12 ms·

Bitcoin just crossed $7.00.

74 points by kolinko 14y ago

killyourheros 14y ago
I was a big opponent of bitcoin- still wouldn't use it for anything that matters- but there are some great use cases. With government bans on online gambling bitcoin could really take over(that market). And, of course, there is the illegal drug trade. When people say that "it's not backed by anything" all they need to do is fire up tor and take a peak at silkroad. It's backed by one of the most in-demand products ever.
- jerguismi 14y ago
  Bitcoin is pretty useless, since almost the only thing you can buy with it is illegal drugs and guns... (btw. drugs & weapons are the second and third biggest international markets, food is the first.)
  - dnlhoust 14y ago
    I think the people looking to buy drugs and guns would disagree.
    - Anderkent 14y ago
      Pretty sure that was sarcasm.
- gokhan 14y ago
  Referring to this: http://en.wikipedia.org/wiki/Silk_Road_(marketplace) http://en.wikipedia.org/wiki/Silk_Road_(marketplace)
- kolinko 14y ago
  This is also my opinion. For me, BTC doesn't make sense when purchasing, say, computers. But for buying e-goods, MMO game items, or anything else where there are huge margins, it actually makes sense. And yeah, it's backed by the Silk Road :)
- repsilat 14y ago
  I wonder if it's liquid enough to do an "instant trade". Essentially, you could route (possibly international) financial transactions through BitCoin and avoid big fees by doing a buy on the buyer's side, transferring the coins to the seller, then having them sell the coins in their local currency. The best part about this is that neither the buyer nor the seller needs to have the slightest interest in BitCoin and it doesn't matter at all if the value of the currency is reasonable so long as it's reasonably stable. Even better, neither side needs to know the other's bank details, just a throw-away BitCoin account number. This isn't just an IMT-killer, it's a PayPal killer as well. Assuming the BitCoin market is more or less efficient relative to currency markets, and assuming those transactions could be cleared within ~1 day, you could absolutely kill the international transfer market (known for high fees, long delays and shitty exchange rates).
  - bencoder 14y ago
    This can be done but I believe it is a bit more expensive than via banks, since you have exchange fees and the spread as liquidity isn't quite high enough (assuming you want to transfer ASAP. If you are willing to wait on both sides you can do a lot better) Example exchanging 500 GBP to EUR (via intersango at current rates): Buy 104.6 BTC @ 4.76GBP Fees for instant trade: 0.95% = ~1 BTC. Balance: 103.6BTC Sell 103.6BTC @ 5.8EUR = 600.88 eur Fees for instant trade: 0.95% = ~5.71. Balance: 595.17EUR 500 GBP went to 595.17EUR. Exchange rate: 1.19. (google tells me the exchange rate is about 1.26 at the moment, so this is quite poor)
    - repsilat 14y ago
      You're right, that's not good. I imagine it would get better if people started doing things like that in higher volumes, but that's a bit of a Catch 22. Until then, there are a couple of mitigating factors: - You may not get the market rate from anyone. The UK post office is only giving me a rate of 1.2260 to the Euro. - If you need to pay a fee for a transfer it could be worthwhile for small amounts. The UK post office doesn't charge a fee, but it has a min transfer of £250. www.tranzfers.com charges £7 or $15AU. I've paid more elsewhere.
    - 14y ago
- rockyleal 14y ago
  https://en.bitcoin.it/wiki/Trade https://en.bitcoin.it/wiki/Trade
- Gormo 14y ago
  When people say "it's not backed by anything", they need only compare it to mainstream currencies - they're not backed by anything anymore either.
  - nhaehnle 14y ago
    Government currencies have the benefit that the government creates demand for them by using it as denomination for tax debts. Non-government currencies have no such external creation of demand. It's actually quite curious that Bitcoin was able to take off the way it did despite this lack of initial forced demand. I wonder which was more important: the fact that there are so many anti-government ideologues out there, the fact that Bitcoin can help with illegal transactions, or simply the fact that it's a neat technology. I'm certain all three played a role, perhaps to a different extent at different times.
    - Gormo 14y ago
      Independent currencies don't have that particular source of demand, but economies are made of much more than tax debts. And you could argue that overbearing policy itself creates demand for currencies that enable untaxable (and other illicit) transactions. Government itself could be said to encourage demand for both forms of currency. I doubt that the 'neat technology' aspect contributes much to the exchange rate; or little more impact than coin and banknote collectors have on mainstream currencies. You don't need to put much money in, or participate in many transactions, in order to examine the technology itself.
mtgx 14y ago
The last thing Bitcoin needs is another speculation craze based on its high value. If Bitcoin's value is growing, that's fine, let it keep growing naturally. Don't start publicizing it so it starts another speculation roller coaster, at least until the Bitcoin market is big enough to not be impacted much by speculation-based transactions.
- kokey 14y ago
  After the initial bubble , it now seems fairly stable and growing slowly at a rate that resembles what one would expect from an inflation hedge. It would be nice if it was able to avoid another bubble, but I think it will still happen. As long as another bubble is purely a function of speculation and market size and not due to manipulation or other corruption, it will eventually build a track record for credibility. I think this the route every non-government linked currency has to take at first. The road to credibility is a long one but I'm confident that over time there will be some like Bitcoin that will get there.
- Paul_S 14y ago
  Obviously, you are absolutely right. Then again, as much as I despise myself for it I did make a killing last time a bunch of idiots started buying them for >20$ a pop so I wouldn't mind. Taking money from speculators and giving money to geeks... I'm sure someone could spin this into something positive. I don't think it's going to hurt bitcoin, it's proven itself to withstand it and is here to stay.
  - deleted 14y ago
    [deleted]
  - tatsuke95 14y ago
