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How To Use Bitcoin – The Most Important Creation In The History Of Man

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pantsorama said:
OK. But that's disingenuous, because we were originally talking about the risks of exchanges.

Also it assumes you can move money through them at will, which did not happen at Mt Gox at least.
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AFAIK, you can't move money through any exchange at will, at least not as "at will" is ordinarily defined. There are transaction limits and mandatory waits for withdrawals and so on; you can't just put your 1,000 BTC into an exchange and then turn around and withdraw your $450,000. The entire BTC system appears to be very thinly capitalized; for all the talk about the billions in "market cap", I doubt there's as much as $5 million in fiat in all of the exchanges combined.
 
pantsorama said:
OK. But that's disingenuous, because we were originally talking about the risks of exchanges.
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Now you are being disingenuous. The question was how you could distinguish "scam" from "non-scam" exchanges and you can't. The best you can do is take steps to minimize the risks from dealing with exchanges.

pantsorama said:
Also it assumes you can move money through them at will, which did not happen at Mt Gox at least.
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Nobody ever suggested any such thing. It has always been known that there are limits to how much you can move through an exchange at any one time.
 
jhunter1163 said:
AFAIK, you can't move money through any exchange at will, at least not as "at will" is ordinarily defined. There are transaction limits and mandatory waits for withdrawals and so on;
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That's true, afaik, for all exchanges, not just bitcoin. Come to think of it, you can't really do anything "at will", at least not as "at will" is ordinarily defined.
 
Which brings us back to square one. If there is no way to control how long you are exposed to an exchange and you can not effectively evaluate an exchange then BTC has a risk evaluation problem. Until such time as it captures enough mkt share that there is minimal need to exchange to other currencies.
 
pantsorama said:
Which brings us back to square one. If there is no way to control how long you are exposed to an exchange and you can not effectively evaluate an exchange then BTC has a risk evaluation problem. Until such time as it captures enough mkt share that there is minimal need to exchange to other currencies.
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There are three reasons to use an exchange: 1) to sell BTC, 2) to buy BTC, 3) to speculate on the market. If someone is doing option one or two they can easily minimize exchange risk by not keeping a balance on the exchange. Exchanges do get audited now and then and many are more transparent about how the business is run so there are some ways to evaluate risk. I'm guessing the day traders generally go where they think they can make the most money though, since people doing this activity are not exactly risk averse.
 
As we creep up on the date, the banks shut down the exchanges accounts. Now what will happen to the price of bitcoin? With no real way to speculate, it should drop back to $150 and eventually $15. The outflow of bitcoin from China to the other exchanges is probably going to be massive.

As I said earlier , the smart ones sold two weeks ago. Notice how the break of the 200dma coincided with the rumors of the PBOC actions. This latest action is of course perfectly timed with the death cross on the daily that happened yesterday.
 

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Belz... said:
I don't know why. If your point is that it'll collapse, the number is irrelevant.
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Well maybe that is where you have misunderstood my comments, that isn't my point. Things get overdone, they lose energy and retreat. Bitcoin was so much more overdone than anything else I have ever seen it's hard to figure out how much of the price is hype, how much is speculation and how much is actual value. I don't think the value part exceeds $150, probably less than $50 so I chose $150 as a round number before the last really ridiculous move up began. It's not a magic number, just something I picked as a low before a correction was done. In other words, it might be a buy point if you were waiting for the bottom.
 
wrs said:
Well maybe that is where you have misunderstood my comments, that isn't my point. Things get overdone, they lose energy and retreat. Bitcoin was so much more overdone than anything else I have ever seen it's hard to figure out how much of the price is hype, how much is speculation and how much is actual value. I don't think the value part exceeds $150, probably less than $50 so I chose $150 as a round number before the last really ridiculous move up began. It's not a magic number, just something I picked as a low before a correction was done. In other words, it might be a buy point if you were waiting for the bottom.
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IIUC, you are suggesting this is the realistic value of a bitcoin. Correct?
 
