Bitcoin Trends in the First Half of 2015

https://blog.coinbase.com/2015/07/15/bitcoin-trends-in-1h-2015/

by ntomaino • 11 years ago

146 105 11 years ago

blog.coinbase.com

ceallen• 11 years ago

No mention of the 'stress test' that's brought the network to its knees the past few days, or of the soft fork that resulted in suggestions to wait for 30+ confirmations? Puff piece.

C'mon Coinbase, at least spin them into a '<X> is actually good for Bitcoin, because <Y>' format.

bendykstra• 11 years ago

Those events seem outside the scope of an article that is about multi-year trends.

bduerst• 11 years ago

For those who don't know, the stress test was where a company tested what would happen if someone filled the network with transactions.

The results were not favorable for bitcoin and highlights key design problems -> some transactions cost $280/transaction to put through, and other transactions that had <$20 fees were not processed and stuck in limbo.

theseatoms• 11 years ago

Are there plans for a second stress test? It probably doesn't make sense to run it again until we have reason to expect different results.

Other than increased block-size, is there something that could improve these results? More full nodes?

mths• 11 years ago

The results were not favorable for bitcoin and highlights key design problems

Some would disagree, considering the system kept functioning exactly as intended under the circumstances imposed on it.

Personally I agree that the whole thing is troubling, but was anything really discovered here?

Considering that the price has been rising, if you believe in prediction markets, these design problems could likely be overcome. After all, people have been working on it since long before any of these stress tests were performed.

petertodd2• 11 years ago

Huh? $280/tx?

Maybe some people paid fees that high by mistake, but no-one had too. Equally $20/tx fees are still ludicrously high by about three orders of magnitude.

Bitcoin miners prioritize transactions from highest fee to lowest; the attackers never sent transactions with more than 0.2mBTC/KB fees, which works out to about $0.01/tx. In other words, if you paid more than about $0.01 in fees, your transaction was unaffected by the flood.

The problem was a lot of badly written Bitcoin wallets don't let their users set fees at all, nor do they let you resend transactions stuck due to low fees. This is an easily solved problem, and fortunately we're seeing wallet authors fixing it. This should have happened years ago... but a lot of people are heavily invested into the idea that Bitcoin transactions are "free", which just isn't true...

You may find my writeup on the flood useful reading: https://gist.github.com/petertodd/8e87c782bdf342ef18fb

williamcotton• 11 years ago

On the contrary, the network worked as expected. A somewhat costly stress test resulting in a backlog of transactions that were prioritized by fee, just as predicted.

The backlog has since been drastically reduced and high priority fees are back in the 50,000 satoshi per kb range [0]... the average Bitcoin transaction is about 250 bytes, so 12,000 satoshi per transaction, or roughly 3 cents. Low priority transactions of < 1 cent are still somewhat easily confirmed [1].

Even during the stress test I saw high priority fees hovering around the 85,000 satoshi/byte range, and never in the 1,000,000+ satoshi/byte range that you're talking about.

What's impressive is that the price [2] of Bitcoin was completely unaffected by a bit of weather [3] on the network and in fact gained in value during the entire ordeal.

Public data storage like the ledger maintained by the Bitcoin blockchain has a definite cost and it makes sense that prices would rise as demand increased. The blockchain is a scarce resource. It might make sense for transactions fees to end up around the price of a postage stamp at some point. It's hard to predict how this economic system will continue to evolve.

What's most important is that the ledger continues to be maintained, eventually consistent, secured by lots of hashing power, 100% verifiable and has an open and equal access to read and write as it ever did.

Not every transaction between two parties needs to be recorded on the blockchain. The blockchain is for clearing and settlement. Between lightning networks [4], private federated offchain networks for batch transactions, and possibly public sidechains (if they every materialize), there's a number of approaches that can help facilitate micropayments and other situations that require very low fees.

[0] https://api.blockcypher.com/v1/btc/main

[1] https://blockchain.info/tx/417d1c3ada3744910503d58b464070531...

[2] https://blockchain.info/charts/market-price?timespan=30days&...

[3] https://blockchain.info/charts/n-transactions?timespan=30day...

[4] http://rusty.ozlabs.org/?p=477

xirdstl• 11 years ago

Interesting. How many transactions were needed to 'fill' the network?

