As MtGox trading remains suspended, bitcoin price falls from $160 to $60
bitcoinity.org
bitcoinity.org
My next thought was this: watch MtGox and assume that it drives the market price. Then buy/sell on another exchange, taking advantage of the fact that there is a delay.
Long story short, it's not as easy as this. However, there is definitely an opportunity for arbitrage here as for example currently BTCe is showing $65, while BitStamp is showing $61.
So there is definitely room for this.
Bitcoin has many fundamental uses as an exchange of value (note the vernacular) that is not done properly by anything else. It is the reason that markets like the Silk Road can exist. The "fundamental" flaw of bitcoin is that it is deflationary. This causes mass speculation, which causes instability.
It's instability means that it is not a good store of value. It is good for exchange of value under certain conditions (anonymous, distributed, trust required, cryptographic, etc.). Bitcoin is taking a hit right now because all of the speculators are cashing out (or panicking, or whatever). Most of the people who use bitcoin for it's fundamental strengths only hold on to bitcoin briefly. This is one of the (perhaps unintended) features of the commodity.
Bitcoin is not good for measuring value. You would never set a price in terms of bitcoin. You would set the price in terms of dollars or euros and then use a conversion to figure out what the price in bitcoins should be. This will probably always be the case for bitcoin transactions, because that's just how bitcoin is.
But as long as bitcoin does 'distributed, anonymous, and cryptographic' better than everybody else, it will be used for those strengths, and this will keep it alive. Bitcoin is not dead until there is something to replace it. A market crash does not count.
It just makes for some sad speculators.
Think bitcoin as a some random micro cap manufacturing company located overseas, one news coverage and everything changes.
It seems to me that the exact opposite trend is more likely. The use of bitcoin as a currency will become increasingly swamped by speculative investments and the swings in value will only get larger and larger, not smaller.
Edit-
It looks like http://realtimebitcoin.info is using mtgox for their data, which explains the discrepancy.
Mt.Gox reopens at 02:00 UTC. (This comment was written at approx 22:25 UTC, so when this comment is about 3.5 hours old. When that happens, I predict, all hell will break loose.
It had already dropped considerably (below $130, IIRC) from the ~$200 it had bounced back to from the earlier drop from $266 by the time MtGox shut down trading. The shutdown of trading at MtGox may have encouraged further decline across other markets, but it doesn't seem to be the original source of the decline.
> if so why does it have that effect, I don't run into the street and burn my cash just because the banks are closed on Sundays
OTOH, you might demand more dollars for goods (or just be less likely to accept them at all), or, on the other side, accept less good for dollars and be more eager to get rid of them if the main outlet for trading dollars for other currency shut down on a day that it would normally have been open (e.g., not a regular Sunday office closure) after a day of high volatility trading where the dollar had lost half its value before the trading was shutdown.
Because the blockchain is shared, the only thing that mtgox being down prevents you from doing is buying/selling with money stored on mtgox itself-- you can still move money from your personal wallet(s) (you're not keeping 100% of your BTC on mtgox, right?) to another exchange and sell it there.
I think the price is falling because there's been a speculative bubble rising, and the speculators' confidence is a fickle thing. Maybe up until now, you were a speculator and you didn't think you needed to go anywhere else. Now Mt.Gox has frozen trading and they are also not processing withdrawals. Most people stop trading too.
So, it's a fire sale, because nobody knows if our bubble will blow itself back up again, or how long it's going to take for that to happen. If you were keeping 2/3 of your money at Mt.Gox and now you're afraid that it's utterly gone (at least you know you won't be trading it today), so you've only got 1/3 of what you had, and everyone in town says it's worth 1/7 what it was yesterday.
A few people would surely take the money and get rid of it.
Now it looks like the economic bubble works even when everyone knows it's a bubble: http://imgur.com/jvSKdEv
Huh? Why would it be surprising that placebos work when the patient knows they're getting the placebo?
"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffet
Regardless of their origins, they now use this CamelCase. In fairness, I did omit the period, inexplicably.
I'm not sure if you did it to drive the point or not, but Magic: The Gathering is by no means "for children". The average age of players is way over 18 in most areas.
(Slightly biased as someone who's been playing M:TG for over 18 years.)
