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Bitcoin 'Glitch' Sparks 23% Flash Crash

Tyler Durden's picture




 

While we are used to seeing insta-crashes in our highly-regulated and trustworthy equity markets, the unregulated digital world of Bitcoins suffered another flash-crash last night. According to Ars Technica, the 23% plungefest in the value of the digital currency (the second in a week) was due not to Waddel & Reed, not HFT algos, but 'forking' Cryptographic algos gone wild agreeing on different (legacy) keys as being correct  - akin to finding Tungsten in your Gold bars (and hence the drop in the value). This latest glitch is different from the problem that caused Bitcoin prices to briefly crash to zero in June of 2011. In that case, the sell-off was caused by the compromise of the exchange itself, whereas this time the glitch occurred in the core Bitcoin software. Obviously, the incident will be another important test of the cryptocurrency's decentralized governance structure - to say nothing of its reputation among the less technically-capable owners and miners (even though BTC rapidly recovered almost all its losses).

Last night's bitcoin software-related crash...

 

and last week's 'market' based crash

 

and the life of BTC...

 

From a high of more than $48 earlier Monday, the value of Bitcoins plummeted to less than $37 around 10 PM Central time on Monday evening, a 23 percent decline. The price has since recovered; one Bitcoin is now worth about $46 - which, one could argue reflects a rapid recoupling with value and confidence (especially given the recent run-up in price) but notably, flash-crashes in equities (as we noted above) never seemed to stop greed-stricken investors piling into them anyway.

Charts: Bitcoincharts.com

(h/t BD)

 

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Tue, 03/12/2013 - 21:41 | 3324601 Zer0head
Zer0head's picture

 

Max was on infowars talking up bitcon yesterday 

it was like listening to WWF

Jones is making millions with his schtick and Max is tapping into Alex's well intentioned but naive listeners

http://www.youtube.com/watch?v=wmfLTKRphxU

Tue, 03/12/2013 - 21:50 | 3324634 alfred b.
alfred b.'s picture

 

     Wow....from Bitcoin to Coinbit...in matter of seconds!!

         ....and this can happen anyday and anytime:  what a ride!!!

 

Tue, 03/12/2013 - 21:53 | 3324643 Schacht Mat
Schacht Mat's picture

Just yesterday we were discussing Bitcoin and it was suggested, and strongly countered, that Bitcoin is more vulnerable than people think.  Truth be told, much of that discussion centered on TPTB causing havoc, but it seems the darn thing doesn't even need their help (or did it have some help here).

Either way, it is rare that such a vigorous countering and down voting gets its come uppance this quickly - must be the Vatican conclave.

Stick to local, low key and small.  This is the new post global paradigm.

Tue, 03/12/2013 - 21:54 | 3324646 Tango in the Blight
Tango in the Blight's picture

I bought one bitcoin just out of interest a few weeks ago. I considered selling it earlier this week after I noticed it had gone up from $9 to $46. But when Keiser figured it could go up to $100,000 to $1,000,000 I decided to keep it. It may never go near that price but I just treat it as a lottery ticket, it may or may not go there but it just may appreciate nicely. I've wasted way more $$$ on lottery tickets than on bitcoin.

Tue, 03/12/2013 - 22:43 | 3324770 Money Squid
Money Squid's picture

Home Run. That what BC is for. Fun. If you win big for a few bucks great, if not it was only a few bucks. Just sit back and enjoy the show.

Tue, 03/12/2013 - 22:57 | 3324804 RideTheWalrus
RideTheWalrus's picture

Yeah your bitcoin will be worth a million dollars if Keiser can keep going on the Alex Jones show pumping greater fools into buying bitcoins. He has a tendency to talk up anything he's invested in so greater fools join in and pump up his investments.

It's one thing to hope that bitcoins can challange the Fed if everyone adopts them but it's a completely different thing to expect that to happen and then claim when it does the coins will be worth a million bucks because everyone will be trying to get them.

More likely, in 24 months there will be a 100 bitcoin clones and it'll be a game of Hot Tulips - don't be the last one holding the digital tulips when everyone wakes up and realises these are actually worthless and the speculating peak that made a handful of early insiders rich ain't ever coming back.

 

Tue, 03/12/2013 - 23:41 | 3324924 digitalhermit
digitalhermit's picture

 

 

More likely, in 24 months there will be a 100 bitcoin clones and it'll be a game of Hot Tulips - don't be the last one holding the digital tulips when everyone wakes up and realises these are actually worthless and the speculating peak that made a handful of early insiders rich ain't ever coming back.

