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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#271

Post by dsrguru »

dia80 wrote: post #169
cs702 wrote: post #135

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!" The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate. In the long run, however, if Bitcoin continues to work as in…

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main…

> If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it.

The Facebook IPO was pretty damn similar and didn't end capitalism as we know it :)

Re: Bitcoin falls from $266

#272

Post by ritchiea »

stonemetal wrote: post #240
ritchiea wrote: post #67

Earlier quoted context omitted.

Intrinsic value and market price are slightly different. I imagine the difference brings us back to the fact that bitcoin is unbacked by any government. There is a worst case scenario that bitcoins are worthless. Government backed currencies despite not being tied to the standard of a physical good have a sovereign entity responsible for their value thus they are as valuable as your trust in that sovereign.

What does it mean to trust in a sovereign in this case? If I take a $20 from my wallet down to the county court house, or any other government building you like, what should I trust to happen?

Actually when I used the word "trust" I was thinking of countries with their own currency that have unstable governments and/or economies. So imagine country X exists in South America and you have 20 country X dollars. A week ago one country X dollar was worth 2 US dollars. But today country X decided to introduce into circulation hundreds of trillions of dollars in new currency to deal with their massive debts and it completely devalues your 20 country X dollars.

Or today there is a communist coup in country X and the new regime declares the old currency worthless.

That's what I meant by "trust."

Re: Bitcoin falls from $266

#273

Post by rhizome »

cs702 wrote: post #135

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!" The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate. In the long run, however, if Bitcoin continues to work as in…

"Sell on news."

Re: Bitcoin falls from $266

#274

Post by fnordfnordfnord »

dia80 wrote: post #169
cs702 wrote: post #135

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!" The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate. In the long run, however, if Bitcoin continues to work as in…

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main…

>the end of capitalism as we know it.

>I hope a more able exchange arrives soon.

I hope for both of those things!

Re: Bitcoin falls from $266

#275

Post by EliRivers »

coldtea wrote: post #211
cs702 wrote: post #135

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!" The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate. In the long run, however, if Bitcoin continues to work as in…

It's until one-two major governments decides to make it illegal to deal in bit-coins that it's price will drop to zero. It doesn't matter if they can't enforce it 100% (or even 1%). What matters is that it will kill almost all opportunities to use it as regular money for legitimate purchases by major companies etc in the future. And that it could also land your ass in jail (with ISP monitoring and such being what it…

A vast number of major governments have made it illegal to trade in, for example, heroin. Just making something illegal doesn't necessarily stop trade.

Re: Bitcoin falls from $266

#276

Post by brazzy »

bdr wrote: post #231
wcoenen wrote: post #201

Earlier quoted context omitted.

> On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The bitcointalk forums and /r/bitcoin are full of paranoia like this. After months of stress trying to divine market patterns, people see market manipulation and conspiracies everywhere. The simple truth is that there was an agressive bubble. The doubling per…

> paranoia MtGox has said they were subject to DDoS attacks: https://twitter.com/MagicalTux/status/317423311174909954 > If you looked at the log plot[2], it still looked exponential! Trying to divine future price movement from looking at a graph has been proven definitively, repeatedly to be foolish.

Divining that a price that is rising in a superexponential manner will be going down sometime soon is one of the least fooling things one can do when looking at a graph.

Re: Bitcoin falls from $266

#277

Post by mcherm »

crapshoot101 wrote: post #171
jessriedel wrote: post #111

Earlier quoted context omitted.

My Econ 101 understanding is that the value of USD is not primarily due to taxes, i.e. if the government stopped collecting taxes (or started forcing people to pay taxes in gold or Euros) the value of the dollar would not tank. Instead, we're in a Nash equilibrium where we're all accepting dollars as a means of exchange and it would be costly and have little benefit for individuals to defect. The intrinsic value of t…

correct in a sense- the US dollar is backed by the full faith and credit of the US Government, nothing more. Would I still have that faith in the US $ if the government did not collect taxes / did not seem like a stable entity? Probably not, but your point is still valid

Um, no. The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts and by US law requiring taxes to be paid in USD. All of which, as the parent post points out, is dwarfed by the backing provided by all the merchants, banks, and consumers in the world who are using USD today. The corner grocery store in Pottsville, PA backs the USD by accepting it as payment for frozen pizza and toothpaste. The drug dealer in Venezuela backs the USD by accepting payment in $100 USD bills. These are the most important backing for the USD (the "Nash equilibrium" that the parent post mentioned.

And that kind of backing is what the community is TRYING to build for BTC.

Re: Bitcoin falls from $266

#278

Post by fnordfnordfnord »

wting wrote: post #17

I'm interested in the price of Bitcoin, but we don't need these daily submissions. If you're interested in following the price, I suggest these links: - https://bitcoinity.org/markets - http://bitcoincharts.com/charts/mtgoxUSD - http://bitcoin.clarkmoody.com/ If you're interested in talking about the price, try #bitcoin-pricetalk on Freenode.

>I'm interested in the price of Bitcoin, but we don't need these daily submissions.

Bitcoin markets are having unprecedented volume and volatility. This is a relevant current event. You don't need to click the links if you don't want to.

>try #bitcoin-pricetalk on Freenode.

The discussion quality on IRC is almost as bad as it is here.

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