Bitcoins - anyone else mining? (3 Viewers)

[chet]

And come on chet, doesn't it strike you as a little odd that this figure seems to indicate that there aren't really any more users using this system today than there were in April?

Much of what I've put out here focuses on the fact that the early history indicates a small number of users mined up all of the coins, went out of their way to drown out new users when they came on from Slashdot, etc. And then based on the RSA paper, the vast majority of said coins from that era are sitting in holding accounts of a few users and you've seen a lot of effort to hide that fact and do some kind of strange things with the coins. The "top 100" list is a complete sham and this still seems to be controlled by a few users. That's what most of my investigation here has surrounded and I haven't focused a lot on current numbers.

I actually didn't even realize that's what it looked like until I just spun those off a few moments ago and I'm honestly floored by that figure. How can this increase 10x in value without there even being a growth in users? After it had gone up like 8X in the few months before this. That's ummm....a little bit strange.

It would be more interesting to compare BTC price to number of users IMO.

Why should a dramatic increase in hash power lead to more users? New technology led to increased power--as I said above, I bet the number of miners decreased. Your graph only goes through the end of October. I'd be interested to see the user data from November on when BTC price went up dramatically.

 

[CBusAlex]

Ergo, the price has to go up or those 2nd/3rd/4th generation miners lose their collective shirts.

This is really not how markets work. Like, at all.

 

[DrJ]

And come on chet, doesn't it strike you as a little odd that this figure seems to indicate that there aren't really any more users using this system today than there were in April?

Much of what I've put out here focuses on the fact that the early history indicates a small number of users mined up all of the coins, went out of their way to drown out new users when they came on from Slashdot, etc. And then based on the RSA paper, the vast majority of said coins from that era are sitting in holding accounts of a few users and you've seen a lot of effort to hide that fact and do some kind of strange things with the coins. The "top 100" list is a complete sham and this still seems to be controlled by a few users. That's what most of my investigation here has surrounded and I haven't focused a lot on current numbers.

I actually didn't even realize that's what it looked like until I just spun those off a few moments ago and I'm honestly floored by that figure. How can this increase 10x in value without there even being a growth in users? After it had gone up like 8X in the few months before this. That's ummm....a little bit strange.

It would be more interesting to compare BTC price to number of users IMO.

Why should a dramatic increase in hash power lead to more users? New technology led to increased power--as I said above, I bet the number of miners decreased. Your graph only goes through the end of October. I'd be interested to see the user data from November on when BTC price went up dramatically.

Will put that together an address vs price at some point. I want to figure out how to pretty up this enormous number of tabs. My guess off the top of my head based on what I know of this data:

1) Current data is going to look a lot like the "speculation index". You're going to see a run up in price without the run up in users.

2) The data will actually diverge from the "speculation index" back during 2011, the first big bubble. During that time you did see a large increase in addresses that correlated with the run up in price.

Will also add November and even December to the current graph. I stopped because it basically looks the same but will make your complaint regarding number of addresses in that one table look even worse. I stopped so you could actually tell that addresses was flat lining.

My main point with these graphs was to illustrate the "ArtForz" incident from the early days. But seeing the addresses flat line since April is a little surprising. Like I said, that's kind of strange and might deserve some further investigation with some other metrics without a doubt. And like I said, I'd like compare price to some metrics to find some correlation there.

And you're correct, a higher hash rate doesn't mean a higher number of users. Sometimes they correlate well, other times they really don't. During the times where the price grows relatively normally and there isn't gigantic leaps in mining technology, you see a very strong correlation between hash rate and number of users, transactions, price, etc. The price tends to demonstrate a pretty strong measure of stability. Then these technologies come along, radically change the cost of mining without yielding any increase in number of coins distributed overall, and the price starts to rapidly increase without an increase in number of users, transactions, any of that sort of thing . That's where I'm coming from in that hashing power (in the form of these huge technology leaps) seem to be the main driver during said times. If you look at this history, this even happened to some degree during the multi processor days. That's where it ran up 10 fold from .6 cents to 6 cents. First guy values it off of how much electricity it costs him to get coins, this is late 2009. And it stagnates for a long time and few people do any trading, because there really aren't many people using the network. Multi-processing is released, bitcoin forum itself kicks off - this is start of 2010. And there's still no users basically, but now the difficulty is going up because you have people throwing multiple processors (more hashing power) and more electricity to get the same exact amount of coins. Some people talked on the forum about whether it would be profitable to carve out Amazon EC2 instances to mine, to which Laszlo the pizza guy warned about increasing difficulty. Their forums are like 3 pages from that time, you can read most of the stuff from around there.

