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NYTimes: Move Over, Bitcoin. Ether Is the Digital Currency of the Moment. (nytimes.com)
An anonymous reader shares a report: The price of Bitcoin has hit record highs in recent months, more than doubling in price since the start of the year. Despite these gains, Bitcoin is on the verge of losing its position as the dominant virtual currency. The value of Ether, the digital money that lives on an upstart network known as Ethereum, has risen an eye-popping 4,500 percent since the beginning of the year (alternative source). With the recent price increases, the outstanding units of the Ether currency were worth around $34 billion as of Monday -- or 82 percent as much as all the Bitcoin in existence. At the beginning of the year, Ether was only about 5 percent as valuable as Bitcoin. The sudden rise of Ethereum highlights how volatile the bewildering world of virtual currency remains, where lines of computer code can be spun into billions of dollars in a matter of months. [...] The two-year old system has picked up backing from both tech geeks and big corporate names like JPMorgan Chase and Microsoft, which are excited about Ethereum's goal of providing not only a digital currency but also a new type of global computing network, which generally requires Ether to use. In a recent survey of 1,100 virtual currency users, 94 percent were positive about the state of Ethereum, while only 49 percent were positive about Bitcoin, the industry publication CoinDesk said this month.
Buy tulip bulbs now! Get rich quick!
The rich have way too much money sitting around. They're investing in nothing backed by nothing on the promise that it might one day be something. It's insane. What ever happened to investing in building something?
There's a new gold rush in crypto currency that is causing video card prices to go up as everyone and their mother tries to mine the latest and greatest from the ether.
http://www.pcgamer.com/it-looks-like-cryptocurrency-mining-is-driving-up-nvidia-graphics-card-prices-too/
Bitcoin is on the verge of losing its position as the dominant virtual currency
In terms of actually being used as a currency, i.e. people using it to buy and sell things, I don't think I've personally come across anywhere accepting Ether. I've bought software, VPN service, pharmaceuticals (no, the legal kind) with bitcoin, which seems to be widely accepted. Surely before you can say that Ether is replacing bitcoin as the "dominant virtual currency", it would have to gain widespread acceptance as an actual currency, rather than just something to get speculators excited.
Oh no... it's the future.
This kind of jump, especially against an well established currency sounds like a Soros-esce pump and dump scheme. The idea is simple:
* Buy a bunch of currency which drives the cost of buying more currency up with another currency or precious metals
* When the currency hits its peak sell off all of your stock of said currency
* When the currency crashes buy back your stock back for pennies on the dollar or what every your currency's equivalent is.
* Rinse and repeat until you become an enemy of the state
Give it 6 months and you'll see a huge crash and then it will normalize at about 1/3 of its current value. After that look for gradual but steady increase in price.
You say things that offend me and I can deal with it. Can you?
Notes on Ethereum .Money is what people believe it is.
-Key man risk of 22 year old kid. Benign dictatorship akin to Torvalds.
-Supply isn't limited like Bitcoin, annual inflation.
-Currently hugely overvalued due to ICOs, not to say it doesn't have some value
-Its blockchain is huge, bloated and doesn't currently scale very well. Network clogs quickly.
-Smart contracts are promising, interesting technology that have some very useful cases but very specific cases. Prediction markets are gold for this. Put a blockchain on it is the new put a bird on it.
-Enterprise use is mostly vapourware. Banks all trust each other and know each other. The Gov knows itself. They just need better databases. Consultants and innovation theatre practioners looking for a passing bandwagon. What back office is left to automate?
-Premine for the insiders
-Not immutable. Read about the ideological split between Ethereum and Ethereum Classic. Gresham's law gone wild. The bad money turned into the good money and good money the bad. Could be argued Etheruem should actually be $20.
-Bitcoin has been a ridiculous bubble for 9 years. Keep thinking that. If it fell to $1000 the longterm trend still holds. Better money will win.
A currency is most useful if its value is stable: if the dollar in my pocket will buy me roughly the same amount of goods a month or a year from now, then that dollar is useful because I can make a promise for an exchange a year from now based on that dollar.
Imagine, for example, if your rent had been defined in terms of a number of Bitcoins per month for a year. The price of Bitcoins fluctuations so much over the course of a year that you might end up paying vastly more for rent by the end of the year than you paid at the start, or conversely you might end up paying vastly less. No reasonable person or entity would dare writing a long-term contract based on Bitcoin. And the rapidly fluctuating values make it dubious for most products, as they'd have to readjust the value frequently.
Maybe the concept of a blockchain could be useful as a medium of exchange, such that the buyer converts their money to Bitcoins and the seller converts it directly to the currency of their choice upon receipt. But I doubt it. It seems overly-complicated for the task.
If Bitcoins crash, and Ethereum takes over, then it's only a matter of time before Ethereum crashes and the next cryptocurrency takes over. But none of these currencies will ever replace government-backed currencies. Because they can't assure stable value.