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Bitcoin rises from $14 to $40 in two months

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Re: Bitcoin rises from $14 to $40 in two months

#31

Post by omellet »

oleganza wrote: post #28
omellet wrote: post #24

Earlier quoted context omitted.

People will want to have it as an asset, not as a usable currency. Appreciating currencies are disastrous for any economy stuck with them, which is why we're no longer on the gold standard.

We are no longer on the gold standard because the gold was confiscated under threat of 10 years in prison. Please explain how holding a piece of metal under mattress destroys someone else's wealth, so you can come to a person and extract gold by force. http://2012patriot.files.wordpress.com/2011/06/executive_ord...

When you have a growing economy but a fixed money supply, money will appreciate. When this happens, people will prefer to keep money rather than spend it, and you get deflation-induced recessions/depressions. See the latter part of the 19th century in the US for repeated examples of this.

Re: Bitcoin rises from $14 to $40 in two months

#32

Post by sanxiyn »

eterm wrote: post #25
Zigurd wrote: post #23

Earlier quoted context omitted.

In theory it can go 2-4 orders of magnitude higher. The value of all bitcoin now is about the value of a dozen tons of gold, or about 1% of the gold backing SPDR. Bitcoin is still minor-league, but it's knocking on the door of being significant. It will be interesting to see if any major governments freak out about bitcoin, or if any governments embrace it for, say, selling oil.

It's just a commodity, why would Governments freak out about a commodity? Whether or not bitcoins are currently in a commodity bubble or not is speculation, but bitcoins are no more a currency than Iron, Gold or Tulips are. In theory commodities can go to very high heights indeed.

Governments do freak about gold though.

Re: Bitcoin rises from $14 to $40 in two months

#33

Post by Nursie »

maeon3 wrote: post #21

But how will the Federal Reserve be able to allocate new blocks of bit coins to give to one of the 12 federal reserve banks so we can fund more trillion dollar packages of spending borrowed money if all they can do is try to acquire bitcoins from other people who have them? In theory, would inflation be impossible with bitcoin provided that the number of humans who are willing to exchange labour for coins always incr…

You mean how will a central authority with the economic stability of the country as its central aim be able to help provide that stability?

Yeah, not so much. Which is a shame because that's a feature of the current monetary systems that I like.

Re: Bitcoin rises from $14 to $40 in two months

#34

Post by bti »

fabiandesimone wrote: post #7

I've been following it since it was at $7 saying, this won't go up from $10. Then a bit more...a bit more. Now is in $40 and I'm kicking my head against the wall. Surely this time, it won't go up again, right? ;)

Same here. I've been following it but have always talked myself out of throwing money into it. Guess I'll just make money the old fashion way. Curious what this guy [1] is thinking right now.

[1] http://www.reddit.com/r/Bitcoin/comments/18f3pd/i_have_my_en...

Re: Bitcoin rises from $14 to $40 in two months

#35

Post by rtkwe »

oleganza wrote: post #28
omellet wrote: post #24

Earlier quoted context omitted.

People will want to have it as an asset, not as a usable currency. Appreciating currencies are disastrous for any economy stuck with them, which is why we're no longer on the gold standard.

We are no longer on the gold standard because the gold was confiscated under threat of 10 years in prison. Please explain how holding a piece of metal under mattress destroys someone else's wealth, so you can come to a person and extract gold by force. http://2012patriot.files.wordpress.com/2011/06/executive_ord...

We're no longer on the gold standard because it lead to hoarding and economic inflexibility. It doesn't destroy wealth, however when gold is your currency and people hoard gold (for any reason be it economic instability or as an investment in the future price increases) the economy loses that amount of circulating money and moving money is what makes an economy work, not stagnant saved money. So by signing that executive order and replacing hoarded gold with non-appreciating paper money there was less incentive to hoard and more likely to spend, which is what we needed to get out of the Great Depression.

It'd be a little harder for that to happen with Bitcoin since it's not a currency backer but a side currency but the chance it could stagnate into investment only is there. Then it's value is entirely determined by the whim of the market since it's entirely ephemeral. (Yes all monetary value is ephemeral, intangible and based on the belief and good will of the market, but thing like gold have a longer history of having value everywhere.)

Re: Bitcoin rises from $14 to $40 in two months

#36

Post by lucb1e »

rubyrescue wrote: post #29
lucb1e wrote: post #18

Earlier quoted context omitted.

Me at $24 by accident (stupid misclick on Mt. Gox, and didn't think paying the trade fee again would be worth it). Wanted to wait till $27, then the socks I bought would have been free. Free, as in, I earned them back. I do wonder from whom I stole though; these socks cost labor but I did pay the laborer. Then the price rose and I got an equal amount of euros back as I put in. Who did I steal from, the Bitcoin commun…

it's the same with stock price. say there's a giant correction. the value disappears. it wasn't stolen from anyone. the same way the global economy has grown over thousands of years, and people are much wealthier - that isn't because they stole from anyone but the total value of the entire economy grew and "everyone" became wealthier.

Hmm I think I understand. It's hard to wrap my head around though: I gained socks (and didn't loose money), the sock maker gained money but lost time and resources, but nobody's money was stolen.

Re: Bitcoin rises from $14 to $40 in two months

#38

Post by 3pt14159 »

omellet wrote: post #31
oleganza wrote: post #28

Earlier quoted context omitted.

We are no longer on the gold standard because the gold was confiscated under threat of 10 years in prison. Please explain how holding a piece of metal under mattress destroys someone else's wealth, so you can come to a person and extract gold by force. http://2012patriot.files.wordpress.com/2011/06/executive_ord...

When you have a growing economy but a fixed money supply, money will appreciate. When this happens, people will prefer to keep money rather than spend it, and you get deflation-induced recessions/depressions. See the latter part of the 19th century in the US for repeated examples of this.

And our GDP growth rate is so much high now, right? With our depreciating money that people spend within a month of earning it.

Re: Bitcoin rises from $14 to $40 in two months

#39

Post by crntaylor »

tokenadult wrote: post #37

What is the price of tulip bulbs in the Netherlands these days? What have been the ups and downs in that commodity over the years?

I don't know why you're being downvoted. This is a very valid point. We've had speculative bubbles for as long as we've had financial markets - I don't see any reason why this one should be different.
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