7 ms·

Bitcoin Reaches All Time High Market Capitalization

91 points by mrb 14y ago

steeve 14y ago
Am I the only one here who feels like they're missing out on something with Bitcoin?
- agorabinary 14y ago
  You'll feel like that even more once it hits $1B capitalization.
- paulgb 14y ago
  Yeah, but I felt the same way watching the US housing bubble from the sidelines. (I'm assuming you meant missing out on an investment. If you are interested in the technology, it's worth checking out bitcoin.)
- csdreamer7 14y ago
  I still feel the majority of the money that is being put into bitcoin is speculative(as opposed to having hard data). I think if you buy bitcoins now you lose money at the end of the bull's run. That could easily change if Amazon or Steam start accepting them and the money from actual uses drowns out the speculators (and therefore any growth in the value of the coin has real use backing instead of easily spooked speculators).
  - jerguismi 14y ago
    Amazon or steam hardly matters if the international drug/gun trade adopts them. However that might also mean regulatory problems.
stch2 14y ago
I have a question about bitcoin -- let's assume that it actually starts becoming popular. What stops any country that's adopting it from simply forking their own version? Specifically, why is everyone investing in this particular instance of bitcoin?
- betterunix 14y ago
  Why would any country want to adopt Bitcoin? What incentive does any country have to do such a thing? A country would be more likely to introduce a Chaum-style digital cash system, where the government would act as an issuing authority for digital cash tokens.
  - adrianbg 14y ago
    They might adopt it if it's more stable than their currency, like how Ecuador uses the US dollar.
    - betterunix 14y ago
      Perhaps, but it would have to be adopted side-by-side with a currency that can be used (securely) for offline transactions. Why do that, when you could just adopt one currency that can be used both offline and online (especially since you can deploy a digital cash protocol for any currency, and thus you only really need one that is useful for offline payments)?
  - deleted 14y ago
    [deleted]
  - MacsHeadroom 14y ago
    Relevant: The Royal Canadian Mint recently invented MintChip, a fully digital crypto-currency where private keys are stored in integrated circuit chips in micro sd cards (for smartphones/tablets) and USB dongles (for computers). They say it is able to be exchanged online AND offline fully anonymously. The details on that are yet to be released. This makes Canada the first country in the world to explore a fully electronic currency. http://mintchipchallenge.com/ http://mintchipchallenge.com/ http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip
- tytyty 14y ago
  Nothing. There is no reason not to fork it. There are papers on using blockchains to pass on titles and ownership of physical goods. It's just one market, that happens to currently be worth over $200,000,000 though.
tytyty 14y ago
I'm quite ecstatic about this. I invested in bitcoin early on when it was around $1-3 a coin. I try to buy goods with it at legitimate places like bitcoinstore when it's up, and buy more when it's down. I just, you know, actually believe it's a great alternative and want to see it succeed. I do have concerns about it scaling to handle massive amounts of transactions, and what will happen with transaction fees and mining rigs as the mining reward is reduced, but it's step in the right direction for currencies.
- betterunix 14y ago
  "I do have concerns about it scaling to handle massive amounts of transactions," Relevant: https://dl.acm.org/citation.cfm?id=1754992 https://dl.acm.org/citation.cfm?id=1754992 Of course, Bitcoin does not really have offline transactions, so this may not be all that relevant (though lacking offline transactions is a pretty serious limitation).
  - nazgulnarsil 14y ago
    A bitcoin is just a signature, a string that you use to demonstrate ability to transfer it. You can hand someone a physical copy of a bitcoin signature. Of course you won't be able to verify the transaction yourself, but trusted third parties are using things like scratch off holograms to access them.
  - jerfelix 14y ago
