can't stop feeding the troll, but so be it.

As I said a long time ago itt: If you can't see the usefulness of secure, fast, frictionless, anonymous international transfers that don't require a 3rd party bank, corporate entity, processor, or govt to be involved - then you truly are hopeless. On a poker forum no less. Wow, just wow.

Not sure about the US, but in Europe the BTC would be easier. I can send a transfer to Mt Gox from my bank and buy bitcoin. Exactly the same for the stocks except the broker will make me prove my identity first. That's assuming you don't have an account with either.

I'm not taking sides in your argument as frankly I'm not too sure what you're arguing about.

I see it as *potentially useful*, not useful right now. There's a big difference. Potential is all great, and the source of the speculation, but potential doesn't pay the bills. The key is figuring out how it will make that jump. The people involved (and have incentives to cross this bridge, making their investments super valuable) give me no hope. They are either geeks or gamers, not businessmen. There is no common sense, no one who knows how to build that up. The only possible business with enough resources and need for this would be overseas gambling. That's what I would bet on if anything, although it's not one that's anything close to certain.

As far as all of the other benefits, those are flaws to a lot of people. If this ever takes off, it will be a scam artists dream come true. Not having a bank or anyone who actually knows what they are doing control your wallet is a huge flaw for mainstream adoption. You need to be a computer expert to keep your wallet secure. Having someone resolve disputes is possible on BTC, but it's not like those sites have any track record of reliability. Governments will label this as a currency for child pornographers and terrorists.

There are a huge set of hurdles in place. I definitely could see speculating at $.70 or lower. At $5, it's becoming very unattractive as a gamble unless I had inside knowledge of some major gambling company both expanding exchange sites and starting to use it.

I'm more of a realist. Fighting both the true believers and the haters.

Europe it's definitely easier, until they crack down (if they do). In the US, if I want BTC, I either wire the money to mtgox and pay huge fees in the process, or I find some person to meet up with, hand him a bunch of cash, and hope he doesn't screw or rob me.

just fyi, in the US, you can fund MtGox with a Dwolla transfer. Sure, it may be a slight hassle to set up a Dwolla account, and then 2 days for them to make an ACH pull from your bank. But not exactly "wire and pay huge fees".

total fees: 25 cents per transfer.

Ah, this is new. It will be interesting to see how long before Dwolla shuts it down, but this is a good alternative.

haha, something we can agree on. I expect Dwolla to shut it down eventually, too. It took Paypal months to wake up, we'll see about Dwolla. They can't really claim ignorance though, they refer to Bitcoins in their FAQ!

ahh there goes $5...good times.

They might be able to keep from being shut down, it would be interesting seeing their Terms and Conditions. This is actually a pretty solid approach, of having Dwolla just transfer money to mtgox, then you actually buy stuff with it on mtgox.

This is going to be a crazy ride. It really is like trying to drive a car with enough speed to make a jump, though. Gotta get going fast enough to get enough air. Maybe it gets there. There's a ton of uncertainty, but that's where profit is to be made, right?

I'm a true believer. I keep selling small amounts because I think surely it'll drop and I'll pick some more up 10-20% cheaper, hasn't really worked out yet. But if there is a collapse I'll be there to support.

It's not true that my coins might as well not exist. My grip will be loosened considerably when I'm offered a house for a few. I'll still have 3 coins when they hit 1M, but how am I going to turn down selling some at $1000 each? Everyone has a price(s). They aren't at the right long term price at all. I could easily see people wanting to hold more than 10x the current 'market cap' just to play poker with once there are a few good sites. An unregulated instant deposit instant payout intrade? Come on. There is so much potential for win here it's ridiculous.

I'm working on a way to get some bitcoin income while I wait to play bitcoin poker.

$5.49 now. I really should have bought more at 6 cents when there were 11 people interested in this thing.

I bought 50 BTC at $2.2. Wish I would have bought more

Do you really think it's appropriate to characterize the entire userbase based on a few tards on a message board?

There can't be too many actual uses of these things outside of that message board and illegal stuff.

Yeah, that would be impossible.

