6 ms·

Bitcoin price reaches a record high for the first time since April

73 points by binarybits 13y ago

wellboy 13y ago
I've been in it since the first bubble in April and it's surprising how resilient Bitcoin has become to negative news such as the seizure of 5% of all Bitcoins recently. There was a drop of 20%, but it had recovered from that after a few days already. Since then it has been on the up and up. I think it's pretty likely that 1 Bitcoin will be worth $1,000 within the next year and $10,000 within the next 3 years.
- RussianCow 13y ago
  That's what people said before the crash in April. Not that I disagree--I don't really care one way or another--but I think it's impossible to predict its price in a year, let alone 3. Anything can happen at this rate.
  - throwaway98604 13y ago
    The only way for Bitcoin to not go up is for a different cryptocurrency to come to fruition that has significant improvements over Bitcoin, like zerocoin, and subsequently can not be integrated into Bitcoin's blockchain.
    - darkmighty 13y ago
      Can bitcoins security algorithms become outdated due to Moore's law in any reasonable period of time? Is there a possible threat of algorithm compromise by cryptanalysis?
      - teraflop 13y ago
        Bitcoin uses ECDSA signatures to verify transactions. According to Wikipedia [1], the current record for solving the discrete logarithm problem (which is how you recover a private key from the corresponding public key) was done on a 112-bit key in 6 months. Bitcoin uses 256-bit keys, and the algorithm in question has a complexity of O(2^(N/2)), so breaking its keys is 2^72 times harder. So even under the ridiculously unlikely assumption that computational power halves in cost every 18 months for the indefinite future: 50 years from now, the entire current global GDP still won't be enough to buy a processor that can crack a Bitcoin key in less than a decade. (Of course, this is assuming there are no other unknown flaws in the protocol, and that no better algorithms are found to find discrete logarithms over elliptic curves. But if a vulnerability is found, it won't be thanks to Moore's law.) [1] http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elliptic_curves http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elli...
      - oleganza 13y ago
        As for mining, there are enough bits in SHA256 to allow billion-fold increase in difficulty. And if there is a danger of breaking it much quicker, all people holding bitcoins have huge incentive to change the protocol to fix the problem. As for ECDSA, it can only be broken by quantum computers, but still most balances are protected by sha256*ripemd160 hash, so they are safe in the face of sudden QC attack or a weakness in ECC. People will want to protect their wealth and thus will change the protocol for other algorithms.
        darkmighty 13y ago
        Cool info, thx! But do you think it would actually be viable to make a protocol algorithm transition?
        oleganza 13y ago
        When everyone's money is at stake, it'll be very quick. This March, when the network forked, miners with newer version 0.8 agreed to forego mining rewards and abandon their own branch (incompatible with v0.7) just to resolve the issue quickly to not shake the confidence in Bitcoin.
        nwh 13y ago
        They got their money back anyway. A user paid every single missed bounty from blocks on the abandoned fork.
        oleganza 13y ago
        v0.7 miners got those rewards, not v0.8 ones.
        nwh 13y ago
        v0.8 miners were paid back for the lost funds from a private fund, leftover from the original Bitcoin Faucet.
    - RussianCow 13y ago
      Or stricter regulations are put in place, or a big company like PayPal creates a competitor product, or... Lots of things can happen. There is absolutely nothing backing the price of Bitcoin, so to say that its price won't go down is foolish--pure speculation. If that were irrefutably true, the price would already be $1,000 or $10,000, but it's not, which means there are valid concerns for the future of Bitcoin.
      - yason 13y ago
        There isn't much to back the price of fiat currencies either: Bitcoin is valued by demand which is effectively the case with other currencies too. If there's demand for bitcoins and trust in the platform, that's all the back up Bitcoin needs. After all, with any currency the only value it has is the ability to later exchange the currency back to services or material goods. Even if a currency is backed by gold like in old times there can only be faith in that gold will actually buy you goods in the future, too.