    Correct me if I am wrong, but the prevailing thought when that article was written (1992) was that digital currency would resemble more of a transferred digital coin, with signatures representing each transaction. So if I had coin #12345, and I transferred it to you, I would digitally sign it to you giving your private key the spend capability. With those architectures, a central authority would be required to prevent the double-spend. And with those architectures, the coins grow with each spend. The difference with Bitcoin (which I think is totally misnamed) is that it's not a coin architecture, it's a ledger architecture. So no matter how many times the amount 1BTC is transferred, each transfer could be just the same length - the sender's address, the recipient's address, and an appropriate signature. Even 50 years from now and ten thousand transfers of that "coin" later, the "coin" doesn't get larger. The ledger gets larger, but the coin does not (since really there's no such thing as a "bit COIN" - really what you have is a series of account numbers in the giant shared ledger.)
nym 14y ago
If you want to find out how to buy bitcoins (it's hard to mine them now), there are a set of online guides at: http://howdoyoubuybitcoins.com/ http://howdoyoubuybitcoins.com/ tl;dr use coinbase (just like paypal / 1%) or bitme (chase deposits / 0.75%)
- MacsHeadroom 14y ago
  coinbase.com is actually a Ycombinator start-up! So if you have problems with them, you know just were to bitch about it. I kid. I kid. Joking aside, I've only had great experiences with the folks over at Coinbase.
- ianpurton 14y ago
  The guide is good but doesn't include Bitcoinary https://www.bitcoinary.com/ https://www.bitcoinary.com/ With Bitcoinary you buy from bitcoin miners and traders directly. More currencies, more ways to trade and deal directly with real people.
eof 14y ago
I have been following bitcoin since they were less than a penny each, and got my first coins at about .20 each. I have written articles (really the only thing I have ever written that has been widely read) about bitcoin, and I want to see it succeed, both because it will change my financial situation and because I believe central bank issued currency that flows through the hands of banks is a mechanism for control over people. All that being said, I think we are in the middle of the next big bitcoin surge, and I don't want to see "bitcoin reaches all time high xxxx" posts everyday.
- mrb 14y ago
  I made the HN submission; and you know what? I agree with you. On a second thought I would have rather not posted it. I much prefer a slow and steady increase of value, instead of another Bitcoin valuation bubble made even more rapid by publicizing it all the time.
- betterunix 14y ago
  "I believe central bank issued currency that flows through the hands of banks is a mechanism for control over people." Only to the extent that laws are a mechanism for controlling people. I have argued elsewhere that laws are what give money its value, and that Bitcoin still requires the existence of fiat currencies to be useful to anyone (put simply, most people still have taxes to pay and debts to settle, and so they only accept Bitcoin because they believe they can exchange it for another currency; even you speak of Bitcoin in terms of another currency). I would argue, though, that laws and fiat money are not necessarily ways to control people, but that they are necessary tools for any large society. Sometimes people disagree and require a third party to settle their dispute. Laws help give third parties (also known as judges) legitimacy in their judgments -- they can point to laws that were written before the dispute, so that there are fewer questions about bias or personal sentiments affecting the verdict. When people fail to use laws and court systems to settle their disputes, they turn to their weapons and civil wars ensue. At the very least, the operation of a court must be paid for. A person whose job is to mediate disputes all day -- and even a society with only a few thousand people will require such a person -- is not producing food or maintaining infrastructure. We would not be satisfied with a system where the parties in some dispute were directly paying the judge. At the very least, some sort of tax system is needed to pay for a court system, and humans discovered that using animals or crops as taxes does not really satisfy the needs of society. Currency makes taxation fair (do judges need wheat, or do they need cattle?) and reduces the expense of collecting taxes (tax collectors no longer need to decide if one cow is of the same quality as another). Of course, the moment you introduce a tax law that requires people to make payments with money, you have created a fiat currency: you have created a law that fuels demand for money (and thus gives money value), and it makes no difference whether that money is made of clay, gold, paper, or even if that money is nothing more than information stored on computers. So while I can understand the dissatisfaction with what today's banks and governments do with money, I do not think fiat money itself is the problem. Fiat money is a consequence of any appreciably large human society; without it, we would be living in tiny groups in the wilderness, jabbing each other with spears whenever we had a disagreement, or we would be trying to convince government officials that our sheep are of high enough quality to be accepted as a tax payment.
