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Bitcoin Exchange Value Halves After Chinese Ban

Unknown Lamer posted about 7 months ago | from the newton's-law-of-should-have-gotten-out-last-week dept.

Bitcoin 475

An anonymous reader writes with news of the latest major fluctuation in the price people are willing to pay for Bitcoins. From the article: "China's ban on its financial institutions handling bitcoin causes world's largest exchange to cease trading, halving the value of the currency from $1,000 to less than $500 in a matter of days. The country's central bank took a hard line on Bitcoin in early December when it banned financial institutions from handling the decentralized crypto-currency, and as a result BTC China, the world's largest bitcoin exchange, has stopped accepting deposits from its users." Just watch that line trend downward.

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475 comments

Buttcoins! (0, Insightful)

Anonymous Coward | about 7 months ago | (#45726021)

Buttcoins. LOL. Everyone knows the real money is in ass pennies.

In Slashdot USA... (0)

Anonymous Coward | about 7 months ago | (#45726037)

downwards means upwards.

history, itself, repeat, etc. (1)

Anonymous Coward | about 7 months ago | (#45726063)

A week ago, there was a Chinese ban on Bitcoin as a currency (not as a tradable asset) and BTC had its value halved from $1k to $500. Now, you're telling me there's a ban on Bitcoin in China and it has caused BTC's value to be halved from $1k to $500? Now that's what I call news!

Re:history, itself, repeat, etc. (1)

beelsebob (529313) | about 7 months ago | (#45726493)

More like (nearly) thirded, it's gone from $1215 down to $425.

Re:history, itself, repeat, etc. (1)

Anonymous Coward | about 7 months ago | (#45726677)

Really??? I'll give you $425 for all the bitcoins you can supply. Don't lie.

And this (4, Interesting)

FooAtWFU (699187) | about 7 months ago | (#45726109)

And this is why we're still decades away from having mortgages denominated in bitcoin. :P

Re: And this (0)

Anonymous Coward | about 7 months ago | (#45726257)

LIBOR reacts to news like this in much the same way when it comes to countries joining and leaving the market... and there are mortgages out there tracking LIBOR.

Re:And this (1)

cheater512 (783349) | about 7 months ago | (#45726303)

I dunno....seems slightly more reliable than getting a mortgage from a US bank.

Re:And this (1)

BitZtream (692029) | about 7 months ago | (#45726407)

... considering you would be dealing with the same bank ... in bit coin ... how exactly is it different?

Re:And this (1)

i kan reed (749298) | about 7 months ago | (#45726417)

Fixed rate home mortgages in the U.S. are backed by the federal government, who provides insurance in order to "incentivize" ownership. For reasons unrelated to the present discussion, I think this is a bad idea, but that doesn't influence the main point that mortgages in the U.S. tend to have lower interest rates than in most other countries.

Re:And this (1)

gl4ss (559668) | about 7 months ago | (#45726541)

doesn't matter who it is backed by if they can just issue foreclosures on it at will and the court agrees for some weird reason("bank wouldnt lie, would they?")

Re:And this (2, Informative)

Anonymous Coward | about 7 months ago | (#45726711)

While that has happened, it's extremely rare, to the point of not even being a statistic.

can I just say (0, Redundant)

Gothmolly (148874) | about 7 months ago | (#45726117)

ROFL.

me too... (1)

globaljustin (574257) | about 7 months ago | (#45726255)

after I picked myself up off the floor and composed myself a bit, I still laughed to myself at how fast the BTC bubble burst

that said, I learned alot by studying & discussing how BTC worked & what it's benefits/drawbacks were...I wish I had found my BTC wallet info!

i bought exactly 1 BTC back in late 2009 IIRC but I was so busy with grad school it got lost in the shuffle

any idea that BTC could replace currency or be an investment vehicle were/are silly but its still noteworthy as a sort of 'prank' that got taken very seriously!

Re:me too... (2)

SuricouRaven (1897204) | about 7 months ago | (#45726373)

There may still be a niche in informal transfers: Party A buys coin, sends to party B, B sells coin. Potentially handy for those who are unable to deal with conventional payment processors (Criminals, activist groups under government oppression, those affected by international sanctions, people in obscure countries where Paypal does no operate) or who are just unwilling (Anti-corporate idealists, paranoid activists, people worried about the many paypal stories of those who struggled to get their money out).

As a medium of long-term storage, or even something you could price goods in, it's just too volatile.

