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

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

#91

Post by VexXtreme »

kolev wrote: post #55

I feel sorry for those buying bitcoins at prices $900+, seriously! China has two more weeks until the shut down - so far Huobi and a couple of other exchanges still allow bank transfers into the exchanges and the Chinese are making their last profits. When Yuan stops flowing into the exchanges (or becomes much harder), the only Yuans you can get to buy is when you sell. I'm sure people will figure out to buy via frie…

> 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 your mouth is and short it? There's a fortune to be made if your predictions turn out to be correct.

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

#92

Post by atmosx »

ok_craig wrote: post #57
atmosx wrote: post #45

Earlier quoted context omitted.

Really? If that was the case the bust of DPR and the downfall of SR should drive the price of BTC down, to it's knees - since it was the only market where BTC was treated like a curency . This fact shows that either BTC is not as rational as one might think or that big players (or a small team of players) are trying to keep the price as high as possible (by not selling in bulk). Note that if A. Shamir's paper is corr…

I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events." The closing of silk road lead people to anticipate that bitcoin would come to be associted with mostly legitimate purposes instead of nefarious ones in the future. So the price rose. (That was only part of it though; the senate hearings had a greater effect.)

> I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events."

That's elementary: Since SR was the only place where owning BitCoin was actually useful since you couldn't buy using dollars and was a big market (in turn-over), it's seizure by the FBI should driven BTC price down because the largest btc-related goods trader closed, so all those people buying illegal products, would stop searching/buying for bitcoins. Simple as that.

So losing 40% to 50% of it's value should be expected/rational, IIRC lost from 10 to 20% for a couple of hours. The senate thing you're referring happened later on and it's still NOT clear how will end.

Then you go making an assertion... Like if anyone really cares if you buy drugs, guns or chocolate with your currency. The world doesn't work like that, no one bought/used BTC because suddenly became ethical to own one since the good BFI caught the bad Silk Road guys. If that was the case, the USD wouldn't be so widely used.

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

#93

Post by aaronpeck »

uniclaude wrote: post #82
aaronpeck wrote: post #78

Earlier quoted context omitted.

Yeah, a currency that has no transactional cost from a third party thus offering a 2-4% discount to either buyer, seller or split by both, that maintains one value globally, and isn't controlled buy a particular nations government, probably is of no interest to the retailers of the world and likely just inflated bits that will never become an actual system of payments down the road. If you believe that, I have a plet…

> I don't doubt that Bitcoin will become a revolutionary system of payments and money storage down the track The tone I get from your comment makes me wonder if you really understood what GP meant. You could be both right, as in BTC being very useful to a lot of people, but still overinflated.

I hear you, but the author of the comment heavily edited his post. That's not what it initially said. Either way, we all have our views. With something like BTC the future is unknown and thus just fun to discuss. It's great to engage with you and everyone else here. Theres's obviously a pool of great minds in the HN community.

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

#94

Post by saalweachter »

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"]

Bitcoin actually isn't doing too bad, according to blockchain.info.

They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad.

Of course, if you take the same stats, and divide the money which went to miners -- 4,811.59892633 BTC -- by the transaction volume, you get an effective transaction fee of 5.8% for that same period...

EDIT: Whoops, mixed up quarters and years. BTC goes through its money supply 0.6x per quarter. I'm not sure if that's good -- "only" an order a magnitude off from USD -- or bad -- a "full" order of magnitude off from USD.

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

#95

Post by tcbawo »

CamperBob2 wrote: post #22
jval wrote: post #13

This is just ridiculous. If Overstock is the biggest retailer in the world accepting Bitcoin, and on their opening day they only manage $130,000 in sales (130 BTC), what does that tell you about the volume of Bitcoin actually being used in trade and commerce rather than speculation? There are 12.5 Million BTC in circulation. I don't doubt that Bitcoin will become a revolutionary system of payments and money storage d…

Why would I want to spend Bitcoins that are increasing in value? I'll spend them on the way down, not up.

