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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#431

Post by dinkumthinkum »

joshuahedlund wrote: post #72

I have a casual interest in economics, markets, currencies, etc, but I don't understand why DDOS attacks would cause the price to drop as opposed to just causing trade and prices to halt altogether?

Someone else mentioned panic and that I suspect is right and part of the source for bitcoin that differs from traditional exchanges is that it is a much more risky currency at this point. It is very susceptible to panics, and rightly so. I don't think anyone could seriously invest in bitcoins; it would be the dumbest thing you could do with your money. You'd be better off eating your money and get the caloric value. I'm just being honest about it; maybe it will change one day.

Re: Bitcoin falls from $266

#432

Post by brc »

RockyMcNuts wrote: post #294
dia80 wrote: post #169

Earlier quoted context omitted.

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main…

In the days before computers, believe it or not, price reporting often ran behind. In the 68 'paperwork crisis' the NYSE went to a four-day trading week for a while to give back offices time to catch up. Capitalism survived.

Indeed - 'capitalism' is about the allocation of saved capital to investment in a largely unregulated marketplace of goods and services. The rise of capitalism and free markets spawned shared capital markets as investments got too large for even the wealthiest invididuals to solely fund.

The instant-casino-trading side of things came much later along the road. It's not crucial to capitalism to the level people might think it is.

The arch-capitalist Warren Buffet regularly says he'd be happy for markets to close for a year. Though that refers to equities and not forex, which obviously does need to stay open to allow trade to happen.

Re: Bitcoin falls from $266

#433

Post by brc »

mrb wrote: post #325
coldtea wrote: post #211

Earlier quoted context omitted.

It's until one-two major governments decides to make it illegal to deal in bit-coins that it's price will drop to zero. It doesn't matter if they can't enforce it 100% (or even 1%). What matters is that it will kill almost all opportunities to use it as regular money for legitimate purchases by major companies etc in the future. And that it could also land your ass in jail (with ISP monitoring and such being what it…

"It's until one-two major governments decides to make it illegal to deal in bit-coins..." I don't know about other governments, but I doubt the US will ever declare Bitcoin illegal (though I am told to never say never). Supporting my viewpoint, the US Treasury Department, through FinCEN, has recently tacitly approved Bitcoin: http://www.businessinsider.com/is-bitcoin-legal-2013-4 I think the US government would prefe…

Marijuana and heroin were both legal in the USA at one point. Heroin itself is (was?) a trademarked brandname.

My point being that governments will allow somethign up until the point that a group of politicians either see a threat or some votes in banning it.

Re: Bitcoin falls from $266

#434

Post by smartwater »

mrb wrote: post #427
altcognito wrote: post #417

Earlier quoted context omitted.

> You say it can be used for money laundering, but gold and cash can already be used for money laundering (and even more discreetly since trading gold or cash does not leave a trail like in the Bitcoin blockchain) Spoken like a person who has never tried to launder millions of dollars in gold. You don't just go down to the pawn shop and redeem millions of dollars in gold.

You are wrong. Gold is very often used by drug cartels for their laundering operations: http://www.nytimes.com/2003/06/06/nyregion/drug-money-launde... http://www.insightcrime.org/news-briefs/mexico-cartels-steal... "Mexican authorities say that, since 2008, criminal gangs have robbed so many trucks carrying gold shipments that some mining companies have been forced to switch to aerial transportation"

I don't really understand what stealing trucks full of gold has to do with any of this. He said that the US is "totally fine with side markets that they cannot control directly" and that "Your other argument also fails to convince me that the government would want to declare Bitcoin illegal." and I have to agree.

Re: Bitcoin falls from $266

#435

Post by Houshalter »

Cushman wrote: post #413
Houshalter wrote: post #382

Earlier quoted context omitted.

No, it's not backed in the sense that it has a concrete value. No one is guaranteeing that a US dollar will buy you exactly a gallon of gas, an ounce of gold, or a bushel of wheat or anything like that. It is "backed" in the sense that people need it to pay taxes, but exactly how much value that gives it is completely uncertain and only determined by the supply and demand of people spending it/accepting it. If there…

And who guarantees that an ounce of gold will buy me some amount of wheat? Or that a bushel of wheat will give me some amount of energy when eaten? Only a very powerful entity can make such guarantees. On that basis I would say that the word of the United States is far more intrinsically valuable than any physical object.

