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Bitcoin breaks $200

168 points by conductr 13y ago

lectrick 13y ago
I came here to bitch that the inflated MtGox price doesn't count... Then I realized that is the non-MtGox price... So it's officially a bubble? sigh
- torhorway 13y ago
  You don't really know what a bubble means do you...
- jaekwon 13y ago
  On a related note, ever heard of the bubble theory of money? The theory goes, that good money is essentially a bubble that can't be popped easily. People compare Bitcoin to the tulip mania, but that is a wrong analogy, given that tulips can be cultivated by anyone to any degree -- whereas Bitcoins are capped by design.
  - presidentender 13y ago
    Furthermore, bitcoins are fungible, while the tulips grown from each bulb had different characteristics.
  - betterunix 13y ago
    What stops someone from creating their own Bitcoin alternative? Many such systems exist.
    - mateuszf 13y ago
      The fact that small number of people use it. They will be not a real alternative unless they have some better features than Bitcoin itself.
      - jacoblyles 13y ago
        PPC has better features than BTC, but people haven't heard of it yet[1]. That said, BTC may win by being "good enough" and having a strong network effect. [1] http://www.ppcoin.org/static/ppcoin-paper.pdf http://www.ppcoin.org/static/ppcoin-paper.pdf
        jaekwon 13y ago
        I would argue that PPC does not have better features than BTC. But yes, either way, BTC for now is good enough.
      - betterunix 13y ago
        In other words, there is no particular technical or legal feature of Bitcoin to differentiate it from another system. Bitcoin just happens to be the most popular and receive the most press. If you cannot identify a particular, distinguishing feature of Bitcoin that accounts for its popularity, why should we believe that this is not a bubble?
        ferdo 13y ago
        Bitcoin has a gigantic first mover advantage. The free rider alt coins are all essentially based on Bitcoin's blockchain innovation. Until Bitcoin is broken through advances in computing or a solution better than Bitcoin comes along, Bitcoin is the top of the heap for digital cash.
        yebyen 13y ago
        > Bitcoin has a gigantic first mover advantage Not only that, but: 1) People with investment in hashing power tend to hash on bitcoin 2) If another coin were to come along (as they do, ask me about Terracoin) the speculators would find it. 3) The coin would be vulnerable to attack from those speculators who control even a tiny fraction of the hashes of Bitcoin. I'm not just talking about double-spend, I mean someone (or several someones) with a large amount of hash power (say, each individually much smaller than 51% of total) coming along to service the network for a short while, driving up the difficulty, and getting away with a lot of coins while actually processing transactions for a comparatively short amount of time. TRC, as a network with usually several terrahashes[2] hashing constantly, had to implement some controls[4] to prevent this kind of attack. When the coin is more profitable to hash, the speculators find out, they bring their hashes, and it drives the difficulty up. When the difficulty goes up, a slog ensues (the per-hash temporary advantage of mining Terracoin dries up) as the speculators take their hashes elsewhere and the remaining sloggers have only to hope that they can provide enough TRC at low cost[3] such that there is never an advantage to speculators, and thus the network can experience organic growth bringing in more permanent hashes from those who support its development. The controls only limit the mobility of the difficulty (it can't shift up by 4x or down to 0.25x of the last retarget) So when the slog is particularly bad (high difficulty), or when the hashing hordes are particularly voracious (low difficulty compared to coin price)... instead, it can increase to 1.25x or decrease to 0.75x -- you have to watch the network pretty close to see when people are getting over on profitability, but when they do you can still feel it for days. The effect of not being the largest network seems to be that your difficulty goes up and down, not always just up up up. It's hard to find long-term difficulty reporting.[1] Of course when bitcoin spenders are willing to wait up to 10 minutes for blocks, and Terracoin targets 2 minute blocks, even "network's running slow" seems pretty fast in relative terms, as long as it's not uncontrolled adjustment. They must be doing something right, they're still/currently the most profitable Alt-SHA256 coin, even if the share prices have taken a serious dump.[5] [1] http://pool.bitcoinreactor.com/pool/statistics/?cur=trc http://pool.bitcoinreactor.com/pool/statistics/?cur=trc [2] http://trc.cryptocoinexplorer.com/ http://trc.cryptocoinexplorer.com/ [3] https://www.cryptsy.com/markets/view/27 https://www.cryptsy.com/markets/view/27 [4] http://terracoin.org/news.html http://terracoin.org/news.html [5] http://www.coinwarz.com/cryptocurrency http://www.coinwarz.com/cryptocurrency
    - bmm6o 13y ago
      I made my own and I was bummed to discover that my BmmCoins are worthless!
  - klochner 13y ago
    . . . but the quantity of all crypto-currencies is unlimited.
    - zachlatta 13y ago
      There will only ever be 21 million bitcoins. I recommend giving http://en.wikipedia.org/wiki/Bitcoin http://en.wikipedia.org/wiki/Bitcoin a read.
      - betterunix 13y ago
        Nothing stops anyone from making their own personal variant of Bitcoin, however. Or 10 of those variants. Or a million. In other words, the limit applies only within a single system, and there is no limit on the number of such systems.
        PilateDeGuerre 13y ago
        This comment is a classic type of comment in which the commenter ignores the social context of a technology.
        skriticos2 13y ago
        People care about Bitcoin. They don't care about other variants much. This gives Bitcoin value and not the other variants. In other words, creating another blockchain is easy but convincing enough people that the variant coins are worth something is hard. Very hard.
        betterunix 13y ago
        "convincing enough people that the variant coins are worth something is hard. Very hard." Somehow, people managed to be convinced that Bitcoin was worth something back in 2009. What makes the current situation different? Whatever convinced people that Bitcoin had any value in the first place might convince people that some new alternative you started this morning has some value.
  - crassus 13y ago
    See Moldbug's excellent essay "Bitcoin is money, Bitcoin is a bubble" [1] [1] http://unqualified-reservations.blogspot.com/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.com/2013/04/bitcoin...
  - simplemath 13y ago
    Tulips and gold also don't have built in rock solid transaction protocols
    - betterunix 13y ago
      Rock solid? A system that requires vast and increasing amounts of the world's energy to be devoted to it just to achieve a vague notion of security? A system that can be attacked in polynomial time (but let's just say that is not a problem; after all, we never defined security in a way to preclude such things!)? That is your definition of "rock solid?"
      - simplemath 13y ago
        It presents significantly fewer attack vectors than any other payment system that I'm aware of.
      - jafaku 13y ago
        If it's not solid you are free to attack it. You keep dismissing the incentives that Bitcoin gives, which should also be considering part of its security. The only rational attacker that could have an interest and resources to stop Bitcoin is a nation-state. But even then, another nation-state could jump in and protect it. We can't know what will happen until it happens. The field that you want to use to model everything is too narrow for Bitcoin.
        betterunix 13y ago
