
Bitcoin falls from $266 - sillysaurus
https://data.mtgox.com/api/0/png/24hours.png?Currency=USD
======
wting
I'm interested in the price of Bitcoin, but we don't need these daily
submissions.

If you're interested in following the price, I suggest these links:

\- <https://bitcoinity.org/markets>

\- <http://bitcoincharts.com/charts/mtgoxUSD>

\- <http://bitcoin.clarkmoody.com/>

If you're interested in talking about the price, try #bitcoin-pricetalk on
Freenode.

~~~
ghshephard
This is HUGE news on Bitcoin - nothing like this has ever happened in it's
history. Market went from $250 to $110 in 5 hours. MtGox was down for 30
minutes today. Trading lag was 600 seconds for orders placed at market prices.
April 10th, 2013 may be the day that will be remember for the next 20 years as
the day that Bitcoin crashed and either (A) never recovered or (B) kept
progressing after an incredible Blip.

Definitely HN fodder today.

~~~
kybernetikos
> Definitely HN fodder today.

Maybe, but my own unscientific, vague sense is that I've been seeing multiple
bitcoin related submissions to HN every day for quite some time now. At this
stage all of the arguments have been hashed and rehashed (ho ho) in the
comment threads to the extent that they're getting pretty repetitive and
tedious (especially since so many of them are so political).

So, sure, it was marginally interesting a few days ago that bitcoin was up a
significant amount so we had multiple articles about that, and then it was up
the next day too so we had some articles, and then there were opinion pieces
about why it was a bad idea / good idea, none of which really said anything
much new, then there were columns about how it was becoming mainstream (which
was obvious if you'd been following all the bitcoin startups that also get
posted to HN), then today we find it's down an unusual amount. Surely you can
see how this is becoming a little grating even for someone who started out
with an interest in the topic.

~~~
beedogs
We could go back to talking about Aaron Swartz if you'd prefer.

------
cs702
Evidently, many hoarders/speculators decided to cash out at once -- much like
the audience in a movie theater would try to go through the exit door at the
same time if someone were to yell "fire!"

The naive souls who recently bought bitcoins to make a 'quick buck' are in for
a rude surprise. In the short run, no one knows how Bitcoin's price will
fluctuate.

In the long run, however, if Bitcoin continues to work as intended, the more
people around the world who adopt it as a store of value and/or medium of
exchange, the more demand there will be for it, and with supply being fixed,
growing demand will be reflected in a rising price.[1]

\--

[1] My full thoughts on the matter: [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/)

~~~
dia80
On the contrary this is just the most pronounced in a series of recent
coordinated DDOS / aggressive selling attacks designed to (successfully)
inspire panic. The attackers unload their bitcoin before the price gets
smashed and presumably buy it all back again from frightened speculators.

If anything it might be a positive sign for bitcoin that the attackers are
keen to acquire it!

On another note, mtgox.com the main exchange is shockingly unfit for purpose.
If real markets could get 1 hour behind in transaction processing because of a
spike in volume it would be the end of capitalism as we know it. I hope a more
able exchange arrives soon.

~~~
wcoenen
> _On the contrary this is just the most pronounced in a series of recent
> coordinated DDOS / aggressive selling attacks designed to (successfully)
> inspire panic._

The bitcointalk forums and /r/bitcoin are full of paranoia like this. After
months of stress trying to divine market patterns, people see market
manipulation and conspiracies everywhere.

The simple truth is that there was an agressive bubble. The doubling period
for the price was halving with each iteration[1]. If you looked at the log
plot[2], it _still_ looked exponential! A crash was inevitable.

> _On another note, mtgox.com the main exchange is shockingly unfit for
> purpose._

They have a big update scheduled for April 17th[3].

[1] <https://bitcointalk.org/index.php?topic=171312.0;all>

[2]
[http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...](http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g25zvzl)

[3] <https://mtgox.com/press_release_20130409.html>

~~~
bdr
_> paranoia_

MtGox has said they were subject to DDoS attacks:
<https://twitter.com/MagicalTux/status/317423311174909954>

_> If you looked at the log plot[2], it still looked exponential!_

Trying to divine future price movement from looking at a graph has been proven
definitively, repeatedly to be foolish.

~~~
brazzy
Divining that a price that is rising in a superexponential manner will be
going down sometime soon is one of the _least_ fooling things one can do when
looking at a graph.

~~~
bdr
You are empirically wrong. Please, quantify your idea and go backtest it on
the stock market.

