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Bitcoin Tops $50USD on MtGox

mtgox.com

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Re: Bitcoin Tops $50USD on MtGox

#61

Post by dmm »

gojomo wrote: post #47
josephagoss wrote: post #42

Earlier quoted context omitted.

I think the "max block size" issue is one of the biggest ones at the moment. Oh and the censorship of S.Dice sets a terrible precedent too.

Do you have a reference link about what you mean by censorship of Satoshi Dice?

I'm not the parent but he's probably referring to the opinion of some that SD is the equivalent of a spammer and its transactions should be blocked. You can find lots of threads on bitcointalk.org discussing it: https://bitcointalk.org/index.php?topic=150405.0

SD notifies losers by sending them a very small transaction. Because of this SD generates the majority of BTC transactions and inflates the size of the generated blocks.

Re: Bitcoin Tops $50USD on MtGox

#62

Post by josephagoss »

gojomo wrote: post #47
josephagoss wrote: post #42

Earlier quoted context omitted.

I think the "max block size" issue is one of the biggest ones at the moment. Oh and the censorship of S.Dice sets a terrible precedent too.

Do you have a reference link about what you mean by censorship of Satoshi Dice?

https://bitcointalk.org/index.php?topic=150405.msg1598258#ms...

https://bitcointalk.org/index.php?topic=150481.0

There were a few more discussions around this time too, a few people including a pool operator want to block all businesses and applications that "abuse" the blockchain. This shows that a few higher ups in the Bitcoin community are short-sighted and very selfish, and also shows the problems Bitcoin will have at getting any larger.

Re: Bitcoin Tops $50USD on MtGox

#63

Post by millstone »

shredfvz wrote: post #39
arasmussen wrote: post #10

It's literally doubled in a month. This is out of control.

Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50. Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500. Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we nee…

A global financial currency can surely give the world many times the value of Facebook. But the price increase does not represent interest in Bitcoin as a currency, but instead as a speculative investment vehicle and/or store of value. You yourself talked about not exchanging your bitcoins: it sounds like you wish to own bitcoins, but not circulate or spend them. They are not a currency for you.

This is as predicted by those who say that Bitcoin is a deflationary currency.

Re: Bitcoin Tops $50USD on MtGox

#64

Post by Helianthus »

zwtaylor wrote: post #31
Helianthus wrote: post #14

Earlier quoted context omitted.

Bitcoin hasn't been legitimate for a long time. The last boom-bust they went through proved that and nothing has changed since. If you still have Bitcoins, sell'em and don't buy more, except as an intermediary exchange for your discreet transactions.

If everyone took your second piece of advice and only used it for discrete transactions, then Bitcoin would be worth exponentially more than it is now, which would invalidate your first piece of advice. The number of bitcoin users is still exceptionally small.

Implicit in the advice is the (strong) assumption that not everyone's going to take it.

-_-

Re: Bitcoin Tops $50USD on MtGox

#65

Post by Helianthus »

BrianEatWorld wrote: post #52
Helianthus wrote: post #19

Earlier quoted context omitted.

I don't believe that you actually have any understanding of the supply/demand economics of booms/busts necessary to be skeptical of parent. Increasing demand of a finite resource drives the price up. This drives the demand up even more. The real value of a Bitcoin is still in USD, of course, so at some point it's going to cross over a line where the people holding Bitcoins want to get rid of it. Decreasing demand of…

Your analysis holds true if you are treating bitcoins as purely speculative. You are correct that I don't fully understand supply/demand economics, because as an Austrian theorist, my concepts relating to booms and busts use dynamic models and not the statics you are using to prove your point. In a static situation, increasing demand of a finite resource does drive the price up, which can drive up demand even more, b…

>Do I really think that it has doubled? No.

Then it sounds like the speculative bits are driving, even if there are other passengers in the car.

Re: Bitcoin Tops $50USD on MtGox

#66

Post by plaguuuuuu »

frisco wrote: post #37

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency? A few reasons I can think of why it would: * The current banking system is inherently insecure. If you have an account number and a routing number (written o…

>Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency?

Bit of a strawman.