Well there are actually quite a few "clones" already in the sense that folks have created several alternative blockchains based on branches of the original bitcoin software. A few worth mentioning are:

Namecoin, Litecoin, Devcoin, Liquidcoin, Solidcoin...

So far the "Network Effect" seems to be focusing most user activity on Bitcoin, but Litecoin has been having a bit of a run too recently (up several 100% in the past few weeks). I guess time will tell if there is more room in the marketplace for additional virtual currencies.

 

Wed, 03/13/2013 - 00:36 | 3325011 adr
adr's picture

So now Bitcoin and its copies are turning into stock certificates without representing anything at all. A virtual stock exchange where people trade items of accepted value for items of representative value.

Nearly everyone that runs a successful Ponzi scheme gets filthy rich for a time. This entire thing has Ponzi written all over it. The early Bitcoin adopters can cash out big at the expense of new users.

The story and actors change, but the scam is always the same.

How many hackers were there in the 70s that got rich off hacking early computer systems?

Wed, 03/13/2013 - 01:45 | 3325130 digitalhermit
digitalhermit's picture

So now Bitcoin and its copies are turning into stock certificates without representing anything at all. A virtual stock exchange where people trade items of accepted value for items of representative value.

Yes, that's Virtual Currencies are in a nutshell, and they are springing up all around us online. Kids "get" them because they've already had plenty of experience paying for virtual items with real money in the video games they spend so much time playing.

But I can see how you might not understand that and thus, fearing what you don't understand, equate virtual currencies with a ponzi scheme. Maybe this will help or not:

https://www.youtube.com/watch?v=E_9R45RLNR0

Meanwhile, the rest of the world will move on and use virtual currencies where they see fit. The free market in action!

Wed, 03/13/2013 - 02:09 | 3325145 Lost Wages
Lost Wages's picture

Some of you bit trolls just don't understand how ignorant and stupid you sound. Obviously kids have been programmed to accept the new con, just like every other generation has been programmed to accept its cons. If the average bitcoin user wasn't some college aged dipshit buying drugs online, wacking it to Japanese kiddie porn and looking for some way to fight the power without getting off his fat stupid ass, you might have some concept of history and the scams that have come before you. People in the 60s thought LSD was all anti-authoritarian and cool, but it was the CIA handing it out to them and 80-year-old Illuminati like Aldous Huxley writing their New Age books for them. WOW MAN, BRAVE NEW WORLD. Just a fake new paradigm to deliver power into the same withered old hands.

Wed, 03/13/2013 - 01:26 | 3325104 moonstears
moonstears's picture

Good info, hermit. Who knew?

Tue, 03/12/2013 - 22:03 | 3324665 sitenine
sitenine's picture

HAHAHA! Who the fuck could have seen this coming, right? I guess this is a little like Apple. Remember the day they claimed the iOS was 'superior' because it was less 'hackable' - turned out to be a piece of shit that hadn't been hacked only because it was relatively pointless to do so. Same thing here, obviously. The more attention bitcoin brings upon itself, the faster it will be crushed into irrelevance.

Tue, 03/12/2013 - 22:12 | 3324684 PSEUDOLOGOI
PSEUDOLOGOI's picture

there are merchants who will take your bitcoins and send you silver or gold.

But bitcoins can't prevent boating accidents

Tue, 03/12/2013 - 23:08 | 3324825 Matt
Matt's picture

bitcoin boating accidents are even easier; if you just "forget" your wallet and password, and then when you need to recover the money, you "suddenly" remember them.

Tue, 03/12/2013 - 22:15 | 3324694 TraderTimm
TraderTimm's picture

I fully expected the usual snark-sharks of ZH to come out swinging. I mean, wow, look at that - a market that is now trading at 45.00 - but of course they'd make it look like it went to zero or something.

The Ars piece showed something important, that any technical problem will be addressed within the hour, not days or weeks. Remember that bank that had all its ATM's go on the fritz? Oh yeah, RBS. But we let that slide - because of course, its a bank - such duplicity astounds me.

Reference: http://www.computerworlduk.com/news/it-business/3372424/rbs-woes-continu...

I also understand that anyone who can't wrap their mind around virtual things can't even begin to grasp what bitcoin is about. That's fine - stick to your gold or silver, though I still maintain they can work together well.