        RussianCow 13y ago
        Currencies aren't backed by anything physical; they're backed by the confidence that you will actually be able to buy something with them. Bitcoin doesn't yet have that confidence, so it basically has no inherent value. (Technically, fiat currencies don't have truly inherent value either, but I don't want to argue about semantics.) The value of Bitcoin today is purely speculative, because it doesn't actually have much of a practical use. Those investing in Bitcoin are betting that it's going to become a currency you can use as confidently as US dollars, but no one can accurately predict whether that will ever happen; it's all a gamble at this point.
        umanwizard 13y ago
        Fiat currencies (at least those that are the official currency of one or more sovereign states) actually do have intrinsic value beyond people's beliefs. USD is valuable not only because people trust you'll always be able to buy things with USD, but also because the US. government collects USD-denominated tax. As long as the government continues to have the firepower to enforce the tax code, there will always be a demand for USD, irrespective of how confident people are in its viability.
    - wmf 13y ago
      Or maybe for it to be outlawed in the US, Europe, and China.
    - raws 13y ago
      Besides Zerocoin which other ones would you consider improvements over Bitcoin?
      - iSnow 13y ago
        Zerocoin is not a competing cryptocurrency but a way to anonymize transactions that could be integrated into bitcoin.
        throwaway98604 13y ago
        Yes, but the creator of Zerocoin has stated that it seems unlikely to integrate into Bitcoin's blockchain and may only be usable if it is put into a new blockchain.
- flycaliguy 13y ago
  I certainly hope so. It appears as if the one big difference between today and the first crash is Chinese investment. I'm worried we will see a Chinese based crash similar to the one we saw earlier this year.
  - oleganza 13y ago
    We will see a crash, of course. The question is how high this new low will be? From $500 to $300? Or from $2663 to $1300? Bitcoin will only grow slow and steady when it becomes world money. Before that happens, we'll see quick land grab hysteria, huge corrections, consolidation period and then again the same cycle.
- letney 13y ago
  What's your source for the '...seizure of 5% of all Bitcoins recently'? The FBI total seizure from Silk Road is 173,991 Bitcoins [1] -- which is about 1.45% of the Total BTC (11,954,825 [2]) [1] http://www.fbi.gov/newyork/press-releases/2013/manhattan-u.s.-attorney-announces-seizure-of-additional-28-million-worth-of-bitcoins-belonging-to-ross-william-ulbricht-alleged-owner-and-operator-of-silk-road-website http://www.fbi.gov/newyork/press-releases/2013/manhattan-u.s... [2] http://bitcoinwatch.com http://bitcoinwatch.com
- sireat 13y ago
  Nitpicking a bit, but first bubble was not in April, but in 2011 summer when it reached $30+ before falling to $2-3 level. There were smaller bubbles before that too. That said, Bitcoin could conceivably go for $10,000 (200B market cap while there is 1.2T USD in circulation) if/when it gains widespread acceptance. There are still some issues though. From what I understand there is a limit on maximum transactions that can be included in a block.
modo_ 13y ago
It seems that Bitstamp has been much more stable than Mt. Gox lately, and interestingly hasn't hit its all time high just yet.
kbd 13y ago
What's the best Bitcoin exchange to buy with? In the early days I stayed away because a lot of the exchanges seemed to have really poor security, but it looks like it may be time to invest somewhere.
- bdr 13y ago
  Coinbase is really easy if you're in the US.
- flycaliguy 13y ago
  I recommend LocalBitcoins.com. Due to fraud prevention I found the big exchanges overly complicated to join. LB allows simple same day transactions that only require a quick trip to the bank to transfer cash.
- sodafountan 13y ago
  Coinbase is great, it has been very secure and reliable. The only thing that i don't like about it is the fact that you have to wait a little while for your Bitcoins to come in, although I haven't used any other exchanges so I don't know if this is standard.
