Bitcoin crashes over 25% in 24 hours, under $180

http://bitcoinity.org/markets

by TylerE • 12 years ago

193 312 12 years ago

bitcoinity.org

jhildings• 12 years ago

Low was 152 at Bitstamp, quite a dump https://bitcoinwisdom.com/markets/bitstamp/btcusd

gii• 12 years ago

If you see the trend, it is definitely sinking...

derefr3• 12 years ago

Huh. Does this have anything to do with the 1.25-hour mining gap that occurred on Monday?

atian• 12 years ago

No. It's all speculation.

hueving5• 12 years ago

The majority of bitcoin transactions are speculation. If you ever purchased or sold bitcoin because you expected a price appreciation/depreciation, you were speculating.

There was a very small percentage of the market using it to buy online goods that wasn't speculating, but it's small representation is the reason the price is so unstable.

sanswork30• 12 years ago

Not really surprising. 2014 was meant to be the year of bitcoin and it flopped as far as the general public was concerned. Bitcoin picked up some more merchants but they almost universally saw disappointing sales or dramatic drop offs(Overstock the poster child which at one point was claiming serious expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end of their claim).

Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures.

I don't think Bitcoin is dead or even close to dead but I'm pretty sure we've seen its peak.

Unlike the previous bubbles this one was in full sight of the general public with constant media coverage. It's gone to $1000 had most people(in western nations) learn about it and respond almost unanimously with 'Meh'.

Hermel2• 12 years ago

400 million of venture capital has flown into Bitcoin startups in 2014. This money is used to improve Bitcoin and to build new services on top. It's not over until we have seen what comes out of that.

sanswork30• 12 years ago

Square alone has raised more 50% more than that. VC money in an industry doesn't guarantee success.

Look at the services built too. Mining companies and exchanges. Tell me how those are going to draw in new users?

curiously• 12 years ago

likely that money will never be recouped.

people throw at money at anything.

sz4kerto• 12 years ago

That's actually a quite tragic number considering that the Bitcoin market cap is around 2.5B, if the other poster in the thread is right. It is a serious disparity at the moment.

xorcist• 12 years ago

"Was meant to be" amounts to your own view. The software isn't even called 1.0 yet, and the core developers all say the important applications are a couple of years away.

Yes, Bitcoin was probably hurt by the mania surrounding $1000. Had it gone to $180 from $30, without the spike, there would be calls of tulip mania instead.

Is it too early to build applications on top of Bitcoin? No, I don't think so, some wants to be in early. But to call "the year of" on what amounts to beta software and VC backed startups is a bit much.

sanswork30• 12 years ago

"Was meant to be" based on the claims of all the leading people in the bitcoin world outside of Gavin. Barry Silbert has been telling everyone about how Wall st was coming in 3 months since Nov 2013. Go back to January 2013 posts on /r/bitcoin to get a feel for what people expected of the year. With the exception of more merchant acceptance it has failed all those expectations.

No one cares what version the software is and that you would think anyone does is one of the problems with the Bitcoin community. Bitcoin had its chance to impress the general public and get them on board when it had all its media attention this past year and it failed.

quonn• 12 years ago

It's not beta software, it has been running for years and not much has changed. It has constantly lost value/trust for one year now. I can't think of a piece of software that is clearly _losing_ momentum (especially if it's beta) and then, magically, after 1.0 things turn around.

bdcravens• 12 years ago

The software isn't even called 1.0 yet

Neither is node.js, yet tons of successful startups run on it.

For years, Gmail was still "beta". If it had a major security leak, "it's beta" would mean little. It would still qualify as a failure.

roel_v2• 12 years ago

I'm hearing echos of 'x will be the year of Linux on the desktop' in these discussions...

IvyMike2• 12 years ago

most people(in western nations) learn about it and respond almost unanimously with 'Meh'.

I have very mundane needs, and I've never figured out a compelling case for me to use bitcoin. In general, it's always been more trouble than convenience.

I know there are people with exotic needs, but I think the majority of people are more like me.

throwawaymsft3• 12 years ago

When was the last time you transferred money to someone (esp. out of country), how much did it cost, and how long did it take?

Now, imagine you're poor, your family lives abroad, and a $20 fee on a $500 transfer is indeed a big issue.

There are usability concerns (a bitcoin ATM to deposit money and have it sent to an address would be nice) but the use case of near-zero, same-day money transfers is enormous. In the affluent western world it's strange to imagine that someone could depend on your speedy transfers and that even an extra $20 would go a long way.

politician• 12 years ago

a 3rd of the lower end of their claim

$5M USD in Bitcoin sales is pretty astonishing, actually.

