Bitcoin Exchange Value Halves After Chinese Ban 475
An anonymous reader writes with news of the latest major fluctuation in the price people are willing to pay for Bitcoins. From the article: "China's ban on its financial institutions handling bitcoin causes world's largest exchange to cease trading, halving the value of the currency from $1,000 to less than $500 in a matter of days. The country's central bank took a hard line on Bitcoin in early December when it banned financial institutions from handling the decentralized crypto-currency, and as a result BTC China, the world's largest bitcoin exchange, has stopped accepting deposits from its users."
Just watch that line trend downward.
And this (Score:5, Interesting)
Comparison: Bitcoin is like 'Abortion' in the US.. (Score:3, Interesting)
Totally legal but...
States do everything to prevent access to it... shutting down clinics left and right..
And if you do find a clinic you to face a picket line
Given the responses from all these governments you can tell that Bitcoin is something big... that is.. maybe not the actual coins, but the intellectual underpinnings:
- Decentralized
- Limit in coins
- No one governs/owns
It is really what the world has been waiting for.. something that can not be corrupted by any government, is safe and fast. The internet needs this
Re:Price not value. (Score:5, Interesting)
For a certain definition of value, yes, but not necessarily for the common one. In an idealized market, you do hope this is true for the common definition also: people have independently assessed how much they value some commodity, and offer a price accordingly. The price then converges on some aggregation of values.
But in real markets, this is often recursive: someone is offering $x for a commodity not because they themselves consider it to have a certain value, but because they think they will be able to resell it for $(x+y), due to market fluctuations. They may themselves consider it a worthless pile of trash valued at $0; day-traders, unlike value investors, don't make trade decisions based on their own assessments of the underlying value of the commodities or equities they're buying and selling. Instead they base their decisions on statistical estimates of market dynamics, independent of whatever the underlying item is and whether it may or may not have any value at all (models often don't even consider the underlying item in the equation).
Crypto COMMODITY (Score:5, Interesting)
I wish people would stop calling these "crypto-currencies", because it is a total misrepresentation of what these things are. They are crypto-commodities. BTC is just like gold right now - it is not used to transact, it is used as a value store - except it is much worse as a value store because it is orders of magnitude more volatile. No one can use BTC as a currency because its value fluxuates so wildly. Everyone who is SUPPOSEDLY using it as a currency just has it pegged to the US dollar with a live update.
Re:i got some bitcoins (Score:4, Interesting)
Yes, just use Electrum or equivalent if running the full-blockchain is too bothersome (it is for most, now). Avoid putting your bitcoins on *any* online account, that is way too dangerous. With Electrum, you don't have to download a blockchain, but only you still have the wallet.
Re:Crypto COMMODITY (Score:2, Interesting)
Bitcoin is an innovative payment network and a new kind of money.
How about reading their their FAQ [bitcoin.org] where it specifically says Bitcoin is a cryptocurrency? You might learn something.
Re:me too... (Score:3, Interesting)
Then again, every time bitcoin bubbles and pops, it rises to unexpected levels later.
People like you were saying exactly this when it dropped from a high of $200 to a low of $50, and said the same thing in the bubble prior to that. My only regret at the time was that I believed it. Not long after, it began trading at $1300.
Anyways, I've actually profited rather well off of bitcoin; in fact the whole thing could collapse tomorrow and I'd still have made a profit. The silly thing is that while you've been rolling on the floor laughing at me, I've been rolling in cash.
Re:Comparison: Bitcoin is like 'Abortion' in the U (Score:4, Interesting)
Apologies, forgot to actually hyperlink...
Re:No surprise in the collapse (Score:4, Interesting)
Re:No surprise in the collapse (Score:2, Interesting)
to your first paragraph: it's said that Joseph Kennedy sold most/all of his shares weeks before the 1929 crash because "he knew it was time to get out of the market when he received stock tips from a shoe-shine boy." http://en.wikipedia.org/wiki/Joseph_P._Kennedy,_Sr.#1929_Wall_Street_Crash
Personally I knew the "new market" bubble would burst months before it did - because everyone and their dog bought shares and told me to do so, too.
profit (Score:5, Interesting)
right, I'm assuming you mean you bought at a low price and cashed out at a high price?
what I'm wondering is, which BTC to $$$ service you used (Mt Gox?), how often you were able to cash out, what the daily $$$ limits were, what the transfer fees cost, etc.
