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Bitcoin Price Hits Fresh Record High Above $2,200 (cnbc.com)
An anonymous reader writes: Monday marks the seven-year anniversary of Bitcoin Pizza Day -- the moment a programmer named Laszlo Hanyecz spent 10,000 bitcoin on two Papa John's pizzas. More important than the episode being widely recognized as the first transaction using the cryptocurrency is what it tells us about the bitcoin rally that saw it break through the $2,100 mark on Monday. Bitcoin was trading as high as $2,185.89 in the early hours of Monday morning, hitting a fresh record high, after first powering through the $2,000 barrier over the weekend, according to CoinDesk data. Throughout the weekend, the value of cryptocurrency was looming around $2,000.
Man, $11 million dollars for a pizza; I hope it was damn good!
-SaNo
Bit coin is slowly limiting the supply of new bit coin (by design), which drives up the price of bitcoin. So every time you go to buy a good or service you spend less bitcoin because its value has increased. I see a problem emerging when someone says they want to get paid in a fixed amount of bitcoin per hour.
Architectural plans are like computer source code with a couple of differences: You only compile once.
That's assuming he could sell each coin for 2k without crashing the economy.
Anyone still on the bitcoin bandwagon are the ones who either have free electricity or criminals. As a currency it's just doomed to fail due to the ever changing "value" people attribute to it. It's simply too volatile. One day it can be worth $2k and the next it could be worth $500. The fact it becomes rarer after a while, only the ones who invested heavily in bitcoin in the early days actually made a decent profit, today if you join, you basically get peanuts.
I remember when every third story on slashdot was some bitcoin mania hype. It was awful.
Thank ghod President Trump was elected and drove the bitcoin stories from slashdot.
It can work if there is some sort of central authority managing the money supply. I'm sure Bitcoin thought of that and has built that into their system.
Architectural plans are like computer source code with a couple of differences: You only compile once.
POP! GOES! THE! WEASEL!
Bit coin is slowly limiting the supply of new bit coin (by design), which drives up the price of bitcoin.
Correct. This is because the makers of bitcoin were under the (incorrect) belief that having no ability to adjust the money supply quickly (ala the gold standard) is beneficial and failed to understand why such a system failed. Those who don't learn from history are doomed to repeat it.
So every time you go to buy a good or service you spend less bitcoin because its value has increased.
Not necessarily true. Just because the supply of bitcoins is (roughly) fixed it doesn't mean the demand for them is fixed. The price can and does go both up and down with great regularity.
I see a problem emerging when someone says they want to get paid in a fixed amount of bitcoin per hour.
That would be no different than saying you want to be paid a fixed number of dollars per hour. Inflation/deflation are real things with real consequences. Doesn't matter if you are talking about bitcoins or dollars. The difference of course is that you can buy most things with dollars but very few things with bitcoins so you are experiencing exchange rate risk in addition to simple inflation/deflation.
1849.
The flip side (which BTC proponents don't want to talk about) is that fees are currently running around $2 USD per transaction if you don't want your transaction to sit around unconfirmed for hours if not days. The Chinese mining pools are loving it.
You want to buy a $20 item with BTC? Someone has to pay that ~10% transaction fee on top of sales tax. Credit card fees are a bargain by comparison. So what has happened is that Bitcoin has become useless for what its supporters intended it to be - as money (unless the transaction is large enough to make the transaction fee negligible). Bitcoin has devolved almost exclusively into an instrument for speculation, blackmail, and transactions in illegal goods.
Even the big names in BTC processing (e.g. BitPay) are calling for an increase in the block size, which of course is being ignored by the mining pools. Why would they change a system that is funneling money into their pockets with each transaction? The alternative is a hard fork in the blockchain, but that may result in a crash in BTC prices.
The next few months will be interesting for Bitcoin.
Buying shares from a startup is the only stock investing possible?
Actually most people CAN'T buy stocks from startups, you usually have to wait until they IPO. My last IPO is now at 152% what I paid for it the day it opened, RACE (Ferrari NV) if you are curious.
So you complain about a situation that doesn't happen, and the closest thing to what you complain about has gotten me a 50% return over a couple year period.
Please don't take economic advice from Opportunist. He is literally making stuff up to match his fake political view of the world.
"Markets can remain irrational longer than you can remain solvent."
