Come on. Was it ever attributed to anything but speculation.
I'm open to being wrong about my assumptions.
"Stable" as in exchange rate, no. But the bitcoin technology in itself is really solid, and will continue to work well.
"the currency has increased in value one-thousandfold against the US dollar in fourteen months. Yes. Read that again: one-thousandfold, fourteen months. There is currently no indication it would stop or has saturated; quite the opposite."
Note that Jim Cramer is still running his show.
So the early adopters could promote them and we can just wait and see. Since the rest of us won't earn much by promoting it, so just mine 1 or 2 BC (still takes some efforts given the massive amount of bot-nets out there) and speculate.
I mean that "if" as a true logical statement, not an implied assertion that it must be true. (I do believe that, but I'm not asserting it right now, because I'm not defending it.)
True, speculation and hoarding dominates its usage at the moment but there is still potential.
For it to be a currency it doesn't need a huge value per bitcoin, nor does it need to be constantly rising a huge amount - but it does need to be reasonably stable.
As a sidenote, that's a terrible graph(as are most graphs of this nature). There's a wonderful technology called a logarithmic plot for that sort of thing.
Right now, it is going down, for a long time. So that is not why it will fail.
It will fail because noone actually needs it. It has no real value over other means of electronically exchanging money - paypal, for example, is much faster, easier to use and, dwhile it is not free, thanks to the wild exchange rate of bitcoin, one will probably still have more money from paypal than bitcoin money exchange.
There is no place to spend bitcoin, because most of the people don't CARE that it's centralized and someone can watch it, because it is infinitely easier to use paypal to just PAY STUFF, instead of going through the pains to exchange bitcoins through shady sites, wait DAYS to get it on your wallet, then wait hours until the blockchain is downloaded, then wait another hours since the block is 6 times confirmed.
Maybe it will work in the end, it's nicely designed and all. But I don't see anyone using it right now. There is no real reason to do so.
With Paypal, the same company is responsible for sending, receiving and storing your money. A decentralized currency like Bitcoin could act as an intermediary protocol that would allow users to choose different companies to handle each of these tasks.
Bitcoin to me seems interesting because it's essentially an open protocol for transferring and manipulating finances. I kinda feel that talking about deflationary currencies or currency fluctuations is somewhat missing the point.
Reminds me of an episode of This American Life. Brazil's currency was down the toilet, so they invented a new currency and tricked the populace into thinking it had value.
Some anthropologists say that this is how money got started in the first place around the palaces in ancient Egypt. In more modern history, there are stark examples of how "taxes drive money" really does work to monetize an economy; search for "Hut taxes".
They are backed by a government which knows that once it doesn't honor the value, the economy (and probably the govt too) is finished.
Compare it with transferring money to bitcoin wallet, then paying, then waiting hours until it is confirmed by 6 consecutive blovks
I'll probably end up using a new email address for every PayPal purchase I make (otherwise the almost unavoidable 'login with your email' problem), which means even more PayPal spam over time.
Most BitCoin vendors accept the payments before the blocks are confirmed. You only have to wait for the blocks if you want to be extra, super-sure. Likewise with credit cards the vendor can also not be 100% sure that they buyer won't just cancel later on or the credit card was a stolen one.
It should also be noted that criminal use doesn't raise the price of bitcoins, since criminals don't necessarily hold their bitcoins. For them bitcoin is just an another money laundering system.
Disagree. There's a "float" period between when the order is placed and when it's completed (service/goods verifiably delivered). The dollar-value volume in this float period sets a floor on the market cap of Bitcoin.
I'm clearly fascinated by all this, and a little surprised that more people aren't. The Bitcoin protocol is one of the great recent innovations in distributed systems, and this particular application of it is the culmination of a lot of crypto work into a cypherpunk fantasy.
yep. All your transactions are recorded for posterity and law enforcement can access them at anytime. The moment i first time heard about bitcoin i immediately read their paper and this was the instant end between me and BT - it is either a honeypot or an NSA's distributed "calculate these hashes@HOME" project. Most probably it started as the latter and once NSA had gotten enough results and withdrew the funding (which supported the currency valuations stable growth before speculation rushed in), the BT now is only the former.
"Jeff Garzik, a member of the Bitcoin core development team, says in an email that bitcoin is not as anonymous as the denizens of Silk Road would like to believe. He explains that because all Bitcoin transactions are recorded in a public log, though the identities of all the parties are anonymous, law enforcement could use sophisticated network analysis techniques to parse the transaction flow and track down individual Bitcoin users."
ALL transactions, including the receiver and sender addresses are public. They have to be, since the global bitcoin network has to verify and add them to the blockchain.
A full copy of a currency's block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history.
Basically, if the cops grab your box with your Bitcoin crypto keys on it, they know all of your transactions. This is why you need to encrypt your keys if you're doing something illegal.
tl;dr: Nothing ties you to your address but evidence not inside of the chain.
