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Drug Site Silk Road Says It Will Survive Bitcoin's Volatility
Sparrowvsrevolution writes "Bitcoin's recent spike and then collapse in value has convinced many that it's too unstable to use as a practical currency. But not the founder of Silk Road, the black market drug site that exclusively accepts Bitcoin in exchange for heroin, cocaine and practically every other drug imaginable. Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence to issue a short statement that Silk Road will survive Bitcoin's bubble and bust. The market's prices are generally pegged to the dollar, with prices in Bitcoin fluctuating to account for movements in the exchange rate. And Roberts explained that vendors on the site have the option to also hedge the Bitcoins that buyers place in escrow for their products, so that they can't lose money due to Bitcoin's volatility while the drugs are in the mail. As a result, only about 1,000 of the site's more than 11,000 product listings were taken down during the recent crash."
Why blame the victim? The rise and fall in price (PLEASE, not "value". There's a difference, you know) is due to speculation, not to the currency itself. Dollars, euros and other fiat currency are just as vulnerable.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. While it's only a tiny percentage of overall sales, it's still exciting to see a currency that can actually become a true bartering agent that is freed of non-market forces.
If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency. It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.
I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.
to bitcoin?
Sheesh, evil *and* a jerk. -- Jade
I own my sole to the company store has deeper meaning then just a song lyric. Mine companies used to pay people not just not enough to survive (so they had to borrow credit from the company store and then be forever in debt) but often in company currency, that could only be spend in the company store. It is a way to enslave people, not free them.
But ah... it was the GOVERNMENT that freed these people by enforcing that salaries should be payed in fiat currencies. So basically, you want to reverse that. Here are your wages, in bitcoins. No you can't convert them anywhere, you can only use them to buy goods from my friends, at whatever prices they set.
Nice.
When you meet a libertarian, remember, the oppression of government is not what he objects to, it is that it is the government doing the subjugation and not him. Remember what the south was really about, it was about freedom from a government that told them to stop denying freedom to other people. When a republican wants to make government so small, he can drown it in a bathtub, ask him what is going to replace it. Ten to one he thinks it is going to be him waving the biggest gun around. Libertarians are all against the government because they want to be the one doing the telling. And frankly unless you own a VERY big gun, no matter how bad the government may be, a local warlord is going to be even worse.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
With the very recent forceful closing of the BitFloor BitCoin exchange, and the inavailability of bitcoin-24, another (european) exchange, there seems to be a crackdown on BitC exchanges going on.
What is needed, is a decentralised method for trading BitCs for other currencies, or else BitCoins can be made to be worthless by shutting down the current centralised, easily identified exchanges. I'd suggest Ripple but that technical solution seems to be going nowhere at the moment, alas.
Maybe we deserve this world ?
Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence
Yegads, man! You're going to scare the horses. Your usual media silence is a wise practice. The general public doesn't know you exist, and doesn't know you use Bitcoins. Those are good things. The first rule of drug dealing is you do not talk about drug dealing. Just 'cuz I don't use your service doesn't mean I want to see more scrutiny aimed at you, or at Bitcoin.
Stop-Prism.org: Opt Out of Surveillance
Uhh. There were a flaming ton of bank crashes during that time, and still more until the dollar was decoupled from metal prices.
The Age of Gold was no golden age, financially speaking. It also gave too much financial sway to gold producers (mine owners) who could control the rate of production and have disproportionate power over financial markets because of this.
Hit up tordir and search for it:
dppmfxaacucguzpc.onion
"When information is power, privacy is freedom" - Jah-Wren Ryel
Ahhh Yes.. Without an exchange willing to convert my bitcoin to some other currency, there are few retailers who will be accepting payment in bitcoin for much of anything. Once folks realize that bitcoin cannot be easily converted, they will become valueless.
Of course, they have huge value to those who engage in illegal trading exactly because there is no government backing, but is that the kind of thing I want to be indirectly involved in?
I wonder if this is an effort to shut down the currency or is it an effort to control the market? Either way, the little fish had better be wary. The big sharks are obviously on the move and this thing could go south quickly. (or not...)
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Go read about the stock market just before the great depression. What you are seeing is the market makers doing "pump and dump" just like stocks In the 1920's. It was common to see large investors buy up some stock, start talking about how it was heading up (and having recent history to show) then as the small investor piled on, slowly sell their shares at huge profit. Once the big guys where all out, they'd start the cycle again on another stock and leave the small fish to take the risks. Eventually, the prices started to drop and everybody wanted to sell at once and you have the crash of October 29, 1929. Problem was that there was no *real* value in all these stocks, it had been a lot of hype, so the prices fell rapidly. Where many of the big fish got caught with their money in the market and lost too, nearly ALL of the little guys lost. Remember you make money on stocks by buying low and selling high.
