Is there some other thread where my posts would be more welcome? 

Actually, I find this thread far more interesting than the more focused ones I have looked at.  I have learned a lot more about Bitcoin here than I could possibly have lerned there.  (All the gossips about MtGOX, for example, or why bitcoincharts does not cover Huobi and OKCoin, or ....)

Besides, the "liquidity" of the other threads is abysmal...

SHA-2 being broken is always a possibility.  Keep in mind that all public crypto schemes rely on a conjecture
for which there is no compelling theoretical argument or empirical evidence,

And there are many other developments that could make bitcoins worthless, for example

* The US government bans crypto-currencies.
* Everybody chooses to use Dogecoin instead of Bitcoin
* The Bitcoin blockchain stops being maintained because
** Mining becomes unprofitable
** Other crypto-coins become more profitable to mine
** It got all messed up and the network cannot agree on the fix

and so on.  Surely there are many more possible disasters no one has thought of.  (One year ago crypto-currencies were believed to be untraceable and un-seizeable, for example.)  That is why one cannot put a probability on "price will crash to zero"...

The nuclear industry once sponsored a very thorough safety study that examined all the ways in which a nuclear plant could possibly fail, and concluded that, assuming several hundred operating reactors, there might be one partial meltdown every century or so.  That was before Three Mile Island, of course.  According to the principles of that study,  three separate reactors melting down down at the same time would be less likely than a meteorite killing Santa Claus; and the possibility that an unloaded reactor could explode and become a major nuclear risk was not even considered.

NASA too once sponsored a very detailed study of the Space Shuttle's safety.  It concluded that the chances of a total loss were about 1 every 100,000 launches.  The actual rate turned out to be 1 every 50 launches.

Why should I have an answer better than anyone else's? 

But since you ask:  I think any solution has to be through politics.  I am not a libertarian; I believe that getting rid of banks and governments is neither possible nor desirable, and instead we must fight to have good governments and tightly regulated banks with strictly limited powers.

People must fight in the streets if necessary to end the plutocracy (une dollar, one vote) that has dominated the world, and restore democracy (one man, one vote).  I still cannot believe that the people of Italy and Greece, for example, could let the banks appoint governments which put the banks' profits above the very life of their citizens.   

It will not be an easy fight.  Along the way, the people in every country must somehow get rid of corporate media, and wrestle control of the internet away from big corporations, which will always prefer and support plutocracy over democracy.

My price prediction formula (can you see what it is?) is starting to fail, but can't resist making another guess.

Again, for tomorrow 2014-02-10 at 19:00 UTC (not before that, not after that):

Huobi: 4450 plus or minus 25 CNY.
Bitstamp: 690 plus or minus 10 USD.

This prediction is free of charge, and worth every cent of it. 

So this forum needs three more buttons: "laugh at", "fight",  and "capitulate". 

Is that for me?  

My mouth says that bitcoin may crash to zero without warning; and, while it is fun playing the prophet, there is no way to assign probabilities to any predictions, not even to "it will crash to zero tomorrow" or "one day it will be worth more than 1000 US$".

So my money is indeed where my mouth is -- well away from bitcoin...

Yesterday at 23:18 UTC I made the following predictions:


Prices on 2014-02-09, 19:00:00 to 19:00:59 UTC
Huobi: predicted 4490--4530 CNY, actual 4492.0--4494.9 CNY
Bitstamp: predicted 690--710 USD, actual 704 USD.



 

I may be naive, but I do not believe that the Chinese government will try to ban or further restrict Bitcoin trade in the near future.

The People's Bank of China has prudently forbidden banks to speculate or trade crypto-coins, so there is no risk that they would lead to instabilities in the banking system.  

Commerce has been prohibited from quoting prices or accepting payment in crypto-coins, so the PBOC monopoly on issuing currency is preserved.

And exchanges are now limited to BTC/Yuan transactions, with withdrawals and depositis in Yuan through Chinese banks; so crypto-coin trade cannot bypass PBOC's tight control on the Yuan's exchange rate, nor the government's ability to track money flow inside China or across the border.

So now the flow of Yuan in the crypto-coin economy in China is isolated from the flow of other national national currencies outside China.  Trading in crypto-coins may transfer sizable amounts of Yuan from some Chinese pockets to other Chinese pockets, but the PBOC is not concerned about that
(in fact, that is what the finance industry is all about).   Crypto-coins now cannot be used to exchange Yuan for dollars or vice-versa.

A Chinese citizen still can buy 10 BTC with 45,000 Yuan at Huobi, sell them at Bitstamp for 7000 US$, and use that money to pay for his trip to Disneyland.  But the PBOC is happy with that, since those Yuan stayed in China, and those dollars came out of the pockets of the American bitcoiners who bought those coins.   Why would the PBOC object to Americans giving a 7,000 US$ trat to a Chinese citizen?

