Bitcoin Hits New All-time High of $32 339
Sabbetus writes "Bitcoin tops its previous all-time high of $31.91 and in doing so it proves to be quite a resilient virtual currency. To the supporters of Bitcoin this does not come as a surprise, since we have seen the likes of WordPress, Reddit and Mega embrace it. Recently Namecheap also confirmed that they will start accepting bitcoins. The new record price was reached on the same day that Mt. Gox, the world's largest Bitcoin exchange, reached an agreement with CoinLab to manage the exchange's operations in the U.S. and Canada."
A far cry from the end of 2011.
A Far Cry From the End of 2012 As Well! (Score:5, Informative)
A far cry from the end of 2011.
And a far cry from the end of 2012 [theverge.com]!
... on a more serious note (if such a thing is possible with BTC) everything is proceeding according to plan [slashdot.org].
Sorry
Whoops, wrong link (Score:2, Funny)
And a far cry from the end of 2012 [wikipedia.org]!
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Bah, blew that joke! First link should be:
And a far cry from the end of 2012 [wikipedia.org]!
How about this?
And a far cry [wikipedia.org] from the end of 2012 [wikipedia.org]
Bitcoins will be the end of the world in the tropics. (disclaimer: I neither played the game, nor saw the movie.)
Re:A Far Cry From the End of 2012 As Well! (Score:5, Interesting)
You can thank online gambling, where the big news is that some sites are taking BTC so americans can play again.
Surprise, surprise, it continues to show some utility when dealing in illicit goods and services.
Re: (Score:3, Interesting)
No "goods" or "services" should be illegal. Period. Restricted, perhaps. Taxed, open for debate. Controlled, possibly. But never ever made illegal. Even the most toxic/harmful materials have uses that aren't "evil" (tm)*. The moment you make them "illegal", the ones that have the most utility become black markets and crime sprouts up to support those markets. Just ask the US how Prohibition worked out, or .. gasp .. the "war on drugs".
Yes, I am Libertarian, but I don't do drugs, don't care to do drugs. I've
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Are human beings considered goods?
Two things (Score:3, Insightful)
Think about it:
A slave is a product. Murder is a service.
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illicit /ilisit/
Adjective
Forbidden by law
Im fairly certain it is not meaningless, in any sense of the word.
Re:A Far Cry From the End of 2012 As Well! (Score:4, Interesting)
Why is Slashdot's categorical example of "injustice" a guy who was actually guilty(whether you think the penalty is appropriate he did it), was offered ridiculously lenient pleas considering the maximum penalties involved and for whatever reasons took his own life before he could actually even see how the justice system was going to treat him.
Far worse injustice happens in the US every single day, but it mostly happens to poor black people who aren't computer nerds so no one on Slashdot gives a shit.
Re:A Far Cry From the End of 2012 As Well! (Score:5, Insightful)
"Two problems with discussing crime in the context of any global technological innovation like bitcoin: relativism and corruption.
Relativism -- Except for those acts identified by Bastiat as universally criminal, one society's crime is another's norm. No matter how digusting and criminal you consider an act to be (drugs, gambling, prostitution, bizarre consensual sex, sex between adults and adolescents, eating insects, dogs, cats, etc.), I can find you a society that considers the act normal. And no matter how obviously acceptable you find an act (lending money, Protestant worship, female literacy) I can find you a society that considers it a disgusting crime. Like it or not, the globe is vast, and bitcoin is global.
Corruption -- Victimless crimes are exploited and enforced by those in power to oppress everyone else. This is because such "crimes" are deliberately crafted to be ambiguous. They enable punishment of the powerless, no matter how timid and cautious. They exempt the powerful, no matter how arrogant and tyrannical." ~coqui33
Volatile (Score:5, Insightful)
Re:Volatile (Score:5, Funny)
It has been said that comedy on the internet is tragedy followed by the words "....and then I lost my bitcoins".
This price spike is just a set up for one hell of a punchline.
Re:Volatile (Score:4, Insightful)
Do you know of a way to create a new currency and associated economy from scratch without volatility?
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Get used to disappointment. It's a nerd currency, and is only getting more popular. We are far from running out of nerds to use it, much less average folks.
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It's a nerd currency,
Oh, so, it's kind of like Magic, the Gathering cards, except there isn't a game designed around it.
Re:Volatile (Score:5, Insightful)
...dollars can be used anywhere...
Dollars *can't* be used everywhere (online gambling, for example). Thus, interest in bitcoin.
So? (Score:4, Insightful)
I'll be using my Bitcoins as currency as usual. Trading for services or donating to good causes. I'll continue to accept Bitcoin in exchange for services rendered (only 10 Bitcoin for a handjob!).
