

Bitcoin just crossed $7.00. - kolinko
http://mtgoxlive.com/orders?10-07

======
csomar
The reason for that is the death of Bitcoinica. Bitcoinica offered shorting,
which stabilized prices at around $5. When Bitcoinica went out of business,
the only way to make money on Bitcoin is to speculate its' price increase
which will drive demand; which will drive its' price even more.

That being said, it might be the right time to buy Bitcoins, and sell before
the bubble bursts. However, for a more stable Bitcoin, we need a shorting
system and enough traders.

~~~
kiba
That's nonsense. Bitcoinica have virtually no effect on the market.

~~~
csomar
No it did. The shorting stabilized prices, and if you don't have any
economical background, you can check out Khan Academy videos on economics.

The price of Bitcoin started to raise since Bitcoinca ended operations.
Certainly, it won't skyrocket in 24 hours. It'll take many days (and maybe
weeks) to visualize the trend.

~~~
kiba
Nonsense, as there were shorting tools that were available after bitcoinica
shut down.

------
morsch
For further amusing reading, look at
<https://bitcointalk.org/index.php?topic=91661.20>

User pirateat40 is running a BTC investment scheme with super-high returns
(BS&T: Bitcoin Savings & Trust, a name suggested by investors). So high, that
the community is split between the believers who can't resist the ROI and the
non-believers who are convinced that Pirate is running a Ponzi scheme.

But that's not the fun part. The fun part is that pirateat40 and another
member have agreed to participate in a sort of bet to settle the issue, which
involves certain payouts under certain conditions. Mostly it's a bet that
pirateat40/BS&T will default within a couple of months. Both have put _5000
BTC_ , ie. roughly 30k USD on the line.

~~~
damian2000
Both those users are probably the same guy, and its an attempt to gain
credibility, when he wins... ;-)

~~~
javert
That's a funny idea, but as someone who pays attention to bitcointalk.org,
it's extremely unlikely.

------
tokenadult
What goes up could also go down. I've seen it happen in my adult life to gold
(in the 1980s), to housing (twice, once mostly in Texas, completely killing
off the savings and loan industry nationally, and more recently all over the
world), and to petroleum multiple times. As I have posted before here on
Hacker News, perhaps the greatest contribution the Bitcoin experiment will
make to humankind is to teach you and me and our neighbors more about the
realities of economics. Many of the ideas about how to mine Bitcoins, store
Bitcoins, and trade with Bitcoins as a medium of exchange illustrate both the
strengths and weaknesses of any other medium of exchange in a world full of
human beings. Seeing the discussion of Bitcoins here on Hacker News reminds me
of the last time that the price of gold (in United States dollars) crashed,
and the arguments beforehand that such an occurrence was impossible, for
instance. "The market can remain irrational longer than you can remain
solvent" is still an important principle of investment.

~~~
base698
Last year it went up to over $30 before hitting $3 over the course of a few
months--no one knows what goes up just come down more than bitcoin.

It's steadily risen back to $7 on a much more stable trajectory. The
interesting thing this time is the relative stability over the last 6 months.

~~~
rmc
Ah so this time it's different! The battle cry of every bubble.

~~~
jerguismi
If the bubble keeps repeating, it is still an opportunity for speculators who
can do the timing right.

Personally I'm long on bitcoins, I do dollar-cost-averaging. Good way to do
this is for example bitcoinbuilder.com, or 10-line python script will do the
same thing.

~~~
DanBC
> _it is still an opportunity for speculators who can do the timing right._

Gamblers - it is still an opportunity for gamblers who can do the timing
right.

------
dvanduzer
Perhaps a bit off topic, but would a finance nerd recognize this style of
graph better? I've never seen such a thing before, and it took a little while
to understand what the instructions were saying. But once I got it, I was
immediately confused that there aren't more commonly known high information
financial visuals beyond the standard two axis graph.

Is it just that most exchanges somehow don't publicly publish such granular
data?

