10 ms·

Bitcoin Hits $1 Billion

187 points by sangfroid 14y ago

jstalin 14y ago
That article is incorrect, it says there are 109,000 BTC in circulation. It's more like 11 million. http://bitcoincharts.com/bitcoin/ http://bitcoincharts.com/bitcoin/
- Alphasite_ 14y ago
  I think he meant this figure "1,019,672,546 USD".
- andrewljohnson 14y ago
  Correct, about half of all bitcoins have been mined, 11 million to go! I wish someone would make a drop in widget for me to sell android apps for bitcoins and PayPal on my website.
  - eof 14y ago
    There are a bunch of such widgets. mtgox has widgets, bitpay has widgets.. i am sure others do as well. (for the bitcoin side not the paypal side, which there are also countless widgets for)
- sangfroid 14y ago
  I've corrected it. Thanks.
- Dylan16807 14y ago
  That many exist but they're not actually circulating.
  - NoahTheDuke 14y ago
    I know I have two previous computers that crashed with close to 15 BC each. (Which is a small number, clearly, but how many others like me have small sums of BC that will be gone forever?)
niggler 14y ago
Anyone have statistics on the total size of BTC transactions? Has BTC 1B in trade occurred yet?
- VMG 14y ago
  There are all kinds of charts under http://blockchain.info/ http://blockchain.info/. I guess it would be possible deduce a trade that occurred at a price that put the value over $1B but that depends on your exact definition. Also the valuation might go over and under $1B multiple times in the future.
  - niggler 14y ago
    I said BTC 1B and not $1B because not all BTC transactions occur between participants dealing in USD.
- wting 14y ago
  Right now there seems to be about 15M transactions total. Number of Transactions https://blockchain.info/charts/n-transactions-total https://blockchain.info/charts/n-transactions-total Transactions / Day: https://blockchain.info/charts/n-transactions https://blockchain.info/charts/n-transactions Trade:Transaction Ratio: https://blockchain.info/charts/tx-trade-ratio?showDataPoints=false&timespan=30days&show_header=true&daysAverageString=7&scale=1&address= https://blockchain.info/charts/tx-trade-ratio?showDataPoints...
  - niggler 14y ago
    https://blockchain.info/stats https://blockchain.info/stats 156,779.62 BTC in the past 24 hours
    - waterlesscloud 14y ago
      That's what was traded on the exchanges. What I think you're looking for is known as Estimated Transaction Volume - https://blockchain.info/charts/estimated-transaction-volume https://blockchain.info/charts/estimated-transaction-volume
psycr 14y ago
I particularly enjoyed this line: "For a bit of perspective, that's how much Facebook spent on its acquisition of Instagram last April." Some might argue that the comparison employed distinctly encourages a lack of perspective.
- jes5199 14y ago
  I guess it's not so much that bitcoin is worth a lot, but that real money isn't worth much anymore.
deleted 14y ago
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ChuckMcM 14y ago
Pretty much seems to have hit the speculation threshold. Perhaps the Eurozone crisis will do for Bitcoin what the first Gulf War did for CNN.
- elmuchoprez 14y ago
  "Pretty much seems to have hit the speculation threshold." Based on what? Are you seeing something that suggests it's capped out for now? I'm asking because I'm at a complete loss to explain BTCs charts; all seems like gambling to me at the moment. That said, I haven't seen any numbers that really suggest the gambling is over.
  - ChuckMcM 14y ago
    "Based on what?" From the article and from the valuation/volume charts that are available from MtGox and elsewhere. Having watched a number of things become the object of speculation (stuffed animals[1], old computers, internet stocks, real estate, Etc) if you look at their value over time and their trading frequency the traffic develops a quick jump and dump mode when folks are speculating. I attribute it to people buying, capturing gains, then buying again to capture more gains. I don't think its "capped out" what I think is that a bunch of people are jumping into the currency to make a quick buck. And the way speculation works is very much like musical chairs, you jump in and sit down, jump in and sit down, and hope that when the music stops you were sitting down and not standing. If enough players have the stomach for it (it can be both exhilarating and scary to gamble a lot of cash) then the run will continue, once it crosses some threshold, it will come crashing down. [1] Met a person at a garage sale that had over 1,000 "new in box" Beanie Baby(tm) stuffed animals, including some of the "really rare" ones. They were selling them for a dollar each, it was kind of sad.
- cinquemb 14y ago
  Until the next country needs to be bailed out again at the expense of deposit holders. greece in 2010, portugal in 2011, spain and greece in 2012, and cyprus so far in 2013. 2 more for 2013 before it starts to look like a Fibonacci sequence :D
VMG 14y ago
You can still see the fun that was had yesterday here: http://bitcoinity.org/markets?currency=USD&exchange=mtgox http://bitcoinity.org/markets?currency=USD&exchange=mtgo...
- deleted 14y ago
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mrkmcknz 14y ago
I want to be able to get behind Bitcoin I really do. I just don't understand the purpose it serves. As an asset class it's far too volatile even for someone who plays naked options. Imagine putting $10,000 into an asset class that swings 20-30% daily on a regular basis. Trading curbs eat your heart out. As a currency it's too impractical and there are serious hurdles involved with turning central bank currency into Bitcoin and vice versa. We think Wall Street plays a rigged game. Manipulating the Bitcoin market would not only be possible for someone with a small amount of capital, but the regulatory boards(SEC/FSA) don't seem to be interested in coming within 50 parsecs of the stuff. Bitcoin is an interesting idea with the potential to change the world, sadly the world just isn't ready. More importantly the people running the world aren't ready. The moment Bitcoin starts to worry a Government or a big bank they'll simply manipulate the market. Oh, and you wouldn't even know.
- reaclmbs 14y ago
  OK, let's play a game. Say you had $5mm. How would you manipulate the Bitcoin market and earn a guaranteed return?
  - zalzane 14y ago
    A government entity looking to destroy the market wouldn't necessarily care about getting a return. Even if they were, take a look at what happened yesterday when someone dumped 5k bitcoins onto mtgox. http://i.imgur.com/K8T4F0Y.png http://i.imgur.com/K8T4F0Y.png
    - reaclmbs 14y ago
      He drew an analogy to wall street and called it a "rigged game". So, I'm curious to hear how he'd rig it.
    - blocktuw 14y ago
      This is excellent. Any explanation to accompany the graph? How about a link to the source?
tvladeck 14y ago
Remember: "What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich." - Paul Krugman EDIT: To be clear - this quote is not intended (by me) to be a knock on BTC. It's just an elegant statement of my own opinion that the value of 1 BTC is not all that indicative of its value to the economy.