Sure, for speculators that matters. For people who just want to use a decentralized non-government/non-corporate currency, it continues to just work.
Oh, and it's not an "anonymous currency", it's a "pseudo-anonymous currency". In the future there will be real laundries that operate with a decent reserve. At that point it becomes more anonymous. I'm looking forward to that future.
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Too bad that as the currency gets more valuable your services get more expensive compared to your competitors.
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Too bad that as the currency gets more valuable your services get more expensive compared to your competitors.
Yes, this is the problem with bitcoin. It is utterly impossible for him to adjust his rates so that the bitcoin amount is comparable to the dollar amount. The primary reason for this is that the use of bitcoin apparently erases common sense so no user of bitcoin would be capable of taking such an obvious step.
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Question 1: Who does squeezies for 10 bitcoin (or any bitcoin for that matter)? Question 2: At current exchange rates, that's over $300, which is way over market. Since you mentioned that you also donate to good causes, does the volatility in the exchange rate have any effect on how you spend your bitcoins?
Anonymous currency (Score:2)
Once Bitcoin reaches some level of critical mass, it will attract the attention of the entrenched banking system and their lap dog regulators. If it takes outlawing the possession of graphics cards to stop mining, they'll get that law passed.
If your hard drive will serve as a bank or credit card, you are a serious threat to the banking industry.
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GPUs are crap at mining bitcoin anymore compared to the ASICs.
Re:Anonymous currency (Score:5, Informative)
No, the established banking system will see it as another forex system to make money on by speculating and all that.
Hell, Wall Street is probably looking at ways to set up fractional bitcoin systems so they can do HFT in bitcoins,
The only way for bitcoin to reach critical mass and attract the attention of regulators would be for those Wall Street bankers to have caused a lot of harm - either by sending so many transactions through the system that everyone hashing through gets overloaded to the point of being unable to rollback (if you're doing a trade every millisecond, and it takes 10 minutes on average to confirm a transaction, you could ptentially send 600,000 transactions through...).
Bitcoin hasn't yet attracted the attention at a high level - because it's the perfect currency to do stuff in. Banks love unregulated things, so they're going to find ways to make money through bitcoins before they're going to cry foul through a government regulator.
When the banks start offering the usual array of futures, options, trading, etc., in bitcoins, that's when regulators may start picking up on it.
Right now the problem is the increasing value of a bitcoin - at $30 each, 1 bitcoin is seriously going to overpay for a lot - I mean, if 1 bitcoin buys you a 2 year domain registration, that's about 50% more than what it would cost regularly. Or say I ran a store offering 10 music tracks per bitcoin or 2 albums. Now with it going higher, it would mean having to let customers overpay, or give them stuff they don't want (e.g., 25 tracks, or 2 albums + 5 tracks), which if you only want ONE song, is kind of annoying.
The banking system loves bitcoin. They're just trying to figure out how to exploit it to make money. And they're not going to run to any government regulator to reign in on potential windfalls.
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Now with it going higher, it would mean having to let customers overpay, or give them stuff they don't want (e.g., 25 tracks, or 2 albums + 5 tracks), which if you only want ONE song, is kind of annoying.
Software to the rescue: Stores which take bitcoin automatically adjust the price to the market, in real time. I'm surprised a Slashdot reader didn't get that immediately.
http://bitcoinstore.com/ [bitcoinstore.com]
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Yes. The current protocol allows for divisions down to 0.00000001BTC
Re:Anonymous currency (Score:4, Interesting)
The banking system loves bitcoin. They're just trying to figure out how to exploit it to make money. And they're not going to run to any government regulator to reign in on potential windfalls.
Go talk to the Swiss*. Banking secrecy is a thing of the past. If a bank can't report customers account balances and transactions to regulators, they can't touch the business. So if they can't touch it, they'll work to kill off an alternative business model that could attract customers and that they can't participate in.
Needless to say, tax, law enforcement and financial authorities don't like anonymous transactions either. So when the banks ask for help to kill off Bitcoin, they'll get it.
* Last week's Economist Magazine had a good special report on offshore finance. Its paywalled, but worth reading at the local library if you want to understand the issues.
Re:Anonymous currency (Score:5, Insightful)
Hell, Wall Street is probably looking at ways to set up fractional bitcoin systems so they can do HFT in bitcoins,
Right now the problem is the increasing value of a bitcoin - at $30 each, 1 bitcoin is seriously going to overpay for a lot
https://en.bitcoin.it/wiki/FAQ#How_divisible_are_bitcoins.3F [bitcoin.it]
How divisible are bitcoins?