~~~
jonaldomo
I thought the same thing. And I don't think it's offtopic since hackernews is
a place for development discussion.

~~~
duncan
I also felt the same way.

------
moonchrome
Isn't bitcoin trade on like a few million dolars per day globally according to
some really rosy estimates ? If I'm reading this correctly it has 1.6M$ on the
bid side. Do people realize that with such low liquidity the price is
irrelevant ? Real news would be it doing $100M transactions in a day or having
$100M on bids, not that it would be significant but that would show some real
growth, this is just a few people playing with their savings.

~~~
ulvund
My guess is that bitcoins are mainly used for college students' and drug
hobbyists' $50 purchases of LSD and the like on silk road and not for big
transactions.

~~~
kiba
Silk Road is famous, but it doesn't mean that illegal activities are the main
economic activities in bitcoin.

 _The number of accounts is currently at about 22000, and the largest number
of people online at any given time is 126 – a stable community, but much
smaller than those who see Silk Road as being the single shadowy force keeping
up the Bitcoin economy behind the scenes imagine._ \--
<http://bitcoinmagazine.net/the-silk-road-report/>

~~~
rbn
The problem is that CCs and PayPal is much easier to use and it is much safer
than Bitcoins.

So I for one see no reason to use bitcoin to purchase anything other than
products that can only be purchased via bitcoins

~~~
kiba
_The problem is that CCs and PayPal is much easier to use and it is much safer
than Bitcoins._

If you never use bitcoin, you wouldn't realize how convenient it is in some
situation. For example, when I brought an album, I just sent some coins to the
address and then it was a done deal. I don't have to enter my credit card
information or enter my username/password.

If you aren't convinced about bitcoin but you have time, you should experiment
and find if there's any usecases for bitcoin rather than just dismissing it
outright.

Let also note that the security pressure by criminals have lead lot of bitcoin
sites to adopt 2 factor authentication. Some figured out that they don't need
their wallet online at all and can get away with just using the blockchain to
process payment. This meant even if the server were to get hacked, there's no
bitcoin to steal. The bitcoin team themsleves are also working on adding
multi-signature transactions.

~~~
TazeTSchnitzel
Also, I'd argue that BitCoin is very simple to use. Put in an address, type in
the amount of money, and wait. Sure, transactions can take a while, but it's
not very complex.

------
vannevar
Apparently we're in the "pump" phase of the Bitcoin pump-and-dump cycle.
Really, the entire Bitcoin market would fit comfortably inside the volume of
your average OTC penny stock. Does anyone _not_ think the Bitcoin game is
rigged?

~~~
javert
_Does anyone not think the Bitcoin game is rigged?_

There are significant reasons why having a deflationary, digital currency (or
commodity) would be quite useful, at least for certain people and use cases.

If there were no use case for Bitcoin, calling it a scam without presenting
evidence would be much more reasonable. Given that there are use cases,
calling Bitcoin a scam without presenting evidence is completely arbitrary.

To make an analogy - if I ask you to invest in my company that makes a brand
new food item with no nutritional value or flavor, it's probably a scam.
However, if I ask you to invest in my company that makes a tasty and
nutritional food item, regardless of whether you think my food will do well in
the market in the long run, it requires evidence to claim that it is a scam.