EDIT: 1/5 of $15M is still pretty astonishing. I expected something around 250K in BTC-denominated sales.

sanswork30• 12 years ago

I made a mistake in typing that it was $3m. 1/3rd of which was in the first week. I'll correct it above.

justincormack2• 12 years ago

Well the money laundering from Silk Road and Silk Road 2 etc (eg $70k on a Tesla) was probably much of it.

roel_v2• 12 years ago

$3M in sales is the yearly turnover of a small local bakery chain with a few retail points. Every village of more than 5000 people has several companies with this turnover. $3M is nothing. For a retailer of low-margin goods like Overstock, they must have spend more on implementing bitcoin payments than they made on the sales that were paid with them, and that's not even counting costs of converting back to $ etc.

ema• 12 years ago

In the case that bitcoin succeeds we shouldn't expect it to be a smooth ascend. After the dot-com bubble it too seemed like we had seen peak internet. A bunch of people underestimated how hard it is to do something useful with bitcoin, that doesn't necessarily mean that it will be a failure. I'm not confident that bitcoin will succeed, but neither am I confident that it won't.

EricBlair• 12 years ago

"2014 was meant to be the year of bitcoin and it flopped as far as the general public was concerned."

"as far as the general public was concerned" :) Yeah, they were too busy watching the big bottom Kim and losing their home.

"(Overstock the poster child which at one point was claiming serious expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end of their claim)."

Did you see how poorly Amazon did? They're a much larger and better store. No coins on Amazon.

"Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures."

As are oil companies. So goes the world. Isn't linear let alone vertical. Two steps forward...

What would those, 'more profitable ventures' be? You of course don't say because those miners aren't good for anything else.

"I don't think Bitcoin is dead or even close to dead but I'm pretty sure we've seen its peak."

If you're pretty sure, you would say why, but you don't. Apparently cirucular logic is big on the HH. That and or Tourette's.

sanswork30• 12 years ago

"as far as the general public was concerned" :) Yeah, they were too busy watching the big bottom Kim and losing their home.

They are the ones that matter when you're trying to promote a new currency. And yes they don't care.

Did you see how poorly Amazon did? They're a much larger and better store. No coins on Amazon.

I don't understand what you're trying to say here?

What would those, 'more profitable ventures' be? You of course don't say because those miners aren't good for anything else.

For Vault of Satoshi it was apparently streaming video.

If you're pretty sure, you would say why, but you don't. Apparently cirucular logic is big on the HH. That and or Tourette's.

I've said why. You are throwing out a lot of personal insults here to cover up the fact that in all your posts you've added zero content. You've attacked things that people have said without providing counter points and insulted them to mask your lack of content.

celticninja7• 12 years ago

this is hugely disingenous.

2014 was meant to be the year of bitcoin

You obviously base this off price alone. If you look at startups based around bitcoin or the blockchain, if you consider that regulatory clarity has or is being provided by most major economies, if you look at transaction volume, feature developement etc then 2014 was a good year for bitcoin.

Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures.

One cloud mining service (CEX.io) has suspened cloud mining operations. What other mining companies have closed? The hashrate has fallen recently but if lots of mining companies(as you suggest) have closed we would have expected a much larger drop.

As for exchanges shutting to pursue other more profitable ventures, this is 1 exchange (Vault of Satoshi) not a huge exchange by anyones metrics. You said exchanges (plural) which others?

Unlike the previous bubbles this one was in full sight of the general public with constant media coverage. It's gone to $1000 had most people(in western nations) learn about it and respond almost unanimously with 'Meh'.

The general public may have, investors and people that understand tech have not responded in that way at all. If you asked the general public about the internet in 1990 they would have said meh!, those same people now bank online, shop online and communicate online. Do they care about the internet? No, but at the same time could they bare to be parted from facebook?

Bitcoin will become widely used and adopted, whether consumers know they are using it or not is another matter.

sanswork30• 12 years ago

I don't base it off price, I base it off adaption and public interest of which outside of new merchants there has been no indication of any growth(and I'm pretty sure if you started subtracting merchants who no longer take it or who don't have their staff trained on it it would be shrinking as well). Bitpay has shown now growth in processing numbers($1m/per day) for almost all of 2014.

Transaction volume is a ridiculously bad metric to judge growth. You want to prove growth get coinbase and blockchain.info to release MAU figures. They won't of course for obvious reasons.

One cloud mining service (CEX.io) has suspened cloud mining operations.

HASH profit, PETAmine, Hashie, Coins-miner are the first few I found after a quick look for more names for you.

Also Cointerra for mining equipment.

As for exchanges shutting to pursue other more profitable ventures, this is 1 exchange (Vault of Satoshi) not a huge exchange by anyones metrics. You said exchanges (plural) which others?

The other company I was thinking of was Delta Financial. Not an exchange.

The general public may have, investors and people that understand tech have not responded in that way at all.

Except they have. Look outside of bitcoin forums for the general feelings towards bitcoin some time. It is almost universally negative especially in tech and finance circles.

?If you asked the general public about the internet in 1990 they would have said meh!, those same people now bank online, shop online and communicate online. Do they care about the internet? No, but at the same time could they bare to be parted from facebook?

Luckily though we have the internet now which has accelerated the spread of new ideas and products on it. We're not dealing with a pre-internet world anymore so comparing them is silly.

Bitcoin will become widely used and adopted, whether consumers know they are using it or not is another matter.

If consumers don't know they are using it then there is no reason for it to be used. You think banks can't speed up their transfers to be instant if there is any pressure without using bitcoin?

tribaal12• 12 years ago

Yeah, as much as I like the concept of bitcoin (and the blockchain), I don't see adoption becoming anything more than anecdotal.

