1. However big is MMM, it's probably too small for the size of the bitcoin economy right now. Remember that if you are transacting in bitcoin, there is one party buying and the other one selling. So you are not rising the price to the moon.
2. The number of transactions has been growing again as of late. It's heating at the blockchain right now ( https://blockchain.info/charts/n-transactions ). With 1MB, bitcoin can support less than 300k transactions a day.
3. The total output volume is jumping to crazy levels ( https://blockchain.info/charts/output-volume?timespan=all&sh... ) only seen in bubbles.
4. I have a localbitcoins post. I usually get 1-2 requests per week. In the last few days, well, I really lost count.
5. Google trends is spiking: https://www.google.com/trends/explore#q=bitcoin But maybe this is happening because bitcoin price is rising, not the other way around?
6. If the price is rising fast, the supply will dry because nobody wants to sell an appreciating asset. If an asset is appreciating, it'll drive demand. Which will drive the price higher.
7. Media will start talking about it. It'll drive more people. It'll drive the price more.
8. We'll see if the new fancy infrastructure that bitcoin got is rock-solid.
9. If you don't own the keys, you don't own the bitcoins.
10. It's nice, but only if you bought the dip and sold before the crash.
Always the most important point. You need to hold your keys, and be the only person to do so (unencrypted).
As for the rest, they can be summarized into this simple advice: If you're getting in, DO NOT spend more than you can afford to lose. You'll regret going into debt more than you'll regret not making a twice as big profit.
Many times, other companies have had that happen, and there is all kinds of recourse. To the extent bitcoin companies are special, its because people participating in the bitcoin craze have been willing to entrust large amounts of value with companies that don't have the basic characteristics that would otherwise establish trustworthiness, or at least accountability.
Bitcoin, on the other hand, is irrevocable and pseudo-anonymous. In July 2011 the owner of MyBitcoin.com web wallet allegedly walked away with 50,000 btc of customer funds. We know where those funds are. You can see them on any block explorer. But it is not possible to freeze or confiscate those funds. And we don't know what real world person or people have access to the keys controlling those funds. So what are you going to do?
MtGox went under with 850,000 btc of customer funds. Its creditors are currently fighting over the 200,000 btc that was found to still be in possession by the company. The other 650,000 btc? Who knows.
It's just a simple fact of reality. If you don't have physical control over the keys for that bitcoin, it is not your bitcoin. Some of us have learned that lesson the hard way.
That is just a limitation of the Bitcoin protocol. One could build a protocol where communities could agree to freeze (not accept) or greatly devalue those funds.
It wouldn't even have to be done in a way that was visible on the bitcoin network, they would just have to agree to not include transactions from whatever addresses.
A strong majority could probably refuse to acknowledge blocks including the blocked addresses, which would be a real freeze (rather than the hassle freeze obtained by not including the address in blocks produced by the conspiracy).
Of course, without strong consensus (and a real algorithm/protocol) such attempts will likely just result in fractured blockchains (basically the state at the moment, with many competing implementations of the same basic idea).
You'll need 100%, because if a single miner decided to include the transaction, then it is in!
If a single miner includes the transaction, a majority can just bypass that sole miner.
You do need 100% of something, but that something is just >50% of the miners.
The same features of BTC that serve as its advantage and, arguably, goal make it more difficult to offer basic protections that other fiscal infrastructures have had for decades.
Many see this capacity of the US Treasury to fabricate money from nowhere as the very sort of flaw that BTC's coin-generation process is intended to avoid, but that protection does not come without a price.
I suspect that at the moment it may be more difficult to find an insurer for a vault with that piece of paper, compared to a vault with $100m cash though :) but perhaps that'll change.
Sure, but whether that difference from "the same protection" is more or less protection depends on the number of people that $100 million is held on behalf of.
FDIC-style insurance is for when the security is breached, not if.
So for a speculative trader, I dont e that holding keys if any more essential than physically holding goods is for physical commodities; you obviously have to account for trust/security of the entity serving as your agent/broker, but that's typical.
