11 ms·

Bitcoin reaches an all-time trading high of over $33

135 points by Steveism 14y ago

adambom 14y ago
Bitcoin is a deflationary currency since it's supply is limited. Doesn't that mean that it's expected to rise in price? This also ends up being the currency's downfall, since there's an incentive to hoard it rather than spend it.
- thangalin 14y ago
  http://bitcoin.stackexchange.com/questions/408/does-hoarding-really-hurt-bitcoin http://bitcoin.stackexchange.com/questions/408/does-hoarding... "The argument that increasing value means people would prefer to hold Bitcoins rather than spend them is specious. While it will make people want to have Bitcoins more, it will also make people want to convince others to give them Bitcoins more so they can have them."
  - TylerE 14y ago
    That....doesn't answer the question at all.
    - justinmk 14y ago
      It is a coy answer to the question. Currency is a good, like anything else. An economic agent (human) trades currency for some other good precisely when that currency becomes less valuable to that individual than the good.
- cbr 14y ago
  Doesn't that mean that it's expected to rise in price? No. Because people can buy and sell bitcoins freely then its current price should include peoples expectations about future value.
- jasonkolb 14y ago
  No, because demand is also rising.
  - davmre 14y ago
    Bounded supply + rising demand = rising price, no?
- markkat 14y ago
  Consider that it's not a just a currency; it's also a commodity, and a tool, and possibly a few other things. IMHO it is a mistake to apply traditional notions of currency to bitcoin as it has several other non-traditional characteristics.
- gojomo 14y ago
  If the designed-in deflation works (and is widely understood), then yes, there's an incentive to hoard. Whether that means a 'downfall' is far less clear. If Bitcoin just keeps becoming more valuable, serving a role but not circulating as much as other currencies (be they traditional or digital-of-a-post-Bitcoin-design), is that a 'downfall', or just a peculiar kind of success? Bitcoin is like a new form of monetary/economic matter... some lessons from traditional domains may apply, but others not at all. Casual, confident pronouncements either way are silly.
- justinmk 14y ago
  > deflationary ... there's an incentive to hoard it rather than spend it. By that logic, everyone would put their dollars into investments that beat inflation (this is a form of saving). Yet they do not. You can hold (hoard?) securities (VBLTX, HTS, JNJ) that beat inflation, yet people spend dollars on depreciating assets (cars, computers). There are other less-risky financial instruments [1] that beat nominal CPI, yet people spend dollars. > Doesn't that mean that it's expected to rise in price? Sure, relative to an inflationary currency. But bitcoin fluctuates quite a bit. By they way, currency is just a good, like anything else. One trades currency for some other good that one values more than the currency [2]. [1] http://www.mint.com/blog/investing/beat-inflation-with-i-bonds-102011/ http://www.mint.com/blog/investing/beat-inflation-with-i-bon... [2] http://en.wikipedia.org/wiki/Time_preference http://en.wikipedia.org/wiki/Time_preference
  - yungchin 14y ago
    I'm not sure I get that "currency is just a good". If people hoard gold, then the price of gold spikes, and it will be hard to come by gold, but you can probably still buy other things. But if people hoard a currency, to the point where there's not enough freely flowing to pay for stuff, it will affect all kinds of transactions. Doesn't that make it different? (So I mean, the point of the securities you mention is exactly to hold/hoard them, whereas the point of a currency is not to hold it, but to pass it around, or?)
  - lmm 14y ago
    >You can hold (hoard?) securities (VBLTX, HTS, JNJ) that beat inflation, yet people spend dollars on depreciating assets (cars, computers). No-one buys a dozen computers and puts them in their basement as savings for retirement. People buy cars and computers to use, not as investments. People with nontrivial quantities of "spare" dollars generally do put them into inflation-beating investments.
- Retric 14y ago
  It leads to value instability as bubbles form and pop. In theory the total value of bit coins in circulation is not all that important to an individual however price instability is a major downside so deflation does hurt adoption.