- aneth4 14y ago
  That's great for us and the economy. Personally, I'd prefer my money to increase in value. I'm not going to avoid a currency for the benefit of the economy, nor would that be consistent with expected economic behavior.
  - leot 14y ago
    Yes, it would be nice for us all to become rich without contributing anything. If you're a Good Person, however, you should be interested in becoming rich by creating real value. And you should be interested in promoting an economic system that encourages people to create value rather than hoard assets. You don't have to be a Good Person, of course. And no one has to like you, either.
  - TylerE 14y ago
    Actually you don't, unless you never intend to take out on ounce of debt. Deflation is very bad for the average user.
- chasing 14y ago
  Unregulated currency seems like a way to do the former, not the latter.
- deleted 14y ago
  [deleted]
cs702 14y ago
As usual on HN, any submission about Bitcoin is met with concerned comments about its high volatility, present impracticality as a currency, disadvantages versus precious metals, current concentration of transactions in a single exchange (MtGox), potential for market manipulation by governments and/or speculators, etc. This is analogous to being present at the creation of the World Wide Web, but instead of getting excited about its obvious potential, one decides to stay on the sidelines because it's still unproven technology, almost no content has been made available online, commercial opportunities are virtually non-existent, etc. As hockey superstar Wayne Gretzky said, "a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be." Judging Bitcoin based on where it is today, instead of where one thinks it will be in the future, is shortsighted. -- PS. My full thoughts on Bitcoin's potential: http://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/ http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... -- I wrote this almost two years ago, but my views haven't changed since then. -- Edit: In hindsight, I see how my quoting Gretzky could come across as arrogant, which was not at all my intention. The only point I was trying to make is that new technologies like Bitcoin should not be judged based on what they look like today, but rather on how one thinks they will look in the future.
- chasing 14y ago
  As hockey superstar Wayne Gretzky said, "Please stop trotting out that quote Steve Jobs once said because we've all heard it and there are very few hockey players who are actually great enough to really know where the puck's going, anyway. Don't automatically assume you're one of them."
  - fcatalan 14y ago
    True, apropos that today I heard someone call bitcoin "the Dunning-krugerrand"
    - RockyMcNuts 14y ago
      'digital pet rock' is what I've become partial to.
0majors 14y ago
While I can appreciate the need for the Bitcoin model I refuse to take part of it due to level of fraud involved. How much Bitcoins have been acquired by malicious bot-nets and held by small number of black hats? How much of the value is directly linked to drug trade or worse? Sure, similar arguments can be made about using cash but there are fundamental moral issues with Bitcoin I can't agree with. I would like to believe a better model is possible. Thoughts?
- bwood 14y ago
  I can't give you any numbers to support or refute your suspicions. However, if you genuinely believe that there is a need for something like Bitcoin, honest individuals using Bitcoin will help legitimize the currency and hopefully drive down the level of fraud and other unsavoury behaviour. If that is your only objection to it, then presumably honest folk like yourself staying away from Bitcoin are also preventing it from becoming more acceptable (not that you have any duty or obligation to do otherwise). Or, are you implying that there is something fundamentally immoral about Bitcoin itself, which cannot be affected by having more honest users? I admit that this could also be the case, for example, if Bitcoin turns out to be such a massive success that it destroys the ability of nations to collect taxes, affect monetary policy, etc.
  - 0majors 14y ago
    I do understand that illegal activities being paid with Bitcoins is something that comes with the benefits of the system. You are correct, the ratio of legal/illegal activity will probably improve with time as more legitimate business will be conducted with Bitcoins. At the same time it's worth being concious of the fact that at the moment the biggest use of this tool is paying for criminal activities. If this is true, we can't pretend that bringing in more "real" money to the pool doesn't mostly aid criminals. What I see as "fundamentally immoral" about Bitcoin is the fact how so much of it has been acquired by black hats through bot-net and hacking of exchanges. They OWN a fixed percentage of this economy thus their net worth increases every time fresh "real" money is brought in anywhere in the pool. There is no way around it that I can see. To give an analogy, I would personally not eat in a restaurant if I knew it is co-owned by local drug dealers even if the food was delicious. Obviously I can see the positive side of having the ability to process payments without going through the government. This discussion is not black and white for me at all.
tocomment 14y ago
One thing that hit me recently on bitcoin is I realized that for the first time in history micropayments are 100% possible. I'm thinking all kinds of startups should spring up from that, but I haven't thought of any yet. What are your thoughts?
- wmf 14y ago
  Bitcoin micropayments are possible if you can solve the UX issues (copying and pasting addresses, etc.) and if you can avoid "recommended" transaction fees that are currently near 5 US cents.
  - tocomment 14y ago
    I don't get the recommended transaction fee thing. What happens if someone pays 1 cent? Will no one process it?
    - waterlesscloud 14y ago
      You can even send transactions with no fee at all, but they tend to be prioritized rather low. So far, every transaction get processed. Eventually. I've seen some no-fee transactions take several hours recently. But there's also currently some issues with the overall load of transactions, due to a gambling site spamming tiny "dust" transactions as part of its system. That's caused there to be a lot more transactions, which means sometimes you'll have to wait a number of blocks for a no-fee transaction to process. A block is supposed to happen an average of every 10 minutes, but it's not deterministic and there's a variance. It can take an hour or more for the next block to come up, in rare cases.
      - wmf 14y ago
        People accepting micropayments tend not to wait for any confirmations, so the lag may or may not matter. But if the network gets to a point where zero-fee transactions never get confirmed then there may be a problem.
    - 14y ago
tocomment 14y ago
