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Bitcoin value falls from above $33 to below $3

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Re: Bitcoin value falls from above $33 to below $3

#21

Post by polshaw »

It is essential to remember that there is massive inflation of the money supply going on (by design), and that this is the key driver of the price downwards. ~35% increase in the money supply over the next 12 months; proportionately higher over the last 12 (as the same in absolute terms).

Its rise to $30 was driven by hype and speculation. The falling prices stop any speculators jumping on board, and there is no significant 'economy' yet. The rate of money supply increase will be halved in 2013, so don't expect any recovery before then.

Re: Bitcoin value falls from above $33 to below $3

#22

Post by synctext »

dudurocha wrote: post #12

this reminds me about the quora post about bitcoin. In a world of where there is no regulation in currency, you dont have a FED, this money will crash. We dont have liquidity in this currency, as so, nobody can 'inject' money in the market.

It's very simple. As the money creating/coin mining is unregulated. It's not tied to any actual usage. This is a classical deflating bubble which will never recover. Just wait for Cybercurrency 2.0 with decent build-in regulation of coin minting.

Re: Bitcoin value falls from above $33 to below $3

#23

Post by jerguismi »

lurch00 wrote: post #19

Bitcoin is essentially a giant pyramid scam. The early adopters have cashed out long ago. As mining gets more and more difficult, less people will cling to the liquid currency. Why trade with a deprecating currency, anonymous or not? The fact that the exchange rate is below the cost of mining should be alarming for many reasons. I'd assume the creator/first adopters do not care, either way.

It's free market, everyone is free to buy and sell as they wish. It's not a scam since there is the same information to everyone.

I'm pretty sure that the early adopters couldn't guess this year's rise in value, and couldn't guess the price drop either.

While I believe in bitcoin or cryptocurrencies in the longterm, I'm still pretty sure that bitcoin value will stay very volatile in the coming years. The stability will take time, and widespread adoption for this kind of innovation will take years if not tens of years.

Re: Bitcoin value falls from above $33 to below $3

#24

Post by polshaw »

lurch00 wrote: post #19

Bitcoin is essentially a giant pyramid scam. The early adopters have cashed out long ago. As mining gets more and more difficult, less people will cling to the liquid currency. Why trade with a deprecating currency, anonymous or not? The fact that the exchange rate is below the cost of mining should be alarming for many reasons. I'd assume the creator/first adopters do not care, either way.

The mining difficulty is adjusted periodically to balance the computing power of miners. As people stop mining, difficulty will reduce.

I must agree it is massively stacked in favour of the early adopters, who could have made an absolute killing so far if they played things smart.

Re: Bitcoin value falls from above $33 to below $3

#26

Post by rorrr »

mikeryan wrote: post #15
Zodiakos wrote: post #11

Earlier quoted context omitted.

So, in other news - governments everywhere ban bitcoin. Bitcoin use soars wildly.

Not sure where you make that assumption from. If bitcoin never gets adopted as legal tender for real world goods its value gets severely limited. If Government's explicitly state that bitcoin is not legal tender, and I can't buy a latte at Starbucks with it then its not very useful.

But if you can buy things privately or online with bitcoins, bitcoins will be used without government permission, and will have value.

SilkRoad works.

http://www.wired.com/threatlevel/2011/06/silkroad/

http://gawker.com/5805928/the-underground-website-where-you-...

Re: Bitcoin value falls from above $33 to below $3

#27

Post by VladRussian »

bdr wrote: post #10
jerguismi wrote: post #6

Earlier quoted context omitted.

It seems pretty inevitable in the longer term. If current technologies break up, new technologies will be popping up. I guess law enforcement has already lost this battle (in the long term), similarly as RIAA/MPAA has lost to piracy. It should also be noted that criminal use doesn't raise the price of bitcoins, since criminals don't necessarily hold their bitcoins. For them bitcoin is just an another money laundering…

It should also be noted that criminal use doesn't raise the price of bitcoins, since criminals don't necessarily hold their bitcoins. For them bitcoin is just an another money laundering system. Disagree. There's a "float" period between when the order is placed and when it's completed (service/goods verifiably delivered). The dollar-value volume in this float period sets a floor on the market cap of Bitcoin. I'm cle…

>a cypherpunk fantasy

yep. All your transactions are recorded for posterity and law enforcement can access them at anytime. The moment i first time heard about bitcoin i immediately read their paper and this was the instant end between me and BT - it is either a honeypot or an NSA's distributed "calculate these hashes@HOME" project. Most probably it started as the latter and once NSA had gotten enough results and withdrew the funding (which supported the currency valuations stable growth before speculation rushed in), the BT now is only the former.

Re: Bitcoin value falls from above $33 to below $3

#28

Post by gojomo »

ajones05 wrote: post #4

Here was Jason Calacanis's take on May 15: "Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen" -- "We are 100% certain that governments will start banning bitcoins in the next 12 to 18 months. Additionally, we’re certain bitcoins will soar in value and a crush of folks will flood the system and start using them." http://www.launch.is/blog/l019-bitcoin-p2p-currency-the-most...

The exchange rate for Calacanis-certainty to actual-liklihood has also been collapsing, and is now at about 4:1. (100% Calacertainty = 25% actual probability.)

Re: Bitcoin value falls from above $33 to below $3

#29

Post by polshaw »

jerguismi wrote: post #23
lurch00 wrote: post #19

Bitcoin is essentially a giant pyramid scam. The early adopters have cashed out long ago. As mining gets more and more difficult, less people will cling to the liquid currency. Why trade with a deprecating currency, anonymous or not? The fact that the exchange rate is below the cost of mining should be alarming for many reasons. I'd assume the creator/first adopters do not care, either way.

It's free market, everyone is free to buy and sell as they wish. It's not a scam since there is the same information to everyone. I'm pretty sure that the early adopters couldn't guess this year's rise in value, and couldn't guess the price drop either. While I believe in bitcoin or cryptocurrencies in the longterm, I'm still pretty sure that bitcoin value will stay very volatile in the coming years. The stability wi…

Your reply missed his point as bitcoin is 'mined' not just bought and sold. The difficulty of that mining is set based upon the computing power of the miners. Add to this the fact that the number of coins available to be mined each day is designed to be reduced over time, and you end up with early adopters (formost of which being the creators) controlling a massive proportion of the total worth of bitcoins.

Re: Bitcoin value falls from above $33 to below $3

#30

Post by mikeryan »

rorrr wrote: post #26
mikeryan wrote: post #15

Earlier quoted context omitted.

Not sure where you make that assumption from. If bitcoin never gets adopted as legal tender for real world goods its value gets severely limited. If Government's explicitly state that bitcoin is not legal tender, and I can't buy a latte at Starbucks with it then its not very useful.

But if you can buy things privately or online with bitcoins, bitcoins will be used without government permission, and will have value. SilkRoad works. http://www.wired.com/threatlevel/2011/06/silkroad/ http://gawker.com/5805928/the-underground-website-where-you-...

I'm not saying that Bitcoin won't have value, my response is to the grandparent that makes the argument that bitcoin usage would explode if it were made illegal. It seems to me bitcoin would be further marginalized in that case, hardly a catalyst for growth.
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