Re: me too... (2)

AvitarX (172628) | about 7 months ago | (#45726471)

That's funny, the first time I read that the value burst, it fell 50 percent to around 100 or so.

Every time I see it loose 50 rapidly, it bounces back and further, see the various scandles, see when silk road closed. It's super volitile, but it has been fairly resilient too.

scale & timing (0)

globaljustin (574257) | about 7 months ago | (#45726691)

Every time I see it loose 50 rapidly, it bounces back and further

going from 100->50->100 is not the same as going from 1000->500->1000

see this isn't abstract numbers, this is $$$...money doesn't scale the same as flat abstract numbers

a 50 point swing vs a 500 point swing is an order of magnitude more **volitile**

also the timing of the drop is important, there are many new big name investors in BTC now, and in the past for the swings you cited there were none...the stakes are much higher now

Re:me too... (2, Interesting)

AlphaWolf_HK (692722) | about 7 months ago | (#45726539)

Then again, every time bitcoin bubbles and pops, it rises to unexpected levels later.

People like you were saying exactly this when it dropped from a high of $200 to a low of $50, and said the same thing in the bubble prior to that. My only regret at the time was that I believed it. Not long after, it began trading at $1300.

Anyways, I've actually profited rather well off of bitcoin; in fact the whole thing could collapse tomorrow and I'd still have made a profit. The silly thing is that while you've been rolling on the floor laughing at me, I've been rolling in cash.

profit (4, Interesting)

globaljustin (574257) | about 7 months ago | (#45726597)

I've actually profited rather well off of bitcoin

right, I'm assuming you mean you bought at a low price and cashed out at a high price?

what I'm wondering is, which BTC to $$$ service you used (Mt Gox?), how often you were able to cash out, what the daily $$$ limits were, what the transfer fees cost, etc.

I've seen alot of people yammering about BTC but few claim to have made a profit...i'd like to know more about how

Re:me too... (1)

crypticedge (1335931) | about 7 months ago | (#45726593)

The bitcoin bubble gets inflated and bursts monthly. When silkroad closed the same thing happened.

The concept is neat, but the chance of it ever becoming more has always been nil.

Re:can I just say (1)

chfriley (160627) | about 7 months ago | (#45726433)

We've been hearing this on Slashdot for 3.5 years now and during the time bitcoin has gone from well below dollar parity, to here.

Comparison: Bitcoin is like 'Abortion' in the US.. (3, Interesting)

Anonymous Coward | about 7 months ago | (#45726119)

Totally legal but...

States do everything to prevent access to it... shutting down clinics left and right..

And if you do find a clinic you to face a picket line

Given the responses from all these governments you can tell that Bitcoin is something big... that is.. maybe not the actual coins, but the intellectual underpinnings:

- Decentralized
- Limit in coins
- No one governs/owns

It is really what the world has been waiting for.. something that can not be corrupted by any government, is safe and fast. The internet needs this

Re:Comparison: Bitcoin is like 'Abortion' in the U (0, Flamebait)

i kan reed (749298) | about 7 months ago | (#45726219)

Totally legal but...

States do everything to prevent access to it... shutting down clinics left and right..

And if you do find a clinic you to face a picket line

Given the responses from all these governments you can tell that Bitcoin is something big... that is.. maybe not the actual coins, but the intellectual underpinnings:

- Decentralized
- Limit in coins
- No one governs/owns

It is really what the world has been waiting for.. something that can not be corrupted by any government, is safe and fast. The internet needs this

No, it's pretty much just what libertarian utopians have been waiting for. "No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties. It isn't an advantage, and exposes the currency to dramatic volatility.

I only wish I had some recent evidence of dramatic bitcoin volatility.

Re:Comparison: Bitcoin is like 'Abortion' in the U (5, Informative)

Captain_Chaos (103843) | about 7 months ago | (#45726489)

"No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties.

Wow. It's been a long time since I've seen such a high concentration of ill informed bullshit in one sentence...

  1. The Euro is not "not governed". It is governed by a very strong and independent central bank, namely the European Central Bank
  2. The EU did not "almost collapse". A few countries have received some large loans, all of which still look like they will be paid back in full. At no point was the "EU" in danger, nor even the Eurozone (despite wild speculation in the media), which is what you probably meant
  3. The Euro was not "dramatically volatile" at any point. It's been trading for about $1.20 to $1.40 consistently for the last ten years

Re:Comparison: Bitcoin is like 'Abortion' in the U (4, Informative)

IamTheRealMike (537420) | about 7 months ago | (#45726589)

"No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties.