        "You keep dismissing the incentives that Bitcoin gives, which should also be considering part of its security" We do not speak of "incentives" in other contexts. When we talk about encryption, we do not spend our time pondering the "incentives" for not attacking our cryptosystems -- we create encryption systems that cannot be feasibly attacked regardless of what motivates the attacker. When we talk about secure multiparty computation, we do not talk about what might motivate the attacker, we only talk about how to prevent attacks. There are historical counterexamples to the idea that we can analyze a cryptosystem's security in terms of the attacker's "incentives." A famous and well-known example is the German Enigma cipher from WWII. After the war, German cryptographers were captured and interrogated (the TICOM operation), and one of the things they revealed was that they knew that Enigma could be attacked, but did not believe that it would be worth the effort. Even the assumption that the attacker will act rationally is bad -- we should be secure against irrational attackers too. "We can't know what will happen until it happens" We can, however, design systems that maintain their security properties regardless of what happens (at least under standard cryptographic hardness assumptions, though sometimes we can even get information theoretic security). ElGamal encryption is secure against any polynomial-time chosen-plaintext attack -- provably so. The GMR signature system is secure against any polynomial-time adaptive chosen-message attack. For a very strange construction that illustrates how we can defend against attack strategies we cannot even imagine, consider this work on non-malleable commitments (the construction is on page 13; it is very strange, but the strangeness is key to the security proof, or in other words there are possible attack methods that nobody is aware of that the construction prevents): http://eprint.iacr.org/2010/483.pdf http://eprint.iacr.org/2010/483.pdf "The field that you want to use to model everything is too narrow for Bitcoin." Yes, things are very easy when you have no clearly-specified goals, requirements, or constraints. How can there be any technical criticism of Bitcoin if this sort of response is considered valid? Anything anyone says is wrong with Bitcoin could always be dismissed as being "too narrow."
  - anonymoushn 13y ago
    Tulip mania involved surprisingly few tulips! The primary instrument being traded was what we would now call a tulip futures contract. It seems like a silly thing, but we currently favor units of sovereign debt (or, if you prefer, units of the future ability of the government to tax its citizens).
- cbrauchli 13y ago
  How does this prove it is a bubble? If anything, isn't this evidence for the opposite? I expected the price to drop dramatically after the Silk Road shutdown.
  - krrrh 13y ago
    It would have been rational for the price to drop after SR. This might then be irrational exuberance.
    - gwern 13y ago
      Not really. The market was well-aware that SR was an illegal enterprise which could end at any time. The risk should have already been priced in. To a reasonably efficient market, good news is not good news if it was already predicted, and bad news is not bad news if that had been predicted instead. What matters is the extent to which the news is better or worse than predicted. In SR's case, the news was better than one would have predicted. Despite it being the worst-case scenario - the server seized intact, Ross's laptop seized unlocked, all outstanding balances confiscated - it wasn't that bad because Ross's personal savings do not yet seem to have been taken, the current seizures will not be sold until the trial is over, and the bust was not due to breaks in either Bitcoin (they didn't even bother with blockchain analysis in the indictments!) or Tor (as far as we can currently tell) but to errors and overwhelming hubris on Ross's part, so SR could be and was quickly replaced by a flood of clones/competitors (at last count: BlackMarket Reloaded, Sheep Marketplace, BuyItNow, DeepBay, Budster, & Black Flag are all actively buying & selling; in addition, The Market and Silk Road Reloaded are expected to come online in the next few weeks/months).
swswsw 13y ago
This is a chart on coinbase.com. Interesting, for a while, coinbase prices seem to be following with bitstamp price. but at this moment, it seems to be closer to mt. gox price. At the very moment, I see mt. gox and coinbase price at $202. And bitstamp price at $194.
jnbiche 13y ago
The fact that the Gox gap is closing makes me suspect that a lot of this rise is coming from new money. I'm guessing few new Bitcoin purchasers are buying through Mt. Gox, which is driving the price up on other exchanges, and closing the gap due to Gox's illiquidity.
- clarkm 13y ago
  Bitstamp is also running up near 190, so it makes sense that lot of the new money has come in through MtGox. https://bitcoinity.org/markets/bitstamp/USD https://bitcoinity.org/markets/bitstamp/USD
  - mayneack 13y ago
    What's the cause of the consistent disparity between exchanges? Is it just the slow speed of transactions?
    - wmf 13y ago
      You can't actually withdraw USD from MtGox, so all the USD prices there are essentially fiction.
- conductr 13y ago
  My thought was new money too. Maybe the press from the SR bust. Also, maybe confidence because the price withheld the SR bust. But... what do I know
- InXorWeTrust 13y ago
  > a lot of this rise is coming from new money. Speculation, but could some of the new money be coming from CryptoLocker[0]? [0] http://www.bleepingcomputer.com/virus-removal/cryptolocker-ransomware-information http://www.bleepingcomputer.com/virus-removal/cryptolocker-r...
  - garybizzle 13y ago
    yes, absolutely, it's actually quite likely considering it's a very thinly traded currency.
rdmcfee 13y ago
I wonder why the coinbase prices are inflated to almost the GOX price. Are there market makers and scalp traders driving up the coinbase prices now? From my experience coinbase doesn't have the withdrawal issues like gox
Fuzzwah 13y ago
All those new ASIC miners coming online? The difficulty jump over the last month is intense: http://bitcoindifficulty.com http://bitcoindifficulty.com edit: This is a pretty good quick wrap up of what I think is going on here: http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubble-bitcoin-mining/ http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubb...
- astrodust 13y ago
  If anything that should drive down prices.
  - eterm 13y ago
    Why? It's now harder and harder for the average person to get hold of a bitcoin. That fewer, richer people are now spending money to get more bitcoins isn't going to reduce the price if those players aren't liquidating their bitcoins.
    - paulhodge 13y ago
      For "average" users, mining has been prohibitively difficult for a while now. CPU mining has been worthless for years. GPU mining has also been mostly worthless, unless you picked (or happened to already have) one of the few cards that perform well. So anyway, I think we're at a point where the mining difficulty has little impact on the price. Newcomers are going to buy coins, not mine them.
- simplemath 13y ago
  I personally think critical mass has been reached, and unless someone actually cracks the protocol (which I seriously doubt) and brings down the txn network, BTC is here to stay. Quibbling about the current valuation misses the point. The secure transfer mechanism is the real value, and is not getting shoved back in the bag. Bet long on BTC and I doubt very highly you'll regret it, even if you get in at 200US and lose over the next few months.
  - 13y ago
simplemath 13y ago
See you again at $1000 to talk about the bubble.
- gweinberg 13y ago
  Looking forward to it. Bitcoin almost certainly will crash sooner or later, and the pricks who have been insisting that bitcoin is JUST a bubble will all be patting themselves on the back for being "right all along", even if t never falls to what they were saying were vastly inflated values, and even if it recovers again soon after. Which it likely will. There are two things that can kill bitcoin: a dteermined attack by a major world government, and something clearly better (from the point of view of its users). I'm betting on the second.
  - simplemath 13y ago
    i agree that there is likely something better down the pipe, but at this point almost 5 years on, BTC is finally gaining traction and awareness from even non tech savvy people. The entire ecosystem is not going to be easy to duplicate.
immad 13y ago
Back down to $195.
gesman 13y ago
US default now-or-later squabble certainly fueled bitcoin. It is becoming de-facto plan B for big players.
- oscargrouch 13y ago
  wow! that will have big implications.. but i wonder what would do vey rich people invest in bitcoins instead of gold wich is probably safer right now? Thats not my area, but i would like to know if BC could get more attractive than gold in a fallout economy scenario?
  - jaekwon 13y ago
    Bitcoin is more useful than gold in a society that has the internet. If you want to prepare for a situation where we no longer have the internet, then gold might be a viable option. But I don't care to consider that possibility, for the same reason I don't care to prepare for a nuclear holocaust. I believe my expected utility/happiness is greater this way.
  - gweinberg 13y ago
