Bitcoin Price Crashes

Beardydog writes "Bitcoin trading site MtGox.com has suspended operations for the rest of the day after illicit access to at least one account resulted in a steep drop in the price of Bitcoins on the site. Commenters to the support page for the event are reporting that a list of usernames and associated email addresses and password hashes have been posted online. MtGox are currently planning to roll back all of the day's trading, email notices to all affected users, and require replacement passwords for affected accounts."

Comments

Enough already

[Anonymous Coward]

Enough with this Bitcoin spam already.
Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.

Re:Enough already

[hipp5]

Enough with this Bitcoin spam already. Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.

To be fair, it's nice to hear news that predictions about bitcoins being crappy are indeed true. This story is somewhat of an anti-spam.

Re:Enough already

[DaveV1.0]

You cared so much, you wouldn't risk your precious slashdot karma. Therefore, bitcoins are worth less than slashdot karma.

Re:Enough already

[_Sprocket_]

Bah. Bitcoins represent a number of interesting concepts. Currency alone is a rather fascinating thing that touches on psychology, economy, history, and one of the earliest forms of information technology. Toss in some cryptography, peer-to-peer / decentralisation, etc. and there's no end to the facets of this subject.

That doesn't mean you have to buy in to Bitcoins. Keep in mind that these Bitcoin stories are more than simple "yay Bitcoin - buy buy buy" that you would expect from advertisements / spam. There are negative sides being covered by these stories. But if you have no interest in anything remotely related to Bitcoins, then by all means... don't click on the damn article that says it is, in fact, about Bitcoins.

Re:Bitcoin to revolutionise economy

[David Gerard]

The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.

(One good thing about Bitcoin threads on Slashdot: plenty of opportunity to beat Econ 101 into the heads of libertoonians who think they've got the perfect zinger for every situation.)

Re:Bitcoin to revolutionise economy

[Colin Smith]

The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.

You realise that most dollars are not paper? They make up only about 6% of money. The rest is debt based.

There is only about ~900 billion paper and coin dollars.
There is about ~14 trillion dollars worth of credit supplied by banks.
There is about ~55 trillion dollars in total debt, again, supplied by banks.

What backs the dollar is the faith that the 14 trillion dollars will some day pay the 55 trillion dollars off.

BitCoins are simply a hobby, not a currency

[sirwired]

Usefulness as a currency is inversely proportional to potential as an investment. BitCoin fans, when you boast that your "currency holdings" have shot up in value by several hundred percent in a year, this is NOT A GOOD THING for BitCoins as a currency. You, Joe Merchant, would have to be a complete blithering idiot to set yourself up to accept BitCoins as a form of payment if deflation of several orders of magnitude is REQUIRED in order for your "currency" to be anything but a niche toy. In addition, credit, the lifeblood of any economy is completely impossible under such conditions; it would be the height of insanity to take out a loan if you had the potential of owing the equivalent of several hundred percent interest after a year. (As in, if you took out a loan for a thousand BitCoins a year ago, you'd be praying for an event like this to happen right now...)

An ideal currency remains relatively stable in value in relation to something you actually want to buy. An illiquid currency that gyrates wildly in value is useless, as it makes proper pricing of goods, services, and credit impossible.

In the end, BitCoins are no more a "currency" than Beanie Babies were. And at least Beanie Babies are cute. (And tulips were/are pretty flowers.) BitCoins are an interesting experiment in cryptography, nothing more.

Re:BitCoins are simply a hobby, not a currency

[RobinEggs]

These are very good points.

It wasn't until bitcoin that I understood the point of constant inflation: it makes credit feasible. You can only borrow safely if you can be almost certain money won't increase in relative value in the future, and to make a borrower feel truly safe currency value should have a near certainty of decreasing somewhat. With significant deflation a possibility you can't even take out a car loan without simultaneously risking indentured servitude; it would be insane to take home or business loans, and I don't mean figuratively insane, either.

Inflation also encourages lending and investing. It's like the Red Queen hypothesis: with inflation eating the valuation of your cash you have to put it to work somehow in hopes of earning more than the rate of inflation.

It seems no one makes loans or investment in bitcoins, and the scam artists - excuse me, properly rewarded early adopters - who minted thousands or millions of coins back when they cost 1/1000th as much processing time to generate still seem to be hoarding and not using them.

It's technically true that they're not a ponzi scheme, but they're still basically a confidence game that at the current trajectories don't seem like any benefit to people who weren't already in the market by mid-2010. Anyone who adopted after that could use them as money laundering and anonymous payments (like Silk Road), but couldn't efficiently generate or purchase them without wasting more fiat currency than the coins are worth in service fees or electricity.

Re:Bitcoin to revolutionise economy

[canajin56]

OK, lets say there is only a single gold coin in town. That's the only currency in existence. OK so far? So, I have that one coin, and I pay somebody that coin for a new window. The glassier takes that coin, and he goes to the pub and he buys a beer for that one coin. Now the bar pays the bartender with that one coin. Now he takes that coin and he buys a sandwich with that coin. Oops, so far our town as a GDP of 4 coins, but there's only one in existence. DO YOU UNDERSTAND YET THAT AN ECONOMY IS NOT A ZERO SUM GAME? I know, you should use the broken window fallacy next! Point out that if you hadn't broken my window in that above example that the GDP of my fictional town would have been 0 instead of 4! ;)

Re:Bitcoin to revolutionise economy

[Jeremi]

Pop Quiz: What was the Zimbabwean dollar backed by?

Ooh! Ooh! I know!

It was backed by the full faith and credit of the Zimbabwean government!

(which, unfortunately, didn't have a very good grasp of economics)

Re:Let's attempt some critical thinking.

[Capsaicin]

Imagine this headline: Forex.com hacked, concept of USD put into question. Doesn't that sound a bit ridiculous? This was a bad day for mtgox.com and bitcoin speculators, but it does not demonstrate inherent weaknesses in the system of bitcoin.

I agree, this does not "demonstrate inherent weaknesses" in the design or Bitcoin, per se, and I would add that an event such as this one could strangle Bitcoin in its cradle. Consider these points:

i) Unlike the USD, Bitcoin has still to establish legitimacy in the eyes of the serious investor.
ii) Sites such as Mt Gox, provide the primary (perhaps even exclusive) gateway to Bitcoin. FX dealing sites are very much down the list on how most people gain exposure to USD.
iii) The USD can be used by US citizens to settle their taxation debt. The USD can be used internationally to purchase oil. Within the US (and not only there), the USD can be used to purchase practically the entire range of goods and services.

If we apply critical thinking, it will be apparent that the analogy you propose with your headline, while appealing on the surface, cannot do justice to the differences between Bitcoin and the USD.

Bigoted much?

[SuperKendall]

Remember, most people are stupid

This is untrue, if you actually examine the world people, on average are VERY CLEVER. If "people" were stupid our species would have been wiped out long ago.

Now what people are, is selectively informed. They may not have chosen to be informed about topics you consider important, but it does not mean they are stupid...

I'm sure your average redneck ain't keeping his ammo dry, and your average gun nut (simply for lack of a better term) can't guarantee their storage spot is impervious to floods or broken water pipes

How "sure" are you? Because I'm damn sure you are wrong. Almost anyone I've ever seen keeps ammo in something like an ammo box, which is quite dry and mostly impervious to occasional water. The "redneck" that talks so funny probably knows quite a lot more than you about the care of ammo, and humorously would probably call you an idiot for not knowing the details on this better...

Grow up and realize that people who are different from you are not automatically stupid.