I've seen alot of people yammering about BTC but few claim to have made a profit...i'd like to know more about how
Re:"Proof against tyranny" (Score:4, Interesting)
I think only the most naive anarchists argued that (and I've called them on it many times before in various Bitcoin forums). The gamble being made there is effectively that given a choice, a government would choose not to become totalitarian and oppressive, and would prefer to give up some control over the financial system.
Well, only an idiot would believe China would do that. They are already totalitarian and oppressive, no surprise they'd be willing to jail anyone who uses Bitcoin.
In contrast, many European countries are sorting out how they're going to handle it. See the recent announcement from Denmark saying that Bitcoin is fully legal, and people who want to run exchanges don't even have to be regulated as financial institutions at all! It seems very unlikely that the governments of Norway or Denmark are going to start jailing anyone who sells sandwiches for coins.
America is somewhere in the middle. It's not as free or liberal as most of the smaller European states, but it's not as oppressive as China. Hence the confused approach there where the US government is saying one day Bitcoin is cool and it's all OK, and then next day threatening Bitcoin businesses with jail time. They can't quite decide which direction to go in, it seems.
Re:Bitcoiners on reddit are completely delusional (Score:4, Interesting)
Minor correction - dispute mediated transactions have been a part of the design since day one [bitcoin.it]. The problem is lack of surrounding infrastructure like "file dispute" buttons in wallets and the various protocols needed to organise that, companies that run dispute mediation services with those protocols and so on. But there is widespread consensus that it's a good idea and basically, it's just waiting for someone to do the design and implementation work to make it happen.
It's certainly a PITA at the moment, yes, although when Bitcoin is out of the public eye and governments aren't busy banning it there have been relatively long stretches of peace and stability. During those times you HAVE seen vendors price things in Bitcoins, actually, although yes most prefer to peg to an exchange rate.
Over time the instability will go away because governments will all decide on their policies around it, the technology will mature and become boring, most people will have heard about it and decided what they think, etc. The huge volatility you see at the moment is because almost every day there's some important piece of news that affects people's perception of future value.
As to the /r/bitcoin posters, yes, the over-excitability there is quite something. But that doesn't mean all people who use Bitcoin or like it think the same way.
Re:profit (Score:5, Interesting)
Re:Bitcoiners on reddit are completely delusional (Score:0, Interesting)
I don't read Reddit, but there is one thing that is not factored here, actually two:
The first is that actual value has been traded for BitCoin on a very large scale. That value is not going anywhere. Yes, BitCoin is going to have its ups and downs, but as a trend, it will only go up as the hard limit of coins is reached and coins disappear for good (due to wallets getting lost, etc.)
The second is that it has earned its place as an anonymous currency that the bad guys can use and use securely. No, the block chains are public, but wallets are. The bad guys can have their ransomware apps feed a wallet. That wallet can be fed to an anonymous exchange (just takes one broken link to hide transactions), or the wallet just sits for seven years until statute of limitation laws pass, and the contents can be emptied, free and clear.
BitCoin has too much physical value in it to be going anywhere south on the long term.
Re:thanks (Score:5, Interesting)
Amazon doesn't use anything. Bitpay handles the conversion and the supplier of the cards gets paid in dollars (This is something I believe you said was just too difficult to implement in a previous thread). The supplier of the cards gets them from Amazon (and other places) at a discount and makes their profit that way. Bitpay takes a slice so the purchaser pays a slight premium. Then again, if you bought your Bitcoins lower, you probably still come out ahead.
Re:profit (Score:5, Interesting)
I got 2300 Bitcoin in 2011. I sold 500 at $119.99 earlier this year and bought a nice car. I sold 900 at $997 and am in the process of buying 3 rental apartments for case. I still have over 1000 Bitcoin.
Once you get Trusted on mt.gox you can withdraw $500k per month. Its not enough to do arbitrage but its not small change either.
I am not alone - lots of people have made huge profits on Bitcoin and we expect to make more. Its designed to work even if its made illegal to own Bitcoin. The price has always fluctuate violently because the markets are so small and liquidity is so poor. But its the most interesting social experiment on the Internet and I love being part of it.