
Bitcoin up 15+ percent in 1 day - PaperclipTaken
https://mtgox.com/
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qdog
Not sure how you can accept Bitcoins as a payment form, unless you tie it
expressly to another currency. With this much fluctuation, the only other
option would be an auction.

I think this makes it likely speculation is the only driving force for the
value of a bitcoin at the moment, which doesn't bode well for something that
wants to be a currency.

Edit: To be clear, what I mean is that normally we sell things for say, $2 and
rarely adjust the price (a few times a year is unusual, usually it isn't even
that quickly). You would need to constantly adjust your selling price in
Bitcoins, making it very hard to use as an actual currency when the perceived
value goes up this quickly.

Gasoline is one of the few things we buy that fluctuates pretty rapidly, and
when it fluctuates people that own gas stations are often squeezed, sure they
have a tank of gas they bought for say $3/gallon, but they need to schedule
the next tank at $3.25/gallon, so all the profit from the current tank of gas
is going to the next fill up. And when the price of gas drops, if they can't
sell their $3.25/gallon gas quickly enough, they take a loss. For small
stations operating on thin margins, this can wreck a month of profits.

~~~
PaperclipTaken
There are several factors driving the bitcoin prices up, including people from
European countries converting their money to bitcoin because it makes it
harder to seize.

But since the beginning of the year bitcoin has doubled nearly 3 times, and
this past month has seen additional acceleration. Bitcoin has been in the news
a but I don't see any legitamate reason for the dramatic spikes of the past
few weeks... except for speculaiton.

I posted this because I think that today's extraordinary spike is preceeding a
crash of the market. At some point, all of the serious speculators will have
put all their money into the coin, and they will be looking to cash out. A
huge spike like this would seem like an optimal time to cash out.

And if there aren't enough people to buy the coins, the market will plummet.

Bitcoin has been succesful recently because the value has continued to go up.
When the price takes a hit, people will lost confidence, and non-speculators
will also start to sell. I don't know how hard the initial hit will be, but
the last time that Bitcoin started losing value, it spent almost 3 months
declining.

I believe that the same thing will happen again, and bitcoin will (after the
initial hit) decline for several months before starting to make its
deflationary recovery.

~~~
inoop
> There are several factors driving the bitcoin prices up, including people
> from European countries converting their money to bitcoin because it makes
> it harder to seize.

I doubt many people are stupid enough to trust Bitcoin with their savings.

The thing with Bitcoin is that identities are easily made, and transactions
are hard to track. Nothing is stopping you from creating a whole load of
transactions between addresses you own, essentially creating a lot of traffic
and faking interest in the currency. I'm sure there are lots of Bitcoin bots
out there propping up prices, run by speculators who bought low.

~~~
Lerc
>I doubt many people are stupid enough to trust Bitcoin with their savings.

You should have more faith in human stupidity. It has a proven track-record.

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ghshephard
Now, whenever I buy something in Bitcoins, I always end up getting a refund
after the vendor converts into local currency - which I then need to sell to
get USD again.

I expect that when it comes back down at 15% a day, the opposite will occur,
and I will have to add a bit more.

It's annoying - I don't really care whether 1 Bitcoin = $USD 1, $USD 10, $USD
100, $1000, or $USD 10,000 - that's completely immaterial to me - I just wish
it wouldn't move around.

It is interesting how more vendors who, for whatever reason are no longer able
to accept paypal or credit cards, are transitioning over to BitCoin. It's
certainly going mainstream more quickly than I would have thought.

This constant volatility is nothing but bad news though.

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josteink
That a _whole currency_ can have fluctautions as big as this one in such a
short time-span shows that it's still a very small currency, and that it
doesn't take much manipulation, supply or demand to significantly impact it's
value.

Not that there's anything wrong with that, but it's worth mentioning to
balance recent articles quoting how the BitCoin economy is now very big(tm).

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adrianwaj
"Bitcoin is good if you want to make a deposit of between $1,000 and $10,000.
But the liquidity is just not there in the system for multimillion dollar
transactions," Colas points out.

[http://www.businessweek.com/articles/2013-03-20/jittery-
span...](http://www.businessweek.com/articles/2013-03-20/jittery-spaniards-
seek-safe-haven-in-bitcoins)

It's not a bubble if big money decides (or rather realizes) they can and will
transfer and settle differences in bitcoin rather than fiat. (to me that's
bitcoin's strongest point.. it's too cumbersome for day-to-day instant
purchases) It might be a bubble now, but at some point either now or in the
future, the (next) bubble won't pop.

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conanbatt
Im super surprised at this and i certainly dont understand it. True, Bitcoin
now has a surge of popularity because several retailers with pull are using it
and it got more news. Then it spiked the price, getting more attention. But
the rise is so big that i dont understand what buyers are thinking.

Holders of BTC are making a lot of money selling (if they are selling), but
why are people buying at this prices? BTC is not a need-purchase.

I wonder if after spiking price, the very BTC community started investing more
money in what they already have. That could explain lack of sellers and price-
spiking.