Many price-monitoring tools pull data from MtGox. For anyone using those tools, the price has been stable at $125 for the last few hours and will stay that way until the exchange reopens at whatever the price is then (currently around $65).
When that jump happens, I can only imagine a vast quantity of BTC will be sold and the price will crash.
That there will come another rise, and this time it won't be a bubble.
Because I know you think these things, that you're true believers, and you think that an unregulated currency with a track record of insane volatility will replace our means of commerce somehow.
Here's the thing:
The majority of people that have Bitcoins now are the people that don't want to sell them. Ever.
The mainstream media watched you this time. It saw just how dysfunctional Bitcoin is.
You lost.
| ready for prime time (another year perhaps)
I don't know if I'm more annoyed by your smug attitude (and the attitude that many others here have regarding Bitcoin), or if I just feel sorry for you that you have to be this smug and condescending about having been "right" that it is in a slump.
I want to be rid of this financial magical thinking. I ain't gonna apologize for that.
And I rather think your smug/condescending quota doubles mine.
Not sure if you're mad at those of us that made a ton of money from holding and selling. Or are mad at those of us that wanted to trade with them. Or are you just mad at the silly people claiming Bitcoins would rule the world? Either way, you seem very mad over something that is worthy of no anger... unless you feel personally spurned by not having bought/sold as others?
I'm actually a fair deal uglier than what you think: I'm openly gloating. I have been gawking at this whole process unabashedly. I'm going "I am so right!"
I'd feel bad about it, but the whole thing is just so... _hilarious_.
Seriously, _I_ have no hard feelings about this. I'm cheerful as all get out.
You're sounding pretty defensive, though.
You may be right, however I don't think the inverse is true.
"The majority of Bitcoins are owned by people that don't want to sell them. Ever"
There are some big players now that absolutely want to continue selling coins as they're being earned.
Plus the gambling sites are making a lot of coin, and I cant' imagine they're just sitting on them http://www.forbes.com/sites/jonmatonis/2013/01/22/bitcoin-ca...
| You lost.
Wall Street didn't disappear because of the Great Depression, but I'll bet there were plenty of people right after the crash that were predicting doom and gloom.
| Bitcoin fanatics
| insane volatility
Why? Because it's _so obvious_ to people outside the Bitcoin fixation that Bitcoin is crippled. And here you are saying "You don't _know_ it's not going to rise in price again" as if that constitutes a useful argument in favor of Bitcoin.
You just _assume_ that Bitcoin is in its 'early' stages, that it's similar to Wall Street.
Nothing Bitcoin does solves the problem money presents in the first place: its misuse by the greedy.
| Yes I am an anti-Bitcoin fanatic!
| And here you are saying "You don't _know_ it's
| not going to rise in price again" as if that
| constitutes a useful argument in favor of
| Bitcoin.
| You just _assume_ that Bitcoin is in its
| 'early' stages, that it's similar to Wall
| Street.
If Bitcoin is not in the 'early' stages as a currency, then what would you define as it's early stages? All you're really doing is
Nothing Bitcoin does solves the problem money presents in the first place: its misuse by the greedy.
I'm actually tired of listening to contradictory ideas/evidence about Bitcoin. It gets pretty repetitive and it never gets very convincing.
A whole lot of government regulations affecting the Wall Street and other parts of the financial sector were put into place to prevent a recurrence of the crash of '29 and subsequent panics affecting the financial industry, which is one reason why Wall Street, the banks, etc., didn't disappear.
Somehow, that seems less likely with Bitcoin.
And that's telling, because it indicates that bitcoin isn't a medium of exchange, it's an investment denominated in dollars. People are talking about the "price" of bitcoin more than anything these days, but that's not why people choose a medium of exchange. Bitcoins shouldn't be exciting, they should be boring, and dependable. As boring and dependable as a dollar bill.
However, the blockchain inherently limits BTC from being able to be used in the same way that, say, Paypal is right now, just because of it's inability to deal with a high volume of transactions, not to mention the confirmation time. And efforts to mitigate this through 3rd parties removes the distributed semianonymous merits, thus leading to a position where you're better off just using PayPal or a credit card anyways.
Thats like saying the lottery winner didnt win because he had to pay taxes for it.
http://falkvinge.net/2011/05/29/why-im-putting-all-my-saving...