damian2000 14y ago
History of bitcoin: - slow start - exponential rise - exponential fall - exponential rise - ??
- MacsHeadroom 14y ago
  More like: - constant exponential climb http://bitcoincharts.com/charts/mtgoxUSD#igWeeklyza1gEMAzm1g10zm2g25zi1gVolzl http://bitcoincharts.com/charts/mtgoxUSD#igWeeklyza1gEMAzm1g... (note the Log scale) That minor "fall" in 2011 was an over-hyped blip. Minor boom and bust cycles are normal.
  - arethuza 14y ago
    I would agree that the underlying trend looks exponential - but that "blip" takes up about a quarter of that chart (about 7 months or so).
JumpCrisscross 14y ago
I investigated launching a Bitcoin exchange traded product (ETP) about a year ago. One of the issues was the market cap of BTC - an ETP would not be profitable with under $25 million under management. That is still 10% of the market cap. More pressing is float, i.e. volume being traded or sitting on the sidelines able to be traded. The concern is that BTC is like the diamond or Facebook private stock markets - a tiny float, bid up by a few zealots, unable to sustain a broader liquidation event without a significantly impairing its price. BTC is still of tremendous interest, e.g. practically uncorrelated with the U.S. money markets, though that will get eroded as it plugs into the financial system. But the complexity of the BTC microstructure is holding back the development of deeper, more sophisticated markets.
- dfc 14y ago
  I like the idea of bitcoins but I do not understand what the purpose of a btc ETP would be? It seems that an ETP would have all the risk associated with buying BTC but none of the benefits. I'm a finance noob so this is not criticism, I'm curious.
  - JumpCrisscross 14y ago
    It offers liquid BTC exposure on a trusted platform. There are more investors and market makers with deeper pockets on stock than Bitcoin exchanges. They prefer trading there because of there is a lower chance of one's balance vaporising at JPMorgan than at Mt Gox.
    - dfc 14y ago
      How is it more liquid than a mtgox account? Edit: I see that you edited your response. I guess the selling point is the trust factor and that is certainly attractive. How much trust do you think is placed in JPM that is not due to regulatory oversight?
      - deleted 14y ago
        [deleted]
gbhn 14y ago
So how would one short bitcoin?
- AndrewDucker 14y ago
  With a contract to supply it at a future date, paid immediately.
  - boboblong 14y ago
    This, of course, has unlimited downside.
  - betterunix 14y ago
    So what would you do if the counterparty failed to deliver on that contract?
    - SilasX 14y ago
      Castration? I don't know, whatever they do on "plain vanilla" exchanges/brokerages that allow shorting. Although there were recent scandals about people shorting shares that didn't exist, and when they would have reaped a profit, they were told there was no record of the shares, "but we can reverse the transaction if you like".
k2enemy 14y ago
The fact that people talk about the "market capitalization" of bitcoins suggests that they treat it as a speculative investment and not a currency. Maybe it is unavoidable in the adoption phase of its life (supply relatively fixed and demand fluctuating), but the price swings relative to other established currencies detract from its usefulness as a currency.
synctext 14y ago
Bubble Warning That is the more fitting word, instead of 'all time high market cap'. See our before-it-was-famous academic debunking of Bitcoin: http://www.pds.ewi.tudelft.nl/~victor/bitcoin.html http://www.pds.ewi.tudelft.nl/~victor/bitcoin.html Highlights: - scalability to Visa/Mastercast number-of-transactions is architecturally not possible currently - as many have said: it's not anonymous - security has numerous widely discussed issues
- gst 14y ago
  Your last paragraph on the link says it all: "BitTorrent is technologically complicated, infrastructure-wise inefficient, much less usable than a regular Web download, etc. But it got popular anyway, mostly because of unreasonable greed and paranoia of incumbent oligopolistic players." After reading this (I started with reading the conclusion) I'm glad that I didn't waste my time with the remainder of the article. This doesn't seem to be an objective article, but just subjective ranting.