CyberDildonics• 11 years ago

First, it didn't highlight design problems, only very inefficient prioritizing from clients. Second, those numbers are ridiculous.

essofluffy• 11 years ago

I remember paying about 2 cents in fees for a transaction and having it go through within the next two blocks during this stress test.

herendin• 11 years ago

some transactions cost $280/transaction to put through

The stress 'test', (or was it really an attack?), is interesting, though it may be too recent to be included. But where did you get that $280 from? That figure sounds ridiculous.

Can you give the source?

contingencies• 11 years ago

Trends as I see them: decreased media interest, loss of trust in the Bitcoin Foundation and by extension the core development team, lots more government surveillance of related businesses (helped by a stabilization of centralized exchanges), still virtually no banks globally willing to work with Bitcoin-related companies, failure to achieve any real 'killer app' at scale: beyond tax or forex-restriction evasion or international drug distribution.

On the plus side, scope creep seems to have slowed, more people are aware of the overall concept, and Merkle trees have begun to be applied experimentally to additional problem domains.

PS. Reading between the lines, new user growth has slowed dramatically at Coinbase. IIRC they sent an email this week begging for referrals, offering $25/signup. And like all startups, it probably defines users as people who once gave them their email address, rather than actual regular users of some nontrivial part of the service. "A trillion wallets!" indeed.

PPS. What percentage of increased Bitcoin transactions are due to the use of automated gambling sites for Bitcoin-trail erasure type money laundering through numerous microtransactions?

joeyspn• 11 years ago

While what you say is true, there are also increasing good vibes because of news like this one...

http://www.businessinsider.com/bnp-paribas-bitcoin-blockchai...

These are the kind of "news" and media attention that matter. The big guys are starting to bet heavily on the technology.

davidgerard3• 11 years ago

That report is literally "one analyst mentioned it in passing in some report".

petertodd2• 11 years ago

loss of trust in the Bitcoin Foundation and by extension the core development team

Note that the supermajority of members of the core development team have never received funding from the Bitcoin Foundation.

xasos• 11 years ago

47% of Coinbase users are now from countries outside the US

I wonder what the country breakdown estimation is for all Bitcoin transactions. I would guess more international use than Coinbase numbers

vdnkh• 11 years ago

Wow, the first graph in this article looks exactly like the graph of the bubble phenomenon (http://i.imgur.com/Amon5PR.jpg). I guess stability will increase, which is a good thing.

koonsolo4• 11 years ago

Great graph, haven't seen this before. Although according to that graph, bitcoin hasn't reached 'despair' yet :(.

ewillbefull• 11 years ago

I believe that in all of bitcoin's major bubbles, it has never crashed below the previous bubble's high.

sgt101• 11 years ago

When all the greek and chinese people who have jumped in (see the transaction spike in the article) in the last two months discover that no one will buy their coins then we will see the trough. I have to say though, I genuinely did not see the switch out of the recent past coming - good luck to the folks who did, and commiserations to the folk switching in ...

dwaltrip• 11 years ago

This graph shows the full picture in a little more detail: http://bitcoincharts.com/charts/bitstampUSD#rg1460zigDailyzc...

To me, it looks like January 15, 2015 could easily have been the final moment of despair in the the 2014 downtrend. Of course, only time will tell.

Sidenote: That bubble graph has been posted hundreds of times (literally) on the bitcointalk.com forums and reddit over the past few years, for different bubbles even: 2011, 2013 part 1, and 2013 part 2. The posters often proudly & spitefully think they are first to see the resemblance, and are usually received pretty poorly... It is an inside joke at this point. So I found it entertaining to see the comments in this thread here (not trying to say anything negative about the posters here :)

dnautics3• 11 years ago

key differences: The downslope in most bubbles is twice as steep as the upslope. For bitcoin it was half as steep. Bubbles typically drop below the pre-bubble price.

One possible reason for the differences: Bitcoin speculation is less of a leveraged instrument than most other speculative activities. This is about to change as Bitcoin makes it onto ETFs (where leveraged investors can play more easily) and if potentially leveragable contracts (like ripple) gain in popularity.

That is, if you believe Kindleberger's thesis in "manias, panics, and crashes".

slg• 11 years ago

As global events that highlight the restrictions of closed banking systems and insecure data security practices (e.g. the Greece debt crisis and recent United States Office of Personnel Management data breach) continue to occur, we believe that bitcoin is likely to be adopted by more people looking for digital money that is global, secure, and inclusive.