    >"Taking money from speculators and giving money to geeks... " Classic fallacy. "Those rules don't apply to me!" Guess what? You are a speculator, no better or worse than any other speculator out there, be it in gold, houses or mortgages. Sorry.
    - 14y ago
csomar 14y ago
The reason for that is the death of Bitcoinica. Bitcoinica offered shorting, which stabilized prices at around $5. When Bitcoinica went out of business, the only way to make money on Bitcoin is to speculate its' price increase which will drive demand; which will drive its' price even more. That being said, it might be the right time to buy Bitcoins, and sell before the bubble bursts. However, for a more stable Bitcoin, we need a shorting system and enough traders.
- kolinko 14y ago
  Interesting, thanks for this info.
- kiba 14y ago
  That's nonsense. Bitcoinica have virtually no effect on the market.
  - cygal 14y ago
    Care to elaborate?
    - kiba 14y ago
      When bitcoinica shut down operation, there wasn't any signficant change in the price of bitcoin in either direction. Also, it's a really bad idea to use ad-hoc reasoning after-the-fact to explain why the price rose or goes down. There could be multiple reasons and multiple events why the price of bitcoin rose as it did. Sometime, there's no reason at all.
  - csomar 14y ago
    No it did. The shorting stabilized prices, and if you don't have any economical background, you can check out Khan Academy videos on economics. The price of Bitcoin started to raise since Bitcoinca ended operations. Certainly, it won't skyrocket in 24 hours. It'll take many days (and maybe weeks) to visualize the trend.
    - 14y ago
jamesu 14y ago
Will be interesting to see how high it goes. Will we see a return to $31.91/BTC?
pitt1980 14y ago
http://xoxohth.com/thread.php?thread_id=1985065&mc=34&forum_id=2 http://xoxohth.com/thread.php?thread_id=1985065&mc=34&#3... they are way too cumbersome to buy, why invest in a currency that the average computer user can't figure out how to buy?
- Paul_S 14y ago
  The barrier to entry is a good thing, kind of a safeguard for new users. You are storing real money on your computer, you need to be able to keep that safe. I'm sure someone will offer banking services in the future to solve this "problem" and make it work like any online account, which just happens to be denominated in bitcoins.
- chimi 14y ago
  I'm not advocating the purchase of bitcoins, simply providing an answer. I have no opinion on whether or not bitcoins are a good "investment." The transactional friction is a reason the market is small. If it's easier to transact and more people can do it, the supply/demand curves will push the price up in the future. Assuming demand is proportional to the size of the market.
- njharman 14y ago
  Much easier to manipulate (the price of).
moonchrome 14y ago
Isn't bitcoin trade on like a few million dolars per day globally according to some really rosy estimates ? If I'm reading this correctly it has 1.6M$ on the bid side. Do people realize that with such low liquidity the price is irrelevant ? Real news would be it doing $100M transactions in a day or having $100M on bids, not that it would be significant but that would show some real growth, this is just a few people playing with their savings.
- ulvund 14y ago
  My guess is that bitcoins are mainly used for college students' and drug hobbyists' $50 purchases of LSD and the like on silk road and not for big transactions.
  - kiba 14y ago
    Silk Road is famous, but it doesn't mean that illegal activities are the main economic activities in bitcoin. The number of accounts is currently at about 22000, and the largest number of people online at any given time is 126 – a stable community, but much smaller than those who see Silk Road as being the single shadowy force keeping up the Bitcoin economy behind the scenes imagine. -- http://bitcoinmagazine.net/the-silk-road-report/ http://bitcoinmagazine.net/the-silk-road-report/
    - jerguismi 14y ago
      Hmm, I guess those statistics are from the SR forums, a separate site. The actual SR web site doesn't give out such statistics. You could perhaps estimate the usage by listings & reviews.
    - rbn 14y ago
      The problem is that CCs and PayPal is much easier to use and it is much safer than Bitcoins. So I for one see no reason to use bitcoin to purchase anything other than products that can only be purchased via bitcoins
      - 14y ago
joering2 14y ago
Ok but given current pricing of GPUs, is it profitable to mine the coins, given I have access to free electricity (my office building does not charge for that).
- Retric 14y ago
  They are cutting the rate of bit-coin generation in half in January. (The total bit-coin's always stay under 21million but they don't use an exponential curve just cutting the rate in 1/2 every few years.)
  - nullc 14y ago
    You probably know this, but for people that don't— "They are" is the wrong pairing. The subsidy halves every 210,000 blocks (~4 years) as part of the innate core rules of the system enforced by every participant. So it would be more accurate to say "They cut" (past tense as this was established years ago), or "The system will" (no human actor). Also it looks like the halving will be early December to late November. (The block number is fixed, not the time, and because the difficult updates lag rapid increases/decreases in computing power can shift the date around a bit)
- petemc_ 14y ago
  http://www.butterflylabs.com/order-form-bitforce-sc-mini-rig/ http://www.butterflylabs.com/order-form-bitforce-sc-mini-rig... This might make a lot of GPU setups obsolete. Edit to add more info: I'm told the expected generation output, from 1000000 Mhps, at current difficulty 1751454.53534068, is 574.2818 BTC per day or 23.9284 BTC per hour.
  - sp332 14y ago
    $4,000/day at current exchange rates, it should pay for itself in less than 8 days. Of course the rate of BTC generation will go down over time, but it looks like these rigs would easily pay for themselves for several years yet.
    - 14y ago
vannevar 14y ago
Apparently we're in the "pump" phase of the Bitcoin pump-and-dump cycle. Really, the entire Bitcoin market would fit comfortably inside the volume of your average OTC penny stock. Does anyone not think the Bitcoin game is rigged?
- javert 14y ago
