Where has the excitement gone?
It seems like it's different this time around. During the last downward cycle, people panicked at every word the Chinese said. Threads of thousands of posts filled the front page of /r/bitcoin, and people talked about the end of the world.
This time, the price is down 15% already from the peak of the cycle, and few seem to notice or care. There are lots of press releases from companies getting out, but there isn't much excitement around them. Even announcements from companies as big as Dell rise to the front page and then fall down to oblivion a day later. Investors place millions into bitcoins, and it's just another banker buying in. Even the New York regulations, which arguably are the most significant event to happen to bitcoin this far, have started to fade from the public eye.
Unlike the excitement and positive outlook of the last cycle, the only people who seem to be hanging around now are the die-hards, who have been around since the beginning, and those who have a lot of money invested in the system, like the owners of businesses that deal in bitcoins. Bitcoin seems to have entered into a slow decline simply at the moment because few people care about it for now.
Some altcoins are laughable examples of poor programming
One of the final tasks in launching our mining pool is having /u/chris_sokolowski install the most profitable coin daemons that have been released since the first round of daemons was installed at the start of development in January. Of the 100-120 altcoins we expect to install, about half of them work as expected. The other half are messes of poorly tested, incompatible, elementary school-like code.
Some coins have obvious bugs, like excessive CPU power usage that is far outside the norm. Others actually have spelling errors in their code, or makefiles that won't compile as distributed. Some produce more or fewer coins than intended. Some incorrectly compute transaction fees. The primary lesson one can learn from trying to install these altcoins is that at least 50% are programmed by people who have no idea how to manage a project or produce a production-quality system. While some see bitcoin possibly being eclipsed by an altcoin, most of them probably have no idea how there are few altcoins that actually work correctly.
It shocks me that some of these coins are actually traded on Cryptsy and that some people would like to buy them. For example, Emerald, a coin that is highly profitable to mine, has no changes from the litecoin codebase except for a few constants being modified. Who are the people with the buy orders for coins like Emerald, and how has such a coin survived for over a year? Surely they can't believe that Emeralds are going to become the world currency.
Collecting E-Mails sent to New York
In a thread on /r/bitcoin, I proposed that all the E-Mails people are sending to the New York Department of Financial Services in comment be copied to a different E-Mail address that someone sets up. With copies of the E-Mails, the following could occur:
- Someone can publish the messages in real-time to get ahead of the story. The press will be able to read the messages before the NYDFS does, biasing articles in the community's favor.
- People can analyze the comments to see what themes are brought up repeatedly. If a single theme recurs throughout most of the comments, then that theme would be a good focus of a targeted campaign to get rid of at least one part of the regulations.
- The comments can be examined for quality to see whether what is going to the NYDFS is likely to succeed. If most of the comments contain profanity instead, then it is likely the good comments will be overshadowed by the bad.
Most panic sales are profitable
Something interesting worth pointing out is that most bitcoin panic sales have been profitable. In fact, there are usually three or four panics per cycle, so as long as you don't panic at the bottom, you make money. Never panic selling is poor advice.
If I just panic sold at a random time without knowing anything else, the odds of being correct are 66% or 75%. That's a pretty good way to make money, and it makes me wonder if people who panic at the first sign of bad news are actually making the right decision.
Other
- The profitability of altcoin mining has dropped by $0.37/Mh/s/day, down from $2.00 last month. ASICs are coming online at an incredible rate, and it is now impossible to make any money mining altcoins, just as it is impossible to make money by mining bitcoins.