Sometimes the price lags because they can't drum up enough demand. Like from the July 2010 to October 2010 run up in hashing rate. The price flat lined there at .06 because they didn't get almost any long term users off of the Slashdot deal. You scared away all the fish, Art, what are we going to do? Well, we can release public GPU mining and pooling so they can at least get some coins, and now we can get some people to start mining and basing the value off of their current and far more dramatic costs. Afterall, mining guy isn't going to make his guest room unusable due to heat and noise for nothing: http://dealbook.nytimes.com/2013/12/21/into-the-bitcoin-mines/?_r=1&

 

[Jojo the circus boy]

The hash rate seems to be more of a leading indicator in the price shooting up during these gigantic run ups. Technological advance hits network, hash rate starts exponentiating, price starts exponentiating shortly after. Miner's mine for 2 reasons. 1) To turn an immediate profit. 2) To horde a larger share of coins. The "ArtForz incident" clearly wasn't to turn an immediate profit, it was intended to horde coins and kicked off a gigantic arms race between a few miners in what was then a tiny community that was still trying to push value on these. There was still only a couple of hand fulls of original users plus an extra hand full of slashdot users that stuck around long term.

For this one, the ASIC miners lead it off. At the beginning of this run up you had guys like Garzik advertising that he paid his ASIC off in 9 days. http://www.reddit.com/r/Bitcoin/comments/188ljj/jeff_garziks_avalon_asic_miner_paid_for_itself/

And low and behold, an arms race ensued and the price ran up.

The only times we've seen these meteoric rises in price they were lead by disruptive changes in mining technology that created arms races. And we've never seen these sorts of increases during times where arms races created by disruptive technology weren't happening. 2012 was a really good year for bitcoin, and the price doubled. The ASICs come on and the price starts exponentiating. Like GPU mining did before it.

Logic says you've got it backwards. Price goes up which encourages mining.

However, unless the price goes up, mining doesn't make economic sense at this point unless you've already sunk money into the equipment. If so, you're simply trying to salvage whatever you can. If someone wanted to horde coins, they'd be better off buying them on the open market rather than buying mining equipment.

In the traditional world where you're mining for gold, absolutely. The bitcoin world is very different, and as I pointed out several pages ago doesn't behave much like gold especially in the way that it responds to advances in mining technology. These dramatic increases in power come about due to significant hardware advances which render previous forms of mining technology virtually obsolete. This is why hashing rate jumps in orders of magnitude overnight without increases in number of users. GPU was 50-100x more powerful than CPU, ASIC in 50-100X more powerful than GPU. And ASICs are actually growing in power very quickly themselves, You can pre order a 600 GH/s miner from Butterfly labs which will be coming soon. Or you can get one of last year's 10 GH/s or 50 GH/s models.

This feeds difficulty, which in turn feeds price.

It still doesn't make sense. You can keep on typing it, but it doesn't become true the more times you write it.

 

[DrJ]

Thinking about the address vs hash rate situation a little more and there are some interesting dynamics at play here today that differ a little bit in comparison to the GPU wars as well. This current spike actually resembles the July 2010 - December 2010 period in terms of hash rate vs addresses. You're seeing a pretty big run up in hash rate, but the number of users on the system isn't actually growing. Wondering why that is, and I'm seeing a few key differences.

1) The entry point to mining is more expensive in comparison to those days. When public GPU mining hit (the first time in Bitcoin's history where there was actual publicity and users could come on and get any coins), it was easier to attract people to mining. This is because a lot of people actually had hardware capable of doing it that was either sitting idle or being used for something else at the time. All you needed was a gaming rig and you had an avenue to turn your unused cycles into profit. No need for investment whatsoever outside of the electricity. This allowed them to more easily start growing the number of interested and vested users with some good advertisement in 2011. "Bitcoin reaches parity with US dollar", etc. Today you aren't getting anything unless you buy hardware built specifically for this purpose. So they're really asking for more of a buy in. This has created a situation where they aren't really getting too many more miners or users unlike during the 2011 stages of the GPU race.

