Silk Road forums

Discussion => Philosophy, Economics and Justice => Topic started by: T5 on February 12, 2013, 10:39 pm

Title: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: T5 on February 12, 2013, 10:39 pm
Hello all bitcoin investors!

Just read a very interesting round up of all the milestones reached by the bitcoin in the month of January alone. There are tons of linked articles to support the claims the author makes. Here is the link: http://bitcoinmagazine.com/january-2013-bitcoin-news-roundup/?utm_source=twitterfeed&utm_medium=twitter

Don't forget also that bitcoin trading is becoming more and more popular, and that the author of the article didn't talk about the role of SilkRoad in the bitcoin world. With the site growing at an astronomical rate, it can only help the value. I for one think it's an excellent news that bitcoins are starting to be used for way more things than simply speculation and illegal money transfers. Kind of add strength to the currency.

So who here really got invested in bitcoins? Would like to hear from your opinion on what the future may hold for the crypto-currency. If you are still not invested, well what are you waiting for??? Currency warfare is becoming ever more cruel and intense around the world! Time to protect yourselves :)

Cheers! :D
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: KQueen on February 12, 2013, 10:48 pm
wow, great article, thanks :D

bitcoin is the future!
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: busta999 on February 14, 2013, 11:10 am
There are indeed many good signs and bitcoin will likely have a bright future, one should however not ignore that there are very real possible dangers too before putting all your savings in bitcoins.

Biggest risk is probably some moves from politicians / central banks. While they probably cannot ban bitcoin, they may be able to ban the exchanges from operarting in ones country and banks from cooperating with bitcoin exchanges, claiming to counter money laundering or drug trafficking or to impose some other strict controls. This would almost certainly send the value of bitcoin crashing and even if it bitcoin technically might survive this it could conceivably make it of little practical use for most users.

I would be really surprised if the politicians and bankers give up their control of money without a fight. Same as they more and seem to develop a taste for censoring the internet. Hopefully bitcoin will have enough muscle and momentum behind it to fight off these challenges when they come. 
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: sleepyeyes2k2 on February 14, 2013, 02:38 pm
One thing that puzzles me about the sharp uptick in BTC value is the monolithic response of vendors' prices on the Road.  Granted, I have a narrow view of this.  But, the couple dozen or so vendors who sell the products I tend to buy the most haven't repriced anything, even though the value of the BTC has swung from $20 to $26 just since the beginning of February.  I'd be interested to know how sales have been affected, and whether or not vendors have gotten the message that a rise in BTC value does not necessarily translate into a rise in demand for their products, and a corresponding price increase.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: MagicMan on February 14, 2013, 02:56 pm
One thing that puzzles me about the sharp uptick in BTC value is the monolithic response of vendors' prices on the Road.  Granted, I have a narrow view of this.  But, the couple dozen or so vendors who sell the products I tend to buy the most haven't repriced anything, even though the value of the BTC has swung from $20 to $26 just since the beginning of February.  I'd be interested to know how sales have been affected, and whether or not vendors have gotten the message that a rise in BTC value does not necessarily translate into a rise in demand for their products, and a corresponding price increase.

Vendors generally peg their prices to the USD meaning that the BTC cost of the listings changes as the value of a BTC changes with respect to USD. For example, say something costs $100, that's ~4btc at $25/btc but if btc were to go up to $50 each, then that same listing would only be 2btc.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: dex on February 15, 2013, 03:08 am
Cool. I'm surprised more investors haven't already linked up to the bitcoin
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: nuyt on February 15, 2013, 03:44 am
Damn, hadn't checked mtgoxlive in a couple weeks, now see it's up to $27+! Should have bought more when it was at $20 when I last checked, but thought it would drop back down. I'm way too timid with my investment strategies. :(
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Tyl3rdurden on February 18, 2013, 03:24 am
Just need Kim Dot com to use it to take his www.mega.co.nz payments
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: camomug on February 18, 2013, 03:53 am
I remember the days when it was just $6/btc...if only I wasn't stupid and just spent all my money :(
I never realized how big bitcoins would become
How high do you think the price will get before they start crashing down? I can't even imagine it rising to $50/btc
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: dex on February 18, 2013, 04:22 am
Just need Kim Dot com to use it to take his www.mega.co.nz payments
Already done I believe
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: T5 on February 19, 2013, 11:31 pm
Just need Kim Dot com to use it to take his www.mega.co.nz payments

He announced somewhere this week they will now use Bitvoucher as a premium account reseller!
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: T5 on February 19, 2013, 11:32 pm
I remember the days when it was just $6/btc...if only I wasn't stupid and just spent all my money :(
I never realized how big bitcoins would become
How high do you think the price will get before they start crashing down? I can't even imagine it rising to $50/btc

I wouldn't be too surprised if the BTC reached 50$ by this year's end to be honest!
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Fallkniven on February 28, 2013, 11:15 pm
the media is giving bitcoin bad karma by linking it with only silk road and drugs.

if they painted the bitcoin in a pretty way, linking it with online shopping, amazon, ebay etc more people may be tempted by its anonymity.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: iheartmolly on March 01, 2013, 07:06 am
In my opinion, what I see in the short term as to what could cause the value of BTC's to fall is...

if a major BTC website like MTGox gets hacked(robbed). I think this will make people feel like BTCs is an unsafe wild wild west currency and that thought alone may make people start to dump their BTC back to cash.

or if SR is permanently taken down. In which demand will drop.

