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Bitcoin Hits $400 Ahead of Senate Hearing On Virtual Currency

timothy posted about 5 months ago | from the and-I-used-to-regret-not-buying-domain-names dept.

Bitcoin 276

An anonymous reader writes "The value of bitcoin has surged through the $400 barrier for the first time, as unprecedented growth sees the virtual currency's value quadruple in just three months. Meanwhile, on 18 November, a Senate subcommittee is scheduled to hold a hearing on virtual currencies like bitcoin and its lesser-known competitors litecoin and altcoin. The hearing comes after a unit of the Treasury Department earlier this year issued guidelines stating virtual currencies should be subject to the same anti-money-laundering laws as traditional currency-transfer businesses like Western Union."

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276 comments

Posting (4, Funny)

c00rdb (945666) | about 5 months ago | (#45424744)

Posting to undo accidental mod

Re:Posting (0)

Redmancometh (2676319) | about 5 months ago | (#45424764)

Uh...this is the only comment here..I assume troll?

Re:Posting (0)

Anonymous Coward | about 5 months ago | (#45425112)

I'm pretty sure (s)he's just saying "first" in a slightly more clever/amusing way.

Really? (3, Insightful)

Redmancometh (2676319) | about 5 months ago | (#45424780)

The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC?
That makes sense.

Re:Really? (2, Insightful)

Anonymous Coward | about 5 months ago | (#45424802)

Nothing about how the BTC market has behaved could be remotely construed as "logical," particularly in the last couple months. Nobody knows what's going on.

Re:Really? (2, Insightful)

Anonymous Coward | about 5 months ago | (#45424818)

.... BTC largely used for legitimate purposes. You live in fairy tale world with villains and no real data.

Re:Really? (5, Insightful)

Anonymous Coward | about 5 months ago | (#45424848)

BTC is largely used for speculation and you know it.

Re:Really? (2)

jythie (914043) | about 5 months ago | (#45425638)

I would really love to see some statistics one way or the other. I suspect you are correct in that BTC is currently being driven by speculation and we are basicly looking at tulips, but I would be curious just how much volume is trading vs payment.

Re:Really? (1)

MickyTheIdiot (1032226) | about 5 months ago | (#45424884)

I don't see how any government can regulate the idea of "worth." People give items worth, not governments. Though it's probably too much to ask the poor leadership we see all around us to understand this.

Congress can say, for instance, that a pound note can not be used on US soil and create all kinds of problems, but they can't say a pound note has no worth. I wonder if they even have an inkling that there is a difference.

Re:Really? (0)

Anonymous Coward | about 5 months ago | (#45424974)

People give items worth, not governments

Government is an item. People assign worth to governments as they do other items.

A government that the people assigned wroth to in turn has the ability to regulate worth. Should people stop valuing a government, that government loses such power, usually in the form of that government's currency collapsing, losing its ability to obtain credit, etc.

Re:Really? (4, Informative)

alexander_686 (957440) | about 5 months ago | (#45425066)

That’s not exactly the issue.

There have been various schemes to avoid taxation and/or for criminal use. I.O.U.s, scripts, payment-in-kind, coupons, assets swaps, forward contracts, loan forgiveness gifting techniques, etc. Each of these techniques have legitimate purposes but at times are just way to circumnavigate the law.

If I swap my services for goods – US Dollars, BitCoins, an old car, credits towards baby-sitting – I have earned income that I need to declare at fair market value on my income tax. Now determining the fair market value for some of these goods are easier than others but the principal remains the same.

Re:Really? (2)

ZombieBraintrust (1685608) | about 5 months ago | (#45425512)

Goverenments are made up of people. They have been requlating worth for most of written history. They have set prices, imposed quotas, imposed caps, redistributed land and assets. In lawsuits Judges set the value of things. They have made some assets illegal. Look up the "Gold Reserve Act" and you see the US goverment taking everyones gold in exchange for paper currency. If they can make Gold illegal they can mess with Bitcoins as well.

Re:Really? (1)

Anonymous Coward | about 5 months ago | (#45424902)

BTC isn't largely used for anything at all, except to make money.

Re:Really? (1)

Anonymous Coward | about 5 months ago | (#45424896)

Bitcoin is not U.S-centric.