    It's not a question of one or the other. If you're a billionaire, it might make lots of sense to have a whole bunch of accounts in different countries with "just" a couple million, since that will still allow you to live reasonably comfortably for the rest of your life and yet is an insignificant fraction of your total wealth.
- ajross 13y ago
  Um, no. According to blockchain.info and this $200 price, there are less than $2.5 billion worth of bitcoins in circulation, total. The idea that this would somehow serve as a hedge against an economy a thousand times larger is laughable.
  - jaekwon 13y ago
    Nobody is suggesting that Bitcoin will replace the USD (yet). For now, some people are going into Bitcoin because it cannot be confiscated. And govt default is correlated with crazy taxation measures. Take a look at what France is doing now.
csomar 13y ago
If anything to like about Bitcoin is that it has proved that almost everyone else is wrong. * SilkRoad shutting down? Bitcoin is doomed. * Mt.gox is not paying in time or at all? Bitcoin doesn't work. * Asics? There will be a flood of new coins. And yet Bitcoin value continue to raise. If history repeats itself, we should see 1 Bitcoin levels at around $2,000. I think Bitcoin is an interesting phenomena to watch. Being too solid for the quakes that it got, means it's going to stay for a longer period. I'll be just watching, meanwhile.
- exit 13y ago
  > Asics? There will be a flood of new coins.* the rate of production is fixed, so no one would have predicted that. asic would increase the difficulty level significantly though.
  - mayneack 13y ago
    Being wrong rarely stops people from predicting things
  - gwern 13y ago
    >the rate of production is fixed, so no one would have predicted that. IIRC, the arguments actually went that GPU miners had their equipment already paid for, and so could afford to hoard their mined coins, but that ASIC miners, who were paying thousands of dollars for their equipment, would be forced to sell their coins immediately to pay for their equipment & electricity.
    - bdcravens 13y ago
      I'd dare say the majority of GPU miners did invest in new equipment. I'd venture that there were plenty of nerds who were interested in mining that didn't already have rigs with decent GPUs already.
  - waterlesscloud 13y ago
    This isn't quite right. The rate of production has increased, because the computing power is increasing at a very high rate between difficulty adjustments. Blocks are being solved faster than they are "supposed" to be, statistically. It won't last, eventually the increase in computing power will taper off, but that's the state of things at the moment.
throwaway9222 13y ago
I'd never heard of SilkRoad until the heightened media coverage of the bust, nor had I ever purchased a Bitcoin. I always assumed that there were black markets online, but never invested the time to discover them. Since the bust, I've discovered new black marketplaces and purchased Bitcoins to purchase illicit drugs. It's completely anecdotal, but I'd assume that there are a number of other people like me who might be contributing new money to the Bitcoin market.
yvishyar 13y ago
the price is up because the miners cannot sell at prices lower than this as the mining difficulty has gone up immensely...same as gold...if you have to do sophisticated digging then you will do it only when the price of digging is less than the price of gold...it will only go up more if the mining difficulty continues at the same pace
deleted 13y ago
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Permit 13y ago
Can't wait to see all the amateur investors wishing for an opportunity to short Bitcoin like we saw in Jan/February when it hit $60.00. https://www.hnsearch.com/search#request/all&q=%22short+bitcoin%22&start=0 https://www.hnsearch.com/search#request/all&q=%22short+bitco...
- dwaltrip 13y ago
  Silly hyped up bitcoiners. Let's totally short this virtual imaginary currency thing. I mean, just look at the graph! What goes up always comes down! until it doesn't Value is entirely subjective, all money is imaginary and built on a trust. For bitcoin, this means trust that the network is healthy, the protocol works, the transaction system is effective and has advantages to competing systems, and that others understand and share these thoughts. However, bitcoin also reduces the trust required in several areas (this is one of its advantages): chargebacks, control of your account (it is immensely difficult for third parties to seize bitcoins), and stability of the monetary policy (systemic incentives were designed to strongly resist manipulation of the algorithm, and seem to be working well so far). Edit: This isn't to say bitcoin will go to the moon. It could very well fail for a number of reasons. However, it is also something that deserves careful consideration. It has shown surprising resilience. People are working hard at building augmenting systems. It is programmable money. The potential applications are hard to fully fathom.
nazgulnarsil 13y ago
Who wants to talk about china? Over the last few days the volume of transactions on btcchina has doubled. Gov run chinese media outlets have been surprisingly positive about btc. What is going on? One of the potential uses of btc is capital flight, and that is something that china has been incredibly strict about with their capital controls. Why aren't they clamping down? edit: some commentary from someone in china familiar with the baidu subsidiary announcement: https://bitcointalk.org/index.php?topic=315380.0 https://bitcointalk.org/index.php?topic=315380.0
- fleitz 13y ago
  Various banks have programs to collateralize chinese assets and offer a loan based on those assets. eg. You collateralize $10 million in Chinese assets, you get a $8 million dollar loan from a bank branch in another jurisdiction. Capital controls have already essentially be thwarted by the market, the second item is that BTC actually provides a great public ledger for amounts that would be unfeasible for the usual controls like FINTRAC. It shouldn't really be called bitcoin so much as bitledger. You also have to consider that factions within the party may think bitcoin will generate more capital inflows rather than capital outflows.
  - tedunangst 13y ago
    Do loans like that really defeat capital controls? The "owner" of the money has changed, but the location hasn't. The bank giving you the loan is playing a very long game, because they still can't move the collateral out. Right, wrong?
    - nazgulnarsil 13y ago
      It doesn't have to be a long game as long as they can unwind their position over a longer time frame and with less frictional costs than the individual, which wouldn't be surprising for a large institution.
    - fleitz 13y ago
      Not really, as soon as the loan is repaid the bank is whole. The loan originates in a non-Chinese country so when the loan is extinguished the bank has the value of the loan plus interest. Only if the loan defaults does the bank run any risk of having capital trapped in China. Worst comes to worst they use the capital in China to originate more loans in China. Any bank offering this service has a presence in China so it's not a big deal anyway.
salamandratech 13y ago
This dashboard is very nice to see what's happening in the bitcoin world, in real time : http://realtimebitcoin.info/ http://realtimebitcoin.info/
- jafaku 13y ago
  I like this one better: https://bitcoinaverage.com/#USD https://bitcoinaverage.com/#USD
theklub 13y ago
I'm afraid that when bitcoin becomes more mainstream there is going to be serious amounts of fraud and scamming.
- olalonde 13y ago
  Bitcoin can be seen as a sort of digital gold. Credit cards / Paypal / etc. could work exactly the same but be backed by Bitcoins instead of USD. See http://undergroundeconomist.com/post/36076277512 http://undergroundeconomist.com/post/36076277512
  - brazzy 13y ago
    Funny you should mention gold... remember all those "digital gold currencies" in the early 2000s? And how they were used in all kinds of frauds and scams?
- SpeakMouthWords 13y ago
  A business opportunity whichever way you slice it.
sliverstorm 13y ago
For once my general laziness looks like it is paying off. Mined a couple bitcoins years and years ago, and was too lazy to sell them at the time.
- Phlarp 13y ago
  Aha, but did your general laziness prevent you from properly storing the keys?
  - sliverstorm 13y ago
    You're sharp. That's exactly what I'm wondering right now. I think the answer is yes though.
    - Phlarp 13y ago
