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Bitcoin Bonanza
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Five years ago it was worth $0. Then, a month and a half ago it went to $150 a piece. On Monday it shot to over $600. On Tuesday, the value rose to over $900, meaning a 6, 445%-increase in value since the start of the year. It plummeted to $531 at midday today and then recovered reaching $793 while being traded on the Asian markets. Bitcoin: it’s the bonanza of the century.
Volatility and hikes are based on nothing except speculation and the desire to make a mint, thinking that you can predict what the markets are going to do. But, will that Bitcoin volatility lead to a bubble? Or is it bringing in a new era of a new type of currency that people are willing to use and that merchants are now being forced to accept? It might never become a legitimate currency in the future, but that’s hardly important when you can make a profit from it. Of course central banks are at risk from the use of virtual currencies as it would mean that they would have little control over what we spend and how transactions are carried out. Is Bitcoin the death of our central banks?
Some might say that Bitcoin is associated with crime and is an easy way for illicit transactions to take place. Tell me one currency in the world that isn’t laundered these days? Tell me one place in the world where there is a currency that is clean? Pure snow-white virgin money doesn’t and never has existed. Just because it’s associated with crime doesn’t mean it’s not good for the rest of the world. All of the currencies of the world are associated with crime somehow. Perhaps after all the fall of the Dollar, the death of the greenback will not be because the Chinese have taken the world over and imposed the Renminbi as the reserve currency on the world. Perhaps it will be the Bitcoin that takes over the world economically today.
- When Bitcoin started out in 2009 after being founded by Satoshi Nakamoto (or under his real name of Gavin Andresen) one Bitcoin was worth $0.30.
- It rose to $32, but then fell to $2. There are some 12 million Bitcoins in circulation today and the number of Bitcoins issued every four years is reduced by 50% (and will be until that number reaches a circulation level of 21 million Bitcoins).
- The currency is already accepted on some of the world’s most highly-ranked internet sites today:
- WordPress.com ranked 22 in the world, offering custom-designed software and templates. They have accepted Bitcoins since November 2012.
- The Pirate Bay, ranked 108 in the world which started accepting Bitcoins in April 2013 for their music and move-software directory.
- Reddit, which ranks 117 in the world and accepted Bitcoins for the first time in February 2013 for the social and entertainment network site.
There are plenty more and they will be increasing in the future, simply because it’s the people that have decided that they are willing and ready to use Bitcoins as a means of exchange. Have the people started the demise of the Dollar and all other currencies? Are we living a moment in history that we shall look back upon in years to come as we wave goodbye to the hegemonic control of the politically-aided and biased reserve currency that is the greenback and that all other currencies are vying to overtake? Will they all lose out, because we have decided for it to happen? That will certainly wipe the smile off the faces of some at the top of the hill.
Gaining legitimacy is essential for the Bitcoin to be a valued and a valuable means of exchange. The difference between Bitcoin and any other currency that is controlled by a government is that Bitcoins have become accepted because the market has decided that they are. People want them and merchants accept them. It is not a political currency but quasi-commodity money. The number of transactions has suddenly increased since the start of November and it has now reached dizzy heights around the world. Even governments are starting to recognize the existence and the validity of Bitcoins today. Germany in August 2013 decided to recognize the virtual money as a real currency, legally and fiscally approving it is valid.
When Andresen spoke of begging Julian Assange not to use Bitcoin back in 2010 as a means of getting around the normal method of financial transactions and thus finding a route to funding WikiLeaks, he said ‘it will destroy us’ adding that they were too small a company to be able to deal with it. Although, with hindsight the ‘you-will-destroy-us’- statement probably had little to do with the nascent company not being able to cope with the financial trading of the currency that had been invented, but the fact that Bitcoin would have been closed down and nipped in the bud before it had got off to a start. Now we can see why Bitcoin wanted to steer away from that can of worms. It had greater things in its sights than WikiLeaks.
It’s a rare thing to have the opportunity today to choose which currency we want to use. Maybe this time the choice will be the right one. Maybe the central banks, the ones that have done the damage in the past and are continuing to do so today will have their power taken away from them.
Climbing the greasy pole that politics has become is nothing to do with who you are and what you say. It has everything to do with where you come from and what you have in the bank account to back you up.
Originally posted: Bitcoin Bonanza
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this is not the labor-theory of value.
This is the physics value of what can't be fudged by imagination.
Time, matter, energy - resources you can't print because you feel like it.
You can trade your accumulated matter & energy, you can trade a period of time for something else or the time of another, you can negotiate with other parties what kind of ratio to trade of like resources or differing resources is fair.
That's is NOT labor-theory of value.
You invoked this in error.
This is very much similar to a labour theory of value. The only ones who still cling to such ideas are literalist simpletons or janitors that think they should be paid as much as a skilled surgeon.