Re:Really? (-1)

Anonymous Coward | about 5 months ago | (#45424952)

All currency is U.S.-centric, because the world economy is centered around the U.S.

Re:Really? (1)

g0bshiTe (596213) | about 5 months ago | (#45425520)

What planet do you live on?

I'm American and if your statement was true my 401k that is largely in foreign markets would have tanked when the banks collapsed and the stock market took a shit. Instead it nearly tripled in one quarter.

Says to me the worlds monetary system is not US-centric.

Re:Really? (0)

Anonymous Coward | about 5 months ago | (#45425826)

"Centers around" at a macro level does not mean "is completely and utterly dependent on in every way."

If the Fed raises interest rates shopkeepers in Bangkok don't scream and jump the counter to change their prices. The arguement you're making is that there is no global warming because it's really cold outside your house right now. You apparently got lucky because I had a decent chunk of change in emerging markets in 2008-2009 too, and if I had any plans on retiring then I probably would have thrown myself off a bridge.

At the end of the day the USD is the currency of national reserves, it's the currency of oil, and it's still the official or defacto currency of a couple dozen countries and territories. The USD is the most traded currency as well, making up 87% of financial transactions by value. That means that anything the US says or does is more important to the world economy than anything any other country, or for that matter, union of countries does.

Re:Really? (1)

Anonymous Coward | about 5 months ago | (#45424982)

I don't think the value is in response to the hearings, I think the value is just going up for whatever reason (possibly more demand due to publicizing the various drug sites lately, or investors trying their hand at BTC).

It worked out for me, though. I bought some BTC a couple months ago for around $140 each, and then bought some MDMA via Sheep Marketplace for a trip to Vegas. I spent about 2/3 of what I had, I had a little over 1 BTC left. After seeing the increase in value I just went and placed another order for around $375 using my remaining 1 BTC. The value of the second order was more than the first order, I thought I was going to need more BTC for another order. I could sell the entire second order and end up with quite a bit more money than I put into it in the first place, even counting the first order that I used for myself and friends and sold none of.

Some things just work out, I guess. Score for me.

Alternate Slashdot (4, Funny)

DrYak (748999) | about 5 months ago | (#45425266)

and then bought some MDMA via Sheep Marketplace for a trip to Vegas.

Announcement from your friendly NSA :

We would like to inform you, that the following keywords: "MDMA", "Sheep Marketplace", "trip" and "hearings" (*)
have triggered our system to send you to our "fake slahsdot [slashdot.org] ".

A javascript exploit has been injected into you browser to help track you down and burst your door,
but we wanted to inform you that we detected that the chinese were already in your computer trying to steal your private keys.

(*): Don't ask.

Re:Really? (0)

Nom du Keyboard (633989) | about 5 months ago | (#45425292)

You may think that you're an AC, but the NSA likely knows who you are.

Re:Really? (0)

Anonymous Coward | about 5 months ago | (#45425756)

An anonymous online confession is not enough evidence to convict. They would need to do a further investigation and find real evidence. Most likely they wouldn't be able to do find evidence for the past occurrence. They could maybe try to catch him buying drugs again. But this would take a lot of resources just to catch a guy buying a recreational amount of drugs for a special occasion now and then. This person isn't dealing drugs presumably, and he isn't addicted to drugs either. Sounds like he could afford them and only uses them on occasion. There is no reason for the government to go after people like that. They want the big distributors, the cartels, the manufacturers, the importers, etc. They bust the little guys when they have obvious evidence, open and shut case, no wasted resources.

Some brief points (5, Insightful)

Okian Warrior (537106) | about 5 months ago | (#45425052)

The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC? That makes sense.

1) It doesn't matter what the US government decides, if people want to use it it will be used. Reference: drugs, prostitution, illegal immigration, abortion, illegal guns, and other world countries.

2) People don't act because they have no alternatives. This is an alternative, but not many people know about it. High-profile senate hearings publicize BitCoin, so that more people will realize how useful it is, and this spurs demand.

3) There are no valid argument against BitCoin. There are economic "story telling" arguments, and predictive "doom and gloom by story telling" arguments, and false equivalences with closely related things (fraudulent exchanges, Silk Road, &c), and outright lies ("it's a Ponzi scheme!!!"), but no actually valid arguments.)

4) All the standard aphorisms apply: buggy-whip manufacturers, the invisible hand, liquidity, privacy and freedom.

BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.

Re:Some brief points (0)

Anonymous Coward | about 5 months ago | (#45425458)

High-profile senate hearings publicize BitCoin, so that more people will realize how useful it is, and this spurs demand.

But the hearing hasn't happened yet and demand is up, that's speculation.

Re:Some brief points (1)

jythie (914043) | about 5 months ago | (#45425748)

Plenty of things can stop it, the most important one being lack of consumer interest. Right now there is a great deal of enthusiasm, but it remains to be seen how much long term usage there will be. BTC's sustained (as opposed to speculative) value comes from the ability to use it for things, which means ability to spend them. Long term niche or passing fad, we don't know yet.

Either way, I suspect it will not be much of a game changer. It is easier to use then something like gold, but various places have attempted to create gold backed electronic currencies and either blown up or faded away. But will that ease of use result in a sustainable critical mass?

Re:Some brief points (4, Insightful)

bobbied (2522392) | about 5 months ago | (#45425780)

BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.

Apparently it already IS a game changer. Why else would they be calling meeting about it in congress?

Re:Some brief points (0)

Anonymous Coward | about 5 months ago | (#45425816)

>BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.

It can be easily replaced with other crypto-currency. I see no reason to pay speculators a large amount of money rather than mining new types of coins. Bitcoin only has great inherent value if they hold patents that make other forms of crypto-currency impossible.

Re:Really? (4, Insightful)

JustAnotherIdiot (1980292) | about 5 months ago | (#45425166)

Remember back in high school where all the cool kids wanted alcohol because they were told they weren't allowed to have it?
It's the same thing. The US government is about to tell a bunch of nerds they can't have something, so they want it even more now.

Re:Really? (1)

bobbied (2522392) | about 5 months ago | (#45425876)

It's the same thing. The US government is about to tell a bunch of nerds they can't have something, so they want it even more now.

I don't agree that they will say you can't have BitCoin, but the net effect may be the same.

What the government seems likely to do is regulate the exchange of currency in and out of BitCoin to make it reportable. This will mean that you will have the same reporting requirements of services like Western Union, Pay Pal and the like. They are not going to prevent you from buying and selling BitCoin. You will still be allowed to own them. You, and the exchanges who buy and sell BitCoin, will be legally required to report transactions.

Now how they enforce this is the real question... But preventing money laundering and such has always been an enforcement nightmare.

Re:Really? (1)

Anonymous Coward | about 5 months ago | (#45425194)

The value of bitcoin is up because the Chinese have taken to it just as people from countries who don't currently take for granted their position as printers of the world's reserve currency are increasingly doing. To the extent that our government has taken to publicly playing russian roulette with its financial standing to score political points with crazy constituencies at home, the rest of the world is naturally investigating non-American dominated and non-American regulated alternatives. Add to that Edward Snowden's revelations about NSA snooping on _everyone_ and I'm pretty sure that much of the world floats between distrust of and outrage at Washington.

Ironically, in the Citizen's United decision, the SCOTUS decided that money was equivalent to free speech. Bitcoin as free speech is saying something: It's saying that a lot of people are increasingly rejecting the American empire and increasingly recognizing that in the face of the increasing gulf between our ideals and practices, the emperor has no clothes.

Of course the government will try to regulatebitcoin out of existence or otherwise legislate a way to strangle it. Of course the IRS wants its 'share'... and before long, if it hasn't happened already, Wall Street will soon come calling to 'sanitize', 'legitimize', and dominate it... all of which leads me to believe that in the end, it won't be the 'bitcoin' itself that poses the grand threat to the system but rather 'the idea' of it. There is no material difference that makes the $100 bill one hundred times more valuable than the $1 bill. Our _trust_ in the currency is what ultimately establishes its value. That trust is an abstraction. Bitcoin appeals to the imagination, and until the establishment figures out a way to control it, they're going to do everything they can to disuade people from trusting it. Why?

Because otherwise, bitcoin/virtual currencies may well become REAL change that people can believe in... and the establishment doesn't want that.

Re:Really? (1)

TWiTfan (2887093) | about 5 months ago | (#45425556)

Anyone remember that South Park episode [wikipedia.org] where all the YouTube stars were bragging about how much they were worth in THEORETICAL dollars? That's what I think of every time I hear about bitcoin's supposed value. Yes, a bitcoin is now worth 400 theoretical dollars.

