Slashdot Mirror
Bitcoin Plunges After Mt. Gox Exchange Halts Trades
krakman writes with this excerpt from Bloomberg News: "Bitcoin plunged more than 8 percent [Friday] after a Tokyo-based exchange halted withdrawals of the digital currency, citing technical malfunction. Mt. Gox, claimed in a blog post it needed to 'temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes.' It promised an 'update' — not a reopening — on Monday, Feb. 10, Japan time. This is day after Russia's Prosecutor General concluded Bitcoin and other digital currencies are illegal under current law."
Things have taken a bit of a dive.
Rule 1 of currency trading: Economic news is bull. It's either used to mislead a trader before they pull the trigger on a trade, or it's a pathetic excuse they give you after they've yanked your money.
"'temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes" sounds like the latter kind of BS.
Yeah sorry traders, we just had a technical hiccup.... SLURP! YOU LOST YOUR MONEY THANKS FOR PLAYING
Three fat red bars on the chart going down, followed by a doji that's just waiting there for people to jump on board. Looks like market manipulation... look for the reversal set up.
READY.
PRINT ""+-0
This scheme relies on calculations that now require expensive hardware and the relative rate of return is diminishing. Without a move to distributed malware where someone else pays those costs I do not see how this scheme can persist for much longer.
I don't understand how bitcoins or gold either one retain their values.
Bitcoin is a bubble, though as with every other bubble there are delusional people who assert the emperor is not naked/that it all somehow makes sense. It doesn't... the valuation is absurd.
As for gold, I think the explanation is a mixture of inertia, rarity, resistance to governmental manipulation, and lack of corrosion.
Being able to beat it into a thin leaf is not a real explanation ("ZOMG! You can hammer this *how* thin?! SHUT UP AND TAKE MY MONEY!" said essentially no one ever). Saying it is valuable for jewelry begs the question (i.e. it's valuable for jewelry because its rare and expensive, but it's supposedly rare and expensive because it's valuable for jewelry?)
So, it really comes down to "it's always been this way", but everyone can be reasonably certain that there won't be a sudden massive increase in supply, and that their holdings of gold won't corrode away into nothing. Furthermore, the government cannot simply pass a law saying that there is now twice as much gold as there was yesterday; this security against manipulation is certainly a valuable feature (well, unless you believe Krugman, who thinks that the government should always be able to manipulate currencies).
This was the scene today at Mt. Gox as people frantically tried to withdraw their Bitcoins. Err, no wait, that's a scene from Mary Poppins. Seemed legit.
---
DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
Virtually anything you might buy or sell derives at least some of its value from faith, and currencies are no exception to this. In other words, as long as a sufficient number of people believe that 1BTC is worth ~$680, then 1BTC is indeed worth ~$680.
This is even true of gold to a certain extent - its value goes up and down too, though it's seldom as volatile because it has other uses beyond currency.
When something happens to shake that faith, the value drops. When something happens to strengthen that faith, the value rises.
Any currency that isn't backed by something tangible (eg. a precious metal) by definition derives more-or-less all its value from faith. This isn't usually a big deal - most countries came off the gold standard decades ago - but one side-effect is that if your country's government is unstable, there's a very good chance your currency will follow suit in short order. For extreme examples, see Zimbabwean dollars, Afghan Afghanis and German Papiermarks.
Gold had value historically because of permanence - even though it's somewhat delicate, it does not tarnish or rust which is a damn impressive thing in a world full of other things that fade away quite rapidly.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Nice sock puppet. Wonder who modded this up?
Sure as shit not a real user.
The people who made this site - the real grown ups who don't post AC - object not just to the technically poor execution of the latest sites; (both the mobile and the beta desktop sites suck). No, what they loath is that they took time to give feedback, as I did - in detail - which was ignored...and then the beta was just rolled out.
Hence the rather "childish" fuck beta campaign. Treat people like kids, don't be surprised at what you get back.
On a final note, fuck beta, and fuck you AC.
The grown ups want to discuss the news.
Why don't all of you Anonymous Coward "grown ups" hop on over to Huffington Post to discuss the news? Here's a fucking link for the lazy. In a month you can come back to Slashdot and you won't even know the difference.
Look where all this talking got us, baby.
The value is rising slower than the value of the resources required to make the token used in this scheme. That's what I mean by "the relative rate of return is diminishing".
