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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#451

Post by lucb1e »

kokey wrote: post #442
nikcub wrote: post #394

Sold everything I had yesterday at ~$240 https://twitter.com/nikcub/status/321751009598791682 I was buying and selling BitCoins with a very simple theory. Each time the currency would rally I would check the stories on Google News and check the graph on Google Trends[1]. Other price peaks would correspond with a peak on the trends graph[2], a new peak in new stories (with more stories in more general media publicatio…

What I find funny about most of the comments on here and everywhere else is that many of it reminds me of the investment bulletin boards and forums I've been frequenting over the years. There is always a lot of people talking the price up (since they are invested in it), and when there is a dip it is a 'buying opportunity' (so that others can buy and help the value of their holdings) What to me the most striking is t…

> What to me the most striking is the firm belief that demand will keep on growing, just like people believed property prices will keep on going up since the population is growing and land is finite. Sure, but demand spikes can still price these things too high.

I don't think anyone really expected it to go up in one straight line all the way to the value that it should have during mainstream usage.

Re: Bitcoin falls from $266

#452

Post by psionski »

stevewilhelm wrote: post #414
thatthatis wrote: post #360

Earlier quoted context omitted.

Dollar/Euro are backed by central banks who dynamically maintain money supply to maintain a promise of low price inflation. Their fundamental value is derived from fiat. It's similar, but not the same.

I am constantly amazed how little Bitcoin fans value large, stable, global financial and legal institutions like the US or EU. Without them, Bitcoin, the Internet, and most of the other aspects of their comfortable lives would exist.

- the legal system is a huge disappointment (CISPA, SOPA, etc.)

- the financial system is a huge disappointment (worldwide financial crisis)

It's not that we love Bitcoin (sure, it is an interesting piece of technology, but it's money, and money is a dirty word), we just dislike the alternatives.

Re: Bitcoin falls from $266

#453

Post by muyuu »

kragen wrote: post #395
muyuu wrote: post #327

Earlier quoted context omitted.

Bitcoin has been through worse than this at least twice.

Last time it crashed 50% (which I think has only happened once, in 2011) it took more than a few hours.

Which made it a lot worse.

It looked pretty much like the end of the system to a lot of people.

Whoever bought at 250 and was looking all day at the graph to see how to scalp some dough, got exactly what he deserved.

Sometimes you win, sometimes you lose.

Re: Bitcoin falls from $266

#454

Post by mathattack »

codeulike wrote: post #307
mathattack wrote: post #258

Here is the thing I can't get around... If Bitcoin is open source, what's stopping someone from setting up a competing currency? Perhaps it could have the promise of a more optimal growth mechanism over time, or some other feature. Once it's in use, the value of Bitcoin drops quickly, no? And what if there are many Bitcoin-like currencies?

Because a currency is basically a _convention_ within a _community_. Bitcoin has a _community_, whereas an arbitrarily cryptocurrency launched next week probably wont have, unless a lot of groundwork is done first.

Right, but it can be done so perpetual scarcity is a fallacy, no?

Re: Bitcoin falls from $266

#455

Post by Nursie »

ihsw wrote: post #39
6thSigma wrote: post #16

Am I the only one who thinks of Bitcoin as purely a speculative commodity which is leveraged mostly by the fact that it is in a financial grey area?

The currency itself is very grey, yes, however the transaction network is excellent and high-quality. It's unfortunate that the currency so loudly dominates the news surrounding it. Personally I find the technological achievement of a major, reliable, and international transaction network more impressive.

"the transaction network is excellent and high-quality."

Really?

I thought the transaction network was already struggling with SatoshiDice and the volume of transactions it's caused? If that is the case then the network is going to have a lot of trouble coping with increased use in future.

Re: Bitcoin falls from $266

#456

Post by dcc1 »

Helianthus wrote: post #77
songzme wrote: post #31

To everyone claiming that bitcoin isn't a currency, no shit! Currency doesn't happen overnight, it's a process to get there. Just like anything revolutionary, it takes time before anyone knows what it will be come. By the time (with a very big IF) bitcoin becomes a viable currency, it's price won't be $200 anymore. It'll be at least a few thousand per coin and people will be transacting in micro bitcoins. What bitcoi…

I have a personal reason to hate it: it thinks it's revolutionary when it's actually just... money. It solves no problems because it carries greed with it.

It solves two huge problems merchants face

1. Ultra low transaction fees 2. No chargebacks/reversals

1 and 2 are features of Credit Cards and Paypal which make ads up to a sizable % to anyone trying to sell online.

Re: Bitcoin falls from $266

#457

Post by dllthomas »

gph wrote: post #362
dllthomas wrote: post #322

Earlier quoted context omitted.

You read me as being more precise than I'd meant it. But it's basic economics that competition drives the cost down toward the cost of production (including labor cost and opportunity cost), and there's nothing in bitcoins that's preventing people from competing. And regardless, there's absolutely no conceptual reason cost of production would represent any kind of floor .

>And regardless, there's absolutely no conceptual reason cost of production would represent any kind of floor. Well no sane/rational entity would want to sell for less than cost of production because that would entail a loss (let's keep this simple and say there aren't any ulterior reasons one would receive gains/benefits from selling at below cost). Since competition drives the price towards the cost of production i…

A rational entity would absolutely sell at a loss. They would not acquire with the goal of selling at a loss, but once they already have the thing what they paid to get it is a sunk cost, which a sane or rational agent ignores in making future decisions.

If bitcoins were overproduced, say during a bubble, they could well remain low long-term - there is no particular pressure driving them up.

Re: Bitcoin falls from $266

#458

Post by cjg »

mkr-hn wrote: post #405
wamatt wrote: post #403

Earlier quoted context omitted.

..and this is probably going to look foolish when it goes to $1000 later this year. Your actions looks like someone trying to pat themselves on the back and reassure the "right decision". I wish online P2P wagers were legal in the US :) I was watching everything during the "crash". It's already back up to 170 in a few hours . Previous crash took months to recover. I've been around the block and the same tired and wor…

You sound like every person who believed in the non-bubbleness of every bubble. What justifies the price of Bitcoins? They have no real value before they're widely accepted, and that won't happen until the price is stable.

"Widely accepted" isn't a binary value. As adoption increases bitcoins gain value. That's what justifies the price.

The problem is deciding just how much adoption implies how much value.

Re: Bitcoin falls from $266

#459

Post by chii »

betterunix wrote: post #370
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…

"My Econ 101 understanding" Go just a bit past Econ 101, and you'll discover that economists do not universally agree on these things. That being said, here is one popular view: https://en.wikipedia.org/wiki/Modern_monetary_theory From wiki: "[Knapp] argued the state could create pure paper money and make it exchangeable by recognising it as legal tender, with the criterion for the money of a state being "that which…

> Or in other words, taxes, torts, and other laws give money its value.

i think legitimacy is more correct than value - value is a result of what people demand in exchange for their goods/services. Legitimacy is the trust that people have on the currency (ie, the trust that others woudl also accept the currency).

Re: Bitcoin falls from $266

#460

Post by cjg »

Siecje wrote: post #361

To buy a bitcoin you need to buy it from someone? Does that mean a miner can only 'create' a bitcoin (or partial bitcoin) when there is a transaction. So how did it start in the beginning? Someone would have had to be able to create bitcoins.

You get new bitcoins by creating a new block in the block chain (mining). If there are no other transactions in the block that's fine.

The first block is known as the Genesis block. You might find this useful: https://en.bitcoin.it/wiki/Genesis_block

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