91 points by mrb 14y ago

steeve 14y ago

Am I the only one here who feels like they're missing out on something with Bitcoin?

agorabinary 14y ago
You'll feel like that even more once it hits $1B capitalization.
paulgb 14y ago
Yeah, but I felt the same way watching the US housing bubble from the sidelines. (I'm assuming you meant missing out on an investment. If you are interested in the technology, it's worth checking out bitcoin.)
csdreamer7 14y ago
I still feel the majority of the money that is being put into bitcoin is speculative(as opposed to having hard data). I think if you buy bitcoins now you lose money at the end of the bull's run. That could easily change if Amazon or Steam start accepting them and the money from actual uses drowns out the speculators (and therefore any growth in the value of the coin has real use backing instead of easily spooked speculators).
- jerguismi 14y ago
  Amazon or steam hardly matters if the international drug/gun trade adopts them. However that might also mean regulatory problems.

stch2 14y ago

I have a question about bitcoin -- let's assume that it actually starts becoming popular. What stops any country that's adopting it from simply forking their own version? Specifically, why is everyone investing in this particular instance of bitcoin?

betterunix 14y ago
Why would any country want to adopt Bitcoin? What incentive does any country have to do such a thing? A country would be more likely to introduce a Chaum-style digital cash system, where the government would act as an issuing authority for digital cash tokens.
- adrianbg 14y ago
  They might adopt it if it's more stable than their currency, like how Ecuador uses the US dollar.
  - betterunix 14y ago
    Perhaps, but it would have to be adopted side-by-side with a currency that can be used (securely) for offline transactions. Why do that, when you could just adopt one currency that can be used both offline and online (especially since you can deploy a digital cash protocol for any currency, and thus you only really need one that is useful for offline payments)?
- deleted 14y ago
  [deleted]
- MacsHeadroom 14y ago
  Relevant: The Royal Canadian Mint recently invented MintChip, a fully digital crypto-currency where private keys are stored in integrated circuit chips in micro sd cards (for smartphones/tablets) and USB dongles (for computers). They say it is able to be exchanged online AND offline fully anonymously. The details on that are yet to be released. This makes Canada the first country in the world to explore a fully electronic currency. http://mintchipchallenge.com/ http://mintchipchallenge.com/ http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip
tytyty 14y ago
Nothing. There is no reason not to fork it. There are papers on using blockchains to pass on titles and ownership of physical goods. It's just one market, that happens to currently be worth over $200,000,000 though.

tytyty 14y ago

I'm quite ecstatic about this. I invested in bitcoin early on when it was around $1-3 a coin. I try to buy goods with it at legitimate places like bitcoinstore when it's up, and buy more when it's down. I just, you know, actually believe it's a great alternative and want to see it succeed. I do have concerns about it scaling to handle massive amounts of transactions, and what will happen with transaction fees and mining rigs as the mining reward is reduced, but it's step in the right direction for currencies.

betterunix 14y ago
"I do have concerns about it scaling to handle massive amounts of transactions," Relevant: https://dl.acm.org/citation.cfm?id=1754992 https://dl.acm.org/citation.cfm?id=1754992 Of course, Bitcoin does not really have offline transactions, so this may not be all that relevant (though lacking offline transactions is a pretty serious limitation).
- nazgulnarsil 14y ago
  A bitcoin is just a signature, a string that you use to demonstrate ability to transfer it. You can hand someone a physical copy of a bitcoin signature. Of course you won't be able to verify the transaction yourself, but trusted third parties are using things like scratch off holograms to access them.
- jerfelix 14y ago
  Correct me if I am wrong, but the prevailing thought when that article was written (1992) was that digital currency would resemble more of a transferred digital coin, with signatures representing each transaction. So if I had coin #12345, and I transferred it to you, I would digitally sign it to you giving your private key the spend capability. With those architectures, a central authority would be required to prevent the double-spend. And with those architectures, the coins grow with each spend. The difference with Bitcoin (which I think is totally misnamed) is that it's not a coin architecture, it's a ledger architecture. So no matter how many times the amount 1BTC is transferred, each transfer could be just the same length - the sender's address, the recipient's address, and an appropriate signature. Even 50 years from now and ten thousand transfers of that "coin" later, the "coin" doesn't get larger. The ledger gets larger, but the coin does not (since really there's no such thing as a "bit COIN" - really what you have is a series of account numbers in the giant shared ledger.)

