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Bubbles in action - Bitcoins now at $147


Dan_Murphy

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Feb 22, 2010
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Most people in IT will have heard about bitcoins, and I imagine a lot of people here will have heard about them too. For the uninitiated, they are an electronic decentralised cryptocurrency, with semi-anonymous transactions, a small amount of monetary expansion (which will decrease to zero as time goes on) and absolutely no central bank that can generate them at will. These scream out as the perfect modern libertarian currency.

So why is it all going wrong?

Currently, bitcoins seem to be skyrocketing in price, from around $10 just 4 month ago to the wildly unstable $147 when I checked today. Yesterday, it was around $115.



Currently, the currencies problem is that it lacks mainstream acceptence outside of speculation, as the main place that coins are spent it seems is The Silk Road. Since the coins are increasing in price by the hour, the currency seems to be increasing due to people being unwilling to part with their coins rather than newcomers adopting them en masse.

So, what lessons can we learn from looking at Bitcoins; would we see the same stuff happen with a gold-backed currency like Austrian Economists advocate? Are we instead watching the currency of the future preparing to overthrow the failed currencies of the central banks? Personally I think the whole thing is a proof of concept rather than a proper currency, but its interesting to observe all the same. I feel somewhat bad for the people who are about to lose their money though. :(
 
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pragmaticapproach

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Jul 21, 2010
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8,817
Most people in IT will have heard about bitcoins, and I imagine a lot of people here will have heard about them too. For the uninitiated, they are an electronic decentralised cryptocurrency, with semi-anonymous transations, a small amount of monetary expansion (which will decrease to zero as time goes on) and absolutely no central bank that can generate them at will. These scream out as the perfect modern libertarian currency.

So why is it all going wrong?

Currently, bitcoins seem to be skyrocketing in price, from around $10 just 4 month ago to the wildly unstable $147 when I checked today. Yesterday, it was around $115.



Currently, the currencies problem is that it lacks mainstream acceptence outside of speculation, as the main place that coins are spent it seems is The Silk Road. Since the coins are increasing in price by the hour, the currency seems to be increasing due to people being unwilling to part with their coins rather than newcomers adopting them en masse.

So, what lessons can we learn from looking at Bitcoins; would we see the same stuff happen with a gold-backed currency like Austrian Economists advocate? Are we instead watching the currency of the future preparing to overthrown the failed currencies of the central banks? Personally I think the whole thing is a proof of concept rather than a proper currency, but its interesting to observe all the same. I feel somewhat bad for the people who are about to lose their money though. :(
I've suspected this for ages, bitcoin is a classic ponzi scheme with a a modern twist. I can fully understand its appeal, the idea of a decentralised alternative currency and I am a big fan of competing currencies, but bitcoin AFAIC is just a short term fad, and I'll feel sorry for anyone left holding the bag when this thing pops.
 

Analyzer

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Feb 14, 2011
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What is one bitcoin in Facebook shares ?
 

lies

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Most people in IT will have heard about bitcoins, and I imagine a lot of people here will have heard about them too. For the uninitiated, they are an electronic decentralised cryptocurrency, with semi-anonymous transations, a small amount of monetary expansion (which will decrease to zero as time goes on) and absolutely no central bank that can generate them at will. These scream out as the perfect modern libertarian currency.

So why is it all going wrong?

Currently, bitcoins seem to be skyrocketing in price, from around $10 just 4 month ago to the wildly unstable $147 when I checked today. Yesterday, it was around $115.



Currently, the currencies problem is that it lacks mainstream acceptence outside of speculation, as the main place that coins are spent it seems is The Silk Road. Since the coins are increasing in price by the hour, the currency seems to be increasing due to people being unwilling to part with their coins rather than newcomers adopting them en masse.

So, what lessons can we learn from looking at Bitcoins; would we see the same stuff happen with a gold-backed currency like Austrian Economists advocate? Are we instead watching the currency of the future preparing to overthrown the failed currencies of the central banks? Personally I think the whole thing is a proof of concept rather than a proper currency, but its interesting to observe all the same. I feel somewhat bad for the people who are about to lose their money though. :(
I went to school with the creator of this. He also was one of the creators behind "bit torrent". He's jumped the bit coin ship and started this:

https://ripple.com/

Go check it out... petty interesting idea.
 

Dan_Murphy

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Feb 22, 2010
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I've suspected this for ages, bitcoin is a classic ponzi scheme with a a modern twist. I can fully understand its appeal, the idea of a decentralised alternative currency and I am a big fan of competing currencies, but bitcoin AFAIC is just a short term fad, and I'll feel sorry for anyone left holding the bag when this thing pops.
The lack of a central bank has meant its succeptable to pumping and dumping, but that doesn't appear to have been the reason for its creation, it seems it was just an experiment by nerds that has gone out of control.

Its my understanding it actually has some interesting applications as a fast way to exchange currencies, but lack of takup in online businesses has been an issue, as there really is very few ways people can spend their coins so what else can you do except hold on and watch your coins gain value?