2) Some of the natural barriers for the hashing rate tend to be different as a result of this. With GPU hashing you've got a whole lot of people that make GPUs and have mass produced them for a long time. They did create a worldwide shortage during the later 2011 stages of the GPU race (and Litecoin created one off of the latest Bitcoin bubble - boy are those people going to be disappointed now that the ASICs are coming), so they may not be capable of delivering them at the rate a full blown GPU arms race demands once it's in full swing, but there's not going to be several month back orders either. And like I said in #1, you had a whole lot more people that actually had GPU's already. Today is quite different - you have these relatively small ASIC companies that are completely unable to keep up with the demand when new hardware hits. They get to pick the winners and losers in the race to a large extent. And you're seeing this arms race and price run up take place without there actually being any new users coming onto the system as a result of all of this. Just a small group of speculators - either on the mining end trying to get virtual ATM machines, or on the trading end like chet is doing.

I'd say that this is relatively uncharted territory, it's unlike anything that's happened in the history of this. Outside of the July 2010 - October 2010 period mining was always accessible on hardware people already had or could acquire easily via a trip to your local electronics retailer. To me it's pretty clear that this price run up has occurred in large part due to the ASICs and the disruption they've created. It's pretty clear this happens to some degree every time there's a change in technology that causes the mining difficult to start to increase rapidly. But it's never happened quite like this before. One interesting side effect is that this has obviously created another interested party that not only has a lot of stake in the game but also a lot of control over who the winners and losers are. They essentially are the "central authority" for printing up the currency at this point. And by and large the power they bestow is ending up in the hands of a smaller percentage of users in comparison to the public GPU mining days, putting stress on decentralization aspects that the system depends on at a technical level.

To me this seems unhealthier than even the GPU arms race that lead to the first bubble, since at least during the 2011 part of that run up you did see some of what you guys are describing. A lot more people coming on and mining thanks to a lot of good press, a price that was on the upswing, and it being very easily accessible to them. Today you see a huge run up of hashing power, a huge increase in price, but with absolutely none of the things you would expect to cause a rise in price. Like increased users, increased transactions vs trades - healthy things that show people are actually using it as currency more. And some of the decentralized aspects of the system are breaking down as part of it.

 

[Jojo the circus boy]

Thinking about the address vs hash rate situation a little more and there are some interesting dynamics at play here today that differ a little bit in comparison to the GPU wars as well. This current spike actually resembles the July 2010 - December 2010 period in terms of hash rate vs addresses. You're seeing a pretty big run up in hash rate, but the number of users on the system isn't actually growing. Wondering why that is, and I'm seeing a few key differences.

False. Why do you keep posting this?The number of users went up 10 fold in the last year.

1) The entry point to mining is more expensive in comparison to those days. When public GPU mining hit (the first time in Bitcoin's history where there was actual publicity and users could come on and get any coins), it was easier to attract people to mining. This is because a lot of people actually had hardware capable of doing it that was either sitting idle or being used for something else at the time. All you needed was a gaming rig and you had an avenue to turn your unused cycles into profit. No need for investment whatsoever outside of the electricity. This allowed them to more easily start growing the number of interested and vested users with some good advertisement in 2011. "Bitcoin reaches parity with US dollar", etc. Today you aren't getting anything unless you buy hardware built specifically for this purpose. So they're really asking for more of a buy in. This has created a situation where they aren't really getting too many more miners or users unlike during the 2011 stages of the GPU race.

Cry me a river you cannot make money with your GPU's.

2) Some of the natural barriers for the hashing rate tend to be different as a result of this. With GPU hashing you've got a whole lot of people that make GPUs and have mass produced them for a long time. They did create a worldwide shortage during the later 2011 stages of the GPU race (and Litecoin created one off of the latest Bitcoin bubble - boy are those people going to be disappointed now that the ASICs are coming), so they may not be capable of delivering them at the rate a full blown GPU arms race demands once it's in full swing, but there's not going to be several month back orders either. And like I said in #1, you had a whole lot more people that actually had GPU's already. Today is quite different - you have these relatively small ASIC companies that are completely unable to keep up with the demand when new hardware hits. They get to pick the winners and losers in the race to a large extent. And you're seeing this arms race and price run up take place without there actually being any new users coming onto the system as a result of all of this. Just a small group of speculators - either on the mining end trying to get virtual ATM machines, or on the trading end like chet is doing.

GPU shortages: This was happening way before bitcoin.Users: See above

You know when there was a gold rush everyone and their brother did it. When it got hard and you had to invest money to mine, the number of miners went down significantly. With bitcoin the kiddies used their gaming rigs that their mommy and daddy's bought them. When the difficulty went up they could not convince their parents to buy them an Asic.

