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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPump or dump? Bitcoin's moment of truth draws nigh
What a difference a DDoS attack or two can make. Attacks on bitcoin exchanges Bitstamp and Bulgaria-based BTC-e, coming on the heels of Mt. Gox's decision to suspend transactions last week because of a bug in bitcoin's software, have unsettled markets for the virtual currency. Last week, a bitcoin was valued in the mid-$900s after reaching highs exceeding $1,000 in January. Today (2/14/14), it's hit a low of $302.
Members of the bitcoin industry were quick to emphasize that they expect the problems to be resolved soon and pointed out that the "transaction malleability" bug cited in Mt. Gox's decision to shutter operations is a long-known technical issue in bitcoin's software, and the exchange should have been prepared for it. "This is a good reminder that bitcoin is still young and experimental," the Bitcoin Foundation said.
Max Hampel, who runs the Coinwatch blog, expressed confidence in the currency. "Bitcoin is still secure, the network is still working," he told Business Insider. "The developers are working on a fix to this problem, which is not even as grave as portrayed by Gox. These are just minor problems that will be solved as bitcoin evolves. Don't panic, everything still works."
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China, Thailand, and Russia have banned the bitcoin, and India has shut down bitcoin exchanges. Estonia has urged consumers to steer clear, and the central bank of Finland dismissed bitcoin as a currency and declared it a commodity.
That really gets to the heart of the matter: When discussing bitcoin, it helps to be explicit about which bitcoin you mean -- the virtual currency or the speculative commodity?
As a virtual currency, bitcoin is highly attractive to libertarians, who love its lack of regulation, and others suspicious of banks and the Federal Reserve. Its primary attractions for e-commerce are that it's safe -- consumers don't have to reveal personal information, reducing opportunities for identity theft -- and cheap for small businesses struggling under the high fees associated with credit cards.
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http://www.infoworld.com/t/e-commerce/pump-or-dump-bitcoins-moment-of-truth-draws-nigh-236337
Purveyor
(29,876 posts)bitcoins were valued around $900 last week and now valued around $300. So does this mean those that bought at $900 just took a $600 haircut?
It means they gambled....and lost (if they sold). lol
Although, unlike a casino, they're only down 66% and it could still come back and go up above $900. All markets and currency prices fluctuate though so it's really not that big of a deal.
upaloopa
(11,417 posts)You have to put up more $ or wait and hope it goes back up.
Me I don't trust people so would never use bit coins. Without some security other than trust the thing is worthless. It is human nature.
upaloopa
(11,417 posts)I am not sure how it works but I think some old adages fit here. You don't get something for nothing and there is a sucker born every minute.
So if you put in $1,000 a few weeks ago do you now have $300 something?
Renew Deal
(81,846 posts)upaloopa
(11,417 posts)good at trading and others will get taken. Greed is at play here as it is everywhere. The trusting souls will get taken.
Something similar happens on EBAY. But there are rules at EBAY and you can rate the buyer and seller. With no way to control or react to the exchanges of bit coins it is ripe for plunder.
There is a reason libertarianism isn't more popular. Greed.
unblock
(52,117 posts)I think a few currencies remain that are backed by something like gold or a government promise to convert into something else (into us dollars, for instance). but for the most part, currencies are just worth what people think they're worth.
now, the us dollar has considerable value because there's a huge economy built around it and supply of dollars is, to a large extent, regulated by a government that has a vested interest in keeping that economy chugging. this gives people some assurance that dollars will retain at least some of their value, and that the value can be predicted based on looking at the economy that uses it.
same goes for bitcoin, though without much regulation. you need to look at the "economy" that relies on bitcoin to determine its value. as long as it remains at least trendy, bitcoins will have value. if they lose favor, they could become near worthless, but if they gain traction and become widespread, they could become hugely valuable.
but that's the "risk" and the key question: what "economy" will be built around bitcoin?
upaloopa
(11,417 posts)one one side you have the US government and on the other you have who knows who?
lumberjack_jeff
(33,224 posts)The achilles heel of crypotcurrency (of which Bitcoin is only one) is the willingness of people in the marketplace to accept it in exchange for goods and services.
At some point the exchange rate should be no more important to individuals than the US dollar exchange rate for Canada dollars.
upaloopa
(11,417 posts)you are asking to get screwed. There is a reason people want to hide in the dark. There is human nature.
Why you would give up security for "trust me" is beyond me.
lumberjack_jeff
(33,224 posts)If it doesn't work out, I'll stilll get a better video card out of the deal.
I think it'd be fun to tip good DU posts in dogecoins rather than hearts or recommends.
The odds of breaking even are better than Las Vegas.
I think there's something beneficial for people to separate the currencies which govern exchange from the fortunes of the countries which print them. I think it's a worthwhile social experiment.
upaloopa
(11,417 posts)lumberjack_jeff
(33,224 posts)I wouldn't buy cryptocurrency with USD unless I had some specific transactional need.
JustABozoOnThisBus
(23,321 posts)... and never will be.
May his retirement plan be paid in bitcoins.
1StrongBlackMan
(31,849 posts)libertarians oppose to fiat currency ... by buying into an electronic fiat currency?
Well ... isn't that about as consistent as just about every other libertarian tenet?
Tommy_Carcetti
(43,153 posts)It's got electrolytes!
lumberjack_jeff
(33,224 posts)Nevermind.
Tommy_Carcetti
(43,153 posts)However, how is Bitcoin supposed to be better than the dollar?