A few points that weren't mentioned in the original piece - not that I expected ZH to do any true diligence on the matter:

1. Regular users didn't have to do anything special at all

2. Full nodes switched to alleviate the fork

3. No coins were lost, transactions were delayed however until the fork was resolved

4. Some muppets tried to do 'doublespend' transactions during the fork for their own benefit, but that backfired (predictably).

5. The large exchanges and merchants/payment processors coordinated beautifully

And here we are. The blockchain is whole, everyone including me still has their balances. And not a single representative of the FDIC or FED in sight. Amazing. I guess there is something to the anti-fragileness of this system.

But feel free to disagree, as I'm sure you're going to as soon as this is posted.

Tue, 03/12/2013 - 22:25 | 3324720 fonzannoon
fonzannoon's picture

hey man, all the best to you. i have to say it sounds interesting. it really does. something about digital currency just scares the shit out of me. but if it stays out of the wrong hands it seems to be a better alternative than a fractional reserve bank.

Tue, 03/12/2013 - 22:40 | 3324758 willwork4food
willwork4food's picture

Bitcoin is a pretty cool system. Where else can you spend money internationally without standard costs built in? But does using bitcoin really fight the fiat currencies? Really? Today I need to go out and earn $45 USD for each BTC..if something cost 2 BTC, I've got to work harder..for fiat. So do the people in Norway, Chile, Iceland if they want to trade...they still have to work hard for their fiat currency to purchase BTCs. How is that hurting central banks?

Anyway, even though you might get some good drugs and some gold.... wake me when I can go down to the grocery store and buy some good food and a good case of beer with my BTCs.

Tue, 03/12/2013 - 23:11 | 3324836 Matt
Matt's picture

And what, exactly, do you do to get gold or silver? Generally, people buy them with dollars. 

You could trade goods or services for gold or silver, and you can trade for bitcoins as well.

You can go pan handle some gold, and you can mine bitcoins.

If you wait until bitcoin is mainstream, you won't be able to get any hipster cred.

Tue, 03/12/2013 - 23:20 | 3324856 sitenine
sitenine's picture

You have to appreciate the real motivation here. Nothing will EVER be allowed by TPTB to compete with state issued fiat on a larger scale, that's an indisputable fact. It's all about the 'get rich now'. Everyone knows the eventual fate of bitcoin. Same as it always was. Get in early, and get out in time..

Tue, 03/12/2013 - 23:53 | 3324944 digitalhermit
digitalhermit's picture

Nothing will EVER be allowed by TPTB to compete with state issued fiat on a larger scale, that's an indisputable fact.

 

 

Just like nothing will ever be allowed to compete with state run postal message delivery? (Email)

Just like nothing will ever be allowed to compete with state enforced copyright monopoly (torrents/peer-to-peer)

Just like nothing will ever be allowed to compete with the state run propaganda passing for news? (blogs like zerohedge)

Yes... it's an indisputable FACT that nothing will ever be allowed to compete with state issued money and central banks... sitenine knows the future like some kind of genius oracle.

Wed, 03/13/2013 - 00:18 | 3324956 sitenine
sitenine's picture

Your perception of what TBTF actually means and the tyranny you live under is underwhelming, to say the least.

Tue, 03/12/2013 - 23:46 | 3324933 digitalhermit
digitalhermit's picture

And what, exactly, do you do to get gold or silver? Generally, people buy them with dollars.

Not in this store they don't: http://coinabul.com/

Wed, 03/13/2013 - 00:09 | 3324950 sitenine
sitenine's picture

Bitcoins for GOLD! Great. At least now we know without doubt that stupidity/greed knows no bounds. You understand that these fucks are just taking the BTC and exchanging it for fiat to buy more gold for you suckers who could have just bought it with fiat in the first place, don't you? Arbitrage at work to steal your wealth - what would possibly go wrong?

[edit] I guess there could be an advantage if you want to buy gold 'anonymously', but even then, these guys are going to have your address if you need it shipped. So no, I don't see much point in it. Thanks though.

Wed, 03/13/2013 - 00:28 | 3325000 Matt
Matt's picture

Or I can convert electricity into bitcoins by way of my video cards, then buy the gold with the bitcoins. I could argue it was all commodity trades, so no income or sales tax is applicable.

Wed, 03/13/2013 - 00:44 | 3325014 sitenine
sitenine's picture

I would buy that argument, except for one detail you forgot to mention. I'll pose the detail in the form of a question, just to see if you can figure it out. How much would you spend in electricity to mine 1 bitcoin today, and how long would it take?

