Bitcoin plummets 32% in two days, threatens mainstream adoption | Hacker News Reader

Bitcoin plummets 32% in two days, threatens mainstream adoption

bloomberg.com

14 pointsilamont24 comments

I wonder if Bitcoin's recent adoption by some big sites is actually what is bringing the price down as people with stored up BTC are sending them to merchants, who are instantly converting them to their preferred currency?

THat's an interesting thought, - I vector toward thinking that there was a chokehold on new money coming into the system. It was really hard to acquire bitcoins by a wide base of people.

It got tons of press - but at the end of the day Joe Schmoe who has a desire for it has no idea how to purchase it.

I've always thought of it like this: Bitcoin:Cryptocurrency::Yahoo:InternetSearchEngines

Cryptocurrencies have a strong future, but I don't think Bitcoin has much of one. Yahoo had its early glory, but it declined as other search engines solved its problems.

Yahoo is doing just fine

As of early/mid-2014, their share of the search market hit its lowest ever of 10% of the market. My stats for my web properties paint an even worse picture.

As a company they're doing fine because the market size is growing and they're getting aggressive about paid search, not by being technically superior.

For anyone watching bitcoin technicals, has the volume been driving the volatility or has the volatility driven the volume? The volume spikes seemed to coincide directly with the price drop, so I am assuming this is someone just trying to divest themselves of a lot of bitcoin over the course of a few days.

I don't think cryptocurrencies long term value is in their USD amount. It's in their other features like being able to send money across the world with minimal transaction fees and certianity the transaction will not be interrupted.

If the value of bitcoin is so low that you can't buy enough of them to pay for your purchase without drastically changing the value of the currency then they're not particularly useful as a method of payment.

At the moment of this writing, there are 13725450 Bitcoins in existence [1], with a value of $195.30 each [2]. That makes a grand total of $2,680,580,385 (2.6 billion).

How low would they have to fall for there not being enough of them to perform a transaction?

[1] https://blockexplorer.com/q/totalbc [2] https://www.coinbase.com/charts

2.7 billion market cap, not available to you. Say you needed to make a $10,000+ purchase. If you can't buy or sell that much bitcoin without considerably altering it's price it becomes a hassle of a currency.

Well, it's good enough already.

First, international transactions just don't matter that much for most people.

Second, for small amounts of money use a Credit Card. The extra cost is negligible. Or if this is not possible, something like Western Union. This will cost 5%, but it doesn't really matter for amounts < $1000 and people do it all the time. For larger amounts (> $10.000), you can send a cheque or for > $100.000 do a stock trade on two markets.

Note that the existing systems have fraud protection and convenience as features which are worth something. If bitcoin would threaten any of the existing systems, banks will simply lower the fees. At that point Bitcoin would be only slightly cheaper but less convenient and secure.

This means it's another time to buy in. I made a ton of money off the last debasement; I bet this one will be incredible.

I still consider the coins undervalued at $800/btc.

How can you put a value on an intangible good that is backed by nothing?

Godaddy.com must blow your mind.

Perhaps "intangible" was the wrong word. But domain names, unlike bitcoins, are actually useful for something. Bitcoins are just placeholders for value or wealth, like any other currency. The only reason they are useful is because we say a bitcoin is worth x dollars. We don't have to make an artificial distinction like that for a domain name because it is obvious what it is used for.

Even if domain names were free they would still have value, if bitcoins were free they would have 0 value.

If domain names were free one guy/robot would inevitably take them all. If he couldn't sell them or be paid for the monumentally complicated service of allocating them to the world (they're "free") then in the end nobody would have any domains except him, and everyone would use a different resolution system that wasn't free. The guy's domains would be worthless.

If domains were free they would have zero value. Just like bitcoin and virtually everything, ever.

No, if the price of domain names collapses tomorrow to zero dollars news.ycombinator.com would still point to this website. This is the intrinsic value.

This intrinsic value isn't so intrinsic when every DNS registrar stops providing DNS services because they are unable to make money doing so.

Fat lot of good it would do for n.yc.com to "point" here if there are no more authorities to do the pointing, and everyone has moved to a different system.

There is absolutely no "intrinsic" value in a domain, other than that provided by the economic structures around it.

Eh, I can trade a bitcoin for +/- 200$ bucks, currently. That seems like a example of "good for something".

I can also transfer currency of any type, via the internet, without interacting with a financial institution(buy bitcoin using your preferred currency, trade bitcoin, the received converts bitcoin into their preferred currency), this capability also seems like it could be "good for something".

I feel like the "it's internet funny money!" claims are just as wrong as the "bitcoin will change everything about currency" claims.

That's not what the intrinsic value argument is about. The "good for something" (as intrinsic value was put here) is the question if something is still useful if its use as a placeholder for value collapses.

If the price of rice collapses, I can still eat it. If the price of cars collapses I can still drive mine to work. If the price of web domains collapses, people can still use it to visit my web page. If the price of Bitcoin collapses to zero, you can still do what with your coin?

US Dollars have no intrinsic value either, this does not stop anybody from using them.

Talking about rice is silly, we are talking about currency. No major economies currencies are based on anything with intrinsic value.

Technically they do because the paper and metal cost money. Other than that, they are actually backed by something.

Backed by what? Faith? Confidence? You can't trade your US dollar in for gold. The note literally just says, "You must accept this for any debt(Because)".

Are we really going to go down to that intrinsic value of the paper it's printed on??? To be honest, I actually have little faith in bitcoin myself, but I can at least see the reason why it has taken off as far as it has, and it did earn me a pretty penny when I got out(I mined all my own bitcoins and just to experiment with a new technology, right from the beginning).

I just get tired of hearing extremophile arguments this way or that.

You have to pay taxes in US dollars if you are an American citizen. So the intrinsic value is not getting thrown into jail. But you are right, we mostly use USD because we trust that we can always find someone who will want it.

All major fiat currencies have an army/police force backing them up. Not that long ago all major currencies were backed by gold or silver. Fiat is a very small, recent part of the history of currencies.

Talking about rice makes perfect sense in explaining intrinsic value.

If we look at major currencies that are not upheld by force we have gold and silver which have been staple currencies with intrinsic values throughout probably most of civilized history.

Other societies uses cigarettes (jails) as currency, because even non-smokers know they can easily find someone to trade with, so cigarettes become a storage of value that is not upheld by any violent force.

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