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Comment by reconbot | Hacker News Reader

I got 2 coins off a guy in a coffeshop about 1 year ago for $20. I sold them today for about $1600. About 2 years ago I almost dropped $1000 on bitcoins but was talked out of it by family and friends. It feels weird. I can't connect bitcoins to social or economic value. The "china explosion" of btc price won't last imho. And while I like bitcoin, it's just a currency and not an investment, as in it doesn't generate value itself. I have a hard time connecting stocks to social or economic values too. I'd like to think we can invest in actual businesses where it's a better connected to reality. I don't know how to do that however. Not yet anyway.

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I struggle with the word "currency."

Any economy built on a currency that fluctuates this wildly is going to be unpleasant.

I don't know how someone can genuinely believe that bitcoin is a currency with this kind of pricing turbulence. It is behaving like the focal point of rampant speculation.

I suspect the current fluctuation is only a result of newness of bitcoin and that over the years as it becomes more familiar, the fluctuation will mirror more common currencies. I suspect that in order for that to happen, it will need to become more liquid, with more places accepting bitcoin for purchases, and more people using bitcoin to purchase goods rather than as an investment tool.

The "problem" is that the number of bitcoins is asymptotically bounded from above, but there is so far as we know no similar bound on human productivity and output. So there's really no reason to think that the deflation of bitcoin would ever die off. At most it would slow down, as right now the upward trend is fueled not just by the "natural" deflation of the currency but also as it plays catch-up to the market cap of more established currencies, like the USD.

It's worse than that. As the post at the root of this thread observes, it's possible for bitcoins to be lost forever. So while the total number of possible BTC is merely asymptotically bounded, the actual number of BTC in circulation is going to peak and then go into a period of inexorable decline once the rate at which BTC are "destroyed" by data loss exceeds the rate at which BTC can be mined.

"The "china explosion" of btc price won't last imho"

You might be wrong ;) This week, Yi Gang (a very high-ranked chinese government official: no less than the Director of the State Administration of Foreign Exchange and Deputy Governor of the People's Bank of China), said he would personally adopt a long-term perspective on the currency! See https://news.ycombinator.com/item?id=6782870

Did you get actual cash for the transaction, or some kind of goods or service? I'm having a hard time finding people who actually got CASH MONEY for a bitcoin.

There are dozens of exchanges where you can get "cash money" for Bitcoins. Lately, the buy side (the people with cash money wanting to buy Bitcoin) is much more active than the sell side, which is why it's been climbing. In the US there's Coinbase and CampBX. Worldwide, there's Mt Gox (probably the largest, and, I believe, the oldest), and a whole lot of others. But, to get US dollars deposited into a US bank account, I'm using Coinbase.

People entering the bitcoin game generally put money into it. That money must go somewhere.

There are companies which accept bitcoins, for instance Foodler lets you pay with bitcoins.

Ugh, I kick myself all the time for not investing in bitcoins. I did end up buying 30 of them back in the earlier days of SilkRoad... Wish I saved them instead.

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