Cryptocurrency bloodbath continues as Bitcoin falls below $10,000
arstechnica.com
arstechnica.com
When exactly did $10,000 become "the psychologically significant" number for bitcoin? It's only been above 10K for less than 2 months and only above 1K for less than a year.[1]
As humans we like to reduce information so we think in terms of milestones.
A typical conversation might go like this:
"What is the price of Bitcoin? $9,400. Oh - it fell below $10,000, wow!"
It has some utility, but there are armies of other cryptocurrencies with higher utility waiting to be used.
It may be that people will still assign value to Bitcoin in a couple of decades, like they do with gold. It may also be that you'll need 100 Bitcoin to buy a pizza.
I agree so much with this. I tell this to everyone who will listen. Blockchain will be huge and Bitcoin was a pioneer. I think 10 years from now everyone will be using blockchain (either directly or indirectly) it just won't be through Bitcoin.
I do hope that proof-of-stake or a similar system come into being trustworthy systems, however, to decouple the security of a blockchain from its energy usage.
It's about using cryptography to create something that's scarce and tradeable and hopefully decentralized - a cryptocurrency.
Let's not spread rumors here...
Does this have anything to do with the futures?
ATH->10k: ~30 days
ATH->10k: ~ -50%
I think it's going to be very difficult/very long time to see ATH again
There's a lot of venture money coming in and new hedge funds popping up.
To say the fall was quicker than the rise is at best cherry picking price point data and at worst an outright lie.
Nov 2013 $200
Dec 2013 $1100
Jan 2014 $800
Jan 2015 $200
Tether is busy printing new tokens to try and absorb the selling pressure. $100M on Monday and another $100M yesterday.
I'll see you here in a few months for the article crowing BTC at all time highs. Or maybe not :)
I'm excited for whats next, even if its nothing.
Edit: The price of BTC is not fluctuating wildly, Crypto currencies for the most part still follow the rules of Technical Analysis
A man who was moving across states carrying his savings in cash and who had everything confiscated by police under civil forfeiture law emphatically disagree with you. http://www.huffingtonpost.com/2015/05/07/dea-asset-forfeitur...
Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you. http://money.cnn.com/2017/11/22/news/economy/venezuela-curre...
You see, despite being volatile, Bitcoin still solves important issues. Fundamentally it gives people the ability to carry "digital cash" and encrypt it, protect it, back it up, in a way infinitely more robust than a banknote in your pocket, or digital numbers in a computerized bank account.
Which ones? Can you use bitcoin to pay for some food? Or to get your roof fixed?
Now, that said, its worth as a speculative investment vehicle is proven. Low cost to acquire, low cost to sell, abundant, minimally appreciates in value over an 18-month period (much less a quarter-century), resistant to tampering (setting aside external price manipulation), high popularity -- few other speculative investment vehicles outside of the finance industry have had such success.
Granted, its staying power is an unknown and whether it will be around when it reaches its 25-year age is something else to consider.
A store of value is the function of an asset that can be
saved, retrieved and exchanged at a later time, and be
predictably useful when retrieved.
Actual stores of value include real estate, bonds, currency (real currency, not crypto"currency" that can't be used as a currency), and collectibles.
Stocks are not stores of value. Their prices are too volatile.
Cryptocurrencies, presently, are not stores of value. Their prices are too volatile.
You're proving the point you're attempting to debunk.
This is a bit of false argument. One of the most universally recognized value stores is gold. Yet, can you use gold to pay for some food?
Try marching into Tesco, grab some groceries, drop the gold bar on the counter and expect change... Yes, if you overpay it 50-times (a 1 oz gold bar for 20 EUR groceries), someone (cashier, other customer, anybody) will accept it on their personal risk (maybe it is fake? who in sane mind would pay with gold at grocery store?), pay for you, take your gold and give you the groceries.
But by definition: no, you cannot pay for food with gold/Bitcoin/diamonds/stocks/land/weapons/tobacco/alcohol/other food... At most, you can barter it.
