Bitcoins reached $300 • Hacker News Board

Re: Bitcoins reached $300

#111

Post by TomGullen » Thu, Nov 07, 2013, 2:10 PM UTC

WayneS wrote: post #108

TomGullen wrote: post #86

Earlier quoted context omitted.

Look at Bitcoin closing price on a log scale: http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxU... Not so scary anymore! From what I understand, people should be looking at this sort of data on a log scale.

I agree the log chart is the desired way to view the data because then a straight line is showing steady growth. But look at the chart you posted. I see a sharp uptick on a nice linear trend since July. Now go look at the rest of the chart and ask yourself what happened every time there was a sharp uptick? Hmmm I believe bitcoin will continue to grow, but I wouldn't tell people this is a good time to buy. Wait for th…

Every sharp uptick will have a corrective period because upticks have momentum.

Now is a good a time to buy as any. No one knows if the correction is going to drop below the current price or not. So it really doesn't matter when you buy, especially so if you're holding for the long term.

Re: Bitcoins reached $300

#112

Post by harshpotatoes » Thu, Nov 07, 2013, 2:23 PM UTC

So, I don't understand. Why does bitcoin have such high deflation?

Is this just because there has been a constant stream of people switching their traditional currencies for bitcoins at a rate faster than bitcoins can be mined?

Presumably at some point bitcoin will stop being deflationary if it ever wants to be useful as a currency. When does that happen?

Why do people buy bitcoins if it isn't really useful as a currency yet? I mean, there are supposedly 3.5 billion USD worth of bitcoins in existence, but if I want to buy any sort of physical product or pay for utilities, I have to use a traditional currency.

Currently it appears that bitcoins are most popularly used for less than legal purposes (payment for drugs, payment for services to avoid taxes, payment for blackhat services). Does this mean that by buying into bitcoin, I'm essentially providing USD to these black market activities which might not have had USD to begin with?

Many questions I don't understand...

Re: Bitcoins reached $300

#113

Post by oleganza » Thu, Nov 07, 2013, 2:26 PM UTC

adrianwaj wrote: post #107

oleganza wrote: post #100

Earlier quoted context omitted.

Last rally started at $14 and crashed into $100. This time we started at $140 around Silk Road shutdown. If this history repeats itself, the bubble may crash into whopping $1000.

The main argument I heard against bitcoin from a Russian tycoon during the Cyprus shenanigans for bitcoin being a good store of value was that there was no quick way to liquidate large sums of bitcoin if you wanted to (I presume into some fiat currency for spending.) An interesting point: it wasn't really about the currency losing value it was about liquidity. But the counter-thought is that it's better having a stor…

Many people bet on Bitcoin becoming world money. Then you don't need to "liquidate" it at all. At the same time, market evolves: the more people invest tomorrow, the more btc you will be able to liquidate.

When Bitcoin becomes a world currency, then capital controls wouldn't matter.

Re: Bitcoins reached $300

#114

Post by maxerickson » Thu, Nov 07, 2013, 2:27 PM UTC

oleganza wrote: post #98

csomar wrote: post #89

Hate BitCoin or like it. Let's agree, nobody can explain this; and nobody can predict BitCoin value or usage. Some top HN members criticized BitCoin heavily. I, for one, invested $0 in BitCoin. But we can be sure about something: Bitcoin is weird, new and innovative. It's something completely new and has no rules. The game is open. How the market will react will not depend on your limited (or wide) experience. Bitcoi…

1. Bitcoin can be explained if you take time and study it. It has no new or strange constructs in it. Hash functions and digital signatures were around for decades. You may also like this glossary: https://github.com/oleganza/CoreBitcoin/blob/master/GLOSSARY... 2. Bitcoin has rules and those rules are strictly followed and very strictly specified in actual software.

The block size blockchain fork was resolved on an ad hoc basis. There was nothing in the software to deal with it. Miners lost rewards over it (or at least, wasted cycles).

Re: Bitcoins reached $300

#115

Post by yebyen » Thu, Nov 07, 2013, 2:36 PM UTC

oleganza wrote: post #104

heeton wrote: post #83

Earlier quoted context omitted.

Would something like FreiCoin help? (bitcoin with demurrage - coins 'evaporate' over time so that there are always new ones to be mined and lost coins eventually go back into the pool)

No one would bother with Freicoin (which leaks money) because no one will invest in it when you can invest in Bitcoin. So it will not have a crowd of people that value it, therefore it won't have "value", therefore it won't be used as currency. Because currency is something that has widely-acknowledged value (by those who save it, of course). There is no such thing as "transactional currency".

My understanding is that coins must sit idle for a full year before they "evaporate."

If you simply create another wallet, or another wallet address, and move your coins (transact) without buying or selling anything, you fulfill the demurrage requirement and your coins don't evaporate.

If you work with large amounts of digital money and you don't check on it for a year, quite frankly you deserve to lose it! You should have robots executing on arbitrage opportunities and it should be no problem for you to show some activity in the span of a year, if you call yourself an investor. That being said, I don't have any Freicoin and I won't put my money where my mouth is, there are more interesting bits to tune in Bitcoinia, like Terracoin which has shorter block targets and hard-coded limits on the amount of variability and swing that difficulty can have.

Re: Bitcoins reached $300

#116

Post by adrianwaj » Thu, Nov 07, 2013, 2:43 PM UTC

oleganza wrote: post #113

adrianwaj wrote: post #107

Earlier quoted context omitted.