A bitcoin can be divided down to 8 decimal places.
Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction.
If necessary, the protocol and related software can be modified to handle even smaller amounts.
I'm surprised you had so much to say about bitcoins without knowing this fact.
Will crash again (Score:5, Insightful)
The "old money" is still sitting on most of the coins and will crash the value again by cashing in even a small percentage. The Bitcoin economy is just too small compared to the wealth of the early adopters.
long term (Score:4, Interesting)
Why anyone would think this is a good thing (Score:2)
Why would anyone consider this a good thing?
It means these coins are being hoarded. If it was real money this would be damaging the economy.
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It is worth pointing out that the current upward trend in BTC prices began right after the difficulty of mining doubled last December. Mining has ceased to be profitable except for the most sophisticated custom hardware, so the supply of new BTC has dried up for the average person using a graphics card.
No new supply = rising prices. The deflationary spiral has definit
Re:Why anyone would think this is a good thing (Score:5, Interesting)
Of course they're being hoarded.
One of the key issues with bitcoin is the ultimately limited supply.There are about 10.5 mln into existence, mining continues, and over the upcoming century or so it's going to grow to 21 mln. So that means the first half is there already.
Normal money (USD, EUR, whatever) can be created by banks through lending. This keeps the value of currencies in check, and actually over time decreases the value of a currency, as seen by inflation. The good thing of inflation is that it keeps people from hoarding cash, as hoarding cash means you're losing value.
Assuming uptake of use of bitcoin continues to increase, there is more and more demand for the coins, and there is limited new supply. Supply goes down over time (by design), and more uptake will naturally cause more loss: people keeping bitcoins on their computer, not properly keeping backups, computer breaks down, bitcoins lost. Not sure if there is any way to recover them. And people may take bitcoins and forget about them, another cause of loss. So more and more people want bitcoins, but there is only a limited number available - and that number may indeed decrease over time - causing the price to go up.
Now there are two problems this almost guaranteed increase in value of the bitcoins.
First: people start hoarding them, as speculative investment. This takes more bitcoins out of the payments market, pushing up the value.
Second: it is going to cause deflation in the value of services that charge bitcoin. Imagine a web site sells accounts for 1 bitcoin. That is currently $32 in real money. So people will have to buy bitcoin at $32 each, and the web site can sell those bitcoins at $32. But next year the bitcoin is at maybe $64. That would double the price of the account, which is probably not good for business, so the website compensates for this by changing their price to 0,5 bitcoin. Especially if such a site gives an option of paying in bitcoin or paying in USD, they must adjust prices to keep them equivalent.
People owning bitcoin see the value of the bitcoin in USD (money they can actually spend) go up, while at the same time for everything they could use bitcoin for, the prices go down. Where a donation of 1 bitcoin now would be worth $32, the equivalent donation next year would be only 0,5 bitcoin. Buy a bitcoin now, and the web site account next year would effectively cost you only $16. And the other half bitcoin you could sell at $32, making the account free.
And this is how I call bitcoin an interesting concept, but terribly defective by design.
Thank you! (Score:2)
I've been saying this ever since Slashdot started carrying every last bit of news about BitCoins. I get flamed every time. Without fail. (Apparently, I "enjoy" inflation, am a crude fighter against innovation, and any understanding of economics I have is not relevant because apparently the entire discipline is invalid. (Unless, of course, it agrees with whatever said BitCoin fanboy is saying.))
Re:Thank you! (Score:4, Insightful)
Economics as a discipline isn't invalid, but you do have to take it with a huge pinch of salt especially at the macro level.
Here are a couple of facts that should make you think twice about macro-economic wisdom. One of the most basic tenets of science is to compare your theories against observable reality to see if they match, and if they don't, you come up with a better theory. But the theory of the deflationary spiral was not actually studied to see if it matched historical data until 2004, and then when it finally was analyzed, it was discovered that the theory was wrong [minneapolisfed.org]. Should have been a pretty huge event, but no, Bernanke and his colleagues continue to act as if the study was simply never done.
If that theory is wrong, what other conventional wisdom might be wrong? Well, it turns out that economists have models of how the economy works. Of course they do. The state of the art in macro-economic modelling, widely used by central banks, are dynamic stochastic general equilibrium models (DSGE). Sounds sophisticated, right? Wrong. These models are so crude they do not include banks at all [economist.com] because the people who designed them thought that banks had no impact on economies. Worse still, as their name implies the models predict equilibrium rather than the boom/bust cycles that typify real economies. It might seem obvious to the man on the street that if your explanation of how the economy works ignores banks and predicts stability, then you have a pretty bad explanation ... but this is the quality of science on which central banks base their decisions.
