Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin Price Pressure

blog.samaltman.com

Post reply on HN
Print view View original

11–20 of 191 posts

Re: Bitcoin Price Pressure

#11

Post by DennisP »

MarkPNeyer wrote: post #2

> The other way to get enough buy pressure would be if many people started deciding they want to hold bitcoin as a hedge or a speculation. ding ding ding. that's all i'm doing. i've had a bunch for a while. i don't need the liquidity, so i figure i might as well hang on to them. i think a lot of us are in the same boat. if a group of 100,000 'crazy' and 'irrational' people all decided to put $100 USD a month into bit…

But if the price is mainly based on that, it's nothing but a tulip bubble. I don't think we get sustainable value unless people are actually using it as currency to buy things.

Re: Bitcoin Price Pressure

#12

Post by jonny_eh »

Sounds like he's moving the goal post. When did the conversation change from "Bitcoin is going to change everything!" to "Bitcoin itself doesn't matter, it's the blockhain idea that does!"

Re: Bitcoin Price Pressure

#13

Post by dragontamer »

MarkPNeyer wrote: post #2

> The other way to get enough buy pressure would be if many people started deciding they want to hold bitcoin as a hedge or a speculation. ding ding ding. that's all i'm doing. i've had a bunch for a while. i don't need the liquidity, so i figure i might as well hang on to them. i think a lot of us are in the same boat. if a group of 100,000 'crazy' and 'irrational' people all decided to put $100 USD a month into bit…

The only "outs" therefore are the greater fool theory (http://en.wikipedia.org/wiki/Greater_fool_theory) or a pyramid scheme structure.

Or, perhaps all of this price-mongering is the wrong way to look at things. Consider this: BTC success should instead be measured in transactions / day. The only people who care about BTC per $$$ are speculators.

Re: Bitcoin Price Pressure

#14

Post by sama »

pcmonk wrote: post #6

Using bitcoin for transactions won't help if the merchants immediately sell them (all the buying pressure just got cancelled out). Right now, bitcoin is only held in large quantities for speculation. Speculation, as he notes, has only worked for temporary bubbles. He says that bitcoin isn't failing, but I don't see how it can succeed. It doesn't make short-term economic sense for individuals to either mine or buy bit…

I think, especially in emerging markets, merchants will eventually hold bitcoin.

Re: Bitcoin Price Pressure

#15

Post by zorpner »

vbuterin wrote: post #4

The Bitcoin price is falling because the Google Trends search volume is going down. That's it. All of the technical analysis and China news is just a mirage that makes a few jolts in the short term. http://www.google.com/trends/explore#q=bitcoin&date=today%20... And it will keep going down until the search volume stops going down, at which point it will stabilize, and then start to go up once again. Of course, this s…

> The Bitcoin price is falling because the Google Trends search volume is going down.

This is some serious correlation/causation confusion. What do you think is causing the Google search volume to decrease?

Re: Bitcoin Price Pressure

#16

Post by pdq » 

  When most merchants take bitcoin for a purchase, 
  they immediately sell for dollars.
This is ignoring the other side of the equation. For someone to spend bitcoins, they had to have bought them for cash.

Bitcoin has declined lately because of 3 main reasons:

1. There was a massive 10x price increase in the past year or so. (You could call this a bubble.) Now a 50% drop from the high just means a 5x increase in the past year.

2. Much of this growth was due to China speculation, and with the Chinese government cracking down on bitcoin ownership and exchanges, this pops much of the speculation.

3. Mt. Gox going insolvent.

Re: Bitcoin Price Pressure

#17

Post by pcmonk »

sama wrote: post #14
pcmonk wrote: post #6

Using bitcoin for transactions won't help if the merchants immediately sell them (all the buying pressure just got cancelled out). Right now, bitcoin is only held in large quantities for speculation. Speculation, as he notes, has only worked for temporary bubbles. He says that bitcoin isn't failing, but I don't see how it can succeed. It doesn't make short-term economic sense for individuals to either mine or buy bit…

I think, especially in emerging markets, merchants will eventually hold bitcoin.

Why? Why wouldn't they just sell it immediately, for all the reasons why merchants sell it now?

Re: Bitcoin Price Pressure

#18

Post by VMG »

> And even if bitcoin itself fails, I think the blockchain will be one of key technical innovations of this time period.

A blockchain is only useful if it is heavily secured by hashing power. This is only the case if there is significant mining equipment devoted to validating blocks. That in turn only happens if there is a reward for validating a block.

Long story short, it's currently very difficult to use a secure blockchain that is not based on Bitcoin, which puts the quote into perspective. Those who want to use blockchain technology have an incentive to use the Bitcoin blockchain because it has the greatest security.

Re: Bitcoin Price Pressure

#19

Post by natrius »

applecore wrote: post #10

There's no such thing as "default price pressure" (up or down) in financial markets. Every trade has both a buyer and a seller—for someone to have sold bitcoins, someone else has to have bought them.

This sounds true, but it's not. First of all, the supply of bitcoins increases every day when they are created out of thin air.

Even without that factor, having a buyer and a seller doesn't mean that prices can't have a tendency towards a trend. People who purchase goods and services with bitcoins usually aren't making a calculated decision to sell bitcoins for dollars, but that's what they're doing when they pay with bitcoins.

Humans aren't rational actors, especially when you try to judge their actions in a single market without considering other motivations.

Re: Bitcoin Price Pressure

#20

Post by diego »

pdq wrote: post #16

When most merchants take bitcoin for a purchase, they immediately sell for dollars. This is ignoring the other side of the equation. For someone to spend bitcoins, they had to have bought them for cash. Bitcoin has declined lately because of 3 main reasons: 1. There was a massive 10x price increase in the past year or so. (You could call this a bubble.) Now a 50% drop from the high just means a 5x increase in the pas…

  |This is ignoring the other side of the equation. For someone to spend bitcoins, 
  |they had to have bought them for cash.
This is not true. 3600 coins are mined every day. The people with the most incentive to spend coins are early miners who have a significant chunk of their net worth in Bitcoin.
Post reply on HN