I really want to personally invest large amounts of cash in BTC, but I don't like as to how much information these websites want about your identity. Seems like that could easily lead to Identity Theft.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Tyl3rdurden on March 02, 2013, 06:01 am
$50 a coin IMO is now an easy target, it has support at 31.8 which is a huge psychological level, only bad data/news can push it below that.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: JackBlue on March 04, 2013, 03:24 am
$50 a coin IMO is now an easy target, it has support at 31.8 which is a huge psychological level, only bad data/news can push it below that.


When you say "psychological level"  I'm afraid that's exactly what it's based on.  Exchange rates in Real world "fiat"  currencies increase for one of two reasons.   If interest rates set by a central bank are increased bank deposits pay higher interest that attract investors looking for higher interest returns.  That obviously doesn't apply to the btc exchange rate because coins in our wallets or mount gox. accounts don't pay interest.  The second reason exchange rates typically increase is if there's a booming economy and a lot of currency is needed to conduct transactions,  increasing demand for money.   I can certainly see some of the second reason explaining the recent rise.   But does anyone think that real economic activity in the bit coin economy has more than doubled in the last 2 months?   maybe but I'm skeptical.   Then there is market psychology.  Markets can go up for a long time just because investors convince themselves that they will keep going up,  even if there is no real economic reason why they should. Think 2007 USA housing market,  1999 Tech Stock market.   Bubbles almost always end badly and hurt a lot of people.   I'm not saying the bit coin market is definitely a bubble.   But it could be and it's really hard to identify a bubble when you're in the middle of it.

I'm just suggesting everyone think long and hard before investing money that's essential for your future well being.   Sure if you have money you're comfortable risking and can afford to lose go for it and you might win big.    But the bit coin market isn't huge in world terms and if a hostile government decided btc was against its interests it could very easily wipe out a huge amount of value with very little effort in the big scheme of things.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: T5 on March 04, 2013, 11:14 am
$50 a coin IMO is now an easy target, it has support at 31.8 which is a huge psychological level, only bad data/news can push it below that.


When you say "psychological level"  I'm afraid that's exactly what it's based on.  Exchange rates in Real world "fiat"  currencies increase for one of two reasons.   If interest rates set by a central bank are increased bank deposits pay higher interest that attract investors looking for higher interest returns.  That obviously doesn't apply to the btc exchange rate because coins in our wallets or mount gox. accounts don't pay interest.  The second reason exchange rates typically increase is if there's a booming economy and a lot of currency is needed to conduct transactions,  increasing demand for money.   I can certainly see some of the second reason explaining the recent rise.   But does anyone think that real economic activity in the bit coin economy has more than doubled in the last 2 months?   maybe but I'm skeptical.   Then there is market psychology.  Markets can go up for a long time just because investors convince themselves that they will keep going up,  even if there is no real economic reason why they should. Think 2007 USA housing market,  1999 Tech Stock market.   Bubbles almost always end badly and hurt a lot of people.   I'm not saying the bit coin market is definitely a bubble.   But it could be and it's really hard to identify a bubble when you're in the middle of it.

I'm just suggesting everyone think long and hard before investing money that's essential for your future well being.   Sure if you have money you're comfortable risking and can afford to lose go for it and you might win big.    But the bit coin market isn't huge in world terms and if a hostile government decided btc was against its interests it could very easily wipe out a huge amount of value with very little effort in the big scheme of things.

Right, though nothing indicates that it might be a bubble. Bitcoins has only recently started being inserted into the mainstream web (Reddit, 4chan, Mega, a bunch of server hosts). I think there is a wider future for bitcoins, other than speculation and shady trades only. I wouldn't be surprised at all if the bitcoin economy had doubled in the last two months. Re-reading that article shows us many record breaking stats for most bitcoin services. Add to that the booming drug trading here on SilkRoad...

I'm inclined to think it has doubled...at least, even though it's true that right now the market psychology is at an all-time high. Not surprising for a currency that has risen from its ashes like a Phoenix...and that has now beaten the price of silver...
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: JackBlue on March 06, 2013, 02:02 am
Reassurances from people who are admittedly hoarding bitcoins and actively talking up the price of bitcoins in forums are not particularly reassuring to me.  You are saying that bitcoin demand is rising faster than people can mine new ones.  Where is that demand coming from?  If it's coming from people like you who are buying as speculators, while talking up the price on forums, that is the classic definition of a price bubble.

