Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1].
Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't have an exchange-based economic system without some expected stability in the value of the exchange.
It's hard to say. There are many who justify prices far higher based on future adoption. Adoption is picking up at a remarkable rate.
The USD money supply is around $3T or $10T, depending on whether you are counting money multiplied by leverage. The US GDP is $15T. If we presume that a currency then should be on the same order of magnitude of money supply as the GDP or transaction volume, it's not hard to project a $100B+ supply of bitcoin. With the supply currently at $2B, there is a lot of room to grow. I have no idea if this analysis is reasonable, but I suspect it is close to the "story" behind the bubble.
Of course all of this presumes that bitcoin will prevail as the leading crypto-currency, regulatory hurdles will be surmounted, and the currency remains secure. Those are not implausible ifs. In fact, I'm a big believer in the future of bitcoin, even if it is getting a little ahead of itself.
I anticipate a significant collapse at some point, regardless of the success of bitcoin. That crash may very well be from $1000 to $200 though.
Does anyone have a link or justification in any way for the rise in the conversion rate?
Yes. Nearly two years ago I wrote an essay with my thoughts on Bitcoin's potential for long-term appreciation at http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... and the essay is holding up pretty well so far, particularly given the recent reported spike in adoption by people in Spain[1] and Cyprus[2].
The TL;DR summary of my argument: the more people who adopt Bitcoin as a store of value or medium of exchange of last resort, the more demand there will be for it around the world. Supply being fixed, this growing demand will be reflected in a rising price. Should Bitcoin continue to work as intended, in the long run nothing prevents it from eventually gaining as much credibility as, say, gold.
Most Bitcoin supporters agree that there are only two possibilities in the long run: either a fundamental flaw in the Bitcoin code or economics is discovered and the value drops down all the way to zero; or Bitcoin reaches a point of global acceptation causing the value to reach way, way above 200$.
For someone who leans towards the second outcome, they see the recent rise as a 'correction towards the true value' rather than a bubble.
If everyone's intention is just to buy low and sell high, then it's a tulip mania. But if there are people who would be satisfied with a stable price, or price above their investment amount, or ability to buy stuff for it, then it is not just a tulip mania.
Bitcoin price was pretty stable during 2012. Some people used it as a "store of wealth". Now, you still can use it for the same purpose, but you have to bid up the price a little to take a piece of it.
I'm along your lines. If I happened to have a stash of bitcoins in my pocket, I'd be very careful about actually buying anything with them today, as the next week they would be more and more valuable. So I think the deflation is the main reason why I don't feel comfortable with idea of using bitcoins as a currency for buying anything - selling might be a different story.
edit: How large volumes of selling bitcoins for USD/EUR/etc. is enough to have significant effect on the value of bitcoin? For example if I had VERY URGENT need to sell 100 000 bitcoins by tomorrow in exchange for USD.
the real test of a bubble is to see if people are buying to hold or merely flip. their time horizon is also an important consideration.
if they're buying to flip with a short horizon, it's a bubble. the first buyer to feel they might be the greatest fool walks away, and the bubble pops.
> speculation driven
speculation is a normal economic mechanism. taking risk in expectation of reward.
> you can't have an exchange-based economic system without some expected stability in the value of the exchange
yes you can. especially if the value of the currency is only going up. probably not if it's going down.
currently the ratio of stock to flow is rather high. since there is less flow available, and lots of fiat chasing it, the price rises. since the value of the currency rises, people who sell in that currency benefit (especially if they keep the difference in bitcoin).
money is a shared societal delusion. it's a giffen good, where rising price acts as a signal that more should be owned. misesian/mengerian theory requires only an initial direct barter exchange, the rest of it is bootstrapped by historical events (given certain basic properties, which bitcoin has in abundance[2]).
we are living those historical events today, thanks to the ECB & Cyprus.
at the moment bitcoin is a transient medium of exchange (usd->btc->silkroad) on both sides and a few risk-takers are betting on it holding value, where few is relative to world population. most merchants (at least thru bitpay etc) don't hold it either.
for the price to drop consistently, bitcoin-busters would have to take a large position, driving up the price, and then consistently sell enough to trigger other people's latent limit-sell orders. the problem is that naked shorting is not possible, so on the way to building large positions, they will send out the rising-price signal, which will make downward price-pressure quite hard later (aka high prices will be sticky since people's expectations have been reset). [1]
when the price gets high enough, the realization will sink in that the only way to accumulate bitcoin is to participate in the economy with one's labor (ie, sell things for bitcoin).
that's the ultimate win for bitcoin.
