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709 comments

Bitcoin (5, Insightful)

TechLA (2482532) | more than 2 years ago | (#37761450)

People keep saying that BitCoin will have it's value as long as people keep using it and that you're not supposed to get rich by mining. But that isn't even the problem. I transferred some cash to BitCoins and back on Friday and it was paid out to me on Sunday. By the time I got the transfer, it had lost almost half of its value. Now imagine if that would constantly happen with your real money. It wasn't much, but I sure as hell aren't going to use it again. This is why PayPal and other ecurrencies are fixed to real world value - they are stable (as far as it can be), and BitCoin can't ever get as stable as real world currencies (yes I know they aren't that stable, but that just means even bigger problems with BitCoin)

Re:Bitcoin (5, Insightful)

Smallpond (221300) | more than 2 years ago | (#37761494)

You may have lost money on it, but somebody gained. Currency speculation has been around a long time. Most currencies aren't as volatile because there is a government making a monetary policy to control it. Bitcoin is a real opportunity for speculators.

Re:Bitcoin (4, Insightful)

Goaway (82658) | more than 2 years ago | (#37761520)

Oh, that's nice. I can give my money to speculators! Let me get right on that.

Re:Bitcoin (4, Informative)

MareLooke (1003332) | more than 2 years ago | (#37761686)

You are most likely already doing that already anyway. What do you think your bank does with your money?

Re:Bitcoin (-1)

Anonymous Coward | more than 2 years ago | (#37761728)

They can do what they want as long as I can get back what it says on my balance. Are you seriously this fucking stupid?

Re:Bitcoin (2)

slim (1652) | more than 2 years ago | (#37761828)

That only applies for current / savings accounts, who's interest rates barely keep up with inflation. If your balance stays still, you're losing money.

Re:Bitcoin (3, Insightful)

mmcuh (1088773) | more than 2 years ago | (#37761868)

You get back what it says on your balance with Bitcoin as well. It's a currency, not a banking system.

Re:Bitcoin (2)

LordLimecat (1103839) | more than 2 years ago | (#37761740)

Gives me a return and guarentees my money will be available?

Re:Bitcoin (1)

Surt (22457) | more than 2 years ago | (#37761964)

They don't actually guarantee that your money will be available. And neither does the FDIC. The FDIC sort of promises you can get some of your money back, eventually, but how long eventually is, and whether or not your money has any worth if they have to go on a printing spree ...

Re:Bitcoin (0)

Anonymous Coward | more than 2 years ago | (#37762048)

You're obviously not living in Greece...

Re:Bitcoin (0)

Anonymous Coward | more than 2 years ago | (#37762078)

Sooooo boring having your money always be where you left it. And federally insured? Ugh.

Re:Bitcoin (1)

MattSausage (940218) | more than 2 years ago | (#37761946)

Exactly how is this different than taking my money to the riverboat and laying it down on blackjack?

Re:Bitcoin (1)

Lumpy (12016) | more than 2 years ago | (#37761962)

"What do you think your bank does with your money?"

Rolling around naked in it laughing like maniacs...

Re:Bitcoin (1)

shentino (1139071) | more than 2 years ago | (#37761730)

The real problem IMHO is that hackers have pissed in the punch by writing trojans to steal them and are using armies of botnets to mine them.

So now bitcoins are derisively aggregated with everything else nefarious that black hats are up to.

One may as well try to deal in booze during prohibition.

Re:Bitcoin (0)

DrgnDancer (137700) | more than 2 years ago | (#37761794)

Hell at least people made a lot of money in exchange for the risks they took selling booze during Prohibition. Bitcoins don't even have that advantage.

Re:Bitcoin (1)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#37761826)

Actually, that's how my family made its money when it moved here: bootlegging during prohibition. They did very well for themselves. But, bitcoin, that's just a tax on people who suck at macroeconomics.

Re:Bitcoin (1)

repapetilto (1219852) | more than 2 years ago | (#37761952)

Assuming you understand macroeconomics...How so? I am honestly wondering. I don't know much about economics but many of the people who think bitcoin is a good idea actually seem to have a very good grasp of macroeconomics.

Re:Bitcoin (4, Informative)

TheRaven64 (641858) | more than 2 years ago | (#37761920)

No, the real problem is that bitcoin is not backed by anything. Old currencies were backed by a precious metal. If you had one Pound Sterling, then the Bank of England would give you one pound of sterling silver. Modern fiat currencies are backed by a promise from the government that they will accept them in payment of taxes. Bitcoin was backed by some pointless computation.

