Bitcoin value falls from above $33 to below $3 • Hacker News Board

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

#101

Post by netcan » Tue, Oct 18, 2011, 12:59 AM UTC

joejohnson wrote: post #73

Murkin wrote: post #63

Can someone give a concrete example of themselves using Bitcoins for something other than speculative trade ?

Silkroad. It has consistant business and I know people who have used this website. However, it fails to use bitcoin as a currency in the sense that other stores use dollars as a currency. The prices on Silkroad are adjusted to mirror the USD->BTC exchange rate dialy. And, I would suspect that the majority of the users are buying bitcoins to buy goods on Silkroad, and that venders on Silkroad turn their BTC back into…

Using a currency as a means of payment is its main purpose. Using it to store value is also important, but secondary. Obviously some people where using it as an investment (which is kind of a store of value), but probably not the same people.

Anyway, a currency that people buy to use in particular markets is possibly a way that money got started in the first place. People traded for a currency to use in a (physical) market and then traded that into different stuff that day. Eventually, as things stabilized they might have been happy holding some money.

If bitcoin became commonly used as a way of transacting, but not of storing value or denominating prices it could still be a good enough starting point.

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

#102

Post by nl » Tue, Oct 18, 2011, 1:01 AM UTC

joshhart wrote: post #84

spiceapps wrote: post #71

Earlier quoted context omitted.

As the article states, the site is only accessible through the TOR network, which is completely anonymized. All transactions are completed through Bitcoins, which is also pretty anonymous. When shipping the drugs, users are urged to get creative, such a vacuum sealing to avoid smell detection.

I don't understand how it would be safe at all for the recipient. If the "smell prevention" failed couldn't the police just arrest whomever it was shipped to? I can understand that the shipper is pretty safe dropping the package off but if it's flagged as black-market goods it seems like the buyer is totally busted.

How would it get flagged as a black-market goods?

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

#103

Post by jbri » Tue, Oct 18, 2011, 1:05 AM UTC

icebraining wrote: post #99

lwat wrote: post #95

Earlier quoted context omitted.

The seller can easily buy virtual goods, like other e-currencies, and hide his trail that way.

Yes, that's what I said. But on the other hand, the BTC market is still very poor. Besides domains and hosting, what other virtual goods are there to buy?

Real money. Sell bitcoins to people who are buying them in order to purchase drugs.

There's nothing inherently linking the two transactions of "X bitcoins transferred from wallet #1 to wallet #2" and "Y USD transferred from Bob to Joe" - with sufficient care and redirection, you can make it very difficult to track down exactly where the bitcoins are being traded for real money.

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

#104

Post by polshaw » Tue, Oct 18, 2011, 1:11 AM UTC

joshhart wrote: post #84

spiceapps wrote: post #71

Earlier quoted context omitted.

As the article states, the site is only accessible through the TOR network, which is completely anonymized. All transactions are completed through Bitcoins, which is also pretty anonymous. When shipping the drugs, users are urged to get creative, such a vacuum sealing to avoid smell detection.

I don't understand how it would be safe at all for the recipient. If the "smell prevention" failed couldn't the police just arrest whomever it was shipped to? I can understand that the shipper is pretty safe dropping the package off but if it's flagged as black-market goods it seems like the buyer is totally busted.

The law requires a little more proof than that, otherwise you could just ship drugs to people you don't like to get them arrested.

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

#105

Post by sneak » Tue, Oct 18, 2011, 1:12 AM UTC

tptacek wrote: post #68

powertower wrote: post #66

Earlier quoted context omitted.

http://gawker.com/5805928/the-underground-website-where-you-...

How real is that? Like, I know the site exists, but how many people here know people who have successfully conducted commerce on it? How are they keeping themselves from being exposed?

It's a tor hidden service, and it works really well. I know lots of people who have used it from both sides of the commerce equation.

It's the main driving force behind the price of bitcoins on the public exchanges, which makes for a rather novel opportunity for a market-moving attack I'll leave as an exercise for the reader.

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

#106

Post by Joakal » Tue, Oct 18, 2011, 1:14 AM UTC

johnny22 wrote: post #93

Joakal wrote: post #9

Earlier quoted context omitted.

Forbid businesses from accepting the currency due to stability issues. Also use FUD terms such as "deflationary, the exchange rate changes so much, IRS may take a more active role in investigating sudden influx of cash".

how is calling bitcoin deflationary FUD?

> how is calling bitcoin deflationary FUD?

Businesses trying to deal in Bitcoins will find their value going down much faster relative to cash value by end of day. That's the very definition of FUD.

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

#107

Post by weavejester » Tue, Oct 18, 2011, 1:19 AM UTC

runn1ng wrote: post #79

Every bitcoin opposer repeats, that the money will artificially start going up and that is why it will crash. Right now, it is going down, for a long time. So that is not why it will fail. It will fail because noone actually needs it. It has no real value over other means of electronically exchanging money - paypal, for example, is much faster, easier to use and, dwhile it is not free, thanks to the wild exchange rat…

Even though users typically don't care whether a service is centralized or not, decentralized services have the advantage when it comes to building infrastructure around them.

With Paypal, the same company is responsible for sending, receiving and storing your money. A decentralized currency like Bitcoin could act as an intermediary protocol that would allow users to choose different companies to handle each of these tasks.

Bitcoin to me seems interesting because it's essentially an open protocol for transferring and manipulating finances. I kinda feel that talking about deflationary currencies or currency fluctuations is somewhat missing the point.

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

#108

Post by npongratz » Tue, Oct 18, 2011, 1:26 AM UTC

caf wrote: post #53

mahyarm wrote: post #47

Earlier quoted context omitted.

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.

You know that they don't just give the money away to banks, right? It's loaned. They have an obligation to repay it.

Fine, money is loaned to a bank, and they have an obligation to repay the loan. With what does said bank repay the loan? Money, of course. Where does that money come from? Ultimately: other loans.

"It's loans all the way down..."

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

#109

Post by [deleted] » Tue, Oct 18, 2011, 1:34 AM UTC

datasink wrote: post #82

tptacek wrote: post #68

Earlier quoted context omitted.

How real is that? Like, I know the site exists, but how many people here know people who have successfully conducted commerce on it? How are they keeping themselves from being exposed?

My understanding is that the real risk is taken by the buyer. The seller can anonymously receive payment, then drop the drug envelope into a random postbox. On the buying end, regardless of Tor and Bitcoin, they still need to have it shipped to a real physical location.

[deleted]

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

#110

Post by icebraining » Tue, Oct 18, 2011, 1:34 AM UTC

jbri wrote: post #103

icebraining wrote: post #99

Earlier quoted context omitted.

Yes, that's what I said. But on the other hand, the BTC market is still very poor. Besides domains and hosting, what other virtual goods are there to buy?

Real money. Sell bitcoins to people who are buying them in order to purchase drugs. There's nothing inherently linking the two transactions of "X bitcoins transferred from wallet #1 to wallet #2" and "Y USD transferred from Bob to Joe" - with sufficient care and redirection, you can make it very difficult to track down exactly where the bitcoins are being traded for real money.

But now you have to trust "Joe" to make sure his real identity can't be easily linked from his bitcoin addresses, or else they'll find out about the USD transfer.