Interestingly, the price is now rising in the non-Chinese markets, but flat on OKCoin. 

It would seem that Huobi is the main "terminal" for arbitrage into all the Chinese markets. 

Perhaps someone outside China is trying to pump up the price, and does not want to waste money into dragging Huobi along?

Huobi has been offline for "DDOS attacks" since 1pm China time; the note on their site said they would be back by 3 pm; it is now 5pm in China... 

The problem (actually, just an aggravant to the main problem) is not coins that have passed through the hands of criminals, but coins that are STILL in the hands of criminals.

Agree 100%, but very few of those criminals seem to be prosecuted.  (I know of one case in China,, are there any others?)  The vast majority of the "thieves" remained unknown and kept their booty.

Is that so? If a thief spends a few bitcents of his booty now to buy a pizza, the payment will be visible and the police could catch him by following the delivery boy.  As long as he leaves the coins untouched, he cannot be traced through them, and they cannot be taken from him.  If he waits for a few yers he may even be beyond the reach of the law.

And the problem does not get solved if he has to give the keys to other criminals like him.

EDIT: furtehrmore, 600,000 BTC are not easily spent or sold...

The early adopters are not necessarily "scumbags", just that I do not see why the world would agree giving them such a large slice of their wealth.

But there are undoubtedly many bad guys among them.  The MtGOX thief alone got hold of 600,000 BTC, which is 5% of all existing bitcoins -- hence 2.5% of all the money in the world in that extreme scenario.  The SilkRoad operator is claiming 173,000 BTC that were seized by the FBI as being his property.  There have been already a couple dozen smaller versions and variants of MtGOX,  where thieves and scammers got away with various amounts of BTC, proably adding to hundreds of thousands.  (The BitcoinRain "theft" here in Brazil, for example, slurped up over 15,000 BTC from its investors.)  It seems likely that 10% or more of all existing bitcoins were acquired by criminal means.

Where is that date?  (Their "no later than March 2014" did not mean "March 1st"...)


Yes, we were duly warned that the trust was "illiquid" on the site, and presumably the contracts specify the details.  But it would be nice if they (or some investor) would publish what the "limited basis" means.  It could only do good for their image.

I suppose that "FUD" in the investment world is the acronym for a Greek or Latin phrase meaning "Prudence and Healthy Skepticism". 

Hm, how exactly?

There does not seem to be any data about concentration of BTC ownership and how it is evolving.  The early miners and investors probably did not spend much of their hoards buying things or services.  It is not clear whether speculative trading at the exchanges distributes or concentrates BTC wealth.  Bitcoin enterprises like funds, banks, and ATM networks should create relatively large holdings for reserve and from fees. 

It seems that I have not been clear enough on this point....

There are scumbags everywhere, in the banks and governments too.  What is different about making the Satoshi Blockchain into the basis of a crypto-currency economy is that a few thousand people, including many scumbags, will start out OWNING all the money in the world --- as oposed to just having the oligopolistic privilege of storing, handling, managing, and transmitting it.

I have not looked hard into Auroracoin, but from what has been said here it seems to be an improvement over BTC in this regard: It will distribute some of the money evenly to all Icelanders, instead of only to miners.  Of course, if some private individuals will still retain a large fraction of all the AURs, it will still have the same problem of Bitcoin or any altcoin: those people will end up grabbing a large slice of the Icelanders' total wealth, totally out of proportion to their contribution to the society.

I don't know.

On one hand, there are many people who invested millions in ancillary business (exchanges, funds, payment processors, mining hardware, ATMS...) and many owners of large hoards who may be willing to spend some million USDs in marketing and creating factoids just to keep Bitcoin alive for years.  There are also many faithful who will probably stick to it no matter what.

I read that Warren Buffett thinks that Bitcoin will be around for 10 years still.  Maybe. 

