Silk Road forums
Discussion => Newbie discussion => Topic started by: YoungnReckless on February 28, 2013, 11:15 pm
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whats up everyone im new to the road and to the forums. Just a quick question to the more experienced users....does the price of bitcoin usually fluxuate this much. Last week a bitcoin was going for 28.7 USD and now its about 34 USD. Will it go back down? I know its best to buy low sell high but should I buy some asap cause at this rate the price just keeps going up.
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i been monitaring the price it seems in the large scale stable but this huge spike recently is questionable, their was two drops to 31 today
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Doesn't seem too stable today at least, seems like an artificial hike. Then again who knows given the last 2 months.
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Don't worry about the bitcoin exchange rate unless you plan on buying them and holding them as an investment (a potentially very risky investment but that's a whole different topic). Almost every vendor on SR pegs their prices in BTC to a constant $US price. As a vendor, that means that I set my price in $US, and the price will change in BTC so it will always be the same in $US. So if you're only planning on buying bitcoins so you can buy drugs on SR, it shouldn't make any difference at all what the exchange rate is when you buy the BTC. The price of the products you're buying will be the same in $US equivalent. The only risk is if you get bitcoins, and then don't make a purchase immediately. So if you're worried, don't make the bitcoin purchase until you're ready to buy. And it wouldn't hurt to buy a couple of extra dollars worth of bitcoins to cover for any small shifts in the rate from the time you buy the bitcoins until you buy your product.
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oh how great would it have been when i bought 50 bc at 11 dollars if I held on to it. ah well
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Don't worry about the bitcoin exchange rate unless you plan on buying them and holding them as an investment (a potentially very risky investment but that's a whole different topic). Almost every vendor on SR pegs their prices in BTC to a constant $US price. As a vendor, that means that I set my price in $US, and the price will change in BTC so it will always be the same in $US. So if you're only planning on buying bitcoins so you can buy drugs on SR, it shouldn't make any difference at all what the exchange rate is when you buy the BTC. The price of the products you're buying will be the same in $US equivalent. The only risk is if you get bitcoins, and then don't make a purchase immediately. So if you're worried, don't make the bitcoin purchase until you're ready to buy. And it wouldn't hurt to buy a couple of extra dollars worth of bitcoins to cover for any small shifts in the rate from the time you buy the bitcoins until you buy your product.
This ^
Another thing that helps is to go to your account > settings > then check "display prices in US dollars" not sure if they have other currencies or not. But, I don't care how many bitcoins I have as long as they convert to the proper dollar amount, which is why it's best to just buy them when you're ready to purchase. Some vendors actually put dollar amounts in the product description, but not many that I've seen.
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New to the road but following BTC ages
Fluctuation is normally much higher than standard currency but the only other time it's risen this fast was when there was a lot of press for the first time about a year ago.
This time there are more complicated reasons - you can 'mine' bitcoin (run a program on your computer than generates it based on the GPU power available) - the reward for that halved recently so there's less to be sold by miners. Also, something called ASICs are just about to come to market which will render GPU mining obsolete and make it much harder for the average person to mine significant quantities of BTC. So I'm guessing the halved rewards for mining and speculation about the price of bitcoin following ASIC deliveries (within 1-2months) are driving the price up a lot.
What happens now is anyone's guess. I think either it'll drop 50%ish or continue to rise but I wouldn't put money on it. I spent half my BTC reserves when it hit $30 just in case we don't see that happen again.
It's also worth keeping in mind the relatively unlikely but still quite possible fact that bitcoin could be rendered worthless or significantly less valuable overnight by a hack (unlikely), legal legislation (slightly more likely) or various other factors such as whether SR was to close down, people selling off in droves due to the all time high or the first ASIC miners selling all the coins they mine to recover their costs.
Unless you have spare cash to invest and trust in the stability of bitcoin and it's deflationary nature (which if true essentially ensure a good return on investment, but that's a big if) the best thing to do is to buy-spend as quickly as possible.
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The only problem is when your dealing with an abundance of BTC's for example I have over 3K in BTC, however a small change in the value of one BTC can drastically change the amount of USD my BTC's represent! Im in constant limbo,but or sell ,buy or sell, buy or sell! I hate it, but I love it !!
Surfingsilly
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I wish I just had a mountain of them from mining, then if they hit the floor I would have lost nothing.