I'm curious, why hasn't anyone implemented a mining client in javascript, so you could in effect has visitors to your website mine coins for you. It might be a create way to fund content instead of advertising.
- twodayslate 14y ago
  Java miners exist. Not as pretty but it works.
- zenocon 14y ago
  it would have to be in a web worker. it would have to be a site with high traffic that users will stay on for long periods of time, and even then, cpu mining (ala JS or any language) is pretty much a waste of time now. very few do it even with dedicated boxes -- everything has moved to GPU and forthcoming ASICs. not sure if you could offload JS web worker to GPU using WebGL or something, tho.
- miles 14y ago
  why hasn't anyone implemented a mining client in javascript They have: https://news.ycombinator.com/item?id=2566365 https://news.ycombinator.com/item?id=2566365 http://www.bitcoinplus.com/miner/embeddable http://www.bitcoinplus.com/miner/embeddable https://bitcointalk.org/index.php?topic=9042.0 https://bitcointalk.org/index.php?topic=9042.0 https://github.com/progranism/Bitcoin-JavaScript-Miner https://github.com/progranism/Bitcoin-JavaScript-Miner
- vbuterin 14y ago
  Because it's really inefficient and a horrible waste of electricity. Doing Bitcoin mining in that way basically turns it into a payment processor charging you through your electricity bill, with a 90% transaction fee.
- jmharvey 14y ago
  We can do some back-of-the-envelope math to estimate how much you could make doing this. Let's assume that the benefit from bitcoin mining is roughly equal to the cost of the electricity used. Electricity in the US costs about 12 cents per kWh. Let's suppose you can get your web site visitors to put 100W of extra power into mining bitcoins for you. And let's say your visitor spends 5 minutes (1/12 of an hour) on your page. Then each visitor is worth 12 (c/kWh) * (1/12) h * 100 W = 0.1 cents. Which would be like $1 CPM advertising. But these are all best-case assumptions. Your visitors might not average 5 minutes per page. Your JS mining tool almost certainly won't be as efficient as the specialized GPU rigs that can mine bitcoin for less than the cost of electricity (and drive up the cost per unit for everyone else who's mining bitcoin). Or your users might not have an extra 100W of power to throw at your mining operation. Taking these factors into consideration, I'm guessing you'd be looking at CPM equivalents that you would never touch. Also, I suspect it would be considered malware by many. Still, it's an interesting idea.
femto113 14y ago
Seems like using Amazon's EC2 to mine Bitcoins could now be profitable, anyone know if this is actually going on? Per this couple year old article (http://glennfrancismurray.com/cost-defective-mining-with-gpu-clusters-amazo http://glennfrancismurray.com/cost-defective-mining-with-gpu...) looks like the break even point was around ~$30/BTC.
- Guvante 14y ago
  The problem is you have to account for the difficulty, which has changed. It looks like he was predicting a block per 78 hours, while it is now closer to 2/3 of a year. Looks like 1.64 GH/s = $10.66 a day roughly, compared to a cost of $400 a day.
- cadetzero 14y ago
  That's about to be a total non-factor once all the ASICs online. http://launch.avalon-asics.com/ http://launch.avalon-asics.com/ and http://www.butterflylabs.com/ http://www.butterflylabs.com/ The hash rates are order of magnitude faster than what's currently out there for the price, and most importantly they'll drive up the difficulty quite a bit.
deleted 14y ago
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- wmf 14y ago
  Trying to override market prices has been tried many times, and what always happens is liquidity disappears from the official market (e.g. nobody's willing to sell you a BTC for $1) and a black market with shadow prices emerges.
zeitgeist88 14y ago
wow!
tocomment 14y ago
Basic BTC 101 question. Are there a fixed number of txns in a block or is it variable? (And what do you recommend I read to learn this kind of stuff)
- rmc 14y ago
  As far as I know there is no limit on the number of transactions, but there is a limit on the total number of possible bitcoins (about 21 million IIRC)
  - tocomment 14y ago
    So when a node picks up a block to process it gathers up all of the pending transactions at that time?
    - wmf 14y ago
      Yes. (More like the node creates a block containing all pending transactions, but that's a nit.)
- mckoss 14y ago
  It's variable. Each miner decides (in software) which transactions to include in a block. Everything is in here: https://en.bitcoin.it/wiki/Protocol_specification https://en.bitcoin.it/wiki/Protocol_specification Or read the source code for the standard client: https://github.com/bitcoin/bitcoin/blob/master/src/main.cpp https://github.com/bitcoin/bitcoin/blob/master/src/main.cpp
jpdoctor 14y ago
Great! A $1B down, and now only $23B more until it becomes 1% of the total US money that the Federal Reserve has printed! http://research.stlouisfed.org/fred2/series/M1/ http://research.stlouisfed.org/fred2/series/M1/
kyledrake 14y ago
So, in a sentence: Bitcoin is being used by people as a highly liquid, defensive store of value from within Cyprus, where capital controls are preventing people from moving their money out through traditional means. This is what gold used to be used for. But gold is not liquid, and Bitcoin is. It appears that hackers have made something better than gold, the longest standing store of value in human history. What an incredible achievement! For the first time in history, I can somewhat safely make the argument that we now live in a post-gold economy. Gold is still there, but we now have something even better for storing value. This is getting deep into the economics of mediums of exchange, which are important for understanding what is going on here. I did a talk on Bitcoin a while ago where I went into describing Bitcoin from a medium of exchange perspective rather than a technology one. It may help you to understand what is going on here, and why I think that this will continue into the future: http://www.slideshare.net/KyleDrake/bitcoin-the-cyberpunk-cryptocurrency http://www.slideshare.net/KyleDrake/bitcoin-the-cyberpunk-cr...
- benbataille 14y ago
  We have been in a post gold economy since the end of the Breton-Wood agreement. Hording gold is far from a wise investment. It certainly isn't a safe way to store value. First, history aside where it's value comes from is difficult to understand. There is literally tones of it lying around without any real use (far more than what is produced). Basically it's a safe haven because people decide to use it this way but the market could crash any day and has multiple times before and thus despite central banks holding so much of it they dwarf anything someone could decide to inject. From my point of view, bitcoin is an even more stupid investment. As little as 5000BT makes the rate plummets. Nothing could stop a young Soros from pulling out a mini-black Wednesday. Add the fact that the market is completely unregulated and you have a pretty risky situation. I see Bit coin has a step backward. It's like current currency without any of the warranty provided by governments (security of trade is one of the main reason we instituted government after all). To the people who will argue that Cyprus is currently stealing its citizen, please think about what would have happen to them if there was no way to get a bailout and the banks actually collapsed.
