

Bitcoin has everything it needs to become a major speculative bubble - hodgesmr
http://www.businessinsider.com/im-raising-my-bitcoin-price-target-to-400-2013-4

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wladimir
Can we stop with the bitcoin topics that are solely about the price? Sure, if
a company starts accepting it it's news, if something happens to bitcoin
network it's news, but not this. This is getting crazy. This is not 'pimp your
currency' news (yes, I say that as a bitcoin dev). I'm sure everyone one HN
has made their mind about it by now anyway...

~~~
hodgesmr
Hacker News: for when all you really want to talk about is Bitcoin and Aaron
Swartz.

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beedogs
I'm raising my LOL target to over 9000.

Also, mtgox is down; has been for about an hour.

~~~
cinquemb
api is still working…

<http://data.mtgox.com/api/1/BTCUSD/depth/fetch>

~~~
beedogs
That's been displaying the same price ($141.32001) for the past hour, though.

~~~
oleganza
Price doesn't change because mtgox is down and people cannot trade.

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sturadnidge
I like the part about bitcoin 'not having amy fundamentals to fall back to'.
As if fiat currencies are any different.

~~~
Thrymr
The USD has the US government behind it. Whatever you think of that, it's not
nothing.

~~~
willurd
"The USD has the US government behind it"

What does that even mean?

Also, the US government doesn't really have anything to do with the USD; the
USD is managed solely by the Federal Reserve, and the Federal Reserve is _not_
a branch of the US government (it's a privately held bank; look it up).

"it's not nothing"

It's worse than nothing. The Federal Reserve can and does change the value of
the dollar at will (it's called inflation). That's why you can buy a loaf of
bread with your 5 bucks now, but in 10 years your 5 bucks probably won't even
buy a candy bar.

Contrast that with gold. In 1913 (the year the Federal Reserve was created),
you could buy a house with 100 ounces of gold. 100 1913 dollars is worth
roughly 2 2013 dollars, but 100 1913 ounces of gold is worth exactly 100 2013
ounces of gold, and you can still buy a house with it (100 ounces of gold is
$156,740 USD; no, this won't buy you a house in New York, but it will in most
other parts of the country). That's what it means for a currency to be backed
by something of value. Value doesn't change.

~~~
fr0sty
Just to pick some other dates: 100 ounces of gold in 2000 was worth ~$28k
which wouldn't buy much house anywhere.

Also, comparing gold @ ~$20/oz in 1913 to a dollar stuffed under a mattress in
the same year is a bit of a false comparison. The Compounding the same $20 in
10year Tbonds (a decent 'risk free rate' starting in 1928 (the first year I
could find data) would yield ~$679 in 2000 (outperforming gold by over 2x) and
~$1385 in 2012 (underperforming slightly, but with almost no volatility).

~~~
willurd
You can't compare gold just sitting there with USD gaining interest in an
investment for 90 years. Well you can, but then you'd be making a ridiculous
comparison.

~~~
fr0sty
What is ridiculous about that?

Tbonds are pretty much the definition of the "risk free rate of return" for
USD. Is there an alternate (non-zero) "risk free rate" for gold that you would
like use instead to make comparisons?

~~~
willurd
Because you're comparing the value of one thing over time against the rate at
which you would gain value in a different investment over time. I can see an
argument for why you might say tbonds have been a better _investment_ than
gold, per se, but that's not what I'm talking about. I'm talking about the
necessary volatility of fiat money because _it's not backed by anything of
real, unchanging value_. I'm talking about the purchasing power of the same
amount of gold and USD over time.

~~~
fr0sty
> it's not backed by anything of real, unchanging value.

Are you actually arguing that gold's value does not change?

Also, what are you using to measure the "volatility" you claim fiat money has
so much of?

~~~
willurd
"what are you using to measure the "volatility" you claim fiat money has so
much of"

Inflation.

And 'unchanging' wasn't the best choice of words, but my point is that gold is
not subject to the whims of monetary policy makers because you can't create
more gold. Gold's value only changes when more gold is discovered.

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Sambdala
It seems like a price target of $400 misses the point.

