10 BTC on February 1, 2014 had the same buying power as 18.31 BTC on April 27, 2014. 
Annual inflation over this period was 1246.66%.

Indeed, in another planet perhaps the scientists are underwater barnacle-like beings, so they have no force sensors in their non-existent arm muscles, never invented the lever (and balance scales), pulley, and inclined planes, and never noticed of Hooke's law; until one of them defined force by f = ma and went on to find that this abstract concept obeyed many interestting properties, including Hooke's law and weight = g m.

But that is not how things happened on this planet, sorry.


Wait, I thought that I was the lone odious heretic in this thread who dared to question the Holy Words of Satoshi (as properly corrected, expanded and interpreted by the numerous Reverend Fathers of the Holy Church  of Bitcoin, who, according to themselves, were appointed by Him to spread the Word and prepare mankind for His triumphant Second Coming). 

You mean, something like what happened at MtGOX's? 

Note that it took two years between the time some people lost faith in the company's future (the start of the share price downtrend) until the real extent of Worldcom's problems became known, and it filed for bankruptcy.

Was MtGOX just a bump in the road for Bitcoin, or an early sign? 

This has happened several times in the past.  Last time I asked Bitcoinwisdom's owner and he said it was a  bug in Huobi's server, not his scripts.  

Coincidentally, this Huobi bug seems to hit whenever there is a price crash.  Last time it was a freak 5000 BTC sale that went all the way down to the Lower Mantle; their chart froze in a bizarre state, and when it came back up that sale had apparently been rolled back.

EDIT: and their data has not been updated for 3 hours already.  Another DDOS attack? Or the owner went to pay a visit to Danny Brewster?

Well, I would take issue with that. Sure, mathematically one can choose any set of consistent concepts and true statementes as the starting point, and treat the remainder as derived.

However, that is not how f = ma developed historically.  Acceleration of course is defined as the second derivative of position with respect to time, and Galileo, before Newton, was one who contributed to the understanding of uniformly accelerated motion.  Force however can be "felt" and measured independently of any motion (e.g. with a dynamometer), and well before f = ma there was allready a large consistent quantitative theory of forces without motion, that included weight ("two identical objects have twice the weight of one"), levers, pulleys, and inclined planes, buoyancy and more.   So when Newton stated f = ma, he indeed discovered a law of nature.

Thanks for the article.

Even though it is supposed to be a "bearish" article, I think that it is too optimistic already when it implicitly identifies "crypto-currency" with "bitcoin".   Consider this hypothetical statement that one might have made 20 years ago:

Sorry, we teachers develop a bad habit of simplifying 40 years of experience with a tool into childish examples.

What would your incredibly precise model say about this real-world (in more than one sense!) example:



What difference do you see between Apr/1997 and Jan/2000 in this example?

Hm, that points out a problem with using linear regression on all the monthly points.

Suppose two items A, B that start out both at the same price 1$. Item A then grows steadily to 1000$ over 2 years.  Item B shoots up to 2000$ on the first month and then decays steadily to 1000$ in the next 23 months.

Linear regression will give a positive slope for item A and a negative slope for item B, even though both increased by a factor of 1000 over that time span.

On the other hand, consider item C that starts out at 1000$, drops to 1$ on the first month and recovers steadily to 1000$ over the next 23 months.  Linear regression would give positive slope.

These examples do not prove that linear regression is "wrong", but should make one aware that its meaning is not what one may think.

"Your results are not right. They are not even wrong." --some famous scientist reviewing the work of some colleague

I don't know how KNC sells their mined coins; but they seem to be a carefully planned enterprise, so I guess that they secured from the start a contract with some investor who is bound to buy their bitcoins at a fixed price.  If that price is still below market, that could be a source of cheap coins.

SecondMarket of course will not knowingly buy stolen bitcoins.  But why would not they buy at 80% discount of market price from some respectable investor who bought them at 60% from someone who bought them at 40% from someone who bought them at 25% from a Russian mobster who bought them at 15% from the MtGOX thief?  It is not their job to trace all stolen coins in the blockchain, is it?

EDIT: "80% of market price", of course, not "80% discount".

I suppose that, in the early days, sites like exchanges and online casinos would have a single bitcoin address for bitcoin deposits, and all clients would transfer bitcoins to it (using the decimal satoshi amount to identify their deposits); whereas now such sites commonly generate a new unique address for each client and/or each deposit.  Is this correct?

Yes, I think we agree on that.

My PNG images are still being truncated, randomly. Sometimes reloading the page works, sometimes it doesn't.