I'd say that this is relatively uncharted territory, it's unlike anything that's happened in the history of this. Outside of the July 2010 - October 2010 period mining was always accessible on hardware people already had or could acquire easily via a trip to your local electronics retailer. To me it's pretty clear that this price run up has occurred in large part due to the ASICs and the disruption they've created. It's pretty clear this happens to some degree every time there's a change in technology that causes the mining difficult to start to increase rapidly. But it's never happened quite like this before. One interesting side effect is that this has obviously created another interested party that not only has a lot of stake in the game but also a lot of control over who the winners and losers are. They essentially are the "central authority" for printing up the currency at this point. And by and large the power they bestow is ending up in the hands of a smaller percentage of users in comparison to the public GPU mining days, putting stress on decentralization aspects that the system depends on at a technical level.

You have failed to post anything of substance to support this statement:

Difficulty goes up -> USD Price of BTC goes up

It is designed to flow the other way,

USD Price of BTC goes up -> Hashing Power can go up due to increased interest with higher value -> Difficulty goes up

this is by design not some voodoo economics that you are solving.

Conversely, when

USD Price of BTC goes down -> Hashing Power can go down due to decreased interest with lower value -> Difficulty goes down

Thus far however difficulty has mostly gone up. so this graph in and of itself puts the kaibash on your theory that difficulty directly influences the USD price of bitcoin - as you can see this chart also shows hashrate (difficulty is the red line that adjusts as hashrate increases) they are supposed to be related like that, this is by design.

To me this seems unhealthier than even the GPU arms race that lead to the first bubble, since at least during the 2011 part of that run up you did see some of what you guys are describing. A lot more people coming on and mining thanks to a lot of good press, a price that was on the upswing, and it being very easily accessible to them. Today you see a huge run up of hashing power, a huge increase in price, but with absolutely none of the things you would expect to cause a rise in price. Like increased users, increased transactions vs trades - healthy things that show people are actually using it as currency more. And some of the decentralized aspects of the system are breaking down as part of it.

Your conclusions are based on bunk, see above.# of transactions (excluding most popular) have also spiked 8 fold in the past year, a low of 11.5k and a high of 94k. (to support that there are more users participating in the economy)

 

[Jojo the circus boy]

30,000 meals fed to the homeless through use of Bitcoin

 

[Tom Servo]

Is Bitcoin evil or just dumb?

http://io9.com/is-bitcoin-evil-or-just-dumb-1495301399?utm_source=recirculation&utm_medium=recirculation&utm_campaign=tuesdayAM

 

[Tom Servo]

Charles Stross wants BTC to "die in a fire":

http://www.antipope.org/charlie/blog-static/2013/12/why-i-want-bitcoin-to-die-in-a.html

 

[Jojo the circus boy]

Almost Human

 

[Tom Servo]

"Not available in your country."

 

[DrJ]

This post is hidden because you have chosen to ignore posts by Jojo the circus boy. View it anyway?

Wow, this does work pretty well.

 

[Wilfredo Ledezma]

The bleeding edge in Bitcoin-mining hardware comes to CES | The Verge

Bitcoin is intangible money, but that doesn't mean you won't see it at CES, the nation's premier electronics trade show. There's currently an arms race in Bitcoin mining, the intense computing required to generate new units of the increasingly popular virtual currency that approximates cash on the internet. And now the companies that produce high-end equipment for generating Bitcoin are here in Vegas, pitching their wares on the convention floor.

 

[DrJ]

The bleeding edge in Bitcoin-mining hardware comes to CES | The Verge

Even the Butterfly labs guy openly admits it works the way I've described:

"Mining is a treadmill," said Dave McClain, account manager at Butterfly Labs. "You've got to be reinvesting money into more hardware and the latest hardware. It's like the lottery; the more tickets you buy, the better your chances."

 

[Jojo the circus boy]

This post is hidden because you have chosen to ignore posts by Jojo the circus boy. View it anyway?

Wow, this does work pretty well.

Nice timing, right after I shoot a dozen holes in your supposed theories.

 

[Tom Servo]

This post is hidden because you have chosen to ignore posts by Jojo the circus boy. View it anyway?

Wow, this does work pretty well.

Nice timing, right after I shoot a dozen holes in your supposed theories.

I must be on ignore too.

 

[[icon]]

"But because of the way Bitcoin was designed, mining produces diminishing returns as time goes on. The simple mining rig Butterfly Labs had set up at their booth was producing just .02 Bitcoin per day, or $16.90."

BUY OUR CARD FOR $1000.