One of the most ridiculous cases I have seen lately is comparing Bitcoin fees with paying for coffee. Do you pay for coffee with gold bars? Do you pay for coffee with international non-SEPA bank transfers (expect 30 EUR fee, more than BTC, and weeks-long fulfillment)?
Yes, Bitcoin was originally intended as "pay-for-coffee" currency. No, it isn't that anymore, it shifted more towards value store, settlement money between large entities, alternative to global bank transfers.
My favorite counterexample is: Can you run from war conflict with money or gold under your shirt? You will be searched, stripped from cash and possibly detained. Or learn 20 English words, run naked and input those 20 words into the computer on the other end of the world.
Do you think this is a overinflated example applied only to the worst parts of the world, where nobody have the money with them anyway? We, in the civilized world don't have any of such oppressions, right? Try leaving European Union with more than 10 000 EUR... During my business flights (especially to Arabic countries, where people were returning from shopping trips in Vienna etc.), I have seen quite a few folks detained just because of the cash they had on person.
I guess banks never thought of offering this kind of service. Thanks Satoshi!
That's the important issue that bitcoin solves. Do you understand what being decentralized & permissionless mean? And the power shift it implies on a social level?
From the examples you provided: if that man deposited his savings into Bitcoin last week, and had to withdraw today, he would be at an enormous loss. Not everyone is in a position to 'hodl'.
If Venezuelans deposit their weekly paycheck into Bitcoin, but have no way of spending it on tangible goods - they still need to convert back into their domestic currency. The only thing that changes is now they pay transaction fees.
Yes - the technology can solve some issues. But not how it is currently implemented.
Anyhow, it’s not as if they would just give up if you refused to produce the password. In the US one can be jailed indefinitely for contempt of court.
https://arstechnica.com/tech-policy/2016/05/feds-say-suspect...
The same could happen to Coinbase etc. Sure, you can store it yourself in a wallet, just as Cyprus citizens could put money under their mattresses.
> A man who was moving across states carrying his savings in cash and who had everything confiscated by police under civil forfeiture law emphatically disagree with you.
If he'd had the same amount in Bitcoin on a hardware wallet, there's a decent chance they'd have taken that as well. Hell, they managed to get DPR's coins and sell them for nearly $50M.
> Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you.
Bitcoin lost half its value this month...
Assuming eventual widespread adoption of bitcoin or a competing coin, storing your own funds in your own wallet has basically the same advantages as storing money in a bank, but without the same risks (of the bank or the mattress).
> If he'd had the same amount in Bitcoin on a hardware wallet, there's a decent chance they'd have taken that as well. Hell, they managed to get DPR's coins and sell them for nearly $50M.
Cash out of your hands is cash you no longer control. Hardware wallets can have pin codes and other measures to prevent the funds from being used and help you recover them later.
> Bitcoin lost half its value this month...
Was the drop in the Venezuelans currency preceded by a huge run-up in value as was Bitcoins? Who has lost more value?—people holding bitcoin over the last few years or people holding Bolivars over the same period?
The Bolivar is regular currency's version of Bitconnect, not Bitcoin.
> Assuming eventual widespread adoption of bitcoin or a competing coin, storing your own funds in your own wallet has basically the same advantages as storing money in a bank, but without the same risks (of the bank or the mattress).
That's a big assumption. Are you also assuming the FDIC will extend its coverage to personal wallets, that the FBI will automatically involve itself when yours gets stolen/hacked, etc.? The banking system involves a lot of consumer protections that aren't present when you store stuff at home.
> Cash out of your hands is cash you no longer control. Hardware wallets can have pin codes and other measures to prevent the funds from being used and help you recover them later.
Sure, if you want to spend the rest of your life in jail for contempt of court.
The assumption of widespread adoption is necessary to have any meaningful discussion about the advantages of cryptocurrency over traditional currency supply controlled by a central bank. Of course the currency must be adopted to actually matter!
I do not assume that FDIC will extend coverage, or that FBI will automatically investigate or recover hacked funds. That said there is nothing stopping this from happening and it may happen if one or more cryptocurrencies are largely accepted and used. It's also possible that private insurance plans become available, which undoubtably will come with more choice and control than the FDICs protection.