  Does anyone not think the Bitcoin game is rigged? There are significant reasons why having a deflationary, digital currency (or commodity) would be quite useful, at least for certain people and use cases. If there were no use case for Bitcoin, calling it a scam without presenting evidence would be much more reasonable. Given that there are use cases, calling Bitcoin a scam without presenting evidence is completely arbitrary. To make an analogy - if I ask you to invest in my company that makes a brand new food item with no nutritional value or flavor, it's probably a scam. However, if I ask you to invest in my company that makes a tasty and nutritional food item, regardless of whether you think my food will do well in the market in the long run, it requires evidence to claim that it is a scam.
  - vannevar 14y ago
    I didn't say Bitcoin itself is a scam, only that the market is so tiny that a single player could easily manipulate it. And if someone can, someone will. And while I see Bitcoin's legitimate use cases, few (very few) people are using it for actual trade. The market seems purely speculative, with no underlying Bitcoin economy to stabilize it (save possibly the money-laundering business).
    - javert 14y ago
      I agree that the market is largely speculative. But I think the speculation is mainly very long-term speculation - so people predominantly want to get more bitcoins, or they want to hold them. This will tend to drive the price up.
dvanduzer 14y ago
Perhaps a bit off topic, but would a finance nerd recognize this style of graph better? I've never seen such a thing before, and it took a little while to understand what the instructions were saying. But once I got it, I was immediately confused that there aren't more commonly known high information financial visuals beyond the standard two axis graph. Is it just that most exchanges somehow don't publicly publish such granular data?
- jonaldomo 14y ago
  I thought the same thing. And I don't think it's offtopic since hackernews is a place for development discussion.
  - duncan 14y ago
    I also felt the same way.
- coderrr 14y ago
  I'm the original creator of this site. The initial version had no market rate chart (the one in the middle). It was purely a live version of the bids/asks (see bottom graph http://bitcoincharts.com/markets/mtgoxUSD.html http://bitcoincharts.com/markets/mtgoxUSD.html). After making that it didn't take much creativity to realize a price chart would fit nicely in the middle.
- a-priori 14y ago
  It is a bit confusing, but here goes: Ignore the green curve for a second. The gold curve is the 'bid' curve. It shows, at any given USD value (horizontal axis), how many Bitcoins people are willing to buy (vertical axis). So it says that, based on the orders currently in the market's books, at the $6.00/Bitcoin price point, you could sell up to 23,282 Bitcoins to get $549,907. This trade could happen immediately, because the matching buy orders already exist. Similarly, the blue curve is the 'ask' curve. It shows how many Bitcoins people are currently willing to sell at any given price. So right now, at the $8.00/Bitcoin price point, you could buy 19,242 Bitcoins at a cost of $144,682. Obviously, you'd be stupid to do either of those trades because they're far from the market rate. The action happens where those curves meet, currently at $7.10362-7.18242. This means that, currently, someone could buy at least one Bitcoin at $7.18242, or sell one at $7.10362. If someone were to put either a buy or sell order in between those numbers, then it would sit there until a match came in. Which brings us to the green curve. This is the trade history. Like the other curves, the horizontal axis is the price, but here the vertical axis is time. It shows, trade by trade, what prices Bitcoins have actually traded at. Right now, the most recent is $7.10110; this is what people quote as the market price.
tokenadult 14y ago
What goes up could also go down. I've seen it happen in my adult life to gold (in the 1980s), to housing (twice, once mostly in Texas, completely killing off the savings and loan industry nationally, and more recently all over the world), and to petroleum multiple times. As I have posted before here on Hacker News, perhaps the greatest contribution the Bitcoin experiment will make to humankind is to teach you and me and our neighbors more about the realities of economics. Many of the ideas about how to mine Bitcoins, store Bitcoins, and trade with Bitcoins as a medium of exchange illustrate both the strengths and weaknesses of any other medium of exchange in a world full of human beings. Seeing the discussion of Bitcoins here on Hacker News reminds me of the last time that the price of gold (in United States dollars) crashed, and the arguments beforehand that such an occurrence was impossible, for instance. "The market can remain irrational longer than you can remain solvent" is still an important principle of investment.
- base698 14y ago
  Last year it went up to over $30 before hitting $3 over the course of a few months--no one knows what goes up just come down more than bitcoin. It's steadily risen back to $7 on a much more stable trajectory. The interesting thing this time is the relative stability over the last 6 months.
  - rmc 14y ago
    Ah so this time it's different! The battle cry of every bubble.
    - jerguismi 14y ago
      If the bubble keeps repeating, it is still an opportunity for speculators who can do the timing right. Personally I'm long on bitcoins, I do dollar-cost-averaging. Good way to do this is for example bitcoinbuilder.com, or 10-line python script will do the same thing.
      - DanBC 14y ago
hetman 14y ago
Here we go again...
nihilocrat 14y ago
Am I the only one who can't read this graph? It looks like it's rotated 90 degrees and there's no time axis so I don't see what this is representing. I don't understand what the legend for the Y axis means.
- deleted 14y ago
  [deleted]
- elliottcarlson 14y ago
  It's a market depth chart - the orange line on the left represents the cumulative standing buy orders, the blue line represents the standing sell orders, the green line is the historical price per trade with the latest trade (thus value) being at the bottom. The Y axis is a representation of the bitcoin value, and the X axis is the representation of the USD buy/sell prices.
- NelsonMinar 14y ago
  Here's a traditional market chart showing USD vs BTC since the beginning of Bitcoin. Salient features: enormous bubble a year ago, and many months of stability at $5 before the recent runup. http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv
- teach 14y ago
  It's not just you. For me, the "graph" is blank. (Chrome on Windows)
morsch 14y ago
