Silk Road forums
Discussion => Silk Road discussion => Topic started by: 20247245 on February 04, 2013, 01:06 pm
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First of all, i apologize if this topic already exists here, but i couldn't really find it anywhere!
As you might have noticed, the price of BTC has reached an all time high recently - I invite you, the people SR, with your infinite wisdom, and hive mind, with your drug enhanced brain prowess, to provide theories/reasons as to why this might be happening.
In my opinion i think its because btc are becoming more widely accepted as payment (even on the clearweb) , therefore more people are looking to buy, and the supply of btc has remained somewhat steady (low supply, high demand, as any economist in a free market will tell you increases prices!).
Also - vendors, how do you cope with such drastic price changes? Are your listing set to fluctuate accordingly? ( i read somewhere that vendors can link the prices of their goods in USD, and have them move appropriately - is this correct, or did i dream it up?)
Discuss!
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First of all, i apologize if this topic already exists here, but i couldn't really find it anywhere!
As you might have noticed, the price of BTC has reached an all time high recently - I invite you, the people SR, with your infinite wisdom, and hive mind, with your drug enhanced brain prowess, to provide theories/reasons as to why this might be happening.
In my opinion i think its because btc are becoming more widely accepted as payment (even on the clearweb) , therefore more people are looking to buy, and the supply of btc has remained somewhat steady (low supply, high demand, as any economist in a free market will tell you increases prices!).
Also - vendors, how do you cope with such drastic price changes? Are your listing set to fluctuate accordingly? ( i read somewhere that vendors can link the prices of their goods in USD, and have them move appropriately - is this correct, or did i dream it up?)
Discuss!
How do we cope with a pay rise? Oh, it's quite easy hehe.
If some vendors don't want to take the chance of coins going up or down they can hedge so they will receive the exact same amount in $$, irrespective of coin value.
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Ok I will enthrall you with my acumen, People buy more price goes up, people buy less price goes down. It's not Harvard standard economics is it? The recent press( intentional or not) who knows with this fucked up place, have had a right go at degrading SR, but like with anything the adverse affects have created more people to join, then buy BTC the the rates flies up gedditt?
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In my opinion i think its because btc are becoming more widely accepted as payment (even on the clearweb) , therefore more people are looking to buy, and the supply of btc has remained somewhat steady (low supply, high demand, as any economist in a free market will tell you increases prices!).
That is probably true. I'll just quote what I wrote before about it.
The exchange rate of bitcoins has nothing to do with mining difficulty. It is based on supply and demand. On trading platforms like MtGox, people post buy and sell orders at various prices. Let's say that BTC are currently trading for 15 USD. If a bunch of buy orders come in, then all the BTC at 15 USD will be bought up, so the next buyers will have to get BTC that are posted for 15.50 USD, then 16 USD and so on.
Conversely, if more people are trying to sell BTC than buy them, then sellers will have to post orders at decreasing prices in USD to get them sold (they are in effect competing to sell their BTC, so naturally the price will go down).
Take a look at http://mtgoxlive.com/orders
The diagonal lines indicate how many BTC will have to be bought or sold to move the exchange rate to that point. You'll notice some vertical jumps around the whole dollar marks. That's human psychology at work in the market. People are more likely to post a sell order at a round number like 20 USD, although plenty of people post sell orders at intermediate prices.
Based on all buy and sell orders, they know exactly how much BTC will have to be bought (or how much USD will have to be "bought" by selling BTC) in order to move the exchange rate to any point.
The rising BTC price means that more people are buying then selling bitcoins. It simply reflects the growing popularity of bitcoins.
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How do we cope with a pay rise? Oh, it's quite easy hehe.
If some vendors don't want to take the chance of coins going up or down they can hedge so they will receive the exact same amount in $$, irrespective of coin value.
Thank you sir! i thought as much..
Ok I will enthrall you with my acumen, People buy more price goes up, people buy less price goes down. It's not Harvard standard economics is it? The recent press( intentional or not) who knows with this fucked up place, have had a right go at degrading SR, but like with anything the adverse affects have created more people to join, then buy BTC the the rates flies up gedditt?