Is it any wonder the world got so messed up? Maybe you should indeed exercise more skepticism towards the so-called "dismal science", and consider whether us Bitcoiners have got it right after all.
Re:Why anyone would think this is a good thing (Score:5, Insightful)
How is "hoarding cash" .... also known as saving .... equivalent to losing value? In a stable financial system saving money should be value neutral. In the financial systems we actually use, it's the opposite - inflation is the reason that savings lose value. This is not a good thing!
The design of Bitcoin is correct. It's the design of existing currencies that's hosed, though possibly calling the result of a few centuries of evolution "design" is overly generous.
Let me sum up our existing currencies for you in two paragraphs. Because pre-Bitcoin we lacked a way to globally synchronize everyones view of each others balances, we have to delegate this job to organisations called banks. We trust them to decrement one accounts balance when another is incremented and this is why people have to, you know, go to work and more or less live within their means. Naturally the trust we place in them for that is constantly abused, because the banks routinely increment peoples accounts without decrementing anyone elses. They charge interest for this "service". They especially love incrementing the governments accounts in this way, but the free money doesn't just go there, it sprays all over the place. This eventually leads to inflation.
Inflation is extremely convenient for governments because it lets them buy nice things for voters and pay for it using an invisible tax on savings. Because people would be naturally very angry at this taxation if it was done directly, economists and politicans came up with a brilliant theory as to why this is actually a good thing! Zero inflation, says them, would be terribly bad because if peoples savings aren't being constantly stolen at 2% per year or more then they lose all interest in profit. Given the choice of sitting on their money and getting no return, or making a safe 2%-per-year investment, those stupid citizens will choose to sit on it, and that will lead to economic collapse and anarchy and cats living together with dogs, which would never do.
There's a couple of problems with this theory. One is that it is contradicted by actual studies of historical data [minneapolisfed.org]. The other is that it makes no sense. Capitalism is based on the assumption that people like profit. Normally, if someone is offered a low or even zero risk way to profit, they'll go for it unless they need the money right now. But when it comes to the (non existent, it turns out) "deflationary spiral" we're expected to suddenly stop believing that .... we're told that people will pass up good investment opportunities unless they're forced into it. That flatly contradicts how people actually work. The only kind of investment that becomes interesting solely due to inflation is the bad kind. You know, the kind that tends to be involved with asset bubbles.
By the way, Bitcoin is not intended to be deflationary. You assert that people will lose Bitcoins and sure, a tiny amount might disappear that way. But you'd better expect that easy and automatic backup will become common in future. All the incentives to properly solve that problem are there.
Re:Why anyone would think this is a good thing (Score:4, Interesting)
Bitcoin will probably last another few years and then it will choke on its own deflation. i.e. bitcoins will become so valuable that none of them will be in circulation.
I'm sure some bitcoins will remain in circulation, and they will get divided into ever finer fractions to provide the requisite liquidity to be a currency at the scale they wish to be. Then eventually the deflation will have gone far enough that a hoarder will decide to cash out. Then, when everyone has been trading in .0001 bitcoins, they'll sell their 1000 bitcoins for a lot of cash and bitcoins will suffer from a sudden massive bout of inflation as the money supply expands by orders of magnitude in an uncontrolled fashion. Then the deflation will kick in again until ...
All the bitcoin fanatics saying that deflation is good and inflation is the root of all evil ... they're missing the point: bitcoin is going to suffer from inflation, just a sudden unpredictable rampant uncontrolled bursts -- and that's the inflation that really sucks. Slow, small scale predictable controlled inflation can be accepted, large scale unpredictable uncontrolled inflation is what causes panics, crashes and economic mayhem.
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Hoarding does count as a type of scarcity. Not the only one, however. A perfectly liquid commodity can still rise and fall in price based solely on good ol' Supply and Demand.
When more people want to use Bitcoin, they need to first obtain BTC before they can spend it. As the easiest way to get Bitcoins, they "buy" some with their local currency. This transaction demonstrates increased demand for BTC, and
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I believe the OP was referring to seigniorage.
http://en.wikipedia.org/wiki/Seigniorage [wikipedia.org]
Quick example: The US Mint releases commemorative state quarters. People “buy” these coins and throw them in their sock drawer - effectively giving the US a zero percent loan. In this case it a win for everybody – an odd way to spend money but I don’t collect coins.
If people where hoarding currency as a hedge against deflation – well – that would be a different story.