- gyom 14y ago
  I like your slides and I'll probably check out the talk later on. I think that depending on what the future looks like (no zombie apocalypse, massive wars, etc.), there will be some kind of cryptocurrency that basically replaces gold. It's very exciting. At the current time, though, given that bitcoin hasn't withstood the test of time, it's a bit hard to claim that gold is outdated. It's not hard to convince someone that gold or silver have value because of all the historical precedents. That counts for something when considering in which money to invest.
adestefan 14y ago
People keep comparing the "value" of bitcoin against the USD. If bitcoins were a truly useful currency, then there would be no need to value them against another base currency.
- nobodysfool 14y ago
  People keep comparing the "value" of the Euro against the USD. If Euros were a truly useful currency, then there would be no need to value them against another base currency.
- indrax 14y ago
  All currencies can be valued in terms of other currencies. Bitcoin can also be valued directly against goods. (as can other currencies) The price of most goods is currently tied to some other currency, because most businesses have expenses in traditional currencies. But you get similar price fluctuations in international trade.
  - adestefan 14y ago
    Yes, but for everyday purchases people do not care about that. Until bitcoin can get to that point, then it's not a useful currency. Especially since it seems like people bitch and moan now about things costing too much in bitcoin because it's currently strong against the USD.
  - eric-hu 14y ago
    It sounds like a metric that would satisfy the parent post more is some sort of consumer price index in Bitcoins? Perhaps that would be useful to have side-by-side with a Bitcoin-to-USD metric.
    - Helianthus 14y ago
      Sadly there isn't enough data for a consumer price index, because Bitcoin isn't a currency (in the extent that its main use is exchange for commercial goods), it's a financial sandbox.
alyx 14y ago
Is nobody else here bothered by the following statement? It's on the first page, last sentence of the original paper on Bitcoins... "The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes." [1] [1] http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf
- nadaviv 14y ago
  No. If someone does manage to control 51% of the computing power of Bitcoin, he's much better off using that to mine bitcoins rather than "cheating". If he'll use it to cheat, he'll cause panic, make bitcoin drop their value and undermine the source of his own potential wealth. It'll be much better for him to play fair and just gain (a lot, with that much computing power) wealth by mining.
  - sashagim 14y ago
    That's true only if you assume the motivation is purely financial.
    - nadaviv 14y ago
      I guess that's right. Someone with enough computing power could harm bitcoin to the point it'll be unusable. But the people with those motives (government, banks) are much less likely to be part of something like that than people with financial motives.
ttrreeww 14y ago
The key to prosperity is printing money to fund productive activities. Eg: hire people and pay them. Instead, we print money and give it to Wall Street and the super rich.
boffo9 14y ago
Hooray! I love bitcoin!
genwin 14y ago
I wonder when governments will start cracking down on Bitcoin holders for unpaid gains taxes.
- jb- 14y ago
  You don't owe capital gains taxes until you sell the assets.
  - genwin 14y ago
    Ah yes, forgot about that.
michaelochurch 14y ago
I'm going to start calling it ShitCoin. Not because it's a scam and I hate it, but in the sense of "Oh, shit". (BitCoin is doing well right now because of the Cyprus crisis.) I have no clue about its directional future, but I can see it being, for the next 10 years, a way of betting against the world-- a distinction that gold used to have.
- andrewljohnson 14y ago
  Even better though, it's like gold you can get for cheap for now. Assuming people don't stop using bitcoins, it's hard to imagine bitcoins not appreciating over time. Either a major calamity like government intervention will end BitCoin, or it will be supplanted by different technology, or BitCoins will appreciate for decades. They will either be worth zero, or a lot in my estimation. Disclosure: I own 20 bitcoins.
  - michaelochurch 14y ago
    It's unstable. There's no barrier to entry. I could make a competing product called ZitCoin with a different inflation/deflation profile. At some point, it comes down to weird, fickle, and not especially meaningful brand effects. Then it's just speculation. If you buy BitCoin, you're betting on the prestige of its being the first. Do people even know what the first fiat currency is? Or care? People who sell at the top of BitCoin are going to make a lot of money, but for the long-term value, I'm betting on zero.
    - andrewljohnson 14y ago
      I don't think the comparison to the life of fiat currency is reasonable - no fiat currency outlives the nation-state backing it. It is a fair point that there could be other competing, but not dominant currencies, which could lead to a non-zero, but low price for bitcoins. So perhaps, 0, a lot, or anywhere in between for the value of a bitcoin. As long as the number of things you can buy with bitcoins rises over time, the value of bitcoin will rise. I don't think it is unreasonable that the momentum, including technology and community (not just brand around BitCoin) will make it a favored son in digital currencies. So it's not just buying it based on the prestige of being first, it's buying based on the value of being first. I actually bought my coins when YC invested in CoinBase, because I thought that was a strong signal. It will be an interesting future where people buy currencies based on their mathematically-dictated value profiles, as opposed to whichever currency is sold by the local government, and _seems_ to be the most stable.
eah13 14y ago
The market cap isn't the stat to watch on BTC- the daily volume is. With volume at something in the low millions of dollars it'd be very easy for the currency to be manipulated by dollar-based traders. There's not much evidence that there are large deep pocketed investors who will toe som imaginary line in the wake of a retail investor sell-off. Until volumes pick up the daily price ont he various exchanges represents the valuations of a distressingly low number of traders. That said, I think bitcoin is super exciting and want to see it succeed. But it needs to be much more heavily traded, regardless of its dollar exchange rate, for that to happen.