~~~
vannevar
I didn't say Bitcoin itself is a scam, only that the market is so tiny that a
single player could easily manipulate it. And if someone can, someone will.
And while I see Bitcoin's legitimate use cases, few ( _very few_ ) people are
using it for actual trade. The market seems purely speculative, with no
underlying Bitcoin economy to stabilize it (save possibly the money-laundering
business).

~~~
javert
I agree that the market is largely speculative. But I think the speculation is
mainly very long-term speculation - so people predominantly want to get more
bitcoins, or they want to hold them. This will tend to drive the price up.

------
cs702
I’m persuaded that _in the long run_ \-- that is, over many years -- Bitcoin
is likely to appreciate far above current levels as it gains further adoption
worldwide. Here's why: [https://cs702.wordpress.com/2011/05/29/on-the-
potential-adop...](https://cs702.wordpress.com/2011/05/29/on-the-potential-
adoption-and-price-appreciation-of-bitcoin-in-the-long-run/) \-- I wrote this
more than a year ago, and still think it's correct.

However, I would _not_ bet on the direction of Bitcoin prices in the short
run, because I have no advantage over the many short-term traders and
speculators who make up the daily Bitcoin market. (As Warren Buffett says, “if
you've been playing poker for half an hour and you still don't know who the
patsy is, you're the patsy.” I don't want to be the patsy.)

~~~
javert
I haven't read your post, but I agree with your projection. I'm happy to put a
significant but disposable amount of my money in bitcoin _while I can still
afford to get a significant percent of all bitcoins ever_ (which I still can).

(EDIT: And by that I mean, say, something like .01%.)

~~~
cs702
Thank you. FWIW, my post both outlines the reasons why Bitcoin would
appreciate and makes an effort to quantify potential appreciation under
different worldwide usage assumptions.

------
nihilocrat
Am I the only one who can't read this graph? It looks like it's rotated 90
degrees and there's no time axis so I don't see what this is representing. I
don't understand what the legend for the Y axis means.

~~~
elliottcarlson
It's a market depth chart - the orange line on the left represents the
cumulative standing buy orders, the blue line represents the standing sell
orders, the green line is the historical price per trade with the latest trade
(thus value) being at the bottom. The Y axis is a representation of the
bitcoin value, and the X axis is the representation of the USD buy/sell
prices.

------
ChrisNorstrom
I lost a lot of money in bitcoin. I learned a valuable lesson that's better
than anything I learned in collage.

1) Easy to make, easy to lose.

2) Whatever you are thinking of doing, so is everyone else. _If you're
planning on outsmarting thousands of other people, just remember, they are
planning to outsmart you._

3) Any market with a high volume of flippers (buys to resell and make money)
vs users (actually use a product or service) might be a bubble. _High rise
bubble, mortgage bubble, housing bubble, Miami condo bubble_

4) The worst time to make decisions is when you feel like you're going to lose
out on something spectacular. When you have visions of grandeur. When the
emotional side of you is most active, the logical side of you is being
repressed. Watch out for that.

5) "This time is different!" is bullshit _(when relating to bubbles and re-
occuring events)_. Each new generation brings the same humanistic flaws of the
last generation. Doomed to repeat itself forever and ever. Humans will be
humans the same way sharks will be sharks. We are cursed with a primitive
instinct that might have worked thousands of years ago in a tribal society but
now is working against us.

6) Whenever you take a gamble, ALWAYS assume you are going to lose. If you're
ok with the outcome of losing and find the gamble to be worth it go ahead and
take a risk.

I didn't lose too much money in bitcoin but lets just say it was money that I
was saving up for braces. That was the deal I made with myself. I'm still
angry that I lost, there's no point in lying, emotions will be emotions. But
the way I see it, I didn't lose the money in bitcoin, I invested it in some
really good "real world economics" classes at a good collage somewhere...

~~~
stcredzero
_5) "This time is different!" is bullshit._

There are times when it is indeed different. When Columbus landed, it was
genuinely different. (Especially for the natives.) When general artificial
intelligence arrives, it will also be genuinely different. (Especially for
us.)

~~~
gyom
I'm not sure if you just implicitly suggested that we (humans) will be
mistreated by the general AI (and its offsprings) just like the natives were
mistreated by people who followed after Columbus.

~~~
ktizo
Or on the flip side, we might treat the AI's worse due to being so scared of
them, as in the situation in Neuromancer where all the AI's legally have to be
built with a kill switch.

~~~
koningrobot
How is that bad treatment? I for one would welcome an instant, painless death.

~~~
landhar
But would you welcome living in fear of being killed at any moment ?