No interest rate, and you have to secure it yourself? No thanks. My "big bad bank" guarantees me at least a small interest in saving money, and if my card is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm happy to pay some transaction fees ("extortion!") to get that kind of insurance.

Bitcoin is the electronic version of "let's buy a lot of gold and stash it somewhere".

EDIT: Burn karma, burn. Ah well.

hueving5• 12 years ago

Bitcoin is the electronic version of "let's buy a lot of gold and stash it somewhere".

It's even worse than that because normal people at least have a decent idea of when their gold is secure. A non-techie just has to trust that the online bitcoin provider or author of the wallet is doing what he/she really says and in a secure fashion.

tribaal12• 12 years ago

You're completely right.

tlrobinson5• 12 years ago

Dedicated hardware wallets help to some extent, and they already exist and work (e.x. Trezor). It's hard for people to understand backups, security updates, "don't open that funny-cat-photos.exe file from your aunt", but easy to understand "if this device is lost or stolen, my money is gone"

You have to trust the hardware (open source hardware/firmware will be an improvement), and verify addresses out of band (see https://medium.com/@octskyward/why-you-think-the-pki-sucks-b... for solutions), but otherwise you can safely use it on even a malware infested computer.

As a bonus, it can be protected by a pin (with firmware-enforced rate limits). And backups of the seed can be made in case the hardware wallet is stolen/lost/destroyed. They can even be split up using Shamir's Secret Sharing.

(Eventually mobile devices will be able to accomplish the same thing. You could imagine a more advanced version of Apple's "Secure Enclave" that presents the user with a UI (rendered by the Secure Enclave coprocessor) to authorize transactions)

facepalm5• 12 years ago

Actually I find the problem of stashing gold very tricky. A bank vault seems like a bad idea because of the history when the government seized the gold and people weren't allowed to open their bank safes without a policeman.

Hiding it at home seems risky because of burglaries.

I haven't found a solution yet, that's why I don't own any gold.

With bitcoin, at least I can spread the risk, like putting a part of the "secret" into a bank vault, hide part at home, at a friends house, whatever. The risk of a simultaneous burglary in two unrelated houses seems low.

olalonde6• 12 years ago

Although Bitcoin is often marketed as such, it doesn't necessarily compete with banks. I personally see it as a currency which competes with other currencies. It's a bit like paper cash except that it can be stored digitally. I don't see what would prevent "big bad banks" (although unlikely) from adopting BTC as one of the many currencies they support and offer all the protections and services they offer with other currencies. This is actually the direction that Coinbase seems to be taking.

shittyanalogy• 12 years ago

It's not federally insured.

tribaal12• 12 years ago

Banks can already transfer fund between themselves electronically and efficiently. And a bank account is exactly storing paper currency digitally.

Again, I don't see what the innovation here is, except the technical aspects (the blockchain as a distributed system is very clever).

frozenport• 12 years ago

Bitcoin is the electronic version of "let's buy a lot of gold and stash it somewhere".

It's even worse than that because gold is palpable can be used to make things.

jasonisalive15• 12 years ago

Gold's value in industrial uses is a fraction of its market value, just like the value of a dollar bill for industrial uses (wallpapering, rendering to make paper, burning for heat etc etc) is a fraction of its market value too. Ultimately all currencies are overvalued because they represent the stored savings energy of all deferred purchases. One commodity must fulfil this function (allowing people to defer the completion of trades) and that commodity must be valued above its "inherent" value.

teekert2• 12 years ago

I think it is expected that relatively new currencies have a turbulent period of a certain time. And as for interest, here in the Netherlands it is less than inflation so you loose money (interest on savings accounts is about 1%, inflation is between 1 and 2% over the past years).

Bitcoin has or will have its niche, perhaps it will not be for your savings but sharing money with friends using a bitcoin wallet app is by far the most frictionless paying experience I ever had. I think you opinion is on the spot though... for now.

rimantas• 12 years ago

What are the factors which could make bitcoin less turbulent later? As for most frictionless exprience: you do not need new currency for that. My bank offers 'quick send' functionality in their app, basically you just enter amount and select whom to send money to, that's it. You don't even have to login.

brazzy6• 12 years ago

Has there ever been a time and place where interest on savings accounts was above inflation? I rather doubt it.

adnam• 12 years ago

"I don't see adoption becoming anything more than anecdotal."

Well the value of the whole blockchain is over $2.5Bn, so it's more than anecdotal. http://coinmarketcap.com/

Thomashuet• 12 years ago

Can you find another mainstream currency whose value is not several orders bigger? $2.5Bn is anecdotal at the world scale.

JoachimS2• 12 years ago

And Dogecoin has a value of 12 MUSD. A currency invented for the such wow.

The value of BTC speaks more about people prepared to jump into anything that seems to be the next fast way of making money than the long term viability of it.

tribaal12• 12 years ago

2.5B is the price Microsoft paid for Minecraft.

