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Bitcoin Recovers Some Losses After Its Worst Week Since 2013 (reuters.com)
An anonymous reader quotes a report from Reuters: Bitcoin fell nearly 30 percent at one stage on Friday to $11,159.93. At 3:09 p.m. (2009 GMT) on Tuesday, bitcoin BTC=BTSP was up 15 percent at $16,030 in light trading on the Luxembourg-based Bitstamp exchange. The digital currency had risen around twentyfold since the start of the year, climbing from less than $1,000 to as high as $19,666 on Dec. 17 on Bitstamp and to over $20,000 on other exchanges. Critics have pointed to bitcoin's design flaws and hacks of digital "wallets" in which bitcoins are kept as an alternative to traditional currencies. Prices of other cryptocurrencies, which slid along with bitcoin last week, have also recovered, with Ethereum, the second-biggest cryptocurrency by market size, quoted around $771, up from Sunday's low of $689 but still far from highs around $900 hit last week.
Once the warehouses of Tulips clear at the temporarily lower prices, Tulip markets will return to astronomic levels, especially once the South Sea boats arrive!
-- Tigger warning: This post may contain tiggers! --
It is year end. It makes sense that some of the long term holders (1yr+) sell off to get the lower tax rates. Others maybe splitting the profits between 2018 & 2019. A few of those two groups and then a ton of panicked sellers cashed out.
Also people probably needed the cash to buy gifts during the year end sales or pay off things.
The amount of vitriol this site has for bitcoin makes me wonder, why even bother posting related stories?
It's like old nerds' kryptonite. I swear in five years when it has become ubiquitous, the folks here will still have their heads up their asses.
while True:
bitcoin.pump()
bitcoin.dump()
http://michaelsmith.id.au
The highest it reached in 2013 was about $1200. So when it fell near $11,000, it was roughly 10x what it was in 2013. I have a hard time seeing how anyone could say with a straight face that this was bitcoins worst week since 2013 when it is up that much.
while speculators and suckers have cash or can borrow cash:
bitcoin.pump()
bitcoin.dump()
Bitcoin has ceased being a currency if it ever was. It's now a virtual tulip.
North Korea probably cashed out, so they could afford a new missile or bomb or something.
You missed Bitcoin.
You missed Litecoin.
You missed Dash (A.K.A. The coin previously known as Darkcoin).
You missed Ethereum.
You missed Monero.
What are you waiting for?
Dogecoin is almost at one cent per coin.
Reddcoin is already over one cent per coin.
Digibyte is over five cents per coin.
Get $20 of each of these three. Worst case scenario, you lost $60. Best case scenario, the top ten crypto-currencies all increase to tens of thousands of dollars and these little coins "only" go up to a few hundred or a few thousand dollars each. That's still a shit-ton of cash.
.
Hold them while you can, and don't worry, the price will be back up. Just as soon as those with enough money to manipulate the market are ready to cash in. You just need to sell before they do, and so the price goes back down again.
You thought the stock market was bad? Companies have intrinsic value. You can sell a physical hole in the ground for cash. Bitcoins are only worth what the people that don't have them assigns to them. Lets hope that value isn't zero anytime soon.
What's so surprising? There're huge price jumps and falls in not so long periods of time.
That Other People Believe Has Value Because Other People Believe Has Value Because Other People Believe Has Value Because Other People Believe Has Value.
Other people say Anarchy would never work. That too is a belief.
Wew that fantasy though
The lightning network will solve the problem of bitcoin being too slow to be useful for commerce. The problem of the lightning network getting "hacked" and your digimon going poof is solved by using offline bitcoin wallets instead of lightning...
Wait, what now?
Seen around the internet
See that "Preview" button?
Despite this site being one of the first places most people heard of Bitcoin, the denial of it's success is still rampant. It's funny. Please continue.
Read about bank and savings and loan failures during the Great Depression, then the subsequent mistrust of said institutions. There is a great book about this called Diary of the Great Depression by Benjamin Roth.
Oh dear, a Reuters article that pimps a shit exchange called bitstamp. Why did I click this?
No one needs shoe shine boy tips.
You're missing the point of the tulip comments.