~~~
Cthulhu_
> But the rise is so big that i dont understand what buyers are thinking.

"Hey, internet money / commodities on the rise, buy now, sell for profit, I'm
in!" times tens or hundreds of thousands.

~~~
conanbatt
Way too speculative for new users. I think its the players themselves.

This might not be that known but Bitcoin has a stockmarcket with bonds and
stock. For the volume of the coin, a significant part of the users of the coin
are people trading and speculating with it. They are way more comfortable and
likely to play with a rise like this than any other.

Someone with 1000 BTC made over 60k dollars in a couple of weeks.

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niggler
I hope people are selling something at these price levels. BTC may continue to
run or may crash really hard soon, but at least make sure that if the crash
comes you end up ahead.

~~~
zenmonk
See, this logic makes no sense to me, unless you bought way more bitcoin than
you could afford. Every bitcoin I sell now (without topping back up, as I
would normally do for my spending bitcoins) represents a potentially massive
amount of future wealth. The downside is limited to the amount I put in to
begin with.

If bitcoin crashes to nearly nothing, I will be sad that such a brilliant
experiment has failed. I'll also be bummed that my money is gone, but I won't
be destitute and it won't make my life worse off.

~~~
niggler
" Every bitcoin I sell now (without topping back up, as I would normally do
for my spending bitcoins) represents a potentially massive amount of future
wealth. The downside is limited to the amount I put in to begin with."

Lets say you purchased 10 BTC at 40 bucks. Losing 400 won't break the bank.
Now it crossed 120. If you sold 4 BTC you'd still have 6 BTC and make 80 bucks
in the process. The $80 isn't as important as the fact that you've already
effectively reduced the cost basis of the 6 BTC to zero, in which case you
literally could just sit there and wait. If the price did crash to zero, you
would still be net ahead.

~~~
DavidSJ
You're making the sunk cost fallacy. The amount you paid for an asset is
irrelevant to its present value, and equally irrelevant to whether and how
much of it to sell.

~~~
shelf
'Sunk cost' implies an irreversible transaction. Bitcoins are highly liquid.
Nothing fallacious about this logic.

~~~
DavidSJ
It does not imply anything about reversibility. It applies just as well to a
liquid asset like bitcoin or stock as to an illiquid asset such as a house.

Two people each have 1 BTC. One paid $5 for it, the other paid $10 for it.
Their present situations are identical, therefore the rational behavior is the
same for both of them, despite their different purchase prices.

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vijayboyapati
It's up to $147. Was $140 just a few minutes ago. Any bets on whether it hits
$200 today?

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b0rsuk
I oppose Bitcoin for the same reason I oppose money not based on gold or other
valuable physical resource. It lets one entity to produce money out of
nowhere, at the drop of a hat.

There used to be a video in higher quality, but this will have to do. Hans
Hermann Hoppe gives a concise, high-level explanation of money:
<http://www.youtube.com/watch?v=Gizetn5VuA0>

~~~
josephagoss
There is a hard limit to the amount of Bitcoins however.

~~~
ashray
I don't get this. If there are 21 million bitcoins but they're infinitely
divisible - you can send 0.0000001 BTC to someone.. Then how is there a hard
limit?

Countries have done this many times by dropping zeros when their currencies
devalue, etc. The whole 'there are a fixed number of bitcoins' makes no sense
if you can just divide the currency unit by 1 million and call the new
currency micro bit coin.

~~~
josephagoss
What I meant is you can't make more. If someone owns a million Bitcoins, that
million Bitcoins cannot be devalued by someone mining a trillion Bitcoins.
More Bitcoins cannot come into existence after the 21 million limit.

Sure, they can be slit down and down, but Gold can too. The difference is you
can mine more Gold. Not possible with Bitcoin.

~~~
Devilboy
I guess the main difference is that we know exactly how many bitcoins are left
to be mined, while we don't really know how much gold is left in the earth's
crust.

