
Bitcoin Now Worth $1B - enmaku
http://codinginmysleep.com/one-billion-dollars/
======
nlh
Holy cow. It was worth $60 last time I checked (last time a story was
discussed on HN). I'm not one usually to play Chicken Little, but doesn't a
50% rise in a matter of a week or two seem a bit unsettling? Unless adoption
has risen similarly, which I doubt -- it's not like Amazon just announced
they'll be accepting BTC.

Enjoy the run, speculators. But don't get greedy -- remember the tulips...

~~~
celticninja
Cyprus just announced they would be taxing peoples bank accounts, the EU said
that was a fair resolution for the banking crisis and other nations (greece,
ireland, spain and italy) could see similar action to cope with the bank
problems. Adoption as a currency has been ocurring for a while, reddit, mega,
bitmit etc, adoption for investment has been ongoing, adoption out of fear of
state controlled banks is another viable reasonf or adoption but harder to
quantify. So there is a reason behind the price surge we are currently seeing
but it is difficult to label because it is about individuals adopting it for
use and not big corporations.

~~~
knowaveragejoe
Maybe this is a misinformed question, but isn't the reason anyone is adopting
it at all due to the fact they can later convert it back into actual currency?

~~~
niggler
"they can later convert it back into actual currency?"

Or final goods. Silk Road gives a final good endpoint for BTC

~~~
knowaveragejoe
SR sure transits a large amount of btc, but what do you think the sellers are
doing with the incoming bitcoins?

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xoail
Bitcoin definitely has potential. I doubt if it's in a bubble. Its a right mix
of need and want for the global economy. It is also getting a lot of traction.
As more enterprises adopt, the more its potential for disruption. [Disclaimer:
I have bitcoins in my wallet]

~~~
cantankerous
The exchange rate in USD has quintupled since mid January. I can't see how
this is _not_ a bubble.

~~~
oleganza
Bitcoin is not some promise of a future product. It is already here, it works,
it survived hackers, viruses, bugs in core software, it is not attacked by
anyone (FinCEN guidelines suggest you can do whatever you want with BTC unless
you exchange for cash), number of services and merchants accepting BTC grows.
Why shouldn't it grow exponentially after the fact it is proven to work?

~~~
cantankerous
_Why should it grow exponentially after the fact it is proven to work?_

Fixed that for you. Those reasons are all much older than this sudden jump in
value. Even if they weren't old, there's no way they're pumping the value of
Bitcoin by 500%. If something's too good to be true, it probably is.

------
noname123
Anyone know if there is a good bitcoin futures/options market with good
liquidity?

The vol on this asset class is out of this world and given that it's so new,
pricing on these things must be so out of wack that it'll be good to exploit.

Only if there's a good futures exchange like Mt.Gox that's very very
authoritative.

And also important for the bitcoin infrastructure, that way merchants will
take bitcoins for less risk since they can hedge it against dollar or euro's.
A big money potential out there. Some one please take the idea and build one
so everyone can profit.

~~~
cel
ICBIT has futures trading. <https://icbit.se/>

Bitfinex allows margin trading and lending. <https://bitfinex.com/>

~~~
noname123
Ty for link ICBIT futures has no liquidity.

Bitfinex's current best lending rate is at 200% APY, or 0.54%/day with maximum
lend-out window of 7 days. Making most futures and options delta-hedging
trades, even if ICBIT had liquidity probably not profitable.

To compare, current US broker margin rate is 1.8% APY or 0.004%/day. Will
stick to regular exchanges until this is fixed or if there is an ETF for BTC
in regular exchanges.

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jessriedel
I find bitcoin fascinating, but everyone who's bullish on it should understand
the fundamental issue with its price stability, as pointed out by libertarian
GMU economist Tyler Cowen (among others, presumably):

> It is a privately created fiat currency, bundled together with an anonymity
> scheme for transactions. The anonymity scheme means there is some reason to
> grant one-time seigniorage to the original currency issuers. Eventually the
> anonymity scheme, in some form or another, will be available without the
> fiat currency. At that point, or more likely before then, the fiat currency
> will fall to near-zero in value. Hold it at your own risk. The original
> issuers will have kept some of their initial gains.

[http://marginalrevolution.com/marginalrevolution/2011/04/the...](http://marginalrevolution.com/marginalrevolution/2011/04/the-
economics-of-bitcoin.html)

Essentially, the value of a bitcoin is set by the value of all worldwide
transactions desired which utilize bitcoin's advantages (anonymity, security
from government intervention, etc) divided by the total number of bitcoins,
which is capped. However, there is nothing to stop someone from starting a
competitor (perhaps with some slight improvement) which duplicates all of
bitcoin's functionality and essentially inflates away bitcoin's value. In
fact, it might not be crazy to suppose governments would do this on purpose.