Re:Really? (1)

Anonymous Coward | about 5 months ago | (#45425858)

How is it theoretical when people will pay $400 for a single bitcoin? That's actual value by the traditional definition.

Re:Really? (1)

ultranova (717540) | about 5 months ago | (#45425732)

The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC?
That makes sense.

If your hypothesis leads to predictions that disagree with observed reality, then the logical conclusion is that your hypothesis is wrong. Perhaps you should tell us where you got your "95%" statistic, so that we can analyze what, exactly speaking, went wrong?

Re:Really? (0)

Anonymous Coward | about 5 months ago | (#45425738)

I don't expect that the Chinese speculators that drove the price up have any interest in what the U.S. government has to say as long as they're not announcing a crack that destroys the bitcoin network.

just what we need (-1)

Anonymous Coward | about 5 months ago | (#45424792)

Judgmental blowhard political assholes that don't understand ANYTHING weighing in on things that they're too idiotic to grok.

Re:just what we need (-1)

Anonymous Coward | about 5 months ago | (#45424860)

Maybe you'd be better understood if you put together a coherent sentence.

Re:just what we need (-1)

Anonymous Coward | about 5 months ago | (#45425446)

Maybe you'd better understood - SHUT THE FUCK UP.

I have a solution (1)

bluefoxlucid (723572) | about 5 months ago | (#45424826)

Repeal all the anti-money-laundering laws. Problem solved.

Re:I have a solution (1, Interesting)

ADRA (37398) | about 5 months ago | (#45424906)

Sure, which means getting rid of all income tax, capital gains, any form of 'service' as in no government, so buy a lot of guns, because the robber barons that were politely robbing you blind privately will be shooting you in your face for all those gold coins you have packed under your matress.

Re:I have a solution (1)

bluefoxlucid (723572) | about 5 months ago | (#45425144)

No, it means getting rid of stuff like mandatory reporting of transactions over $10,000. Meanwhile your employer would still be required to report your income; you'd still be required to file taxes; etc. It's just that suddenly "suspicious transactions" don't need to go to the Fed, suddenly you're not going to be detained for having $10,000 in cash on hand, etc.

Dude - reallyt? (1)

Okian Warrior (537106) | about 5 months ago | (#45425730)

Sure, which means getting rid of all income tax, capital gains, any form of 'service' as in no government, so buy a lot of guns, because the robber barons that were politely robbing you blind privately will be shooting you in your face for all those gold coins you have packed under your matress.

Really dude?

Is this the sort of argument that rates "+4 interesting" on slashdot nowadays?

Stop story-telling! We're nerds - we're better than that.

Re:I have a solution (0)

Anonymous Coward | about 5 months ago | (#45425864)

Did you know that the concept of "money laundering" is relatively new, and wasn't regulated in the USA until the 1970's? It's astonishing how governments managed to exist before then.

No matter what clever crypto scheme you've worked out, you can never hide land.

Shortsighted (4, Insightful)

brunes69 (86786) | about 5 months ago | (#45425088)

This kind of short-sighted answer is the problem with BitCoin backers.

Anti-money laundering laws and regulations are very important because they are what forces the systems that allow law enforcement to determine and sieze the proceeds of crime. Without such siezing, the incentivization of crime increases exponentially.

IE - say I rob a bank. If it is trivial for me to convert the money to bitcoin and transfer to a third party in an untraceable way, then my incentivization for robbing banks is now HUGE, because even if I get caught, I will still be able to keep my proceeds. Get caught robbing bank, go to jail for 10 years, get out, and buy your own island. Sounds like a good deal to me.

Re:Shortsighted (1)

larry bagina (561269) | about 5 months ago | (#45425160)

Since it sounds like a good deal, I assume you're posting from a prison via a phone that was ass-smuggled in. Right?

Re:Shortsighted (1)

bluefoxlucid (723572) | about 5 months ago | (#45425188)

Uh, no. If you are guilty of robbing a bank, you are guilty of robbing a bank. If you are guilty of selling drugs, you are guilty of selling drugs. If the money is traceable, it's traceable.

