Bitcoin value triples in a month to all-time high of more than $100
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Man. I wish I'd done some mining last summer. I don't expect to retire, but it sure would have been nice to have 15 or 20 of these right now.
What are the odds I'll be saying the same thing in a few months to a year?
What are the odds I'll be saying the same thing in a few months to a year?
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Such volatility is exciting for speculation, but not so good for its use as a currency.
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I wish I would have bought some Bitcoins last year. It would have been nice to get in then. Now I'm waiting for the price to drop off of that high, but I'm wondering if it will drop or if it will keep going up and up and up!
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Funny how there are these "uncertain" times and the "gold" people aren't coming out of the woodwork.
Mark to Mark?
Mark to Mark?
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Frankly this is about the timeframe in which I started to notice Bitcoin getting mentioned in 'mainstream' (read: large audience) media outlets. My guess is that there was a critical mass of speculators that became aware of them recently, therefore the bubble started to expand.
Use in more traditional types gambling couldn't have hurt either.
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Question for bitcoin experts: is there (or will there be) enough bitcoin in existence to make it a viable currency for everyone, or is it a scarce thing that only some folks can use?
Kind of seems like the latter to me, based on my somewhat limited observations.
Kind of seems like the latter to me, based on my somewhat limited observations.
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I had started mining last year, but gave up when the price crashed from around $20 USD to $2.50 USD. The electric bill just wasn't worth it. Of course now I am kicking myself in the pants, but mining has become a lot more difficult since last year. In December the number of coins for a successful mine was halved from 50 to 25 and the difficulty has gone up significantly. So even at $100 a coin, I'm finding mining only breaks even at this point in terms of electricity and value.
On the horizon are new ASICS that will crush mining throughput. I believe this will end the GPU era of mining as the difficulty scales and the electricity/value proposition skews significantly. I don't know whether Bitcoins will weather this transition well. I think part of Bitcoin's appeal is that anyone could mine. Shrug. I sure find them fascinating though.
On the horizon are new ASICS that will crush mining throughput. I believe this will end the GPU era of mining as the difficulty scales and the electricity/value proposition skews significantly. I don't know whether Bitcoins will weather this transition well. I think part of Bitcoin's appeal is that anyone could mine. Shrug. I sure find them fascinating though.
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Spazmodica":1v8e7q9f said:
Bitcoins can be traded to 8 decimal places (I think) so there are plenty to go around. If for example in the future one bitcoin was worth $1000 than a tenth of a bitcoin would be worth $100, a hundredth worth $10, etc...
If it does indeed become a viable currency you would expect a single Bitcoin to be worth quite a lot because there will only ever be a bit more than 20 million bitcoins in existence due to the way it is designed.
All of that to say, that it could be viable for everyone, you would just be using fractions of bitcoins for most transactions.
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The amount of Bitcoins is finite, which makes it different from a "normal" fiat currency. I suppose it could just deflate indefinitely (supply-side deflation) where the "normal" price of everything simply decreases uniformly, but I don't know enough about economics to understand the implications of that.Spazmodica":73ga3c1c said:
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Spazmodica":167ppnz3 said:
This question is a non sequitur. The 'number' of them doesn't really matter. Bitcoins are not locked into a physical form. As in, there could really be a shortage of pennies if the US decided to stop minting them. But a bitcoin can be split down to tiny numbers. For example, I can send you 0.000005 bitcoins. You can't chop up a penny and do that.
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I wonder if this is the digital gold rush...calling it that on TV news would push the popularity of bitcoins through the roof.
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Spazmodica":3gkgwfn9 said:
I'm not an expert, but I think I can answer this one: Bitcoins are divisible nearly-infinitely, so there's "enough" for everyone to use them, technically. The Bitcoin unit is arbitrary. Transactions operate equally well on fractions as they do on wholes.
So that won't be the obstacle to its use as a currency. Right now, instability seems to be the main obstacle. There are other, more technical reasons, too, like a built-in deflationary tendency.
I think the crypto-currency concept holds a lot of promise, and Bitcoin has been a great experiment. It's time for a new version that corrects some of its flaws and incorporates equivalent technology with better economic design.
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Loarf":5jvqstic said:
You are right about the eight decimal places, but the algorithm could be modified to allow even smaller units. Anyways, 20million BTC * 10million (for eight decimal places) which I believe gives you 20 quadrillion units. That is a lot of dosh to spread around.