I see much the same thing going on here with BTC, only without *any* regulation or controls. The question right now is who is trying to manipulate the market? Follow the money, not the BTC, but the REAL money...
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation.
The price of bitcoin rose much higher than the cost to mine bitcoins (i.e. price of computers and electricity). While some people got caught up in speculating, others saw this and started mining and selling instead, causing a crash. Bitcoins are volatile because people don't understand it yet. If they did, they'd realize that the value can not go far above the price of mining. Having said that, the price of mining is continually going up.
Once a few websites start publishing indices of the average cost of mining a bitcoin at any given time, I think that will keep this sort of speculation in check.
99% of the world's gold is sitting in a vault not being used.
So in terms of utility, it is useless^Wworthless.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
It's cloth, actually. Currency isn't printed on paper, it's roughly 75% cotton, 25% linen.
U.S. currency is printed on paper
Cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn.
Paper can be made of many things including cotton and linen. Paper is a thin material mainly used for writing upon, printing upon, drawing or for packaging. It is produced by pressing together moist fibers, typically cellulose pulp derived from wood, rags or grasses, and drying them into flexible sheets.
If you want news from today, you have to come back tomorrow.
They are little more than promissary notes. Units of Debt/Value that can be traded. The "value" of either can be destroyed in a day, and restored as quickly.
It may be that "money" as an arbitrary store of value has reached it's useful limit in a technological society. As self-replicating memes go, it has certainly gone from providing symbiotic utility to becoming a pathological agent on more than one occasion.
Current society, however, is built around it. Replacing it means a new social order - probably one in which no one person can accumulate a massive surplus of goods and services. This goes against our evolutionary programming in a big way, so I'm skeptical that we'll get a rational economic/monetary system until we have better intelligences to work with (i.e. AIs).
Please do not read this sig. Thank you.
decentralised exchange is pretty much impossible, the fact that you cannot handle conventional currencies in a decentralized manner is the very reason why bitcoin was created. if you could have a decentralized exchange, would you need bitcoin at all anymore?
I can't answer. But there are more valuable things then gold to own and the smartest richest people on the planet kind of technically more or less own them.
Like big corporations. Stock. Land. Contracts with the DoD. Things like that are far better to "have" then gold. I would say diamonds are a start as well. I wouldn't stock gold unless I was really into making jewelry or using it to produce electronics. And because of golds "volatile nature' I would stock just enough to run whatever business I was making translating it to something else.
So the answer is, gold has uses but its useless as a measure of wealth by itself in todays economy. Virtually everything you can invest in is a gamble backed by the governments you are working through for your rights to conduct commerce.
Because gold is a hedge against currency manipulation. The price of gold in fiat currencies has been up in the last decade due to fiat currencies being printed a LOT more. Many central banks are repatriating their gold (that's being stored in other countries) because they are losing trust in other central banks due to this massive printing (such as the Fed and it's monetarist policies like Quantitative Easing, and zero interest rate policies). The trend is to acquire as much gold as they can (China, Russia, India are all doing this) due to the scarcity of it.
Why though?
Assuming the GP's figure is close to accurate, "99% of the world's gold is sitting in a vault", it explains itself.
The rarity of gold IN CIRCULATION combined with its physical properties (ie. it's desirable for many applications) sets its base price, and the higher the rarity (assuming there's still enough out there to be useful), the higher that price. So, stockpile a lot of it and lock it away, and what remains grows in value.
This is actually the same thing that happens to bitcoin, and is a big part of why they claim it self regulates... As bitcoin is removed from the market (bought and moved into savings), the price of bitcoin on the exchange goes up. Supposedly, the market would still work with just one bitcoin on the exchange. If it got to that point, adding one bitcoin from savings back into the exchange would earn someone a healthy chunk of money, but the price of bitcoin would drop in half instantly. This is supposed to mean that having a big pile of it doesn't help you, because if you have 100 bitcoin, it's not worth 100 x's the current price as each one put into the exchange reduces the price of the rest of bitcoin on the exchange. IMO, that doesn't make sense, and would make speculation increase (buy one, hope price goes up really high, sell high, wait for it to drop again as others try to do the same, repeat). This paragraph probably has a LOT of details wrong, misworded, etc, but the main point is still there... bitcoin chose it's block creation algorithm such that it approximates the rate at which commodities like gold are mined. (see : https://en.bitcoin.it/wiki/Controlled_Currency_Supply).
Anyway, if all the gold was released into circulation, the price per ounce would certainly drop, but that doesn't mean it wouldn't be just as useful as currency. It's value is based highly on what is in circulation, and that total value (amount_in_circulation * price) would probably be about the same. That's what bitcoin is counting on, and it plays a very similar rarity game.
