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Bitcoins reached $300

news.ycombinator.com

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Re: Bitcoins reached $300

#101

Post by TomGullen »

leokun wrote: post #92
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.

Why?

Take a look at this explanation: http://www.fool.com/foolfaq/foolfaqcharts.htm

Re: Bitcoins reached $300

#102

Post by polarix »

deskamess wrote: post #93
gnerd wrote: post #61

Earlier quoted context omitted.

I may be wrong, but due to the deflationary nature of BTC (limited supply, increasing demand), when that happens, those fees are worth more (in government backed fiat currencies) than they are today. It's like being upset that the original miners could get a block reward of 50 BTC for mining on a CPU but today you have to use specialized hardware for less BTC. But as competition increased (and difficulty increased),…

I am still learning about Bitcoin... so these may be a silly questions or questions based on wrong assumptions. From what I understand, as you get close to the max (21 million or so) the coins are harder to mine. Does that not mean transactions take longer to verify? And if you cannot verify transactions in a 'timely' manner is the system effectively dead? What is the acceptable user experience for maximum verificati…

The blocks (the fundamental unit of verification) get harder or easier to complete based only on how quickly the last set completed: this is to maintain a constant speed of block mining.

The bitcoin payout (which goes to the miner of a block) gets predictably smaller over time.

So no, this affect does not increase expected transaction time.

Re: Bitcoins reached $300

#103

Post by polarix »

heeton wrote: post #83
gnerd wrote: post #61

Earlier quoted context omitted.

I may be wrong, but due to the deflationary nature of BTC (limited supply, increasing demand), when that happens, those fees are worth more (in government backed fiat currencies) than they are today. It's like being upset that the original miners could get a block reward of 50 BTC for mining on a CPU but today you have to use specialized hardware for less BTC. But as competition increased (and difficulty increased),…

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)

I don't think anyone sane would use that as a value store.

Re: Bitcoins reached $300

#104

Post by oleganza »

heeton wrote: post #83
gnerd wrote: post #61

Earlier quoted context omitted.

I may be wrong, but due to the deflationary nature of BTC (limited supply, increasing demand), when that happens, those fees are worth more (in government backed fiat currencies) than they are today. It's like being upset that the original miners could get a block reward of 50 BTC for mining on a CPU but today you have to use specialized hardware for less BTC. But as competition increased (and difficulty increased),…

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".

Re: Bitcoins reached $300

#105

Post by ajiang »

grey-area wrote: post #57

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 find bitcoin really interesting, love the idea of a cryptocurrency, and also find the idea of a deflat…

I think of the value of any asset in the form of expected value. For bonds and stocks, it's present value for forecasted future cash flows. For Bitcoins, there is an element of underlying value, but also an element of acceptance as a broader currency. As the probability of Bitcoins becoming a more accepted currency increases, so does it's value. While the underlying currency value may not change (or perhaps it does, hard to tell), its probability of acceptance is going up as Bitcoins enter the mainstream via publicity and mass adoption.

Re: Bitcoins reached $300

#106

Post by Houshalter »

grey-area wrote: post #57

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 find bitcoin really interesting, love the idea of a cryptocurrency, and also find the idea of a deflat…

Well people were saying it was a bubble over a year ago when it was only $19. How do we know if it's not a bubble though? Is there any way to estimate what the "true value" of a bitcoin is? Like the number of bitcoins in circulation and the total size of the bitcoin economy?

Re: Bitcoins reached $300

#107

Post by adrianwaj »

oleganza wrote: post #100
adrianwaj wrote: post #87

I wouldn't say it's a bubble just yet, because it's too close to the last ramping which was a response to the Cyprus confiscations. This is just a response to what many would perceive as the beginnings of capital controls in the USA... it's probably the tail end of that. Another "Bitcoin Bubble" to me would be around $500 in the next few days... thus entailing some burst or large correction. http://www.foxbusiness.co…

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 store of value that one can't spend than not having anything at all! At least time is on your side with bitcoin in terms of liquidity, it's not with fiat if you look at capital controls on the increase. Capital controls are an issue especially if you want to move between countries. Anyone with $100mil+ and not in bed with government should move into bitcoin and get a good anonymizer .. the rest of us just get a free ride. Assume some goverment will then come after (if not those bitcoins) then you. And so the end game of bitcoins is when goverment ends up with most of them (or at least wanting them.)

Re: Bitcoins reached $300

#108

Post by WayneS »

TomGullen wrote: post #86
grey-area wrote: post #57

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 find bitcoin really interesting, love the idea of a cryptocurrency, and also find the idea of a deflat…

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 the "correction" then buy.

Re: Bitcoins reached $300

#110

Post by userulluipeste »

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…

I don't see how Bitcoin could go down to $0 (assuming that it's not the philosophical scenario with $ growing to infinite), unless the entire thing is somehow compromised and exploited in an abusive manner; thus, destroying the trust of anyone left with Bitcoin holdings.
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