There is approximately 1.3 Trillion Dollars in paper/coin form, according to the Federal Reserve Bank of New York: http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html, and that's just USD.

So yeah, anecdotal.

FatalLogic6• 12 years ago

The 'Market Cap' of bitcoin is more a reflection of how much people believe in its future value. It's not a very good indicator of current adoption.

For adoption, you'd want to look more at data like transaction numbers, transaction value, merchants accepting it and order statistics from retailers. There's not much data, though.

nickik• 12 years ago

Its very easy to imagen a case where you lend your bitcoins to some institution, the problem is that there is not yet any investment in the bitcoin system.

honeybooboo1232• 12 years ago

I don't own any bitcoins, but felt like pointing a couple of things out.

Whatever shreds of interest your bank gives you will be way, way less than the inflation you're experiencing. In other words, your money's purchasing power keeps decreasing even if you're getting some interest on it, ie. you're losing your wealth.

Bitcoin doesn't experience inflation like that, so it should be a better store of value than your fiat currency. I said "should" because bitcoin has been in a speculative bubble, and just came down even more. Right now it's still just a speculative asset, but it could serve as a stable currency.

Your card is irrelevant.

Transaction fees are not extortion. They're a massive skimming operation inflicted on the masses, because the masses have no choice but to eat them. Thank your state-maintained bank cartel for that.

tribaal12• 12 years ago

Your card is irrelevant.

My card is very relevant.

If someone steals it, they can use it but it doesn't impact me in any way except having to wait for the new card to come.

If someone steals my bitcoins, it means they have a copy of my private key, and there is nothing I can do about it. Zich. Nada.

Transaction fees pay for this insurance (among other things, but still).

sanswork30• 12 years ago

Bitcoin doesn't experience inflation like that

Bitcoin inflation is at 10% per year right now not even considering the dropping price.

redthrowaway3• 12 years ago

There are no grounds to say that BTC should be a superior store of value. Aside from its very public history of being an absolutely abysmal store of value, it also has no central bank tending its value, as fiat currencies do, and no substantial trade denominated in it, which is what gives fiat currencies value in forex markets. It is solely a speculative vehicle. It sucks at commerce and it sucks at investment.

Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions. It's not a bad intermediary for transactions between people using different currencies, provided the third party transaction service has legal, fast, and cheap ways to convert to and from fiat in both countries. But then, it's not so much a currency as a transport layer with added uncertainty.

I've yet to see a compelling case for BTC as anything but TCP/IP for dollars or a wayback machine for anything you want. It's bad for savings, god-awful for investment, and useless for [legal] commerce.

davidw2• 12 years ago

the inflation

Not a lot of that going around the developed world at this point in time, though, is there?

pjc507• 12 years ago

There is a "cost per transaction" in bitcoin as well: https://blockchain.info/charts/cost-per-transaction

It costs a certain (very high!) amount of real electricity to process a block. This plus an incentive has to be paid to miners. Miners have to pay for their electricity in real local currency. Therefore for every transaction block processed either someone "buys in" ~$10 worth of bitcoin or the outstanding value of all bitcoin drops by that amount.

sgt101• 12 years ago

One bitcoin application that is reasonable is as a transferable karma token.

olalonde6• 12 years ago

a transferable karma token

That's arguably the definition of money.

bigbugbag2• 12 years ago

You may be mistaken here, the day your bank disappear all your deposits and interests disappear with it. You probably this cannot happen which is what people believe until it happened to them, and this happened all around the world.

In Europe a 2013 law is now in effect which basically states no more bank bail-outs, from now on it will be bail-ins. In other words if a bank fails it will use its customer's deposits to cover its debt.

hueving5• 12 years ago

Not in the US. If a bank fails, the FDIC will insure each account for 200 or 400k (can't remember which).

rplnt• 12 years ago

Bailing out bank and paying out deposits are two different things. Even in Europe your deposits are "protected" and will be paid out in the even that the bank can't. To a certain amount that is.

simonh3• 12 years ago

...all your deposits and interests disappear with it

The US, EU and many other countries have deopsit insurance* schemes that limit risk to depositors. You may not get all your money back if you have large deposits, but for example in the EU you're generaly guaranteed to get at least the first 50,000 Euros.

* http://en.wikipedia.org/wiki/Deposit_insurance

lxcid• 12 years ago

This comment is why sometimes we techie are kinda delusional.

We despise existing solution thinking that we could and should disrupt everything. Tear down everything and build everything from scratch; Our way or the high way attitude.

Bitcoin definitely have some innovations here and regardless of what happen in the future, it's impact will be felt. It was a great experiment, probably the greatest social experiment of the 21st century. The best is that it's self contained and sandboxed. Allowing it too roam freely in unchartered water.

But the financial industry is not as un-innovative as we hope they are. To innovate means you have to experiments, to experiment mean there will be failures. Over the years we seen financial industry fail and fail again. In fact, the incentive to "innovate" is so high, you constantly see the cat and mouse game between the regulators and the industry players, and the revolving doors of the prison cells never really stop.

While the greed and failure of the financial industry has irked us and certainly bred a level of mistrust. Trust in the financial system is at the highest level in human history. You have to understand that they are no stranger to mistrust and throughout human history it is a recurring problem they have to solve over and over again.