On the other hand, there are many more BTC off market than on-market.  If their owners decide to dump, the price may fall so much that many of those ancillary businesses would fail, and miners may abandon BTC for greener coins.  Or the US government may decide that it does not like bitcoin (BTC specifically, or all private cryptocoins, or any cryptocoins).  Or the bitcoin scene may become so polluted with scams and crimes that the public will be turned off at the very name. Or whatever...

I feel a moral and professional obligation to warn the general public about the risks of investing in bitcoin, and about the false or exaggerated claims that many bitcoin "salesmen" of all sorts are still making.    I would feel that my time has not been wasted if I can prevent at least one person from being scammed this way.

I am not concerned with adult and mentally capable people who still choose to invest in Bitcoin,  knowing perfectly well what they are doing (as probably is the case of most people in this thread).   They must know that there is no objective way to assign probabilities of "success" (by any definition) or expected future prices to Bitcoin, so that they are gambling in a game with undefined odds.  What advice or help could I give to those people?  What outcome could I wish for them? 

I was surprised to see on this forum (not this thread) people openly asking for "good Ponzi schemes" to invest in.  Well, as long as all investors are aware that something is a Ponzi, I suppose that it can be considered a kind of gambling, so it is their problem, their money, and their fun.  What is not OK is people who know it is a Ponzi trying to lure new investors without telling them that.

Hi, I happened to compare the daily volumes from today (March 22 00:00:00--23:59:59 UTC) with those of Bitcoincharts.com.  They all match except for BTC-e BTC/USD, which is   3.74 kBTC according to bitcoincharts, 4.14 kBTC on your chart.  I thought that you might want to check.

Click on "Load raw data", just below the chart, in this link:
http://bitcoincharts.com/charts/btceUSD#rg5zigDailyztgOzm1g10zm2g25zv

More precisely, the problem that the world will face by adopting THE Bitcoin as the global currency is that the system will start out with ALL the money in the hands of a few thousand people and the "bankers" (miners).

Even if those "bitcoin barons" are generous and spend half of their BTC hoards in exchange for trifles, just to get the bitcoin economy started, they will still hold half of the money supply in the world.

What are the chances of the world being OK with that?

Chinese Slumber Method prediction for Sunday March 23

Prediction valid for: Sunday 2014-03-23, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 3386 CNY.
Bitstamp's predicted price: 551 USD.



The red and green strokes are actual hourly prices (Huobi on the left, Bitstamp on the right).  The magenta square at right is the above prediction.  The blue square next to it is the last prediction (see below). The light blue-gray squares are the older predictions.   The blue dots are the Slumber Points, the mean prices ((L+H)/2) in the interval 19:00--19:59 UTC every day. On the Huobi plot, the size of the Albertosaurus under each dot indicates the night-time activity at Huobi. Specifically, the area of the reptile is proportional S = V_h/V_d, where V_h is Huobi's mean hourly volume in the three hour period 18:00--20:59 UTC (02:00am--04:59am China time), and V_d is Huobi's daily volume 00:00--23:59 UTC on the same date.  The largest Albertosauri correspond to the S = 0.010 or greater.   The size of each blue dot (on both plots) is proportional to its reliability weight, computed from Huobi's ratio S.  The brown lines on Huobi's plot are trends fitted a posteriori to the Slumber Points. The orange line is the trend assumed for the Huobi prediction above.

The trend assumed for the above prediction is the shifted exponential A + B*Q**(d-d0), where d is the day of the month, d0 = 19, A = 2685.90, B = 1061.64, Q = 0.901.  The values of A and B were fitted by weighted least squares to the points Mar/19--22.  (A straight line would have fit almost as well, but shifted exponentials are more "physically" plausible than straight lines or pure exponentials.)

The Bitstamp prediction, as usual, is the Huobi prediction divided by the currency conversion factor R, which was assumed to be 6.15 CNY/USD (it was 6.09 yesterday, 6.20 today).

