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Bitcoin Hits New All-time High of $32 339

Posted by Unknown Lamer
from the causes-peak-oil dept.
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.
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Bitcoin Hits New All-time High of $32

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  • by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Thursday February 28, 2013 @04:29PM (#43039373) Journal

    A far cry from the end of 2011.

    And a far cry from the end of 2012 [theverge.com]!

    Sorry ... on a more serious note (if such a thing is possible with BTC) everything is proceeding according to plan [slashdot.org].

    • by Anonymous Coward
      Bah, blew that joke! First link should be:

      And a far cry from the end of 2012 [wikipedia.org]!

      • Bah, blew that joke! First link should be:

        And a far cry from the end of 2012 [wikipedia.org]!

        How about this?

        And a far cry [wikipedia.org] from the end of 2012 [wikipedia.org]

        Bitcoins will be the end of the world in the tropics. (disclaimer: I neither played the game, nor saw the movie.)

    • by Anonymous Coward on Thursday February 28, 2013 @04:50PM (#43039615)

      You can thank online gambling, where the big news is that some sites are taking BTC so americans can play again.

      Surprise, surprise, it continues to show some utility when dealing in illicit goods and services.

      • Re: (Score:3, Interesting)

        No "goods" or "services" should be illegal. Period. Restricted, perhaps. Taxed, open for debate. Controlled, possibly. But never ever made illegal. Even the most toxic/harmful materials have uses that aren't "evil" (tm)*. The moment you make them "illegal", the ones that have the most utility become black markets and crime sprouts up to support those markets. Just ask the US how Prohibition worked out, or .. gasp .. the "war on drugs".

        Yes, I am Libertarian, but I don't do drugs, don't care to do drugs. I've

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          Are human beings considered goods?

        • Two things (Score:3, Insightful)

          by Anonymous Coward

          Think about it:
          A slave is a product. Murder is a service.

  • Volatile (Score:5, Insightful)

    by ak3ldama (554026) <james_akeldama@noSpAM.yahoo.com> on Thursday February 28, 2013 @04:40PM (#43039503) Homepage Journal
    The only thing Bitcoin has proven to be is incredibly volatile. Great job? I am suprised these exchanges don't advertise on Glenn Beck.
  • So? (Score:4, Insightful)

    by magic maverick (2615475) on Thursday February 28, 2013 @04:41PM (#43039505) Homepage Journal

    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.

    • by h4rr4r (612664)

      Too bad that as the currency gets more valuable your services get more expensive compared to your competitors.

      • Too bad that as the currency gets more valuable your services get more expensive compared to your competitors.

        Yes, this is the problem with bitcoin. It is utterly impossible for him to adjust his rates so that the bitcoin amount is comparable to the dollar amount. The primary reason for this is that the use of bitcoin apparently erases common sense so no user of bitcoin would be capable of taking such an obvious step.

    • Question 1: Who does squeezies for 10 bitcoin (or any bitcoin for that matter)? Question 2: At current exchange rates, that's over $300, which is way over market. Since you mentioned that you also donate to good causes, does the volatility in the exchange rate have any effect on how you spend your bitcoins?

    • Once Bitcoin reaches some level of critical mass, it will attract the attention of the entrenched banking system and their lap dog regulators. If it takes outlawing the possession of graphics cards to stop mining, they'll get that law passed.

      If your hard drive will serve as a bank or credit card, you are a serious threat to the banking industry.

      • GPUs are crap at mining bitcoin anymore compared to the ASICs.

      • by tlhIngan (30335) <.slashdot. .at. .worf.net.> on Thursday February 28, 2013 @06:03PM (#43040433)

        Once Bitcoin reaches some level of critical mass, it will attract the attention of the entrenched banking system and their lap dog regulators. If it takes outlawing the possession of graphics cards to stop mining, they'll get that law passed.

        If your hard drive will serve as a bank or credit card, you are a serious threat to the banking industry.

        No, the established banking system will see it as another forex system to make money on by speculating and all that.

        Hell, Wall Street is probably looking at ways to set up fractional bitcoin systems so they can do HFT in bitcoins,

        The only way for bitcoin to reach critical mass and attract the attention of regulators would be for those Wall Street bankers to have caused a lot of harm - either by sending so many transactions through the system that everyone hashing through gets overloaded to the point of being unable to rollback (if you're doing a trade every millisecond, and it takes 10 minutes on average to confirm a transaction, you could ptentially send 600,000 transactions through...).

        Bitcoin hasn't yet attracted the attention at a high level - because it's the perfect currency to do stuff in. Banks love unregulated things, so they're going to find ways to make money through bitcoins before they're going to cry foul through a government regulator.

        When the banks start offering the usual array of futures, options, trading, etc., in bitcoins, that's when regulators may start picking up on it.