The first time I sent Bitcoin directly from my wallet, to someone else's I was amazed at how quickly, and easily it was done - and blown away by the fact that it had been done in a decentralized manner.
I think all Bitcoin users (as opposed to speculators) are highly annoyed by the volatility, but keep in mind, by and large, none of the transactional users of BitCoin care whether the nominal value of a Bitcoin is $1, $100, or $10,000. All we want is for it to be stable so we don't have to keep sweeping our local currency in/out of Bitcoin as we use it.
I'm really curious as to where you are coming from, both personally and professionaly, when you utter single word sentences like, "You lost."
Oh I'm really just not a nice person.
I actually appreciate the use of Bitcoin for the Silk Road. Sure, we need changes to our financial system.
>All we want is for it to be stable so we don't have to keep sweeping our local currency in/out of Bitcoin as we use it.
It's unfortunate that this will never happen.
Bitcoin is _fundamentally flawed_.
If I send you 2 Bitcoins expecting they will be $200 USD when they get to you, but when you transfer them back to USD, they are only worth $150 - then I still need to send you another $50 in bitcoins.
I can live with 10-20% volatility in currency a year, or even a month - but within a particular transaction? It makes the currency unusable.
One thing that no bitcoin user I've talked to who uses it as a currency mentions, is the nominal value. They would be quite happy (more happy) with a $1 USD BC that never, ever, changed its value.
>Is it because there are more speculators in the market than actual users?
It's because you can't _stop_ that from being true.
Bitcoins are a form of money. Money has no intrinsic value--it's what you can do with it that matters, right? _Real_ money has commodities exchanges to track staples of production.
But we treat it with intrinsic value and we can do interesting things with it when we do. It occupies this nebulous space between inherently valuable and worthless.
The part where it's almost valuable by itself is what leads to greed, which is what leads to speculators.
So: Bitcoin doesn't solve the __real problem of money__ (because... is there really a good solution?), it just tries to pretend that decentralized and electronic money is better.
If you've really been lamenting people's excitement over bitcoins as long as you say you have, I feel sorry for you and maybe you deserve this token of happiness. Fruitless as it is, you make it seem like you don't have much else.
"Take no pride in your confession that you too are biased; do not glory in your self-awareness of your flaws. This is akin to the principle of not taking pride in confessing your ignorance; for if your ignorance is a source of pride to you, you may become loathe to relinquish your ignorance when evidence comes knocking. Likewise with our flaws—we should not gloat over how self-aware we are for confessing them; the occasion for rejoicing is when we have a little less to confess."
- http://lesswrong.com/lw/h8/tsuyoku_naritai_i_want_to_become_...
I don't even view it as a flaw. Which is probably what _makes_ me not a nice person.
Don't get me wrong, I'm not cruel--I don't intend to hurt people. I just don't really mind if people feel stepped on because someone said something they didn't like.
I mean, I'm laughing that drivebyacc thinks his hands are any less mud-covered than mine. But I also look at that mud-slinging bit and think--well, I pushed him into revealing that he's playing at being an investment banker with Bitcoin, which is exactly what prevents Bitcoin from being a suitable replacement for the money we already have.
And I emphasized the gloating bit because it's a little true and I'm not angry and it gave that guy a bit of a shove. I think the emotion I feel about Bitcoin is similar to this XKCD: http://xkcd.com/194/
Bitcoins.
They don't work.
Now can we, as a technical culture, move on to something that will?
He gives me a hex string, "1LnLfnc3nU3fYAY3DfuPsmqJqFAuRb4p9U".
Presuming, that Bitcoins are trading at $40 USD/ i type at the linux prompt, "bc sendtoaddress 1LnLfnc3nU3fYAY3DfuPsmqJqFAuRb4p9U 50"
15 minutes later, after three confirmations, he sells those 50 bitcoins at his exchange, and he now has $USD 2000.
That's the way it's been working just fine for the last 18+ months, until the recent couple weeks of increased volatility.
I don't see anything inherent in the currency that suggests we will have 10+% volatility every 15 minutes for the for seeable future. Doubling every month, of halving every month is fine, users of the currency can adjust for 2%/day volatility.
That's about the only problem I see with BitCoin as a currency right now. Let's check back in six months and see if we're still seeing the +/- 10% swings per day.
