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Bitcoin breaks 30 USD
- jere 14y agoI'm interested to see it pass $32, which should have symbolic significance if nothing else (the peak happened at $31.91 and crashed to $10 days later).
- vijayboyapati 14y agoThis reminds me of the great article by Mencius Moldbug on monetary restandardization: http://unqualified-reservations.blogspot.com/2011/04/on-monetary-restandardization.html http://unqualified-reservations.blogspot.com/2011/04/on-mone... "If Bitcoin becomes the new global monetary system, one bitcoin purchased today (for 90 cents, last time I checked) will make you a very wealthy individual. You are essentially buying Manhattan for a quarter. There are only 21 million bitcoins (including those not yet minted). (In my design, this was a far more elegant 2^64, with quantities in exponential notation. Just sayin'.) Mapped to $100 trillion of global money, to pull a random number out of the air, you become a millionaire. Wow!"
- drewblaisdell 14y agoDoesn't $100 trillion exceeds the value of the sum of all currency in the world?
- drcode 14y agoYes, probably the world money supply is smaller than this. Nonetheless, but the point is still valid.
- jessriedel 14y agoNot by too much. M2, which I think is the relevant money supply in the US, is $8 or $9 trillion. http://money.howstuffworks.com/how-much-money-is-in-the-world.htm http://money.howstuffworks.com/how-much-money-is-in-the-worl... If I remember, the US is about 1/5 of the world economy. And some random graphs suggest the world money supply is roughly $60 trillion.
- redblacktree 14y agoMy guess is that it's more likely to be another cryptocurrency that becomes the standard. Once the right people figure out how to be the main beneficiaries. Also, I'm not sure that a depreciating currency is good for society as a whole, since it encourages hoarding, rather than investment.
- wmf 14y agoDid you mean Bitcoin is appreciating because it's deflationary?
- polshaw 14y agoFWIW bitcoin is still inflationary (in terms of money supply increase)-- and quite a lot more than traditional currency; although the rate of increase halved at the start of the year.
- drcode 14y agoI believe this question is hotly debated among economists. I think deflation is probably fine: In the end, money isn't any good if you don't spend it, so hoarding has a natural limit.
- kamaal 14y ago>>In the end, money isn't any good if you don't spend it The money that you hoard, invest and which grows itself is the best kind of investment. I know of a few people who saved through their life to buy real estate and rent it out. The next generations have practically slept through their lives without ever working and yet continued to live like millionaires.
- narrator 14y agoRead "The Paradox of Savings" by F.A Hayek for a different view.
- GHFigs 14y agoMy guess is that it's more likely to be another cryptocurrency that becomes the standard. Out of curiosity, what are the existing or potential differences between cryptocurrencies? What does the competitive landscape look like?
- Steko 14y ago"great article" Interesting way to describe a one dimensional get rich quick scheme. 1. Buy some Bitcoins. 2. ??? 3. You own Manhattan!
- ceol 14y agoThat seems to be a common theme with bitcoin eccentrics. 1. Replace currencies with bitcoins. 2. ??? 3. All financial and economic problems are solved!
- linhares 14y agoWell you have to consider that: * CBs are monetizing enormously; and if they stop the stock market crashes; they are also promising inflation; * the Libor conspiracy might bring down one TBTF in London * Bankia and Santander are under stress and might fail * There's a full-blown currency war going on with competitive devaluations * People are placing billions of dollars betting that the Japanese bonds & yen will collapse * there are reasons Germany is repatriating their gold I could go on, but bitcoin is oblivious to all that; in some ways it is less risky than the int'l banking system. Finally, just as an example, the Fed is printing $800,000 new usds per each new bitcoin created. I'm not saying that bitcoin is going to be that valuable, of course, but if you look at the numbers involved you might as well consider putting some savings completely out of an interconnected banking system that is the contrary of the internet: it needs all nodes to be up and running to survive.
- kamaal 14y ago1. Buy some Bitcoins. 2. Wait till Bitcoins are in demand, continue till demand reaches epic levels. Since supply is short, more people are read to pay big dollars to buy same number of bit coins. Continuing this cycle. 3. You own Manhattan. But the article says some between 2 and 3 say .... 2a. Drug dealers, mafia, war lords, terrorists and such a likes will flock this market. 2b. Since its decentralized they will reap the benefits of anonymity. 2c. Government gets pissed due to the fact anonymity gives the criminals all the immunity they need. There fore they can't be sanctioned/tracked etc. 2d. Government moves to shut down all Bitcoin exchanges. We never go to 3. And therefore we never get to own Manhattan.
- free652 14y agoIt somewhat a surprise for me, it was a pretty quick rise. Reminds me of 2011, I wonder if it will crash the same way.
- drcross 14y agoI think the present time is completely different from the 2011 bubble. The range of services offered have grown dramatically and the Bitcoin protocol has shown it's resilience.
