Bitcoin thread anyone?

The same here. The whole concept is actually rather complicated, because one needs to understand and know (at least on a basic level):
IT, math, psychology, history and finance. Most people don't, specially the usually younger people who makes up most of the bitcoin fans.

Sure the algorithm is clever, the security is there, but the creators forgot about history and psychology. After all we are human... Original distribution was bad (meaning very concentrated) and they didn't count on that its sudden popularity can actually kill the concept by eventually scaring people away from it because its high volatility.

A highly volatile, scarce, concentrated and hoarded (not circulated) money can not function as currency. End of story...

And actually there are design problems in the system. Monetary-wise, it is badly designed. Here is a good article explaining some of the faults:

http://www.slate.com/articles/news_...heme_the_internet_currency_will_collapse.html

"Felix Salmon and many others have pointed out that a currency cannot succeed with a supply that is fixed, or if it grows too slowly. A currency is used to enter transactions; the more transactions there are, the more of the money you need. As the economy grows, a fixed-supply currency becomes worth more in terms of goods and services, and people begin to hoard it—expecting that if they wait a little longer, they will be able to buy more. Once hoarding takes over, circulation ends, and with it the function of the currency. Hoarding accounts for the large increase in the value of bitcoins; hoarding also sank Krugman’s baby-sitting scrip."

Here is my long term prediction. BTC will go the way of the penny stock. After the next real big crash, people will get burnt so badly, that they will stay away from the coins and there will be newer and better systems. The faithful still will buy and hoard it and it will trade at 5 cents level with an occasional quick runup, because people will remember the days when it sold over $200 per coin...

 

The Winklevosses (of early Facebook fame) are bitcoin millionaires and still buying:


http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-bitcoin-gets-ready-for-its-close-up/

" The brothers said they took advantage of the low prices to buy more.
“It has been four years and it has yet to be discredited as a viable alternative to fiat currency,” Tyler Winklevoss said. “We could be totally wrong, but we are curious to see this play out a lot more.”"

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"A Maltese company, Exante, started a hedge fund that the company says has bought up about 82,000 bitcoins — or about $10 million as of Thursday — with money from wealthy investors. A founder of the fund, Anatoli Knyazev, said his main concern was hackers and government regulators, who have so far mostly left the currency alone."

 

130 at bitfloor, the easiest 100% gain you ever made in a day!

It is a new paradigm shift or swinefart or whatever... If it is good enough for the Winklevii, it is good for me too.

 

The freaking ladder is showing an average size of like 3 BTC.

Bitfloor: On September 4, 2012 the operator of BitFloor reported a security breach that resulted in the exchange's wallet with 24K BTC being stolen. The site was shuttered and access to customer funds denied as the exchange's reserves were insufficient to accommodate all funds deposited. As of March 8, 2013, 3 months had passed since the last repayment (December 2012), and the operator had been unresponsive.

 

If every dollar was converted into bitcoins at an ever increasing rate, what would you wind up with?

300 million idiot bagholders.

Think about it.

 

u can stop wondering Mark

 

According to the article, its an unusual coalition of the awake who are bitcoin true believers:

"... Given this, why all the enthusiasm for bitcoin? Partly, the technological ingenuity of the scheme.... But more fundamentally, bitcoin unites futuristic left-wing Internet anarchism—the fantasy that the Web can provide the conditions for a governmentless society—with the cave-dwelling right-wing libertarianism of goldbugs who think a stable money supply can be established without government involvement. It is proof for both that government is not needed for much, or at all...." (kinda like occupy+tea party)

 

haha. Well, BTC managed to live another day. Weak hands to strong hands, and all that...

I think the intrinsic value argument doesn't hold much water. Where's the intrinsic value in paper? Fiat proves worthless symbols can work as money, so long as we all agree on it's value. One is backed by Government law, and the other, anonymity and transferability. Arguably, this crash is the best thing that could have happened, given the circumstances. Once prices stabilize, more vendors adopt it as an alternative currency. Either way, I say let the good times roll.

 

The issuers of fiat have guns for starters. At the end of the day that plays a very important role in tax collection and trust of a currency

 

Sure, sure. But that's not intrinsic value...