So, That’s the End of Bitcoin Then? | Hacker News Reader

So, That’s the End of Bitcoin Then?

blogs.forbes.com

37 pointstaylorbuley30 comments

This article does not understand bitcoins. The value of BTC did not drop on Sunday. What happened was the value of BTC, on on exchange, dropped momentarily because of a hacker selling large amounts very quickly.

MT Gox was compromised, but bitcoins themselves do not rely on MT Gox or even exchanges. The currency is fine.

This "experiment" is largely unaffected by this single market crash.

This incident has just shown that Bitcoin is a serious store of value, and hackers are targeting the exchanges because they are the weakest link in the chain.

Unfortunately, right now, it's still amateur hour with MtGox running an insecure site and generally lax security practices - vulnerable to XSRF, and apparently they let one of their developers download a full copy of the MySQL database to his home PC which was compromised.

Now that there is real money in Bitcoin, the free market should start to weed out the exchanges that have lax security. We already appear to have more professional exchanges like Tradehill opening that seem to take security more seriously.

Though the 'experiment' has shown the grave consequences of a security breach. They might be able to fix the current problem, but markets are about trust, and the doubt that this causes cannot be undone. We all know it can, and will, be hacked again.

Similar things have happend on stock exchanges, with automated micro-second trade algorithms running wild. Now those exchanges have learned from past crashs and installed limits and market fluctuation. Bitcoin exchanges will learn and do similar things. It's only just starting.

It is just starting, and there's a long way to go before its fair to compare any aspect of them to your everyday stock exchange that we know. And again, they have to retain trust to get there. Who's to say these countermeasures and limits won't be specifically targeted by a future hack? They're too easy a target.

The price has fallen from $17 pre-crash to around $12, but I can't tell if that's the risk being priced in or just the usual 40% daily volatility.

In the past 6 months, I have been issued 3 new credit cards due to security breaches. The stock market has crashed a couple times. Despite these breaches or crashes, I'm not going to cancel my cards and transfer everything to cash.

Markets are about risk, and higher risk equals higher return (or loss). Trading in a market like stocks, commodities, forex, bitcoin, etc. carries inherently high risks.

You said it right. That is what these "hacks" may be designed to do so it's important to see it for what it is and not to let the idea die.

Look at the right column, under "Most popular" is a tab "My Posts". His other most popular article is titled "The End of Facebook". Looks like "The End of ..." stuff sells well.

And, I don't agree with his conclusion. Paper sheets and butter may be anonymous too, but its difficult to store it in digital form. Duh.

Paper sheets and butter may be anonymous too, but its difficult to store it in digital form.

Yes, he completely misses the point. It is digital and distributed. Moreover, the old adage about newspaper titles rings true here: If a newspaper title ends in a question mark, you can probably replace the entire article with the word "no".

In fairness, the question mark was added on HN. The article title is "So, that's the end of Bitcoin then".

Sorry, my mistake.

Moreover, the piece is riddled with incorrect grammar, punctuation, and capitalization. Such errors don't necessarily mean the piece is poor, but it does imply it. It also implies it wasn't edited well.

His piece ends with "It’s difficult to see what the currency has going for it." This statement describes his imagination, or lack thereof, saying nothing about bitcoin.

Your definition of "riddled" and mine must be different.

Going after former article titles and punctuation are not strong counter-arguments.

There are plenty of criticisms one can level at Bitcoin, but the author of this piece does not appear to have a particularly good understanding of the subject matter.

Mt Gox relies on Bitcoin, but Bitcoin does not rely on Mt Gox.

Look for the blue dots. If you see blue dots then the answer is no, sorry to disappoint you -- that wasn't the end of Bitcoin.

- http://bitcoinmonitor.com/

This only shows the last 120 minutes. Are there statistics about the last weeks/months? That would be better for making out trends.

It's fascinating watching the ecosystem evolve. Kind of remends me of Star Trek III - The Search for Spock, where evolution is "sped up" on a planet originally devoid of life.

Mt Gox was at the right place in the right time, but poorly executed (so far). I'm very curious to see how or if trust will be re-established for websites hoping to serve as exchanges.

"It's fascinating watching the ecosystem evolve. Kind of remends me of Star Trek III - The Search for Spock, where evolution is "sped up" on a planet originally devoid of life."

I feel like just about everything I've seen in the last five years is like this. We live in interesting times.

I think Bitcoin is a terrible idea, and doomed to failure. At the very least, there is a long, rough road ahead. But he left something off the list, something new: electronically anonymous.

Not sure I agree with any of it, but I definitely object to claim that btc lacks liquidity. Most of its liquidity problems are caused by the crappy USD banking infrastructure. The #2 exchange, Tradehill, is adding traders like crazy. It takes traders literally 10 minutes to move their bitcoin onto the Tradehill exchange but it will be another week before their USD will get transferred in.

When MtGox reopens in a day I expect a run. MtGox is rolling back trades, but some withdrawals almost certainly made it through so there is some concern they won't have the funds to cover. If MtGox survives the run I think btc is stronger than before the crash. I give MtGox better than 50:50 odds. They've been pulling 1.3% of every trade, or more than $300k in the past month alone. There are daily withdrawal limits so MtGox has time to make trades on the (depressed) open market to fill any holes.

It's a non-sequitur. mtgox is just an exchange.

I love the irony that while everyone was going long, someone sacked the quarterback.

lol football

"Large number of dollar bills stolen from bank, exchanged for other products at ruinous rates. So, that's the end of paper currency, then."

Obviously, this is a setback, but it's hard to say that this is the end of bitcoin.

This site has a $10 bid: https://www.bitcoinmarket.com/market/orders/

Hardly the "end," though it's not a huge bid by any means.

If the Fed or competing currencies want to try and nip the bitcoin idea in the bud, one way to do it would be to buy up a bunch of bitcoins and then dump them to crash the market in an attempt to sour the bitcoin concept in people's minds.

But really, why do that when you can simply let the pundits do what the pundits do: make up shit on financial sites.

Evidently bitcoin is getting it from all directions -- it must have ruffled some feathers.

If the Fed wants to nip it in the bud they can just go after people converting Bitcoins into dollars or goods for money laundering.

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