Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin Tops $50USD on MtGox

mtgox.com

Post reply on HN
Print view View original

71–80 of 94 posts

Re: Bitcoin Tops $50USD on MtGox

#71

Post by modeless »

panarky wrote: post #58
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…

Thank you, this is the kind of well reasoned argument that makes HN worth it. I don't pretend to know whether Bitcoin is going to $5,000 or to $0, but I do see a big market opportunity along with some very large risks. Here are a few more: * Positive: increasing mainstream interest and investments -- Coinbase, Silicon Valley Bank, Wordpress, Reddit, Mega, Tradehill, etc. * Positive: greater public awareness of the ri…

You're missing the biggest risk: Governments are likely to declare Bitcoin illegal as soon as it shows any signs of threatening their control over the global financial system. Of course they can't stop people from trading Bitcoins online, but they can come down hard on the exchanges, which must exist as brick-and-mortar institutions with deep ties to the existing financial system, and thus can't be hidden or decentralized in any practical way. That would cause Bitcoin to crash to 0 overnight, as Bitcoins are worthless if you can't exchange them for other currencies.

Re: Bitcoin Tops $50USD on MtGox

#72

Post by frisco »

modeless wrote: post #71
panarky wrote: post #58

Earlier quoted context omitted.

Thank you, this is the kind of well reasoned argument that makes HN worth it. I don't pretend to know whether Bitcoin is going to $5,000 or to $0, but I do see a big market opportunity along with some very large risks. Here are a few more: * Positive: increasing mainstream interest and investments -- Coinbase, Silicon Valley Bank, Wordpress, Reddit, Mega, Tradehill, etc. * Positive: greater public awareness of the ri…

You're missing the biggest risk: Governments are likely to declare Bitcoin illegal as soon as it shows any signs of threatening their control over the global financial system. Of course they can't stop people from trading Bitcoins online, but they can come down hard on the exchanges, which must exist as brick-and-mortar institutions with deep ties to the existing financial system, and thus can't be hidden or decentra…

While I grant you that this is possible, it's probably risk #971 on my list of Bitcoin risks right now. China has already forbidden buying real things with virtual currencies, but I think it's very unlikely that many Western governments, especially the United States, will do so. It's almost certainly constitutionally protected, though it will trigger complex tax questions. I can't guess what will happen with China, but I don't think that it's a game breaker.

Re: Bitcoin Tops $50USD on MtGox

#73

Post by modeless »

frisco wrote: post #72
modeless wrote: post #71

Earlier quoted context omitted.

You're missing the biggest risk: Governments are likely to declare Bitcoin illegal as soon as it shows any signs of threatening their control over the global financial system. Of course they can't stop people from trading Bitcoins online, but they can come down hard on the exchanges, which must exist as brick-and-mortar institutions with deep ties to the existing financial system, and thus can't be hidden or decentra…

While I grant you that this is possible, it's probably risk #971 on my list of Bitcoin risks right now. China has already forbidden buying real things with virtual currencies, but I think it's very unlikely that many Western governments, especially the United States, will do so. It's almost certainly constitutionally protected, though it will trigger complex tax questions. I can't guess what will happen with China, b…

I think "fighting terrorism" in the form of preventing "money laundering" through Bitcoin will be more than enough justification to push a bill through Congress, and even if it is unconstitutional it won't really matter at that point, because Bitcoin will crash long before any constitutional challenge could possibly make it through the courts.

Re: Bitcoin Tops $50USD on MtGox

#74

Post by eric_bullington »

habosa wrote: post #16

Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

https://icbit.se/ is a Bitcoin Derivatives Market and Exchange. It's probably got the most liquidity available. I think more and more merchants and miners will use icbit for currency exchange hedges.

Re: Bitcoin Tops $50USD on MtGox

#75

Post by jfoutz »

habosa wrote: post #41
Permit wrote: post #24

Earlier quoted context omitted.

Short selling Bitcoins would be an incredibly risky move on your part. There are no financial regulations in place to prevent market manipulation. You used to be able to short sell on Bitcoinica and there were some really questionable margin calls that took place.

Can you elaborate? I'm not too familiar with the bitcoin market, just viewing it from a normal (amateur) financial perspective.

Read up on the hunt brothers and the silver markets. Essentially, they would buy up contracts with brokers to buy 1lb of silver on july 1st for $10 (or whatever the specifics happen to be). Then, in June they bought all the silver, like some ridiculously huge fraction of all the silver in the world. When it comes time for that broker to find that pound of silver he owes the hunt brothers, the hunt brothers get to set the price, because they're the only ones with silver. So this broker, he has to come up with how ever much the Hunt brothers demand, he is really over a barrel.

Just one memorable example of market manipulation and unlimited exposure.

Re: Bitcoin Tops $50USD on MtGox

#76

Post by eric_bullington »

zwtaylor wrote: post #35

This recent spike may have a lot of do with this just-issued repot from the Treasury department. http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G...

This 100%. The U.S. Government just effectively legalized Bitcoins and other virtual currencies in the document posted above. This is a huge development, much more important than Bitcoin going over $50.

Re: Bitcoin Tops $50USD on MtGox

#77

Post by joezydeco »

wmf wrote: post #67
joezydeco wrote: post #50

Earlier quoted context omitted.

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.

So? Everyone knows how to do the necessary math.

One Japanese Yen currently costs $0.0104715 USD. The price fluctuates down into the lower decimals. People deal with this every day.

Re: Bitcoin Tops $50USD on MtGox

#78

Post by khuey »

mrb wrote: post #69
citricsquid wrote: post #57

Earlier quoted context omitted.

> 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…

BTC may solve buyer-side fraud, but it creates a giant seller-side fraud problem.

Re: Bitcoin Tops $50USD on MtGox

#79

Post by wmf »

EvanKelly wrote: post #70
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.

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?

I can't think of any way SatoshiDice benefits from the spam it creates. It's almost like a form of trolling. If this spam benefits no one a rule change shouldn't be a big deal.

Re: Bitcoin Tops $50USD on MtGox

#80

Post by w-ll »

modeless wrote: post #73
frisco wrote: post #72

Earlier quoted context omitted.

While I grant you that this is possible, it's probably risk #971 on my list of Bitcoin risks right now. China has already forbidden buying real things with virtual currencies, but I think it's very unlikely that many Western governments, especially the United States, will do so. It's almost certainly constitutionally protected, though it will trigger complex tax questions. I can't guess what will happen with China, b…

I think "fighting terrorism" in the form of preventing "money laundering" through Bitcoin will be more than enough justification to push a bill through Congress, and even if it is unconstitutional it won't really matter at that point, because Bitcoin will crash long before any constitutional challenge could possibly make it through the courts.

Just like alcohol use crashed with prohibition, or the drug market? Previous attempts to stop these have resulted in larger market shares of those willing to still do related business and almost always increases demand.
Post reply on HN