        Right now the problem is the increasing value of a bitcoin - at $30 each, 1 bitcoin is seriously going to overpay for a lot - I mean, if 1 bitcoin buys you a 2 year domain registration, that's about 50% more than what it would cost regularly. Or say I ran a store offering 10 music tracks per bitcoin or 2 albums. Now with it going higher, it would mean having to let customers overpay, or give them stuff they don't want (e.g., 25 tracks, or 2 albums + 5 tracks), which if you only want ONE song, is kind of annoying.

        The banking system loves bitcoin. They're just trying to figure out how to exploit it to make money. And they're not going to run to any government regulator to reign in on potential windfalls.

        • Now with it going higher, it would mean having to let customers overpay, or give them stuff they don't want (e.g., 25 tracks, or 2 albums + 5 tracks), which if you only want ONE song, is kind of annoying.

          Software to the rescue: Stores which take bitcoin automatically adjust the price to the market, in real time. I'm surprised a Slashdot reader didn't get that immediately.

          http://bitcoinstore.com/ [bitcoinstore.com]

        • by PPH (736903) on Thursday February 28, 2013 @06:39PM (#43040763)

          The banking system loves bitcoin. They're just trying to figure out how to exploit it to make money. And they're not going to run to any government regulator to reign in on potential windfalls.

          Go talk to the Swiss*. Banking secrecy is a thing of the past. If a bank can't report customers account balances and transactions to regulators, they can't touch the business. So if they can't touch it, they'll work to kill off an alternative business model that could attract customers and that they can't participate in.

          Needless to say, tax, law enforcement and financial authorities don't like anonymous transactions either. So when the banks ask for help to kill off Bitcoin, they'll get it.

          * Last week's Economist Magazine had a good special report on offshore finance. Its paywalled, but worth reading at the local library if you want to understand the issues.

        • by TubeSteak (669689) on Thursday February 28, 2013 @06:46PM (#43040803) Journal

          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.

  • Will crash again (Score:5, Insightful)

    by Anonymous Coward on Thursday February 28, 2013 @04:41PM (#43039517)

    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.

  • long term (Score:4, Interesting)

    by WillgasM (1646719) on Thursday February 28, 2013 @04:43PM (#43039539) Homepage
    I'm curious to see how bitcoin holds up. If it sticks around, it would be neat to see a long-term comparison between bitcoin, various fiat currencies, and hard commodities.
  • Why would anyone consider this a good thing?

    It means these coins are being hoarded. If it was real money this would be damaging the economy.

    • by timholman (71886)

      Why would anyone consider this a good thing?

      It means these coins are being hoarded. If it was real money this would be damaging the economy.

      It is worth pointing out that the current upward trend in BTC prices began right after the difficulty of mining doubled last December. Mining has ceased to be profitable except for the most sophisticated custom hardware, so the supply of new BTC has dried up for the average person using a graphics card.

      No new supply = rising prices. The deflationary spiral has definit

    • by wvmarle (1070040) on Thursday February 28, 2013 @05:14PM (#43039889)

      Of course they're being hoarded.

      One of the key issues with bitcoin is the ultimately limited supply.There are about 10.5 mln into existence, mining continues, and over the upcoming century or so it's going to grow to 21 mln. So that means the first half is there already.

      Normal money (USD, EUR, whatever) can be created by banks through lending. This keeps the value of currencies in check, and actually over time decreases the value of a currency, as seen by inflation. The good thing of inflation is that it keeps people from hoarding cash, as hoarding cash means you're losing value.

      Assuming uptake of use of bitcoin continues to increase, there is more and more demand for the coins, and there is limited new supply. Supply goes down over time (by design), and more uptake will naturally cause more loss: people keeping bitcoins on their computer, not properly keeping backups, computer breaks down, bitcoins lost. Not sure if there is any way to recover them. And people may take bitcoins and forget about them, another cause of loss. So more and more people want bitcoins, but there is only a limited number available - and that number may indeed decrease over time - causing the price to go up.

      Now there are two problems this almost guaranteed increase in value of the bitcoins.

      First: people start hoarding them, as speculative investment. This takes more bitcoins out of the payments market, pushing up the value.

      Second: it is going to cause deflation in the value of services that charge bitcoin. Imagine a web site sells accounts for 1 bitcoin. That is currently $32 in real money. So people will have to buy bitcoin at $32 each, and the web site can sell those bitcoins at $32. But next year the bitcoin is at maybe $64. That would double the price of the account, which is probably not good for business, so the website compensates for this by changing their price to 0,5 bitcoin. Especially if such a site gives an option of paying in bitcoin or paying in USD, they must adjust prices to keep them equivalent.