- oleganza 13y ago
  You don't need to keep bitcoins on an exchange. It's not like buying stocks or gold certificates. You can own bitcoin like having gold coins shipped to you. Even if the exchange is hacked, your usb stick isn't. Simply buy and withdraw immediately to your encrypted personal wallet.
- pera 13y ago
  using bitcoin-otc as an exchange is pretty cool too: you do it through IRC (no web interface), there is a very well done WoT, and the wiki is excellent.
- broolstoryco 13y ago
  If you are in the EU, bitstamp is great.
- alexro 13y ago
bdr 13y ago
I'm happy about the rise, but I'm not fully counting this as a record yet. The Bitcoin exchange ecosystem has changed since April. MtGox started massively delaying dollar withdrawals, so the price there diverged from other exchanges. I'll be watching Bitstamp (now at $254) for the real thing.
- w-ll 13y ago
  http://markets.blockchain.info/ http://markets.blockchain.info/ is a great resource. While its not unanimous, the peak they are quoting is Mt.Gox and comparing it to... Mt.Gox.
bdcravens 13y ago
Everyone's quoting Mt. Gox eclipsing its previous high. However, it's pretty much impossible to cash out of Mt. Gox, and so it's trading at a premium to other exchanges. To this end, Mt. Gox beating its previous isn't an apples-to-apples comparison.
- binarybits 13y ago
  I think there's something to this, and I say as much in my story. But with exchanges trading at different values, it's hard to know which price is the "real" one.
  - w-ll 13y ago
    They are all real. And yet they are all fake. One might guess the lowest markets price is the closest to the actual value, but you most look at the volume of trades. And, this is what I think is partly due to the major gaps between Gox and Bitstamp and other markets, is the ease/fees of the different markets and actually going from say USD to BTC and back again.
  - bdcravens 13y ago
    Perhaps the Coindesk weighted index? http://www.coindesk.com/price/ http://www.coindesk.com/price/ Among other factors, for inclusion in the index, money must be liquid within 7 days.
    - VMG 13y ago
      Also http://www.bitcoinaverage.com http://www.bitcoinaverage.com
  - wmf 13y ago
    Dollars that you can actually access are real, and ones that you can't access (e.g. in a MtGox account) are fake. A price denominated in fake dollars is a fake price.
    - pyalot2 13y ago
miguelrochefort 13y ago
In April, I got in @ $220 / BTC. Yesterday, I got out @ $220 / BTC. I suck at this.
- ekianjo 13y ago
  At least you didn't lose money :) At this stage it wouldn't hurt too much to hold onto it for a little longer. It's not increasing at exponential speed at this stage, so I'd say it is likely to go up a bit more before we see another crash. Difficult to predict, though.
  - netrus 13y ago
    It's a market. Half of all predictions are wrong, all the time. Only question is: Do you belong to the smarter half?
theklub 13y ago
I think its due for another crash and I'll wait until that happens. Plus with this Senate hearing who knows what could happen to the price after that.
- drcode 13y ago
  Today, anyone who ever bought bitcoins can sell their coins at a profit. When an airplane or car crashes, the losses are irretrievable. But when an asset is at an all time high, I don't really think the word "crash" for earlier fluctuations makes much sense.
- oleganza 13y ago
  Previous "crashes" were pretty profitable: 2011: From $1 to $30 and then down to $5. 500% total gain. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2011-03-02zeg2011-11-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... (Slow decrease in price was probably due to huge mining inflation rate at that time: https://bitcointalk.org/index.php?topic=130619.0 https://bitcointalk.org/index.php?topic=130619.0) Summer 2012: From $5 to $15 to $11. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2012-05-02zeg2012-09-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... Spring 2013: From $14 to $266 to around $100-120. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2013-01-02zeg2013-05-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... If this time it crashes from $2000 to $1000, it'd be pretty spectacular and profitable. Those traders who will have bought too high will have to patiently wait another year or two for their profits.

