Silk Road forums
Discussion => Security => Topic started by: SleepingMind on August 06, 2012, 08:41 pm
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The BTC market has been very volatile during past several weeks. It feels like people with few million USDs can impact the BTC market sentiment heavily.
I do not know about others. But this fluctuation in the market makes me nervous to do business using BTC. Last time I bought some BTC and it took about a week for me to research some products and make purchase. While waiting I lost almost 8-10% of my money due to this fluctuation. So, this time I am holding off and waiting for the market to stabilize. My fear is that if I buy BTC today the market may go down tomorrow so much that I will loose a lot.
I have no intention of using BTC as an investment opportunity and make money off of it. All I want is use BTC to buy some goodies quickly and done with it. But sometimes it takes some time on SR to find the right product from the right vendor as vendors often go out of stock or whatever. I think two weeks is a good time to hold BTC to get whatever I want from SR. But with so much of BTC market fluctuation there is a chance of loosing a lot.
Are the vendors worrying about it as well?
Am I just being too irrational and thinking negatively?
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This is my first actual post since registering & I am actually in the same boat as you. I lost a % of my investment while waiting for a purchase.
Normally my advice (What I initially did) is to wait until you have found the product, get in touch with seller & make sure that if you spend half a day getting the funds in place that they will still be able to accommodate you - i.e. should their 1 time listing go down while you're still acquiring BTC, that they still have more of what it is you wanted.
The first issue I ever had in regards to this was following the aforementioned, only to have what I wanted bought while I actually had it in my cart. A gap of a few minutes cost me. There wasn't more to immediately purchase so I had to play the waiting game - during which time the fluctuation nearly gave me a heart attack.
Basically make sure you dot & cross all those letters before actually putting the money in - make sure you can put it in & spend it before too much time passes. Again, it's in your best interest to get ahold of the seller, tell them what you want & if there's more just in case what happened to me happens to you - then I recommend using bitinstant & making the transaction happen as fast as possible.
On a final note, if you're getting a custom listing from them, ask them to list it while you still have their attention, before depositing funds so you're good to go! If not you may spend hours or the better part of a day just waiting to get back in touch with them and ask for that listing. In my eyes that's valuable time for fluctuation in this incredibly volatile currency!
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I see it as a part of the experience. If you're on here enough, it most likely will even out after a number of transactions. My method is to deposit in large amounts when bitcoins are relatively low, and go on a big spending spree over the next couple weeks to stock up on products. Vendors are protected by the hedge method which helps a bit on that end. Also, there are bitcoin price prediction websites you can subscribe to, but you have to pay. I guess the bottom line is that if you can't afford to take a hit of a couple hundred dollars or so over the years transactions, it's probably a poor decision for you to be using your hard earned money to buy drugs in the first place.
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I think the best advice I've seen on here is to only put into BTC what you are ready to immediately use. Meaning, find out what product(s) you want before you even go to the step of depositing BTC into your account. Personally, I don't see a lot of benefit into having a bunch of BTC in my account that may or may not diminish in value when I can just keep my cash until I'm actually ready to make a purchase.
Sure, you might come upon the rare circumstance where you decide on something, go deposit your coins, then come back and the listing is gone. That would be a bummer for sure, but to me is a worthwhile risk to take if you are that worried about BTC market fluctuation. The other thing is, if it is taking you upwards of half a day to deposit your BTCs, you should investigate some other deposit methods. I made my very first BTC purchase this week, and by the time I got home from depositing the cash, the coins were already in my account, some 30 minutes later, and I was ready to make purchases.
Now, if you are a big time vendor or buyer and need to have a large amount of BTCs available this advice probably isn't good for you. But for a personal use kind of guy like me, I think it works.
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The BTC market has been very volatile during past several weeks. It feels like people with few million USDs can impact the BTC market sentiment heavily.
I do not know about others. But this fluctuation in the market makes me nervous to do business using BTC. Last time I bought some BTC and it took about a week for me to research some products and make purchase. While waiting I lost almost 8-10% of my money due to this fluctuation. So, this time I am holding off and waiting for the market to stabilize. My fear is that if I buy BTC today the market may go down tomorrow so much that I will loose a lot.