How would Bitcoin have prevented or mitigated the OPM hack?

mikeash4• 11 years ago

It's possible that one could use the data leaked in the OPM hack to hijack someone's bank account. I imagine a lot, maybe all, of the verification info a bank would ask for in order to do a password reset would be in those files for many people.

The link is a bit of a stretch, though.

ntomaino• 11 years ago

Bitcoin couldn't have prevented the OPM attack, but these types of attacks will continue to highlight the flawed way that institutions store data online.

I suggest reading this post: http://blog.onename.com/americans-hacked-opm/

TLDR; The blockchain offers a more secure database that allows institutions to stop storing massive amounts of user data on centralized servers.

minimaxir• 11 years ago

I'm calling statistical shenanigans. While the data presented is likely correct, the narrative is completely misleading.

While the price is down 9% YTD (as of July 13), it's up over 213% over a two year time frame.

So they are ignoring the price drop from $1,000?

This has attracted more institutional investors to the market and volatility has decreased as a result.

Chart indicates a gradual decrease, it's hard to establish causality. Also, it ignores the fact that 50% volatility for a currency is absurd.

As of June 30, there were 6,109 Github repositories referencing Bitcoin. By comparison, there were 2,352 Github repositories referencing Stripe and 2,318 repositories referencing Paypal.

Comparing a currency with a currency processor is blatantly comparing Apples and Oranges. How many GitHub repositories are there mentioning Coinbase?

philrapo• 11 years ago

If institutional investors were responsible for the decrease in volatility, I'd think we would've seen a corresponding increase in liquidity. (It's the additional liquidity and depth of market that they presumably would provide that dampen the price swings). I haven't run the data recently, but anecdotally I don't think liquidity has improved much.

The most liquid/highest volume period was still the run to $1000.

zapdrive• 11 years ago

How many GitHub repositories are there mentioning Coinbase?

Conversely, how many GitHup repositories are there mentioning USD or GBP. Oh wait, you can not transact USDs online without a payment processor. So what would be a better way to compare? By comparing all the fiat payment processor mentions against Bitcoin and Bitcoin payment processors. Which is kind of what they are doing here.

ytdht• 11 years ago

makes sense from a Coinbase's perspective to present facts like this, I guess...

02• 11 years ago

The alternative is to admit the ship is slowly sinking.

Ologn5• 11 years ago

91 year old billionaire Charlie Munger has referred to Bitcoin as "rat poison". His friend, 84 year old Warren Buffett has said Bitcoin is "not a currency" and advised people to "stay away from it".

Now you can ascribe this to them being old fuddy duddies who "just don't get it". You can also ascribe this to the wisdom of people who lived through the Great Depression, World War II etc. and have seen every scam and snake oil pitch under the sun.

Which is exactly what Bitcoins are. They are worthless, they have no value. They're not only a scam, they're a scam that should be obvious on the face of it, like subprime real estate, or a Pets.com IPO. People talk about a Silicon Valley bubble - nothing is more indicative of a bubble than Bitcoins. These guys may not know the specifics of blockchain algorithms, but from decades of hard experience they can distinguish value from non-value, and Bitcoins have no value.

I can't think of a commodity it makes less sense to hold onto than a Bitcoin. Gold has value, as do other precious metals, oil has value - Bitcoins have no value. The only comparison I've seen made to Bitcoins is fiat money, but it would take too long to fully explain why Bitcoins don't have the value of a US dollar in a post here.

I was warning people of this scam here when Bitcoin was over $460 ( https://news.ycombinator.com/item?id=6753545 ). It has since fallen to $290. It will be falling to $0.

For some laughs, read http://bitcoin.org/en/faq#why-do-bitcoins-have-value - "Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies)."

What? Commodities which already have value(!) become currencies because they have "durability, portability, fungibility, scarcity, divisibility, and recognizability". Gold has all of those properties so it has made a good currency through history - but even if it had none of those properties, it derives its value from it being a commodity with useful physical traits - like the ability to fill a tooth, or conduct electricity, and so forth. Bitcoins have no such traits - they have the traits which would make a commodity with value a good currency, but it has no inherit value as a commodity!