Kapeesh!
The exchange rate of bitcoins has nothing to do with mining difficulty. It is based on supply and demand. On trading platforms like MtGox, people post buy and sell orders at various prices. Let's say that BTC are currently trading for 15 USD. If a bunch of buy orders come in, then all the BTC at 15 USD will be bought up, so the next buyers will have to get BTC that are posted for 15.50 USD, then 16 USD and so on.
Conversely, if more people are trying to sell BTC than buy them, then sellers will have to post orders at decreasing prices in USD to get them sold (they are in effect competing to sell their BTC, so naturally the price will go down).
Take a look at http://mtgoxlive.com/orders
The diagonal lines indicate how many BTC will have to be bought or sold to move the exchange rate to that point. You'll notice some vertical jumps around the whole dollar marks. That's human psychology at work in the market. People are more likely to post a sell order at a round number like 20 USD, although plenty of people post sell orders at intermediate prices.
Based on all buy and sell orders, they know exactly how much BTC will have to be bought (or how much USD will have to be "bought" by selling BTC) in order to move the exchange rate to any point.
This is sort of what i was looking for - Has mining not proved as cost-effective for those engaged in it? Are there less/more btc in circulation?
Im also curious to see what % of bitcoins are spent on SR, and other websites alike - I mean if you are buying on clearweb, its a hassle to get btc in the first place, why would you bother?
Methinks for one its speculators that are buying them in hopes of making a profit
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This is sort of what i was looking for - Has mining not proved as cost-effective for those engaged in it? Are there less/more btc in circulation?
Miners are making money, if that's what you're asking.
https://blockchain.info/charts/miners-revenue
https://blockchain.info/charts/miners-operating-profit-margin
Im also curious to see what % of bitcoins are spent on SR, and other websites alike - I mean if you are buying on clearweb, its a hassle to get btc in the first place, why would you bother?
Researcher Nicolas Christin estimates $1.2 million in monthly SR seller revenue, so you just have to figure out how much fiat currency is converted to BTC per month. That's hard to determine because there are so many ways of buying bitcoins, and you don't know from analyzing the block chain which are purchases (or conversions from fiat currency to BTC) and which are just bitcions moving around between addresses. It's trivial to determine the transaction volume (ie, BTC moving between addresses) but lots of that activity is people moving BTC around to mix it, obscure it, etc., and that doesn't represent purchases of BTC.
Methinks for one its speculators that are buying them in hopes of making a profit
Yes, I think it's mostly speculators, various anarchist types who support non-state sponsored currency, and people buying illegal things.
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I agree with the above comments and will add:
When the price is rising, People tend to try and wait longer to sell (if they plan to sell). Also more people think buying them seems like a good idea. This all pushes the price higher and self fulfills.
As soon as the price falls a bit, some will sell that have been waiting for the right time. If enough sell, the price will move down enough to spook the masses into fear selling. Then we will get another crash unless speculators are buying all the btc near current prices. I'd guess fear selling will lead to low price opportunities for speculators and that will push the price down hard soon.
These fluctuations in this unstable currency don't bother me much as the long-term trend for BTC is upward and I think signs are good for that to remain true for the forseeable future. If I had cash, I'd look at the next crash as a likely opportunity. That said, I would not gamble like this unless I could afford to lose my stake. I do see this as gambling due to the lack of stability.
As a vendor, the instability is quite a concern, especially due to the potential of escrow taking a long time. Hedging my sales costs like 4% or somesuch and I hate to pay fees like that even if they are fair. I guess if I think a crash is imminent, I should hedge my sales? I have not really figured it out yet. I have not hedged any sales yet. I think that means I am still optimistic :-)
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hopefully price will keep on rising
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I believe the block reward being cut down to 25 BTC instead of 50 BTC is one of the major contributing factors... also FPGA mining.
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We'll all look back and laugh when we are paying 0.00000002 BTC for a key of cocaine in 2024
And we'll also wonder who called it a "coin" in the first place when the metaphor breaks.
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We'll all look back and laugh when we are paying 0.00000002 BTC for a key of cocaine in 2024
And we'll also wonder who called it a "coin" in the first place when the metaphor breaks.