For further amusing reading, look at https://bitcointalk.org/index.php?topic=91661.20 https://bitcointalk.org/index.php?topic=91661.20 User pirateat40 is running a BTC investment scheme with super-high returns (BS&T: Bitcoin Savings & Trust, a name suggested by investors). So high, that the community is split between the believers who can't resist the ROI and the non-believers who are convinced that Pirate is running a Ponzi scheme. But that's not the fun part. The fun part is that pirateat40 and another member have agreed to participate in a sort of bet to settle the issue, which involves certain payouts under certain conditions. Mostly it's a bet that pirateat40/BS&T will default within a couple of months. Both have put 5000 BTC, ie. roughly 30k USD on the line.
- damian2000 14y ago
  Both those users are probably the same guy, and its an attempt to gain credibility, when he wins... ;-)
  - javert 14y ago
    That's a funny idea, but as someone who pays attention to bitcointalk.org, it's extremely unlikely.
- javert 14y ago
  I really wish I had been the guy betting against pirate, because then I'd invest 5,000 BTC in pirate pass-through accounts. Perfect hedge.
coderdude 14y ago
I've been asked in the past if I could accept Bitcoin. I believe there are even services that convert Bitcoin on the fly to US dollars for you when you accept a purchase. It doesn't really seem like a smart business decision though. What are the legal ramifications of accepting money that came from Bitcoin? Is the IRS going to come knocking at your door? My gut tells me to avoid BTC like the plague, but it does intrigue me.
- Karunamon 14y ago
  Why would the IRS come knocking at your door? Take the same laws that apply to any other currency transaction and apply.
  - coderdude 14y ago
    Would they/why would they, these are the questions I'm asking because I'm uncertain how these things even work. With currencies backed by nations I can see the IRS not caring, but Bitcoin isn't just "any other currency." It's a currency not made up or backed by any nation. In a way it's money out of thin air. That's what worries me.
    - 286c8cb04bda 14y ago
      The IRS doesn't care where your income comes from. They care that it is (1) reported, and (2) correctly valued. They have, for example, rules for reporting bartered income[1]. Barter is certainly not "any other currency" either. [1]: http://www.irs.gov/businesses/small/article/0,,id=187904,00.html http://www.irs.gov/businesses/small/article/0,,id=187904,00....
ChrisNorstrom 14y ago
I lost a lot of money in bitcoin. I learned a valuable lesson that's better than anything I learned in collage. 1) Easy to make, easy to lose. 2) Whatever you are thinking of doing, so is everyone else. If you're planning on outsmarting thousands of other people, just remember, they are planning to outsmart you. 3) Any market with a high volume of flippers (buys to resell and make money) vs users (actually use a product or service) might be a bubble. High rise bubble, mortgage bubble, housing bubble, Miami condo bubble 4) The worst time to make decisions is when you feel like you're going to lose out on something spectacular. When you have visions of grandeur. When the emotional side of you is most active, the logical side of you is being repressed. Watch out for that. 5) "This time is different!" is bullshit (when relating to bubbles and re-occuring events). Each new generation brings the same humanistic flaws of the last generation. Doomed to repeat itself forever and ever. Humans will be humans the same way sharks will be sharks. We are cursed with a primitive instinct that might have worked thousands of years ago in a tribal society but now is working against us. 6) Whenever you take a gamble, ALWAYS assume you are going to lose. If you're ok with the outcome of losing and find the gamble to be worth it go ahead and take a risk. I didn't lose too much money in bitcoin but lets just say it was money that I was saving up for braces. That was the deal I made with myself. I'm still angry that I lost, there's no point in lying, emotions will be emotions. But the way I see it, I didn't lose the money in bitcoin, I invested it in some really good "real world economics" classes at a good collage somewhere...
- stcredzero 14y ago
  5) "This time is different!" is bullshit. There are times when it is indeed different. When Columbus landed, it was genuinely different. (Especially for the natives.) When general artificial intelligence arrives, it will also be genuinely different. (Especially for us.)
  - gyom 14y ago
    I'm not sure if you just implicitly suggested that we (humans) will be mistreated by the general AI (and its offsprings) just like the natives were mistreated by people who followed after Columbus.
cs702 14y ago
I’m persuaded that in the long run -- that is, over many years -- Bitcoin is likely to appreciate far above current levels as it gains further adoption worldwide. Here's why: https://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/ https://cs702.wordpress.com/2011/05/29/on-the-potential-adop... -- I wrote this more than a year ago, and still think it's correct. However, I would not bet on the direction of Bitcoin prices in the short run, because I have no advantage over the many short-term traders and speculators who make up the daily Bitcoin market. (As Warren Buffett says, “if you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.” I don't want to be the patsy.)
- aristus 14y ago
  A reader offered to buy a copy of my book if he could pay in BTC. I printed it out for safekeeping and to show my kids someday. I think that's about as far as I will invest.
- javert 14y ago
  I haven't read your post, but I agree with your projection. I'm happy to put a significant but disposable amount of my money in bitcoin while I can still afford to get a significant percent of all bitcoins ever (which I still can). (EDIT: And by that I mean, say, something like .01%.)
  - cs702 14y ago
    Thank you. FWIW, my post both outlines the reasons why Bitcoin would appreciate and makes an effort to quantify potential appreciation under different worldwide usage assumptions.
xODF 14y ago
It's a new currency, it would be illogical to assume that the price of bitcoins will be wildly irratic as it catches on. The one thing I know about bitcoins is that I don't know what they'll do. The volatility makes bitcoin trading attractive to me, also, you can only lose what you put in, the trading costs are ridiculously low, and I started my account with $100 bucks. Initially I lost value but I just waited it out and turned $100 into $130. That's a huge return in less than a year. Obviously this is more of an exercise, I wouldn't get stupid with how much I put into bitcoins, the whole thing could collapse tomorrow.

