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Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same

• Retric 14y ago
  Assuming that bit-coin is not passed over for a more useful digital currency at which point the network fails and the total value of all bit-coins falls to 0.
  • cpressey 14y ago
    I wonder if the value would ever fall to precisely zero. Mightn't they still have value as a novelty or collector's item? Like, "Hey, a Bitcoin! I remember those... sure, I'll buy one, just to say I have one." It's unfortunate that you couldn't mount it in a decorative frame, though.
    • phreeza 14y ago
      At some point it would probably be easier to mine one, if the value and interest drops low enough.
      • jdludlow 14y ago
        That's backwards. As the value approaches zero, the relative cost of mining grows not shrinks.
        • entropy_ 14y ago
          That's true, but as value drops, there is less incentive to mine bitcoin so there'll be a lot less mining going on(not cost-effective with respect to the cost of electricity).
      • mynameisvlad 14y ago
        Unless we reach the mining gives you 0BTC limit.
    • DanBC 14y ago
      One guy made physical coins for bitcoin: (https://www.casascius.com/ https://www.casascius.com/)
      • vyrotek 14y ago
        Indeed. My friend knows the man behind this. He owns another software company in Utah and gives his employees bonuses in BitCoin.
      • nekgrim 14y ago
        or http://www.coinedbits.com/ http://www.coinedbits.com/
    • lwat 14y ago
      It will never fall to zero, I'll personally buy every last one of them at $0.0001 each.
      • fnayr 14y ago
        It would not make sense to buy EVERY one of them, as then you're guaranteeing they won't have value to anyone else.
        • lwat 14y ago
          I don't care, I'll buy them all. I'd be the sole owner of a piece of internet history.
        • jlgreco 14y ago
          Perhaps he sees minimal value in being the only person that has any.
        • thatthatis 14y ago
          Once you own 50% can't you create fake transactions to transfer the rest of the BTC to yourself?
          • lwat 14y ago
            No you need 50% of the mining capacity, not the bitcoins
• dia80 14y ago
  On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main exchange is shockingly unfit for purpose. If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it. I hope a more able exchange arrives soon.
  • dubfan 14y ago
    Do you have any evidence at all of a coordinated attack against Bitcoin, or is this just an unsubstantiated conspiracy theory?
    • sliverstorm 14y ago
      Do you even have to ask?
    • DanBC 14y ago
      Don't the DDoS attacks count as evidence?
      • awj 14y ago
        What DDoS attacks? So far I've seen no compelling evidence that this is anything but high volumes of legitimate usage.
        • L0j1k 14y ago
          As a long-time (since 2010) miner, I can tell you first-hand that there are massive DDoS attacks taking place against not only MtGox (who has already described DDoS against their infrastructure) but the pools as well. In fact, Reddit's pool (MtRed.com) is completely DOWN at the moment because of a larger DDoS than we've ever seen. You can keep drinking the "everything's fine" koolaid, or get with the reality that currency manipulators have arrived on the Bitcoin train, and are using all the tools they have available to do their job.
• coldtea 14y ago
  It's until one-two major governments decides to make it illegal to deal in bit-coins that it's price will drop to zero. It doesn't matter if they can't enforce it 100% (or even 1%). What matters is that it will kill almost all opportunities to use it as regular money for legitimate purchases by major companies etc in the future. And that it could also land your ass in jail (with ISP monitoring and such being what it is). Why would a government do that? For one, because they don't like money systems they can not control. Second because they would argue it can be used for money laundering and such. Time and again it has been proven that you cannot solve social issues with technology. For example a solution for private communication exists: cryptography. And yet, the government can limit what kind of cryptography you can use in your app or export, etc. And they can even throw your ass in jail if you have an encrypted file and you don't hand them the key. You have to go all the more deeper, and even that doesn't solve the issue of your dumb cousin exposing your secret in his plain text email to you.
  • mayneack 14y ago
    That will keep it down, but never zero (because of that). There's a real value to the illicit transactions. Even if it's merely a way to exchange dollars into something like silk road points, that's worth enough to enough people to keep it at some non zero value.
    • dgroves 14y ago
      or make it skyrocket - think about the prohibition or drugs.
  • EliRivers 14y ago
    A vast number of major governments have made it illegal to trade in, for example, heroin. Just making something illegal doesn't necessarily stop trade.
    • dllthomas 14y ago
      I don't think the users of bitcoin are quite as committed, though.
• thatthatis 14y ago
  There is literally no fundamental value to bitcoins. Spikes and crashes are absolutely to be expected in such a situation.
  • drcross 14y ago
    same as the dollar and euro then. They are not backed by anything except the status quo.
    • tvladeck 14y ago
      not 100% true. you have to pay taxes in dollars. the currency is backed by the value of not going to jail.
      • wordplay 14y ago
        You may have hit on something here. There is no guarantee that any item will be worth any amount of another item. You can make claims about the relative likelihood that some item will be exchangeable for some quantity of another item, but you cannot claim that in every future scenario your item will be exchangeable for any amount of another item. Just because a transaction looks more like barter than commercial doesn't magically convert the ideas underpinning fundamental economics. At this level of understanding economics is more a study of sociological systems and less about banking, fiat currencies, and all the other modern mumbo-jumbo we go on about these days. This is really key when discussing some utopian reality where we've untethered ourselves from any form of currency--an exchange of value is tied to the very earliest societal systems. Unless society shrinks back into nomadic wandering tribes some form of value exchange (aka: currency) will exist.