~~~
moe
_which duplicates all of bitcoin's functionality and essentially inflates away
bitcoin's value_

You mean like the Euro "inflates away" the USD, and vice versa?

Your idea doesn't make any sense.

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undershirt
That's a lot of money. What is this $1 billion being used for? Is this money
just circulating for the sake of making more money, or is it being used to buy
goods and services?

~~~
AdmiralBeotch
Most is probably being used for savings as the potential for it to increase in
value over years is ridiculously high. If bitcoin succeeds in taking over
fractions of global markets, which is is poised to certainly do because of its
efficiencies, then the market cap will be hundreds of billions, and valued
above several thousand dollars each.

But, bitcoins are being used in commerce too. New merchants added every day. I
know of at least 6 brick and mortar businesses in Las Vegas alone that have
sprung up recently.

~~~
knowaveragejoe
The success of bitcoin in taking over fractions of global markets also depends
on its learning curve, both in how to use them and how to keep your bitcoins
safe(while still having access to them everywhere you need). Right now that's
a pretty steep learning curve for non-technical folks.

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nym
If you're trying to figure out how to buy bitcoins, check this out:

<http://howdoyoubuybitcoins.com/>

I recommend Bitfloor at the moment because they offer free capitolone360
transfers as well as cash deposits at local banks for only 1%.

If you're an accreted investor, check out <http://tradehill.com/>

~~~
asciimo
I only see Bank of America options for deposits to Bitfloor. That entails
filling out a deposit slip to Bitfloor's account at a local branch.

UPDATE: PEBCAK. That's for the default "cash" tab in the UI. There are also
"wire" and "CapitalOne 360 P2P" tabs. Thanks for the tip!

~~~
nym
Glad I could help you out!

------
jamespitts
By design, the supply of new bitcoins is slowing down. If there continues to
be utility for people to use bitcoins, and this usage is increasing, the value
of an individual bitcoin vs. other currencies will increase (averaging out
speculative action).

This pattern will very likely continue until an alternative is found. Perhaps
the alternative will simply be for holders to return to national currencies,
perhaps it will be to adopt a new bitcoin rival for transactions and value
storage.

In the short-run, there may be speculation, bubbles, and pops. That gets the
attention. But look beyond that. In the long-run, the bitcoin economy may
indeed "grow" to many times its current "size".

~~~
tatsuke95
Increasing value of currency promotes hoarding, when in fact, bit coin should
be promoting spending. If everyone's intention is to buy and hold bit
coins,they are useless as currency and become a speculative asset.

