Even a full turn?

   AFAIK, Adam is just taking a break from bitcoin trading.

I cannot imagine why the Receiver (or someone working for him) whould chop those coins into hundreds of small random amounts, moving them from address to address dozens of times in quick sucession.  And do thatafter business hours.  (23:42 UTC is around midnight in Europe,  17:42 in Chicago Kansas City, correct?)

The tiny withdrawal at 2014-11-06 22:42:31 (=16:42 CST) may have been a test, as others suggested.  Perhaps the person stumbled upon the private key, and tested it by sending that request from some computer at hand; seeing that it worked, he first got himself a more secure computer/setup, for the real scoop.  

EDIT: wrong city

The last significant withdrawal from 1QAH, before the recent drain, was on 2014-09-17.  Up to that date, withdrawals on the order of 2000 BTC happened about once every few days.

The FTC raid of BFL was on 2014-09-19.  That is quite consistent, at least, with 1QAH belonging to BFL and therefore being covered by the asset freeze -- up to the recent drain.

It does not imply that the FTC knew about it, though.  The owner of 1QAH may have stopped withdrawals just as a precaution.

I thought that someone said that 1QAH was mentioned in the paperwork filed by the FTC.  Was it?

That is a possibility, they may claim that "we know nothing about it your honor, must have been some hacker"...

I am not used to blockchain snooping, but it seems that the 10'000 BTC chunk (for example) was quickly transferred to several addresses in succession, dropping off random amounts to other addresses. Some of those side drops were round numbers, some were numbers like 555.555555 or 777.77777. 

Does not look like something that an FTC consultant would do.  Looks more like the start of a mega tumbling operation.  The funny numbers suggest that it was done manually, rather than through a script.

Two possibilities that I have not seen mentioned: (a) someone connected to BFL but outside the reach of the FTC had the private key to the 1QAH... account; (b) someone hacked into the BFL computers (or the FTC computers) and found the private key.

Option (a) could be someone who has not been in the FTC radar yet, or one of the known players who managed to flee the country a few days ago.

Could it be that the receiver got the private key from BFL, but did not understand that he had to immediately transfer the bitcoins to a new address, in order to secure them? 

Reports say that the FBI had infiltrated his site a year ago.  Now guess again. 

I am a bit lost now... Is this what is being said: the address https://blockchain.info/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs is [ believed to be ] owned by BFL and used to receive the coins mined with customers' equipment.  From that address, 1 M$ worth of bitcoin were once converted to cash via BitPay and sent to BFL, ostensibly as a advance payment by HashTrade for a bunch of Monarchs.  At some point there were 88 kBTC in that address, and about 2/3 of that (now worth 30 M$) has been cashed through BitPay already.  Is that it?

Indeed. Southern Brazil is just now feebly coming out of a bad dry spell, with all the dams that supply the São Paulo region already below their official "empty" level.  Allegedly is has to do with El Niño, a quasi-periodic oscillation of winds and ocean currents over the Southern Pacific.  Because of our drought, maize and soybean are up 10% at the Chicago commodities market.   

Sorry for abusing the term.  I used "bubble" in the very broad sense of "fast price increase that starts and stops rather abruptly". 

Is "bull trap" appropriate, though?  The price was relatively flat at the top for about two months.  "Trap" suggests a move that quickly reverses, causing the traders who bought or sold late in the move to lose money.


The stabilization of the price at ~450$ from Apr/25 to May/19 must indeed have been due to absence of further bad news from the Chinese government, and to the "five exchanges" public pledge to make the game more friendly to small players.  But I don't see why the sudden rise after May 20 could have been due to that.

The May/2014 "bubble" was also very different from the typical bubble -- not an exponential that started off gradually and accelerated, but instead a steep linear rise, starting with no advance warning at all.  Looking closely, it was actually a series of concentrated buying episodes, each lasting only a couple of hours, separated by days of aimless (or downward) wandering.   

I explained earlier my theory about that "bubble", although I still cannot tell who those mystery buyers were.  I think (but with not much confidence) that those late-May buyers are still mostly holding; so that the -300$ drop after Aug/2014 is not due to to them, but is only a continuation of the drop from Feb to Apr, namely the Chinese speculators continuing to pull out.  (By the way, Bobby Lee of BTC-China claimed that the Huobi and OKCoin broke their pledge, some time after May.)

Prices do not move on their own, by looking at their past history, without any external causes.  Apple stock goes up or down because of their current products and marketing, not because of what its price did 5 or 20 years ago.