Er, no. What people were worried about was that heavily indebted countries would voluntarily choose to exit the Euro so they could inflate away their debts by printing money as fast as possible, and bulk exits of countries from the Euro would cause problems. The "solution", if you want to call it that, was that after resisting for a long time the ECB (actually Mario Draghi) gave into immense political and personal pressure to start open-ended Euro printing in order to essentially reallocate money from savers in Germany and other northern states to heavily indebted, often highly corrupt governments in the south. In order to preserve the fiction that Europe is one big happy family all sharing the same wonderful currency, the ECB agreed to a global tax on all Euro savings everywhere and made lots of people who managed their finances appropriately very very unhappy!

This is not actually solving any problems - it just sends a powerful message from governments that only suckers try to save money because governments will inevitably confiscate it from you in order to pay for (e.g.) absurdly generous pensions in Greece or elsewhere.

Bitcoin does not allow governments to do this. If Europe had been running on Bitcoin at the time, then those governments would have had to go through an actual default and inflict the pain on the people who lent them the money - but on the other hand, if Europe was run on Bitcoin, it's very unlikely the southern countries could have got into so much debt in the first place. Who was lending such vast sums to countries that had such basic, fundamental fiscal problems? Banks, of course, banks who knew they would be bailed out (with yet more money printing) if something went truly tits up. They gambled that politicians cared more about keeping the Euro than protecting savers, and they were right. If Europe used Bitcoin for everything, the "moral hazard" of banking would not exist as they would know that nobody could bail them out, and they'd have far fewer deposits to play with anyway (or maybe none). As a result, far less money would have been invested into places like Greece and the economic distortions such huge borrowing allowed would have never happened.

Re:Comparison: Bitcoin is like 'Abortion' in the U (0)

i kan reed (749298) | about 7 months ago | (#45726615)

I get that sentiment, hence why I said that "libertarian utopians" would want it. Because they actually believe that gigantic defaults can be a good thing for an economy.

Re:Comparison: Bitcoin is like 'Abortion' in the U (1)

u38cg (607297) | about 7 months ago | (#45726527)

Yep, except it's total bullshit.

Re:Comparison: Bitcoin is like 'Abortion' in the U (3, Interesting)

u38cg (607297) | about 7 months ago | (#45726563)

Yep, except it's total bullshit. [arxiv.org]

Apologies, forgot to actually hyperlink...

Re:Comparison: Bitcoin is like 'Abortion' in the U (1)

AlphaWolf_HK (692722) | about 7 months ago | (#45726639)

I think the problem the government has with bitcoin is that bitcoin has the potential of destroying the US government. In fact, any currency other than the US dollar does actually.

The government currently has a habit of going perpetually further into debt (spending exceeds income every year for the last few decades, the only exception being during the economic bubble of the late 90's where tax revenues were artificially high.)

So long as the government maintains control of the value of the dollars that it spends with, it can simply devaluate the dollar to make up for its losses (which comes at the expense of you and me, as well as encouraging consumer borrowing instead of saving.) Of course, that house of cards will come crashing down should the dollar ever run into any serious trouble. Bitcoin has the greatest potential of causing that to happen than any other currency.

trending downward? (1)

Anonymous Coward | about 7 months ago | (#45726121)

If anything, it looks like it bounced off the bottom and is recovering upward.

Don't bet on trendlines though.

Price not value. (3, Insightful)

trout007 (975317) | about 7 months ago | (#45726125)

Both parties in a trade value what they are getting more than what they give. The person selling the item values the cash higher than the item. The person buying values the item higher than the cash. The price is where the exchange takes place where both parties value what they get more.

Re:Price not value. (4, Interesting)

Trepidity (597) | about 7 months ago | (#45726189)

Both parties in a trade value what they are getting more than what they give.

For a certain definition of value, yes, but not necessarily for the common one. In an idealized market, you do hope this is true for the common definition also: people have independently assessed how much they value some commodity, and offer a price accordingly. The price then converges on some aggregation of values.

But in real markets, this is often recursive: someone is offering $x for a commodity not because they themselves consider it to have a certain value, but because they think they will be able to resell it for $(x+y), due to market fluctuations. They may themselves consider it a worthless pile of trash valued at $0; day-traders, unlike value investors, don't make trade decisions based on their own assessments of the underlying value of the commodities or equities they're buying and selling. Instead they base their decisions on statistical estimates of market dynamics, independent of whatever the underlying item is and whether it may or may not have any value at all (models often don't even consider the underlying item in the equation).