Now, holding the keys may be essential to realizing some of the benefits of bitcoin which drive is value to some users, but for people investing in bitcoin, that may be peripheral to the purpose.
If someone steals my Schwab account contents for Schwab's servers, I can call on the government for help; and the stock market bookkeeping system has the technical ability restore my shares to me. If someone gets a copy of my wallet key, I've got no recourse unless (unlikely) someone can track down the obfuscated thief.
If someone steals your bitcoin from an exchange, you can call on the government for help, too. If the exchange itself is completely insolvent, that may not be effective recourse, and that risk is certainly greater for the kind of firms people have been dealing with in the bitcoin space, which often aren't held by their customers to the same standards that customers of similar services for commodities other than bitcoin would hold companies to.
That's my point: the lack of recourse isn't essential to bitcoin (yes, holding the keys is like holding cash, and not holding the keys is giving something up just like not holding cash is -- but we deal with other businesses with accounts denominated in national currencies without holding all the cash ourselves all the time, and have recourse available for losses.) The lack of accountability is because the firms people choose to do business with are, compared to the firms that people do other financial business with, shady fly-by-night operators.
That's the point, though. You're looking at it as a speculative investment, and proceeding accordingly, which is good. The OP is admonishing people to not treat bitcoin like a standard bank account (which is all too easy to do), but rather in the same terms as you already do.
Not blanket protection, but enough to ask why such and such bitcoin exchange doesn't advertise their participation.
"help staple correct horse ..."
From there, just store that seed somewhere secure and you can use that to generate your keys whenever you want, on any machine you want. Personally I keep my seed in two different safe-deposit boxes and one on (shameless plug) my own encrypted text app I made called Onions - http://onionsapp.github.io.
Hmm, really? Why? The ledger sets up its own private key as well.
That's very hard to quantify, but there might well be a feedback loop involving the media which leads to a price increase caused by MMM Global.
The following Google Trends data for South Africa and the Philippines shows a nice correlation between searches for bitcoin and MMM Global: http://www.google.com/trends/explore?hl=en-US&geo=ZA&cmpt=q&...
The thing is, transacting with bitcoin will not raise the price exponentially. BTC is already being exchanged in many millions of dollars a day.
So unless MMM turns out to be a billion-dollar ponzi scheme I don't really think it'll affect the BTC price much.
The actual transaction volume of bitcoin is not even that large. The total market cap is 6.5 billion and only because of the recent price surge.
While I don't know much about this incarnation of MMM, the original MMM ponzi scheme in the early 90s is thought to have taken in about $10bn (not adjusted for inflation).
Looks like Sergei is persistant with these pyramid schemes;
In January 2011, Mavrodi launched another pyramid scheme
called MMM-2011, asking investors to buy so-called Mavro
currency units. He frankly described it as a pyramid,
adding "It is a naked scheme, nothing more ... People
interact with each other and give each other money. For
no reason!" Mavrodi said that his goal with MMM-2011
is to destroy the current financial system, which he
considers unfair, which would allow something new to take
its place. MMM-2011 was able to function openly as Ponzi
schemes and financial pyramids are not illegal under
Russian law. In May 2012 he froze the operation and
announced that there would be no more payouts.
In 2011 he launched a similar scheme in India, called MMM
India, again stating clearly that the vehicle is a
pyramid. He has also launched MMM in China. He
was reported to be trying to expand his operations into
Western Europe, Canada, and Latin America. As of
September 2015 it had spread rapidly in South Africa with
a claimed 1% per day or 30% per month interest rate
scheme and warnings from both the South African and
Russian Communist Parties for people not to participate
Active thread talking about Sergei's current scheme:
Did you see a change in the type of customer?
I'm not sure what you mean by "real" here. Even if demand is created from questionable/fraudulent sources, the transactions are just as real as any others. That's not to say it's sustainable or even driven by rational behavior (it never really is). Any trend, bubble or not, is just that - a trend. There may be numerous factors driving it, and it's almost never a good idea to make trading decisions based on the trend itself (the few exceptions of traders should be very aware of the limitations and risks involved in such a strategy).
