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Bitcoin Businesses The Almighty Buck

Bitcoin Hits $10,000 Because Ceilings Are Just a Construct, Man (gizmodo.com) 348

Posted by msmash from the what-in-the-world dept.
An anonymous reader shares a report: On Tuesday, the trading price of the most prominent cryptocurrency hit $10,000 for the first time. And that nice round number will almost certainly have the kind of psychological effect that brings in new traders. Based on analysts' recent predictions, the $10,000 milestone could be the beginning of the end or just the beginning. Some thought that $2,000 would be the point at which we'd see a reversal of Bitcoin's ascent. Others predicted it would top out at $4,000. Then, $4,000 became the floor. These days, analysts with decent reputations have predicted the cryptocurrency's trading price could go as high as $50,000, $100,000, and even $1 million.
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Bitcoin Hits $10,000 Because Ceilings Are Just a Construct, Man More

Bitcoin Hits $10,000 Because Ceilings Are Just a Construct, Man

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  • 5 bucks (Score:4, Interesting)

    by Danathar ( 267989 ) on Tuesday November 28, 2017 @03:26PM (#55637885) Journal
    I bought 5 bucks worth of bitcoin last year... It's now worth $80 bucks (as of this writing). I'm simply floored by how much its gone up!

    • Re:5 bucks (Score:5, Funny)

      by Oswald McWeany ( 2428506 ) on Tuesday November 28, 2017 @03:35PM (#55637949)

      Good grief! You're loaded! It's time to think about hiring a butler!

      • Good grief! You're loaded! It's time to think about hiring a butler!

        I'll bet the Butler won't take bitcoin for payment.. But that's just a guess..

        • I'll bet the Butler won't take bitcoin for payment.. But that's just a guess..

          That's what Doge Coins are for.

    • Re:5 bucks (Score:5, Insightful)

      by Anonymous Coward on Tuesday November 28, 2017 @03:37PM (#55637963)

      Pure speculation. It is not used (and can not be used) as currency. Somebody is just pumping the price to lure in suckers. Ironically crypto is propably most manipulated market in the world. And people just buy it with no other intention than to sell it later to somebody else for higher price. This can not and will not end well. Remember, value is not generated out of thin air, just transfered from one to another, in order for one person to get a "bitcoin millionaire" there MUST be thousand people who lose 1000$. There is no way around it.

      • You can't use BTC for everything but more and more I am seeing people and websites accepting BTC for real goods and services. Although it may not technically be "currency" it's close to making no difference.

      • Re: (Score:2)

        by gnick ( 1211984 )

        And people just buy it with no other intention than to sell it later to somebody else for higher price.

        That doesn't describe my Bitcoin transactions at all. Many things cannot be bought easily with Bitcoin. Other things can only be bought easily with Bitcoin. AlphaBay & Hanza are gone, but those were only two heads of the hydra.

      • in order for one person to get a "bitcoin millionaire" there MUST be thousand people who lose 1000$. There is no way around it.

        Yes, there is a way around it. As more fiat money is created out of thin air, you can have a scenario where everybody can sell his bitcoin for more than he bought it for.

        • In that case it's the exchange that loses the money. So you're right, there don't have to be a thousand people losing money, but it does have to be someone.

          • Re:5 bucks (Score:4, Insightful)

            by religionofpeas ( 4511805 ) on Tuesday November 28, 2017 @04:36PM (#55638501)

            In that case it's the exchange that loses the money.

            It's the people that are holding fiat that are losing the value of their money

            • Re:5 bucks (Score:4, Interesting)

              by Bucky24 ( 1943328 ) on Tuesday November 28, 2017 @05:33PM (#55639149)

              In that case it's the exchange that loses the money.

              It's the people that are holding fiat that are losing the value of their money

              It's true that if you assume bitcoin is actually worth what the exchange pays for it (and it would be, because some entity is willing to pay for it), then the exchange has not actually lost any value, just exchanged one form of it for another. But from what I gather, GP wasn't counting the value of bitcoin as an actual value. With that assumption, then the exchange is rapidly losing money because they are paying out something of value (USD) for something of no value (bitcoin).

              And if you assume, as GP did, that bitcoin is a closed system, and the only way to get bitcoins is to buy them from the exchange (not technically true but for most people entering the market at this point it might as well be), then people are giving USD in exchange for bitcoins, putting money into the market, then it's possible for one person to sell a ton of coins that have gone way up in value, and be paid out all the exchange's USD reserve. In that case, since the exchange can't print more money, they have essentially lost the ability to buy anyone else's bitcoins. At that point the people who still own bitcoins technically haven't lost value either, but as there's no entity (we assume only one exchange in this scenario) that can pay them for their bitcoins, the coins essentially become worthless outside of the bitcoin system.

