Bitcoin Now Worth $1B
codinginmysleep.com
codinginmysleep.com
Enjoy the run, speculators. But don't get greedy -- remember the tulips...
http://money.cnn.com/2013/03/28/investing/bitcoin-cyprus/ind...
BTC is definitely finding a spectator audience outside of the tech world. The amount of PR it's been getting due to the price rise has to be playing a huge part in the recent wide-scale investment in it.
Or final goods. Silk Road gives a final good endpoint for BTC
The liquidity part of it is a big factor, but we've had pretty good liquidity for a while if you're willing to do a bank wire or trade with someone in person.
In other words it will hit an equilibrium value where the price modifiers in both directions balance each other, but nobody knows what that is.
Think it more like how the value of a futures contract might be determined.
But if you are business who takes money over the internet and is sick of the banking BS and you notice that there are a lot of people out there holding these strange coins which seem to have a rising value..
If you are a merchant then the easiest way to start holding it is to start accepting payments with it, which is easy enough to do especially if there are enough people holding it already.
At that point it has value not just because you can convert it , but because you can buy stuff with it.
Which probably means that the price is not speculative. Speculative like "I hoard" but not like "Ponzi".
I will definitely buy in this case, tho.
I get the impression plenty of people might buy if the price dropped to $35 or $30.
My question is: would you then sell if the price dropped a further $5 or $10?
Fixed that for you. Those reasons are all much older than this sudden jump in value. Even if they weren't old, there's no way they're pumping the value of Bitcoin by 500%. If something's too good to be true, it probably is.
I haven't seen a single discussion of Bitcoin as a currency, it's always an investment. I asked someone a few days ago about how much is actually being spent and they linked me to a list of transactions but they all seemed to be either SatoshiDice or really low amounts, are there any statistics on who is actually spending Bitcoins on products and/or services unrelated to Bitcoins? I saw reddit mentioned that the volume of Bitcoin transactions they have (on reddit gold) is so low they're losing money and that's a site that has a big community of Bitcoin users / supporters.
What happens when a government decides enough is enough and buys then dumps BTC? It wouldn't take much capital to cause a bank run type of inflation attack.
The vol on this asset class is out of this world and given that it's so new, pricing on these things must be so out of wack that it'll be good to exploit.
Only if there's a good futures exchange like Mt.Gox that's very very authoritative.
And also important for the bitcoin infrastructure, that way merchants will take bitcoins for less risk since they can hedge it against dollar or euro's. A big money potential out there. Some one please take the idea and build one so everyone can profit.
Bitfinex allows margin trading and lending. https://bitfinex.com/
Bitfinex's current best lending rate is at 200% APY, or 0.54%/day with maximum lend-out window of 7 days. Making most futures and options delta-hedging trades, even if ICBIT had liquidity probably not profitable.
To compare, current US broker margin rate is 1.8% APY or 0.004%/day. Will stick to regular exchanges until this is fixed or if there is an ETF for BTC in regular exchanges.
> It is a privately created fiat currency, bundled together with an anonymity scheme for transactions. The anonymity scheme means there is some reason to grant one-time seigniorage to the original currency issuers. Eventually the anonymity scheme, in some form or another, will be available without the fiat currency. At that point, or more likely before then, the fiat currency will fall to near-zero in value. Hold it at your own risk. The original issuers will have kept some of their initial gains.
http://marginalrevolution.com/marginalrevolution/2011/04/the...
Essentially, the value of a bitcoin is set by the value of all worldwide transactions desired which utilize bitcoin's advantages (anonymity, security from government intervention, etc) divided by the total number of bitcoins, which is capped. However, there is nothing to stop someone from starting a competitor (perhaps with some slight improvement) which duplicates all of bitcoin's functionality and essentially inflates away bitcoin's value. In fact, it might not be crazy to suppose governments would do this on purpose.
You mean like the Euro "inflates away" the USD, and vice versa?
Your idea doesn't make any sense.
Stack-exchange for others who want more info: http://bitcoin.stackexchange.com/questions/845/what-are-bitc...
But, bitcoins are being used in commerce too. New merchants added every day. I know of at least 6 brick and mortar businesses in Las Vegas alone that have sprung up recently.
http://howdoyoubuybitcoins.com/
I recommend Bitfloor at the moment because they offer free capitolone360 transfers as well as cash deposits at local banks for only 1%.
If you're an accreted investor, check out http://tradehill.com/
UPDATE: PEBCAK. That's for the default "cash" tab in the UI. There are also "wire" and "CapitalOne 360 P2P" tabs. Thanks for the tip!
This pattern will very likely continue until an alternative is found. Perhaps the alternative will simply be for holders to return to national currencies, perhaps it will be to adopt a new bitcoin rival for transactions and value storage.
In the short-run, there may be speculation, bubbles, and pops. That gets the attention. But look beyond that. In the long-run, the bitcoin economy may indeed "grow" to many times its current "size".
I get bit coin, I think it's interesting and useful as an alternative currency. But any hope that it is going to upend USD in any meaningful way is wasted. Dollars are far, far ahead in value, convenience and redeemability. And I don't see that changing anytime soon- at least not soon enough to get in on the speculation.
There's been a fair amount of cashing out the last few weeks, which has the effect of transferring coins from pre-existing large hoards to new, smaller hoards. That's a good thing overall, I think.
The next step is to get those smaller hoards spending, that's the trick.
The FinCEN guidance was a major step forward for Bitcoin, allowing companies to start taking Bitcoin as a serious option.
For example, see this announcement today, from a company that processes payments for local governments. They plan to offer bitcoin acceptance to those governments for all sorts of online payments. You might soon be able to pay local taxes using bitcoin!
http://www2.egovlink.com/press-release-bitcoin.cfm
They directly state this is a result of FinCEN's statements. The floodgates may be opening.
It's a subtle but important difference, because the use of non-local currencies in a transaction can trigger currency exchange gain/loss reporting requirements (in the US, at least).
Governments already know how to deal with foreign currencies: they simply make you convert your foreign-currency-denominated income into the local currency for purposes of calculating taxable income.
I am very intrigued by Bitcoin. It has all the signs.
Paradigm shift, hackers love it, yet it's derided as
a toy. Just like microcomputers.
http://goldprice.org/gold-price-history.html#36_year_gold_pr...
A similar thing is ocurring with bitcoin now however it is much easier to buy and store btc for the layman than it is for them to buy and store gold.
Adoption due to technology is also faster, essentially gold has been $1600 an ounce for a while now, BTC has a way to go before it stabilises but after $200 a coin we will see less daily fluctuations because a $10 change in price is actually only 5% of the overall value
Illicit money? Thats _far_ less useful. Money like goods get their value from being accepted as valuable by large numbers of people.
This will be a fun ride until governments start auditing people for not reporting their bitcoin-denominated income.
Governments, especially governments with many international residents and companies, have long since passed foreign currency laws that require taxpayers to convert foreign currency transactions into the local currency for purposes of reporting income. Failure to report your bitcoin-denominated income can mean that the local tax authority (i.e., the IRS) has until the end of time to go after you for back taxes, penalties and interest, and even criminal sanctions (depending on the amount of underreporting).