I was going to write up a long reply but nevermind that. Here's the tl;dr version:
Tulips and bitcoins are both inherently worthless. Both were/are speculative bubbles of a worthless resource. Neither is usable for daily commerce. Additionally bitcoin has numerous technical flaws tulips don't have. Go read an article on the greater fool theory and then think about what value bitcoin really has and how it is worth anything at all much less thousands per bitcoin.
You won't but maybe I just saved someone else from being the greater fool.
Does anyone else think it's kind of ridiculous to talk about the worst week for a currency that is up 1659.43% for the year? Oh no, it dropped a few thousand dollars after going from $6K to $19K in a few weeks. You can't be serious.
Because past performance is guarantee of future performance.
So naive. Or you have a lot of early bitcoin so feel the need to cheerlead.
"...bitcoin isn't a company"
This is a totally shocking statement. Take a look at who the actual miners are (percentage of blocks mined, affiliation, location and capital investment required to do that).
Look, what an idiot!
He is actually comparing banks to bitcoin.
Ok, stop. I am assuming you are the same poster as the other ACs. It seems you are about as educated as a 5th grader in Finance. Please do us all a favor and spend some time taking one to two finance or even accounting courses in your local community college. About 80% of your post is completely utterly wrong!
All you said about the banks is completely wrong. I do not know how else to say it. I have no idea where you got all that drivel but just stop while you are behind and go play with your bitcoins.
- I can name plenty of advantages of BTC over banks:
Oh my, this will be fun
o No overdraft fees.
Because you don't have an overdraft on a crypto currency.
o No miscalculations, always in the bank's favor.
When, exactly, did this happen to -you-, and if it did, show that you lost money.
o No "oh, some place decided to start monthly withdrawals because I didn't read the fine print in a purchase" BS. I either explicitly pay someone, or they don't get cash.
Just wait. Smart Contracts
o Three party escrow, guaranteeing a receiver gets their goods before payment is made.
Oh, you mean like PayPal, eBay, etc buyer protection?
o No worries about my accounts being part of the bank's books, and funds depleted when they fail.
You mean you have bank accounts with more than the FDIC limit...
o No worries about runs on the bank.
or do you deal with a 'bank' that isn't insured by the FDIC?
o BTC only gains in value, while the dollar always loses value.
Late December so far says you're just wrong.
o Once a transaction is made and the escrow party signs off, it is done. No chargebacks or stop payments.
The inability to back out a fraudulent transaction is a good thing... how?
o Big stock manipulators can't fuck up Bitcoin as they can with other markets.
Early December says you're wrong.
o I can have currency on a paper wallet, where it exists well away from where I am normally.
Got a match? And BTW, there's that FDIC thing again
o They are as easy as cash to spend.
Really? Wow, how do you get around the network latency and transaction fees?
o I trust my Trezor hardware wallet more than I trust bank security.
Again with the not knowing about that whole FDIC thing. You don't trust your bank, and you don't have to because of deposit insurance.
o I have proof of a transaction in the blockchain should someone say they didn't get paid.
Right, because your credit card co or bank don't keep records and send you statements. Someone should look into that!
o I won't have my wallet frozen because my Bitcoin app pulled my credit report and didn't like it, unlike banks which can freeze and kill your accounts if they feel like it, taking your dosh with them.
Right, no one has ever had their exchange account frozen. Oh wait, you mean your wallet software... now i have a whole lot of other useability questions, starting with the $25+ transaction fee for your morning Starbucks.
o I know my money will be in the wallet tomorrow. With the shitty security of US credit cards, it is very common for someone to find their checking account is drained of cash due to a skimmer and some tweaker buying purchases at a Wally World. That cannot happen with Bitcoin.
Really? I woke up a few days ago and 1/4 of my bitcoin value was gone, the price had dropped by that much.
o With all the deregulation happening, banks will fail, sooner or later. Bitcoin will keep on chugging during the next Dust Bowl era, while the dollar and Euro go the way of Zimbabwe's currency.
1000 times FDIC. Fiat currencies don't evaporate 25% overnight... Bitcoin -> late December.
o Bitcoin is free of international idiocy. Europeans, Russians, Bolivians, Brazilians, and people in the US all accept it. Just like gold without worry of someone breaking in and stealing your stash.