187 points by sangfroid 14y ago

That article is incorrect, it says there are 109,000 BTC in circulation. It's more like 11 million. http://bitcoincharts.com/bitcoin/ http://bitcoincharts.com/bitcoin/

Alphasite_ 14y ago
I think he meant this figure "1,019,672,546 USD".
andrewljohnson 14y ago
Correct, about half of all bitcoins have been mined, 11 million to go! I wish someone would make a drop in widget for me to sell android apps for bitcoins and PayPal on my website.
- eof 14y ago
  There are a bunch of such widgets. mtgox has widgets, bitpay has widgets.. i am sure others do as well. (for the bitcoin side not the paypal side, which there are also countless widgets for)
sangfroid 14y ago
I've corrected it. Thanks.
Dylan16807 14y ago
That many exist but they're not actually circulating.
- NoahTheDuke 14y ago
  I know I have two previous computers that crashed with close to 15 BC each. (Which is a small number, clearly, but how many others like me have small sums of BC that will be gone forever?)

niggler 14y ago

Anyone have statistics on the total size of BTC transactions? Has BTC 1B in trade occurred yet?

VMG 14y ago
There are all kinds of charts under http://blockchain.info/ http://blockchain.info/. I guess it would be possible deduce a trade that occurred at a price that put the value over $1B but that depends on your exact definition. Also the valuation might go over and under $1B multiple times in the future.
- niggler 14y ago
  I said BTC 1B and not $1B because not all BTC transactions occur between participants dealing in USD.
wting 14y ago
Right now there seems to be about 15M transactions total. Number of Transactions https://blockchain.info/charts/n-transactions-total https://blockchain.info/charts/n-transactions-total Transactions / Day: https://blockchain.info/charts/n-transactions https://blockchain.info/charts/n-transactions Trade:Transaction Ratio: https://blockchain.info/charts/tx-trade-ratio?showDataPoints=false&timespan=30days&show_header=true&daysAverageString=7&scale=1&address= https://blockchain.info/charts/tx-trade-ratio?showDataPoints...
- niggler 14y ago
  https://blockchain.info/stats https://blockchain.info/stats 156,779.62 BTC in the past 24 hours
  - waterlesscloud 14y ago
    That's what was traded on the exchanges. What I think you're looking for is known as Estimated Transaction Volume - https://blockchain.info/charts/estimated-transaction-volume https://blockchain.info/charts/estimated-transaction-volume

psycr 14y ago

I particularly enjoyed this line: "For a bit of perspective, that's how much Facebook spent on its acquisition of Instagram last April." Some might argue that the comparison employed distinctly encourages a lack of perspective.

jes5199 14y ago
I guess it's not so much that bitcoin is worth a lot, but that real money isn't worth much anymore.

deleted 14y ago

[deleted]

ChuckMcM 14y ago

Pretty much seems to have hit the speculation threshold. Perhaps the Eurozone crisis will do for Bitcoin what the first Gulf War did for CNN.

elmuchoprez 14y ago
"Pretty much seems to have hit the speculation threshold." Based on what? Are you seeing something that suggests it's capped out for now? I'm asking because I'm at a complete loss to explain BTCs charts; all seems like gambling to me at the moment. That said, I haven't seen any numbers that really suggest the gambling is over.
- ChuckMcM 14y ago
  "Based on what?" From the article and from the valuation/volume charts that are available from MtGox and elsewhere. Having watched a number of things become the object of speculation (stuffed animals[1], old computers, internet stocks, real estate, Etc) if you look at their value over time and their trading frequency the traffic develops a quick jump and dump mode when folks are speculating. I attribute it to people buying, capturing gains, then buying again to capture more gains. I don't think its "capped out" what I think is that a bunch of people are jumping into the currency to make a quick buck. And the way speculation works is very much like musical chairs, you jump in and sit down, jump in and sit down, and hope that when the music stops you were sitting down and not standing. If enough players have the stomach for it (it can be both exhilarating and scary to gamble a lot of cash) then the run will continue, once it crosses some threshold, it will come crashing down. [1] Met a person at a garage sale that had over 1,000 "new in box" Beanie Baby(tm) stuffed animals, including some of the "really rare" ones. They were selling them for a dollar each, it was kind of sad.
cinquemb 14y ago
Until the next country needs to be bailed out again at the expense of deposit holders. greece in 2010, portugal in 2011, spain and greece in 2012, and cyprus so far in 2013. 2 more for 2013 before it starts to look like a Fibonacci sequence :D

VMG 14y ago

You can still see the fun that was had yesterday here: http://bitcoinity.org/markets?currency=USD&exchange=mtgox http://bitcoinity.org/markets?currency=USD&exchange=mtgo...

deleted 14y ago
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mrkmcknz 14y ago

I want to be able to get behind Bitcoin I really do. I just don't understand the purpose it serves. As an asset class it's far too volatile even for someone who plays naked options. Imagine putting $10,000 into an asset class that swings 20-30% daily on a regular basis. Trading curbs eat your heart out. As a currency it's too impractical and there are serious hurdles involved with turning central bank currency into Bitcoin and vice versa. We think Wall Street plays a rigged game. Manipulating the Bitcoin market would not only be possible for someone with a small amount of capital, but the regulatory boards(SEC/FSA) don't seem to be interested in coming within 50 parsecs of the stuff. Bitcoin is an interesting idea with the potential to change the world, sadly the world just isn't ready. More importantly the people running the world aren't ready. The moment Bitcoin starts to worry a Government or a big bank they'll simply manipulate the market. Oh, and you wouldn't even know.

reaclmbs 14y ago
OK, let's play a game. Say you had $5mm. How would you manipulate the Bitcoin market and earn a guaranteed return?
- zalzane 14y ago
  A government entity looking to destroy the market wouldn't necessarily care about getting a return. Even if they were, take a look at what happened yesterday when someone dumped 5k bitcoins onto mtgox. http://i.imgur.com/K8T4F0Y.png http://i.imgur.com/K8T4F0Y.png
  - reaclmbs 14y ago
    He drew an analogy to wall street and called it a "rigged game". So, I'm curious to hear how he'd rig it.
  - blocktuw 14y ago
    This is excellent. Any explanation to accompany the graph? How about a link to the source?