      My pet theory is that a good amount of the early coins are effectively "dead" with either the keys lost, brain wallets forgotten or the back-up USB keys long since formatted (or you know, you got arrested and the encrypted wallet is seized as evidence and revealing the key or otherwise moving the coins would basically be an admission of guilt) It's easy to set up triple redundant cold storage and promptly place multiple paper backups in different safety deposit boxes now when the price is rounding $200; but how many people went through this amount of effort when bitcoin was still considered a joke or nifty social/economic experiment and traded below $4 or even $.04 Even better; how many people stored them in an insecure manner and have since lost them to a scam/virus/offline attack.
      - sktrdie 13y ago
        Those are all risks that come with using Bitcoin. I'm sure with time we'll see lots of improvements. For now a good way to store coins is by using paper wallets: http://www.bitaddress.org/ http://www.bitaddress.org/ -you can print them yourself using any printer. Some say your keys shouldn't even be on any computer until you're ready to use them. But for the rest Bitcoin is like cash. You lose the key you lose the cash.
dllthomas 13y ago
I've been wondering whether people benefiting from bitcoin stability (silk road?) mightn't have been manipulating exchange rates. This seems to be weak evidence in support of that (though I still wouldn't say it seems likely).
- narcissus 13y ago
  For what it's worth, Silk Road provided it's own system for guaranteeing stability of price (that is to say, there were guaranteed exchange rates if desired). I don't think there was any need for SR users (well, sellers at least) to manipulate the price for that reason.
  - dllthomas 13y ago
    Interesting; have you more detail on that system?
    - gwern 13y ago
      Google its 'hedging' system; now that it's down, the documentation will be harder to come by but there should still be clearnet discussions of it.
ksrm 13y ago
So is there a good exchange for UK people that doesn't require ridiculous amounts of identification like mt.gox?
- dan1234 13y ago
  It's not an exchange (more of an escrow), and I've not used it but https://bitbargain.co.uk https://bitbargain.co.uk looks OK. They make the right noises regarding security and the prices seem reasonable.
- shawabawa3 13y ago
  I'm using bitstamp. I think it wasn't too bad to get on. I had to send a photo of my driver's license then transfer money on using transferwise.
stokedmartin 13y ago
Don't get why the rate has risen? What factors have triggered the demand? Also[1], stated that there is a while before corporations will start adopting it. [1] https://news.ycombinator.com/item?id=6589067 https://news.ycombinator.com/item?id=6589067
Datsundere 13y ago
I tried to buy bitcoins when they were $60. I look for sites that would sell me bitcoins for USD. It was so hard and the ways to buy them were so damn complicated. I had to sign up for a 3rd party site to import bitcoin to mtgox. The 3rd party site needed me to upload my personal identity information to verify my bank account. I was ready to do that as well, except they said it'd take 10+ days to verify. Also someone explain to me how that is anonymous when they have all my information if I had uploaded my driver's license and my bank account information. I got frustrated and just stopped looking to buy bitcoins. I was aware of irc channels too but I just don't trust them. And then there was money gram, what the actual fuck, the fees were so high. I could buy them, if I send my money to an account in a foreign bank in japan. Such bullshit. And this fluctuating price isn't very impressive either.
- jamestnz 13y ago
  I experienced similar frustration when trying to buy bitcoins. I ended up using localbitcoins.com, and had an excellent experience. The site matches up private users (by geographic location by default) wishing to buy bitcoins with those wishing to sell. It offers "feedback" ratings for traders, and an escrow system where the site confirms your coins have been sent to it and placed in reserve, and these get released to you once the seller confirms receipt of your funds, either by texting a code from their phone or by using the website. There were no onerous fees, and my entire trade was completed within hours. Typical trading methods would include internet bank transfer (which is what I did), or even meeting in person with cash (riskier but more anonymous I guess). >Also someone explain to me how that is anonymous when they have all my information if I had uploaded my driver's license and my bank account information. Nobody claimed it was anonymous. And companies acting as "money transmitters" (or who the feds decide to consider as such) have a bunch of AML/KYC regulations they are required to follow, hence the whole ID thing. You can enhance the anonymity of your coins in various ways, typically by services which chop them up and shuffle them between many addresses to obfuscate their trail in the blockchain (so-called "mixers"). >And this fluctuating price isn't very impressive either What concerns you about it? For many people I guess the short-term fluctuations aren't such an issue (e.g. those playing the long game with their bitcoin investment; or those only holding coins for a short time to make a specific purchase, particularly where the sales platform offers a hedging feature like Silk Road apparently did).
MarcusBrutus 13y ago
Bitcoin is fiat, it's not backed by anything of real value and doesn't have a government or a strong (and I mean national-government-kind strong) player behind it that is willing to devote actual resources to prop it up (which is what all other fiat monies have and which is why they usually stay around for a century or so, after that they either become obsolete or their value greatly diminishes due to inflation). It has all of the Aristotelian properties of money (durable, portable, fungible), and some extra ones too, except intrinsic value. So it's not money according to Aristotle. When a better system comes along (and it would be trivially easy for that to eventuate, imagine, e.g. China or a major corporation or - even better - an industry association offering an altcoin backed by gold, agricultural land, shares, face time with celebrities, mentoring time - hey these are good ones! etc.), the value of bitcoins will go to zero as everybody will want the new, better altcoin that has at least some intrinsic value. The same death spiral cannot happen in the case of government-backed fiats when a new fiat is introduced, for a number of reasons. Bitcoin is inertia-backed fiat. I'll take the government-backed variety any time.
- kinghajj 13y ago
  There is no such thing as intrinsic value, all value is subjective, and Bitcoin most definitely has subjective value; otherwise it would not be exchanged! If you define "intrinsic value" as something like "has subjective value for a great majority of individuals," then Bitcoin does have intrinsic value as a way to easily and quietly send wealth without requiring a central middle man. There are also numerous theoretical ways in which it could be made useful (colored coins, for instance.) I don't understand how people can look at Bitcoin and not see that it has some use, even if they believe that use is overblown.
- phaemon 13y ago
  That's not what the word "fiat" means. A fiat is a decree. An order given by an authority. In currency terms, this usually means a decree given by a government that a certain currency will be used. It makes no sense to say "Bitcoin is fiat" and then to say it doesn't have any government or strong player behind it. It's one or the other.
deleted 13y ago
[deleted]
brenfrow 13y ago
I just sold all of my bitcoins. Here's to hoping the bubble burst.
- TallboyOne 13y ago
  Same here. Now it's up another $30 :|
moccajoghurt 13y ago
What about that guy that spent all his money on bitcoins? Is he rich now? Any news about that guy?
- zby 13y ago
  There might be more than one such guys - but maybe you think about Rick Falkvinge (http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/ http://falkvinge.net/2011/05/29/why-im-putting-all-my-saving...)? I thik he bought around $8 or something and sold at $16 when his money doubled, just got scary about the speed - but probably bought back later.
- epaga 13y ago
  "I originally went all in at $7, went out at the same price on the way down, and went back all in at about $3. I've done extensive (bad) trading, and don't have my entire initial position, and far from enough to make me financially independent, but still a substantial amount (more than a year's average net pay, to give a ballpark number). I'm currently all in." http://www.reddit.com/r/IAmA/comments/1owf4v/im_rick_falkvinge_founder_of_the_first_pirate/ http://www.reddit.com/r/IAmA/comments/1owf4v/im_rick_falkvin...