How many BitCoins did Jed McCaleb "mine" when he sold Mt.Gox...or did he settle out in fiat? ;-)
All of this has already been addressed numerous times. I suspect you already know that though and just prefer to sling FUD anyway.
If Bitcoin was backed by gold or something else (as in someone has a physically allocated pool) I would not own Bitcoin because all a government (or any other thugs) would have to do is go steal that commodity pool and *poof*, there goes your currency backing.
then you're a fool.
Government can steal bitcoins a million times easier & a trillion times faster than gold, silver, copper or land.
It could take YEARS and wars in some cases to steal land & gold.
It could take NANOSECONDS to steal 90% of bitcoins since most computers are compromised by backdoors with windows/Microsoft, rather than running secure open-source Linux.
snooped passwords, snooped packets, snooped wallet-files & possibly ERASURE so that if theft itself doesn't happen then erasure of all copies WOULD happen.
Bitcoin is the LEAST secure MOST dangerous (to yourself for using it) so-called "currency" invented so far.
You obviously have no background in this arena but you are more than free to comment anyway. We will keep winning and you will keep losing. Seems pretty simple to me, and that's simple as in something you can touch and hold in your hands.
How can gold and silver be worth anything, with such volitile prices? People complain about all the manipulation, with the futures contracts, ETFs, and all the othert derivatives to suppress the price, but I bet you all the regulation and derivatives massively suppress volitility in gold and silver. Once the markets mature for bitcoin, I'm sure volitility will drop quite a bit.
You have to measure the true value & volatility using tangibles to get any answer at all.
btc is highly volatile measured to EVERYTHING.
gold & silver are only slightly more volatile than the normal things we need like food, energy & land but keep in mind as with all markets for all necessary things, the proportion matters.
If gold was as available as land it would be less volatile in price vs land, meaning pricing one in the other (either ratio) would show a far smaller volatility.
Since there's much less gold no matter how the ratio changes of one vs the other the volatility of gold vs land will always remain, even if there are no btc or dollars in existence to price things in, no euros or yen, no pesos, no yuan.
Size matters.
Since no more btc can be issued beyond 21 million then btc will be INCREASINGLY volatile vs goods produced.
Since rescaling this by subdividing btc only has a linear multiplier this HAS NO EFFECT on removing (or increasing) volatility per BTC vs any tangible good or any service requiring a finite # of human-work hours.
How can those that claim to understand Gresham's law (when applied to gold and silver) suddenly claim ignorance on the subject once it is applied to Bitcoin? Is YTD returns is the thousands of percentile range really considered "volatile"? No, you don't think there could be just a slight upwards bias in that chart do you? At what point exactly do you just stop pouting, be a man and admit you were dead wrong?
btc isn't money so Gresham's law doesn't apply.
Gresham's law can be clearly seen as good money is hoarded. Gold & silver are that money.
btc are being TRADED, not held, for the purpose of gaining fiat, and FIAT is being traded, not held, for the purpose of acquiring guns, transport, oil/gas/energy, food, gold, silver, tools, repairs, various services.
Not only does it apply but it is being demonstrated right in front of your eyes. You are free to discard reality that does not meet your confirmation bias (until reality eventually discards you).
absolutely right. There are a number of items you can purchase with BC over the internet right now, and growing by the day.
Bitcoin was created to solve exactly one problem: how to transmit, across the internet, something of value from person A to person B without using a third party. Bitcoin has proven that it can be done. No matter what Bitcoin is worth, marketized Bitcoin is comedy gold to reveal the ignorance that unbridled greed and envy can bring.
Re: Satoshi = Gavin - waaaay off the mark. Gavin's not smart enough to have come up with Bitcoin.
except GPG / PGP solved that problem years ago, PGP in fact since 1993.
PGP has been moving money around the net since 1993? How much have you made on PGP?
Yes, Bitcoin is the ultimate digital cash.
all digital cash is trash. They stand on equal ground, all of them.
If you wrote that most Digital Cash is trash then I would agree as most Digital cash is Fiat..
But Bitcoin is different in that the supply is neither set by the Political Whims of a Government, nor, the value cannot be set by the dictates of any Government.
So it is NOT a Fiat Currency. The value is not set by a Government but by the Economic Laws of Supply and Demand. It is a truly Free Currency., sovereign from any Government, an entity unto itself, the Sovereign Citizen's dream.
It is a threat to the Statist as it undermines the authority of the State. When it comes right down to it the only thing that I have in common with my Countrymen is the Currency. A loss of control over the currency leads to a loss of control over the State.
I think that Bitcoin is here to stay now that First World Nations, as Germany, and the United States, are recognizing it. (There were Senate Hearings in the USA on Monday. That is a de facto recognition. They are recognizing it as a threat to the DIGITAL FIAT US Dollar.) Recognition means the acceptance of the existence. It does not mean approval or legal.