Also, apparently if all "mining" stops then that will prevent transactions from occurring and render the tokens worthless. Whenever this has been brought up before the response of people involved in the scheme has been "mining will never stop", and the question otherwise ignored.
That's a very convenient mechanism to let the early adopters in the pyramid know when it is time to cash out.
In a few years we'll look back at this and laugh at the bitcoin pyramid players as if they were methheads. In the meantime it's a obvious scam baited for geek. We've become mainstream enough to attract predators.
"Slashdot traffic plunged by way more than 8 percent" /. although it might make it worse. The beta-numbnuts on the other hand are totally destroying it right now.
That would be awesome! Then the other 91+ percent could get to read comments again.
beta is not ruining
The gold fetishist believe gold has value, no matter what. It doesn't. Examples are for instance the holocaust, people ended up selling small fortunes of gold just to survive or even just to eat. The end of time of dreamers who think that once the government collapses, their gold horde will be any safer then a bank account, forget that when Mad Max becomes real, gold has no value.
THIS is why Fallout uses bottle caps. NOT because of anything to do with bottle caps, just to show value is without meaning. People value whatever they value. And I got food and you don't I am not going to give you my food in exchange for your gold because that would leave me holding no food and only worthless gold.
VALUE is ALWAYS what someone ELSE is willing to give up in exchange for it. Take the value of a dollar bill. How much sex does it buy? It can vary from woman to woman and even from moment to moment and from buyer to buyer. Or for something slashdot readers are more familiar with, how about a softdrink from the exact same factory? Can vary from 35 cents to 2.50 with in a few hundred meters (chinese toko to convention hall).
Bitcoins trade is one person selling and another person buying. The more such traders happen, the more you get an average price. But I am going to bet that if I showed up and wanted to sell a BILLION bitcoins in one go, the average price would not apply. Same as if the US tried to sell all its gold at once.
THAT is how easy value can change. Very few things have any intrinisic value whatsoever. What is the value of water to someone living near a lake? The value of food to a farmer with a bountiful harvest? Want proof, read up on changing eating habbits. Like pigeons, peasant food, flying rats or fine dining?
The hardest thing to accept in life after death is that value is fleeting.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
The people on Slashdot complaining about the new design are the same folks in IT who are scared to learn new technologies. Adapt or get left behind. There is nothing wrong with the new design, you are just scared of change. Look inwards for a fix.
When Germany invaded Denmark in World War II, Hungarian chemist George de Hevesy dissolved the gold Nobel Prizes of German physicists Max von Laue (1914) and James Franck (1925) in aqua regia to prevent the Nazis from confiscating them. The German government had prohibited Germans from accepting or keeping any Nobel Prize after jailed peace activist Carl von Ossietzky had received the Nobel Peace Prize in 1935. De Hevesy placed the resulting solution on a shelf in his laboratory at the Niels Bohr Institute. It was subsequently ignored by the Nazis who thought the jar—one of perhaps hundreds on the shelving—contained common chemicals. After the war, de Hevesy returned to find the solution undisturbed and precipitated the gold out of the acid. The gold was returned to the Royal Swedish Academy of Sciences and the Nobel Foundation. They re-cast the medals and again presented them to Laue and Franck.
"Destroyed", but, no, not really.
Il n'y a pas de Planet B.
Is this still necessary? They've already acknowledged that people don't like the beta and stated that they won't make it mandatory in a few months as they had planned. The goals of the boycott seem to have already been met, it doesn't look like there's a good reason to go through with it at this point or to continue with these posts (barring further news on the matter).
Grow the fuck up and stop spamming the comments. The grown ups want to discuss the news.
What a childish thing to say. When I was younger and naive I thought that voting and going through proper channels was how people changed the systems that govern them or otherwise affect their lives. When I became an adult, I put away childish idealism and threw out the narrative fairy tales of the indoctrinators. Once I let only observation and fact shape my thinking I was able to clearly see that voting doesn't matter. The systems are rigged. If you do not know this, then you are ignorant of history. The rulers react only to save face when confronted with loud and vocal and persistent protest. Just look at the majority of changes enacted by the world's peoples.
