Bitcoin value dives after China banks ban
aljazeera.com
aljazeera.com
Yes, the virtual currency that soared from $100 to $1200 has plunged down to $1000.
Edit: 10% drop is considered a "correction". 20% drop is usually a bear market.
How many of these multi-dozen-percent downward fluctuations will it take before those storeowners and shops that take bitcoin stop doing so or start maintaining an insane markup on Bitcoin prices?
You should know that you don't actually have to hold bitcoin to accept it as a payment method. Services like Coinbase let you instantly exchange it to cash if you use their merchant tools, so the merchant is actually exposed to zero risk.
China telling large banks they can't handle BTC will not have any impact on the currency because everyone buying/selling BTC in China weren't using the banks anyway. The "dive" was potentially a slight overreaction to the news from China but it's also a fairly uninteresting fluctuation in a highly volatile resource.
how are average people in China buying bitcoins without the use of a bank??? How do they get the cash to the seller of the bitcoin I guess is my question?
Do they walk into a brick and mortar "bitcoin store" and make a deposit (with cash)... and then they can trade from that "bitcoin store"? (Provided they accept all the risk).
Is there some other user friendly way this happens that doesn't require the use of cards that flow through financial institutions?
Or is the trade really complex currently and relegated to just "people in the know" so to speak?
Just trying to get an idea of how these new rules would affect the average Chinese.
I imagine they use that or something similar.
2. mining.
This "news" (which is really just the official announcement of something announced unofficially a couple weeks ago) changes nothing whatsoever about the status quo.
can't they just tell the banks that they can't deal with bitcoin businesses in the future???
but I wouldn't.
Those transfers to the exchanges from the banks are currently one of the few reliable monitors of this activity.
So I would first put the tech in place to monitor the bitcoin network... then I would say that you can't use banks to get to the exchanges anymore. (Monitoring blockchain changes on that scale is non trivial).
Anyway, if I was serious about impeding bitcoin usage... that would be the order I'd do things in.
I know, because my coinbase didn't come through till last Tuesday.
"Any statement about bitcoin's value is outdated by the time it's published."
Whenever you see a huge crash in a short period of time and a quick gain, expect it to recover. If you see a prolonged slow decline, it's time to abandon ship...
Oh to buy a bunch at 2009 prices...
Honestly i expected more but it's already recovering it was more like a minor bump in the road.
> Prices on BTC China, the country's biggest Bitcoin trading platform -- which had stood at more than 7,000 yuan (around $1,100) each -- plunged by more than a third to an intra-day low of 4,523.12 yuan.
A 33% reduction in value is a dive. It may be constrained to the yuan, to China, to the particular exchange or just the crazy fluctuations of bitcoin, but it is still a dive no matter how you slice it.
Everywhere else the dive was much smaller, and it's already recovering.
http://bitcoinwisdom.com/markets/bitstamp/btcusd
Explore various intervals (time period). Even at the 1d interval, there are 15% swings. Is this bad, given the qualifier that "it is Bitcoin" after all? That depends on what you expect Bitcoin to be. If you expect to use it as a currency, then yes, it's very bad. If you earned your Bitcoins yesterday, and you have to pay a bill today, then that kind of swing is a big problem. You could end up taking a 15% haircut. If you expect to use it as a speculative investment, then you've got a lot of opportunities for trading.
Both of these are fine, but they're opposing goals. Most economists agree that you want stability in a currency; that is the currency should act as an accounting measure only. It is a means of storing value at as close to NET zero gain/loss as possible, with it's real value being the ability to transact goods indirectly.
I'm not sure what values Bitcoin endeavors to hold, but if we're using duck typing, it looks a lot more like a speculative investment than a currency.
'Platypus typing', maybe?
I tend to agree that Bitcoin acts more like a store of value than a primary medium of exchange. Theoretically if a lot people started to use Bitcoin the volatility should decrease. Even still I think we may see the development of an alternative cryptocurrency that's supply is able to inflate dynamically to offset deflation...
This could be a viable way of taking relatively anonymous payments and not loose more the say 5% to market fluctuations.
And you have 50 - 50 odds of loosing or gaining from market fluctuation so i don't see the problem.
Plus you can temporarily stop taking payments if your automated script notices the market fluctuate too fast and resume after the market has stabilized.