Checking the previous prediction

Prediction was posted on: Friday 2014-03-21, 21:56 UTC
Prediction was valid for: Saturday 2014-03-22, 19:00--19:59 UTC (~21 hours later)

Huobi's predicted price: 3477 CNY.
Huobi's actual price (L+H)/2: 3462 CNY
Error: 15 CNY (~2.50 USD)

Bitstamp's predicted price: 566 USD.
Bitstamp's actual price (L+H)/2: 558 USD
Error: 8 USD

The larger error in the Bitstamp prediction could be due to a value of R (6.09) that was too low.

NOTE: Still looking for icons that are more exciting than dinosaurs but still within the limits of academic decorum.

Oops, the math is wrong of course - expected return is 120 k$ so only 20 k$ over investment. 

Playing Russian roulette with other people's heads is of course very different from playng with one's own.  Have you seen this great little French movie, 13 Tzameti?   (There is a remake,  13).

Cheap energy is not "essential", it is just cheap.  Yes, electric cars are at best barely competitive with gasoline-powered ones, so while the latter exist they are "economically challenged."  Ditto for wind and solar power.  But I believe that the world will figure out that it can't have a coal- and oil- based economy forever, so they will learn to live with more expensive electric cars, choose more energy-efficient homes and transportation, etc..  Civiization will surely NOT grind to a halt because of that.

For me, that is one of the most scary things: large numbers of people being convinced that governments and laws are bad, and therefore rejecting democracy and democratic politics.  Historically, those people have always been instruments of parties that overthrow democratic governments to install opressive dictatorships.


China and Southeast Asia seem to be improving, not sure about the rest.  Parts of Africa are getting worse...

More than that: the loss/gain in "real wealth" (or quality of life, or hapiness, whatever) is not linear in the dollar amounts.

In those examples, consider a 100 k$ investment that has 60% change or returning 200 k$, 40% chance of returning 0$.  For the millionaire, value is pertty much proportional to dollars. So his expected return over investment is +40 k$, so he definitely should take the chance.

For the guy with the 200 k$ house and no savings, the life improvement that he would get from an extra 100 k$  profit is nowere comparable to the consequences of a 100 k$ loss.  For him  the real expected returnover investment is negative, so he shoudl not take that investment.


Lots of things; but my skepticism applies to any reasonable defintion, from "consumers buying things through the internet" to "all payments in the world".


I am not sure I understand.  Its supposed "deflationary" character is a substantial argument against its adoption as a currency, but that is not my reason.

Actually I have no strong feelings about what its price will do in the medium term.  Its price is not tied to anything, there is no argument that would justifify why its price now is 500$, why it was 800$ two months ago, why it can't be 5,000$ or 5$ tomorrow.  It is the result of suply and demand, sure, but the demand is due to perceptions of future prices that are not based on anything. "The market" thinks that it is worth 500$, but no trader can convincingly explain why.

To make the point clearer,  consider the "extreme libertarian" scenario where Bitcoin (THIS bitcoin) is the only currency in use for all payments.

In that scenario, every person in the world is forced to keep his money stored in one single "bank", the Bitcoin Network.  That "bank" is different in many ways from the banks we have now, publlic or private.  One may argue whether these differences are advantages or disarvantages, but that still is not my point.

In that scenario, the money held by every person in the world is determined by its balance on that "bank"'s ledger, the BTC blockchain.

In that scenario, the BTC blockchain is still the same blockchain that Satoshi started and is in use today. 

But, in this blockchain, all the BTC that exist now, which is more than 50% of all the money that will exist in that scenario, are already assigned to a few thousand people.  And the coins that are yet to be found will be given exclusively to the "bankers" -- the miners who keep the "bank" running.

Moreover, the vast majority of the existing coins are in the hands of people who did nothing more than run an algorithm in their laptop for some time, or  invest a few thousand dollars.  Worse, the owners of those coins include all sorts of scammers and sleazy entrepreneurs, criminals, corrupt officials,  and common thieves  -- such as the MtGOX Thief, be it Mark or anyone else -- who have amassed large hoards of bitcoins by unethcal tricks, or worse.

