Author Topic: Bitcoin currency (merged topics)  (Read 236775 times)

Offline raveneye

  • Prepper
  • **
  • Posts: 15
  • Karma: 4
  • New TSP Forum member
Re: Bitcoin currency (merged topics)
« Reply #90 on: April 05, 2013, 02:24:14 PM »
One question I have for you Bitcoin users... how difficult would it be for somebody to "corner the market" on it and manipulate it's value based on scarcity?

First of all, let's dispel this idea of "someone buying all the bitcoins".  The price right now is about $140.  If you took $14,000,000 to MtGox and clicked BUY, you would not end up with 100,000 BTC.  You are more likely to get less than 10K BTC and in the process drive the price up over $2,000 per.  The next 10K BTC would cost you far more.  If someone were to try to attack the BTC users by buying all their BTC, all they would end up doing is lining their pockets with billions of dollars, and drive the prices so high that people would just switch to spending mBTC  (0.001 BTC) or uBTC (0.000001 BTC) or satoshis (0.00000001 BTC).  Even if someone was able to secure 99.99% of all BTC, then there would still be 21,000,000,000,000 (that's 21 Trillion) satoshis still in circulation.

The far more real threat is price manipulation, as is currently being done with Gold and Silver in the futures markets.  Someone comes in, spends $1M slowly over a week, driving the price up from $140 to $150, then selling them all at the same time, crashing the market down to $100 instantly, then buying more in the $50-100 range as people panic sell, waiting until the price recovers, and repeating the process.  Big swings in price could have a huge psychological impact on the users and can scare them out of a market they don't fully trust to begin with.

Offline Prodigy

  • Survivalist Mentor
  • *****
  • Posts: 636
  • Karma: 41
  • Better to die on your feet than live on your knees
Re: Bitcoin currency (merged topics)
« Reply #91 on: April 05, 2013, 02:59:30 PM »
I guess what I'm saying is... if Amazon and EBay announced they were accepting Bitcoins, or if Bank of America said I could pay my mortgage payment with Bitcoins, I'd be much more on board.

I had posted on this earlier, but the link is now dead.  Here's a new one:

http://www.marketwatch.com/story/bitpay-integrates-bitcoin-with-fulfillment-by-amazoncom-2013-03-06

I think it's going to be a very long time (read: never) before Bank of America accepts bitcoins, though...

Offline nimzy88

  • Survivalist Mentor
  • *****
  • Posts: 383
  • Karma: 16
Re: Bitcoin currency (merged topics)
« Reply #92 on: April 06, 2013, 04:56:39 AM »
This was a concern by a few.  Bitcoin Hacked: Price Stumbles After Buying Frenzy

Quote
More than 80 percent of all bitcoin-USD trades and more than 70 percent of all bitcoin currency trades are done on Mt.Gox's servers, according to the company, making it a major target for anyone wanting to take down bitcoin trading, it said.

http://www.cnbc.com/id/100615508

THoughts from those who use often? I am guessing profit taking is crossing many peoples minds who got in at $40 and maybe looking for a bit more clarity into the vulnerabilities of bitcoin sites.

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #93 on: April 06, 2013, 12:27:54 PM »
There's no getting around the fact that Mt Gox is the weak spot in the bitcoin economy, at least at this point in time.  But, until you can go to the Atm at the corner store, it's the only game in town and will be vulnerable to attack from criminals and governments, alike.

Mt Gox has been attacked alot in the last month and it does make logging in and executing market trades difficult, but, since almost all my trades are preset to trigger at prices I scheduled in advance, I have not been adversely affected.  Mt Gox is to be commended for handling the attacks as well as they have, but that doesn't mean they're invulnerable, especially from governmental intrusion, which is why I try not to keep many bitcoin or dollars in my account between trades.