Re:Price not value. (1)

trout007 (975317) | about 7 months ago | (#45726611)

Speculators still value the prospect of future gains over the cash they give in the trade.

Re:Price not value. (1)

sunsurfandsand (1959680) | about 7 months ago | (#45726431)

Both parties in a trade value what they are getting more than what they give.

The party that values cash more than bitcoins, though, probably will suffer less buyer's remorse.

Re:Price not value. (1)

dj245 (732906) | about 7 months ago | (#45726631)

Both parties in a trade value what they are getting more than what they give. The person selling the item values the cash higher than the item. The person buying values the item higher than the cash. The price is where the exchange takes place where both parties value what they get more.

This is a key part of the economic argument (The "Scrooge" argument) on why giving non-cash gifts is a colossal waste of time and money. It is difficult to know how much another person values something unless they tell you.

Litecoins (1)

click2005 (921437) | about 7 months ago | (#45726133)

I guess this why Litecoins halved from $30 to $15 each too.

Re:Litecoins (1)

Anonymous Coward | about 7 months ago | (#45726175)

Cosbycoin is way up, though!

I'm not the boss of my house. I don't know how I lost it, I don't know when I lost it, I don't really think I ever had it. But I've seen the bosses job...and I don't want it!

Re:Litecoins (0)

Anonymous Coward | about 7 months ago | (#45726235)

That's because it's backed by sweet sweet Jell-o Pudding Pops!

Re:Litecoins (0)

Anonymous Coward | about 7 months ago | (#45726227)

I hope the mining difficulty will drop as well :)

Re:Litecoins (1)

SuricouRaven (1897204) | about 7 months ago | (#45726401)

Not just yet, please. I'm just about to mine some myself. Not because I think I've a snowball's hope in hell of making a profit off it - I'll be lucky to pay for the power. I'm just interested to see how the maths works, and a good way to find out what this technology can do is to play with it.

Re:Litecoins (1)

compro01 (777531) | about 7 months ago | (#45726707)

Not just yet, please

If you're just starting mining, the difficulty dropping would be an excellent thing for you. It would mean you would have a larger share of the network hash rate and thus get more coin out of the same equipment.

Though a difficulty cut doesn't seem all that likely at the moment unless the current trend suddenly reverses itself. Even with the price drop, the network hash rate is flirting with 10 petahashes (up from about 6 at the start of the month) and it looks like the difficulty is going to break 1 billion next adjustment, which looks like it will be either on christmas or boxing day.

Darn! (1, Funny)

Anonymous Coward | about 7 months ago | (#45726135)

Darn! Just when I finally got the BFL miner I ordered over a year ago - and silly me thought my 5GH miner was going to make me stupid rich...

Re:Darn! (5, Funny)

sunsurfandsand (1959680) | about 7 months ago | (#45726491)

silly me thought my 5GH miner was going to make me stupid rich...

One out of two ain't bad.

Seems like a good time to buy (1)

Anonymous Coward | about 7 months ago | (#45726139)

If only one could trust any of the fly-by-night exchanges.

and yet dogecoin trends upwards! (0)

dknight (202308) | about 7 months ago | (#45726151)

Pretty much all the cryptocurrencies are headed downwards after this announcement... Except, oddly enough, for meme-based dogecoin (www.dogecoin.com).
Yes, its a real alt coin. Its actually the second biggest, in hash rate (right behind litecoin).

This is a crazy world we live in!

Re:and yet dogecoin trends upwards! (0)

Anonymous Coward | about 7 months ago | (#45726203)

This is a crazy world we live in!

Yes, full of clowns and trolls from /b/. I'm afraid of the future when those characters start to set econimic trends ...

Re:and yet dogecoin trends upwards! (1)

grasshoppa (657393) | about 7 months ago | (#45726229)

That's cute.

What did you think the stock market was?

Re:and yet dogecoin trends upwards! (1)

dugancent (2616577) | about 7 months ago | (#45726315)

Not the members of 4chan. Arguably the most worthless site on the internet.

Re:and yet dogecoin trends upwards! (1)

Anonymous Coward | about 7 months ago | (#45726395)

It very well could be members of 4chan, shitposting doesn't really have a barrier to entry.

