Is there an Oscar for particularly persistent rumors?

Volume is higher when the price is changing faster, for obvious reasons.  At Bitstamp the record daily volume (137 kBTC) was on 2013-12-18, when price opened at 675$ and closed at 520$ (-155$).   Recent volume records were at the bottom of a sharp dip and bounce (2014-10-05 and -06, ~62 kBTC) and at the top of a sharp rally and crash (2014-11-12 and -13, ~50 kBTC).

Now lots of people are selling, lots of people are buying.  Who is the smart guy, and who is the sucker?  One cannot tell that in a single trade, one cannot tell that without knowing what the price will do...

Is that Moebius stuff?

Sorry, by "get them off exchange" I meant "get them through a private over-the-counter deal (not at the exchanges)".  So, I expect that bids will be limited by the price that one could pay in an over-the-counter buy of the same size (unless an "irrational" rich bidder enters the auction).

I would think that the over-the-counter price for 10'000 is not much above the open market, otherwise arbitragers would promptly step in and equalize the prices.  For 50'000 coins, I would not dare to guess...

I still think that the price dropped in June, just after the previous auction announcement, because traders feared that the coins would end up on the exchanges; and recovered, the day after the auction, because the outcome reassured them that the coins would stay off the market, and (so people thought) they had been bought at a premium.

So the price may or may not recover this time, depending on what the outcome will be.  Note that people bid at auctions not to get coins at any cost, but to get coins at a good price.  If someone wants 10'000 coins, and he can get them off exchange for 300$/BTC, it makes no sense to bid for more than 300$/BTC, even if he expects that there may be higher bids.

BitVC removes the "20x leverage season contract" option, leaves only 10x, 5x:
http://www.bitell.com/t/2153

Could this be the cause of the recent 5$ jump?

There is no recipe for immortality, no monument that will neer become a ruin, no cellphone battery that will last forever.   No store of value is totally risk- and loss-free, including bitcoin.  Life just sucks.

Bitcoin wasn't even designed to be such a thing: "non-inflationary", in the technical sense of having a fixed money supply, does not guarantee preservation of value.

The best you can do is invest in things that actually produce valuable goods or services, such as stocks of solid companies, or real estate that you can rent.  Then you do not need to speculate; even if you hold the thing for decades, you may get the ful value of your investment back, and some more. But of course you may have bad luck and stock on some Enron or WorldCom.  That risk is increased if you are too greedy, and look for higher returns rather than solidity.  You must keep watch, and be ready to switch if it seems that the company is faltering.  You can also invest indirectly in investment funds, and trade some of the returns for the convenience and risk reduction.

Oops, that is not an actual quote, it is a parody, right?

Yes, but I was thinking of this two-part Wired article:
The Decline and Fall of an Ultra Rich Online Gaming Empire
http://archive.wired.com/gaming/virtualworlds/magazine/16-12/ff_ige?currentPage=all

A Drive Through Laurel Canyon With Brock Pierce
http://archive.wired.com/gaming/virtualworlds/magazine/16-12/ff_ige_pierce

I believe that there are many who see it that way, yes.(*)  But there must be also many robots.  In their joint statement, last May, the leading Chinese exchanges pledged to curb high-frequency trading to make the field more even for human traders; but it seems that they have backtracked on that pledge.

On OKCoin and Huobi, whenever a large trade opens up the spread, the gap is immediately filled with dozens of small random orders.  I have not looked closely, but my impression is that the orders are mostly bids, so that the spread shrinks towards its upper end.  These sprays seem too quick and too regular to be issued by hand, and they seem to happen 24/7. I would guess that they are one or several robots, perhaps ran by the exchange itself.

(*) An article published several years ago told how Brock Pierce built a billion-dollar company that cornered the market of virtual money and other virtual goods from some computer game (IIRC, World of Warchraft).  He got partners in China who set up "mines" of  those virtual goods.  They had umpteen Chinese workers playing the game all day long, stopping only to eat and sleep on the premises.  His company collapsed when regular players of the game sued it, claiming that their gaming experience was ruined because those Chinese miners were everywhere in the game, and cared only about collecting stuff.