Offline kiteflyer

  • Survival Demonstrator
  • *******
  • Posts: 2022
  • Karma: 48
  • The more corrupt the state, the more it legislates
Re: Bitcoin currency (merged topics)
« Reply #94 on: April 06, 2013, 01:41:28 PM »


 Here's a little tidbit for Bitcoin!

       kiteflyer


   US Begins Regulating BitCoin, Will Apply "Money Laundering" Rules To Virtual Transactions

    http://www.zerohedge.com/news/2013-03-21/us-begins-regulating-bitcoin-will-consider-virtual-transactions-money-laundering

    The WSJ reports that, "the U.S. is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the Internet are being used to fund illicit activities. The move means that firms that issue or exchange the increasingly popular online cash will now be regulated in a similar manner as traditional money-order providers such as Western Union Co. They would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000. Moreover, firms that receive legal tender in exchange for online currencies or anyone conducting a transaction on someone else's behalf would be subject to new scrutiny, said proponents of Internet currencies.

Offline libertyzeal

  • Prepper
  • **
  • Posts: 72
  • Karma: 5
Re: Bitcoin currency (merged topics)
« Reply #95 on: April 06, 2013, 07:34:58 PM »
There's no getting around the fact that Mt Gox is the weak spot in the bitcoin economy, at least at this point in time.  But, until you can go to the Atm at the corner store, it's the only game in town and will be vulnerable to attack from criminals and governments, alike.

There are a lot of other exchanges, the just don't all have the trustworthiness and reputation that mtgox does (and that does count for a lot).  Recently I just signed up at BTC-e which is based in Russia.  I don't really trust Russians all that much, and my wife trusts them even less (and she is one!).  But we are going to Russia this summer to visit the in-laws and I was going to see how/easy hard it was to withdraw/convert bitcoins to rubles once I'm over there.

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #96 on: April 06, 2013, 08:35:29 PM »
There are a lot of other exchanges, the just don't all have the trustworthiness and reputation that mtgox does (and that does count for a lot). 

In the end, this whole bitcoin economy comes down to trust.  Good luck with the Russians!

Offline Otis

  • Prepper
  • **
  • Posts: 51
  • Karma: 1
Re: Bitcoin currency (merged topics)
« Reply #97 on: April 08, 2013, 06:52:42 PM »
Wow, BTC went up almost $50 from Friday.

Otis

Bonnieblue2A

  • Guest

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #99 on: April 09, 2013, 12:15:36 PM »
Wow, BTC went up almost $50 from Friday.

Otis

And it's gone up another $40 since last night, to $238, $200 more than the price a month ago.

Offline libertyzeal

  • Prepper
  • **
  • Posts: 72
  • Karma: 5
Re: Bitcoin currency (merged topics)
« Reply #100 on: April 09, 2013, 01:07:27 PM »
And it's gone up another $40 since last night, to $238, $200 more than the price a month ago.

The current market cap of bitcoin is still only 2.6 billion.  That is tiny for a currency (for some perspective, I think Apple's market cap is around 400 billion).  If bitcoin is "successful" and gains widespread adoption (and that's a big if), imagine bitcoin with a market cap at 100 billion (for a currency, i don't consider that unreasonable).  That would be a 38x increase above today's price (this should probably be adjusted for bitcoin inflation however).

Just speculating, I'm definitely not buying bitcoins at these prices (but I'm not selling the few I have either).




Offline BriGy86

  • Senior Survivalist
  • ****
  • Posts: 269
  • Karma: 10
  • Good news everyone!
Re: Bitcoin currency (merged topics)
« Reply #101 on: April 09, 2013, 03:31:26 PM »

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #102 on: April 09, 2013, 07:15:53 PM »
The current market cap of bitcoin is still only 2.6 billion.  That is tiny for a currency (for some perspective, I think Apple's market cap is around 400 billion).  If bitcoin is "successful" and gains widespread adoption (and that's a big if), imagine bitcoin with a market cap at 100 billion (for a currency, i don't consider that unreasonable).  That would be a 38x increase above today's price (this should probably be adjusted for bitcoin inflation however).

I agree, a $100 billion market cap is a fairly conservative estimate with global adoption (but certainly not a sure thing).  Projecting 17 million bitcoin by 2018, the price per coin is close to $6,000. 

As near as I can tell, the total platinum produced to this point is 9,500 tons, valued at over $400 billion, and gold is absolutely enormous, at around 160,000 tons, or $8 trillion.  Bitcoin taking even a small share of this market doesn't seem too far out there.