      People owning bitcoin see the value of the bitcoin in USD (money they can actually spend) go up, while at the same time for everything they could use bitcoin for, the prices go down. Where a donation of 1 bitcoin now would be worth $32, the equivalent donation next year would be only 0,5 bitcoin. Buy a bitcoin now, and the web site account next year would effectively cost you only $16. And the other half bitcoin you could sell at $32, making the account free.

      And this is how I call bitcoin an interesting concept, but terribly defective by design.

      • I've been saying this ever since Slashdot started carrying every last bit of news about BitCoins. I get flamed every time. Without fail. (Apparently, I "enjoy" inflation, am a crude fighter against innovation, and any understanding of economics I have is not relevant because apparently the entire discipline is invalid. (Unless, of course, it agrees with whatever said BitCoin fanboy is saying.))

        • Re:Thank you! (Score:4, Insightful)

          by IamTheRealMike (537420) <mike@plan99.net> on Thursday February 28, 2013 @06:37PM (#43040737) Homepage

          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.

      • by IamTheRealMike (537420) <mike@plan99.net> on Thursday February 28, 2013 @06:28PM (#43040661) Homepage

        The good thing of inflation is that it keeps people from hoarding cash, as hoarding cash means you're losing value.

        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.

    • by pla (258480)
      It means these coins are being hoarded. If it was real money this would be damaging the economy.

      Hoarding does count as a type of scarcity. Not the only one, however. A perfectly liquid commodity can still rise and fall in price based solely on good ol' Supply and Demand.

      When more people want to use Bitcoin, they need to first obtain BTC before they can spend it. As the easiest way to get Bitcoins, they "buy" some with their local currency. This transaction demonstrates increased demand for BTC, and
  • Loose change (Score:5, Interesting)

    by BennyB2k4 (799512) on Thursday February 28, 2013 @04:53PM (#43039655)
    In the bitcoin equivalent of losing loose change in your couch, one of my old hard drives has 4 mined bitcoins on it somewhere. They are rapildly approaching a value high enough for me to stop being lazy and ressurect the machine.
    • by h4rr4r (612664)

      Better do it soon if you don't everyone else in the same position will. Since you can't mine new bitcoins profitably anymore without ASICs anyway, the value will shoot up until enough folks cash out and it crashes.

      • by Teppy (105859)
        "That place is so popular that nobody goes there anymore."
  • by Anonymous Coward

    Can't stop going up, guys! I've got plenty to sell. Please buy, as I guarantee this is nowhere near the top. I'm offering mine for $32, and it's a bargain. I'm a fucking moron, so that is why I want you to have mine at this low price.

    Fuck me, the captcha is economy.

  • by Teppy (105859) on Thursday February 28, 2013 @05:24PM (#43040017) Homepage
    Because human lifetimes are limited, and the value-to-you goes to zero when you die.
    • When I die, the value to me doesn't die with me. The value to me stays with me until the value to me goes away. If I build a monument to me, that lasts a long long time, that money, buys that monument, and thus is important to me, even if I am dead.

      I cannot see beyond Sheol, but I know there is something beyond it, even if it isn't what I expect. This is why we have a "last will". I dare you to die, without a will, especially if you have substantial wealth accumulated during your lifetime. If you have a wil

  • by Anonymous Coward on Thursday February 28, 2013 @05:27PM (#43040069)

    Tulip Speculator
    -- January 1637

  • by Anonymous Coward on Thursday February 28, 2013 @05:34PM (#43040133)

    Valuation of bitcoin, or BTC, in other sovereign currencies isn't the point here - neither is 'cashing out' or any of that nonsense. The end-game here is to supplant and possibly replace sovereign currencies entirely. It may seem overly ambitious, but from all the financial scandals and other daily scams that are perpetuated by the banking and financial industry - people are getting *sick* of how the current system operates.

    Edge exchanges will dominate for a while, but as things change, and end-to-end supply chains form that are BTC denominated, the conversion demand will change and people will be able to keep their entire activity within the BTC realm. This is important, because then true monetary freedom has been achieved. Nobody telling you what you can spend your money on, or stipulations as minimum balances or hours of operation.

    This is the biggest revolution in finance taking place right in front of you, and most commenters here dismiss it out-of-hand.

    • People are sick of the current currencies because they are realizing the currencies are FIAT only. BitCoins are also FIAT currency, but unlike national currencies, are limited resource (deflationary). AND with most other currencies being inflationary, BitCoins will only INCREASE in value, especially as they become more popular (FIAT) for normal trading (buying/selling items).

      My only concern is how does BitCoin handle fractions of coins? Is it built into the protocol and if so, how.

    • I see it as an inherently transnational currency, where other currencies are locally issued and controlled, although they may be traded and used outside their native region. Removing national borders as toll booths and inspection stations is a plus for trade, just like removing river and bridge tolls was in early European trade.

