Quote from: bitanarchy on February 11, 2011, 11:30:43 AM

Quote from: barbarousrelic on February 11, 2011, 02:56:01 AM

Quote from: ShadowOfHarbringer on February 10, 2011, 08:44:33 PM

So it is possible for a currency to be strong without the need for a lot of goods to be traded with it ?

I suppose, if the currency is backed by another currency that does have a lot of goods traded with it.

Bitcoin is a medium (or currency) to trade hard private currencies with. So this is good for the private currencies, because they will be used more.

When I first made the statement, what I meant (and probably should have said) is that it should be backed by a diverse base of goods and services so that the value doesn't just implode next time somebody sells a few.

It looks like we crossed parity just by someone making what looked like a $30k buy all at once. Then somebody sold off a few, being past parity vanished just as quickly as it started. A couple more sells like that would have the disastrous opposite effect, since nothing but hope is holding the value there, hope only gets you so far. Look what hope is doing for real estate.

If someone sold as few as 80000 BTC today (well less than 2% of total BTC...somebody generating coins has GOT to have this in their couch, there's 5.3M of them out there!) they would capture that $30k for themselves, plus the few big buys others have made to bring the price so high. And BTC would be trading under 50 cents again. The only thing would bring it back up would be a line of suckers willing to put their $30k's on the table while the price was artifically high, where the same people could swipe it again...

It would be different if there were thousands of merchants all offering $1 worth of goods and services per BTC... someone liquidating 80000 BTC would be nuts, people would be snapping it up to turn around and get cheap groceries. That's nowhere near the case today. The true rate of growth of BTC is directly related to what you can buy with it... it's growing... but it's still mainly VPN's and porn.

On the one hand, I can see coin generators not wanting to liquidate their stash, as they too wouldn't mind the value of their coin going sky high. But then, perhaps one of them sees there's a pretty sizeable pot out there, understands it's a mirage, and would like to be the first to take it in exchange for only a small percentage of their holdings. To buy BTC right now is to leave money where someone can take it anytime and we just hope they don't.