The efficient-market hypothesis does not have an asterisk excluding
cryptocurrencies.

~~~
phyalow
the efficient market is dead and always has been.

~~~
derleth
> the efficient market is dead and always has been.

This is what people mean when they say "efficient market" in this context:

> In finance, the efficient-market hypothesis (EMH) asserts that financial
> markets are "informationally efficient". In consequence of this, one cannot
> consistently achieve returns in excess of average market returns on a risk-
> adjusted basis, given the information available at the time the investment
> is made.

<http://en.wikipedia.org/wiki/Efficient-market_hypothesis>

There are variations of this hypothesis, so saying "it's dead" is meaningless
unless you specify which one is "dead" and how it has failed.

~~~
Retric
There are generally arbitration opertunity's that offer short term rewards
well beyond the standard risk reward curve. Which is how many algorithmic
traders consistently return high double digit returns with ought leverage. The
simplest being having a mix of buy and sell orders that straddle the average.

~~~
tatsuke95
Which is exactly what the hypothesis says. Assume that others are using
arbitrage to reduce your opportunities, leaving you with an efficient market.

~~~
Retric
Except arbitration requires more than just money + information, people doing
arbitration must have low fees / latency for example so it's not available to
all players in the market. Net result real world markets are not efficient due
to various access levels.

Also: _Empirical analyses have consistently found problems with the efficient-
market hypothesis, the most consistent being that stocks with low price to
earnings (and similarly, low price to cash-flow or book value) outperform
other stocks._ Which is presumably due to cognitive bias.
<http://en.wikipedia.org/wiki/Efficient-market_hypothesis>

PS: It's a reasonable simplification that's useful for the average investor,
but not policy makers for example.

------
eksith
BTC crashed primarily because the market suddenly got flooded by
Bitcoinbillionaire :

[http://arstechnica.com/business/2013/04/bitcoin-crashes-
losi...](http://arstechnica.com/business/2013/04/bitcoin-crashes-losing-
nearly-half-of-its-value-in-six-hours/)

This bares repeating...

The value of BTC is in the _nature_ of the transaction; not the currency
itself. People have turned BTC into a commodity instead of actually bloody
spending it. Their old fashioned thinking still ties it to traditional fiat
like a smoker trying to give up the habit.

Look, I don't want anyone to lose their money, but people have to stop
thinking of BTC as something that has value. What's valuable is the
_transaction_ itself, not the _means_ of transaction. To put it another way,
fiat currency is just colorful paper until it gets distributed to banks and
into your hands.

This original _transaction_ and all future transactions give it value; without
it, the paper means nothing.

Edit: Spelling. Ironically, I wrote "bears repeating" instead "bares
repeating". BTC ain't a bear market ;)

~~~
niggler
Who is satoshi nakamoto?

~~~
eksith
He's the Yamaga Soko of modern digital currency. Basically wrote the book on
the first plausibly practical means of exchanging currency for services and
the edicts of transactions.

Also, I hear he plays a mean banjo.

------
napoleoncomplex
Not that I'd wish monetary loss on anyone, but if the first Bitcoin crash is
any indication, these things tend to have a positive side-benefit of driving
out most of the speculators flooding in after all the news reports that fuel
these cycles, and the people actually interested in the currency itself stay
behind, with an influx of new folk.

After all the noise dies down, new businesses and services get built backed by
the wider audience, and the ecosystem develops further.

It's not yet clear if this is a crash similar to the previous one, but if it
comes, I don't think much will change in terms of Bitcoin's future for the
next few years.

(Posted this in the other thread just before it got ethered)

~~~
BrianEatWorld
Anecdotally, I have been waiting for prices to fall because I was looking to
actually use some btc starting a month ago, but because Im planning on using a
tumbler, I was afraid of where the price might be in a week.

~~~
brador
What is a tumbler?

~~~
anonymoushn
It's money laundering for btc.

------
tptacek
Don't worry! It won't ever fall below its intrinsic value!

~~~
clicks
Serious question: Is that really a fair criticism of BTC? Because afterall,
our beloved US currency is fiat based, and often subject to whims of
geopolitical games.

