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Why Bitcoin Boomed During the Government Shutdown
Daniel_Stuckey writes "Just two weeks after the Feds shuttered the Silk Road, the notorious online drug bazaar, Bitcoin prices have touched a five-month high — with a single Bitcoin fetching nearly $156 on Tokyo-based exchange Mt. Gox. Bitcoin's resiliency can no longer be denied, especially as the digital currency continued its ascendancy even against the backdrop of a U.S. government in utter disarray. At the 11th hour of the crisis, President Obama signed a bill that ended the partial government shutdown and, more importantly, raised the debt ceiling, an arbitrary limit on the amount of money the country can borrow that would have been surpassed today. If Congress had failed to reach a deal and the U.S. was unable to pay its bills, the results might have been catastrophic, eclipsing the bankruptcy of Lehman Brothers five years ago, the domino that could trigger the worst financial crisis since the Great Depression."
How many people honestly understand the relationship between currency prices and the government shutdown? Very very few I would guess.
Gold dropped when the goverment was down and bounced back after the deal was signed. Why? Gold is supposed to be a safe harbour.
Does the author of TFA see BTC as the opposite of gold, or does he see BTC as filling the same kind of role as gold?
Or is this simply a case of making using hindsight to construct an argument that fits a general argument that BTC is worth investing in?
The recent price of Bitcoin has far more to do with explosive adoption in China than anything happening in the United States.
If Congress had failed to reach a deal and the U.S. was unable to pay its bills, the results might have been catastrophic, eclipsing the bankruptcy of Lehman Brothers five years ago, the domino that could trigger the worst financial crisis since the Great Depression."
Someone's been watching too much "news". The results wouldn't be catastrophic. They'd be annoying. Like everything else the government has done over the past decade. Catastrophic is the entire government collapses, food shortages and water become scarce, and people start killing one another in open anarchy.
Words. They mean shit, Slashdot. Choose them carefully.
#fuckbeta #iamslashdot #dicemustdie
Are you freaking kidding? Why is it that every half wit thinks that bitcoin is all about drug transactions and prostitution?
Your first statement is a rather unargumentative (i.e. no persuasiveness to it) comment. At least a few millions in America with millions in Europe and elsewhere nowadays care about currency devaluation and manipulation and that, if not formally declared then in substance that using fiat or legal currencies to store value means that they are slowly robbed. And I mean a few million ordinary people, while economists and businesspeople up-high care even more (short term at least). Plenty of people may care about it to attempt to hide money but given it's an open transactions system, using unmodified Bitcoin protocol is a bad idea for them. On the other hand, your second is quite good.
Intelligent idiots are we. | Evil men do not understand justice.
I use BitCoin to make donations to various Linux projects. That way when I download all those Linux ISOs on BitTorrent, I really feel like I'm sticking it to The Man.
Trolling is a art,
Correction. Threatening not to raise the debt ceiling lead to a credit rating downgrade. Explicitly saying in public that you're thinking about not honoring your financial obligations does that.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
They aren't even anonymous transactions... if you convert bitcoins to cash, that's a major weakness.
And they have a great use: eliminating payment processing costs. Those costs are distributed among the people who run the mining software.
You liar. The credit rating downgrade wasn't because we raised the ceiling, it was because the Republicans threatened not to.
The ratings agency EXPLICITLY SAID SO:
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Banks made transferring out of MTGOX impossible, MTGOX refunded my $. They are about 8 weeks behind processing withdraws.
Bad news, banks and government attacking at same time interfered with each other.
Also, they had this guy, he sold drugs... lots of drugs... but did they bust him? Nope, they did an elaborate sting to bag him for something REALLY REALLY evil... (I hate drugs btw) Why? So he wouldn't be a martyr for free wealth exchange.
Also the whole BTC aren't totally anonymous thing is a good to know.
No, you are the liar. The agencies that downgraded the US debt (and it is JUNK today, anybody who doesn't understand it has his or her head up their own asshole) were sued by the US gov't.
Of-course they were supposed to downgrade it to junk, the only agency that really downgraded the US bonds (Egan Jones) was stripped of their license to rate US debt. The sequester (cut to the spending) was the condition, the promise, under which the US gov't wouldn't be downgraded further (and eventually the worthless 'rating' agencies brought the US debt rating up again after getting scared of the feds and the SEC, etc.).
