Bitcoin interest spikes in Spain as Cyprus financial crisis grows
wired.co.uk
wired.co.uk
Bitcoin is going to kill a lot of money transfer companies eventually
Argentina has also embraced bitcoins en masse considering it's now illegal to transfer any money out of the country, and no Argentinian trusts their bank to not steal all their deposits. On payday in Argentina you see huge lines of people at the ATMs withdrawing everything they own to keep under a mattress, or smuggle to Uruguay to deposit in a stable bank.
Theres a far more simple explanation that just sticking the "its Cyprus fault". Several popular spanish blogs and newspapers have run big stories about Bitcoin recently (Xataka, El Mundo...). That probably has sparked curiosity among spaniards on the Bitcoin phenomenon. Simple as that.
In the town where I live the local police hadn't been paid for two months, so they made up their wages by setting up checkpoints and fining drivers.
When you're seeing that level of dysfunction it's not hard to see how the situation in Cyprus would make people question how safe their Euro accounts are.
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[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...
"First Bitcoin Hedge Fund Launches From Malta
Current assets under management in the Bitcoin Fund are $3.2 million (2.5€ million) and there is no performance-based fee. However, the fund charges an annual management fee o.5% of Net Share Value payable monthly in order to provide the sophisticated security and wallet management that one would expect with such large amounts at stake"
http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitc...
When stuff like that happens, some may freak out and sell their BTC. Speculators who still believe, will do the same and then buy at a lower price, recovering the market price. If the problem is fixed, in 24 hours no one will notice the difference. Luckily, Bitcoin is getting more and more decentralized and stable as more people are involved in development and more money is at stake. This motivates everyone to protect the system and act quick to fix the issues.
See more on incidents: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
Draw the trend line and see the variance of 2-day average around that trend. The volatility is silly compared to how much you can gain if you invest early.
What do you think HN community?
Edit: By launch bitcoin currency I mean raise awareness and tailor existing bitcoin tools to local needs
As a research project though this idea is fantastic, go through and figure out all the things that would have to be true to base the Cyprian economy on Bitcoin. Start with a solid Micro and Macro economic model of the economy, factor in reserves and currency transfers. There is a lot of data you can gather by going over Argentina's economic policies and their actions with regard to currency. A great way to learn from that is to say "This is what Argentina did, this is how you would/wouldn't do that with Bitcoin."
Economics is challenging because it seems very very squishy as a "science" (the gears in the machine are people after all) but there is a lot of really solid stuff which can inform on the question of what role currency plays in an economy, politics, and global trade.
I'm not a Bitcoin expert, but my understanding is that you can encrypt a wallet and store it offline somewhere protected, like a safe-deposit box at a bank. I'd expect any large scale and bureaucratic organization with Bitcoin reserves to have those kinds of safe guards.
Bitcoin, on the other hand, by it's own proselytes, is an "anonymous crypto-currency" with "no chargebacks" and "no way to recover a lost wallet", as if any of those things is a benefit to any nation, any consumer, or any person who's ever had to access a "recover password" form.
Bitcoin has it's uses, and is fantastic under certain circumstances. But this is not one of them.
[1] http://www.dbs.com.hk/en/aboutus/newsroom/2004/041005/
[2] http://www.dailymail.co.uk/news/article-1362561/Bank-gangste...
EDIT: I don't think that parent^ post is suggesting trying to make it legal tender either.
Offline storage of an encrypted wallet is fine, although in a functioning economy there will be pretty constant transactions flowing in and out of the depository bank but that is one of the cool things about doing the exercise, you can walk through the scenarios and say "Ok, if this were the case you would need maybe a 'fractional' offline wallet where you could bring a portion online and leave the bulk offline.
I'd love to read about a design for that. When you consider the steps that folks went to in order to penetrate Iran's nuclear facilities, there are similarly challenging places like banks, and depository banks are especially juicy targets.
