not really; we got rice, soybeans, coffee, etc traded as commodity...

You misspelled utility.

I hate to drag semantics into it, but I don't think the two of you are using the word "speculate" in the same way at all.

Where this matters is if people are buying bitcoins to spend them (or earning them or whatever), that will increase velocity and give more liquidity in the market and stabilize against violent swings.

lol so true.

This is how bitcoin works. It's 100% pure speculation. It's only priced at what it's currently valued based on how many people are interested in it. People are looking at litecoin now as a backup for these downswings in BTC. I am currently in the process and buying quite a few litecoins myself. Who knows what will happen with either currency.

Wait, you are like the biggest skeptic on this thread and you're buying LTC as a hedge against BTC????? This is crazy on several levels.

mtgox is 191, bitstamp 180, bitfloor 200. is that remotely correct atm?

Skeptic of what though? IF BTC has a major crash, LTC could be an alternative that people will buy up, therefor driving up the price. Might as well grab a few now while they are cheap and hold on for the ride..if it ever comes.

I think the whole reason why Bitpay and others have been growing so quickly is because it is a zero risk proposition for the companies involved. The companies aren't interested in holding the BTC, just accessing the market of people who like to use them.

Yeah, bitcoin has some advantages, but it isn't a proper currency. The thing is, it has a problem with stability. It will be stable and then maybe it looks like a good currency ready for widespread adoption, but then we get these massive bubbles and now it looks like not very predictable and people won't want to use it. I don't see any way to overcome this problem.

Any links for a real time graph?

Having increased liquidity and options markets might smooth things out tremendously.

Yes

Yes I understand..

Maybe there is a situation where the BTC are stable and people decide to buy them in order to spend. So speculators see that more people are buying to spend, so they buy until they raise the price. The folks who are buying to spend will have a very inelastic demand in the short term, because they are just using the BTC as a proxy currency and the price doesn't matter. In this case the people who have inelastic demand will lead others to make decisions that could lead to instability and violent swings.

good god, somebody just made a ****load of money off that dip and rise. unfortunately, it was not me. i have no idea where it will settle at, but it went from 266 to 105 and back up to 195. this is the most violent swing that i have seen in my short time watching btc. apparently there is a ton of lag too, so 195 might not even be right. btw, this is why i thought setting a certain level to sell-off at is stupid. if you are getting into btc, you should really be thinking long-term. if you think the price is too high, don't buy. also, be prepared to lose if it doesn't work out. its the same as playing poker. don't buy into a 1k buyin game if you can't afford it. it will cause you to play even worse than normal, and likely lead to bad results.

I understand your point about stability and support it, but have a bit more optimistic view about the future. When enough cash is displaced from the "real-world" the price should stabilize. If everyone on this planet who doesnt believe in some way in the fiat currency/banks/goverments moves to BTC, there will much more liquidity, many exchanges, much more people and etc and less fluctuations in prize. If there are as much BTC exchanges as email providers around the world, would anyone care/notice if some of them is down?

Of course until such utopia day, the market is susceptible to manipulations.

thank you for cliff notes

Only thing that matters is that there's no bug in the bitcoin protocol.

That's pretty much what just happened in the last 3 months. Legitimate inelastic demand increased, blind speculators wanted to ride the train, drove the bubble. Predicting the peak is so tough because you have no clue how many blind speculators are left to come in.

Speculators who are rationally looking at long term potential will also help stabilize things by raising the price by reducing supply of coins in the present (when they aren't needed as much) and moving them to the future (by holding). We already have quite a lot of that in early adopters who believe this has huge potential and will hoard considerably and only release small amounts at a time.

Aha, here is where you and I differ. I don't think that the large holders will be looking to do this slowly. If they all offload their coins at a slow place, as a whole ,that is what would be best for them. The point that I think you might not have considered is that individuals will be able to make more by dumping them very quickly.

After that my thought is that speculators will want to book a profit because they will be risk-averse (http://en.wikipedia.org/wiki/Prospect_theory). For example if they bought at 100 dollars, they will sell somewhere slightly above 100, because they are averse to taking a loss. So my prediction is that the price will fall to 50 bucks or less in the timeframe of less than a month. Your prediction I was reading looked about the same except you thought it would decrease by 1% a day or so for a longer period of time.

Looks like they are rebounding now, crazy day. Well maybe we are both wrong and they go to $1000 dollars!

Try telling that to the people who just bought at $260 and lost their ass.

The market is not talk, every movement in the price is backed up by actual money changing hands. Whereas when you make these claims like "I expect $50/coin", "BTC is not a 'proper currency'", "bitcoins are worthless", it is backed up by nothing. You are just freerolling: if bitcoin crashes, you pat yourself on the back; and if it gains widespread adoption you shrug your shoulders.

No one knows the future, but people that are buying into bitcoin to hold are betting that it does gain in use and popularity, and those people put their money where their mouth is.

Every time someone trades bitcoins for dollars, someone else on the other side of the transaction is trading dollars for bitcoins. That buyer would not have bought the bitcoins if they were worthless. So it's false to say that "because all transactions end in dollars, bitcoins are worthless." The fact that a transaction in bitcoin even occurred in the first place proves otherwise.

Now, as mentioned, bitcoin may one day be worthless. But even though the future is uncertain, there are strong reasons to suspect that bitcoin may gain widespread adoption.

• Timing. This technology comes at the precipice of confidence in the market and in particular sovereign debt. Between talk of QE in America, Greece, Cyprus, eurozone failures etc. people are concerned about inflationary policies or worse. Also, before there was no real secondary options -- for example to trade silver with people would be cumbersome at best and not an improvement over the status quo.
  
  
• Convenient, cheap, worldwide transactions. Between paypal, western union, money exchangers, even bank wires etc., all of these are big business. There is a huge market for sending money to people worldwide. This makes so many middlemen obsolete. Even if we are just talking about micro transactions -- say for example a bitcoin card or phone app with a small amount of money on it that you use for day to day expenses. You or anyone (your employer, friends/family etc.) can add money to the card, from anywhere in the world at any time. Then you can use this card anywhere where BTC is accepted seamlessly. This is extremely useful, and the cost of such technologies is basically nil. Compare this to a credit card.
  
  
• Ideal for merchants. Basically any merchant can now use BTC in an ideal way - no fees, no chargebacks or claims of that nature, no verifying identities, no real paper trail. This can easily make VISA/MC obsolete which is a tremendous business. It is already ridiculously easy for businesses to accept BTC today, for example using BitPay. Because transactions in BTC are cheaper, and the initial cost to start accepting them is almost nothing, you can expect eventual widespread adoption.

Basically you can see for every case of general business conducted, BTC wins. That's what people mean when they speak of strong fundamentals.

This list doesn't even get into more esoteric advantages of bitcoin -- credit networks, assurance contracts, escrow, third party arbitration, etc. That being said, there are potential fatal flaws of bitcoin, I don't care to discuss them here though. But basically as long as there are no fatal flaws, its full steam ahead.

think we will see 125 again today

41% loss of value in one day is a nightmare.

Only 100%?

What % would you give to ltc?