tvladeck 14y ago

Remember: "What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich." - Paul Krugman EDIT: To be clear - this quote is not intended (by me) to be a knock on BTC. It's just an elegant statement of my own opinion that the value of 1 BTC is not all that indicative of its value to the economy.

aneth4 14y ago
That's great for us and the economy. Personally, I'd prefer my money to increase in value. I'm not going to avoid a currency for the benefit of the economy, nor would that be consistent with expected economic behavior.
- leot 14y ago
  Yes, it would be nice for us all to become rich without contributing anything. If you're a Good Person, however, you should be interested in becoming rich by creating real value. And you should be interested in promoting an economic system that encourages people to create value rather than hoard assets. You don't have to be a Good Person, of course. And no one has to like you, either.
- TylerE 14y ago
  Actually you don't, unless you never intend to take out on ounce of debt. Deflation is very bad for the average user.
chasing 14y ago
Unregulated currency seems like a way to do the former, not the latter.
deleted 14y ago
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cs702 14y ago

As usual on HN, any submission about Bitcoin is met with concerned comments about its high volatility, present impracticality as a currency, disadvantages versus precious metals, current concentration of transactions in a single exchange (MtGox), potential for market manipulation by governments and/or speculators, etc. This is analogous to being present at the creation of the World Wide Web, but instead of getting excited about its obvious potential, one decides to stay on the sidelines because it's still unproven technology, almost no content has been made available online, commercial opportunities are virtually non-existent, etc. As hockey superstar Wayne Gretzky said, "a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be." Judging Bitcoin based on where it is today, instead of where one thinks it will be in the future, is shortsighted. -- PS. My full thoughts on Bitcoin's potential: http://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/ http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... -- I wrote this almost two years ago, but my views haven't changed since then. -- Edit: In hindsight, I see how my quoting Gretzky could come across as arrogant, which was not at all my intention. The only point I was trying to make is that new technologies like Bitcoin should not be judged based on what they look like today, but rather on how one thinks they will look in the future.

chasing 14y ago
As hockey superstar Wayne Gretzky said, "Please stop trotting out that quote Steve Jobs once said because we've all heard it and there are very few hockey players who are actually great enough to really know where the puck's going, anyway. Don't automatically assume you're one of them."
- fcatalan 14y ago
  True, apropos that today I heard someone call bitcoin "the Dunning-krugerrand"
  - RockyMcNuts 14y ago
    'digital pet rock' is what I've become partial to.

0majors 14y ago

While I can appreciate the need for the Bitcoin model I refuse to take part of it due to level of fraud involved. How much Bitcoins have been acquired by malicious bot-nets and held by small number of black hats? How much of the value is directly linked to drug trade or worse? Sure, similar arguments can be made about using cash but there are fundamental moral issues with Bitcoin I can't agree with. I would like to believe a better model is possible. Thoughts?

bwood 14y ago
I can't give you any numbers to support or refute your suspicions. However, if you genuinely believe that there is a need for something like Bitcoin, honest individuals using Bitcoin will help legitimize the currency and hopefully drive down the level of fraud and other unsavoury behaviour. If that is your only objection to it, then presumably honest folk like yourself staying away from Bitcoin are also preventing it from becoming more acceptable (not that you have any duty or obligation to do otherwise). Or, are you implying that there is something fundamentally immoral about Bitcoin itself, which cannot be affected by having more honest users? I admit that this could also be the case, for example, if Bitcoin turns out to be such a massive success that it destroys the ability of nations to collect taxes, affect monetary policy, etc.
- 0majors 14y ago
  I do understand that illegal activities being paid with Bitcoins is something that comes with the benefits of the system. You are correct, the ratio of legal/illegal activity will probably improve with time as more legitimate business will be conducted with Bitcoins. At the same time it's worth being concious of the fact that at the moment the biggest use of this tool is paying for criminal activities. If this is true, we can't pretend that bringing in more "real" money to the pool doesn't mostly aid criminals. What I see as "fundamentally immoral" about Bitcoin is the fact how so much of it has been acquired by black hats through bot-net and hacking of exchanges. They OWN a fixed percentage of this economy thus their net worth increases every time fresh "real" money is brought in anywhere in the pool. There is no way around it that I can see. To give an analogy, I would personally not eat in a restaurant if I knew it is co-owned by local drug dealers even if the food was delicious. Obviously I can see the positive side of having the ability to process payments without going through the government. This discussion is not black and white for me at all.

tocomment 14y ago

One thing that hit me recently on bitcoin is I realized that for the first time in history micropayments are 100% possible. I'm thinking all kinds of startups should spring up from that, but I haven't thought of any yet. What are your thoughts?

wmf 14y ago
Bitcoin micropayments are possible if you can solve the UX issues (copying and pasting addresses, etc.) and if you can avoid "recommended" transaction fees that are currently near 5 US cents.
- tocomment 14y ago
  I don't get the recommended transaction fee thing. What happens if someone pays 1 cent? Will no one process it?
  - waterlesscloud 14y ago
    You can even send transactions with no fee at all, but they tend to be prioritized rather low. So far, every transaction get processed. Eventually. I've seen some no-fee transactions take several hours recently. But there's also currently some issues with the overall load of transactions, due to a gambling site spamming tiny "dust" transactions as part of its system. That's caused there to be a lot more transactions, which means sometimes you'll have to wait a number of blocks for a no-fee transaction to process. A block is supposed to happen an average of every 10 minutes, but it's not deterministic and there's a variance. It can take an hour or more for the next block to come up, in rare cases.
    - wmf 14y ago
      People accepting micropayments tend not to wait for any confirmations, so the lag may or may not matter. But if the network gets to a point where zero-fee transactions never get confirmed then there may be a problem.
  - 14y ago

tocomment 14y ago

I'm curious, why hasn't anyone implemented a mining client in javascript, so you could in effect has visitors to your website mine coins for you. It might be a create way to fund content instead of advertising.