~~~
stcredzero
...that's what it is to be a slave

<http://www.youtube.com/watch?v=KS0Rc45tj60>

------
mtgx
The last thing Bitcoin needs is another speculation craze based on its high
value. If Bitcoin's value is growing, that's fine, let it keep growing
naturally. Don't start publicizing it so it starts another speculation roller
coaster, at least until the Bitcoin market is big enough to not be impacted
much by speculation-based transactions.

~~~
Paul_S
Obviously, you are absolutely right. Then again, as much as I despise myself
for it I did make a killing last time a bunch of idiots started buying them
for >20$ a pop so I wouldn't mind. Taking money from speculators and giving
money to geeks... I'm sure someone could spin this into something positive.

I don't think it's going to hurt bitcoin, it's proven itself to withstand it
and is here to stay.

~~~
tatsuke95
> _"Taking money from speculators and giving money to geeks... "_

Classic fallacy. "Those rules don't apply to me!"

Guess what? You _are_ a speculator, no better or worse than any other
speculator out there, be it in gold, houses or mortgages. Sorry.

~~~
Paul_S
I don't think I'm a speculator. I just started mining back in the day when CPU
mining was still viable. Early in the day when we got a 50 bitcoin batch every
other week. I didn't buy a single bitcoin. I just sold the ones I mined. Is
this really speculation?

~~~
irishcoffee
You speculated that the electricity you used to mine the bitcoins would be
worth the cost of mining them. I'd say it was as safe a speculation as one
could make. =pp

~~~
Paul_S
By that definition any and all investment is speculation. Does this word mean
anything on its own then? Though the fervour with which I deny being one
proves it must.

------
xODF
It's a new currency, it would be illogical to assume that the price of
bitcoins will be wildly irratic as it catches on. The one thing I know about
bitcoins is that I don't know what they'll do. The volatility makes bitcoin
trading attractive to me, also, you can only lose what you put in, the trading
costs are ridiculously low, and I started my account with $100 bucks.
Initially I lost value but I just waited it out and turned $100 into $130.
That's a huge return in less than a year. Obviously this is more of an
exercise, I wouldn't get stupid with how much I put into bitcoins, the whole
thing could collapse tomorrow.

------
coderdude
I've been asked in the past if I could accept Bitcoin. I believe there are
even services that convert Bitcoin on the fly to US dollars for you when you
accept a purchase. It doesn't really seem like a smart business decision
though. What are the legal ramifications of accepting money that came from
Bitcoin? Is the IRS going to come knocking at your door? My gut tells me to
avoid BTC like the plague, but it does intrigue me.

~~~
Karunamon
Why would the IRS come knocking at your door? Take the same laws that apply to
any other currency transaction and apply.

~~~
coderdude
Would they/why would they, these are the questions I'm asking because I'm
uncertain how these things even work. With currencies backed by nations I can
see the IRS not caring, but Bitcoin isn't just "any other currency." It's a
currency not made up or backed by any nation. In a way it's money out of thin
air. That's what worries me.

~~~
286c8cb04bda
The IRS doesn't care where your income comes from. They care that it is (1)
reported, and (2) correctly valued. They have, for example, rules for
reporting bartered income[1]. Barter is certainly not "any other currency"
either.

[1]:
[http://www.irs.gov/businesses/small/article/0,,id=187904,00....](http://www.irs.gov/businesses/small/article/0,,id=187904,00.html)

------
pitt1980
[http://xoxohth.com/thread.php?thread_id=1985065&mc=34...](http://xoxohth.com/thread.php?thread_id=1985065&mc=34&forum_id=2)

they are way too cumbersome to buy, why invest in a currency that the average
computer user can't figure out how to buy?

~~~
chimi
I'm not advocating the purchase of bitcoins, simply providing an answer. I
have no opinion on whether or not bitcoins are a good "investment."

The transactional friction is a reason the market is small. If it's easier to
transact and more people can do it, the supply/demand curves will push the
price up in the future. Assuming demand is proportional to the size of the
market.

------
jamesu
Will be interesting to see how high it goes. Will we see a return to
$31.91/BTC?

------
hetman
Here we go again...

------
joering2
Ok but given current pricing of GPUs, is it profitable to mine the coins,
given I have access to free electricity (my office building does not charge
for that).

