Bitcoin exchange rate reached $100 USD per BTC • Hacker News Board

Re: Bitcoin exchange rate reached $100 USD per BTC

#181

Post by oleganza » Mon, Apr 01, 2013, 4:36 PM UTC

lolcraft wrote: post #176

Some people here seem to think that this is temporary, that sometime in the future Bitcoin will stabilize into a glorious future global currency -- never mind the new class of cryptobarons it will have created from its inner circle, through shameless hoarding. My question is, what then will happen when Bitcoin stabilizes, that is, when the time to new coin mined approaches practically infinity? Let's assume the globa…

1. Unjustified moral reference to "shameless hoarding". Where is the magical date when your property belongs to you for "too long" and you should give it to someone? And to whom exactly?

2. Why take credit for business if you can save your own earned money which appreciates over time and have 100% stake at your own project?

3. How deflationary spiral is supposed to happen? Will people be paralyzed and dead of hunger and thirst holding their precious coins? Or they will trade with each other to get stuff done?

Re: Bitcoin exchange rate reached $100 USD per BTC

#182

Post by 1SaltwaterC » Mon, Apr 01, 2013, 4:36 PM UTC

calinet6 wrote: post #121

grovulent wrote: post #42

Earlier quoted context omitted.

I'm not a bitcoin fanboy - but I see this sentiment around a lot and I'm not sure I agree with it. The claim is that the value of a currency is supposed to also be somehow related to its utility in acquiring goods and services. And if this isn't the case - then people will go off it. When was the last time someone acquired a good or service with an ounce of gold? Perhaps we shouldn't consider gold a currency? Well I'…

If I see a currency rising in value faster than Gold itself, I'm going to want to get in on the value. Fact is, if I had "invested" in 100 BTC only 5 months ago when it was hovering around USD$10, that would have cost me about $1000. And now it would be worth $10000. There are not that many investments that have that kind of return in such a short time. You'd have to be dumb to believe that people aren't doing exactl…

Call me a skeptic as I see this like speculation, but where I've seen that kind of return, turned out to be really clever ponzi schemes and enough supply of dumb enough "investors". Oh yea, I remember that fun time when the housing market in my area went up 5X in 4 years. It was all fine till people ran out of actual money. The rest is history.

Re: Bitcoin exchange rate reached $100 USD per BTC

#183

Post by comicjk » Mon, Apr 01, 2013, 4:37 PM UTC

mikemoka wrote: post #70

How could the bitcoin exchange rate reverse its trend and start falling? Do you have any scenarios in mind?

If speculators decide they've had enough and start selling, then the bitcoin will return to a value based on its usefulness for transactions, instead of its attractiveness as an investment. How far it can go down depends on the size of consumer bitcoin demand vs investor bitcoin demand.

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

This is the value over a larger time. Sustainable?

Re: Bitcoin exchange rate reached $100 USD per BTC

#184

Post by unclebucknasty » Mon, Apr 01, 2013, 4:38 PM UTC

dragontamer wrote: post #167

nawitus wrote: post #139

Earlier quoted context omitted.

"A new domain name has been 10 USD from Namecheap for the last decade. A new domain name in BTC however, has varied between 1 BTC and 0.1 BTC in just the past two months." I agree that the value of bitcoins changes faster than other currencies. However, the fact remains that the prices for all currencies change. Domain names are the exception, but inflation adjusts prices upwards of almost all commodities. "BTC as a…

USD changes at a rate of 3% per year, according to the CPI. Bitcoin is currently changing at a rate of 50% per month . Volatility is a bad thing for currency. Bitcoin has too much of it right now. And sorry, as long as BTC keeps changing by 50%+ per month, it will only be a proxy currency. If BTC is to become a true currency, it will need to settle down to ~3% / year volatility, like the other major currencies of the…

Yeah, this. Right now, BTC is more of a speculative investment than it is a currency. You just can't have insane volatility or even too much uni-directional movement in your medium of exchange.

For a merchant to offer something at a particular BTC price, that merchant would have to update its prices at least daily, if not more so. This to avoid losing money or overcharging himself out of the market, depending on the direction of the currency. It's just not practical at this point.

And, it's a catch-22: As long as it's a speculative investment, it's likely to remain volatile. And, as long as it remains volatile, it's likely to remain a speculative investment vs. a "true" currency.

Re: Bitcoin exchange rate reached $100 USD per BTC

#185

Post by knowaveragejoe » Mon, Apr 01, 2013, 4:41 PM UTC

specto wrote: post #158

MacsHeadroom wrote: post #142

Earlier quoted context omitted.

