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Bitcoin The Almighty Buck Technology

The Bitcoin Strikes Back 344

Posted by Soulskill
from the digital-boom-and-bust dept.
smitty777 writes "Slashdot readers are no doubt informed of the infamous crash of Bitcoin. In fact, its demise was followed closely here. Wired has a recent article tracking Bitcoin's climb out of chaos. Valued at $17 before the crash, it had lost 90% of its value due to the hacking incident, down to a low of $2. It climbed back up to $3 in December, and is currently valued at $4. From the article: 'Bitcoin boosters have traditionally suggested that Bitcoin is an alternative to [the world's] currencies. But we'll suggest an alternative explanation: that Bitcoin is not so much an alternative currency as a "metacurrency" that allows low-cost and regulation-free transfer of wealth between nations. In other words, Bitcoin's major competitors aren't national currencies, but wire-transfer services like Western Union.' Still, Bitcoin has significant obstacles to overcome, such as covert mining, criminal uses, and other security issues." Amir Taaki of the Bitcoin Consultancy (who did an interview here a while back) disputes the reasoning and the conclusions in the Wired article.
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The Bitcoin Strikes Back

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  • Criminal uses? (Score:5, Informative)

    by Anonymous Coward on Saturday December 24, 2011 @07:01PM (#38485168)
    Regular money has criminal uses. The security concerns are also a non-issue as regular wallets and bank accounts are routinely stolen and money diverted.
    • by Goaway (82658)

      Regular wallets can not be stolen with a computer program. Stealing money from a bank account is possible for a program, but there are ways to recover it after the fact, unlike with bitcoin.

      • Re:Criminal uses? (Score:4, Informative)

        by lkcl (517947) <lkcl@lkcl.net> on Saturday December 24, 2011 @08:21PM (#38485598) Homepage

        Regular wallets can not be stolen with a computer program. Stealing money from a bank account is possible for a program, but there are ways to recover it after the fact, unlike with bitcoin.

        err, no. the banks are willing to *refund* the "electronic" money that is stolen, by replacing it with another lot of "electronic" money. and neither the police nor the bank of england (or whatever) will print you another bank note with the same serial number, will they?

        so all that's required to "emulate" the present situation is for someone to set up an online bitcoin bank, and to offer the same "insurance" against theft as regular banks. of course, that means that they will need to charge for the service, and will need to be happy with the massive fluctuation in the currency. actually what would happen is that that bank would bitch like hell that it was your fault and that you didn't have the right anti-virus updates, and would delay the insurance claim just like any other bank.

        • by makomk (752139)

          The general reckoning is that the biggest theft from online bitcoin "banks" was the work of the owner, who did a runner shortly thereafter, so that doesn't actuallly help much.

      • by tompaulco (629533)
        And bitcoin wallets cannot be stolen by a pickpocket. Well, OK, I guess technically it is a distant possibility, but the chances that somebody happens to have an unencrypted wallet file on a flash drive in their pocket AND the pickpocket knows what to do with it is almost zero.
    • by artor3 (1344997)

      It's the difference between assault rifles with silencers and armor piercing rounds, compared to regular hunting rifles. Both can be used for criminal purposes, but one is particularly well suited to those purposes while only having minor benefits for legal purposes.

      I'm not saying bitcoin should be illegal, since the criminal purposes aren't nearly as dangerous as those involving high powered weaponry, but it is an obstacle that would need to be dealt with if the people behind bitcoin want it to actually g

      • Both can be used for criminal purposes, but one is particularly well suited to those purposes while only having minor benefits for legal purposes.

        I don't know, assault rifles can be very useful - especially when the bunnies fight back - I don't know where they get their armament, but with the whole 'pop up out of a hole, spray the attackers, dive back down the hole and show up at another one' tactic, they can really decimate my team. Bunnies - they're a lot more hard core than that cute+fuzzy image!! It's a good idea to enlist a few former SEALs to lead the penetration tem, just to assure you can get through their lines and into the inner sanctum.