- ealloc 14y ago
  Currently bitcoin supply is inflationary because 25 bitcoins are created every 10 minutes, and a similar amount will be generated for decades. True, this amount is set to decrease to 0 eventually. However, with some planning conceivably this could be changed, as long as the majority of bitcoin users agree it should be changed.
- pixie_ 14y ago
  Are you saying that inflationary currency is the root cause of an economy geared towards consumption.
- mrb 14y ago
  Critics keep saying that there is no incentive to spend it. But all the numbers indicate that there is increased spending: http://news.ycombinator.com/item?id=5296889 http://news.ycombinator.com/item?id=5296889 Therefore, no, I do not think it will cause its downfall. I guess people are irrational and still spend bitcoins despite knowing about deflation.
  - lmm 14y ago
    Spending makes sense because the future of bitcoin is uncertain. If you could guarantee that bitcoin wasn't going to crash, hoarding would be a guaranteed winner and people would stop spending (and ironically enough, it then would crash).
- netcan 14y ago
  Prices adjust to reflect expectations. Theoretically, if everyone knew with certainty that prices will increase in the future, it would rise now instead. It would rise to reflect the NPV of the future price at any point where its NPV is highest. The mechanism that would happen through is just as you predict. People would buy & hold bitcoin. Buying & holding is an increase of demand (buying) & a decrease in supply (holding). These both increase prices until the point where buying and holding isn't any more attractive than buying and holding some other asset with a known future value (like government bonds). In reality that certainty doesn't exist. Current prices of bitcoin a reflection of all sorts of wild guesses about possible future effects that are dependent on all sorts of things.
- im3w1l 14y ago
  >rise in prise >incentive to hoard it >downfall I don't see how these are compatible. Reminds me of "No one in New York drove. There was too much traffic."
jasonkolb 14y ago
This sucks. I was just about to pick up a bunch last week at $29. Unfortunately it's not very straightforward to obtain.
- dangrossman 14y ago
  Just make a free Coinbase (YC S12) account and click the buy button. Couldn't be easier. http://i.imgur.com/Yym66Gv.png http://i.imgur.com/Yym66Gv.png
  - ekianjo 14y ago
    Only if you are in the US, though.
  - DanBlake 14y ago
    Coinbase was a giant waste of time for me. I signed up a week ago and its been a mostly crap experience. Would not recommend. Im using mtgox now and its a much more streamlined experience. . Here was my coinbase timeline- Keep in mind I verified my account, did 2 step auth, everything. About as normal a user as possible. They make buying bitcoins near impossible. 1: Create a account and link it with a US bank. I am located in the US myself. 2: Wait 3 days to verify 3: Put in a order for a max of 10 bitcoins. 4: Wait 5 days for order to complete. You cannot order more than 10 bitcoins during this process. 5: Be told they are over capacity and have your order cancelled. 6: Go to 3 . Coinbase is only a option if you want to buy under 10 bitcoins and dont mind waiting. I wanted to buy much more than that. I wish they put up on the homepage that they only allow you to buy 10 bitcoins a day. - Also, they say "once you are verified you can do 100 bitcoins a day" but the truth is, they do not have the supply and cannot fulfill those orders (gathered this from searching on twitter and my own experience). Also, you will need to wait a month to get this level of verification.
    - dangrossman 14y ago
      Once you complete all the verification steps you can buy 100 BTC per day, or almost $100,000 USD per month worth. It's a high-risk business they're entering, and they're seemingly targeting the commerce use case -- they want to be BitCoin's PayPal, not its forex brokerage account. Having new account limits seems reasonable to me.
deleted 14y ago
[deleted]
downandout 14y ago