74 points by kolinko 14y ago

I was a big opponent of bitcoin- still wouldn't use it for anything that matters- but there are some great use cases. With government bans on online gambling bitcoin could really take over(that market). And, of course, there is the illegal drug trade. When people say that "it's not backed by anything" all they need to do is fire up tor and take a peak at silkroad. It's backed by one of the most in-demand products ever.

jerguismi 14y ago
Bitcoin is pretty useless, since almost the only thing you can buy with it is illegal drugs and guns... (btw. drugs & weapons are the second and third biggest international markets, food is the first.)
- dnlhoust 14y ago
  I think the people looking to buy drugs and guns would disagree.
  - Anderkent 14y ago
    Pretty sure that was sarcasm.
gokhan 14y ago
Referring to this: http://en.wikipedia.org/wiki/Silk_Road_(marketplace) http://en.wikipedia.org/wiki/Silk_Road_(marketplace)
kolinko 14y ago
This is also my opinion. For me, BTC doesn't make sense when purchasing, say, computers. But for buying e-goods, MMO game items, or anything else where there are huge margins, it actually makes sense. And yeah, it's backed by the Silk Road :)
repsilat 14y ago
I wonder if it's liquid enough to do an "instant trade". Essentially, you could route (possibly international) financial transactions through BitCoin and avoid big fees by doing a buy on the buyer's side, transferring the coins to the seller, then having them sell the coins in their local currency. The best part about this is that neither the buyer nor the seller needs to have the slightest interest in BitCoin and it doesn't matter at all if the value of the currency is reasonable so long as it's reasonably stable. Even better, neither side needs to know the other's bank details, just a throw-away BitCoin account number. This isn't just an IMT-killer, it's a PayPal killer as well. Assuming the BitCoin market is more or less efficient relative to currency markets, and assuming those transactions could be cleared within ~1 day, you could absolutely kill the international transfer market (known for high fees, long delays and shitty exchange rates).
- bencoder 14y ago
  This can be done but I believe it is a bit more expensive than via banks, since you have exchange fees and the spread as liquidity isn't quite high enough (assuming you want to transfer ASAP. If you are willing to wait on both sides you can do a lot better) Example exchanging 500 GBP to EUR (via intersango at current rates): Buy 104.6 BTC @ 4.76GBP Fees for instant trade: 0.95% = ~1 BTC. Balance: 103.6BTC Sell 103.6BTC @ 5.8EUR = 600.88 eur Fees for instant trade: 0.95% = ~5.71. Balance: 595.17EUR 500 GBP went to 595.17EUR. Exchange rate: 1.19. (google tells me the exchange rate is about 1.26 at the moment, so this is quite poor)
  - repsilat 14y ago
    You're right, that's not good. I imagine it would get better if people started doing things like that in higher volumes, but that's a bit of a Catch 22. Until then, there are a couple of mitigating factors: - You may not get the market rate from anyone. The UK post office is only giving me a rate of 1.2260 to the Euro. - If you need to pay a fee for a transfer it could be worthwhile for small amounts. The UK post office doesn't charge a fee, but it has a min transfer of £250. www.tranzfers.com charges £7 or $15AU. I've paid more elsewhere.
  - 14y ago
rockyleal 14y ago
https://en.bitcoin.it/wiki/Trade https://en.bitcoin.it/wiki/Trade
Gormo 14y ago
When people say "it's not backed by anything", they need only compare it to mainstream currencies - they're not backed by anything anymore either.
- nhaehnle 14y ago
  Government currencies have the benefit that the government creates demand for them by using it as denomination for tax debts. Non-government currencies have no such external creation of demand. It's actually quite curious that Bitcoin was able to take off the way it did despite this lack of initial forced demand. I wonder which was more important: the fact that there are so many anti-government ideologues out there, the fact that Bitcoin can help with illegal transactions, or simply the fact that it's a neat technology. I'm certain all three played a role, perhaps to a different extent at different times.
  - Gormo 14y ago
    Independent currencies don't have that particular source of demand, but economies are made of much more than tax debts. And you could argue that overbearing policy itself creates demand for currencies that enable untaxable (and other illicit) transactions. Government itself could be said to encourage demand for both forms of currency. I doubt that the 'neat technology' aspect contributes much to the exchange rate; or little more impact than coin and banknote collectors have on mainstream currencies. You don't need to put much money in, or participate in many transactions, in order to examine the technology itself.

mtgx 14y ago

The last thing Bitcoin needs is another speculation craze based on its high value. If Bitcoin's value is growing, that's fine, let it keep growing naturally. Don't start publicizing it so it starts another speculation roller coaster, at least until the Bitcoin market is big enough to not be impacted much by speculation-based transactions.

kokey 14y ago
After the initial bubble , it now seems fairly stable and growing slowly at a rate that resembles what one would expect from an inflation hedge. It would be nice if it was able to avoid another bubble, but I think it will still happen. As long as another bubble is purely a function of speculation and market size and not due to manipulation or other corruption, it will eventually build a track record for credibility. I think this the route every non-government linked currency has to take at first. The road to credibility is a long one but I'm confident that over time there will be some like Bitcoin that will get there.
Paul_S 14y ago
Obviously, you are absolutely right. Then again, as much as I despise myself for it I did make a killing last time a bunch of idiots started buying them for >20$ a pop so I wouldn't mind. Taking money from speculators and giving money to geeks... I'm sure someone could spin this into something positive. I don't think it's going to hurt bitcoin, it's proven itself to withstand it and is here to stay.
- deleted 14y ago
  [deleted]
- tatsuke95 14y ago
  >"Taking money from speculators and giving money to geeks... " Classic fallacy. "Those rules don't apply to me!" Guess what? You are a speculator, no better or worse than any other speculator out there, be it in gold, houses or mortgages. Sorry.
  - 14y ago

csomar 14y ago

The reason for that is the death of Bitcoinica. Bitcoinica offered shorting, which stabilized prices at around $5. When Bitcoinica went out of business, the only way to make money on Bitcoin is to speculate its' price increase which will drive demand; which will drive its' price even more. That being said, it might be the right time to buy Bitcoins, and sell before the bubble bursts. However, for a more stable Bitcoin, we need a shorting system and enough traders.

