Bitcoin falls from $266

https://data.mtgox.com/api/0/png/24hours.png?Currency=USD

by sillysaurus • 13 years ago

396 471 13 years ago

data.mtgox.com

ponyous• 13 years ago

Two of the largest exchanges seems to be under DDOS (mtgox and bitstamp). And it wasn't 6 hours it was more like 1 hour.

tibbon• 13 years ago

Is that the likely root of that fall?

Any idea who/why someone is DDOSing them? And why they are so effective at it? Can't they just use Cloudfront which supposibly 'fixes' DDOS issues?

theboywho2• 13 years ago

Mtgox engine has a 40 minute lag, things will eventually go back to normal.

adamisen• 13 years ago

I think the big question is whether normal is $300 or $30... or $3.

TheCoelacanth• 13 years ago

Seriously. It was at $30 a few weeks ago. It's hard to say what's normal when things are changing that quickly.

theboywho2• 13 years ago

normal is when there's no lag. Now you can't trust those numbers

dlhavema• 13 years ago

last post i heard said it was $90.. bitcoin fluctuates more often than most girls i know change clothes.

mckoss2• 13 years ago

When real-time trading data is available from MtGox these sites show up to date charts and seem to be the most up-to-date.

http://coinlab.com http://bitcoin.clarkmoody.com/

sukuriant• 13 years ago

Wasn't Bitcoin at $100 just a couple of days ago? I feel like I'm watching a penny stock; and, while I would have enjoyed something like a 10x stock value worth if I'd gotten in when I thought to, this variability is scary

shin_lao• 13 years ago

There was a lot of BitCoin related press coverage. This is probably related.

Volatility is high which will harm the adoption of BitCoin by vendors, which will in turn drive the price down when people realize they can't do anything with their BitCoins, etc.

erikpukinskis2• 13 years ago

Bitcoin isn't really in the adoption by vendors stage yet. Two things are happening right now that are driving the price:

1) Adoption in politically sensitive markets (drug dealers, disaporas, people in corrupt states, etc) who have no other options.

2) The slow process of the finance world understanding what Bitcoin is, and how to value it.

The first is happening because there is demand for it. The second is happening because global finance organizations seek out and exploit any and all market opportunities.

I think what we'll see in the next few years is that #1 will keep growing, and #2 will cause wild swings in bitcoin prices as we develop the technologies and scholarship necessary to truly reckon Bitcoin's value.

At that point, the markets will have a good bead on the true adoption rate and the market mechanics, which will allow them to converge on a more stable value. Only then will Bitcoin start to become a good medium for broader consumer exchange.

That said, even if it's only ever used for politically sensitive transactions, and it never takes off as a consumer payment service, it will be a very big economy.

mjackson• 13 years ago

Get ready for the massive pop sound...

jgoewert• 13 years ago

I'm going to believe that will happen soon. However, right now, it seems to me that Bitcoin is really just going "SHIFT".

We have countries like Cyprus yanking money out of banks, so you get some people shifting their money out of country. So, what does it matter what a bitcoin costs if you are going to launder some cash out? 1:1 is a fabulous laundering rate.

Buy 200 Euro worth of Bitcoin from an account in Cyprus -> Instantly (or asap) sell for 200 Euro to an account in London. The current price doesn't matter as long as you exchange fast enough or at a profit.

mikeash3• 13 years ago

How is someone in Cyprus going to buy bitcoins? If the exchange is out of the country, then it doesn't help, because you already have to move the money out of the country to get it to the exchange. If the exchange is within the country, then the rate offered is likely to be far less favorable than elsewhere in the world, because demand is higher.

riffraff2• 13 years ago

I don't think you should coalesce money laundering and bank tranfers into one concept.

ashray6• 13 years ago

Before crying wolf, understand that bitcoin exchanges are unfortunately not battle hardened internet businesses. Two of the largest exchanges MtGox and bitstamp are both under DDOS. This may be an attempt by someone to make a large buy at a cheaper price. Due to lack of trading, prices are going downward.

However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world.

Yes, the exchanges need to toughen up and it's sad that someone can manipulate prices so easily but bitcoin is still very geek centric and as long as geeks understand and hold their BTCs this can't succeed. Of course, now that regular people are jumping on the bandwagon it'll be interesting to see how events unfold..

ljlolel• 13 years ago

Agreed, it is geek centric both in terms of early adopters, people who will support this even under attacks, and people who build it: https://news.ycombinator.com/item?id=5526118

caissy• 13 years ago

I have been following BTC China along side MtGox, and it seems that BTC China is starting to fall also. Price was ¥1700 ($274) 15 minutes ago, and now it runs at ¥1,386.00 ($223). I'm still not sure if this is due to MtGox being DDOS or people panicking and selling everything.

metachris• 13 years ago

Other exchanges tend to tail MtGox.

pc86• 13 years ago

Is it possible to buy from MtGox at $200 and sell in BTC China shortly thereafter at $275?

I know nothing about BTC.

ashray6• 13 years ago

If you do have a verified account at both, yes, it should be fairly simple. As of now though it's unlikely that your trades will go through.

Also, the price has started falling on BTC China as well.

Jtsummers6• 13 years ago

Once the transaction is processed and you have your BTC, then yes. I don't know how fast MtGox releases BTC from the wallets they control though (or similarly, how long it takes BTC China to give you access via their controlled wallets).

ihsw2• 13 years ago

As others have stated due to the DDOS your trades will have low likelihood of going through (in fact some people may be doing this as we speak).

suhastech• 13 years ago

In theory, yes.

It happens even in the real world. http://en.wikipedia.org/wiki/Arbitrage

quinndupont• 13 years ago

Yup, the arbitrage opportunities are real. Just yesterday the Canadian exchange (cavirtex) was trading $40CAD/BTC higher than MtGox (CAD); if you had an account with both, and free money to spare, you could take a handsome profit (minus fees, usually around 3% each, so 6% roundtrip)

jacquesm2• 13 years ago

Keep in mind you're playing 'musical chairs' here. If you do this with money you need and the music stops you might possibly be in deep trouble. Only do this with money that you don't actually need, and only do it if you understand all the risks that come with playing arbitrage over exchanges with flaky connectivity. If your initial trade goes through but your offload does not you have a problem.

vader1• 13 years ago

It's not just MtGox and bitstamp. Pretty much every other exchange, as well as bitcointalk.org and trackers like bitcoinity are under attack simultaneously. It's a pretty obvious attempt at manipulating the market by causing widespread panic, so that the attackers can buy in at a conveniently low price the moment the attack is halted.

knowaveragejoe5• 13 years ago

How can you confirm this?

gruseom• 13 years ago

A genuine crash in which everyone was trying to sell at once might look like a DDoS. How do you know this is not that? (No opinion, just curious.)

ars• 13 years ago

How do they manage to make the DDOS only target buyers and not sellers?

Seems to me a DDOS would just make no bitcoins available for sale, but would not change the price. It doesn't matter if the price is low if they can't actually buy anything.

chollida1• 13 years ago

> However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world.

