Bitcoin breaks 30 USD

http://bitcoincharts.com/charts/mtgoxUSD

by SlipperySlope • 13 years ago

66 90 13 years ago

jere2• 13 years ago

I'm interested to see it pass $32, which should have symbolic significance if nothing else (the peak happened at $31.91 and crashed to $10 days later).

vijayboyapati• 13 years ago

This reminds me of the great article by Mencius Moldbug on monetary restandardization: http://unqualified-reservations.blogspot.com/2011/04/on-mone...

"If Bitcoin becomes the new global monetary system, one bitcoin purchased today (for 90 cents, last time I checked) will make you a very wealthy individual. You are essentially buying Manhattan for a quarter. There are only 21 million bitcoins (including those not yet minted). (In my design, this was a far more elegant 2^64, with quantities in exponential notation. Just sayin'.) Mapped to $100 trillion of global money, to pull a random number out of the air, you become a millionaire. Wow!"

drewblaisdell2• 13 years ago

Doesn't $100 trillion exceeds the value of the sum of all currency in the world?

drcode12• 13 years ago

Yes, probably the world money supply is smaller than this. Nonetheless, but the point is still valid.

jessriedel• 13 years ago

Not by too much. M2, which I think is the relevant money supply in the US, is $8 or $9 trillion.

http://money.howstuffworks.com/how-much-money-is-in-the-worl...

If I remember, the US is about 1/5 of the world economy. And some random graphs suggest the world money supply is roughly $60 trillion.

redblacktree• 13 years ago

My guess is that it's more likely to be another cryptocurrency that becomes the standard. Once the right people figure out how to be the main beneficiaries. Also, I'm not sure that a depreciating currency is good for society as a whole, since it encourages hoarding, rather than investment.

wmf• 13 years ago

Did you mean Bitcoin is appreciating because it's deflationary?

drcode12• 13 years ago

I believe this question is hotly debated among economists. I think deflation is probably fine: In the end, money isn't any good if you don't spend it, so hoarding has a natural limit.

narrator• 13 years ago

Read "The Paradox of Savings" by F.A Hayek for a different view.

GHFigs• 13 years ago

My guess is that it's more likely to be another cryptocurrency that becomes the standard.

Out of curiosity, what are the existing or potential differences between cryptocurrencies? What does the competitive landscape look like?

Steko3• 13 years ago

"great article"

Interesting way to describe a one dimensional get rich quick scheme.

1. Buy some Bitcoins.

2. ???

3. You own Manhattan!

ceol3• 13 years ago

That seems to be a common theme with bitcoin eccentrics.

1. Replace currencies with bitcoins.

2. ???

3. All financial and economic problems are solved!

kamaal2• 13 years ago

1. Buy some Bitcoins.

2. Wait till Bitcoins are in demand, continue till demand reaches epic levels. Since supply is short, more people are read to pay big dollars to buy same number of bit coins. Continuing this cycle.

3. You own Manhattan.

But the article says some between 2 and 3 say ....

2a. Drug dealers, mafia, war lords, terrorists and such a likes will flock this market.

2b. Since its decentralized they will reap the benefits of anonymity.

2c. Government gets pissed due to the fact anonymity gives the criminals all the immunity they need. There fore they can't be sanctioned/tracked etc.

2d. Government moves to shut down all Bitcoin exchanges.

We never go to 3. And therefore we never get to own Manhattan.

free6522• 13 years ago

It somewhat a surprise for me, it was a pretty quick rise. Reminds me of 2011, I wonder if it will crash the same way.

drcross2• 13 years ago

I think the present time is completely different from the 2011 bubble. The range of services offered have grown dramatically and the Bitcoin protocol has shown it's resilience.

free6522• 13 years ago

I agree. I had few sales now on bitmit.net, I already migrated a bunch of my long term fixed price listings there.

I list like old xbox 360 games

Some PC hardware

Other stuff I have lying around

moocows• 13 years ago

http://i.imgur.com/fqPAySI.png

The previous crash for those who care.

achalkley• 13 years ago

BUY!

mmanfrin• 13 years ago

Didn't it hit $20 like a week ago?

Bubble?

sp3322• 13 years ago

The first ASICs started shipping recently. This made bitcoins harder to mine (for anyone who doesn't have those ASICs, which is most people). This also demonstrated that bitcoins are here to stay, since people have made large investments in hardware that basically doesn't do anything but mine bitcoins. So the perceived future value has skyrocketed.

polshaw6• 13 years ago

Some people believe in the success of bitcoins. They bought custom hardware. This proves bitcoins are going to be a success.

