
Bitcoin hits year-high of $20 - redegg
http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv
======
hnolable
Waiting for tokenadult to repost his Bitcoin comment:
[https://www.google.com/search?q=site%3Anews.ycombinator.com+...](https://www.google.com/search?q=site%3Anews.ycombinator.com+%22greatest+contribution+the+Bitcoin+experiment%22+%22points+by%22)

In all seriousness though, there is one interesting thing that is different
now from last time. Last time being the previous frenzied Bitcoin price hype
bubble that peaked at 31$. No one fears that Bitcoin will crash to 0/pennies
anymore once the price stops climbing, at least not due to standard market
forces. It's pretty well established now that there is some baseline demand
that will form a price bottom (assuming no large network attack occurs). What
effect that will have on this bubble (if one forms) is hard to say but it
should be interesting and not a repeat of last time.

~~~
SlipperySlope
Sure many say that now. But what if public greed takes over again and prices
rapidly approach say $60, then the price rise would be hyperbolic and crash
back to somewhere below here.

... just along for the ride with the bitcoins I mined and am hoarding.

~~~
btbuildem
Well, you sell high, and buy back low, presumably.

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cs702
All else being equal, the more people who use Bitcoin (whether as a store of
value or medium of exchange), the greater the demand for it -- and therefore
the higher its price, because the supply is fixed.

This means that in the long run, Bitcoin's price will be positively correlated
with its adoption.[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/)

~~~
porter
Of course all things are never equal. The problem with investing in bitcoins
for the long-run is that eventually governments will make it illegal. Sure,
they can't easily stop you from owning bitcoins, but they can ban businesses
from accepting the coins, which would of course collapse the currency
overnight. Governments don't like competition.

~~~
efnx
I'm still wondering _why_ governments see it in their best interest (if it is
in their best interest) to make it illegal. I know they can't track their
citizen's activity on the network but when an individual cashes out, they
would pay taxes on their earnings.

To me it seems to be a choice of what does big brother value more - money or
information?

Banning a business from accepting bitcoin would be as hard as telling a
business they couldn't give stuff away for free. I think they could shut down
the exchange portals, but they couldn't keep people from trading goods for
BTC.

~~~
chii
its not the gov't who _wants_ to crush bitcoins (but they will probably be the
one actually implementing the measures). A currency, and the subsequent
control of it, will lend lots of priviledges and power over those who control
it.

Currently, the central banks (the Feds, and the various EU central banks)
control the currency (by control, i mean they are the only ones able to print
more of it). Now, i don't really know who controls those banks, but i m
willing to bet that they are some powerful vested interests there. These
people do not like the gold standard, simply because having a gold standard
strips them of their power they currently enjoy.

Bitcoin, being a good candidate for a digital gold standard, will be targetd
just like the gold standard was targeted in the 70's in the US of A. I really
wish bitcoin could become recognized by the normal peoples of the world, but i
think it can't, because there is no force behind it. The monopoly on using
violence is the only way to have a currency adopted, and i don't see bitcoin
getting any of that. my prediction is that bitcoin will be relegated to being
a niche currency.

~~~
dlitz
My prediction is that Bitcoin will neither be illegal, nor will it replace the
U.S. Dollar, like some of its proponents hope. Most likely, it will continue
to be a useful vehicle for transferring money online.

I see it competing more with companies like Western Union and PayPal than with
the USD.

------
mrb
Plus Avalon _just_ started shipping the first mining chip (
<http://blog.zorinaq.com/?e=70> ). And they announced they will only accept
bitcoins as payment for the 2nd batch of 500 units @ $1500 ea, which starts
selling tomorrow... That potentially means people buying $750k worth of
bitcoins for a batch that will sell out really quickly. This will surely push
the exchange rate even higher than $20.

Edit: there is no resistance upward right now on MtGox. $300k of buys would
push to $24. $500k to $30.
<http://bitcoincharts.com/markets/mtgoxUSD_depth.html>

~~~
nextparadigms
We're getting into the speculation game again. I don't think this is healthy
for Bitcoin. Let Bitcoin grow at its own pace instead of promoting articles
that say Bitcoin is now at $18..and now at $20..and now at $24.

If you keep doing that, it _will_ crash again, at least down to $15.

~~~
runn1ng
Speculation _is_ a part of the free market :)

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api
Bitcoin has speculative bubbles, fraud, robberies, money laundering, gambling,
and Ponzi schemes. I think that takes care of all the qualifications for a
real currency. Am I missing anything? :)

~~~
spoiledtechie
References to each of your claims.

~~~
mrb
I don't think api was criticizing Bitcoin. All these evil activities are very
unfortunate, but on the other hand they are indicators that a currency is
valued and liquid, which is a good thing in itself.

~~~
api
I was actually making a bit of humor, but it really is true. All these things
are common to all forms of currency I know of, so it's sort of a sign of
Bitcoin's coming of age.

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raverbashing
It would be interesting to compare BtC not only to the USD, but also to a bag
of currencies, to see if it relates to a USD devaluation 'compared to the
rest' (usually JPY, EUR, GBP)

~~~
tcgv
I guess that, according to the _efficient market hypothesis_ [1], you can
expect the price of bitcoins in other currencies to be the same as the price
in dollars adjusted by that currency exchange rate. Otherwise easy profit
would be possible through arbitrage, and after some people took advantage of
the price difference to make some money the prices would stabilize at a point
where profitable arbitrage would not be possible anymore.

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

~~~
raverbashing
" according to the efficient market hypothesis[1], you can expect the price of
bitcoins in other currencies to be the same as the price in dollars adjusted
by that currency exchange rate"

You're right, apart from market inefficiencies that's right.

But I'm proposing something else, to analyse the variation (which, of course,
for BtcGBP is effectively BtcUSD * USDGBP) against other currencies to see if
it's (for example, in this case the price of BTCUSD rising) if it's a dollar
devaluation or if it's BTC that's increasing in value

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erode
Your title isn't clear, and it's not even February yet, so I assume you meant
"over the last year".

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jpadkins
Anyone else think this looks like the Gartner Hype cycle?
<http://en.wikipedia.org/wiki/Hype_cycle>

Maybe I need to get back in to bitcoin mining...

~~~
MacsHeadroom
Yes.

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philfreo
Plug for my "fastest way to lookup bitcoin price" website:

<http://bitcoinprices.org/>

~~~
yebyen
As long as we're plugging that...

<http://preev.com>

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snake_plissken
Liquidity is the major issue for the foreseeable future.

~~~
MacsHeadroom
Bitcoin is highly liquid and only becomes more so each day.

