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

Re: Bitcoin exchange rate reached $100 USD per BTC

#271

Post by T-hawk » Mon, Apr 01, 2013, 6:09 PM UTC

SkyMarshal wrote: post #187

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…

The lack of a stabilizing mechanism is a feature, not a bug. The risk-free rate of return on dollars only exists because the central authority possesses compulsive force of taxation and/or inflationary power, to pay out the return that it guarantees. Bitcoin is of course designed without any central authorities, inflationary power, or compulsive force.

Flipping around the question, how could a risk-free rate of return exist in Bitcoin at all? Nobody has the power to create more currency or forcibly acquire some in order to satisfy a promised payout.

Re: Bitcoin exchange rate reached $100 USD per BTC

#272

Post by bencoder » Mon, Apr 01, 2013, 6:10 PM UTC

jcfrei wrote: post #219

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…

I believe we'll see some form of inflation through the introduction of new currencies. when the price (ie. deflation) of one cryptocurrency becomes too high other currencies will jump in. the outcome however is unclear, because we are now at an unprecedented point in history. because of the openness of the bitcoin protocol everybody has now the possibility to create his own currency - and the price of adopting a new…

In testament to this, Litecoin, a bitcoin-alike that creates 4x as many coins and has been designed to be harder to do ASIC mining, has just recently gone above $1

Re: Bitcoin exchange rate reached $100 USD per BTC

#273

Post by MacsHeadroom » Mon, Apr 01, 2013, 6:10 PM UTC

blibble wrote: post #251

drcode wrote: post #246

Earlier quoted context omitted.

Not sure what you mean, since someone who owns a house doesn't have a land lord.

if she owns the property but not the land (i.e. the house is a leasehold instead of a freehold), she has a landlord

Sounds like feudalism.

Re: Bitcoin exchange rate reached $100 USD per BTC

#274

Post by fnordfnordfnord » Mon, Apr 01, 2013, 6:10 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?

The 'cryptobarons' or some currency speculators who hold large quantities of BTC could dump them on the open market and crash the price.

Re: Bitcoin exchange rate reached $100 USD per BTC

#275

Post by mrb » Mon, Apr 01, 2013, 6:11 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…

So you claim hoarding will kill Bitcoin. You are wrong for a very simple reason: the ultimate goal of hoarders is to eventually profit from their fortunes by spending it. They may spend slowly, but they will spend it, and this spending is what will ("should", to sound less pretentious) keep the Bitcoin economy alive.

Basically Bitcoin hoarders are not going to sit on their fortunes and passively watch Bitcoin dies.

Re: Bitcoin exchange rate reached $100 USD per BTC

#276

Post by wmf » Mon, Apr 01, 2013, 6:11 PM UTC

fnordfnordfnord wrote: post #261

wmf wrote: post #243

Earlier quoted context omitted.

In a common scenario where the customer pays 1% to Coinbase and the merchant pays 2.6% to BitPay, Bitcoin comes out worse than Paypal or credit cards.

In a common scenario where Paypal freezes your account for dubious reasons and then refuses to answer your telephone calls or emails, Bitcoin comes out ahead. In another common scenario where a Senator named Lieberman makes a press release accusing Wikileaks of criminal activity, and other payment processors simply refuse to conduct transactions for you, Bitcoin also comes out ahead.

Bitcoin is now regulated in the US, so it's only a matter of time until Coinbase, CoinLab, and BitPay get Lieberman'ed.

Re: Bitcoin exchange rate reached $100 USD per BTC

#277

Post by seanalltogether » Mon, Apr 01, 2013, 6:12 PM UTC

fnordfnordfnord wrote: post #252

seanalltogether wrote: post #230

Earlier quoted context omitted.

Actually in the UK this is exactly what has happened since nobody pays property taxes over there. My fiancee owns her house but still pays rent to a land lord. When there are no liabilities for holding an asset, there's not a big incentive to sell it.

>My fiancee owns her house but still pays rent to a land lord. How... what...? Please explain.

UK land rights are much different then the US owing to their history of kings and lords. You don't pay property tax[1] on the land you hold. As a result there isn't much incentive to ever sell your land. Since other people still want to live on your land though you set up a deal so that they can build houses and live on that land, but they have to pay you rent. You are effectively a landlord in the truest sense of the word.

[1] If you rent out your land you start paying property tax, the government wants there own piece of that pie.

Re: Bitcoin exchange rate reached $100 USD per BTC

#278

Post by jamoes » Mon, Apr 01, 2013, 6:13 PM UTC

deelowe wrote: post #218

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…

There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…

> deflation makes it more profitable to do nothing than to invest

Saving is investing. You're investing in your ability to manage your risk at a future date. If you have no savings, then you are at risk of any minor problem (e.g. an injury, decreased revenue, or a natural disaster) causing you a major setback.

The "common wisdom" you've heard about inflation being necessary for an economy is a lie. It's a lie that justifies the wealthiest class of individuals in this society to be "bailed out" again and again.

Re: Bitcoin exchange rate reached $100 USD per BTC

#279

Post by pg_bot » Mon, Apr 01, 2013, 6:14 PM UTC

randallsquared wrote: post #232

deelowe wrote: post #218

Earlier quoted context omitted.

There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…

> The reason it's bad is that deflation makes it more profitable to do nothing than to invest. This makes no sense to me. If keeping 100 units makes one richer because they are worth more in a year, then any investment which has a positive return (that is, you end up with more than 100 units in a year) must be that much better... What am I missing?

Deflation increases the value of holding cash. By definition deflation occurs when the price of a basket of goods decreases. Why invest your money in a basket of goods today when it is going to be cheaper to buy that same basket tomorrow?

Re: Bitcoin exchange rate reached $100 USD per BTC

#280

Post by deelowe » Mon, Apr 01, 2013, 6:14 PM UTC

teebs wrote: post #247

deelowe wrote: post #218

Earlier quoted context omitted.

There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…

This is part of the issue. The other part is that no one has any incentive to spend money, which can cause a recession. You can either 100 units of something today, or buy 110 units of it tomorrow. This gives you a very strong incentive to wait and not spend money. This means that no one buys anything, so no one needs to make or manufacture anything. People lose their jobs, so they don't have money, so they can't buy…

Which is why everyone in Washington was freaking out and throwing cash out the window in 2009. Crony capitalism aside, they were terrified of deflation(and rightly so).