Circular logic at it's finest!

drcode12• 13 years ago

Perhaps "yes", perhaps "no". I'm guessing (and I can only guess, like everyone else) that more people are convinced of the benefits of bitcoin than at the point of the previous bubble, so it probably wouldn't crash AS MUCH as before.

I think it's more likely though, even if it does end up being a bubble, that it'll shoot higher first before crashing this time around.

drcross2• 13 years ago

I've been considering this over the past few days, I have a vested interest (early adopter) and I don't think the current performance is a bubble. It took some months for online properties to build the code needed to facilitate bitcoin, since they are now coming to fruit the growth pattern is organic. Bitcoin started with a tech savvy crowd, and as we know, the ones who can understand a system early are the first to benefit from it. I found the comparison of Bitcoin to a Tech startup to be particularly interesting, in the article it is estimated that Bitcoin is understated by two orders of magnitude. http://vincesamios.com/bitcoins/bitcoins-are-a-tech-stock

eof• 13 years ago

There is much, much, more merchant acceptance, transaction volume, etc. for Bitcoin compared to the last time there was a big rise; not to mention production is only half of what it was before; ASICs are here/on the horizon, YC has funded a bitcoin startup, it's mentioned basically daily in the blogs of major publications, etc.

It is also worth taking a look at a log-scale chart to see that the rise isn't quite so steep as before: http://www.bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25...

Clearly a lot of speculation going on here; but I very strongly doubt we will see a crash anything like we saw last time (how many people were preaching that the end of bitcoin had come?); though a significant correction when people start taking their profit seems almost inevitable.

Anecdotally, a number of people I have been telling to buy bitcoins for years now are finally like, "well okay, I am just going to wait till it drops to $xx or so (where xx is ~40% less than whatever it is at the moment we have the conversation).

zobzu• 13 years ago

well yeah it makes sense, they already missed the train. it's hard to predict when you're not in the known. will it keep rising? they don't know.

someone like you have a much better insight of the risk. its how the market works, except when its young, the amount of people in the known is low. Thus there is more potential gains

Steko3• 13 years ago

"I very strongly doubt we will see a crash anything like we saw last time"

This assumes that all crashes are built the same. In fact they are not. An an example, increased usage and profile also greatly increase the likelihood that governments come in and panic investors.

conroe64• 13 years ago

Another thing to worry about is something better coming along. As soon as it does, bitcoins will crash and never recover, since their only worth is they are better than anything else for making anonymous secure trades. If Ripple or soemthing else begins to take off, that may change.

geuis• 13 years ago

So the 10 btc I bought a couple years ago for ~$2 are now "worth" $300 USD. Do I sell them now, or wait 20 years until they're worth more?

How do you know when to wait longer, and when to sell? Its not like a company where you can at least get some information on their past and future performance, whether they are growing or shrinking, etc.

josephagoss2• 13 years ago

Well to be honest if you cash out now all you have is $300, which is a fantastic rise but not a lot of money.

This is the way I see it, its only a days earning or even less, so I would hold on to it for the next decade as a experiment and see what happens.

Would you pay $300 to be in on this game for the next 10 years? :)

drcode12• 13 years ago

According to the efficient market hypothesis (which you may or may not agree with) the only guide you have as to how much something is worth in the future is the current price, as well as "future information" which is not currently available (if it was already available somewhere, it would already be priced in.)

In other words, no one can answer that question for you :)

javert• 13 years ago

If you want to sell them without the pain of going through an exchange or whatever, I'll probably send you money in the mail for them.

polshaw6• 13 years ago

The volatility of BTC is useful in such situations. If you sold now, the price may rise to $40, then crash to $15, and then rise again to new heights. So if you do sell (and are keen to stay in the long-game), you have to be confident that you will be able to buy in again at below that price (NB transaction costs). If you achieve that (which is done most effectively by guessing when the peak of the bubble occurs) then you wouldn't lose out it the long term. Then you have to weigh up the risk vs reward..

coopdog• 13 years ago

Spend it on bitcoin merchants! Then cash $300 more meat dollars into BTC

Don't speculate, keep the currency flowing : P

drcode12• 13 years ago

I think most people think the only reason bitcoins are useful is that they're not controlled by a government. However, I've recently started using bitcoins for some tiny transactions and found out something I didn't expect: They're EASY PEASY to use... much easier than papal, credit cards, or even cash!

