Silk Road forums
Discussion => Security => Topic started by: C21H23NO5 on July 17, 2012, 12:44 am
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I haven't been on SR long, less than a month still. But I notice that bitcoins have jumped +2$ since I joined, so I was wondering if the price of a bitcoin is just expected to keep rising like it has? I can read pretty far back in time what prices were (on mtgox**), but I cant exactly see a trend besides certain hours of the day (because I check a few times a day out of boredom). Has there ever been a trend in depreciating value for bitcoins?
I know that I don't have to worry much because of fund-hedging (granted the vendor offers that option), but I'm just curious. :)
Thanks
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I've been on the site since March. When I started it was around $5/Bitcoin. It even dipped as low as $4/coin. Today I bought some coins at $7.85 and just a few minutes ago I saw it top $9!
This seems pretty crazy. I assume most vendors do hedging on here. When rates gets super-inflated like this, SR most lose a lot of coin.
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It hit 9.31 a sec ago.
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I wouldn't speculate on this currency. It's rising too fast and could easily drop.
I think I had it backwards in my last post. If coins keep inflating then actually SR is making even more money than before. The only thing to be wary about is the crash.
Conspiracy theory: If the DEA wanted to hurt us then they could pump up the value and then let it drop like a rock. Some sellers could lose a lot of money this way.
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I try not to watch it for long periods of time, it gives me anxiety haha. I wish that hedging was a little more obvious while browsing the listings instead of just in escrow after you purchase it (please let me know if this is incorrect, as ive only had 2 purchases, and that was the only way I believe I was able to see exactly how much I spent in USD amount).
It's so unsatisfying seeing only a couple of bitcoins in your account after dropping so much $$$. Oh well, thats just the way of the road I suppose.
SIDE-NOTE: could the potentially be due to hackers stealing 40k USD (i think), from "bitcoinca." I skimmed over a post related to that earlier, and it seemed to be getting several pages of responses in only a day, which i imagine is problematic .
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I would bet it is the New Gawker article about SR getting people buying more BTC. It could be speculation, it could be a stupid attempt by the DEA to buy up all the bit coin (I can not believe they would be that stupid but you never know)
Who knows, I dont hedge my account so with prices like this I am selling. ;) If it drops Ill buy or make more and wait for the next peak
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I wouldn't speculate on this currency. It's rising too fast and could easily drop.
I think I had it backwards in my last post. If coins keep inflating then actually SR is making even more money than before. The only thing to be wary about is the crash.
Conspiracy theory: If the DEA wanted to hurt us then they could pump up the value and then let it drop like a rock. Some sellers could lose a lot of money this way.
That is absurd lol, but since the government is absurd I can't put it past me that the DEA would actually spend reckless amounts in an attempt to cause a disruption in bitcoins. Lord knows they've confiscated enough drugs to sell em back to the community, make a couple million $$ fast, and then try something like that. BUT! They still always have the opportunity to spend that money back in to their own agency. Not to mention that SR practically supplies DEA jobs year-round. It would only be hurting them to try.
1 word folks, make sure you *hedge* everything. religiously
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I don't know how far back you guys have looked at the history of BTC but it's gone through a massive upward boom followed by bust already. The market is worth something around $50 million, it's quite possible for a mid sized bank to fuck the market up, but the DEA would have a hard time justifying speculation on BTC to fuck some SR dealers.
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Is there any way to know when the currency is going to fluctuate either way? Its fking madness the last few months, Is it a good time to buy now because they could be another euro per bitcoin in the next week or two?
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I would much rather they just stay within the 5-6 USD range =(.
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Is there any way to know when the currency is going to fluctuate either way? Its fking madness the last few months, Is it a good time to buy now because they could be another euro per bitcoin in the next week or two?
Nobody ever became successful without taking risks, I say invest a little because this is likely a spike that was caught early enough to capitalize off. (& yes, spending 1$ on a lottery ticket is still a risk).
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The reason for the fast-paced value shifts are essentially because the BTC economy flows with much more liquidity than normal money because it is unregulated and has no central bank that controls it. If all money worked in this way then it would rise and fall in value in just the same way however that would not be in any way viable for a stable national economy. BTC doesn't have this restraint so it can be volatile.