~~~
richardwhiuk
USD are backed by the fact that US citizens have to pay in USD to pay their
taxes. Bitcoins have no such imperative.

~~~
jessriedel
My Econ 101 understanding is that the value of USD is not primarily due to
taxes, i.e. if the government stopped collecting taxes (or started forcing
people to pay taxes in gold or Euros) the value of the dollar would not tank.
Instead, we're in a Nash equilibrium where we're all accepting dollars as a
means of exchange and it would be costly and have little benefit for
individuals to defect. The intrinsic value of the dollar is roughly set by the
value of all good and services exchanged in a given time period divided by the
number of dollars in circulation.

That said, the tax part does add a bit of stability in the form of an
additional friction to any hypothetical plan for everyone in the US to
coordinate to start exchanging gold or Euros in lieu of dollars.

~~~
crapshoot101
correct in a sense- the US dollar is backed by the full faith and credit of
the US Government, nothing more. Would I still have that faith in the US $ if
the government did not collect taxes / did not seem like a stable entity?
Probably not, but your point is still valid

~~~
jessriedel
> the US dollar is backed by the full faith and credit of the US Government

Huh? What does this mean? This phrase can be applied to government bond ("The
US gov't promises to pay you back") or to FDIC insurance ("The US gov't
promises to refund your money if your bank closes"). But it doesn't have any
meaning for dollars, unless it were to mean that the gov't would exchange it
for gold, which of course is false.

~~~
encoderer
Not true. The fact that you're somewhat informed on these matters is working
against you here.

If the US Gov't stopped collecting taxes -- or had some other substantial
liquidity crisis -- the very real issue is debt service. Since the USD is the
global reserve currency, we are in the rather unique situation of having our
debt denominated in our own currency under control of our own central bank.
This is where the "full faith and credit" of the USA enters the discussion of
our currency. If we had issues servicing our public debt, the government has
the option of devaluing our currency. In other words, inflating away our debt.
In such a scenario, the value of USD plunges against foreign currencies, and
there would be a massive effort by everybody with substantial USD holdings to
sell.

This, among other reasons, is why Keynes envisioned a super-national reserve
currency traded among central banks. If the US public debt was denominated in
Bancor, the option of inflating it away wouldn't exist.

~~~
jessriedel
First, I think the interesting question is just about fiat currencies, not the
US in particular. The global reserve currency aspect is a secondary effect.
Let's concentrate on a generic fiat currency issued by a government.

So you're saying that "full faith and credit" just means "The gov't promises
not to crazily inflate the money by printing lots of it". Fine. (That doesn't
explain what process determines the street value, it just acknowledges that
the government can destroy it.)

I don't really see how the rest of what you are talking about applies to my
comment. Are you claiming that fiat currencies are impossible in countries
without debt?

~~~
encoderer
No, you don't have to have debt to have good credit.

~~~
jessriedel
It sounds like you are suggesting that fiat currency functions like debt, but
I've never understood this claim.

------
nikcub
Sold everything I had yesterday at ~$240

<https://twitter.com/nikcub/status/321751009598791682>

I was buying and selling BitCoins with a very simple theory. Each time the
currency would rally I would check the stories on Google News and check the
graph on Google Trends[1].

Other price peaks would correspond with a peak on the trends graph[2], a new
peak in new stories (with more stories in more general media publications),
and more traffic to the sites that are the top results for "BitCoin" (using
Compete etc.)

The peak yesterday had no new interest driving it, and no new buyers coming
in. It was clear what was going to happen next.

Previous price peaks would drive new news stories which would drive the next
peak. Yesterday I logged into News and Trends and found the trends level at
its lowest in 30+ days and no new large items in news and sold.

[1] <https://twitter.com/nikcub/status/319427166817357824>

[2] <https://twitter.com/nikcub/status/315680085468405760>

~~~
wamatt
..and this is probably going to look foolish when it goes to $1000 later this
year. Your actions looks like someone trying to pat themselves on the back and
reassure the "right decision".

I wish online P2P wagers were legal in the US :) I was watching everything
during the "crash". It's already back up to 170 in a few _hours_. Previous
crash took months to recover.

I've been around the block and the same tired and worn arguments were being
used at $10 then $20 and $100.

~~~
mkr-hn
You sound like every person who believed in the non-bubbleness of every
bubble. What justifies the price of Bitcoins? They have no real value before
they're widely accepted, and that won't happen until the price is stable.

~~~
cjg
"Widely accepted" isn't a binary value. As adoption increases bitcoins gain
value. That's what justifies the price.

The problem is deciding just how much adoption implies how much value.

------
gojomo
There hasn't been a buying opportunity this attractive since less than 48
hours ago!