The fact that Bitcoin has flourished despite numerous high profile incidents of theft and fraud, the relative difficulty associated with buying and selling them, and the rather unsavory nature of many of its most popular uses today, is a testament to its long-term viability as a currency. The Bitcoin ecosystem has a long way to go before it is considered mainstream, but I believe its long-term success is almost inevitable at this point. The price would likely be even higher right now if Bitinstant, once one of the most popular and easy ways to obtain Bitcoins, hadn't had serious financial and technical issues over the last two weeks. Here's hoping they get their issues sorted.
- oijaf888 14y ago
  Are you sure its not proof that there's a huge market for an internet based currency and despite all of bitcoin's issues it is still growing?
  - downandout 14y ago
    There have been hundreds of virtual currencies introduced both before and after Bitcoin. However, Bitcoin remains the most popular of all of them. While it has some obvious advantages over many of the other schemes, it would be speculative to try to explain exactly why it has succeeded where others have failed. However, regardless of the reasons, it has a strong enough foothold to last for a very long time. My personal opinion is that Bitcoin is popular because it makes money more flexible, and enables people to take absolute control over their money - in the same way that the mp3 standard enabled them to take control of their music.
- glesica 14y ago
  It says to me that there is a large amount of speculation. As a currency, Bitcoin is basically useless except for illicit transactions (which are usually pretty inefficient anyway). Would you use dollars if the value of a dollar could change by hundreds of percentage points in a few months? No one would.
  - wolfpackk 14y ago
fourstar 14y ago
Can someone tell me if I should invest in this right now or not or did I miss the boat and I should just move on?
- simonsarris 14y ago
  I think that's a good question in general, and to answer you sincerely someone cannot tell you that. It's anyone's gamble. Look at Apple: http://goo.gl/6hZfI http://goo.gl/6hZfI People felt like they "missed the boat" in 2005, 2006, 2007, 2008, 2009, 2010, 2011, and 2012. Seriously. And none of them had any concrete way of knowing that it would continuously impress year over year. ...Or that it would go from 700 to 450 in the last six months.
- ChuckMcM 14y ago
  Sure, you should not invest. I say that because investing has different skill levels and different risk/reward profiles. The lowest level is perhaps savings accounts and CDs and at the most extreme end are derivative financial instruments. Long before you get to currency speculation you go through equity value investing, bond investing, and equity option investing. After going through those things you get to commodities, precious metals (a form of commodity) and then currencies. So to ask the question "should I invest in this right now?" doesn't make a lot of sense to an investor who is always looking at what they have invested, the risks of those investments, and the forces that move things. If you are wondering what the outlook is for price expansion of bitcoin relative to the Yen or Yuan, or what geo-political events are most likely to move the value of bitcoin and in which way, then you are looking at the investment in context and really the only answer is one with your other context which isn't part of your question. If you portfolio was a million dollars and you wanted to put $10K into bitcoin as a 'kicker' (something that would potentially kick up a big return but if you lost it in its entirety it would only represent 1% of the return. That's an interesting question. It has far more downside than upside at this point.
  - eliasmacpherson 14y ago
    A voice of reason in a world gone mad! He would have to clarify the amount of risk he wants to take and how much time he wants to spend on it. A friend has very successfully invested in bitcoin (1000%+ return), but I am very sure he has the price up on his smartphone 24/7 and can sell very quickly. I don't know how much downside it has, as a long term gamble, because there's an upper limit on the amount of currency. If it does take off with the general public, the longer you can hold the more it will be worth. "Hard limit of about 21 million Bitcoins" say you bought 1 million bitcoin at $1 and bitcoin becomes a replacement for paypal?
eksith 14y ago