It is true that the transaction removed 10 BTC from the pool of bitcoins in the Chinese exchanges. Theoretically, that made bitcoins a little more expensive in China, which means the Yuan lost a little of its purchasing value.  However, the PBOC thinks bitcoins are worthless, so reducing their supply does not reduce China's real wealth in their view.  And, anyway, the positive effect of those bitcoin exports on the Chinese BTC price is nil compared to the price swings that we have seen in the last 18 months.

What about the opposite: an American investor buys 10 BTC at Bitstamp, sells them on Huobi, and uses the 45,000 Yuan to pay for his holidays in China?  In that case, it would be the Chinese bitcoin investors who would pay the foreigner's expenses.  In theory, the PBOC should not like that, since it makes hotels and food a bit more expensive (in real terms, not just in Yuan) for the Chinese people.   However, since there is no Bitpay or equivalent in China, the tourist would have to open an account in a Chinese bank in order to open a Huobi account and get the Yuan out of the exchange; which is probably difficult, if not impossible.  So the PBOC should have no reason to worry about that either.

(By the way, a while ago I posted a simplified example showing how a non-Chinese trader could do arbitrage between the Chinese and Western exchanges, by associating with a Chinese trader.  As shown in that example, even if the arbitrage transactions do not even out by themselves, the two partners can evenly split the profits by exchanging bitcoins, without ever exchanging national currencies.  In the end, the profit of the non-Chinese arbitrager comes entirely out of the pockets of other non-Chinese traders, and likewise the Chinese partner takes money only from other Chinese traders.  So arbitraging is not a concern to PBOC either.)

In conclusion,  I believe that the PBOC is satisfied with the measures it has already taken, and will not give any more thought about the crypto-coin market.

There are other authorities in China that might want to ban bitcoin trading altogether.  As it happened in the US with Enron and Madoff, and in Brazil with OGX,  if some really big investor loses a lot of money and feels cheated, the Chinese equivalent of the SEC may step in.  Or, if thousands of Chinese workers lose their savings after being lured by promises of fabulous gains, public attorneys may close the exchanges using common anti-scam laws.  But I feel that both are unlikely to happen, given that the PBOC has already warned everybody about the risks of playing that game.

Good advice, but what does "going down" mean?

Should one look at the charts for the past minute, hour, day, week, month, year, decade?  They will often say completely opposite things...

MtGOX's 30-min or 15-min volume charts show a very steady background activity of about 600 BTC/hour, which started on Feb/07 between 12:00 and 13:00 UTC.

I can see a stream of 0.01 BTC trades (several per minute), as were seen several times over the last few months, but they could not add up to more than 5 BTC/hour.  So what is that big robot? Is Willy back on line?

Yes, that price has been crossed already and may be crossed again soon.  However those are coincidences which I did not foresee.  I still hold my prediction, but only for 19:00 UTC, not an hour earlier, not an hour later.  I will not risk a guess about what the price will do at other times.

AFAIK banks in China reopened on Feb/07, perhaps some already on Feb/06; and they are usually open 7 days a week (although with reduced hours on the weekends). 

Since their banks reopened, the Chinese have generally pulled the price down while they are awake.  Check that hourly chart I posted yesterday.  But the price is falling gradually even when they are all asleep.

In each exchange, prices as low as today's were last seen on about

MtGOX    Dec 22
Bitstamp Dec 25
BTC-e    Dec 29

BTCChina Jan 02
Huobi    Jan 07*
OKCoin   Jan 07*

* Or Jan 02, i we ignore the single-day dip at Jan 07.

Another way an exchange could lose almost all of its clients' bitcoins is by accidentally reformatting the drive which contained the only copies of the exchange's cold wallets.

Total volume today (Sat Feb/08 UTC) was less than half of yesterday's. 

Non-China shrunk ~70%, China shrunk ~46%; so today China was ~65% of total volume.

M:tGOX shrunk less than the other non-Chinese exchanges.  It again had the largest volume among them, now twice as much as Bitstamp.

BTC-China's volume was ~1/3 of yesterday and was ~5.6% of the total Chinese volume (previous percentages were ~4.5%, ~5.8%, ~7.8%).