It'll pay for itself in 100 days... no wait... 200 days....no wait....500 days...... no wait.....3 years..... no wait....

 

[cstu]

Like increased users, increased transactions vs trades - healthy things that show people are actually using it as currency more.

I was recently shown Black Market Reloaded and will say that despite what I've said about Bitcoin before I think it will continue to go up in value as long as illegal products are available to purchase with it.

 

[Jojo the circus boy]

This post is hidden because you have chosen to ignore posts by Jojo the circus boy. View it anyway?

Wow, this does work pretty well.

Nice timing, right after I shoot a dozen holes in your supposed theories.

I must be on ignore too.

tu quoque

 

[DrJ]

This post is hidden because you have chosen to ignore posts by Jojo the circus boy. View it anyway?

Wow, this does work pretty well.

Nice timing, right after I shoot a dozen holes in your supposed theories.

I must be on ignore too.

Nah, as long as you don't poke too many holes in my theories you're safe.

 

[Politician Spock]

Almost Human

Almost Currency

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

 

[[icon]]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

OMG. So everyone who has some bitcoins spent one?

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

OMG. So everyone who has some bitcoins spent one?

Imagine that, a retailer starts accepting bitcoin and they actually make sales in bitcoin!?!

 

[culdeus]

What are the tax implications of making a purchase with bitcoin? If you bought some at 100 and bought a couch on overstock at 1000, do you report cap gains on this?

 

[stbugs]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

OMG. So everyone who has some bitcoins spent one?

Imagine that, a retailer starts accepting bitcoin and they actually make sales in bitcoin!?!

My thought was more on the $2700 for that set of furniture? I could get some much nice/more comfortable outside furniture from Costco for less with a nice umbrella.

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

If this pace kept up for a year they'd save ~$1MM in processing fees (1% vs. 3%)

 

[[icon]]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

 

[culdeus]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

Why don't you just look at their latest 10q?

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

Why don't you just look at their latest 10q?

If you could read between the lines of my post, you would understand that 4th quarter numbers have not been released, why do you think I was quoting 2012 ANNUAL SALES NUMBERS?!?I swear if people in this thread would stop being such d-bags it might lead to some productive discussion instead of:



If you take 2013Q1 numbers which would be the most comparable (quarter over quarter) it still comes to 4% of daily sales numbers - no manipulation/misrepresentation going on here...haters are gonna hate.

 

[cstu]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

OMG. So everyone who has some bitcoins spent one?

Imagine that, a retailer starts accepting bitcoin and they actually make sales in bitcoin!?!

My thought was more on the $2700 for that set of furniture? I could get some much nice/more comfortable outside furniture from Costco for less with a nice umbrella.

True, but can you do it with profits from your drug sales?

 

[stbugs]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

OMG. So everyone who has some bitcoins spent one?

Imagine that, a retailer starts accepting bitcoin and they actually make sales in bitcoin!?!

My thought was more on the $2700 for that set of furniture? I could get some much nice/more comfortable outside furniture from Costco for less with a nice umbrella.

True, but can you do it with profits from your drug sales?

Pretty sure they take cash and I see plenty of folks pulling out nice wads in there for big purchases. Since you have to be a member, that tends to keep the riff-raff out and the FBI/DEA may not be monitoring there that much. Maybe it is a good place for drug money to launder itself a little. That said, I don't have drug money, so I put it on my Amex to get the 1.5% back + 2% executive membership back.

 

[stbugs]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

Why don't you just look at their latest 10q?

If you could read between the lines of my post, you would understand that 4th quarter numbers have not been released, why do you think I was quoting 2012 ANNUAL SALES NUMBERS?!?I swear if people in this thread would stop being such d-bags it might lead to some productive discussion instead of:



If you take 2013Q1 numbers which would be the most comparable (quarter over quarter) it still comes to 4% of daily sales numbers - no manipulation/misrepresentation going on here...haters are gonna hate.

So do you think that it will continue at the rate on its first day? Could you look at iPhone releases and let us know if the first day/week sales extrapolates out to yearly sales when you multiply it by 365/52? Kind of like that Subway article you linked, do you think that he will get people driving 4 hours to Subway every day of the year or just those first couple days? If you look at something like an iPhone and look at the rate of decay, you might be able to accurately extrapolate what this means for an actual full year.

 

[Jojo the circus boy]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

Why don't you just look at their latest 10q?