Gold has generally had stable value throughout history, but you are right that it isn't guaranteed. Other commodities like wheat are a little harder to use to back a currency, but from year to year they are fairly stable and pretty much guaranteed to have some value whatever happens.

But US dollars aren't guaranteed to do anything for you either in such a situation. The currency could hyper-inflate tomorrow for all anyone knows, and it has no intrinsic value other than the requirement to pay taxes with it. It seems to work fine as a currency and maintain stable value, but the point is it really isn't backed by anything.

Re: Bitcoin falls from $266

#436

Post by Houshalter »

thatthatis wrote: post #422
Houshalter wrote: post #382

Earlier quoted context omitted.

No, it's not backed in the sense that it has a concrete value. No one is guaranteeing that a US dollar will buy you exactly a gallon of gas, an ounce of gold, or a bushel of wheat or anything like that. It is "backed" in the sense that people need it to pay taxes, but exactly how much value that gives it is completely uncertain and only determined by the supply and demand of people spending it/accepting it. If there…

You do realize that modern fiscal policy near zero. Ergo, a dollar today is guaranteed, on the average, to buy just under a today's dollar worth of things next year. Ergo, a modern dollar is about the closest thing to a guaranteed exchange value that the world has ever seen.

Yes, it is a huge economy that has decades to stabilize, unlike bitcoin. My point is that it still isn't backed by anything. There is absolutely no guarantee that it will buy anything next year except what people next year are willing to give you in exchange for it (which could change due to a lot of factors.)

Being stable in value, and being guaranteed to have value are two very different things.

Re: Bitcoin falls from $266

#437

Post by Houshalter »

stevewilhelm wrote: post #414
thatthatis wrote: post #360

Earlier quoted context omitted.

Dollar/Euro are backed by central banks who dynamically maintain money supply to maintain a promise of low price inflation. Their fundamental value is derived from fiat. It's similar, but not the same.

I am constantly amazed how little Bitcoin fans value large, stable, global financial and legal institutions like the US or EU. Without them, Bitcoin, the Internet, and most of the other aspects of their comfortable lives would exist.

There are a lot of reasons why people are skeptical of those systems. How could you not be at least a little? And I doubt the internet and life as we know it wouldn't exist if things were different, but it depends a lot what that means.

Re: Bitcoin falls from $266

#438

Post by frabcus »

smrtinsert wrote: post #112
ashray wrote: post #13

Before crying wolf, understand that bitcoin exchanges are unfortunately not battle hardened internet businesses. Two of the largest exchanges MtGox and bitstamp are both under DDOS. This may be an attempt by someone to make a large buy at a cheaper price. Due to lack of trading, prices are going downward. However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one…

Those people who converted their USD to BTC yesterday just got screwed. If only there were a central authority to regulate bitcoins volatility. oh wait...

Not necessarily. They might have bought to hold - expecting BTC to be worth more in a year. Not caring about day-to-day fluctuations.

That will depend on fundamentals - is it being used as a trading currency or store of value currency by millions of people for a long period, or not?

Re: Bitcoin falls from $266

#439

Post by BrokenPipe »

wcoenen wrote: post #201
dia80 wrote: post #169

Earlier quoted context omitted.

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main…

> On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The bitcointalk forums and /r/bitcoin are full of paranoia like this. After months of stress trying to divine market patterns, people see market manipulation and conspiracies everywhere. The simple truth is that there was an agressive bubble. The doubling per…

Yeah I'm sure some people do exaggerate. However mtgox is a toy system and it has been attacked for a while on the recent days, it creates lag and panics.

Anyhow, there's a correction every once in a while. It then goes higher than before, I'm still not convinced it is a bubble afterall.

Re: Bitcoin falls from $266

#440

Post by Kiro »

L0j1k wrote: post #237
awj wrote: post #198

Earlier quoted context omitted.

What DDoS attacks? So far I've seen no compelling evidence that this is anything but high volumes of legitimate usage.

As a long-time (since 2010) miner, I can tell you first-hand that there are massive DDoS attacks taking place against not only MtGox (who has already described DDoS against their infrastructure) but the pools as well. In fact, Reddit's pool (MtRed.com) is completely DOWN at the moment because of a larger DDoS than we've ever seen. You can keep drinking the "everything's fine" koolaid, or get with the reality that cur…

You were wrong.
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