nym 14y ago

If you want to find out how to buy bitcoins (it's hard to mine them now), there are a set of online guides at: http://howdoyoubuybitcoins.com/ http://howdoyoubuybitcoins.com/ tl;dr use coinbase (just like paypal / 1%) or bitme (chase deposits / 0.75%)

MacsHeadroom 14y ago
coinbase.com is actually a Ycombinator start-up! So if you have problems with them, you know just were to bitch about it. I kid. I kid. Joking aside, I've only had great experiences with the folks over at Coinbase.
ianpurton 14y ago
The guide is good but doesn't include Bitcoinary https://www.bitcoinary.com/ https://www.bitcoinary.com/ With Bitcoinary you buy from bitcoin miners and traders directly. More currencies, more ways to trade and deal directly with real people.

eof 14y ago

I have been following bitcoin since they were less than a penny each, and got my first coins at about .20 each. I have written articles (really the only thing I have ever written that has been widely read) about bitcoin, and I want to see it succeed, both because it will change my financial situation and because I believe central bank issued currency that flows through the hands of banks is a mechanism for control over people. All that being said, I think we are in the middle of the next big bitcoin surge, and I don't want to see "bitcoin reaches all time high xxxx" posts everyday.

mrb 14y ago
I made the HN submission; and you know what? I agree with you. On a second thought I would have rather not posted it. I much prefer a slow and steady increase of value, instead of another Bitcoin valuation bubble made even more rapid by publicizing it all the time.
betterunix 14y ago
"I believe central bank issued currency that flows through the hands of banks is a mechanism for control over people." Only to the extent that laws are a mechanism for controlling people. I have argued elsewhere that laws are what give money its value, and that Bitcoin still requires the existence of fiat currencies to be useful to anyone (put simply, most people still have taxes to pay and debts to settle, and so they only accept Bitcoin because they believe they can exchange it for another currency; even you speak of Bitcoin in terms of another currency). I would argue, though, that laws and fiat money are not necessarily ways to control people, but that they are necessary tools for any large society. Sometimes people disagree and require a third party to settle their dispute. Laws help give third parties (also known as judges) legitimacy in their judgments -- they can point to laws that were written before the dispute, so that there are fewer questions about bias or personal sentiments affecting the verdict. When people fail to use laws and court systems to settle their disputes, they turn to their weapons and civil wars ensue. At the very least, the operation of a court must be paid for. A person whose job is to mediate disputes all day -- and even a society with only a few thousand people will require such a person -- is not producing food or maintaining infrastructure. We would not be satisfied with a system where the parties in some dispute were directly paying the judge. At the very least, some sort of tax system is needed to pay for a court system, and humans discovered that using animals or crops as taxes does not really satisfy the needs of society. Currency makes taxation fair (do judges need wheat, or do they need cattle?) and reduces the expense of collecting taxes (tax collectors no longer need to decide if one cow is of the same quality as another). Of course, the moment you introduce a tax law that requires people to make payments with money, you have created a fiat currency: you have created a law that fuels demand for money (and thus gives money value), and it makes no difference whether that money is made of clay, gold, paper, or even if that money is nothing more than information stored on computers. So while I can understand the dissatisfaction with what today's banks and governments do with money, I do not think fiat money itself is the problem. Fiat money is a consequence of any appreciably large human society; without it, we would be living in tiny groups in the wilderness, jabbing each other with spears whenever we had a disagreement, or we would be trying to convince government officials that our sheep are of high enough quality to be accepted as a tax payment.

damian2000 14y ago

History of bitcoin: - slow start - exponential rise - exponential fall - exponential rise - ??

