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Bitcoins reached $300

news.ycombinator.com

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Re: Bitcoins reached $300

#91

Post by oleganza »

dwaltrip wrote: post #29

Damn. Sometimes I can't believe it. I have been following bitcoin quite closely for over 18 months now. The ecosystem is growing in ways only a few bold people have predicted. Fundamentally, it is about belief and trust. The protocol has largely proven itself. People are starting to believe in bitcoin. This is why the price is going up. For those who say "It isn't being used as a currency!" here is my response: Bitco…

Small addition: for something to become a currency, it must have value and market acceptance. The value is coming only from the speculative desire to hold money (either expecting it either to grow, or at least to outperform alternatives, like Argentinians holding dollars to protect against peso inflation). In case of Bitcoin, the amount of acceptance is reflected in the price because the more people want to hold it, the higher price they will have to bid. Therefore, price tells everyone that 1) bitcoin has value and 2) bitcoin has growing acceptance. Only after that it can be used as a currency.

TL;DR: Speculative investment is the only way for an asset to have value and thus become useful currency.

Re: Bitcoins reached $300

#92

Post by leokun »

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.

Why?

Re: Bitcoins reached $300

#93

Post by deskamess »

gnerd wrote: post #61
crassus wrote: post #59

Earlier quoted context omitted.

The only thing I don't like about bitcoin is that the mining reward goes to 0. Sure, there will be fees, but fees reduce the usefulness of a currency. And if people don't mine, bitcoin dies. Perhaps something else will take its place?

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 verification time of a transaction? At that max 'verification time' difficulty level, how long would it take to generate all remaining coins?

Re: Bitcoins reached $300

#94

Post by oleganza »

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…

Instead of "accountability from the creators" you have accountability of every single investor and bitcoin business. Every single one of them is motivated enough to keep system working well and preserving their individual wealth. Compare that with coercive power of government which simply declares something a "legal tender" and then you are forced to accept their paper and their monetary policy as a fact.

Re: Bitcoins reached $300

#96

Post by nathanm412 »

laichzeit0 wrote: post #48
pera wrote: post #32

Earlier quoted context omitted.

I prefer localbitcoin and bitcoin-otc, but I do have an verified account in MtGox.

I wouldn't trust Gox as far as I could throw a piano right now. I've been waiting more than 24 hours for a BTC withdrawal. It's not even showing up on blockchain.info yet. Search the forums there are a lot of people this is happening to. Some with more than 3 days. I'd be EXTREMELY cautious and suspicious about Mt.Gox right now. Make very sure you can get your BTC/USD out of Gox before you trust it.

3 days? People haven't been able to withdraw BTC to USD in months as far as I was aware. http://www.reddit.com/r/mtgox

Re: Bitcoins reached $300

#97

Post by oleganza »

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?

I think, because money as any other standard is always a network effect. Networks grow exponentially, in a self-reinforcing manner. Or they don't grow at all (when at a point of saturation).

Re: Bitcoins reached $300

#98

Post by oleganza »

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.

Re: Bitcoins reached $300

#99

Post by Expez »

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…

The value of bitcoins is tied to the size of the bitcoin economy. If you believe the size of the bitcoin economy is going to grow over time, then the value of each coin will also increase (as there will never be more than 20m coins).

If bitcoins are to be used as a niche instrument to make financial transactions easier, the total value of all bitcoins should probably be more more than a few billion dollars.

Re: Bitcoins reached $300

#100

Post by oleganza »

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.
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