Re:and yet dogecoin trends upwards! (1)

sandytaru (1158959) | about 7 months ago | (#45726629)

You'd be quite surprised what many 4channers do for a living. Yeah, the majority of them are teens and college kids, but some of the adults are doctors, professors, high level executive managers, software developers... guys (and the occasional girl) that log in there through 3-4 different VPN tunnels to blow off steam.

Re:and yet dogecoin trends upwards! (0)

Anonymous Coward | about 7 months ago | (#45726333)

doge has nothing to do with 4chan.

Re:and yet dogecoin trends upwards! (-1)

Anonymous Coward | about 7 months ago | (#45726241)

That is seriously the gayest fucking thing I've seen since Perez Hilton walked down an alleyway in West Hollywood and slipped on a discarded dildo causing his exposed, gaping asshole to land length-wise on a fire hydrant.

Re:and yet dogecoin trends upwards! (-1)

Anonymous Coward | about 7 months ago | (#45726253)

I assume this is because the Chinese cryptocurrency market never quite got the pun. I see that and think 'doggy coin', they see that and think 'fancy dinner on gold plate.'

Re:and yet dogecoin trends upwards! (-1)

Anonymous Coward | about 7 months ago | (#45726271)

wow
much money
so coin

"Proof against tyranny" (4, Insightful)

i kan reed (749298) | about 7 months ago | (#45726163)

Kind of a sideline approach here...

This is the clearest evidence yet that the pro-bitcoin libertarian segment misunderstand how government control works. The argument goes "government prints the money, and tracks the money therefor can tax me." The presumption of bitcoins is if the currency doesn't come from the government, they don't have any means to control it.

Good ol' actually tyrannical China comes along, and does the thing any government is capable of doing. Saying "if we catch you dodging our system, our system will throw your stupid self in jail." Poof.

If having a wallet.dat is a crime, the fact that the coins inside of it are encrypted won't protect you.

Re:"Proof against tyranny" (1, Funny)

operagost (62405) | about 7 months ago | (#45726567)

Because there totally isn't crime or a black market in places like China.

Re:"Proof against tyranny" (2)

i kan reed (749298) | about 7 months ago | (#45726635)

Did I say no one breaks the damn law? That's so radically different what I said that I must question your basic verbal processing capability.

Re:"Proof against tyranny" (1)

ADRA (37398) | about 7 months ago | (#45726651)

No, but they don't seem to have qualms executing corrupt politicians / business people who have done great harm:
http://www.businessinsider.com/chinese-white-collar-criminals-death-sentence-2013-7 [businessinsider.com]
http://www.bbc.co.uk/news/world-asia-pacific-14197485 [bbc.co.uk]
http://www.nytimes.com/2007/07/11/business/worldbusiness/11execute.html?pagewanted=all&_r=0 [nytimes.com]

Re:"Proof against tyranny" (3, Interesting)

IamTheRealMike (537420) | about 7 months ago | (#45726645)

I think only the most naive anarchists argued that (and I've called them on it many times before in various Bitcoin forums). The gamble being made there is effectively that given a choice, a government would choose not to become totalitarian and oppressive, and would prefer to give up some control over the financial system.

Well, only an idiot would believe China would do that. They are already totalitarian and oppressive, no surprise they'd be willing to jail anyone who uses Bitcoin.

In contrast, many European countries are sorting out how they're going to handle it. See the recent announcement from Denmark saying that Bitcoin is fully legal, and people who want to run exchanges don't even have to be regulated as financial institutions at all! It seems very unlikely that the governments of Norway or Denmark are going to start jailing anyone who sells sandwiches for coins.

America is somewhere in the middle. It's not as free or liberal as most of the smaller European states, but it's not as oppressive as China. Hence the confused approach there where the US government is saying one day Bitcoin is cool and it's all OK, and then next day threatening Bitcoin businesses with jail time. They can't quite decide which direction to go in, it seems.

Re:"Proof against tyranny" (1)

i kan reed (749298) | about 7 months ago | (#45726675)

And, that seems like a perfectly reasonable belief. But bitcoin suffers from an excess of "true believers".

Re:"Proof against tyranny" (1)

crypticedge (1335931) | about 7 months ago | (#45726709)

It is china, where they execute people for bankrupting a company. I doubt they'd just throw them in jail because of that.

Not too worried (0, Insightful)

Anonymous Coward | about 7 months ago | (#45726205)

I expect the Chinease Yuan is going to collapse within, at most, five years with nothing but bitcoin to replace it. Fiat currency is doomed, and the governments know it.