MacsHeadroom 14y ago
More like: - constant exponential climb http://bitcoincharts.com/charts/mtgoxUSD#igWeeklyza1gEMAzm1g10zm2g25zi1gVolzl http://bitcoincharts.com/charts/mtgoxUSD#igWeeklyza1gEMAzm1g... (note the Log scale) That minor "fall" in 2011 was an over-hyped blip. Minor boom and bust cycles are normal.
- arethuza 14y ago
  I would agree that the underlying trend looks exponential - but that "blip" takes up about a quarter of that chart (about 7 months or so).

JumpCrisscross 14y ago

I investigated launching a Bitcoin exchange traded product (ETP) about a year ago. One of the issues was the market cap of BTC - an ETP would not be profitable with under $25 million under management. That is still 10% of the market cap. More pressing is float, i.e. volume being traded or sitting on the sidelines able to be traded. The concern is that BTC is like the diamond or Facebook private stock markets - a tiny float, bid up by a few zealots, unable to sustain a broader liquidation event without a significantly impairing its price. BTC is still of tremendous interest, e.g. practically uncorrelated with the U.S. money markets, though that will get eroded as it plugs into the financial system. But the complexity of the BTC microstructure is holding back the development of deeper, more sophisticated markets.

dfc 14y ago
I like the idea of bitcoins but I do not understand what the purpose of a btc ETP would be? It seems that an ETP would have all the risk associated with buying BTC but none of the benefits. I'm a finance noob so this is not criticism, I'm curious.
- JumpCrisscross 14y ago
  It offers liquid BTC exposure on a trusted platform. There are more investors and market makers with deeper pockets on stock than Bitcoin exchanges. They prefer trading there because of there is a lower chance of one's balance vaporising at JPMorgan than at Mt Gox.
  - dfc 14y ago
    How is it more liquid than a mtgox account? Edit: I see that you edited your response. I guess the selling point is the trust factor and that is certainly attractive. How much trust do you think is placed in JPM that is not due to regulatory oversight?
    - deleted 14y ago
      [deleted]

gbhn 14y ago

So how would one short bitcoin?

AndrewDucker 14y ago
With a contract to supply it at a future date, paid immediately.
- boboblong 14y ago
  This, of course, has unlimited downside.
- betterunix 14y ago
  So what would you do if the counterparty failed to deliver on that contract?
  - SilasX 14y ago
    Castration? I don't know, whatever they do on "plain vanilla" exchanges/brokerages that allow shorting. Although there were recent scandals about people shorting shares that didn't exist, and when they would have reaped a profit, they were told there was no record of the shares, "but we can reverse the transaction if you like".

k2enemy 14y ago

The fact that people talk about the "market capitalization" of bitcoins suggests that they treat it as a speculative investment and not a currency. Maybe it is unavoidable in the adoption phase of its life (supply relatively fixed and demand fluctuating), but the price swings relative to other established currencies detract from its usefulness as a currency.

synctext 14y ago

Bubble Warning That is the more fitting word, instead of 'all time high market cap'. See our before-it-was-famous academic debunking of Bitcoin: http://www.pds.ewi.tudelft.nl/~victor/bitcoin.html http://www.pds.ewi.tudelft.nl/~victor/bitcoin.html Highlights: - scalability to Visa/Mastercast number-of-transactions is architecturally not possible currently - as many have said: it's not anonymous - security has numerous widely discussed issues

gst 14y ago
Your last paragraph on the link says it all: "BitTorrent is technologically complicated, infrastructure-wise inefficient, much less usable than a regular Web download, etc. But it got popular anyway, mostly because of unreasonable greed and paranoia of incumbent oligopolistic players." After reading this (I started with reading the conclusion) I'm glad that I didn't waste my time with the remainder of the article. This doesn't seem to be an objective article, but just subjective ranting.