Bitcoin $600
data.mtgox.com
data.mtgox.com
2. It's never too late. The bet is that Bitcoin becomes world money. If so, all the wealth stored in cash, gold, silver, bonds and other low-risk less liquid assets will go into Bitcoin. This will make it worth more than 10 million of today's USD per BTC.
It's also worth noting that the US government now owns 0.686% of all bitcoins that will ever be created. (They seized 144k coins in the Silk Road raid, and eventually there will be 21 million total coins.)
And they probably won't do that until they've convicted "Dread Pirate Roberts"
And plummet the price back to sub dollar values
http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN...
This is rather utopic vision. None of the gold owners would sell significant part of their gold for btc - gold is used to store value for ages, bitcoin is a currency.
The thing about "store of value" principles is that the ascribed value of things changes. It generally has a floor of the marginal cost of production / extraction / acquisition, though sometimes it can fall below even that (viz: inflated currency literally not worth the paper it's printed on).
If someone's willing to pay more for bitcoin than gold, or you're betting that that the value of bitcoin will increase, trading gold for BTC makes sense.
In terms of tangible value -- Gold is more likely a persistent store of value than BTC, but where you need to move wealth quickly and easily (say, you're fleeing an unstable situation), a BTC wallet somewhere else might be a lot easier than smuggling out gold ingots. Even a (moderately) modest amount of wealth, say, $50m, would be somewhat over a ton of gold. Hard to run with that in your pockets.
If you want to limit yourself to a maximum of 45# of weight, you could carry slighltly under $850,000 at current market prices. Not insignificant, but depending on the loot you're trying to, well, loot, possibly less than you might hope.
http://www.dailyreckoning.com.au/silver-a-brief-history-of-d...
It'll be interesting to see this play out as it's a great example of a completely unregulated market at work.
http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g...
I don't see bitcoin becoming a world currency without some large changes to the protocol - for example to track users and link them with real world IDs, reversible transactions etc, and there are also political reasons which would make it very difficult - governments enjoy being able to fund deficit spending and control the economy by manipulating the currency, they won't easily give up that power.
Now, my brain melts when I see the current price.
I was going to buy $300 worth when they were 30 cents each. I didn't, though, as it involved travel to a nearby town and I was working on a book and thought I should be practical and spend the weekend on that. Ah well, one less house.
If the bitcoins in the lost wallet never get recovered, does that mean that the amount bitcoins available for trading has just decreased? My small understanding of bitcoin tells me that there only a limited number of bitcoin available once it has all been mined.
The lowest bitcoin denomination is one Satoshi, which is 0.00000001 BTC. If one Satoshi would equal one cent, this means that one US dollar would equal 0.000001 BTC.
Given that the maximum number of Bitcoins is ~21 million, this amounts to a max capitalization of ~21 trillion USD.
I'm sure this question makes it pretty obvious I'm not a cryptographer, but I'm still curious.
http://www.businessinsider.com.au/isaac-newton-and-the-south...
Putting it in BTC rather than cigarettes is a sensible strategy because even if BTC goes up in smoke (see what I did there?), at least that smoke didn't end up inside your lungs.
I'm a smoker. I'm quitting. My cig spend will likely go on BTC. Maybe.
I noticed you're based in London, happen to work near Shoreditch? I'm in contact with Dishoom - trying to get them to accept BTC. Another reason to quit, eh? ;)
There is absolutely no guarantee that low stock will rise [2].
[1] http://en.wikipedia.org/wiki/The_Art_of_Thinking_Clearly
[2] http://www.nasdaq.com/investing/5-stock-market-myths.stm
Still to late to invest?! :P
Had I put $500 in then I would have $1500 now :(
Only if you had invested and cashed out would you have $1500. And then you might feel exactly the same as you do now in a weeks time. Then again bitcoin might crash and you would feel good for getting out now.
If you want to invest you have to be entirely willing to lose all of that money. You can't lose money that you didn't invest so it is pointless thinking about the past.
I just think that you should be willing to lose it all to get to a situation where you can zero your risk (whilst keeping a reasonable amount in).
Also, we yet to see journalists screaming "insane bubble!" like in April, when it hit $100. So far media was quite positive and informative.
I don't understand why people keep price quoting mtgox as it seems it's not very reflective of the other indicies.