      • by tftp (111690)

        assault rifles with silencers and armor piercing rounds

        Those aren't compatible requirements. Silencer requires a heavy, slow (subsonic) bullet. An armor-piercing round requires all the speed you can get (E=mv^2)

        regular hunting rifles. Both can be used for criminal purposes, but one is particularly well suited to those purposes

        I don't know which one, though. If one gangster wants to kill another gangster, the best he can do it with is a hunting rifle - he can take the target out from half a mile and e

        • by artor3 (1344997)

          Silencers can be used on supersonic ammo. You still get a loud noise, but it's quiet enough that you don't need ear protection, which would be a plus if you're trying to rob a bank or something. And really, that's even true with subsonic ammo. The whisper quiet silenced guns used in movies are a Hollywood invention.

          Also, the idea of a gangster sniping a victim from a safe distance is laughable. These guys typically don't know how to hold a pistol, and get all their gun handling techniques from crappy ac

    • by lkcl (517947)

      yes. a friend of mine pointed out that bitcoin would not be considered a "serious currency" until you could buy drugs and pay for sex with it. then he found out that there is a web site that accepts bitcoin payments and will mail you some drugs, anywhere in the world. all that's left now is to find an intelligent and enterprising prostitute willing to understand and accept bitcoin, and we'll know that bitcoin has come of age, hurrah!

  • Propaganda (Score:5, Insightful)

    by Anonymous Coward on Saturday December 24, 2011 @07:04PM (#38485180)

    The speculators push the price up, pay for press releases and stories, put up blogs talking about how awesome Bitcoin is... then they get out as soon as it starts selling for enough. They've done it once, judging from this article they're doing it again, are people going to fall for it again?

    • Yeah it's gonna pop soon. Those who trade them should start shorting them. The crashes are always hard.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      'Bitcoin boosters have traditionally suggested that Bitcoin is an alternative to [the world's] currencies. But we'll suggest an alternative explanation: that Bitcoin is not so much an alternative currency as a "metacurrency" that allows low-cost and regulation-free transfer of wealth between nations. In other words, Bitcoin's major competitors aren't national currencies, but wire-transfer services like Western Union.'

      Sounds more like they're saying get in and out as quickly as possible, do not keep wealth or speculate on bitcoins, just push money in and let someone somewhere else convert the coins back into real money ASAP.

      That's pretty much the opposite of what speculators want (The proposed use is highly liquid so harder to bubble).

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        They've already had one bubble (a quite marvellous one, straight out of the text books). I think at this point there are many disillusioned "investors" that want out. Some people even claim they invested all their savings [falkvinge.net] in bitcoin. That's gotta smart right now.
        As long as they can lure new people with money into the system, they can dump slowly dump their coins without crashing the market again.

    • by lkcl (517947)

      yes of course they will "fall for it", because people are running automatic programs which offer exchange of money for bitcoins and vice-versa.

    • Crash course in laize faire capitalism.

      I'm a bitcoin speculator, I believe in the value of the currency and the extrication of the information world from the policed world.

      The truth about bitcoin is that significantly more money has been invested in bitcoin than the current total value of the currency. This is not because it's a ponzi scheme, it's because it has opponents. People who are willing to lose money to keep out other investors and drive the price down. Who? Well obviously I can't tell for sure but

  • Building a case... (Score:4, Interesting)

    by benjamindees (441808) on Saturday December 24, 2011 @07:12PM (#38485250) Homepage

    Pay attention to what is going on here, because you will start to see it in other areas as well.

    The establishment (through the media) is attempting to build a consensus that Bitcoin is not a legitimate currency, but a "money transfer service". "Money transfer" is a service that carries with it the implication of guarantee against loss of value during that transfer. It is a regulated industry.

    By branding Bitcoin a "money transfer service" in the eyes of the public, powerful banking interests will then be able to begin loading Bitcoin down with regulations. Large Bitcoin institutions may even go along willingly. Regulations create monopolies, and monopolies bring higher rents.

    This is the classical method in which the free market is subverted by government regulation, and creeping nanny-statism benefits large, risky centralized corporate interests at the expense of main street. It is the prisoner's dilemma in action. So pay attention as it plays out.