It does not seem to be an image size or file size problem; larger JPG images apparently work fine.

It would be tolerable if it gave an error at uploading time, "image too big" or whatever.

Could this be that mythical holy grail of computer alchemists, the Bug That Just Cannot Be Fixed?

Every exponential price trend that grows faster than population, inflation, and total economic output must perforce cease to hold at some point.  Unchecked, a 10x increase per year would mean that 1 BTC would buy the whole Earth within a few decades.

So, the question is not IF, but WHEN will Bitcoin's price stop following the historic exponential trend?

(Do I need to post again the Worldcom price chart? It followed an exponential trend much more closely and for a longer time than Bitcoin so far...)

Price trends should not be trusted without undersanding the fundamentals behind them.  Some bulls here have their explanation for Bitcoins historical exponential trend.  I have mine,  The conclusions seem to be very different...

Meanwhile, it looks like Huobi may end the day with the lowest daily volume since Dec/03, lower even than "DDOS Sunday"'s (Mar/23).

Has anyone seen any public response by them to the latest PBoC news? (The red-lamp announcement on their homepage has not changed since Apr/17.)

The image that comes to my mind is a sumo wrestling match to be played with the speed of a chess-by-mail match.
(No offense intended.)

In 18 hours or so it will be Monday morning in China.

Maybe nothing special will happen, an the price will "normally" drift from the current 460$.

Or the exchanges may confirm the bad news, and the price may crash.  The dip of Apr/11 shows that the ultimate Chinese Bottom (when the Chinese exchanges are bled to death) is below 340$.  It may not be reached before May/10.

Or the bad news may be dispelled, and the price will rebound.  The upper limit for the rebound should be the level before the Apr/25 crash, around 500$. 

This article in Chinese seems to have more details on PBoC's "clarification of the clarification", with comments by/about individual exchanges:

http://gd.sina.com.cn/zh/finance/2014-04-26/11502646.html

It is hard to figure out from Google Translate output, but I understood that
* BTC-China and OKCoin think that their "recharge code" system (where clients "purchase" yuan from other clients, paying them without the exchange's involvement) will not be affected;
* Huobi says that their card deposit system is still working.
* However Huobi's cards are "recharged" via AliPay(?)
* AliPay said that they will block any payment related to bitcoin (not just those that contain the word "bitcoin").

Beware that Google translates AliPay sometimes as PayPal, and Huobi.com as "fire currency network".

May be useful:

狗狗币 = gǒu gǒu bì = dog dog currency = dogs' coin = Dogecoin

 

Fortress is turning its direct investment of 13 M$ in Bitcoin into an investment in a hedge fund.

http://www.ft.com/cms/s/0/5877fff0-aefb-11e3-a088-00144feab7de.html#axzz303O1FxGu

This is what I understood, please correct me if I am wrong:

* Fortress owned 13 M$ worth of Bitcoins. (They posted a loss in its Bitcoin investments not long ago, because of the falling BTC prices).

* They have now given the bitcoins to Pantera, in exchange of ownership of a slice of Pantera Capital Management.

* Pantera Capital Management is not a bitcoin investment per se; it manages Pantera Bitcoin Partners (PBP) fund.

* PBP is like SecondMarket's Bitcoin Investment Trust (SMBIT).  Other investors can buy shares of PBP, which will buy bitcoins for them at current marekt price and hold them.  After some time the investors may liquidate, and then PBP will sell those bitcoins at current market price and give the money to them.  (Meanwhile those PBP investors, like the SMBIT investors may perhaps get a chance to trade PBP shares -- privately, or on some specific exchange.)

* If the price goes up in between investment and liquidation, the PBP investors will make a profit.  If the price goes down, they will lose money. If bitcoin goes to the moon, they will be billionaires. If bitcoin crashes to zero, they will lose all their investment.

* Whatever happens to bitcoin price, Pantera Capital Management (hence Fortress) will make money by collecting fees from PBP investors
(a few percent of their investment and eventual profits).

* With a bit of luck, Pantera Capital Management (and hence Fortress) may make additional money by buying bitcoins below market and "selling" them to new PBP investors at market price.

* At some point in the past, the PBP fund already had investors who invested 140 M$ in it.  therefore, it should have bought that much of bitcoins.  (It is not known when they bought and how many BTC the PBP fund now holds.)

It seems that Fortress (like SecondMarket, Pantera, Bitpay, KNC, the exchanges, etc.) found a way to make money from the bitcoin phenomenon, while avoiding the risks of investing directly in bitcoin or bitcoin-based funds.