
Bitcoin broke $700 ($750 at this moment) - was_hellbanned
http://bitcoin.clarkmoody.com/?blah
======
jmduke
Bitcoin's price at the first of November was $197. That's around a 250%
increase over the course of two and a half weeks.

General question: if you expect the price of Bitcoin to continue this rate of
growth, does the rational consumer have any reason to spend? I don't follow
BTC too closely, but it feels as though there's an innate conflict between its
role as a speculative investment and its role as a currency.

~~~
gnaritas
> but it feels as though there's an innate conflict between its role as a
> speculative investment and its role as a currency.

Exactly the reason a deflationary by nature currency isn't going to succeed as
a currency. Bitcoin might want to be a currency, but it isn't a currency, it's
a commodity like Gold and its deflationary nature dooms it to be.

~~~
polarix
Pulverizing the dead horse: it will hold value like gold, but its infinite
divisibility and ease of transport make it more like an evolved currency.

~~~
gnaritas
Good currencies aren't about divisibility or about holding value long term,
they're about being useful for exchange. Being deflationary by nature makes
Bitcoin a bad currency, but a good commodity (once it settles down). A good
currency slowly inflates.

~~~
polarix
"A good currency slowly inflates." This is the "common wisdom" which BTC
assaults frontally.

~~~
gnaritas
And it's proving the common wisdom true, as history has already done.

------
songzme
The most common question I get every day when the topic of bitcoin comes up:
"This is skyrocketing. Is it a good time to buy?"

The truth is, there is no right or wrong answer. Bitcoins could very well go
to 6000/coin and we'll still be asking that same question. Bitcoins could also
just as likely go down to $1/coin and everybody would be talking about how
they could've sold at $650/coin. The beauty here is that BitCoins is not
managed by anyone, its completely p2p, and its 100% opensourced. Nobody
controls it, nobody has insider info, nobody knows what is going to happen.

I would personally throw in a few thousand just see what it becomes. If
nothing comes of it, think of it as a very expensive speeding ticket.

~~~
cstrat
"nobody has inside info"

It is not known who are making all the trades, wouldn't it be possible that a
small group of large bit-coin holders are simply trading between each other in
an effort to inflate the price... they have nothing to lose.

~~~
xorblurb
> they have nothing to lose

the trading fees ?

~~~
brainburn
Which are optional

~~~
foobarqux
How are exchange fees optional?

------
cs702
The number of bitcoins is fixed, so price is a solely function of mass
adoption.

All else being equal, the more people who adopt Bitcoin, the higher its
price.[1]

\--

[1] [http://cs702.wordpress.com/2011/05/29/on-the-potential-
adopt...](http://cs702.wordpress.com/2011/05/29/on-the-potential-adoption-and-
price-appreciation-of-bitcoin-in-the-long-run/)

\--

Edits: replaced "supply" with "number of bitcoins" and "demand" with "mass
adoption," which more accurately convey my thoughts. (Thanks for pointing that
out, amalcon!)

~~~
wozniacki
The Winkelvosses must be laughing all the way to the bank.

Must have at least made one trip to cash out a portion, since they first
started stashing the coin. [1]

[1] [http://www.bloomberg.com/video/winklevoss-twins-
mine-11m-bit...](http://www.bloomberg.com/video/winklevoss-twins-
mine-11m-bitcoin-fortune-dh7Tpl8NTaOaiTgec3dT2g.html)

~~~
phaus
I don't think anything can put the smile back on their faces due to the fact
that they still feel as if someone stole their $100 billion idea.

~~~
scotty79
They'll soon have a 100bln. Withtout even having an idea. Apart from "let's
buy bitcoins".

~~~
phaus
I'm not sure their BC investment will ever be worth that much. Time will tell
though.

------
poopsintub
I don't pretend to know anything about how bitcoin works but it seems to be
very volatile. The stock market is bad enough, but this fluctuates wildly just
on speculation and seemingly nothing more.

~~~
hnha
What really grinds my gears is that you have to assume that everyone who talks
positively about it, just does so to make his bitcoins "worth" more. For that
reason alone I hope that it will fail. Speculation and hype should not be
rewarded.

~~~
blake8086
I guess by the same token, everyone who doesn't have any has to criticize it
to justify their decision not to buy.

~~~
hnha
well, I have 1.something bitcoins which I once mined because it seemed like an
interesting idea for "pseudonymous" online.payments. What it primarily has
become utterly disgusts me. I always felt (yeah, it was uneducated) that
bitcoin would be something opposed to our financial system with all its
unsocial speculation, lies and deceit.

------
dragontamer
Interesting.

Clarkmoody is using "Mt. Gox", which is a well known exchange where it is damn
near impossible to get your USD out of. Notice that other BTC exchanges (btc-e
is more cannonical right now...) have prices closer to $550.

