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Bitcoin heading towards $200, new bubble forming

bitcoinwisdom.com

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Re: Bitcoin heading towards $200, new bubble forming

#21

Post by gizmo »

joelthelion wrote: post #14

I'm still hesitant to sell my (smaller) stash. The probability that bitcoin will explode is fairly low, but trading a small but real possibility of becoming a millionaire against a few thousand dollars is a difficult decision :)

Assuming you have $5000 worth of Bitcoin that's 25 bitcoins at the current $200 exchange rate.

So bitcoin has to go to $40.000 for you to become a millionaire.

Bitcoin at launch was $0.05. So value of bitcoin has doubled 12 times since launch, and the value of bitcoin has to double 8 more times for your to become a millionaire. So that's quasi-plausible. Not holding my breath, though :)

[1] Source https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHJ...

Re: Bitcoin heading towards $200, new bubble forming

#22

Post by Choronzon »

bayesianhorse wrote: post #8
peteretep wrote: post #5

Why does this imply a bubble?

Because nowadays any exponential growth is called a "bubble in forming". And because all stochastic exponential process eventually crash, or "underperform", it sounds really smart to "predict" a crash months or years in advance. Especially when using non-logarithmic axes, the predictions and the crash look really impressive. You don't, however, often see these prophets of doom profiting from their predictions, becaus…

Its actually generally a lot easier to profit buying a bubble than shorting it.There are a lot more points of increase than points of collapse. Paulson made a fortune shorting the housing market,plenty of people predicted the collapse but Paulson picked the peak correctly. The interesting thing is given his shocking trading performance since then he appears to have been lucky rather than smart.

Didier Sornette has some interesting theories(and dubious models) about bubbles,well worth a read.

Re: Bitcoin heading towards $200, new bubble forming

#24

Post by nolok »

I know you can sell your coin when the price is high; but can you trade quickly enough to profit from such temporary surges (buy low then sell high only a dozen hours later) ? What is the average request processing time if you want to buy, say, 10 BTC on mtgox ?

Re: Bitcoin heading towards $200, new bubble forming

#25

Post by neals »

$200? Hardly. Maybe if you look at Mt.Gox, it might look like you could get $190 per bitcoin. Howerver, there is no way to actually get that money to your bank account, since Mt. Gox hasn't been doing any banktransfers for months.

The price is high on Mt.Gox because people that have money on there can only get it out by buying Bitcoins and transfering those to other exchanges. This drives the Mt.Gox price up.

If you look a the exchanges that are actually solvent, the price is more around $160.

Re: Bitcoin heading towards $200, new bubble forming

#26

Post by brazzy »

devx wrote: post #15
Choronzon wrote: post #4

Earlier quoted context omitted.

Its inherently deflationary anyway (which is a terrible idea for a currency).

I wonder if someone could build a new digital currency that starts let's say at 1 trillion units, and is expanded by 2 percent per year (that 2 percent being split so a slight increase happens every day, so it doesn't happen all at once, but after a year, the increase rounds up to 2 percent). The problem would be seeding it and distributing it early on. But it could still be mined much like Bitcoin, with the differen…

The problem is that for a real currency you ideally want inflation to match the growth of the economy. Fixed inflation rates (including 0) are decidedly non-optimal.

Re: Bitcoin heading towards $200, new bubble forming

#27

Post by gabemart »

joelthelion wrote: post #14

I'm still hesitant to sell my (smaller) stash. The probability that bitcoin will explode is fairly low, but trading a small but real possibility of becoming a millionaire against a few thousand dollars is a difficult decision :)

If you currently held 0 BTC, would you spend a few thousand dollars on BTC now in anticipation of huge price increases later?

Re: Bitcoin heading towards $200, new bubble forming

#29

Post by SuperChihuahua »

doctorfoo wrote: post #20

I'm going to sell when I can retire on it. Which won't be for a couple orders of magnitude yet. Some of us are holding for the longest time... I apply this same logic to my startup attempts. If anyone offers me enough to retire, I'll sell with no doubts.

Gray Swan investing!

Re: Bitcoin heading towards $200, new bubble forming

#30

Post by vbuterin »

devx wrote: post #15
Choronzon wrote: post #4

Earlier quoted context omitted.

Its inherently deflationary anyway (which is a terrible idea for a currency).

I wonder if someone could build a new digital currency that starts let's say at 1 trillion units, and is expanded by 2 percent per year (that 2 percent being split so a slight increase happens every day, so it doesn't happen all at once, but after a year, the increase rounds up to 2 percent). The problem would be seeding it and distributing it early on. But it could still be mined much like Bitcoin, with the differen…

Freicoin takes the inflationary cryptocurrency idea:

http://freico.in/

PPcoin is also slightly inflationary, although it offers you an interest rate higher than the inflation rate if you participate in the validation process (basically like mining except you "mine" with your ppcoins rather than with your cpu cycles):

http://ppcoin.org

Personally, I don't mind the inflation/deflation argument too much; one thing I would like to see, however, is a coin with a semi-centralized distribution model - an organization bound by contract to give X units to every person in the world. Ripple could have been it, but they went with keeping the coins to themselves instead.

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