If a bitcoin had been a promise to do some computation work in the future, then it may have had some value, because people need computational work done. For example, something like Amazon's compute cloud could potentially back a currency, because the service of running a VM for some number of CPU seconds is fungible and - importantly - people actually want it. No one wants the work that is done to generate a bitcoin, so the coin itself is worthless. Its value is based entirely on the premise that other people will want it in the future, but that's just a pyramid scheme.

Re:Bitcoin (0)

mcmonkey (96054) | more than 2 years ago | (#37762016)

If a bitcoin had been a promise to do some computation work in the future, then it may have had some value, because people need computational work done. For example, something like Amazon's compute cloud could potentially back a currency, because the service of running a VM for some number of CPU seconds is fungible and - importantly - people actually want it. No one wants the work that is done to generate a bitcoin, so the coin itself is worthless. Its value is based entirely on the premise that other people will want it in the future, but that's just a pyramid scheme.

Quoted for truth.

Re:Bitcoin (1)

PopeRatzo (965947) | more than 2 years ago | (#37762022)

Oh, that's nice. I can give my money to speculators! Let me get right on that.

Can anyone explain the purpose of "speculators"? When I ask "What do speculators produce?" the answer seems to always be, "Speculators produce liquidity in the market."

That sounds suspiciously like when my mom used to say "Because I said so."

it's only off 45% from its medial value. (1)

goombah99 (560566) | more than 2 years ago | (#37761550)

How big a fall is depends on where you measure it.
It is volatile. THere's a difference between something that is volatile and something the either crashes or always goes up.

I'm pretty sure there are serious problems with bit coins model that lacks a central bank or reserve system (though as some have pointed out it' not impossible a country could adopt it as a currency and provide a reserve system. That would make no sense for a major country, but for a banana republic that did not trust it's own leadership not to print money that would be a sound idea. Or they can just use Dollars like everyone else).

But I'd be surprised if those fundamental flaws are showing up this early. Thus I suspect this is more of a public interest fluctuation or the speculators cashing in.

Re:it's only off 45% from its medial value. (1)

vlm (69642) | more than 2 years ago | (#37761966)

I'm pretty sure there are serious problems with bit coins model that lacks a central bank or reserve system

How would you implement a centralized control system on top of a system specifically designed to be decentralized?

Re:it's only off 45% from its medial value. (1)

somersault (912633) | more than 2 years ago | (#37762154)

it' not impossible a country could adopt it as a currency and provide a reserve system. That would make no sense for a major country, but for a banana republic that did not trust it's own leadership not to print money that would be a sound idea.

Anyone can "print" bitcoins if they build a powerful enough computer. I don't think a country would adopt bitcoin, because then anyone with a powerful enough supercomputer could game their economy.

Re:Bitcoin (2)

TechLA (2482532) | more than 2 years ago | (#37761606)

To be honest, it's really a paradise for those who want to short sell and gain money on crashing the market. Bitcoinica [bitcoinica.com] seems to be one such platform which allows short selling with 1:50 or higher leverage. I guess it's a good opportunity to make some quick cash, but along the way actual Bitcoin users will get fucked over and Bitcoin's value just keeps going lower and lower. I guess the developers didn't really plan for that.

Re:Bitcoin (1)

onepoint (301486) | more than 2 years ago | (#37761770)

the real problem is the level of adoption and liquidity. In the history of money, the crash of money ( and the rise ) is always based on the availability of liquidity. the more people that adopt the currency, the less likelihood that there will be a crash of the currency, because the currency will have a perceived value.

to you a historical example of liquidity : If you recall, in the temple where jesus flipped the tables, it was all money changers. another example was the Knights Templers usage of letters of credit ( or something like those ), which made trade easier and off laid the currency's risk, another good example is Zimbabwe, where the currency kept dropping due to too much supply and no demand, but it still traded, the liquidity was there and it was a steady decline.

   

Re:Bitcoin (-1)

Anonymous Coward | more than 2 years ago | (#37761526)

And I keep saying that it's means it is and people keep using it and you're not supposed to use the apostrophe that way.

Re:Bitcoin (1)

rodrigoandrade (713371) | more than 2 years ago | (#37761580)

Money IRL is backed by debt, a promise to honor the debt by a central bank. Currency has some stability because people have fairly reasonable expectations that a government will pay back its debt, but it's not 100% trustworthy (just look at Greece).

The problem with Bitcoin is that it's not tied to an index (e.g. 1 bitcoin = 1 US dollar) nor is it backed by anyone.

Re:Bitcoin (0)

Anonymous Coward | more than 2 years ago | (#37761802)

On the other hand, the fundamental nature of exponents is that as long as debt grows faster than the economy you are in fact engaged in a pyramid scheme that must, mathematically, fail. Why not make money tied to resources as it should have been in the first place?

