Bitcoin price soars 40% in the last month

http://arstechnica.com/tech-policy/2012/07/bitcoin-price-soars-above-9-for-the-first-time-in-almost-a-year/

by cpeterso • 14 years ago

41 40 14 years ago

arstechnica.com

blhack• 14 years ago

Okay. I have $10, and I want a bitcoin. What do I do?

wmf2• 14 years ago

https://en.bitcoin.it/wiki/Buying_Bitcoins_(the_noob_version...

politician2• 14 years ago

You'll need to find a currency exchange, open an account, and buy BTC with your 10 USD. It's the same thing you'd need to do if you wanted to buy yen or euros.

http://www.mtgox.com is one such exchange.

rorrr3• 14 years ago

> It's the same thing you'd need to do if you wanted to buy yen or euros

No, it's not. I can go to pretty much any local bank and buy euros.

DividesByZero• 14 years ago

You invest your $10 in these shares of the moon I'm selling. When their value increases, you can buy many bitcoins.

potatolicious2• 14 years ago

Is a wildly fluctuating valuation supposed to be a good thing for a currency?

elmuchoprez2• 14 years ago

Calling bitcoin a "currency" seems a bit off to me. I think of currency as the thing you use to buy a gallon of milk or buy a movie ticket. It's for facilitating day-to-day transactions. But nobody (or almost nobody) is using bitcoins to buy groceries or fill up their car with gas.

Bitcoins are more like stocks in my opinion. People don't use stocks to buy day to day items either. They're investments, some riskier than others. And that risk, which would be catastrophic to a currency such as the US dollar, is much more easy to tolerate if it's just another non-currency investment vehicle that you can choose to participate in or not.

potatolicious2• 14 years ago

This doesn't seem to make sense to me - BTC as an investment implies that there is some external value to BTCs beyond merely an investment vehicle (see: houses, which are useful for living in, power companies that produce electricity, etc).

If BTCs are not useful as an actual currency, then isn't it purely an investment vehicle that isn't backed up by any sort of real value, present or future?

discountgenius• 14 years ago

With your definition, I guess I would consider bitcoin to be a currency in embryo. It will take some time to build up the infrastructure and adoption for people to use it for every day expenditures.

thorax• 14 years ago

No, it's not a good thing beyond perhaps raising awareness of it and maybe temporarily increasing demand for it. The stability it had was a great sign and it was seeing some solid use for transactions (especially for virtual goods). The sudden increase is going to add risk to day to day transactions and thus make people shy again from using BTC for purchases.

stevenwagner• 14 years ago

Its pretty obviously a good thing if you bought some at 7 a week ago. 30% increase in a week is not bad.

SkyMarshal2• 14 years ago

Generally no, it's why one half of the Federal Reserve's mandate is price stability. Wildly fluctuating prices make it very difficult for businesses to plan expenditures - hiring, production levels, R&D, etc., resulting in more conservative spending and investment.

But bitcoin is still new, not fully understood, in limited supply, relatively illiquid (compared to other currencies and financial assets), and coming onto the scene right in the middle of a banking system and sovereign debt crisis unlike anything ever seen and most of its early adopters see it as a hedge against that.

So, volatility is going to be norm for bitcoin's foreseeable future.

tptacek• 14 years ago

Do you really believe "most of Bitcoin's early adopters" see it as a hedge against monetary crises? I know some fairly successful Bitcoin speculators, and none of them see it as anything other than a way to make a quick buck.

notaddicted• 14 years ago

Another factor is that the cost/reward for mining will double (assuming same hashing power for the network) in the mid future. Quoting http://bitcoinx.com/profit/ "When the block count will hit ~200000 some time around December 2012 the generation reward will go down to 25BTC. This might partly be compensated by falling difficulty, raising prices, higher transfer fees, etc."

seanalltogether• 14 years ago

If you were an online gambling company why WOULDN'T you use bitcoin? As long as you're not running a money exchange like mtgox in tandem, doesn't it isolate you much better from legal problems?

elmuchoprez2• 14 years ago

These huge jumps (and crashes) in bitcoin valuation are precisely why gambling sites can't use them as proxies for cash... there's just no guarantee of parity between what a dollar is worth and what a bitcoin is going to be worth tomorrow.

Some sites try this schtick from time to time using things like long distance minutes on calling cards, but even those seem to fail fairly quickly because as soon as there is a major price disruption in whatever proxy you're using, you get screwed hard.

ewillbefull2• 14 years ago

> why gambling sites can't use them as proxies for cash

Wrong, it's the users who can't use them as proxies for cash. A bitcoin casino is currency agnostic. It deals exclusively with bitcoins.

There are things like SatoshiDice which allow you to gamble with no possible cheating, with tangible probabilities etc., and these effectively _must_ operate currency agnostic. It's up to the user to decide how the exchange spread effects his/her bet.

jorgem• 14 years ago

Because your customers want local money. They don't understand bitcoin, etc.

jasonlingx2• 14 years ago

Bubble

dllthomas• 14 years ago

Bobble?

jasonlingx2• 14 years ago

I really really wonder what's driving this. Some say it is money flocking to safety from the Euro crisis. I'm not convinced. I'm guessing it's more likely the increased media attention on bitcoin recently attracting speculators.

chaud3• 14 years ago

I would imagine it also has something to do with the guy that has been paying people 7% interest per week to hold on to their bitcoins: https://bitcointalk.org/index.php?topic=50822

wmf2• 14 years ago

That's been going on for months, although the discussion about it has become deafening lately.

sounds• 14 years ago

Just in case that isn't already setting off your alarm bells, here's the math:

7% interest per week, up to 5000 BTC:

http://www.wolframalpha.com/input/?i=1.07^52

3372.53% per year

So if I deposit 148 BTC today, he's promising to pay me 4991.3444 BTC in one year. Note that he only takes referrals, a classic way to drive up demand by limiting availability of the profits.

If it sounds too good to be true, it probably is.

alaaibrahim• 14 years ago

Sounds like a Ponzi scheme

jlgreco• 14 years ago

It could also be an idiot who is trying to engineer some sort of stability in the currency at his own expense. That is the only other thing I can think of, and it seems quite unlikely.

Fuzzwah• 14 years ago

Interesting reading, thanks. Do you have an opinion if this is a ponzi scheme? If it isn't, do you think its sustainable over any decent length of time?

chaud3• 14 years ago

I can't think of anything legal that would net you 7% a week in a remotely safe manner. He has been going for a while now and only recently reduced his interest rates, so it may go on until there aren't enough new people signing up anymore.

I got in before the spike last summer and sold on the way down, netting some free hardware and USD, so I put what was left from that in. Worst case, I lose money that I earned through luck. Best case, new computer hardware!

Bitcoin price soars 40% in the last month

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