Keep in mind WHICH exchange these prices are coming from. Unlike more
established currencies, there is very little arbitration going on between
exchanges, and prices swing DRAMATICALLY between say... Mt. Gox and BTC-e.

~~~
fudge
BTC-e is above $610, BTCChina at $830.

[edit current prices]

------
BenderV
Whenever I look at the evolution of Bitcoin's price, I feel oblige to think
about the internet bubble...

But I was too young to care about that then.

Could someone explain to me the similarities and differences between those two
events ? How Bitcoin could avoid the "too-early" bubble ?

~~~
dragontamer
Bitcoin is designed to be deflationary in nature. Many people here will see
BTC's dramatic rise in price as a feature, not a bug. I personally am more
concerned about the difficulties of BTC -> USD conversion... with exchanges
going down and others getting hacked.

Speculators obviously love BTC's volatility. But surely, this is not a sign of
a healthy "currency".

~~~
rsynnott
Bitcoin is indeed designed to be inherently deflationary, but the volatility
is far too great to be explained by that; it's likely in a speculative bubble.

~~~
quotha
Or it is just really young and eventually will be less volatile.

~~~
rsynnott
I have difficulty thinking of _anything_ that went from being as volatile as
that to stability.

------
lmg643
not to add fuel to the fire: but if bitcoin is really un-hackable (can't guess
individual keys held offline by private owners), untraceable, and all that
goodness ...

... and there are only 21 million of them in the world ...

... then the value of each bitcoin could be $100,000 or more, assuming it can
attract 1/4 of the interest that gold currently enjoys worldwide.

of course, as the value creeps up, it's use as a currency will diminish, and
it becomes more of a store of value. eg, without bitcoin dimes and quarters,
you'd have a hard time buying smaller items. but it is lighter than a pound of
gold for sure.

the possibilities are interesting.

~~~
wlesieutre
And my company will be huuuuge, once it captures 1/4 of the market of China.

~~~
SwellJoe
Bitcoin isn't a company. It's not comparable to much that has existed before,
actually. So, while I won't try to predict where BTC will end up, I think it's
not a useful analogy to compare it to a company and discuss market share in
those same terms.

~~~
astrodust
It is not going to eclipse gold in terms of importance. It won't even come
within an order of magnitude.

~~~
SwellJoe
That's an assertion I've heard, mostly from goldbugs who have a vested
interest in gold remaining high and going higher. But, I haven't heard any
useful evidence to support the thesis.

~~~
astrodust
Seriously? Will the US and other major countries hold their _reserves_ in
Bitcoin?

It's not goldbugs or small-time hoarders. There's literal tons of the stuff
held in vaults around the world.

This is just _one_ vault:
[http://www.dailymail.co.uk/news/article-2247196/Pictured-
Pro...](http://www.dailymail.co.uk/news/article-2247196/Pictured-Professor-
Poliakoff-takes-TV-cameras-inside-Bank-Englands-gold-bullion-vault-197BILLION-
precious-metal-stored.html)

The total reserves are 31,000 tons of gold
([http://en.wikipedia.org/wiki/Gold_reserve](http://en.wikipedia.org/wiki/Gold_reserve))
which at $35M works out to about $1 trillion.

So if the sum of all Bitcoins is to be worth the same, then you'd need a per-
Bitcoin price of $51,600 for all 21 million _theoretical_ Bitcoins.

I find it unlikely that price could be sustained.

~~~
SwellJoe
I've asked you why you think gold is a better currency than Bitcoin. You've
answered, roughly, "There's a lot of it being hoarded by some people all over
the world."

I think maybe I just don't understand you. Are you saying because gold is one
popular store of value, it is a better currency than Bitcoin? That's kinda
what I'm hearing, but that doesn't really make sense, so I assume I'm
misinterpreting you.

From my perspective, the US currency (and most of the currencies found the
world over) are not backed by gold or other precious metals. The idea of
gold==money has been kind of dead since before I was born, and I'm not
convinced there's a useful reason to return to it in the Internet age. Sending
gold over a wire is not feasible, so I'd have to trust someone to hold my gold
for me, were I to use it as a currency. That's not really appealing to me. The
de-centralized nature of BTC is what makes it so disruptive.

It just feels like a really old-fashioned idea that we should return to gold
for currency (and I've felt that way even way back when I was a card-carrying
member of the LP and a subscriber to Reason _and_ Liberty magazines).

~~~
astrodust
The thing is, gold is a physical commodity that requires great expense to
mine, process, and produce in a form that's useful. This limits the amount of
gold that can be produced. That's why, historically speaking, it was used as a
backing for currency, or as currency itself in some circles.

Worst case scenario, no matter what the price of gold is, you still have the
gold itself, and it can be made into things. If Bitcoin collapses you have
nothing, the currency is intrinsically worthless.

