https://smilingdavesblog.wordpress.com/2013/04/16/do-the-bitcoin-markets-like-mtgox-set-a-value-for-bitcoin/
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
all I see is a link to some blog nobody reads. is there a topic here to discuss?
Viz., does the largest market determine a currency's value? Is that what's being asked?
Alan,
Read the article.
And reread the title. It says markets, plural.
Dave, surely MtGox fixes the historical, objective exchange value of a single BitCoin? Arbitrageurs would ensure conformity among all such exchanges.
But MtGox does not fix a value for all extant ~11 million BitCoins. You are right that the hoarders liquidating their holdings would quickly cause a precipitous drop in the price. Based on the work of Adi Shamir, one of the world's top cryptographers, it seems like the wealth is highly concentrated among BitCoin's one-percenters.
See http://www.loper-os.org/?p=1009
"People who have invested serious time and wealth in Bitcoin ought to feel angry. Not from any abstract sense of fair play, but from the simple fact that Ron and Shamir’s findings reveal a serious – and quite mathematically-certain – flaw in the sytem. The total number of bitcoins in actual circulation is much smaller than previously believed. If the early adopters were to cash out and place their hoards on the market, the exchange rates (as denominated in anything) would dive through the floor, never to recover. The hoarders, in effect, possess an off switch for Bitcoin"
Baxter,
Thank you for that important link.
So bitcoin is a ponzi scheme, after all. Whoda thunk it?
Well at least it's not a link to a Master's Thesis that no one will ever read.