PRISM’s Effect on Bitcoin Prices | Hacker News Reader

PRISM’s Effect on Bitcoin Prices

coindesk.com

73 pointsdcawrey18 comments

The idea that this is a result of PRISM is, well, specious. You might just as well argue that its due to CoinDesk's article on Apple's iMoney patent which has been read as a statement of intent for Apple to launch a competing digital currency.

Though I think its a lot more likely its a combination of profit taking a short-term weakness tied to the rash of recent government efforts directed at bitcoin-related and other online money exchange businesses based on anti-money-laundering violations. PRISM seems pretty distant (there doesn't really seem to a plausible explanation for why the PRISM revelations would decrease interest in bitcoin, while there is plenty of more directly bitcoin-related news that would explain the effect.)

Causation vs correlation.

I have eaten approximately 50% more Chobani since the PRISM story broke, so PRISM has definitely had a huge impact on my consumption on Chobani.

You've got that backwards, your consumption of Chobani obviously caused the PRISM leak.

This theory supposes that Bitcoin is mature enough to respond to outside influence. The market isn't stable enough to endure events inside of the market: major exchanges getting hacked or experiencing downtime on a frequent basis, "banks" getting "hacked" with little explanation, and whales causing major price shifts by spending a few hundred thousand $ on a big buy or sell.

The market isn't by any stretch of the imagination mature, but my impression by watching the price these past three months is that external events do influence the price from time to time. That being said, the shifts happening lately are most likely caused by random whales cashing out.

NSA/PRISM has nothing to do with Bitcoin. I predicted this a month ago in an HN thread. It has to do with DHS freezing dwolla and speculation that similar things will happen elsewhere. Some of us (that bought in years ago) are profit harvesting. That's all. It takes a while to get a lot of cash out of mtgox.

I am surprised to see the value of the bitcoin fall. Although transactions are public, it still beats credit and debit cards, paypal, etc.

Cash is the only thing that wins from bitcoin in this respect, but is useless on the net.

What am I not seeing?

Irrationality from regular-joe "investors".

For most people, for most uses, it does not beat credit cards.

Uncertainly, as usual, is my guess. For one thing (more paranoid) people are worried that the fallout from PRISM, the realization how easily everything is monitored, will cause a loss of trust in the internet, resulting in laws that damage it internationally. Maybe even a balkanization of global networks. Bitcoin will have a harder time operating without a united internet.

It does put China's insistence on a local internet, surrounded by a 'fire wall', and serviced by local companies, in a very different perspective doesn't it.

Bitcoin is not yet established enough that a few warrantless wiretaps can't drive it into the ground (of major exchanges) [1]. The likelihood those wiretaps are already going on increased, and the market is pricing that in.

[1] Edit to clarify: Currently, I'd estimate at least 25-50% of bitcoin transaction volume is exchanging with other currencies. Shutting down the major exchanges will prevent BTC getting over the hump from a temporary medium of exchange to an actual currency.

Bitcoin can handle this by cash for bitcoin.

My theory is that NSA's ability to crack the Bitcoin hashes might be better than we thought.

Do you disagree? Let's discuss instead of downvoting.

Additional point: some think Assange's INSURANCE.AES256 was encrypted with AES-256 specifically because he knows that the NSA can crack or force this encryption method, so the US Government got a tipoff as to what Assange could release if his situation became dire.

What do you think?

I was initially surprised to see it fall, too. My kneejerk expectation was for the price to rise.

In retrospect, it's reasonable to believe that the expectation of anonymity has decreased, especially among future buyers/users. For some, anonymity was a major reason to hold/use bitcoin.

A couple of the major transients in the past week have correlated well with NSA-related news. The big increase in volatility started with a sudden spurt of trades on ~ June 3. That had nothing to do with any obvious news stories.

The point of bitcoin was never necessarily the ability to privately exchange value (given that the blockchain is public, if you can tie a wallet to an individual you know their transactions).

It was to provide a currency that was decentralized.

The Prism leak also seems to have caused a series of severe thunderstorms in Bangkok. It's really been wet here.

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