- free652 14y agoI agree. I had few sales now on bitmit.net, I already migrated a bunch of my long term fixed price listings there. I list like old xbox 360 games Some PC hardware Other stuff I have lying around
- moocows 14y agohttp://i.imgur.com/fqPAySI.png http://i.imgur.com/fqPAySI.png The previous crash for those who care.
- achalkley 14y agoBUY!
- mmanfrin 14y agoDidn't it hit $20 like a week ago? Bubble?
- sp332 14y agoThe first ASICs started shipping recently. This made bitcoins harder to mine (for anyone who doesn't have those ASICs, which is most people). This also demonstrated that bitcoins are here to stay, since people have made large investments in hardware that basically doesn't do anything but mine bitcoins. So the perceived future value has skyrocketed.
- polshaw 14y agoSome people believe in the success of bitcoins. They bought custom hardware. This proves bitcoins are going to be a success. Circular logic at it's finest!
- sp332 14y agoThat's true of all commodities and currencies. Some people believe in the success of gold. They invested heavily in the future of gold. This proves gold is going to be a success. Some people believe in the success of US dollars. They invested heavily in the future of US dollars. This proves US dollars are going to be valuable. Edit: ok so to be clear, it's not just wishful thinking at work, but the fact that people are working toward making bitcoins successful and stable that makes them successful and stable.
- niggler 14y agoThe difference is that with gold, there's an actual intrinsic demand backing it. There's a cultural demand (indian weddings) but also a real industrial use for gold. There is zero use for bitcoin outside of the financial context. The US Dollar is backed by the united states government and economy, and enough people have faith in both to confer present value and future value. There was a massive effort to introduce a new currency backed by physical silver (by the Hunt brothers), which never gained much traction despite the cash thrown at it. Right now the people investing in bitcoins are speculating that they will stay. For them to stay, there needs to be confidence that it will retain some sort of value, and the early people are at best described as speculators (no one is betting the farm on BTC).
- eof 14y agoThere is much, much, more merchant acceptance, transaction volume, etc. for Bitcoin compared to the last time there was a big rise; not to mention production is only half of what it was before; ASICs are here/on the horizon, YC has funded a bitcoin startup, it's mentioned basically daily in the blogs of major publications, etc. It is also worth taking a look at a log-scale chart to see that the rise isn't quite so steep as before: http://www.bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zvzl http://www.bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25... Clearly a lot of speculation going on here; but I very strongly doubt we will see a crash anything like we saw last time (how many people were preaching that the end of bitcoin had come?); though a significant correction when people start taking their profit seems almost inevitable. Anecdotally, a number of people I have been telling to buy bitcoins for years now are finally like, "well okay, I am just going to wait till it drops to $xx or so (where xx is ~40% less than whatever it is at the moment we have the conversation).
- zobzu 14y agowell yeah it makes sense, they already missed the train. it's hard to predict when you're not in the known. will it keep rising? they don't know. someone like you have a much better insight of the risk. its how the market works, except when its young, the amount of people in the known is low. Thus there is more potential gains
- Steko 14y ago"I very strongly doubt we will see a crash anything like we saw last time" This assumes that all crashes are built the same. In fact they are not. An an example, increased usage and profile also greatly increase the likelihood that governments come in and panic investors.
- conroe64 14y agoAnother thing to worry about is something better coming along. As soon as it does, bitcoins will crash and never recover, since their only worth is they are better than anything else for making anonymous secure trades. If Ripple or soemthing else begins to take off, that may change.
- geuis 14y agoSo the 10 btc I bought a couple years ago for ~$2 are now "worth" $300 USD. Do I sell them now, or wait 20 years until they're worth more? How do you know when to wait longer, and when to sell? Its not like a company where you can at least get some information on their past and future performance, whether they are growing or shrinking, etc.
- polshaw 14y agoThe volatility of BTC is useful in such situations. If you sold now, the price may rise to $40, then crash to $15, and then rise again to new heights. So if you do sell (and are keen to stay in the long-game), you have to be confident that you will be able to buy in again at below that price (NB transaction costs). If you achieve that (which is done most effectively by guessing when the peak of the bubble occurs) then you wouldn't lose out it the long term. Then you have to weigh up the risk vs reward..
- josephagoss 14y agoWell to be honest if you cash out now all you have is $300, which is a fantastic rise but not a lot of money. This is the way I see it, its only a days earning or even less, so I would hold on to it for the next decade as a experiment and see what happens. Would you pay $300 to be in on this game for the next 10 years? :)
- drcode 14y agoAccording to the efficient market hypothesis (which you may or may not agree with) the only guide you have as to how much something is worth in the future is the current price, as well as "future information" which is not currently available (if it was already available somewhere, it would already be priced in.) In other words, no one can answer that question for you :)
- javert 14y agoIf you want to sell them without the pain of going through an exchange or whatever, I'll probably send you money in the mail for them.
