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Bitfloor Indefinitely Suspends Bitcoin Trading
PerformanceDude writes "Bitfloor (a New York-based online exchange for Bitcoin) yesterday made the following announcement on their website: I am sorry to announce that due to circumstances outside of our control BitFloor must cease all trading operations indefinitely. Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past. As such, I have made the decision to halt operations and return all funds. Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request. Roman — bitfloor.com" According to the company's Twitter account, money should be returned to users' bank accounts shortly.
Sounds like the govenrment finally decided they didn't like money outside their control.
>> US bank account is scheduled to be closed
Clearly this is the work of the Illuminati Lizard People.
Bitcoin is already down to $90, where is that $1000 bitcoin troll at now?
Money has to at least be a short term store of value. If bread costs twice as much in the evening as it does in the morning no one will want your currency. Bitcoin is not doing well on that front. I am sure all the early folks are cashing out now and laughing all the way to the bank though.
> Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past.
Is it me or is that the most understated sentence ever written?
Bitcoin is already down to $90, where is that $1000 bitcoin troll at now? ... [all the early folks are] cashing out now and laughing all the way to the bank though.
Sounds like you just answered your own question.
My work here is dung.
There is no conspiracy here. No one cares about this toy money. They broke already existing federal anti-laundering laws so this happened. They could have followed the law and been able to stay open.
going to indefinitely suspend its bitcoin stories?
Sheesh, evil *and* a jerk. -- Jade
What's is the story here?
This is Slashdot: The story is "bitcoin something something".
Sheesh, evil *and* a jerk. -- Jade
There is no conspiracy here.
I find it curious that you post so much BS to Bitcoin threads that I actually recognize your handle at this point.
No one cares about this toy money.
Even a speculative bubble doesn't hit $90 if "no one cares" about the underlying asset. Quite the opposite - So many people have an interest in Bitcoin, whether legitimate or speculation, than its market capitalization last week qualified it as a mid cap (and it still plays in the same ballpark despite the post-$250 sell-off).
They broke already existing federal anti-laundering laws so this happened. They could have followed the law and been able to stay open.
You have made an assertion about a company's business practices without a shred of evidence. They may have violated money laundering laws. They may have used the wrong type of account (ie, personal checking) for running a business they didn't expect to grow so fast. They may simply have scared a bank that wanted nothing do with Bitcoin (much like the EFF's stance on Bitcoin donations) simply because it would distract them from their core mission. You know nothing about which of those, or dozens of other possibilities, actually happened.
Stick with (incorrectly) calling it a pyramid scheme - At least that, not having an immediate victim of your accusation, doesn't count as libel.
You’re making a lot of assumptions. Like, BitCoins will tend to go up in value over your time period (be it in days or years). That you will actually be able to execute on a displayed priced – before everybody else does.
Suggestion - find (and read up on) a arbitrage opportunity. For example, a US dollars / BitCons / Eurs / US Dollar trade should net you zero dollars less fees – but does it? I have heard of times that it has not and could be taken advantage of. Also, try to find somebody who knows something about program stock trading – which is basically what you are doing. (and stay away from those green arrows / red arrows FX trading programs you see on TV)
Excellant points. One of the problems with bitcoins is there is no assurance of liquidity; unlike many other commodities or real currencies. For arbitrage to work you have to be able to buy and sell when you want so you can take advantage of the opportunity; ideally at the same time so you never really put any of your money at risk. Bitcoin, OTOH, operates on the well known "greater fool" theory that drives many speculative bubbles such as tulips. You hope someone somewhere will pay more for it than you did; even though there is no underlying reason for them to do so other than they believe they will go even higher. They have no unique value behind them; anyone can create a new crypto chain separate from bitcoin and if they convince people the new bytecoin is better than bitcoin then bitcoins will cease to have value. In the end, there is no control over the amount of cryptocurrency in circulation despite promises otherwise. The one valid comparison of bitcoins to money is that, like money, any country can decide to issue it and in what quantity; its value will depend on people's faith in the issuer.
I'm a consultant - I convert gibberish into cash-flow.
I'm not in a position to judge. So let me speculate based upon my own prejudices and stupidity.
What this obviously proves is that THE MAN hates freedom and is hating Bitcoins so has leaned on the bank (though didn't need to be because the bank IS THE MAN too) to close down Bitcoins which are totally a legitimate currency because you can exchange CPU cycles for Bitcoins which is much better than the dollar because the dollar can be made to hyperinflate by printing more although it doesn't whereas Bitcoins never have inflation because they're based on CPU cycles and its just its success that means it keeps oscillating between $50 and $200 every few months. This is simply another case where the MAFIAA are trying to shut us down because we threaten their business model by selling things that have value because they're products of really big prime numbers which everyone knows are totally worth thousands of dollars.
(c) 50% of Slashdot posters.
You are not alone. This is not normal. None of this is normal.
Surprisingly, no. It can be a great way to make a lot of money.
Take a look at http://en.wikipedia.org/wiki/Dollar_cost_averaging, and then do some basic scenarios. The key thing is that if there's a lot of oscillating between two extremes, then putting the same amount of money into an investment vehicle over a period of time will result in fairly substantial growth of your account - even if, on average, the vehicle itself never gains value.
The system works because when you put in the same amount of cash (rather than buy the same number of securities) basic math is working in your favor. Put $1000 when Bitcoins are worth $200, and when the price collapses to $50, that part of your investment is worth $250 - a $750 loss.
