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For Sale: 29,656.51306529 Bitcoins

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Re: For Sale: 29,656.51306529 Bitcoins

#151

Post by jnbiche »

Ologn wrote: post #135
jnbiche wrote: post #104

Earlier quoted context omitted.

I didn't downvote, but I have to wonder what you're threshhold for not being a scam is? What companies will have to accept it, and how long will it have to be around? I'm pretty amazed that people still think it's a scam when huge companies with massive legal departments are accepting it. That's some pretty extreme skepticism. BTW, there are plenty of easy, legitimate ways to short Bitcoin, but given your extraordina…

> people still think it's a scam when huge companies with massive legal departments are accepting it. Sub-prime real estate was a scam. Huge companies with massive legal departments protected themselves from the illegal part of the scam - all those loan officers telling people to lie on their loan applications. In fact these banks got their lobbyists to get them TARP bailouts after the scam had run its course. Banks…

At what point would you accept that Bitcoin is not a scam? What percentage of the Fortune 500 accepting it? How many years? 10 years? 20 years? Can you give a number?

I mean, at least Prof. Bitcorn gave us a date. An open ended "it's a scam and you people are going to learn...someday" is not very useful.

And speaking of value, after years of paying $30 a pop to receive a few thousand dollars from Europe in 3-5 business days, being able to effortlessly send a few digits, pay a few cents, and receive that money in less than an hour is...highly valuable.

Re: For Sale: 29,656.51306529 Bitcoins

#152

Post by PeterisP »

dnautics wrote: post #83
PeterisP wrote: post #67

Earlier quoted context omitted.

The increased [bit-]money supply doesn't explain the observed price drop - it would explain a price drop, but much, much smaller than this one; those 30k bitcoins is a rather tiny part of the whole bitcoins in circulation; so obviously some other reasons dominate this particular price change. If US treasury prints a billion dollars, then that doesn't trigger a 10% drop in value of a US dollar - it's a comparably tiny…

Yes, but market fluctuations always shoot above and below 'rationalizable valuations'. A few reasons why your analogy is flawed. First, M0 (which is one of the more conservative definition of money, is about 4 trillion, so the value loss from a billion dollars is not going to be anywhere near 10% to start off with). Secondly, by printing money you're again only affecting M0, but there are a lot of debt-based instrume…

My analogy doesn't seem flawed to me- that's exactly what I meant:

1. printing a billion dollars should be approximately just as [in]significant to USD supply as the 30k BTC to the BTC supply in circulation; that's why I said a billion, but not a million or a trillion;

2. market fluctions over/undershooting any corrections is reasonable, but not exaggerating them by multiple orders of magnitude - it may react to a 0.1% change as a 0.2% change, but not as 10% change;

3. a market that's "functioning properly" would be expected to correct for so huge overexaggerations - if some people get a little silly from time to time, then the market should (and would) take their money from them; but if most of the people get very silly frequently, then that's not a properly functioning market.

Re: For Sale: 29,656.51306529 Bitcoins

#153

Post by ryan_j_naughton »

polshaw wrote: post #116
ryan_j_naughton wrote: post #89

Earlier quoted context omitted.

The volatility in the bitcoin price just demonstrates how the majority of the people trading it have no conception of how to value the underlying asset (i.e. demand for a low cost transaction system) and thus it is speculators leading speculators a la the blind leading the blind. The current sharp price decrease is because people are worried that whoever wins this auction (and the subsequent auction of DPR's coins) w…

It has very limited use as a serious transaction system while there is so much volatility. Prices are therefore pegged to local currencies, and if you want to keep that then it's no longer low cost because conversion to/from local currency costs just as much. The speculation and (eventually) deflationary nature of BTC significantly hinders the chances of it ever stabilising, and therefore a true 'bitcoin economy' eme…

All very good points.

The volatility is the greatest hindrance to it being a viable transaction system. I'm hopeful that well functioning derivatives (futures, options, etc) will help to stabilize the price (as is the purpose of a futures market); however, that would rely on the traders having effective forecasts on supply and demand which I view as unlikely.

Related to that, I thought of an idea a while ago for a non-profit to create a new cryptocurrency that is by design pegged to the USD. Whenever anyone wants a unit of this currency, they can buy one from the non-profit for $1 and the non-profit will mint a new coin.

Similarly, if you want to sell the currency, the non-profit will always buy it for $1. The non-profit must keep the appropriate reserves (ideally, they would keep 100% of the US dollars bought or have always sufficient credit lines).

With this design, the proposed cryptocurrency will always maintain a $1 peg, removing the insane amounts of volatility. I know that is will be hated by all those in the btc community as it brings in a centralized monetary authority who controls minting coins; however, there is a huge value to an extremely low cost transaction system that is decentralized and pseudo-anonymous (which this would still be).

The central authority would not be capable of destroying coins or changing blockchain history, only minting new coins (and as per their charter, only when they are provided $1USD for the coin).

People would not have any obligation to use this monetary authority to exchange coins, and surely other exchanges which were more user friendly would appear. Simply, by an entity existing which will always buy at a given price or sell at a given price, it will cause the intended effect without having to have any central role in the decentralized transaction system.

Re: For Sale: 29,656.51306529 Bitcoins

#154

Post by baddox »

JohnTHaller wrote: post #137
Alupis wrote: post #26

Earlier quoted context omitted.

Street value of approx: $17,330,000 USD I'd wager it will sell for much less, likely 3/4 of that street price.