The Chinese don't want the US debt to grow, they just don't want the threat of not being paid what they are owed, so that's nonsense and that's why Chinese rating agencies downgraded US debt now, after the so called 'ceiling' was raised again.
The real crisis in USA is the debt, not the fake ceiling. The ceiling would have actually put a lid on ability of USA to continue running this enormous, biggest in history of the world ponzi scam, made up of the US bonds, dollars (the SS and Medicare are second in size ponzi scams after the bonds and the dollars).
USA is bankrupt, it can't pay its debts.
USA did NOT have to default on its creditors, 2300BILLION USD are collected per year by the feds, less than 300BILLION USD need to be paid out as the interest.
Obama, other politicians, the MSM all came out and told the bond holders: you are the low men on the totem pole, we won't pay you if we can't borrow more from you even though we collect almost 10 times the money in taxes that we need to pay you.
Anybody in their sane mind would see this as a direct threat against their assets (US bonds or dollars) if they have any and would immediately start unloading, but then again, this was obvious for a couple of decades now what is going on, specifically after the real default in 1971, when Nixon defaulted on the gold dollar.
The real story of-course is that USA is bankrupt, US bonds are junk, USA will never pay any of its debts and would rather cause massive inflation (maybe even hyper inflation) and the credit agencies are bought and paid for not to report that truth.
GS came out with a recommendation to dump the gold to its muppets^C^C^C^C^C 'investors'. Somebody was dumping large quantities of gold on the market of a few days straight, in an attempt to move the price down, most likely trying to weed out the weak hands so that they could buy much more back at lower prices.
Anyway, enjoy your Marxist/Keynesian ideology, certainly the only thing it will bring you will be a total economic and societal collapse, maybe that's your cup of tea of-course but you desire it so much, you should get to experience it.
You can't handle the truth.
The U.S. Government gets somewhere between $200 billion and $225 billion a month in tax payments. I forget the exact figure, but let's say debt payments are around $50 billion a month.
We would only default if we chose to pay our debt with the lowest priority.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
If people stop mining, then the currency stops being created... no matter - that will happen eventually anyway.. More likely, the price of bitcoins will continue to rise as usage does, and this will drive more people to mine. If usage does not increase, then who cares if they are mined or not?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Much in the same way as bitcoin isn't backed by anything real or stable, just demand.
What is backed by "real and stable"? US currency? Nop, it gets devalued pretty fast. Gold? Real Estate? (How much Real Estate do you put in your wallet when going grocery shopping?)
Humans used to use all sort of currency, from sea shells to alcohol to pretty pieces of paper we have today. None of them backed by anything, just convenience. Maybe bitcoin is the next "it"
sounds like your problem is with all forms of cash
I thought this was an interesting take on Bitcoin:
http://ianso.blogspot.com/2013/10/bitcoin-as-law-enforcementnatsec.html
If people stop mining, each miner gets more per time interval. Which makes it very attractive to mine again. Its a self-regulating system.
USA did NOT have to default on its creditors, 2300BILLION USD are collected per year by the feds, less than 300BILLION USD need to be paid out as the interest.
Obama, other politicians, the MSM all came out and told the bond holders: you are the low men on the totem pole, we won't pay you if we can't borrow more from you even though we collect almost 10 times the money in taxes that we need to pay you.
Anybody in their sane mind would see this as a direct threat against their assets (US bonds or dollars) if they have any and would immediately start unloading, but then again, this was obvious for a couple of decades now what is going on, specifically after the real default in 1971, when Nixon defaulted on the gold dollar.
Apparently you got downmodded for speaking the truth.
The difficulty parameter autoadjusts depending on the number of miners. Less miners = easier difficulty.
There should always be a new block every 10 mins (on average).
Also while the benefits of mining diminish, the 'fees' should increase with the use of bitcoin.
At some point the fees overtake the benefit of finding a new block.
Remember the fees get paid to the block finder.
Or maybe because what I buy is my business and my business alone? Without anonymity, it makes it trivial for people to track my purchases. If people can track my purchases, they can target me for their sales campaigns in order to try and manipulate me into giving them more money, Since I'm not terribly fond of being manipulated, nor am I terribly fond of junk mail or spam, I prefer my transactions to be as anonymous as possible.