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The only problem is when your dealing with an abundance of BTC's for example I have over 3K in BTC, however a small change in the value of one BTC can drastically change the amount of USD my BTC's represent! Im in constant limbo,but or sell ,buy or sell, buy or sell! I hate it, but I love it !!
Surfingsilly
Wow, you either got in early or have a lot of cash to play with. I would definitely be cashing in at least a little of that right now!
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The only problem is when your dealing with an abundance of BTC's for example I have over 3K in BTC, however a small change in the value of one BTC can drastically change the amount of USD my BTC's represent! Im in constant limbo,but or sell ,buy or sell, buy or sell! I hate it, but I love it !!
Surfingsilly
shouldnt you be making a small fortune right now? lol
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The way BTCs have been going I certainly would not want to be sitting on to many for to long, so buy as soon as you get the coins. This market seems really unstable...
mushmold
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The way BTCs have been going I certainly would not want to be sitting on to many for to long, so buy as soon as you get the coins. This market seems really unstable...
mushmold
if you wanted to, you could day trade bitcoins. or am i wrong?
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if you wanted to, you could day trade bitcoins. or am i wrong?
[/quote]
Yep, that is what mtgox.com and bitfloor.com are all about.
mushmold
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The reason I think bitcoins have been going up so steadily has to do with the difficulty vendors on SR (and miners to a lesser extent) have in cashing out into $ or Euros. If you guys buying bitcoins think it's tough to buy bitcoins, try the other way around, especially if you're trying to do it anonymouosly and without attracting attention of money laundering enforcement authorities or the IRS. I know a lot of vendors, myself included, who are sitting on growing piles of bitcoins because they don't know what else to do with them. I've come up with a few different ways of cashing out bitcoins and have been cashing out as quickly as I think I can discretely, but not vast amounts quickly, and my holdings of bitcoins is growing not shrinking. I bet a lot of others are in the same boat. Bitcoin miners have an easier time cashing out, at least if they are willing to pay taxes on their income. Not so easy for bitcoin drug dealers. So with that many bitcoins tied up in vendor accounts, there are that many less available for day to day transactions on SR which I suspect is the elephant in the room as far as the bitcoin economy is concerned. Have you ever by checked out the list of places you can spend bitcoins. There ain't a whole lot of things worth buying that you can buy with bitcoins. Nothing that would amount to much compared to SR.
It seems to me that SR is still growing pretty rapidly, and just the number of people needing coins on a day to day basis to conduct transaction on SR amounts to a sizable quantity of coin demand. Especially if as many as I think are tied up in vendor and miner accounts. If SR were ever to go down I think the exchange rate would drop extremely fast. Vendors holding large amounts of BTC would panic and try to get out before it dropped further, accelerating the decline. Miners with vast hoards of coin would be likely to do the same thing. It could be a major bloodbath. I should have put IMHO in front of this whole thing which is a somewhat educated guess on my part. I don't think the mining technology has a whole lot to do with it. As I understand it the algorithm that determines the diffuculty of mining new blocks increases as the rate of mining increases, making the growth of the BTC money supply fairly slow and steady. All this new mining tech is compensated for by the greater difficulty in mining. The algorithm itself is way above my pay grade, but that's how the bitcoin.it web site explains it.
It would seem great that I've been making all this money on the exchange rate. But it ain't a profit until you convert it to dollars. Just like when the stock market peaks, the only people who actually enjoy the profits of the peak are the ones who sell before it drops. It's paper profit until you actually make the trade.
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Excellent point from JackBlue. Never thought of it from the other way around.
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I was kind of hoping that was the case when I started writing a program to do the convenient things that would take 2 days to add to the site if anybody gave a damn... I thought there might be a lot of people who wouldn't mind shoving some of their dirty coins off on to me and making them my problem instead. Win-win and all.
I don't vend, so it's not as risky for me. I've been pondering a way to automate that sort of thing in either direction: USD to BTC or vice versa. BitInstant style. Either direction would be good. Or both really. Whatever.
If anyone has ideas on the logistics, do let me know. I'd sink massive time and effort into implementing such a thing: if I had an automated method of doing it, it wouldn't matter to me that the coins are dirty (well, not much anyway). I'd be a businessman who saw an opportunity to make lots of money in a gray area, and little more.
... I just can't figure out how to automate it and keep it anonymous for others even if it isn't for me, is my problem ::)
Seriously though, I'd love any ideas anybody has. Even if it's just telling me how wrong I am and how it's riskier than I'm thinking. Public key's linked in my sig.