As of the time I wrote this, there were 10,861,225 total bitcoins either in use or being hoarded, worth approximately $442M.  That seems like a reasonable number of bitcoins for the bitcoin economy to operate smoothly.  So where are all of those 10M  bitcoins? Here's the real story.  Check out this article:

http://arstechnica.com/tech-policy/2012/10/78-percent-of-bitcoin-currency-stashed-under-digital-mattress-study-finds/   

The study is from October 2012, recent enough for me to think it's reasonable to assume not much has changed about it's conclusions.  A math/computer genius analyzed the bitcoin market at the transaction level from the dawn of time, and PROVED that 78% of the bitcoins that have been created have never been spent and are in fact being hoarded.  It seems to me that's a huge number of coins overhangning the market.  So basically, the vast majority of bitcoins are in fact being held by speculators who are waiting for the right time to sell into the market.  What would it take to trigger panic selling.  Anyone holding a large paper net worth of bitcoins who sees selling start to force down the value of bitcoins is going to be very tempted to try to cash in those paper profits before they disappear in a diving market.  That's a classic market panic, and it seems there's certainly potential for it to happen.  If a large holder of bitcoins gets in a financial crunch IRL and is forced to liquidate his bitcoins in a hurry, that could be enough to send the market on a steep slide.   The higher the price of bitcoins goes, the greater the risk this can happen, because speculators paper profits have soared, making their potential "losses" that much greater for anyone who hasn't locked in their profits by cashing out.

I would just say that anyone watching from the sidelines thinking this might be the time to buy bitcoins because it's going to keep going up, I would seriously consider rethinking that strategy.  Sure bitcoins are useful, but there are already plenty in existence to serve their useful purpose.  The "shortage" is completely artificial and caused by speculators.  The market may sound big at $442M, but that's chump change in the scheme of global finance.  Just trying to inject some realism into the conversation.  Sorry if it's a downer.  I just dont' want to see people investing their hard earned money into a speculative market that is probably very risky and certainly not a safe investment for money that you may really need someday.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Ben on March 06, 2013, 02:28 am
Bitcoins are difficult to compare to ordinary currencies. 78% of them being 'hoarded' doesn't really mean that much, its just like people having dollars or euros in savings accounts. These euro's and dollars do not move for decades sometimes, but that doesn't mean they are not real.

Perhaps they are actually being held onto for speculation, that is very hard to determine.

The exchange rate of BTC has gone up at a very steep rate though. A year ago we were testing $5 as a bottom, today a bottom of $40 is being tested. The $40 figure is interesting since it is more than the price of the amount of electrical power required to mine a bitcoin even with the recent increase in difficulty.

I would not consider BTC at $40 a sensible investment: with ASIC mining rigs rolling out as we speak, producing BTC will be cheaper than $40 a piece, which will result in a price collapse at some point. There is upward potential still, but eventually this will be stifled by more energy efficient computing gear becoming available.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Tyl3rdurden on March 06, 2013, 04:11 am
There will be lots of buy orders at the previous all time high ( sell orders below) this automatically gives it support. Nothing to do with anything else, its where I would put my buy/sell orders
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Trappy on March 14, 2013, 03:02 am
I feel safe investing in bitcoins, because I'm a part of the community that gives bitcoins their value.

The Silk Road.

You can say MtGox and all those other websites' transactions are what gives bitcoin its value. Maybe they do, to a some degree... But it all eventually feeds into here. Thats why I feel safe. If I spend a bitcoin outside of the Silk Road, it'll get sold by that third party for cash. Whatever entity that bought that bitcoin, has no use at all for bitcoins. That same bitcoin is going to be sold again, on MtGox or another related website to someone like me. Who'll spend that bitcoin on weed or ecstasy on here... So the cycle will continue.

:)

I suppose, somewhere down the line, that coin will end up on a lost USB drive, or a sheet of paper that gets crumpled up and thrown away, or the hard drive hosting that wallet will fail... But it had a good fucking life. That one coin made several people happy, and I feel honored to be a part of that.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Mr. Fluffles Schrodinger on March 14, 2013, 05:24 am
Damn, hadn't checked mtgoxlive in a couple weeks, now see it's up to $27+! Should have bought more when it was at $20 when I last checked, but thought it would drop back down. I'm way too timid with my investment strategies. :(

Lol wondering how you feel atm. :P  Still wishing I had bought up when it was 4 or so.  Damn....