> We'll see if the new fancy infrastructure that bitcoin got is rock-solid.
Are you referring to Bitcoin XT / BIP 101? As far as I'm aware, the support for this is still represented by a minority, so we're not really going to see any "new fancy infrastructure" tested, at least not for a while.
To explain a bit more: If a merchant receives fraudulent credit card transactions, he/she could reasonably refer to those as "not real" because once the banks discover the fraud, they have the power to move money and effectively nullify those transactions in many cases.
In contrast, on the blockchain (and off the blockchain for most bitcoin exchanges), that kind of thing doesn't normally happen. Even in Mt Gox's case where they directly manipulated the price from the inside, the people who bought and sold on the exchange still experienced "real" price movement, and as long as they got their money/BTC out before Gox imploded (which is another matter), those transactions and price movements were every bit as real as any other. From the perspective of other exchanges at the time it didn't matter at all whether the driving force for the trend was fraud or completely legitimate behavior.
Finally, if MMM's "net effect is zero" as you say, then we wouldn't be seeing the price movement that we're seeing (and a price "boosted only by the float" is no different from a price boosted by anything else), or perhaps MMM just isn't the primary driving force in the current trend.
But the float is much smaller than the total volume of the fraud. If MMM is doing $10b of fraud a year, then it's not boosting Bitcoin's marketcap by $10b as one might naively guess ('$10b fraud drives Bitcoin price growth!' scream the headlines), it's boosting the price by much much less, by just the float (which could be more like $27m).
Much of the $1000 bubble is discussed in terms of mtgox and "willie", but the initial peak was triggered by another driver which was the first large wave of cryptolocker infections.
It goes without saying I'd stay well clear of bitcoin still though.
Then in a few months the 2 coins I kept were worth hundreds apiece.
I've not read that before (and I was pretty active on bitcoinforums during the $1000 bubble). Got a link?
Looks remarkably like the bitcoin price graph doesn't it?
If you don't trust what csomar is saying, then you should just say that instead of saying they are lying AND doing it for X reasons. Otherwise, you are just coming across as illogical in your arguments.
I would also point out that blockchain technologies implement a particular type of trust. Bitcoin's blockchain trust delivers an identity mechanism (note I did not say it doesn't allow pseudo anonymous identity), a way to track a value for exchange between identities, and a means to deliver a standard format of information exchange comprised of contract via script, transaction with identities and op_return codes.
That you are here doubting a known trust mechanism through a biased statement, and based on its momentary exchange value to a fiat currency, makes me not trust you as well.
Note the correlation between the registration deadline date and the start of the rise.
This sounds a lot like the kinds of claims that are routinely made in technical analysis for stocks. To the best of my knowledge, new claims can always be generated because humans are very good at imagining patterns in random data, but attempts afterwards to verify those theories uniformly fail. However stock brokers have found that it is very good for business to have customers who believe in technical analysis, because it is always easy to convince those customers to trade. Therefore lots of people get exposed to all sorts of technical analysis theories about "psychological support levels" and so on. But it doesn't actually work in reality.
If the price is 314.44 they will push it to 316.88 because that is the number they like, and if they dictate that price it is like they have created their own luck. At least this is my philosophy dealing with Chinese and watching their buy patterns.
We are not talking about a regular market.
A couple other points: mining is exploding as well with the global GHash rate / Difficulty accelerating. I have not calculated an exact correlation between price and compute but it could be an indicator of "real" moves in the currency.
The truest indicator is of course price-action. During last summer and into the fall, before Beijing implemented capital controls, when you observed the depth of book on orders on BW, you'd notice that the vast majority of orders were for even lots of ~0.0100BTC. This was indicative of algorithmic market making. Very few orders were above 100BTC. Now it's the exact opposite. Large orders with fast fills are common. I wish I had some real data and actual stats on the order book during the run-up ;( as I believe it would make a good indicator as to whether the current move is sustainable...