Bitcoin does have alot of advantages over existing currencies it, but this isn't one of them. I can buy and sell USD/CAD/AUE/GBP in many markets around the world

ashray6• 13 years ago

Yes, but that's because those governments have allowed their currencies to be free float currencies or something like that. Buying and selling an Indian Rupee for example is quite heavily restricted. Probably to prevent instability caused from speculation.

BTC never had that from the start because it's pretty much unregulated from the get go.

smrtinsert2• 13 years ago

Those people who converted their USD to BTC yesterday just got screwed. If only there were a central authority to regulate bitcoins volatility. oh wait...

Cthulhu_• 13 years ago

Those that cashed in, though, are in the money. Even if they bought a few days ago, they still made a 33% markup. And the real winner is the exchange, who takes a certain percentage for each transaction.

frabcus• 13 years ago

Not necessarily. They might have bought to hold - expecting BTC to be worth more in a year. Not caring about day-to-day fluctuations.

That will depend on fundamentals - is it being used as a trading currency or store of value currency by millions of people for a long period, or not?

jvm2• 13 years ago

> However, BTC China is still trading at above $275

Spreads for fungible commodities are generally not good. They mean that either a) somebody is getting massively screwed by paying a price that's way off the mark, or b) nobody's actually trading, which means the asset is illiquid. That is, unless there is some real reason why a BTC should be worth double in China what it is in the US.

crgt• 13 years ago

Perhaps a pseudoanonymous currency's value is correlated with the oppressiveness of the local govt? I can imagine circumstances where someone might be willing to pay a premium for BTC solely based on their desire for the privacy of their transactions.

trent_91• 13 years ago

See, it's times like this people should remember that bitcoin is not yet a currency and is rather a toy for things like http://bitcoinpyramid.com/r/91 and http://satoshidice.com, or for speculators.

fiatpandas• 13 years ago

Oh weird, you accidentally left your referral ID attached to the URL for the pyramid site.

jeremysmyth• 13 years ago

It is sorta a currency; you can buy things in selected outlets. But sure, right now the large movements of bitcoins seem to be speculators who treat it as an investment for capital appreciation rather than a currency, and that's not sustainable until it has some objective worth outside of itself.

derleth2• 13 years ago

> bitcoin is not yet a currency

Bitcoin is just as much a currency as Ithaca Hours are.

http://en.wikipedia.org/wiki/Ithaca_Hours

6thSigma2• 13 years ago

Am I the only one who thinks of Bitcoin as purely a speculative commodity which is leveraged mostly by the fact that it is in a financial grey area?

Jtsummers6• 13 years ago

No, that's pretty much a summary of the primary criticism of bitcoin as a currency.

ihsw2• 13 years ago

The currency itself is very grey, yes, however the transaction network is excellent and high-quality.

It's unfortunate that the currency so loudly dominates the news surrounding it. Personally I find the technological achievement of a major, reliable, and international transaction network more impressive.

Nursie• 13 years ago

"the transaction network is excellent and high-quality."

Really?

I thought the transaction network was already struggling with SatoshiDice and the volume of transactions it's caused? If that is the case then the network is going to have a lot of trouble coping with increased use in future.

jlgreco2• 13 years ago

I think you are largely correct (and no, you are without doubt not the only person to think that ;). However I do think that to some degree the ability to buy drugs with it plays a role in its value; it is not just a financial toy.

dinkumthinkum2• 13 years ago

No, that's basically what it is.

wting2• 13 years ago

I'm interested in the price of Bitcoin, but we don't need these daily submissions.

If you're interested in following the price, I suggest these links:

- https://bitcoinity.org/markets

- http://bitcoincharts.com/charts/mtgoxUSD

- http://bitcoin.clarkmoody.com/

If you're interested in talking about the price, try #bitcoin-pricetalk on Freenode.

ritchiea4• 13 years ago

I appreciate the daily submissions because I am only slightly curious about the price of bitcoin as long as it's interesting and newsworthy (i.e. rising or falling significantly). If the price of bitcoin stabilized it would cease to be newsworthy and I'm sure the daily submissions would stop. I suspect many people feel the way I do, which is why these submissions get upvoted.

Kaedon• 13 years ago

It's interesting how quickly its fallen even since this article was posted. It looks like it's around 150 now.

safwanc• 13 years ago

..and 5 minutes later, its back up to $190 USD/BTC.

NathanKP2• 13 years ago

I like this prettier and easier to read interface: http://realtimebitcoin.info/

I've been watching it drop from $200 to $157 over the last hour or so.

mcintyre1994• 13 years ago

What do the numbers in the background mean? I've seen everything from $0.01 to $8000+ in about 30 seconds.

EDIT: Realtime transactions? Impressive range if they are.

brador2• 13 years ago

How many sellers caused this? Was it a whale cashing out or multiples panic jumping the ship?

phyalow2• 13 years ago

http://bitcoin-analytics.com/#charts

motti_s• 13 years ago

I'd argue that HN has a built-in mechanism for determining what's interesting to its users. If a Bitcoin related story gets voted up to appear in the top page every day, then maybe it should be there.

binaryorganic• 13 years ago

This. There's been so much talk about curation/deletion of posts lately. Letting the algorithm do it's job is the only way to determine what's HN worthy in my view.

mattmaroon2• 13 years ago

No, there aren't downvotes. If 20% of users really love something, and 80% hate it (assuming they only use flagging for spam) it will still keep making the top page.

driverdan• 13 years ago

Agreed. I'm going to start flagging them. Due to their volume they've become spam.

brink• 13 years ago

Don't forget that people upvote them. There are many people who find them interesting and don't think that they're spam, including me.

trotsky2• 13 years ago

for what its worth, i lost my flagging privileges doing the same thing in the bitcoin bubble two years ago

rdl• 13 years ago

I think part of the issue is that it's kind of a slow news period right now. There are not a whole lot of really exciting other stories hitting HN's front page so far in April.

Kiro2• 13 years ago

No, thanks. I prefer getting the relevant updates from HN.

ghshephard2• 13 years ago

This is HUGE news on Bitcoin - nothing like this has ever happened in it's history. Market went from $250 to $110 in 5 hours. MtGox was down for 30 minutes today. Trading lag was 600 seconds for orders placed at market prices. April 10th, 2013 may be the day that will be remember for the next 20 years as the day that Bitcoin crashed and either (A) never recovered or (B) kept progressing after an incredible Blip.

Definitely HN fodder today.

imsofuture• 13 years ago

It's hard to treat this re-pricing as a huge crash given that it was preceded by an equally unprecedented boom.

waterlesscloud• 13 years ago

Should bitcoin continue from here as topic of noteworthy discussion, I can say with absolute certainty this will not be the last time it crashes.

sneak• 13 years ago

> nothing like this has ever happened in it's history

Completely false. The curve mirrors the speculative run-up from $0.50 to $30 pretty closely... the LAST time bitcoin's market scaled an order of magnitude.