I wonder how the poor BTC price managed to survive 2009 without going insane.  Imagine having to decide whether to go up or down, every single day, without even one year of past history to tell it what to do.

Seriously, the previous history of bitcoin (and not just of its price) certainly influenced those 3 events, especially since they appear to have been mostly the opening of short-term speculative markets (as opposed to communities of computer nerds, as in 2009, or people using bitcoin for payments, as may have been the case of some previous bubbles).  Presumably, many of the people who bought coins in those three events did so because they saw those multi-year trend extrapolations and believed them.  But even they surely were more impressed by the price increase in the previous year than by what happened in the previous years.

The events before 2013 also prepared the ground by soaking up the most part of the 14 million coins, leaving a relatively small amount for short-term speculators to play with; so that the entry in 2013 of N new traders in the game would have a much larger effect on prices than it would have had otherwise.  And, granted, many of the long-term investors who are holding the bulk of those older coins may do so because they believe in that multi-year TA, too.

However, the price got from 140$ to 800$ not because of some mysterious "multi-year trend force" pulled it up, but because the Chinese speculators discovered bitcoin and bough it en masse; and it fell from 800$ to the present 350$ not because of some even more mysterious "correction force", but because the Chinese government policies have been driving most of those speculators away.  It can't get more obvious than that.


Great. You will see that it will all begin to make sense from now on.   

Too bad that it makes the price nearly impossible to predict.  Lines on charts cannot tell whether Bitcoin will be the next TelexFree in Brazil, or whether the US government will change its mind and decide to ban it...

Perhaps.  It is a privately funded company, so they are not required to publish their accounting, and may be arbitrarily creative with their interpretation of it.

Umberto Eco observed that, if you want to know how was life in ancient times, you need only read what was strictly forbidden by the laws of the time.  For example, there was an article in the bylaws of the Templars that forbade the knights from raising chickens inside the headquarters of the Order.  Another article prohibited a knight to insult his officer, dump the armour and weapons at his feet, and stomp out of the room, slamming the door.

Now, it seems that Bitpay insists that they are not an exchange, and thus the client should not use them to convert bitcoins to dollars, by sending a "payment" to himself.  They demand all payments to be to actual merchants, in exchange for some goods or services.  Therefore...   

By the way, in this thread it is claimed that an infamous manufacturer or mining equipment used Bitpay to launder 1 M$ worth of bitcoin that was mined on their customers' machines -- specifically, under pretense of advance payment of a large purchase by a mining pool.

I believe that the demand that caused the Nov/2013 bubble is nearly gone by now. 

Another bubble that may have deflated completely was the one of Apr--Jun/2011, that lifted the price from ~0.8$ to ~12$.  The segment of the market that created that demand, I suspect, had all but vanished by early 2012.  Its demise was however masked after Nov/2011, when the price was still ~2.3$.  On that date, some other market opened, and the resulting demand lifted the price to ~5$.

It is not certain that each bubble is always bigger than the previous one.

For one thing, the price is not proportional to the demand; the same absolute increase in demand will cause a much larger % rise in price, if the supply is already limited because of previous demand.  That means that the bubbles may not be increasing in terms of extra demand, even of they have increasing effect on price.  It also means that, for example, a market segment that lifted the price by +5$ when it opened in 2011 could cause a drop of -150$ if it closed today.

Moreover, a small surge in price, that would be very significant if it has occurred years ago, may not even be visible if it happened today.  Thus, it may be that bubbles come in all sizes, randomly -- but we only notice a bubble when it is comparable to all the previous bubbles together.  Hence the impression that bubbles are steadily increasing.

Finally, the bubbles of Nov/2011 and May/2014 were smaller than the previous ones.  By the way, both were noticed only because they happened after a substantial deflation of those previous bubbles.  If the Nov/2011 surge (+2.7$) had occurred with the price at 12$, rather than at 2.3$, it would have been ignored as mere "noise".  Ditto for the May/2014 bubble:  a jump from $450 to $600 was quite dramatic, but a jump from 800$ to 950$ would have been just noise.

I don't know, but I seem to recall Huobi (or OKCoin?) boasting of a 10 M$ VC investment, earlier this year.

This amount seems to double at each retelling, like my crypto holdings.    I think I saw 70 million in an article yesterday.

Anyway, many bitcoin services now seem to be making enough money to justify that much investment:

* By my estimates, SMBIT has collected 2--5 M$ in fees from its clients, so far.  When it started in Sep/2013, it also sold some 18'000 old BTC that belonged to its founders, which may have netted them another 2 M$

* Bitpay claimed to have processed 100 M$ of payments in 2013.  I don't know how much they processed in the last 12 months, but they must have made several M$ in fees and trading margins.