73 points by binarybits 13y ago

I've been in it since the first bubble in April and it's surprising how resilient Bitcoin has become to negative news such as the seizure of 5% of all Bitcoins recently. There was a drop of 20%, but it had recovered from that after a few days already. Since then it has been on the up and up. I think it's pretty likely that 1 Bitcoin will be worth $1,000 within the next year and $10,000 within the next 3 years.

RussianCow 13y ago
That's what people said before the crash in April. Not that I disagree--I don't really care one way or another--but I think it's impossible to predict its price in a year, let alone 3. Anything can happen at this rate.
- throwaway98604 13y ago
  The only way for Bitcoin to not go up is for a different cryptocurrency to come to fruition that has significant improvements over Bitcoin, like zerocoin, and subsequently can not be integrated into Bitcoin's blockchain.
  - darkmighty 13y ago
    Can bitcoins security algorithms become outdated due to Moore's law in any reasonable period of time? Is there a possible threat of algorithm compromise by cryptanalysis?
    - teraflop 13y ago
      Bitcoin uses ECDSA signatures to verify transactions. According to Wikipedia [1], the current record for solving the discrete logarithm problem (which is how you recover a private key from the corresponding public key) was done on a 112-bit key in 6 months. Bitcoin uses 256-bit keys, and the algorithm in question has a complexity of O(2^(N/2)), so breaking its keys is 2^72 times harder. So even under the ridiculously unlikely assumption that computational power halves in cost every 18 months for the indefinite future: 50 years from now, the entire current global GDP still won't be enough to buy a processor that can crack a Bitcoin key in less than a decade. (Of course, this is assuming there are no other unknown flaws in the protocol, and that no better algorithms are found to find discrete logarithms over elliptic curves. But if a vulnerability is found, it won't be thanks to Moore's law.) [1] http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elliptic_curves http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elli...
    - oleganza 13y ago
      As for mining, there are enough bits in SHA256 to allow billion-fold increase in difficulty. And if there is a danger of breaking it much quicker, all people holding bitcoins have huge incentive to change the protocol to fix the problem. As for ECDSA, it can only be broken by quantum computers, but still most balances are protected by sha256*ripemd160 hash, so they are safe in the face of sudden QC attack or a weakness in ECC. People will want to protect their wealth and thus will change the protocol for other algorithms.
      - darkmighty 13y ago
        Cool info, thx! But do you think it would actually be viable to make a protocol algorithm transition?
        oleganza 13y ago
        When everyone's money is at stake, it'll be very quick. This March, when the network forked, miners with newer version 0.8 agreed to forego mining rewards and abandon their own branch (incompatible with v0.7) just to resolve the issue quickly to not shake the confidence in Bitcoin.
        nwh 13y ago
        They got their money back anyway. A user paid every single missed bounty from blocks on the abandoned fork.
        oleganza 13y ago
        v0.7 miners got those rewards, not v0.8 ones.
        nwh 13y ago
        v0.8 miners were paid back for the lost funds from a private fund, leftover from the original Bitcoin Faucet.
  - RussianCow 13y ago
    Or stricter regulations are put in place, or a big company like PayPal creates a competitor product, or... Lots of things can happen. There is absolutely nothing backing the price of Bitcoin, so to say that its price won't go down is foolish--pure speculation. If that were irrefutably true, the price would already be $1,000 or $10,000, but it's not, which means there are valid concerns for the future of Bitcoin.
    - yason 13y ago
      There isn't much to back the price of fiat currencies either: Bitcoin is valued by demand which is effectively the case with other currencies too. If there's demand for bitcoins and trust in the platform, that's all the back up Bitcoin needs. After all, with any currency the only value it has is the ability to later exchange the currency back to services or material goods. Even if a currency is backed by gold like in old times there can only be faith in that gold will actually buy you goods in the future, too.
      - RussianCow 13y ago
        Currencies aren't backed by anything physical; they're backed by the confidence that you will actually be able to buy something with them. Bitcoin doesn't yet have that confidence, so it basically has no inherent value. (Technically, fiat currencies don't have truly inherent value either, but I don't want to argue about semantics.) The value of Bitcoin today is purely speculative, because it doesn't actually have much of a practical use. Those investing in Bitcoin are betting that it's going to become a currency you can use as confidently as US dollars, but no one can accurately predict whether that will ever happen; it's all a gamble at this point.
        umanwizard 13y ago
        Fiat currencies (at least those that are the official currency of one or more sovereign states) actually do have intrinsic value beyond people's beliefs. USD is valuable not only because people trust you'll always be able to buy things with USD, but also because the US. government collects USD-denominated tax. As long as the government continues to have the firepower to enforce the tax code, there will always be a demand for USD, irrespective of how confident people are in its viability.
  - wmf 13y ago
    Or maybe for it to be outlawed in the US, Europe, and China.
  - raws 13y ago
    Besides Zerocoin which other ones would you consider improvements over Bitcoin?
    - iSnow 13y ago
      Zerocoin is not a competing cryptocurrency but a way to anonymize transactions that could be integrated into bitcoin.
      - throwaway98604 13y ago
        Yes, but the creator of Zerocoin has stated that it seems unlikely to integrate into Bitcoin's blockchain and may only be usable if it is put into a new blockchain.
flycaliguy 13y ago
I certainly hope so. It appears as if the one big difference between today and the first crash is Chinese investment. I'm worried we will see a Chinese based crash similar to the one we saw earlier this year.
- oleganza 13y ago
  We will see a crash, of course. The question is how high this new low will be? From $500 to $300? Or from $2663 to $1300? Bitcoin will only grow slow and steady when it becomes world money. Before that happens, we'll see quick land grab hysteria, huge corrections, consolidation period and then again the same cycle.
letney 13y ago
What's your source for the '...seizure of 5% of all Bitcoins recently'? The FBI total seizure from Silk Road is 173,991 Bitcoins [1] -- which is about 1.45% of the Total BTC (11,954,825 [2]) [1] http://www.fbi.gov/newyork/press-releases/2013/manhattan-u.s.-attorney-announces-seizure-of-additional-28-million-worth-of-bitcoins-belonging-to-ross-william-ulbricht-alleged-owner-and-operator-of-silk-road-website http://www.fbi.gov/newyork/press-releases/2013/manhattan-u.s... [2] http://bitcoinwatch.com http://bitcoinwatch.com
sireat 13y ago
Nitpicking a bit, but first bubble was not in April, but in 2011 summer when it reached $30+ before falling to $2-3 level. There were smaller bubbles before that too. That said, Bitcoin could conceivably go for $10,000 (200B market cap while there is 1.2T USD in circulation) if/when it gains widespread acceptance. There are still some issues though. From what I understand there is a limit on maximum transactions that can be included in a block.