Witness all the angels and VC's who sing the high holy praises of this scam. Are they just complete fools who have no understanding of the economics they claim to have expertise in, or are they just scammers trying to fleece suckers out there? I don't know the answer to this, but at the end of the day, all the VC's and seeders and angels on Twitter etc. who support this Bitcoin scam are either fools or thieves. Keynes said markets can remain irrational longer than he could remain solvent, but it's inevitable that Bitcoins price will go to $0. Since my first statement of this here, Bitcoin has gone from $460 to its present $290. It will inevitably go to $0, no matter how many of the scammers downvote this post so people won't see it. Because no matter what anyone says, the market cap of the $5 trillion worth of gold mined will never change more than an order of magnitude (barring some amazing chemical technological advance). Whereas lack of doubt is all that is keeping Bitcoin's $4 billion market cap from going to $0. From it's scammy beginnings (the anonymous "Satoshi"), to all the legal problems and scams of Mt. Gox, Butterfly Labs etc., it's only a matter of time before this Ponzi scheme comes to an end. More instructive than that is all the existing VC's, seeders, angels etc. who are vocal in their support of this scam - that's what you should really remember.

deadmik32• 11 years ago

Works pretty fine for me when I buy stuff with it, idk. Not like it's replaced money for me, but sometimes I use it. I wouldn't go investing in it as a currency on its own but completely writing off at the very least the technology itself is a bit ignorant, don't you think?

And don't forget that Ponzi schemes were originally invented using that foolproof valuable currency you cite as a foil to bitcoin's scam! I'd say the time and resources that go into making bitcoin have inherent value just like using a little bit of gold to fill a tooth.

Ologn5• 11 years ago

Works pretty fine for me when I buy stuff with it, idk.

Were you around for the last .com bubble? You could have ( https://en.wikipedia.org/wiki/Flooz.com ) said the same thing ( https://en.wikipedia.org/wiki/Beenz.com ) back then ( https://www.youtube.com/watch?v=4s7V9I7LVp4 ).

Not that I'm saying startups are currently bubble level overvalued - but stuff like the Bitcoin hype is a canary in a coal mine.

but completely writing off at the very least the technology itself is a bit ignorant, don't you think?

I can conceive of the possibility of people using blockchains and such things in the future for various reasons. I have no desire to right off the technology of the blockchain any more than I would write off the technology of a distributed git repository. The question though is whether Bitcoins should have a $4 billion market cap, and to me the answer is clearly no - it already fell from $11 billion to $4 billion, and I see this falling to $0.

P.S. Re-watching that Whoopi Goldberg ad about "hip, young" Flooz versus "old, out of touch" money gives me deja vu all over again....

koonsolo4• 11 years ago

Sorry you got downvoted. I don't agree with you, but I agree it's a valid point of view to have. But in the end, only the future knows if bitcoins price will rise or fall. Everyone is guessing here.

Let me leave you with this: If I told you 10 years ago, a website where everyone can edit the pages, and were nobody gets paid, will create an encyclopedia that has more content and is more accurate than professional encyclopedia publishers, would be believe me? I definitely wouldn't, that concept is completely absurd to me, but yet, it worked. Bitcoins seems like a way more viable idea to me.

Bitcoin is not competing with gold, it's basically competing with "I owe you" notes, managed by some central entity. You could argue that those "I owe you" notes have value, but maybe so does distributed transactions.

Bitcoin might just keep itself alive: because it has value, you can do transactions with it, and because you can do transactions with it, it has value.

Ologn5• 11 years ago

Bitcoin is not competing with gold, it's basically competing with "I owe you" notes, managed by some central entity. You could argue that those "I owe you" notes have value, but maybe so does distributed transactions.

As I said, it would take too long to fully explain why Bitcoins have less value than dollars and euros (of course last year, EUR/USD was 1.35, today it's 1.09, but the problems of Greece etc. are a little tangential...) Dollars had no inherent value in 1970 - you could trade dollars for gold, but it was still just a promissory note - I'd rather have an ounce of gold in my hand than a note promising me an ounce of gold.