Loose change (Score:5, Interesting)
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Better do it soon if you don't everyone else in the same position will. Since you can't mine new bitcoins profitably anymore without ASICs anyway, the value will shoot up until enough folks cash out and it crashes.
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Because that is the most expensive way to heat anything. Pretty much all other methods are cheaper and a normal heating system can heat where you want thus using less energy to keep you warm.
Have you considered selling those old machines and buying a ground source heat pump?
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Because that is the most expensive way to heat anything. Pretty much all other methods are cheaper and a normal heating system can heat where you want thus using less energy to keep you warm.
Not really. At current prices around here, Electrical heating is cheaper than oil. And that's without the power doing anything else useful.
Natural gas and pumped head obviously come out way ahead of both, but if you don't have the equipment already in place for either, that doesn't mean a whole lot.
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Why not profitably?
Because electricity is not free. Those costs are eclipsing the value of what is being mined.
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This is a poor analysis. I mine bitcoin partly to heat my computer room in the winter. It displaces electricity that otherwise would go into a portable heater. Therefore it doesn't cost me anything to mine right now (aside from wear and tear on my graphics card). Even ignoring that, if I paid full electric cost, the coins I accumulated through mining are worth more than twice the electricity used. I just had to be patient for the price to rise.
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Can't stop going up (Score:2, Funny)
Can't stop going up, guys! I've got plenty to sell. Please buy, as I guarantee this is nowhere near the top. I'm offering mine for $32, and it's a bargain. I'm a fucking moron, so that is why I want you to have mine at this low price.
Fuck me, the captcha is economy.
Why ever spend a deflationary currency? (Score:3)
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When I die, the value to me doesn't die with me. The value to me stays with me until the value to me goes away. If I build a monument to me, that lasts a long long time, that money, buys that monument, and thus is important to me, even if I am dead.
I cannot see beyond Sheol, but I know there is something beyond it, even if it isn't what I expect. This is why we have a "last will". I dare you to die, without a will, especially if you have substantial wealth accumulated during your lifetime. If you have a wil
Driven by online gambling (Score:2)
This is probably being driven by online gambling. [theverge.com] Satoshi Dice is now doing more Bitcoin transactions than all other users combined. [bitcoin.it]
And I'm going to buy a house with my tulips (Score:5, Funny)
Tulip Speculator
-- January 1637
Price Is Not Relevant - You're missing the point (Score:5, Interesting)
Valuation of bitcoin, or BTC, in other sovereign currencies isn't the point here - neither is 'cashing out' or any of that nonsense. The end-game here is to supplant and possibly replace sovereign currencies entirely. It may seem overly ambitious, but from all the financial scandals and other daily scams that are perpetuated by the banking and financial industry - people are getting *sick* of how the current system operates.
Edge exchanges will dominate for a while, but as things change, and end-to-end supply chains form that are BTC denominated, the conversion demand will change and people will be able to keep their entire activity within the BTC realm. This is important, because then true monetary freedom has been achieved. Nobody telling you what you can spend your money on, or stipulations as minimum balances or hours of operation.
This is the biggest revolution in finance taking place right in front of you, and most commenters here dismiss it out-of-hand.
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People are sick of the current currencies because they are realizing the currencies are FIAT only. BitCoins are also FIAT currency, but unlike national currencies, are limited resource (deflationary). AND with most other currencies being inflationary, BitCoins will only INCREASE in value, especially as they become more popular (FIAT) for normal trading (buying/selling items).
My only concern is how does BitCoin handle fractions of coins? Is it built into the protocol and if so, how.
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I see it as an inherently transnational currency, where other currencies are locally issued and controlled, although they may be traded and used outside their native region. Removing national borders as toll booths and inspection stations is a plus for trade, just like removing river and bridge tolls was in early European trade.
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The end-game here is to supplant and possibly replace sovereign currencies entirely.
The problem with replacing sovereign currencies is that there's no one steering the ship when things get ugly.
Europe is a prime example where sovereign currencies were replaced, everything has gone to shit, and there's 27 competing agendas.
I'm happy to see bitcoins form the foundation of a parallel economy, but fuck no I don't want it to supplant or replace the dollar.
It may seem overly ambitious, but from all the financial scandals and other daily scams that are perpetuated by the banking and financial industry - people are getting *sick* of how the current system operates.
This could be fixed, but the bankers and the regulators are far too tightly intertwined.