abaddon said:
IIUC, you are suggesting this is the realistic value of a bitcoin. Correct?
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It would be my guess at it. A correction could take it a lot lower than it's true value since it ran so much past any realistic value. I guess the real test is how it does as people become disillusioned with the prospect of getting rich quick or at all from buying and holding bitcoins.
 
wrs said:
It would be my guess at it. A correction could take it a lot lower than it's true value since it ran so much past any realistic value. I guess the real test is how it does as people become disillusioned with the prospect of getting rich quick or at all from buying and holding bitcoins.
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OK. Fair enough. I would have pegged a realistic value below $100, but that's just quibbling about the price.
 
abaddon said:
OK. Fair enough. I would have pegged a realistic value below $100, but that's just quibbling about the price.
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Well like I said, it's probably less than $50 but $150 is the high end, there is always a range on these things.
 
Why would people continue to mine when it's not profitable to do so? Even if you beleive the value will come back, why not jump to one of the other crypto-currencies that is more profitable and exchange for BTC?
 
The other currencies seem to drop when BTC drops, so the relative profitability may not fluctuate as much. I suspect the miners are overall fairly efficient in how they allocate their resources.
 
wrs said:
A correction could take it a lot lower than it's true value since it ran so much past any realistic value.
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How can bitcoin have any "true" value? Its only value is in how much people are willing to pay for it.

Sure, the resources required to mine it cost money, but this amount is variable. The less amount of money miners are willing to spend on mining bitcoin, the less it costs to mine bitcoin, because the same amount of bitcoins are generated regardless of how much resources are invested in mining them.

It's effectively a roundabout way of buying bitcons, by paying for the computing power to mine new bitcoins instead of paying for bitcoins already mined by others.

Bitcoin is not backed by anything, owning bitcoin does not guarantee you the ability to exchange it for any resource, so is there really any amount of money, however small, that can be said to be the innate value of a bitcoin?

ETA: Contrary to the thread title, I suspect the only practical value in bitcoin is that a bitcoin wallet is a modernized internet-accessible equivalent to what numbered Swiss bank accounts used to be fifty years ago. Not much use for the average person, but a good place to secretly stash your cash where the government can't get at it. (Assuming that the price of bitcoin ever achieves long-term stability.)
 
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Is there evidence that anyone was able to convert Bitcoins to large amounts of another currency (U. S. dollars, for example) and have the converted sum successfully deposited to an external bank account when the price was skyrocketing last year? Any examples of deposits over $10,000? Any examples of deposits over $100,000? Deposits over $1 million?
 
Scopedog said:
Is there evidence that anyone was able to convert Bitcoins to large amounts of another currency (U. S. dollars, for example) and have the converted sum successfully deposited to an external bank account when the price was skyrocketing last year? Any examples of deposits over $10,000? Any examples of deposits over $100,000? Deposits over $1 million?
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Looking at charts that show volume gives an interesting picture. And if you click on the "Load Raw Data" button under the chart, you can get the exact figures for each day.

Taking a look at the figures, on the first of December US$58,200,765.26 exchanged hands on the Bitstamp exchange. The next day US$31,532,295.81 exchanged hands. Hell skip forward to Christmas Eve and $82,97,360.84 exchanged hands.

With those amounts of US dollars being exchanged for bitcoins, I'd be very surprised if there wasn't the occasional seller liquidating a couple of million dollars worth of bitcoins and completely withdrawing it from the exchange.
 
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Brian-M said:
How can bitcoin have any "true" value? Its only value is in how much people are willing to pay for it.
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It has a value based on the amount of investment made on behalf of the concept due to infrastructure and applications as well as acceptance. This is true of ATM cards and credit cards for the dollar. The fact that the money has utility based on an existing infrastructure gives it value.


Brian-M said:
Bitcoin is not backed by anything, owning bitcoin does not guarantee you the ability to exchange it for any resource, so is there really any amount of money, however small, that can be said to be the innate value of a bitcoin?
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The same can be said of the dollar on the same basis.
 
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