------
ashray
Before crying wolf, understand that bitcoin exchanges are unfortunately not
battle hardened internet businesses. Two of the largest exchanges MtGox and
bitstamp are both under DDOS. This may be an attempt by someone to make a
large buy at a cheaper price. Due to lack of trading, prices are going
downward.

However, BTC China is still trading at above $275! That's the beauty of
bitcoin, it isn't restricted to just one region in the world.

Yes, the exchanges need to toughen up and it's sad that someone can manipulate
prices so easily but bitcoin is still very geek centric and as long as geeks
understand and hold their BTCs this can't succeed. Of course, now that regular
people are jumping on the bandwagon it'll be interesting to see how events
unfold..

~~~
pc86
Is it possible to buy from MtGox at $200 and sell in BTC China shortly
thereafter at $275?

I know nothing about BTC.

~~~
ashray
If you do have a verified account at both, yes, it should be fairly simple. As
of now though it's unlikely that your trades will go through.

Also, the price has started falling on BTC China as well.

~~~
SODaniel
Yeah but you need to perform the sales with matching funds on both trading
platforms. Selling here and transferring BTC/USD to another trading platform
is not the method due to the swings and time for verification.

------
songzme
To everyone claiming that bitcoin isn't a currency, no shit!

Currency doesn't happen overnight, it's a process to get there. Just like
anything revolutionary, it takes time before anyone knows what it will be
come. By the time (with a very big IF) bitcoin becomes a viable currency, it's
price won't be $200 anymore. It'll be at least a few thousand per coin and
people will be transacting in micro bitcoins.

What bitcoin is going through right now, is puberty. If you invest early, you
reap profits. If you invest after it is stable, there is very little profit to
be made.

Love and give every new idea a chance until you've used it and have a personal
reason to hate it.

Negative speculation is for chumps

~~~
Helianthus
I have a personal reason to hate it: it thinks it's revolutionary when it's
actually just... money.

It solves no problems because it carries greed with it.

~~~
mattm
"It" is just a system. It doesn't think anything. It's the people who think
it's worth using it for something. So really you hate the people that use it.

~~~
Helianthus
Fair (though a bit pedantic :P).

And to be clear, I don't really _hate_ them (or the system). I had to phrase
it that way as a rejoinder to his statement; but I am deriving _so_ much
amusement out of this whole debacle.

------
codexon
Someone supposedly sold $10+ million worth of bitcoins.

[http://blockchain.info/address/1HQ3Go3ggs8pFnXuHVHRytPCq5fGG...](http://blockchain.info/address/1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx)

~~~
morsch
Well, transferred. Can't even say for sure if the BTC changed owners.

------
sukuriant
Wasn't Bitcoin at $100 just a couple of days ago? I feel like I'm watching a
penny stock; and, while I would have enjoyed something like a 10x stock value
worth if I'd gotten in when I thought to, this variability is scary

~~~
shin_lao
There was a lot of BitCoin related press coverage. This is probably related.

Volatility is high which will harm the adoption of BitCoin by vendors, which
will in turn drive the price down when people realize they can't do anything
with their BitCoins, etc.

~~~
erikpukinskis
Bitcoin isn't really in the adoption by vendors stage yet. Two things are
happening right now that are driving the price:

1) Adoption in politically sensitive markets (drug dealers, disaporas, people
in corrupt states, etc) who have no other options.

2) The slow process of the finance world understanding what Bitcoin is, and
how to value it.

The first is happening because there is demand for it. The second is happening
because global finance organizations seek out and exploit any and all market
opportunities.

I think what we'll see in the next few years is that #1 will keep growing, and
#2 will cause wild swings in bitcoin prices as we develop the technologies and
scholarship necessary to truly reckon Bitcoin's value.

At that point, the markets will have a good bead on the true adoption rate and
the market mechanics, which will allow them to converge on a more stable
value. Only then will Bitcoin start to become a good medium for broader
consumer exchange.

That said, even if it's only ever used for politically sensitive transactions,
and it never takes off as a consumer payment service, it will be a very big
economy.

------
6thSigma
Am I the only one who thinks of Bitcoin as purely a speculative commodity
which is leveraged mostly by the fact that it is in a financial grey area?

~~~
ihsw
The currency itself is very grey, yes, however the transaction network is
excellent and high-quality.