Re:Bitcoin (1)

betterunixthanunix (980855) | more than 2 years ago | (#37761854)

Money IRL is also backed by the fact that people must obtain money in order to settle government debts (e.g. taxes). Bitcoin still fails under this theory, since no government will accept Bitcoin as a tax payment.

Re:Bitcoin (1)

nedlohs (1335013) | more than 2 years ago | (#37761888)

No. Government bonds are backed by a promise to honor the debt. Money is just money, if you have a $5 note it will be worth $5 tomorrow and that's all you can say. it might buy half as much stuff tomorrow as today if you happen to be experiencing hyper inflation. The only promise involved is that the government will use its powers of force to make creditors accept that currency for debt payments and that the government itself will accept payments to it in that currency.

There's an expectation that the government won't print obscene amounts of money overnight - though there's no promise that they won't (and many governments have).

There's no need for indexing or backing for a currency. There's a built in limit to money printing so even the normal expectation of not printing obscene amounts is enforced. Bitcoins problems are that the market is thin and hence volatile. However, there's also no reason to expect that governments wouldn't take steps to prevent its use if it did "take off", since they'd very much like to be able to not have limits on their monetary policy options.

Re:Bitcoin (2)

cyn1c77 (928549) | more than 2 years ago | (#37761698)

People keep saying that BitCoin will have it's value as long as people keep using it and that you're not supposed to get rich by mining. But that isn't even the problem. I transferred some cash to BitCoins and back on Friday and it was paid out to me on Sunday. By the time I got the transfer, it had lost almost half of its value. Now imagine if that would constantly happen with your real money.

Ummm, that does happen with your real money. Have you looked at the stock markets and the international exchange rates lately?!

Re:Bitcoin (1)

discord5 (798235) | more than 2 years ago | (#37761876)

I transferred some cash to BitCoins and back on Friday and it was paid out to me on Sunday. By the time I got the transfer, it had lost almost half of its value. Now imagine if that would constantly happen with your real money.

That happens with real money too, you know. There's this wonderful thing called hyperinflation, which if left unchecked leads to money with preposterous values printed on it. An example would be Zimbabwe dollar, which had bills worth several million dollars. It became so bad a couple of years ago that the days the 100.000.000 dollar bill was first printed, the 200.000.000 dollar bill was announced. They abandoned their currency that year and currently trade in foreign currency if I'm not mistaken. I know Zimbabwe is a terrible example to use, but still...

This is why PayPal and other ecurrencies are fixed to real world value - they are stable (as far as it can be)

The value of currency is like you imply not all that stable. Sure, it's not like the zimbabwe dollar, since most countries try to keep their currency in check as well as they can, but don't assume that over the course of a month suddenly your money isn't worth as much as it used to be.

As for Bitcoin... Well... Meh, who really gives a fuck. (Pardon my french) The only people who made any real profits on it are GPU vendors and power companies, and a lucky few which I doubt exceed a handful of people. FWIW, it behaves like a real currency would, but not a very reliable one.

Re:Bitcoin (2, Insightful)

operagost (62405) | more than 2 years ago | (#37761978)

On September 16, 1992, Black Wednesday, Soros's fund sold short more than $10 billion in pounds,[20] profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound, earning Soros an estimated $1.1 billion. He was dubbed "the man who broke the Bank of England".[25] In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

Re:Bitcoin (1)

nedlohs (1335013) | more than 2 years ago | (#37762072)

But why would you do that in the first place? I don't often convert my money to rupees on Friday and back to dollars on Sunday. And if you transferred it back on Friday surely you locked the rate then?

if you are forced to use a such a volatile implement you hedge anyway. Costs very little.

And paypal is not an "ecurrency" it's a transfer (and storage if you are an idiot) mechanism for whatever currencies they happen to support.

bitbubble? (1)

alphatel (1450715) | more than 2 years ago | (#37761458)

Eerily resembles the Nasdaq chart from 99 through '02

The truth is immanent! Brrekwj0iyf98hin yuppaZZZ (0)

For a Free Internet (1594621) | more than 2 years ago | (#37761468)

aDigital ass computers! Digital ass compoters! These wioiiilll be digital and will include all asses! Especially for Aermicia the greatest nation on planet America! Ass, now digital! Ass! Ass Ass! Donkeyshit~!!!!! ASS! the greatest balonASS! ASS! the the the the hello, not thank you, OI anb rflkn,myejugmewa mtehjwbmsdf hte ASS!ASS ASS ASS ASS ASS ASS ASS liminal! AASSSASSA Gikn the formula for the necessa,kbyLO P(*Y>LIH JVEHB aASSS ASS ASS ASSASS it will be digital people,remember, DIGITAL! ass...... goodnigh!