Regardless of the answer, there comes a point where the electricity becomes more 'expensive' than what the coin you produced is worth. Not to mention that this technology is 100%, now, and forever, dependent on and inseparable from electricity. Again, no thanks.

Wed, 03/13/2013 - 11:07 | 3325932 Matt
Matt's picture

Right now, I could make almost $10 per week net of electricity if I left my computer running full bore 24/7.

Calculator here: http://tpbitcalc.appspot.com/

If the electricity starts to cost too much compared to the amount of coins mined, fewer people will mine, so the difficulty will go down, so those remaining mining will get more of the new coins.

Certainly, people who have cheaper electricity and bandwidth, or who make their own electricity, have a competitive advantage.

Disclosure: I have 1.77 bitcoins, since I got 2 from mining a couple years ago, then spent a couple days Martingaling Satoshi Dice to get a better understanding of bitcoin mechanics.

 

Wed, 03/13/2013 - 02:06 | 3325151 digitalhermit
digitalhermit's picture

You understand that these fucks are just taking the BTC and exchanging it for fiat to buy more gold for you suckers who could have just bought it with fiat in the first place, don't you? Arbitrage at work to steal your wealth - what would possibly go wrong?

You do understand the food vendor that sold you that salami sandwich is just taking your fiat and turning around and buying more salami in bulk to to sell to you later, don't you?

Yes, that is generally how a healthy business operates: for a profit; Apparently that's not appropriate in your vision of reality?

Tue, 03/12/2013 - 23:42 | 3324923 samwell
samwell's picture

you don't necessarily need to go out and slave away for FRN's to exchange for bitcoin.  You can also mine bitcoin in which case you manufacture you're own money using electricity/computing power which can be manifested in physical form using checks and actual physical coin.  additioal miners and accessories can also be purchased with BTC so it is a self contained monetary system which is international, has no usary attached to it, does not come into existance as a debt, and has very low friction compared to the current barbaric relic of the FRN.  

For instance, if you would like to move your money across international borders without the permission of the "authorities", you can convert your FRN's or gold into BTC, fly to that country, open a bank account, and finally convert btc back to the local currency all without anyone being the wiser.  Try doing that with FRn's or gold/silver and you will have it confiscated by the TSA goons as slaves are not allowed to own large amts. of gold/silver or FRN's.

 eventually the FRN system will collapse under the weight of usary and return to the depths of hell from whence it came.  You can choose to use a new money or rely upon gold/silver the majority of which is owned by the same criminal syndicate of subhuman psychopaths that brought you fiat FRN's.  

Wed, 03/13/2013 - 08:39 | 3325419 Papasmurf
Papasmurf's picture

This transaction, moving money to another country through stealth means would be legally defined as money laundering.  If you expect to get away with it, be sure to donate sufficient portions to important political campaigns, like Corzine did.

Wed, 03/13/2013 - 12:35 | 3326248 TraderTimm
TraderTimm's picture

@fonzannoon

Yeah, I understand. We're in a period of time that seems like just about anything can occur. As others have said, we all take the risks that we deem acceptable. If you don't think bitcoin is an acceptable risk, I can't fault you for it.

If you're not going to use bitcoin, please use gold and silver. We're on the same side in that regard.

Tue, 03/12/2013 - 22:39 | 3324729 sitenine
sitenine's picture

@Trader - I dig your enthusiasm. Really. Right the fuck on. Now scamper off, and buy more bitcoins - the less peeps buying PM, the cheaper it is for me to purchase (as much as I envy your ownership of something even less tangible than a $ - LOL).

Tue, 03/12/2013 - 23:12 | 3324842 Matt
Matt's picture

Actually, the volume of sales in precious metals seems inversely proportional to price, so the more people buy gold and silver, the cheaper they get.

Tue, 03/12/2013 - 23:27 | 3324891 sitenine
sitenine's picture

Supply and demand be damned! Welcome to your Brave New Centrally Planned World.

Wed, 03/13/2013 - 12:36 | 3326253 TraderTimm
TraderTimm's picture

@sitenine

Sure, I get your motivation. Continue with gold and silver if you don't think bitcoins are an acceptable risk. Like I've said before, all bitcoin users are really on the same side as those that don't trust conventional sovereign currencies.

Fight the good fight, that's all I ask.

Tue, 03/12/2013 - 22:30 | 3324732 GrinandBearit
GrinandBearit's picture

A bitcon apologist -lol

Bitcon will eventually reach their fair value...  ZERO

And when it gets there, you'll still be a believer.