It's happened before. It will happen again.

pygy_• 13 years ago

The 50% drop is larger than usual, but 30% falls have regularly been seen during the current rally, and they recovered as fast as they occurred.

Furthemore, the trade volume in Bitcoin is unexceptional.

Edit, 10:56PM CET: It went down to ~$100, and it is already back up to $180. I predict another drop in the next few hours, then a recovery around at least 200. That's the usual pattern.

jelled2• 13 years ago

You must be new to bitcoin. Take a look at what the price did over the Summer of 2011.

kybernetikos• 13 years ago

> Definitely HN fodder today.

Maybe, but my own unscientific, vague sense is that I've been seeing multiple bitcoin related submissions to HN every day for quite some time now. At this stage all of the arguments have been hashed and rehashed (ho ho) in the comment threads to the extent that they're getting pretty repetitive and tedious (especially since so many of them are so political).

So, sure, it was marginally interesting a few days ago that bitcoin was up a significant amount so we had multiple articles about that, and then it was up the next day too so we had some articles, and then there were opinion pieces about why it was a bad idea / good idea, none of which really said anything much new, then there were columns about how it was becoming mainstream (which was obvious if you'd been following all the bitcoin startups that also get posted to HN), then today we find it's down an unusual amount. Surely you can see how this is becoming a little grating even for someone who started out with an interest in the topic.

muyuu3• 13 years ago

Bitcoin has been through worse than this at least twice.

jcomis• 13 years ago

http://realtimebitcoin.info/ is another good one to watch

fnordfnordfnord3• 13 years ago

>I'm interested in the price of Bitcoin, but we don't need these daily submissions.

Bitcoin markets are having unprecedented volume and volatility. This is a relevant current event. You don't need to click the links if you don't want to.

>try #bitcoin-pricetalk on Freenode.

The discussion quality on IRC is almost as bad as it is here.

wting2• 13 years ago

My reply was a lot more relevant at the time of posting and when the original title was, "Bitcoin drops from $260 to $230". :/

tptacek• 13 years ago

Don't worry! It won't ever fall below its intrinsic value!

peejaybee• 13 years ago

Part of me is pulling for Bitcoin, but dang was that funny.

clicks• 13 years ago

Serious question: Is that really a fair criticism of BTC? Because afterall, our beloved US currency is fiat based, and often subject to whims of geopolitical games.

sliverstorm9• 13 years ago

US currency isn't backed by gold- it is in a sense backed by the US government. BTC is wholly unbacked.

slg2• 13 years ago

The same geopolitical games also back the US currency. So it is no longer gold back but ICBM backed.

richardwhiuk• 13 years ago

USD are backed by the fact that US citizens have to pay in USD to pay their taxes. Bitcoins have no such imperative.

bdr3• 13 years ago

Actually, you can set a price floor on Bitcoin. It's the dollar value of the transaction float at The Silk Road.

gdw22• 13 years ago

I just thought about something I'd never thought before:

Could it be said that bitcoins _do_ have an intrinsic value equal to the marginal amount of electricity and equipment needed to produce one?

slg2• 13 years ago

No, because you can't go from Bitcoin back to electricity in the same way you could smelt a gold coin.

sliverstorm9• 13 years ago

That isn't an intrinsic value. Waste heat does not have an intrinsic value equivalent to the cost of producing it- it is waste heat.

Intrinsic value is derived from what you can do with something, not what you did to get it.

kleinsch• 13 years ago

Intrinsic value doesn't have anything to do with cost/effort necessary to produce something.

dragonwriter3• 13 years ago

> Could it be said that bitcoins _do_ have an intrinsic value equal to the marginal amount of electricity and equipment needed to produce one?

No, that's an intrinsic cost. It would only be an intrinsic value if that electricity and equipment could inherently be extracted back from the bitcoin. The intrinsic value of gold comes from what you can use gold for other than a medium of exchange. Bitcoin has neither the intrinsic value of commodity currencies nor the sovereign backing of fiat currencies.

abentspoon• 13 years ago

I don't know if intrinsic value is the right term, but I've been thinking along the same line.

A Bitcoin is essentially a tradable hashcash, which has direct value in spam filtering.

"Isn't it enough that I ruined a pony, making a gift for you?

aero142• 13 years ago

So, what do you think the intrinsic or non-monetary price of gold is?

Symmetry• 13 years ago

Gold is useful stuff in all sorts of electronic applications... I'd say at least 4x that of Bismuth or around $50/pound.

jjcm• 13 years ago

In some ways the price is tied to the cost of electricity needed to mine a coin. Granted, the mining "price" is usually about two weeks behind the actual price, and the electricity required is variable based on the current sum of computational power being used by all the miners, so there's certainly some disconnect.

nwatson• 13 years ago

So if I shock a turd with a thousand dollars worth of electricity from my electric utility company, can I sell it for $1,000? Or add some non-intrinsic worth by calling it "art" and sell it for $2,000? Actually, make those figures $1,010 and $2,010 -- my turds also have intrinsic value.

caf2• 13 years ago

It's the other way around. The cost of electricity needed to mine a coin will tend towards the price that coin can be sold for. If the bitcoin price drops significantly, then the least efficient miners will become unprofitable and drop out, and the difficulty will reduce.

andrewtbham• 13 years ago

The value of gold, and bitcoins is that their scarcity and inflation serve as an accurate proxy for the real economy of goods and services.

chii5• 13 years ago

neither gold nor bitcoins are inflationary. In fact, both are deflationary.

lurkinggrue2• 13 years ago

What is it's intrinsic value? Nothing?

songzme• 13 years ago

To everyone claiming that bitcoin isn't a currency, no shit!

Currency doesn't happen overnight, it's a process to get there. Just like anything revolutionary, it takes time before anyone knows what it will be come. By the time (with a very big IF) bitcoin becomes a viable currency, it's price won't be $200 anymore. It'll be at least a few thousand per coin and people will be transacting in micro bitcoins.

What bitcoin is going through right now, is puberty. If you invest early, you reap profits. If you invest after it is stable, there is very little profit to be made.

Love and give every new idea a chance until you've used it and have a personal reason to hate it.

Negative speculation is for chumps

Helianthus2• 13 years ago

I have a personal reason to hate it: it thinks it's revolutionary when it's actually just... money.

It solves no problems because it carries greed with it.

mattacular• 13 years ago

It solves the problem of giving Libertarians something to feel good about?

mattm• 13 years ago

"It" is just a system. It doesn't think anything. It's the people who think it's worth using it for something. So really you hate the people that use it.

dcc1• 13 years ago

It solves two huge problems merchants face

1. Ultra low transaction fees 2. No chargebacks/reversals

1 and 2 are features of Credit Cards and Paypal which make ads up to a sizable % to anyone trying to sell online.

chii5• 13 years ago

greed, when directed with proper force, is how progress is made.

unchecked greed, of course, is when progress happens unevenly for society.

