BitCoin Value Collapses, Possibly Due To DDoS 605
hydrofix writes "The Bitcoin-to-USD exchange rate had been climbing steadily since January 2013, from around 30 USD to over 250 USD only 24 hours ago. Now, the value bubble seems to have burst, at least partially. The primary trading site MtGox reported a drop in value all the way down to 140 USD today, a loss of almost half in real value. With many sites unreachable or slow, there are also news of a possible DDoS attack on MtGox: 'Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.'"
Get your numbers right (Score:5, Informative)
Today's high was $266, the low was $105 and currently it is trading around $180
Re:Get your numbers right (Score:5, Informative)
Today's high was $266, the low was $105 and currently it is trading around $180
Note that final figure. Despite the continued DDoS, the price is already halfway back to the previous high. The drop was just a short-term effect due to the impact of the DDoS on liquidity and a mild amount of panicked selling. Another point to keep in mind is that the price was under $15 at the beginning of January—even at the low of $105 we were still up by 600% YTD, and 200% over the last 30 days (from $35).
Re:Well the ultimate value of Bitcoin is (Score:3, Informative)
Just today (Score:4, Informative)
Really, once the general public is aware of 'get rich quick scheme' it is going to collapse.
I am not saying Bitcoins is such a scheme, just that some people interpret it as such. Currency speculation is not a good get rich quick scheme. It seems to best with people who have taxes in 30% range, or otherwise need to launder their money.
Re:Well the ultimate value of a dollar is (Score:5, Informative)
You're understanding of the dollar is laughable, at best.
" but there is no limit to the amount of dollars the government can print."
Not true in in practical way, but common statements from the ignorant masses.
" the bank cartel known as the federal reserve "
the federal reserve is not a bank cartel,. You should probably look up what a 'cartel' is so you understand why the Fed. Reserve isn't one.
Let me know when they eliminate banks, until then Rothbard isn't even worth considering.
"print insane amount of money every "
hardly insane amount.
"year to finance government spending, "
nope.
" take a dime from 1942, "
ok:
type: mercury
weight 2.5 grams (current dime weight 2.268 grams
Content: 90% silver
Silver weight 2.25 grams.
Value(4/10) 1.99 ASSUME 100% purity of the silver.
So, no you couldn't by a gallon of gas.
But Weight!*
in 1942 Cost of a gallon of Gas 15 cents, Coca Cola 5 cents Average Price for a new car $920.00
So no, it wouldn't have bought a gallon of gas, but it wold get 2 bottles of coca cola, unlike today.
you would need 9200 of them to buy a house. If what you said was correct(it isn't) the average house would 18,400 dollars today.
It's nice that you can cherry pick a dime out of all of USE dime history and kinda force it into you incorrect understanding of money, but you are wrong.
*ha!
DDoS == lots of people scrambling to sell and buy (Score:4, Informative)
AFAIK there hasn't been any evidence of an actual DDoS against any of the market sites. People who were using the biggest market site Mt.Gox reported 25 minute delays in their trade orders, most likely because of people scrambling to cash in on their bitcoins before it's too late and people looking to buy bitcoins at 'bargain' prices. The most popular chart site bitcoincharts.com crumbled completely, most likely under the load of people who were legitimately interested in viewing the data, or in my case semi-legitimately interested in it (it's fun to watch).
Full discosure: I sold my small fraction of a bitcoin back when the price was at $235. I currently hold 0 BTC. I'm treating this like a game and I hope everyone else is too. I feel sorry for anyone who is investing real money now. Don't be stupid.
Re:Well the ultimate value of Bitcoin is (Score:5, Informative)
You mean the renminbi. _A_ yuan is the unit of _the_ renmimbi currency in the same way that _a_ dollar is the unit of _the_ dollar currency.
Re:Well the ultimate value of a dollar is (Score:5, Informative)
The government and the bank cartel known as the Federal Reserve can and do print insane amount of money every year to finance government spending, at the expense of the value of every other dollar in existence.
That is at least as questionable claim. The "insane amount of money" that the Federal Reserve "printed" (actually, just enters a number in a computer, but never mind that) was about $280 billion in 2012. Now, that's obviously not a small chunk of change, but it's not even remotely close to funding the $1,126 billion deficit in federal spending in that same year. Where most of that deficit spending money is actually coming from is private investors happily buying up US Treasury bonds (at very low interest rates to boot), which is probably caused by (a) investors fleeing Europe, and (b) record high profits for businesses and their owners that has to go somewhere.
Also important to think about: Ronald Reagan and George H.W. Bush spent more during their administrations (as a % GDP) than Barack Obama did in 2010-2 (2009 was a year he only had partial control over budget-wise), and is currently projected to go lower. The reason deficits are so high right now is that tax receipts are the lowest they've been (again, as a % GDP) since 1945.
Re:Well the ultimate value of Bitcoin is (Score:5, Informative)
We really need a corollary for Godwin's Law adapted specifically to Bitcoin discussions: as soon as you say, "The US dollar doesn't have any intrinsic value either!", you lose.
Godwin's Law isn't actually about losing an argument; it simply predicts that the longer an Internet discussion goes on, the higher the probability that someone will bring up Hitler.
Re:DDoS == lots of people scrambling to sell and b (Score:4, Informative)
Actually, if you were a user of the sites, you'd notice there is strong evidence that points to a coordinated DDOS. The spurts of traffic aren't continuous, and they "break" at suspicious timings. For example, at the bottom of the curves, the sites work fine, most of the market/chart sites get their feeds, etc. It's only during the drops/raises start, when it would be fortuitous for people to put in trades, and then freak out when they can't, that the connection issues occur.
I'm not entirely ruling out it being sheer volume of people, but if it was it wouldn't "Come and go" as drastically as it's doing. We're talking sites entirely unusable one minute, and suddenly perfectly fine the next, then unusable 30 min later.
Massive surges in trade are expected during a speculative boom-bust cycle. This is how it works: every now and then, for whatever reason, the price either drops or increases significantly into a territory where you enter into a self-reinforcing surge of traders (many of which will be small traders) who are scrambling to sell and/or buy before it's 'too late'. This goes on until the price stabilizes at which point people calm down.
Re:Well the ultimate value of Bitcoin is (Score:4, Informative)
But then it's no more a currency than chickens - it's a commodity.
Re:Well the ultimate value of Bitcoin is (Score:5, Informative)
In the United States, people cannot ... trade real goods and services with BC -- because the U.S. gov' ...will enforce the dollar as the sole legal tender
That's not what "legal tender" means.
I could set up shop today in New York State and accept only bitcoins if I wanted to. The government wouldn't stop me, and in fact they'd back up my right to set my prices as whatever my little heart desires, in whatever strange currency I want.
But as soon as I ask the police to force a shoplifter to pay, I'll wind up having to deal with dollars, because that's all the government will force anyone to pay a debt in. And if I am on the other end of that transaction, I might wind up having to convert some bitcoins to dollars at a sub-optimal time when the bill comes due.
(That I'll also have to pay my taxes in dollars and likely pay my vendors and suppliers in the same means I'll have to deal with some local currency regardless. but that's a different issue.)