    • by GameboyRMH (1153867) <gameboyrmh@NoSpAM.gmail.com> on Saturday December 24, 2011 @07:22PM (#38485304) Journal

      Wow you've confused yourself by going into too many layers of libertarian paranoia. How the hell could Bitcoin be regulated or policed? Places operating on the web would just move to darknets and that would be the end of that.

      • by Omnifarious (11933) * <eric-slashNO@SPAMomnifarious.org> on Saturday December 24, 2011 @08:21PM (#38485602) Homepage Journal

        One could make the same argument for the Internet. But now we have SOPA, which has a real chance of passing. It is true that SOPA will not actually stop piracy, and likely not even make a significant dent in it. But for the average person, the Internet will become a significantly more regulated and diverse place. Censorship masquerading as copyright enforcement.

        There used to be (and mostly still is) a regime had censorship masquerading as media consolidation with the resultant centralized control over distribution. Sure, you can say anything you want, but your ability to reach an audience is gated by people who have a vested interest in making sure certain ideas aren't heard.

        Regulation doesn't have to be absolute in order to succeed as a tool of social and economic control. It just has to be successful enough to make not following it seem like something only unsavory people do.

        I don't necessarily agree with the grandparent. But I don't think his or her paranoia is unwarranted.

      • by petermgreen (876956) <plugwash@p10l[ ].net ['ink' in gap]> on Saturday December 24, 2011 @08:31PM (#38485654) Homepage

        If the US governement wanted to they could put a lot of pain on bitcoin. For example they could go after the financial transactions with offshore bitcoin exchanges (just as they now go after financial transactions offshore online poker sites). They could announce that anyone caught running an unlicensed bitcoin exchange was open to prosecution and that authorised exchanges were only to accept coins whose history could be traced back to either an authorised miner or to before the introduction of the rules. They could further introduce laws stating that authorised miners and exchanges were required to keep transaction records including bitcoin addresses, that using or operating a "mixing service" was a felony and so on..

        Personally I think the reason they haven't done any of this yet is that bitcoin is too small for them to care. Afaict there are currently just under 8 million bitcoins in existence (and some unknown proportion of those bitcoins have been rendered irretrievable as the associated keys are lost) at $30 per bitcoin that gives a theoretical "market cap" of arround $240 million. The actual amount of money involved is probablly a hell of a lot smaller than the aforementioned theoretical market cap.

    • by PopeRatzo (965947) * on Saturday December 24, 2011 @07:57PM (#38485498) Homepage Journal

      creeping nanny-statism

      The only "nanny-statism" we have is the government treating the corporations like badly spoiled children, giving them the biggest portions and the best bits. Catering to their needs and desires. Letting them make the rules (yes, including the regulations).

      For the rest of us, there's actually less "nanny-statism" than there was twenty-five years ago.

      On a related note, did you know there are fewer government workers today than there were during the Reagan Administration in the 1980s, despite the fact that there are about 100 million more Americans today?

    • by artor3 (1344997) on Saturday December 24, 2011 @08:08PM (#38485548)

      And that's just step one! Next they'll use their bitcoin monopoly to buy fluoride to put in the water supply, corrupting our precious bodily fluids!

    • by billcopc (196330)

      I don't care what the establishment is saying. From the day I found out about Bitcoin, crunched some numbers and made sense of it all, it seemed to me like a self-defeating system. The fact that are limited "coins" but exponentially increasing miners, combined with the fact that the current value of a coin is less than the cost of electricity to mine it, and has been for a long time now, have already doomed this concept beyond recovery.

      The only good to come of this, is if I ever meet someone who blew a wa

      • by Troed (102527)

        Miners are moving from GPUs to FPGAs right now, just as they went from CPUs to GPUs early last year. Thus, for lead adopters the electricity cost of mining a bitcoin is a lot less than its current value on the market.

        The next step, if Bitcoin survives, is most likely sASIC and then ASIC.

      • There is no set "cost of electricity". If less people mine, it will become easier (cost less) to generate the coins.

        • by billcopc (196330)

          The whole "money for nothing" bullet point means there is no shortage of suckers jumping on the bandwagon. Just like people were launching countless random crap blogs a decade ago, in the hopes of raking in beaucoup AdSense bucks (and failing), those same suckers are deploying half-baked mining clusters.