Here are a few from around the world:
* USA: http://howdoyoubuybitcoins.com/in/united-states/
* Mexico: http://howdoyoubuybitcoins.com/in/mexico/
* Malaysia: http://howdoyoubuybitcoins.com/in/malaysia/
* Russia: http://howdoyoubuybitcoins.com/in/russia/
* Germany: http://howdoyoubuybitcoins.com/in/germany
* Germany (translated): http://howdoyoubuybitcoins.com/de-de/deutschland/
More on http://howdoyoubuybitcoins.com/ - all the guides are free and updated regularly.
Edit: Moved the discussion to it's own thread if people don't think it's suitable here: https://news.ycombinator.com/item?id=5418404
Terrible plan that serves mostly to enrich current bitcoin holders.
I guess you could start an exchange targeting those two countries, but that isn't a small undertaking.
http://github.com/yebyen/testnet-debian
At one point I was able to find a blog or github from GavinAndresen that detailed a few more ways to make your bitcoin blockchain incompatible with the standard chain, but I think this kind of activity is frowned upon due to the risk of 51% attacks. Unless your coin is approaching the popularity of Bitcoin (or somehow you got there much earlier... time machine?), it is vulnerable to being taken over by a small fraction of large Bitcoin miners' community coming over and playing with their clocks and hashing your chain into oblivion.
This is not necessarily all bad, or worse than creating Bitcoin in the first place. You can lose money in banks when your government fails, too.
1 year ago, top comment on Bitcoin article "worthless fad"
2 weeks ago "I will feel stupid if those guys were right"
Today "Im not at all surprised"
I guess this is how we see a community slowly come round to the idea of something. I am just suprised it took HN this long.
Once you get 90-year-old grandmas wandering around trying to put their money in "coinbits like I heard about on Oprah" then you'll know the end is nigh.
http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-fo...
Anarchy isn't an answer to a poorly run government, but open elections and transparency may be.
Poorly run central banks are notoriously secretive and corrupt, Bitcoin is just the opposite.
Your argument is a rationale for a commodity currency. Markets are good at finding prices for high-volume competitive commodities such as wheat [0]. No one will ever turn down a wheat dollar: you can eat it.
Maybe... BECAUSE it can't be eaten and has "no (economic) use". Think about it.
You save your excess production for future consumption (your retirement and/or your offspring) -- in apples and burritos?
That's true for everything. Whale oil was extremely popular for more than a century, now it's barely used. That doesn't mean it wasn't an useful thing at the time.
It is not intrinsic value.
There's no such thing. Value (market or use) is always relative to someone or some group of people. And even if the item is still useful in itself, the existence of better and/or cheaper alternatives may still drive its market value to zero.
It is value assigned by group psychology, like a bubble.
I think you're just not seeing Bitcoin with the right point of view. Instead of thinking of the speculators trading it like a commodity, think of it as a service, like Paypal.
When I want to send money to someone else online, how can I do it? I have to use it some kind of service (bank transfer, Paypal, etc), and those services can be "convinced" to prevent my transaction (like when the CC companies prevented WIkileaks donations), or it can freeze my funds (see Paypal again), etc.
Now, if people are willing to pay Paypal some percentage for that transfer, it means the service has some value. If Bitcoin can do the same, it stands to reason that it must have at the least some value as well.
Now, this is different from the (real or not) value one gets by trading and holding Bitcoins, but that's just part of the whole system. For the record, I have zero bitcoins.
Yes, but there's an important and qualitative difference between valuing something because it's useful, and only valuing something because a crowd of people value it, only because they know everyone else values it, only because... recursively.
This is what I mean by "intrinsic value": it has a utility value independent of pure psychological value.
Useful things like oil or wheat won't suddenly become useless. (They could be obsoleted, but that's not sudden or unexpected). But it's not that easy to reason about group psychology. Empirically, we know there have been many bubbles where everyone suddenly "agreed" something was actually worth much less than the going price and crashed it. We know psychologically can do that.