What does the phrase "gold reserve" mean ( https://en.wikipedia.org/wiki/Gold_reserve )? The USA golds 8000 tons of gold in Fort Knox (and in NYC's Federal Reserve building). Why? Why does it do this? It must cost a lot to hold all that gold. The reason it does is because that gold implicitly (but not explicitly) backs the US dollar. If the dollar began crashing tomorrow, Obama could go on TV and say he was opening the vaults of Fort Knox and would exchange dollars for gold. Gold doesn't have any special properties, it's just convenient to use a currency, any commodity trade would do.

Even with economic dips, people don't think about the things underlying economic confidence in the face of potential collapse - but governments do think about these long term things, and major changes in policy always indicate changes in thinking ( http://www.nytimes.com/2013/01/17/business/global/german-cen... ).

SamReidHughes• 11 years ago

Sorry for making you feel old, but Wikipedia was well-established 10 years ago.

billions2• 11 years ago

It exactly because opinions like this exist that I am bullish on bitcoin. Because nobody fully understands bitcoin, it means it is either undervalued or overvalued. Since old people have trouble adopting new tech and have most of the investment capital, with all other things being equal, it is undervalued.

jcranmer• 11 years ago

By exactly the same arguments, you should have been buying loads of CDOs and mortgage-backed securities in 2006 and 2007.

It's actually very scary how many people have already forgotten the lessons of the causes of the Great Recession.

icebraining• 11 years ago

Nobody disagrees that Bitcoins have no value other than being a currency. The thing is: that doesn't matter, nor does it make it a "scam". Value purely as a currency is value nonetheless. Your argument is lacking the justification that only "inherent" value is "true" or "real" value.

mikeash4• 11 years ago

You say that gold has value. What is that value? Certainly there's some value in using it for things like electronic contacts, but that doesn't come anywhere close to accounting for the price. If you buy an ounce of gold right now, the $1323 is maybe $13 practical utility and $1310 collective faith in its use as a currency. Do you think that tiny bit of utility is enough, or do you disagree with my assessment that gold mostly has no value?

Ologn5• 11 years ago

History is often clearer than the present, so let's look at the price of silver around 1980. In 1979 silver was $6 an ounce, by 1980 it was worth $48.70 an ounce by 1982 it was back below $5. Was silver really have $48 of value in 1982 dollars? Clearly not. Over the short term the price of gold, silver, subprime real estate, dutch tulip bulbs, pets.com stock etc. can soar over its real value. Over the longer term, price and value always come back together though.

the $1323 is maybe $13 practical utility and $1310 collective faith in its use as a currency

But non-speculators pay $1323 to fill teeth and conduct electricity. For them, the $1323 is 100% for practical utility. Of course, as the value of gold soars, they look for alternative products to fill these needs (ceramic, copper). Over the long term, I think gold derives 0% of its price from anything other than its value, over the short term, different factors come into play (like silver in 1980).

nhaehnle• 11 years ago

Don't forget the use of gold for jewelry, which dwarfs the other uses.

MichaelGG• 11 years ago

If they're worthless and have value, why are people willing to pay so much for them?

I mostly agree with you, overall, but the "value" part of your argument is simply wrong.

And don't ignore the large positive impact Bitcoin had on people trying to purchase essential medicines. Can you explain why I can't easily buy medicines free of regulation without Bitcoin?

alexbosworth• 11 years ago

I don't know what the market will do, maybe fall hard, but I can tell you from personal experience it has utility over the alternatives in situations I've come across

openasocket• 11 years ago

I'm far from an expert on economics, but I thought a large part of the value of a currency is the country backing it. If you are a business in the US, you are required to accept payment in the form of US legal tender. i.e. Walmart can't decide tomorrow that they will only accept rubles (or, more relevantly, Bitcoin). So as long as there are people in the US doing business, the US dollar retains value.

sanswork2• 11 years ago

Walmart actually can decide that they will only accept rubles they just can't enforce it for debts. So if you owe them money they have to take USD but if you want to buy something they can say they will only accept rubles.

ubersync2• 11 years ago

It will never go to 0. I will buy all at 0.001, and I am sure a lot more people are willing to bid more than that. Anyways, will you eat your hat if it ever goes back to 460, or 1000 or 2000?

deadmik32• 11 years ago

I believe this is what's referred to as the "pump"

Animats3• 11 years ago

The main trend for Bitcoin in 2015 is that not much happened. The price is within 10% of where it was at the beginning of the year. Transaction volume in dollars is flat, or down a little. Many of the companies which were accepting Bitcoin no longer are; those that are report low transaction volumes. (There are lots of merchants which "accept Bitcoin" because it's an option in some shopping cart programs, but those just send the Bitcoins to Coinbase, which converts them to dollars and sends the funds to the merchant.)

