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Oddly, market conditions seem to have conspired to give bitcoin what is essentially "backing" for the time being: that being goods and services which are availa

by scythe 15y ago

Oddly, 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 ago
The 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 ago
Well, 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 ago
  It'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 ago
    Many 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.
    - dave1010uk 15y ago
      Theoretically, someone could make a BTC to BTC anonymizing service. You could even put your BTC through multiple anonymizing services, similar to how you can route network traffic through multiple proxies.
      - ssharp 15y ago
        Money laundering?
        wmf 15y ago
        Nah, the Bitcoins are still dirty when they come out.

by scythe 15y ago

cookiecaper 15y ago

The 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 ago

Well, 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 ago
It'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 ago
  Many 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.
  - dave1010uk 15y ago
    Theoretically, someone could make a BTC to BTC anonymizing service. You could even put your BTC through multiple anonymizing services, similar to how you can route network traffic through multiple proxies.
    - ssharp 15y ago
      Money laundering?
      - wmf 15y ago
        Nah, the Bitcoins are still dirty when they come out.