Re:Not too worried (0)

Anonymous Coward | about 7 months ago | (#45726361)

I expect the Chinease Yuan is going to collapse within, at most, five years with nothing but bitcoin to replace it. Fiat currency is doomed, and the governments know it.

Other than being deemed legal tender by a government, Bitcoin has all the features of a fiat currency.

Re:Not too worried (2)

TheloniousToady (3343045) | about 7 months ago | (#45726421)

It lacks one central feature of a true fiat currency: potentially unlimited supply.

Re:Not too worried (0)

Anonymous Coward | about 7 months ago | (#45726619)

Yes, and a government entity that controlls that supply.

Re:Not too worried (2)

Copid (137416) | about 7 months ago | (#45726695)

And with that comes its inability for supply and demand to move together to smooth out the insane price fluctuations. Bitcoin holders who are worried about the theoretical possibility of hyperinflation in a well-managed fiat currency scheme seem to be ignoring the actual hyperinflation and hyperdeflation of their currency.

Re:Not too worried (0)

Anonymous Coward | about 7 months ago | (#45726469)

Idiots in the west have been predicting the renmibi's collapse "within at most five years" for about forty years now.

Re:Not too worried (0)

Anonymous Coward | about 7 months ago | (#45726485)

I'm not from the west, but thanks for assuming anyway.

Re:Not too worried (0)

Anonymous Coward | about 7 months ago | (#45726689)

Sounds exactly like what they've been saying about Gold & Silver since the 1970s...

"If we all act like stupid sheep and put our life savings in precious metals we'll FINALLY bust the COMEX shorts! TAKE PHYSICAL DELIVERY! OMGWTFBBQ!!!!1 We're totally serious this time!"

Don't get me wrong, I'm invested in bitcoin/litecoin/altcoin, so the propaganda does me favors, but I'm always skeptical of the pom poms & talk about "Silver Rocket Ships! OMG!"

yes halved (0)

Anonymous Coward | about 7 months ago | (#45726207)

halved to four times what it was a month or so ago...

Re:yes halved (0)

Anonymous Coward | about 7 months ago | (#45726409)

With nowhere to go but down.

This is just a clever trick by China . . . (5, Funny)

PolygamousRanchKid (1290638) | about 7 months ago | (#45726251)

Now that they have driven the price of bitcoins down, they will now buy up all of them at low prices . . . and then . . . announce that the will accept them as currency . . .

Profit!

Re:This is just a clever trick by China . . . (0)

Anonymous Coward | about 7 months ago | (#45726317)

Okay, great, so why don't you buy some now and profit too?

Re:This is just a clever trick by China . . . (1)

Anonymous Coward | about 7 months ago | (#45726525)

I am :)

Re:This is just a clever trick by China . . . (3, Funny)

Anonymous Coward | about 7 months ago | (#45726529)

Okay, great, so why don't you buy some now and profit too?

Buying bitcoins seems a lit like buying drugs or hookers. I may want to, but if I haven't done it before, I don't have the slightest idea how to go about it without getting screwed. Or not, in the case of the hookers.

Crypto COMMODITY (5, Interesting)

brunes69 (86786) | about 7 months ago | (#45726269)

I wish people would stop calling these "crypto-currencies", because it is a total misrepresentation of what these things are. They are crypto-commodities. BTC is just like gold right now - it is not used to transact, it is used as a value store - except it is much worse as a value store because it is orders of magnitude more volatile. No one can use BTC as a currency because its value fluxuates so wildly. Everyone who is SUPPOSEDLY using it as a currency just has it pegged to the US dollar with a live update.

Re:Crypto COMMODITY (1, Interesting)

DaveV1.0 (203135) | about 7 months ago | (#45726435)

Perhaps you should tell that to the inventors of Bitcoin.

Bitcoin is an innovative payment network and a new kind of money.

How about reading their their FAQ [bitcoin.org] where it specifically says Bitcoin is a cryptocurrency? You might learn something.

Re:Crypto COMMODITY (1)

Anonymous Coward | about 7 months ago | (#45726515)

They can call it what the want, but it's not traded like a currency.

Re:Crypto COMMODITY (4, Insightful)

brunes69 (86786) | about 7 months ago | (#45726549)

It does not matter what people intended something for, it matters what it is USED for in actual practice. Until people start actually using BTC as a real currency, it is not a currency.

I can write a bunch of numbers on post-it notes and claim it is a currency as well - it does not make it one.