      • thatthatis 14y ago
        I've seen a lot of good arguments on the value/worthlessness of fiat currency, but I'd never seen fiat currency defended as having the value of not going to jail. That's an amusing and on its face compelling argument.
        • 14y ago
• rhizome 14y ago
  "Sell on news."
• Jtsummers 14y ago
  Thoughts on your essay: Fractional reserve banking - if it's merely backed in BTC then what's the point of bitcoin? It entirely defeats the system as people will be back to fiat currency. Early adopters and clever nation states have the opportunity to totally turn the world upside down in a BTC backed future. They should have a significant percentage of all existing (as it's finite) BTC which would distort their actual worth. A clever North Korea - estimated GDP of $40 billion, and about $4 billion each in exports and imports - could hold an incredible amount of BTC buying power. Why would any other nation want to acknowledge them? Similarly, they'd be holding onto a financial nuclear bomb if they held enough BTC. They'd be able to almost singlehandedly alter the value (in purchasing power) on a whim with a significant enough percentage. --- Next, you focus heavily on hyperinflation, but never once seemed to mention deflation. Or the fact that under a scenario like above, hyperinflation is almost feasible as suddenly a large amount of BTC could reenter the market. Long term it would get absorbed, but short term impacts could be severe.
• jonnathanson 14y ago
  In the long run, yes, there could be a bright future for BTC. In the short run, there are several big challenges, liquidity being a huge one. When it comes to BTC, the activities of speculators/hoarders, and the activities of free exchange and commerce, have shown themselves to be in direct opposition so far. The "store of value" and the "medium of exchange" are not mutually exclusive, of course, but for the time being, they're functionally mutually exclusive. It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. It's in the best, long-term interests of BTC to stabilize and become the latter. But BTC is going to be the former for quite awhile, precisely because it's so mysterious in the public eye, there's such information asymmetry about how it works, and because the markets for BTC-based commerce are still fairly niche. Stabilization is going to come when more businesses start accepting BTC, and accordingly, when BTC becomes more freely convertible for goods, services, and other currencies. Until then, it'll proceed apace slowly and steadily, with the occasional burst of volatility as public interest spikes and wanes, and as speculators jump in and out. What the currency really needs is exchange volume -- not just from trading, but from commerce.
  • fredwilson 14y ago
    Exactly
  • derefr 14y ago
    > It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. Where is gold on that spectrum? As far as I can tell, Bitcoin seems to have all the properties of gold (except that it's easier to transport.) I'm pretty sure that gold is not considered to be a "currency" in any sense in the modern era; it's traded as a commodity, like oil. But people still can use it (or any other commodity, like oil--or, say, laundry detergent[1]) for under-the-table anonymous transactions as well. [1] http://www.thedaily.com/page/2012/03/12/031212-news-tide-theft-1-4/ http://www.thedaily.com/page/2012/03/12/031212-news-tide-the...
    • thatthatis 14y ago
      The gold analogy is apt, but I think diamonds are a more apt analogy. Diamonds capture the "value is what people are willing to pay" aspect better than gold does.
• fakeer 14y ago
  >>someone were to yell "fire!" Who did yell this time? >>the more people around the world who adopt it Who shall be those people? Are we, by any chance, thinking that we should count the people in mining bitcoins or adopting a currency based on algorithms(let alone the talk about encryption/bits/bytes/code) which they do not have an iota of idea about? Or are we considering that "naah, it's not for them 'non-techies' anyway!"? Well, in that case it's actually fine if bitcoin is to be restricted to paying for goods/services that we (the 'techies') shall buy and we'll buy from us (the 'techies'). But then, this will go nowhere. But 'they' can buy the bitcoins at those exchanges, can't they? No, they shall not buy sth fluctuating in price(paid in dollars and rupees) which shames any share price fluctuation or currency value change except Zimbabwean dollar. And certainly not sth that they do not understand and sth where they have to remember a cryptic and random long string and if they misplace it, forget it or even change it accidentally - well, they just lost all their bitcoins! There's no support number to call to, no branch manager to go to and tell "well, I just happened to have my id/pwd forgotten". To me it doesn't even look like a currency. It just looks like, from an average person's point of view, another merchandise(if we do not call dollar a merchandise)/online-'stuff' that people(better say enthusiasts) are buying. Like some share which are generated by running more and more computers.
  • gtirloni 14y ago
    Agreed. I don't trust the dollar as investment and I don't understand why people consider bitcoin something worth investing in. Sure, for trading stuff between techies it looks fair enough but it'll never reach the general public. The whole banking system works hard to earn the customers' trust and any small mistake damages that. Bitcoin doesn't provide any assurances, support, etc... Looks like another fad the computer industry created for its own amusement. Let's see how long it lasts. I'm sure all the revolutionaries out there fighting the man will come up with solutions for the trust issues.
    • mcantelon 14y ago
      >I don't understand why people consider bitcoin something worth investing in You don't understand the power of frictionless micropayments and monetary privacy?
• sseveran 14y ago
  Its not panic if your first.