Just speculating, I'm definitely not buying bitcoins at these prices (but I'm not selling the few I have either).

Me, too. 

Offline pokeshell

  • Survivalist Mentor
  • *****
  • Posts: 385
  • Karma: 11
  • Against the assault of laughter nothing can stand.
Re: Bitcoin currency (merged topics)
« Reply #103 on: April 10, 2013, 01:06:39 AM »
I had a huge conversation with a friend for bit coin back last November. I had a bunch, and I took $1000 plus another $2000 of my own and invested. We purchased some items, and he was out. We got a poster overseas that was legal, but very hard to find.

I bumped mine up to about $5k at $25ish, and kinda forgot about it. I have had bit coin for years due to some online gambling(small change). I'd play in US currency, let it rid the bit coin market durring the week, and re buy (I was profiting 25-30 bucks a week this way). I would usually make more from the bitcoin than the poker. I purchased bitcoin when it was at $.75. About 2 years ago, I was able to cash out bit coin in Canada at a casino. From what I have read, this is no longer the case.

I cashed out or moved back to currency, 3 good chunks the last month. Need to talk to my tax guy about that.

I think I learnd about it initially from selling online characters for video games.

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #104 on: April 10, 2013, 06:40:34 PM »
Pop!!  Woosh!!  Up to $266, then crashed to $105 due to DDOS attacks on Mt Gox and several other exchanges.  Mt Gox executed my preset lowball buys on the way down without any major mishaps, besides not sending out the email confirmations on those executed below $175.  Back up to $170 now.  Glad I'm not running a business/household with btc, it's just too damn volatile to be used as a currency, at this point, anyways.

Offline libertyzeal

  • Prepper
  • **
  • Posts: 72
  • Karma: 5
Re: Bitcoin currency (merged topics)
« Reply #105 on: April 10, 2013, 07:05:01 PM »
Pop!!  Woosh!!  Up to $266, then crashed to $105 due to DDOS attacks on Mt Gox and several other exchanges.  Mt Gox executed my preset lowball buys on the way down without any major mishaps, besides not sending out the email confirmations on those executed below $175.  Back up to $170 now.  Glad I'm not running a business/household with btc, it's just too damn volatile to be used as a currency, at this point, anyways.

Yeah, the exchanges still seem way too fragile =( and things like this really shake peoples confidence in the entire system.  I put a small buy order in at $215 when it was still at $250+ which I considered lowball at the time.  Obviously it wasn't lowball enough!

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #106 on: April 10, 2013, 09:32:35 PM »
I put a small buy order in at $215 when it was still at $250+ which I considered lowball at the time.  Obviously it wasn't lowball enough!

I'm keeping some buy orders set for $100 and below, anything is possible, especially when it's this easy for hackers to pull off a flash-crash. 

Offline Prodigy

  • Survivalist Mentor
  • *****
  • Posts: 636
  • Karma: 41
  • Better to die on your feet than live on your knees
Re: Bitcoin currency (merged topics)
« Reply #107 on: April 11, 2013, 12:50:22 PM »
I thought I was somewhat well versed on this topic, but I have a question:

Why is there a panicked sell off every time MtGox has a major slow down?  Isn't it clear that time after time it's either major traffic they can't handle, or DDoS attacks?  What's causing people to do this?

Even worst case scenario, say MtGox goes under.  I get my bitcoins through another site, so I'm not sure about this, but aren't they just an exchange, or do they also hold bitcoins/wallets for people?  If they're just an exchange I don't get why everyone freaks out when they have a hiccup.  Yes, they are the biggest exchange that deals with 80% of the market, but I don't see how that would mean anywhere near the end for bitcoin.

Offline BriGy86

  • Senior Survivalist
  • ****
  • Posts: 269
  • Karma: 10
  • Good news everyone!
Re: Bitcoin currency (merged topics)
« Reply #108 on: April 11, 2013, 01:02:25 PM »
I thought I was somewhat well versed on this topic, but I have a question:

Why is there a panicked sell off every time MtGox has a major slow down?  Isn't it clear that time after time it's either major traffic they can't handle, or DDoS attacks?  What's causing people to do this?