          The very fact that a Bitcoin's trade-in value is inversely linked to popularity means this system has absolutely no hope of getting anywhere. It does not represent actual value, because the only way you ca

    • by lkcl (517947)

      By branding Bitcoin a "money transfer service" in the eyes of the public, powerful banking interests will then be able to begin loading Bitcoin down with regulations.

      um... how?

  • by Rogerborg (306625) on Saturday December 24, 2011 @07:14PM (#38485258) Homepage

    What was the peak (notional) value? A few tens of millions of dollars? That's just noise. A few nerds, pimps and pushers got all excited, played with it for a while, then got bored. The number of bitcoin nodes has been dropping steadily even before the Bit Sploit, and that's coming from the true believers on the bitcoin forums.

    Sure, it's fun to discuss the theory, but can we please stop pretending that it was or could ever be a real currency used by actual folks.

    • by Rix (54095) on Saturday December 24, 2011 @07:21PM (#38485296)

      It has value because we pretend it does.

      So stop pretending about the US $, then.

      • by PureFiction (10256) on Saturday December 24, 2011 @07:31PM (#38485356)

        "It has value because we pretend it does."

        absolutely true!

        fiat currencies are just as much a shared hallucination as bitcoin.

            at least bitcoins may provide more privacy...

        • And at least USD is actually useable to buy a car and house.

          Guess which one I prefer: The anonymous, p2p, super cool hi tech bitcoin, or the currency that I can use to purchase goods and can be paid by an employer with?

      • by Richard_at_work (517087) <richardprice.gmail@com> on Saturday December 24, 2011 @07:41PM (#38485414)

        The value of the US $ is in the fact that it's accepted at millions of places, not just in the US but around the world. Yes, it might only have a set value because we allow it to, but the real difference between it and BitCoin is the number of people willing to allow that set value. Personally i wouldnt accept any payment in BitCoin today, because i have no reasonable use for it as-is, and the exchange rate to another currency is nowhere near stable enough to be sure my balance doesnt become worthless overnight.

        BitCoin doesn't have the momentum to be a viable fiat currency yet - look at the problems the Euro is currently suffering, and that's bing pushed by governments and huge financial institutions, did anyone really think BitCoin had a better chance?

        • by Rix (54095)

          Most people businesses will only accept one currency. That doesn't really impact the others.

          The Euro is having trouble because of concerns about it's issuers. Bitcoin doesn't have any.

      • by artor3 (1344997)

        Those words you typed only have meaning because we all "pretend" they do.

        The fact is that bitcoin has some serious flaws that prevent it from gaining acceptance as an actual currency. Those flaws have nothing to do with the fact that, like all monetary systems, it's based off a shared agreement of value. The flaws have much more to do with an uncontrollable supply, a reliance on machines that not everyone has, the risk of losing your wealth in a computer crash, and so on.

      • by rtb61 (674572)

        That's a foolish notion. All national currencies eventually are bound to the capital value of a country, it's land and resources. The currency drops in value when more is printed than the country is worth plus of course the manipulation of scum sucking pig currency speculators.

        So you real value enemies are the nature of you reserve bank that defines how much of your currency is out there relative to the capital value of the country and of course shit eating currency speculators (the banks et al).

        Stable

      • It has value because we pretend it does.

        So stop pretending about the US $, then.

        The US $ is backed by guns. Domestically, by the IRS, which accepts payment only in $, even for bartered goods and labor. Internationally, by the U.S. military if an oil-producing country tries to go off the petro-dollar.

        Granted, the US $ has no intrinsic value the way gold does, but there is more pretend going on with BitCoin than with the US $. Even with the pretend, I'm a fan of BitCoin due to its scarcity, anonymity, and

        • by roman_mir (125474)

          I'm a fan of BitCoin due to its scarcity, anonymity, and digital transfer

          - never mind the rest of your comment, but anonymity is not part of BitCoin operation.

          Every client/server knows every single transaction that was ever transacted in BitCoins, that the exact opposite of anonymity. Any paper dollar, any piece of gold, any paper euro has more anonymity than BitCoin, BitCoin has none.