If you could read between the lines of my post, you would understand that 4th quarter numbers have not been released, why do you think I was quoting 2012 ANNUAL SALES NUMBERS?!?I swear if people in this thread would stop being such d-bags it might lead to some productive discussion instead of:



If you take 2013Q1 numbers which would be the most comparable (quarter over quarter) it still comes to 4% of daily sales numbers - no manipulation/misrepresentation going on here...haters are gonna hate.

So do you think that it will continue at the rate on its first day? Could you look at iPhone releases and let us know if the first day/week sales extrapolates out to yearly sales when you multiply it by 365/52? Kind of like that Subway article you linked, do you think that he will get people driving 4 hours to Subway every day of the year or just those first couple days? If you look at something like an iPhone and look at the rate of decay, you might be able to accurately extrapolate what this means for an actual full year.

There are many factors at play including the growth of Bitcoin which you conveniently omitted in your 1-sided analysis. Comparing people buying items at Overstock with bitcoins with people buying the first iPhone is absurd.

 

[Maelstrom]

Overstock, $10k in purchases from 100 purchasers in 2 hours from bitcoin

$124k in 21 hours now

Which I believe is equal to about 4% of their 2012 daily sales, nice 1st day.

Care to manipulate the data any further to prop up your fledgeling cause?

Care to work your magic and produce verifiable 2013 sales figures of this public company?

Why don't you just look at their latest 10q?

If you could read between the lines of my post, you would understand that 4th quarter numbers have not been released, why do you think I was quoting 2012 ANNUAL SALES NUMBERS?!?I swear if people in this thread would stop being such d-bags it might lead to some productive discussion instead of:



If you take 2013Q1 numbers which would be the most comparable (quarter over quarter) it still comes to 4% of daily sales numbers - no manipulation/misrepresentation going on here...haters are gonna hate.

So do you think that it will continue at the rate on its first day? Could you look at iPhone releases and let us know if the first day/week sales extrapolates out to yearly sales when you multiply it by 365/52? Kind of like that Subway article you linked, do you think that he will get people driving 4 hours to Subway every day of the year or just those first couple days? If you look at something like an iPhone and look at the rate of decay, you might be able to accurately extrapolate what this means for an actual full year.

There are many factors at play including the growth of Bitcoin which you conveniently omitted in your 1-sided analysis. Comparing people buying items at Overstock with bitcoins with people buying the first iPhone is absurd.

What he's saying is that people that have Bitcoins now have an outlet, and there is bound to be a spike on the first couple days it's available. Right now, I don't think anyone would expect Bitcoin to keep up the pace it is currently at (as far as purchases at Overstock go).

That said, Overstock is unlikely to see a huge number of bitcoin payments anytime soon. The bitcoin community remains relatively small, and with so many of them hoarding bitcoins as an investment, they’re reluctant to spend them on, say, patio furniture or an Xbox One. But Byrne is taking the long view.

To the broader picture, this is good news for Bitcoin, although news that we knew was coming. It is actually pretty low risk for Overstock, they never actually get any Bitcoins. Coinbase, the Bitcoin wallet and payment processor, is the one with any exposure to price fluctuations. I wish them luck.

Many have assumed that Byrne and Overstock are taking a big financial risk in accepting bitcoin because the price of the digital currency is so volatile — at least for the moment. Overstock might accept a bitcoin payment when the digital currency is valued at $1,000, the argument goes, only to see the value rapidly drop to $750, or less. In the beginning, though, with relatively few payments going through the site, the risk will be low — and all of it will sit with Coinbase, not Overstock.Before each payment is made, Coinbase sets an exchange rate, immediately converts the buyer’s bitcoin into dollars, and transfers the dollars to Overstock. The retailer never holds any bitcoin.

 

[[icon]]

Comparing people buying items at Overstock with bitcoins with people buying the first iPhone is absurd.

Good point.

One was a pretty revolutionary telecommunications device.....And one is the fiscal equivalent of three dorks huddled in the corner of the cafeteria spelling out 8008135 on their calculator and pretending it's money.

 

[Jojo the circus boy]

What he's saying is that people that have Bitcoins now have an outlet, and there is bound to be a spike on the first couple days it's available. Right now, I don't think anyone would expect Bitcoin to keep up the pace it is currently at (as far as purchases at Overstock go).