twodayslate 14y ago
Java miners exist. Not as pretty but it works.
zenocon 14y ago
it would have to be in a web worker. it would have to be a site with high traffic that users will stay on for long periods of time, and even then, cpu mining (ala JS or any language) is pretty much a waste of time now. very few do it even with dedicated boxes -- everything has moved to GPU and forthcoming ASICs. not sure if you could offload JS web worker to GPU using WebGL or something, tho.
miles 14y ago
why hasn't anyone implemented a mining client in javascript They have: https://news.ycombinator.com/item?id=2566365 https://news.ycombinator.com/item?id=2566365 http://www.bitcoinplus.com/miner/embeddable http://www.bitcoinplus.com/miner/embeddable https://bitcointalk.org/index.php?topic=9042.0 https://bitcointalk.org/index.php?topic=9042.0 https://github.com/progranism/Bitcoin-JavaScript-Miner https://github.com/progranism/Bitcoin-JavaScript-Miner
vbuterin 14y ago
Because it's really inefficient and a horrible waste of electricity. Doing Bitcoin mining in that way basically turns it into a payment processor charging you through your electricity bill, with a 90% transaction fee.
jmharvey 14y ago
We can do some back-of-the-envelope math to estimate how much you could make doing this. Let's assume that the benefit from bitcoin mining is roughly equal to the cost of the electricity used. Electricity in the US costs about 12 cents per kWh. Let's suppose you can get your web site visitors to put 100W of extra power into mining bitcoins for you. And let's say your visitor spends 5 minutes (1/12 of an hour) on your page. Then each visitor is worth 12 (c/kWh) * (1/12) h * 100 W = 0.1 cents. Which would be like $1 CPM advertising. But these are all best-case assumptions. Your visitors might not average 5 minutes per page. Your JS mining tool almost certainly won't be as efficient as the specialized GPU rigs that can mine bitcoin for less than the cost of electricity (and drive up the cost per unit for everyone else who's mining bitcoin). Or your users might not have an extra 100W of power to throw at your mining operation. Taking these factors into consideration, I'm guessing you'd be looking at CPM equivalents that you would never touch. Also, I suspect it would be considered malware by many. Still, it's an interesting idea.

femto113 14y ago

Seems like using Amazon's EC2 to mine Bitcoins could now be profitable, anyone know if this is actually going on? Per this couple year old article (http://glennfrancismurray.com/cost-defective-mining-with-gpu-clusters-amazo http://glennfrancismurray.com/cost-defective-mining-with-gpu...) looks like the break even point was around ~$30/BTC.

Guvante 14y ago
The problem is you have to account for the difficulty, which has changed. It looks like he was predicting a block per 78 hours, while it is now closer to 2/3 of a year. Looks like 1.64 GH/s = $10.66 a day roughly, compared to a cost of $400 a day.
cadetzero 14y ago
That's about to be a total non-factor once all the ASICs online. http://launch.avalon-asics.com/ http://launch.avalon-asics.com/ and http://www.butterflylabs.com/ http://www.butterflylabs.com/ The hash rates are order of magnitude faster than what's currently out there for the price, and most importantly they'll drive up the difficulty quite a bit.

deleted 14y ago

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wmf 14y ago
Trying to override market prices has been tried many times, and what always happens is liquidity disappears from the official market (e.g. nobody's willing to sell you a BTC for $1) and a black market with shadow prices emerges.

zeitgeist88 14y ago

wow!

tocomment 14y ago

Basic BTC 101 question. Are there a fixed number of txns in a block or is it variable? (And what do you recommend I read to learn this kind of stuff)

rmc 14y ago
As far as I know there is no limit on the number of transactions, but there is a limit on the total number of possible bitcoins (about 21 million IIRC)
- tocomment 14y ago
  So when a node picks up a block to process it gathers up all of the pending transactions at that time?
  - wmf 14y ago
    Yes. (More like the node creates a block containing all pending transactions, but that's a nit.)
mckoss 14y ago
It's variable. Each miner decides (in software) which transactions to include in a block. Everything is in here: https://en.bitcoin.it/wiki/Protocol_specification https://en.bitcoin.it/wiki/Protocol_specification Or read the source code for the standard client: https://github.com/bitcoin/bitcoin/blob/master/src/main.cpp https://github.com/bitcoin/bitcoin/blob/master/src/main.cpp

jpdoctor 14y ago

Great! A $1B down, and now only $23B more until it becomes 1% of the total US money that the Federal Reserve has printed! http://research.stlouisfed.org/fred2/series/M1/ http://research.stlouisfed.org/fred2/series/M1/

kyledrake 14y ago

So, in a sentence: Bitcoin is being used by people as a highly liquid, defensive store of value from within Cyprus, where capital controls are preventing people from moving their money out through traditional means. This is what gold used to be used for. But gold is not liquid, and Bitcoin is. It appears that hackers have made something better than gold, the longest standing store of value in human history. What an incredible achievement! For the first time in history, I can somewhat safely make the argument that we now live in a post-gold economy. Gold is still there, but we now have something even better for storing value. This is getting deep into the economics of mediums of exchange, which are important for understanding what is going on here. I did a talk on Bitcoin a while ago where I went into describing Bitcoin from a medium of exchange perspective rather than a technology one. It may help you to understand what is going on here, and why I think that this will continue into the future: http://www.slideshare.net/KyleDrake/bitcoin-the-cyberpunk-cryptocurrency http://www.slideshare.net/KyleDrake/bitcoin-the-cyberpunk-cr...