Money laundering laws make it a separate crime to, say, allow someone to deposit $10,000 in a bank, or $5000 and $5000, or $9950 but "it looks like they're trying to come just under the mandatory reporting limit", without reporting it. It makes it illegal and/or difficult to carry around thousands of dollars of cash on hand at once. It subjects you to reporting your private accounts in some situations.

Here's a hint: Laundering actually happens. Laundering happens and the money gets lost and the fed can't seize it. If you're convicted of making $5 million in drug sales, and you have $5 million, the police will basically take that because, hey, mystery drug money found.

Re:Shortsighted (1)

brunes69 (86786) | about 5 months ago | (#45425854)

You seem to be missing the connection that the money laundering laws are what contain the regulations forcing reporting limit in the first place. Without money laundering laws these regulations would not exist, because companies will not incurr the overhead cost for no reason. "If the money is traceable, it's traceable" - but without anti-money laundering laws, it would all be untraceable. That is the whole point of the laws.

Altcoin is best altcoin (5, Informative)

Anonymous Coward | about 5 months ago | (#45424828)

Yes altcoin is the best of the altcoins, there isnt an alternate bitcoin called altcoin, all alternatives are referred to as altcoins.

Real reason is due to Swiss Banks (1)

SuperKendall (25149) | about 5 months ago | (#45424882)

Any rise in the value of BitCoins is probably because it's the only way to keep anonymous funds now that the Swiss banks are no longer keeping records confidential.

Re:Real reason is due to Swiss Banks (4, Informative)

CreatureComfort (741652) | about 5 months ago | (#45425128)

Bitcoins are NOT anonymous. Every transaction a particular coin is part of is irrevocably written to that coin for all eternity. So, it is only as anonymous as a person keeps their bitcoin wallet identity anonymous. Which is effectively impossible if you want anyone to say...send you bitcoins. Now tying a particular wallet address to a physical address or person is currently not inherently easy, though not impossible at any point where Bitcoins are turned into, or from, cash.

That is actually the crux of the Senate hearings. Essentially the FTC is asking congress to pass legislation that says that any service designed to exchange between Bitcoin and cash, be required to follow all the laws that other credit/cash exchanges (and a slew of other businesses) have to follow, a key part of which is properly identifying all the participants in the transaction.

So, MtGox,, etc. would be required to verify your name, address, credentials, etc. when you setup an account, so "You" can be tied to a specific wallet address when the Feds go snooping for illegal activities.

Re:Real reason is due to Swiss Banks (0)

Anonymous Coward | about 5 months ago | (#45425234)

So how is it that the two biggest online consumers of Bitcoin are the kind folks who run the Cryptolocker virus (who accept it as payment, even suggesting it as the 'cheapest alternative' when paying the ransom on your data) and Dread Pirate Roberts and his buddies at Silk Road?

Re:Real reason is due to Swiss Banks (1)

CreatureComfort (741652) | about 5 months ago | (#45425590)

Duh...because currently it is sufficiently easy to transfer Bitcoin to physical currencies at exchanges where they DON'T require identity verification.

Once those requirements are put in place, if the FTC gets its way, then Bitcoin will be FAR more traceable than cash.

Re:Real reason is due to Swiss Banks (3, Interesting)

HornWumpus (783565) | about 5 months ago | (#45425180)

The Swiss are continuing to keep the numbered accounts opened prior to 1950 secret.

The Kennedy, Rockefeller and DuPont accounts are safe.

Re:Real reason is due to Swiss Banks (1)

Nom du Keyboard (633989) | about 5 months ago | (#45425246)

Any rise in the value of BitCoins is probably because it's the only way to keep anonymous funds now that the Swiss banks are no longer keeping records confidential.

The flaw in your argument is that the government doesn't have to track every BitCoin. They only have to worm their way into the far less numerous exchanges where you turn your BC to fully usable currencies and demand that they require full identification and keep records of every transaction. Tax problem solved --- and you know that what they're working on exactly that step by step.
 

Of course the Treasury says that. (1)

intermodal (534361) | about 5 months ago | (#45424898)

The Treasury has a vested interest in keeping people on the dollar.

Re:Of course the Treasury says that. (2)

i kan reed (749298) | about 5 months ago | (#45424948)

And, you know, preventing financial support for organized crime.

Re:Of course the Treasury says that. (1)

stewsters (1406737) | about 5 months ago | (#45425352)

Then why do they support the dollar? Shouldn't they issue some sort of treasury credit card that tracks all your purchases? The government keeps the dollar because they need a quick deniable way to pay people that is more difficult to track.