~~~
oleganza
When everyone has hoarded some bitcoins they can trade them for goods any time
they run out of fiat cash or fiat cash is stolen/diluted/frozen, or some
arbitrary controls are imposed (e.g. sending money to another country is not
easy or cheap). The instant mobility is the true value of "hoarded" bitcoins.

~~~
tatsuke95
Everyone can't hoard bit coins, that's the point. Unless you are mining them,
which is a small portion of the market I assume, you are buying them from
another person. Ie someone else has decided to sell.

I get bit coin, I think it's interesting and useful as an alternative
currency. But any hope that it is going to upend USD in any meaningful way is
wasted. Dollars are far, far ahead in value, convenience and redeemability.
And I don't see that changing anytime soon- at least not soon enough to get in
on the speculation.

------
enmaku
The price chart looks a lot like the transaction volume chart, which is
usually how I make my guesses as to whether we're in a bubble or not -
increase in price without similar increase in usage = bubble. That said, it's
anyone's call.

------
waterlesscloud
There have been some strong signs of an inflection point in the last couple of
weeks.

The FinCEN guidance was a major step forward for Bitcoin, allowing companies
to start taking Bitcoin as a serious option.

For example, see this announcement today, from a company that processes
payments for local governments. They plan to offer bitcoin acceptance to those
governments for all sorts of online payments. You might soon be able to pay
local taxes using bitcoin!

<http://www2.egovlink.com/press-release-bitcoin.cfm>

They directly state this is a result of FinCEN's statements. The floodgates
may be opening.

~~~
gamblor956
You're not paying your taxes in bitcoin. You're paying an amount equal to your
taxes, plus transaction fees, to the processor, who then converts your payment
into the local currency and remits it to the government.

It's a subtle but important difference, because the use of non-local
currencies in a transaction can trigger currency exchange gain/loss reporting
requirements (in the US, at least).

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gamblor956
I can't help but think of all the people (in the US) who will owe back taxes
for 2013 for unreported foreign currency exchange gain...or (in the event
Bitcoin crashes again) all the people who won't realize that they have foreign
currency exchange losses that could reduce their other taxable income...

------
ionwake
I can't believe it's taken the HN community 3 years to take Bitcoin seriously.
Makes me wonder about you guys.

~~~
niggler
its all fun and games until people really start cashing out.

~~~
oleganza
Or until people realise that many around them already have BTC or ready to
accept it as payment. Then who needs dollars?

~~~
tatsuke95
I think you seriously underestimate the demand and use of dollars.

~~~
knowaveragejoe
This. Wordpress, Reddit, even Expensify are but a glimmer of how much trade
goes on with dollars in the world.

------
tocomment
Does anyone know when we can start buying again on coinbase? I'm still getting
error messages.

------
illegalsmile
After a few weeks ago reading that BTC was at $45/btc and thinking this has to
drop drastically soon enough only to see it now at $90... Not saying this
growth isn't possible but it's not sustainable this early on, unless I'm
wrong?

~~~
celticninja
this chart shows the historic gold price over 36 years:

[http://goldprice.org/gold-price-
history.html#36_year_gold_pr...](http://goldprice.org/gold-price-
history.html#36_year_gold_price)

A similar thing is ocurring with bitcoin now however it is much easier to buy
and store btc for the layman than it is for them to buy and store gold.

Adoption due to technology is also faster, essentially gold has been $1600 an
ounce for a while now, BTC has a way to go before it stabilises but after $200
a coin we will see less daily fluctuations because a $10 change in price is
actually only 5% of the overall value

------
ashray
There's an interesting spike in bitcoin value everyday when Europe wakes up.
This does look like a bubble but at the end of the day, as long as the rest of
the world currencies keep people nervous, bitcoin will gain wider adoption.

------
mitchi
A radio station was giving away bitcoins if you only liked their facebook page
not too long ago... I gave mine to a friend :( This is madness!

------
mtgx
Come on Bitcoin-Central (or whoever) - hurry up and implement IBAN numbers so
I can buy some in Europe!

~~~
Risse
I used Mt.Gox with SEPA transfer, it was a bit slow but otherwise worked
flawlessly.

------
cpursley
The Diamond Age. Good by nation state, it was a good run.

------
porter
This will be a fun ride until governments ban it.

~~~
whackedspinach
That worked out so well when they banned copyright infringement.

~~~
knowaveragejoe
That's completely different though. Banning the conversion of btc into real
currency would be a huge problem for btc, who is going to accept btc in
exchange for a product or service performed if they can't turn that btc into
money to exchange with other individuals/companies? There needs to be a much
wider acceptance of bitcoins by companies providing services/products over a
longer period of time before banning the conversion(at least legitimate
conversion) would no longer phase bitcoin.

