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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#331

Post by fnayr »

lwat wrote: post #320
cpressey wrote: post #178

Earlier quoted context omitted.

I wonder if the value would ever fall to precisely zero. Mightn't they still have value as a novelty or collector's item? Like, "Hey, a Bitcoin! I remember those... sure, I'll buy one, just to say I have one." It's unfortunate that you couldn't mount it in a decorative frame, though.

It will never fall to zero, I'll personally buy every last one of them at $0.0001 each.

It would not make sense to buy EVERY one of them, as then you're guaranteeing they won't have value to anyone else.

Re: Bitcoin falls from $266

#332

Post by lotyrin »

bdr wrote: post #305
brazzy wrote: post #276

Earlier quoted context omitted.

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.

You are empirically wrong. Please, quantify your idea and go backtest it on the stock market. The efficient-market hypothesis does not have an asterisk excluding cryptocurrencies.

So... going up super-exponentially is efficient-market, but a crash is an attack? Is that what I'm hearing?

Truly, the capacity for people to employ cognitive bias is staggering.

Re: Bitcoin falls from $266

#333

Post by derleth »

phyalow wrote: post #313
bdr wrote: post #305

Earlier quoted context omitted.

You are empirically wrong. Please, quantify your idea and go backtest it on the stock market. The efficient-market hypothesis does not have an asterisk excluding cryptocurrencies.

the efficient market is dead and always has been.

> the efficient market is dead and always has been.

This is what people mean when they say "efficient market" in this context:

> In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.

http://en.wikipedia.org/wiki/Efficient-market_hypothesis

There are variations of this hypothesis, so saying "it's dead" is meaningless unless you specify which one is "dead" and how it has failed.

Re: Bitcoin falls from $266

#334

Post by derleth »

trent_91 wrote: post #14

See, it's times like this people should remember that bitcoin is not yet a currency and is rather a toy for things like http://bitcoinpyramid.com/r/91 and http://satoshidice.com , or for speculators.

> bitcoin is not yet a currency

Bitcoin is just as much a currency as Ithaca Hours are.

http://en.wikipedia.org/wiki/Ithaca_Hours

Re: Bitcoin falls from $266

#335

Post by fnayr »

jessriedel wrote: post #111
richardwhiuk wrote: post #71

Earlier quoted context omitted.

USD are backed by the fact that US citizens have to pay in USD to pay their taxes. Bitcoins have no such imperative.

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…

As a game theorist, I got happy when you used Nash equilibrium in your explanation.

Re: Bitcoin falls from $266

#336

Post by fnordfnordfnord »

foobarqux wrote: post #199
dia80 wrote: post #193

Earlier quoted context omitted.

Will a press release from the target suffice? https://mtgox.com/press_release_20130404.html

That's from a week ago. Is there any evidence that a DDOS happened today?

Lots and lots of tiny trades. <0.001

Re: Bitcoin falls from $266

#337

Post by Jtsummers »

maxerickson wrote: post #326
Jtsummers wrote: post #311

Earlier quoted context omitted.

There's also the cost of setting it all up, the time in learning the tech involved or hiring those who do. If it cost you $X to produce, why would you sell it to me for less than $X? You'd be losing money on the production side. The lower bound ought to be at least the cost to the miner that produced the new bitcoin (when they try and sell it or use it in the market). The upper bound is essentially nonexistent. If I…

There isn't any ought to be for the lower bound. (In a successful bitcoin world) There is eventually going to be a clear relationship between the cost of mining and the reward available, but if some miner switches to mining his own variety of digital money, we don't suddenly owe him something for the effort. If we end up with a very competitive market for using cryptography to clear digital transactions, miners might…

I meant to say that was the per miner cost. A more efficient miner would see a lower production cost for their bitcoins. They'd then be able to either take advantage of their position (sell with a significant margin) or drive the other miners out of business (sell at a small margin that puts bitcoins at an uncompetitively low value). In either case they'd be able to expand their mining operation (or accounting operation once mining itself has low returns) to improve their odds and yield.

Re: Bitcoin falls from $266

#338

Post by justatdotin »

richardwhiuk wrote: post #71
clicks wrote: post #36

Earlier quoted context omitted.

Serious question: Is that really a fair criticism of BTC? Because afterall, our beloved US currency is fiat based, and often subject to whims of geopolitical games.

USD are backed by the fact that US citizens have to pay in USD to pay their taxes. Bitcoins have no such imperative.

bullets.

Re: Bitcoin falls from $266

#339

Post by danudey »

mcherm wrote: post #277
crapshoot101 wrote: post #171

Earlier quoted context omitted.

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…

> The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts

If you're referring to the 'legal tender for all debts public and private' clause on the notes themselves, that means that it can be used for such purposes, not that it must be accepted. If we agree that I'll do your deck and you'll give me your car, you can't just say 'I want to keep my car, here's some cash instead'.

Re: Bitcoin falls from $266

#340

Post by jonnathanson »

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…

In the long run, yes, there could be a bright future for BTC.

In the short run, there are several big challenges, liquidity being a huge one. When it comes to BTC, the activities of speculators/hoarders, and the activities of free exchange and commerce, have shown themselves to be in direct opposition so far. The "store of value" and the "medium of exchange" are not mutually exclusive, of course, but for the time being, they're functionally mutually exclusive. It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. It's in the best, long-term interests of BTC to stabilize and become the latter. But BTC is going to be the former for quite awhile, precisely because it's so mysterious in the public eye, there's such information asymmetry about how it works, and because the markets for BTC-based commerce are still fairly niche.

Stabilization is going to come when more businesses start accepting BTC, and accordingly, when BTC becomes more freely convertible for goods, services, and other currencies. Until then, it'll proceed apace slowly and steadily, with the occasional burst of volatility as public interest spikes and wanes, and as speculators jump in and out.

What the currency really needs is exchange volume -- not just from trading, but from commerce.

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