I have no intention of using BTC as an investment opportunity and make money off of it. All I want is use BTC to buy some goodies quickly and done with it. But sometimes it takes some time on SR to find the right product from the right vendor as vendors often go out of stock or whatever. I think two weeks is a good time to hold BTC to get whatever I want from SR. But with so much of BTC market fluctuation there is a chance of loosing a lot.
Are the vendors worrying about it as well?
Am I just being too irrational and thinking negatively?
If you're worried about BTC price fluctuation vis-a-vis your base currency, your best bet is probably to simply hold cash in your exchange account (Bitfloor, MtGox, whatever the kids use these days). Once you make a decision to purchase., place an order on the exchange and then transfer your coin your SR account. That whole process will take all of one hour. You can easily kill that time on the forums or doing some final research on vendors.
Your exposure to price fluctuations will be limited to that 1 hour time period until you click purchase.
side note: I'm really surprised there has not been any young enterprising vendors out there who have taken it upon themselves to start a bitcoin futures market/exchange in order to save on the huge SR hedging fees. It would be a business in its self.
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Yeah I find it easier if I don't concentrate on exactly how much I've paid, you need to go with the flow a bit.
And I think as time goes on the major BTC holders will decrease and the market will become more stable.
I've been using SR for about a year now and even in the last 12 months I've noticed it's been getting better.
I first bought BTC for something like $15 each and then soon after they crashed to around $3. But since then I've more than made up for the loss.
But my strategy is the opposite, I like to hold BTC ... overall the value of BTC is tending upwards so if you're worried, just buy them, wait a couple of months and then spend them :)
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I always buy my product immediately after I receive my coins because of this. If you do this you don't have a lot to worry about.
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My advice is to dollar average your acquisitions over time.
e.g. You are spending 1000 USD, so use up $200 in five transactions in five days. That way you can ride out the downs and ups to an average. However in the long term, you are better off lumping it into one transaction and simply doing more transactions. But if you can't be sure about the long haul, then stick to the first approach.
I mean, in either case you should be swarming that 1000 USB in five or more packages in standard mail anyway, since it drastically decreases the chances of getting interceptions. Packages get exponentially more likely to be intercepted as they increase in weight/size. It's kind of counter-intuitive, but this is not done because of 'personal use' laws, it's just that swarming is an excellent long term risk management strategy on many levels, especially if you have multiple addresses to ship to like the pros do.
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Simple.
If you find a listing you like.. message the vendor, make your BTC order, get your BTC in the morning, place the order, wait, accept, pewpew.
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only buy BTC right now if you're going to spend them immediately. i strongly suspect the btc value is going to plummet in early to mid september.
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only buy BTC right now if you're going to spend them immediately. i strongly suspect the btc value is going to plummet in early to mid september.
Major LOL! :D
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Or it will be around 40.00 in December. :D
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Or it will be around 40.00 in December. :D
I think we are sensing a tempting arbitrage strategy...
But probably best avoided. Efficient markets hypothesis and all that jazz.
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I'll trust what you say because your brain is bigger than my monitard.
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Eh, only put coin in when you are going to spend it, if the vendors are on their toes or hedged, the "price" should be the same in your local currency, leaving coin on is probably not the best use of your money anyway. I would think that the vendors face the most risk depending on how fast they can turn bc into currency or take the chance and ride wave (for better or worse).
Peace
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spend them as soon as you buy them hun :P
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only buy BTC right now if you're going to spend them immediately. i strongly suspect the btc value is going to plummet in early to mid september.
Major LOL! :D
you disagree?
lets make a gentleman/woman's bet, dear pine! i bet a hardy handshake that the bitcoin drops to 7 or under by september 19th (talk like a pirate day)
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only buy BTC right now if you're going to spend them immediately. i strongly suspect the btc value is going to plummet in early to mid september.
Major LOL! :D
you disagree?
lets make a gentleman/woman's bet, dear pine! i bet a hardy handshake that the bitcoin drops to 7 or under by september 19th (talk like a pirate day)
Hmmmm. But how to achieve this?