kolinko 14y ago
Interesting, thanks for this info.
kiba 14y ago
That's nonsense. Bitcoinica have virtually no effect on the market.
- cygal 14y ago
  Care to elaborate?
  - kiba 14y ago
    When bitcoinica shut down operation, there wasn't any signficant change in the price of bitcoin in either direction. Also, it's a really bad idea to use ad-hoc reasoning after-the-fact to explain why the price rose or goes down. There could be multiple reasons and multiple events why the price of bitcoin rose as it did. Sometime, there's no reason at all.
- csomar 14y ago
  No it did. The shorting stabilized prices, and if you don't have any economical background, you can check out Khan Academy videos on economics. The price of Bitcoin started to raise since Bitcoinca ended operations. Certainly, it won't skyrocket in 24 hours. It'll take many days (and maybe weeks) to visualize the trend.
  - 14y ago

jamesu 14y ago

Will be interesting to see how high it goes. Will we see a return to $31.91/BTC?

pitt1980 14y ago

http://xoxohth.com/thread.php?thread_id=1985065&mc=34&forum_id=2 http://xoxohth.com/thread.php?thread_id=1985065&mc=34&#3... they are way too cumbersome to buy, why invest in a currency that the average computer user can't figure out how to buy?

Paul_S 14y ago
The barrier to entry is a good thing, kind of a safeguard for new users. You are storing real money on your computer, you need to be able to keep that safe. I'm sure someone will offer banking services in the future to solve this "problem" and make it work like any online account, which just happens to be denominated in bitcoins.
chimi 14y ago
I'm not advocating the purchase of bitcoins, simply providing an answer. I have no opinion on whether or not bitcoins are a good "investment." The transactional friction is a reason the market is small. If it's easier to transact and more people can do it, the supply/demand curves will push the price up in the future. Assuming demand is proportional to the size of the market.
njharman 14y ago
Much easier to manipulate (the price of).

moonchrome 14y ago

Isn't bitcoin trade on like a few million dolars per day globally according to some really rosy estimates ? If I'm reading this correctly it has 1.6M$ on the bid side. Do people realize that with such low liquidity the price is irrelevant ? Real news would be it doing $100M transactions in a day or having $100M on bids, not that it would be significant but that would show some real growth, this is just a few people playing with their savings.

ulvund 14y ago
My guess is that bitcoins are mainly used for college students' and drug hobbyists' $50 purchases of LSD and the like on silk road and not for big transactions.
- kiba 14y ago
  Silk Road is famous, but it doesn't mean that illegal activities are the main economic activities in bitcoin. The number of accounts is currently at about 22000, and the largest number of people online at any given time is 126 – a stable community, but much smaller than those who see Silk Road as being the single shadowy force keeping up the Bitcoin economy behind the scenes imagine. -- http://bitcoinmagazine.net/the-silk-road-report/ http://bitcoinmagazine.net/the-silk-road-report/
  - jerguismi 14y ago
    Hmm, I guess those statistics are from the SR forums, a separate site. The actual SR web site doesn't give out such statistics. You could perhaps estimate the usage by listings & reviews.
  - rbn 14y ago
    The problem is that CCs and PayPal is much easier to use and it is much safer than Bitcoins. So I for one see no reason to use bitcoin to purchase anything other than products that can only be purchased via bitcoins
    - 14y ago

joering2 14y ago

Ok but given current pricing of GPUs, is it profitable to mine the coins, given I have access to free electricity (my office building does not charge for that).

Retric 14y ago
They are cutting the rate of bit-coin generation in half in January. (The total bit-coin's always stay under 21million but they don't use an exponential curve just cutting the rate in 1/2 every few years.)
- nullc 14y ago
  You probably know this, but for people that don't— "They are" is the wrong pairing. The subsidy halves every 210,000 blocks (~4 years) as part of the innate core rules of the system enforced by every participant. So it would be more accurate to say "They cut" (past tense as this was established years ago), or "The system will" (no human actor). Also it looks like the halving will be early December to late November. (The block number is fixed, not the time, and because the difficult updates lag rapid increases/decreases in computing power can shift the date around a bit)
petemc_ 14y ago
http://www.butterflylabs.com/order-form-bitforce-sc-mini-rig/ http://www.butterflylabs.com/order-form-bitforce-sc-mini-rig... This might make a lot of GPU setups obsolete. Edit to add more info: I'm told the expected generation output, from 1000000 Mhps, at current difficulty 1751454.53534068, is 574.2818 BTC per day or 23.9284 BTC per hour.
- sp332 14y ago
  $4,000/day at current exchange rates, it should pay for itself in less than 8 days. Of course the rate of BTC generation will go down over time, but it looks like these rigs would easily pay for themselves for several years yet.
  - 14y ago

vannevar 14y ago

Apparently we're in the "pump" phase of the Bitcoin pump-and-dump cycle. Really, the entire Bitcoin market would fit comfortably inside the volume of your average OTC penny stock. Does anyone not think the Bitcoin game is rigged?