Yes, I'd expect to see a spike the first week. I disagree with your outlet statement, there are plenty of places to spend bitcoin today, OSTK is not opening the floodgates to allow people a place to spend their btc. I also disagree with the iPhone fad comparisons, OSTK does business in 91 countries, they only started accepting bitcoin in the U.S. in what is probably their slowest revenue producing month so that "4% of annual sales" number that so many people in this thread are trying to dismiss was a conservative estimate. The number of bitcoin users grew 10 fold last year, the number of merchants that will accept bitcoin in 2014 is only going to grow. So much to the dismay of the haters, bitcoin is not fading any time soon. The OSTK rollout was great news for bitcoin in raising exposure and awareness of the technology through print, online and TV such as CNN and all of the financial networks legitimizing bitcoin as a valid payment processor.

 

[Maelstrom]

What he's saying is that people that have Bitcoins now have an outlet, and there is bound to be a spike on the first couple days it's available. Right now, I don't think anyone would expect Bitcoin to keep up the pace it is currently at (as far as purchases at Overstock go).

Yes, I'd expect to see a spike the first week. I disagree with your outlet statement, there are plenty of places to spend bitcoin today, OSTK is not opening the floodgates to allow people a place to spend their btc. I also disagree with the iPhone fad comparisons, OSTK does business in 91 countries, they only started accepting bitcoin in the U.S. in what is probably their slowest revenue producing month so that "4% of annual sales" number that so many people in this thread are trying to dismiss was a conservative estimate. The number of bitcoin users grew 10 fold last year, the number of merchants that will accept bitcoin in 2014 is only going to grow. So much to the dismay of the haters, bitcoin is not fading any time soon. The OSTK rollout was great news for bitcoin in raising exposure and awareness of the technology through print, online and TV such as CNN and all of the financial networks legitimizing bitcoin as a valid payment processor.

Even all the articles talking about this (I read a number of them the other day when announced) said this was the first major outlet for Bitcoin purchases. But we've covered that story earlier in this thread, sure there are places to spend BC, but this is by far the biggest, we can agree on that, right? That's why it was such a story.

As I said, not a high risk for the retailer, all of the risk is with Coinbase. I could definitely see more retailers accepting BC through a deal similar to what Overstock did, where they carry none of the risk associated with BC but can get the upside of allowing people to purchase with it.

 

[Das Boot]

What he's saying is that people that have Bitcoins now have an outlet, and there is bound to be a spike on the first couple days it's available. Right now, I don't think anyone would expect Bitcoin to keep up the pace it is currently at (as far as purchases at Overstock go).

Yes, I'd expect to see a spike the first week. I disagree with your outlet statement, there are plenty of places to spend bitcoin today, OSTK is not opening the floodgates to allow people a place to spend their btc. I also disagree with the iPhone fad comparisons, OSTK does business in 91 countries, they only started accepting bitcoin in the U.S. in what is probably their slowest revenue producing month so that "4% of annual sales" number that so many people in this thread are trying to dismiss was a conservative estimate. The number of bitcoin users grew 10 fold last year, the number of merchants that will accept bitcoin in 2014 is only going to grow. So much to the dismay of the haters, bitcoin is not fading any time soon. The OSTK rollout was great news for bitcoin in raising exposure and awareness of the technology through print, online and TV such as CNN and all of the financial networks legitimizing bitcoin as a valid payment processor.

Even all the articles talking about this (I read a number of them the other day when announced) said this was the first major outlet for Bitcoin purchases. But we've covered that story earlier in this thread, sure there are places to spend BC, but this is by far the biggest, we can agree on that, right? That's why it was such a story.

As I said, not a high risk for the retailer, all of the risk is with Coinbase. I could definitely see more retailers accepting BC through a deal similar to what Overstock did, where they carry none of the risk associated with BC but can get the upside of allowing people to purchase with it.

Agreed, if there's no risk financially to the retailer, then why not?... assuming the set up effort is not too expensive.

I'd expect to see a few retailers jump in at the beginning just for the publicity, but once it's no longer particularly newsworthy, that reason for adding BC goes away.

 

[Jojo the circus boy]

What he's saying is that people that have Bitcoins now have an outlet, and there is bound to be a spike on the first couple days it's available. Right now, I don't think anyone would expect Bitcoin to keep up the pace it is currently at (as far as purchases at Overstock go).

Yes, I'd expect to see a spike the first week. I disagree with your outlet statement, there are plenty of places to spend bitcoin today, OSTK is not opening the floodgates to allow people a place to spend their btc. I also disagree with the iPhone fad comparisons, OSTK does business in 91 countries, they only started accepting bitcoin in the U.S. in what is probably their slowest revenue producing month so that "4% of annual sales" number that so many people in this thread are trying to dismiss was a conservative estimate. The number of bitcoin users grew 10 fold last year, the number of merchants that will accept bitcoin in 2014 is only going to grow. So much to the dismay of the haters, bitcoin is not fading any time soon. The OSTK rollout was great news for bitcoin in raising exposure and awareness of the technology through print, online and TV such as CNN and all of the financial networks legitimizing bitcoin as a valid payment processor.