They would have to define it to ban it. Bitcoin would just evolve to no longer fit the ban. There are already dozens of other cryptocurrencies brooding- just waiting for a scenario where Bitcoin is pushed out to make more room for them. A ban on bitcoin will work about as well as a ban on piracy.

Not really, since the success of bitcoin still relies on conversion to another currency.

Additionally, the same applies to those other digital currencies as well.

Re: Bitcoin exchange rate reached $100 USD per BTC

#186

Post by jvm » Mon, Apr 01, 2013, 4:41 PM UTC

Hermel wrote: post #2

I.e. the USD has fallen below 10 mBTC.

Indeed goods and services have gotten extremely cheap in the past few months!

Re: Bitcoin exchange rate reached $100 USD per BTC

#187

Post by SkyMarshal » Mon, Apr 01, 2013, 4:42 PM UTC

acabal wrote: post #72

I added a Bitcoin purchase option to Scribophile to test the waters. But I'm interested in a Bitcoin economy, not a USD cash alternative--the situation where a Bitcoin has its own value, not a value dependent on a different currency. For that reason, I decided to fix the price of an upgrade to 2 BTC, not peg it to the dollar like most other sites do. Unfortunately it seems like that's just not going to work at this p…

One reason debt-backed currencies are relatively stable (vs stocks, commodities, and bitcoin) is that they are pegged to an interest rate, in the case of the dollar the (at least what used to be) the risk-free rate of return. You can even think of them as derivatives of the interest rate, for a loose definition of derivative.

This bounds their volatility in a way that bitcoin can't, and makes me wonder if the lack of a similar stabilizing mechanism isn't a long-term flaw in bitcoin's design.

The only way I can see bitcoin ever reaching a similar level of stability is for its market cap to reach a level such that it stabilizes under sheer weight and momentum rather than any built-in mechanic, which could require exceeding that of all other currencies combined (making speculation and market manipulation difficult or impossible), no small feat.

Re: Bitcoin exchange rate reached $100 USD per BTC

#188

Post by jamoes » Mon, Apr 01, 2013, 4:42 PM UTC

lolcraft wrote: post #176

Some people here seem to think that this is temporary, that sometime in the future Bitcoin will stabilize into a glorious future global currency -- never mind the new class of cryptobarons it will have created from its inner circle, through shameless hoarding. My question is, what then will happen when Bitcoin stabilizes, that is, when the time to new coin mined approaches practically infinity? Let's assume the globa…

> shameless hoarding

Hoarding is a derogatory term, intended to evoke an emotional response from the reader. I prefer the term "saving".

> Why lend, why build new companies, when simply storing it is more than enough? Take shocks such as bubbles and demand-side crises.

Most bitcoin proponents to indeed reject Keyensian, demand-side economics.

I, for one, think entrepreneurs would typically benefit from not relying on debt.

>capitalism[...] needs inflation, feeds from it

Increasing the money supply helps one class of people: the bankers. It doesn't help the middle class, it doesn't help entrepreneurs, and it definitely doesn't help the common person. It's an insidious hidden tax.

All this talk about inflation reminded me of a funny (in a dark way) propaganda video made in 1933 regarding inflation: https://www.youtube.com/watch?v=JUvm9UgJBtg.

Re: Bitcoin exchange rate reached $100 USD per BTC

#189

Post by rrrrtttt » Mon, Apr 01, 2013, 4:42 PM UTC

xhrpost wrote: post #79

Everyone keeps saying that a crash is around the corner and the current price is unsustainable, been hearing it since $40/BTC, maybe earlier. I don't completely disagree, the question I keep pondering though is, if there is a big sustained crash coming, is it from $100 to $30, or $900 to $300?

If the crash will happen it will lead to a drop in trading volume, making prices unreliable. You will not be able to sell substantial quantities of Bitcoin without crashing the market further.

Re: Bitcoin exchange rate reached $100 USD per BTC

#190

Post by oleganza » Mon, Apr 01, 2013, 4:43 PM UTC

wmf wrote: post #131

baddox wrote: post #90

Earlier quoted context omitted.

Give it time. I happen to think that bitcoin is still stabilizing. Whether it will stabilize at an even higher price than it is now, or "crash" and stabilize at a much lower price, I think it will eventually stabilize.

Since Bitcoin's monetary supply is totally disconnected from economic activity, I wonder how it can ever stabilize (except perhaps by accident).

Right now a landgrab is going on. People want to hold some btc. At some point in the future, when everyone knows about btc and purchased as much as they want/can, the price will be more stable and grows only as much as new wealth is created by the global economy and new people are born.