6thSigma2• 13 years ago

I don't hate Bitcoin, in fact I think it's a really cool idea, but I think the mindset you are portraying is very bad. Ignoring all but positive speculation is pretty much the definition of a bubble.

smrtinsert2• 13 years ago

It's the speculators! Where have I heard that before?

andyakb• 13 years ago

How is positive speculation any more admirable?

niico• 13 years ago

Can someone explain me why this could happen? Large amounts of BTCs moving at the same time? What are your theories?

krcz• 13 years ago

I guess most people were buying BTC because its value was rising really fast. Any price drop could cause them to lose their faith in it and want to sell them. And the drop (or at least growth end) was inevitable, because the price was rising faster than exponentially.

sixothree• 13 years ago

My theory is that it's far easier to sell bitcoins than it is to buy or mine them.

dragonwriter3• 13 years ago

> Can someone explain me why this could happen?

The market value of a speculative commodity can move for any reason at all, as its entirely a consensus among the people buying and selling as to what other people will be willing to accept for it in the future.

> Large amounts of BTCs moving at the same time

The charts from mtgox seem to show that volume picked up after the price had plateaued and maybe dropped a little bit and then volume shot up further again after it went through a trough and a lower peak and started back down again, and once it got down around 200 volume dropped briefly and then picked way up (with a lot more price volatility) again when it dropped further to below 175.

Intuitively say that the first volume pickup was largely profit taking from the plateau and maybe the slight drop, after the slight rebound and smaller peak, I suspect the longer drop was panic selling, and right now (or, given the apparent delay, an hour or so ago) the high volume, high volatility oscillation is a combination of panic selling, bargain shopping for investment, and people taking advantage of arbitrage opportunities between the low price at mtgox and higher prices on other exchanges. But that's mostly just guesswork based on the look of the price and volume graphs.

Where it goes from here...well, we'll see.

eah132• 13 years ago

The simple answer is that sellers kept taking the 'ask' prices on the exchange until the only ones left were significantly lower. See this graph of current 'market depth' (existence of bids and asks): http://bitcoincharts.com/markets/mtgoxUSD_depth.html

In a double auction market, there are bids (offers to buy) and asks (offers to sell). The 'market price' is the last price at which a bid or an ask was taken by a market buyer. Taking a bid or ask removes that bid or ask, queueing up the next in line. In an illiquid market, there aren't many bidders and/or askers, leading to price volatility. In a liquid market (such as for US Govt bonds) there are many bidders and askers, meaning the price swings are much more likely due to a significant change in information.

Hence my contention that daily volume is the most important stat to watch on the BTC market. It's a proxy for market depth, which is a precondition for liquidity and relative price stability.

gojomo• 13 years ago

There hasn't been a buying opportunity this attractive since less than 48 hours ago!

fr0sty• 13 years ago

Just for reference: as of 2:26ET last trade I can get from the mtGox API was for $157.

EDIT:

2:52:00 last trade: $142

2:56:58 last trade: $135

3:10:10 last trade: $117.57

3:20:52 last trade: $106.00 (this is the lowest price I've seen)

3:42:ish trades between $125-$150

mckoss2• 13 years ago

Something bad is happening at MtGox - they quote a price of $156 for the last trade - yet my order at $200 was not filled and is still marked as "pending".

rubinelli• 13 years ago

It's just lagging horribly, as in, taking more than one hour between receiving an order and executing it: https://data.mtgox.com/api/1/generic/order/lag

joshuahedlund• 13 years ago

I have a casual interest in economics, markets, currencies, etc, but I don't understand why DDOS attacks would cause the price to drop as opposed to just causing trade and prices to halt altogether?

Mahn• 13 years ago

People buy less, so those wanting to sell have to lower their prices, which makes others panic and sell at a low price, and there you go.

dinkumthinkum2• 13 years ago

Someone else mentioned panic and that I suspect is right and part of the source for bitcoin that differs from traditional exchanges is that it is a much more risky currency at this point. It is very susceptible to panics, and rightly so. I don't think anyone could seriously invest in bitcoins; it would be the dumbest thing you could do with your money. You'd be better off eating your money and get the caloric value. I'm just being honest about it; maybe it will change one day.

xoail2• 13 years ago

So if someone decides to sell 1 bitcoin at $157, immediately the lowest price falls to $157, causes panic among other bitcoin-ers and they all start selling, is that how the market works? I am not sure what is going on, I placed an order to buy at $210 but that is still pending since yesterday.

omellet• 13 years ago

No, whatever the current highest bid is will get executed, and you'll sell at that price, instead of $157 (assuming your offer is through the bid).

kaoD2• 13 years ago

Just ignore the high/low prices and focus on the weighted average (223$ right now) which is a much better indicator IMHO.

conanbatt• 13 years ago

Its going down hard now.

mikecane2• 13 years ago

This is interesting. But I think it's only test to see how they can actually crash it to zero later on.

And if we're voting here in Comments too, yes, let's have the Bitcoin submissions. Hacking a currency is interesting.

mikecane2• 13 years ago

A downvote? Should I have capitalized They? As in all those in power who do not want to see alternative currencies succeed and have therefore infiltrated it to see what They can do to stop it? Does that make it better? (Yes, I expect a downvote now here too. Que sera sera...)

nichols• 13 years ago

Dance, monkey, dance!

codexon• 13 years ago

Someone supposedly sold $10+ million worth of bitcoins.

http://blockchain.info/address/1HQ3Go3ggs8pFnXuHVHRytPCq5fGG...

morsch• 13 years ago

Well, transferred. Can't even say for sure if the BTC changed owners.

vyrotek2• 13 years ago

In case anyone else was confused like me, you click the green button in the bottom right to covert it to dollars.

clarkmoody2• 13 years ago

That's probably a transaction resulting from MtGox's shuffling coins around.

napoleoncomplex• 13 years ago

Not that I'd wish monetary loss on anyone, but if the first Bitcoin crash is any indication, these things tend to have a positive side-benefit of driving out most of the speculators flooding in after all the news reports that fuel these cycles, and the people actually interested in the currency itself stay behind, with an influx of new folk.

After all the noise dies down, new businesses and services get built backed by the wider audience, and the ecosystem develops further.

It's not yet clear if this is a crash similar to the previous one, but if it comes, I don't think much will change in terms of Bitcoin's future for the next few years.

(Posted this in the other thread just before it got ethered)

BrianEatWorld• 13 years ago

Anecdotally, I have been waiting for prices to fall because I was looking to actually use some btc starting a month ago, but because Im planning on using a tumbler, I was afraid of where the price might be in a week.

brador2• 13 years ago

What is a tumbler?

cs702• 13 years ago

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!"

The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate.

In the long run, however, if Bitcoin continues to work as intended, the more people around the world who adopt it as a store of value and/or medium of exchange, the more demand there will be for it, and with supply being fixed, growing demand will be reflected in a rising price.[1]

[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...

Retric3• 13 years ago

Assuming that bit-coin is not passed over for a more useful digital currency at which point the network fails and the total value of all bit-coins falls to 0.

cpressey• 13 years ago

I wonder if the value would ever fall to precisely zero. Mightn't they still have value as a novelty or collector's item? Like, "Hey, a Bitcoin! I remember those... sure, I'll buy one, just to say I have one." It's unfortunate that you couldn't mount it in a decorative frame, though.

dia803• 13 years ago

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators.