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I'm sure this is because everyone has recognized the inherent value of a semi-anonymous deflationary crypto-currency with near-zero transaction costs and no gov't meddling.
Right?
Right?
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I have a jar of bitcoins in the living room. They emit a delicious tulip-like scent.
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Can you? How is liquidity doing at this point. If I had 1000 bitcoins that I wanted to sell is it likely that I'd be able to do it in a single transaction on Mt. Gox? Would it be enough to make a noticeable change in the trading price?Banzai51":m4rw5eww said:
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The real story is about the massive deflation that has occurred with Bitcoins. A pizza that you could have sold for 1 bitcoin at the start of the year is now .1 bitcoin. If you accepted bitcoins you are better off hording then investing.
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I get the feeling that the creators of Bitcoin (whoever they are) are loving this one and will slowly cash out, a little at a time (as they probably have been doing for years).
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kontos":kex8rnvi said:
Theoretically, yes if your favorite private exchange isn't being hacked to hell and back, and the crypto wizards running the show don't pull the rug out from under you.
Spring is the time for tulips!
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Loarf":2gclz4fn said:
So it'll undergo constant deflation and it has a fixed currency base? This'll probably be supported by sound money interests.
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Not to rub it in, but I bought $500 worth in January, back when it was $15. I just sold about $1000 worth, and the rest is house money that I intend to sit on. If it becomes viable for more people to use there's no way it won't appreciate, and it seems that it's headed that way with governments acknowledging it. I'll either sell at when it hits $1000 a few years from now (I'm sure it will crash several times in the process), or watch it implode and not lose anything.
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I think it has more to do with the Troika/ECB's early statements about using insured deposits to help fund a bank rescues. Even though the plan was never fully implemented, they actually floated the idea and made it public, which has to go down as one of the most idiotic policy statements ever; putting it on the record the most scared of sacreds can and will be plundered if a private bank fails.
You've got Spain, Italy and Portugal still potentially needing hundreds of billions of Euros to recapitalize their banking sectors, with the spectre of government appropriation of your savings. That's the perfect scenario for wanting to own BitCoins.
You've got Spain, Italy and Portugal still potentially needing hundreds of billions of Euros to recapitalize their banking sectors, with the spectre of government appropriation of your savings. That's the perfect scenario for wanting to own BitCoins.
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kontos":iq98ye8h said:
1000 bitcoins would be about 1.5 percent of the average daily volume at Magic the Gathering Online Exchange. From what I can easily see in a 2 minute search this is about 10 times higher then most of the largest trades. In reality it would kill the price if you tried to dump it in 1 go around. If you really wanted to with a 1000 bitcoins you could wreck havoc on the market as 1.5 percent is more then enough with the proper techniques to swamp the market in a couple of hours. Even at a billion it is not worth it for anyone to do though.
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Semi off topic: last week TorrentFreak demoed a new anonymous downloading service that only accepts bitcoins as payment. It was 0.03 BC per gig or something. Not sure what my point is, I just find it weird that the value of BC fluctuates so dramatically and can have an affect on the "price" of products.
I mean, I don't go around thinking "man this dr pepper was $1 last week, but now my $1 is only worth 88 cents". I don't use BC because my confidence would be undermined by thoughts of "last week .03 BC was worth $3, now it's worth $30" (and vice versa)
I mean, I don't go around thinking "man this dr pepper was $1 last week, but now my $1 is only worth 88 cents". I don't use BC because my confidence would be undermined by thoughts of "last week .03 BC was worth $3, now it's worth $30" (and vice versa)
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Mtgox is capped at 1000$ a day withdraws to USD IIRC so you could not withdraw 1000 bitcoins from that one exchange. And they currently have no way to convert directly into USD need to convert from bitcoin to dwolla and then to USD
I you truly wanted to get rid of bitcoins you could also just use them to buy electronics https://www.bitcoinstore.com/
I have been using my old GPU to mine for the last couple months now and have yet to get a full bitcoin. I'm hoping that I can keep going or the price keeps going up so that what I have managed to get will be worth enough to upgrade to one of the new aisc mining rigs that should be able to hash 200% faster than I currently am and only costs ~150$.
