Bitcoin weirdness

[AndyJWest]

Strange things going on: a 'bitcoin billionaire' has been giving them away - $13,627 worth. Needless to say, this has led to the price fluctuating.

Guardian report: http://www.guardian.co.uk/technology/2013/apr/10/bitcoin-new-high-losing-160

Business Insider: http://www.businessinsider.com/who-is-bitcoinbillionaire-2013-4

I'd say that it is a safe bet the the bubble will burst. Anyone want to start investing in tulip futures? :03:

[Feuer Frei!]

Bitcoin is mostly untraceable and mostly secure. Bitcoin is good in the sense that it's decentralized, and the network of bitcoin users keeps tabs on itself, knowing the location of every bitcoin. This prevents people from making counterfeit bitcoins.
You can buy real stuff with Bitcoin and you can also, believe it or not, buy illegal drugs with them, without a serious risk of being caught. SOURCE (http://en.wikipedia.org/wiki/Silk_Road_%28marketplace%29)

Bitcoin exists outside of the IRS, the Federal Government, banks and basically every other authority. As long as you can access the internet, you have access to your Bitcoins.
At this stage, in fact until the year 2140, meaning until then at least they won't be inflated away.
Here is why (http://au.businessinsider.com/why-bitcoin-speculators-laugh-at-anyone-who-calls-it-a-bubble-2013-4) Bitcoiners are laughing at everyone who thinks it's just a bubble.

Prices may rise 2-fold, 4-fold, 8-fold, no-one knows by how much. Why? Because there's no real way to find out what a fair price for Bitcoin is.

Until 2140, you'll be fine.

[AndyJWest]

Until 2140, you'll be fine

I'm fine now - I don't have any bitcoins. :O:

Seriously though, putting money into something 'because there's no real way to find out what a fair price for it is' seems to me to be rather a gamble. Particularly when it has no intrinsic value at all, which would seem to imply that the 'fair price' is actually zero. As for the claims of the bitcoin-promoters, obviously they will state that this isn't a bubble - as did the promoters of every previous bubble. And no doubt come the next bubble, the claims made will be the same...

[Tribesman]

Here is why (http://au.businessinsider.com/why-bitcoin-speculators-laugh-at-anyone-who-calls-it-a-bubble-2013-4) Bitcoiners are laughing at everyone who thinks it's just a bubble.

And that piece explains that it is just a bubble.

[HundertzehnGustav]

5 lines on: it might go to zero and you lose everything.
95 line son how high it will go and might go and maybe its awesomeness reinvented.

a lot of hype.

two direct words:
don’t know the probability of each possible outcome, but I firmly believe those are the only two possible options…

and at the end of the article

WARNING: Bitcoins have no inherent value, and they could go to zero at any time. If you decide you just can’t stand missing out all all the Bitcoin riches and plunge in, and they instantly go to zero, don’t come crying to me.

so it is all virtual money with no physical backup whatsoever.
i have never sold anything, i know squat about trade or anything.

but even "I" understand.
Bitcoins is all mental, its all in your head.

and the human head is a WEEEIIIRDDD piece of machinery.
Nope. not for me.

[raymond6751]

network of bitcoin users ????

The local news did a story on this. Apparently a trend, but not actually being accepted by very many businesses. The commentator asked the "bitcom expert" this ' Ok, I have $1000 worth of bitcoins and now I want my money. Where do I go to get my actual $1000?' Answer was vague.

"You have to find someone willing to buy your bitcoins."

Hmmm

[Chuck U F4rley]

You actually managed to draw me back from lurker mode with that topic. :-)

Getting 1000$ for bitcoin: mtgox.com for starters. That's just one of the trading houses.

2140: Until 2140 (or thereabouts) new coins can be mined. The total amount of coins is 21 million, not more. Sounds bad, but you have to keep in mind that bitcoin has 8 digits, so that should work out. Much worse might be, that bitcoin is inherently deflationary, so people have no real interest in selling them, since one bitcoin would be worth more in the long run. Kynesian economists probably vomit at the thought of that.

Bubble: Likely, since the bitcoin was at just $10 in January. The question is: If the bubble bursts, will it dive BELOW $10 or not? My guess ist: no.

Fair price: What's fair to you? Fair is what the market decides, in my book. In that way bitcoins are probably the most democratic form of money there is, since all other fiat currencies are in some way manipulated (Excahnge rate management, politics, interest rate adjustments, etc. pp.)

Money being mental: Of course bitcoins are all mental and have no real value. No Fort Knox no nothing. But take a look at the fiat currencies: The gold backing those is negligible compared to the amount of paper money that is in circulation. What gives currencies their strength is just one resource: Trust. In that way bitcoin is the same as any other (fiat) currency. The difference in my book is that nobody is screwing around with it with policies (Just yet, anyways) and that it is a truly multinational if not global currency. As such it should weather a local crisis a lot better than a normal fiat currency.

[AndyJWest]

Fiat currencies aren't backed by gold. Which is probably just as well, considering that the current gold bubble is likely to burst soon...

http://upload.wikimedia.org/wikipedia/commons/thumb/9/9c/Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012 .svg/800px-Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012 .svg.png

[Tribesman]

Bubble: Likely, since the bitcoin was at just $10 in January. The question is: If the bubble bursts, will it dive BELOW $10 or not? My guess ist: no.

Yet what happens if a trading house like the one you mention shuts down the bitcoin business?
If more follow todays move by mtgox in stopping trade and it extends then they become worthless.

[Chuck U F4rley]

Fiat currencies aren't backed by gold. Which is probably just as well, considering that the current gold bubble is likely to burst soon...

Well, most nations still do have a gold reserve which, for all intents an purposes, is worthless in relation to the total amount of money in circulation. And that's what I wrote.

Yet what happens if a trading house like the one you mention shuts down the bitcoin business?

That's the question, isn't it? The historic low for BTC last year was 7$something, which is why we should be good if a crash (which I am still not sure is coming, although it sure seems likely) does not go below say 10ish. Me personally? I'd be thankful for a little cooling of the market, because even although I made a ****load of cash in the last few weeks, I hardly believe this to be sustainable. Too much trust might just be as bad as too little, it seems. Then again that probably is the same for all other types of currency in theory, be it fiat or virtual. Just ask the Cypriots how much they trust in their banking system and the ability to get cash at all times at the ATM right now.

[Tribesman]

Chuck. At what stage did you offload all your bitcoins?
How far will you expect it to fall before you convert cash back into bitcoins again(if you intend to do the gamble again)?

[Chuck U F4rley]

I offloaded at 130ish €s. I assume it'll go down to the twenties. Or maybe that's hope only? Assumptions rest on at least some hard data, right? ;-)

Ride the elevator again? Not sure, I think I might, but... that depends on my whims and my spare time at the time of the next bubble really, since I have a job and a family and a life that takes precedence. :-)