You can easily validate that someone owns a certain amount of gold, and you
can be reasonably assured that, if you've put a gold brick in your safe, that
barring someone physically breaking into your safe, that it'll still be there
when you need it later.

Bitcoin, on the other hand, is digital, and comes with it all the risks of
digital data. It can be stolen silently, invisibly, or your wallet can become
corrupted, or you can lose your password, which renders it utterly worthless.

I'm not saying we should return to gold, but that gold is a commodity with
more stability than Bitcoin.

Bitcoin could utterly collapse tomorrow and the impact on the markets wouldn't
even register. If gold collapsed tomorrow the markets would crumble.

~~~
SwellJoe
This is probably something we'll just have to agree to disagree on. To me,
gold is a ridiculous thing to base money on. It serves the interests of an
elite few at the expense of everyone else, it is impossible to transfer over
the Internet without a trusted intermediary (presumably someone with a
presence on both sides of the transfer and owning large quantities of gold)
imposing high fees and inconvenience on all parties.

There's nothing, in my estimation, good about gold as a currency. It is,
maybe, a useful store of value, if you're wealthy enough to store it safely.
But, its value as a substance (should you decide to make it into things) is
vastly lower than its trading value. So, you're still trading mostly on what
everybody agrees the gold is worth, rather than its expected utility as a
substance. Bitcoin just removes the fiction that it is "backed" by a useful
substance.

In the past, there have been times when gold was _fantastic_ as a store of
value. When the Jews fled Poland, Germany, etc. during World War II, the lucky
and the rich had some physical gold or silver reserves to take with them. That
allowed them to rebuild in a new country, even after all of their Polish or
German currency became worthless or was confiscated.

So, that's cool. Gold has a purpose. I understand that. When shit hits the fan
in your home country and you need to rebuild, historically speaking, gold and
silver were good to have. Why? Because they were accepted for trade the world
over and had some kind of value. But, nonetheless, the fiat money economy is
vastly larger than the gold economy...and Bitcoin is slightly more gold-like
than fiat money, in this instance.

If, suddenly, my government became really oppressive and started spying on
everyone all the time and I felt unsafe because the police had become
militarized and equipped with drones and tanks and had placed cameras all over
the city (umm...wait...that's sounding vaguely familiar...but, whatever, let's
continue...) and I felt I needed to flee for the safety of myself and my
family, I could take my Bitcoins with me. They'd be spendable or convertable
to local currency in almost any locale on the planet. Even if there is no
currency exchange operating in a given local currency, there may be
individuals who will sell local currency for Bitcoins. And, that's happening
more frequently every day, just as more local exchanges spring up.

"Bitcoin could utterly collapse tomorrow and the impact on the markets
wouldn't even register. If gold collapsed tomorrow the markets would crumble."

Of course. Gold has had thousands of years to establish a vital position in
the market. Give Bitcoin a little time. It's still a puppy.

~~~
astrodust
> It serves the interests of an elite few at the expense of everyone else...

I think you've just described Bitcoin. The early adopters have benefitted
_enormously_ compared to everyone else.

I do know that when "the shit hits the fan" that I'll be able to trade junk
gold for goods and services, but I have zero faith that Bitcoin will be worth
_anything_ in the future. It has zero fundamental value.

If you think you can "take your Bitcoins with you" I think you're mistaken.
The whole apparatus could be disrupted and destroyed overnight by an
organization like the NSA or China's equivalent. Also it's dependent on the
Bitcoin infrastructure being operational.

The government can try to seize your gold, they can make it hard to move, but
there's always a way. With Bitcoin there may be no-win scenarios no matter how
hard you try. All you'll have is some cryptographic hash and a whole lot of
tears.

~~~
DanBC
While I tend to agree with you:

> _The whole apparatus could be disrupted and destroyed overnight by an
> organization like the NSA or China 's equivalent._

Just for fun, how? And not just a one sentence quote of "the 51% attack", but
how much computing power would be needed for that attack? (Forget electrical
power for the moment, and money.)

------
taigeair
I wouldn't mind buying some to speculate since I can only lose the amount I
buy which won't be much. But it's not very easy to do it.

What's everyone using?

~~~
byoung2
I signed up with Coinbase (YC S12) today specifically to engage in gold rush
type speculation. Much better odds than lottery tickets, and more convenient
than driving to Vegas.

~~~
phaed
Well did you pick the wost possible service for the job. Currently you can't
buy coins at Coinbase til the 22nd.

------
acallaghan
"One likes to believe in the freedom of Bitcoin. But glittering prices and
endless rate rises shatter the illusion of integrity."

------
antonius
Everytime I see a new bitcoin article discussing its' new price, I'm reminded
why I should have never sold at $75. Sigh.

~~~
rjd
I look at it and think its a con. Coincidentally after a several massive
thefts, the price suddenly raises? sounds like deliberate manipulation to dump
stolen coins to me.

