Bitcoin: Which way is down?

Lets try to keep this short... I mean, shorter, I still had to try to keep the last Bitcoin post short :) However, it would seem I have misjudged at least the short term direction of Bitcoin, as Monday saw some moderate (which is generally good for stability, with less chance of rapid correction in the other direction) rise. I'm still not convinced the crash is over however, as I can only anticipate more negative news as businesses react to the volatility and regulators think of new things to rein Bitcoin down.

There is, however, opposing views, one just recently posted on Washington Post blog: Here's Why Volatility Isn't a Big Problem for Bitcoin. However, the article fails slightly at the delivery point, summarizing at the end "Bitcoin's extreme volatility is a problem right now, but that won't last forever." So which is it, a problem or not? From my present viewpoint if the volatility continues, maybe even if it doesn't, it'll be solved by majority losing all interest in Bitcoin.

And here's Fridays Bitcoin flash-crash immortalized in media. The author, of course, seemingly misjudges the action - Bitcoin price didn't lose its mind, the last moments of the flash-crash were just playing in an auto-repeat loop during the almost 3 hour downtime, which judging by the internet chatter fooled a lot of people into thinking things were okay and there were huge profits to be made. I don't think that was Mt.Gox's doing however, possibly just a flaw in the price-graphing site as my own price-feed showed transactions in standstill.

For those who still don't even know what Bitco is, I'll just simply summarize it's a decentralized, alternative (to the established currencies) digital cryptocurrency that's been around for over 4 years. Certain very complex calculations are performed to certify all previous transactions as valid after they've been verified as valid. First person to succesfully do so gets a reward, currently set at 25 bitcoins. This reward halves every 4 years to keep inflation at bay, and the calculation complexity is adjusted so that one is completed on average every 10 minutes.


And that's that for now.