Re:Crypto COMMODITY (0)

Anonymous Coward | about 7 months ago | (#45726683)

gold is a currency, in my view. Or you could hedge your bets and call gold a 'commodity currency'. It is not a commodity because it is not used up (at least negligably). The markets trade it as a currency (in fact they trade the dollar price of gold as an exchange rate).

But the distinction is not a real one, as Marx had it, a commodity becomes a currency when it is used as a universal representation of exchange value. Gold is partially used this way, though more commonly it is used as a store of value with safety (low volatility) in mind.
Bitcoin is primarily a store of value with speculation in mind.
Gold has some use value, although it is low. Bitcoin has almost no use-value (it has some only bvecause it is cool and fun. Dollars have no use-value) But anyway that's irrelevant to whether or not it's a currency. Cheese could be a currency if and when it fulfills Marx's definition, although since it is used up, and has finite shelf-life, and is easily produced, this is unlikely. But if people buy goods in cheese, then cheese is a currency. If people store value in cheese, then it is still a currency to me, though others might call it a commodity currency.
If enough people buy goods in bitcoin then it's a currency. How many people is enough is a grains-of-sand question.

Bitcoiners on reddit are completely delusional (5, Insightful)

gapagos (1264716) | about 7 months ago | (#45726273)

Bitcoiners on reddit are completely delusional. They constantly interpret any kind of news from China as "good news" and any price drop as a sign to "buy more Bitcoins at a cheaper price". Wake up people. This "currency" is never going to have anything close to wide adoption.

The inability to charge back is the #1 reason that prevents any consumer from perceiving it as a safe currency against vendor fraud. It serves no benefit to the consumer.

Its incredible volatility is the #1 reason that prevents any vendor from seriously adopting it. It's impossible to do business when you have no control of your prices. This is why every "Bitcoin accepted" vendor isn't actually adopting bitcoins, just merely accepting them at current exchange rate. Bitcoins will get "adopted" when vendors start listing their prices in fixed bitcoins, i.e never.

Posting this on reddit gets you instantly downrated because users there only upvote anything positive about Bitcoin, no matter how ridiculous it is. Whenever somebody with any form of economics, finance or political education reminds Bitcoiners of the realities of world foreign exchanges, people downvote it to hell and ignore it because those people have been "brainwashed by the system".

Bitcoiners have been warned, and ignored all sensible advice, only motivated by their greed. Now, after constantly bragging about their virtual billions earned and insulting their friends who are not convinced and reminded them to be careful, they are upvoting the National Suicide Hotline for the U.S. Too bad not many people will feel sorry for them after this whole fiasco.

Re:Bitcoiners on reddit are completely delusional (-1, Troll)

gapagos (1264716) | about 7 months ago | (#45726305)

Oh and I look forward to be moderated -1 Troll. Go ahead. Shield yourself from the truth.

Re:Bitcoiners on reddit are completely delusional (1)

Anonymous Coward | about 7 months ago | (#45726359)

Try and relax and have a little fun with them. Reddit coiners are possibly the most fun group to troll I have ever encountered. They eat the bait like sharks in bloody water. I hope this never ends. Comparing Bitcoin to Enron is always fun over there.

Re:Bitcoiners on reddit are completely delusional (1)

DogDude (805747) | about 7 months ago | (#45726503)

Why are you talking about reddit, exactly? What does that have to do with this article?

Re:Bitcoiners on reddit are completely delusional (0)

Anonymous Coward | about 7 months ago | (#45726575)

I had 2200 bitcoins accumulated (I started mining 5 years ago)... and I sold them between 700 and 900... I think I did pretty well, to be honest. (and yes, I am going to pay my taxes)

But, you're right, hearing Bitcoiners talk is like listening to Glenn Beck talk about Gold.

Re:Bitcoiners on reddit are completely delusional (1)

gapagos (1264716) | about 7 months ago | (#45726643)

Holy crap you made more than 1.5 million?
Lucky you.

Re:Bitcoiners on reddit are completely delusional (1)

operagost (62405) | about 7 months ago | (#45726587)

Hmm... I can't chargeback cash, either.

i got some bitcoins (-1)

Anonymous Coward | about 7 months ago | (#45726281)

i'm bitcoin. but i hate waiting days for the 10 GB blockchain to download. made a big mistake. can't wait for the blockchain to finish downloading so that I can move my coins to an online account. but Instawallet Easy Wallet have been hacked. guess i'll try electrum instead.