Right you are, Bitcoin is free from government oversight. Except for China, where it is highly restricted. Or US where there are a pile of regulation around exchange accounts. Or the EU. Or Japan, Canada... oh wait.
Look, I hate banks, they are the bane of my existence for a lot of reasons (you've no idea). Bitcoin feels like it's heading in the right direction, but for all sorts of practical reasons, it's -not- a currency, a store of value, or a security. It's a proof of concept... and people are working on those, for sure.
Bitcoin is a decentalized ponzi scheme. It is a disaster that will hurt investors.
Burning a lot of electricity to get what? A silly number that is of no use.
The fundamental value of anything is what you get out of it - bitcoin offers almost nothing.
1930s - all of them
And then, behold! The FDIC.
Neck Beard? What exactly are you talking about?
Bitcoin is following exactly the exponential curve that bubbles follow, the most famous of which was the tulip bubble. Just because you don't want to hear that doesn't make it less true. Just because 'neck beards' point that out doesn't make it less true.
But I understand. It's different, this time.
If you have to ask what a neck beard is then you might be one. People claimed bitcoin would collapse at $20, then $200, then $2,000. Here we are at $16k and doing fine.
Only the State obtains its revenue by coercion. - Murray Rothbard
"Really? I woke up a few days ago and 1/4 of my bitcoin value was gone, the price had dropped by that much."
Your amount of bitcoin wasn't depleted by someone screwing around though, it's value against your local currency changed.
I can't make anyone pay the difference in buying power my Canadian dollar lost in the US in the last few years, why would bitcoin be different?
The tulip thing never actually happened anyway, it's just a convenient public belief to point at like the Rolling Stone campus rape article because mass belief beats actual occurrences now.
The widows and orphans who sunk their fortunes in bitcoin can suck it when it collapses.
You think Bitcoin is doing fine. Is it? Is it really? It could be. Do you know? Do you really know? I don't know.
People claim a lot of shit. Some right, others wrong. Why would you care what others say?
-Another Neckbeard
There are much better analogies. Bitcoin is much more like art - it's value is defined by 'experts' and demand. Basquiat painting sold for over 100 million - and it's worse than average graffiti you see in cities. Is art in a bubble too?
Why does the US treasury spend more than 1 cent to make pennies when they are worth less than one cent?
It's because Currency has value _as Currency_
That's only _part_ of the value of BitCoin.
Are we going to have another bitcoin story every time the fucking price changes now?
Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
Why does the US treasury spend more than 1 cent to make pennies when they are worth less than one cent?
Wrong. Bitcoin has production costs that keep rising over time as the math to solve blocks get harder and harder by design. These costs set a bottom price for the coin that has to be paid for anyone to do any mining. Depending on the price of electricity and what kind of equipment one is using, that price is anywhere from a 500 to 1500 dollars per coin mined (not including hardware costs, that's just the electricity the actual costs with hardware are higher), and it's going to keep going up. You can't get the coins below this pricepoint, because at that price producing the coins will mean losses for the miners.
So the system has a built-in design factor that causes the costs to go up over time. This means there's much more than just 'experts' and demand at play when it comes to the price of the coin. If the value people assign to bitcoin drops below the costs of production, mining will seize and transactions will become impossible.
A more apt comparison to BTC would be if Basquait was creating and selling one such painting every 5 days, because at the current BTC market price (13 376 euros per coin) 100 million euros worth of new coins are created approximately every 100 hours.
If that was the case, his art would certainly be a bubble, as is bitcoin.
"It is the business of the future to be dangerous" -Alfred North Whitehead
Bitcoin has production costs that keep rising over time as the math to solve blocks get harder and harder by design.
No, the math doesn't get harder and harder. It is adjusted to keep the average at 6 blocks/hour. If more people start mining, the math will get harder, but if fewer people mine (for example because electricity prices go up, or bitcoin price goes down), then the math will get easier again.
When the value of the metal in a penny exceeds 1 cent, you'll probably find they start disappearing from circulation as people start to collect them and sell them for the metal.
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
Long-time Wall Streeter here. Actually, the trading dynamics of BTC are very much like any other speculative vehicle, although the short-term volatility is unusually high. (It is hard to get exercised over the nearly 50% retrace that occurred since the peak just under $20,000, especially since its extent was widely predicted by quants. The bounce came almost precisely off the Fibonacci support level around $11,600.)