Tue, 03/12/2013 - 22:42 | 3324764 Seasmoke
Seasmoke's picture

You had to be sweating ...... Even a little

Wed, 03/13/2013 - 06:23 | 3325251 awakening
awakening's picture

Costs me nothing to get them (time, electrics and computer usage would have been the same though with bitcoins/derivatives I do stand a chance to gain with higher chances than I could have got from lotto) so if they go back to nothing then ultimately what have I lost? Nothing.

Wed, 03/13/2013 - 12:39 | 3326262 TraderTimm
TraderTimm's picture

@Seasmoke

The only fear that was expressed was in the market valuations, which is why it exhibited the classic spike down and "dead cat" bounce. The developers were aware of the problem early, and chose the right course to affect the minimum of people at the time.

In fact, any time there is an upgrade we technically 'fork' the chain - they're just usually much more gradual than this situation, which required a rapid response.

I'll take a bitcoin fork over any conventional sovereign currency fork - say the Drachma to the Euro.

Tue, 03/12/2013 - 22:24 | 3324705 israhole
israhole's picture

Let that be a lesson to you Goyim, there is no money like Judefetzen.

http://incogman.net/2013/03/never-ending-jew-psyops-on-america/comment-p...

Tue, 03/12/2013 - 22:21 | 3324708 GrinandBearit
GrinandBearit's picture

LOL!

Where are all the bitcon shills, pumpers and cheerleaders now?

Like I told these bitcon shills the other day: "You'd better sell now before the next crash".

So predictable and so hilarious.

Tue, 03/12/2013 - 22:37 | 3324751 Money Squid
Money Squid's picture

they are licking their wounds cause they got it right in the ass

Tue, 03/12/2013 - 23:18 | 3324852 digitalhermit
digitalhermit's picture

Actually most bitcoin users barely noticed unless they read the news. It was quite anti-climactic when the block-chain remerged after a couple hours.

Tue, 03/12/2013 - 23:52 | 3324914 Haole
Haole's picture

Yeah, licking our wounds.

...after not one but two recent "crashes", STILL up over 400% on my original speculative gamble.

Yeah, that hurts alright... /sarc

It's the idea and concept of Bitcoin that I'm interested in being involved in. Not whether I lose a few thousand bucks outright or make a fortune.

The market fully recovered after developers, miners, etc. networked globally and essentially fixed a fully functional global currency in 25 minutes. What part of nobody lost anything, including virtually all the value in their existing holdings, are you unable to understand?

The outright ridicule leveled towards BTC by characters like yourself that admittedly know squat about it, without so much as looking at a price chart of BTC or research the issue itself before confirming yourself as a jerk-off, is nothing short of laughable. Nice job and thanks.

Wed, 03/13/2013 - 00:17 | 3324985 GrinandBearit
GrinandBearit's picture

So you do admit it... it's a pump and dump gamble, not a currency.

Thank you.

Wed, 03/13/2013 - 00:40 | 3325016 Haole
Haole's picture

I realize how desperate many here are to discredit BTC and those involved in it in any way possible but don't put words in my mouth or manipulate what I said to suit your agenda.

It's a gamble like many things in life. Holding gold and silver isn't without risk. Counting on one of any "doomsday" scenarios occurring has risks. "Prepping" has risks. Getting out of bed in the morning has risks. Sorry to state the obvious but evidently that is required. I'm sure that everything you do in life has absolutely no risk though.

It is a currency and it's being used all over the globe right now as such. Then again, you'd know that yourself if you weren't so worried about yanking yourself.

Wed, 03/13/2013 - 04:43 | 3325214 All Out Of Bubblegum
All Out Of Bubblegum's picture

The only ones that took it in the ass were the dipshits that sold in the flashcrash. The rest of us are doing great, thanks for asking.

Wed, 03/13/2013 - 08:40 | 3325426 Papasmurf
Papasmurf's picture

Where are all the bitcon shills, pumpers and cheerleaders now?

 

They will be back after the complete their virus scans...

Tue, 03/12/2013 - 22:34 | 3324742 Money Squid
Money Squid's picture

But but but Bitcoin is a safe and secure modern crypto currency that you non computer geniuses simply can not understand. And and and its double hash .......   

Tue, 03/12/2013 - 22:41 | 3324761 dick cheneys ghost
dick cheneys ghost's picture

MY WALLETS GONE..........MY WALLETS GONE...........

 

http://www.youtube.com/watch?v=4tuDwbDMidM

Tue, 03/12/2013 - 22:42 | 3324766 Banjo
Banjo's picture

Not an enemy of fiat. I just want to save in something NOT a medium of exchange.

