Hacker News Reader

Comment by Ihmahr | Hacker News Reader

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?

View on HN

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.

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.

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

Irrationality from regular-joe "investors".

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?

Reply on news.ycombinator.com