I was buying a lot of article writing service (0% payment fees is nice!)
I shipped several orders from international customers in my http://store.gifti.us and accepted payments in bitcoins (0% foreign transaction fees is nice too!).
I bough steam codes.
I built somewhat profitable for short period of time site - http://betco.in and used some profit in bitcoins to pay for development work on open source project.
Bought, just like few other visitors, articles in PDF at http://ubitio.us. This is also project of mine and I am going to contribute it to open source soon, so just another bit into bitconomy.
And I am working on two other projects involving products/services and bitcoin :)
This is just what came in to my head right away...
I envision a bitcoin meme: 0% fees, 1000% volatility :)
I am converting to usd only part needed to pay suppliers and rest leave in coins for now. Agree, income is fluctuating. But I am ok with it since so far I did not see technical issues with bitcoins itself.
But you are right - as I said below, huge fluctuation (although, what time period you used for 1000% fluctuation claim?) is a problem. And I will welcome stabilization at any level. Although market is too small to be stabilized soon.
1 & 2 - were existing pieces of software which are actively developed further.
3 - started from scratch.
All of these are open source. Technically anyone can clone github repo and follow instructions to spawn copy of this project.
Project licensed under AGPL which secure all future changes into it will become open sourced as well.
However, it fails to use bitcoin as a currency in the sense that other stores use dollars as a currency. The prices on Silkroad are adjusted to mirror the USD->BTC exchange rate dialy. And, I would suspect that the majority of the users are buying bitcoins to buy goods on Silkroad, and that venders on Silkroad turn their BTC back into USD often. These two use cases don't support BTC as a viable currency. It is being used exactly as detractors presumed: merely a way to launder money.
Anyway, a currency that people buy to use in particular markets is possibly a way that money got started in the first place. People traded for a currency to use in a (physical) market and then traded that into different stuff that day. Eventually, as things stabilized they might have been happy holding some money.
If bitcoin became commonly used as a way of transacting, but not of storing value or denominating prices it could still be a good enough starting point.
Even if the only markets in which it was "commonly used as a way of transacting" were illegal ones, as a means of money laundering? Is that really a "good enough starting point," a way for drug dealers to clean their money?
All currencies are valued against each other, it is no surprise to see the dollar value used most frequently to determine value, since dollars are the worlds reserve currency.
My opinion is that bitcoin is probably ahead of its time, the technology is amazing, and could be used in many different ways, and I am not yet ready to count bitcoin out just yet.
You can buy web hosting at http://cinfu.com, https://bitcoinwebhost.com, or https://kalyhost.com/?Currency=BTC
Purchase domain names at http://privacyshark.com, http://exoware.net, or http://bitdomain.biz
Use them at a variety of travel locations: http://bitcoin.travel/
Buy NewEgg stuff through http://bitcoinredemption.com or http://bitspend.com
Charity: http://bitcharity.org, http://bitcoin-charity.com, http://bitcoinsforcharity.org
Like, I know the site exists, but how many people here know people who have successfully conducted commerce on it?
How are they keeping themselves from being exposed?
It's the main driving force behind the price of bitcoins on the public exchanges, which makes for a rather novel opportunity for a market-moving attack I'll leave as an exercise for the reader.
Unless they only buy virtual goods, there's a trail to follow.
There's nothing inherently linking the two transactions of "X bitcoins transferred from wallet #1 to wallet #2" and "Y USD transferred from Bob to Joe" - with sufficient care and redirection, you can make it very difficult to track down exactly where the bitcoins are being traded for real money.
Then, they have to setup a trap in which the recipient knowingly takes delivery (and there can be no other way than the recipient signing for it, or else it would be entrapment or just mis-shipment, which is just as common) and catch them. All for a person who bought a small packet of drugs.
I think the Feds even consider such a thing a lost cause.
While there is an iTunes store in Germany, some of the apps aren't available (e.g. TV Station apps that I could use with a VPN) and with the current euro/usd ration, the US store is cheaper.
Sorry to hear betco.in's going down -- StrikeSapphire.com will stick around no matter what the price goes to, because it's just a good, efficient way to take bets, process payments, and pay people out.
Even if you are familiar with the expression, the full article is well worth reading.
Its rise to $30 was driven by hype and speculation. The falling prices stop any speculators jumping on board, and there is no significant 'economy' yet. The rate of money supply increase will be halved in 2013, so don't expect any recovery before then.
And every hour 300 new bitcoins are mined, I'm still willing to buy some, but I'm a rather late adopter, and, obviously, there a limit for me too, after which I'll stop buying.
Anyway if bitcoin will survive until 2013 then... I'll be ready to accept bets (as in 10 to 1) that it will make it.
The value is mostly driven by mass psychology, the inflation caused by miners is only one factor.
If some goverment-issued currency would start hyperinflating, bitcoin or similar cryptocurrency would be pretty good choice for people to move to.