We're going to keep saying BitCoin is stupid, and the value is going to keep going up. Not because BitCoin really IS the currency of the future, but because prices will keep going up just as long as enough people believe it's the currency of the future.
There are too many shortcomings for it to supplant more valuable currencies, but as a commodity and for specific use cases it's going to stay around. I laugh when I hear some anti-bitcoin person write or say that it's dead or going to die, yet it keeps right on doing it's thing (whatever that ends up being for whatever purpose). Bitcoin is here to stay.
Deflation and Inflation are not a bad thing on their own.
Sorry, but wrong. Deflation is indeed a bad thing. Deflation means that currency gets more valuable with time. This means that is to everybody's advantage to hoard currency, since it gets more valuable the longer you hold onto it. That means less currency in circulation, which means it gets even more valuable with time, which means people hoard it more. This is a bad vicious cycle.
Deflation is a bad feedback cycle.
If their rate is in balanced with the rest of the economy it isn't that big of a deal.
Deflation can be "balanced" with the rest of the economy if the rest of the economy is crashing. I suppose in that case you could say that the "not good" part should be attributed to some other part of the economy, not to the deflation itself, but, no, it's not good. In more general terms, tas currency increasing in value with respect to the things that can be purchased, there really isn't any time at which it is good.
> bitcoin rally that saw it break through the $2,100 mark
That price is set by just one factor: the large number of ransomware / cryptor computer infections, where hackers demand 300-700 USD per incident tithe in bitcoins, usually sent via the Tor/Onion network, to divulge the cryptographically strong unlocking key.
As soon as the powers that be get fed up with the ransomware menace (e.g. think some heavily publicized hospital crisis with many patient deaths) bitcoin-to-tangible exchangers will be rounded up and locked away for life (at the very least) and it's game over.
As the ultimate measure, the guvmint may even resort to mandatory printing "Crypto-currency is death" on every banknote, envelope, newspaper. Do you remember from history class how the earliest US (13 rebel colonies) paper money carried the warning "Forgery is death". Those pieces were so primitive not even worthy of the name banknote, but the warning was backed by armed force, so it worked. (Despite cipher-punk fantasies, there are few problems in real life which cannot be solved by hanging a few people from lamp posts and trees.)
Wannacry must be driving the value up...
I believe bitcoin has value when someone actually expends the effort to find that legendary harddrive with a cache of 7500 bitcoins that got thrown out by accident.
Literally mining a pile of garbage to recover old-growth, early sequence bitcoins.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
i give you B- for economics
Gee thanks professor.
Republic of China had two decades of economic growth while having a deliberately set deflationary monetary policy.
I presume you are talking about Taiwan. Please cite your source for "deliberately set deflationary monetary policy". The Taiwan Dollar exchange rate has varied quite a bit on Forex markets in relation to the dollar but never consistently deflationary.
This is a country that now supplies 90% of world's microchips
Taiwan does supply the most but the number is no where near 90% and to my knowledge never has been.
I don't see why parent post is modded Insightful. To me, it looks like another bitcoin-hate rant, typical of "I-wish-I-were-an-early-adopter" people.
Nope. Don't have the slightest regret for not getting involved in bitcoin. I think bitcoin is a dumb idea and I think it is important to say why so that people can make an informed decision about whether they want to bother with it or not. I'm sure some people have made a lot of money off bitcoin but I largely regard them as charlatans who found a greater fool.
First of all, it's funny to see opinions such as "why Bitcoin is doomed to fail/succeed". I guess strong opinions have their charm, but the truth is *nobody really knows yet*.
I might not know with 100% certainty but that doesn't mean I can't judge based on the evidence. And bitcoin is far from the first attempt at a new currency and it very clearly has certain known characteristics. I'm not about to pretend that the laws of economics have been repealed for the benefit of bitcoin. It has some advantages and a lot of disadvantages. There are many people telling falsehoods about which are which.
If you look at the reason of "why the gold standard failed", literally NONE of these reasons apply to cryptocurrencies such as Bitcoin.
Sadly you couldn't be more wrong. Almost all of the criticisms relating to the gold standard apply. Basically the only thing bitcoin solves that was a problem in the gold standard is the problem of physically warehousing and transporting the gold if someone demanded it. Obviously with data this isn't an issue. Otherwise it is little different than any other fixed supply asset being used as a form of currency. Same economic rules apply - only the minor details of use differ. And that's a play we've seen before many many times.