        • Gold doesnt have any intrinsic value in the sense that you are using the word. It has intrinsic value in its usefulness (alloying, electronics, etc), but those are wholly out of line with its monetary value.

          If we wanted to get all semantic and argue it, I could point out that a US dollar also has intrinsic worth, since I can write notes on it, and in the event of a global extinction event, the ability to transmit messages on paper would be of far more value than the ability to make gold-plated electrical c

    • by Teppy (105859)
      Peak value was around $200M in June, and current value is around $32M. Using Bitcoins as an investment is a lot like gambling. However...
      I can assure you that as a *currency* Bitcoin is wonderful. I run Dragon's Tale [www.dragons] which is a cross between an MMORPG and a casino, and the game functions entirely in Bitcoins. Players routinely deposit anywhere from a few cents worth of Bitcoins to $100+ worth. Their account is credited immediately, they (and I) pay almost no transaction fees, there are no chargebacks to w
      • by timeOday (582209)

        Using Bitcoins as an investment is a lot like gambling. However... I can assure you that as a *currency* Bitcoin is wonderful.

        In other words, you agree with the article that Bitcoin is useful as a money transfer service but not as a reserve currency. If it's easy to exchange but its value fluctuates a lot, the only reasonable use is to buy bitcoins with dollars and send them to somebody who immediately converts them back. In other words, to transfer funds.

        But even that could be revolutionary. I'm on

      • by makomk (752139)

        Their account is credited immediately

        I hope you mean "within an hour or so". Otherwise someone's probably robbing your site with fake transactions already...

  • Bitcoin isn't a national currency. National laws don't apply.

    • Agreed. Today's posting appears to be (yet another) attempt to manipulate Bit Coin prices. Whenever there's a bit of good publicity for Bit Coin (with the associated rise in price), you need only wait a day or two, and another posting will be made talking about some sordid array of illicit uses, and the price drops again.

      Were it not for the constant misinformation that magically reappears with every one of these postings, I'd have no way to track them.

  • by 93 Escort Wagon (326346) on Saturday December 24, 2011 @07:29PM (#38485344)

    Please, PLEASE add "BitCoin" to the "Exclude stories by topic" /. site option.

  • Stability (Score:5, Insightful)

    by Xugumad (39311) on Saturday December 24, 2011 @08:00PM (#38485512)

    Yes, because relative value of a Bitcoin vs USD is really what's holding the currency back, and not, in fact, the massive price instability.

    Realistically, people don't want to use a currency that gains 1000% in value, then drops again, then up 200% in only a few months. Until you can pay your taxes in Bitcoin, you're going to have to convert money out of Bitcoin ASAP after getting it, to ensure you can actually meet future obligations, and that makes it a right pain to deal with.

  • by Beautyon (214567) on Saturday December 24, 2011 @08:17PM (#38485576) Homepage

    Bitcoin is a very new technology, even though the concept that it brings to life is decades old. The double spending problem has been solved; this means that it is possible to use a digital certificate to stand in the place of money and be sure that no one else can spend that certificate other than you as long as you hold it. This is an unprecedented paradigm shift, the implications of which are not yet fully understood, and for which the tools do not yet exit to fully take advantage of this new idea.

    This new technology requires some new thinking when it comes to developing businesses that are built upon it. In the same way that the pioneer providers of email did not correctly understand the service they were selling for many years, new and correct thinking about Bitcoin is needed, and will emerge, so that it reaches its full potential and becomes ubiquitous.

    Hotmail used familiar technologies (the browser, email) to create a better way of accessing and delivering email; the idea of using an email client like Outlook Express has been superseded by web interfaces and email ‘in the cloud’ that provides many advantages over a dedicated client with your mail in your own local storage.

    Bitcoin, which will transform the way you transfer money, needs to be understood on its own terms, and not as an online form of money. Thinking about Bitcoin as money is as absurd as thinking about email as another form of sending letters by post; one not only replaces the other but it profoundly changes the way people send and consume messages. It is not a simple substitution or one dimensional improvement of an existing idea or service.

    As I have explained previously, Bitcoin is not money. Bitcoin is a protocol. If you treat it in this way, with the correct assumptions, you can start the process of putting Bitcoin in a proper context, allowing you to make rational suggestions about the sort of services that might be profitable based on it.

