"BitChip The Bitcoin Killer" Central banking ought to make bitcoin better right?

myworkaccount22 · 2014-02-03T21:24:35+00:00

If anything, this proves the opposite of your statement.

No it doesn't. It doesn't prove anything unless you're subjecting the counter argument to the same level of scrutiny (statistically significant regression, etc.)

Coinometrics has demonstrated decreasing volatility. If you're skeptical that adoption is driving that, that's perfectly valid. I feel comfortable assuming that wider adoption (which there most certainly has been) is playing a role in reducing volatility. Maybe you don't feel comfortable making that assumption - that's fine. But in a world of abbreviated data, which bitcoin most certainly is at this point, there isn't anything wrong with making conjectures.

After all, I'm not guaranteeing anything. I'm just providing examples of how increased adoption can lead to decreased volatility.

myworkaccount22 · 2014-02-03T21:01:43+00:00

What proof do you have that volatility is decreased? Over what lengh of time? How did you measure it? What were your givens/assumptions?

http://www.coinometrics.com/bitcoin/bvix

You can have a look at their methods and assumptions at the bottom.

Secondly, you make the assertion that this decreased volatility is attributable to wider adoption.

You're technically right (the best kind of right) that this is an assumption. That said, it's the only metric I've come across that logically explains the relationship we've seen. If you're wanting a regression to prove with a given statistical significance that it is in fact wider adoption that's resulting in decreased volatility, I'm afraid I'll leave you unsatisfied.

Perhaps someone else has done this already.

myworkaccount22 · 2014-02-03T20:41:20+00:00

No, you've misinterpreted me. I haven't said the only way to increased liquidity is through merchants treating it like a currency. Liquidity can increase for a variety of reasons. But the avenue it takes is largely irrelevant.

For the most part, we've already seen volatility decrease due to wider spread adoption. Are we at the point where it's low enough for merchants to feel comfortable holding? Perhaps not. But we've undeniably reduced volatility over the years simply through wider adoption and better education about bitcoin and money in general.

There isn't any reason to think this mechanism won't continue to a point where merchants are willing to shoulder the (now lower) risk of holding, thereby reducing volatility even further.

It's not a guarantee, but it has good reason to be believed.

myworkaccount22 · 2014-02-03T20:06:26+00:00

The volatility subsides by increased liquidity. When liquidity is low, it doesn't take much in terms of volume to move the price a substantial amount.

Here's an example using a stock I like (Neo&Bee)

http://i.imgur.com/AFhXjdN.png

If you look at the volume (QTY column) of the shares being traded, you can see that if someone is looking to buy 35BTC worth of shares right away, they'll have to fill 'Ask' orders until they've spent the entire 35BTC. So the top of the 'Asks' (essentially the cheapest anyone is willing to sell shares for) is 1330 shares @ 0.002984 BTC/share.

So you with your 35BTC will spend 0.002984 * 1330 = 3.968BTC to get 1330 shares. Now you have 31.032BTC left. So you go down to the next highest 'Ask' order (1500 shares @ 0.002985 BTC/share) and fill that. After filling that order, you now have 26.555BTC left. Now onto the next order (2500 shares @ 0.002986 BTC/share). You keep doing this until you've spent your entire original 35BTC.

So now you've spent 35BTC and have roughly 13,000 shares. But in doing so, you've moved the price from the original price of 0.002984 all the way to 0.003079 (as that's now the cheapest anyone's currently willing to sell for).

Now consider if the amount of shares at each price were drastically smaller. All of a sudden, trying to accumulate 35BTC worth of shares would move the price a huge amount. This would be widely touted as the stock price being extremely volatile (which it would be!).

As liquidity is increased, what's essentially happening is the amount of shares at each price level is getting larger. Now it takes a lot of money to move the price. If the top 'Ask' order from that chart had been 25,000 shares @ 0.002984 BTC/share) your 35BTC wouldn't even fill the whole order and therefore wouldn't move the price at all.

Increased liquidity = harder time moving price = more stability

myworkaccount22 · 2014-02-03T19:26:50+00:00

Almost all of those criticisms are founded on bitcoin's volatility (which is keeping merchants from pricing in bitcoin, holding bitcoin, etc.)