168 points by conductr 13y ago

I came here to bitch that the inflated MtGox price doesn't count... Then I realized that is the non-MtGox price... So it's officially a bubble? sigh

torhorway 13y ago
You don't really know what a bubble means do you...
jaekwon 13y ago
On a related note, ever heard of the bubble theory of money? The theory goes, that good money is essentially a bubble that can't be popped easily. People compare Bitcoin to the tulip mania, but that is a wrong analogy, given that tulips can be cultivated by anyone to any degree -- whereas Bitcoins are capped by design.
- presidentender 13y ago
  Furthermore, bitcoins are fungible, while the tulips grown from each bulb had different characteristics.
- betterunix 13y ago
  What stops someone from creating their own Bitcoin alternative? Many such systems exist.
  - mateuszf 13y ago
    The fact that small number of people use it. They will be not a real alternative unless they have some better features than Bitcoin itself.
    - jacoblyles 13y ago
      PPC has better features than BTC, but people haven't heard of it yet[1]. That said, BTC may win by being "good enough" and having a strong network effect. [1] http://www.ppcoin.org/static/ppcoin-paper.pdf http://www.ppcoin.org/static/ppcoin-paper.pdf
      - jaekwon 13y ago
        I would argue that PPC does not have better features than BTC. But yes, either way, BTC for now is good enough.
    - betterunix 13y ago
      In other words, there is no particular technical or legal feature of Bitcoin to differentiate it from another system. Bitcoin just happens to be the most popular and receive the most press. If you cannot identify a particular, distinguishing feature of Bitcoin that accounts for its popularity, why should we believe that this is not a bubble?
      - ferdo 13y ago
        Bitcoin has a gigantic first mover advantage. The free rider alt coins are all essentially based on Bitcoin's blockchain innovation. Until Bitcoin is broken through advances in computing or a solution better than Bitcoin comes along, Bitcoin is the top of the heap for digital cash.
        yebyen 13y ago
        > Bitcoin has a gigantic first mover advantage Not only that, but: 1) People with investment in hashing power tend to hash on bitcoin 2) If another coin were to come along (as they do, ask me about Terracoin) the speculators would find it. 3) The coin would be vulnerable to attack from those speculators who control even a tiny fraction of the hashes of Bitcoin. I'm not just talking about double-spend, I mean someone (or several someones) with a large amount of hash power (say, each individually much smaller than 51% of total) coming along to service the network for a short while, driving up the difficulty, and getting away with a lot of coins while actually processing transactions for a comparatively short amount of time. TRC, as a network with usually several terrahashes[2] hashing constantly, had to implement some controls[4] to prevent this kind of attack. When the coin is more profitable to hash, the speculators find out, they bring their hashes, and it drives the difficulty up. When the difficulty goes up, a slog ensues (the per-hash temporary advantage of mining Terracoin dries up) as the speculators take their hashes elsewhere and the remaining sloggers have only to hope that they can provide enough TRC at low cost[3] such that there is never an advantage to speculators, and thus the network can experience organic growth bringing in more permanent hashes from those who support its development. The controls only limit the mobility of the difficulty (it can't shift up by 4x or down to 0.25x of the last retarget) So when the slog is particularly bad (high difficulty), or when the hashing hordes are particularly voracious (low difficulty compared to coin price)... instead, it can increase to 1.25x or decrease to 0.75x -- you have to watch the network pretty close to see when people are getting over on profitability, but when they do you can still feel it for days. The effect of not being the largest network seems to be that your difficulty goes up and down, not always just up up up. It's hard to find long-term difficulty reporting.[1] Of course when bitcoin spenders are willing to wait up to 10 minutes for blocks, and Terracoin targets 2 minute blocks, even "network's running slow" seems pretty fast in relative terms, as long as it's not uncontrolled adjustment. They must be doing something right, they're still/currently the most profitable Alt-SHA256 coin, even if the share prices have taken a serious dump.[5] [1] http://pool.bitcoinreactor.com/pool/statistics/?cur=trc http://pool.bitcoinreactor.com/pool/statistics/?cur=trc [2] http://trc.cryptocoinexplorer.com/ http://trc.cryptocoinexplorer.com/ [3] https://www.cryptsy.com/markets/view/27 https://www.cryptsy.com/markets/view/27 [4] http://terracoin.org/news.html http://terracoin.org/news.html [5] http://www.coinwarz.com/cryptocurrency http://www.coinwarz.com/cryptocurrency
  - bmm6o 13y ago
    I made my own and I was bummed to discover that my BmmCoins are worthless!
- klochner 13y ago
  . . . but the quantity of all crypto-currencies is unlimited.
  - zachlatta 13y ago
    There will only ever be 21 million bitcoins. I recommend giving http://en.wikipedia.org/wiki/Bitcoin http://en.wikipedia.org/wiki/Bitcoin a read.
    - betterunix 13y ago
      Nothing stops anyone from making their own personal variant of Bitcoin, however. Or 10 of those variants. Or a million. In other words, the limit applies only within a single system, and there is no limit on the number of such systems.
      - PilateDeGuerre 13y ago
        This comment is a classic type of comment in which the commenter ignores the social context of a technology.
      - skriticos2 13y ago
        People care about Bitcoin. They don't care about other variants much. This gives Bitcoin value and not the other variants. In other words, creating another blockchain is easy but convincing enough people that the variant coins are worth something is hard. Very hard.
        betterunix 13y ago
        "convincing enough people that the variant coins are worth something is hard. Very hard." Somehow, people managed to be convinced that Bitcoin was worth something back in 2009. What makes the current situation different? Whatever convinced people that Bitcoin had any value in the first place might convince people that some new alternative you started this morning has some value.
- crassus 13y ago
  See Moldbug's excellent essay "Bitcoin is money, Bitcoin is a bubble" [1] [1] http://unqualified-reservations.blogspot.com/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.com/2013/04/bitcoin...
- simplemath 13y ago
  Tulips and gold also don't have built in rock solid transaction protocols
  - betterunix 13y ago
    Rock solid? A system that requires vast and increasing amounts of the world's energy to be devoted to it just to achieve a vague notion of security? A system that can be attacked in polynomial time (but let's just say that is not a problem; after all, we never defined security in a way to preclude such things!)? That is your definition of "rock solid?"
    - simplemath 13y ago
      It presents significantly fewer attack vectors than any other payment system that I'm aware of.
    - jafaku 13y ago
      If it's not solid you are free to attack it. You keep dismissing the incentives that Bitcoin gives, which should also be considering part of its security. The only rational attacker that could have an interest and resources to stop Bitcoin is a nation-state. But even then, another nation-state could jump in and protect it. We can't know what will happen until it happens. The field that you want to use to model everything is too narrow for Bitcoin.
      - betterunix 13y ago
        "You keep dismissing the incentives that Bitcoin gives, which should also be considering part of its security" We do not speak of "incentives" in other contexts. When we talk about encryption, we do not spend our time pondering the "incentives" for not attacking our cryptosystems -- we create encryption systems that cannot be feasibly attacked regardless of what motivates the attacker. When we talk about secure multiparty computation, we do not talk about what might motivate the attacker, we only talk about how to prevent attacks. There are historical counterexamples to the idea that we can analyze a cryptosystem's security in terms of the attacker's "incentives." A famous and well-known example is the German Enigma cipher from WWII. After the war, German cryptographers were captured and interrogated (the TICOM operation), and one of the things they revealed was that they knew that Enigma could be attacked, but did not believe that it would be worth the effort. Even the assumption that the attacker will act rationally is bad -- we should be secure against irrational attackers too. "We can't know what will happen until it happens" We can, however, design systems that maintain their security properties regardless of what happens (at least under standard cryptographic hardness assumptions, though sometimes we can even get information theoretic security). ElGamal encryption is secure against any polynomial-time chosen-plaintext attack -- provably so. The GMR signature system is secure against any polynomial-time adaptive chosen-message attack. For a very strange construction that illustrates how we can defend against attack strategies we cannot even imagine, consider this work on non-malleable commitments (the construction is on page 13; it is very strange, but the strangeness is key to the security proof, or in other words there are possible attack methods that nobody is aware of that the construction prevents): http://eprint.iacr.org/2010/483.pdf http://eprint.iacr.org/2010/483.pdf "The field that you want to use to model everything is too narrow for Bitcoin." Yes, things are very easy when you have no clearly-specified goals, requirements, or constraints. How can there be any technical criticism of Bitcoin if this sort of response is considered valid? Anything anyone says is wrong with Bitcoin could always be dismissed as being "too narrow."
- anonymoushn 13y ago
  Tulip mania involved surprisingly few tulips! The primary instrument being traded was what we would now call a tulip futures contract. It seems like a silly thing, but we currently favor units of sovereign debt (or, if you prefer, units of the future ability of the government to tax its citizens).
cbrauchli 13y ago
How does this prove it is a bubble? If anything, isn't this evidence for the opposite? I expected the price to drop dramatically after the Silk Road shutdown.
- krrrh 13y ago
  It would have been rational for the price to drop after SR. This might then be irrational exuberance.
  - gwern 13y ago
    Not really. The market was well-aware that SR was an illegal enterprise which could end at any time. The risk should have already been priced in. To a reasonably efficient market, good news is not good news if it was already predicted, and bad news is not bad news if that had been predicted instead. What matters is the extent to which the news is better or worse than predicted. In SR's case, the news was better than one would have predicted. Despite it being the worst-case scenario - the server seized intact, Ross's laptop seized unlocked, all outstanding balances confiscated - it wasn't that bad because Ross's personal savings do not yet seem to have been taken, the current seizures will not be sold until the trial is over, and the bust was not due to breaks in either Bitcoin (they didn't even bother with blockchain analysis in the indictments!) or Tor (as far as we can currently tell) but to errors and overwhelming hubris on Ross's part, so SR could be and was quickly replaced by a flood of clones/competitors (at last count: BlackMarket Reloaded, Sheep Marketplace, BuyItNow, DeepBay, Budster, & Black Flag are all actively buying & selling; in addition, The Market and Silk Road Reloaded are expected to come online in the next few weeks/months).

