

Bitcoin price soars 40% in the last month - cpeterso
http://arstechnica.com/tech-policy/2012/07/bitcoin-price-soars-above-9-for-the-first-time-in-almost-a-year/

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chaud
I would imagine it also has something to do with the guy that has been paying
people 7% interest per week to hold on to their bitcoins:
<https://bitcointalk.org/index.php?topic=50822>

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alaaibrahim
Sounds like a Ponzi scheme

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jlgreco
It could also be an idiot who is trying to engineer some sort of stability in
the currency at his own expense. That is the only other thing I can think of,
and it seems quite unlikely.

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potatolicious
Is a wildly fluctuating valuation supposed to be a _good_ thing for a
currency?

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elmuchoprez
Calling bitcoin a "currency" seems a bit off to me. I think of currency as the
thing you use to buy a gallon of milk or buy a movie ticket. It's for
facilitating day-to-day transactions. But nobody (or almost nobody) is using
bitcoins to buy groceries or fill up their car with gas.

Bitcoins are more like stocks in my opinion. People don't use stocks to buy
day to day items either. They're investments, some riskier than others. And
that risk, which would be catastrophic to a currency such as the US dollar, is
much more easy to tolerate if it's just another non-currency investment
vehicle that you can choose to participate in or not.

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potatolicious
This doesn't seem to make sense to me - BTC as an investment implies that
there is some external value to BTCs beyond merely an investment vehicle (see:
houses, which are useful for living in, power companies that produce
electricity, etc).

If BTCs are not useful as an actual currency, then isn't it _purely_ an
investment vehicle that isn't backed up by any sort of real value, present or
future?

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cookingrobot
Investments just require an expectation that they will rise in cost. Think
baseball cards - they don't "do" anything or really have any value, but
there's a pattern that rare commodities rise in cost over time. Bitcoin was
engineered to stay a relatively rare commodity.

Stocks are the same. The value of a stock is really only it's dividend, and
many stocks don't (or can't) pay much. The cost has little to do with the
value.

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blhack
Okay. I have $10, and I want a bitcoin. What do I do?

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politician
You'll need to find a currency exchange, open an account, and buy BTC with
your 10 USD. It's the same thing you'd need to do if you wanted to buy yen or
euros.

<http://www.mtgox.com> is one such exchange.

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rorrr
> _It's the same thing you'd need to do if you wanted to buy yen or euros_

No, it's not. I can go to pretty much any local bank and buy euros.

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shawnz
The procedure is the same. Adaption is not. Of course.

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rorrr
> _The procedure is the same._

No, it's not. I can buy currency with cash, it will take me 10 min to get them
from a local bank.

With bitcoins you have to jump through all kinds of hoops and pay all kinds of
fees.

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haakon666
You pay fees for currency conversion at your local bank to. It is just hidden
in the spread between their rates and the market rates.

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rorrr
I had to travel to Europe recently, and for my bank the difference between the
market rate and what they gave me was less than 1%.

Now, what % of $20 would be gone by the time you get your bitcoins?

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jasonlingx
I really really wonder what's driving this. Some say it is money flocking to
safety from the Euro crisis. I'm not convinced. I'm guessing it's more likely
the increased media attention on bitcoin recently attracting speculators.

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notaddicted
Another factor is that the cost/reward for mining will double (assuming same
hashing power for the network) in the mid future. Quoting
<http://bitcoinx.com/profit/> "When the block count will hit ~200000 some time
around December 2012 the generation reward will go down to 25BTC. This might
partly be compensated by falling difficulty, raising prices, higher transfer
fees, etc."

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seanalltogether
If you were an online gambling company why WOULDN'T you use bitcoin? As long
as you're not running a money exchange like mtgox in tandem, doesn't it
isolate you much better from legal problems?

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elmuchoprez
These huge jumps (and crashes) in bitcoin valuation are precisely why gambling
sites can't use them as proxies for cash... there's just no guarantee of
parity between what a dollar is worth and what a bitcoin is going to be worth
tomorrow.

Some sites try this schtick from time to time using things like long distance
minutes on calling cards, but even those seem to fail fairly quickly because
as soon as there is a major price disruption in whatever proxy you're using,
you get screwed hard.

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ewillbefull
> why gambling sites can't use them as proxies for cash

Wrong, it's the users who can't use them as proxies for cash. A bitcoin casino
is currency agnostic. It deals exclusively with bitcoins.

There are things like SatoshiDice which allow you to gamble with no possible
cheating, with tangible probabilities etc., and these effectively _must_
operate currency agnostic. It's up to the user to decide how the exchange
spread effects his/her bet.

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pavel_lishin
Does that casino also pay its hosting costs, its developers, its customer
service agents, etc with bitcoin as well?

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ewillbefull
<http://www.satoshidice.com/>

* They can run their website with very few computers. It runs completely over Bitcoin, which is decentralized.

* The owners do not need to provide customer service, it's verifiable and they can't screw people over without everybody instantly knowing.

* This could be developed by a single person and never need to expand or compete. As long as the service is always running, he can take a _predictable and transparent_ commission out of losing bets. Hell, you'd even know exactly how much money the operator is making, and perhaps what they're earning against the exchange rate.

And this bitcoin casino is partly responsible for the immense jump in the
number of transactions over Bitcoin in the last few months:

<https://blockchain.info/charts/n-transactions>

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pavel_lishin
I know that millions of people sitting at penny slots prove me wrong every
year, but what fun is inserting a digital coin and waiting for a yay/nay
response from a server?

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jasonlingx
Bubble

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dllthomas
Bobble?

