
Bitcoins reached $300 - kolinko
Here are the charts:
http:&#x2F;&#x2F;bitcoinity.org&#x2F;markets
A screenshot:
http:&#x2F;&#x2F;i.imgur.com&#x2F;kW1CJz2.jpg<p>And a link to the front page of WSJ&#x27;s financial section today:
http:&#x2F;&#x2F;m.imgur.com&#x2F;4bcGGZG
======
dwaltrip
Damn. Sometimes I can't believe it. I have been following bitcoin quite
closely for over 18 months now. The ecosystem is growing in ways only a few
bold people have predicted. Fundamentally, it is about belief and trust. The
protocol has largely proven itself. People are starting to believe in bitcoin.
This is why the price is going up.

For those who say "It isn't being used as a currency!" here is my response:

Bitcoin excels as a secure protocol for tracking account balances in a
decentralized, seemingly untamperable fashion, as well as transferring value
very quickly to anywhere in the world at the sole, uncensorable discretion of
the owner. It is both a payment protocol and a distributed ledger. A lot of
people want these unique feautures, even if they can't buy groceries with it
yet. Those types of merchants will always be the last to adopt.

Bitcoin also has the pontential to be used in diverse ways as "progammable
money". It has a built-in API, and features like timelock, mutli-entity
transaction signing (built-in escrow), and others that I don't fully
understand. An AI bot could utilize bitcoin (might have trouble with a bank
account!).

Also, see gold and its $8 trillion of largely made-up valuation (not stemming
from industrial/ornamental demand). You don't see gold owners buying things
with a few shavings ;) Bitcoin is far superior to gold in almost every way (it
isn't quite as shiny tho). If society can make up several trillion dollars of
monetary valuation for gold, then I definitely can picture bitcoin snagging a
pretty decent slice (right now it is only 1/3,000 the size gold).

People recognize this potential, and thus choose to invest. The first mover
advantange is massive. Network effects are very important - it will take quite
the innovation to unseat bitcoin, and it has to be something that can't be
simply copied/integrated into the existing protocol. The whole thing is sort
of a self-fullfilling positive feedback loop. I'm a cautiously strong
proponent, and find it absolutely fascinating to watch. These kind of events
don't unfold that often.

TL;DR - magic internet money!

Sorry for the multiple edits. I wrote this on my phone.

~~~
chii
i wish bitcoin's equating with gold is going to last - but i believe that
because bitcoin's uncontrollability (from the banker's point of view), it will
be stamped out as soon as it threatens fiat currencies as the dominant means
of transfer.

~~~
vdaniuk
Stamping out a global, decentralized currency with mass adoption won't be
easy. Even if bitcoin will be legal in 10% of countries it would be enought to
bridge bitcoin-fiat exchanges.

~~~
_pmf_
> Stamping out a global, decentralized currency with mass adoption won't be
> easy. Even if bitcoin will be legal in 10% of countries it would be enought
> to bridge bitcoin-fiat exchanges.

Especially if trading would just move to Tor-like channels if this happens.

------
grey-area
If I had money in bitcoin I'd find this movement terrifying. It is not
correlated with broader economic movements or the inflation rate of USD, and
has all the classic hallmarks of a bubble, including true believers telling
everyone it is different this time, increasingly wild oscillations, and
exponential growth.

I find bitcoin really interesting, love the idea of a cryptocurrency, and also
find the idea of a deflationary currency interesting. I've no argument with
that side of it. Obviously there are issues with things like exchanges which
seem to be almost entirely run by amateurs who think that a VPS or leased
server is secure enough for financial transactions, but those problems could
go away in time, they are not inherent to the currency, though they're another
reason to be cautious at present.

However there are a few issues with the use of the currency which can't easily
be fixed. What I find more troubling is the commitment to anonymity and lack
of accountability from the creators - it is designed to allow anonymous
transactions, and the users seem to be resistant to regulation. Those two
things mean people can engage in bitcoin theft, fraud, laundering, cornering
the market, setting up bogus or insecure exchanges/banks, with impunity and
anonymity. Without proper regulation, insurance, compensation, which means
identification of users and verification of transactions and everything that
goes with that, I can't see bitcoin spreading beyond enthusiasts.

I wouldn't use it for anything important because of the lack of regulation and
controls, but do think it represents something of the future of currencies,
after our latest experiment in hyper-inflationary fiat runs its course (see
Fiat Money Inflation in France for a previous experiment). It'll be
interesting to see if other cryptocurrencies are born which take a different
direction and attempt to build in accountability and responsibility to secure
transactions and allow them to be policed effectively by tying them to real
world identity. Anyone know of any?

~~~
TomGullen
Look at Bitcoin closing price on a log scale:
[http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxU...](http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=360&i=&c=0&s=&e=&Prev=&Next=&t=C&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=1&p=0&)

Not so scary anymore! From what I understand, people should be looking at this
sort of data on a log scale.

~~~
leokun
Why?