MtGox is trading higher because people can't reliably and easily withdraw USD. In order to take on this risk, the sell price is higher.
The MtGox USD price is not real. At least not for the purposes of arbitrage. Although it says $600 USD, no one (or almost no one) is actually buying or selling BTC on MtGox for $600 USD. They are buying/selling it for other currencies and MtGox is using an internal exchange rate to convert it to USD. Their internal exchange rate does not reflect the risk free rate you can actually get if you were to try to arbitrage it across borders (namely china/japan). MtGox does not allow you to withdraw USD.
What is happening is that people are buying BTC on Mtgox and then transferring it to other exchanges to withdraw their USD.
For more accurate price information I suggest goign off coinbase or bitstamp.
Regarding price - MtGox's has been fairly in step with BTCChina's price. BTCChina and MtGox both represent the top exchanges by 30-day volume, so it would seem to me that MtGox's price is more accurate than BitStamp's price which lags miserably behind every rally.
Although from what I was reading the last time this came up, these issues are largely caused in no small part by poor decisions on the part of MtGox.
According to graph at the top of mtgox.com there are about 1000-3000 bitcoins being sold for USD every hour.
This volume is huge compared to the volume for euros or any other currency on Mtgox.
Anyone that quotes MtGox as the reference bitcoin price almost certainly has little experience trading bitcoin. Bitstamp is a much better reference price or if you want to be US centric CoinBase.
It's not that arbitrage opportunities don't exist in the Bitcoin world. There are some rare and fleeting ones. This just isn't a good one.
After a lot of back and forth they said I could pay a 5% fee and get my USD in 7 days. Basically a bribe for them to convert to JPY and send the transfer through..
At the time, they said withdrawals would take 2 weeks.. Now if they say 6 weeks you should pray :p
I ended up buying back some BTC (at about 10% loss due to price) and then selling later on bitstamp due to the recent price rise. Worked out okay for me but please DO NOT USE GOX FOR USD.
"Well you see, when Bitcoin was only worth $8, Daddy tried to buy some, but to buy them he had to scan his passport and send it to MtGox, Daddy thought that was a bother, so he shrugged and moved on."
"I am hungry daddy."
:(
The reason is that it's perceived as anonymous is that there is no ceremony involved with making a bitcoin 'bank account', that means that you can do it without identifying yourself. You can make a Bitcoin address even without connecting to the internet, you can make a private key that fits to an address, and not let anyone know that you have it.
Now you have an anonymous account, that you can send money to, but everything that happens to that money is public.
Order a Pizza delivered to your door, paid with bitcoin? Gone anonymity. Are you the one person that buys 3 apples every tuesday at a particular food stand paid with bitcoin? Gone anonymity.
Relevant to this example: Every entity that exchanges Bitcoin for Dollars or Euros is legally required (anti-money laundering laws) to identify you. In Canada they apparently even need your palm print.
http://www.slate.com/articles/news_and_politics/view_from_ch...
Another thing; I didn't buy from my usual takeaway because they didn't accept bitcoin. So bitcoin acceptance was the primary factor in making me choose a new takeaway.
So remember, when your bus drivers or barista tells you to buy Microsoft shares, it's probably best to consider Put options.
You're probably right, but she wasn't saying "buy it" just mentioning its existence.
And the buy/sell mentality only really applies if you're planning on "cashing out" at some point.
So, there is no bubble in my opinion, there will be ups and downs without a doubt, but I see this out lasting all of us in some form or another!
1. I'm probably too lazy to look this up, but given mining Bitcoins essentially boils down to solving hard math problems and there is no centralisation, what prevents collisions from two miners mining the same bitcoin at the same time? Is there a GUID element involved? (if so, then perhaps collisions are possibly, just extremely unlikely as to be practically zero).
2. If the bitcoin mining difficulty increases on a known path, would it be possible to tie the current BTC price (probably would have to try estimate a forward price) vs the current cost of GPU processing on EC2 (ie. via Amazon's spot market mechanism). Has anyone done this?
Absolutely nothing. There can, in fact, be two blocks at the same height. This is a temporary fork. What happens is that miners mine the next block on top of one or the other at random, and the chain which gets the next block "wins", and everyone then mines on top of that.
