Posted: 1/14/2015 1:11:12 PM EDT
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Bitcoin broke the $250 mark, then the $200 now resting at $185 (per the Coinbase charts).
So far around a 50% drop in the past month. I don't own any but I do follow it. Following a 15 percent drop on Tuesday, the price of bitcoin took another hammering on Wednesday, making some traders worry about the stability of the cryptocurrency. Bitcoin—which saw levels above $400 in November and topped out at $1,150 in 2013—briefly fell as low as $170 in Wednesday morning trading before edging back to just under $200. Bitcoin is notoriously volatile, but its swings are often linked to news about the technological ecosystem that supports it. This time, however, the source of the drop is less obvious. http://www.cnbc.com/id/102337172#. |
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I see what ya did there... |
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Quoted:
bitcoin is the future, so i've heard No, electronic currency is the future. Bitcoin is not the format it will be in. Heck, it can be argued we have electronic currency now. My paycheck is automatically deposited into my account. I buy stuff with my credit card, and every month I do an electronic transaction with my credit cards to pay them. There isn't a single actual dollar bill involved anywhere. |
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Quoted:
No, electronic currency is the future. Bitcoin is not the format it will be in. Heck, it can be argued we have electronic currency now. My paycheck is automatically deposited into my account. I buy stuff with my credit card, and every month I do an electronic transaction with my credit cards to pay them. There isn't a single actual dollar bill involved anywhere. Quoted:
Quoted:
bitcoin is the future, so i've heard No, electronic currency is the future. Bitcoin is not the format it will be in. Heck, it can be argued we have electronic currency now. My paycheck is automatically deposited into my account. I buy stuff with my credit card, and every month I do an electronic transaction with my credit cards to pay them. There isn't a single actual dollar bill involved anywhere. The abstraction that's laughable isn't electronic currency. It's the idea that Bitcoin was going to supplant the Dollar. |
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Quoted:
No, electronic currency is the future. Bitcoin is not the format it will be in. Heck, it can be argued we have electronic currency now. My paycheck is automatically deposited into my account. I buy stuff with my credit card, and every month I do an electronic transaction with my credit cards to pay them. There isn't a single actual dollar bill involved anywhere. Quoted:
Quoted:
bitcoin is the future, so i've heard No, electronic currency is the future. Bitcoin is not the format it will be in. Heck, it can be argued we have electronic currency now. My paycheck is automatically deposited into my account. I buy stuff with my credit card, and every month I do an electronic transaction with my credit cards to pay them. There isn't a single actual dollar bill involved anywhere. I concur. For any investment, ask "what problem does it solve?" Define the problem, then ask if it solves it. Coke solves the problem of humans needing to hydrate. It does it well by a sugary formula that human's find pleasing. CSX (trains) solves the logistical problem of moving heavy stuff from were it is currently located to were it is needed. It does it great by doing it cheap, fast, and secure. The U.S. Dollar (USD) solves the problems of people needing to exchange one thing of value for another. I have a cow and want a pig. The guy that has a pig wants a duck. And the guy that wants a duck wants a cow. The USD solves this well by being backed by the largest most powerful nation on this Earth. The USD makes for a lousy store of value long term but it is relatively stable compared to most other currencies. The government institutions (FDIC, laws-i.e. mandating it good for public and private debts, Credit cards) surrounding it make it great for commerce. While the USD is not unique in this endeavor (EURO, GBP, CNY, etc), it is the world's reserve currency for the foreseeable future making it even easier to conduct business internationally. Bitcoin is similar to gold in that it has a somewhat limited supply and if is stolen its fungible properties make it difficult to recover. The thing where Bitcoin is not like a commodity is that the bitcoins don't actually exist. The strength that separates bitcoin from gold being its ability to send it across the internet is also its weakness in security. You can't print them out Bitcoin's zeros and ones and secure them in your backyard. Bitcoin is just a public ledger that says this private/public key has this much. If I know your private key, I can spend your coins (create an output from the inputs of previous transactions hashed with my private key). Whether I get your private key from an insecure website (online wallet or exchange), cracking the cryptography (very improbable but not impossible), or with male-ware that infects your computer, your bitcoins are 'and now there gone'. I always think there will be fringed (partially libertarian) demand for decentralized currency. Whether this is for illicit activities or to snub the evil "Rothschild" banker is up for debate. The only part that provokes me to consider 'investing' in this greater fool trade would be that amount of money and resources invested in its infrastructure (miners, online wallets, payment processors, etc.) might create a pop. But I cannot valuate this so I doubt I would go further. Bitcoin's strengths are also its weakness. The decentralized, irreversible, semi-anonymous nature is the natural breeding ground for criminals, scammers, and hackers. I love the technology aspect of a decentralized cryptographic shared ledger resistant to double spending, but I do not see it being widely adopted (meaning overtaking or even being a blimp in online transactions relatively compared to credit cards). People want to feel safe with their money. Transactions over the internet are already easily possible with credit cards. And they are protected/insured against theft! There is no problem needing to be solved on part of the consumer. Bitcoin was marketed towards business owners/stores for the low transaction costs and irreversibility. Now this does indirectly benefit the consumer if the industry passes the cost-savings down instead in traditional capitalistic ways of staying cost competitive. But this can be offset with the difficulty securing them (while maintaining their accessibility for transactions). Again, people want to easily spend it; otherwise, it just reinforces the greater-fool aspect of it. The fact that an unknown person can steal $800 million from Mt.Gox (malleability or inside job?) or $5 million just this month from BitStamp (unsecured hot wallet?) and the criminals getting away and are still unknown are proof that this system has some major issues. While not with the actual Bitcoin code, which appears cryptographically secure, it undermines the creditability of this financial system. If these technology companies can't secure their funds, how is the technologically dumb consumer suppose to secure them? You might say, 'paper wallets generated on a remote computer with no internet access' and it sound practical to those failing to see the point in this mechanism; the whole purpose of bitcoin is for easy transactions (meaning I need easy access to my private keys either via my cellphone or computer). I won't even talk about waiting for multiple transaction block confirmations (~10 minutes each). I can do online commerce with my credit card with much less volatility and less worry about "and now its gone." Yes, the credit card transaction fees of 3-5% might be higher than Bitcoin transaction fees, but for the insurance against theft or even of being scammed by a business--is in my opinion a fair price to pay for the consumer. Understand the large run up to $1,000 was a pure bubble. People saw the 100%, 1000%, 10,000% run-up with people making millions and thought they were missing the train. More piled on fueling further speculation. Again, the techno-libertarians might love it, but the mass populace consumers who barely know how to use a computer or even download an app will have a hard time with it. The biggest problem I see Bitcoin solving is the ability to transfer wealth across borders. For instance, I am in Russia or Cyprus and need to (mostly illegally) get value out of, or away from, the Country. This Bitcoin does well (again going back to it always being in demand with libertarians, anarchist, and criminals). For every day transactions or a store of value, there are better alternatives. |