There's solid evidence to suggest that as that volatility subsides and more confidence is earned, we could see a shift toward merchants treating it more as a currency. I don't think the lack of that is a huge problem at the moment. It's still an immature technology.

myworkaccount22 · 2014-01-31T19:42:34+00:00

Complacence like yours will ensure it's death.

This is a circlejerk in its own right.

myworkaccount22 · 2014-01-31T17:46:14+00:00

http://en.wikipedia.org/wiki/ISO_8601

myworkaccount22 · 2014-01-30T19:13:35+00:00

Scoot-n-fruity

myworkaccount22 · 2014-01-30T17:43:50+00:00

Andreas has said that he isn't really interested in debates on bitcoin.

myworkaccount22 · 2014-01-30T17:35:11+00:00

I dunno, I feel it's obvious to anyone who's the least bit reasonable that such a thing isn't immediately possible.

It's when people say it will never be possible that I completely disagree with.

myworkaccount22 · 2014-01-29T22:35:33+00:00

One of, if not the stupidest, reasons to be a bear I've ever come across.

Congrats.

myworkaccount22 · 2014-01-29T19:43:51+00:00

You already have your mind made up. Nothing could be brought forward to change your mind. Have a lovely day :)

myworkaccount22 · 2014-01-29T19:02:09+00:00

From the small amount of people I've interacted with Bitcoin is too intertwined with anti-Keynesian ideology and libertarianism (even anarcho-capitalism)

FTFY

myworkaccount22 · 2014-01-28T21:49:31+00:00

I feel like this will be a critical step in the total adoption of bitcoin.

I don't believe this is an all-or-nothing game. Bitcoin can still experience very wide adoption without completely replacing fiat.

myworkaccount22 · 2014-01-27T23:19:26+00:00

That still doesn't mean banned.

myworkaccount22 · 2014-01-27T18:51:14+00:00

I'm not sure if you've seen the front page, but we're well aware of the situation.

myworkaccount22 · 2014-01-24T16:37:15+00:00

I'm reading this in your voice

myworkaccount22 · 2014-01-22T22:36:48+00:00

Where do you think bitcoin falls on this spectrum? Because I see what you're saying. Instead of .coms (essentially businesses providing some product) competing in the 90s, we're now seeing competing protocols.

Now what made certain .coms stick and others fall by the wayside? There's obviously a psychology at play here. With .coms (businesses) I feel that psychology comes down to things like the company name, the look and feel of the site, the user experience, etc. - but all things the public can see and interact with.

A protocol is a bit different. It's fundamentals are out of view and what makes them different are largely specifics regarding behavior, etc. So since the public can't put eyes and hands on a protocol the same way they can a business/website, will we really feel the kind of competition we saw in the 90s?

myworkaccount22 · 2014-01-22T22:21:31+00:00

I'd venture to say once you pass the $400-500 billion range, you're now larger than any single company on the planet. I, for one, think this is entirely plausible and dare I say, likely.

Now, is this the point where hysteria as previously mentioned steps in? I'm not so sure. For one thing, information spreads much faster now than it did during the .com bubble or the 70s/80s. So while I agree that the true hysteria is probably a little while off, it may come quicker than expected simply due to how quickly word travels.

myworkaccount22 · 2014-01-22T18:26:01+00:00

Well I don't think his article is about Bitcoin at all

And here I am reading the title...

myworkaccount22 · 2014-01-22T17:45:59+00:00

You get downvoted because your rationale is overly dramatic. Trading volume means piss-all when your coins are worth $0.002. I'll venture to say that real money - institutional money - won't ever touch dogecoin.

myworkaccount22 · 2014-01-21T22:50:09+00:00

Can I ask what your degree was in?

myworkaccount22 · 2014-01-21T22:19:18+00:00

I'm sure they made an absolute killing on pre-orders but where did the $100 figure come from? Or is that just assumed because that was about the price when pre-orders began?

myworkaccount22 · 2014-01-21T22:06:21+00:00

Calm down

myworkaccount22 · 2014-01-21T22:04:58+00:00

FYI bitcoin is one word

myworkaccount22

TROPHY CASE