"lesser-known competitors litecoin and altcoin" (0)

Anonymous Coward | about 5 months ago | (#45424922)

lol

Netcraft confirms Bitcoin is dying.... (0)

Danathar (267989) | about 5 months ago | (#45424928)

Queue the people who will say "Bitcoin will never amount to anything"

Of course these are the same people who have said that every 6 months for years....

Re:Netcraft confirms Bitcoin is dying.... (1)

ADRA (37398) | about 5 months ago | (#45424978)

Yup, and houses are precious too! You can't make more land! Oh, I better jump onto the bubble as it crests! I can see all the way to ... ugh don't look down, just don't look down.... Oh no, I just looked down. The difference is houses can have SOME value to you personally even when its externally useless, and BitCoins are literally bits on your computer.

Re:Netcraft confirms Bitcoin is dying.... (1)

rasmusbr (2186518) | about 5 months ago | (#45425148)

Yup, and houses are precious too! You can't make more land! Oh, I better jump onto the bubble as it crests! I can see all the way to ... ugh don't look down, just don't look down.... Oh no, I just looked down. The difference is houses can have SOME value to you personally even when its externally useless, and BitCoins are literally bits on your computer.

My one third of a BTC is bits on Mt:Gox's servers, that is assuming they're not doing fractional reserve banking yet. I don't think I'm much different from the average BTC owner.

As always I would advice against investing significant amounts of real money in BTC. If you want to invest real cash, at least invest in a basket of several virtual currencies and do it across several trade sites.

Re:Netcraft confirms Bitcoin is dying.... (0)

Anonymous Coward | about 5 months ago | (#45425236)

House prices haven't actually fallen since the crash. In most places they are still going up, just not as fast.

Re:Netcraft confirms Bitcoin is dying.... (0)

Anonymous Coward | about 5 months ago | (#45424980)

And have been right so far.

Re:Netcraft confirms Bitcoin is dying.... (2)

ledow (319597) | about 5 months ago | (#45425016)

The thing is, Bitcoin doesn't HAVE to amount to anything.

You really think that Snapchat is a $2bn business? Bollocks. Same as every other IPO.

The trick is to get in while it's cheap, and out while it's expensive, before it collapses. It can collapse or not. That's not the question. The question is: If you used your brain, could you have made lots of money? And the answer is Yes. At one point there were Bitcoin faucets giving out 0.01's of a Bitcoin for free. They would be worth $4 each now.

And for what? Doing nothing. No, you don't even have to mine. And if you put in a few pounds like I did a year or so again, I've seen that investment double-and-a-bit in that time (even if you don't include the Humble Bundles I bought with Bitcoin out of my wallet).

The thing about Bitcoin is that while every say "it's failed" for years on end, others are quietly building up a stash worth a fortune. It's only a definition of "failed" if you didn't use it to your advantage, apparently.

Re:Netcraft confirms Bitcoin is dying.... (4, Insightful)

SleazyRidr (1563649) | about 5 months ago | (#45425158)

I've said this before, and no doubt I'll find the need to repeat it again in the future.

I'm very happy for you that you made some money from Bitcoin speculation. That's not sarcasm, I am genuinely happy that you made some money. The problem is that is really no way to judge whether it can be a viable alternative currency. People don't sit on their USD and hope to profit, they go out and buy stuff: that's what you're supposed to do with money. Right now all Bitcoin amounts to is a bunch of people sitting around hoping that they're on the right side of the greater fool theory.

Re:Netcraft confirms Bitcoin is dying.... (0)

Anonymous Coward | about 5 months ago | (#45425282)

And it's only a 'fortune' if you exchange it for real currency. Now.

Re:Netcraft confirms Bitcoin is dying.... (0)

Anonymous Coward | about 5 months ago | (#45425048)

I'm surprised by BitCoin's success and I don't think it can be realistically adapted to a large scale (The early adopters would become rich beyond anything seen in history simply for making a wild guess and luckily investing a few thousand bucks at the right time) It is interesting to see that the demand for a currency free of traditional controls can drive the demand so high.