The main argument I heard against bitcoin from a Russian tycoon during the Cyprus shenanigans for bitcoin being a good store of value was that there was no quick way to liquidate large sums of bitcoin if you wanted to (I presume into some fiat currency for spending.) An interesting point: it wasn't really about the currency losing value it was about liquidity. But the counter-thought is that it's better having a stor…

Many people bet on Bitcoin becoming world money. Then you don't need to "liquidate" it at all. At the same time, market evolves: the more people invest tomorrow, the more btc you will be able to liquidate. When Bitcoin becomes a world currency, then capital controls wouldn't matter.

I know that. Bitcoin's main risk is that it can make a person's fortune known, and accessible (or rather vulnerable.)

"You have 50,000 bitcoins.. transfer them to me now or alternatively do xxxx now .. or else." In fact some sort of time-lock or trusted partner would be a good busines idea, so that someone couldn't just come with a gun to your head. It can't become a world currency because it makes people too personally vulnerable... at least as it stands now, but it's a really good start.

Re: Bitcoins reached $300

#117

Post by yebyen » Thu, Nov 07, 2013, 2:44 PM UTC

grey-area wrote: post #90

Mahn wrote: post #70

Earlier quoted context omitted.

If I had money in bitcoin I'd find this movement terrifying. It is not correlated with broader economic movements or the inflation rate of USD, and has all the classic hallmarks of a bubble, including true believers telling everyone it is different this time, increasingly wild oscillations, and exponential growth. I have money in bitcoin, I believe in its future, and I acknowledge we are in a bubble. Nothing to be te…

I have money in bitcoin, I believe in its future, and I acknowledge we are in a bubble. Nothing to be terrified of; As long as you don't have significant money in it, it's no big problem, but say you had your savings in it or were paid a salary in it - at that point the volatility would be a nightmare and the prospect of a bubble seriously troubling (bubbles always burst badly, and frequently go through successive wa…

So, some people were meant to play craps and others blackjack. Some people don't have the stomach for a casino at all. I have played SatoshiDice and it's thrilling, I have never actually lost there, or if I did it was overtaken by winning. Still, I never bet anything like when I go to a casino. The bitcoins will still be there tomorrow.

By and large I have made a lot more money holding bitcoins and not selling them, than by gambling or actual market activities like trading or selling actual goods and services. I can't say I trust it, but when you take your first $50 and turn it into $500, only to spend it all on mining equipment that doesn't expect to make you 5BTC because other people are out there betting extra zeros, well hell, sometimes you gotta double down and make money.

I have no illusion that it's not a bit risky. I could also be paying bank fees. Today it looks like the last three years there has never been a bad day to buy bitcoins.

Re: Bitcoins reached $300

#118

Post by Mchl » Thu, Nov 07, 2013, 3:20 PM UTC

yebyen wrote: post #115

oleganza wrote: post #104

Earlier quoted context omitted.

No one would bother with Freicoin (which leaks money) because no one will invest in it when you can invest in Bitcoin. So it will not have a crowd of people that value it, therefore it won't have "value", therefore it won't be used as currency. Because currency is something that has widely-acknowledged value (by those who save it, of course). There is no such thing as "transactional currency".

My understanding is that coins must sit idle for a full year before they "evaporate." If you simply create another wallet, or another wallet address, and move your coins (transact) without buying or selling anything, you fulfill the demurrage requirement and your coins don't evaporate. If you work with large amounts of digital money and you don't check on it for a year, quite frankly you deserve to lose it! You shoul…

I'm pretty sure you have some savings or belongings that you didn't touch for a year or more. Can I have those?

Re: Bitcoins reached $300

#119

Post by oleganza » Thu, Nov 07, 2013, 3:35 PM UTC

yebyen wrote: post #115

oleganza wrote: post #104

Earlier quoted context omitted.

No one would bother with Freicoin (which leaks money) because no one will invest in it when you can invest in Bitcoin. So it will not have a crowd of people that value it, therefore it won't have "value", therefore it won't be used as currency. Because currency is something that has widely-acknowledged value (by those who save it, of course). There is no such thing as "transactional currency".

My understanding is that coins must sit idle for a full year before they "evaporate." If you simply create another wallet, or another wallet address, and move your coins (transact) without buying or selling anything, you fulfill the demurrage requirement and your coins don't evaporate. If you work with large amounts of digital money and you don't check on it for a year, quite frankly you deserve to lose it! You shoul…

"you deserve to lose it"

Your opinion is irrelevant. People will not put money where they need to run some robots just not to lose their funds if they have a better alternative. Freicoin thus will never have any value and therefore no one would use it as a currency.

Terracoin is essentially the same as Bitcoin, but is compatible with Bitcoin ASICs and thus prone to attacks from their part. Litecoin, on the other hand, has incompatible hashing scheme, but no one would invest in mining Litecoin if you can invest in mining Bitcoin. In other words, people want one, most marketable, most popular, most liquid money. If Bitcoin was leaking savings, people would choose Bitcoin 2 which wouldn't and stick with it.

Re: Bitcoins reached $300

#120

Post by oleganza » Thu, Nov 07, 2013, 3:39 PM UTC

maxerickson wrote: post #114

oleganza wrote: post #98

Earlier quoted context omitted.

1. Bitcoin can be explained if you take time and study it. It has no new or strange constructs in it. Hash functions and digital signatures were around for decades. You may also like this glossary: https://github.com/oleganza/CoreBitcoin/blob/master/GLOSSARY... 2. Bitcoin has rules and those rules are strictly followed and very strictly specified in actual software.

The block size blockchain fork was resolved on an ad hoc basis. There was nothing in the software to deal with it. Miners lost rewards over it (or at least, wasted cycles).

Software has bugs. They need to be fixed and some people may lose money. This story only proves that incentives are correctly working in favour of everyone: miners voluntarily chose to lose rewards and stay compatible with the older network to not shake confidence in it.

The point is not to have a perfect system (which is impossible), but to have proper motivations for everyone to play along instead of cheating and stealing.