Do you think Bitcoin will experience a crash? If so what effect will this have? If not why?
http://goo.gl/CQjFe
Ask HN: Will Bitcoin crash?
1–10 of 13 posts
Re: Ask HN: Will Bitcoin crash?
#2The link is to the lifetime market cap of Bitcoin. Here is a clickable version: http://goo.gl/CQjFe
Re: Ask HN: Will Bitcoin crash?
#3It won't matter if it does unless you're speculating. (Or holding onto a non-trivial number of bitcoin for whatever reason.) Bitcoin has proved it's point, that a decentralized currency is possible, and that it can be done practically and used for real transactions.
As a proof of concept, bitcoin is a huge win for anarchists and libertarians everywhere. So in that sense, I don't think that it's original author really cares.
I think that if it does "crash" the crash will be caused by regulatory pressure, or it will live to see the end of bitcoins being issued in whole.
EDIT: In the short term, I would not be surprised if the currencies value takes a sharp drop.
Re: Ask HN: Will Bitcoin crash?
#4I don't have much bitcoin experience. The accelerating exchange rate seems to indicate there will be a major crash. At the same time the increase could be a result of bitcoin going "viral", but I don't think the amount of coverage of bitcoin justifies the massive prices.
Re: Ask HN: Will Bitcoin crash?
#5It won't matter if it does unless you're speculating. (Or holding onto a non-trivial number of bitcoin for whatever reason.) Bitcoin has proved it's point, that a decentralized currency is possible, and that it can be done practically and used for real transactions. As a proof of concept, bitcoin is a huge win for anarchists and libertarians everywhere. So in that sense, I don't think that it's original author really…
Speculation aside I think it has merit. If Bitcoin crashes it seems like it could cease being used. Which would be unfortunate because Bitcoins have proven to be an excellent medium of exchange. Also I definitely agree with you about Bitcoin proving its theoretical value.
Re: Ask HN: Will Bitcoin crash?
#6I don't believe so. There will be some downs for sure. The main difference with Bitcoin is that every coin is accountable. You know if you possess it or not. Compare that to Tulipmania for instance where one of the reasons for the crash was that people would buy tulips from others that didn't exist.
It's the same as a run on the banks. It happens when the bank has lent out too much money - money that it doesn't have. When people try to withdraw their actual money they put in, it leads to the bank going belly up because they actually created money out of thin air.
I think this is a big difference with Bitcoin and a reason why it will survive the inevitable ups and downs and stick around for the long term.
Re: Ask HN: Will Bitcoin crash?
#7I don't believe so. There will be some downs for sure. The main difference with Bitcoin is that every coin is accountable. You know if you possess it or not. Compare that to Tulipmania for instance where one of the reasons for the crash was that people would buy tulips from others that didn't exist. It's the same as a run on the banks. It happens when the bank has lent out too much money - money that it doesn't have.…
This is a really interesting point! Do you think if there was a run on the bitcoin exchanges they would be able to pay consumers back?
Re: Ask HN: Will Bitcoin crash?
#8I don't believe so. There will be some downs for sure. The main difference with Bitcoin is that every coin is accountable. You know if you possess it or not. Compare that to Tulipmania for instance where one of the reasons for the crash was that people would buy tulips from others that didn't exist. It's the same as a run on the banks. It happens when the bank has lent out too much money - money that it doesn't have.…
This is a really interesting point! Do you think if there was a run on the bitcoin exchanges they would be able to pay consumers back?
They should be able to unless malicious intent is involved or their servers get overloaded but eventually everyone should be able to get their bitcoins out as long as security is in place.
Even if everyone withdrew their Bitcoins from Mt. Gox into private wallets, it shouldn't cause Mt. Gox to go bankrupt as they are not a bank but an exchange and take a commission cut on each transaction.
The only way that this would be a problem is if someone sets up an exchange but then gives people "fake" bitcoins to people that leave their bitcoins with the exchange. They would have real bitcoins around of course if people withdraw them but it would turn into a juggling act and eventually fail if too many people withdraw their bitcoins.
I don't want to say it's farfetched but it's probably better to store your bitcoins yourself in your own wallets rather than leaving a significant amount in the control of someone else.
Re: Ask HN: Will Bitcoin crash?
#9If a form of currency has intrinsic value as opposed to being fiat currency, it will fail. Bitcoin has intrinsic value.
Re: Ask HN: Will Bitcoin crash?
#10Earlier quoted context omitted.
This is a really interesting point! Do you think if there was a run on the bitcoin exchanges they would be able to pay consumers back?
They should be able to unless malicious intent is involved or their servers get overloaded but eventually everyone should be able to get their bitcoins out as long as security is in place. Even if everyone withdrew their Bitcoins from Mt. Gox into private wallets, it shouldn't cause Mt. Gox to go bankrupt as they are not a bank but an exchange and take a commission cut on each transaction. The only way that this woul…
hmm I agree. But if there was a rush it seems like people wouldn't convert to private wallets they would attempt to exchange their bitcoins for a national currency. Mt.Gox seems to have a 10,000 max withdraw limit over a 30 day period. Something like that would hopefully prevent Mt.Gox from not having enough on hand national currency.