Re:The truth is immanent! Brrekwj0iyf98hin yuppaZZ (0)

mwvdlee (775178) | more than 2 years ago | (#37761576)

I agree.

Re:The truth is immanent! Brrekwj0iyf98hin yuppaZZ (1)

For a Free Internet (1594621) | more than 2 years ago | (#37761768)

Thank you for your support comrade! There are many Italins here who do notwant to hear the truth but soon they willhave to taste their own bitter "ice cream"!!!!!!! Hahahhahahahaahahaahahaahaaa!

STOP WITH THE SLASHVERTISEMENTS FOR BITCOIN (-1)

Anonymous Coward | more than 2 years ago | (#37761476)

Stop with the Bitcoin Slashvertizements already. No crackpot schemes wanted here.

Re:STOP WITH THE SLASHVERTISEMENTS FOR BITCOIN (3, Insightful)

TarMil (1623915) | more than 2 years ago | (#37761664)

Stop with the whining already. It's been at least a month since I saw a bitcoin article on slashdot. Btw "bitcoin crashed 90%" is hardly advertisement.

R. Mewster's Billions (1)

Dogtanian (588974) | more than 2 years ago | (#37762110)

Stop with the Bitcoin Slashvertizements already. No crackpot schemes wanted here.

You really think that this story describing how the value of Bitcoin is extremely volatile and has plumetted to a tiny fraction of its previous value is biased publicity aimed at roping in people who need a way to lose a large amount of money within a very short period of time? That hadn't occurred to me, but thanks for pointing it out.

I myself am involved in a scheme that requires me to squander my inheritance [wikipedia.org] and was almost led into believing that Bitcoin would be suitable for this purpose. Thank you for drawing my attention to this.

Speculation (2)

Hentes (2461350) | more than 2 years ago | (#37761490)

The majority of bitcoins is in the hands of a handful who cash in large quantities from time to time thus crashing the market.

Re:Speculation (1)

vlm (69642) | more than 2 years ago | (#37761754)

The majority of bitcoins is in the hands of a handful who cash in large quantities from time to time thus crashing the market.

This is very insightful, from someone who is obviously also in the BTC economy as I am. I'm getting disillusioned with BTC because we're creating a new set of 1%ers, these being the guys with server farms full of GPU cards. I love the idea of BTC, but I'm completely uninterested in making those guys billionaires.

The other inherent problem, is the protocol design tries pretty hard to make the rate of BTC production mostly constant over time. The problem is people are hoarding BTC "to eventually get rich" and occasionally cashing out. So with a mostly constant absolute rate of real world transactions, and the number of coins piling up faster than transaction rate can grow, deflation seems inevitable. At least until the last coin is mined.

A protocol that tried to hold the velocity per BTC constant by varying difficulty by transactions seen, thus varying production would be somewhat more stable.

BTC is a pretty cruddy monetary system... Its also the best one out there at this time.

Re:Speculation (1)

Lord Bitman (95493) | more than 2 years ago | (#37761878)

So you want your decentralised and anonymous system to vary the payout based on how many transactions are processed?
I think I found a flaw in the plan.

Re:Speculation (1)

vlm (69642) | more than 2 years ago | (#37762080)

So you want your decentralised and anonymous system to vary the payout based on how many transactions are processed?
I think I found a flaw in the plan.

Not necessarily... People who hold the most BTC can artificially "stir the pot" the easiest, yet they lose the most when the currency is diluted. People who hold the least BTC would benefit the most from more BTC being generated, yet they have the least ability to "stir the pot". I'm "stir the pot to make BTC" is a bit oversimplified.

There is a certain inherent limited flood control that discourages people from trading the same 1 BTC a million times per second, due to transactional costs. If those costs raised to discourage such behavior...

Re:Speculation (1, Insightful)

Zironic (1112127) | more than 2 years ago | (#37761890)

Best one out there? Handwritten IOU notes and shiny sea shells are both more stable and more useful currencies for actual use.

Bitcoin objectively worse as a currency then any other in current use.

Re:Speculation (1)

Therilith (1306561) | more than 2 years ago | (#37762014)

The other inherent problem, is the protocol design tries pretty hard to make the rate of BTC production mostly constant over time.

Actually, the system has been designed to reduce the production/time to 50% of what it used to be (25BTC instead of 50BTC/10 min IIRC) pretty soon.

https://en.bitcoin.it/wiki/FAQ#What.27s_the_current_total_number_of_Bitcoins_in_existence.3F [bitcoin.it]

Re:Speculation (1)

TobascoKid (82629) | more than 2 years ago | (#37762076)

I'm less than convinced by there being an upper limit to the amount of bitcoins that will ever be created. Look at Spain before the New World was founded - they didn't have enough money because they lacked enough precious metals so they had a terrible economy compared to places that did have an adequate money supply (like the middle east). It's hard to see how the bitcoin economy wouldn't eventually dry up, especially as there no new world to get more bitcoins from.