If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it!

On another note, mtgox.com the main exchange is shockingly unfit for purpose. If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it. I hope a more able exchange arrives soon.

dubfan• 13 years ago

Do you have any evidence at all of a coordinated attack against Bitcoin, or is this just an unsubstantiated conspiracy theory?

foobarqux2• 13 years ago

What evidence do you have of this claim?

axusgrad• 13 years ago

btc-e seems to be another big one.

http://bitcoincharts.com/markets/ will show prices in the major exchanges, if it's online. I had to use the Google cache.

wcoenen• 13 years ago

> On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic.

The bitcointalk forums and /r/bitcoin are full of paranoia like this. After months of stress trying to divine market patterns, people see market manipulation and conspiracies everywhere.

The simple truth is that there was an agressive bubble. The doubling period for the price was halving with each iteration[1]. If you looked at the log plot[2], it still looked exponential! A crash was inevitable.

> On another note, mtgox.com the main exchange is shockingly unfit for purpose.

They have a big update scheduled for April 17th[3].

[1] https://bitcointalk.org/index.php?topic=171312.0;all

[2] http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...

[3] https://mtgox.com/press_release_20130409.html

gavinlynch• 13 years ago

>> "If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it!"

I don't think it inherently implies anything of the sort. There is nothing to suggest that they believe in Bitcoin or care about it. If your suggestions are true, the only thing we know is that they are playing a very, very easy game of manipulation for financial gain. I don't see that as a positive for Bitcoin and think you're reaching with that statement.

nhaehnle2• 13 years ago

> If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it.

That's (probably unintentionally) sad commentary on the state of our world today. After all, this trading is just finance. Truly forging the materials or implementing the algorithms that improve our standards of living happens in on a completely timescale, where a one hour delay of some financing operation (such as getting a loan approved) makes no difference at all.

andylei• 13 years ago

> aggressive selling attacks

what's the difference between a "selling attack" and just "selling"?

dsrguru2• 13 years ago

> If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it.

The Facebook IPO was pretty damn similar and didn't end capitalism as we know it :)

fnordfnordfnord3• 13 years ago

>the end of capitalism as we know it.

>I hope a more able exchange arrives soon.

I hope for both of those things!

unreal37• 13 years ago

Did you see Nasdaq's performance on Facebook's IPO day? I don't think there's an exchange in the world that can handle a serious amount of crushing volume (many times above normal) without some failure somewhere.

RockyMcNuts2• 13 years ago

In the days before computers, believe it or not, price reporting often ran behind. In the 68 'paperwork crisis' the NYSE went to a four-day trading week for a while to give back offices time to catch up. Capitalism survived.

mynameishere• 13 years ago

I hope a more able exchange arrives soon.

It would be possible to create a GLD-style ETF around Bitcoin and it would be as an accurate reflection of the real price as possible. But why bother?

coldtea5• 13 years ago

It's until one-two major governments decides to make it illegal to deal in bit-coins that it's price will drop to zero.

It doesn't matter if they can't enforce it 100% (or even 1%). What matters is that it will kill almost all opportunities to use it as regular money for legitimate purchases by major companies etc in the future. And that it could also land your ass in jail (with ISP monitoring and such being what it is).

Why would a government do that? For one, because they don't like money systems they can not control. Second because they would argue it can be used for money laundering and such.

Time and again it has been proven that you cannot solve social issues with technology. For example a solution for private communication exists: cryptography. And yet, the government can limit what kind of cryptography you can use in your app or export, etc. And they can even throw your ass in jail if you have an encrypted file and you don't hand them the key. You have to go all the more deeper, and even that doesn't solve the issue of your dumb cousin exposing your secret in his plain text email to you.

mayneack• 13 years ago

That will keep it down, but never zero (because of that). There's a real value to the illicit transactions. Even if it's merely a way to exchange dollars into something like silk road points, that's worth enough to enough people to keep it at some non zero value.

EliRivers• 13 years ago

A vast number of major governments have made it illegal to trade in, for example, heroin. Just making something illegal doesn't necessarily stop trade.

erikpukinskis2• 13 years ago

If you're trying to do something that's already illegal (sending money to your grandmother in Iran) then you won't care if bitcoins are illegal.

The market for making politically sensitive transactions is huge. There's no need for Bitcoin to be the currency of choice for buying a Big Mac in New York.

mrb7• 13 years ago

"It's until one-two major governments decides to make it illegal to deal in bit-coins..."

I don't know about other governments, but I doubt the US will ever declare Bitcoin illegal (though I am told to never say never). Supporting my viewpoint, the US Treasury Department, through FinCEN, has recently tacitly approved Bitcoin: http://www.businessinsider.com/is-bitcoin-legal-2013-4

I think the US government would prefer to take the benefits of Bitcoin (startups springing up everywhere, taxable Bitcoin economic activity, etc), rather than banning it because the technology is used by a minority of users for illegal activity.

"For one, because they don't like money systems they can not control"

This is a broken argument. The US does not control the Euro, or Yen, etc, yet they do not make it illegal to trade in Euros/Yens within the borders.

caf2• 13 years ago

I've been trying to figure out a way in which bitcoin could be useful for money laundering, and I just don't see it.

Classic money laundering schemes use businesses which typically have large amounts of anonymous customers paying in cash - the dirty money flows in as cash purchases that didn't really happen from customers that didn't exist. The pseudonymous bitcoin doesn't seem to support this use - it will be obvious from an examinination of the block chain where that money came from.

Can anyone describe a workable money laundering scheme using bitcoin?

thatthatis10• 13 years ago

There is literally no fundamental value to bitcoins. Spikes and crashes are absolutely to be expected in such a situation.

drcross2• 13 years ago

same as the dollar and euro then. They are not backed by anything except the status quo.

apw• 13 years ago

That's not quite true is it? A distributed cryptographically-guaranteed ledger has fundamental value, no?

rhizome• 13 years ago

"Sell on news."

Jtsummers6• 13 years ago

Thoughts on your essay:

Fractional reserve banking - if it's merely backed in BTC then what's the point of bitcoin? It entirely defeats the system as people will be back to fiat currency.

Early adopters and clever nation states have the opportunity to totally turn the world upside down in a BTC backed future. They should have a significant percentage of all existing (as it's finite) BTC which would distort their actual worth. A clever North Korea - estimated GDP of $40 billion, and about $4 billion each in exports and imports - could hold an incredible amount of BTC buying power. Why would any other nation want to acknowledge them? Similarly, they'd be holding onto a financial nuclear bomb if they held enough BTC. They'd be able to almost singlehandedly alter the value (in purchasing power) on a whim with a significant enough percentage.