Re:i got some bitcoins (3, Interesting)

paskie (539112) | about 7 months ago | (#45726351)

Yes, just use Electrum or equivalent if running the full-blockchain is too bothersome (it is for most, now). Avoid putting your bitcoins on *any* online account, that is way too dangerous. With Electrum, you don't have to download a blockchain, but only you still have the wallet.

Re:i got some bitcoins (1)

SuricouRaven (1897204) | about 7 months ago | (#45726419)

It's only going to get bigger. Bit of a flaw in the system, that.

A very happy bureaucrat. (4, Insightful)

MarkvW (1037596) | about 7 months ago | (#45726335)

Somewhere in China a group of Bitcoin-speculating bureaucrats are very happy right now.

Must make the Bitcoiners really happy to know that their financial world can be so readily disrupted . . ..

No surprise in the collapse (5, Insightful)

timholman (71886) | about 7 months ago | (#45726357)

When a couple of my friends started posting "now is a great time to buy into BitCoin" messages on my Facebook feed a couple of weeks ago, I had a feeling the BTC price was about to take a strong downward turn. It is never a good sign when the "true believers" begin actively recruiting new buyers into a price bubble.

The collapse of BitCoin as a speculative investment is inevitable, and its own success will be its downfall. The speculative frenzy over BTC is based strictly on artificial scarcity. The problem is that there are an infinite possible number of cryptographically signed digital currencies. If only X amount of gold exists in the world, there is no replacement for it, assuming you desire the exact physical qualities of gold. But if only Y digital coins exist, it is trivial to create another digital coinage with a slightly different protocol that behaves exactly the same way as far as a user is concerned.

The boom in BTC has led to several new competitors, with similar frenzies growing around some of them. And given the low barrier to entry, you can expect more and more competing digital currencies to appear. It is only a matter of time before people realize that they're fighting over a particular set of tulip bulbs while standing in an infinitely large field of tulips. Once that happens, the speculative bubble will pop for good for all digital currencies. In the long run, this is a good thing, because once the speculators are gone, some digital currencies may actually prove useful as a real medium of exchange, with values that don't fluctuate wildly from one day to the next.

Re:No surprise in the collapse (3, Interesting)

kencurry (471519) | about 7 months ago | (#45726573)

Your point that digital currency value is based upon scarcity, yet nothing prevents a new one popping up anytime is a good one. A sober reality check and one I hadn't though of.

Re:No surprise in the collapse (2, Interesting)

Anonymous Coward | about 7 months ago | (#45726579)

to your first paragraph: it's said that Joseph Kennedy sold most/all of his shares weeks before the 1929 crash because "he knew it was time to get out of the market when he received stock tips from a shoe-shine boy." http://en.wikipedia.org/wiki/Joseph_P._Kennedy,_Sr.#1929_Wall_Street_Crash

Personally I knew the "new market" bubble would burst months before it did - because everyone and their dog bought shares and told me to do so, too.

It;s all right - - I bought high so I am doing ok (-1)

Anonymous Coward | about 7 months ago | (#45726363)

It pays to get in late so you buy high. I can always sell low so I am doing all right. I know about these internet things and always come out smelling like bacon, kevin bacon.

No surprise in this trend... (2)

geogob (569250) | about 7 months ago | (#45726467)

Looking at the data provided in the summary's link, the value got from under 200 to over 1000 within a month. How is a drop of 50% within a few days any surprising? I would expect any currency that volatile and - above all - unregulated (in the sense of regulation through central banks), to do about anything.

Not China's Fault (1)

medv4380 (1604309) | about 7 months ago | (#45726557)

It was a standard parabolic bubble. It's happened three times with bitcoins now, and they always have a 40 to 60 percent drop when they pop followed by a random walk as they deflate. The 3rd one just happened to occur just as the second finished its random walk, and China just had to be the last to say anything about bitcoin before it poped. These will just keep getting close, and closer until the fun begins. My bet is the next one in 3 months, then a month, followed by ... fun. Who would have thought that one of these with the modern era of communication, and education would still be possible. But I guess without a modern example with that perfect bitcoin transaction log to watch it all go down it was probably inevitable to happen at least one more time.

B-b-b-but... (2)

callmebill (1917294) | about 7 months ago | (#45726669)

They promised that THIS time it's DIFFERENT!

Overreaction (0)

Anonymous Coward | about 7 months ago | (#45726693)

I'm not fan of bitcoin and am in no way invested in it, but this seems like a classic case of a nervous market overreacting. Buy low my friends.

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