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The reason I think bitcoins have been going up so steadily has to do with the difficulty vendors on SR (and miners to a lesser extent) have in cashing out into $ or Euros. If you guys buying bitcoins think it's tough to buy bitcoins, try the other way around, especially if you're trying to do it anonymouosly and without attracting attention of money laundering enforcement authorities or the IRS. I know a lot of vendors, myself included, who are sitting on growing piles of bitcoins because they don't know what else to do with them. I've come up with a few different ways of cashing out bitcoins and have been cashing out as quickly as I think I can discretely, but not vast amounts quickly, and my holdings of bitcoins is growing not shrinking. I bet a lot of others are in the same boat. Bitcoin miners have an easier time cashing out, at least if they are willing to pay taxes on their income. Not so easy for bitcoin drug dealers. So with that many bitcoins tied up in vendor accounts, there are that many less available for day to day transactions on SR which I suspect is the elephant in the room as far as the bitcoin economy is concerned. Have you ever by checked out the list of places you can spend bitcoins. There ain't a whole lot of things worth buying that you can buy with bitcoins. Nothing that would amount to much compared to SR.
It seems to me that SR is still growing pretty rapidly, and just the number of people needing coins on a day to day basis to conduct transaction on SR amounts to a sizable quantity of coin demand. Especially if as many as I think are tied up in vendor and miner accounts. If SR were ever to go down I think the exchange rate would drop extremely fast. Vendors holding large amounts of BTC would panic and try to get out before it dropped further, accelerating the decline. Miners with vast hoards of coin would be likely to do the same thing. It could be a major bloodbath. I should have put IMHO in front of this whole thing which is a somewhat educated guess on my part. I don't think the mining technology has a whole lot to do with it. As I understand it the algorithm that determines the diffuculty of mining new blocks increases as the rate of mining increases, making the growth of the BTC money supply fairly slow and steady. All this new mining tech is compensated for by the greater difficulty in mining. The algorithm itself is way above my pay grade, but that's how the bitcoin.it web site explains it.
It would seem great that I've been making all this money on the exchange rate. But it ain't a profit until you convert it to dollars. Just like when the stock market peaks, the only people who actually enjoy the profits of the peak are the ones who sell before it drops. It's paper profit until you actually make the trade.
Hey I'll sell you my art for inflated BTC prices (to account for fluctuations, of course), sell for cash and wire you your 'change' 8)
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The reason I think bitcoins have been going up so steadily has to do with the difficulty vendors on SR (and miners to a lesser extent) have in cashing out into $ or Euros. If you guys buying bitcoins think it's tough to buy bitcoins, try the other way around, especially if you're trying to do it anonymously and without attracting attention of money laundering enforcement authorities or the IRS. I know a lot of vendors, myself included, who are sitting on growing piles of bitcoins because they don't know what else to do with them. I've come up with a few different ways of cashing out bitcoins and have been cashing out as quickly as I think I can discretely, but not vast amounts quickly, and my holdings of bitcoins is growing not shrinking. I bet a lot of others are in the same boat. Bitcoin miners have an easier time cashing out, at least if they are willing to pay taxes on their income. Not so easy for bitcoin drug dealers. So with that many bitcoins tied up in vendor accounts, there are that many less available for day to day transactions on SR which I suspect is the elephant in the room as far as the bitcoin economy is concerned. Have you ever by checked out the list of places you can spend bitcoins. There ain't a whole lot of things worth buying that you can buy with bitcoins. Nothing that would amount to much compared to SR.
It seems to me that SR is still growing pretty rapidly, and just the number of people needing coins on a day to day basis to conduct transaction on SR amounts to a sizable quantity of coin demand. Especially if as many as I think are tied up in vendor and miner accounts. If SR were ever to go down I think the exchange rate would drop extremely fast. Vendors holding large amounts of BTC would panic and try to get out before it dropped further, accelerating the decline. Miners with vast hoards of coin would be likely to do the same thing. It could be a major bloodbath. I should have put IMHO in front of this whole thing which is a somewhat educated guess on my part. I don't think the mining technology has a whole lot to do with it. As I understand it the algorithm that determines the diffuculty of mining new blocks increases as the rate of mining increases, making the growth of the BTC money supply fairly slow and steady. All this new mining tech is compensated for by the greater difficulty in mining. The algorithm itself is way above my pay grade, but that's how the bitcoin.it web site explains it.