Look at the shit show created by Republicans because
FFS, this isn't a good thing (Score:5, Insightful)
For a currency to be useful as a medium of exchange, you want it to be STABLE in regards to the value of whatever it is you want to purchase. (And if it can't be stable, it should at least be predictable.) High volatility, with and edge towards deflation (due to irreplaceable currency loss and any increases in the size of the BitCoin "economy"), makes for a rather poor currency. (You'd have to be completely, utterly, nuts to ever even THINK about taking out a loan in the things)
It's deflated by about 100% in the last month, and as I type this, the current bid/ask spread is 66 basis points. It's what you would expect with a thinly-traded stock; not a serious currency.
An increase in the value vs. the USD is only useful if you are using BtC's as an investment.
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Stability is easily achieved by software that adjusts price in BTC to the current exchange rate, which already is done by many online stores taking BTC for payment. The coin value then only needs to be stable for the time the transaction takes to complete (minutes for the buyer, a day for the merchant to sweep their funds back to local currency)
As more people use it, the fluctuations are decreasing over time. It's not yet as stable as other assets, but give it time, it's still new.
My BitCoin story (As if you care) (Score:5, Interesting)
After actually SPENDING it, I decided to start accepting it at my GunBroker auctions. PayPal doesn't (knowingly) handle transactions related to firearms or firearm accessories, and a lot of buyers were interesting in this "BitCoin" thing. An instant way to transfer funds with almost no fees? Yes please. Unfortunately, most of them got stuck at obtaining it, much as I would be confused about how to obtain Euros if someone accepted only Euros. So far, no one has paid in BTC.
However, I am seeing more BTC accepting auctions out there, which corresponds to its value increasing. That's pretty neat.
I don't plan on keeping my money in BTC, as I don't trust it that fully, but I've gotten comfortable enough with getting money in and out of BTC-land that the transactions have become pretty fluid. Right now, my only concern is its volatility. It sucks to buy something for the $20 USD equivalent and then having it arrive when that $20 worth of BitCoin is now worth $50 USD. It works for me, though.
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In deflationary currencies, you want to hold onto the currency until you NEED to spend it. It promotes savings without the need of a bank. Banks on the otherhand have an incentive to be a place where one saves coins so they can loan them out. In a perfect deflationary economy, loaning currency will result in net increase in value for the Bank, even without interest, as the deflation becomes the interest. I put 10 BC into the bank for it to hold. The bank loans out 10 BC to a person, who only receives 9.99
Re:My BitCoin story (As if you care) (Score:4, Interesting)
So far, I am convinced that the BTC that you pay me with can only be used once by you, and that there isn't a trivial way for someone to inject unlimited BTC into the system. That's sufficient to represent debts to me. But I am perhaps a fool.
If prime numbers were currency... We know there are actually an unlimited number of them. There are some that are easy to "mine"... But then they require further and further investments of energy to "mine". Assuming a way to make sure only one person at a time can "own" a given prime number, it would work just fine for the functions of currency: Giving some fluidity to trade. That's all I use Bitcoin for. That's all I use USD for, too. My wealth is stored in either more tangible things (land, house, vehicles, etc) or far more intangible things (stock, 401k, etc).
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That is a huge problem with this currency. It is a pyramid scheme and now with its rising value it is going to have a nice deflationary spiral.
Re:Old arguments (Score:5, Insightful)
This is an old and tired argument. There is no central issuer of bitcoins promising high gains to new investors and paying off old investors with the proceeds. New bitcoins are issued in a decentralized fashion for verifying the transaction history. Therefore it does not meet the definition of a pyramid scheme.
What it is closer to is a collaboratively built database which tracks account balances. What value is put on those balances in terms of other goods (including local currencies) is purely a supply and demand situation, there never was a promise of any future value made. What value people find in it is the features the software and database provides - privacy, fast transfers around the world, low fees, predictable growth rate, etc.
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Seriously, what incentive is there for me to support BTC now the rush is over?
What good is an anonymous virtual currency?
What incentive is there for me to support Euro/USD etc. now that I can't just print it willy-nilly?
Your post is as bad as those who equate Bitcoin with Ponzi schemes. According to their logic, any profitable business would be a Ponzi. OK, so you didn't invest in a hugely succesful company back in its garage days. That doesn't mean the company is useless today. Quite the contrary.
Re:Hurry up and die please (Score:4, Informative)
Bitcoin is not an anonymous currency. Every single Bitcoin transaction is permanently recorded in a public, globally replicated database. True, there may not be any way to link the transactions to your identity now (that you know of anyway!) but you don't just have to worry about whether anyone can now, you have to worry about whether they'll figure out some way to extract it from the transaction history in the future as well.
For instance, for years there was a ridiculous bug that made it a lot easier to figure out that different addresses belonged to the same person than the public documentation claimed it was. The bug's been fixed now, but all the past transactions affected by it are still affected and there's nothing anyone can do about that.