Since Bitcoin has a fixed currency pool, with population growth and increasing supply of goods/services, we might see the cost of goods/services priced in Bitcoins fall. In such a deflationary environment, the rational incentive is to delay purchases for the future, which is bad for the aggregate economy. When people stuff money under the mattress, it reduces the velocity of money (decreasing trade, decreasing wealth). This is why the Fed sets an inflation target in the low single digits.

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

#96

Post by ok_craig »

atmosx wrote: post #92
ok_craig wrote: post #57

Earlier quoted context omitted.

I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events." The closing of silk road lead people to anticipate that bitcoin would come to be associted with mostly legitimate purposes instead of nefarious ones in the future. So the price rose. (That was only part of it though; the senate hearings had a greater effect.)

> I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events." That's elementary: Since SR was the only place where owning BitCoin was actually useful since you couldn't buy using dollars and was a big market (in turn-over), it's seizure by the FBI should driven BTC price down because the largest btc-related goods trader c…

I mean, we clearly saw that the price rose. You provided an explanation for why it should have fallen. It didn't, so you are wrong. Therefore I think the world "does work like that", in some contexts.

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

#97

Post by ok_craig »

ctrl wrote: post #75
ok_craig wrote: post #57

Earlier quoted context omitted.

I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events." The closing of silk road lead people to anticipate that bitcoin would come to be associted with mostly legitimate purposes instead of nefarious ones in the future. So the price rose. (That was only part of it though; the senate hearings had a greater effect.)

Because people != common sense. The closing of silk road put it in the news as a currency for bad things.

It was already widely known as a currency for bad things. The closing basically eliminated that argument.

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

#98

Post by atmosx »

ok_craig wrote: post #96
atmosx wrote: post #92

Earlier quoted context omitted.

> I don't see why the closing of silk road should have resulted in a drop of the price if "prices rise immediately in anticipation of positive future events." That's elementary: Since SR was the only place where owning BitCoin was actually useful since you couldn't buy using dollars and was a big market (in turn-over), it's seizure by the FBI should driven BTC price down because the largest btc-related goods trader c…

I mean, we clearly saw that the price rose. You provided an explanation for why it should have fallen. It didn't, so you are wrong. Therefore I think the world " does work like that ", in some contexts.

I offered an explanation of the context in which the prices did not rose, but you clearly you don't believe that's the case.

Out of curiosity, you think that Adi Shamir is wrong?

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

#99

Post by kolev »

VexXtreme wrote: post #91
kolev wrote: post #55

I feel sorry for those buying bitcoins at prices $900+, seriously! China has two more weeks until the shut down - so far Huobi and a couple of other exchanges still allow bank transfers into the exchanges and the Chinese are making their last profits. When Yuan stops flowing into the exchanges (or becomes much harder), the only Yuans you can get to buy is when you sell. I'm sure people will figure out to buy via frie…

> 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 of $40K or higher and go to bed with a smile. Instead of creating real value, many rush to make money from the raise by not doing much, putting their last penny into bitcoins. As companies like BitPay and Coinbase eventually drag the price down, I read many Bitcoin diehards suggesting to immediately replenish your coins right after purchase, i.e. spend your bitcoins and then pay 1% + $0.15 at Coinbase. I won't mention that the rate will be different at that moment, too! :) Loyalism to the level of idiotism! If you believe Bitcoin price will keep going up, pay with your credit card, and then pay your credit card balance 30 days later when it will cost you less Bitcoins! Or don't pay it at all - the APR will be nothing compared to the logarithmic growth, right? :)

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

#100

Post by throwaway_yy2Di »

saalweachter wrote: post #94
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"]

Bitcoin actually isn't doing too bad, according to blockchain.info. They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad. Of course, if you take the same stats, and divide the money which went to miners -- 4,811.59892633 BTC -- by the transaction volume, you get…

Yes, but what fraction of that is "economic" stuff that goes into a GDP? With cryptocurrency you have clearly non-economic transactions that get registered in the global blockchain, like someone reorganizing their wallet internally, or a group shuffling bitcoins in circles as a money laundering method. Bitcoin transaction volume could be orders of magnitude higher than the Bitcoin "GDP'; it's not a measurement of it.

"They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad."

I think that's off by a factor of four: the Fed uses financial quarters (3 months) as the time interval.

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