    If Bitcoin is a protocol and not money, then setting up currency exchanges that mimic real world money, stock and commodity exchanges to trade in it doesn’t make any sense. You would not set up an email exchange to buy and sell email, and the same thing applies to Bitcoin.

    Staying with this train of thought, when you type in an email on your Gmail account, you are inputting your ‘letter’. You press send, it goes through your ISP, over the internets, into the ISP of your recipient and then it is outputted on your recipient’s machine. The same is true of Bitcoin; you input money on one end through a service and then send the Bitcoin to your recipient, without an intermediary to handle the transfer. Once Bitcoin does its job of moving your value across the globe to its recipient it needs to be ‘read out’, i.e. turned back into money, in the same way that your letter is displayed to its recipient in an email.

    In the email scenario, once the transfer happens and the email you have received conveys its information to you, it has no use other than to be a record of the information that was sent (accounting), and you archive that information. Bitcoin does this accounting in the block chain for you, and a good service built on it will store extended transaction details for you locally, but what you need to have as the recipient of Bitcoin is money or goods not Bitcoin itself.

    Bitcoin’s true nature is as an instant way to transmit money anywhere in the world. It is not an investment, or money itself, and holding on to it in the hopes that it will become valuable is like holding on to an email or a PDF in the hopes it will be come valuable in the future; it doesn’t make any sense.

    Despite the fact that you cannot double spend them and each one is unique, Bitcoins have no inherent value, unlike a book or any physical object. They cannot appreciate in value. Mistaken thinking about Bitcoin has spread because it behaves like money, due to the fact it cannot be double spent. This fact however has masked Bi

    • You sound smart. Do you think the price is gunna go up or down?

    • In some cases, you have to wait up to seven days to receive a transfer of your fiat currency after it has been cashed out of your account from Bitcoins. Whilst this is not a fault of the exchanges, it represents a very real impediment to Bitcoin acting in its nature and providing its complete value.

      Yes, this is a serious problem limiting the use of bitcoins. I don't see how the situation can be improved without improving the ability to quickly and reliably transfer fiat currencies between accounts.

      Regarding the main point, using bitcoins to facilitate currency transfers. It seems to be a pointless middleman, if an exchange can do USD -> BTC -> GBP, then surely it can just do USD -> GBP and skip the bitcoin part completely.

    • by bertok (226922)

      I found your post interesting, even though it appears to plagiarise this blog post [wordpress.com], but I'll give you the benefit of the doubt and assume it's your work.

      Anyway, your point is sort-of valid. I too find Bitcoin far more interesting as a protocol than as a real currency, because as a currency it is flawed, but it is a substantial step forward in the application of cryptography to seemingly unrelated problems.

      You posit Bitcoin as not-a-currency, but a protocol for the exchange of currency. This doesn't making s

  • While bitcoin has failed as a currency, it is true that it could be used for money transfer. If the receiving party cashes out regularly, there is not much risk involved, and the transfer itself is fast and cheap. The problem is with the cashing out part: just like Paypal or Mastercard refused to relay money to Wikileaks, bitcoin exchanges can also deny doing business with certain people. The advantages of P2P are lost when you want to get some money for your coins.

  • by nothings (597917) on Saturday December 24, 2011 @09:36PM (#38485920) Homepage
    Why did Soulskill add a contradictory viewpoint to the story? One from an obviously biased source (a bitcoin developer)? We slam the mainstream media for this kind of bogus "balance"; do we want Slashdot to follow down that path?

    If you want to offer a contradictory viewpoint from a less-biased observer, that's fine. But if you go straight to the maximally biased source, it's suggestive that there isn't an unbiased source with that perspective in the first place. Maybe there is, but if so, use them. If not, don't bother with "balance".

  • Obstacles? (Score:4, Insightful)

    by J'raxis (248192) on Saturday December 24, 2011 @10:17PM (#38486090) Homepage

    So long as governments define myriad victimless activities and mere attempts to keep their prying nose out of your private financial transaction as "crimes," I would say Bitcoin's "criminal uses" are a feature, not an obstacle.