Wouldn't mind betting some syndicate took a huge upfront loss to drive up
price, and are now recapitalising that loss with said stolen coins.

~~~
sliverstorm
Can be explained as "no news is bad news", e.g. high profile thefts got BTC a
spike in publicity.

Up until this month, nobody but geeks knew what BTC was. Now I'm hearing
philosophy & art majors talking about it.

~~~
vezzy-fnord
Not really. Bitcoin got its first mass mainstream exposure around February of
this year when it broke its peak from mid-2011, IIRC. Definitely before this
month, however.

~~~
sliverstorm
That's true, but if memory serves that was a metaphorical 10th-page oped. The
coverage we're seeing now, starting around the thefts, is 1st or 2nd page.

------
pbreit
An obvious bubble but impossible to predict when it'll pop. It could easily go
to $1k, $10k, $100k and beyond since supply is so limited and most of the
coins are held tightly by folks who have already cashed out nicely.

------
triptychs
I'm interested in it's psychologically limited factors related to price "per"
bitcoin... or, in other terms, bitcoin's "exchange rate".

Owning 1 bitcoin, no matter what it's worth, psychologically makes you feel
poor. It's an arbitrary habit and, really, meaningless but to the average
person they can't stand trading $1000 for 1-2 bitcoins. When people look in
their bank accounts, they want to see thousands... millions! Not 1 or 2.
Right? I think people would more likely buy 10,000 of something they perceive
as a currency instead of 1.0000 -- even if through a change of "terms" they
were worth the exact same in USD. Am I selling the general public short in
this assumption?

(Probably not pertinent note: I sold today and no longer hold any BTC.)

------
VMG
There is good reason to assume that the senate hearing on CSPAN-3 has
something to do with it. Strong positive signals there.

[http://www.c-span.org/Live-Video/C-SPAN3/](http://www.c-span.org/Live-
Video/C-SPAN3/)

------
jrs235
I've been seeing the bitcoin news hitting [more major] news outlets. Seeing an
article like this [http://finance.yahoo.com/blogs/michael-santoli/bitcoin-
price...](http://finance.yahoo.com/blogs/michael-santoli/bitcoin-price-bests-
one-apple-share--but-is-it-worth-buying-185417569.html) with a picture of
physical coins worries me. Why? All the uninformed people that want to get in
on this bitcoin action may be sold of physical coins by scammers like the
coins in the pictures. I'm concerned for the technically illiterate.

~~~
vezzy-fnord
I'm not feeling very jaded today, but I think you might be underestimating
people's intelligence.

If they want to get into Bitcoin, I think they'd read up on it being entirely
virtual (minus the optional paper wallets) pretty quickly.

~~~
jrs235
Sadly, I worried about older folks. I bet you could get some metal "bit coins"
like those in numerous pictures and go door to door selling them for several
hundred dollars to some people. It'd be easy o come up with a story as to why
you're selling them.

------
AndrewDucker
Does this mean that it's become more economic for miners? Are people breaking
out their GPUs right now to make a few dollars?

------
icpmacdo
Man I really wish I had a handful of bitcoins right now.But I think that it is
going to be rough for people either way if the price goes up you will have a
bunch of depressed people not buying in and if it goes down a bunch of people
are going to be REALLY depressed for obvious reasons

------
ewams
That graph is darn sexy, and I am talking about the object itself not the
data. The most practical and useful "interactive chart" I have ever seen.
Props to Clark Moody. Does anyone know how to use that type of chart to
display information from other data sources?

------
schrodinger
How is bitcoin income reported and taxed? Is it the same as holding a stock?

~~~
taigeair
Don't think it's regulated that much yet.

~~~
wmf
In the absence of specific regulation, everything is taxed by default.

------
the_watcher
I bought a bit of BTC in October because I am interested in it. I've now sold
off enough to cover my initial investment plus a bit extra, and now get to
watch BTC with house money.

------
adrianwaj
China: Bitcoins welcome here.

------
lafar6502
I bet the only goods that are currently bought for bitcoin are US dollars.

------
throwwit
I wonder how many ppl are repurposing PS4 or XB's to mine.

~~~
brainburn
Noone in their right mind would do that

------
romanovcode
Already down to $520.

~~~
cryowaffle
Check out prices at bitcoinity.org/markets, prices haven't gone down to $520,
it's short term stabilized around $720 after the first round of congressional
meeting.

------
Tycho
Will cross $1000 within 2 weeks.

~~~
matthuggins
But how many more weeks before it comes crashing down?

~~~
rjd
Probably as soon as all the stolen coins in circulation have been cashed in
and suddenly there is no market manipulation to keep it up.

------
caycep
how easy is it to sell your BTC for USD?

~~~
astrodust
About as easy as scoring a kilo of weed.

------
phaed
To the core!