Bitcoin is likely making order of magnitude changes in value, one direction or
another.

Edit: Oops, didn't read the article first, the author isn't actually setting a
price target because he doesn't like Bitcoin, but I still stick by my
statement.

------
Irregardless
I'm sticking to my price target of $2 by late June/early July[1].

Still no sign of adoption by any popular retailers, the majority of demand is
coming from speculators, and the exchanges are getting slower every day (MtGox
is down as I write this and the queue to open an account is several days
deep).

At this point, BitCoin is still more of a toy than a currency.

[1] <https://news.ycombinator.com/item?id=5324722>

~~~
iSnow
A toy with a 1.4 bn market cap.

Of course no one - including you - will remember your prophecy come August,
but I am pretty sure you are wrong. Why? Because history does not repeat
itself, esp. not when it comes to speculation.

~~~
matwood
_Why? Because history does not repeat itself, esp. not when it comes to
speculation._

Haha, that's funny. See tulips, housing, Iraqi Dinar, CO Silver industry
crash, gold in the 80s, the list goes on.

~~~
iSnow
All different asset classes. The last gold bubble was in the 80s, 30 years
from now.

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ohwp
Noob question: as I understand Bitcoins are linked to values of other
currencies. Is it possible to link it to a stable non-currency value/index?
(I'm thinking about the Big Mac index here:
<http://en.wikipedia.org/wiki/Big_Mac_Index>)

Or to put it in another way: it it possible to link a Bitcoin value (or any
currency) to an index not influenced by greed? Could it be linked to the
number of people alive for example?

~~~
icebraining
You can only determine the Bitcoin value in another index if there are trades
being made of Bitcoins for the item being indexed.

So if you want to create a BTC/Number of People Alive exchange rate, you need
people trading lives for Bitcoins, which is a bit macabre.

------
hazov
I post about my beliefs relating to bitcoin/cryptocurrency right here:
<https://news.ycombinator.com/item?id=5486245>

Would love to see much discussion about the topics.

Anyway the post (posted 2 hours ago) is not in the front page anymore.

------
tlrobinson
I'm sure Business Insider's _31 posts about Bitcoin in the last week_ has
nothing to do with it...
[http://www.businessinsider.com/s?q=bitcoin&vertical=&...](http://www.businessinsider.com/s?q=bitcoin&vertical=&author=&contributed=1&sort=date)

------
venomsnake
So - if the bitcoins quadrupled in value for a month this means two things:

We have 4 times as many goods and services offered for bitcoins or speculative
bubble.

So unless we have lots of new businesses that accept them ... the market for
bitcoins will be as fun as the Apple one.

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nicholassmith
Slightly away from the crux of the article, I've seen a few people mention
hacking as a reason why BitCoin is still risky. Are they talking about hacking
of BitCoin at the low level, or hacks on BitCoin repositories?

~~~
ionwake
repos

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k-i-m
during the first bubble i bought about a hundred bitcoins (2k usd worth), just
after few days the bubble unfortunately popped and the price was back to 4-5,
and i decided to sell them (it was my first "trading" experience, the stress
of the losing was high), after a while (late 2012) i bought back what i had
left for $9 and sold them for $13, now I just wish that I kept them instead
when i bought them initially :-(

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codemonkeymike
The number doesn't matter, the experiment was a success.

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luckystarr
So the author just bought his first bitcoins, eh? :D

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gokhan
Bitcoin price increase lacks the necessary volume element. So little people
are buying and selling at this price.

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johnmurch
MTGox is down? Price jump $40 in a night - things getting crazy!

~~~
killerpopiller
not here
[http://bitcoinity.org/markets?currency=EUR&exchange=mtgo...](http://bitcoinity.org/markets?currency=EUR&exchange=mtgox)

I really would like to buy more, but I am unsure if it is normalizing soon
(back to 100$) or hiking like gold did last year.

~~~
narcissus
Don't know if we can trust that link at the moment: it's showing the last
trade as "an hour ago".

~~~
johnsoft
It's right; MtGox has been down/frozen for the past hour (at the time of this
post). Bitcoinity is a pretty solid site in my experience.

