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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
I just thought of a name for it: "deflation". It will NEVER work!
Spread your transactions over a few days on all the exchanges.
#DeleteFacebook
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.
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.
That's the nature of every system, including Wall Street, education, investments, government, and sex.
The ones who get in early reap the benefits.
So, you were whining 5 years ago; had you invested 5k, you could retire today.
Instead, you're still whining today.
The ones who get in early reap the benefits.
Unless you're Apple, then you can join the party late, come out with a new design, and claim to have invented it first. MP3 players before the iPod? Meh... Cellphones before the iPhone? Meh... PCs before the Macs? Meh...
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.
This may lead to its actual demise. With the value increasing so much so fast, with the designed supply limit. Means actually buying anything with bitcoins will be a loss. With the average 3% inflation of the US dollar, that is values is derived from a complex economy. It means I am willing to spend my Dollar, on things that may grant a temporary reward ($20 for a Pizza) or a long term reward such as investment in some company that actually makes something. Because after 7 years that $20 Pizza would only be about $25.00 so that benefit of having a Pizza for your short term pleasure isn't a major loss. Bitcoins may be too valuable to buy anything, because their value will just go up, with a mostly fixed supply, any increase of demand will cause hording.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
It's the online extortion racket that is creating a big part of this rise in the price of bitcoin. Would it really have gone up so much if so many people weren't being asked to buy and send it to criminals as a result of viruses and malware? The problem with that is that it is increasingly becoming seen by the general population as the way for criminals to make and move money, therefore it is becoming ever more tainted.
Deflation and Inflation are not a bad thing on their own.
If their rate is in balanced with the rest of the economy it isn't that big of a deal. If the economy slows a relative deflation is a good thing, because it will make our prices cheaper so it would be purchased more from other economies.
Inflation when the economy is good is also a good sign. As we can purchase more from cheaper economies.
The problem is when these go at a rate faster then the growth of the actual economy.
Deflation during a strong economy, causes over consumption where people buy things that they cannot really afford for the long term.
Inflation during a week economy, causes under consumption where people can't buy things that they need to simulate the economy.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
You're investing in the hope that someone else in the future will want to pay more for it.
It's nothing more than speculation. And people have been made rich (and poor) by speculating for a very long time.
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.
You messed the terms, inflation actually causes more spending while deflation causes people to stack money for later spending "when money is worth more". It is deflation that reduces spending and consumption.
Both terms matter when the currency is used as a primary currency in a country. For a virtual currency, meant only as means of exchange, inflation or deflation - it doesn't really matter.
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.
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.
Inflation punishes people who keep money under their mattress.
Deflation rewards people who keep money under their mattress.
Keeping money under the mattress, instead of investing it, is generally bad for the economy, which is (in part) why we generally have inflation.
Bitcoin is smaller than a bit player in the general economy. If a major currency like the US dollar were to deflate 1000x in 7 years, it would upset the economic apple cart too much, and the people with the most apples in that cart would do whatever they could politically to pressure the system into keeping their apples safe, secure, and most importantly: more numerous than everyone else's.
I just thought of a name for it: "deflation". It will NEVER work!
You know, there's this whole sham called "antiques", "art" and "collector's items" that often get more valuable over time and seem to be doing quite well as a deflationary market. You might say, well if they're getting more valuable why would anyone sell them? There's lots of reasons people choose to cash in and do something else. The only thing that's needed is the faith that people would always want to buy a genuine Ming vase or Picasso or Superman #1, if you end up sitting on yesterday's fad it might be landfill material. It's not great as your everyday trading currency because you want people to spend it rather than hoard it and a market where the product's value depends on the whims of public opinion is always volatile, but the market does exist and is neither collapsing nor booming to infinity. Not that it's a great analogy to Bitcoin, but it's not like deflation = FAIL.
Live today, because you never know what tomorrow brings
Deflation means that currency gets more valuable over time.
That people will save, rather than consume.
It's not that "people will hoard currency" it's that : people will be saving for retirement; services and costs previously provided by the government, and through taxes, are now self-generated by the individual. It's a full replacement of tax-policy, taxation, 401k and other forms of subsidized retirement.
People will still spend money, but on what is important to them, rather than mindless consumerism. Peopel will still buy food. Buy housing, etc. But those who want, can live normally, with a modest income. Those who put off purchases for a year, will see just how much more money will buy, and will be able to save for retirement, through purchases though time, rather than work.
Thus, the economy will switch over to producing things of value, that people will buy, rather than things with no inherent value (hello kitty tweezers?) that few people will. And society will become more loose with their money, as over time, the money they have will allow any regular citizen to fund and pay others to devise solutions to their problems; and that money flow plus an added few years of money, will allow the next generation to be financially independent and capitalize the next generation.
People spend more on what's worth to them in the now instead of just mindlessly consuming, because people are now intuitively aware that the value of anything they buy is zero. (everything falls apart, wears out, or has a fixed lifespan)
People will be able to travel and have more life experiences.
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.