The current floating currency and central banks structure which provides deposit insurance among many other things are the result of many iterations over thousands of years. This system run the global economy, it scale is unimaginable large in human scale. There's a lot to appreciates.

Sure there's room for improvements. Many people treats Bitcoin like it must replace the financial system but the problems it facing now is exactly what the financial system had solved. What I'm pretty sure is that Bitcoin's will definitely had an impact on the next iteration of the ever evolving financial system.

The Bitcoin community I have seen fails to recognized the important of trust in finance. Not just trust between computers, but trust between humans. Like the 90's and 00's software industry fails to recognize the important of simplicity and good user experience. The next Steve Jobs of the cryptocurrency is in my believe one who understand these ideas to heart.

There's a lot to celebrate about Bitcoin and what we had done, as I always like take a contrary position. Bitcoin is not a replacement of the existing financial system, it is, or will be if it haven't, part of the system. Thus, the rise and fall of its price is part and parcel. It's kinda exciting to see this great experiment in the running, although I'll dread experiencing it first hand.

As Bruce Lee once said, "In great attempts it is glorious even to fail." I wouldn't consider this a failure but it's definitely glorious.

TheDong4• 12 years ago

It's worse than that. To me, the biggest flaw of bitcoin is that you have to constantly spend energy on it (as in computation power / burn coal) for it to remain viable. As soon as enough people get tired of throwing away money at their miners someone can pull a 51% attack, so everyone must put more energy into their miners to protect their investment... forever.

Over time the amount of energy wasted by bitcoin could become stupendously dumb. We could be using our spare processor cycles to fold proteins or aid in numerous other research, and yet we're using it to allow people to send bits of data to each other without a need for centralized trust.

Compare that to the centralized bank where you have a single centralized trusted source which allows transferring money from one person to another to take no more energy than a modest server and some backups -- far less than the power consumption of a single GPU miner.

The above problem also won't get better. Even after you're no longer mining for new coins, you must keep up the mining volume to protect existing coins and allow transactions to occur at all. I personally find the above to be a fundamental problem with the "proof of work" solution. Sure, on paper you've solved the General's problem, but the reality is that you're throwing massive amounts of energy out the window. Because of that, I think this proof's place should have been to remain on paper.

brazzy6• 12 years ago

Do you have any idea how much energy, work and time is being spent on the infrastructure of regular currencies? Minting, ATMs, secure transport, brank branches, all kind of mainframe dinosaurs running 40 year old COBOL code?

Even if scaled up to global usage, I very much doubt Bitcoin mining would be worse.

davidw2• 12 years ago

Because of that, I think this proof's place should have been to remain on paper.

I'm not really a fan of bitcoin, and wouldn't touch it myself, but I think it's an interesting experiment.

spiritplumber2• 12 years ago

I'd like something like Foldcoin where your proof-of-work is actually doing something beside keeping my home warm inefficiently.

olalonde6• 12 years ago

Proof of Stake is a proposed solution to that criticism https://en.bitcoin.it/wiki/Proof_of_Stake (although not free of criticism itself).

Normati2• 12 years ago

The time to make these complaints was years ago, possibly on the way up a big boom just to show that you're confident in yourself despite the apparent evidence to the contrary. Now that it's going down doesn't mean it was caused by people realizing it wastes power, doesn't scale or doesn't pay interest. These are age old criticisms that haven't stopped the price from still being 10 times higher than it was when I first heard about bitcoins.

throwawaybit• 12 years ago

There's one use of bitcoins, it's a great currency to avoid paying taxes which compensates for the loss of small interests (not saying I'm doing this, but I'm quite sure that some of the users use it for exactly this reason)

tribaal12• 12 years ago

Well, that is a compelling argument I guess...

Bonus points for being honest about it (a rarity) :)

moe18• 12 years ago

Bitcoin is the electronic version of "let's buy a lot of gold and stash it somewhere".

It's also the electronic version of: Be able to move that gold around the globe near instantly, without a middleman, at almost zero cost. And some other quite neat things.

While these features may seem "anecdotical" for many people in the western world, there's also a large number of people in poorer countries for whom e.g. the fees on long distance transactions or not being able to get a bank account are a very real problems.

mikkom• 12 years ago

Be able to move that gold around the globe near instantly

The biggest advantage of gold is that it's value is relatively stable and has been used as a valuable metal since ancient times.

That's quite the opposite of Bitcoin actually.

pliny• 12 years ago

Near instant is a bit (a lot?) misleading, it takes on average about 10 minutes to have a transaction confirmed, sometimes much more.

tribaal12• 12 years ago

I live in Tanzania :)

I think you're overestimating the impact of bitcoin on poor countries by several orders of magnitude. People who don't have access to a bank account now don't have a smartphone, and certainly not a computer either. And internet access is rare and expensive (most people have dumb phones, internet at home is a rarity, and most coffee places charge you for wifi).

On top of that the only way to buy bitcoin here (for now, at least) is to send money through western union to some guy on localbitcoins and of course, that's far from "almost zero cost" or "without a middleman".