Even worst case scenario, say MtGox goes under.  I get my bitcoins through another site, so I'm not sure about this, but aren't they just an exchange, or do they also hold bitcoins/wallets for people?  If they're just an exchange I don't get why everyone freaks out when they have a hiccup.  Yes, they are the biggest exchange that deals with 80% of the market, but I don't see how that would mean anywhere near the end for bitcoin.

I think it has to do with Auto sell options.  Here you can see a flash crash in 2011. Check around the 7:40 min. mark. "I hope no one had any limit orders, because they just took all your coins."
https://www.youtube.com/watch?v=T1X6qQt9ONg

I don't even own any but from what I gather;

With the price going down. People had rules set to sell their bitcoins if it got to 30, 20, 10 etc. What ever they personally set.  If someone can initiate a market downturn they can essentially force others to sell their bitcoins as those auto sell/limit order rules are hit (if those people have the options set.)  Once that's done, There's a flood of bitcoins up for sale in the market and you can buy them on the cheap.

Maybe FreeLancer can elaborate on his "orders" he mentioned he had set.

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #109 on: April 11, 2013, 02:17:14 PM »
With the price going down. People had rules set to sell their bitcoins if it got to 30, 20, 10 etc. What ever they personally set.  If someone can initiate a market downturn they can essentially force others to sell their bitcoins as those auto sell/limit order rules are hit (if those people have the options set.)  Once that's done, There's a flood of bitcoins up for sale in the market and you can buy them on the cheap.

Maybe FreeLancer can elaborate on his "orders" he mentioned he had set.

Yes, I guess the technical term for the preset orders I've mentioned is a limit order, which merely means that you designate a price in advance that you wish to either buy or sell at, and how many shares (or bitcoin, in this case) you want to transact.  I have never actively traded anything else before, so it's all new territory for me, too.  I participate in the stock market through (mostly index) mutual funds, I don't actively trade individual stocks, because the data shows that even the experts have a hard time beating the averages, so I'm sure not going to try.

With BTC, my goal isn't to make money in the short-term by trying to time the ups and downs, but rather the accumulation of wealth, betting on the likelihood of the scheme's long-term success as a unique store of value.  Therefore, my limit orders are all set to buy a few more coins as the price falls during these flash-crash scenarios, not sell in a panic due to fear.  I'm comfortable with this strategy because I only use dollars I can afford to lose.  I got in when the value was in the single digits, I've already recouped my initial investment and put those dollars back into my traditional accounts, and anything from here is gravy, which helps to lessen the chance that fear and greed will cloud my judgement.

There is (probably) nothing wrong with the nuts and bolts of how bitcoin works, but there is weakness regarding how it's integrated into the existing economy.  The exchanges are a huge vulnerability, and Mt. Gox is a target due to being the biggest game in town.  I believe Mt. Gox to be trustworthy, based on my experience, and I think they are doing the best they can to adapt as this economy wildly expands, but there will be exploits by the hacker crowd to manipulate the price to their advantage.  That's part of being on the bleeding edge of a crypto/anarchist currency, there are no referees or do-overs.  It's the wild, wild west, so you've got to be aware of the risks. 

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #110 on: April 11, 2013, 02:31:38 PM »
While I was typing the above, Mt. Gox suspended trading at $125 until 10pm eastern, hoping for a cool down.  The other exchanges are seeing the price fall into the $60 range.  It's a full-on panic.

Offline Prodigy

  • Survivalist Mentor
  • *****
  • Posts: 636
  • Karma: 41
  • Better to die on your feet than live on your knees
Re: Bitcoin currency (merged topics)
« Reply #111 on: April 11, 2013, 02:41:10 PM »
You both make a lot of sense.  So if I'm understanding this correctly, it can only take a small number of people to sell, which then triggers a bunch of auto sells that cascade into a crash?  And attackers or pure lag can cause that small number of people to panic and start the cascade?  Makes sense.  It's not ideal for a stable currency, of course, but this roller coaster has a while before it'll even out long term.


While I was typing the above, Mt. Gox suspended trading at $125 until 10pm eastern, hoping for a cool down.  The other exchanges are seeing the price fall into the $60 range.  It's a full-on panic.