As for "It also prevents central banks from being the arbiters of the money supply"... sorry, am I the only one seeing this as a GOOD thing?
Fixing the money supply to an unalterable amount does not solve the problem of the failures of central banks. In fact by all objective measures it actually increases the problems that central banks we created to deal with. Yes central banks do an imperfect job of managing the money supply. But there is no evidence to reasonably believe that bitcoin or any similar crypto-currency will do the job any better. That is just an unsupported pipe dream by bitcoin supporters.
The thing people seem to fail understanding is that Bitcoins are VERY FINE-GRAINELY splittable.
So is gold. Down to the atom if desired. You're failing to illustrate a difference. You can split a dollar in sub penny amounts too and it's done all the time down to 5-6 decimal points in many contexts.
And, in case anybody is even considering that, I refuse to enter into the debate "BTC is fake and without any value, unlike real currencies and gold", because that's just moron.
Bitcoin isn't fake. I just don't think it is a smart idea. It's proponents generally support it for either ideological reasons (typically unsupported by evidence) or sometimes for nefarious purposes. Proponents typically claim it is a cheaper way to exchange funds but that's only true if you don't adjust for risk. It's not widely accepted, has substantial deficiencies as a medium of exchange, is an unstable store of value, is based on still-unproven technology, and has a host of other serious issues. I haven't heard a single argument that I find credible that bitcoin will be the magical solution to the problems of central banks or fiat currencies. To date it largely seems to be attractive to those engaged in activities that they would prefer to remain untraceable to law enforcement and/or taxing authorities.
Look at all these Economics "experts" that come out of the woodwork when Slashdot runs a Bitcoin story. Deflation is only a bad thing for a nation's currency since it discourages consumption which lowers GDP and can cause a recession. It's good for the people who hold that currency when deflation happens. So deflation is actually an argument in favor of an investment asset (it means it gets more valuable over time), though it wouldn't be a good thing for the Euro or US Dollar.
Anybody who knows anything about Bitcoin isn't actually expecting it to replace the Dollar. And it doesn't have to in order to become extremely valuable. It already is, in fact.
let's pray
Everyone should definitely buy bitcoins as an investment. It is 100% guaranteed to have a huge return and no one will ever lose money. All the investment advisers I know tell me to dump my shitty performing index funds and switch to an all-bitcoin portfolio because it is the one investment that is always guaranteed to go up.
Hi Slashdot,
Go look up the Nov 2016 Chinese changes to getting money out of the country, it's significantly more difficult now.
Then go look up the value of bitcoin from that period until now.
I'm from Melbourne, although I imagine anyone observant from London, Sydney, Vancouver, New York could confirm though, that there's an almost endless supply or Chinese housing investors hitting the big cities of the world and they're having more and more difficulty getting money out.
Honestly, I can't see the value of bitcoin dropping in the short term, but I imagine if you own any, it may be wise to offload at some point, since it's being just artificially pumped to traffic Chinese cash into Western housing. From a goods and services perspective, I think it's EXTREMELY unlikely that a lot more retail stores or wholesalers have started offering it as a payment method, over the small handful who already had.
Wow I left about 30 bitcoins in some bitcoin bank about 5 years ago! I'm gonna log in and CASH OUT! What was it called, Mount Cox or something? I wrote it down somewhere.
"Savings" in the long-term is the removal of money from the economy. Money that goes unspent is the same as money that's been burned.
Not true at all as long as you hold your savings in a financial institution. Put your money in a savings account or similar and that money will get lent out to do other useful things in the economy. You can take it out of circulation by stuffing it in the figurative (or literal) mattress but that's not what happens to most money. Even if you purchase a financial instrument such as a stock or bond that money is merely transferred to someone else who can then put it to productive use. Now savings aren't perfectly efficient so there can be too much saving and not enough investing but that isn't the same thing as removing the money from the economy. It just means that the money isn't being utilized optimally.
If you put your money in the bank and then come back 10 years later and take it out to spend it, it's functionally the same as printing new money.
This is a direct contradiction to your assertion that savings = removal of money from the economy. If you put money into a bank and it gets lent out then it is not money that has "been burned" because it's in circulation. You are correct that fractional reserve banking has a money creation effect but that's the exact opposite of taking it out of circulation.
That's a false premise. The gold standard didn't fail, it worked for millennia.