---

Next, you focus heavily on hyperinflation, but never once seemed to mention deflation. Or the fact that under a scenario like above, hyperinflation is almost feasible as suddenly a large amount of BTC could reenter the market. Long term it would get absorbed, but short term impacts could be severe.

jonnathanson2• 13 years ago

In the long run, yes, there could be a bright future for BTC.

In the short run, there are several big challenges, liquidity being a huge one. When it comes to BTC, the activities of speculators/hoarders, and the activities of free exchange and commerce, have shown themselves to be in direct opposition so far. The "store of value" and the "medium of exchange" are not mutually exclusive, of course, but for the time being, they're functionally mutually exclusive. It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. It's in the best, long-term interests of BTC to stabilize and become the latter. But BTC is going to be the former for quite awhile, precisely because it's so mysterious in the public eye, there's such information asymmetry about how it works, and because the markets for BTC-based commerce are still fairly niche.

Stabilization is going to come when more businesses start accepting BTC, and accordingly, when BTC becomes more freely convertible for goods, services, and other currencies. Until then, it'll proceed apace slowly and steadily, with the occasional burst of volatility as public interest spikes and wanes, and as speculators jump in and out.

What the currency really needs is exchange volume -- not just from trading, but from commerce.

fredwilson• 13 years ago

Exactly

derefr• 13 years ago

> It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two.

Where is gold on that spectrum? As far as I can tell, Bitcoin seems to have all the properties of gold (except that it's easier to transport.)

I'm pretty sure that gold is not considered to be a "currency" in any sense in the modern era; it's traded as a commodity, like oil. But people still can use it (or any other commodity, like oil--or, say, laundry detergent[1]) for under-the-table anonymous transactions as well.

[1] http://www.thedaily.com/page/2012/03/12/031212-news-tide-the...

fakeer• 13 years ago

>>someone were to yell "fire!"

Who did yell this time?

>>the more people around the world who adopt it

Who shall be those people?

Are we, by any chance, thinking that we should count the people in mining bitcoins or adopting a currency based on algorithms(let alone the talk about encryption/bits/bytes/code) which they do not have an iota of idea about?

Or are we considering that "naah, it's not for them 'non-techies' anyway!"?

Well, in that case it's actually fine if bitcoin is to be restricted to paying for goods/services that we (the 'techies') shall buy and we'll buy from us (the 'techies'). But then, this will go nowhere.

But 'they' can buy the bitcoins at those exchanges, can't they? No, they shall not buy sth fluctuating in price(paid in dollars and rupees) which shames any share price fluctuation or currency value change except Zimbabwean dollar. And certainly not sth that they do not understand and sth where they have to remember a cryptic and random long string and if they misplace it, forget it or even change it accidentally - well, they just lost all their bitcoins!

There's no support number to call to, no branch manager to go to and tell "well, I just happened to have my id/pwd forgotten".

To me it doesn't even look like a currency. It just looks like, from an average person's point of view, another merchandise(if we do not call dollar a merchandise)/online-'stuff' that people(better say enthusiasts) are buying. Like some share which are generated by running more and more computers.

gtirloni• 13 years ago

Agreed. I don't trust the dollar as investment and I don't understand why people consider bitcoin something worth investing in. Sure, for trading stuff between techies it looks fair enough but it'll never reach the general public.

The whole banking system works hard to earn the customers' trust and any small mistake damages that. Bitcoin doesn't provide any assurances, support, etc...

Looks like another fad the computer industry created for its own amusement. Let's see how long it lasts. I'm sure all the revolutionaries out there fighting the man will come up with solutions for the trust issues.

sseveran• 13 years ago

Its not panic if your first.

mattmaroon2• 13 years ago

At this point I'm just flagging bitcoin price updates. We don't need these here.

nlh• 13 years ago

To be fair, this isn't just a price update. This is an event that many people have been waiting anxiously to play out - if this were just a "Bitcoin is at $250" post, fine, I agree. But this is news - the bubble may be popping and that's newsworthy.

eksith2• 13 years ago

BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire :

http://arstechnica.com/business/2013/04/bitcoin-crashes-losi...

This bares repeating...

The value of BTC is in the nature of the transaction; not the currency itself. People have turned BTC into a commodity instead of actually bloody spending it. Their old fashioned thinking still ties it to traditional fiat like a smoker trying to give up the habit.

Look, I don't want anyone to lose their money, but people have to stop thinking of BTC as something that has value. What's valuable is the transaction itself, not the means of transaction. To put it another way, fiat currency is just colorful paper until it gets distributed to banks and into your hands.

This original transaction and all future transactions give it value; without it, the paper means nothing.

Edit: Spelling. Ironically, I wrote "bears repeating" instead "bares repeating". BTC ain't a bear market ;)

niggler• 13 years ago

Who is satoshi nakamoto?

eksith2• 13 years ago

He's the Yamaga Soko of modern digital currency. Basically wrote the book on the first plausibly practical means of exchanging currency for services and the edicts of transactions.

Also, I hear he plays a mean banjo.

what_the_frell• 13 years ago

Who is Tyler Durden?

MacsHeadroom3• 13 years ago

Who is John Galt?

jcoder• 13 years ago

You actually had it right the first time—"bears repeating"

joel_perl_prog• 13 years ago

You had it the first time: "bears" is correct.

Definition 3 c: http://www.merriam-webster.com/dictionary/bear

Ologn• 13 years ago

The value of BTC is in the currency itself.

How much is a three year old's scrawled drawing with the note "I love you Grandma" worth? To most people it is worthless, but to the recipient it has worth. Its utility and use value to the recipient is not measurable. The utility and use value of any commodity is not measurable. The drawing has a use value even if no one wants to buy it - it is useful to the recipient.

Commodity values also reflect the work put into them. Let's say I assemble PCs. I buy $600 worth of parts - motherboard, disk drive etc. I spend an hour assembling the parts into a PC. I now want to sell it for more than $600 since I want to be paid for my time, maybe $50 for the hour - it is now $650 total. Each of the components of the PC I paid $600 for the parts of is more expensive because of the labor costs associated with assembling that component. So the value of a commodity is also connected to its labor costs.

Utility can not be measured as it is subjective - like the child's painting. Exchange value can be measured though. I can buy an OK pair of headphones for $20, I can buy dinner for $20 as well. So a certain pair of headphones are worth the same as 20 dollars are worth the same as a certain dinner at a certain restaurant.

We have had currency for thousands of years. Currencies have always held value due to their inherit value as a commodity, not due to being an exchange medium. Attempts have been made over the centuries to try to change this, but it has never been long lasting. The US dollar was backed by gold until 1971. Now paper currency has value due to the US government accepting it for taxes, stamps and so forth, but such things have been relatively short-lived through history so far. Paper currencies like Confederate dollars, Reichmarks in 1945 and such depend on political factors for their worth( http://www.moneymuseum.com/moneymuseum/library/texts/text.js... ) . Gold and other precious metals have retained value over thousands of years, no matter which way the political winds blew.

tommorris• 13 years ago

> BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire

From the Ars Technica link:

> At the moment, no evidence links the currency's plunge with this random reddit charity.