Please keep your hands and feet inside the ride at all times...

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #112 on: April 11, 2013, 02:47:15 PM »
Please keep your hands and feet inside the ride at all times...

....and those with heart conditions or motion sickness are advised to not board!

Offline BriGy86

  • Senior Survivalist
  • ****
  • Posts: 269
  • Karma: 10
  • Good news everyone!
Re: Bitcoin currency (merged topics)
« Reply #113 on: April 11, 2013, 02:55:16 PM »
You both make a lot of sense.  So if I'm understanding this correctly, it can only take a small number of people to sell, which then triggers a bunch of auto sells that cascade into a crash?  And attackers or pure lag can cause that small number of people to panic and start the cascade?  Makes sense.  It's not ideal for a stable currency, of course, but this roller coaster has a while before it'll even out long term.


Please keep your hands and feet inside the ride at all times...

Another problem is too many coins in too few of hands.  people that got in early have more power to start this cascade than others.  And I believe there were a bunch bitcoins mined even before it went public.  (Million+ in the hands of maybe 10 people.)  I'm still looking for hard facts on that though.

The buy and sell options that FreeLance is talking about aren't all that different than stocks either.  I'm sure you could use those same options in stocks, and I'm sure people have gotten burned there too.  But Bitcoin is a smaller market.  And any larger than normal moves, have a compounding effect due to the size of the market in general.

Offline libertyzeal

  • Prepper
  • **
  • Posts: 72
  • Karma: 5
Re: Bitcoin currency (merged topics)
« Reply #114 on: April 11, 2013, 03:33:26 PM »
While I was typing the above, Mt. Gox suspended trading at $125 until 10pm eastern, hoping for a cool down.  The other exchanges are seeing the price fall into the $60 range.  It's a full-on panic.

I'm trying to buy some BTC on a different exchange to take advantage of the panic, unfortunately funding exchanges in a pinch seems to be difficult.  =(

Offline Cedar

  • ...just aDD water...
  • TSP Supreme Galactic Ant
  • ************
  • Posts: 28429
  • Karma: 1396
  • Dont wait for the storm to pass, dance in the rain
Re: Bitcoin currency (merged topics)
« Reply #115 on: April 11, 2013, 03:41:57 PM »
It is all fine and good to buy the bitcoins.. but on a practical side.. WHO do you do business with to use them?

Cedar

Offline BriGy86

  • Senior Survivalist
  • ****
  • Posts: 269
  • Karma: 10
  • Good news everyone!
Re: Bitcoin currency (merged topics)
« Reply #116 on: April 11, 2013, 04:00:20 PM »
It is all fine and good to buy the bitcoins.. but on a practical side.. WHO do you do business with to use them?

Cedar

I assume its mainly online merchants.
https://www.spendbitcoins.com/places/

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #117 on: April 11, 2013, 05:36:24 PM »
It is all fine and good to buy the bitcoins.. but on a practical side.. WHO do you do business with to use them?

I'm just a speculator, I won't be using them to buy anything until the price stabilizes and the economy surrounding it matures. 

Although, I would be comfortable doing face to face transactions with trusted parties and exchanging BTC via smartphone.  I'm actually doing this as an informal exchange for a small number of friends and family who want in on the action but don't want the hassle of buying coins online.

Offline FreeLancer

  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 5992
  • Karma: 771
Re: Bitcoin currency (merged topics)
« Reply #118 on: April 11, 2013, 08:20:22 PM »
Well....Mt. Gox opened 20 minutes ago and the price fell far enough that my buy orders at $100 and $70 have already executed.  One more left at $50 and then I'm out of dollars.

Offline pokeshell

  • Survivalist Mentor
  • *****
  • Posts: 385
  • Karma: 11
  • Against the assault of laughter nothing can stand.
Re: Bitcoin currency (merged topics)
« Reply #119 on: April 12, 2013, 12:12:45 AM »
It is all fine and good to buy the bitcoins.. but on a practical side.. WHO do you do business with to use them?

Cedar

For a long time it was "THE" way to fund your online poker accounts. I miss them days. Very easy fun money.