $1 Billion

#33

Post by ChuckMcM »

elmuchoprez wrote: post #19
ChuckMcM wrote: post #9

Pretty much seems to have hit the speculation threshold. Perhaps the Eurozone crisis will do for Bitcoin what the first Gulf War did for CNN.

"Pretty much seems to have hit the speculation threshold." Based on what? Are you seeing something that suggests it's capped out for now? I'm asking because I'm at a complete loss to explain BTCs charts; all seems like gambling to me at the moment. That said, I haven't seen any numbers that really suggest the gambling is over.

"Based on what?"

From the article and from the valuation/volume charts that are available from MtGox and elsewhere. Having watched a number of things become the object of speculation (stuffed animals[1], old computers, internet stocks, real estate, Etc) if you look at their value over time and their trading frequency the traffic develops a quick jump and dump mode when folks are speculating. I attribute it to people buying, capturing gains, then buying again to capture more gains.

I don't think its "capped out" what I think is that a bunch of people are jumping into the currency to make a quick buck. And the way speculation works is very much like musical chairs, you jump in and sit down, jump in and sit down, and hope that when the music stops you were sitting down and not standing. If enough players have the stomach for it (it can be both exhilarating and scary to gamble a lot of cash) then the run will continue, once it crosses some threshold, it will come crashing down.

[1] Met a person at a garage sale that had over 1,000 "new in box" Beanie Baby(tm) stuffed animals, including some of the "really rare" ones. They were selling them for a dollar each, it was kind of sad.

Re: Bitcoin Hits $1 Billion

#34

Post by waterlesscloud »

elmuchoprez wrote: post #25
mrkmcknz wrote: post #17

I want to be able to get behind Bitcoin I really do. I just don't understand the purpose it serves. As an asset class it's far too volatile even for someone who plays naked options. Imagine putting $10,000 into an asset class that swings 20-30% daily on a regular basis. Trading curbs eat your heart out. As a currency it's too impractical and there are serious hurdles involved with turning central bank currency into B…

I see BTC as a proof-of-concept experiment right now more than anything else. And I think it's still too early to tell what it's actually proving.

The billion dollar question- is Bitcoin Myspace or Facebook?

Re: Bitcoin Hits $1 Billion

#35

Post by cs702 »

As usual on HN, any submission about Bitcoin is met with concerned comments about its high volatility, present impracticality as a currency, disadvantages versus precious metals, current concentration of transactions in a single exchange (MtGox), potential for market manipulation by governments and/or speculators, etc.

This is analogous to being present at the creation of the World Wide Web, but instead of getting excited about its obvious potential, one decides to stay on the sidelines because it's still unproven technology, almost no content has been made available online, commercial opportunities are virtually non-existent, etc.

As hockey superstar Wayne Gretzky said, "a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be." Judging Bitcoin based on where it is today, instead of where one thinks it will be in the future, is shortsighted.

--

PS. My full thoughts on Bitcoin's potential: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... -- I wrote this almost two years ago, but my views haven't changed since then.

--

Edit: In hindsight, I see how my quoting Gretzky could come across as arrogant, which was not at all my intention. The only point I was trying to make is that new technologies like Bitcoin should not be judged based on what they look like today, but rather on how one thinks they will look in the future.

Re: Bitcoin Hits $1 Billion

#36

Post by niggler »

tocomment wrote: post #31
eric_bullington wrote: post #18

Earlier quoted context omitted.

If you're looking for a good metric for BTC transaction volume, I would suggest Bitcoin days destroyed: https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed Here's a chart of BDD per week (log scale is best in this case): http://blockchain.info/charts/bitcoin-days-destroyed?showDat... Here's an attempt to track transaction volume, minus change transactions (the Bitcoin client almost always performs a transaction to issu…

I'm not getting an intuitive grasp on what the days destroyed tells you? Is it how many people are holding bitcoins? What does a higher number mean, what does a lower number mean?

A larger number means that people are holding onto BTC for long periods of time, a smaller number means that people are spending BTC soon after receiving it.

In a sense, its a more granular way of looking at money velocity.

Re: Bitcoin Hits $1 Billion

#37

Post by Taylorious »

aneth4 wrote: post #26
mrkmcknz wrote: post #17

I want to be able to get behind Bitcoin I really do. I just don't understand the purpose it serves. As an asset class it's far too volatile even for someone who plays naked options. Imagine putting $10,000 into an asset class that swings 20-30% daily on a regular basis. Trading curbs eat your heart out. As a currency it's too impractical and there are serious hurdles involved with turning central bank currency into B…

You're totally right. The world is not ready, just like it wasn't ready for e-commerce in 1996. I mean, who's going to put their credit card online? Who wants to buy stuff without feeling it? BitCoin may always be more volatile than other currencies. That doesn't actually matter much as long as it's liquid with other commodities and currencies. Its primary purpose is transfer, not store value. It will however stabili…

I think eCommerce was a different situation than what you describe. People were already used to calling up and ordering things over the phone from a catalog using their credit card. Doing the same thing over the internet wasn't that much of a stretch.

Re: Bitcoin Hits $1 Billion

#38

Post by chasing »

cs702 wrote: post #35

As usual on HN, any submission about Bitcoin is met with concerned comments about its high volatility, present impracticality as a currency, disadvantages versus precious metals, current concentration of transactions in a single exchange (MtGox), potential for market manipulation by governments and/or speculators, etc. This is analogous to being present at the creation of the World Wide Web, but instead of getting ex…

As hockey superstar Wayne Gretzky said, "Please stop trotting out that quote Steve Jobs once said because we've all heard it and there are very few hockey players who are actually great enough to really know where the puck's going, anyway. Don't automatically assume you're one of them."

Re: Bitcoin Hits $1 Billion

#39

Post by 0majors »

While I can appreciate the need for the Bitcoin model I refuse to take part of it due to level of fraud involved. How much Bitcoins have been acquired by malicious bot-nets and held by small number of black hats? How much of the value is directly linked to drug trade or worse?

Sure, similar arguments can be made about using cash but there are fundamental moral issues with Bitcoin I can't agree with. I would like to believe a better model is possible. Thoughts?

Re: Bitcoin Hits $1 Billion

#40

Post by eric_bullington »

tocomment wrote: post #31
eric_bullington wrote: post #18

Earlier quoted context omitted.

If you're looking for a good metric for BTC transaction volume, I would suggest Bitcoin days destroyed: https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed Here's a chart of BDD per week (log scale is best in this case): http://blockchain.info/charts/bitcoin-days-destroyed?showDat... Here's an attempt to track transaction volume, minus change transactions (the Bitcoin client almost always performs a transaction to issu…

I'm not getting an intuitive grasp on what the days destroyed tells you? Is it how many people are holding bitcoins? What does a higher number mean, what does a lower number mean?

You're absolutely right, Bitcoin Days Destroyed only indirectly tells us about transaction volume. What it's trying to measure is the amount of "hoarding" occurring in the Bitcoin economy. More BDD suggests less hoarding. So it looks like people are spending their Bitcoins more and more.
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