Thats why i don't want a gold standard. current system since 1970 is fine.

Tue, 03/12/2013 - 23:33 | 3324906 Matt
Matt's picture

It might be even better to use metals that are not widely traded, such as palladium and platinum, since they might be manipulated less. Of course, platinum will take a dive one way or another as demand for it for catalytic converters for cars dries up.

Wed, 03/13/2013 - 11:07 | 3325240 The Abstraction...
The Abstraction of Justice's picture

As far as I can tell, AFAICT, platinum and palladium are even more manipulated than silver. Consider that platinum is 5% the abundance of gold, yet only the same order of price. Palladium is 10% the abundance of gold and half the price. 

 

Platinum is the most abundant hard precious metal that can resist fragmentation in an extreme catalytic chamber. That is why it is used in vehicle catalytic converters, but the principle is general, yielding platinum as perhaps the most important catalytic agent on Earth.

 

Platinum and palladium, like silver, are industrial metals, and end up atomized in their industrial usage in a way that is not easily recoverable. Follow the graphs on kitco, you will see whenever gold and silver are attacked, so too are platinum and palladium, only platinum spikes are even more absurd and severe.

Tue, 03/12/2013 - 23:01 | 3324811 Conman
Conman's picture

Funny reading these comments, and realizing how few people have command of reading comprehension. The exchange rate flash crashed and recovered. The fork happened yea, but its not really that big of a deal.

Tue, 03/12/2013 - 23:47 | 3324932 Haole
Haole's picture

Reading comprehension isn't the only thing some here have no command of...

Wed, 03/13/2013 - 00:52 | 3325037 sitenine
sitenine's picture

Yeah, reality for instance. Thanks for volunteering as the poster child.

Wed, 03/13/2013 - 06:31 | 3325255 awakening
awakening's picture

You know, it's incredibly rude and selfish to talk about yourself like that. Kind of puts the fun out of it for the rest of us.

Tue, 03/12/2013 - 23:22 | 3324871 Kirk2NCC1701
Kirk2NCC1701's picture

I prefer its non-virtual counterpart:  the silver or gold Bite-Coin.  For when the PC's and/or grid is down.

Wed, 03/13/2013 - 00:12 | 3324978 snblitz
snblitz's picture

1. Bitcoin is an excellent way to transfer value world wide.

2. Bitcoin is a bad way to store wealth.

3. Bitcoin is also bad as a speculative investment.

It is this last issue that ruins bitcoin's usefulness in points 1 and 2.

Wed, 03/13/2013 - 00:32 | 3325006 Matt
Matt's picture

How is bitcoin a bad speculative investment?

speculation is bad for bitcoin, since the volatility makes it less desireable, but people can make (or lose) a fortune speculating on the wild swings.

Wed, 03/13/2013 - 05:50 | 3325237 The Abstraction...
The Abstraction of Justice's picture

You don't have to use it to store wealth. Gold and silver do that. You should use it, in want of better things, to transfer money to remote agents. As storage, it is certainly risky. As a transaction system, not a significant risk.

Wed, 03/13/2013 - 00:42 | 3325018 Gordon_Gekko
Gordon_Gekko's picture

Hahahahahaaahhaaa!!!

Where the hell is Trace Mayer?

Wed, 03/13/2013 - 00:49 | 3325029 resurger
resurger's picture

+5

Wed, 03/13/2013 - 00:56 | 3325041 moonstears
moonstears's picture

Well, JMO, but at $46 one can buy 1.4 OZT silver(at the real $33 per physical ozt prices). Everyone here who claims to own bitcoins ain't buyin' 'cause they bought at at $2 and such,  as they us tell repeatedly, and they are all up 400%, etc...so where's my greater fool(to quote D Casey)?? Hmmm, what to buy?? Decisions, decisions.

Wed, 03/13/2013 - 01:01 | 3325058 adr
adr's picture

an alternative currency should not be about making money off speculation, but a store of the value of your labor that can be traded for an equal value of the labor of another. That is the true purpose of money.

The problem is humans have been trying to figure out how to run scams to obtain money without the need for labor since the concept came into being.

Bitcoin does not require human labor to mine, so what is its value? Is it based on the cost of the electricity required to mine? Is it based on the time required? Bitcoin favors those with access to supercomputers over a person with an average PC. If you can't afford a network cluster, you can't compete. Like a panhandler competing with a guy using a Caterpillar. Most likely the IT guy using the extra server capacity to mine Bitcoins isn't paying the power bill, or paying for the equipment. So he is getting something of value for no expense to him. A lot of people would call that stealing.

