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Bitcoin Exchange Value Halves After Chinese Ban
An anonymous reader writes with news of the latest major fluctuation in the price people are willing to pay for Bitcoins. From the article: "China's ban on its financial institutions handling bitcoin causes world's largest exchange to cease trading, halving the value of the currency from $1,000 to less than $500 in a matter of days. The country's central bank took a hard line on Bitcoin in early December when it banned financial institutions from handling the decentralized crypto-currency, and as a result BTC China, the world's largest bitcoin exchange, has stopped accepting deposits from its users."
Just watch that line trend downward.
And this is why we're still decades away from having mortgages denominated in bitcoin. :P
The World Wide Web is dying. Soon, we shall have only the Internet.
Kind of a sideline approach here...
This is the clearest evidence yet that the pro-bitcoin libertarian segment misunderstand how government control works. The argument goes "government prints the money, and tracks the money therefor can tax me." The presumption of bitcoins is if the currency doesn't come from the government, they don't have any means to control it.
Good ol' actually tyrannical China comes along, and does the thing any government is capable of doing. Saying "if we catch you dodging our system, our system will throw your stupid self in jail." Poof.
If having a wallet.dat is a crime, the fact that the coins inside of it are encrypted won't protect you.
For a certain definition of value, yes, but not necessarily for the common one. In an idealized market, you do hope this is true for the common definition also: people have independently assessed how much they value some commodity, and offer a price accordingly. The price then converges on some aggregation of values.
But in real markets, this is often recursive: someone is offering $x for a commodity not because they themselves consider it to have a certain value, but because they think they will be able to resell it for $(x+y), due to market fluctuations. They may themselves consider it a worthless pile of trash valued at $0; day-traders, unlike value investors, don't make trade decisions based on their own assessments of the underlying value of the commodities or equities they're buying and selling. Instead they base their decisions on statistical estimates of market dynamics, independent of whatever the underlying item is and whether it may or may not have any value at all (models often don't even consider the underlying item in the equation).
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Now that they have driven the price of bitcoins down, they will now buy up all of them at low prices . . . and then . . . announce that the will accept them as currency . . .
Profit!
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
I wish people would stop calling these "crypto-currencies", because it is a total misrepresentation of what these things are. They are crypto-commodities. BTC is just like gold right now - it is not used to transact, it is used as a value store - except it is much worse as a value store because it is orders of magnitude more volatile. No one can use BTC as a currency because its value fluxuates so wildly. Everyone who is SUPPOSEDLY using it as a currency just has it pegged to the US dollar with a live update.
Comment removed based on user account deletion
Somewhere in China a group of Bitcoin-speculating bureaucrats are very happy right now.
Must make the Bitcoiners really happy to know that their financial world can be so readily disrupted . . ..
When a couple of my friends started posting "now is a great time to buy into BitCoin" messages on my Facebook feed a couple of weeks ago, I had a feeling the BTC price was about to take a strong downward turn. It is never a good sign when the "true believers" begin actively recruiting new buyers into a price bubble.
The collapse of BitCoin as a speculative investment is inevitable, and its own success will be its downfall. The speculative frenzy over BTC is based strictly on artificial scarcity. The problem is that there are an infinite possible number of cryptographically signed digital currencies. If only X amount of gold exists in the world, there is no replacement for it, assuming you desire the exact physical qualities of gold. But if only Y digital coins exist, it is trivial to create another digital coinage with a slightly different protocol that behaves exactly the same way as far as a user is concerned.
The boom in BTC has led to several new competitors, with similar frenzies growing around some of them. And given the low barrier to entry, you can expect more and more competing digital currencies to appear. It is only a matter of time before people realize that they're fighting over a particular set of tulip bulbs while standing in an infinitely large field of tulips. Once that happens, the speculative bubble will pop for good for all digital currencies. In the long run, this is a good thing, because once the speculators are gone, some digital currencies may actually prove useful as a real medium of exchange, with values that don't fluctuate wildly from one day to the next.
"No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties.
Wow. It's been a long time since I've seen such a high concentration of ill informed bullshit in one sentence...
silly me thought my 5GH miner was going to make me stupid rich...
One out of two ain't bad.
Er, no. What people were worried about was that heavily indebted countries would voluntarily choose to exit the Euro so they could inflate away their debts by printing money as fast as possible, and bulk exits of countries from the Euro would cause problems. The "solution", if you want to call it that, was that after resisting for a long time the ECB (actually Mario Draghi) gave into immense political and personal pressure to start open-ended Euro printing in order to essentially reallocate money from savers in Germany and other northern states to heavily indebted, often highly corrupt governments in the south. In order to preserve the fiction that Europe is one big happy family all sharing the same wonderful currency, the ECB agreed to a global tax on all Euro savings everywhere and made lots of people who managed their finances appropriately very very unhappy!
This is not actually solving any problems - it just sends a powerful message from governments that only suckers try to save money because governments will inevitably confiscate it from you in order to pay for (e.g.) absurdly generous pensions in Greece or elsewhere.
Bitcoin does not allow governments to do this. If Europe had been running on Bitcoin at the time, then those governments would have had to go through an actual default and inflict the pain on the people who lent them the money - but on the other hand, if Europe was run on Bitcoin, it's very unlikely the southern countries could have got into so much debt in the first place. Who was lending such vast sums to countries that had such basic, fundamental fiscal problems? Banks, of course, banks who knew they would be bailed out (with yet more money printing) if something went truly tits up. They gambled that politicians cared more about keeping the Euro than protecting savers, and they were right. If Europe used Bitcoin for everything, the "moral hazard" of banking would not exist as they would know that nobody could bail them out, and they'd have far fewer deposits to play with anyway (or maybe none). As a result, far less money would have been invested into places like Greece and the economic distortions such huge borrowing allowed would have never happened.
right, I'm assuming you mean you bought at a low price and cashed out at a high price?
what I'm wondering is, which BTC to $$$ service you used (Mt Gox?), how often you were able to cash out, what the daily $$$ limits were, what the transfer fees cost, etc.
I've seen alot of people yammering about BTC but few claim to have made a profit...i'd like to know more about how
Thank you Dave Raggett
Every sale is also a buy. Derp.
"I have zillions of dollars worth of comic books! Wizard says I do!"
"I have zillions of dollars worth of Bitcoin! The exchange says I do!"
*Together* Let's cash out!
"WTF? Nobody wants to buy my comics at massively inflated prices!"
"WTF? Nobody wants to buy my Bitcoin at massively inflated prices!"
Cue the Python!
SCAM! SCAM! SCAM! SCAM! SCAM!
Chas - The one, the only.
THANK GOD!!!
Amazon doesn't use anything. Bitpay handles the conversion and the supplier of the cards gets paid in dollars (This is something I believe you said was just too difficult to implement in a previous thread). The supplier of the cards gets them from Amazon (and other places) at a discount and makes their profit that way. Bitpay takes a slice so the purchaser pays a slight premium. Then again, if you bought your Bitcoins lower, you probably still come out ahead.