For those of you who don't know. A bitcoin "bank account" can be conjured out of thin air using randomness and some crypto algorithms. It consists of only two numbers, a public "bitcoin address" and a "private key". (kinda like an RSA key pair).

The moment you've created these two numbers, you can say to someone "hey, send your $$$ to my address". Then, any time in the future you can withdraw money out of the account via your private key. This last step (withdrawing your money) is actually the ONLY step that requires any real effort at all (installing software on your PC, or trusting an online wallet site) and that's STILL super easy.

EDIT: I think I ended up sounding too much like a cheerleader in this post... I'm talking purely about easiness from a theoretical standpoint. In the real world, there are clearly still many obstacles making bitcoins a PITA to deal with.

josephagoss2• 13 years ago

This ease of use is certainly attractive. Try sending a couple of BTC to a poker room online, and then cash out your winnings and have that BTC within your wallet in a matter of hours max, not days!

I can't wait till I can buy coffee and rent with BTC, it might never happen but I like the idea.

drcode12• 13 years ago

You know, I was buying a sandwich with cash at Subway today and I suddenly thought "you know, this would actually be less cumbersome with bitcoins."

OGinparadise• 13 years ago

Could this be used (wholesale) to get around the US ban on online gambling? I read that the major sites were busted and execs taken to US courts but maybe this is more secure and harder to track? Probably enough serious gamblers and gambling sites will probably take the chance with currency fluctuations.

drcode12• 13 years ago

Not in itself: Bitcoins are actually embarrassingly easy to track (the full transaction history is available to anyone.) However, you can certainly go through some extra hoops to make tracking more difficult.

lwat• 13 years ago

Yes, the major bitcoin gambling site SatoshiDice is making loads of money already.

http://www.techweekeurope.co.uk/news/bitcoin-casino-105204

lectrick4• 13 years ago

Have you been living under a rock? Just about all the online gambling sites have BTC projects either in the works or already out there.

moxie5• 13 years ago

Whenever I engage with BTC, "easy" is the last thing that I experience. Let's say that someone wants to start using bitcoin: it's as simple as downloading the software, double clicking on the icon, and... waiting 24hours or more for the block chain to sync, while the i/o volume on their disk goes through the roof.

Once you finally accomplish that, you can purchase some bitcoins, which involves... this: https://support.mtgox.com/entries/20490576-Withdrawals-and-D...

A few days later, you finally have BTC in your wallet, so it's time to start your bitcoin client again and use them. You double click on the icon and... wait 30min to 1hr for the block chain to sync.

Finally, you're ready to send them. Let's say you want to buy some music online, so you send BTC to an address that was generated by the site you're purchasing from and... wait 50 minutes to get enough verified transactions before they finally send you the music.

All of this would be completely impossible on a mobile device.

There are plenty of ideas for making bitcoin more usable, but they all unfortunately involve mitigating the strengths of the bitcoin as a concept.

lectrick4• 13 years ago

Blockchain.info gets you a free wallet. Signed client-side so they can't mess with it. You don't need to run the "client" (which is really a "node") at all. The fact that this is not communicated well is a communication problem more than a technical one.

localbitcoins.com if you want to buy some from anyone in the neighborhood.

jonwaller2• 13 years ago

"Waiting 24 hours or more for the blockchain to sync..."

Wrong client. Try blockchain.info. Instant sync.

"You can purchase some bitcoins, which involves..."

Wrong method. Try BitInstant. Instant.

"Wait 50 minutes to get enough verified transactions..."

Could be a few seconds. As a seller, you can choose the number of verifications you wait for. My web shop waits for the first only (fine for sub $100 purchases), so verification takes about 5 seconds. If you wait for 10 verifications, well, yeah it's going to take a while, but you don't need that level of security unless you're buying a house.

"All of this would be completely impossible on a mobile device."

Er... Google "site:play.google.com bitcoin"

Loads of mobile wallets.

doublextremevil• 13 years ago

You make some valid points regarding the inverse relationship between convenience and security with bitcoin. However, the latest version (0.8.0) of the bitcoin reference client is a significant improvement in terms of initial syncing speed and overall optimization. Being experimental software, there is still room for improvement.

celticninja• 13 years ago

easy is achieveable.

wallet - use blockchain, no need to sync, or on your desktop the electrum client, alternatively in the official client it will be much faster from version 0.8.

buying BTC from mtgox sucks, buy them from bitcoin-otc, localbitcoins.com or other private selelrs for a much easier and quicker transaction.

You can do this on a mobile device, I buy of bitmit.net and only use my smartphone to do so.

