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Bitcoin hits $200

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Re: Bitcoin hits $200

#71

Post by kiba »

eduardordm wrote: post #57

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.

Why isn't mining regulating the prices? Is it too costly?

It is a consensus that mining don't affect the price of bitcoin. However, mining is certainly affected by the price of bitcoin.

Re: Bitcoin hits $200

#72

Post by ghgr »

antr wrote: post #68

I'd love to short Bitcoin. Are their any platforms/startups that allow short selling this currency?

Yes, there are. But consider that people have been saying this since BTC reached $30. Most of them would have been / actually are out of the market.

Of course, I'm not saying that you are wrong, just that the market can stay irrational longer than you solvent.

Re: Bitcoin hits $200

#73

Post by antr »

ghgr wrote: post #72
antr wrote: post #68

I'd love to short Bitcoin. Are their any platforms/startups that allow short selling this currency?

Yes, there are. But consider that people have been saying this since BTC reached $30. Most of them would have been / actually are out of the market. Of course, I'm not saying that you are wrong, just that the market can stay irrational longer than you solvent.

> the market can stay irrational longer than you solvent

100% agree

Re: Bitcoin hits $200

#74

Post by sfjailbird »

eduardordm wrote: post #57

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.

Seems to me the more valuable bitcoins are, the more attractive it is for vendors to accept them as payment. And the more vendors accept them as payments for real stuff, the more attractive and established they become as a currency.

Also, concluding that bitcoin is doomed because too many people want them seems backwards.

Re: Bitcoin hits $200

#75

Post by caf »

tomp wrote: post #32
AndrewDucker wrote: post #23

It's fascinating to watch this, largely because Bitcoin has no "natural" value. The only utility it has is as a transfer of value from one place to another, and it can do that equally well with a bitcoin being worth $1 or $200. But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people b…

The alternative possibility is: the amount of bitcoins kept for trade significantly outweighs the amount of bitcoins kept as an investment. Then, the price (in $) would roughly equal to the ratio of the amount of money circulating in the society over some period of time (in $) the number of available bitcoins. Thus, bitcoin would probably be worth somewhere between $100,000 and $1,000,000.

It's worth keeping in mind in mind that the equilibrium total mining power consumption is proportional to the price of a bitcoin in terms of the amount of electricity it can purchase.

With the current mining rate of 150 bitcoin per hour, a bitcoin price of $100,000 implies around 100GW of power consumption for bitcoin mining (for comparison, a large thermal power station has around 1GW of output). That's a lot of energy to throw out the window...

Re: Bitcoin hits $200

#76

Post by rplnt »

Hermel wrote: post #9
mikecane wrote: post #4

Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it? I've stayed away from it simply because of that. I fear some people are in for a very rude awakening. Don't count your money just yet -- and, for god's sake, don't try to use it as the basis for any paper money loans! None of you knew about Stuxnet. The story of Bitcoin's infiltration and manipulation is y…

Who do you have in mind? I don't see anyone who wants Bitcoin to crash desperately enough to spend millions on inflating a bubble and then pop it - which is a very risky and costly plan. More likley would be a scenario in which someone who holds a lot of Bitcoins pushes MtGox prices upwards in order to be able to sell OTC at inflated prices. However, given that Bitcoin on MtGox has a volume of USD 20 million daily, t…

> given that Bitcoin on MtGox has a volume of USD 20 million daily, this takes a lot of resources

Or $200,000 in yesterday's terms. Doesn't seem so hard to influence anymore.

Re: Bitcoin hits $200

#77

Post by rplnt »

andyhmltn wrote: post #13
shanelja wrote: post #2

Wasn't it like $130 a few days ago? This kind of inflation is really cool for the people invested in bitcoins but this is the point where I would panic sell, but perhaps I'm a coward. EDIT: Link's down, it was $203 at 12.06 GMT.

Yes and a few days before that it was $100. I was watching it out of curiosity yesterday and it went up about $20-$30 I believe just while I was at work. Hopefully it crashes, stables out and then gains use as a currency rather than an investment.

It will never do that due to its design.

edit: unless the market is controlled by someone willing to lose money to keep it stable.. so no, it won't happen.

Re: Bitcoin hits $200

#78

Post by dragontamer »

aneth4 wrote: post #27
graeham wrote: post #7

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't…

It's hard to say. There are many who justify prices far higher based on future adoption. Adoption is picking up at a remarkable rate. The USD money supply is around $3T or $10T, depending on whether you are counting money multiplied by leverage. The US GDP is $15T. If we presume that a currency then should be on the same order of magnitude of money supply as the GDP or transaction volume, it's not hard to project a $…

http://blockchain.info/charts/n-transactions

The number of bitcoin transactions per day has remained roughly constant since February. The price of Bitcoins however, has risen by 1000%.

Do you have any evidence to suggest that people are actually using Bitcoins? Because the hard evidence I've got seems makes it seem like Bitcoins are getting traded like crazy, but not necessarily used.

Re: Bitcoin hits $200

#79

Post by hollerith »

betterunix wrote: post #53
aneth4 wrote: post #35

Earlier quoted context omitted.

Gold also has no "natural" value as a currency, and make no mistake gold is traded as a currency, not for it's actual usage.

Where is gold traded as a currency? In what market are weights of gold used as a medium of exchange?

What grandparent (almost certainly) means is that gold is a "monetary asset": although there are industrial, cosmetic and personal uses for gold, if people were not using gold as a store of economic value, its price would be much lower than it is.

More to the point, even if gold's industrial, cosmetic and personal uses completely disappeared, it would probably continue to be quite valuable because people would probably continue to use it as a place in which to "park" some of their savings.

Re: Bitcoin hits $200

#80

Post by cs702 »

graeham wrote: post #7

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't…

Does anyone have a link or justification in any way for the rise in the conversion rate?

Yes. Nearly two years ago I wrote an essay with my thoughts on Bitcoin's potential for long-term appreciation at http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... and the essay is holding up pretty well so far, particularly given the recent reported spike in adoption by people in Spain[1] and Cyprus[2].

The TL;DR summary of my argument: the more people who adopt Bitcoin as a store of value or medium of exchange of last resort, the more demand there will be for it around the world. Supply being fixed, this growing demand will be reflected in a rising price. Should Bitcoin continue to work as intended, in the long run nothing prevents it from eventually gaining as much credibility as, say, gold.

--

[1] http://www.wired.co.uk/news/archive/2013-03/20/bitcoin-spain...

[2] http://news.cnet.com/8301-1023_3-57576928-93/bitcoin-hits-re...

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