Storing money your own wallet has risks too, but they are not the same as those of storing money in a bank or at home. As crypto adoption grows, I believe the number of people making this choice will also grow.
> Sure, if you want to spend the rest of your life in jail for contempt of court.
The original post, and my reply, was about civil forfeiture.
Insured deposits were un-affected--anyone with less than €100,000 lost nothing [1]. 47.5% of un-insured deposits converted to equity [2]. That was in the depths of a national financial crisis. Meanwhile, today is Wednesday and everyone in Bitcoin lost 50% of their purchasing power from peak mark.
[1] https://www.reuters.com/article/us-cyprus-parliament/cyprus-...
[2] https://www.economist.com/news/finance-and-economics/2159864...
What makes you think your government couldn't seize Bitcoins from Coinbase or knock down a door and seize a hardware wallet?
People in bitcoin who are government proof are about as common as people running console emulators and not violating any copyright laws in the process.
But at least with the Cyprus bank case and those like it, all it involved was legislation (or maybe not even that; not sure of the particulars) plus compliant lapdog banks, plus the unspoken understanding that the government "owns" all the official money anyway and just lets us use it from time to time.
Yes, as long as we are subject to a government, we are subject to its theft and violence. We can at least not make it so easy for them, though.
Its very volatile, thats it.
But not only that, its not even that volatile compared to other things like startup stock. IF employees were able to sell their options/stock at their company you would see startups also fluctuate insanely like this on each little announcement.
Its a relatively small market, with no central figure to make the rules. Its what it is, but once you accept its volatile, a 50% jump is not significant, specially on such an incredible upward trend.
Deceptive statement. Only those who bought Bitcoin in the last 90 days really lost money. Everyone else is heavily in the green.
1. If we were using cryptocurrencies as real currencies, bet your bottom dollar that your local government will have a way to control the use of it. A government is defined by its ability to use (possibly deadly) force to achieve its goals; if your local government legislates (or dictator dictates) that bitcoin is tantamount to money laundering, how useful is your BTC in a jail cell?
2. The same could have happened if they confiscated his laptop with his wallet info on it. What the police did was horrible and not justified; I am only claiming that btc would not have helped any more than a savings account. In fact, the savings account is insured!
3. Instead they invest in a cryptocurrency that is subject to the incompetence of people who do not have a single thought about the plight of the Venezuelans.
Bitcoin does not permanently solve any issue that is created by malevolent governance. It is the same issue with saying that people can circumvent laws by using VPCs; it might be working for now, and it might work in the future, but it mostly depends on the ignorance/incompetence of government to regulate or enforce. If your government feels helpless in enforcing laws, it will resort to physical force.
Yes, and plenty of people have also lost their bitcoin to their exchanges/online wallets/hackers. And yes, with adequate security and personal cold storage, some of this can be avoided, but if you want to actually transact with Bitcoin these days, you have to convert to fiat since using Bitcoin as an actual currency right now is a train wreck, which means you have to interact with an exchange. And if you do use personal storage, and were to lose your keys or passwords, there is no recovering your money. Its gone forever.
> A man who was moving across states carrying his savings in cash and who had everything confiscated by police under civil forfeiture law emphatically disagree with you.
I'm sorry, how is this related to a bank? The entire problem is that the man had his savings in cash and not in a bank. If your issue is with the government seizing his money, the government has seized Bitcoins as well.
> Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you.
I fail to see how this is worse than a currency that is as volatile as Bitcoin is, which is also subject to manipulation by anonymous institutions, investors, and governments, if not directly then indirectly.
1. So what about all the other central banks that have been fairly stable for generations and have done fairly well in their stated goals?
2. Civil asset forfeiture isn't a banking issue. And you're naive if you think police can't seize a bitcoin wallet. The government has already done that http://www.slate.com/blogs/future_tense/2017/12/15/bitcoin_s...