Erm, does this mean what I think it means?

Also: BFL recently submitted, as evidence of the unspeakable cruelty of the FTC,  a string of emails from a user who accuses the FTC of squandering the funds that should go to clients, together with the claim that the FTC is evil because it ignored said emails.  That reminded me of the last message from Danny Brewster, wherein he claimed that the Cyprus Police was to blame for people not receiving the bitcoins he sold them, because the police did not read his emails. 

Also: in this last batch of documents, an FTC staff refers to SLoK as an "employee" of BFL.  In his testimony, Josh described him as a "non employee".  Has the FTC identified him as someone on BFL's payroll? Or is he being referred as "employee" only on account of him doing moderator work for BFL?  Is that distinction important?

Well, what about these plots:
Estimated total transaction outputs minus changebacks, in BTC/day:
https://blockchain.info/charts/estimated-transaction-volume?showDataPoints=false&show_header=true&daysAverageString=7&timespan=&scale=0

Ditto, in USD/day (the previous graph times the BTC market price):
https://blockchain.info/charts/estimated-transaction-volume-usd?showDataPoints=false&timespan=&show_header=true&daysAverageString=7&scale=0

I don't know what those plots show actually.

OK, that is a feedback channel; but is it sufficient to hold the price?  Miners who have such long-range, inflexible contracts (are there any?) could simply indemnify their buyers (who are supposed to be long-range investors) in dollars, instead of spending dollars on the market to buy bitcoins to give to their buyers.  More likely, at that point they will not have enough money to do either, and will declare bankruptcy.

A good part of the hashpower is in pools, and most of the individal miners in those pools will not have a "mine or buy" requirement.  If lower price makes mining unprofitable, they would just stop mining.

In any case, if the price falls below the cost of production, both the hashrate and the difficulty will decrease, until the remaining miners are again barely profitable.  There is no hard 350 $/BTC bottom for the production cost, nor for the price (just as there wasn't in 2010).

However, there is no feedback from the cost of production (or whatever the network is doing) to the price.  The dependency goes only the other way: difficulty gets adjusted until the total cost of the network (say, per day)  is a little below the block reward (per day) times the market price.

If the price goes up, or down, the hashrate will eventually follow, with a delay.  If accidents were to destroy half of the hashpower, the price would hardly be affeected.

I have no interest either way, just want to understand what is going on.  Some here obviously have an interest in painting a bullish picture.


If you read back, I ASKED one poster whether there was evidence that miners are holding.  He replied with a statement of faith and no data.  That phrase above is my rephrasing of his reply.

But they did sell more (up to 50% of mined amount) when the price was a bit higher.


Note that, for digitalBTC, "reserve bitcoins" means "the bitcoins that we did not sell yet". Does it mean the same for BitFury?


So 1 miner sold 100%, 1/3 of the miners sold 0%.  What about the other 2/3?


Without an official balance like that of digitalBTC, I don't know whether to trust these statements.  Obviously it is their interest to say that they believe that the price will go up, hence they are holding.  Anyway, like the folks at digitalBTC, they may be only hoping/waiting for the price to rise again to sell.

So the data seems to say that miners are selling at least a sizable fraction of their mined bitcoins.

I stand corrected. By that document, that company has mined ~13300 BTC to date, and is holding ~8500, so it has dumped only ~4800, or about 1/3.

EDIT: Actually they claim to have sold ~6200 on the table.  Whatever.

I started using the internet in 1979, when I began my PhD.  That was not the beginning, true, ... 

The point of bitcoin was only to prove that the protocol designed by "Satoshi" (mining rewards, fees, proof of work etc) could be self-sustaining and self-adjusting.  That experiment may still be successful even if the user base and prices return to the 2010 level.

I do not see a connection between price, number of mining nodes, and usefulness as a currency.  The latter depends on how many businesses and employers adopt bitcoin (actually, not through Bitpay/Coinbase).  Increased adoption arguably would raise the price, but that is not happening yet.

That is not quite how the internet developed...