* Bitstamp clients trade over 10'000 BTC per day.  Assuming 0.3% average trading fee, that is 30 BTC/day, or ~3.5 M$/year.  Exchanges may also make money from deposit/withdrawal fees, interest on leveraged trading, arbitrage, trading against their clients, etc.

* Large mining enterprises may earn hundreds of BTC per day, and their costs (including equipment) may be 50% of that, or less.  Thus, their net profit may be in the tens of M$/year.

So, there does seem to be enough revenue sources in the bitcoin ecosystem to justify 100 M$ VC investment -- even if it will not grow beyond its present size.

(All the revenue of those companies, by the way, comes out of the pockets of those who are buying and/or using bitcoins now.)

I do not know whether the price will go below 100$, but it is not impossible. 

The current price is basically the result of three major surges in demand:

(1) Jan-Apr 2013 (that increased the price by about +125$, from ~15$ to ~140);
(2) Oct-Nov 2013 (increased by about +660$, from ~140$ to ~800$), and
(3) June 2014 (about +150$, from ~450$ to ~650$).

The first two events left the price at ~800$ in Jan/2014.  From Feb to May the price fell by about -350$; the most likely cause is partial loss of the demand that caused bubble 2, the only one that seems large enough to cause such a drop.  That would explain also the continuing drop since Jun/2014 (by about -300$).

If bubble 2 (only) deflates completely, the price may fall to 275$.  A partial deflation of the other two bubbles would be enough to take the price below 100$.

I suspect that bubble 1 is Chinese too, but in the special economic zones, and perhaps with a different demographics from bubble 2.  I still don't have a clue about bubble 3, but I see signs that it may be deflating too.

There is no real data on BTC adoption.  Anyway it is obvious that the BTC price is due to speculation, not adoption.  Without speculation, the demand for payment use may not be enough to support 100 $/BTC.

The NUMBER of transactions is rising, but the daily transaction VOLUME IN USD is basically flat, somewhat down from January.  However, we do not know how much of that is actual payments (BTC changing hands).

Merchant integration means more merchants are accepting dollars or euros that come from the sale of bitcoins.  It gives more excuses for early adopters to sell their old coins.  I have yet to see evidence that it is attracting new users.

VC funding seems to be going mostly into service companies, like exchanges, fund management, and payment processors; not into bitcoin itself.  Most of those investors do hope that the price will recover, or at least stop falling, so that they get more customers; but they will make money even if the BTC price gradually goes to zero.  And some service companies (such as slightly dishonest investment funds) will make MORE money in this case.

The big fundamental fact in the last 11 months is strongly negative: the Chinese government has made bitcoin nearly useless in Mainland China.  Apparently, the Chinese speculators who drove the price from ~140$ to ~1200$ have been leaving the market, with some ups and downs, since last December.

A new bubble will require opening some new market, bigger than Mainland China was before de December decrees.  Will the COIN ETF do that?

Indeed, the following information ought to be widely known:

SECURITY PRIMER FOR DRUG SITE OPERATORS

* Never use your real life name for any purpose related to your site.

* Choose a secure moniker: 10 or more characters, including at least two digits and a spelling error, e.g. "PyrateAt17".

* Keep a low web profile: gray background, 8 pt fonts max, no flashy images.

* Paint your server with camouflage pattern.

* Be sure to wear the Guy Fawkes mask and hat whenever you log into your server.

* Always use a condom when plugging the internet cable into your computer.

* To receive payments from customers, never use blockchain addresses generated in your own country.  When needed, take a weekend trip to Mexico (or, better, North Korea) and generate a few thousand addresses there.  (If you can't travel, find someone in those places who is willing to do that for you and send you the address-key pairs by email.)

* To protect your coins and records from being seized, spell all file names in your laptop backawards, e.g. "tad.tellaw".

* Post an "EXIT" sign on your front door. That may give you a few precious extra minutes in case of a raid.

* If a customer insists on picking up the merchandise in person, before giving him your location make him swear that he is not from the FBI.

Also, the Google index built from page URLs is often wrong, because when old posts are deleted, later posts will appear on different pages.  ("Deleted" posts should be reduced to a stub, not really deleted. Make a note of that for when you will build your own forum software.) 

It would have been better to do the opposite -- index the posts with their permanent URLs, but not the pages.