Yes the gold standard failed. It caused more problems than it solved and it was impossible to maintain for a host of reasons. All the gold standard is fundamentally is a peg of a currency to a commodity - in this case gold but other commodities could be used to more or less the same effect. This does have certain advantages but it also carries some very important disadvantages as well.
We moved off the gold standard as an international currency because it was too hard for the US government to balance its budget.
The actual reasons are multiple but there are a few key ones. For various practical reasons mostly related to international trade it was impossible to move the gold around to perfectly match the money supply in any given country at any given time. "Paper" Currency can change countries faster than it is practical to move the gold around to match where the currency is. And since most money is not actually in the form of coins nor is it practical to exchange it that way we tried a variety of (ultimately futile) means to compensate. There also were issues relating to imbalances in money supply versus labor and capital mobility.
If you want a modern example of the problems caused by a currency peg without the ability to adjust the money supply look at the problems Greece has had in recent years. When they joined the Euro they effectively pegged the drachma to the euro at a fixed rate (similar to a gold standard) and abrogated their right to tinker with the money supply. This has caused a host of difficult problems because the best tools to deal with the issues have been taken away from Greece.
On the other hand, we have seen fiat currencies fail many, many times
We've seen countries on the gold standard experience hyperinflation many times. The Weimar Republic is probably the most notable example and it led more or less directly to a world war. The gold standard is not a viable means to prevent this from happening. Countries on various incarnations of a gold standard defaulted routinely.
The US has only been on fiat currency since 1971
The US left the gold standard effectively in 1933 under FDR. What happened in 1971 is that the US stopped converting dollars to gold at a fixed rate but the US had already de-facto left the gold standard decades earlier.
It remains to be seen if we can manage it or not.
True enough I suppose but we've already proven that the gold standard cannot work in a modern economy so I'm not sure why you seem to favor returning to something that we've already established did not work well enough. Bitcoin does not show any characteristics that eliminate most of the problems with the gold standard aside from the physical transport issues.
This means that is to everybody's advantage to hoard currency, since it gets more valuable the longer you hold onto it.
I believe the word is save, not hoard. Deflation does not work like you think it does. Money is just like any other good in the economy,
Nope. Money is the medium of exchange.
and so its price is set just like every other good -- by supply and demand schedules.
Of course. The fact that money is not "like any other good in the economy" does not exempt it from supply and demand.
The rest of your argument fails because you apparently think "money is just like any other good in the economy" and thus a liquidity crisis is no big deal. A liquidity crisis actually is a big deal.
There's a quote I like: "Money, to a society, plays the same role that blood does to an organism. When it fails to circulate, the organism dies."
Sorry, but wrong. Deflation is indeed a bad thing. Deflation means that currency gets more valuable with time. This means that is to everybody's advantage to hoard currency, since it gets more valuable the longer you hold onto it. That means less currency in circulation, which means it gets even more valuable with time, which means people hoard it more. This is a bad vicious cycle.
I want to point out that this is a hypothesis frequently used to justify inflation, but
Like almost everything, saying "X is bad" does not mean "the opposite extreme must therefore be good."
Most things, in economics and in life in general, involve a trade-off. Saying "deflation is bad" should not be used to imply "inflation is good":
Medio tutissimus ibis.
in fact there is little evidence to support it. There just haven't been many periods of deflation to really develop an empirical understanding of how people will react, so all we have is guess work. And somehow the guesswork always leans to the side that people wanted it to.
I want to use it like money. Money has 3 requirements for me.
1. Store of value
2. Medium of exchange
3. Unit of account
As long as it doesn't drastically lose value bit coin is a good store of value.
Where it is accepted it's transaction costs are very low compared to using banks or credit cards. It does differ from cash in that transactions do not occur instantly
Unit of account is where bitcoin currently fails to be a currency. Very few items are actually valued in Bitcoin. Most items are valued in US dollars and then the current bitcoin conversion is quoted. Even if I had an online business that sold everything in bitcoin I would still likely count the value of my inventory in US dollars, or Euros.
The block size and the number of coins mined per day both need to increase though so that transaction times and transaction costs decrease.
For some reason, today's bitcoin operation reminds me of Pyramid Schemes, where only the first people actually make money. This system is going to fail somewhere in the future. And it's being taken by terrorists and crackers as a way of receiving untracked money. It doesn't matter. Unregulated "freedom" stuff here on earth will never work because of human (bad) nature.