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !   Wed !   Thu !   Fri !   Sat !   Sun !   Mon !   Tue !   Wed !    Thu !    Fri !    Sat !                     
  EXCHANGE     ! 01/29 ! 01/30 ! 01/31 ! 02/01 ! 02/02 ! 02/03 ! 02/04 ! 02/05 !  02/06 !  02/07 !  02/08 ! Currencies considered

  MtGOX        |  7.21 |  6.60 |  4.45 |  5.13 |  2.28 |  3.37 |  5.40 |  8.20 |  21.54 |  58.89 |  26.82 | USD,EUR,GBP,AUD,JPY 
  Bitstamp     |  7.04 | 13.13 |  7.73 |  8.30 |  4.07 |  4.93 |  7.59 |  8.48 |  20.65 |  42.79 |  13.50 | USD                 
  BTC-e        |  6.53 | 12.54 |  4.65 |  6.30 |  4.74 |  5.75 |  4.51 |  6.55 |   9.72 |  31.84 |  11.67 | USD,EUR,RUR         
  BitFinEx     |  3.87 |  8.18 |  3.91 |  4.54 |  3.15 |  3.45 |  3.36 |  5.22 |  21.11 |  66.36 |  11.12 | USD                 
  CaVirtEx     |  0.21 |  0.25 |  0.24 |  0.24 |  0.20 |  0.08 |  0.17 |  0.18 |   0.39 |   1.07 |   0.57 | CAD                 
  Bitcoin.DE   |  0.33 |  0.47 |  0.35 |  0.33 |  0.35 |  0.51 |  0.27 |  0.31 |   0.61 |   1.30 |   0.37 | EUR                 
  Kraken       |  0.24 |  0.37 |  0.20 |  0.23 |  0.15 |  0.21 |  0.29 |  0.23 |   0.59 |   1.45 |   0.37 | EUR                 
  CampBX       |  0.07 |  0.06 |  0.05 |  0.23 |  0.16 |  0.10 |  0.12 |  0.16 |   0.21 |   0.82 |   0.27 | USD                 
  Crypto-Trade |   .   |  0.01 |   .   |  0.01 |  0.01 |   .   |  0.01 |  0.01 |   0.04 |   0.05 |   0.01 | USD                 

  SUBTOTAL     | 25.50 | 41.61 | 21.58 | 25.31 | 15.11 | 18.40 | 21.72 | 29.34 |  74.86 | 204.57 |  64.70 |                     

  Huobi        | 32.14 | 29.27 | 15.26 | 28.86 | 26.27 | 24.77 | 18.65 | 19.55 |  39.97 | 131.91 |  77.00 | CNY                 
  OKCoin       | 29.11 | 18.56 | 17.11 | 20.38 | 20.00 | 18.09 | 12.77 | 12.33 |  26.07 |  74.37 |  37.63 | CNY                 
  BTC-China    |  1.94 |  1.99 |  1.17 |  2.31 |  2.21 |  1.70 |  1.33 |  1.54 |   4.09 |  17.66 |   6.86 | CNY (NOTE 1)         

  SUBTOTAL     | 63.19 | 49.82 | 33.54 | 51.55 | 48.48 | 44.56 | 32.75 | 33.42 |  70.13 | 223.94 | 121.49 |                     

  TOTAL        | 88.69 | 91.43 | 55.12 | 76.86 | 63.59 | 62.96 | 54.47 | 62.76 | 144.99 | 428.51 | 186.19 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase is said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

(NOTE 1) On 2014-01-30, BTC-China had a burst of extremely fast, regular and atypical transactions, all with similar amounts (a few tens of BTC) and prices (~4836 CNY), adding up to about 41,050 BTC.  The burst started suddenly around 17:00 UTC and and stopped suddenly around 19:30 UTC. Presumably those transactions were made by a faulty robot trading against itself or some other robot, and did not represent actual exchange of money and bitcoins between distinct individuals. Therefore those anomalous transactions were subtracted from the BTC-China volume for Jan/30.

Have you heard of Ackerman's Function?  It may be a better fit to the charts than super-exponential.



 

And they use the market share charts from bitcoincharts.com, which simply omit Huobi and OKCoin.

It is like the Wall Street Journal posting a piechart of the stock markets of the world that omits NYSE and London...

OK, I will risk a sharp prediction:
Tomorrow 2014-02-09 at 19:00 UTC, Huobi's price will be 4510 Yuan, plus or minus 20 Yuan.
At that same time, Bitstamp will be at 700 USD plus or minus 10 USD.
Before or after that time, I would not dare to guess. 

Huobi's bears woke up even earlier today, at 06:00 05:00 am China time; perhaps hoping to avoid the bulls?  

In one hour they dropped the price by 50 Yuan (~1%).

Bistamp, BTC-e, and MtGOX started dropping too; 20 min to half an hour later than Huobi.  But they dropped a lot more, 20-30 USD (~3%).

But at 07:15 06:15 China Time the bulls came out too and put up a fight, but the bears prevailed and kept pushing the price down.

We'll see what happens next.