swswsw 13y ago

This is a chart on coinbase.com. Interesting, for a while, coinbase prices seem to be following with bitstamp price. but at this moment, it seems to be closer to mt. gox price. At the very moment, I see mt. gox and coinbase price at $202. And bitstamp price at $194.

jnbiche 13y ago

The fact that the Gox gap is closing makes me suspect that a lot of this rise is coming from new money. I'm guessing few new Bitcoin purchasers are buying through Mt. Gox, which is driving the price up on other exchanges, and closing the gap due to Gox's illiquidity.

clarkm 13y ago
Bitstamp is also running up near 190, so it makes sense that lot of the new money has come in through MtGox. https://bitcoinity.org/markets/bitstamp/USD https://bitcoinity.org/markets/bitstamp/USD
- mayneack 13y ago
  What's the cause of the consistent disparity between exchanges? Is it just the slow speed of transactions?
  - wmf 13y ago
    You can't actually withdraw USD from MtGox, so all the USD prices there are essentially fiction.
conductr 13y ago
My thought was new money too. Maybe the press from the SR bust. Also, maybe confidence because the price withheld the SR bust. But... what do I know
InXorWeTrust 13y ago
> a lot of this rise is coming from new money. Speculation, but could some of the new money be coming from CryptoLocker[0]? [0] http://www.bleepingcomputer.com/virus-removal/cryptolocker-ransomware-information http://www.bleepingcomputer.com/virus-removal/cryptolocker-r...
- garybizzle 13y ago
  yes, absolutely, it's actually quite likely considering it's a very thinly traded currency.

rdmcfee 13y ago

I wonder why the coinbase prices are inflated to almost the GOX price. Are there market makers and scalp traders driving up the coinbase prices now? From my experience coinbase doesn't have the withdrawal issues like gox

Fuzzwah 13y ago

All those new ASIC miners coming online? The difficulty jump over the last month is intense: http://bitcoindifficulty.com http://bitcoindifficulty.com edit: This is a pretty good quick wrap up of what I think is going on here: http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubble-bitcoin-mining/ http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubb...

astrodust 13y ago
If anything that should drive down prices.
- eterm 13y ago
  Why? It's now harder and harder for the average person to get hold of a bitcoin. That fewer, richer people are now spending money to get more bitcoins isn't going to reduce the price if those players aren't liquidating their bitcoins.
  - paulhodge 13y ago
    For "average" users, mining has been prohibitively difficult for a while now. CPU mining has been worthless for years. GPU mining has also been mostly worthless, unless you picked (or happened to already have) one of the few cards that perform well. So anyway, I think we're at a point where the mining difficulty has little impact on the price. Newcomers are going to buy coins, not mine them.
simplemath 13y ago
I personally think critical mass has been reached, and unless someone actually cracks the protocol (which I seriously doubt) and brings down the txn network, BTC is here to stay. Quibbling about the current valuation misses the point. The secure transfer mechanism is the real value, and is not getting shoved back in the bag. Bet long on BTC and I doubt very highly you'll regret it, even if you get in at 200US and lose over the next few months.
- 13y ago

simplemath 13y ago

See you again at $1000 to talk about the bubble.

gweinberg 13y ago
Looking forward to it. Bitcoin almost certainly will crash sooner or later, and the pricks who have been insisting that bitcoin is JUST a bubble will all be patting themselves on the back for being "right all along", even if t never falls to what they were saying were vastly inflated values, and even if it recovers again soon after. Which it likely will. There are two things that can kill bitcoin: a dteermined attack by a major world government, and something clearly better (from the point of view of its users). I'm betting on the second.
- simplemath 13y ago
  i agree that there is likely something better down the pipe, but at this point almost 5 years on, BTC is finally gaining traction and awareness from even non tech savvy people. The entire ecosystem is not going to be easy to duplicate.

immad 13y ago

Back down to $195.

gesman 13y ago

US default now-or-later squabble certainly fueled bitcoin. It is becoming de-facto plan B for big players.