- coopdog 14y ago
- drcode 14y agoI think most people think the only reason bitcoins are useful is that they're not controlled by a government. However, I've recently started using bitcoins for some tiny transactions and found out something I didn't expect: They're EASY PEASY to use... much easier than papal, credit cards, or even cash! For those of you who don't know. A bitcoin "bank account" can be conjured out of thin air using randomness and some crypto algorithms. It consists of only two numbers, a public "bitcoin address" and a "private key". (kinda like an RSA key pair). The moment you've created these two numbers, you can say to someone "hey, send your $$$ to my address". Then, any time in the future you can withdraw money out of the account via your private key. This last step (withdrawing your money) is actually the ONLY step that requires any real effort at all (installing software on your PC, or trusting an online wallet site) and that's STILL super easy. EDIT: I think I ended up sounding too much like a cheerleader in this post... I'm talking purely about easiness from a theoretical standpoint. In the real world, there are clearly still many obstacles making bitcoins a PITA to deal with.
- josephagoss 14y agoThis ease of use is certainly attractive. Try sending a couple of BTC to a poker room online, and then cash out your winnings and have that BTC within your wallet in a matter of hours max, not days! I can't wait till I can buy coffee and rent with BTC, it might never happen but I like the idea.
- venus 14y agoWhenever BTC spikes like this I think of the first pizza sale a couple of years ago: https://bitcointalk.org/index.php?topic=137.msg1195#msg1195 https://bitcointalk.org/index.php?topic=137.msg1195#msg1195 Probably the most expensive pizza in history, in hindsight.
- polshaw 14y agoWell, this is going to be an interesting watch! The fundamental issue is that holding is what increases the value (because, really, it is an exchange medium; the world still ultimately prices pegged to their respective local currencies, no matter what any bitcoinite insists), and as the value increases, you are incentivised to hold. It is going to be interesting to see what happens when the bubble bursts (and it will, to some extent), and how big it gets, as most of the bitcoins held will probably be owned by users who have been through a crash before. This could mean we are only just starting the bubble-- increased confidence may let it grow far beyond the previous one.
- niggler 14y agoAre there any POS systems that use bitcoins? Any other way in which small transactions can be conducted en masse with BTC?
- jonwaller 14y agoYes. BitPay has one.
- jaredstenquist 14y agoThe rising price just makes me laugh. I "invested" $1,000 in BTC during the early hype as it was approaching $32.00. I told my co-workers how cool of a concept it was and that my investment was sure to pay off with a skyrocketing price. After months and months the price drops and drops. My $1,000 is worth $200. I go through a ridiculously long process of proving my identity to Mt. Gox and Dwolla just to get real USD back at 1/5 their original value. Now if only I had kept it in there for the long haul, I'd have my $1,000 back. It's precisely this volatility that personally makes me skeptical of it truly reaching a critical mass of any sort.
- enraged_camel 14y agoYou made the cardinal mistake of investing: you bought high, and sold low. Many rookie investors make this mistake because they are unable to control their emotions when the value of their investment takes a downturn. It can be nerve-wrecking to imagine all your money evaporating. Fortunately, your mistake cost you only $800. So it was actually a good learning experience. From now on, buy low and sell high. For example, the best time to buy is when a (recoverable) disaster or sensationalized story cause a financially strong company's stock price to dip. That's the perfect opportunity to buy some of that stock.
- drcode 14y agoSorry enraged_camel, but I think most people would consider this very bad investment advice. There's much, much more thinking that needs to go into speculative investment decisions than just the phrase "buy low sell high". In fact, that phrase is pretty useless advice on its own and often invoked as a joke among investors. (Though there is truth in your specific point that people are at risk of making irrational decisions they regret when investments go sour.)
- jaredstenquist 14y agoWhat is high and what is low is of course speculative. When investing in the stock market I of course use that basic logic by analyzing the KPIs of the securities. This was less of an investment and more of an experiment in modern technology, prompted by some skeptical comments from my friends. For that reason it was more like purchasing a lottery ticket. My $1000 lottery ticket didn't perform well, but due to my real investments paying off well over the years, I can handle the loss without much thought. Win some. Lose some.
- lectrick 14y ago1) BTC is a perfect fit for porn websites 2) Porn websites, for some reason, have not gone BTC yet 3) Pornographers are a tight knit community. When a couple go, I think they will all go to stay competitive 4) Google how big the porn industry is.
- winthrowe 14y agoPoint 1 is not entirely true; sites of that nature rather like recurring billing, which bitcoin doesn't do out of the box.
- BrokenPipe 14y agoI love bitcoins, easy to use, no middle man, quick. I can travel with them yet nobody can take them from me.