The big trends in Bitcoin seem to be:

- Amateur hour is over. The remaining exchanges are bigger and seemingly more stable, although none of them are up to bank-level yet. New York's Bitcoin regulation seems to have been accepted.

- Mining is more centralized than ever. Most of the big Bitcoin miners are in cold areas of China with cheap power. China has well over 50% of the hash rate now. This may just be a way to convert yuan to dollars. (China has currency controls, but encourages exports. For a few months, it was legal in China to buy Bitcoins with yuan through regular payment channels, then sell the Bitcoins outside China for dollars. That drove the $1000 Bitcoin bubble, and was shut down by the People's Bank of China last year, causing the Bitcoin crash. Mining Bitcoin in China, and selling it outside China, is considered "exporting" and is a legal way to convert yuan to dollars.)

- Since the shutdown of Silk Road I and Silk Road II and the related arrests, Bitcoin is no longer considered a safe way to buy drugs. This doesn't seem to have affected the price much one way or the other.

- Bitcoin ATMs are disappearing. In the SF bay area, Hacker Dojo and Workshop Cafe got rid of theirs, and Nakamoto's doesn't have theirs working. Hero City (a co-working space) may still have one.

History of Bitcoin:

    2013: Wow!
    2014: Aargh!
    2015: Meh.

drcode5• 11 years ago

2013: "Decentralized money is amazing- Let me build a business around it!"

2014: "Hmmm... I just built a centralized business around Bitcoin, so now my customers have the same counterparty risks as before... why was I excited about Bitcoin again?"

2015: ???

2016: Profit

(If someone figures out the entry for 2015, please let me know what it is...)

danbruc2• 11 years ago

2016: Reward-Drop

nestorp• 11 years ago

2015: Let's start discovering where the big disruption comes. Blockchain. Many companies like for example Stampery.co are using the technology behind bitcoin to change failed ways to do things, like certifying things.

_lce0• 11 years ago

2013: Wow!
2014: Aargh!
2015: Meh.

so, bitcoin got into productivity plateau?

Animats3• 11 years ago

The Bitcoin bubbles were driven by external use cases. The first runup was driven by Silk Road I, and the second by the use of Bitcoins to get around China's exchange controls. Bitcoin is now stuck waiting for a third killer use case.

vbezhenar• 11 years ago

May be stability is what Bitcoin need? Especially when many other currencies are jumping like a mad cows. Bitcoin attracts many people who don't really need or even understand bitcoin, they just want to play a casino game. They are not healthy for bitcoin.

danbruc2• 11 years ago

Bitcoin doesn't really attract many people, there is just this handful or so million users. Bitcoin is still really far from anything that could be called mass adoption or even mainstream.

nosuchthing• 11 years ago

Bitcoin seems instable by design, the major flaw being an anticipation of increase in value due to "limited supply" which encourages people to speculate and horde rather than participate in real economic activity.

naveen99• 11 years ago

One of the nasdaq exchanges has a etf equivalent in Europe. Once we have options on those the market will be more mature.

I think countries giving up fiscal policy for the euro would make other countries consider bitcoin. Makes sense to have a tax regime based on immobile property taxes rather than resorting to inflation or foreign currencies. Since us and Europe already are pretty confident in their ability to collect taxes, they won't be too hostile to bitcoin.

marcell• 11 years ago

In the SF bay area, Hacker Dojo and Workshop Cafe got rid of theirs

Nit: as of a few days ago when I was there, the one at Hacker Dojo is still there.

Animats3• 11 years ago

I've seen it powered off, and then gone. Maybe it broke and went out for repair.

Originally, the Robocoin machines displayed their bid and ask prices on the attract screen. They stopped doing that; the size of the spread (about 15-20%) was embarrassing.

cb18• 11 years ago

Bitcoin is no longer considered a safe way to buy drugs.

Is this really the consensus of the dark-net market denizens? Are they using another currency now?

AnonNo15• 11 years ago

Bitcoin is no longer considered a safe way to buy drugs.