Anyone join any mining pools lately now that prices are increasing? I figured there would be a pretty serious drop after the 50 to 25 drop, but there seems to be some dedicated miners still out there. Looks like brand new FPGA boxes are coming out for it as well.
- nwh 14y ago
  Not FPGA, but ASIC. Mining with a GPU is fairly useless now unless you've a warehouse of them and free power.
  - eksith 14y ago
    Good point. I imagine those up North may get some use as they can double as heating (if the area's small), but besides that, it does seem like a waste of time and electricity at this point.
npguy 14y ago
Currency = Truat + Wide Acceptance. The wide acceptance angle for bitcoin is going to take some time, so till then this is all just speculation.
kaviraj 14y ago
Should welcome and grow the Bitcoin ecosystem . When it flourishes the INTERNET becomes like a separate country with its own currency !
vetleen 14y ago
Looking at the history of Bitcoin and saying “Wow, the price of Bitcoins will never drop because it hasn’t dropped so far” is like looking in the back mirror of your car saying “Wow, there will always be a freeway ahead of me because I have been driving on the freeway for so long now”. The fact that is has flourished can have a million explanations, where one is that it does actually have a long term viability as a currency. We do, however, not have enough information to say with any certainty that that is indeed the case. What we do know, is that so long as new users flock to the currency there is an increasing demand, and this will drive the price up – until the recruitment halts. Then what will happen? We don’t know. It might disappear, it might drop slightly, and it might stay the same. That will be the true experiment. Right now we don’t have enough data to say whether it is sustainable over the long term.
- lukehorvat 14y ago
  One word: deflationary.
hackerpolicy 14y ago
Is there any research on the bitcoin generation algorithm?
bayesianhorse 14y ago
Trading bitcoins, even in an otherwise legal fashion, is essentially money laundering at this point. Yes, there are legal bitcoin traders or bussinesses. And No, you can't pretend these are the majority. And it's not really a problem that I am thinking this. The big problem is that the European Central Bank is saying this too. The legal status of Bitcoin businesses remains unsolved, even if the proponents don't run out of reasons why trading Bitcoins is purportedly legal.
- shredfvz 14y ago
  * citation needed
tocomment 14y ago
Question I've been wondering. What happens to lost bitcoins? Say your hard drive dies and you didn't have a backup. Are those coins out of circulation forever? Will this gradually decrease the supply of bitcoins?
- nacker 14y ago
  Yes. Gone forever. https://bitcointalk.org/index.php?topic=109117.0 https://bitcointalk.org/index.php?topic=109117.0
  - wglb 14y ago
    Or, in technical terms, Clementine.
tocomment 14y ago
So if there is ever a bug discovered in the protocol or say the crytography methods get broken, or say we need more than 8 decimal places in the coins. How do you get all members of a distributed system to upgrade? Would holders of bitcoins have to upgrade as well?
- EliRivers 14y ago
  If we need more than 8 decimal places, we have a new currency of very similar nature with a more convenient base unit. By that point, the principle will have been proven.
geoffc 14y ago
At some point Dominos Pizza or the like is going to take bitcoins for web orders and it will go mainstream. Zero transactions fees and no charge backs make it a no brainer for a big class of normal, nonillict online transactions.
bakerchan 14y ago
The value of BTC is not just based on speculation. It has a use and thats transferring wealth from one to another in the same way paypal/western union does but much cheaper. Consider that paypal alone transacted $451million per day in the 4th Qtr 2012 and another $20 Billion via western union in the same financial qtr. Now just imagine whats going to happen to the value of BTC when just 1% of the people using Paypal/WU start using Bitcoin to transfer or store their wealth. Now add in the people turning to BTC from other money transfer systems too. I think this is what is pushing up the value of BTC along with the speculators that are jumping on the gravy train too