I you truly wanted to get rid of bitcoins you could also just use them to buy electronics https://www.bitcoinstore.com/
I have been using my old GPU to mine for the last couple months now and have yet to get a full bitcoin. I'm hoping that I can keep going or the price keeps going up so that what I have managed to get will be worth enough to upgrade to one of the new aisc mining rigs that should be able to hash 200% faster than I currently am and only costs ~150$.
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countcracula":3bw4pl70 said:
To correct it a tiny bit. Outside of sale events you go buy a Dr Pepper last week or last year it cost you 1 dollar today it still cost you 1 dollar. The time range for the cost of Dr Pepper actually rising or lowering 12 cents is more like 2 or 3 years. Compare that with bitcoin where on Jan 1st it would have cost you about .1 bitcoin for a dr pepper and today it would cost you .01 bitcoins. This would be like a Dr Pepper costing you 1 dollar then .10 just 4 months later. Unless you just had to have that Dr Pepper you are much better saving it because at this rate by July that Dr Pepper would cost just 1 cent.
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strohminator":3l0133nm said:
In general, nobody admits there was a bubble until it has popped.
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cmacd":hlvi89ap said:
I guess that's the next store for Ars to be writing.
Right now it feels weird that the 4.4 Bitcoins I own is suddenly worth real money. Esp. since I never bought them, I farmed a bit when electricity is free, then used the Martingale betting system on Satoshi dice.
Now I don't feel like gambling with them, it's not fun to loose when it's "real".
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I'm not in the bit coin market, but I enjoy how their mere existence annoys some politicians, especially the ever cranky John McCain. Some people need to realize there are things government can't control and just chill out.
Funny how I go about my life totally oblivious that people are trading bit coins, having sex outside of marriage, doing drugs, foot tapping in bathroom stalls, paying hookers, walking the Appalachian trail, blah blah blah.
That said, expect some useless legislation this year regarding bit coins. I still laugh at how the pols are upset about the Silk Road, as if that is a significant source of illicit drugs. If I were in the market for dope, I'd just ask some high school kid where to buy drugs. Or go to any number of Doctor Feelgoods.
Funny how I go about my life totally oblivious that people are trading bit coins, having sex outside of marriage, doing drugs, foot tapping in bathroom stalls, paying hookers, walking the Appalachian trail, blah blah blah.
That said, expect some useless legislation this year regarding bit coins. I still laugh at how the pols are upset about the Silk Road, as if that is a significant source of illicit drugs. If I were in the market for dope, I'd just ask some high school kid where to buy drugs. Or go to any number of Doctor Feelgoods.
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Even more reason to not get into this... too volatile for actual use and not enough legit exits for investing.
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sbol":ric0viga said:
I wish this article had two things.
First, any type of analysis like this. People should know if they want to get in on Bitcoin what they're getting into, the good and the bad. That means understanding of financial basics (and how they apply to BC, which they do) and I'd argue Ars coverage of Bitcoin's technical woes and troubles is pretty unbalanced by omission; way too many articles lately on "look at this price going up up up!" and nowhere near enough on the myriad hacks and social engineering and bad security design and you name it. I think if anyone wants in on BC they owe it to themselves to know what they're getting into, and how to protect their 'investment' or whatever.
plus, hello, a jump this big? Bubble. Come on. Obvious.
Second, a proof reader. "It's market cap" and "Cyrpus" really.
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normally butters
Ars Praefectus
Bitcoin may be a wise investment, but it isn't a viable exchange medium in the long-run. Like gold-backed currencies, Bitcoin will suffer from excessive price deflation. The currency is inevitably more valuable for saving than for spending, so Bitcoins will not tend to circulate as an exchange medium.
Currencies require some positive rate of price inflation in order to give people a reason to exchange them for goods and services rather than holding them as a store of value. Inflation is also required to give savers a reason to loan their currency to spenders at interest.
Without inflation, Bitcoin is not a useful currency. We might as well be trading cryptographic pork bellies.
Currencies require some positive rate of price inflation in order to give people a reason to exchange them for goods and services rather than holding them as a store of value. Inflation is also required to give savers a reason to loan their currency to spenders at interest.
Without inflation, Bitcoin is not a useful currency. We might as well be trading cryptographic pork bellies.
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This news really makes me sad. I had mined a bunch of bitcoins back when they first got introduced. I lost about 2,500 of them in a format in which I forgot to back them up...
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