~~~
petemc_
[http://www.butterflylabs.com/order-form-bitforce-sc-mini-
rig...](http://www.butterflylabs.com/order-form-bitforce-sc-mini-rig/)

This might make a lot of GPU setups obsolete.

Edit to add more info: I'm told the expected generation output, from 1000000
Mhps, at current difficulty 1751454.53534068, is 574.2818 BTC per day or
23.9284 BTC per hour.

~~~
sp332
$4,000/day at current exchange rates, it should pay for itself in less than 8
days. Of course the rate of BTC generation will go down over time, but it
looks like these rigs would easily pay for themselves for several years yet.

~~~
nullc
The bitcoin system adapts itself to keep the rate of coin creation constant.
So it's impossible to say what their return will be in the future. Perhaps a
few monts later someone puts out a run of 28nm ASICS at 1/4 the price with 4x
the performance and they're bought in massive waves.

~~~
sp332
Yes... and maybe a supervolcano under Yellowstone will destroy half the USA.
But there's no evidence that will actually happen anytime soon.

------
killyourheros
I was a big opponent of bitcoin- still wouldn't use it for anything that
matters- but there are some great use cases.

With government bans on online gambling bitcoin could really take over(that
market). And, of course, there is the illegal drug trade.

When people say that "it's not backed by anything" all they need to do is fire
up tor and take a peak at silkroad. It's backed by one of the most in-demand
products ever.

~~~
repsilat
I wonder if it's liquid enough to do an "instant trade". Essentially, you
could route (possibly international) financial transactions through BitCoin
and avoid big fees by doing a buy on the buyer's side, transferring the coins
to the seller, then having them sell the coins in their local currency.

The best part about this is that neither the buyer nor the seller needs to
have the slightest interest in BitCoin and it doesn't matter at all if the
value of the currency is reasonable so long as it's _reasonably stable_. Even
better, neither side needs to know the other's bank details, just a throw-away
BitCoin account number. This isn't just an IMT-killer, it's a PayPal killer as
well.

Assuming the BitCoin market is more or less efficient relative to currency
markets, and assuming those transactions could be cleared within ~1 day, you
could absolutely kill the international transfer market (known for high fees,
long delays and shitty exchange rates).

~~~
bencoder
This can be done but I believe it is a bit more expensive than via banks,
since you have exchange fees and the spread as liquidity isn't quite high
enough (assuming you want to transfer ASAP. If you are willing to wait on both
sides you can do a lot better)

Example exchanging 500 GBP to EUR (via intersango at current rates):

Buy 104.6 BTC @ 4.76GBP Fees for instant trade: 0.95% = ~1 BTC. Balance:
103.6BTC

Sell 103.6BTC @ 5.8EUR = 600.88 eur Fees for instant trade: 0.95% = ~5.71.
Balance: 595.17EUR

500 GBP went to 595.17EUR. Exchange rate: 1.19. (google tells me the exchange
rate is about 1.26 at the moment, so this is quite poor)

~~~
repsilat
You're right, that's not good. I imagine it would get better if people started
doing things like that in higher volumes, but that's a bit of a Catch 22.

Until then, there are a couple of mitigating factors:

\- You may not get the market rate from anyone. The UK post office is only
giving me a rate of 1.2260 to the Euro.

\- If you need to pay a fee for a transfer it could be worthwhile for small
amounts. The UK post office doesn't charge a fee, but it has a min transfer of
£250. www.tranzfers.com charges £7 or $15AU. I've paid more elsewhere.