It would seem great that I've been making all this money on the exchange rate. But it ain't a profit until you convert it to dollars. Just like when the stock market peaks, the only people who actually enjoy the profits of the peak are the ones who sell before it drops. It's paper profit until you actually make the trade.
I assumed that would be the case - which is why I'm surprised there arn't more partnerships like the one between btcmaster and xtcexpress (I think, or maybe it's supertrips) where one changes money and the other sells massive amounts of drugs.
But what about a few possible solutions:
I've thought about implementing a buying service: you send me your dirty btc and I'll buy anything (legal) you might need from food to clothes to cars to whatever and then get them shipped to you. Then the only risk you'd have with the IRS is if they're physically watching what you have in your possession. And I'd only have to explain my small mark up for what would amount to a fully legal service.
The other option is Gold and other precious metals and even certified diamonds. The upside to that is that in terms of weight, it doesn't cost much more to ship than cash would and UNLIKE cash, you could INSURE THE SHIPMENT. Which means you could essentially launder all of your BTC into precious metals or diamonds without risk of loosing the shipment. Then, instead of sitting on a pile of BTC that could drop at any second, you could be sitting on a pile of gold bullion (or, if you wanted to be even sneakier, scrap gold), which will likely never decrease significantly again until people start using something else in electronics (virtually every piece of electronic equipment in the world has a small amount of gold in it and the about of gold in the world is finite - one of the many reasons gold keeps going up)
If you have lots and lots of BTC to launder, diamonds would be a wise choice. The resale value of certified diamonds is dismal - but the only reason it's dismal is because no one trusts anyone enough to do a p2p diamond sale. If you had the money to rent a store front and start a small but classy jewelry store, you could buy diamonds from pawn shops and individuals and literally sell them for twice what you paid. And if you hired someone like me as your diamond buyer, you could do it all with BTC. But diamonds don't work unless you know someone in the jewelry business to sell them for you or you can start a jewelry store because person to person diamond sales are a pain in my ass.
PM me if you are interested in anything I have to say. I would love to be a part of the process of getting the vendor's hoarded BTC back into circulation so that the price could stabilize.
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The reason I think bitcoins have been going up so steadily has to do with the difficulty vendors on SR (and miners to a lesser extent) have in cashing out into $ or Euros. If you guys buying bitcoins think it's tough to buy bitcoins, try the other way around, especially if you're trying to do it anonymouosly and without attracting attention of money laundering enforcement authorities or the IRS. I know a lot of vendors, myself included, who are sitting on growing piles of bitcoins because they don't know what else to do with them. I've come up with a few different ways of cashing out bitcoins and have been cashing out as quickly as I think I can discretely, but not vast amounts quickly, and my holdings of bitcoins is growing not shrinking. I bet a lot of others are in the same boat. Bitcoin miners have an easier time cashing out, at least if they are willing to pay taxes on their income. Not so easy for bitcoin drug dealers. So with that many bitcoins tied up in vendor accounts, there are that many less available for day to day transactions on SR which I suspect is the elephant in the room as far as the bitcoin economy is concerned. Have you ever by checked out the list of places you can spend bitcoins. There ain't a whole lot of things worth buying that you can buy with bitcoins. Nothing that would amount to much compared to SR.
It seems to me that SR is still growing pretty rapidly, and just the number of people needing coins on a day to day basis to conduct transaction on SR amounts to a sizable quantity of coin demand. Especially if as many as I think are tied up in vendor and miner accounts. If SR were ever to go down I think the exchange rate would drop extremely fast. Vendors holding large amounts of BTC would panic and try to get out before it dropped further, accelerating the decline. Miners with vast hoards of coin would be likely to do the same thing. It could be a major bloodbath. I should have put IMHO in front of this whole thing which is a somewhat educated guess on my part. I don't think the mining technology has a whole lot to do with it. As I understand it the algorithm that determines the diffuculty of mining new blocks increases as the rate of mining increases, making the growth of the BTC money supply fairly slow and steady. All this new mining tech is compensated for by the greater difficulty in mining. The algorithm itself is way above my pay grade, but that's how the bitcoin.it web site explains it.
It would seem great that I've been making all this money on the exchange rate. But it ain't a profit until you convert it to dollars. Just like when the stock market peaks, the only people who actually enjoy the profits of the peak are the ones who sell before it drops. It's paper profit until you actually make the trade.
yeah except your gunna get knocked for cashing out. That sucks, having all that money and not being able to convert it to USD...if your in the US why not convert it to euros somehow and do a little offshore banking?