But Germany has recognized it as a legal entity. They have legitimized it as a Legal Currency.
I like the idea as that in the Long Term, that if wealth were stored in Bitcoin, that Goods and Services become less expensive. I like it in the Short Term as it is a Speculative Market.
Do not tell me that it will not last that long. I am amazed that the Euro is still viable after 14 Years. It is not even backed by a Government but a Confederation of States, the European Union...like the United States under the Articles of Confederation.
Even the United States did not have a common currency (Gold and Silver Coin) until after the US Constitution was ratified and the Coinage Act of 1792 was enacted. Furthermore Foreign Currency (Gold and Silver Coin) was allowed to compete until the Coinage Act of 1857.
But the most appealing attribute of Bitcoin is the fact that it is SUBVERSIVE and a direct assault on the US Dollar. That has me grinning from ear to ear. The US Dollar must die an ignoble death, and deservedly so, as it has been adulterated by dishonesty and devalued to a fraction of that which was intended.
What price freedom?
+/u/bitcointip 2 internets verify
oops, wrong message board.
The idea that people will go back to a physical money only type system is beyond ludicrous. If you really believe that, there's some farms I know of that will take you right now. Most of the food is organic, men still have big beards, a heard of oxen and the women always wear bonnets and shawls.
Except that 1 bitcoin's worth of digital cash is equal to 600+ of the FRN flavor of digital cash. So not exactly equal.
You do have to use a third party, your transaction has to be processed by the network of bitcoin miners.
A decentralized network, instead of a centralized authority, as a third party is revolutionary enough that it completely obliterates the idea of a third party.
this is of no assistance.
If there was a direct connection from party A to party B there need only be established for the message the authenticity & up to that moment some measure of trust with NO 3rd parties.
gpg / pgp signatures can do this. No bitcoin required. Anything can be traded on debt (btc is only a debt marker) so real value (time, energy, matter) can be delivered (not a debt).
The 3rd-party of btc as an entire network is actually a weakness: destroy any large portion of the network or create any competing network forked from the parent & you destroy the currency. This is incredibly EASY to do which is IMPOSSIBLE for gold or silver or even dollars.
Worthless. Very dangerous. I'd be safer putting a .45 in my mouth.
Go away, you're wasting the time of the people who give a shit.
please donT put a .45 in your mouth!
Your posts humor me.
I was thinking good article until I saw your premise that Gavin is Satoshi . . . . There have been quite a few in-depth investigations/articles done about speculation on who is Satoshi - and Gavin isn't on the short list.
Err....could Bernanke be Satoshi?
We've been hearing for years about a digital world currency favoured by the NWO overlords.
What better way to introduce it than cloaking it with an "undergrpound' 'libertarian' 'anti-central bank' vibe?
Which is a remarkable point...that also means one should not overlook it just yet.
I'm sorry what evidence do you have that AKA Satoshi is actually Gavin Andresen? I mean really pull out all the fireworks here and show it.
Satoshi 'passed the torch' to Gavin, which if you have two brain cells, means Gavin is Satoshi, until he proves otherwise.
why do i get the feeling this will turn out just like all other bubbles. First they get in early, then bubble up the price, then get out just before governments over regulate it (by their request), causing it to crash to worthlessness.
same shit, over and over and over. Just a new stage.
yeah, in the senate hearings, they where all thinking, we cannot stop this thing, we cannot tax this transactions, we will have to do it at the point of the exchanges. even then we would have to shut down all the offshore tax heavens, wait, why didn't do that yet?
www.getbitcoins.tk
transactions are EASILY taxed.
The entire network reports the transactions which means the snooped (it is ) network can report who did what, IP addresses will be used to locate you & you will be billed.
non-payment of tax will mean you are jailed.
Should have stuck with gold & silver coin which are immune to this - no reporting & no network vulnerability.
You really enjoy transmitting your ignorance. Bitcoin transactions are entirely transparent and public, but quite anonymous. Why? Unless you connect or advertise your real name and location to your public wallet key there is no way to discern by either frequency or traffic analysis who the wallet (which has a 40 digit hex key which you generate on your machine) belongs to. In fact, there was no means for the FBI to know who the wallet they seized really belongs to-nor will they ever be able to access its contents unless they have the secret key which they need to digitally sign any transaction including an exchange transaction. So, if you lose your private key, you've lost all your bitcoins in your wallet. Its just like any other currency-untraceable unless your transaction counterparty chooses to rat you out. But then its just his word against yours. I suggest people study this digital currency as it has many desireable properties. And, yes, its subject to all the speculation present in any item.