  • by Animats (122034) on Sunday December 25, 2011 @01:39AM (#38486752) Homepage

    Bitcoin can't compete with Western Union Money Transfer, let alone forex trading, because the total volume in bitcoins is tiny. Yesterday's Bitcoin volume was about $50,000. (Some days are higher, but that's mostly the same money trading back and forth. There are trading programs running.) If one business the size of a typical supermarket converted a day's receipts in Bitcoins to dollars, the Bitcoin market would crash.

    Bitcoin is behaving like a penny stock. It crashed from $31 to $2, and now it's noodling around in the $2 to $4 range.

    Anyone remember Beenz? Flooz? DigiCash? CyberCoin? This isn't the first try at a "digital currency". I suspect that someone will probably make this work, but that somebody will be Facebook. Apple, or a telco.

    • by molecular (311632)

      Bitcoin can't compete with Western Union Money Transfer, let alone forex trading, because the total volume in bitcoins is tiny.

      This post wont be read by anyone because its score is too low.

  • by Deliveranc3 (629997) <deliverance AT level4 DOT org> on Sunday December 25, 2011 @11:34AM (#38488228) Journal

    Crash course in laize faire capitalism.

    I'm a bitcoin speculator, I believe in the value of the currency and the extrication of the information world from the policed world.

    The truth about bitcoin is that significantly more money has been invested in bitcoin than the current total value of the currency. This is not because it's a ponzi scheme, it's because it has opponents. People who are willing to lose money to keep out other investors and drive the price down. Who? Well obviously I can't tell for sure but it makes sense that the U.S. government, major hedge funds, and billionaire diversification wealth management services are involved. Why? Well first to maintain the value of existent wealth, if you have billions that's a level of money that you simply can't spend... you and your great great great great grandchildren will be wealthy... unless something changes. These people diversify into gold and resources when any chance of real social change comes on into the picture, these funds are geared to this... not profit.

    But why not just buy it all up? Why drop the price and keep people thinking it's worth $4? Well the really terrifying thing for these groups is that people would have a realistic notion of how much money there is in the system. People, particularly middle class people, are aghast when they begin to understand how much conventional currency actually exists. There are hundreds of people who could pay you through your great great great great great great grandchildren (all of them) a good wage to bash your face against a wall. With a finite currency, you'd KNOW that you have less than 1/10,000,000,000 of total USD (assuming a solid retirement savings and decent home, for example). That spells rebellion against existent currencies.

    How? Buy high, sell low. Not difficult, and surprisingly, not very expensive (especially when you can sell to yourself). And in addition make strategic sells when speculators buy large lots so that many of the high volume trades appear to be people unloading when in fact most of the transaction was people buying (50,000 price goes up 50c strategic sell right at the end of 2,000 and the overall price trade blip goes red) People are willing to accept the price on offer in most cases, there are always amounts trickling in from people who accepted donations, sold goods (for the current price), or are forced to give up their speculation for financial reasons. Speculators like myself are more than happy to buy in at the current value, and people who don't care (or know better) simply accept the exchange rated value as the actual.

    I saw an example of this while watching the market on the 21st, when it went up to $4.50 and then dropped to $4 in less than 1 second, with a huge heap of available coins suddenly appearing, available in the evacuated space. It looked like the price had never moved.

    Personally I think the brains have been stolen from again and again by the cult of personality and back door individualistic crony capitalism. We NEED our own capital pool, not just because of the many options bitcoins make available but because we'll never be free to create, invent and work together seamlessly if we can get backstabber by anyone with a hand in government, fiscal policy etc. Regulations have never helped us, the people buying change and directing the regulators have never been brains, they've always been the wealthy and the politicians. The ability to sabotage our and each other's projects is at the core of why billionaires struggle to get more billions, so they can fight one another. It takes time, effort, and brains to build something... it takes nothing to pull a fire alarm. The problem is people who think it takes a lack of ethics, they think that's a real thing, god help them.

    Me and other speculators who really believe in bitcoin are holding on to our coins, and I imagine the pool of coins available to the people trying to lower their value is going down. In the coming weeks we'll see more and more articles of this nature. With even o

"Don't discount flying pigs before you have good air defense." -- jvh@clinet.FI

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