javert 14y ago
Does anyone not think the Bitcoin game is rigged? There are significant reasons why having a deflationary, digital currency (or commodity) would be quite useful, at least for certain people and use cases. If there were no use case for Bitcoin, calling it a scam without presenting evidence would be much more reasonable. Given that there are use cases, calling Bitcoin a scam without presenting evidence is completely arbitrary. To make an analogy - if I ask you to invest in my company that makes a brand new food item with no nutritional value or flavor, it's probably a scam. However, if I ask you to invest in my company that makes a tasty and nutritional food item, regardless of whether you think my food will do well in the market in the long run, it requires evidence to claim that it is a scam.
- vannevar 14y ago
  I didn't say Bitcoin itself is a scam, only that the market is so tiny that a single player could easily manipulate it. And if someone can, someone will. And while I see Bitcoin's legitimate use cases, few (very few) people are using it for actual trade. The market seems purely speculative, with no underlying Bitcoin economy to stabilize it (save possibly the money-laundering business).
  - javert 14y ago
    I agree that the market is largely speculative. But I think the speculation is mainly very long-term speculation - so people predominantly want to get more bitcoins, or they want to hold them. This will tend to drive the price up.

dvanduzer 14y ago

Perhaps a bit off topic, but would a finance nerd recognize this style of graph better? I've never seen such a thing before, and it took a little while to understand what the instructions were saying. But once I got it, I was immediately confused that there aren't more commonly known high information financial visuals beyond the standard two axis graph. Is it just that most exchanges somehow don't publicly publish such granular data?

jonaldomo 14y ago
I thought the same thing. And I don't think it's offtopic since hackernews is a place for development discussion.
- duncan 14y ago
  I also felt the same way.
coderrr 14y ago
I'm the original creator of this site. The initial version had no market rate chart (the one in the middle). It was purely a live version of the bids/asks (see bottom graph http://bitcoincharts.com/markets/mtgoxUSD.html http://bitcoincharts.com/markets/mtgoxUSD.html). After making that it didn't take much creativity to realize a price chart would fit nicely in the middle.
a-priori 14y ago
It is a bit confusing, but here goes: Ignore the green curve for a second. The gold curve is the 'bid' curve. It shows, at any given USD value (horizontal axis), how many Bitcoins people are willing to buy (vertical axis). So it says that, based on the orders currently in the market's books, at the $6.00/Bitcoin price point, you could sell up to 23,282 Bitcoins to get $549,907. This trade could happen immediately, because the matching buy orders already exist. Similarly, the blue curve is the 'ask' curve. It shows how many Bitcoins people are currently willing to sell at any given price. So right now, at the $8.00/Bitcoin price point, you could buy 19,242 Bitcoins at a cost of $144,682. Obviously, you'd be stupid to do either of those trades because they're far from the market rate. The action happens where those curves meet, currently at $7.10362-7.18242. This means that, currently, someone could buy at least one Bitcoin at $7.18242, or sell one at $7.10362. If someone were to put either a buy or sell order in between those numbers, then it would sit there until a match came in. Which brings us to the green curve. This is the trade history. Like the other curves, the horizontal axis is the price, but here the vertical axis is time. It shows, trade by trade, what prices Bitcoins have actually traded at. Right now, the most recent is $7.10110; this is what people quote as the market price.

tokenadult 14y ago

What goes up could also go down. I've seen it happen in my adult life to gold (in the 1980s), to housing (twice, once mostly in Texas, completely killing off the savings and loan industry nationally, and more recently all over the world), and to petroleum multiple times. As I have posted before here on Hacker News, perhaps the greatest contribution the Bitcoin experiment will make to humankind is to teach you and me and our neighbors more about the realities of economics. Many of the ideas about how to mine Bitcoins, store Bitcoins, and trade with Bitcoins as a medium of exchange illustrate both the strengths and weaknesses of any other medium of exchange in a world full of human beings. Seeing the discussion of Bitcoins here on Hacker News reminds me of the last time that the price of gold (in United States dollars) crashed, and the arguments beforehand that such an occurrence was impossible, for instance. "The market can remain irrational longer than you can remain solvent" is still an important principle of investment.

base698 14y ago
Last year it went up to over $30 before hitting $3 over the course of a few months--no one knows what goes up just come down more than bitcoin. It's steadily risen back to $7 on a much more stable trajectory. The interesting thing this time is the relative stability over the last 6 months.
- rmc 14y ago
  Ah so this time it's different! The battle cry of every bubble.
  - jerguismi 14y ago
    If the bubble keeps repeating, it is still an opportunity for speculators who can do the timing right. Personally I'm long on bitcoins, I do dollar-cost-averaging. Good way to do this is for example bitcoinbuilder.com, or 10-line python script will do the same thing.
    - DanBC 14y ago

hetman 14y ago

Here we go again...

nihilocrat 14y ago

Am I the only one who can't read this graph? It looks like it's rotated 90 degrees and there's no time axis so I don't see what this is representing. I don't understand what the legend for the Y axis means.

deleted 14y ago
[deleted]
elliottcarlson 14y ago
It's a market depth chart - the orange line on the left represents the cumulative standing buy orders, the blue line represents the standing sell orders, the green line is the historical price per trade with the latest trade (thus value) being at the bottom. The Y axis is a representation of the bitcoin value, and the X axis is the representation of the USD buy/sell prices.
NelsonMinar 14y ago
Here's a traditional market chart showing USD vs BTC since the beginning of Bitcoin. Salient features: enormous bubble a year ago, and many months of stability at $5 before the recent runup. http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv
teach 14y ago
It's not just you. For me, the "graph" is blank. (Chrome on Windows)

morsch 14y ago

For further amusing reading, look at https://bitcointalk.org/index.php?topic=91661.20 https://bitcointalk.org/index.php?topic=91661.20 User pirateat40 is running a BTC investment scheme with super-high returns (BS&T: Bitcoin Savings & Trust, a name suggested by investors). So high, that the community is split between the believers who can't resist the ROI and the non-believers who are convinced that Pirate is running a Ponzi scheme. But that's not the fun part. The fun part is that pirateat40 and another member have agreed to participate in a sort of bet to settle the issue, which involves certain payouts under certain conditions. Mostly it's a bet that pirateat40/BS&T will default within a couple of months. Both have put 5000 BTC, ie. roughly 30k USD on the line.