Regarding your claim of waiting 50 minutes for some music, I dont nknow what site you are using but i bet most music download sites would only require 1 or 2 confirmatons so 10 - 20 mins

Steko3• 13 years ago

"EASY PEASY to use... much easier than papal, credit cards, or even cash!"

99.9% of the purchases I make do not accept Bitcoins. This makes them several orders of magnitude less useful for me than either cash or my VISA card.

drcode12• 13 years ago

Good point- Can't argue with you there.

jere2• 13 years ago

Along the lines of the real world PITA you acknowledged at the end: getting dollars out of mtgox is a nightmare and don't expect for a second that you won't be giving up all your info to the government.

I had some BTC lying around there for a year or so. When I came back, they had upgraded their security methods to the point where I had to:

-submit proof of residence

-submit a valid photo ID

-wait several days

-ask for verification on dwolla

-wait several days

In addition, there is a disclaimer on mtgox explicitly forbidding Tor and using proxies. There's not a shred of anonymity in this process.

venus• 13 years ago

Whenever BTC spikes like this I think of the first pizza sale a couple of years ago:

https://bitcointalk.org/index.php?topic=137.msg1195#msg1195

Probably the most expensive pizza in history, in hindsight.

polshaw6• 13 years ago

Well, this is going to be an interesting watch!

The fundamental issue is that holding is what increases the value (because, really, it is an exchange medium; the world still ultimately prices pegged to their respective local currencies, no matter what any bitcoinite insists), and as the value increases, you are incentivised to hold.

It is going to be interesting to see what happens when the bubble bursts (and it will, to some extent), and how big it gets, as most of the bitcoins held will probably be owned by users who have been through a crash before. This could mean we are only just starting the bubble-- increased confidence may let it grow far beyond the previous one.

niggler2• 13 years ago

Are there any POS systems that use bitcoins? Any other way in which small transactions can be conducted en masse with BTC?

jonwaller2• 13 years ago

Yes. BitPay has one.

jaredstenquist2• 13 years ago

The rising price just makes me laugh. I "invested" $1,000 in BTC during the early hype as it was approaching $32.00. I told my co-workers how cool of a concept it was and that my investment was sure to pay off with a skyrocketing price.

After months and months the price drops and drops. My $1,000 is worth $200. I go through a ridiculously long process of proving my identity to Mt. Gox and Dwolla just to get real USD back at 1/5 their original value.

Now if only I had kept it in there for the long haul, I'd have my $1,000 back.

It's precisely this volatility that personally makes me skeptical of it truly reaching a critical mass of any sort.

enraged_camel• 13 years ago

You made the cardinal mistake of investing: you bought high, and sold low. Many rookie investors make this mistake because they are unable to control their emotions when the value of their investment takes a downturn. It can be nerve-wrecking to imagine all your money evaporating.

Fortunately, your mistake cost you only $800. So it was actually a good learning experience. From now on, buy low and sell high. For example, the best time to buy is when a (recoverable) disaster or sensationalized story cause a financially strong company's stock price to dip. That's the perfect opportunity to buy some of that stock.

drcode12• 13 years ago

Sorry enraged_camel, but I think most people would consider this very bad investment advice. There's much, much more thinking that needs to go into speculative investment decisions than just the phrase "buy low sell high". In fact, that phrase is pretty useless advice on its own and often invoked as a joke among investors.

(Though there is truth in your specific point that people are at risk of making irrational decisions they regret when investments go sour.)

jaredstenquist2• 13 years ago

What is high and what is low is of course speculative.

When investing in the stock market I of course use that basic logic by analyzing the KPIs of the securities. This was less of an investment and more of an experiment in modern technology, prompted by some skeptical comments from my friends. For that reason it was more like purchasing a lottery ticket.

My $1000 lottery ticket didn't perform well, but due to my real investments paying off well over the years, I can handle the loss without much thought. Win some. Lose some.

lectrick4• 13 years ago

1) BTC is a perfect fit for porn websites

2) Porn websites, for some reason, have not gone BTC yet

3) Pornographers are a tight knit community. When a couple go, I think they will all go to stay competitive

4) Google how big the porn industry is.

winthrowe• 13 years ago

Point 1 is not entirely true; sites of that nature rather like recurring billing, which bitcoin doesn't do out of the box.

BrokenPipe• 13 years ago

I love bitcoins, easy to use, no middle man, quick. I can travel with them yet nobody can take them from me.

Bitcoin breaks 30 USD

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