~~~
TomGullen
Take a look at this explanation:
[http://www.fool.com/foolfaq/foolfaqcharts.htm](http://www.fool.com/foolfaq/foolfaqcharts.htm)

~~~
leokun
Ah, that makes perfect sense. With a logarithmic chart, each change is seen in
the context of the current value. Each change is not equal to every other
change. When bitcoin is worth $1, and it goes up one more $1, that's a much
bigger change than when at $300 it goes to $301 but to have the line the same
length is kind of misleading.

------
ck2
Somewhere buried on my hard drive I have a fraction of a bitcoin that people
were giving out for free when bitcoin first came out to encourage adoption.

I really need to find it, it's actually worth money now...

ps. that pizza is now worth $3 Million

~~~
valevk
What about Ebay announcing that they might accept Bitcoins?

~~~
nikcub
I've been buying up in the last week (previously I was in at 5, 10, 12$ and
sold at the last peak at $240) because I think PayPal will jump in soonish.

------
shubhamjain
When Silkroad went down I expected bitcoin to take quite a slump but what has
happened is contrary. I am not implying that anonymous transaction s for
illegal use are the only thing bitcoins are good for but its my guess that it
forms a major part of the group that actually use bitcoins for buying stuff. I
am not sure why would anyone would get troubled in buying bitcoins for
purchasing rather than punching a CC number. What is pushing its value, I am
not sure but I am really spectical that it has to do with bitcoin's
popularity.

~~~
jafaku
Most of the people of the world can't really have a bank account, let alone be
eligible for a credit (card). With Bitcoin you only need internet access.

Most of the people of the world can't really save either. Cash loses value
over time, gold is hard to validate and keep safe, and is even banned in lots
of places. Bitcoin to the rescue! Now everyone can start saving, and even be
rewarded for that.

I could go on all day long, the benefits are endless. Just live in a shitty
country for some time and you'll figure it out pretty fast.

~~~
rmc
_Most of the people of the world can 't really have a bank account, let alone
be eligible for a credit (card). With Bitcoin you only need internet access._

Yeah cause internet access and a modern computer are _waaaaay_ more common
than bank accounts or prepaid credit cards....

~~~
GFischer
They are, if you define modern cellphones as a "modern computer".

Digging around, I found they're almost equal actually, and cellphone users
vastly outnumber bank account holders (cell phone users exceed toilet access
!!!).

50% of adults worldwide have an account at a formal financial institution.

60% of adults worldwide have internet access, with 39% having home internet
access (the remainder having shared or limited internet access).

80% of adults have cell phone access.

Sources:

[http://econ.worldbank.org/](http://econ.worldbank.org/)

[http://en.wikipedia.org/wiki/Global_Internet_usage](http://en.wikipedia.org/wiki/Global_Internet_usage)

[http://www.gallup.com/poll/159815/home-internet-access-
remai...](http://www.gallup.com/poll/159815/home-internet-access-remains-
reach-worldwide.aspx)

newsfeed.time.com/2013/03/25/more-people-have-cell-phones-than-toilets-u-n-
study-shows/

------
mtgx
Bitcoins should lose 3 zeros, like many countries do to their currencies.

So 1 new Bitcoin = 0.001 old Bitcoins = $0.3

I think I'd like that more than just starting naming them something else all
of the sudden, and call them Satoshis or whatever, and then when the Bitcoin
reaches $10,000 we'll probably have to use new names yet again.

Cutting the zeros could be a little confusing at first, but I think less
confusing than starting talking about Satoshis, or mCoins or whatever, all of
the sudden.

~~~
svantana
>Bitcoins should lose 3 zeros, like many countries do to their currencies.

I've never heard of that, although the opposite has been done plenty of times.
But that's rarely a sign of a healthy economy, most of the time it's done out
of desperation I would think.

~~~
dagw
It was very 'popular' in the 80's and 90's for countries coming out of high
inflation. Off the top of my head, Brazil, Peru, Russia, Poland, Yugoslavia,
Turkey and Bulgaria all cut three or 4 zeros from their currency to make the
numbers easier to handle and to try to mark a psychological end to previous
inflation.

Zimbabwe did it about once every other year or so back in the mid 2000's.

~~~
bgaluszka
Mathematically speaking you are talking about dividing but GP talks about
multiplying. That I've never heard of too.

~~~
dagw
Sorry. Realized I completely misread both posts.

------
phaed
To the moon! ┗(°0°)┛

~~~
achalkley
Amen.

~~~
phaed
$320 now.

------
jaibot
In this thread - people confusing up arrows with "good".