Yeah I hear my friends talk about how great it is to get a 10% return on investment per year and want to snicker, at times. Don't get me wrong BTC are risky but there's a consensus on these forums (from what I've seen) that it will continue to slowly rise.
The most hilarious thing about it is that even if I am confident that it will keep going up, I still don't hold onto my BTC. Better to buy drugs then sell for 300-400% profit in a week / month's time than to hold onto it for whatever ROI it has during that period.
Regardless of what happens it is a fun rollercoaster ride.
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Yeah I hear my friends talk about how great it is to get a 10% return on investment per year and want to snicker, at times. Don't get me wrong BTC are risky but there's a consensus on these forums (from what I've seen) that it will continue to slowly rise.
The most hilarious thing about it is that even if I am confident that it will keep going up, I still don't hold onto my BTC. Better to buy drugs then sell for 300-400% profit in a week / month's time than to hold onto it for whatever ROI it has during that period.
Regardless of what happens it is a fun rollercoaster ride.
Excuse my ignorance, but what is ROI? (in my head its Republic of Ireland...haha...)
I was thinking about buying a few bitcoins, purely for speculative purposes (buy them and throw them into a wallet and throw the key to wallet in some electronic vault - you get the idea, haha...) to see if i could make a profit, but im still unsure about it - I mean i dont really see the btc disappearing anytime soon, and i might be able to make a tidy little profit!...
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We'll all look back and laugh when we are paying 0.00000002 BTC for a key of cocaine in 2024
And we'll also wonder who called it a "coin" in the first place when the metaphor breaks.
During runaway inflation of fiat currency, when common items start to cost thousands and millions of <insert currency name>, they simply redefine the currency. So a million old X = 1 new X. They could do that with bitcoins too, except in the opposite direction. Currently, bitcoins are divisible to .00000001 (10^-8), which is called a Satoshi, but that's not a hard limit. 1 Satoshi could be redefined as 1 bitcoin and re-partitioned to 10^-8. In that case, someone holding 10 BTC today would hold a billion of the new bitcoins.
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Yeah I hear my friends talk about how great it is to get a 10% return on investment per year and want to snicker, at times. Don't get me wrong BTC are risky but there's a consensus on these forums (from what I've seen) that it will continue to slowly rise.
The most hilarious thing about it is that even if I am confident that it will keep going up, I still don't hold onto my BTC. Better to buy drugs then sell for 300-400% profit in a week / month's time than to hold onto it for whatever ROI it has during that period.
Regardless of what happens it is a fun rollercoaster ride.
Excuse my ignorance, but what is ROI? (in my head its Republic of Ireland...haha...)
I was thinking about buying a few bitcoins, purely for speculative purposes (buy them and throw them into a wallet and throw the key to wallet in some electronic vault - you get the idea, haha...) to see if i could make a profit, but im still unsure about it - I mean i dont really see the btc disappearing anytime soon, and i might be able to make a tidy little profit!...
I wrote out a couple of paragraphs explaining but for some reason Tor/Mozilla fucked up and erased my post. Here is Wikipedia's explanation (clearnet, obviously):
http://en.wikipedia.org/wiki/Return_on_investment
You almost certainly understand the concept, Return on Investment (ROI) is just the technical term that describes it.
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it has nowhere to go but up.. but still, if SR came out and started using the alternative litecoins in addition to BTC, you can definitely count on bitcoins to make a quick drop and rise.
i think the currency will continue to become more and more commonly used, but i don't see how it'll become a legit world currency.
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BTC works as any currency based on a "physical" asset. The more people have faith in that currency (heavily influenced by the number of people using that currency / fluidity of transactions - it got a lot of press recently and is even getting used mainstream, such as for donations to wikileaks or others), the stronger it gets comparatively to other currencies. Plus, BTC are made as so they'll get harder and harder to mine over time, so a part of their increase in value is built into the system itself.
Sellers just have to set their prices accordingly, and buyer to always think in their local currency. You can also try a little trading. It's always good fun, as long as you don't build your groovy BTC day trading techniques during your BTC bought LSD trips.