Don't kid yourself. Bitcoin is primarily a dark currency used for things that are difficult to do with regular currency because of laws designed to clam down on illicit commerce. There are parallels in other similar underground currency markets. (Drugs, loan shark debt, and even bottles of tide detergent, are used in similar manners)

Re:Netcraft confirms Bitcoin is dying.... (0)

Anonymous Coward | about 5 months ago | (#45425218)

Why are you asking them to stand in line?

bitcoin versus paypal & other online transfers (0)

schneidafunk (795759) | about 5 months ago | (#45424938)

I was just reading about another competitor for online payment called Dwolla [sfgate.com] . Dwolla has the backing of major financial institutes, which makes it more likely to be successful. It seems to me that bitcoin prices are artificially high because people are essentially hording it instead of using it as a currency.

Re:bitcoin versus paypal & other online transf (1)

HornWumpus (783565) | about 5 months ago | (#45425214)

Anybody remember 'Flooze'?

You really thing we need 'major financial institutions' to create a digital currency? Why would we trust the likes of G.S.?

Re:bitcoin versus paypal & other online transf (0)

Anonymous Coward | about 5 months ago | (#45425488)

case and point: http://btc.ondn.net/

Re:bitcoin versus paypal & other online transf (1)

TechyImmigrant (175943) | about 5 months ago | (#45425600)

>bitcoin prices are artificially high because people are essentially hording it instead of using it as a currency.

And are doing extremely well.
$0.10 -> $400 is a good return.

2 actual reasons (1)

slashmydots (2189826) | about 5 months ago | (#45424964)

The press from silkroad going back online mixed with it actually doing so is making people but BTC more than sell and a lot of ASIC miners have sold off enough BTC to pay for their new hardware by now and are now not selling. Those are the 2 actual factors driving up the price in reality. All other speculation is incorrect.

Re:2 actual reasons (0)

Anonymous Coward | about 5 months ago | (#45425036)

I can name a number of reasons BTC is up in value:

1: Lots of buzz, which makes one suspicious of astroturfing and shills.

2: Ransomware demands BitCoins, again more BTC buzz.

3: The "cool" factor.

For a currency where only the people coming in are forced to exchange real value where early-on, only energy for mining was needed (before the need for ASICs), I'm sure the early adopters are quite pleased. In any other field, this would be suspiciously termed a pyramid scheme where the latecomers have to shoulder the actual moving of value.

Certain people "in the know"... (1)

Anonymous Coward | about 5 months ago | (#45425054)

...understand that now that the Gov has a large amount of bitcoins, they need to be tempted to spend them. What better way than driving up the value of the currency?

No. (0)

Anonymous Coward | about 5 months ago | (#45425060)

Bitcoin is not subject to government regulations. They do not mint it, do not control it, and any attempt to control it is an attack on freedom, and they (governemnts) will likely come under some sort of attack if they try.

Re:No. (0)

Anonymous Coward | about 5 months ago | (#45425404)

"and any attempt to control it is an attack on freedom"

Where have you been since May?

Bitcoins. Garbage. (0)

Anonymous Coward | about 5 months ago | (#45425078)

I have no Bitcoins (since I am not an idiot) and have no vested interest in whether they succeed or fail. However, value cannot be created from nothing. Sure, if you want to exchange made up coins for made up property in World Of Warcraft - that makes sense. But if you want to take something "created" by turning energy into heat and then use that "creation" to buy food - well that's idiotic. Adding to the entropy of the universe does not create value.

Re:Bitcoins. Garbage. (0)

Anonymous Coward | about 5 months ago | (#45425216)

Value is created from a combination of demand and scarcity. Of which bitcoins have both. I don't own any but it's nice to see fiat currencies finally getting some competition.

Re:Bitcoins. Garbage. (1)

jythie (914043) | about 5 months ago | (#45425862)

They have had competition for a long time, BTC has had a lot of hype assigned to it as far more unique then it actually is. Hype fuels speculation, and speculation fuels overvaluing.

Re:Bitcoins. Garbage. (1)

stewsters (1406737) | about 5 months ago | (#45425414)

Neither does the US dollar, they just take up space. I will take any of those that you don't want and properly dispose of them.

Now if I could just retrieve that e-wallet with (0)

Anonymous Coward | about 5 months ago | (#45425110)

7 bitcoins I lost a few years ago...

that would be worth some nice christmas cash, I'd cash out.