It's unfortunate that the currency so loudly dominates the news surrounding
it. Personally I find the technological achievement of a major, reliable, and
international transaction network more impressive.

~~~
Nursie
"the transaction network is excellent and high-quality."

Really?

I thought the transaction network was already struggling with SatoshiDice and
the volume of transactions it's caused? If that is the case then the network
is going to have a lot of trouble coping with increased use in future.

------
bdcravens
_We can laugh at Bitcoin but real guys, in real basements, are losing real
fake money right now._

[https://twitter.com/DavidClinchNews/status/32205973231779430...](https://twitter.com/DavidClinchNews/status/322059732317794304)

------
crapshoot101
A currency set up to be deflationary and swings at 50% daily? This sounds like
a great investment - I also have a slot machine I'd like to get you to invest
dollars on.

------
Keyframe
Basically this is watching a whole lot of people getting into FX game without
even knowing they're in the FX game or even know about FX. I wonder if senior
FX sharks sniffed blood and gamed bitcoin into this. My 2c says it's gamed
exactly by FX pros, that's why I'm not into it.

------
AceJohnny2
See also: Tulip Mania in the 17th century.

<http://en.wikipedia.org/wiki/Tulip_mania>

~~~
gwern
Those who read that article to the end will learn that Tulip Mania isn't much
like what they think it is (summary:
[http://www.reddit.com/r/Economics/comments/1bm9fl/the_bitcoi...](http://www.reddit.com/r/Economics/comments/1bm9fl/the_bitcoin_bubble_and_the_future_of_currency/c980pcg)
).

------
mckoss
Something bad is happening at MtGox - they quote a price of $156 for the last
trade - yet my order at $200 was not filled and is still marked as "pending".

~~~
rubinelli
It's just lagging horribly, as in, taking more than one hour between receiving
an order and executing it: <https://data.mtgox.com/api/1/generic/order/lag>

------
craigyk
HILARIOUS.

Note: I think Bitcoin is a cool idea, and a cool implementation, but I've
recently noticed it tends to create zealots who spew crazy whenever there is
an article that questions its suitability for specific purposes (gold
alternative, replace the US dollar, etc.)

From what I can tell, its the same type of people I used to associate with
libertarian+goldbugs+ronpaul, for whom 'fiat' is the worst four-letter word in
the English language.

------
jgon
This is amazing timing because I received a text message from my mother
roughly 3 hours ago wondering if I mine bitcoin and if it is something she
should look into.

If you ever wanted evidence that this was a bubble driven by speculation look
no further than how closely it resembles the dotcom bubble, right up to Joe
and Jane Mainstreet looking to get involved right as the whole thing crashes
down.

------
mathattack
Here is the thing I can't get around... If Bitcoin is open source, what's
stopping someone from setting up a competing currency? Perhaps it could have
the promise of a more optimal growth mechanism over time, or some other
feature. Once it's in use, the value of Bitcoin drops quickly, no? And what if
there are many Bitcoin-like currencies?

~~~
codeulike
Because a currency is basically a _convention_ within a _community_. Bitcoin
has a _community_, whereas an arbitrarily cryptocurrency launched next week
probably wont have, unless a lot of groundwork is done first.

~~~
mathattack
Right, but it can be done so perpetual scarcity is a fallacy, no?

~~~
chii
no - if you started your own 'bitcoin' chainblock, the existing bitcoin
chainblock shouldn't (as far as i understand it) be interoperable. That is,
its like printing your own currency - no one else will reckonize it, unless
you somehow own vast amounts of resources, and is willing to exchange that
with the new bitcoin.

------
dfc
It is not clear to me why Mt Gox did not suspend trading when the order lag
reached 20 minutes and/or once the webpage began returning "Database error"
messages.

A lot of people are commenting that this will be remembered as the day btc
crashed the second time. In my opinion a more accurate characterization would
be that today is the day that Mt. Gox crashed.

~~~
bdcravens
When Mt. Gox was hacked, everyone assumed they were done, and folks like
TradeHill were the future of BTC exchange. Mt. Gox came back, TradeHill got
out (though they recently relaunched after several months), and I'm sure that
led to a feeling of bulletproofness on Mt. Gox's part.

------
fr0sty
Just for reference: as of 2:26ET last trade I can get from the mtGox API was
for $157.

EDIT:

2:52:00 last trade: $142

2:56:58 last trade: $135

3:10:10 last trade: $117.57

3:20:52 last trade: $106.00 (this is the lowest price I've seen)

3:42:ish trades between $125-$150

------
mckoss
When real-time trading data is available from MtGox these sites show up to
date charts and seem to be the most up-to-date.

<http://coinlab.com> <http://bitcoin.clarkmoody.com/>

------
ponyous
Two of the largest exchanges seems to be under DDOS (mtgox and bitstamp). And
it wasn't 6 hours it was more like 1 hour.