I'm not trying to rain on your parade, but the reality is that it's still much, much easier and cheaper to get a bank account than bitcoin here (you can open a bank account in less than an hour, with a minimal deposit of 50$. That allows you to use ATMs and send money anywhere).

So I come back to my original point, adoption is margnial, at best. Especially in poor countries.

mrfusion• 12 years ago

I think if bitcoin dies out, we'll be like that civilization that discovered the wheel but only used it in childrens toys.

oco101• 12 years ago

There are already amazing solutions there in the cryptocurency that gives you interested on your money and has a stable value and much more. The vision behind Bitcoin changed the word this vision give us all hope, but the fact is Bitcoin today has many problems. Instead of trying to fix those things and keep the vision that Bitcoin implemented,alive We try to defend Bitcoin no matter how obvious are its flaws... You can't even mention other blockchain solution you gonna get killed by bitcoin fanboys. We are stuck still defending AltaVista against Google is really sad ... Until this will stop, Bitcoin will continue to fail and drag with it the whole blokchain industry, but it only a matter of time because what's important it the vision that Satoshi gave us NOT who's gonna deliver on it...

bbunix• 12 years ago

Could be something as simple as a russian margin call... commodities in general are having a rough time.

gchokov• 12 years ago

Meh.

sagivo• 12 years ago

bitcoin is dead. long live the bitcoin!

jordsmi• 12 years ago

Time to get more cheap coins

pearjuice• 12 years ago

Which will most likely immediately follow people buying at low and preparing to pump again.

jbverschoor• 12 years ago

bitcoin, just like oil have dropped because energy will be cheap / nearly free soon.

johndevor• 12 years ago

Explain?

dsfsdfd• 12 years ago

do tell? I can see a few game changers, new generation fusion reactors, a renaissance in nuclear, but none of these are just around the corner...

yAnonymous• 12 years ago

If people actually started using it as a currency instead of only using it to trade for other currencies, it would be more stable.

sprobertson• 12 years ago

There's so much that can be done with Bitcoin as a technology, yet people are treating it like a mineral.

Meekro• 12 years ago

They do: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...

ygmelnikova• 12 years ago

Went to purchase $100 worth of Bitcoin back in the day at $0.03 ea. CC didn't go through. Thought I would try again the next morning with a different card. After sleeping on it, decided it was probably a waste of $100.

I'm even less inclined to spend $100 now.

Transisto• 12 years ago

Cool story bro,

teknologist• 12 years ago

bitcoin regret, a sign of the times

whiskyant• 12 years ago

Oh man, lost the opportunity to snag an easy $3M... although I suppose you would've sold it quickly when the price when up and not held until $1k+.

reddytowns• 12 years ago

I wonder if this is due to the Bitstamp fiasco.

Because of what ultimately happened to mtgox, when the bitstamp exchange came back online again, a lot of people probably wanted out as quickly as possible, fearing it to be insolvent.

Since keeping bitcoins oneself is too technical, the easiest path to cut ties with bitstamp would be just to sell, and probably many of them did.

coding4all• 12 years ago

It's amazing how so many people are concerned about the dollar price of Bitcoin. If you believe in Bitcoin, you want Bitcoin and not dollars.

sqrt17• 12 years ago

Not trying to be cynical about this, but: You want nice things, not bitcoins and not dollars.

Currently, more market actors accept dollars (or Euros, or JPY, or UKP) than bitcoin, hence you're closer to the things you desire if you have dollar liquidity than if you have bitcoin liquidity.

Investments, on the other hand, should be neither in dollars nor in bitcoins, because dollars have inflation and bitcoin is too volatile.

jasonisalive15• 12 years ago

If you truly believe in Bitcoin, you believe that a) there is a good chance that in the future USD, JPY, EU, UKP et al. will be worthless relics, ornaments in a history museum that schoolchildren laugh and joke about and b) that the world would be a massively, massively better place if a) were to eventuate.

Your job is to buy as much Bitcoin as you can as cheaply as possible, cross your fingers and try and do whatever you can to make a) happen, while spending at little of your BTC as possible. You hope to profit immensely but you are also excited for how the world as a whole will profit.

If a) doesn't happen, then you basically have to go back to the drawing board for imagining a way for society to progress and you to make some money.

btcthrowaway2• 12 years ago

I mined about 200 BTC in 2011 and I must say, they have changed my live. I still have 150, so during the passed 4 years, while bootstrapping 2 startups, those mere 50 bitcoins I sold have meant that I have been able to keep both companies running. Without those 50 coins, I'm not sure how I would have continued.

But the most important thing was not the value of those 50 coins. Which really isn't that big a deal. It was the knowledge that "I have a buffer, a reserve" and that knowledge has allowed me to make deals in the interest of future growth, instead of short term continuation. I got to decline offers, that I otherwise would have needed to survive.

Now that both companies are making a profit, I have learned how important it is to have a big buffer and I thank Bitcoin for that. I also thank Bitcoin for the financial independence I now have, even though it is an indirect result.