(Rapid deflation is not a great thing for a currency in general)

~~~
Semaphor
I'm wondering, is it as bad for a currency that still rather rarely get's used
exclusively? I don't have a lot of economic knowledge (only what I learned in
high school, though one of my majors was economics & politics; Germany, school
until 13th grade) but it just seems to me that not all the normal rules would
apply in the case of bitcoin.

------
jackgolding
Looking at the chart it doesn't seem as volatile as mainstream media leads us
to believe.

~~~
this_user
Your average currency pair moves less than 1% on almost all days. Moves above
1% are rare and days with moves of several percent are extremely rare and
occur a couple of times a year at most. BTC, on the other hand, may be worth
anything from 250 to 60 USD a day. That is the reason why BTC as a currency is
of little use. You cannot do serious business with something like this unless
you immediately hedge all of your exposure. In a larger organisation that
would be impossible and, on the other hand, only means that someone else is
holding the bag for the next crash.

BTC is driven by little to no fundamental data. Its exchange rate is subject
to pure mass psychology which is why it repeatedly goes through boom and bust
cycles. This is not going to stop unless something like a real BTC economy of
non-trivial size develops. But I think it very unlikely for this to happen for
the aforementioned reason of volatility and the fact that BTC is by design
deflationary. BTC's deflationary properties would choke off any such economic
system that is based on this crypto currency.

All in all, I am of the opionion that BTC is an interesting experiment and a
case study in speculative behaviour. The difference compared to former manias
(see [1] for historic examples) is that in BTC the process plays itself out at
an extremely accelarated pace. Maybe this is even what the creator(s)
intended. Maybe they created a purely electronic ecosystem of speculative
behaviour to be able to study and better understand the phenomenon of
financial bubbles. This would certainly explain the 'Satoshi' entity's non-
interference.

[1]
[http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions...](http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds)

~~~
jackgolding
This is the kind of response I wanted to invoke - that you for your insight!

I guess the closest 'real' currency examples would be something like
[http://www.xe.com/currencycharts/?from=ZWD&to=USD&view=10Y](http://www.xe.com/currencycharts/?from=ZWD&to=USD&view=10Y)

------
adrianwaj
I wouldn't say it's a bubble just yet, because it's too close to the last
ramping which was a response to the Cyprus confiscations. This is just a
response to what many would perceive as the beginnings of capital controls in
the USA... it's probably the tail end of that. Another "Bitcoin Bubble" to me
would be around $500 in the next few days... thus entailing some burst or
large correction.

[http://www.foxbusiness.com/government/2013/10/17/jpmorgan-
ch...](http://www.foxbusiness.com/government/2013/10/17/jpmorgan-chase-denies-
new-capital-controls-on-accounts/)

A better word would be "recapitulation."

~~~
oleganza
Last rally started at $14 and crashed into $100. This time we started at $140
around Silk Road shutdown. If this history repeats itself, the bubble may
crash into whopping $1000.

~~~
adrianwaj
The main argument I heard against bitcoin from a Russian tycoon during the
Cyprus shenanigans for bitcoin being a good store of value was that there was
no quick way to liquidate large sums of bitcoin if you wanted to (I presume
into some fiat currency for spending.) An interesting point: it wasn't really
about the currency losing value it was about liquidity. But the counter-
thought is that it's better having a store of value that one can't spend than
not having anything at all! At least time is on your side with bitcoin in
terms of liquidity, it's not with fiat if you look at capital controls on the
increase. Capital controls are an issue especially if you want to move between
countries. Anyone with $100mil+ and not in bed with government should move
into bitcoin and get a good anonymizer .. the rest of us just get a free ride.
Assume some goverment will then come after (if not those bitcoins) then you.
And so the end game of bitcoins is when goverment ends up with most of them
(or at least wanting them.)

~~~
oleganza
Many people bet on Bitcoin becoming world money. Then you don't need to
"liquidate" it at all. At the same time, market evolves: the more people
invest tomorrow, the more btc you will be able to liquidate.

When Bitcoin becomes a world currency, then capital controls wouldn't matter.

~~~
adrianwaj
I know that. Bitcoin's main risk is that it can make a person's fortune known,
and accessible (or rather vulnerable.)

"You have 50,000 bitcoins.. transfer them to me now or alternatively do xxxx
now .. or else." In fact some sort of time-lock or trusted partner would be a
good busines idea, so that someone couldn't just come with a gun to your head.
It can't become a world currency because it makes people too personally
vulnerable... at least as it stands now, but it's a really good start.

~~~
oleganza
People can find out about your coins the same way as they find out how much
gold you have.

~~~
ceejayoz
What website would you go to to find out how much gold I hold?

~~~
oleganza
What website will tell you how much BTC do I hold? If you can trace from some
exchange or a merchant my identity linked to some bitcoins, you can equally do
that with a gold dealer. Of course, you can see where bitcoins are moved, but
that won't tell you much: they could be equally sold or simply relocated.

