bump:

Real usage is low, converting large amounts to USD is not easy, miners are flirting with loss if the value drops too much, forks in the source (ie namecoin, ixcoin, solidcoin) divert $$ away from bitcoin. Seems like a downswong is in order. Any thoughts?

price has stayed relatively stable throughout mtgox, mybitcoin, and other scandals.
bitcoin.com could be cool, dwolla is back up on tradehill, mtgox point of sale unit has potential, getting $ on keeps getting easier. most miners are also coders who have incentive to keep btcs value high, they will keep designing good innovations using bitcoins.
long term looks good from here

Biggest thing holding the price up now was the anticipating of a conference. A lot of people buying thinking they will get press coverage and then everyone will want to buy after.

Looks like no one gave a crap about the conference, no press coverage, and back to the downswong. There are a lot of committed people who will keep buying, but the trend will keep going down long term.

yeah the conference talk was good bs. Seems fairly obv when everyone thinks one thing is going to happen the opposite occurs. Amazing to think of the money that has been dumped into this and a lot of people are getting fleeced

Bumping this thread for TomCollins, great call. We are seeing bitcoins in the $6 range even as gold goes gang busters.

I think it's most likely a short term overreaction due to bank money getting locked up over the holiday weekend, although I haven't been following developments too much to see what else is going on.

I'm tempted to buy some again just so I can play poker, play is so awful. But even if I double up my roll I could come out behind when it drips lower and lower.

I'll sell you a few hundred dollars worth of end of OCT $7 put options. To be clear, for a small fee I'll promise to buy your coins for $7 if you want to sell them at that price at that time. Say 5%, payable in coin, upfront?

Paul Krugman said this today about Bitcoins:



"Over the past few months a number of people have asked what I think of Bitcoin, an attempt to create a sort of private cybercurrency. Now Alexander Kowalski at Bloomberg News directs me to this Jim Surowiecki article on Bitcoin, which is very interesting.

My first reaction to Bitcoin was to say, what’s new? We have lots of ways of making payments electronically; in fact, a lot of the conventional monetary system is already virtual, relying on digital accounting rather than green pieces of paper. But it turns out that there is a difference: Bitcoin, rather than fixing the value of the virtual currency in terms of those green pieces of paper, fixes the total quantity of cybercurrency instead, and lets its dollar value float. In effect, Bitcoin has created its own private gold standard world, in which the money supply is fixed rather than subject to increase via the printing press.

So how’s it going? The dollar value of that cybercurrency has fluctuated sharply, but overall it has soared. So buying into Bitcoin has, at least so far, been a good investment.

But does that make the experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.

Bear in mind that dollar prices have been relatively stable over the past few years – yes, some deflation in 2008-2009, then some inflation as commodity prices rebounded, but overall consumer prices are only slightly higher than they were three years ago. What that means is that if you measure prices in Bitcoins, they have plunged; the Bitcoin economy has in effect experienced massive deflation.

And because of that, there has been an incentive to hoard the virtual currency rather than spending it. The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply.

So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression."

Hoarding causes deflation! But deflation does not cause depression! Deflation causes real gdp growth. What causes recessions and depressions, every one of them is fractional reserve lending and banking. If you have $10,000 in the bank in hopes of buying a car someday, and of the car drops to $9,000, you can now buy the car.

As for bitcoin, the problem is 100% the cause of the size of the block chain. It is too big and it is hard to get new people into bitcoin. Thus, many new cryptocurrencies are starting and they have the advantage of some improvements and a small fast chain. So bitcoin is a mess, but it still works.

For me it now costs more in electricity to mine, so my miners are off. I pay $0.16 per kilowatt hour. But I am happy because deregulated power in Texas only costs $0.05 and liberty will win.

So if Richard Trumka want Obama to spend more, they can send me a check for $1 million, and I will be happy to buy a couple american made SUVs so their union buddies can work for me. I will give them a job with the money. They can even come over and paint my house and wash the dishes while they are at it. Putting America back to work.

Bitcoin is nowhere close to being a natural experiment in monetary economics and Krugman gets so much completely wrong. Does this guy ever do even a pinch of research when he goes off on a topic? Bitcoin is not a deflationary currency as of yet so if there are any lessons to be drawn from it then they apply to inflationary currencies. Why is bitcoin so volatile? Because of speculators drawn to the inflationary currency and lack of security measures. Depending on expectations on which of these dominates the currency is going to swing back in forth, in exactly the same way as global fiat currencies do.

Just remember this - it applies almost universally. So don't bother with any of his arguments.

Bitcoin was DESIGNED to be a "deflationary currency"...
In fact, it was DESIGNED to create a "deflationary spiral"...
In order to enrich the creators and early adopters...
That's why is totally sleazy at best.

Bitcoin is basically a toy currency...
As would be anything based on gold...
21st century finance is waaaay too sophisticated...
To use Stone Age currency theories.

The internet economy where Bitcoin operates...
People selling t-shirts, drugs, odds and ends...
Is a de facto Stone Age economy.

Uh, it's like the size of a movie and I've downloaded it a few hours like 5 times.

What's ridiculous is how much $100k in small bills weighs.

Still offering this one Alberto?

I'll do 50BTC worth it at that price for anyone (er, lets say up to 10 people) who wants to play at my site. But for $7 puts to the public at the moment I'll do 15%, up to 200BTC, quote expires soon, variance, blah.

Anybody here want to trade bitcoins for tulips? I have some real dutch beauts.

Anyone know what happened to the bitcoin forum? It doesn't seem to work. Was curious what might be behind this crash or at least troll the bag holders some.

Hacked. Of course...

http://www.btcnn.com/2011/09/bitcoin...ked-by-sa.html

and the drama story continues.

Wonder if part of solidcoin vs. bitcoin feud, big government vs. bitcoin, or gold bugs vs. bitcoin.

I am sympathetic to Bitcoin-type currencies, I really am. But this is ****ing amateur hour **** here. ****ing embarrassing.

Yeah, but what would be awesome is if the admin was like screw this cesspool. Ima Cosby it up and dump it.

In before Cosby coins are replaced by Uncle Jesse dollars.

are you guys selling now, or are you praying for a bitcoin-upswing?

People bought over 200k coins on just mtgox at these prices, so I'm guessing there's expectations and prayers.

silver and gold are up only like 30% for the year, bitcoin is up 500%. Not selling, not praying, just watching the show and hoping bitcoin will become profitable again but due the public sector unions electricity is 3x more expensive in Los Angeles than unregulated parts of Texas.

I am not worried about a website going this is like bugs bunny vs. the world everybody is attempting to destroy bitcoin.

But, I think a flaw has been exposed in bitcoin, ixcoin is going to be changing parts of their code to change the difficulty algorithm. Also, on the bitcoin show they were talking about changing the code to allow old coins to be re-mined. Then I heard something will be "hard-coded" to 21 million ixcoin. What all this means is the code of bitcoin can be changed if you gain 1/2 of the network or even less, if you just change the code and the small group of coders agrees. What if the government got control of the coders?

The reality is the rules can be changed. Thus you might have decentralized blocks, but the software can be changed and is centralized and usually controlled by a dictator. Many times mob rule is not good, just look at the national debt.