Well yeah (0)

Anonymous Coward | more than 2 years ago | (#37761506)

Did anyone seriously not expect this to happen?

Re:Well yeah (0)

Anonymous Coward | more than 2 years ago | (#37761542)

Oh just wait, the supporters aren't out of bed yet. Having dozens of mining rigs in their Mom's basements leads to a mild case of heat-stroke every night and they don't typically get out of bed until mid-day or so.

Winner: ATI (5, Insightful)

bengoerz (581218) | more than 2 years ago | (#37761522)

And the winner of this whole experiment ends up being ATI, who sold a bunch of GPUs to doe-eyed bitcoin miners.

Re:Winner: ATI (0)

Anonymous Coward | more than 2 years ago | (#37761716)

Hahah. I remember selling my 5830s, which I originally paid $100 each, on ebay for over $600 (i had 3 of them). Most of them sold to the same person.

Thats the only money I made off of bitcoins....

Bitcoin Crashes,,, (3, Funny)

Oswald McWeany (2428506) | more than 2 years ago | (#37761524)

Bitcoin crashes after CmdrTaco leaves Slashdot.

I don't think that is just a coincidence.

Re:Bitcoin Crashes,,, (2)

mwvdlee (775178) | more than 2 years ago | (#37761616)

Bitcoin crashes after CmdrTaco leaves Slashdot.

I don't think that is just a coincidence.

Not a complete coincidence perhaps, but at the very least a bitcoincidence!

I'll be here all week!...Try the veal!

Re:Bitcoin Crashes,,, (1)

shentino (1139071) | more than 2 years ago | (#37761752)

Yeah, it's kinda like the stock market tanking after 9/11.

Re:Bitcoin Crashes,,, (2)

Chewbacon (797801) | more than 2 years ago | (#37761824)

No, just a coin incident.

Crash? More like correction. (4, Insightful)

Cainam (10838) | more than 2 years ago | (#37761554)

It seems more like a correction to me. The idea that a BTC was worth $20 or more seemed too good to be true, probably because it was.

I think BitCoin is a great concept, but it needs more of a real economy and less currency speculation. I suspect that will come once the hype dies down. Maybe now that the value has gone down, that'll happen soon.

Re:Crash? More like correction. (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37761702)

Sorry, but Bitcoin is only good for speculators.

A real currency needs to be widely used, and largely stable. High volatility is going to chase away anyone who intends to use them for actual currency.

Re:Crash? More like correction. (1)

slim (1652) | more than 2 years ago | (#37761796)

It occurs to me that if services existed that allowed us to trade faster, the current volatility wouldn't matter as much.

That is, a poster here complains that it took him 2 days to trade some BC for dollars, during which time they halved in dollar value. If he had been able to make the trade near-instantaneously, he would have suffered little, if any of that fall. So what's stopping that from happening?

Then it occurs to me, that if trading was faster, the bubbles and crashes would happen more quickly. I'm not enough of an economist to know what could damp these effects.

Re:Crash? More like correction. (1)

maxwell demon (590494) | more than 2 years ago | (#37761922)

Then it occurs to me, that if trading was faster, the bubbles and crashes would happen more quickly. I'm not enough of an economist to know what could damp these effects.

A tax on trading?

Re:Crash? More like correction. (1)

Surt (22457) | more than 2 years ago | (#37762030)

The exchanges are currently operating free of charge? How do they pay for electricity?

Re:Crash? More like correction. (1)

julesh (229690) | more than 2 years ago | (#37762146)

Speculation has less effect on a larger market. The only thing that can make bitcoin less volatile is an increase in the number of people using it for the purpose it was designed for, rather than as a make-money-fast scheme. Unfortunately, I don't suspect stories like this help.

Re:Crash? More like correction. (4, Insightful)

betterunixthanunix (980855) | more than 2 years ago | (#37761800)

I think BitCoin is a great concept

Except that decentralized digital cash is inherently flawed, since the tokens will always grow linearly in the number of transactions they are used for. In other digital cash systems, this problem is solved by having an issuing authority (bank, government, etc.) that accepts old tokens and issues fresh tokens. In the case of Bitcoin, no such authority exists, so the tokens are just going to keep getting bigger, and eventually they will be too large to be useful.