benbataille 14y ago
We have been in a post gold economy since the end of the Breton-Wood agreement. Hording gold is far from a wise investment. It certainly isn't a safe way to store value. First, history aside where it's value comes from is difficult to understand. There is literally tones of it lying around without any real use (far more than what is produced). Basically it's a safe haven because people decide to use it this way but the market could crash any day and has multiple times before and thus despite central banks holding so much of it they dwarf anything someone could decide to inject. From my point of view, bitcoin is an even more stupid investment. As little as 5000BT makes the rate plummets. Nothing could stop a young Soros from pulling out a mini-black Wednesday. Add the fact that the market is completely unregulated and you have a pretty risky situation. I see Bit coin has a step backward. It's like current currency without any of the warranty provided by governments (security of trade is one of the main reason we instituted government after all). To the people who will argue that Cyprus is currently stealing its citizen, please think about what would have happen to them if there was no way to get a bailout and the banks actually collapsed.
gyom 14y ago
I like your slides and I'll probably check out the talk later on. I think that depending on what the future looks like (no zombie apocalypse, massive wars, etc.), there will be some kind of cryptocurrency that basically replaces gold. It's very exciting. At the current time, though, given that bitcoin hasn't withstood the test of time, it's a bit hard to claim that gold is outdated. It's not hard to convince someone that gold or silver have value because of all the historical precedents. That counts for something when considering in which money to invest.

adestefan 14y ago

People keep comparing the "value" of bitcoin against the USD. If bitcoins were a truly useful currency, then there would be no need to value them against another base currency.

nobodysfool 14y ago
People keep comparing the "value" of the Euro against the USD. If Euros were a truly useful currency, then there would be no need to value them against another base currency.
indrax 14y ago
All currencies can be valued in terms of other currencies. Bitcoin can also be valued directly against goods. (as can other currencies) The price of most goods is currently tied to some other currency, because most businesses have expenses in traditional currencies. But you get similar price fluctuations in international trade.
- adestefan 14y ago
  Yes, but for everyday purchases people do not care about that. Until bitcoin can get to that point, then it's not a useful currency. Especially since it seems like people bitch and moan now about things costing too much in bitcoin because it's currently strong against the USD.
- eric-hu 14y ago
  It sounds like a metric that would satisfy the parent post more is some sort of consumer price index in Bitcoins? Perhaps that would be useful to have side-by-side with a Bitcoin-to-USD metric.
  - Helianthus 14y ago
    Sadly there isn't enough data for a consumer price index, because Bitcoin isn't a currency (in the extent that its main use is exchange for commercial goods), it's a financial sandbox.

alyx 14y ago

Is nobody else here bothered by the following statement? It's on the first page, last sentence of the original paper on Bitcoins... "The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes." [1] [1] http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf

nadaviv 14y ago
No. If someone does manage to control 51% of the computing power of Bitcoin, he's much better off using that to mine bitcoins rather than "cheating". If he'll use it to cheat, he'll cause panic, make bitcoin drop their value and undermine the source of his own potential wealth. It'll be much better for him to play fair and just gain (a lot, with that much computing power) wealth by mining.
- sashagim 14y ago
  That's true only if you assume the motivation is purely financial.
  - nadaviv 14y ago
    I guess that's right. Someone with enough computing power could harm bitcoin to the point it'll be unusable. But the people with those motives (government, banks) are much less likely to be part of something like that than people with financial motives.

ttrreeww 14y ago

The key to prosperity is printing money to fund productive activities. Eg: hire people and pay them. Instead, we print money and give it to Wall Street and the super rich.

boffo9 14y ago

Hooray! I love bitcoin!

genwin 14y ago

I wonder when governments will start cracking down on Bitcoin holders for unpaid gains taxes.

jb- 14y ago
You don't owe capital gains taxes until you sell the assets.
- genwin 14y ago
  Ah yes, forgot about that.

michaelochurch 14y ago

I'm going to start calling it ShitCoin. Not because it's a scam and I hate it, but in the sense of "Oh, shit". (BitCoin is doing well right now because of the Cyprus crisis.) I have no clue about its directional future, but I can see it being, for the next 10 years, a way of betting against the world-- a distinction that gold used to have.

andrewljohnson 14y ago
Even better though, it's like gold you can get for cheap for now. Assuming people don't stop using bitcoins, it's hard to imagine bitcoins not appreciating over time. Either a major calamity like government intervention will end BitCoin, or it will be supplanted by different technology, or BitCoins will appreciate for decades. They will either be worth zero, or a lot in my estimation. Disclosure: I own 20 bitcoins.
- michaelochurch 14y ago
  It's unstable. There's no barrier to entry. I could make a competing product called ZitCoin with a different inflation/deflation profile. At some point, it comes down to weird, fickle, and not especially meaningful brand effects. Then it's just speculation. If you buy BitCoin, you're betting on the prestige of its being the first. Do people even know what the first fiat currency is? Or care? People who sell at the top of BitCoin are going to make a lot of money, but for the long-term value, I'm betting on zero.
  - andrewljohnson 14y ago
    I don't think the comparison to the life of fiat currency is reasonable - no fiat currency outlives the nation-state backing it. It is a fair point that there could be other competing, but not dominant currencies, which could lead to a non-zero, but low price for bitcoins. So perhaps, 0, a lot, or anywhere in between for the value of a bitcoin. As long as the number of things you can buy with bitcoins rises over time, the value of bitcoin will rise. I don't think it is unreasonable that the momentum, including technology and community (not just brand around BitCoin) will make it a favored son in digital currencies. So it's not just buying it based on the prestige of being first, it's buying based on the value of being first. I actually bought my coins when YC invested in CoinBase, because I thought that was a strong signal. It will be an interesting future where people buy currencies based on their mathematically-dictated value profiles, as opposed to whichever currency is sold by the local government, and _seems_ to be the most stable.

eah13 14y ago

The market cap isn't the stat to watch on BTC- the daily volume is. With volume at something in the low millions of dollars it'd be very easy for the currency to be manipulated by dollar-based traders. There's not much evidence that there are large deep pocketed investors who will toe som imaginary line in the wake of a retail investor sell-off. Until volumes pick up the daily price ont he various exchanges represents the valuations of a distressingly low number of traders. That said, I think bitcoin is super exciting and want to see it succeed. But it needs to be much more heavily traded, regardless of its dollar exchange rate, for that to happen.