oscargrouch 13y ago
wow! that will have big implications.. but i wonder what would do vey rich people invest in bitcoins instead of gold wich is probably safer right now? Thats not my area, but i would like to know if BC could get more attractive than gold in a fallout economy scenario?
- jaekwon 13y ago
  Bitcoin is more useful than gold in a society that has the internet. If you want to prepare for a situation where we no longer have the internet, then gold might be a viable option. But I don't care to consider that possibility, for the same reason I don't care to prepare for a nuclear holocaust. I believe my expected utility/happiness is greater this way.
- gweinberg 13y ago
  It's not a question of one or the other. If you're a billionaire, it might make lots of sense to have a whole bunch of accounts in different countries with "just" a couple million, since that will still allow you to live reasonably comfortably for the rest of your life and yet is an insignificant fraction of your total wealth.
ajross 13y ago
Um, no. According to blockchain.info and this $200 price, there are less than $2.5 billion worth of bitcoins in circulation, total. The idea that this would somehow serve as a hedge against an economy a thousand times larger is laughable.
- jaekwon 13y ago
  Nobody is suggesting that Bitcoin will replace the USD (yet). For now, some people are going into Bitcoin because it cannot be confiscated. And govt default is correlated with crazy taxation measures. Take a look at what France is doing now.

csomar 13y ago

If anything to like about Bitcoin is that it has proved that almost everyone else is wrong. * SilkRoad shutting down? Bitcoin is doomed. * Mt.gox is not paying in time or at all? Bitcoin doesn't work. * Asics? There will be a flood of new coins. And yet Bitcoin value continue to raise. If history repeats itself, we should see 1 Bitcoin levels at around $2,000. I think Bitcoin is an interesting phenomena to watch. Being too solid for the quakes that it got, means it's going to stay for a longer period. I'll be just watching, meanwhile.

exit 13y ago
> Asics? There will be a flood of new coins.* the rate of production is fixed, so no one would have predicted that. asic would increase the difficulty level significantly though.
- mayneack 13y ago
  Being wrong rarely stops people from predicting things
- gwern 13y ago
  >the rate of production is fixed, so no one would have predicted that. IIRC, the arguments actually went that GPU miners had their equipment already paid for, and so could afford to hoard their mined coins, but that ASIC miners, who were paying thousands of dollars for their equipment, would be forced to sell their coins immediately to pay for their equipment & electricity.
  - bdcravens 13y ago
    I'd dare say the majority of GPU miners did invest in new equipment. I'd venture that there were plenty of nerds who were interested in mining that didn't already have rigs with decent GPUs already.
- waterlesscloud 13y ago
  This isn't quite right. The rate of production has increased, because the computing power is increasing at a very high rate between difficulty adjustments. Blocks are being solved faster than they are "supposed" to be, statistically. It won't last, eventually the increase in computing power will taper off, but that's the state of things at the moment.

throwaway9222 13y ago

I'd never heard of SilkRoad until the heightened media coverage of the bust, nor had I ever purchased a Bitcoin. I always assumed that there were black markets online, but never invested the time to discover them. Since the bust, I've discovered new black marketplaces and purchased Bitcoins to purchase illicit drugs. It's completely anecdotal, but I'd assume that there are a number of other people like me who might be contributing new money to the Bitcoin market.

yvishyar 13y ago

the price is up because the miners cannot sell at prices lower than this as the mining difficulty has gone up immensely...same as gold...if you have to do sophisticated digging then you will do it only when the price of digging is less than the price of gold...it will only go up more if the mining difficulty continues at the same pace

deleted 13y ago

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Permit 13y ago

Can't wait to see all the amateur investors wishing for an opportunity to short Bitcoin like we saw in Jan/February when it hit $60.00. https://www.hnsearch.com/search#request/all&q=%22short+bitcoin%22&start=0 https://www.hnsearch.com/search#request/all&q=%22short+bitco...

dwaltrip 13y ago
Silly hyped up bitcoiners. Let's totally short this virtual imaginary currency thing. I mean, just look at the graph! What goes up always comes down! until it doesn't Value is entirely subjective, all money is imaginary and built on a trust. For bitcoin, this means trust that the network is healthy, the protocol works, the transaction system is effective and has advantages to competing systems, and that others understand and share these thoughts. However, bitcoin also reduces the trust required in several areas (this is one of its advantages): chargebacks, control of your account (it is immensely difficult for third parties to seize bitcoins), and stability of the monetary policy (systemic incentives were designed to strongly resist manipulation of the algorithm, and seem to be working well so far). Edit: This isn't to say bitcoin will go to the moon. It could very well fail for a number of reasons. However, it is also something that deserves careful consideration. It has shown surprising resilience. People are working hard at building augmenting systems. It is programmable money. The potential applications are hard to fully fathom.

nazgulnarsil 13y ago

Who wants to talk about china? Over the last few days the volume of transactions on btcchina has doubled. Gov run chinese media outlets have been surprisingly positive about btc. What is going on? One of the potential uses of btc is capital flight, and that is something that china has been incredibly strict about with their capital controls. Why aren't they clamping down? edit: some commentary from someone in china familiar with the baidu subsidiary announcement: https://bitcointalk.org/index.php?topic=315380.0 https://bitcointalk.org/index.php?topic=315380.0

fleitz 13y ago
Various banks have programs to collateralize chinese assets and offer a loan based on those assets. eg. You collateralize $10 million in Chinese assets, you get a $8 million dollar loan from a bank branch in another jurisdiction. Capital controls have already essentially be thwarted by the market, the second item is that BTC actually provides a great public ledger for amounts that would be unfeasible for the usual controls like FINTRAC. It shouldn't really be called bitcoin so much as bitledger. You also have to consider that factions within the party may think bitcoin will generate more capital inflows rather than capital outflows.
- tedunangst 13y ago
  Do loans like that really defeat capital controls? The "owner" of the money has changed, but the location hasn't. The bank giving you the loan is playing a very long game, because they still can't move the collateral out. Right, wrong?
  - nazgulnarsil 13y ago
    It doesn't have to be a long game as long as they can unwind their position over a longer time frame and with less frictional costs than the individual, which wouldn't be surprising for a large institution.
  - fleitz 13y ago
    Not really, as soon as the loan is repaid the bank is whole. The loan originates in a non-Chinese country so when the loan is extinguished the bank has the value of the loan plus interest. Only if the loan defaults does the bank run any risk of having capital trapped in China. Worst comes to worst they use the capital in China to originate more loans in China. Any bank offering this service has a presence in China so it's not a big deal anyway.

salamandratech 13y ago

This dashboard is very nice to see what's happening in the bitcoin world, in real time : http://realtimebitcoin.info/ http://realtimebitcoin.info/

jafaku 13y ago
I like this one better: https://bitcoinaverage.com/#USD https://bitcoinaverage.com/#USD

theklub 13y ago

I'm afraid that when bitcoin becomes more mainstream there is going to be serious amounts of fraud and scamming.

olalonde 13y ago
Bitcoin can be seen as a sort of digital gold. Credit cards / Paypal / etc. could work exactly the same but be backed by Bitcoins instead of USD. See http://undergroundeconomist.com/post/36076277512 http://undergroundeconomist.com/post/36076277512
- brazzy 13y ago
  Funny you should mention gold... remember all those "digital gold currencies" in the early 2000s? And how they were used in all kinds of frauds and scams?
SpeakMouthWords 13y ago
A business opportunity whichever way you slice it.

sliverstorm 13y ago

For once my general laziness looks like it is paying off. Mined a couple bitcoins years and years ago, and was too lazy to sell them at the time.