Waiting and watching for a few years never hurt anyone. Pfffttt  This sudden increase would have returned more profit than the other things I invested in and in a shorter amount of time.  That doesn't happen often. 
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: dead salmon on March 14, 2013, 06:19 am
I feel safe investing in bitcoins, because I'm a part of the community that gives bitcoins their value.

The Silk Road.

You can say MtGox and all those other websites' transactions are what gives bitcoin its value. Maybe they do, to a some degree... But it all eventually feeds into here. Thats why I feel safe. If I spend a bitcoin outside of the Silk Road, it'll get sold by that third party for cash. Whatever entity that bought that bitcoin, has no use at all for bitcoins. That same bitcoin is going to be sold again, on MtGox or another related website to someone like me. Who'll spend that bitcoin on weed or ecstasy on here... So the cycle will continue.

:)

I suppose, somewhere down the line, that coin will end up on a lost USB drive, or a sheet of paper that gets crumpled up and thrown away, or the hard drive hosting that wallet will fail... But it had a good fucking life. That one coin made several people happy, and I feel honored to be a part of that.

I thought the way bitcoin worked is none of them are ever destroyed, only mined until a maximum 21 million exist, expected to be around year 2140.  I was wondering the other day what will happen when the maximum is reached?  Did Satori (sp?) expect some kind of steady state would be reached where future changes in the BTC follow the fiat currencies after some fashion?  But wasn't that exactly what he didn't want?  What's the endgame for BTC once all the coins have been mined?
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Trappy on March 14, 2013, 09:59 pm
Lost bitcoins are only destroyed if the machinery hosting them is also destroyed. Hell, unless that hard drive or USB has been hit with a strong enough magnet or melted, the data for your wallet.exe and the bitcoins on there, are still there.

You just need a forensic analyst, or a geek, to recover the data. The police could too, but bitcoins are legal and who would be dumb enough to think that smashing a hard drive with a hammer is enough to erase the data it contains?
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: wuq7fath on March 27, 2013, 09:13 pm
And so now that bitcoins have doubled again lol what do you guys think.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: Purple_Hue000 on March 27, 2013, 10:48 pm
I see BTC having a very bright future. The things that will be more easier once it's adopted by the mainstream. Right now we are in the wild west days of Bitcoin.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: pkizenko98 on March 27, 2013, 10:54 pm
I remember the days when it was just $6/btc...if only I wasn't stupid and just spent all my money :(
I never realized how big bitcoins would become
How high do you think the price will get before they start crashing down? I can't even imagine it rising to $50/btc

You're really not good at predicting the market are ya?  :o
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: CallmeBruce on March 28, 2013, 11:04 am
I agree about a bright future for Bitcoins. A decentralized non-nationalized unit of exchange fits perfectly the idea of a global economy. As governments and banks seek tighter controls and improve their ability to regulate record and tax our spending, the idea of bitcoins will seem ever more attractive.

However, I think what it comes down to is how robust the technology of the block chain proves to be. You can be sure that it will come under attack and those attacking it will have substantial resources. If it fails, then its over. If it holds.... well I put it out there that we will see prices in excess of $1000 for one BC in the not too distant future.
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: KazushiS58 on March 28, 2013, 12:58 pm
However, I think what it comes down to is how robust the technology of the block chain proves to be. You can be sure that it will come under attack and those attacking it will have substantial resources. If it fails, then its over. If it holds.... well I put it out there that we will see prices in excess of $1000 for one BC in the not too distant future.

The value of 1BTC was nowhere near it's current value back when MtGox was hacked so I'm sure there are many people looking into ways to attack the system or hack sites 'holding' BTC for their customers now that they are worth so much.

Other things to consider would be:
-The huge amount of mainstream press BTC are suddenly getting (at least in the UK)
-The problems in Cyprus. A lot of 'dodgy' money found it's way to Cyprus because of the set up over there, now with the government looking to take 10% off many savers they will quickly look to put their money somewhere that a government or agency can't take it. BTC is arguably the only place to put money where no one else has any influence, control or involvement beyond the exchange rate.

Fortunately I bought quite a few back in January but I need them for SR so I'm just looking at it as discounted drugs. I spent 1.68 BTC, that was £101 at yesterdays rates but I only paid £22 for them back in January.
I've been debating getting some more (and I'll have to eventually) but I don't want to buy at £50+ per BTC as the increase has been so steady and consistent I don't see how it continue. There have been nearly 4 months of constant growth surely that isn't sustainable?
Title: Re: Why We Should Feel Safe And Optimistic As Bitcoin Investors
Post by: tango on March 28, 2013, 01:33 pm
^agreed with kazushi

SR is not a main contributor to this.

There is more to the bitcoin world than SR.

The latest $20-30 rise in the past week has mainly been due to Cyprus economic situation, and the high media coverage

edited: seems like the person above that said SR was the main contributor for the rise deleted their comment