Bitcoin being as volatile as it is, we need to clarify street value as of when... Street value this morning: $18,752,406.34 Street value now (2014-06-12 @ 7pm NYC time): $17,220,321.22 (it lost $110,000 in value in the hour since you posted) I'd wager it will sell for around 1/2 its street value when the auction is completed.

Not to mention that there probably aren't anywhere near 29,000 buy orders anywhere near the USD price you see on the Yahoo! Finance ticker. Selling 29,000 will probably sprint through the buy orders.

Re: For Sale: 29,656.51306529 Bitcoins

#155

Post by dllthomas »

ryan_j_naughton wrote: post #153
polshaw wrote: post #116

Earlier quoted context omitted.

It has very limited use as a serious transaction system while there is so much volatility. Prices are therefore pegged to local currencies, and if you want to keep that then it's no longer low cost because conversion to/from local currency costs just as much. The speculation and (eventually) deflationary nature of BTC significantly hinders the chances of it ever stabilising, and therefore a true 'bitcoin economy' eme…

All very good points. The volatility is the greatest hindrance to it being a viable transaction system. I'm hopeful that well functioning derivatives (futures, options, etc) will help to stabilize the price (as is the purpose of a futures market); however, that would rely on the traders having effective forecasts on supply and demand which I view as unlikely. Related to that, I thought of an idea a while ago for a no…

I had some ideas for mechanisms to peg without centralization. I stalled out at the question of what to peg to...

Re: For Sale: 29,656.51306529 Bitcoins

#156

Post by bodyfour »

13throwaway wrote: post #139
wmf wrote: post #112

Earlier quoted context omitted.

You'd still be able to buy things if the exchange rate was 1 cent. Where's the rest of the value coming from?

Where does the value of USD come from?

A couple hundred million people are required to pay taxes using it. That implies that there is some inelastic demand for dollars.

That factor alone obviously doesn't prevent every currency collapse, but it is a key difference between "government fiat" and "geek fiat" currencies.

Re: For Sale: 29,656.51306529 Bitcoins

#157

Post by Uhhrrr »

ahallock wrote: post #140
ryan_j_naughton wrote: post #65

Earlier quoted context omitted.

It is presumptuous, but that is how civil forfeiture works. Its atrocious. Take a look at this well written article by the New Yorker Taken: The Use and Abuse of Civil Forfeiture http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_...

That's disgusting. FTA: 'Many states, facing fiscal crises, have expanded the reach of their forfeiture statutes, and made it easier for law enforcement to use the revenue however they see fit.' How are they any better than the criminals they're supposed to be protecting us from?

-Their henchmen wear uniforms so you don't confuse them with normal people

-They operate from fixed headquarters

-Some of them are elected

-They have a complaints department

-Certain social services are provided

Re: For Sale: 29,656.51306529 Bitcoins

#159

Post by baddox »

sillysaurus3 wrote: post #49
viraptor wrote: post #36

Could someone explain the logic behind the price drop? Is that related to the fact that those 30k will be sold below the standard price? For some reason it seems counter-intuitive for me, since the money connected to those coins have been already paid once (whether for mining them or via exchange). So in practice it's more like they've been actually paid for ~twice now, so the effect "should" be opposite.

There is no logic. Searching for logic behind bitcoin's price is a fool's errand. You'll trick yourself into believing things that aren't true, because the price of bitcoin is determined by a small number of large players. Those large players enter or exit the market for any reason they feel like. It's gambling, plain and simple. News announcements serve as a trigger for the gamblers to initiate gambles (exit/enter t…

> There is no logic. Searching for logic behind bitcoin's price is a fool's errand.

The logic is that people (or algorithms that people put in control of their bitcoins) offered to sell bitcoins at a certain price, and other people (or algorithms) decided to accept that offer. One side decided that they prefer x USD to y bitcoins, and the other side decided that they prefer y bitcoins to x USD. So they agreed to swap. That is precisely the same logic that goes into literally every commercial transaction.

To look for some concise one-sentence explanation for the aggregate preferences of a bunch of people, however, is a fool's errand. And that doesn't change when "more than a couple hundred people" are trading.

Re: For Sale: 29,656.51306529 Bitcoins

#160

Post by bumbledraven »

baddox wrote: post #144
Ologn wrote: post #97

Earlier quoted context omitted.

Bitcoins are absolutely worthless. If there is any sign of a tech bubble, it is these worthless hashes that people pay hundreds of dollars for. One of the genius aspects of the Bitcoin scam is the limited output and increasing difficulty as it goes on. This keeps the scam going longer. If it were like tulip bulbs, or subprime real estate, or pets.com type stocks, the bubble would eventually burst. With the types of b…

For any remotely plausible definition of "worthless," bitcoins are just as worthless as any representative money, which inclues fiat money (like a USD) and commodity-backed money (like a gold certificate). The only reason money can be used in general transactions is that people choose to accept it, and they choose to accept it because they are reasonably confident they will be able to trade it again in the future for…

For any remotely plausible definition of "worthless," bitcoins are just as worthless as any representative money, which inclues fiat money (like a USD) and commodity-backed money (like a gold certificate).

The US government is a powerful entity that levies taxes and accepts tax payments only in dollars. Gold has various uses in industry and fashion and therefore a certificate entitling one to ownership of gold would have some value independent of gold's use as a currency. None of these are true for bitcoin.

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