Bitcoin Hits New All-time High of $32 339
Sabbetus writes "Bitcoin tops its previous all-time high of $31.91 and in doing so it proves to be quite a resilient virtual currency. To the supporters of Bitcoin this does not come as a surprise, since we have seen the likes of WordPress, Reddit and Mega embrace it. Recently Namecheap also confirmed that they will start accepting bitcoins. The new record price was reached on the same day that Mt. Gox, the world's largest Bitcoin exchange, reached an agreement with CoinLab to manage the exchange's operations in the U.S. and Canada."
A far cry from the end of 2011.
Duh (Score:1, Insightful)
What did you expect from a currency that has a fixed supply and thus inevitable deflation?
Volatile (Score:5, Insightful)
So? (Score:4, Insightful)
I'll be using my Bitcoins as currency as usual. Trading for services or donating to good causes. I'll continue to accept Bitcoin in exchange for services rendered (only 10 Bitcoin for a handjob!).
Sure, for speculators that matters. For people who just want to use a decentralized non-government/non-corporate currency, it continues to just work.
Oh, and it's not an "anonymous currency", it's a "pseudo-anonymous currency". In the future there will be real laundries that operate with a decent reserve. At that point it becomes more anonymous. I'm looking forward to that future.
Will crash again (Score:5, Insightful)
The "old money" is still sitting on most of the coins and will crash the value again by cashing in even a small percentage. The Bitcoin economy is just too small compared to the wealth of the early adopters.
Re:Hurry up and die please (Score:2, Insightful)
That is a huge problem with this currency. It is a pyramid scheme and now with its rising value it is going to have a nice deflationary spiral.
Re:Hurry up and die please (Score:3, Insightful)
Seriously, what incentive is there for me to support BTC now the rush is over?
What good is an anonymous virtual currency?
What incentive is there for me to support Euro/USD etc. now that I can't just print it willy-nilly?
Your post is as bad as those who equate Bitcoin with Ponzi schemes. According to their logic, any profitable business would be a Ponzi. OK, so you didn't invest in a hugely succesful company back in its garage days. That doesn't mean the company is useless today. Quite the contrary.
Re:Try $33.70 (Score:4, Insightful)
Re:Hurry up and die please (Score:5, Insightful)
Do you ever send (or receive) money outside your home country?
Do you want a bank account no government can freeze if they decide you voted the "wrong" way last election?
Do you believe you have every right to spend your hard-earned money playing online poker if you damned well want to?
Yeah, you can use physical cash for an awfully lot of things. But when you need to get funds halfway around the world, or store more of it than will fit comfortably under your mattress - We finally have a semi-viable alternative. Let the haters hate - In the meantime, I'll just keep using Bitcoin for its intended purpose - As a semi-anonymous digital currency.
FFS, this isn't a good thing (Score:5, Insightful)
For a currency to be useful as a medium of exchange, you want it to be STABLE in regards to the value of whatever it is you want to purchase. (And if it can't be stable, it should at least be predictable.) High volatility, with and edge towards deflation (due to irreplaceable currency loss and any increases in the size of the BitCoin "economy"), makes for a rather poor currency. (You'd have to be completely, utterly, nuts to ever even THINK about taking out a loan in the things)
It's deflated by about 100% in the last month, and as I type this, the current bid/ask spread is 66 basis points. It's what you would expect with a thinly-traded stock; not a serious currency.
An increase in the value vs. the USD is only useful if you are using BtC's as an investment.
Re:Hurry up and die please (Score:5, Insightful)
I dread each and every story on Bitcoin, because inevitably, someone rolls this particular turd out.
A Ponzi scheme pays its yield on an investment (possibly bogus, but not necessarily) out of capital. Bitcoin functions as a currency, not an investment. The exchange rate rises and falls based on supply and demand, "Bitcoin" itself has no expected yield. It doesn't pay dividends, it doesn't go to harvest, you can't eat it or burn it.
Yes, you have people speculating on it - Just as you do with the USD:GBP exchange rate, on the price of gold, on corn futures, on who will win the next big game. Speculation in a market doesn't make the underlying asset a Ponzi scheme, no matter how many times you claim it.
Re:A Far Cry From the End of 2012 As Well! (Score:3, Insightful)
Are human beings considered goods?
Re:Duh (Score:5, Insightful)
Re:Old arguments (Score:5, Insightful)
This is an old and tired argument. There is no central issuer of bitcoins promising high gains to new investors and paying off old investors with the proceeds. New bitcoins are issued in a decentralized fashion for verifying the transaction history. Therefore it does not meet the definition of a pyramid scheme.
What it is closer to is a collaboratively built database which tracks account balances. What value is put on those balances in terms of other goods (including local currencies) is purely a supply and demand situation, there never was a promise of any future value made. What value people find in it is the features the software and database provides - privacy, fast transfers around the world, low fees, predictable growth rate, etc.
Re:A Far Cry From the End of 2012 As Well! (Score:5, Insightful)
"Two problems with discussing crime in the context of any global technological innovation like bitcoin: relativism and corruption.
Relativism -- Except for those acts identified by Bastiat as universally criminal, one society's crime is another's norm. No matter how digusting and criminal you consider an act to be (drugs, gambling, prostitution, bizarre consensual sex, sex between adults and adolescents, eating insects, dogs, cats, etc.), I can find you a society that considers the act normal. And no matter how obviously acceptable you find an act (lending money, Protestant worship, female literacy) I can find you a society that considers it a disgusting crime. Like it or not, the globe is vast, and bitcoin is global.
