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Bitcoin Tops $1,000 For the First Time
An anonymous reader writes with this bit from The Next Web "Bitcoin hit a new milestone today, passing the $1,000 mark for the first time. The virtual currency is currently trading above the four-digit figure, with its highest at $1,030 on Mt. Gox, one of the largest exchanges. Last week, Bitcoin's high for the day was $632. That means its trading value has surged 62.83 percent in a week, assuming we're looking at just its high points. That figure could of course rise even further if Bitcoin continues to push further up throughout the day."
I'm a bitcoin miner and I do agree they are overpriced at the moment. It should be $200-300 IMHO.
Great! Lets do a 100 dollar bet: if the price at January 1st is lower than now I pay you $100, otherwise you pay me $100. You're in?
With the high profile shutdown of Silk Road the number of things you can buy with Bitcoin would be considerably less. While it's true that there are other services available, it seems strange to me that so much money is being dumped into the system now. Maybe someone is trying to buy up enough coins for a trip to space? Or maybe someone is laundering a crapload of money and is having trouble on the outbound side (converting the money back into real life currency) and is creating a backlog?
Or it's an attack on the system itself, maybe someone figure out a way to race the market and make money?
I read the internet for the articles.
I wish I had mod points ^_^ but yeah, that is an element that differs from classic bubble mechanics.
We might encounter other problems though such as traders making BTC unproductive for people using it for goods and services. It could also crash if some large (or simply enough) players cash out and deplete various exchange's ability to convert BTC into other currencies, which could cause exchanges to close shop and thus reduce the utility.
Though historically there are plenty of examples of bubbles of easily subdivided items, even including things like gold. So you can not get a housing-style bubble with BTC, but that does not make it immune from the general pattern.
It is not traceable, unless you are just careless with it. Silk road itself was running a free mixer service, to make your coins untraceable.
I remember a lot of argument on old bitcoin posts about whether bitcoins were a deflationary currency or not. It is certainly looking that they are right now. The value of them is increasing with time allowing one bitcoin to buy more and more with each passing day. So with the current market, why would someone spend bitcoins? They can wait a day and spend less coins for the same goods, or wait two days and possibly spend even less. This will kill it as a currency. Bitcoin will be solely used as an investment for speculation soon.
Sometimes being able to buy stuff without being fucking tracked is not only perfectly reasonable, it's a damn good idea.
Like elections.
Except that several websites keep a running tally of who has donated to whom, and how much.
Sadly, the people buying elections have so much money and power that fear of discovery doesn't even cross their minds; hell, some of them are proud to be subverting the democratic process.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
That's part of the problem. People are putting real value into the bitcoin market, value that the holders of old coins can come and claim whenever they feel like it. If any significant amount of old coins are cashed in, it's going to cause the mother of all crashes.
AFTER that happens, bitcoin might be a reasonably stable currency to do things with. It depends on whether the cashing in kills it or not.
If 10 people with 1000 bitcoins each now went to MtGoX and wanted to cash in their bitcoins, what would that do to MtGoX? I think they'd be fucked.
Seriously, this is empty speculation and there isn't the actual money invested in bitcoins to support this increase in face value. The system is fucked. Theres no way the bitcoins in circulation today could actually be cashed in for actual money.
In the free world the media isn't government run; the government is media run.