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The bursting of the Bitcoin bubble

51 points| arihelgason | 14 years ago |economist.com | reply

36 comments

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[+] mcantelon|14 years ago|reply
Bitcoin it ahead of its time. Bitcoin is has a lot of potential uses and these uses haven't gone away because a bubble burst.
[+] tadfisher|14 years ago|reply
Moreover, the network (and thus Bitcoin) will continue to exist so long as one individual keeps mining.
[+] SkyMarshal|14 years ago|reply
Indeed. In the long term this is just statistical noise, as long as the underlying tech and theoretical foundations are solid.

People weened on CNBC and other breathless, 24/7 financial news give way too much credence to short-term market flutterings and twitterings.

[+] andrewljohnson|14 years ago|reply
Deflationary currency is an oxymoron.
[+] olliesaunders|14 years ago|reply
It’s ahead of its time socially but not technologically or even politically. We need bitcoin now, it’s just consumers don’t realize it yet.
[+] ww520|14 years ago|reply
Just a wild thought. Is there a way to associate an email with a future-created bitcoin account? The goal is to be able to send bitcoins easily to an email address even though the recipient has not created a bitcoin account. The recipient can create an account later on to pick up the bitcoins. This would make it easier to seed wider usage of bitcoins. That's how Paypal started.

I guess this requires a trusted central third party as an eschew to hold the fund for the email recipent and for verifying the recipent's account via email.

[+] Andys|14 years ago|reply
A paypal-style site can create a new bitcoin account on behalf of the new user.

Then the payer can transfer funds to it, using a transaction that requires signing with keys that only the payer knows and can pass to the payee directly. Bitcoin transactions can also have timeouts and have the inputs locked while the outputs are still floating.

https://en.bitcoin.it/wiki/Contracts

[+] euccastro|14 years ago|reply
Create an account for them, send them the wallet.dat, let them log in and transfer to their own account whenever they want? Or just change password, if that's possible.
[+] Tichy|14 years ago|reply
I was about to sell my remaining bitcoins this morning when I realized: wait a minute, I don't even know how long the Euro will continue to exist (living in Euro country). As much as it pains me, because probably the price will fall even further, I'll keep some BTC around just in case...

On the other hand I suppose the existence of Silk Road is not sufficient to drive prices up, because most vendors will just convert their BTC to dollars again immediately.

[+] gasull|14 years ago|reply
> On the other hand I suppose the existence of Silk Road is not sufficient to drive prices up

Right now Bitcoin has a controlled monetary inflation of 30% a year. Its user base isn't growing. It's actually shrinking if you count the speculators as "users".

I agree with other comments, right now it might be better to hold dollars. Also gold, despite it's depreciation lately.

I think Bitcoin will survive. I can see the African diaspora using it in the near future because it's cheaper. Bitcoin won't go up in US dollars at least until some 1st world country devaluates its currency severely, and people start looking for options.

[+] katovatzschyn|14 years ago|reply
>As much as it pains me, because probably the price will fall even further, I'll keep some BTC around just in case...

Swiss Francs, CAD, and even USD are much safer if stability is your concern. If the Euro indeed collapses as you seem to fear, you may even find yourself making gains.

[+] Lexarius|14 years ago|reply
I did a little mining while it was profitable, but running the air conditioning to keep the GPUs from melting cannibalized most of it during the summer. I'll have to check back once things cool down a bit more - perhaps a drop in difficulty could make "free" heating for my apartment viable again. Not holding my breath, though.
[+] hippich|14 years ago|reply
Do not expect it to happen soon tho. Before $30+ price difficulty was _doubling_ every two weeks. Today with 90+% price cut difficulty drops 10-15 % every two weeks...

Now, if you really wants to make it right - buy water blocks for your cards, route water pipes outside your building and mine :) AC will thank you :)

[+] hippich|14 years ago|reply
Overall, reading comments on the economist site I now understand how public perception of bitcoin technology is wrong.
[+] QuestionWriter|14 years ago|reply
Do share more. I thought many of the comments were surprisingly clued-in.
[+] cpeterso|14 years ago|reply
I don't think the public is going to understand BitCoin for a long time. Many people don't know the difference between Google and their browser's address bar. Even for early adopters, BitCoin needs a better marketing to inspire confidence.
[+] aptwebapps|14 years ago|reply
Well, the article is going to help that. Despite its title most of it is a very shallow overview of the currency in general while mentioning how the rate has fallen and some examples of how it is not universally accepted. Finally, in the second to last paragraph, it offers up the hypothesis that it was a speculative bubble.

Usually you get better fare from the Economist.