~~~
tibbon
Is that the likely root of that fall?

Any idea who/why someone is DDOSing them? And why they are so effective at it?
Can't they just use Cloudfront which supposibly 'fixes' DDOS issues?

------
endijs
Looks like paranoia is over. Spread returned to reasonable amount (1$) and
price is steady going up - at the moment 190$. Fun day for Bitcoin holders.
And someone made a lot of money today.

------
eric970
I'm sure it's been stated already... And well, I'm no Bitcoin fanboy, but
didn't the price just go back up to what it was 2 days ago? That hardly sounds
like a "crash" to me.

~~~
MacsHeadroom
>didn't the price just go back up to what it was 2 days ago? That hardly
sounds like a "crash" to me.

Every fucking time.

Oh look, Bitcoins are worth what they were two or three days ago. "BITCOIN
CRASHED!"

Jesus people, really?

------
delsarto
I signed up for mt.gox about a week ago, at that time the verification queue
was >10,000 and I'm still about 5000 now. My plan was to buy one bitcoin to
gamble with; presumably that was the plan of the several thousand others in
the queue as well. So, based on that, with something like 1000 new verified
(hence able to easily trade) people coming into mt.gox a day, I'd expect this
to go on for a while...

------
xoail
So if someone decides to sell 1 bitcoin at $157, immediately the lowest price
falls to $157, causes panic among other bitcoin-ers and they all start
selling, is that how the market works? I am not sure what is going on, I
placed an order to buy at $210 but that is still pending since yesterday.

~~~
omellet
No, whatever the current highest bid is will get executed, and you'll sell at
that price, instead of $157 (assuming your offer is through the bid).

------
akrymski
I'm afraid bitcoin will always be too volatile to be used as a currency
because it's not backed by anything, and can't be inflated/deflated. The
government actually serves a useful function by controlling money in
circulation, even though it's not backed by gold anymore, at least it's stable
(as long as inflation rates are maintained) which allows it to be used as
currency. Sure everyone complains that USD is being printed, but at least that
gets people spending - using the currency, instead of hoarding/saving which is
what's happening with BTC. At current levels of volatility, merchants will
abandon the currency.

Perhaps there's a some theoretical solution out there, whereby the inflation
rate of BTC is a function of volatility ... ?

------
DigitalSea
This sudden drop sounds like an intentional attack on Bitcoin to lower the
price. I have heard stories of hackers trying to sabotage the price of Bitcoin
by forcing the price lower and then buying a whole heap of Bitcoin, sounds
like one of those attacks finally worked. Looks like all of the Bitcoin
publicity from the likes of Business Week and The New York Times has attracted
some good old fashioned currency manipulators who want a piece of the pie.

Although there is no evidence to suggest this isn't an old fashioned bank-run,
there appears to be quite a few reports of mining pools being attacked as
well. Something is definitely going on here, but overall it won't stop the
remarkable progress Bitcoin has made this year so far.

------
mattmaroon
At this point I'm just flagging bitcoin price updates. We don't need these
here.

~~~
nlh
To be fair, this isn't just a price update. This is an event that many people
have been waiting anxiously to play out - if this were just a "Bitcoin is at
$250" post, fine, I agree. But this is news - the bubble may be popping and
that's newsworthy.

------
Siecje
To buy a bitcoin you need to buy it from someone?

Does that mean a miner can only 'create' a bitcoin (or partial bitcoin) when
there is a transaction.

So how did it start in the beginning? Someone would have had to be able to
create bitcoins.

~~~
cjg
You get new bitcoins by creating a new block in the block chain (mining). If
there are no other transactions in the block that's fine.

The first block is known as the Genesis block. You might find this useful:
<https://en.bitcoin.it/wiki/Genesis_block>

------
mikecane
This is interesting. But I think it's only test to see how they can actually
crash it to zero later on.

And if we're voting here in Comments too, yes, let's have the Bitcoin
submissions. Hacking a currency is interesting.

~~~
mikecane
A downvote? Should I have capitalized They? As in all those in power who do
_not_ want to see alternative currencies succeed and have therefore
infiltrated it to see what They can do to stop it? Does that make it better?
(Yes, I expect a downvote now here too. Que sera sera...)