[1] oddly, one of the criticisms of btc, namely that Satoshi holds a significant amount, will provide downward stickiness as long as that large cache isn't sold.
[2] bitcoin has a lot more properties than most other monies, principally anonymity & distance-agnosticism, and also invisibility via the use of darknets/tor
A better comparison than tulips would be silver. Tulips are a bad store of wealth (they rot, anyone can grow them, are not divisible, etc), whereas Bitcoin and silver can be stored and easily divided into smaller units. It still could be in a bubble, like silver was around 1980.
More and more sites are accepting bitcoins, making it more useful as an actual currency. I detail some of the sites in a book I wrote for Bitcoin Beginners.
Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it? I've stayed away from it simply because of that. I fear some people are in for a very rude awakening. Don't count your money just yet -- and, for god's sake, don't try to use it as the basis for any paper money loans! None of you knew about Stuxnet. The story of Bitcoin's infiltration and manipulation is years away from being revealed.
Who do you have in mind? I don't see anyone who wants Bitcoin to crash desperately enough to spend millions on inflating a bubble and then pop it - which is a very risky and costly plan. More likley would be a scenario in which someone who holds a lot of Bitcoins pushes MtGox prices upwards in order to be able to sell OTC at inflated prices. However, given that Bitcoin on MtGox has a volume of USD 20 million daily, this takes a lot of resources. It is much easier to manipulate a low-volume stock on the stock market.
> Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it?
Right now I expect a lot of speculation rather than manipulation for crashing. It will end up crashing bitcoin when speculators start selling, but the end goal of the croad is probably to make a quick buck rather than crash it.
We all know about the world finance industry. We all know how corrupt it is and how fucked-up things really are. Yet discounting Occupy - which was violently suppressed anyhow - I don't see people in on the streets demanding to burn down Wall Street to ashes.
It's fascinating to watch this, largely because Bitcoin has no "natural" value. The only utility it has is as a transfer of value from one place to another, and it can do that equally well with a bitcoin being worth $1 or $200.
But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people buying things with bitcoins don't care if the things they're buying with it are priced 1% higher than they might, theoretically have been, then the price of bitcoins can keep increasing indefinitely.
Until, that is, some people decide that they want to get rid of a lot of bitcoins, and thus are willing to accept less than that, to shift them quickly. Then the price drops. And then more people might also decide to sell, so as to convert the bitcoins they have at the value they're now worth.
It's classic sentiment pricing - but without any of the value "stickiness" that you get when there's some utility to be gained from the objects you're trading.
(I'm not trying to talk Bitcoin down here, I find the whole thing fascinating. Just thinking out loud.)
This last price fluctuation is doing more harm to bitcoin than a moratory does to a country.
No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit?
Why isn't mining regulating the prices? Is it too costly?
My personal and completely uninformed opinion is that bitcoin is doomed.
It's happening because more and more people are buying Bitcoins are fewer are selling. Supply and demand. This interview talks about the real-time increased demand. https://news.ycombinator.com/item?id=5517634
Seems to me the more valuable bitcoins are, the more attractive it is for vendors to accept them as payment. And the more vendors accept them as payments for real stuff, the more attractive and established they become as a currency.
Also, concluding that bitcoin is doomed because too many people want them seems backwards.
I have merely a passive interest in economics, but my two cents:
There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple variation of the weighted average over the past hour * 1.05 would easily provide a price that is always rising, unless a user manually gives a lower buy / sell price - and even then that would have to be beat the current price by 5% to make any impact on the spot price. Hell, you could just inflate the prices you show to users by a certain % to create that sort of meteoric rise, even if they do place lower/higher bids - those bids are somewhat based on what the value they see in that moment.
Is this a bubble? We just don't know. Currently there are people who are willing to part quite a lot of money for a scarce virtual currency, so by all accounts if there's a demand - the value will rise, especially if supply is limited (not just now, but there will only ever be a finite amount of BTC).
Even with the hiccups (0.8 vs 0.7 double spending, Mt Gox crashes) - and a price crash in it's history - surely anyone would think twice before putting down $200 per BTC, especially when it was worth only $15 three months ago.