Commodity, Not Money (1)

Nom du Keyboard (633989) | about 5 months ago | (#45425138)

In the truest sense BitCoin is commodity, not a currency. You can create, or buy, title to ownership of a piece of information that others have agreed to both recognize your ownership rights, and value it as well. It also, unlike every other currency today, is the ultimate Hard Currency because there is a hard upper limit on its creation. You can mine more gold for your gold backed currency, but the total number of BitCoins under the current rules (a most important distinction) has a hard cap.

It's also the ultimate fiat currency because although it took some effort -- or lucky guesses -- to create, it is not legal tender anywhere. It only has value between 2 people willing to agree on that value. Rather the Esperanto of money. But to try and turn it into a currency so that governments can regulate it under existing laws is absolute Fraud on their citizens.

Of course, when has that ever stopped politicians from "creating" new tax sources, which is the ultimate end of this exercise in case you hadn't realized that yet.

Everyone in government supporting this regulation fantasy should be voted out of office immediately -- although we all know that's never going to happen.

Re:Commodity, Not Money (1)

jythie (914043) | about 5 months ago | (#45425880)

This seems to be less creating new tax sources and more looking into people dodging existing taxes. Not quite the same thing.

so it's like playing the stock market (0)

Joe_Dragon (2206452) | about 5 months ago | (#45425252)

where it can shoot up fast and then come down fast.

The winning move is to buy when it is low and sell when it goes up.

But when lot's of people buy and sell is when it makes big moves.

Re:so it's like playing the stock market (1)

TechyImmigrant (175943) | about 5 months ago | (#45425394)

I sold mine halfway up the spike, thinking it couldn't possibly go any higher.

It'll come back down soon enough.

We should all like this Bitcoin *concept* (5, Interesting)

mathimus1863 (1120437) | about 5 months ago | (#45425254)

We should all like this Bitcoin *concept* even if we don't all like Bitcoin itself or the culture that has evolved around it. Yeah, I know it's the "fad" to bash Bitcoin. But it's disappointing, because Bitcoin represents everything that us nerds reading slashdot should like: It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics. Most of us here dig that stuff.

Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different than anything else we know, and there's plenty of reasons to believe that it could succeed as much as it could fail.

Why does gold have value? Nothing is backing gold (and if it was valued only for its material properties, it would have a value only a fraction of $1,400/oz). Yet it has high value, mainly because of its properties to behave as a transferable store of value: scarcity, fungibility, density, identifiability, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow. I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use credit cards or paypal, which all require me to remember log-in creditials, give away personal information to be [improperly] protected by a third-party and/or pay a bunch of fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable?

Re:We should all like this Bitcoin *concept* (0)

Anonymous Coward | about 5 months ago | (#45425574)

Bitcoin represents everything that us nerds reading slashdot should like: It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics.

Bitcoin is bad economics.

Maybe OK on the other stuff.

Cost of Minting -- Fascinating (1)

Nom du Keyboard (633989) | about 5 months ago | (#45425280)

I find it fascinating that as the cost of minting BCs in terms of compute cycles goes up, so does their value relative to the dollar. Is that behavior by design?

Cavet Emptor (1)

wrackspurt (3028771) | about 5 months ago | (#45425408)

Money [wikipedia.org] is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can be considered money.

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money.[4] Fiat money, like any check or note of debt, is without intrinsic use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private"[citation needed]. Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.

The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of the money supply in developed nations.

Money acts as a standard measure and common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems. But its most important usage is as a method for comparing the values of dissimilar objects.

Wikipedia

Bitcoin may be money in nearly every sense of the word but it lacks stability to act as a standard measure and common denomination of trade. Just as money in unstable countries lack the same attributes. It's a medium of speculation and not being tied to a stable market place perhaps overseen by a stable government it will likely never be more than a means of speculation.

Re:Cavet Emptor (0)

Anonymous Coward | about 5 months ago | (#45425750)

Money is historically an emergent market phenomenon establishing a commodity money...

This is mostly a fantasy, as explained here:

http://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

I wish all bitcoin fans would read this.

Bitcoins are here to stay (0)

Anonymous Coward | about 5 months ago | (#45425770)

The value if bitcoin succeeds is 100x +. It's a win for merchants and a win for consumers and a big screw you to the banks. People love clicking on why bitcoins will fail articles, so bloggers keep writing them.

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