It is been made painfully and bluntly apparent that here at slashdot we do not even have the illusion of a vote. We therefore use our voices as it is all we still have, for now. Fuck Beta. The grown ups know how the world works better than some ignorant, complacent, and short sighted children. Rarely do rulers actually know what's good for the people they rule, and nearly universally do they reject the Scientific Method -- a means by which they could discover the correct course of action! This is because they care not for what's best for the people. We have to make them care. It is the very grown ups who see in longer terms and are willing to sacrifice the comments here for a while if it means there's a chance we may not let the community be destroyed. Extract your head from your ass: The beta makes discussion of the news difficult. A few weeks of pain is nothing compared to eternity.
Virtually anything you might buy or sell derives at least some of its value from faith...When something happens to shake that faith, the value drops.
I won't disagree with anything you said, but value also derives from usefulness. A working hammer is more valuable than a broken hammer, and while there is some element of faith in believing that it will still work on the next strike, it isn't much of a leap.
There aren't a lot of currency exchanges that convert bitcoins to traditional currency. If one of them closes up, then bitcoin has less utility, because I can do less with it.
If gas stations stopped selling non-diesel fuel then you'd see the value of non-diesel cars drop significantly, even though nothing about the cars themselves changed. They would have far less utility if they couldn't be driven in a practical way.
Now, usefulness and faith also interplay, because there is a question as to whether another entity could/would replace mtgox. The fact that one exchange handles such a large percentage of bitcoin-to-usd/etc transactions suggests that this is not something that is easy to replace (mostly due to legal reasons). That creates a general fear that bitcoins could lose a lot more of their utility, because right now it is hard to buy anything directly using bitcoins.
"there is far far far less bitcoin than there is gold, and there always will be far far far less bitcoin than there is gold. Limited to 21million coins."
.com stock at this point, perhaps it will survive, perhaps it won't.
Total quantity in existence is completely irrelevant. People could create a currency backed completely by by copper if they wanted to. Copper historically WAS used as money for very low value transactions where dividing silver or gold was not practical. Being rare is not the be-all-end-all of currencies, it's an advantage, but not required. It is an advantage in that the resulting physical coins carry significant purchasing power.
Money has 7 characteristics and the more characteristics something has, the better it will serve as money.
(1) It must be durable, which is why we don’t use wheat or corn or rice.
(2) It must be divisible, which is why we don’t use art work.
(3) It must be convenient, which is why we don’t use lead.
(4) It must be consistent, which is why we don’t use real estate.
(5) It must possess value in itself, which is why we don’t use paper. (The US dollar was originally backed by gold, which is the reason people accepted it in the first place.)
(6) It must be limited in the quantity that is available, which is why we don’t use aluminum or iron.
(7) It should have a long history of acceptance, which is why we don’t use molybdenum or rhodium.
Bitcoin fails 1, 3, 5, and 7.
It is not durable in a practical sense because it relies on a global P2P network to work. Governments have taken their countries off the internet before. How do you spend your bitcoins during civil unrest when you can't access the network? It is also vulnerable to a 51% attack, which is well within the technological capabilities of many governments.
It is not convenient because it relies on both parties having setup a bitcoin wallet and having an internet connection. If I want to buy a used car for 3 ounces of gold, all I have to do is hand the seller the gold and they can verify firsthand that it is real and then I get the title to the car. I've gone to estate sales where there was no cellular or other data service and was not aware of this beforehand. Someone trying to buy via Bitcoin would be SOL, people using gold, silver, or paper money would go on with business as usual.
It does not posses value onto itself. Lets say that one day, nobody wanted to use gold as money, perhaps everyone decided to use Platinum instead. Would your gold's value drop to zero? No, because gold has uses beyond being money, especially today with its many industrial uses. If people stop using bitcoin as money, the values goes immediately to zero.
Bitcoin does not have a long history behind it at all while gold has a record that spans almost all of human history. 5,000 years of use and gold has never gone to zero. I have cans of SPAM that are older than bitcoin. (and still edible too) Once it earns a reputation that lasts a few decades, perhaps it will gain more widespread acceptance, but it might as well be a
The gold atoms remained, but the metal known as gold (consisting of a gold atoms in a metallic lattice) vanished. The dissolved gold atoms don't any more have any of the properties associated with gold. Of course, it is not that hard to make new gold from those atoms provided you can get them in sufficient concentration, but that doesn't mean the old gold is not gone.
Anyway, if you go to that level of nitpicking, you also have to note that bitcoins consist of nothing but information, and according to quantum mechanics, information is never destroyed (OK, for black holes, it's still debated, but here on earth there are no black holes). Therefore bitcoins cannot be destroyed either.
The Tao of math: The numbers you can count are not the real numbers.