I'm going with Ars on this. $12,000 to 12 people on Reddit isn't enough to bring the market tumbling down.

lwat4• 13 years ago

Bitcoinbillionaire supposedly had waaaay more than $12k in Bitcoins. That was just the bitcoins he gave away for nothing. He supposedly had millions worth, if he sold a large chunk of that he could easily crash the price all on his own.

eric_bullington• 13 years ago

Could it be that Bitcoin is presently more well-suited as a digital store of value than a digital currency? Given the difficulty of transferring fiat into digital, a way to store value in the digital world is just as needed as a transactional system. And I suspect we'll see some systems emerging in the coming months that are better suited for transactions, with immediate verification, etc. It could be that Bitcoin's long-term role in the crypto currency ecosystem is as a store of value, with transfers only occurring when someone needs to deposit money into their version of a digital checking account, or else large transactions that are not extremely time sensitive, like buying a house or car.

drivebyacct2• 13 years ago

This is so absolutely untrue. Those values move rather often.

guard-of-terra• 13 years ago

If it doesn't recover today I'm buying another bitcoin tomorrow!

UPD: Actually it did and now is traded >200$

dragonwriter3• 13 years ago

Funny that the value it "recovered" to (~$200 from your post -- looks like its about $190 now) is the value that the original headline on this thread noted it crashing to from $266.

r00fus• 13 years ago

It's now at $159. It was at $164 one minute ago, and $142 a minute before that. This volatility is making some people really really rich, I imagine.

It's also making it very dangerous to use BTC as a way to shuttle money.

crapshoot1013• 13 years ago

A currency set up to be deflationary and swings at 50% daily? This sounds like a great investment - I also have a slot machine I'd like to get you to invest dollars on.

AceJohnny2• 13 years ago

See also: Tulip Mania in the 17th century.

http://en.wikipedia.org/wiki/Tulip_mania

lurkinggrue2• 13 years ago

That's crazy, I have my money hedged into Beanie Babies.

gwern• 13 years ago

Those who read that article to the end will learn that Tulip Mania isn't much like what they think it is (summary: http://www.reddit.com/r/Economics/comments/1bm9fl/the_bitcoi... ).

throwawayG92• 13 years ago

Thank you sillysaurus, I was about to go buy BTC at 270 to a local guy (I don't have any other way for buying bitcoin here). I forgot to check the price again, but I didn't forget to check HN ;)

dfc• 13 years ago

It is not clear to me why Mt Gox did not suspend trading when the order lag reached 20 minutes and/or once the webpage began returning "Database error" messages.

A lot of people are commenting that this will be remembered as the day btc crashed the second time. In my opinion a more accurate characterization would be that today is the day that Mt. Gox crashed.

bdcravens2• 13 years ago

When Mt. Gox was hacked, everyone assumed they were done, and folks like TradeHill were the future of BTC exchange. Mt. Gox came back, TradeHill got out (though they recently relaunched after several months), and I'm sure that led to a feeling of bulletproofness on Mt. Gox's part.

craigyk• 13 years ago

HILARIOUS.

Note: I think Bitcoin is a cool idea, and a cool implementation, but I've recently noticed it tends to create zealots who spew crazy whenever there is an article that questions its suitability for specific purposes (gold alternative, replace the US dollar, etc.)

From what I can tell, its the same type of people I used to associate with libertarian+goldbugs+ronpaul, for whom 'fiat' is the worst four-letter word in the English language.

uptown• 13 years ago

A good chart on price-spikes:

https://twitter.com/BarbarianCap/status/322071032934584320/p...

nacho2sweet• 13 years ago

It's a crazy un-regulated trading market were you can get in some old fashioned market manipulation from some smart dudes and no one can do anything about it.

Personally I think Tulips were prettier, but I know most of you coders like bits.

otikik• 13 years ago

Surprise!

Keyframe• 13 years ago

Basically this is watching a whole lot of people getting into FX game without even knowing they're in the FX game or even know about FX. I wonder if senior FX sharks sniffed blood and gamed bitcoin into this. My 2c says it's gamed exactly by FX pros, that's why I'm not into it.

ThomPete• 13 years ago

So I am wondering.

Perhaps Bitcoins volatility which seems to potentially be huge is a great win for people who study economics and bubbles?

I am aware there are several difference between a crypto currency like bitcoin and the rest of the currencies out there but for a layman like me it seems like it's a perfect tool for research?

endijs• 13 years ago

Looks like paranoia is over. Spread returned to reasonable amount (1$) and price is steady going up - at the moment 190$. Fun day for Bitcoin holders. And someone made a lot of money today.

bdcravens2• 13 years ago

We can laugh at Bitcoin but real guys, in real basements, are losing real fake money right now.

https://twitter.com/DavidClinchNews/status/32205973231779430...

eah132• 13 years ago

As I've said before, daily volume is the stat to watch. There's been a huge spike in trading today: 2.3m btc on Mt Gox alone, up from 150k yesterday. If markets stay this liquid (or some multiple of their normal liquidity) it'll be a hugely positive sign. We're up to $200m+ of BTC traded on Mt Gox today, and that's a huge fraction of the total value of bitcoin (~$1b). Great sign if volume stays high from here on: the volatility should be dampened quite a bit.

http://bitcoincharts.com/markets/

andreash• 13 years ago

All I can think about is this image, that my macroeconomics professor showed to me : http://goo.gl/zBkCr

mathattack2• 13 years ago

Here is the thing I can't get around... If Bitcoin is open source, what's stopping someone from setting up a competing currency? Perhaps it could have the promise of a more optimal growth mechanism over time, or some other feature. Once it's in use, the value of Bitcoin drops quickly, no? And what if there are many Bitcoin-like currencies?

tyw• 13 years ago

There are. Probably the #2 most popular coin is 'litecoin' (http://litecoin.org/). It uses scrypt instead of sha256 in order for it to be harder/more expensive to use GPU clusters and FPGA/ASIC hardware to mine them. Mining using GPU is still somewhat quicker/more efficient than CPU, but the delta is much less than exists for bitcoin.

There are other coins as well, but I'm less familiar with them.

codeulike• 13 years ago

Because a currency is basically a _convention_ within a _community_. Bitcoin has a _community_, whereas an arbitrarily cryptocurrency launched next week probably wont have, unless a lot of groundwork is done first.

mathattack2• 13 years ago

Right, but it can be done so perpetual scarcity is a fallacy, no?

michaelochurch• 13 years ago

Called it (sort of): https://news.ycombinator.com/item?id=5522100

Actually, I have no idea whether there's any causality, and I certainly would not have predicted the effects to be felt today, as opposed to months later when a more mature margin system came into place.

xoail2• 13 years ago

Well looks like it tried to come back (I saw it touch $200) but the media and twitter picked up its fall and started the panic more than ever. Right now at $140.

eric970• 13 years ago

I'm sure it's been stated already... And well, I'm no Bitcoin fanboy, but didn't the price just go back up to what it was 2 days ago? That hardly sounds like a "crash" to me.