I think a currency like bitcoin is the currency of the future, but for now I think the world isn't ready.

What is one bitcoin in Facebook shares ?
5 shares, up from 4 shares a few hours ago.

Wait another week then ask again. :O
 
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lies

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Thanks, will take a look! :)
For the record, Jed is one of the smartest people you'd EVER meet, even as a kid. He grew up in pretty dire poverty as well.. And has an "actual" photographic memory. Good friend for years... glad to see he's finally getting the respect he deserves, though... I also know he's been turning down interviews with people like Wired for ages... a bit of a recluse...

Anyway, smart guy who's had a large impact on a lot of things (considering he wrote the code which makes bit torrent unstoppable).
 

Orbit v2

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This reminds me of someone I spoke to about a year ago who put a lot of money into gold through some website. They were full of all the baloney you read here about fiat-currency this, debased that, and he wanted to get his money out of Irish banks.

So, I asked him did he have the gold in his possession? No, it was all managed through an account. So, I asked then how did he know this company was reputable, was it regulated and what would happen if it collapsed? He had hadn't really thought about that and just assumed it'd be okay :roll:

Anyone investing in this is probably in a similar frame of mind.
 

lies

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This reminds me of someone I spoke to about a year ago who put a lot of money into gold through some website. They were full of all the baloney you read here about fiat-currency this, debased that, and he wanted to get his money out of Irish banks.

So, I asked him did he have the gold in his possession? No, it was all managed through an account. So, I asked then how did he know this company was reputable, was it regulated and what would happen if it collapsed? He had hadn't really thought about that and just assumed it'd be okay :roll:

Anyone investing in this is probably in a similar frame of mind.
welll...

Actually, you're prolly safer in this than gold back funds, etc., as at least the nerds behind this are genuinely altruistic...

That being said, bitcoin HAS had security issues, and fraud issues, as it's massively valuable, but it's a LOT less of a scam than those guys on TV selling gold between the "doom-y" shows on Fox and RT, etc.
 

Dan_Murphy

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Feb 22, 2010
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This reminds me of someone I spoke to about a year ago who put a lot of money into gold through some website. They were full of all the baloney you read here about fiat-currency this, debased that, and he wanted to get his money out of Irish banks.

So, I asked him did he have the gold in his possession? No, it was all managed through an account. So, I asked then how did he know this company was reputable, was it regulated and what would happen if it collapsed? He had hadn't really thought about that and just assumed it'd be okay :roll:

Anyone investing in this is probably in a similar frame of mind.
Possibly, but the surge in price these days seems to be because of a speculative rush rather than the worries of the markets during the crash.

I've read up a lot about the mechanics behind bitocin (which are sound), so there is little chance that someone would be left without receiving their coins, just that there is little chance that those coins will be worth anything. :)
 

Dan_Murphy

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That being said, bitcoin HAS had security issues, and fraud issues,
This is true, I have heard about strains of computer viruses that are hijacking computers solely so they can use those computers for mining bitcoins and transferring coins from any wallets they find on the hijacked machine.
 

Orbit v2

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I don't know if it's been hacked, but the wikipedia article on it is pure comedy.
In June 2011, Symantec warned about the possibility of botnets engaging in covert "mining" of bitcoins,[71][72] consuming computing cycles, using extra electricity and possibly increasing the temperature of the computer
Wow!

The "technical" details in the article are complete random garbage and nonsense. Are you sure this isn't some experiment to see how gullible people are?
 

Dan_Murphy

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Feb 22, 2010
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I don't know if it's been hacked, but the wikipedia article on it is pure comedy.

Wow!

The "technical" details in the article are complete random garbage and nonsense. Are you sure this isn't some experiment to see how gullible people are?
The technology behind it is sound, even if the economics behind it isn't!

Bitcoin mining botnets have been known to exist.
 

Sync

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Aug 27, 2009
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If you pay real money for this you are not smart. The end phase:

 

greenwithirony

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Sep 25, 2007
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For the record, Jed is one of the smartest people you'd EVER meet, even as a kid. He grew up in pretty dire poverty as well.. And has an "actual" photographic memory. Good friend for years... glad to see he's finally getting the respect he deserves, though... I also know he's been turning down interviews with people like Wired for ages... a bit of a recluse...

Anyway, smart guy who's had a large impact on a lot of things (considering he wrote the code which makes bit torrent unstoppable).
So he's the pseudonymous & elusive developer named Satoshi Nakamoto?
 

ballot stuffer

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May 21, 2007
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As the joke goes it's the only currency backed by comedy.

Between the numerous frauds, hacks and wild currency fluctuations you need your head examined if you were thinking of buying bitcoins.
 

Dublin 4

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Feb 6, 2011
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Dublin 4

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Feb 6, 2011
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You geeks - go and play with your coins...

I'm stickin on the Kettle - Fair City time comin up


 
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