6 ms·

Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

by trg2 14y ago

deleted 14y ago
[deleted]
anonfunction 14y ago
I would say a crash is almost guaranteed, the question is when and at what price. A few weeks ago people were having this conversation when it peaked $30.
lwat 14y ago
There are still many people holding large amounts of bitcoin (because they mined them in the early days) and just one of them selling everything would cause a pretty large downswing.
- pokpokpok 14y ago
  how many is a large amount? 1000?
  - oscilloscope 14y ago
    Here's a list of the top 100 large wallets from Dec, 2011. The biggest wallet then had 447785 BTC. Anyone have an updated list? http://bitcoinreport.appspot.com/ http://bitcoinreport.appspot.com/
    - modeless 14y ago
      Wow, this is a fascinating list. So we know there are at least 25 bitcoin millionaires (bitcoin wallets with value > $1,000,000 USD).
      - icebraining 14y ago
        For such large amounts, you can't simply calculate the number of bitcoins * price per bitcoin, since the act of selling such large amounts would itself affect the price.
        modeless 14y ago
        This is true, of course (and a pet peeve of mine when people naively calculate e.g. how much it would cost to replace all coal-fired power plants in the world with solar). However, these days MtGox's average daily volume is in the $1m range. I think you could sell $1m BTC over a couple of weeks without anyone even noticing.
        muyuu 14y ago
        Same applies to a lot of wealthy people in shares. If they sold all their shares, they'd make the share price plummet and they wouldn't get anywhere as much as you initially quoted. As volume picks up (market depth has nearly tripled in 2 months) this is a lesser problem.
      - gwern 14y ago
        No, we know that there is some fuzzy nebulous number of bitcoin millionaires which may be centered around 25 - more based on how many have coins split across many addresses, and less based on the known fact that many earlier miners didn't store their coins safely (because it was just an interesting crypto prototype they were playing with) and many tens of thousands of coins have been lost. (That Polish exchange running on Amazon without backups took out, IIRC, something like 10k all on its own.)
    - Lerc 14y ago
      Do any of the largest Wallets have known owners? I found https://bitcointalk.org/index.php?PHPSESSID=h72gmr1luhb169j15ev9ruud82&topic=92423.0 https://bitcointalk.org/index.php?PHPSESSID=h72gmr1luhb169j1... which shows that the top two wallets are gone now and the 80,000BTC Wallet has grown to 111111.11 The top 400 goes down to about 3,000BTC. A bunch of those could be the former largest ones broken up.
    - cstrat 14y ago
      That is awesome. If you follow the chain of transactions from 12RYJjGk22NiNbhTHffCrCso4XgVzet5Eh (biggest wallet). It all ended up in a MtGox account...
  - retrogradeorbit 14y ago
    Here is some more info on Bitcoin users' demographics: http://www.zerohedge.com/news/2013-03-10/demographics-bitcoin http://www.zerohedge.com/news/2013-03-10/demographics-bitcoi... I read somewhere (source unknown, possibly unreliable) that 75% of all BTC are hoarded (ie. not in circulation).
plaguuuuuu 14y ago
It will probably crash. Obviously it has had greater accessibility and hype lately. Coupled with profitable mining becoming impossible for most people riding the boom looks more and more attractive. At some point in the future the buying volume will taper off due to less new speculators getting into the game. If BTC had anything actually underpinning its value we could work out the ratio of how overvalued it is. Unfortunately it doesn't - even the fact that real transactions are made with BTC doesn't change anything, as the value is so elastic that a T-shirt selling for 1 BTC 6 months ago would sell for a fraction of the BTC now. If the currency is stable now, what exactly is making it stable? Where does the equilibrium come from? Isn't it unstable by definition anyway since it's rising uncontrollably?
- mrb 14y ago
  "Coupled with profitable mining becoming impossible" Well it is incorrect to state that. Obviously, as the exchange rate increases, mining becomes more and more profitable. In fact, as of today ($50/BTC, difficulty factor around 4.9M, 25BTC/block) mining has never been so profitable in over a year(!) since January 2011 ($6/BTC, diff=1.1M, 50BTC/block)!

Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

by trg2 14y ago

Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

deleted 14y ago

[deleted]

anonfunction 14y ago

I would say a crash is almost guaranteed, the question is when and at what price. A few weeks ago people were having this conversation when it peaked $30.

lwat 14y ago

There are still many people holding large amounts of bitcoin (because they mined them in the early days) and just one of them selling everything would cause a pretty large downswing.

pokpokpok 14y ago
how many is a large amount? 1000?
- oscilloscope 14y ago
  Here's a list of the top 100 large wallets from Dec, 2011. The biggest wallet then had 447785 BTC. Anyone have an updated list? http://bitcoinreport.appspot.com/ http://bitcoinreport.appspot.com/
  - modeless 14y ago
    Wow, this is a fascinating list. So we know there are at least 25 bitcoin millionaires (bitcoin wallets with value > $1,000,000 USD).
    - icebraining 14y ago
      For such large amounts, you can't simply calculate the number of bitcoins * price per bitcoin, since the act of selling such large amounts would itself affect the price.
      - modeless 14y ago
        This is true, of course (and a pet peeve of mine when people naively calculate e.g. how much it would cost to replace all coal-fired power plants in the world with solar). However, these days MtGox's average daily volume is in the $1m range. I think you could sell $1m BTC over a couple of weeks without anyone even noticing.
      - muyuu 14y ago
        Same applies to a lot of wealthy people in shares. If they sold all their shares, they'd make the share price plummet and they wouldn't get anywhere as much as you initially quoted. As volume picks up (market depth has nearly tripled in 2 months) this is a lesser problem.
    - gwern 14y ago
      No, we know that there is some fuzzy nebulous number of bitcoin millionaires which may be centered around 25 - more based on how many have coins split across many addresses, and less based on the known fact that many earlier miners didn't store their coins safely (because it was just an interesting crypto prototype they were playing with) and many tens of thousands of coins have been lost. (That Polish exchange running on Amazon without backups took out, IIRC, something like 10k all on its own.)
  - Lerc 14y ago
    Do any of the largest Wallets have known owners? I found https://bitcointalk.org/index.php?PHPSESSID=h72gmr1luhb169j15ev9ruud82&topic=92423.0 https://bitcointalk.org/index.php?PHPSESSID=h72gmr1luhb169j1... which shows that the top two wallets are gone now and the 80,000BTC Wallet has grown to 111111.11 The top 400 goes down to about 3,000BTC. A bunch of those could be the former largest ones broken up.
  - cstrat 14y ago
    That is awesome. If you follow the chain of transactions from 12RYJjGk22NiNbhTHffCrCso4XgVzet5Eh (biggest wallet). It all ended up in a MtGox account...
- retrogradeorbit 14y ago
  Here is some more info on Bitcoin users' demographics: http://www.zerohedge.com/news/2013-03-10/demographics-bitcoin http://www.zerohedge.com/news/2013-03-10/demographics-bitcoi... I read somewhere (source unknown, possibly unreliable) that 75% of all BTC are hoarded (ie. not in circulation).

plaguuuuuu 14y ago

It will probably crash. Obviously it has had greater accessibility and hype lately. Coupled with profitable mining becoming impossible for most people riding the boom looks more and more attractive. At some point in the future the buying volume will taper off due to less new speculators getting into the game. If BTC had anything actually underpinning its value we could work out the ratio of how overvalued it is. Unfortunately it doesn't - even the fact that real transactions are made with BTC doesn't change anything, as the value is so elastic that a T-shirt selling for 1 BTC 6 months ago would sell for a fraction of the BTC now. If the currency is stable now, what exactly is making it stable? Where does the equilibrium come from? Isn't it unstable by definition anyway since it's rising uncontrollably?

mrb 14y ago
"Coupled with profitable mining becoming impossible" Well it is incorrect to state that. Obviously, as the exchange rate increases, mining becomes more and more profitable. In fact, as of today ($50/BTC, difficulty factor around 4.9M, 25BTC/block) mining has never been so profitable in over a year(!) since January 2011 ($6/BTC, diff=1.1M, 50BTC/block)!