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a cyber hardy handshake, of course. you just write the words "hardy handshake" between a few colons or asterisks ;)
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I CHOOSE YOU PINE'MON!
-throws poke'ball-
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a cyber hardy handshake, of course. you just write the words "hardy handshake" between a few colons or asterisks ;)
Very well Mr Terrifying Sir. If B$ is <= $7.00 @ MtGox's Weighted Average on the 19th of September, then I shall pay you the princely sum of 1 Bitcoin.
::: hardy handshake :::
::: hardy handshake :::
::: hardy handshake :::
Otherwise, you shall owe Pine the value of 1 Bitcoin on that day. I am putting this down on my diary, so I shall not forget it, I suggest you do as well.
I suggest SR Staff and the gentle public-folk of this digital wild west note this contractual agreement in the town council's ledger.
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I CHOOSE YOU PINE'MON!
-throws poke'ball-
PINE uses PARANOIA
...
...
...
It's super effective!
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a cyber hardy handshake, of course. you just write the words "hardy handshake" between a few colons or asterisks ;)
Very well Mr Terrifying Sir. If B$ is <= $7.00 @ MtGox's Weighted Average on the 19th of September, then I shall pay you the princely sum of 1 Bitcoin.
::: hardy handshake :::
::: hardy handshake :::
::: hardy handshake :::
Otherwise, you shall owe Pine the value of 1 Bitcoin on that day. I am putting this down on my diary, so I shall not forget it, I suggest you do as well.
I suggest SR Staff and the gentle public-folk of this digital wild west note this contractual agreement in the town council's ledger.
hahaha, alright 1 bitcoin it is.
::: hardy handshake :::
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I CHOOSE YOU PINE'MON!
-throws poke'ball-
PINE uses PARANOIA
...
...
...
It's super effective!
Big Brother is hit with a critical attack!
Big Brother takes 10HP of damage.
Big Brother falls.
Pine'mon gains 2,000,000 experience. Pine'mon leveled up!
OH WAIT.... Pine'mon is evolving......!
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I CHOOSE YOU PINE'MON!
-throws poke'ball-
PINE uses PARANOIA
...
...
...
It's super effective!
Big Brother is hit with a critical attack!
Big Brother takes 10HP of damage.
Big Brother falls.
Pine'mon gains 2,000,000 experience. Pine'mon leveled up!
OH WAIT.... Pine'mon is evolving......!
okay, that post was one too many. 1 pokemon post for each of you was cute, but now you're getting greedy.
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Yes, it would be nice if it was more stable. SR is making it more stable as more people utilize the site. I think most people with bitcoins are either speculators or SR members. It is the slow and steady growth of SR that is going to create the stable rise in bitcoin value (as would any growing market where people used bitcoins). Lets see what happens tomorrow. I am fairly sure there are more then a few SR buyers primed and ready to sink some serious cash into the marketplace.
If you believe SR is an awesome place that more and more people are going to utilize then you can have confidence that your money is safe in bitcoins.
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I think the best advice I've seen on here is to only put into BTC what you are ready to immediately use. Meaning, find out what product(s) you want before you even go to the step of depositing BTC into your account. Personally, I don't see a lot of benefit into having a bunch of BTC in my account that may or may not diminish in value when I can just keep my cash until I'm actually ready to make a purchase.
Sure, you might come upon the rare circumstance where you decide on something, go deposit your coins, then come back and the listing is gone. That would be a bummer for sure, but to me is a worthwhile risk to take if you are that worried about BTC market fluctuation. The other thing is, if it is taking you upwards of half a day to deposit your BTCs, you should investigate some other deposit methods. I made my very first BTC purchase this week, and by the time I got home from depositing the cash, the coins were already in my account, some 30 minutes later, and I was ready to make purchases.
Now, if you are a big time vendor or buyer and need to have a large amount of BTCs available this advice probably isn't good for you. But for a personal use kind of guy like me, I think it works.
best advice.
don't get btc unless you plan on spending it AS SOON as it hits your wallet.
/thumbs