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Comment by blhack | Hacker News Reader

Well, then, bitcoin was about due for a HUGE DISASTER to bring the price back down to sane levels, wasn't it?

For those not watching, BTC is currently trading at ~$45.

What determines whether a price is sane or insane for a commodity with no intrinsic value?

Because "intrinsic value" is not as important than just "value". Bitcoin has a value in the sense that people can use it as a currency that has features that are desirable and useful.

The asset's capacity to facilitate economic trade causes individuals to store it so that they can participate in such exchanges when opportunities present themselves.

The sane price is the total amount of such wealth that individuals are storing or will store in the future, discounted for time, divided by the number of such assets.

Now good luck figuring that out.

It's more than doubled in the last two months.

http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...

That doesn't seem necessarily relevant.

Wild runs are typically- not by requirement, but typically- indicative of a crash in the near future. This is because speculation is usually the main driving force behind very steep ramps.

What determines a "wild run?"

As has been shown time and time again in academic and corporate research, the single best predictor of an asset's value is the current market trading price for that asset.

> What determines a "wild run?"

Parabolic trajectory is a common indicator for a very sharp top and major correction.

Exceedingly rudimentary technical analysis based on non-scientific trends is your basis for valuation?

So you'd argue there is never a bad time to buy?

You have that backwards. It would always be a bad time to buy because of trading costs.

No.

It's great to have an actual conversation. You should try it some time.

Well, you asked me a yes/no question that has little to do with what I said. So I figured I'd just answer it in the same manner.

You are establishing a pattern of responding to comments with maximal brevity and offering zero constructive input.

Ok, so you think RickHull was using "Exceedingly rudimentary technical analysis based on non-scientific trends"? What have you got for us that is so much better?

the same thing that determines a sane or insane price for a fiat currency with no intrinsic value.

I'm actually not sure which side I stand on that issue, to be honest.

IMHO, bitcoin appeals for various reasons that compare favorably with national currencies such as the USD. Those reasons being: anonymity, ease of use, and freedom to send my money any where in the world.

err... I think I disagree on those first two points.

Managing a wallet in a manner that won't result in it getting stolen (as in, disconnected from your main machine) is not easy. Though I suppose tools can be created to make this easier, they don't exist yet.

Also, bitcoin is very traceable. Publicly traceable even. You know which group is getting what, when, and once you ask those recipients for who, you know who's being getting what, when, where, and maybe a bit about how much they have.

Apparently this can be improved? I have no idea how without trusting someone.

I think there are ways to obfuscate who owns what, e.g. always use new addresses and send your coins around a few times to other addresses to hide the true origin. As far as I understand it, it's very hard to track that kind of obfuscation (though certainly not impossible, sure).

As for managing your wallet, you could use a service like coinbase.com. They keep their coins offline. And you could browse to their site through Tor.

> As far as I understand it, it's very hard to track that kind of obfuscation

You understand it incorrectly, then. Bitcoin is not anonymous and transaction flows through the network are very easy to trace. Additionally, it is very easy to link specific transactions to regions or even specific network addresses/services.

Yes, it's not inherently anonymous. But it is possible to obscure the owner of the coins. It's not foolproof, but it probably makes it a little harder to figure out who is doing what...

http://www.gwern.net/Silk%20Road#anonymity

The derived market valuation of the commodity at that price in whatever reference currency you choose, of course.

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