    • by TubeSteak (669689)

      The end-game here is to supplant and possibly replace sovereign currencies entirely.

      The problem with replacing sovereign currencies is that there's no one steering the ship when things get ugly.
      Europe is a prime example where sovereign currencies were replaced, everything has gone to shit, and there's 27 competing agendas.

      I'm happy to see bitcoins form the foundation of a parallel economy, but fuck no I don't want it to supplant or replace the dollar.

      It may seem overly ambitious, but from all the financial scandals and other daily scams that are perpetuated by the banking and financial industry - people are getting *sick* of how the current system operates.

      This could be fixed, but the bankers and the regulators are far too tightly intertwined.
      Look at the shit show created by Republicans because

  • by sirwired (27582) on Thursday February 28, 2013 @05:36PM (#43040155)

    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.

    • Stability is easily achieved by software that adjusts price in BTC to the current exchange rate, which already is done by many online stores taking BTC for payment. The coin value then only needs to be stable for the time the transaction takes to complete (minutes for the buyer, a day for the merchant to sweep their funds back to local currency)

      As more people use it, the fluctuations are decreasing over time. It's not yet as stable as other assets, but give it time, it's still new.

  • by OverkillTASF (670675) on Thursday February 28, 2013 @06:00PM (#43040391)
    I was interested in the technical workings of BitCoin and what the user experience was really like, but I just couldn't wrap my head around it without, you know, USING it. So I purchased about $40 worth of BitCoin via Western Union to one of the exchanges. At the time, that net me about 3 BTC. I started playing around with it, transferring it from my PC wallet to my phone wallet... getting an idea of how transfers went. It was an interesting concept "loading" my phone with BitCoin from my PC "safe" and then carrying that around with me. Then I started looking for things to do with it... I got on BitMit and purchased a few Steam games, some USB cables... All at a pretty hefty USD discount. And it was pretty neat just scanning a QR code and bam, payment sent. Granted the USB cables haven't arrived yet because they're shipping from China... But, whatever.

    After actually SPENDING it, I decided to start accepting it at my GunBroker auctions. PayPal doesn't (knowingly) handle transactions related to firearms or firearm accessories, and a lot of buyers were interesting in this "BitCoin" thing. An instant way to transfer funds with almost no fees? Yes please. Unfortunately, most of them got stuck at obtaining it, much as I would be confused about how to obtain Euros if someone accepted only Euros. So far, no one has paid in BTC.

    However, I am seeing more BTC accepting auctions out there, which corresponds to its value increasing. That's pretty neat.

    I don't plan on keeping my money in BTC, as I don't trust it that fully, but I've gotten comfortable enough with getting money in and out of BTC-land that the transactions have become pretty fluid. Right now, my only concern is its volatility. It sucks to buy something for the $20 USD equivalent and then having it arrive when that $20 worth of BitCoin is now worth $50 USD. It works for me, though.
    • In deflationary currencies, you want to hold onto the currency until you NEED to spend it. It promotes savings without the need of a bank. Banks on the otherhand have an incentive to be a place where one saves coins so they can loan them out. In a perfect deflationary economy, loaning currency will result in net increase in value for the Bank, even without interest, as the deflation becomes the interest. I put 10 BC into the bank for it to hold. The bank loans out 10 BC to a person, who only receives 9.99

      • by OverkillTASF (670675) on Thursday February 28, 2013 @06:45PM (#43040793)
        Would all new currencies be deflationary? BitCoin is set up like a physical thing... There was an initial gold rush, when BTC was just lying on the ground and could be economically mined by CPUs. Then that supply was exhausted, and you had to have some equipment to get it out of the surface of river beds, and had to be mined by GPU. Then you had to start major operations to locate any amount, so you had to use the dedicated mining processors. Initially, the value of gold was fairly minimal, it was just pretty. Then it started getting used for trade and demanded some investment by more people. And then it was recognized as intrinsically tied to a currency and entire business formed around it. If a thing you trade is actually harder and harder to come by, it becomes worth more per unit... But ONLY if people accept it in trade for anything.

        So far, I am convinced that the BTC that you pay me with can only be used once by you, and that there isn't a trivial way for someone to inject unlimited BTC into the system. That's sufficient to represent debts to me. But I am perhaps a fool.

        If prime numbers were currency... We know there are actually an unlimited number of them. There are some that are easy to "mine"... But then they require further and further investments of energy to "mine". Assuming a way to make sure only one person at a time can "own" a given prime number, it would work just fine for the functions of currency: Giving some fluidity to trade. That's all I use Bitcoin for. That's all I use USD for, too. My wealth is stored in either more tangible things (land, house, vehicles, etc) or far more intangible things (stock, 401k, etc).

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