This is why it will not crash long enough to give you the opportunity. That's the nature of the market. Everyone else is going to be doing the same thing, especially speculators. It will probably crash soon enough, but some negative event will need to trigger it.
And it'll have to be worse than a website getting hacked or a hardfork, which were the kinds of things that caused crashes years ago when the market was younger.
Actually, despite the market being older, there's still only one major exchange. If there were another competitor to MtGox that was moving the same volume, I'd agree with you; but as it stands we're still only a MtGox hack or crash away from some major changes in the BTC->USD prices.
In 2013: 1. Much lower inflation due to mining. 2. Many long-term investments in mining, payment processing and related services. 3. Multiple well-secured big exchanges. 4. General increase in number of hands holding BTC. 5. General increase in education on how to keep BTC safe and secure.
My main motivation isn't the crisis, but don't asume that all europeans are trading in EUR ;)
This is over and above the monstrous returns in BTC over the last month!
It's easier to deposit USD into bitfloor through BoA than it is to deposity USD into MtGox. So customers of a certain site use bitfloor to buy BTC with USD.
Thinking about it now you're probably right about the USD/EUR prices.
I hope someone could create a BTC ETF that allows people to trade BTC to USD on the conventional market.
Bitcoin is not ready for prime time yet. I can't wait for some malware to empty everyone's wallets...
I'm guessing most USA based commenters here know nothing about Spain.
In that view, keeping most of your money in a non-seizable currency (Bitcoin or not) and just some "hand money" in the bank makes perfect sense. As a Portuguese, I'm considering it myself.
Well, it's not exactly a conspiracy theory, it's all over the news about Cyprus that the Parliament voted (and rejected) that measure[1], which was proposed by the Eurogroup (and others, IIRC).
why wouldn't they try and take some sort of legislative control over BTC? Why wouldn't they make it illegal or do some other thing with the law to make it harder to use without running the risk of a knock on the door? No country is just going to stand by and let a new currency disrupt them.
My argument wasn't just about Bitcoin, but in any case, I certainly wasn't suggesting a situation where half the population or so would suddenly turn to BTC.
That said, while they could illegalize Bitcoins, preventing people from actually using them would be much harder than just telling a few banks what to do. To buy Bitcoins you just need to make an online payment to some exchange (e.g. Mtgox) - you don't even need to run the Bitcoin client.
So to enforce that illegalization, it would take up much more time and effort to implement the technical and legal counter-measures, and it would either be largely ineffective (see "fight against file sharing") or politically hard to implement (e.g. very large number of arrests).
Finally, this is all mostly irrelevant, because the real reason this measure was proposed wasn't because the money from Cypriots, but because there's a lot of money from wealthy Russian business men which would get seized as well, and which definitively won't be using Bitcoins.
[1]: http://www.washingtonpost.com/business/plan-to-seize-deposit...
That said, you are probably right that the technical education and trust needed to embrace bitcoins is much less common in Spain. I first heard of bitcoins in, of all places, an episode of "The Good Wife" couple years ago, and have only found a handful of people who know about them. I imagine this will be changing rapidly in the following months, just like it's doing everywhere else.
What do you mean with 'A lot of places didn't even take credit card'? Are you sure you've been in Spain?.
I guess YOU know nothing about Spain.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...
The GDP of the country has little to do with credit card use. I was surprised when I went to Australia and discovered that Debit cards are a new thing that required marketing to spread. Credit cards were in wide use but paying for things directly out of your bank account with a card is still relatively new.
Are you one of the many Americans that don't even have a passport never mind exploring anywhere that doesn't take your cheap money?
http://www.theexpeditioner.com/2010/02/17/how-many-americans...
Oh, and that was certainly true of Lloret de Mar as well, just a few years ago. Supermarkets and such all accept cards, but the bazaars (run mostly by easterners, from what I could tell) mostly didn't.
I then signed up for mtgox but all of the funding options look really onerous. Why can't I use ACH or a credit card?
Don't overthink ;)