But yeah, I guess you're right, it's all about the hookers and blow, Couldn't possibly be any other reason I don't want folks up in my business.
Balancing the budget is easy. Dump the military
While I agree with the sentiment, in actual fact the military is one ginormous jobs program, not only for the couple hundred thousand actually putting their lives on the line, but for the millions employed by the MIC.
You chop that off too quickly and the economy crashes leading to GDP losses in greater proportion to the cuts. See pretty much the last 50 years of austerity measures, all countries included.
That is whats fscked up about the economic system we have, the only time you can actually cut government spending is when the economy is growing enough to provide jobs for the laid off workers. Otherwise their belt tightening causes ripples in other businesses resulting in 2nd order layoffs and then 3rd order down the line. Its the same calculation used to compute economic growth in response to tax cuts, only in reverse and without fat cats that tend to be somewhat inelastic to spending in response to tax cuts.
Right. China has tight exchange controls - it take special permission from the State Ministry for Foreign Exchange to exchange yuan for dollars, euros, or yen. But at present, China residents can buy Bitcoins with yuan. They can also sell Bitcoins for dollars, bypassing exchange controls. So if you've made money in China and want, say, to buy an apartment in London, Bitcoin provides a way to bypass the government exchange controls.
That seems to be what's pushing up the price of Bitcoin. The volume on exchanges in China is way up, while volume at Mt.Gox is way down.
However, there's no guarantee that this situation will last. The People's Bank of China can change this policy at any time. There's plenty of info available about PBOC policy; it's as least as important as US Fed policy. But that's enough for Slashdot readers.
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Swiss banks now making financial data available to governments. Switching to bitcoin as an anonymous alternative is inevitable.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
How did we get from
And they have a great use: eliminating payment processing costs. Those costs are distributed among the people who run the mining software.
to
That "percentage" is not an actual percentage, but a minimum fee you have to pay for a miner to accept your transaction into their verification process... and each miner can set their own.
in just 5 posts?
No wonder I haven't grokked bitcoin yet.
Bitcoin value as an anonymous way to pay for things is dubious at best. Every transaction is logged in the blockchain. It is easier to trace then cash. The real advantage is in frictionless payments (i.e. cutting out money processors like visa, paypal or even western union). You should take the time to learn about something rather then spewing out your nonsense. The bitcoin protocol itself can even be leveraged for other uses besides currency. There are many many legit uses of bitcoin. You can buy all kinds of legal goods with it and is not diminished because criminals use it. With that line of thinking we should outlaw cash which is ridiculous.
I would be scared if I didn't have some Bitcoins right now. If they go to zero, oh well.. If they get adopted as a major international currency, then I completely miss out by not having them now.
There will never be enough Bitcoins for everyone to have one. If they do catch on, each one will be worth a fortune. So far, no government has been able to figure out a way to shut them down. Large governments such as China and Germany have announced no intentions against Bitcoin. It makes me believe the people that are Bitcoins' biggest detractors are the ones that don't own any yet.
The media tries to associate Bitcoin with lawbreakers and it calls it an insanely risky bet. But, the media does everything it can to preserve the status quo. Then, limit your risks.. You cannot risk more than the price you pay for the Bitcoins. I think it is a bigger risk to decide you will completely ignore the obvious next form of currency.
--- We need more Ron Paul!
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People like to point to the broken window fallacy in these cases, but cutting government spending too fast is a real problem. The economy doesn't adjust instantly to these types of changes. We could certainly cut the military by a huge percentage and be OK, but you'd have to do it slowly. Why? The same reason it would be bad if the Feds sold off all of the gold at Fort Knox in one day. The market can't absorb the new resources fast enough at the current prices, so prices crash and cause all manner of secondary and tertiary effects.
So what resources does the military industrial complex consume? Prime labor-age literate men, engineers, oil, raw manufacutring materials and factory equipment and personnel. It would be great if we could free those resources up to do something useful, but you also don't want to see what an overnight glut in all of those markets does to the economy as a whole. I'd be totally up for a 10-20 year plan to eliminate most of our military spending. Cutting it by causing, say, a debt limit crisis and dumping all of those resources into markets that aren't ready to handle them? Not so much.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"