I am talking about at this point in time. Down the road, bitcoin could find a number of significant uses.

Oh, yeah, I think most activity that isn't totally boring gets put there in a general way. Like I met a guy through btcnearme.com who I never talked to on the forum and he says he doesn't post there. But we both very likely found btcnearme.com from the forum.

I don't know why someone doing anything remotely interesting and legal wouldn't put a post about it on the forum. It's free advertising and buzz for your thing. So it's a good place to get an idea of what's new. But all the specific tiny activities aren't visible there obviously.

<insert quote of .70 guy>

Will be tedious to keep quoting that, but seriously. It appears that 90% of the haters are primarily bitter because they did not buy any earlier..."Oh my god, it's at $1.40, I missed the boat from .70, fml. I can't pay that much". Another guy sees it at 2.50 - 'Wow, I really missed the boat on this, it can't possibly be a good value if it has already doubled recently!" - obv people are saying the same thing now above $5.5, I almost feel bad for them. Almost.

The Dwolla connection is allowing a LOT more people to fund mtgox fast. ~10 minutes I have been told (from Dwolla funds, not bank). That is a lot of fresh demand coming online that will quickly eat up the existing supply, and with the higher difficulty and coins split up between far more people these days in mining pools, you can't expect the ~7200 new coins daily to be sent to the exchange and sold.

As far as actual utility, check the Trade wiki. New merchants are popping up all the time. The old refrain, 'well I can't buy food with it!' - well check out http://bitmunchies.com/ - sure things are pricey in USD terms, but competition will bring that down.

Dwolla is absolutely huge. The higher difficulty means dick, as there are always 7200 coins generated per day.

Most merchants that sell in BTC are attractive to small time miners who would normally sell some of their profits (but that's difficult or expensive for people not big enough to get direct deposits from mtgox - unless they do dwolla now as well), but no one is going to buy BTC to buy food or something, unless there's a big discount. But, in things like gambling, where funding using traditional means is a huge pain in the ass, buying BTC to gamble with makes a great deal of sense. The rest of the purchasing is speculation.

Purchasing is a gamble. Nothing wrong with that. But it's a gamble that either more people are coming and you sell higher, or it's a gamble that the economy grows into something where people either *need* to use BTC, or have a great advantage in using them. This really feels like "holy ****, I better get some while I can!", and it's a pretty limited marketplace for trading coins (mtgox has very few sellers right now until you hit $9/BTC). There is so much hoarding right now, that if that ever stops, it's going to be a huge mess. I hope the hoarders are committed, though. Hoarding really is just shrinking the supply, so that's jacking up the price considerably for anyone wanting to enter. If that huge stash of coins ever comes free, it will be ugly.

Trying to judge the psychology of it, most people who got those coins got them when they were dirt cheap. So even if the value drops to $3 or $1.50 or even $.25, they still came out ahead from where they initially were, so they won't be as panicking to sell. People tend to panic when they have an actual loss. If you mined when they were worth 4 cents each (or even nothing), then going from $10,000 in imaginary money to $10 in imaginary money isn't that catastrophic. A trader who put $10,000 in, and sees the price cut in half might get scared and dump, but it seems like that's a lot less of the total number of BTC, so a collapse might not be as bad as a lot of bubbles popping.

Still room for upside, especially with how few people are involved, how little is being sold, how easy it is to fund now, and the potential uses.

Of course I am kicking myself for not putting more in at $.70, although I did put in the max Coinpal would let me at the time and just lost it gambling I set up a bank account special for ACH deposits, then my computer crashed, so I've been dealing with that rather than transfering money to mtgox. Of course it goes on a huge run in that time.

There's enough people willing to buy on dips now that I don't think a crash is likely to happen any time soon. I'm trying to figure out actual fundamental valuations based on various scenarios, and then trying to weight the liklihood before I put anything more than gambling money into it.

I'd love to see this take off and don't want to be blinded by what I want and what actually will happen, though.

In fact when difficulty rises it usually doesn't do it enough because the actually hashing power at the end of a period was higher than the average. So a difficulty increase often means more that 7200 coins/day for a while longer.