Corruption -- Victimless crimes are exploited and enforced by those in power to oppress everyone else. This is because such "crimes" are deliberately crafted to be ambiguous. They enable punishment of the powerless, no matter how timid and cautious. They exempt the powerful, no matter how arrogant and tyrannical." ~coqui33
Re:Why anyone would think this is a good thing (Score:5, Insightful)
How is "hoarding cash" .... also known as saving .... equivalent to losing value? In a stable financial system saving money should be value neutral. In the financial systems we actually use, it's the opposite - inflation is the reason that savings lose value. This is not a good thing!
The design of Bitcoin is correct. It's the design of existing currencies that's hosed, though possibly calling the result of a few centuries of evolution "design" is overly generous.
Let me sum up our existing currencies for you in two paragraphs. Because pre-Bitcoin we lacked a way to globally synchronize everyones view of each others balances, we have to delegate this job to organisations called banks. We trust them to decrement one accounts balance when another is incremented and this is why people have to, you know, go to work and more or less live within their means. Naturally the trust we place in them for that is constantly abused, because the banks routinely increment peoples accounts without decrementing anyone elses. They charge interest for this "service". They especially love incrementing the governments accounts in this way, but the free money doesn't just go there, it sprays all over the place. This eventually leads to inflation.
Inflation is extremely convenient for governments because it lets them buy nice things for voters and pay for it using an invisible tax on savings. Because people would be naturally very angry at this taxation if it was done directly, economists and politicans came up with a brilliant theory as to why this is actually a good thing! Zero inflation, says them, would be terribly bad because if peoples savings aren't being constantly stolen at 2% per year or more then they lose all interest in profit. Given the choice of sitting on their money and getting no return, or making a safe 2%-per-year investment, those stupid citizens will choose to sit on it, and that will lead to economic collapse and anarchy and cats living together with dogs, which would never do.
There's a couple of problems with this theory. One is that it is contradicted by actual studies of historical data [minneapolisfed.org]. The other is that it makes no sense. Capitalism is based on the assumption that people like profit. Normally, if someone is offered a low or even zero risk way to profit, they'll go for it unless they need the money right now. But when it comes to the (non existent, it turns out) "deflationary spiral" we're expected to suddenly stop believing that .... we're told that people will pass up good investment opportunities unless they're forced into it. That flatly contradicts how people actually work. The only kind of investment that becomes interesting solely due to inflation is the bad kind. You know, the kind that tends to be involved with asset bubbles.
By the way, Bitcoin is not intended to be deflationary. You assert that people will lose Bitcoins and sure, a tiny amount might disappear that way. But you'd better expect that easy and automatic backup will become common in future. All the incentives to properly solve that problem are there.
Re:Thank you! (Score:4, Insightful)
Economics as a discipline isn't invalid, but you do have to take it with a huge pinch of salt especially at the macro level.
Here are a couple of facts that should make you think twice about macro-economic wisdom. One of the most basic tenets of science is to compare your theories against observable reality to see if they match, and if they don't, you come up with a better theory. But the theory of the deflationary spiral was not actually studied to see if it matched historical data until 2004, and then when it finally was analyzed, it was discovered that the theory was wrong [minneapolisfed.org]. Should have been a pretty huge event, but no, Bernanke and his colleagues continue to act as if the study was simply never done.
If that theory is wrong, what other conventional wisdom might be wrong? Well, it turns out that economists have models of how the economy works. Of course they do. The state of the art in macro-economic modelling, widely used by central banks, are dynamic stochastic general equilibrium models (DSGE). Sounds sophisticated, right? Wrong. These models are so crude they do not include banks at all [economist.com] because the people who designed them thought that banks had no impact on economies. Worse still, as their name implies the models predict equilibrium rather than the boom/bust cycles that typify real economies. It might seem obvious to the man on the street that if your explanation of how the economy works ignores banks and predicts stability, then you have a pretty bad explanation ... but this is the quality of science on which central banks base their decisions.
Is it any wonder the world got so messed up? Maybe you should indeed exercise more skepticism towards the so-called "dismal science", and consider whether us Bitcoiners have got it right after all.
Re:Volatile (Score:4, Insightful)
Do you know of a way to create a new currency and associated economy from scratch without volatility?
Re:Hurry up and die please (Score:4, Insightful)
Yeah... it's more of a "pump and dump" scam than a ponzi scheme.
I think of Bitcoin along the same line as penny stocks... something that is basically worthless, but can be easily inflated with some good story and enough suckers to buy into it.
Then you sell out of your position quickly, and watch the whole thing crash. If you're lucky, people will forget what what happened in a few months and then you can pull the same scam all over again.
Hell, Bitcoin has already crashed before once when Mt Gox got hacked in 2011. Do you really want to invest in a "currency" that can go from $30 to $1 in less than a day?
Re:Anonymous currency (Score:5, Insightful)
Hell, Wall Street is probably looking at ways to set up fractional bitcoin systems so they can do HFT in bitcoins,
Right now the problem is the increasing value of a bitcoin - at $30 each, 1 bitcoin is seriously going to overpay for a lot
https://en.bitcoin.it/wiki/FAQ#How_divisible_are_bitcoins.3F [bitcoin.it]
How divisible are bitcoins?
A bitcoin can be divided down to 8 decimal places.
Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction.
If necessary, the protocol and related software can be modified to handle even smaller amounts.
I'm surprised you had so much to say about bitcoins without knowing this fact.
Re:Volatile (Score:5, Insightful)
...dollars can be used anywhere...
Dollars *can't* be used everywhere (online gambling, for example). Thus, interest in bitcoin.
Two things (Score:3, Insightful)
Think about it:
A slave is a product. Murder is a service.
Re:Duh (Score:4, Insightful)