Now, do you think that, if the world decides that cryptocoins are a god idea, they will create their "global universal bank" with a ledger that, right from the outset, assigns all the money in the world to those people?

Granted that the "extreme libertarian" scenario is extremely unlikely by itself.  But the problem remains even in more limited scenarios where bitcoin is used only for some fraction of the e-commerce.   Anyone who adopts BTC as currency will be sharing his real weatlh with the current BTC owners, just as anyone who uses dollars is sharing his real wealth with the US government (or US citizens, if you wish).  Will people accept that?  Will governments allow that?  (Why is it that they don't allow private money?)

Not much... I see that the world is in a terrible mess, and paths to a better future are long, narrow and lost in the fog of uncertainty...

My country seems to be moving  in the right direction, finally; although it too has a long way to go and its enemies are formidable.

The world is turning away from nuclear energy, coal and oil, hopefully to wind, hydro, solar.  Even if these are more expensive now (not of nuclear it seems), the price will be worth it, IMHO.

Right now I can't think of anything else that feels positive.  Human rights, on the internet or outside it, are not progressing, somtimes are going backwards. (Intenet censorship is much worse now than it was in the 1990s, especially in the "free" countries.)  Agriculture is becoming more and more "inhuman". Industry is centralized in megacorporations that use patents to stifle competition.  And so on...

Even cryptocurrency, a potentially nice idea, has become the "property" of  a swarm of scumbags, that make bankers look like angels of virtue and generosity. in comparison.

A monetary loss cannot be measured just in dollars, you must consider what it could mean to your life, now and in the future.  If you have a few million $, losing 100 k$ is only an inconvenience, and you will probably recover those 100 k$ in a matter of months .  If all you own is a house worth 200 k$, losing 100 k$ is a big trauma, may even cost your family and you may never recover those 100 k$. 

If it helps you decide, I am going to change my signature from "rather skeptic" to "very skeptic".  I now put the chances of Bitcoin (specifically, not some future crypto-coin) becoming a significant currency of e-commerce at about the same level of myself becoming Pope.  And it has nothing to do with price evolution or recent news.

Trade volume does not have much to do with value or price; it has to do with changing perceptions of the market about value.

The bids and asks of each trader reflect his expectations about the future value of the item, in some time frame.  As long as every trader keeps the same expectations, there will be no sustained volume.

Trades will happen only when traders change their expectations (or when a new investor comes in, which is the same as an infinitely skeptic trader becoming more optimistic).  A trader will raise his bids when he becomes more optimistic, lower his asks when he becomes more pessimistic; and that is when trades happen.

Right now, the expected value of 1 BTC, in the opinion of almost all the Bitstamp traders with coins to sell, is at least 559 USD (minus fees); and the expected value among all traders with money to buy is at most 555 USD (plus fees).

The downtrend means that, by and large, most traders are becoming more pessimistic with time.  Right now, traders with spare money believe that the chance of the price reaching 1,000 USD/BTC (say, in the next 2 years) is less than 60%, and the chance of it reaching 10,000 USD/BTC is less than 6%.  Two months ago they may have put those chances at 80% and 8%, respectively.

By that logic, we will be in a bull market until the BTC price gets down to 0$. 

Clarifying that liquidity of course is not equivalent to allowing investors to sell to other investors, on that specific market that (IIRC) has less stringent audting requirements.

If an investor truly liquidates, BIT has to pay him; if that investor entered in September with 100,000 USD, they have to pay him ~500,000 USD now, and then try to recover that sum by selling the corresponding bitcoins.  They will not be free from this obligation until the BTC price itself goes to zero.

On the other hand, if the investor is told to "liquidate" by trading his shares on the open market, he will have to find another sucker who is willing to but a BIT share for its face value; in which case it is that sucker who pays, and BIT keeps all their money, down to the cent.  If BIT then suspends liquidity indefinitely (as other Bitcoin funds have done before, IIUC), the market price of a BIT share may go to zero, and investors may lose all their money -- even if the BTC price (and therefore the nominal BIT share value) goes to the moon.