What's convincing these folks to invest, I just don't know. Maybe they see something I don't, but at the moment I just see a very overvalued bubble just waiting to pop. A part of me fears that it's being overrun by folks who don't trust private financial institutions to hide their (illegitimate) wealth, as I don't think the average Cypriot has the wealth, nor there are enough Cypriots (or average / middle/working-class Europeans) altogether to create the demand which would push the price where it is now. Maybe someone can run the numbers; average salary, savings, investments, total # of folks who are tech savy enough to buy BTC, compare that with the uptake in Mt Gox (or other exchanges) signups, volume, traffic etc and put together a more substantial assessment.
BTC is something the world needs badly, and over the next decade I can see it becoming incredibly prominent. But the sort of rise we've seen in the past 3 months should've taken at least 3 years; and even then it's an incredible run for what's nothing more than a digital, limited commodity.
As long as there are multiple bitcoin exchanges, it will be very hard for a single exchange to influence the price of bitcoin thanks to arbitrage traders.
Wasn't it like $130 a few days ago? This kind of inflation is really cool for the people invested in bitcoins but this is the point where I would panic sell, but perhaps I'm a coward.
The problem with bitcoin is 1 or 2 events that give the public a 'scare' have the potential to nearly floor the usd value.
All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such.
Realistically, there is so much dependency on mtgox, once it went down I believe the price of bitcoins would likely be 10x less than it is currently.
Nobody who owns bitcoin gives a damn who buys what with it, any more than you care who buys what with your country's currency. It's currency.
What could threaten bitcoin is a major flaw in its algorithm, which seems unlikely in the near future, and the hacking of the primary exchange - MTGox. In fact, I keep my Bitcoin at MTGox with the knowledge that if they lose my Bitcoin, the value will plumet to nearly nothing regardless of whether my coins are there or not.
"All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such."
Why would any TLA need a headline to get engaged? They tend to create their own.
Almost everyone new to Bitcoin already has heard every scare story about drugs, money laundering, tax evasion, viruses, hackers, conspiracy etc. The news about DDoS or stolen money will not be a huge surprise (unless ALL money is stolen at once :-)
I'm not a substantial bitcoin investor, but I follow bitcointalk.org fairly actively, and there has been a fairly noticeable increase in posts about ASIC (Application Specific Integrated Circuit) solutions being a profitible means to mine Bitcoins. I don't know whether this is a driving factor, but it certainly relates to the expanding market in general.
The wide perception of Butterfly Lab's ASIC solution as being a scam has resulted in wide interest in alternatives, which are legitimized by seemingly functional and deliverable ASIC solutions by companies like Avalon. At over 6,000 Mh/S per module, they exceed the best GPU/FPGA solutions for mining almost by a almost a hundred fold (after factoring power consumption), which has produced a tangible market of bitcoin hardware.
Regardless of whether specialized Bitcoin ASIC hardware is cost effective, the production serves to legitimize the currency/producing market as a whole (as well as reinforcing the hype/gold rush mentality for miners and speculators).
I'm still not sure how/whether the currency will eventually settle, but it is very interesting to follow.
The past couple of weeks has shown how easily the bitcoin market can be manipulated. People used to do this with shares. Buy up all the shares to push the price up. Then get out with a profit crashing the value of the share.
I don't think this is any different. I wouldn't be surprised if a handful of parties were responsible for the explosion in bitcoin value.
You could point to the Cyprus banking crisis perhaps as a reason for an increase in value but realistically Bitcoin is just one major hack away from being worthless again... Its like keeping your gold on a wooden shelf above a lava pit.. why anyone would put long term savings into Bitcoin right now is beyond me.
The "price" is whatever the last trade went for. If there are market manipulators buying up "all the shares", it would seem like a big risk as they are relying on there being enough bids within their profit range to sell them back at a profit. Right now for example, you could sell 100 BTC on Mt.Gox for an average price of $203USD/BTC. Try to sell 10,000 BTC and the average drops to about $195, and 100,000BTC would only average $111.
BitCoin reminds me so much of the early days of the internet; the ingenius technology, the promise, the hype, the misconceptions, the rampant ill-informed speculation. And of course the few neat things it could actually do, with a promise of so much more to come.
And perhaps, the dot-com style bust at the end that puts things back in perspective and paves the way for real growth and adoption...
One thing I don't get about bitcoin is how the transition from paying for mining to charging for transactions is going to be handled. This seems like a big upcoming change now all this money is sloshing about.