I see hundreds of ads trying to sell me Bitcoin mining systems. If I pay $900 for a Bitcoin mining computer, how long will it take me to mine $900 in Bitcoins?

It seems if I invested $900 in Bitcoins last month, I would have made around $900 already, leaving me with $1800. If I could generate $900 in mined Bitcoins in one month, which seems unlikely, I've only made back my initial investment. My net is zero. If my Bitcoin mining system craps out after one month, now what?

It seems Bitcoin favors the speculator over the productive. Once again the hallmark of a Ponzi.

Wed, 03/13/2013 - 11:24 | 3325992 Matt
Matt's picture

The returns on new hardware will diminish, until it comes in line with electricity.

Buying the hardware is the Cap Ex. Electricity and, to a lesser extent, bandwidth are the operating costs.

You are thinking of the old days, when people made stuff. Now, it is all about robots and algorithms. Will it last, or will we go back to a manual-labor centric society? Only time will tell.

As for speculation, I fully expect there to be another big pullback in bitcoins. It's like boom-bust cycles condensed into 12 months, full round trip from stable - rising - mania - boom - recovery and back to stable.

Since machinery now does 99% of the work mining gold, with mines getting 4 grams of gold per tonne of rock, how is gold mining any better? It seems like a far more wasteful and destructive endevour than bitcoin mining.

Wed, 03/13/2013 - 01:22 | 3325095 valkir
valkir's picture

I explain bitcoin to myself easily.If i go to the farm and try to buy sheep,milk,or whatever,what will be the look of farmer when i offer him bitcoin?I still stick with barbaric relicts bitchez,guess i am old school fart.Uh,forgot to mention,hookers accept only cash.

Wed, 03/13/2013 - 05:49 | 3325236 The Abstraction...
The Abstraction of Justice's picture

As soon as you want to buy something from Amazon without risking sending bullion through the post, you will need something that is an electronic representation of gold and silver. We cannot run an efficient economy if every transation requires the use of a security van.

Wed, 03/13/2013 - 14:45 | 3326736 Prisoners_dilemna
Prisoners_dilemna's picture

You mean a farmer like this one here?

http://www.honestbeef.com.au/

 

edit:  and heres your hooker

https://bitcointalk.org/index.php?topic=45289.20

"I would motorboat that"

 

FWIW my middle name is gold buggery.

Wed, 03/13/2013 - 03:53 | 3325194 orangegeek
orangegeek's picture

Bitcoin lacks one thing.  A military.

Wed, 03/13/2013 - 11:08 | 3325235 The Abstraction...
The Abstraction of Justice's picture

Doesn't need a military, it is the world citizen of currencies.

Wed, 03/13/2013 - 04:39 | 3325211 All Out Of Bubblegum
All Out Of Bubblegum's picture

I can't pay my bills or buy groceries with gold or silver. They must be some kind of ponzi schemes. On top of that, I can't pay my taxes in gold or silver, therefore they have no actual value.

The price of gold and silver can be very volatile at times also, so they're not a reliable store of value. Plus, it costs more to produce the metals than they're worth - all of the energy, electricity and labor that goes into making and storing gold and silver coins and ingots is worth more than the coins and ingots themselves.

Gold and silver will never go anywhere. They're tulip bulb bubbles just waiting to collapse.

Wed, 03/13/2013 - 05:46 | 3325234 The Abstraction...
The Abstraction of Justice's picture

Silver, best conductor, electrical and thermal. Antibiotic, antiseptic, which bateria has not been able to evolve against in the history of life. Also functions as a catalyst in many reactions.

What do you suggest, put all my money in Facebook shares?

Wed, 03/13/2013 - 11:12 | 3325943 All Out Of Bubblegum
All Out Of Bubblegum's picture

You're sarcasm deficient, aren't you? Too much metal in your diet causes that.

You need to lighten the fuck up.

Wed, 03/13/2013 - 11:21 | 3325982 squexx
squexx's picture

Your mom and dad are cousins, aren't they!?!

Wed, 03/13/2013 - 11:24 | 3325994 All Out Of Bubblegum
All Out Of Bubblegum's picture

My family isn't like yours. Sorry.

Wed, 03/13/2013 - 13:37 | 3326437 The Abstraction...
The Abstraction of Justice's picture

Manners. When being sarcastic you run the risk of being misconstrued.