Most users aren't going to practice the ideal security to prevent their crypto-currency for being seized. We know this because we have decades of experience knowing how careless and cavalier users are towards digital security. The currency isn't going to do it for them, so it's not a feature. Period.
3. When Bitcoin is shockingly volatile, so much so that you have to compare it with one of the worst failing economies in the world to make it seem less bad, well, that's a compelling argument. Call me up when there's a serious challenge to something like the USD or EUR.
4. Bitcoin is an interesting experiment. And under ideal conditions could address some issues you've mentioned. But conditions aren't ideal, it appears to be a mess really. Governments can still seize bitcoin. Governments can still regulate it. Half the things you tout have fallen flat on it's face and the other half certainly don't outweigh the glaringly obvious faults.
But hey, if you get in at the right moment, cha-ching. Which begs the question, you now hold $10 million USD in bitcoin, how many millions do you convert into banknotes or digital numbers in a computerized bank account to protect your wealth from the volatility?
Customers of Mt Gox are likely to emphatically agree with him.
Instead of a central bank, a currency may develop a "decentralized central bank" whereby those independent entities take uncoordinated actions to keep a shared currency stable.
It's hard to say at this point. We've really only been thinking about this problem for a short while.
Well not nobody.
https://steemit.com/bitcoin/@steemitguide/2017-top-list-of-b...
Moon or payments? Pick one.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
https://blockchain.info/charts/avg-confirmation-time?timespa...
Also this "nobody accepts BTC anymore" phenomenon is something artificially caused by the BTC devs. They could have increased the block size even to just twice the size and tried to figure out the real solution in the meantime, but instead they decided to be stubborn and kick out everyone who disagreed with them.
This is not a "proof" that the Bitcoin model itself has failed. It's just that one implementation has failed, and that's fine.
https://krebsonsecurity.com/2018/01/website-glitch-let-me-ov...
Kind of like how people are pretending this is like when Bitcoin first hit $1,000 and then fell back to $200x. It's just the same thing, right? It's all just volatility.
Except, that didn't involve a third of a trillion dollars of on-paper wealth being vaporized in a week across all cryptos, with tens of millions of new speculators getting smashed around the world. Slightly different than if $10 or $12 billion similarly goes missing, contained to a tiny group of people who mined it or purchased it at extremely low cost.
Huh? Do we have a lot of data on the volatility of gold coinage when it was first introduced to the world? Also, the difference is that kingdoms could stamp their gold/silver and make their citizens use it. "Render unto Caesar the things that are Caesar's". . .
The 4 years after Nixon took the dollar out of the gold standard (1971), gold had huge volatility even today gold doesn't have low enough volatility to be used as currency.
h i $ is an in=c0rrect interpreationWhat would the bitcoin central bank do to solve its volatility?
This of course breaks down in periods of extreme volatility such as with Zimbabwe and Venezuela.
If it gets to the point that Cryptos are accepted as payment across the board I believe the volatility will decrease to those seen in standard forex markets. Currently though it is seen as a novel investment and as such is traded as one. In addition it still needs to figure out its "True value" in order to establish a baseline.
Because it's easy to see the dotcom bublle nowadays, but those who invested in some companies got a big money back.
Yes, it might not even be a bubble. It might be the end of bitcoin and the adoption of some other criptocurrency that doesn't take that long to confirm small transactions. But, during the times, people might not recognize the bubble, and people might call "bubble" things that weren't.
As for the end of bitcoin/cryptos - I hope not. A bursting of this bubble is hopefully just a rite of passage so that they can mature and gain adoption. Basically everyone knows what they are now.
Bitcoin is a bad currency because it's too volatile. I don't expect it to replace conventional currencies without a regulating force, and since that's complete anathema I think the status quo will persist.
Here's a 5,000-word explainer I wrote about how Bitcoin works. It took significantly longer than an hour to write. https://arstechnica.com/tech-policy/2017/12/how-bitcoin-work...
[0] https://digiday.com/media/washington-posts-robot-reporter-pu...
Market-wide stock corrections usually do get reported upon.
https://join.slack.com/t/hncrypto/shared_invite/enQtMjk5MDg2...