~~~
nichols
Dance, monkey, dance!

------
eah13
As I've said before, daily volume is the stat to watch. There's been a huge
spike in trading today: 2.3m btc on Mt Gox alone, up from 150k yesterday. If
markets stay this liquid (or some multiple of their normal liquidity) it'll be
a hugely positive sign. We're up to $200m+ of BTC traded on Mt Gox today, and
that's a huge fraction of the total value of bitcoin (~$1b). Great sign if
volume stays high from here on: the volatility should be dampened quite a bit.

<http://bitcoincharts.com/markets/>

------
theboywho
Mtgox engine has a 40 minute lag, things will eventually go back to normal.

~~~
adamisen
I think the big question is whether normal is $300 or $30... or $3.

~~~
TheCoelacanth
Seriously. It was at $30 a few weeks ago. It's hard to say what's normal when
things are changing that quickly.

------
joshuahedlund
I have a casual interest in economics, markets, currencies, etc, but I don't
understand why DDOS attacks would cause the price to drop as opposed to just
causing trade and prices to halt altogether?

~~~
dinkumthinkum
Someone else mentioned panic and that I suspect is right and part of the
source for bitcoin that differs from traditional exchanges is that it is a
much more risky currency at this point. It is very susceptible to panics, and
rightly so. I don't think anyone could seriously invest in bitcoins; it would
be the dumbest thing you could do with your money. You'd be better off eating
your money and get the caloric value. I'm just being honest about it; maybe it
will change one day.

------
fixxer
The CME (and other futures exchanges) avoid "DDOS"-like situations (basically,
I'm talking about hyperactive algos taking up too much bandwidth) by
penalizing them monetarily when they go over a limit. The penalties are large.
The same could be applied to Bitcoin exchanges and would definitely improve
performance. I'm not a buyer of cryptocurrencies, but if you're discounting
the concept because of these events, your not considering the system's
potential to evolve beyond them.

------
uptown
A good chart on price-spikes:

[https://twitter.com/BarbarianCap/status/322071032934584320/p...](https://twitter.com/BarbarianCap/status/322071032934584320/photo/1)

------
biturd
I know very little about BTC. I have a few grand and would like to but some at
around 100.00 each in hopes of doubling and cashing out. Is there a good step
by step for beginners?

I'm not worried about secrecy and track ability, more ease of use, being able
to do this all from the comfort if my computer without trips to Walgreens or
doing wire transfers. J have no intention of buying anything other than
perhaps donations to reddit and Wordpress.

------
andreash
All I can think about is this image, that my macroeconomics professor showed
to me : <http://goo.gl/zBkCr>

------
mikkom
If I read that chart correctly, price fluctuated from 266 to ~100 during one
day?!?!?

That tells a bit about the correlation of volume and volatility.

------
PhilandTim
I'm not sure what's more upsetting, the fact that so many people are careless
enough to create speculative positions in such an unconventional and abstract
financial product on short notice, or that despite all the media hype over
Bitcoins recently and what should've been foresight that this would happen,
that I didn't try to catch the wave up myself.

------
mjackson
Get ready for the massive _pop_ sound...

~~~
jgoewert
I'm going to believe that will happen soon. However, right now, it seems to me
that Bitcoin is really just going "SHIFT".

We have countries like Cyprus yanking money out of banks, so you get some
people shifting their money out of country. So, what does it matter what a
bitcoin costs if you are going to launder some cash out? 1:1 is a fabulous
laundering rate.

Buy 200 Euro worth of Bitcoin from an account in Cyprus -> Instantly (or asap)
sell for 200 Euro to an account in London. The current price doesn't matter as
long as you exchange fast enough or at a profit.

~~~
mikeash
How is someone in Cyprus going to buy bitcoins? If the exchange is out of the
country, then it doesn't help, because you already have to move the money out
of the country to get it to the exchange. If the exchange is within the
country, then the rate offered is likely to be far less favorable than
elsewhere in the world, because demand is higher.

~~~
epscylonb
If the exchange allows international traders then the price will equalise with
the rest of the world due to arbitrage.

~~~
mikeash
Arbitrage here implies the ability to move money in or out of the country
using ways other than bitcoin.