135 points by Steveism 14y ago

Bitcoin is a deflationary currency since it's supply is limited. Doesn't that mean that it's expected to rise in price? This also ends up being the currency's downfall, since there's an incentive to hoard it rather than spend it.

thangalin 14y ago
http://bitcoin.stackexchange.com/questions/408/does-hoarding-really-hurt-bitcoin http://bitcoin.stackexchange.com/questions/408/does-hoarding... "The argument that increasing value means people would prefer to hold Bitcoins rather than spend them is specious. While it will make people want to have Bitcoins more, it will also make people want to convince others to give them Bitcoins more so they can have them."
- TylerE 14y ago
  That....doesn't answer the question at all.
  - justinmk 14y ago
    It is a coy answer to the question. Currency is a good, like anything else. An economic agent (human) trades currency for some other good precisely when that currency becomes less valuable to that individual than the good.
cbr 14y ago
Doesn't that mean that it's expected to rise in price? No. Because people can buy and sell bitcoins freely then its current price should include peoples expectations about future value.
jasonkolb 14y ago
No, because demand is also rising.
- davmre 14y ago
  Bounded supply + rising demand = rising price, no?
markkat 14y ago
Consider that it's not a just a currency; it's also a commodity, and a tool, and possibly a few other things. IMHO it is a mistake to apply traditional notions of currency to bitcoin as it has several other non-traditional characteristics.
gojomo 14y ago
If the designed-in deflation works (and is widely understood), then yes, there's an incentive to hoard. Whether that means a 'downfall' is far less clear. If Bitcoin just keeps becoming more valuable, serving a role but not circulating as much as other currencies (be they traditional or digital-of-a-post-Bitcoin-design), is that a 'downfall', or just a peculiar kind of success? Bitcoin is like a new form of monetary/economic matter... some lessons from traditional domains may apply, but others not at all. Casual, confident pronouncements either way are silly.
justinmk 14y ago
> deflationary ... there's an incentive to hoard it rather than spend it. By that logic, everyone would put their dollars into investments that beat inflation (this is a form of saving). Yet they do not. You can hold (hoard?) securities (VBLTX, HTS, JNJ) that beat inflation, yet people spend dollars on depreciating assets (cars, computers). There are other less-risky financial instruments [1] that beat nominal CPI, yet people spend dollars. > Doesn't that mean that it's expected to rise in price? Sure, relative to an inflationary currency. But bitcoin fluctuates quite a bit. By they way, currency is just a good, like anything else. One trades currency for some other good that one values more than the currency [2]. [1] http://www.mint.com/blog/investing/beat-inflation-with-i-bonds-102011/ http://www.mint.com/blog/investing/beat-inflation-with-i-bon... [2] http://en.wikipedia.org/wiki/Time_preference http://en.wikipedia.org/wiki/Time_preference
- yungchin 14y ago
  I'm not sure I get that "currency is just a good". If people hoard gold, then the price of gold spikes, and it will be hard to come by gold, but you can probably still buy other things. But if people hoard a currency, to the point where there's not enough freely flowing to pay for stuff, it will affect all kinds of transactions. Doesn't that make it different? (So I mean, the point of the securities you mention is exactly to hold/hoard them, whereas the point of a currency is not to hold it, but to pass it around, or?)
- lmm 14y ago
  >You can hold (hoard?) securities (VBLTX, HTS, JNJ) that beat inflation, yet people spend dollars on depreciating assets (cars, computers). No-one buys a dozen computers and puts them in their basement as savings for retirement. People buy cars and computers to use, not as investments. People with nontrivial quantities of "spare" dollars generally do put them into inflation-beating investments.
Retric 14y ago
It leads to value instability as bubbles form and pop. In theory the total value of bit coins in circulation is not all that important to an individual however price instability is a major downside so deflation does hurt adoption.
ealloc 14y ago
Currently bitcoin supply is inflationary because 25 bitcoins are created every 10 minutes, and a similar amount will be generated for decades. True, this amount is set to decrease to 0 eventually. However, with some planning conceivably this could be changed, as long as the majority of bitcoin users agree it should be changed.
pixie_ 14y ago
Are you saying that inflationary currency is the root cause of an economy geared towards consumption.
mrb 14y ago
Critics keep saying that there is no incentive to spend it. But all the numbers indicate that there is increased spending: http://news.ycombinator.com/item?id=5296889 http://news.ycombinator.com/item?id=5296889 Therefore, no, I do not think it will cause its downfall. I guess people are irrational and still spend bitcoins despite knowing about deflation.
- lmm 14y ago
  Spending makes sense because the future of bitcoin is uncertain. If you could guarantee that bitcoin wasn't going to crash, hoarding would be a guaranteed winner and people would stop spending (and ironically enough, it then would crash).
netcan 14y ago
Prices adjust to reflect expectations. Theoretically, if everyone knew with certainty that prices will increase in the future, it would rise now instead. It would rise to reflect the NPV of the future price at any point where its NPV is highest. The mechanism that would happen through is just as you predict. People would buy & hold bitcoin. Buying & holding is an increase of demand (buying) & a decrease in supply (holding). These both increase prices until the point where buying and holding isn't any more attractive than buying and holding some other asset with a known future value (like government bonds). In reality that certainty doesn't exist. Current prices of bitcoin a reflection of all sorts of wild guesses about possible future effects that are dependent on all sorts of things.
im3w1l 14y ago
>rise in prise >incentive to hoard it >downfall I don't see how these are compatible. Reminds me of "No one in New York drove. There was too much traffic."

jasonkolb 14y ago

This sucks. I was just about to pick up a bunch last week at $29. Unfortunately it's not very straightforward to obtain.