Its succcess, however, depends on mutual trust, use and acceptance as the article suggests. Just like every medium of exchange, including barter. Just like all other currencies, when hoarded, it has a deflationary bias. It needs lots of velocity/transactions to be really useful. But the real work and energy required to solve the computational problems leading to new bit coins prevents an unlimited supply and regulates it quite nicely, just as it does for other backing media such as gold or oil.
The laws that already exist apply to Bitcoin transactions. If they are followed or enforced is yet to be seen.
Pivot:
What do you think of the Board members of Bitcoin?
Forget the one or two degrees of separation from IQT, how about this charming Silicon Valley type who sits on Bitcoin's Board, one Micky Malka. Good Ol' Mick happens to be a member of the Board of Wonga.com.
Wonga.com, who are thay?
They offer short term loans in a fast, flexible and convenient manner.
One small catch, their representative APR (annual percentage rate) would make Jamie Dimon blush
e.g. Need some fast cash for twenty days? This is what Wonga charges: Borrowing £207 + Interest & fees* £47.42 = Total to repay £254.42 (that's a Representative APR of over 4,000 percent)
http://wonga.com
Dear ZHers: Beware of Silicon Valley as many there would sell your soul for a caffè latte all in the name of doing god's work
Usury. The Wonga/City of London/Wall St method preferred method for the rich to steal from the poor.
bitcoin doesn't affect interest rates so the Fed wont care I guess.
Izabella Kaminska suggests the parabolic rise is a short squeeze caused by the closure of SilkRoad, which removed BTCs from circulation.
http://ftalphaville.ft.com/2013/11/18/1696832/a-crypto-crisis-or-a-crypt...
Makes perfect sense to me.
Market prices rise because there are more buyers than sellers. Market prices decline because there are more sellers than buyers. This is obvious, but needs to be restated since trying to name a "cause" is a misdirection of your mental energy...see Wall St for perfect examples of this.
Hey don't post links that require registration to read the article. I mean WTF is that all about?
Think of it this way the currency was not taken "out" of circulation, it is that it could NOT be taken out of circulation. It is a perpetual savings acount until a later date (much later) when the password to the account is cracked with some quantum algo.
Oh yeah, BTW the % of the total BTC currency that silk road accounts represented is nowhere near enough to move the market like it has been moving. It has been moving because of demand mostly from China. Where everyone wants to get their capital either 1) out or 2) on the bacarrat table or 3) both.
Did I miss something?
Deflation is built into the bitcoin cake. As coins are lost and forgotten the trend is for the price to go up. In direct contrast to all other fiat currencies. It is the only transaction system where credit has the tend to go up in value. Keep your money in the bank or paypal and you are guaranteed to lose money.
I signed up at Coinbase yesterday but haven't bought anything as of yet. I want to be positioned to do so if and when the price crashes, which I believe it will at some point. It may never recover or maybe it will go to a zillion $ per BTC.
Regardless, with respect to anonymity, isn't my going to Coinbase or Mt.Gox, or any of the other exchanges, and transacting out on the web, visible to prying eyes make this less than anonymous? Especially if I am linking to my bank account or credit card?
Also, I've heard about people storing their BTCs on flash drives. How does that work? Wouldn't the Bitcoins I purchase just sit in my Coinbase account?
Thanks.
You transfer the bitcoins to your wallet, then save the wallet. As I said before, elsewhere, I do not recommand flash drives, as they can go wrong when left uncharged after a year. I suggest you email the waller file to yourself using hotmail or googlemail or such. Make sure your wallet file is encrypted, using the wallet encryption. Also, consider renaming it and zipping it in an encrypted zip file. Passwords have to be long and unforgettable and unguessable.
FYI, Coinbase is a Goldman Sachs oepration to give GS a position in Bitcoin as well as providing GS's buddies in the three-letter agencies with your info.
Sheeesh. That's not cool!
Buying via exchanges, inturn partially funds the very establishments restricting a free market? .. and at this early stage in the bit-game?
Somehow, I think it's the side of the trade which one is on that underpins their sentiment or justifications for what is or is not fungible stuff, bargaining chips, commodities.
Banks, exchanges, punters... Greedy much?
To those who seek to dominate and maintain control the universal order of things, maybe displaying a little more dissent could be just as effective.
Are we not me who live and die?
IMO, People could just be a little more dissatisfied, and express that on a daily basis, (and less smug that they hoard metal or bits. There's no reason to fear anything..
Bring it.
And the big banks are making lots of money on exchange fees, so not expecting Senate hearings to amount to anything that will compromise it near term. The hearings will serve to make bitcoin look like a renagade currency.
Just make multiple copies of your wallet.dat file. I wouldn't advise cheesy usb flash keys but quality solid-state drives if you are storing any quantity of BTC. You can just import the wallet.dat into a QT client, it will rescan (can take a while) and you will have your BTC.
and one good EMP flash and/or being slammed into water in a storm and it's all gone.
http://youtu.be/4TlPo0yCSa4