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Bitcoin's Black Friday
- derrida 15y agoDon't upvote this article. It hasn't addressed LulzSec's claim that they were selling off. It is back up to around $25 again.
- hugh3 15y agoAnd if you can't trust the claims of LulzSec, whom can you trust?
- derrida 15y agoI am not saying to trust LulzSec, but to address this information? Also the price is roughly 24 hours old. I don't think this article deserves to find its way on the front of Hacker News, by the time it did, the information contained in would be 36 hours old and the numbers cited off by a factor of 4. Although I must admit, the Financial Times covering bitcoin is news in itself.
- krschultz 15y ago"36 hours old and the numbers cited off by a factor of 4" Just what I want in my currency . . .
- derrida 15y agoI am not advocating or attacking bitcoin.
- gwern 15y agoLulzSec's claim has been discussed on Reddit and the Bitcoin forum. The selloff bitcoins are apparently from very old blocks, and since LulzSec is a recent phenomenon...
- pnathan 15y agoYeah, bitcoin is getting some high level interest, unquestionably.
- tomkarlo 15y agoEven if that's true, it should raise flags that one party selling into a market can do this... shows the bid is thin and liquidity generally poor.
- Symmetry 15y agoI was help a friend work out whether it made sense to start paying for Amazon EC2 to mint bitcoins. I can tell you that yes, thin bids and poor liquidity was exactly what I found.
- derrida 15y agoI just got down voted for pointing out the article is factually wrong and suggesting that it not be up voted for that reason. Believe what you want to believe internets!
- brown9-2 15y agoWhat is factually wrong about the article? It seems to me that what it is reporting is the dramatic drop on Friday. Whether or not the price later regained what it lost on Friday does not really impact the main point of the article - the existence of such a drop, no matter how temporary it was.
- hugh3 15y agoI can't speak for anyone else but personally I downvoted you for: a) Telling people not to upvote something, and b) Justifying that in terms of something I'd never heard of (what's this about lulzsec's claim?) Most of the time when an article shows up on HN there's a bunch of comments criticising the article for being, in some way, incomplete or wrong. But generally they don't directly tell people not to upvote the article. If you wanna criticise the article just say "One important factor which this article doesn't mention is that LulzSec said the other day that [blah blah details for the uninitiated]"
- pbhjpbhj 15y agoI said at the time that LulzSec's claims were possibly an attempt to deflate the market to gain an easy in. With a small market a big buy in should itself create inflation of the price. If I was right then LulzSec or whoever paid him just minted it ... or at least they did if they can ever get their money out again.
- tomelders 15y agoone has to wonder what would happen if people with a complex knowledge of how these things work (market fluctuations and what not) decided to mess with Bitcoin. What I mean is, investors can be twitchy, and susceptible to manipulation. It's sane to assume that people who invest in Bitcoin would be the same. Right now Bitcoin is new, so I doubt there's any sort of "Round Trip Trading" style activities going on, but should those types of speculators move in, could Bitcoin survive it? Especially since there's no laws protecting it.
- rauljara 15y agoWhy are you so sure that it isn't happening already? How would you be able to tell if it was?
- tomelders 15y agoI'm not sure, but the thought only just occurred to me.
- brianbreslin 15y agoyou mean someone like george soros & his dealings with the british pound?
- jarek 15y agoSoros made his money because Bank of England was keeping the pound's value above where the market wanted it to be. (Soros being a large part of that market, but that's another issue.) No government institution is going to be holding bitcoin's value anywhere. In a large, fully mature market, this wouldn't necessarily be a problem, because bitcoin would just trade at whatever its true value was. In a smaller market, especially an opaque one, it will be pretty easy to temporarily manipulate the price for fun and profit. I'd be ready to chalk up this drop to a speculator, except I doubt the market is mature enough to support arrangements that would enable reliable short-selling. The run-up is definitely at least partially orchestrated, however, and not by the guys who write public blog posts titled "why I put all my savings in bitcoin."
- scythe 15y agoOddly, market conditions seem to have conspired to give bitcoin what is essentially "backing" for the time being: that being goods and services which are available only by bitcoin and not by other routes. Among these include ways to buy products not ordinarily available in a country (such as the recent newegg-via-bitcoin site that showed up) and illegal products (such as Left 4 Dead 2 in Australia, or the more obvious example of psychoactive drugs). So I doubt you'll see it crash all the way, though it will probably remain unstable for the forseeable future.
- cookiecaper 15y agoThe bitcoin market has always been unstable and anyone who tracks mtgox for more than two days (and often even those who track it for less) knows this. While a part of me wishes I had put more into it at $0.70, it is definitely not any kind of stable investment. If you're into btc to invest, you should be really, really careful to place only a small portion of your money into it; while you may get lucky and hit a 3000% increase, I wouldn't count on things to stay that way for any reasonable time period; as below, just one big btc holder selling off can drop the price of the market hugely, as supposedly happened this weekend. Take into account btc's prospects for government disruption/poisoning/etc and it is definitely a very unsafe place for any significant amount of money.
- hugh3 15y agoWell, it's not too tricky to buy foreign computer games in Australia; the authorities don't care that much. And the drug thing? Well, it remains to be seen how long it'll be before the authorities shut that one down.
- Estragon 15y agoIt's not really possible to shut it down. They may be able to chill it substantially with sting operations on buyers, but that's not going to stop it.
