1 Bitcoin Worth 10 USD • Hacker News Board

Re: 1 Bitcoin Worth 10 USD

#61

Post by sgornick » Thu, Aug 02, 2012, 10:50 PM UTC

davidklemke wrote: post #52

This is exactly the last thing BitCoin needs to be successful as a currency. After the speculative bubble last year it started to make some headway as the price remained relatively stable. Now in the past 2 weeks we've seen its value appreciate by 50%, something that just doesn't happen with traditional currencies. It's dangerously reminiscent of what happened last year and shows that the BitCoin economy is still ver…

Exchange rate volatility is harmful to commerce, yes.

There are metrics showing Bitcoin becoming more widely used, but there's not 100% more use in two months.

Maybe it finally registered that the upcoming block reward (to 25 BTC per block) was coming and people bought some up ahead of time.

Re: 1 Bitcoin Worth 10 USD

#62

Post by wintersFright » Thu, Aug 02, 2012, 10:50 PM UTC

taligent wrote: post #14

I really don't get Bitcoin. What is the point in a currency that ranges from $2 USD to $12 USD in a year ?

That is only a problem if you try and use the currency as a Store-of-value. Use it only as a Medium-of-Exchange and the fluctations don't really matter.

Money wasn't meant to be saved. Earn and pay your bills in the monetary plane. Save your surplus production in the physical plane.

Re: 1 Bitcoin Worth 10 USD

#63

Post by Andys » Thu, Aug 02, 2012, 10:50 PM UTC

sylvinus wrote: post #27

Am I the only one to think Bitcoin is just a big Ponzi scheme benefiting the first users/creators who got all the first ones?

How do you feel about the property market? With hindsight, people who get in at the start of any bubble always look like they made easy money for no work.

Re: 1 Bitcoin Worth 10 USD

#64

Post by cs702 » Thu, Aug 02, 2012, 10:52 PM UTC

In the view of many HN members, Bitcoin is a Ponzi scheme. In the view of other HN members, Bitcoin is an experimental crypto currency, the use of which is unlikely ever to expand beyond idealistic hackers, online gamblers, and underground characters.

In my view, Bitcoin is likely to gain wide adoption worldwide over the long haul -- that is, over a period of many years or even decades. Its price is therefore bound to rise far above current levels over time.

I've laid out my reasoning here: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...

Re: 1 Bitcoin Worth 10 USD

#65

Post by ghshephard » Thu, Aug 02, 2012, 10:52 PM UTC

Retric wrote: post #46

delluminatus wrote: post #29

Earlier quoted context omitted.

It's quite cheap depending on the service. I use bitfloor, which charges some very small commission ($0.01 on a $40 deposit)

So, there is a transaction fee...

Not for the transaction. The fee is for currency exchange. Should BitCoin be used for more than just purchasing products from Silk Road, it's conceivable that people might one day be prepared to use Bitcoins as a standalone currency.

Re: 1 Bitcoin Worth 10 USD

#66

Post by Animus7 » Thu, Aug 02, 2012, 10:52 PM UTC

sylvinus wrote: post #27

Am I the only one to think Bitcoin is just a big Ponzi scheme benefiting the first users/creators who got all the first ones?

This argument never made sense to me.

If I were designing a Ponzi scheme intending to defraud people, I wouldn't base it on a 100% transparent network of open source software using public domain crypto functions, where the wealth creation is by design not only randomly allocated, but mathematically capped to a static trickle rate.

It's like the most badly designed Ponzi scheme ever.

Re: 1 Bitcoin Worth 10 USD

#67

Post by ghshephard » Thu, Aug 02, 2012, 10:54 PM UTC

drivebyacct2 wrote: post #41

ghshephard wrote: post #32

Earlier quoted context omitted.

Bitcoins are used quite a bit for buying/selling goods. I think the latest round of currency increases is mostly a function of people wanting to purchase goods, and needing to "bid up the price" in order to make their purchase. As vendors receive bitcoins, they usually immediately sell them to get back local currency. In the last 6 months, I've never held onto a bitcoin for more than about 30 minutes. Strictly use th…

If you don't mind me asking, what do you buy with them? I know of only a few things that are only acquirable via Bitcoins, or that couldn't be acquired more cheaply using dollars.

My guess is that 99% of the non-speculative drivers for BitCoin currency are purchases from SilkRoad.

Re: 1 Bitcoin Worth 10 USD

#68

Post by waterlesscloud » Thu, Aug 02, 2012, 10:55 PM UTC

nullymcnull wrote: post #56

Retric wrote: post #47

Earlier quoted context omitted.

They could easily kill bit-coin, and having made bit-coins worthless people would have far less interest using the next currency.

Like joering, you have failed to specify how the government will magically kill bitcoin.

Spend enough money on machines to have 51% of the processing power and subvert the integrity of the keychain, thereby making the entire system untrustworthy.

I cargo-culted that explanation, but it sounds good to me.

Re: 1 Bitcoin Worth 10 USD

#69

Post by corysama » Thu, Aug 02, 2012, 10:56 PM UTC

sylvinus wrote: post #27

Am I the only one to think Bitcoin is just a big Ponzi scheme benefiting the first users/creators who got all the first ones?

It's my understanding that being a Ponzi scheme was an explicitly stated feature in the design of Bitcoin. The idea was that setting up a very large first-mover advantage overcomes the chicken-egg problem of a currency whose entire value is based on network effects but initially has no users.

Re: 1 Bitcoin Worth 10 USD

#70

Post by tatsuke95 » Thu, Aug 02, 2012, 11:01 PM UTC

WhoIsSatoshi wrote: post #55

tatsuke95 wrote: post #36

Earlier quoted context omitted.

> " bitcoin being a deflationary currency by definition means it will likely increase in value" Why would yo want a deflationary currency? This promotes people "holding" onto the money with the hopes of getting a better deal in the future. ie. Why buy that $50 USD item for 5 BTC, when at the current rate it might be worth 4.5 BTC by next month? This is a burden on a currency and commerce.

This is a burden only if you do not use it. but the same applies to any investment - why invest at all? Bitcoins are capped by protocol - Quoting DeathAndTaxes @ https://bitcointalk.org/index.php?topic=80185.0 : (quote) The method used for determining the reward is to do a right shift on 50,000,000 satoshis every 210K blocks. That truncates any fractional satoshis. There are some truncation along the way. For example…

>"but the same applies to any investment - why invest at all"

But "money" isn't an investment. It's a medium of exchange.

If you're buying BTCs to hold them as an appreciating asset, that's one thing. If the intention is for them to be used as a currency, then deflation inhibits the exchange.