>If you think that Bitcoin will ultimately be widely adopted, buy now. $50 / btc is very cheap in that world. If you think Bitcoin will fail, then any price is too much. Any mumbling that "it's doubled in a month and therefore is set up to come back down to earth" is just hand waving.

Bitcoin's use as a currency does not depend in any way on its value. A shirt selling for 1 BTC can sell just as easily for 0.5 BTC. In such a case where the government-mandated currency becomes useless and BTC is used as a true currency fallback, if anything it becomes a major problem, but in this present world it's basically just a proxy for sending fiat currency and a speculative asset.

I love BTC. But I don't need to hold on to any amount of it, or depend on any particular value, to use it to buy stuff. When huge corporations deny donations to Wikileaks, or when Paypal randomly freezes assets, having a digital currency is not only desirable but a necessity. Those of us that would use BTC for its intended purpose (assuming it isn't just a massive social engineernig hack from Satoshi loloolololo) don't even care if it crashes.

That said, I see the price as purely speculative at this point.

Re: Bitcoin Tops $50USD on MtGox

#67

Post by wmf »

joezydeco wrote: post #50
shredfvz wrote: post #39

Earlier quoted context omitted.

Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50. Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500. Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we nee…

The supply of Bitcoin is ridiculously tiny. Only 11,000,000 in total are in circulation today, let alone available for purchase on the market. Bitcoins can be divided to 8 decimal places at the moment (it could be expanded). So instead of 1.1e7 units, isn't it 1.1e15 units?

Yes, but the exchange rate is quoted in BTC.

Re: Bitcoin Tops $50USD on MtGox

#68

Post by wmf »

shredfvz wrote: post #39
arasmussen wrote: post #10

It's literally doubled in a month. This is out of control.

Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50. Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500. Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we nee…

Let's assume that the fundamental value of 1 BTC is over $1,000 as in your scenario. That still doesn't necessarily explain rapid increase in the exchange rate. Are people suddenly discovering these fundamentals? Why? (In which case the exchange rate will continue to climb.) Or are we witnessing another speculative mini-bubble? (In which case the price will drop temporarily before resuming a generally upward trend.)

Re: Bitcoin Tops $50USD on MtGox

#69

Post by mrb »

citricsquid wrote: post #57
frisco wrote: post #37

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency? A few reasons I can think of why it would: * The current banking system is inherently insecure. If you have an account number and a routing number (written o…

> The current banking system is inherently insecure. If you have an account number and a routing number (written on the bottom of every check), you can pull money. Bitcoin is potentially much more secure. If the company you store your wallet with is hacked you lose everything, if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment. If your bank fucks up your money…

"If the company you store your wallet with is hacked you lose everything"

Which is why it is not recommended to store Bitcoin wallets with third parties. Store it and secure it yourself.

"if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment."

Which is why it is recommended to encrypt your wallet, so that if your laptop is stolen, the attacker has no access to it.

"If your bank fucks up your money is (almost always) insured."

Eventually, if the Bitcoin economy continues to grow, an insurance market will develop itself.

"Fraud is a huge issue that Bitcoin does not solve"

Actually it does solve the biggest fraud issue of today: fraud during purchases. Merchants receiving bitcoins are guaranteed that transactions are irreversible and cannot be charged back.

What you mean, is not that Bitcoin does not solve fraud, it is that Bitcoin is hard to "secure". It is a hassle for a user to encrypt his local Bitcoin wallet with a secure passphrase and to ensure that his computer is not infected by keyloggers/malware attempting to steal the passphrase.

Fortunately, there are efforts from different groups to develop credit-card sized tamper-proof hardware Bitcoin wallets (think about typing a pin code on a small device, which sends a Bitcoin transaction via NFC or via showing a QR code on an e-paper display).

Re: Bitcoin Tops $50USD on MtGox

#70

Post by EvanKelly »

josephagoss wrote: post #42
frisco wrote: post #37

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency? A few reasons I can think of why it would: * The current banking system is inherently insecure. If you have an account number and a routing number (written o…

I think the "max block size" issue is one of the biggest ones at the moment. Oh and the censorship of S.Dice sets a terrible precedent too.

I read a few pages of the forum posts about SD's transaction "spam". Could you clarify the notion in the thread that SD is generating more money for themselves by using these micro-transactions rather than internalized accounting?
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