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.
long term (Score:4, Interesting)
Re:A Far Cry From the End of 2012 As Well! (Score:5, Interesting)
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.
Loose change (Score:5, Interesting)
Not true... (Score:1, Interesting)
Wordpress, Mega and Reddit do not take bitcoin. They accept payments through a third-party exchange called BitPay, which converts them into dollars. Why? Because bitcoins are, in fact, worthless and their value depends almost entirely on the liquidity provided by Silk Road and the desire of internet libertarians to get them some Dunning-Krugerands. Until paychecks are issued in bitcoin and you can pay your rent in bitcoin, it's not a currency - it's at best a toy.
Re:Why anyone would think this is a good thing (Score:5, Interesting)
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.
Price Is Not Relevant - You're missing the point (Score:5, Interesting)
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.
Re:A Far Cry From the End of 2012 As Well! (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 seen the harm they do, and quite frankly, not worth it. My point is, you cannot protect people by forcing them into a life of crime. It creates more crimes and solves nothing.
Re:Hurry up and die please (Score:3, Interesting)
Do you ever send (or receive) money outside your home country?
Constantly, and there's a dozen established ways of doing it.
Do you want a bank account no government can freeze if they decide you voted the "wrong" way last election?
I have that. It's called "living in a civilized country".
Do you believe you have every right to spend your hard-earned money playing online poker if you damned well want to?
Got that as well, it's called "not living in the USA".
Don't get me wrong, I'm a big fan of electronic cash. I'm not convinced that Bitcoin is it, but that's besides the point. The reasons you give are weak and alarmist reasons that only appeal to a small minority of people.
Why would I want electronic cash (anonymous, untraceable, etc.)? Because it's nobodys business what I spend my money on, and not leaving a trail is the best precaution against everyone and his dog finding out because someone somewhere in the chain of payment providers has crappy security.
My BitCoin story (As if you care) (Score:5, Interesting)
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.
Re:Anonymous currency (Score:4, Interesting)
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.
Re:My BitCoin story (As if you care) (Score:4, Interesting)
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).
Re:Why anyone would think this is a good thing (Score:4, Interesting)
Bitcoin will probably last another few years and then it will choke on its own deflation. i.e. bitcoins will become so valuable that none of them will be in circulation.
I'm sure some bitcoins will remain in circulation, and they will get divided into ever finer fractions to provide the requisite liquidity to be a currency at the scale they wish to be. Then eventually the deflation will have gone far enough that a hoarder will decide to cash out. Then, when everyone has been trading in .0001 bitcoins, they'll sell their 1000 bitcoins for a lot of cash and bitcoins will suffer from a sudden massive bout of inflation as the money supply expands by orders of magnitude in an uncontrolled fashion. Then the deflation will kick in again until ...
All the bitcoin fanatics saying that deflation is good and inflation is the root of all evil ... they're missing the point: bitcoin is going to suffer from inflation, just a sudden unpredictable rampant uncontrolled bursts -- and that's the inflation that really sucks. Slow, small scale predictable controlled inflation can be accepted, large scale unpredictable uncontrolled inflation is what causes panics, crashes and economic mayhem.
Re:A Far Cry From the End of 2012 As Well! (Score:4, Interesting)
Why is Slashdot's categorical example of "injustice" a guy who was actually guilty(whether you think the penalty is appropriate he did it), was offered ridiculously lenient pleas considering the maximum penalties involved and for whatever reasons took his own life before he could actually even see how the justice system was going to treat him.
Far worse injustice happens in the US every single day, but it mostly happens to poor black people who aren't computer nerds so no one on Slashdot gives a shit.