~~~
epscylonb
No it doesn't if you take your profits in bitcoin you can move them freely
between exchanges to a friendly local jurisdiction.

~~~
mikeash
There needs to be at least two things to exchange.

Let's assume that bitcoin is the only way to move money in or out of the
country. Let's further assume that a purported arbitrage opportunity arises:
The hypothetical Cypriot bitcoin exchange is selling bitcoins for 200EUR,
while other exchanges are selling them for 100EUR. So you:

Buy bitcoins on other exchanges for 100EUR each. Sell those bitcoins on the
Cypriot bitcoin exchange for 200EUR each. You've now doubled your money.

Except your money is now trapped in Cyprus. You can't get it out directly. The
only way to get it out is to use bitcoins. Because you can't move the money
directly, the only way to convert your Cypriot euros into bitcoins is to buy
them on the local exchange, for 200EUR each. If you do that, then you're back
where you started, minus whatever transaction fees you incurred.

For arbitrage to equalize exchange rates across exchanges, you need to be able
to move both currencies involved. If you disagree, then please outline your
procedure for how you'd make money in the scenario given.

------
niico
Can someone explain me why this could happen? Large amounts of BTCs moving at
the same time? What are your theories?

~~~
dragonwriter
> Can someone explain me why this could happen?

The market value of a speculative commodity can move for any reason at all, as
its entirely a consensus among the people buying and selling as to what other
people will be willing to accept for it in the future.

> Large amounts of BTCs moving at the same time

The charts from mtgox seem to show that volume picked up after the price had
plateaued and maybe dropped a little bit and then volume shot up further again
after it went through a trough and a lower peak and started back down again,
and once it got down around 200 volume dropped briefly and then picked way up
(with a lot more price volatility) again when it dropped further to below 175.

Intuitively say that the first volume pickup was largely profit taking from
the plateau and maybe the slight drop, after the slight rebound and smaller
peak, I suspect the longer drop was panic selling, and right now (or, given
the apparent delay, an hour or so ago) the high volume, high volatility
oscillation is a combination of panic selling, bargain shopping for
investment, and people taking advantage of arbitrage opportunities between the
low price at mtgox and higher prices on other exchanges. But that's mostly
just guesswork based on the look of the price and volume graphs.

Where it goes from here...well, we'll see.

------
ThomPete
So I am wondering.

Perhaps Bitcoins volatility which seems to potentially be huge is a great win
for people who study economics and bubbles?

I am aware there are several difference between a crypto currency like bitcoin
and the rest of the currencies out there but for a layman like me it seems
like it's a perfect tool for research?

------
nacho2sweet
It's a crazy un-regulated trading market were you can get in some old
fashioned market manipulation from some smart dudes and no one can do anything
about it.

Personally I think Tulips were prettier, but I know most of you coders like
bits.

------
throwawayG9
Thank you sillysaurus, I was about to go buy BTC at 270 to a local guy (I
don't have any other way for buying bitcoin here). I forgot to check the price
again, but I didn't forget to check HN ;)

------
conanbatt
Its going down hard now.

------
xoail
Well looks like it tried to come back (I saw it touch $200) but the media and
twitter picked up its fall and started the panic more than ever. Right now at
$140.

------
Xanza
I don't understand how anyone would purchase Bitcoin 'to make a quick buck'
when it was running at an all-time high. Good way to run up a deficit.

------
guard-of-terra
If it doesn't recover today I'm buying another bitcoin tomorrow!

UPD: Actually it did and now is traded >200$

~~~
r00fus
It's now at $159. It was at $164 one minute ago, and $142 a minute before
that. This volatility is making some people really really rich, I imagine.

It's also making it very dangerous to use BTC as a way to shuttle money.

------
supervillain
I predict that Bitcoin will be banned in the U.S. before it would be adopted
by any countries.

------
programminggeek
Someone is making out like a bandit on this deal.

------
otikik
Surprise!

------
michaelochurch
Called it (sort of): <https://news.ycombinator.com/item?id=5522100>

Actually, I have no idea whether there's any causality, and I certainly would
not have predicted the effects to be felt today, as opposed to months later
when a more mature margin system came into place.

------
dlhavema
last post i heard said it was $90.. bitcoin fluctuates more often than most
girls i know change clothes.

------
trent_91
See, it's times like this people should remember that bitcoin is not yet a
currency and is rather a toy for things like <http://bitcoinpyramid.com/r/91>
and <http://satoshidice.com>, or for speculators.

~~~
fiatpandas
Oh weird, you accidentally left your referral ID attached to the URL for the
pyramid site.