Hoards ought not come out all at once unless it's as a symptom of a problem (probably technical imo). I agree with the psych assessment, but would add than investors that tripled 10k in a week, might decide to buy more on a pullback too.


I'd love to see your guesses at the probability of various scenarios. I think I have a good idea of possible equilibriums, but not their likelihoods. They are zero, way higher than here because it becomes de facto grey and black market currency plus some internet applications or way way higher because it becomes the one true money of Earth.

Yeah, my probabilities will be wild ass guesses (which is better than being hopeful!). I'd like to try to estimate what "way higher" means as well. I think there's also a lot middle ground between "de-facto currency for grey and black markets"- there's still a niche currency non-zero value where people use it as a form of protest and enjoy using it, there's becoming the standard for one area of grey/black markets, etc... There's also the idea that a technologically savvy country that has a currency collapse starts using it out of necessity. That's a tricky one, since people will use whatever is easily available to them and known, so that would be hard to think would happen even if currency collapse is likely somewhere where they have smart phones.

These are back of the napkin type estimates, but I figure the following:

Rival gold in terms of monetary influence: 1 in 1 million. Value- there are 10 billion ounces of gold that have been mined. If it has an equal value of gold, then 1 ounce of gold would be about .0021 BTC, meaning 1 BTC = $714285.

Black market standard: 1 in 100,000. I think this is not as likely as you might think, since black market transactions are typically face to face, and why not use cash? There is a niche of black/grey market that is not in person, and that's a different category. Value: Say 10% of the GDP is black market. The world GDP is $58T. So we'll call it $5.8T. Say half of those transactions use Bitcoins. So that's $2.9T. We need to measure velocity, and I really am reaching here. I have no idea, but I'll call it 52 times it gets exchanges per year. That might be a bit high but I'm trying to be conservative. So that's $55B. That gives a value of $2655/BTC.

Niche Grey Market: 1 in 100 for 1% of market, 1 in 1000 for 10%. Using the same numbers from before, it comes down to $26.55 and $265.5. There is an interesting part where anything that holds bitcoins in reserves (gambling is huge here), means velocity slows tremendously and the value goes up. I think gambling is the most likely niche (I guess I'm biased) where it could take off. So I'll call it closer to $75 for the 1 in 100 case, and $300 for the 1 in 1000 case.

Small time economy use (geeks, gamers, anarchists, etc...). I think this already exists and is likely to continue for a while. I'll say it's about even money (conservative) to still be used in 10 years by these folks. To estimate value, I'll say that there are two classes of users, small time casual users (90%), and bigger time ones (9%), the huge ones (.9%), and the super huge ones (.1%). The 90% will have on average of $100 in BTC, an the bigger ones $1000, the huge ones $10,000, and the super huge at $100,000. I'll say a user base of 100,000. 9,000,000 + 9,000,000 + 9,000,000 + 10,000,000 = $37M. Value of $1.76/BTC. My numbers here are very rough, and changing a few things could change the valuation a lot. Also, in 5 years, there won't be 21M bitcoins, so let's call it $4 to be safe.

Then the rest of the time, it fails and is nearly worthless. I'll be conservative and say half the time it fails.

So EV is $.71 + .03 + .75 + .3 + 2 = $3.79. I think that's a baseline, and I'm being fairly pessimistic and conservative in my estimates. And these are very rough. True value based on what we know now probably in the $5-10, which is surprisingly close to where it's valued now.

This is super rough, so tell me where I'm wrong.


Also mad I set up a bank account with ACH pushes specifically for mtgox, and they get rid of that feature. I can do Dwolla now, but that will take 2 days to set up, and however long they take to send to mtgox.

If anyone has mtgox money and wants to send some my way for a dwolla payment or mtgox money by next week (whenever it gets resolved), or even a direct ACH payment (I put money into your bank account, it takes 2 days), I'll pay a slight premium. If my reputation is decent, but I have been out of poker a while so I don't have a huge amount of transactions with my reputation.

So basing it on 15 million BTC rather than 21M, that should alter it by a factor of 1.4, meaning I should have a value of $5.306. Last trade on mtgox $5.30. Guess I am a valuation expert.