Phlarp 13y ago
Aha, but did your general laziness prevent you from properly storing the keys?
- sliverstorm 13y ago
  You're sharp. That's exactly what I'm wondering right now. I think the answer is yes though.
  - Phlarp 13y ago
    My pet theory is that a good amount of the early coins are effectively "dead" with either the keys lost, brain wallets forgotten or the back-up USB keys long since formatted (or you know, you got arrested and the encrypted wallet is seized as evidence and revealing the key or otherwise moving the coins would basically be an admission of guilt) It's easy to set up triple redundant cold storage and promptly place multiple paper backups in different safety deposit boxes now when the price is rounding $200; but how many people went through this amount of effort when bitcoin was still considered a joke or nifty social/economic experiment and traded below $4 or even $.04 Even better; how many people stored them in an insecure manner and have since lost them to a scam/virus/offline attack.
    - sktrdie 13y ago
      Those are all risks that come with using Bitcoin. I'm sure with time we'll see lots of improvements. For now a good way to store coins is by using paper wallets: http://www.bitaddress.org/ http://www.bitaddress.org/ -you can print them yourself using any printer. Some say your keys shouldn't even be on any computer until you're ready to use them. But for the rest Bitcoin is like cash. You lose the key you lose the cash.

dllthomas 13y ago

I've been wondering whether people benefiting from bitcoin stability (silk road?) mightn't have been manipulating exchange rates. This seems to be weak evidence in support of that (though I still wouldn't say it seems likely).

narcissus 13y ago
For what it's worth, Silk Road provided it's own system for guaranteeing stability of price (that is to say, there were guaranteed exchange rates if desired). I don't think there was any need for SR users (well, sellers at least) to manipulate the price for that reason.
- dllthomas 13y ago
  Interesting; have you more detail on that system?
  - gwern 13y ago
    Google its 'hedging' system; now that it's down, the documentation will be harder to come by but there should still be clearnet discussions of it.

ksrm 13y ago

So is there a good exchange for UK people that doesn't require ridiculous amounts of identification like mt.gox?

dan1234 13y ago
It's not an exchange (more of an escrow), and I've not used it but https://bitbargain.co.uk https://bitbargain.co.uk looks OK. They make the right noises regarding security and the prices seem reasonable.
shawabawa3 13y ago
I'm using bitstamp. I think it wasn't too bad to get on. I had to send a photo of my driver's license then transfer money on using transferwise.

stokedmartin 13y ago

Don't get why the rate has risen? What factors have triggered the demand? Also[1], stated that there is a while before corporations will start adopting it. [1] https://news.ycombinator.com/item?id=6589067 https://news.ycombinator.com/item?id=6589067

Datsundere 13y ago

I tried to buy bitcoins when they were $60. I look for sites that would sell me bitcoins for USD. It was so hard and the ways to buy them were so damn complicated. I had to sign up for a 3rd party site to import bitcoin to mtgox. The 3rd party site needed me to upload my personal identity information to verify my bank account. I was ready to do that as well, except they said it'd take 10+ days to verify. Also someone explain to me how that is anonymous when they have all my information if I had uploaded my driver's license and my bank account information. I got frustrated and just stopped looking to buy bitcoins. I was aware of irc channels too but I just don't trust them. And then there was money gram, what the actual fuck, the fees were so high. I could buy them, if I send my money to an account in a foreign bank in japan. Such bullshit. And this fluctuating price isn't very impressive either.

jamestnz 13y ago
I experienced similar frustration when trying to buy bitcoins. I ended up using localbitcoins.com, and had an excellent experience. The site matches up private users (by geographic location by default) wishing to buy bitcoins with those wishing to sell. It offers "feedback" ratings for traders, and an escrow system where the site confirms your coins have been sent to it and placed in reserve, and these get released to you once the seller confirms receipt of your funds, either by texting a code from their phone or by using the website. There were no onerous fees, and my entire trade was completed within hours. Typical trading methods would include internet bank transfer (which is what I did), or even meeting in person with cash (riskier but more anonymous I guess). >Also someone explain to me how that is anonymous when they have all my information if I had uploaded my driver's license and my bank account information. Nobody claimed it was anonymous. And companies acting as "money transmitters" (or who the feds decide to consider as such) have a bunch of AML/KYC regulations they are required to follow, hence the whole ID thing. You can enhance the anonymity of your coins in various ways, typically by services which chop them up and shuffle them between many addresses to obfuscate their trail in the blockchain (so-called "mixers"). >And this fluctuating price isn't very impressive either What concerns you about it? For many people I guess the short-term fluctuations aren't such an issue (e.g. those playing the long game with their bitcoin investment; or those only holding coins for a short time to make a specific purchase, particularly where the sales platform offers a hedging feature like Silk Road apparently did).

MarcusBrutus 13y ago

Bitcoin is fiat, it's not backed by anything of real value and doesn't have a government or a strong (and I mean national-government-kind strong) player behind it that is willing to devote actual resources to prop it up (which is what all other fiat monies have and which is why they usually stay around for a century or so, after that they either become obsolete or their value greatly diminishes due to inflation). It has all of the Aristotelian properties of money (durable, portable, fungible), and some extra ones too, except intrinsic value. So it's not money according to Aristotle. When a better system comes along (and it would be trivially easy for that to eventuate, imagine, e.g. China or a major corporation or - even better - an industry association offering an altcoin backed by gold, agricultural land, shares, face time with celebrities, mentoring time - hey these are good ones! etc.), the value of bitcoins will go to zero as everybody will want the new, better altcoin that has at least some intrinsic value. The same death spiral cannot happen in the case of government-backed fiats when a new fiat is introduced, for a number of reasons. Bitcoin is inertia-backed fiat. I'll take the government-backed variety any time.

kinghajj 13y ago
There is no such thing as intrinsic value, all value is subjective, and Bitcoin most definitely has subjective value; otherwise it would not be exchanged! If you define "intrinsic value" as something like "has subjective value for a great majority of individuals," then Bitcoin does have intrinsic value as a way to easily and quietly send wealth without requiring a central middle man. There are also numerous theoretical ways in which it could be made useful (colored coins, for instance.) I don't understand how people can look at Bitcoin and not see that it has some use, even if they believe that use is overblown.
phaemon 13y ago
That's not what the word "fiat" means. A fiat is a decree. An order given by an authority. In currency terms, this usually means a decree given by a government that a certain currency will be used. It makes no sense to say "Bitcoin is fiat" and then to say it doesn't have any government or strong player behind it. It's one or the other.

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brenfrow 13y ago

I just sold all of my bitcoins. Here's to hoping the bubble burst.

TallboyOne 13y ago
Same here. Now it's up another $30 :|

moccajoghurt 13y ago

What about that guy that spent all his money on bitcoins? Is he rich now? Any news about that guy?

zby 13y ago
There might be more than one such guys - but maybe you think about Rick Falkvinge (http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/ http://falkvinge.net/2011/05/29/why-im-putting-all-my-saving...)? I thik he bought around $8 or something and sold at $16 when his money doubled, just got scary about the speed - but probably bought back later.
epaga 13y ago
"I originally went all in at $7, went out at the same price on the way down, and went back all in at about $3. I've done extensive (bad) trading, and don't have my entire initial position, and far from enough to make me financially independent, but still a substantial amount (more than a year's average net pay, to give a ballpark number). I'm currently all in." http://www.reddit.com/r/IAmA/comments/1owf4v/im_rick_falkvinge_founder_of_the_first_pirate/ http://www.reddit.com/r/IAmA/comments/1owf4v/im_rick_falkvin...