Even all the articles talking about this (I read a number of them the other day when announced) said this was the first major outlet for Bitcoin purchases. But we've covered that story earlier in this thread, sure there are places to spend BC, but this is by far the biggest, we can agree on that, right? That's why it was such a story.

As I said, not a high risk for the retailer, all of the risk is with Coinbase. I could definitely see more retailers accepting BC through a deal similar to what Overstock did, where they carry none of the risk associated with BC but can get the upside of allowing people to purchase with it.

Agreed, if there's no risk financially to the retailer, then why not?... assuming the set up effort is not too expensive.

I'd expect to see a few retailers jump in at the beginning just for the publicity, but once it's no longer particularly newsworthy, that reason for adding BC goes away.

Yeah, bitcoin is just a fad.

There couldn't be other factors at play here, could there be? Like maybe lower fees to start? Or maybe lower costs associated with fraud?

 

[Wilfredo Ledezma]

Kanye West Doesn’t Think New Digital Currency Coinye – Or Fishsticks – Is Funny

 

[Jojo the circus boy]

An NSA-Proof Twitter built on code from Bitcoin and BitTorrent.

 

[Maelstrom]

Came across this earlier, "Don't want to build your own mining rig? You can buy mining contracts now on eBay"

http://www.ebay.com/sch/i.html?_odkw=dogecoin+contract&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR0.TRC0.Xdogecoin+mining+contract&_nkw=dogecoin+mining+contract&_sacat=0

 

[Maelstrom]

An NSA-Proof Twitter built on code from Bitcoin and BitTorrent.

That's a cool idea. I don't know that I would call it NSA proof, even that article says to stay off their radar you would have to also take advantage of TOR or other means of obscuring your identity, but that is the first truly distributed social network that looks like it might work.

For those looking to make money, start mining now, and you can save up your promoted tweets and resell them! (Sorry Jojo, but I had to get something in there about how to make money with it, right?)

 

[DrJ]

Came across this earlier, "Don't want to build your own mining rig? You can buy mining contracts now on eBay"

http://www.ebay.com/sch/i.html?_odkw=dogecoin+contract&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR0.TRC0.Xdogecoin+mining+contract&_nkw=dogecoin+mining+contract&_sacat=0

In that earlier article "into the bitcoin mines", the guy was contracting out most of his power. They noted that a large amount of people selling this sort of thing were scammers that ripped people off though, that guy's company was one of the few "real deals" that actually worked out for his customers. Butterfly labs will sell you cloud mining time as well.

On the scammer front - there's been a lot of scams on the mining hardware itself too. Since there's a huge race to get this stuff there have been a lot of people ripped off by people promising their "new awesome" mining hardware only to take off with people's money.

I guess when you found a currency that's based on ripping off a bunch of suckers there's really no shortage of suckers to rip off in the pool.

 

[-fish-]

I've started a currency based on message board "likes"

 

[Maelstrom]

Came across this earlier, "Don't want to build your own mining rig? You can buy mining contracts now on eBay"

http://www.ebay.com/sch/i.html?_odkw=dogecoin+contract&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR0.TRC0.Xdogecoin+mining+contract&_nkw=dogecoin+mining+contract&_sacat=0

In that earlier article "into the bitcoin mines", the guy was contracting out most of his power. They noted that a large amount of people selling this sort of thing were scammers that ripped people off though, that guy's company was one of the few "real deals" that actually worked out for his customers. Butterfly labs will sell you cloud mining time as well.

On the scammer front - there's been a lot of scams on the mining hardware itself too. Since there's a huge race to get this stuff there have been a lot of people ripped off by people promising their "new awesome" mining hardware only to take off with people's money.

I guess when you found a currency that's based on ripping off a bunch of suckers there's really no shortage of suckers to rip off in the pool.

Yah I wonder how many people just give those people their regular credentials rather than creating new ones specifically for the miner to use. Seemed like a scam waiting to happen.

 

[Sarnoff]

I've started a currency based on message board "likes"

How many Schrute Bucks for 100 likes?

 

[Jojo the circus boy]

Cloudcoins - I like it.