modo_ 13y ago

It seems that Bitstamp has been much more stable than Mt. Gox lately, and interestingly hasn't hit its all time high just yet.

kbd 13y ago

What's the best Bitcoin exchange to buy with? In the early days I stayed away because a lot of the exchanges seemed to have really poor security, but it looks like it may be time to invest somewhere.

bdr 13y ago
Coinbase is really easy if you're in the US.
flycaliguy 13y ago
I recommend LocalBitcoins.com. Due to fraud prevention I found the big exchanges overly complicated to join. LB allows simple same day transactions that only require a quick trip to the bank to transfer cash.
sodafountan 13y ago
Coinbase is great, it has been very secure and reliable. The only thing that i don't like about it is the fact that you have to wait a little while for your Bitcoins to come in, although I haven't used any other exchanges so I don't know if this is standard.
oleganza 13y ago
You don't need to keep bitcoins on an exchange. It's not like buying stocks or gold certificates. You can own bitcoin like having gold coins shipped to you. Even if the exchange is hacked, your usb stick isn't. Simply buy and withdraw immediately to your encrypted personal wallet.
pera 13y ago
using bitcoin-otc as an exchange is pretty cool too: you do it through IRC (no web interface), there is a very well done WoT, and the wiki is excellent.
broolstoryco 13y ago
If you are in the EU, bitstamp is great.
alexro 13y ago

bdr 13y ago

I'm happy about the rise, but I'm not fully counting this as a record yet. The Bitcoin exchange ecosystem has changed since April. MtGox started massively delaying dollar withdrawals, so the price there diverged from other exchanges. I'll be watching Bitstamp (now at $254) for the real thing.

w-ll 13y ago
http://markets.blockchain.info/ http://markets.blockchain.info/ is a great resource. While its not unanimous, the peak they are quoting is Mt.Gox and comparing it to... Mt.Gox.

bdcravens 13y ago

Everyone's quoting Mt. Gox eclipsing its previous high. However, it's pretty much impossible to cash out of Mt. Gox, and so it's trading at a premium to other exchanges. To this end, Mt. Gox beating its previous isn't an apples-to-apples comparison.

binarybits 13y ago
I think there's something to this, and I say as much in my story. But with exchanges trading at different values, it's hard to know which price is the "real" one.
- w-ll 13y ago
  They are all real. And yet they are all fake. One might guess the lowest markets price is the closest to the actual value, but you most look at the volume of trades. And, this is what I think is partly due to the major gaps between Gox and Bitstamp and other markets, is the ease/fees of the different markets and actually going from say USD to BTC and back again.
- bdcravens 13y ago
  Perhaps the Coindesk weighted index? http://www.coindesk.com/price/ http://www.coindesk.com/price/ Among other factors, for inclusion in the index, money must be liquid within 7 days.
  - VMG 13y ago
    Also http://www.bitcoinaverage.com http://www.bitcoinaverage.com
- wmf 13y ago
  Dollars that you can actually access are real, and ones that you can't access (e.g. in a MtGox account) are fake. A price denominated in fake dollars is a fake price.
  - pyalot2 13y ago

miguelrochefort 13y ago

In April, I got in @ $220 / BTC. Yesterday, I got out @ $220 / BTC. I suck at this.

ekianjo 13y ago
At least you didn't lose money :) At this stage it wouldn't hurt too much to hold onto it for a little longer. It's not increasing at exponential speed at this stage, so I'd say it is likely to go up a bit more before we see another crash. Difficult to predict, though.
- netrus 13y ago
  It's a market. Half of all predictions are wrong, all the time. Only question is: Do you belong to the smarter half?

theklub 13y ago

I think its due for another crash and I'll wait until that happens. Plus with this Senate hearing who knows what could happen to the price after that.

drcode 13y ago
Today, anyone who ever bought bitcoins can sell their coins at a profit. When an airplane or car crashes, the losses are irretrievable. But when an asset is at an all time high, I don't really think the word "crash" for earlier fluctuations makes much sense.
oleganza 13y ago
Previous "crashes" were pretty profitable: 2011: From $1 to $30 and then down to $5. 500% total gain. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2011-03-02zeg2011-11-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... (Slow decrease in price was probably due to huge mining inflation rate at that time: https://bitcointalk.org/index.php?topic=130619.0 https://bitcointalk.org/index.php?topic=130619.0) Summer 2012: From $5 to $15 to $11. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2012-05-02zeg2012-09-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... Spring 2013: From $14 to $266 to around $100-120. http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2013-01-02zeg2013-05-07ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201... If this time it crashes from $2000 to $1000, it'd be pretty spectacular and profitable. Those traders who will have bought too high will have to patiently wait another year or two for their profits.