If people are jumping out of a printed currency to avoid inflation, they're going to want something where they know it's easy to convert back into something you can buy things with. Jumping into a cryptocurrency for their cash holdings would require they believe that they can easily jump back out.
Gold isn't really a good instrument of exchange. Gold-backed currencies are, but the central issuer has proved problematic historically.
Of course cryptocurrency used widespreadly is just a nerd fantasy right now, but I believe in it more than to a new gold standard :)
Moving cash into bitcoin would make sense if there were some inherent advantages: better returns, more liquidity, better privacy, more stable values, faster transactions. So far, I don't really see any of those being offered; it's essentially an experiment, and folks who are using it are either doing to speculatively or for curiosity value, not economic reasons.
I will. The point is, at the margin, some people will. All and at once? Never! The more adventurous and tentatively? Yes.
Now it all depends on relative outcome of different strategies.
I'd assume the creator/first adopters do not care, either way.
I'm pretty sure that the early adopters couldn't guess this year's rise in value, and couldn't guess the price drop either.
While I believe in bitcoin or cryptocurrencies in the longterm, I'm still pretty sure that bitcoin value will stay very volatile in the coming years. The stability will take time, and widespread adoption for this kind of innovation will take years if not tens of years.
Also Bitcoin is not a company, any more than US Dollar is.
"It's loans all the way down..."
does this really make something not a scam? As far as i've seen, most people do have access to the information needed to prove something a scam. It doesns't mean they will both find it, and believe it.
A lottery isn't a scam, even though only a few actually get money out of it. It's just gambling, and so it Bitcoin.
The current difficulty is 1468e3. It takes 2^32 * 1468e3 Bitcoin hashes to solve a block of 50 BTC. The majority of people mine with HD 5000 or 6000 series. If you pick efficient ones, you can count on 2 Mhash per Joule. The average worldwide domestic electricity price is $.10/kWh. So the average cost of production is:
2^32 * 1468e3 / 50 (BTC per block) / 2e6 (Mhash/Joule) / 3.6e6 (Joule/kWh) * .10 ($/kWh) = $1.8/BTC
I am an early adopter, I was one of the first 100 people to mine, and I've mined thousands of BTC (including 650 with a single CPU), and I wrote the most popular miner, DiabloMiner.
If it was a pyramid scam, why would I currently be ignoring the current price of BTC in USD? It just means the demand is currently low, and since I'm not selling, who cares?
Mining is not about making money, its about preserving the cryptographic integrity of the currency. Also, no, the exchange rate is not yet below the cost of mining for many miners. It will have to drop below $1 before everyone is out.
That is ridiculous. Anyone who criticizes Bitcoin is automatically a scammer themselves?
(Not taking sides here, just pointing out some people conflate economics and war.)
I must agree it is massively stacked in favour of the early adopters, who could have made an absolute killing so far if they played things smart.
This may not be relevant, but not all of them have. Something like 800,000 of the early bitcoins have never moved in the blockchain since they were minted (leading to speculation that they have been held onto by Satoshi).
I expect that the creator already considers the system a success. The goal was not to create an investment vehicle. It was to allow people all over the world to exchange value without corporate or government interference. $30/coin or $3/coin doesn't matter. Either way, it's working.
Biggest hurdle when using bitcoins is not it's high/low price, but rather fluctuation.
Fluctuation happens because too many speculate it and not trade with it (well.. currency trading is also trading..) And I would say this is totally expect-able and acceptable.
With time if this technology will prove itself, it become major online payment method. And believe me - work on this project is very active right now. All this investing mumbo-jumbo is just a random noise...
who cares? Do you care federal reserve guys can print as many dollars for themselves? Does it prevent you from using dollars to buy stuff in walmart?
Difference from FED is that it happens to bitcoin only once - during initial distribution. After all coins "printed" - no more coins will be thrown into circulation.
Initial distribution have to be made somehow. And I believe people who invested their time and money earlier have to be paid accordingly.
Read paper. This is not money question. This is technology question.
It bought me an iPad 2 when I cashed out my 3 weeks worth of mining at the height of the bubble.
Plus, how do you ban something like this?
it would require a financial transfer to purchase
them to begin with
That's not the case with bitcoins. You send money to some bitcoin address that is extremely hard to track to a real person.
Businesses trying to deal in Bitcoins will find their value going down much faster relative to cash value by end of day. That's the very definition of FUD.
seriously, did anyone expect this to be a "new paradigm"? it was a fun toy for financially-minded engineers and traders, but I can't say I'm surprised to hear that it's in free-fall.
i wonder where the bottom is? Once it drops well below USD1.00, I think I'll buy a bunch on a cheap bet :)
Give it a little more time. There has been more widespread adoption only for 8 months or something. I think the amount of bitcoin related activity is pretty impressive.
Let's see after five years if cryptocurrencies are still used.
If you look at this, you can see that gold is more volatile and spiky.