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Bitcoin value falls from above $33 to below $3

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Re: Bitcoin value falls from above $33 to below $3

#41

Post by jerguismi »

tomkarlo wrote: post #36
jerguismi wrote: post #31

Earlier quoted context omitted.

> The rate of money supply increase will be halved in 2013, so don't expect any recovery before then. The value is mostly driven by mass psychology, the inflation caused by miners is only one factor. If some goverment-issued currency would start hyperinflating, bitcoin or similar cryptocurrency would be pretty good choice for people to move to.

So they should jump out of a highly liquid, government-backed security that's proving untrustworthy to go into an experimental currency that's relatively illiquid? I'd think they'd go towards gold, which seems like the opposite direction. If people are jumping out of a printed currency to avoid inflation, they're going to want something where they know it's easy to convert back into something you can buy things with.…

Of course it would require more infrastructure around bitcoin. There is already an impressive amount of exchanges, and it would be pretty easy to exchange bitcoins with software like android bitcoin wallet. excellent app btw: https://market.android.com/details?id=de.schildbach.wallet

Gold isn't really a good instrument of exchange. Gold-backed currencies are, but the central issuer has proved problematic historically.

Of course cryptocurrency used widespreadly is just a nerd fantasy right now, but I believe in it more than to a new gold standard :)

Re: Bitcoin value falls from above $33 to below $3

#42

Post by jerf »

joshontheweb wrote: post #40

Is this really a bad thing? Now people can stop hoarding them and start really using them as currency. It never really mattered what they were worth unless you were holding onto them. If you use bitcoins to enable transactions only and keep your money in real dollars then it can be pretty useful.

It is if the only reason that they have value in the first place was the hoarding and speculating, which seems a reasonable interpretation of events to date. A currency of no value is not useful for trade.

I mean that "if" as a true logical statement, not an implied assertion that it must be true. (I do believe that, but I'm not asserting it right now, because I'm not defending it.)

Re: Bitcoin value falls from above $33 to below $3

#43

Post by DiabloD3 »

lurch00 wrote: post #19

Bitcoin is essentially a giant pyramid scam. The early adopters have cashed out long ago. As mining gets more and more difficult, less people will cling to the liquid currency. Why trade with a deprecating currency, anonymous or not? The fact that the exchange rate is below the cost of mining should be alarming for many reasons. I'd assume the creator/first adopters do not care, either way.

I'm in the school of thought that anyone who says Bitcoin is a pyramid scam is trying to scam Bitcoin and/or intentionally depress the value of BTC for personal gain.

I am an early adopter, I was one of the first 100 people to mine, and I've mined thousands of BTC (including 650 with a single CPU), and I wrote the most popular miner, DiabloMiner.

If it was a pyramid scam, why would I currently be ignoring the current price of BTC in USD? It just means the demand is currently low, and since I'm not selling, who cares?

Mining is not about making money, its about preserving the cryptographic integrity of the currency. Also, no, the exchange rate is not yet below the cost of mining for many miners. It will have to drop below $1 before everyone is out.

Re: Bitcoin value falls from above $33 to below $3

#44

Post by DiabloD3 »

VladRussian wrote: post #27
bdr wrote: post #10

Earlier quoted context omitted.

It should also be noted that criminal use doesn't raise the price of bitcoins, since criminals don't necessarily hold their bitcoins. For them bitcoin is just an another money laundering system. Disagree. There's a "float" period between when the order is placed and when it's completed (service/goods verifiably delivered). The dollar-value volume in this float period sets a floor on the market cap of Bitcoin. I'm cle…

>a cypherpunk fantasy yep. All your transactions are recorded for posterity and law enforcement can access them at anytime. The moment i first time heard about bitcoin i immediately read their paper and this was the instant end between me and BT - it is either a honeypot or an NSA's distributed "calculate these hashes@HOME" project. Most probably it started as the latter and once NSA had gotten enough results and wit…

Satoshi's white paper disproves everything you just said. Either your comment is out of ignorance or out of malice. Go read the white paper.