I still watch the markets and hope some other honest hardworking guy out there gets as lucky as I got.

k-mcgrady• 12 years ago

This is nothing to do with Bitcoin. You basically won the lottery. Some people mined or bought Bitcoin, it got a lot of media hype so the price sky rocketed, and then your coins were worth a lot of money. If I bought 200 BTC now and waited a few years I doubt I'd have the same experience. I'm happy for you that you got to use that to help you start a business but it was a lottery win.

pmorici• 12 years ago

"If I bought 200 BTC now and waited a few years I doubt I'd have the same experience."

Why? This is like the 5th or 6th boom bust cycle in Bitcoin and each boom has been bigger than the last. even the current long price decline is not unprecedented.

marincounty2• 12 years ago

1. Thought it was a scam. 2. looked into it and realized I was wrong. 3. Looked into building a mining rig. 4. Worrried about ROI, after energy and hardware. 5. Seems like everyone was mining. 6. Knew I competed with entities with deep pockets. 7. T.V. news started to treat bitcoins like gold quotes. 8. Started seeing bitcoins accepted here. 9. Wish I didn't procrastinate years ago. 10. Glad I didn't invest in bitcoins. 11. I wish it well though. Anything is better that credit card transactions--with their fees. It is still a great idea, and I hope this is just a market fluctuation!

marincounty2• 12 years ago

Read past the first sentence? Or, was the problem TLDR? "One of the days Alice, POW. Straight to Control-Delete!" I was praising the blessed Bitcoins?

gulpahum• 12 years ago

The reason could be that Russia started banning bitcoin websites. https://www.cryptocoinsnews.com/russia-blocked-several-bitco...

moe18• 12 years ago

Cue the standard HN bitcoin thread with everyone explaining why it is dead, why it could never work and why everyone involved with it is a scam or stupid anyway...

jokoon2• 12 years ago

Does it really matter ?

Wouldnt it smarter to use bitcoin as a secure way to make payments, but not to keep as a currency ?

For example, if you want to buy something using bitcoins, you just buy the exact amount of bitcoins you need, you make the transaction, and the people who gets the bitcoins just convert it back to dollar.

To escape the fluctuation of the conversion rate, just open a bank that keeps amount in dollar and only do transaction with a corresponding amount of BTC, depending on the conversion rate. It's an easy way to diversify payment alternative, while being pretty safe and avoiding fluctuations of BTC.

I don't see any other way to use bitcoin. It's pretty hairy, but it might be a viable alternative to paypal for example.

moe18• 12 years ago

Does it really matter ?

For BTC as a currency it doesn't matter at what price it's going to stabilise, as long as it reaches an equilibrium.

onion2k• 12 years ago

Essentially you're proposing that BTC is used as'digital cash' rather than 'digital currency'. That's what Bitcoin is actually for - a cryptographically secure way of privately and anonymously transferring value between parties - rather than a fiat currency that has implicit value in itself that people can speculate on.

pjc507• 12 years ago

You incur two sets of transaction fees and bid/offer spreads, so it's quite a pricey way of doing a transaction. And you lose any prospect of getting your money back in the event of a dispute.

jokoon2• 12 years ago

At least there's more competition possible between people who sell BTC. right now there's only paypal.

stretchwithme• 12 years ago

Are oil and bitcoin becoming less valuable? Or is the value of the measuring stick, the dollar, changing?

If you measured how tall your kid is every day and he's 5'1" one day and 4'8" the next and 6'1" the day after that, there just might be a measurement problem.

For whatever reason, the end of quantitative easing or whatever, the dollar is getting stronger.

adventured• 12 years ago

The dollar began running right around July 1st (the effect of the Fed shutting down QE):

http://finviz.com/futures_charts.ashx?t=DX

Oil began falling at the same time:

http://finviz.com/futures_charts.ashx?t=CL

And bitcoin also began the current downturn about the same time. I'd be very reluctant to link the dollar's increase with any of the decrease in bitcoin, even though it's an interesting discussion point, with some money potentially flowing out of bitcoin and into dollars (since it's gaining value, and likely to gain more if the Fed proceeds to raise interest rates this year).

That said, gold on the other hand has not taken a beating since July 1st despite the dollar's significant move:

http://finviz.com/futures_charts.ashx?t=GC

xkarga00• 12 years ago

Oil price has also fallen over 80% during 2014 but I guess it's more fun to talk about a "crashed" technology in here.

pg314• 12 years ago

The oil price fell closer to 50% than 80% in 2014: WTI went from $110 to $53.

simias• 12 years ago

So I can't find anything in the comments: what's the cause for this sudden crash?

restalis• 12 years ago

This could be it: https://news.ycombinator.com/item?id=8885075

mikeyouse2• 12 years ago

I think the most likely scenario is the Butterfly Labs theory;

http://www.reddit.com/r/Bitcoin/comments/2sdwf8/butterfly_la...

Basically, BFL pre-sold a ton of miners to people, never actually sent them, mined a ton of bitcoin 'testing' them and were then sued when they refused refunds. The FTC got involved and told them to send customers their money so at some point, BFL has to liquidate a large number of coins to meet those obligations.