Everything I read about it tells me that it is worse. Much, much worse.
Intangible, unrelated virtual "money" that's worth what someone (we don't know who) says it's worth.
How on earth is that in any way supposed to be an improvement?
lumberjack_jeff
(33,224 posts)It's not prone to wild valuation swings only because a lot of stuff is valued in it - it's the default benchmark.
... which is kind of illusory. Instead, let's use gasoline as the medium of exchange, and see how wildly currencies fluctuate around *that* benchmark.
TreasonousBastard
(43,049 posts)pump and dump, without any regulation at all. It's like the stock market before the SEC.
If I had a few thousand lying around doing nothing, I might want to stick it in bitcoins and wait for the next round of bit-inflation and dump it fast enough to at least double my money. I can't imagine the computer trading whizzes aren't working on that right now.
If I were selling something, I can't imagine taking bitcoins, not knowing from day to day what they would be worth. If they can go from a grand to 300 bucks in a short amount of time, how do I price things? Do all my business in some Central American or African country where they're used to that?
Nope, they're not going to replace dollars, Euros, yen, yuan, or anything even close to a stable currency.
Drew Richards
(1,558 posts)after we are all dead and buried...
TheMathieu
(456 posts)It's anarchist, agorist and a lot of other silly philosophy -isms.
KurtNYC
(14,549 posts)NCTraveler
(30,481 posts)There is some stability.
TampaAnimusVortex
(785 posts)Also - it will stabilize as the new markets pop up that allow for people bring derivatives to bear against it.
http://www.forbes.com/sites/timworstall/2013/04/12/bringing-derivatives-to-bitcoin-should-help-stabilise-the-price/
NCTraveler
(30,481 posts)You backed up my point perfectly. You actually showed it is even more volatile. Thanks.
TampaAnimusVortex
(785 posts)Whereas my volatility gained me a huge increase from my purchase at $30 a coin to now currently over $630.
How did those CDs you invested in work out for ya?
NCTraveler
(30,481 posts)I truly find it hard to believe you promote this type of fluctuation as a good investment tool. It goes against all common sense. It goes against all economic education. That is why it is a failure. Kind of funny actually. By the way, I have never met anyone who accepts it as payment. You are talking about it as if its design was in long term investments. Its initial purpose, which you have shown to have been a failure, was as currency. Even you understand it has failed at that and is now an investment vehicle for people with more money than sense. I find it hard to believe this rightwing idea of a currency is even debated here.
TampaAnimusVortex
(785 posts)Maybe not the when, but I knew Bitcoin was going to take off... The digital world demands a digital money.
Also, people hate seeing their wealth eroded by inflation and they don't trust ANY other institutions or people with controlling that value...
Anyone with an IQ above room temperature should know the banksters have bought off all the right politicians... so if you want to side with them, your more then welcome.
You can trust the inherent incorruptibility of people (cough) or the mathematics underlying the encryption in Bitcoin. I for one know a little bit about encryption so while I know that at some point in the future it will be theoretically possible to break, we should be safe for some span of time. I know for absolute certain however that the human system is full of crooks that delight in taking advantage of every opportunity to bilk people out of their wealth.
Bitcoin's value lies in the fact that it's a global payment network. It allows the practically friction-less movement of money around the globe. THAT is what gives it value... Try moving money around the globe any other way... your going to pay at least 1% to 3% doing so. That said, selection pressure demands that the market will take the most efficient road, which will ultimately be Bitcoin... because it's more profitable to do so. It's simple math. It has nothing to do with it being a currency, its about it being a payment network.
Oh, and digital money isn't a right-wing or left-wing idea... You don't get to call anything you don't understand right-wing as a get out of jail free card. If you knew anything about it, you would have invested long ago... It's not too late to learn though. I suggest learning about the blockchain, encryption technology, etherum, smart contracts, distributed autonomous organizations... because the world is a changing...
NCTraveler
(30,481 posts)TampaAnimusVortex
(785 posts)See... its easy to call anything you don't like right wing, libertarian (which you misspelled by the way), or whatever so you don't actually have to debate the points.
It's taken off and new businesses are signing on every day, so you can stick you fingers in your ears and yell all you want.
Here's a directory of over 20,000 different businesses or organizations that take bitcoin.
https://bitpay.com/directory#/
Also, if it's not taking off... why is New York considering creating Bitcoin licenses for business?
http://www.theverge.com/2014/1/28/5353806/new-york-is-considering-bitlicense-bitcoin
And then finally, theres this little nail in the coffin... the amount of dollars traversing the bitcoin network over the last year.
NCTraveler
(30,481 posts)Don't think you even read the second link you gave. Ooops.
Response to NCTraveler (Reply #34)
TampaAnimusVortex This message was self-deleted by its author.
TampaAnimusVortex
(785 posts)Which shows your inability to prove bitcoin is going away anytime soon... Your kids and grandkids will be using it as you froth and fume.
JNelson6563
(28,151 posts)GRACIEBIRD
(94 posts)My brother is into computers, specifically Distributed Computing where a whole bunch of guys, errr nerds join a team and install software on their computers that solves complex equations for medical technology, etc.
So a bunch of the guys stopped running these medical projects and switched over to making bitcoins years back. Back then you could produce bitcoins on your regular home computer. I know he had dozens of them. Now they've altered the computation and a normal computer is projected to produce a single bitcoin in like 120 years lol.