Wed, 03/13/2013 - 14:38 | 3326774 All Out Of Bubblegum
All Out Of Bubblegum's picture

Manners are lost on this board when discussing anything outside of the politically correct metals.

Wed, 03/13/2013 - 06:49 | 3325263 awakening
awakening's picture

For those that have these Bitcoins and think they are a ponzi (brilliant Ponzi that eh, with thanks to TraderTimm again for the freebie a few days ago =) ) I am more than happy to take them off your hands: 1BmmZnN78DKKTBXxsiiodLA2oX8bFxK2Km

Since people are not busy doing anything special (not like your storming the Fed and decorating the place or anything worth talking about so yes you do have free time) follow the below instructions:

1. Go to this site: https://instawallet.org

2. Save the URL link in the address bar as you will need it to re-access the Bitcoin wallet (if you close the page and don't save the URL you will lose access to that bitcoin address)

3. Make a copy of the string of text under 'Your Bitcoin address':

Example: My new address created for the benefit of this post is this: 1BmmZnN78DKKTBXxsiiodLA2oX8bFxK2Km

4. Visit a few of the sites listed here (simple enough starting point): https://bitcointalk.org/index.php?topic=74046.0

5. On each site, paste your new Bitcoin address into the relevant text box (complete the captcha as needed).

6. Wait a few hours and you will eventually get some Bitcoins (well fractions thereof to be more specific). Payouts are batched by site ops to minimise transaction fees.

7. Done, enjoy the free bits of anonymous cryptocurrency (or rinse and repeat 4-6 as I do on occasion) :)

Optional: If you still think they are worthless after doing all the above; then send them to me at that address (other donations also welcome) -  1BmmZnN78DKKTBXxsiiodLA2oX8bFxK2Km

Wed, 03/13/2013 - 07:50 | 3325318 paint it red ca...
paint it red call it hell's picture

Ignoring bitcoin up until now has been quite easy. I knew nothing about the experiment virtually or otherwise. After reading up on the decentralized concept and practice the realization of how easy it would to conscript bitcoin into the digital means of exchange a world government would love.

Being an Old-er fart, my social security card issued in 1957 says right across the front," NOT FOR IDENTIFICATION PURPOSES ". Think for moment the tiny innovation called a social security number was not co-opted from it's original intent for nefarious purpose once it was widely accepted????????

bitcoin, nah! cash, gold, silver, or barter.. keep your digital bullshit.. much too dangerous and irreversible just as the social security number has become an irreversible means of ID.

Wed, 03/13/2013 - 11:21 | 3325944 Debugas
Debugas's picture

a simple question for bitcoin fans they can not honestly answer:

how do i quickly and reliably check if a given bitcoin is not a counterfeit ?

more detailed:

a customer comes in and tells me a number (bitcoin key).

how do i quickly check if that number is in the bitcoin community ledger of transactions? I surely can not in short time query every bitcoin holder if he has not received a payment with that bitcoin recently - it would take too much time, some of them maybe off-line, by the time i ask everyone new transactions with that coin could have happened etc.

So i have to rely on several major "ledger-keepers" and trust them.

Ok do i have a contract with any of them in case they lie me about the ledger or one day decide to discontinue providing the service? At least when i have my gold in a safety deposit box i have a contract with the bank and i can sue the bank just-in-case

Wed, 03/13/2013 - 12:00 | 3326118 All Out Of Bubblegum
All Out Of Bubblegum's picture

> how do i quickly check if that number is in the bitcoin community ledger of transactions?

You can keep a copy of the ledger (the blockchain) yourself or you can use something like https://blockchain.info.

Wed, 03/13/2013 - 11:14 | 3325949 mccoyspace
mccoyspace's picture

This pro and anti Bitcoin talk sounds like Leninist fighting with Trokseyist. Aren't we all on the same team: decentrailization, autonomy, privacy? Rationality can take different forms and still be rational.

Wed, 03/13/2013 - 11:25 | 3325998 All Out Of Bubblegum
All Out Of Bubblegum's picture

^ WISDOM ^

Wed, 03/13/2013 - 18:24 | 3327782 billsykes
billsykes's picture

What a stinking piece of shit- 9% drop that stayed. This is such a fraud ponzi, I can hardly wait for the perp walk on these mf'ers. 

I know they will be in jail becuase they have zero pull with the SEC or justice. Not dening that there is others more deserving, but the whole way this thing was cooked up with the fake name guy and presto a full developed piece of software based off the paper which contained ZERO math. 

 

 

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