damian2000 14y ago
Both those users are probably the same guy, and its an attempt to gain credibility, when he wins... ;-)
- javert 14y ago
  That's a funny idea, but as someone who pays attention to bitcointalk.org, it's extremely unlikely.
javert 14y ago
I really wish I had been the guy betting against pirate, because then I'd invest 5,000 BTC in pirate pass-through accounts. Perfect hedge.

coderdude 14y ago

I've been asked in the past if I could accept Bitcoin. I believe there are even services that convert Bitcoin on the fly to US dollars for you when you accept a purchase. It doesn't really seem like a smart business decision though. What are the legal ramifications of accepting money that came from Bitcoin? Is the IRS going to come knocking at your door? My gut tells me to avoid BTC like the plague, but it does intrigue me.

Karunamon 14y ago
Why would the IRS come knocking at your door? Take the same laws that apply to any other currency transaction and apply.
- coderdude 14y ago
  Would they/why would they, these are the questions I'm asking because I'm uncertain how these things even work. With currencies backed by nations I can see the IRS not caring, but Bitcoin isn't just "any other currency." It's a currency not made up or backed by any nation. In a way it's money out of thin air. That's what worries me.
  - 286c8cb04bda 14y ago
    The IRS doesn't care where your income comes from. They care that it is (1) reported, and (2) correctly valued. They have, for example, rules for reporting bartered income[1]. Barter is certainly not "any other currency" either. [1]: http://www.irs.gov/businesses/small/article/0,,id=187904,00.html http://www.irs.gov/businesses/small/article/0,,id=187904,00....

ChrisNorstrom 14y ago

I lost a lot of money in bitcoin. I learned a valuable lesson that's better than anything I learned in collage. 1) Easy to make, easy to lose. 2) Whatever you are thinking of doing, so is everyone else. If you're planning on outsmarting thousands of other people, just remember, they are planning to outsmart you. 3) Any market with a high volume of flippers (buys to resell and make money) vs users (actually use a product or service) might be a bubble. High rise bubble, mortgage bubble, housing bubble, Miami condo bubble 4) The worst time to make decisions is when you feel like you're going to lose out on something spectacular. When you have visions of grandeur. When the emotional side of you is most active, the logical side of you is being repressed. Watch out for that. 5) "This time is different!" is bullshit (when relating to bubbles and re-occuring events). Each new generation brings the same humanistic flaws of the last generation. Doomed to repeat itself forever and ever. Humans will be humans the same way sharks will be sharks. We are cursed with a primitive instinct that might have worked thousands of years ago in a tribal society but now is working against us. 6) Whenever you take a gamble, ALWAYS assume you are going to lose. If you're ok with the outcome of losing and find the gamble to be worth it go ahead and take a risk. I didn't lose too much money in bitcoin but lets just say it was money that I was saving up for braces. That was the deal I made with myself. I'm still angry that I lost, there's no point in lying, emotions will be emotions. But the way I see it, I didn't lose the money in bitcoin, I invested it in some really good "real world economics" classes at a good collage somewhere...

stcredzero 14y ago
5) "This time is different!" is bullshit. There are times when it is indeed different. When Columbus landed, it was genuinely different. (Especially for the natives.) When general artificial intelligence arrives, it will also be genuinely different. (Especially for us.)
- gyom 14y ago
  I'm not sure if you just implicitly suggested that we (humans) will be mistreated by the general AI (and its offsprings) just like the natives were mistreated by people who followed after Columbus.

cs702 14y ago

I’m persuaded that in the long run -- that is, over many years -- Bitcoin is likely to appreciate far above current levels as it gains further adoption worldwide. Here's why: https://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/ https://cs702.wordpress.com/2011/05/29/on-the-potential-adop... -- I wrote this more than a year ago, and still think it's correct. However, I would not bet on the direction of Bitcoin prices in the short run, because I have no advantage over the many short-term traders and speculators who make up the daily Bitcoin market. (As Warren Buffett says, “if you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.” I don't want to be the patsy.)

aristus 14y ago
A reader offered to buy a copy of my book if he could pay in BTC. I printed it out for safekeeping and to show my kids someday. I think that's about as far as I will invest.
javert 14y ago
I haven't read your post, but I agree with your projection. I'm happy to put a significant but disposable amount of my money in bitcoin while I can still afford to get a significant percent of all bitcoins ever (which I still can). (EDIT: And by that I mean, say, something like .01%.)
- cs702 14y ago
  Thank you. FWIW, my post both outlines the reasons why Bitcoin would appreciate and makes an effort to quantify potential appreciation under different worldwide usage assumptions.

xODF 14y ago

It's a new currency, it would be illogical to assume that the price of bitcoins will be wildly irratic as it catches on. The one thing I know about bitcoins is that I don't know what they'll do. The volatility makes bitcoin trading attractive to me, also, you can only lose what you put in, the trading costs are ridiculously low, and I started my account with $100 bucks. Initially I lost value but I just waited it out and turned $100 into $130. That's a huge return in less than a year. Obviously this is more of an exercise, I wouldn't get stupid with how much I put into bitcoins, the whole thing could collapse tomorrow.