Not that the technical problems are going to be what kills Bitcoin. In terms of economics, Bitcoin has a shaky basis to begin with: people only accept Bitcoin because they believe that they can exchange their Bitcoin tokens for some other currency. Eventually people need to make that exchange, in order to pay their taxes, but there is no similar need to obtain Bitcoin tokens. The gap in demand is not really filled by Bitcoin's utility as a digital cash system, which is questionable to begin with because of the technical limitations on Bitcoin.

Even if somehow that did not become a problem, there is the fact that Bitcoin is an inherently deflationary currency. This creates problems with hoarding (which we are already seeing), and makes it harder to repay loans (loans are crucial to a functioning economy, despite what those "occupy" protesters tell you).

In short, the odds are against Bitcoin being successful. Really, more traditional cryptocurrency is needed, where a bank issues tokens but the tokens can still be transferred anonymously. Sadly, Bitcoin's failure will make it even harder to start a digital cash bank, since everyone will associate digital cash with Bitcoin and think that all digital cash systems suffer the same problems.

Re:Crash? More like correction. (1)

jpapon (1877296) | more than 2 years ago | (#37762100)

Really, more traditional cryptocurrency is needed, where a bank issues tokens but the tokens can still be transferred anonymously. Sadly, Bitcoin's failure will make it even harder to start a digital cash bank, since everyone will associate digital cash with Bitcoin and think that all digital cash systems suffer the same problems.

The real issue is that a "more traditional cryptocurrency" would need to be issued by a bank, which means some reputable institution would need to guarantee the value of the cryptocurrency. It seems unlikely that any reputable institution will ever do this, since the law enforcement agencies of the world are strongly against allowing anonymous transfers. Any company/bank that started advertising that they allow "truly anonymous transfers" would have more law enforcement on them then white on rice.

No company can survive for very long once it becomes widely believed that they are serving as the clearinghouse/money laundering service for the criminals of the world. Banks would simply stop allowing people to wire their money to the company backing the cryptocurrency, and it would wither and die.

Time to invest in tulip bulbs... (4, Funny)

Layzej (1976930) | more than 2 years ago | (#37761570)

I'm moving all of my cash to tulip bulbs. They're due for a comeback ;)

Re:Time to invest in tulip bulbs... (2)

Oswald McWeany (2428506) | more than 2 years ago | (#37761630)

Daffodils are a better investment.

Unless you take the time to dig up your tulip bulbs each year- the number of tulips each consecutive year goes down.

Daffodils on the other hand increase the size of their investment- you plant 10 this year- you'll have 15 next year.

Muscari bulbs would be better yet. You plant one this year- you'll have 12 trillion of them next year... they're like the tribbles of the bulb-world.

Re:Time to invest in tulip bulbs... (1)

s_p_oneil (795792) | more than 2 years ago | (#37761758)

I think you have it backwards. The more rare things are, the more they're worth. So if you take the time to dig up your bulbs each year, and some other slob doesn't, your tulips will end up being worth more. Your muscari bulbs, on the other hand, won't be worth squat once the market is flooded with 12 trillion of them.

Re:Time to invest in tulip bulbs... (1)

operagost (62405) | more than 2 years ago | (#37762044)

So you're saying that productivity creates wealth? Try to explain that to the Occupiers.

You're already invested in thin air (0)

Anonymous Coward | more than 2 years ago | (#37761988)

FYI, there is nothing of actual value backing up your US dollars.

Send your worthless Bitcoins to... (1)

Anonymous Coward | more than 2 years ago | (#37761572)

Dispose of your Bitcoins by sending them to 1jWDbcp7b2vAG1fvfCQ2rN2b5hjJpXruR

I will dispose of them in an environmentally-friendly manner.

Re:Send your worthless Bitcoins to... (0)

Anonymous Coward | more than 2 years ago | (#37761650)

Check ur bitcoins.

Valuable lesson in currency... (4, Insightful)

RyuuzakiTetsuya (195424) | more than 2 years ago | (#37761586)

All currencies are fiat. No matter what they're backed by. Currencies have to exist inside of a strong ecosystem that encourages their trading rather than hoarding.

Re:Valuable lesson in currency... (1)

sveinungkv (793083) | more than 2 years ago | (#37761832)

Gold is not fiat since gold have other uses than money. A currency consisting of gold coins where the value is the gold content would not be fiat. The same can be said for other commodities. (Not all commodities are created equal. I would not recommend an apple currency. They tend to rot and lose value. If you try to divide an apple it will rot even faster. The supply of apples can easily be inflated by farming them. It would still technically be hard money)

Re:Valuable lesson in currency... (1)

ThomasFlip (669988) | more than 2 years ago | (#37761980)

Thats exactly correct. For a good description of the properties of money, check out the following link:

http://www.marketoracle.co.uk/Article10370.html [marketoracle.co.uk]

Re:Valuable lesson in currency... (4, Insightful)

laron (102608) | more than 2 years ago | (#37762050)

Gold was already valuable before it was actually useful. If a large fraction of the value of gold was based on it's technical uses, the gold price should be more stable IMHO. The gold price is more based on a circular logic: It's valuable because everyone thinks so.