I take it the plan for transaction fees is carefully worked out to make it still be attractive to miners and merchants vs charges for visa etc or have I got the wrong end of the stick?
The funny thing is that it didn't hit $203, or $201.12, but $200.
Whoever is driving this big buys to drive up the price is doing it at very predictable, very specific price points, across multiple currencies.
On mtgox GBP, for instance, it plateaus and peaks at very predictable values - £125, £130.
Frankly, I think that what's going on is there are a few traders (actual traders, not BTC speculators) who are driving the entire market. Hell, you can push the GBP price around just by buying or selling a few dozen BTC, the volumes are so low.
Guess what I'm getting at is that there's a hidden force behind this, and they're not dumb - but most of the speculators apparently are.
[+] [-] graeham|13 years ago|reply
Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't have an exchange-based economic system without some expected stability in the value of the exchange.
[1] - http://en.wikipedia.org/wiki/Tulip_mania
[+] [-] aneth4|13 years ago|reply
The USD money supply is around $3T or $10T, depending on whether you are counting money multiplied by leverage. The US GDP is $15T. If we presume that a currency then should be on the same order of magnitude of money supply as the GDP or transaction volume, it's not hard to project a $100B+ supply of bitcoin. With the supply currently at $2B, there is a lot of room to grow. I have no idea if this analysis is reasonable, but I suspect it is close to the "story" behind the bubble.
Of course all of this presumes that bitcoin will prevail as the leading crypto-currency, regulatory hurdles will be surmounted, and the currency remains secure. Those are not implausible ifs. In fact, I'm a big believer in the future of bitcoin, even if it is getting a little ahead of itself.
I anticipate a significant collapse at some point, regardless of the success of bitcoin. That crash may very well be from $1000 to $200 though.
[+] [-] cs702|13 years ago|reply
Yes. Nearly two years ago I wrote an essay with my thoughts on Bitcoin's potential for long-term appreciation at http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt... and the essay is holding up pretty well so far, particularly given the recent reported spike in adoption by people in Spain[1] and Cyprus[2].
The TL;DR summary of my argument: the more people who adopt Bitcoin as a store of value or medium of exchange of last resort, the more demand there will be for it around the world. Supply being fixed, this growing demand will be reflected in a rising price. Should Bitcoin continue to work as intended, in the long run nothing prevents it from eventually gaining as much credibility as, say, gold.
--
[1] http://www.wired.co.uk/news/archive/2013-03/20/bitcoin-spain...
[2] http://news.cnet.com/8301-1023_3-57576928-93/bitcoin-hits-re...
[+] [-] vader1|13 years ago|reply
For someone who leans towards the second outcome, they see the recent rise as a 'correction towards the true value' rather than a bubble.
[+] [-] oleganza|13 years ago|reply
Bitcoin price was pretty stable during 2012. Some people used it as a "store of wealth". Now, you still can use it for the same purpose, but you have to bid up the price a little to take a piece of it.
[+] [-] smackfu|13 years ago|reply
[+] [-] gerhardi|13 years ago|reply
edit: How large volumes of selling bitcoins for USD/EUR/etc. is enough to have significant effect on the value of bitcoin? For example if I had VERY URGENT need to sell 100 000 bitcoins by tomorrow in exchange for USD.
[+] [-] nunb|13 years ago|reply
if they're buying to flip with a short horizon, it's a bubble. the first buyer to feel they might be the greatest fool walks away, and the bubble pops.
> speculation driven
speculation is a normal economic mechanism. taking risk in expectation of reward.
> you can't have an exchange-based economic system without some expected stability in the value of the exchange
yes you can. especially if the value of the currency is only going up. probably not if it's going down.
currently the ratio of stock to flow is rather high. since there is less flow available, and lots of fiat chasing it, the price rises. since the value of the currency rises, people who sell in that currency benefit (especially if they keep the difference in bitcoin).
money is a shared societal delusion. it's a giffen good, where rising price acts as a signal that more should be owned. misesian/mengerian theory requires only an initial direct barter exchange, the rest of it is bootstrapped by historical events (given certain basic properties, which bitcoin has in abundance[2]).
we are living those historical events today, thanks to the ECB & Cyprus.
at the moment bitcoin is a transient medium of exchange (usd->btc->silkroad) on both sides and a few risk-takers are betting on it holding value, where few is relative to world population. most merchants (at least thru bitpay etc) don't hold it either.
for the price to drop consistently, bitcoin-busters would have to take a large position, driving up the price, and then consistently sell enough to trigger other people's latent limit-sell orders. the problem is that naked shorting is not possible, so on the way to building large positions, they will send out the rising-price signal, which will make downward price-pressure quite hard later (aka high prices will be sticky since people's expectations have been reset). [1]
when the price gets high enough, the realization will sink in that the only way to accumulate bitcoin is to participate in the economy with one's labor (ie, sell things for bitcoin).
that's the ultimate win for bitcoin.
