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Comment by eksith | Hacker News Reader

BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire :

http://arstechnica.com/business/2013/04/bitcoin-crashes-losi...

This bares repeating...

The value of BTC is in the nature of the transaction; not the currency itself. People have turned BTC into a commodity instead of actually bloody spending it. Their old fashioned thinking still ties it to traditional fiat like a smoker trying to give up the habit.

Look, I don't want anyone to lose their money, but people have to stop thinking of BTC as something that has value. What's valuable is the transaction itself, not the means of transaction. To put it another way, fiat currency is just colorful paper until it gets distributed to banks and into your hands.

This original transaction and all future transactions give it value; without it, the paper means nothing.

Edit: Spelling. Ironically, I wrote "bears repeating" instead "bares repeating". BTC ain't a bear market ;)

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The value of BTC is in the currency itself.

How much is a three year old's scrawled drawing with the note "I love you Grandma" worth? To most people it is worthless, but to the recipient it has worth. Its utility and use value to the recipient is not measurable. The utility and use value of any commodity is not measurable. The drawing has a use value even if no one wants to buy it - it is useful to the recipient.

Commodity values also reflect the work put into them. Let's say I assemble PCs. I buy $600 worth of parts - motherboard, disk drive etc. I spend an hour assembling the parts into a PC. I now want to sell it for more than $600 since I want to be paid for my time, maybe $50 for the hour - it is now $650 total. Each of the components of the PC I paid $600 for the parts of is more expensive because of the labor costs associated with assembling that component. So the value of a commodity is also connected to its labor costs.

Utility can not be measured as it is subjective - like the child's painting. Exchange value can be measured though. I can buy an OK pair of headphones for $20, I can buy dinner for $20 as well. So a certain pair of headphones are worth the same as 20 dollars are worth the same as a certain dinner at a certain restaurant.

We have had currency for thousands of years. Currencies have always held value due to their inherit value as a commodity, not due to being an exchange medium. Attempts have been made over the centuries to try to change this, but it has never been long lasting. The US dollar was backed by gold until 1971. Now paper currency has value due to the US government accepting it for taxes, stamps and so forth, but such things have been relatively short-lived through history so far. Paper currencies like Confederate dollars, Reichmarks in 1945 and such depend on political factors for their worth( http://www.moneymuseum.com/moneymuseum/library/texts/text.js... ) . Gold and other precious metals have retained value over thousands of years, no matter which way the political winds blew.

> BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire

From the Ars Technica link:

> At the moment, no evidence links the currency's plunge with this random reddit charity.

I'm going with Ars on this. $12,000 to 12 people on Reddit isn't enough to bring the market tumbling down.

Bitcoinbillionaire supposedly had waaaay more than $12k in Bitcoins. That was just the bitcoins he gave away for nothing. He supposedly had millions worth, if he sold a large chunk of that he could easily crash the price all on his own.

You had it the first time: "bears" is correct.

Definition 3 c: http://www.merriam-webster.com/dictionary/bear

You actually had it right the first time—"bears repeating"

Could it be that Bitcoin is presently more well-suited as a digital store of value than a digital currency? Given the difficulty of transferring fiat into digital, a way to store value in the digital world is just as needed as a transactional system. And I suspect we'll see some systems emerging in the coming months that are better suited for transactions, with immediate verification, etc. It could be that Bitcoin's long-term role in the crypto currency ecosystem is as a store of value, with transfers only occurring when someone needs to deposit money into their version of a digital checking account, or else large transactions that are not extremely time sensitive, like buying a house or car.

Who is satoshi nakamoto?

He's the Yamaga Soko of modern digital currency. Basically wrote the book on the first plausibly practical means of exchanging currency for services and the edicts of transactions.

Also, I hear he plays a mean banjo.

Who is Tyler Durden?

Who is John Galt?

This is so absolutely untrue. Those values move rather often.

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