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There are some interesting rules to the creation of BTC and you can probably predict rises based on when the subsidy to mining is going to get cut.
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Sounds like an awesome graduate thesis for an MBA degree.
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Looks like Bitcoin becomes more expensive during summer, at least judging by last year's summer figures where it went as high as 1 to $10. Maybe with people going on festivals / holidays and wanting to buy some good drugs to take along? Anyway it's currently at around the 8.5 mark and I would say it could still go higher up.
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actually, last summer it reached over $30 per coin...
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actually, last summer it reached over $30 per coin...
Do you think you can provide a quick timeline of averages you have experienced over a typical year? Maybe just this last year.
June ~ 6 to 6.50
July ~ 6.9 to 8.5
something like that if possible?
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see here sir
http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g25zcv
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BTC is volatile also because information and forecasting is poor, no one really knows much about the btc economy due to the mixers and lack of transparency that makes it a good solution for people on here.
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The guy who said Bitcoin was the Devil's way of teaching geeks Economics.
Well, he was right... :D
I say this carefully, so read in the same manner.
*Any* possible profit producing regularities or patterns in the Bitcoin network are not going to last for long, that's if they exist at all even now, which I seriously doubt. There is no free money here.
Finally, if you are interested in why this is the general rule, you need to study markets and efficiency. Basically, the market is self-aware. A price is a number which factors in the collective consensus or average on the future. Thus all future predictions by market participant are part of the price, which ultimately means you have to be smarter than nearly everybody in the entire economy of Bitcoin if you are to extract trades that produce profit in a fashion independent from random chance (remember, a rising tide lifts all boats...). Not only that, but you have to do this consistently.
Currency markets are even more efficient than stock markets. In stock markets it's easier to come up with reasonable notions of why certain stocks will outperform market averages. But if you're speculating on an entire currency, then you're indirectly betting on *all* the things done or not done with that currency. There's levels of unpredictability, and this is in the stratosphere.
Bitcoin is an unusual case, because the supply side is completely understood, with possibly bitcoin loss being the only uncertain factor I can see, but that will be quickly worked out and capitalized on, people screwing up their transactions will follow a normal distribution so this is easy to obtain a stable average. There are X Bitcoins and they will exist in X time periods.
This information is, by default, factored into B$ prices. So you are betting specifically on the demand for Bitcoins, having knowledge about the market for them that others do not. Good luck with that.
Paradoxically, if everybody stops trying to eke out profit from this system, everything I just said becomes junk. In a sense, it is a circular argument or self fulfilling prophesy. Even more funny, everything I have said, although we know it to be true, can never be proven to be true, ever. And if you think you understand market efficiency or that you are certain that it is wrong, then you don't even grasp the concept. It's a philosophical mindfuck of the highest order with serious real world implications in science, along with Godel's Incompleteness Theorem to which it is no doubt related.
tldr; Price and value are very much correlated. This has implications for you. Like if you see a £100 dollar bill on the floor of a public space, it could be £100, or it could be a £100 superglued to the pavement and there's a bunch of kids laughing at you taking photos of your hilarious failed attempts to pick it up.
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Conspiracy theory: If the DEA wanted to hurt us then they could pump up the value and then let it drop like a rock. Some sellers could lose a lot of money this way.
It would be awesome if they did so, and then failed. Which is not an unlikely outcome either. A rapidly rising price will quickly attract professional speculators, and then the general public. Which is... kinda something they want to avoid. I have never met a person who knew about bitcoins who didn't know about SR. The vendor's biggest problem could be just logging onto the site due to the sheer volume of new traffic acquiring illicits.
Like J.M.Keynes said, the market can remain irrational for longer than you or I can remain solvent.
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how would we know you dumbass?
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How quickly is the exchange rate changing? I was planning on making my first SR purchase tomorrow but am now concerned that I may take my $200 to the bank, wait a few hours for bitcoins to be deposited and then have the price change and not be able to afford my goodies ...