And who told you this?

Obi_Juan_Kenobi• 11 years ago

The darknet market failures have nothing to do with bitcoin. If anything, faith in TOR has been compromised, but it's still a very effective tool. DNMs are maturing and adapting, and still strong.

And they all still use bitcoin.

gwern• 11 years ago

If anything, the DNMs use Bitcoin more in 2015 than in 2014 or 2013. In 2013-2014, there was a fair amount of interest in Litecoin, Dogecoin, and Darkcoin, with some markets using them exclusively. (Off the top of my head, Atlantis and Litebay for the former, and Doge Road for the middle.) Right now, every market I know of takes Bitcoin, with maybe a handful taking Litecoin/Feathercoin/Darkcoin on the side as a supported-but-hardly-used feature. I kept track of currency support in http://www.gwern.net/Black-market%20survival

bcolb• 11 years ago

Last I checked CoinME had added several Bitcoin ATMs in Seattle.

http://www.coinmekiosk.com/

I think they're up to three now.

Taek• 11 years ago

"Bitcoin is no longer considered a safe way to buy drugs."

This is not true. While it's not a good idea to waltz in naively and buy drugs without educating yourself, most people I know strongly prefer the dark markets to buying on the street.

---

The big trend is that the hype has died and that people have largely stopped using Bitcoin for things that it is not really good at. Growth is up though. People use it for its strengths more, many more people have heard of it, and overall Bitcoin is seeing a lot of traction.

As Greece demonstrated, it's really nice to be in control of your money. At current volatility, Bitcoin is more of a contingency plan than a savings strategy , but its core strengths are just as relevant as ever.

facepalm• 11 years ago

I don't understand how they keep the price stable with waning interest. Is it mostly stakeholders trying to artificially keep it up? But presumably at least the miners need to sell occasionally to finance their operation?

jerguismi• 11 years ago

- Since the shutdown of Silk Road I and Silk Road II and the related arrests, Bitcoin is no longer considered a safe way to buy drugs. This doesn't seem to have affected the price much one way or the other.

You gotta be kidding me. Are you saying that it is safer to go to streets, than to order online?

vectorpush• 11 years ago

Are you saying that it is safer to go to streets, than to order online?

I fail to see how giving out your personal address to random strangers on the internet is somehow preferable to a face to face transaction that insulates the drug dealer from where you sleep and keep all your valuable possessions. I also reject the implication that one must necessarily turn to "the streets" to buy recreational drugs. Most habitual drug users have a relationship with their drug dealer(s) and don't troll "the streets", cash in hand, looking for someone to satiate their fix.

davidgerard3• 11 years ago

That drove the $1000 Bitcoin bubble, and was shut down by the People's Bank of China last year, causing the Bitcoin crash.

I thought that was pretty much entirely Willybot, then other exchanges following Mt Gox's blatantly fraudulent prices about $100 lower.

sanswork2• 11 years ago

I notice they are still pushing out the number of wallets and accounts they have as a sign of anything. Coinbase you are now a few years old and have raised over $100m. It's time to leave behind local social networks, and underused sites everywhere and start reporting MAU. No one but fanatics care how many people have signed up. How many people regularly use your service.

jhanschoo• 11 years ago

I really doubt that most people see Bitcoin's features as pluses rather than minuses.

I have always thought that the financial institutions we have in mainstream currencies are institutions that societies want. If ever Bitcoin goes mainstream, the Bitcoin economy would end up a lot like the world economy when it was gold-backed, albeit one where the transaction costs were not physical but hidden in the work done in blockchains.

It seems to me like people are mistakenly thinking that Bitcoin's lack of financial institutions are a property inherent to the currency rather than the simple fact that Bitcoin is a currency that is not mature enough to have actors sufficiently invested in it to want to create regulatory institutions on top of the currency.

Correct me if I'm wrong, but it seems to me easier to regulate Bitcoins than say, gold. It is far easier to trace and verify the provenance of Bitcoins than that of gold, and hence far easier to classify Bitcoins into "clean Bitcoins" and "dirty Bitcoins". A cabal of influential institutions can simply refuse to deal with wallets and businesses that deal in "dirty Bitcoins", and that can serve as a basis of institutional regulation of Bitcoin as a currency.

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