Besides one obviously fake spike and drop, the value hasn't changed much more than 20% in either direction lately that I've seen. Yeah, the dollar differences are insanely high compared to the last 2 years but from a percentage standpoint, the value hasn't changed much. Overall, it's still up significantly from 3 months ago.
Of course, they have huge value to those who engage in illegal trading exactly because there is no government backing, but is that the kind of thing I want to be indirectly involved in?
Bitcoins have value to those who trade on the Silkroad and other similar websites, not because there is no government backing, but because they allow the buyer and seller to remain anonymous to each other, and the provide a degree of anonymity which is not possible with traditional methods of electronic banking (you can follow the paper trail to see that I transferred Bitcoins to the Silk Road, but you can't see whether I bought anything, or who from).
Of course, cash (notes/coins) have huge value to those who engage in illegal trading - for precisely the same reason, but you don't hear people wanting to shut down cash anytime soon...
Backup not found: (A)bort (R)etry (P)anic
With the very recent forceful closing of the BitFloor BitCoin exchange, and the inavailability of bitcoin-24, another (european) exchange, there seems to be a crackdown on BitC exchanges going on.
What is needed, is a decentralised method for trading BitCs for other currencies, or else BitCoins can be made to be worthless by shutting down the current centralised, easily identified exchanges. I'd suggest Ripple but that technical solution seems to be going nowhere at the moment, alas.
ahh.. erm. you mean like a decentralized credit card processor? dream on. you could do it on tor forums if you wanted. no business is going to touch it without exchanges that turn it into dollars instantly though.
world was created 5 seconds before this post as it is.
What makes gold unique is that it is out of the hands of government. It cannot be manipulated (over the long-term at least) by political authority. Gold is a completely independent form of money, and store of value, which is not subject to the jurisdiction of any political authority
It was illegal to own gold in America for much of the 20th century. Governments have jurisdiction over the stores of value located within their borders - doesn't matter what form they take.
Take it from the central banks. If gold was useless, then naturally, it would make sense to liquidate it to pay for more useful things.
The Fed sold off most of its gold reserves in recent years. I hear China's been buying, but they're in a really odd position to begin with.
Socialism: a lie told by totalitarians and believed by fools.
Then I'm in!
Vote monkeys into Congress. They are cheaper and more trustworthy.
Just a joke here. Maybe the aliens value gold more then us humans?
I don't know why, it seems paper is cheaper and lighter weight to gamble with =) Maybe because its cheap and diversifying your investments is smart? I may not be the best investment but it is one that might have some value if you could sit on it in a post apocalyptic medieval world...
Could be left over from pre 1800's era trading...
Could be the banks are just holding on to that gold for people who think it is.
I think the smartest answer is while gold is cheap its one of those things that is good to hold on to because as the market fluctuates you can sell it back out and buy more back cheaper later. So the banks having a lot of gold right now just means they've been winning at that game. The good banks wouldn't be dumping all their assets into gold though.
Maybe its just one aspect of manipulating fiat currency through their savings. This way they have oil, gold, and other means of controlling the value of fiat currencies by manipulating the markets. This is how I would use it. Call it gold ammunition for the economy. That would explain why they hoard it.
Who's got the power?
think massively parallel computing power
think specialized hash computation arrays
think of the precomputed rainbow table warriors
think oligarchy (of computer power = money)
think no public accountability of resource usage or mission
once these people take an interest in bitcoin it's 'done'
Who's round and jolly and all full of fun
Who's shaped like a great big hamburger bun?
Who's got a job that's a super-breeze?
I'm sure you guessed it, it's Mayor McCheese!
<blink>down the rabbit hole</blink>
There certainly was inflation under the gold standard.
Bitcoins provide a degree of anonymity which is not possible with traditional methods of electronic banking
Really? I don't think they necessarily provide anonymity. All transactions are public record, which is pretty much how the BTC system works. You sign a transaction with your key to transfer money (bitcoin) to somebody else and that gets recorded in public records. These transactions are *anything* but private. If you know somebodies public key, you can go back and trace any transaction they have made by looking though publicly published data. All you need to do is start an archive of bitcoin transaction blocks and you can have a complete transaction history for every bitcoin ever traded. All you need to do is a little detective work and you could start tracing down who's who by data mining the transaction logs.
What bitcoins *do* provide, at least for now, is a way to transfer large sums outside of a government's tracking and reporting laws. A practice which is rapidly getting brought under the laws folks think they can avoid by using bitcoin. That is the push towards getting exchanges to start reporting their transactions just like they do other currency trades. I would expect BTC regulation to only increase if it truly is used for illegal purposes.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101