Someone else mentioned Forex and many have mentioned equities. (Funny, no one is comparing BTC to government-issued fixed-income securities, which have been in a true and highly destructive bubble since late 2008.)
Relative currency values are driven by short-term interest rates, but BTC doesn't pay interest. More precisely, there's no government that issues risk-free bills denominated in BTC into a well-regulated and highly liquid market. There's no overnight repo or carry trade in BTC.
Similarly with stocks, the value of BTC isn't anything like them. People here have said "a company actually has a value." That may be true, but a publicly traded equity isn't directly representative of it. This is a complicated subject, but the value of a stock actually is a measure of its volatility (so-called "beta") relative to the market as a whole, which in turn is correlated with the overall level of risk-free interest rates and risk-bearing rates. If not for the highly distorting effects of tax policy in the US, equities and debt as corporate-finance vehicles are structurally equivalent. BTC has nothing to do with any of this.
Can you compare BTC to other things that are traded speculatively, like oil, grains, and other commodities? Not really, because those things have day-to-day economic value. The futures markets have natural sellers (think of farmers and oil producers) and natural buyers (think of food processors, oil refiners, and finished-goods consumers like yourself). These markets have endogenous and basically stable dynamics. Again, BTC doesn't.
The best analogy I've heard of relates BTC to so-called real (as opposed to financial) assets. Your house is one, but you can live in a house so it has a stable long-term value apart from its value as an asset.
Gold is perhaps the closest analogy. About half of global demand for gold is for use in jewelry; about 10% for electronics and other industrial uses. That leaves about 40% that is held speculatively. If you talk to gold owners, they'll tell you amorphous things like they're hedging against inflation in fiat currencies, or they want independence from governments. Now THAT sounds like how BTC holders talk! In short, the "natural" source of demand for this asset is not all that well-defined, and in particular there is no natural seller of BTC (as there is with every other major asset class). That means there's no inherent source of stability in BTC, although I expect the advent of futures trading in BTC to change this.
So what is speculative gold worth? The overall supply of gold in the world doesn't change too much, and actually hasn't changed much since antiquity. At current prices, 40% of it is worth about $3 trillion (very roughly). If you assume that BTC can take on some or all of the economic function of speculative gold, that means it can be worth anywhere from zero to about $45,000 a coin (again, VERY roughly). As a classic disruptive technology, whether BTC moves into this role and takes a valuation somewhere in that range, depends in part on whether BTC can displace gold for mechanical reasons (for example, is it easier and/or cheaper to hold?) The answer to that looks like yes.
How does futures trading (in theory) add stability to BTC? Basically by adding natural sellers to the market. Futures trading enables professionals to embed BTC into an overall covariance matrix that relates all asset classes to each other. (Breakdowns in the covariance are what you see at times that are otherwise known as financial crises.)
Atheist activist, podcaster and investment advisor Phil Ferguson helps us navigate the rampant hype about Bitcoin.
Phil pulls no punches, and the result is an informative (and often laugh-out-loud funny) commentary from someone who knows the ropes and knows how to talk about "skeptical money" in an engaging way.
https://youtu.be/BrjrMXNRRzQ
When the value of the metal in a penny exceeds 1 cent, you'll probably find they start disappearing from circulation as people start to collect them and sell them for the metal.
Well, for one thing that would be a federal crime... Do so at your own risk.
For another thing, the cost to make a penny already far exceeds what one is worth. The cost to make a penny is 1.5 cents. So a 50cent roll of pennies costs 75cents to make. We're not seeing people taking coins out of circulation to sell them for metal.
Part of that is because, it costs money to break down a penny into it's constituent metals of course... and whereas a penny may cost 1.5 cents to make, that doesn't mean it contains 1.5 cent worth of metal.
All in all though, we should just get rid of the penny. It's useless and is too small a value to be worth anything. buying/selling to the nearest 5cent (as is done elsewhere in the world with currencies that have abandoned the smallest coin) would be a wise move. Inflation has killed the penny, time to stop making them.
"That's the way to do it" - Punch
If you want mine your own crypto currency, you need a motherboard with 19 PCIe 1X slots to plug in 19 GPUs and a couple of 1200W PSUs.