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I think you are mistaken.
Money has value because it can be spent. Since I have to spend some USD on taxes, they have value to me. I must have $X/year no matter what to pay my taxes. I can also spend them at the grocery store and everywhere else.
Re:Hurry up and die please (Score:5, Funny)
Bitcoin is literally a ponzi scheme. It takes in dollars either in cash or in electricity to generate tokens that increase in value as more suckers enter into the scam. The folks who bought in early can make money by selling to suckers down the line, until they run out of suckers and the whole thing crashes.
All they have to do is keep the sale rate below one per minute to match the birth rate of suckers, and they should be fine.
Re:Hurry up and die please (Score:5, Insightful)
I dread each and every story on Bitcoin, because inevitably, someone rolls this particular turd out.
A Ponzi scheme pays its yield on an investment (possibly bogus, but not necessarily) out of capital. Bitcoin functions as a currency, not an investment. The exchange rate rises and falls based on supply and demand, "Bitcoin" itself has no expected yield. It doesn't pay dividends, it doesn't go to harvest, you can't eat it or burn it.
Yes, you have people speculating on it - Just as you do with the USD:GBP exchange rate, on the price of gold, on corn futures, on who will win the next big game. Speculation in a market doesn't make the underlying asset a Ponzi scheme, no matter how many times you claim it.
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What is the difference between a currency and a investment? There is an intersection between the two.
One of the roles of money is a store of value. There are people who invest in currencies because they believe it will go up in value.
Now I don’t think BitCoin is a Ponzi scheme. I do think it is an asset bubble – think Dutch Tulips, Dot Com Stock, or un-built Miami Condos.
Re:Hurry up and die please (Score:4, Insightful)
Yeah... it's more of a "pump and dump" scam than a ponzi scheme.
I think of Bitcoin along the same line as penny stocks... something that is basically worthless, but can be easily inflated with some good story and enough suckers to buy into it.
Then you sell out of your position quickly, and watch the whole thing crash. If you're lucky, people will forget what what happened in a few months and then you can pull the same scam all over again.
Hell, Bitcoin has already crashed before once when Mt Gox got hacked in 2011. Do you really want to invest in a "currency" that can go from $30 to $1 in less than a day?
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Without the ability to print currency what incentive is there for me to use US dollars?
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Their value is that everyone accepts them and you can pay your taxes with them.
Bitcoins like the currency of some backwater nation can be traded in for currency of immediate use, but is of limited utility itself.
Re:Backwater Nation (Score:5, Informative)
Comparing Bitcoin to a small nation is actually a valid one. $33/coin at the moment x 10.84 million coins in circulation = $358 million in circulation. That puts it between Swaziland and Burundi, two small African nations. It just happens that the "Bitcoinians" are a distributed online nation, instead of tied to geography. That there are 23 smaller national money supplies, and 167 larger ones does not invalidate Bitcoin, in fact it shows it has already reached the scale for a national currency, if not the world's largest. Given the value was trivial as little as 2 years ago, that is quite an achievement. It show how fast adoption can be for an internet-based tool.
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US dollars are accepted by many magnitude more businesses, banks, etc. than Bitcoin.
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Sure that's an incentive to favor US dollars over bitcoins, but it's got nothing to do with the fact that the ability to mint bitcoins (or print dollars) isn't supposed to be the main incentive to use them.
Re:Hurry up and die please (Score:5, Insightful)
Do you ever send (or receive) money outside your home country?
Do you want a bank account no government can freeze if they decide you voted the "wrong" way last election?
Do you believe you have every right to spend your hard-earned money playing online poker if you damned well want to?
Yeah, you can use physical cash for an awfully lot of things. But when you need to get funds halfway around the world, or store more of it than will fit comfortably under your mattress - We finally have a semi-viable alternative. Let the haters hate - In the meantime, I'll just keep using Bitcoin for its intended purpose - As a semi-anonymous digital currency.
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1. Lots of legal ways to do that
2. No, I would rather keep my country from being corrupt.
3. No, nor can I spend it on drugs, hookers or the blood of innocent children
How much money do you have that you cannot store it? Ever held $10k? I have, it is just one little bundle of $100s about the same thickness as a deck of cards.
You don't have a semi-viable alternative you have a currency that is going into a deflationary spiral.
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Would you care to explain that, given that we have another 130 years before the last BTC-generating block issues?
Yes, at some point the BitCoin community will need to figure out how to avoid exactly that deflationary spiral. You can't, however, use that argument to explain the current exchange rate.
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Would you care to explain that, given that we have another 130 years before the last BTC-generating block issues?