Re: Bitcoin value falls from above $33 to below $3

#46

Post by hristov »

ajones05 wrote: post #4

Here was Jason Calacanis's take on May 15: "Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen" -- "We are 100% certain that governments will start banning bitcoins in the next 12 to 18 months. Additionally, we’re certain bitcoins will soar in value and a crush of folks will flood the system and start using them." http://www.launch.is/blog/l019-bitcoin-p2p-currency-the-most...

I am shocked Calacanis made a two sentence statement without a plug for one of his companies.

Re: Bitcoin value falls from above $33 to below $3

#47

Post by mahyarm »

polshaw wrote: post #29
jerguismi wrote: post #23

Earlier quoted context omitted.

It's free market, everyone is free to buy and sell as they wish. It's not a scam since there is the same information to everyone. I'm pretty sure that the early adopters couldn't guess this year's rise in value, and couldn't guess the price drop either. While I believe in bitcoin or cryptocurrencies in the longterm, I'm still pretty sure that bitcoin value will stay very volatile in the coming years. The stability wi…

Your reply missed his point as bitcoin is 'mined' not just bought and sold. The difficulty of that mining is set based upon the computing power of the miners. Add to this the fact that the number of coins available to be mined each day is designed to be reduced over time, and you end up with early adopters (formost of which being the creators) controlling a massive proportion of the total worth of bitcoins.

Is that much better than printing money and distributing the new money to major banks? That is what the US government is doing now. Most countries do a combination of distributing newly printed money to domestic banks and the government itself.

Re: Bitcoin value falls from above $33 to below $3

#48

Post by corin_ »

joshontheweb wrote: post #40

Is this really a bad thing? Now people can stop hoarding them and start really using them as currency. It never really mattered what they were worth unless you were holding onto them. If you use bitcoins to enable transactions only and keep your money in real dollars then it can be pretty useful.

It's a problem because the people who are using bitcoin have seen the value drop to less than 10% of what it was, so why should they trust it to be a currency worth using?

For it to be a currency it doesn't need a huge value per bitcoin, nor does it need to be constantly rising a huge amount - but it does need to be reasonably stable.

Re: Bitcoin value falls from above $33 to below $3

#49

Post by rorrr »

esrauch wrote: post #17
Zodiakos wrote: post #11

Earlier quoted context omitted.

So, in other news - governments everywhere ban bitcoin. Bitcoin use soars wildly.

It would actually be a lot easier to ban than the other things I mentioned since it would require a financial transfer to purchase them to begin with. A better example would be online poker, the ban of real money online poker actually had a pretty big impact on users.

    it would require a financial transfer to purchase 
    them to begin with
Not it doesn't. Barter. You send me bitcoins, I send you stuff.

Re: Bitcoin value falls from above $33 to below $3

#50

Post by tomkarlo »

jerguismi wrote: post #41
tomkarlo wrote: post #36

Earlier quoted context omitted.

So they should jump out of a highly liquid, government-backed security that's proving untrustworthy to go into an experimental currency that's relatively illiquid? I'd think they'd go towards gold, which seems like the opposite direction. If people are jumping out of a printed currency to avoid inflation, they're going to want something where they know it's easy to convert back into something you can buy things with.…

Of course it would require more infrastructure around bitcoin. There is already an impressive amount of exchanges, and it would be pretty easy to exchange bitcoins with software like android bitcoin wallet. excellent app btw: https://market.android.com/details?id=de.schildbach.wallet Gold isn't really a good instrument of exchange. Gold-backed currencies are, but the central issuer has proved problematic historically…

It's not a matter of infrastructure. It's a matter of belief: people who are looking for safety and refuge from inflation aren't going to move their money into a less-liquid, less-tangible asset with no track record (relative to alternatives.)

Moving cash into bitcoin would make sense if there were some inherent advantages: better returns, more liquidity, better privacy, more stable values, faster transactions. So far, I don't really see any of those being offered; it's essentially an experiment, and folks who are using it are either doing to speculatively or for curiosity value, not economic reasons.

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