People have tracked large portions of the sell pressure to known BFL wallets and the rest of the downward pressure is probably just follow-on selling continuing the yearly trend.

lordnacho• 12 years ago

From what I can tell, it looks a lot like the oil price collapse. Not that it's directly connected, because BTC holdings are still very low and not really part of any serious investor's portfolio.

But it looks like a lot of people have invested in extraction capacity, and they need to sell to remove their BTC risk. They're buying the mining equipment in dollars after all. And they know that faster and faster chips will come on the market.

On the other side of the equation, demand doesn't seem to have increased quite as much as expected. You still have to go out of your way to find something that you can buy with BTC. Heck, I have a few BTC and I've never used them for anything, and never come across a vendor of something I wanted who wanted BTC for the item. In fact, there are only three categories of people I've met who were interested: nerds, people who wanted drugs, and people who wanted to launder money.

pjc507• 12 years ago

Izabella Kaminska of the Financial Times has been following this: http://ftalphaville.ft.com/2015/01/09/2084052/bitcoins-upcom...

XorNot3• 12 years ago

With the principle difference being that oil will go back up in price, provided you can store it, which is one of the reasons speculation on oil stopped about a year and half ago admidst price hikes: speculators literally started running out of space to store it.

The ability to hold onto Bitcoin offers no such guarantees.

rurban• 12 years ago

Great, time to buy!

rajat2109• 12 years ago

Bitcoin is the currency of future. It looks promising but to change people's mindset and to get accepted widely, it will take some more time. We just need to be patient and believe in this future currency.

heyimwill• 12 years ago

On December 23 a Missouri court ordered a winddown of Butterfly Labs and they began a refund plan.....now here is my theory...I was looking at the blockchain and came across a 5000 btc utxo taken incrementally down to 0....it was sold off continuously. It took me to here. https://blockchain.info/address/12WRnQR85ZUT7dhmaHBNL5dde2QL...

Activity on that address started back up on 12/23 the day the courts provided control again. Ive tied it to butterfly labs because a OP_RETURN said paycoin.com linked to Josh Zerlan an employee of butterflylabs.

What is scary is another 90000 unspent coins reside here also controlled by butterfly labs. https://blockchain.info/address/1B9KrM7bjhJ42qJSWr1KJrNTAP1S...

I think youll have butterfly labs forced to continue to sell the remaining 94000 coins in this court mandated wind down in order to provide refunds to those customers....That is a ton of coins to continuously dump...it exceeds 24 hour volume on the largest exchange.

rasz_pl2• 12 years ago

Gee, almost sounds like Butterfly Labs was a scam on top of bitcoin scam. Sell preorders for a money printing machine, build said machine, and sit on it printing money for yourself.

jasonisalive15• 12 years ago

If you truly believe in Bitcoin, this is just one more insignificant blip on a path, driven by inexorable network effects, that leads to Bitcoin becoming the sole world currency and savings commodity, leaving the fiat currency milieu of 2014 in the dustbin of monetary evolution. A chance to buy at a relative discount and nothing more.

rasz_pl2• 12 years ago

are you talking about Beanie Babies?

jasonisalive15• 12 years ago

No, I'm talking about something which has the potential to be the world currency.

llSourcell• 12 years ago

its not about bitcoin, its about the blockchain.

CyberDildonics4• 12 years ago

It seems that most people still don't fully grasp why bitcoin is valuable or for that matter why fiat or gold are valuable. The best explanation I've seen is actually the series of slide the Winklvoss twins put together (when they were taking a break from creeping everyone out).

https://winklevosscapital.com/value-investors-congress-prese...

chuckkir2• 12 years ago

I was hopeful, but it doesn't explain why gold has value. It just starts with the assumption that it does. I'm afraid that sooner or later folks will realize it's just a shiny metal with little intrinsic value, much more abundant than many elements.

CyberDildonics4• 12 years ago

It absolutely explains that bitcoin, gold, and fiat all have value because they are strong in various properties of money. Gold is scarce, durable, fungible, portable etc. all to a certain degree. Not much money is history has had 'intrinsic value' so their intrinsic value becomes the properties of ideal money that they posses.

If water was scarce, it would probably make good money. But water is both abundant and not atomic so it can be created.

logic_geek• 12 years ago

People might want to ask the question why the Bitcoin price goes down so much. One reason might be that keeping up network security is too expensive with Bitcoin (proof of work) and the miners have to sell their bitcoins to cover their electricity costs. Now if there is not enough demand for bitcoins then the price declines since miners continuously have to sell to cover costs. This also has been laid out here https://www.youtube.com/watch?v=_-TLA3j-ic4 As the guy in the video points out there is not only one way realize blockchain technology and proof of work surely is not the least expensive. Proof of stake systems mitigate the "high cost for network security problem". I suspect that one or more proof of stake systems will be part of the next round of innovation (and the next bubble) based on blockchain technology.

jerrycabbage• 12 years ago

POW's waste has always disturbed me. If BTC was inherited as the global store of value it would just help destroy with planet with the emissions required for security.

Bitcoin crashes over 25% in 24 hours, under $180

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