We're a lot closer to 'niche grey market' than you would think. And Small time use will only continue to rise, unless the network collapses.

These are useless without a timeframe, so i'll say end of 2011.

0$/btc: 20%. Includes Bitcoin^2 taking off, effective multi-national crackdown, crypto flaw found/exploited. Network technical failure by far the most likely. Governments are slow. Look how many years it took them to shut down epoker. Almost 0 chance of 'effective' govt regulation this year.

10$/btc: 30%. Economy stalls at current levels. Mining still profitable, difficulty continues to rise. Black market never takes off beyond current levels. Niche usage continues. Still completely under mainstream radar.

25$/btc: 35%. Growth slows but adoption continues. Continuous press and niche growth, but no new major press hits. the cycle of new demand/increased difficulty/prices rises continues, but at a slower pace. Recognition improves but still unknown to 99% of public.

50$/btc: 9%. Strong growth continues. Continued press hits. More local exchange, more merchants, viable Western Union alternative where local exchanges are active. Cocktail party discussion in certain circles.

100$/btc: 4%. Massive interest/press hits. Positive Wall Street Journal article. Multiple local/global exchange combinations allowing fiat/btc trade with a centralized order book API. Fox News panders about child porn and terrorist funding.

200$/btc: 1.5%. Adopted by major retailers or top 5 gambling site

500$+/btc: .5%. De facto accetped intl money transfer service alongside existing services. buy/sell currency exchange in intl airports, check cashing stores, banks (prob not US, but everywhere else)

I think trying to differentiate between .01 and .0001 chances of certain results of complex interactions between governments, entrepreneurs and regular folk is kind of futile.

Wow, you two with your estimates make me feel like a crazy person. fizz not as much, mostly I think the valuations compared to scenarios are low.

I'm not using an exact time frame, but wherever it's going it's going quickly. The more outrageous will take longer, but these are the possible equilibriums imo.

Total technical fail: 30%
Coins are worth zero because they can't move or because forgeries are possible or double spends are easy and common due to some unfixable bug.

I'm going to ignore Bitcoin^2 possibility because I can tell a good boat when I see it and if I have to switch to that one I can do it before most anyway.

Political fail: 10%
Government goes crazy and shuts down the net or kills/imprisons/tortures lots of people for using Bitcoin. Coins might have value, but it not very much and it sucks because there is no internet to buy things on.

Staying right where it is: 0%
Just not going to happen. So many people involved are building and creating Bitcoin based projects and new people are catching the bug every day. There is no pausing here.

Minor success: 20%
Solid use online and in black markets. Poker and gambling are major uses. Little use IRL.
Total value in coins around $1B. Per coin about $50

Major success: 35%
Trades with regular currencies everywhere currencies are traded. Anyone who wants to live denominated in Bitcoin can do it. Wages, rent, food are all available in Bitcoin in many places around the world.
Total value $100B. Per coin about $5k

World domination: 5%
In ten years people will have trouble understanding how we though paper could hold value. There is still something we call governments, but they really just handle administrative functions for people who want them to. Bitcoin is synonymous with money everywhere.
Value will be north of the value of all world currencies today divided by 20M. This is over $1M/coin. It could be multiples higher because it makes a lot more sense to err on the side of liquidity when you have a guarantee of no increase in the monetary base.

The last scenario swamps my valuation. $50k. Okay, now call me crazy.

I will buy OOTM options from you fools though. I'll start the negotiations at $10 strike in 3 months for 6% up front.

I'm pretty bullish on BTC, but a 5% chance of "world domination" seems a little tin foil hat.

I wear the hat for safety, man. If there end up not being major technical problems with bitcoin (and I have no reason to think there are, I just can't check for myself) then it blows all other currencies away in every way that matters. The main issue would be bootstrapping from no value and it's already over that hump.

There is probably a fight coming, I'd guess it'll be mostly PR, but that could be pretty damaging. If I'm out of touch here it's that I wrongly think regular people are ready to give the third finger to government and won't care what they say about this.