[1] oddly, one of the criticisms of btc, namely that Satoshi holds a significant amount, will provide downward stickiness as long as that large cache isn't sold. [2] bitcoin has a lot more properties than most other monies, principally anonymity & distance-agnosticism, and also invisibility via the use of darknets/tor
[+] [-] Hermel|13 years ago|reply
http://silverprice.org/charts/history/silver_all_data_o_usd....
[+] [-] impostervt|13 years ago|reply
http://www.bitcoinbeginner.com
If you (or anyone else) would like a free copy, just email me: [email protected]
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] mikecane|13 years ago|reply
[+] [-] Hermel|13 years ago|reply
[+] [-] masklinn|13 years ago|reply
Right now I expect a lot of speculation rather than manipulation for crashing. It will end up crashing bitcoin when speculators start selling, but the end goal of the croad is probably to make a quick buck rather than crash it.
[+] [-] yuvadam|13 years ago|reply
We all know about the world finance industry. We all know how corrupt it is and how fucked-up things really are. Yet discounting Occupy - which was violently suppressed anyhow - I don't see people in on the streets demanding to burn down Wall Street to ashes.
[+] [-] AndrewDucker|13 years ago|reply
But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people buying things with bitcoins don't care if the things they're buying with it are priced 1% higher than they might, theoretically have been, then the price of bitcoins can keep increasing indefinitely.
Until, that is, some people decide that they want to get rid of a lot of bitcoins, and thus are willing to accept less than that, to shift them quickly. Then the price drops. And then more people might also decide to sell, so as to convert the bitcoins they have at the value they're now worth.
It's classic sentiment pricing - but without any of the value "stickiness" that you get when there's some utility to be gained from the objects you're trading.
(I'm not trying to talk Bitcoin down here, I find the whole thing fascinating. Just thinking out loud.)
[+] [-] eduardordm|13 years ago|reply
No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit?
Why isn't mining regulating the prices? Is it too costly?
My personal and completely uninformed opinion is that bitcoin is doomed.
[+] [-] rms|13 years ago|reply
[+] [-] sfjailbird|13 years ago|reply
Also, concluding that bitcoin is doomed because too many people want them seems backwards.
[+] [-] kiba|13 years ago|reply
It is a consensus that mining don't affect the price of bitcoin. However, mining is certainly affected by the price of bitcoin.
[+] [-] dancesdrunk|13 years ago|reply
There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple variation of the weighted average over the past hour * 1.05 would easily provide a price that is always rising, unless a user manually gives a lower buy / sell price - and even then that would have to be beat the current price by 5% to make any impact on the spot price. Hell, you could just inflate the prices you show to users by a certain % to create that sort of meteoric rise, even if they do place lower/higher bids - those bids are somewhat based on what the value they see in that moment.
Is this a bubble? We just don't know. Currently there are people who are willing to part quite a lot of money for a scarce virtual currency, so by all accounts if there's a demand - the value will rise, especially if supply is limited (not just now, but there will only ever be a finite amount of BTC).
Even with the hiccups (0.8 vs 0.7 double spending, Mt Gox crashes) - and a price crash in it's history - surely anyone would think twice before putting down $200 per BTC, especially when it was worth only $15 three months ago.
What's convincing these folks to invest, I just don't know. Maybe they see something I don't, but at the moment I just see a very overvalued bubble just waiting to pop. A part of me fears that it's being overrun by folks who don't trust private financial institutions to hide their (illegitimate) wealth, as I don't think the average Cypriot has the wealth, nor there are enough Cypriots (or average / middle/working-class Europeans) altogether to create the demand which would push the price where it is now. Maybe someone can run the numbers; average salary, savings, investments, total # of folks who are tech savy enough to buy BTC, compare that with the uptake in Mt Gox (or other exchanges) signups, volume, traffic etc and put together a more substantial assessment.
