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Bitcoin reaches an all-time trading high of over $33

arstechnica.com

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Re: Bitcoin reaches an all-time trading high of over $33

#71

Post by Jabbles »

downandout wrote: post #44
kjackson2012 wrote: post #39

Earlier quoted context omitted.

A rising price does not imply long-term viability. A stable price does. For long term viability, people can't just be buying and selling it, they should be transacting with it. It seems like the most active form of Bitcoin use that I've seen is trading. There's nothing wrong with that, but it's a double-edged sword, as people learned last year. Once more and more regular people actually start using it for real purcha…

You are correct that a rising price does not necessarily imply long-term viability. It indicates a sharp increase in demand. In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. It enables new business models and transactions that would not have otherwise occurred (in many cases, for legal reasons). For this reason, I b…

for legal reasons

Oh come off it. You mean illegal reasons. You know you do. If you believe people should be free to buy any kind of drug they wish then say so, I don't think HN would view it as too radical a view. But your post sounds like typical corporate bullshit.

Re: Bitcoin reaches an all-time trading high of over $33

#72

Post by eurleif »

Jabbles wrote: post #71
downandout wrote: post #44

Earlier quoted context omitted.

You are correct that a rising price does not necessarily imply long-term viability. It indicates a sharp increase in demand. In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. It enables new business models and transactions that would not have otherwise occurred (in many cases, for legal reasons). For this reason, I b…

for legal reasons Oh come off it. You mean illegal reasons. You know you do. If you believe people should be free to buy any kind of drug they wish then say so, I don't think HN would view it as too radical a view. But your post sounds like typical corporate bullshit.

"For legal reasons" doesn't mean "because what they're doing is legal", it means "for reasons related to the law" (i.e., what they're doing is against it). That wasn't doublespeak, it was pretty clear.

Re: Bitcoin reaches an all-time trading high of over $33

#73

Post by lukehorvat »

vetleen wrote: post #64

Looking at the history of Bitcoin and saying “Wow, the price of Bitcoins will never drop because it hasn’t dropped so far” is like looking in the back mirror of your car saying “Wow, there will always be a freeway ahead of me because I have been driving on the freeway for so long now”. The fact that is has flourished can have a million explanations, where one is that it does actually have a long term viability as a c…

One word: deflationary.

Re: Bitcoin reaches an all-time trading high of over $33

#74

Post by Tichy »

fourstar wrote: post #23

Can someone tell me if I should invest in this right now or not or did I miss the boat and I should just move on?

No.

I mean people can tell you their opinions, but the reality is that nobody knows - as in all other investments...

Now that I think of it, at least with BitCoin there can be no insider trading, because there is no company that owns BitCoin. (There could still be information not available to all, for example somebody could have cracked the protocoll and short BTC knowing that it would be dead once he releases the information).

Re: Bitcoin reaches an all-time trading high of over $33

#75

Post by netcan »

downandout wrote: post #19

The fact that Bitcoin has flourished despite numerous high profile incidents of theft and fraud, the relative difficulty associated with buying and selling them, and the rather unsavory nature of many of its most popular uses today, is a testament to its long-term viability as a currency. The Bitcoin ecosystem has a long way to go before it is considered mainstream, but I believe its long-term success is almost inevi…

I read this a little different. I think this is proof of incredible demand. I'd also add poor usability and difficult to understand to the list of hurdles that bitcoin is overcoming.

I think this is one of those cases where the demand is so strong that people put up with anything. Online Payments really sucks, for both sides. Merchants aren't guaranteed that the money they get will stay in their accounts. They need to become experts in fraud & risk & money laundering. The whole process is mitigated by a duopoly with 150 years of technical debt. Credit Cards, Payment Gateways, Merchant Accounts, Paypal, Chargebacks. All these suck. Not everyone has access to them. No one feels safe using them.

When natural demand is that high, it can overcome everything else. There's a whole class of products priced at insane prices. Quality is uncertain. They product can be dangerous. It's only available from dangerous criminals. You need to be introduced to the vendor by your least favorite "friend." If this product was breakfast cereal, people would just eat something else. But since natural demand for ilegal narcotics is so high, all those hurdles get jumped.

Re: Bitcoin reaches an all-time trading high of over $33

#76

Post by netrus »

neilxdsouza wrote: post #70
glesica wrote: post #42

Earlier quoted context omitted.