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The reason I think bitcoins have been going up so steadily has to do with the difficulty vendors on SR (and miners to a lesser extent) have in cashing out into $ or Euros. If you guys buying bitcoins think it's tough to buy bitcoins, try the other way around, especially if you're trying to do it anonymously and without attracting attention of money laundering enforcement authorities or the IRS. I know a lot of vendors, myself included, who are sitting on growing piles of bitcoins because they don't know what else to do with them. I've come up with a few different ways of cashing out bitcoins and have been cashing out as quickly as I think I can discretely, but not vast amounts quickly, and my holdings of bitcoins is growing not shrinking. I bet a lot of others are in the same boat. Bitcoin miners have an easier time cashing out, at least if they are willing to pay taxes on their income. Not so easy for bitcoin drug dealers. So with that many bitcoins tied up in vendor accounts, there are that many less available for day to day transactions on SR which I suspect is the elephant in the room as far as the bitcoin economy is concerned. Have you ever by checked out the list of places you can spend bitcoins. There ain't a whole lot of things worth buying that you can buy with bitcoins. Nothing that would amount to much compared to SR.
It seems to me that SR is still growing pretty rapidly, and just the number of people needing coins on a day to day basis to conduct transaction on SR amounts to a sizable quantity of coin demand. Especially if as many as I think are tied up in vendor and miner accounts. If SR were ever to go down I think the exchange rate would drop extremely fast. Vendors holding large amounts of BTC would panic and try to get out before it dropped further, accelerating the decline. Miners with vast hoards of coin would be likely to do the same thing. It could be a major bloodbath. I should have put IMHO in front of this whole thing which is a somewhat educated guess on my part. I don't think the mining technology has a whole lot to do with it. As I understand it the algorithm that determines the diffuculty of mining new blocks increases as the rate of mining increases, making the growth of the BTC money supply fairly slow and steady. All this new mining tech is compensated for by the greater difficulty in mining. The algorithm itself is way above my pay grade, but that's how the bitcoin.it web site explains it.
It would seem great that I've been making all this money on the exchange rate. But it ain't a profit until you convert it to dollars. Just like when the stock market peaks, the only people who actually enjoy the profits of the peak are the ones who sell before it drops. It's paper profit until you actually make the trade.
I assumed that would be the case - which is why I'm surprised there arn't more partnerships like the one between btcmaster and xtcexpress (I think, or maybe it's supertrips) where one changes money and the other sells massive amounts of drugs.
But what about a few possible solutions:
I've thought about implementing a buying service: you send me your dirty btc and I'll buy anything (legal) you might need from food to clothes to cars to whatever and then get them shipped to you. Then the only risk you'd have with the IRS is if they're physically watching what you have in your possession. And I'd only have to explain my small mark up for what would amount to a fully legal service.
The other option is Gold and other precious metals and even certified diamonds. The upside to that is that in terms of weight, it doesn't cost much more to ship than cash would and UNLIKE cash, you could INSURE THE SHIPMENT. Which means you could essentially launder all of your BTC into precious metals or diamonds without risk of loosing the shipment. Then, instead of sitting on a pile of BTC that could drop at any second, you could be sitting on a pile of gold bullion (or, if you wanted to be even sneakier, scrap gold), which will likely never decrease significantly again until people start using something else in electronics (virtually every piece of electronic equipment in the world has a small amount of gold in it and the about of gold in the world is finite - one of the many reasons gold keeps going up)
If you have lots and lots of BTC to launder, diamonds would be a wise choice. The resale value of certified diamonds is dismal - but the only reason it's dismal is because no one trusts anyone enough to do a p2p diamond sale. If you had the money to rent a store front and start a small but classy jewelry store, you could buy diamonds from pawn shops and individuals and literally sell them for twice what you paid. And if you hired someone like me as your diamond buyer, you could do it all with BTC. But diamonds don't work unless you know someone in the jewelry business to sell them for you or you can start a jewelry store because person to person diamond sales are a pain in my ass.
PM me if you are interested in anything I have to say. I would love to be a part of the process of getting the vendor's hoarded BTC back into circulation so that the price could stabilize.
the answer to the recent bitcoin inflation is answered in this thread i made about a week ago