- cookiecaper 15y agoMany people hear that btc is an "anonymous currency" and think they're free to participate in all kinds of illicit activity on btc. The reality is that every btc transaction made is publicly recorded and the so-called "anonymity" depends on the obscurity of the btc addresses used in the transaction. Also note that these implications are not necessarily isolated to one transaction; if you and your partner both make a trade using new btc addresses, the coins that were traded can be traced all the way back to their generation and perhaps someone two transactions up the chain will provide a lead as to who is doing what ("oh yeah, that was a trade I made with Johnny..."). Additionally, if the government ever seizes the wallet of a dealer, which is likely to occur in the event that a search warrant is executed, they will have a list of addresses with whom the dealer has traded. These addresses can then be found and traced in the publicly-available tx chain. In this way even innocent people may be implicated in investigations surrounding illicit trades, and trading with a person that doesn't understand the implications of reusing or publishing a btc address can significantly weaken not only your transactions but other transactions that occur in the network. The anonymity issues surrounding bitcoin are certainly more thorny than they appear on the surface. If you intend on using btc for illegal purposes, you need to understand what you're doing and be very careful, just as I'd imagine you need to do when trading illegally in other media.
- lotusleaf1987 15y agoI would be interested in a followup from the guy who invested his entire savings into Bitcoin: http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/ http://falkvinge.net/2011/05/29/why-im-putting-all-my-saving...
- bradleyland 15y agoI'm really puzzled how anyone expects to gain a foothold in a currency market with an instrument experiencing this type of volitiltiy. Popular currencies move fractions of a percentage per day. A 5600% swing is like financial base jumping.
- bradleyland 15y agoMaybe I'm missing the point of bitcoin. I read through the Bitcoin FAQ and it sounds an aweful lot like they're trying to create a system where I can exchange my dollars for bitcoins and use them in transactions. Am I wrong to be confused? Am I supposed to buy in to bitcoins with confidence, given the wild swings the currency is experiencing? I'm not trying to take some random dig at bitcoin. My statement about their volatility is based in fact. I want to be educated on the matter. I find the idea fascinating, but it seems that providing stability should be a goal near the top of the list. Am I wrong about that?
- ScottBurson 15y agoProviding stability? I don't know how you can begin to do that for an asset whose fundamental value no one knows, not even remotely. My recommendation: set up an order on Mt. Gox for some amount you'd be willing to pay, like $12 or $13, and leave it there. The way things are going, odds are the price will come back down to that range sooner or later. Of course, I could be wrong. On the other hand, it could drop even further than that; the $12 or $13 number is just based on the recent history.
- hugh3 15y agoI don't know how you can begin to do that for an asset whose fundamental value no one knows, not even remotely. Actually the fundamental value is well known. It's zero.
- weavejester 15y agoOnly if you see no value to being able to transfer wealth electronically without the need for a centralized broker.
- programminggeek 15y agoBitcoin's daily trading volume is incredibly small. That means if some even remotely large investor decided to buy or sell in volume, it would move the needle in big ways. I doubt there will be any kind of stability in Bitcoin volume until it is being traded in the billions or trillions of dollars, not in the millions of USD.
- steveplace 15y agoReplace Bitcoin with silver and you've got the past 3 months in a nutshell.
- hugh3 15y agoI don't get it. Surely the market for silver is enormous?
- gst 15y agoI'm currently not really worried about the volatility, as Bitcoin turned out to be more stable than I expected for an essentially unregulated P2P currency. Sure - it might be a somewhat bumpy ride at the beginning and some people might be too afraid to buy any substantial amount of Bitcoins. But for the future I hope that Bitcoin will be a viable alternative to today's payment systems used on the Internet.
- rms 15y agoThe author of this article doesn't seem to realize that Bitcoin has dropped 30% in one day many times before.
- jarin 15y agoA friend of mine bought about $2000 worth of Bitcoin a couple of weeks ago and (despite my advice to transfer it to his wallet) left it in his Mt. Gox account. A couple of days ago, the Bitcoin and his transaction history completely disappeared from his account. No response from Mt. Gox yet.
- deleted 15y ago[deleted]
- gst 15y agoIt would surprise me if Mt. Gox would maliciously manipulate accounts, as this would not make sense for them. Currently they own loads of money via transaction fees - why should they risk their monopoly status for some short term gains?
- hugh3 15y agoPerhaps because they think that there are only short-term gains to be had out of bitcoin? I'll take a hundred thousand real dollars now over a million bitcoins in 2013, thankyou very much. MtGox has been fundamental to the whole pump-and-dump side of bitcoin so it wouldn't surprise me if they're manipulating the market.
- gst 15y agoI guess that they currently already earn something like hundread thousand dollars a month, based on the current volume and their trade charges.
- estel 15y agoAccording to http://www.smartmoney.com/invest/stocks/the-bitcoin-triples-again-1307638613180/?link=SM_hp_ls1e http://www.smartmoney.com/invest/stocks/the-bitcoin-triples-... they were making $40,000 a day. That's pretty incredible.
- scott_s 15y ago
- lowglow 15y agoI wish I could get physical bitcoins. That would be great :) It would be a true "trophy" of the new dotcom era.
- wmf 15y agohttp://bitbills.com/ http://bitbills.com/ (Another symptom of the bubble: there's a three-month backlog. (Was there a backlog on Aeron chairs in 1999?) Considering the primitive tools and exorbitant markup, I can only assume that people are ordering these for novelty purposes.)
- kayhi 15y agoAlways wondered how I was going to sell off my pog collection ;)
- Swisher 15y agoSo aside from the "crash"...How many of you sold at $30 and repurchased at $10 only to sell back at $25? I unfortunately had nothing to reinvest otherwise I would have been all in on that ride.