MacsHeadroom3• 13 years ago

>didn't the price just go back up to what it was 2 days ago? That hardly sounds like a "crash" to me.

Every fucking time.

Oh look, Bitcoins are worth what they were two or three days ago. "BITCOIN CRASHED!"

Jesus people, really?

jgon• 13 years ago

This is amazing timing because I received a text message from my mother roughly 3 hours ago wondering if I mine bitcoin and if it is something she should look into.

If you ever wanted evidence that this was a bubble driven by speculation look no further than how closely it resembles the dotcom bubble, right up to Joe and Jane Mainstreet looking to get involved right as the whole thing crashes down.

delsarto• 13 years ago

I signed up for mt.gox about a week ago, at that time the verification queue was >10,000 and I'm still about 5000 now. My plan was to buy one bitcoin to gamble with; presumably that was the plan of the several thousand others in the queue as well. So, based on that, with something like 1000 new verified (hence able to easily trade) people coming into mt.gox a day, I'd expect this to go on for a while...

biturd• 13 years ago

I know very little about BTC. I have a few grand and would like to but some at around 100.00 each in hopes of doubling and cashing out. Is there a good step by step for beginners?

I'm not worried about secrecy and track ability, more ease of use, being able to do this all from the comfort if my computer without trips to Walgreens or doing wire transfers. J have no intention of buying anything other than perhaps donations to reddit and Wordpress.

Siecje• 13 years ago

To buy a bitcoin you need to buy it from someone?

Does that mean a miner can only 'create' a bitcoin (or partial bitcoin) when there is a transaction.

So how did it start in the beginning? Someone would have had to be able to create bitcoins.

cjg2• 13 years ago

You get new bitcoins by creating a new block in the block chain (mining). If there are no other transactions in the block that's fine.

The first block is known as the Genesis block. You might find this useful: https://en.bitcoin.it/wiki/Genesis_block

fixxer• 13 years ago

The CME (and other futures exchanges) avoid "DDOS"-like situations (basically, I'm talking about hyperactive algos taking up too much bandwidth) by penalizing them monetarily when they go over a limit. The penalties are large. The same could be applied to Bitcoin exchanges and would definitely improve performance. I'm not a buyer of cryptocurrencies, but if you're discounting the concept because of these events, your not considering the system's potential to evolve beyond them.

supervillain• 13 years ago

I predict that Bitcoin will be banned in the U.S. before it would be adopted by any countries.

programminggeek• 13 years ago

Someone is making out like a bandit on this deal.

PhilandTim• 13 years ago

I'm not sure what's more upsetting, the fact that so many people are careless enough to create speculative positions in such an unconventional and abstract financial product on short notice, or that despite all the media hype over Bitcoins recently and what should've been foresight that this would happen, that I didn't try to catch the wave up myself.

Xanza• 13 years ago

I don't understand how anyone would purchase Bitcoin 'to make a quick buck' when it was running at an all-time high. Good way to run up a deficit.

DigitalSea• 13 years ago

This sudden drop sounds like an intentional attack on Bitcoin to lower the price. I have heard stories of hackers trying to sabotage the price of Bitcoin by forcing the price lower and then buying a whole heap of Bitcoin, sounds like one of those attacks finally worked. Looks like all of the Bitcoin publicity from the likes of Business Week and The New York Times has attracted some good old fashioned currency manipulators who want a piece of the pie.

Although there is no evidence to suggest this isn't an old fashioned bank-run, there appears to be quite a few reports of mining pools being attacked as well. Something is definitely going on here, but overall it won't stop the remarkable progress Bitcoin has made this year so far.

nikcub2• 13 years ago

Sold everything I had yesterday at ~$240

https://twitter.com/nikcub/status/321751009598791682

I was buying and selling BitCoins with a very simple theory. Each time the currency would rally I would check the stories on Google News and check the graph on Google Trends[1].

Other price peaks would correspond with a peak on the trends graph[2], a new peak in new stories (with more stories in more general media publications), and more traffic to the sites that are the top results for "BitCoin" (using Compete etc.)

The peak yesterday had no new interest driving it, and no new buyers coming in. It was clear what was going to happen next.

Previous price peaks would drive new news stories which would drive the next peak. Yesterday I logged into News and Trends and found the trends level at its lowest in 30+ days and no new large items in news and sold.

[1] https://twitter.com/nikcub/status/319427166817357824

[2] https://twitter.com/nikcub/status/315680085468405760

wamatt2• 13 years ago

..and this is probably going to look foolish when it goes to $1000 later this year. Your actions looks like someone trying to pat themselves on the back and reassure the "right decision".

I wish online P2P wagers were legal in the US :) I was watching everything during the "crash". It's already back up to 170 in a few hours. Previous crash took months to recover.

I've been around the block and the same tired and worn arguments were being used at $10 then $20 and $100.

mkr-hn• 13 years ago

You sound like every person who believed in the non-bubbleness of every bubble. What justifies the price of Bitcoins? They have no real value before they're widely accepted, and that won't happen until the price is stable.

nikcub2• 13 years ago

> later this year

I play a much shorter game than that. If it is justified, I will likely jump back in. This isn't the first time i've bought and then sold BitCoins.

It has run out of new buyers to drive it to that level. The support from those who believe in the currency isn't worth more than $100 - much less than that.

Everybody else is an amateur investor who read about BitCoin in USA Today and believes in it for the profit potential, not as a currency. These people scurried at the slightest smell of a price shock.

kokey2• 13 years ago

What I find funny about most of the comments on here and everywhere else is that many of it reminds me of the investment bulletin boards and forums I've been frequenting over the years. There is always a lot of people talking the price up (since they are invested in it), and when there is a dip it is a 'buying opportunity' (so that others can buy and help the value of their holdings)

What to me the most striking is the firm belief that demand will keep on growing, just like people believed property prices will keep on going up since the population is growing and land is finite. Sure, but demand spikes can still price these things too high.

lucb1e• 13 years ago

> What to me the most striking is the firm belief that demand will keep on growing, just like people believed property prices will keep on going up since the population is growing and land is finite. Sure, but demand spikes can still price these things too high.

I don't think anyone really expected it to go up in one straight line all the way to the value that it should have during mainstream usage.

mikkom• 13 years ago

If I read that chart correctly, price fluctuated from 266 to ~100 during one day?!?!?

That tells a bit about the correlation of volume and volatility.

akrymski• 13 years ago

I'm afraid bitcoin will always be too volatile to be used as a currency because it's not backed by anything, and can't be inflated/deflated. The government actually serves a useful function by controlling money in circulation, even though it's not backed by gold anymore, at least it's stable (as long as inflation rates are maintained) which allows it to be used as currency. Sure everyone complains that USD is being printed, but at least that gets people spending - using the currency, instead of hoarding/saving which is what's happening with BTC. At current levels of volatility, merchants will abandon the currency.

Perhaps there's a some theoretical solution out there, whereby the inflation rate of BTC is a function of volatility ... ?

Bitcoin falls from $266

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