Re:Valuable lesson in currency... (2)

websoongi (2484310) | more than 2 years ago | (#37762088)

Hear, hear. If anyone doubts the real value of gold compared with paper money, consider this: One thousand years from now you find a vault filled with ancient American, paper money. The value of that paper is worthless. It may have worth as an historical artifact. But now consider this: One month later a colleague discovers two vaults filled with ancient American money. The value of your money has now gone down. Having more paper money in this world decreases its value because the paper itself is not wealth. Compare this with gold: (and you can imagine it now, because it works at any time) You find a vault filled with gold. You're rich. Your colleague finds a vault with gold. He's rich. You're both rich because finding more gold just means that there's more (actual) wealth in the world. You're rich if you find such a vault now. You're rich if you find it one thousand years from now. That's because gold has intrinsic worth. It shouldn't, I believe, because I personally don't care about gold. But that doesn't change the fact that others always will. Even if gold didn't have uses other than money, people have, and always will, covet it. If you had a trunk full, you'd line your walls with it. If you had more, you'd have a solid gold swimming pool out back. There's never enough gold.

Re:Valuable lesson in currency... (1, Informative)

betterunixthanunix (980855) | more than 2 years ago | (#37761886)

I think someone needs to look up the definition of "fiat." Bitcoin is not a fiat currency since there is no government or law involved.

Missing the point of currency (2)

Evro (18923) | more than 2 years ago | (#37761592)

The point of currency in general isn't as a store of value, but as a way to facilitate transactions. Currencies are traded as a proxy for trading "stock" in a particular country's economy. When Japan does well and the USA does poorly, the dollar gets weaker against the yen. Bitcoin doesn't represent any country, so trading it seems even stranger. But until and unless there are merchants who accept Bitcoin for purchases, it doesn't seem like the system itself has much value, since as I said, the reason for the existence of currency is as a way to facilitate trade.

Re:Missing the point of currency (2)

wisnoskij (1206448) | more than 2 years ago | (#37761762)

And it cannot do that if from day to day it is worth large amounts different.
Currency only works if people have faith in it and no one with any sense would have faith in a currency that has no solid value.

Re:Missing the point of currency (1)

H0p313ss (811249) | more than 2 years ago | (#37762040)

And it cannot do that if from day to day it is worth large amounts different.

Wise this is.

...and nothing of value was lost (1, Insightful)

fph il quozientatore (971015) | more than 2 years ago | (#37761604)

nuff said

What's that in flooz? (1)

elrous0 (869638) | more than 2 years ago | (#37761658)

Ah man, I was really hoping to unload all my flooz and beenz bucks into this too. I've really got to stop investing in currency based on commercials.

Anyone know if e-gold accepts flooz? Come on man, Whoopi's good for it.

It is a new ecconomic model (1, Insightful)

SystemicPlural (1405625) | more than 2 years ago | (#37761690)

It's a relatively new currency using a new model that takes free market ideas to a new extreme; there is no central authority to ease the peaks and troughs - and no long term consequences as a result. It is going to be bumpy to start with. If it is still all over the place in ten years (assuming it lasts that long) then I will consider it a failure. Meanwhile it is for speculators to have fun with. Kids these days are so impatient.

Re:It is a new ecconomic model (1)

brainzach (2032950) | more than 2 years ago | (#37761816)

The economic model is the gold standard.

Re:It is a new ecconomic model (1)

maxwell demon (590494) | more than 2 years ago | (#37761842)

Well, speculating with bitcoins may be nice, but to really have fun with it, you have to make derivatives. Don't mine them and then sell them. Sell certificates now for the bitcoins you will mine. Sell options on those certificates. Mix several certificates and make new ones out of them. Create a big bitcoin bubble, and then enjoy watching that bubble burst.

Oh, you say that bitcoin is immune against this? You clearly lack imagination.

Probably "Occupy Wallstreet" (3, Funny)

Greyfox (87712) | more than 2 years ago | (#37761720)

Those guys take bitcoins. Probably one of them bought a twinkie, or something.

Well, duh. (1)

s_p_oneil (795792) | more than 2 years ago | (#37761726)

Well, duh. (It surprises me that I'm unable to find anyone else posting this comment.)