The bitcoin fanatics should have "lost" back then. But instead bitcoin kept on chugging and expanded its user base.
The same will happen this time. The speculators will move on but the group of people with a genuine interest in using bitcoin will have grown.
I mean, I'm done in this topic, if that'll satisfy you.
Let's see if I'm permanently afflicted or if it's a temporary thing.
Is anyone else as curious about HN's opaque, passive-aggressive moderation as I am?
I consider myself a bitcoin enthusiast, and I have never made any of those arguments, and I don't consider myself to have "lost." If the value of bitcoin goes to zero and stays there, I don't consider myself to have "lost." It's still an awesome idea that interests me from computer science and economic/political perspectives, and everything we've seen happen in the bitcoin economy is to me a cool proof of concept.
I don't understand why the "anti-bitcoin fanatics" are so vehement in their criticism of bitcoin enthusiasts. You seem to deriving much more excitement from the recent bitcoin price drops than I ever did from its price increases. Honestly, I just think the decentralized transaction log based on proof-of-work is a really cool idea, and the hypothesis that there could be a trustworthy means of making and verifying transactions without a government or central authority controlling the thing being transacted is compelling. I would think that even if I just read the white paper and there had never been a single bitcoin transaction in real life. The fact that there is a high-profile bitcoin economy is just icing on the cake.
The anti-bitcoin fanatics have carefully constructed their position to ensure that they can interpret literally any event as evidence that bitcoin is stupid or doomed or a scam. Is the price rising? That's obviously market irrationality and pure speculation. Is the price falling? That's clearly the market correcting itself. Is a certain exchange doing well and gaining a good reputation? That's an evil monopoly that goes against the decentralized goal of bitcoin. Is a certain exchange experience technical difficulties? Then that's just a bunch of incompetent amateurs, or worse, malicious scammers trying to distort the market. Is there a lack of people actually buying useful things with bitcoin? That's clear evidence that there is no real bitcoin economy. Is a business supporting bitcoin payments? Well that's still crap, since they're tying the price to the USD exchange price, or using credit cards, or the business owner is just some bitcoin shill, etc.
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>The bitcoin fanatics have carefully constructed their position to ensure that they can interpret literally any event as evidence that bitcoin is not stupid and not doomed and not a scam.
I am no Bitcoin fanatic, just an interested observer, but imho it already has.
It has provided the first viable model for a decentralized p2p [currency|medium of exchange|payment system|something as yet uncategorizable] embedded in the Internet, rather than operated by a third party.
The first iteration is imperfect, but subsequent versions that fix its problems are already being worked on. Some are scams, some are honest but flawed attempts at a better Bitcion, and eventually I expect a more sophisticated Bitcoin 2.0 to emerge.
Imho, Bitcoin represents an inflection point. It may not make it to the promised land, but one of its descendents may.
>You lost.
There is no finish line. This game never ends. And Bitcoin's success does not necessarily mean the end of government currencies. I fully expect they will co-exist for a long time.
Less emotional investment from both sides, less fixation on price/exchange rate, and more focus on the underlying ideas, technology, and their ramifications, both positive and negative, please.
The problem I have is that it is still going to be money, and it will still be subject to money's flaws.
Meet the new investment bankers, same as the old ones.
Ask yourself: if we had a global currency backed by the UN that was regulated a la NASDAQ (remember that guy complaining that mtgox was, essentially, unregulated), would that truly be less preferable to Bitcoin or similar?
Official things have a purpose. Someone, some entity to be accountable provides more of an indication of our affirmed agreement.
No idea without more detail on what that would look like.
But the ultimate goal of BTC and hopefully its forks and descendants is to replace that centralized (corruptible) human authority with a decentralized, transparent, fair, robust and reliable system instead.
It's not there yet, and may ultimately be impossible, formerly undecidable even, but it's opened a new avenue for research and experimentation that has never been possible before.
Whether Bitcoin itself succeeds or fails, that alone is a huge win imho.
Money is, in some sense, a contract between people; or perhaps a better way of saying it is that it's within the public concern. So there _must_ be some human authority backing it.
Many of the solutions aren't perfect, but neither are the human authority alternatives. The question to ask is, on the margin, is having a human authority more efficient than the self-regulating alternatives?