However, put $1000 in when they're $50, and when the price rises to $200, that part of your investment is worth $4000, a $3000 gain. If you're putting the same amount of money in at intervals unrelated to the rise and fall of the currency, then on average, you should have as many "$1000 at $200s" as you have "$1000 at $50s".
Of course, the algorithm wouldn't be useful unless you're in the black most of the time even when the currency isn't at its extremes. If you assume that usually it'll float around the $125 range (half way between $50 and $200), then the loss on the $1000@$200 investments will be $375, and the gains on the $1000@$50 "only" look like $1500. You're still making more than 100% return at that rate.
This is a fairly normal investment scheme FWIW and is part of the logic behind most pension systems. Of course, the stock market doesn't fluctuate anything like as much as Bitcoins do. On the other hand, very few people believe that the stock market will ever collapse entirely.
The danger with this scheme is that there's no guarantee Bitcoins aren't going to permanently collapse, and that would cause your investment to be wiped out. I'm not going to do it in large part for that reason. The amounts involved to make this useful are much higher than I'm willing to bet at the moment.
You are not alone. This is not normal. None of this is normal.
In this sense it's like Gold, except:
* probably more vendors take BitCoin than gold as payment (i.e. both gold and BitCoin have some value as a currency/barter, and BitCoin may actually have more, but neither is primarily a currency)
* You can't make jewelry, do dental work, or make Monster Cables with BitCoin (i.e. unlike the shiny metal, it has no inherent value)
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Whenever something sounds too good to be true, you have to ask yourself if it is. In this case, id it were that easy, why haven't other people done it? My guess would be that the price development is clear in retrospect, but hard to predict. How would you know when it is going to peak? How would you know if the bottom have been reached, or if it just plateaued before the real drop?
In the long run, it is really hard to beat the market.
I suspect it was Transaction Reporting requirements, along with Know Your Customer regulations that did them in. The government doesn't care if you are shoveling Benjamins, BitCoins, Euros, Pesos, or British Pounds, across the counter or over the wire... if you want to trade in heavy quantities of Cash or Cash Equivalents, you have to comply with money laundering laws. If their bank felt they could not keep the account open and still comply with those laws... ker-chop!
Did the fact that BitCoins were being traded have something to do with it? You bet. But they would have been equally eager to shut down an operation dealing with physical currency and numbered accounts... they don't like anonymiity combined with large volumes of untracable cash.
Dollar cost averaging is great (and I did mention it’s cousin, regular rebalancing) – but your point is a bit off base.
One of the underlying assumptions of dollar cost averaging is that you are investing in a productive assets that grows with time. Sometimes you are buying too high, sometimes you are getting a steal by buying too low, but you are always buying productive assets. It is a simple discipline that counteracts the unproductive emotional habits of people pilling money into and out of the market. After a few years of investing you should have a sufficient investment where your compound rate of return / interest takes over.
Which is volatility comes into play. The higher the volatility the lower compounded returns.
But currencies are not a productive asset – it just sits there. It is like buying gold coins each month a burying it. You won’t know how many gold coins you will have at the end of 10 years because the number will change each month depending on the value of gold. And you won’t know how much their worth because, once again, you won’t know the value of gold in 10 years. Without the compounding affect the value of dollar cost averaging drops.
You could pretty document every transaction you've performed to you government, and government couldn't do much about it,
If the government knows your bitcoin transactions, then they have all the control they could need or want, as ordinary laws can then cover anything you do with those bitcoins.
And on the other side, bitcoins have some level of secrecy/untraceability built-in.
Not at all. Every bitcoin transaction is announced to the entire network - it's the most traceable currency in history. You can bet the NSA has a database with every bitcoin transaction made starting at some recent point, and in the future will be able to unwind the entire history of any bitcoins in your wallet. What the government wouldn't like would be an anonymous bitcoin exchange - they need to couple bitcoin wallets to identities at the borders of the system, and they do have the power to enforce that.
Socialism: a lie told by totalitarians and believed by fools.
Bitcoins are backed by the utility of being able to send them between people without having to deal with any third parties. They present the value of everything that can be bought with Bitcoins; as that set is slowly growing, so is the value of Bitcoin. It's a classic network effect.
To bet on Bitcoin is to bet that PayPal, Visa, and banks will continue screwing their customers, which seems like a pretty safe bet.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
It seems obvious to me exactly what is going to happen. If I'm wrong, well, good for all those who got into bitcoins.
Sometime within about 1 year from now, someone is going to hack bitcoin. Either
a) The goal will be simply to destroy it and render it worthless.
or
b) The hackers will make a lot of money before bitcoin in rendered worthless. Before anyone realizes what is going on and can stop the hackers, bitcoin will have been ruined.
The end result in both is that bitcoin will be rendered worthless. This attack or hack will be in a way that nobody saw coming, but after the fact everyone will slap themselves in the head and think "How did we not realize that this was possible?" I am not claiming to have any idea how this will all happen. I simply predict it will happen.
When this happens, people like me, Steve Forbes and others will say "Told you". The "true believers" (the anti-government nut jobs) will erroneously conclude that the entire idea was perfect and if they only fix the specific nature of the attack that destroyed bitcoin, then bitcoin2 will be able to start up and it will never, ever be compromised. Right.