Right... (0)

Anonymous Coward | more than 2 years ago | (#37761778)

That's still three times its value in April 2011.

Big fucking help that is.

Time to burn down some forests (2)

Quila (201335) | more than 2 years ago | (#37761792)

Get the value back up, you know.

bitcoin is not money, its payment method (2)

notany (528696) | more than 2 years ago | (#37761806)

Classical properties of money are: medium of exchange, unit of account and store of value.

Very few, if any, goods in bitcoin economy are sold using bitcoins as unit of account. Paying with bitcoin may be option, but goods are priced in other currency. Bitcoin prices are periodically adjusted to match price in other currency. Bitcoin clearly is not way to store value. Most people use it to speculate. Apart from limited use in paying small amounts of drugs for personal use etc. in local settings, bitcoin is not preferred medium of exchange. Because bitcoin is not used like money, it is not money. Currently bitcoin is just way to make payments (similar to debit or credit card) and speculative hobby for some.

Even very shaky third world currencies have some stability because people constantly need to buy them to pay taxes and fees. Only way I can see bitcoins becoming viable currency if some network communities or services would only accept bitcoins as payment. That would tie the value of bitcoin into something that has tangible value.

Re:bitcoin is not money, its payment method (2)

Zironic (1112127) | more than 2 years ago | (#37761936)

Though there is no reason for services to do that. Locking your livelihood to something that can lose 9/10ths of its value in a few months is a guaranteed way to go bankrupt.

And in the end you have to transfer your money from coins to legal tender to pay taxes.

Cashing out (0)

Anonymous Coward | more than 2 years ago | (#37761848)

Someone or some group cashed out big time.
And i don't feel any empathy for the suckers who went after bitcoin.
They deserved being scammed.

When does a Ponzi collapse ? (0)

Martin S. (98249) | more than 2 years ago | (#37761882)

Ponzi schemes require a continuous flow of new investors, when they dry up or existing investors try to cash-out faster than new money it will collapse because there are no legitimate earnings.

Not one person here has had the thought... (0)

Anonymous Coward | more than 2 years ago | (#37761884)

Time to buy low?

Economic Experiment (3, Insightful)

DaMattster (977781) | more than 2 years ago | (#37761892)

Bitcoin is kind of an interesting experiment in economics. Its founders started out with a relatively simple premise by asking the quintessential question: Why is a central clearing house or central regulation is necessary? Unfortunately, they ended up (re-)learning a valuable reason as to why our forefathers realized a need for some centralization and regulation. Our forefathers realized that monetary centralization provides currency stabilization. When the United States was young with newly won independence from Britain, each state minted its own currency and this was a debacle. How would one determine how much New Jersey dollars would one get in trade for, say, Connecticut dollars? Bitcoin's founders also re-learned the difficult concept of valuation. Last summer, Bitcoin essentially bubbled because, for a short time, its followers had a strong, collective emotional belief that bitcoins have real value. The moment this emotional belief foundation is placed into doubt or shattered, the value comes down. With the storm of server, desktop, and web application intrusions resulting in the theft of Bitcoins, the latent problems with the currency model were suddenly propelled into the main stream. Its users became frightened and distrustful. It is more than just supply and demand economics but believing that the medium that you are using for trade is intrinsically worth something (when, in actuality it has no real value.) Finally, centralization helps mitigate criminality and makes it easier for a victim to recover stolen funds.

...And nothing of value was lost. (4, Insightful)

Kaenneth (82978) | more than 2 years ago | (#37761942)

Seriously, what did you expect?

securityhulk on twitter says it best (0)

Anonymous Coward | more than 2 years ago | (#37761954)

http://twitter.com/#!/securityhulk/status/126380860864864257

read it - cant post it here because its all caps (on purpose)

A small Bitcoin success (5, Interesting)

Teppy (105859) | more than 2 years ago | (#37762010)

Our new game, "Dragon's Tale," functions exclusively in Bitcoins. It's a gambling MMORPG based on the same technology as our previous game, "A Tale in the Desert." Choosing Bitcoins means that I never have to worry about PayPal freezing my account, or about $25 chargeback fees, or making Mastercard a 2.5% partner in my business.

When we started Dragon's Tale, Bitcoins were worth 5 cents, and people played for 100's at a time. When Bitcoins were $30, people played for fractions of a coin. Now that Bitcoins are $2.00 or whatever, they may spend a Bitcoin or two on a play session.

The point is that the exchange rate to dollars is irrelevant - players play at the level they're comfortable with, and our revenue (viewed in dollars) has been increasing steadily.

There are better investment options (2)

e-banker (927646) | more than 2 years ago | (#37762140)

Thank goodness I have my 401k in the Linden.
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