Bitcoin Price Touches $1,000 Again as Overstock Sales Hit $130,000 • Hacker News Board

Re: Bitcoin Price Touches $1,000 Again as Overstock Sales Hit $130,000

#101

Post by mrb » Sun, Jan 12, 2014, 11:51 PM UTC

throwaway_yy2Di wrote: post #87

mrb wrote: post #85

Earlier quoted context omitted.

You fail to realize that Overstock represents a tiny fraction of all the commerce done in bitcoins. Bitpay alone is seeing an exponential growth of Bitcoin transactions: they appear to be doing about $20-30 million/month at their current rate: http://blog.bitpay.com/2013/12/bitpay-drives-explosive-growt... and http://blog.bitpay.com/2013/12/bitpay-exceeds-100000000-in-b...

That's still astronomically low compared to non-bullshit money. The US economy goes through its M1 money supply 7 times per quarter, or over twice per month [0]. If Bitcoin had that ratio, it would now be running $30 billion of meaningful transactions per month, not $30 million. [0] http://research.stlouisfed.org/fred2/series/M1V [Ctrl-F keyword: "velocity of money"]

You don't understand Bitcoin. $30 million/month is just the Bitpay figure.

In reality, there are many more payment processors other than Bitpay, and many economic transactions happen outside of payment processor networks. It is hard to estimate money velocity in Bitcoin: http://blockchain.info/charts/estimated-transaction-volume-u... shows approximately $3 billion/month ($100 million/day) but this is an upper bound, because some of these transactions are just people moving coins around their wallets. The real figure is probably $100+ million/month to give an order of magnitude. And $100 million/month is not bad at all considering that it started from zero merely five years ago!

Re: Bitcoin Price Touches $1,000 Again as Overstock Sales Hit $130,000

#102

Post by VexXtreme » Mon, Jan 13, 2014, 4:30 AM UTC

kolev wrote: post #99

VexXtreme wrote: post #91

Earlier quoted context omitted.

> It just can't get any better than this. People were saying this in 2010 when it reached dollar parity, in 2011 when it was $20 a pop and they keep saying it now. It really means nothing. Also, you're getting downvoted because you're making these hard and fast predictions without substantiating them with anything but pure speculation. If you really believe BTC is about to drop then why don't you put your money where…

A lot of people mix profiting and preaching. If you believe in Bitcoin, you don't necessarily have to support its high price. In fact, the high price and the volatility limit mass adoption, the exponential growth makes many people recognize it as a bubble and they don't want to participate. Many just want to get rich from Bitcoin easily and secretly multiply the number of bitcoins they own times the Winklevii level o…

I believe it will keep going up but I am not 100% certain (anyone who says they are is an idiot or clueless) so I am invested only with an amount I am comfortable with. It's not an all or nothing kind of situation; you can be be exposed to an asset in proportion with the risk you associate with the said asset. It's called risk weighting and it's considered basic investing knowledge.

At this point I am not comfortable investing more in BTC but I would also be very reluctant to bet against it. I currently believe that the chance that BTC will reach the levels the Winklevii are talking about is minuscule, otherwise I would've already dumped all my savings into it.

I have a dislike for people who keep preaching either about BTC completely failing or overtaking the entire world economy. Both belong to the same camp of irrational thinking and simply hoping their preferred outcome happens. There is a certain probability distribution associated with the future price and the chance that the price will be at the either end of the curve (0 or max) is tiny. This is why I always tell people who make black and white "predictions" about price to simply invest according to their beliefs and certainty levels. It usually reveals real quick what they really believe (more often than not, they're full of shit).

Re: Bitcoin Price Touches $1,000 Again as Overstock Sales Hit $130,000

#103

Post by kolev » Mon, Jan 13, 2014, 7:42 AM UTC

VexXtreme wrote: post #102

kolev wrote: post #99

Earlier quoted context omitted.

A lot of people mix profiting and preaching. If you believe in Bitcoin, you don't necessarily have to support its high price. In fact, the high price and the volatility limit mass adoption, the exponential growth makes many people recognize it as a bubble and they don't want to participate. Many just want to get rich from Bitcoin easily and secretly multiply the number of bitcoins they own times the Winklevii level o…

I believe it will keep going up but I am not 100% certain (anyone who says they are is an idiot or clueless) so I am invested only with an amount I am comfortable with. It's not an all or nothing kind of situation; you can be be exposed to an asset in proportion with the risk you associate with the said asset. It's called risk weighting and it's considered basic investing knowledge. At this point I am not comfortable…

I have to agree that both extremes don't do a favor to their side. The most important rule is not to invest money you can't afford to lose. I think 10-20% of your play capital can be invested in Bitcoin, but many put every single penny into it - maybe they don't have another chance to make money, who knows. Bitcoin sounds so simple as an investment! Unlike stocks, you don't need any special skills - you just hoard and cash out after a few years when you suddenly wake up a millionaire. By skills in stocks I mean that to match Bitcoin ROI you need to make a sequence of successful trades and stock picks.

Re: Bitcoin Price Touches $1,000 Again as Overstock Sales Hit $130,000

#104

Post by throwaway_yy2Di » Tue, Jan 14, 2014, 1:09 AM UTC

mrb wrote: post #101

throwaway_yy2Di wrote: post #87

Earlier quoted context omitted.

That's still astronomically low compared to non-bullshit money. The US economy goes through its M1 money supply 7 times per quarter, or over twice per month [0]. If Bitcoin had that ratio, it would now be running $30 billion of meaningful transactions per month, not $30 million. [0] http://research.stlouisfed.org/fred2/series/M1V [Ctrl-F keyword: "velocity of money"]

You don't understand Bitcoin. $30 million/month is just the Bitpay figure. In reality, there are many more payment processors other than Bitpay, and many economic transactions happen outside of payment processor networks. It is hard to estimate money velocity in Bitcoin: http://blockchain.info/charts/estimated-transaction-volume-u... shows approximately $3 billion/month ($100 million/day) but this is an upper bound,…

"The real figure is probably $100+ million/month to give an order of magnitude."

So we are completely in agreement on the numbers. I used $30 million as my anchor point: the same power of 10. Either way it's 2.5-3 orders of magnitude from $30 billion (B), which is what you'd predict if money was moving around as fluidly as the rest of the economy.

Emphasis: you're fiddling with a factor of 3, within an uncertainty of a factor of 10 and a shortfall of a factor of 1,000.