BTC is something the world needs badly, and over the next decade I can see it becoming incredibly prominent. But the sort of rise we've seen in the past 3 months should've taken at least 3 years; and even then it's an incredible run for what's nothing more than a digital, limited commodity.
[+] [-] olalonde|13 years ago|reply
[+] [-] rms|13 years ago|reply
[+] [-] shanelja|13 years ago|reply
EDIT: Link's down, it was $203 at 12.06 GMT.
[+] [-] oleganza|13 years ago|reply
[+] [-] aneth4|13 years ago|reply
[+] [-] DanBlake|13 years ago|reply
All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such.
Realistically, there is so much dependency on mtgox, once it went down I believe the price of bitcoins would likely be 10x less than it is currently.
[+] [-] aneth4|13 years ago|reply
What could threaten bitcoin is a major flaw in its algorithm, which seems unlikely in the near future, and the hacking of the primary exchange - MTGox. In fact, I keep my Bitcoin at MTGox with the knowledge that if they lose my Bitcoin, the value will plumet to nearly nothing regardless of whether my coins are there or not.
[+] [-] Hermel|13 years ago|reply
[+] [-] illuminate|13 years ago|reply
Why would any TLA need a headline to get engaged? They tend to create their own.
[+] [-] oleganza|13 years ago|reply
[+] [-] ewoodrich|13 years ago|reply
The wide perception of Butterfly Lab's ASIC solution as being a scam has resulted in wide interest in alternatives, which are legitimized by seemingly functional and deliverable ASIC solutions by companies like Avalon. At over 6,000 Mh/S per module, they exceed the best GPU/FPGA solutions for mining almost by a almost a hundred fold (after factoring power consumption), which has produced a tangible market of bitcoin hardware.
Regardless of whether specialized Bitcoin ASIC hardware is cost effective, the production serves to legitimize the currency/producing market as a whole (as well as reinforcing the hype/gold rush mentality for miners and speculators).
I'm still not sure how/whether the currency will eventually settle, but it is very interesting to follow.
[+] [-] bobsy|13 years ago|reply
The past couple of weeks has shown how easily the bitcoin market can be manipulated. People used to do this with shares. Buy up all the shares to push the price up. Then get out with a profit crashing the value of the share.
I don't think this is any different. I wouldn't be surprised if a handful of parties were responsible for the explosion in bitcoin value.
You could point to the Cyprus banking crisis perhaps as a reason for an increase in value but realistically Bitcoin is just one major hack away from being worthless again... Its like keeping your gold on a wooden shelf above a lava pit.. why anyone would put long term savings into Bitcoin right now is beyond me.
[+] [-] xhrpost|13 years ago|reply
[+] [-] brianbreslin|13 years ago|reply
[+] [-] sfjailbird|13 years ago|reply
And perhaps, the dot-com style bust at the end that puts things back in perspective and paves the way for real growth and adoption...
[+] [-] soapbeard|13 years ago|reply
I take it the plan for transaction fees is carefully worked out to make it still be attractive to miners and merchants vs charges for visa etc or have I got the wrong end of the stick?
[+] [-] ck2|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] Keyframe|13 years ago|reply
[+] [-] antr|13 years ago|reply
Are their any platforms/startups that allow short selling this currency?
[+] [-] ghgr|13 years ago|reply
Of course, I'm not saying that you are wrong, just that the market can stay irrational longer than you solvent.
[+] [-] duiker101|13 years ago|reply
[+] [-] Yuioup|13 years ago|reply
[+] [-] mrjava|13 years ago|reply
[+] [-] madaxe|13 years ago|reply
Whoever is driving this big buys to drive up the price is doing it at very predictable, very specific price points, across multiple currencies.
On mtgox GBP, for instance, it plateaus and peaks at very predictable values - £125, £130.
Frankly, I think that what's going on is there are a few traders (actual traders, not BTC speculators) who are driving the entire market. Hell, you can push the GBP price around just by buying or selling a few dozen BTC, the volumes are so low.
Guess what I'm getting at is that there's a hidden force behind this, and they're not dumb - but most of the speculators apparently are.
[+] [-] tomp|13 years ago|reply
[+] [-] aneth4|13 years ago|reply
Anyway, it is trading over $200 now, so it's a moot point.
I'd be more inclined to suspect bandwagon speculation than manipulation.
[+] [-] OGinparadise|13 years ago|reply