
Bitcoin price reaches a record high for the first time since April - binarybits
http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/05/bitcoin-price-reaches-a-record-high-for-the-first-time-since-april/
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bdcravens
Everyone's quoting Mt. Gox eclipsing its previous high. However, it's pretty
much impossible to cash out of Mt. Gox, and so it's trading at a premium to
other exchanges. To this end, Mt. Gox beating its previous isn't an apples-to-
apples comparison.

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binarybits
I think there's something to this, and I say as much in my story. But with
exchanges trading at different values, it's hard to know which price is the
"real" one.

~~~
wmf
Dollars that you can actually access are real, and ones that you can't access
(e.g. in a MtGox account) are fake. A price denominated in fake dollars is a
fake price.

~~~
pyalot2
It's true that Gox$ aren't US$. But that doesn't mean they're entirely fake.

The matter of the fact is that, some people are doing arbitrage between Gox
and other exchanges. And this arbitrage keeps prices somewhat in line. If the
arbitrage would not exist, then the prices would be all over the place and not
correlate at all.

The question then is, if the Gox$ are all fake and nobody can get any, how
come the arbitrageurs can keep in business? And the answer is: they couldn't.
Some people get to convert their Gox$ to US$ and then use them to buy bitcoin
on other exchanges to sell them on Gox.

But, not all people, for whatever reason, get to do that. And the process
might be lengthy, and there's a risk that it might fail for you.

So the spread between Gox and other exchanges is the arbitrageurs estimate of
the risk of selling BTC to Gox$ and be able to convert them in a suitable
timeframe to US$.

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wmf
The last thing I heard is that you can get money out quickly by paying a 5%
fee, so I think you're right that arbitrage is keeping the price difference
around 5%.

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wellboy
I've been in it since the first bubble in April and it's surprising how
resilient Bitcoin has become to negative news such as the seizure of 5% of all
Bitcoins recently. There was a drop of 20%, but it had recovered from that
after a few days already. Since then it has been on the up and up.

I think it's pretty likely that 1 Bitcoin will be worth $1,000 within the next
year and $10,000 within the next 3 years.

~~~
RussianCow
That's what people said before the crash in April. Not that I disagree--I
don't really care one way or another--but I think it's impossible to predict
its price in a year, let alone 3. Anything can happen at this rate.

~~~
throwaway98604
The only way for Bitcoin to not go up is for a different cryptocurrency to
come to fruition that has significant improvements over Bitcoin, like
zerocoin, and subsequently can not be integrated into Bitcoin's blockchain.

~~~
darkmighty
Can bitcoins security algorithms become outdated due to Moore's law in any
reasonable period of time? Is there a possible threat of algorithm compromise
by cryptanalysis?

~~~
oleganza
As for mining, there are enough bits in SHA256 to allow billion-fold increase
in difficulty. And if there is a danger of breaking it much quicker, all
people holding bitcoins have huge incentive to change the protocol to fix the
problem.

As for ECDSA, it can only be broken by quantum computers, but still most
balances are protected by sha256*ripemd160 hash, so they are safe in the face
of sudden QC attack or a weakness in ECC. People will want to protect their
wealth and thus will change the protocol for other algorithms.

~~~
darkmighty
Cool info, thx!

But do you think it would actually be viable to make a protocol algorithm
transition?

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oleganza
When everyone's money is at stake, it'll be very quick. This March, when the
network forked, miners with newer version 0.8 agreed to forego mining rewards
and abandon their own branch (incompatible with v0.7) just to resolve the
issue quickly to not shake the confidence in Bitcoin.

~~~
nwh
They got their money back anyway. A user paid every single missed bounty from
blocks on the abandoned fork.

~~~
oleganza
v0.7 miners got those rewards, not v0.8 ones.

~~~
nwh
v0.8 miners were paid back for the lost funds from a private fund, leftover
from the original Bitcoin Faucet.

~~~
oleganza
Yes, but this was not planned ahead. Miners did abandon their rewards even
being on a longer chain just to maintain trust in the system. They did not
know if they will ever get their money recovered.

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miguelrochefort
In April, I got in @ $220 / BTC.

Yesterday, I got out @ $220 / BTC.

I suck at this.

~~~
ekianjo
At least you didn't lose money :) At this stage it wouldn't hurt too much to
hold onto it for a little longer. It's not increasing at exponential speed at
this stage, so I'd say it is likely to go up a bit more before we see another
crash. Difficult to predict, though.

~~~
netrus
It's a market. Half of all predictions are wrong, all the time. Only question
is: Do you belong to the smarter half?

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kbd
What's the best Bitcoin exchange to buy with? In the early days I stayed away
because a lot of the exchanges seemed to have really poor security, but it
looks like it may be time to invest somewhere.

~~~
bdr
Coinbase is really easy if you're in the US.

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bdr
I'm happy about the rise, but I'm not fully counting this as a record yet. The
Bitcoin exchange ecosystem has changed since April. MtGox started massively
delaying dollar withdrawals, so the price there diverged from other exchanges.
I'll be watching Bitstamp (now at $254) for the real thing.

~~~
w-ll
[http://markets.blockchain.info/](http://markets.blockchain.info/) is a great
resource. While its not unanimous, the peak they are quoting is Mt.Gox and
comparing it to... Mt.Gox.

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theklub
I think its due for another crash and I'll wait until that happens. Plus with
this Senate hearing who knows what could happen to the price after that.

~~~
oleganza
Previous "crashes" were pretty profitable:

2011: From $1 to $30 and then down to $5. 500% total gain.
[http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201...](http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2011-03-02zeg2011-11-07ztgSzm1g10zm2g25)
(Slow decrease in price was probably due to huge mining inflation rate at that
time:
[https://bitcointalk.org/index.php?topic=130619.0](https://bitcointalk.org/index.php?topic=130619.0))

Summer 2012: From $5 to $15 to $11.
[http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201...](http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2012-05-02zeg2012-09-07ztgSzm1g10zm2g25)

Spring 2013: From $14 to $266 to around $100-120.
[http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg201...](http://bitcoincharts.com/charts/mtgoxUSD#rg5zigDailyzczsg2013-01-02zeg2013-05-07ztgSzm1g10zm2g25)

If this time it crashes from $2000 to $1000, it'd be pretty spectacular and
profitable. Those traders who will have bought too high will have to patiently
wait another year or two for their profits.

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modo_
It seems that Bitstamp has been much more stable than Mt. Gox lately, and
interestingly hasn't hit its all time high just yet.