To make it clearer, at any time, the longest chain of blocks wins. There can be two chains of the same length at any point, but that doesn't last for long, as it's statistically incredibly unlikely that this will continue for more than a block or so.
There's a page full of times that it's happened, here: https://blockchain.info/orphaned-blocks
In cases there two blocks happen to be mined simultaneously there's a brief period of uncertainty regarding which transactions were committed and who earned the mining reward. But as blocks are generated on both branches at random intervals, eventually one will become longer and snowball from there. The key is that the average time between blocks is about 10 minutes, muck longer than the communication delay between miners.
As to #2: first of all, the Bitcoin protocol knows nothing about exchange rates. And secondly, in a market-based exchange, you can't just "tie" a price to anything. You could set up a fixed-price exchange, but if the market price was different from the one you picked, either buyers or sellers would look elsewhere to get a better deal. (That is, unless you provided some additional benefit over the existing exchanges that was considered valuable enough to make up for the price difference.)
The math can be most easily done at mining.thegenesisblock.com
Nitpick: it boils down to solving the same ridiculously simple math problem billions of times with a different parameter until by pure blind chance you get the right result.
and saying "the value of the bitcoin economy is $5bn" or whatever is disingenuous. Economies are measured by the FLOW of money - the gdp, not the STOCK - the total value of the money supply in a different currency. The amount of money changing hands is what matters - and afaik, that's miniscule in comparison.
Distributing a brand new decentralized currency is a hard problem. I think Bitcoin did a pretty good job with its mining reward mechanism. Also, it's not "all" Bitcoin has done. Would you say "all" Paypal has done is make Peter Thiel and co rich?
> and saying "the value of the bitcoin economy is $5bn" or whatever is disingenuous. Economies are measured by the FLOW of money - the gdp, not the STOCK - the total value of the money supply in a different currency. The amount of money changing hands is what matters - and afaik, that's miniscule in comparison.
When people quote Bitcoin's market cap they generally do so to illustrate how tiny Bitcoin is compared to USD or other currencies. The fact that it is still so small is an argument people use to justify its rising price. If anything, using a lower figure is what would be disingenuous.
BTW, I correctly predicted the April crash 2 days in advance.
Past performance is not an indicator of future results
> I didn't say the soon-to-come crash would be the end of Bitcoin
You said "I give it less than 10 days until the crash" which sounds rather dismissive. I think you should work on your communication.
Well, that says really all there needs to be said.
> It doesn't take much to say "the price will go down a bit some time in the next 10 days".
OK, let me be more precise: "the price will go down to less than half its peak."
I bet 0.00125 BTC that the lowest price as reported at http://bitcoincharts.com/charts/bitstampUSD won't fall below $321 USD until after Nov 29.
To clarify, I will pay out under the following circumstances:
You reply agreeing before this reply is "12 hours ago"
I accept your reply
On 2013-11-30:
Load http://bitcoincharts.com/charts/bitstampUSD
Tick "custom time"
Set start date as 2013-11-18
Set end date as 2013-11-29
If the "Lo" price is less than 321, I will pay.
Otherwise you owe me 0.00125 BTC
Deal?
This will be interesting :)
Bitstamp traditionally has lower prices than MtGox, so that's in your favour.
My terms are such that if any trade happens below $321, you win - not just daily average or what have you.
I find it amusing that the payout would be skewed in your favor by the nature of the bet.
Well, cheers anyway. Maybe I'll buy something in 10 days with the bitcoin I would have paid you ;)
> the payout would be skewed in your favor by the nature of the bet.
Yes, if I'd won, the amount would be worth more in dollars than if I lost. But if you're sincerely predicting a crash, you don't believe I'd have won.
So he literally gets his money back.
I think you should make the bet in dollars.
http://www.cryptocoincharts.info/#jump-btc-usd http://www.reddit.com/r/Bitcoin/comments/1mi4h7/mtgox_withdr...
http://www.bloomberg.com/news/2013-11-18/u-s-agencies-to-say...
Buy X amount of USD into BTC
wait for the price to rise to X+ε
Sell for your original X amount in USD
Watch the other ε amount in BTC ride the waves
Buy X amount of USD into BTC
wait for the price to rise to X+ε
Buy X amount of goods, using BTC to pay, thus supporting the economy.
Watch the other ε amount in BTC ride the waves