------
csomar
Hate BitCoin or like it. Let's agree, nobody can explain this; and nobody can
predict BitCoin value or usage.

Some top HN members criticized BitCoin heavily. I, for one, invested $0 in
BitCoin.

But we can be sure about something: Bitcoin is weird, new and innovative. It's
something completely new and has no rules. The game is open. How the market
will react will not depend on your limited (or wide) experience.

Bitcoin can go all the way down to $0 and the rest is history. It can go up
and widely used that it changes history. I'll be just watching though.

~~~
oleganza
1\. Bitcoin can be explained if you take time and study it. It has no new or
strange constructs in it. Hash functions and digital signatures were around
for decades. You may also like this glossary:
[https://github.com/oleganza/CoreBitcoin/blob/master/GLOSSARY...](https://github.com/oleganza/CoreBitcoin/blob/master/GLOSSARY.md)

2\. Bitcoin has rules and those rules are strictly followed and very strictly
specified in actual software.

~~~
maxerickson
The block size blockchain fork was resolved on an ad hoc basis. There was
nothing in the software to deal with it. Miners lost rewards over it (or at
least, wasted cycles).

~~~
oleganza
Software has bugs. They need to be fixed and some people may lose money. This
story only proves that incentives are correctly working in favour of everyone:
miners _voluntarily_ chose to lose rewards and stay compatible with the older
network to not shake confidence in it.

The point is not to have a perfect system (which is impossible), but to have
proper motivations for everyone to play along instead of cheating and
stealing.

~~~
maxerickson
Well, now we are running away from "strictly followed" and "very strictly
specified".

I guess I would be happy if you always posted a disclaimer with such claims,
something like "But of course all software has bugs and who knows how severely
a given bug in the bitcoin software will impact the network".

------
atmosx
Awesome. I wish (as always) I hadn't sold mine earlier. But if I didn't I
would probably sold them now and wait to see what happens.

Thing is, this fluctuations are not connected with any sort of events that
make sense or justify the price sky-rocketing which makes me think that the
whole thing is driven, manually.

When the whale leaves the sea, BTC will turn into peanuts. Till then...

~~~
pja
It's something of a paradox isn't it: If nobody had ever sold their bitcoins
in return for something else, then there would be no market for bitcoins at
all and bitcoins would be irrelevant.

------
heliodor
It seems to me the real price is lower as depicted by Coinbase or CampBX which
have a stable and reliable system, unlike MtGox at the moment. I think the ~6%
higher price on MtGox is a reflection of people's lack of trust in MtGox being
able to provide withdrawals in a reliable and timely fashion.

------
harshpotatoes
So, I don't understand. Why does bitcoin have such high deflation?

Is this just because there has been a constant stream of people switching
their traditional currencies for bitcoins at a rate faster than bitcoins can
be mined?

Presumably at some point bitcoin will stop being deflationary if it ever wants
to be useful as a currency. When does that happen?

Why do people buy bitcoins if it isn't really useful as a currency yet? I
mean, there are supposedly 3.5 billion USD worth of bitcoins in existence, but
if I want to buy any sort of physical product or pay for utilities, I have to
use a traditional currency.

Currently it appears that bitcoins are most popularly used for less than legal
purposes (payment for drugs, payment for services to avoid taxes, payment for
blackhat services). Does this mean that by buying into bitcoin, I'm
essentially providing USD to these black market activities which might not
have had USD to begin with?

Many questions I don't understand...

------
sojorn
Is there any serious research paper on BTC (and not an enthusiast blog post)?

~~~
oscilloscope
Yes, it was originally proposed in a paper.
[http://bitcoin.org/bitcoin.pdf](http://bitcoin.org/bitcoin.pdf)

------
marginview
it fails as a store of value and therefore is not money which is obvious given
its volatility. Bitcoin is best described as a computer programme which sells
itself on features written to provide assets to those with the mindset
desiring such assets - libertarians, those anti fiat currencies, Austrian
economists (more recently now gold is letting them down) etc... Such mindset
are sure to only increase given the Wall St ownership of the Federal reserve
so Bitcoin will continue to sell until its technology is made obsolte. If that
takes years then bitcoin $100,000 soon enough but if tomorrow then hello
bitcoin $0

~~~
VexXtreme
What would make BTC obsolete?

------
Kiro
Brace for impact.

------
seleucia
This reminds me increasing at gold last year.

------
vinchuco
where do you personally buy/sell BTC ?

~~~
WayneS
The easiest for the US is coinbase.com. Unless you want to buy a lot. But they
are not an exchange so you can't setup buy/sell orders.

~~~
kolev
Not really if you want to trade. They are playing safe instead of having
balances in USD and BTC so that you don't need an ACH for each buy/sell, which
takes a week.