Illicit plus grey market and a few special cases. Fine, you win the Pedant's Prize for nitpicking. The point is that they don't make a good general-purpose currency. Just because they're awesome for buying drugs and secret VPNs doesn't mean very much in the grand scheme of things (most transactions, at least in the developed world, do not take place in the grey market). Also, just because some people do something doe…

Bit Coins represent trade in an Economy independent of the Rot Schild banks. There is no proof that the 2007 financial crises was not orchestrated on purpose. There is also no proof that that 2007 financial crises was orchestrated on purpose. But we do know that Goldman Sachs sold financial instruments to their clients which they betted against. When the clients lost that money the profiteers was Goldman Sachs. 1. If…

I cannot completely follow you, but your number of 17.2 Trillion is off by the factor 1.000, and the fortune of the Rothschild family spread and resolved from generation to generation, as large family fortunes always do.

Re: Bitcoin reaches an all-time trading high of over $33

#77

Post by mehwoot »

downandout wrote: post #44
kjackson2012 wrote: post #39

Earlier quoted context omitted.

A rising price does not imply long-term viability. A stable price does. For long term viability, people can't just be buying and selling it, they should be transacting with it. It seems like the most active form of Bitcoin use that I've seen is trading. There's nothing wrong with that, but it's a double-edged sword, as people learned last year. Once more and more regular people actually start using it for real purcha…

You are correct that a rising price does not necessarily imply long-term viability. It indicates a sharp increase in demand. In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled. It enables new business models and transactions that would not have otherwise occurred (in many cases, for legal reasons). For this reason, I b…

> In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled.

So demand has increased 1000% since the low of $3 less than a year ago? I don't buy that reasoning. I think it is 90% speculation and 10% increased demand. Demand is increasing, but nowhere near the amount to explain the large price shifts.

Disclaimer: I have a reasonably sized investment in bitcoins.

Re: Bitcoin reaches an all-time trading high of over $33

#78

Post by mrb »

glesica wrote: post #42
eof wrote: post #38

Earlier quoted context omitted.

Well your logic is obviously flawed, because people do use bitcoins for transactions and they have changed by hundreds of percentage points. "No one" is patently false. Besides, illicit transactions are still transactions. And.. you are just plain wrong. Bitcoin is also useful for buying many completely legal things. Including a VPN that can't be linked to your identity. (Illicit you say? What about a journalist in a…

Illicit plus grey market and a few special cases. Fine, you win the Pedant's Prize for nitpicking. The point is that they don't make a good general-purpose currency. Just because they're awesome for buying drugs and secret VPNs doesn't mean very much in the grand scheme of things (most transactions, at least in the developed world, do not take place in the grey market). Also, just because some people do something doe…

Bitcoins are an awesome general-purpose currency for electronically sending "money" to persons or businesses anywhere in the world, instantly. Say goodbye to: middle-men taking their high fees, currency conversion fees, bank holidays, wire transfers taking 3-5 days, wasting half an hour driving to a Western Union office, etc.

I think what you meant to say is that bitcoins don't make a good general-purpose day-to-day currency (yet). For example paying your hairdresser, paying at the supermarket, etc.

Re: Bitcoin reaches an all-time trading high of over $33

#79

Post by netcan »

adambom wrote: post #2

Bitcoin is a deflationary currency since it's supply is limited. Doesn't that mean that it's expected to rise in price? This also ends up being the currency's downfall, since there's an incentive to hoard it rather than spend it.

Prices adjust to reflect expectations. Theoretically, if everyone knew with certainty that prices will increase in the future, it would rise now instead. It would rise to reflect the NPV of the future price at any point where its NPV is highest.

The mechanism that would happen through is just as you predict. People would buy & hold bitcoin. Buying & holding is an increase of demand (buying) & a decrease in supply (holding). These both increase prices until the point where buying and holding isn't any more attractive than buying and holding some other asset with a known future value (like government bonds).

In reality that certainty doesn't exist. Current prices of bitcoin a reflection of all sorts of wild guesses about possible future effects that are dependent on all sorts of things.

Re: Bitcoin reaches an all-time trading high of over $33

#80

Post by vellum »

downandout wrote: post #19

The fact that Bitcoin has flourished despite numerous high profile incidents of theft and fraud, the relative difficulty associated with buying and selling them, and the rather unsavory nature of many of its most popular uses today, is a testament to its long-term viability as a currency. The Bitcoin ecosystem has a long way to go before it is considered mainstream, but I believe its long-term success is almost inevi…

It's more a testament to high demand than long term viability. In addition to the other things mentioned in this thread, Bitcoin lets you evade oppressive currency controls.

For example, Argentina's real inflation rate is around 18-25%. Because of that, they've taken drastic measures to prevent their citizens from transferring money out of the country.

Here's one guy’s story of using a Bitcoin mailing list to buy pesos at a 25% better exchange rate, due to number of Argentines who wanted to offload their pesos: http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollar...

As the Euro crisis deepens, and the chances of one or more countries leaving the Euro gets higher, we should see a spike in Bitcoin prices. For example, if Greece was about to leave the Euro, they'd have to impose draconian currency controls, because everyone's bank deposits would be devalued overnight.

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