dangrossman 14y ago
Just make a free Coinbase (YC S12) account and click the buy button. Couldn't be easier. http://i.imgur.com/Yym66Gv.png http://i.imgur.com/Yym66Gv.png
- ekianjo 14y ago
  Only if you are in the US, though.
- DanBlake 14y ago
  Coinbase was a giant waste of time for me. I signed up a week ago and its been a mostly crap experience. Would not recommend. Im using mtgox now and its a much more streamlined experience. . Here was my coinbase timeline- Keep in mind I verified my account, did 2 step auth, everything. About as normal a user as possible. They make buying bitcoins near impossible. 1: Create a account and link it with a US bank. I am located in the US myself. 2: Wait 3 days to verify 3: Put in a order for a max of 10 bitcoins. 4: Wait 5 days for order to complete. You cannot order more than 10 bitcoins during this process. 5: Be told they are over capacity and have your order cancelled. 6: Go to 3 . Coinbase is only a option if you want to buy under 10 bitcoins and dont mind waiting. I wanted to buy much more than that. I wish they put up on the homepage that they only allow you to buy 10 bitcoins a day. - Also, they say "once you are verified you can do 100 bitcoins a day" but the truth is, they do not have the supply and cannot fulfill those orders (gathered this from searching on twitter and my own experience). Also, you will need to wait a month to get this level of verification.
  - dangrossman 14y ago
    Once you complete all the verification steps you can buy 100 BTC per day, or almost $100,000 USD per month worth. It's a high-risk business they're entering, and they're seemingly targeting the commerce use case -- they want to be BitCoin's PayPal, not its forex brokerage account. Having new account limits seems reasonable to me.

deleted 14y ago

[deleted]

downandout 14y ago

The fact that Bitcoin has flourished despite numerous high profile incidents of theft and fraud, the relative difficulty associated with buying and selling them, and the rather unsavory nature of many of its most popular uses today, is a testament to its long-term viability as a currency. The Bitcoin ecosystem has a long way to go before it is considered mainstream, but I believe its long-term success is almost inevitable at this point. The price would likely be even higher right now if Bitinstant, once one of the most popular and easy ways to obtain Bitcoins, hadn't had serious financial and technical issues over the last two weeks. Here's hoping they get their issues sorted.

oijaf888 14y ago
Are you sure its not proof that there's a huge market for an internet based currency and despite all of bitcoin's issues it is still growing?
- downandout 14y ago
  There have been hundreds of virtual currencies introduced both before and after Bitcoin. However, Bitcoin remains the most popular of all of them. While it has some obvious advantages over many of the other schemes, it would be speculative to try to explain exactly why it has succeeded where others have failed. However, regardless of the reasons, it has a strong enough foothold to last for a very long time. My personal opinion is that Bitcoin is popular because it makes money more flexible, and enables people to take absolute control over their money - in the same way that the mp3 standard enabled them to take control of their music.
glesica 14y ago
It says to me that there is a large amount of speculation. As a currency, Bitcoin is basically useless except for illicit transactions (which are usually pretty inefficient anyway). Would you use dollars if the value of a dollar could change by hundreds of percentage points in a few months? No one would.
- wolfpackk 14y ago

fourstar 14y ago

Can someone tell me if I should invest in this right now or not or did I miss the boat and I should just move on?

simonsarris 14y ago
I think that's a good question in general, and to answer you sincerely someone cannot tell you that. It's anyone's gamble. Look at Apple: http://goo.gl/6hZfI http://goo.gl/6hZfI People felt like they "missed the boat" in 2005, 2006, 2007, 2008, 2009, 2010, 2011, and 2012. Seriously. And none of them had any concrete way of knowing that it would continuously impress year over year. ...Or that it would go from 700 to 450 in the last six months.
ChuckMcM 14y ago
Sure, you should not invest. I say that because investing has different skill levels and different risk/reward profiles. The lowest level is perhaps savings accounts and CDs and at the most extreme end are derivative financial instruments. Long before you get to currency speculation you go through equity value investing, bond investing, and equity option investing. After going through those things you get to commodities, precious metals (a form of commodity) and then currencies. So to ask the question "should I invest in this right now?" doesn't make a lot of sense to an investor who is always looking at what they have invested, the risks of those investments, and the forces that move things. If you are wondering what the outlook is for price expansion of bitcoin relative to the Yen or Yuan, or what geo-political events are most likely to move the value of bitcoin and in which way, then you are looking at the investment in context and really the only answer is one with your other context which isn't part of your question. If you portfolio was a million dollars and you wanted to put $10K into bitcoin as a 'kicker' (something that would potentially kick up a big return but if you lost it in its entirety it would only represent 1% of the return. That's an interesting question. It has far more downside than upside at this point.
- eliasmacpherson 14y ago
  A voice of reason in a world gone mad! He would have to clarify the amount of risk he wants to take and how much time he wants to spend on it. A friend has very successfully invested in bitcoin (1000%+ return), but I am very sure he has the price up on his smartphone 24/7 and can sell very quickly. I don't know how much downside it has, as a long term gamble, because there's an upper limit on the amount of currency. If it does take off with the general public, the longer you can hold the more it will be worth. "Hard limit of about 21 million Bitcoins" say you bought 1 million bitcoin at $1 and bitcoin becomes a replacement for paypal?