Sure. Plain vanilla monetary economic theory says that you will have deflation if your currency expands slower than economy you will have deflation.
I believe that 99% of bitcoins have been mined, so we can expect a total of a 1% growth.
If the world economy grows at 2% for the next 130 years (which I think is conservative), GNP would grow at 1,312%.
If BitCoin’s market share remained constant – well – that would be a deflation rate of over 99%
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Need to update my post - I guess we are at 50% coins mined. So the situation is not quite that dire – but you still have over 99% deflation in the long run.
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you have a currency that is going into a deflationary spiral
What exactly is wrong with that? Eventually people start spending money again because ultimately, a currency doesn't have any value to you, if you don't spend it. You'll want to buy stuff as well since the whole point of holding on to bitcoins is to eventually buy something with them.
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Umm – just the opposite. If you sit on the money today it would be worth more tomorrow. You use eventually. True – but it rewards those who have wealth today and discourages investment in tomorrow. Relatively speaking, we are worse off.
If you invested your money you could lose it. Even if you create value you could still lose money. Invest $100 in a company – have 2% deflation – get back $99. I mean – yes – you have made money in the sense that you have more value –
Re:Hurry up and die please (Score:4, Informative)
The problem with a deflationary currency is that it discourages investment. If your currency is deflating by, say, 1% per annum, you can, without any risk at all, increase the buying power of your money just by sitting on it.
This is in comparison to an inflationary currency where, if you don't invest it, its buying power eventually dwindles away to nothing. It encourages people with a large reserve of money to make it available to others via the mechanism of investing.
BitCoins and Leagl Pot (Score:3)
BitCoins might be a GREAT idea for Pot Businesses in Washington State and Colorado.
As we know, Pot Business is now legal in these two states. The folks gearing up to participate seem to just be tooling along not really thinking about the Feds because thus far, the Feds have not gotten nasty over this.
But they almost certainly will. How? Itâ(TM)s not going to involve DEA raids or Black Helicopters. Itâ(TM)s the money.
These business will need banking, and the Feds will simply shut that down, seizing
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Sure, but I could just wait for the next one to come along (alternatives are already available) and get in early, making lots of money for little effort.
I like the concept of BitCoin, just not the fact that lots of people got piles of cash for free and then the tap was turned off.
Re: (Score:3, Interesting)
Do you ever send (or receive) money outside your home country?
Constantly, and there's a dozen established ways of doing it.
Do you want a bank account no government can freeze if they decide you voted the "wrong" way last election?
I have that. It's called "living in a civilized country".
Do you believe you have every right to spend your hard-earned money playing online poker if you damned well want to?
Got that as well, it's called "not living in the USA".
Don't get me wrong, I'm a big fan of electronic cash. I'm not convinced that Bitcoin is it, but that's besides the point. The reasons you give are weak and alarmist reasons that only appeal to a small minority of people.
Why would I want electronic cash (anonymous, untraceable, etc.)? Because it's nobodys business what I spend my money on,
Re:Try $33.70 (Score:4, Insightful)
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You mean like gold? :-P
This always seems lost on those people that hate the fed....
Re:Duh (Score:4, Insightful)
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You thought wrong. There is a hard cap O
On how much can be mined. It has not hit this yet.
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Think Zeno’s Arrow. There is a hard limit on the number of bit coins but it become progressively harder to mine them so the supply will always be increase – but a slowing rate until only a infinitesimal amount are created.
For those of us in the deflation is inevitable (and horrible) with bitcoin this slight increase means nothing. If you believe in monetary economic theory, a GNP increase by 1% would need a 1% increase in the money supply to keep inflation at zero. With Bitcoin's hard limit - w
Re:Duh (Score:5, Insightful)
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I believe the current solution is deflation. When there's less bitcoins around, you simply divide them into smaller pieces.
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Is it possible for two different persons to mine the same coin independently from each other?
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Except right now it inflates at the rate of 25 coins every 10 minutes. So your statement seems to be wrong.
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Except right now it inflates at the rate of 25 coins every 10 minutes. So your statement seems to be wrong.
A currency that increases in size slower than the economy using that currency is still deflationary. Yes, there is an increasing amount of the currency available, but the demand for the currency outstrips that. Sure, bitcoin could be inflationary right now, presuming that it only ever traded for the same fixed value of goods and services it is used for right now. I don't think such a non-growth strategy is what bitcoin is after though.
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I don't think that last word means what you think it means.
Deflation? When bitcoins cost more dollars, that's deflation, because bitcoin now buys more than before. Inflation is when the bitcoin buys less. What do you think those words mean? You probably got confused, because deflation of bitcoins is inflation of dollars.