eksith 14y ago

Anyone join any mining pools lately now that prices are increasing? I figured there would be a pretty serious drop after the 50 to 25 drop, but there seems to be some dedicated miners still out there. Looks like brand new FPGA boxes are coming out for it as well.

nwh 14y ago
Not FPGA, but ASIC. Mining with a GPU is fairly useless now unless you've a warehouse of them and free power.
- eksith 14y ago
  Good point. I imagine those up North may get some use as they can double as heating (if the area's small), but besides that, it does seem like a waste of time and electricity at this point.

npguy 14y ago

Currency = Truat + Wide Acceptance. The wide acceptance angle for bitcoin is going to take some time, so till then this is all just speculation.

kaviraj 14y ago

Should welcome and grow the Bitcoin ecosystem . When it flourishes the INTERNET becomes like a separate country with its own currency !

vetleen 14y ago

Looking at the history of Bitcoin and saying “Wow, the price of Bitcoins will never drop because it hasn’t dropped so far” is like looking in the back mirror of your car saying “Wow, there will always be a freeway ahead of me because I have been driving on the freeway for so long now”. The fact that is has flourished can have a million explanations, where one is that it does actually have a long term viability as a currency. We do, however, not have enough information to say with any certainty that that is indeed the case. What we do know, is that so long as new users flock to the currency there is an increasing demand, and this will drive the price up – until the recruitment halts. Then what will happen? We don’t know. It might disappear, it might drop slightly, and it might stay the same. That will be the true experiment. Right now we don’t have enough data to say whether it is sustainable over the long term.

lukehorvat 14y ago
One word: deflationary.

hackerpolicy 14y ago

Is there any research on the bitcoin generation algorithm?

bayesianhorse 14y ago

Trading bitcoins, even in an otherwise legal fashion, is essentially money laundering at this point. Yes, there are legal bitcoin traders or bussinesses. And No, you can't pretend these are the majority. And it's not really a problem that I am thinking this. The big problem is that the European Central Bank is saying this too. The legal status of Bitcoin businesses remains unsolved, even if the proponents don't run out of reasons why trading Bitcoins is purportedly legal.

shredfvz 14y ago
* citation needed

tocomment 14y ago

Question I've been wondering. What happens to lost bitcoins? Say your hard drive dies and you didn't have a backup. Are those coins out of circulation forever? Will this gradually decrease the supply of bitcoins?

nacker 14y ago
Yes. Gone forever. https://bitcointalk.org/index.php?topic=109117.0 https://bitcointalk.org/index.php?topic=109117.0
- wglb 14y ago
  Or, in technical terms, Clementine.

tocomment 14y ago

So if there is ever a bug discovered in the protocol or say the crytography methods get broken, or say we need more than 8 decimal places in the coins. How do you get all members of a distributed system to upgrade? Would holders of bitcoins have to upgrade as well?

EliRivers 14y ago
If we need more than 8 decimal places, we have a new currency of very similar nature with a more convenient base unit. By that point, the principle will have been proven.

geoffc 14y ago

At some point Dominos Pizza or the like is going to take bitcoins for web orders and it will go mainstream. Zero transactions fees and no charge backs make it a no brainer for a big class of normal, nonillict online transactions.

bakerchan 14y ago

The value of BTC is not just based on speculation. It has a use and thats transferring wealth from one to another in the same way paypal/western union does but much cheaper. Consider that paypal alone transacted $451million per day in the 4th Qtr 2012 and another $20 Billion via western union in the same financial qtr. Now just imagine whats going to happen to the value of BTC when just 1% of the people using Paypal/WU start using Bitcoin to transfer or store their wealth. Now add in the people turning to BTC from other money transfer systems too. I think this is what is pushing up the value of BTC along with the speculators that are jumping on the gravy train too