              So in the end I guess it depends on your definition of money. I don't personally consider bitcoin to be money, though it's getting a lot closer. But if it is money, then the exchange never loses value at all, since it's essentially just a money changer. On the other hand, if bitcoin isn't money, then the exchange is almost guaranteed to lose money if the currency becomes more valuable.

              As with all things, its just down to a point of view.

              • Re: (Score:2)

                by Jzanu ( 668651 )
                That does a great job of explaining how the predictable run on a bank compares to the inevitable run on an exchange. Any institution, and I use the word loosely in the case of bitcoin exchanges, is either insured by a larger central bank or other larger more well funded agency, or is limited to the reserve it personally holds. There is some flexibility if the exchange is funded by illegal trade in the background then it can float a little based on its income, but because it is not insured by any larger enti

      • Re:5 bucks (Score:4, Interesting)

        by war4peace ( 1628283 ) on Tuesday November 28, 2017 @05:28PM (#55639069)

        Um... let me simplify.
        John has 1 BTC. It's worth a dollar.
        Jack wants that BTC and is willing to play John 2 dollars.
        John now has 1 BTC worth 2 dollars, but Jill wants to buy it for 10 dollars.
        Fast forward through 10, 20, 50 subsequent buyers, end up with 1 BTC worth 10K dollars and rising. Money (as in dollars) wasn't lost, they simply exchanged hands between various people for the same product.

        Value was not generated out of thin air, it was a product of the ancient demand/offer balance. As long as people want BTC and are willing to play hefty sums of money for it, its value would increase.

        Also BTC can be and is used as currency. It has a slow transfer rate, that's for sure, but it works. Here in my 3rd world country I can buy a variety of legal products with it, such as IT hardware, software and general goods.

    • Kidding, but it did hit $68 USD, on the 18th. There were at the time of writing almost 80,000 unconfirmed transactions. I sold my bit coin a while ago and I'm sure the price could still go higher but at this point bit coin is useless for any common person's day to day transactions. I'll keep to buying my drugs with Monero and cash out of almost everything else.

  • ... I don't give a shit about BTC.

    I do however, wonder if Lindsay Lohan is in rehab or if Pokemon Go is still a thing.

  • I have to admit I've not really kept up on Bitcoin mining economics for some time, but about a decade ago I remember reading a lot about how if you were not using custom ASIC processors to mine you were spending more on electricity than you were getting from bitcoin...

    With BTC going up and up it seems like at this point there's no hardware that is not economical to mine on any longer. Is that really the case or has mining at this stage become so compute intensive you still need powerful custom hardware to

    • A decade ago? Can you share your time machine? ASICs arrived for mining early 2013.

    • It depends on the cost of electricity... Mostly anyway...

      If your landlord is paying the bill, mine away my man... If YOU are paying the bill, then you'd better be careful even at 10K/Coin.

      I recall that in Venezuela they are mining BitCoin for two reasons.. First, Electricity costs are unnaturally low due to government subsidies so it pays and Second, holding bolivars is a bad idea due to inflation rates so they escape that by holding BitCoin. Of course, all this is now illegal in Venezuela as is trading

      • If YOU are paying the bill, then you'd better be careful even at 10K/Coin.

        That's exactly what I was asking in a roundabout way, how much would the electricity cost to mine a single bitcoin today?

    • at this point there's no hardware that is not economical to mine on any longer.

      The bitcoin protocol has a built-in difficulty adjustment algorithm. If there is too much interest in mining (more than 6 blocks per hour found), then the difficulty is increased. If there's not enough interest in mining, the difficulty is lowered. Because the reward stays the same (currently 12.5 BTC per block + fees), the difficulty determines how profitable mine is. At status quo, only the most efficient mine can make a reasonable profit.

  • Seems like yesterday

    • more akin to the dot-com bubble, IMO

    • Well, 23,700 is today on the DOW.

    • Re: (Score:2)

      by bsDaemon ( 87307 )

      But the DJI is an index measuring the value of the stocks in companies followed by the index. It represents a weighted value of what owning shares in those companies is worth (oversimplification is simple). This is like people trading commodities and then running the value of the commodity up even though they have no interest in the actual value or usefulness of the commodity -- similar to the oft-referenced tulip situation in the Netherlands, with the pricing being run up by speculators who bought and sold

  • "Traditional" speculators entered the fray (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Tuesday November 28, 2017 @03:38PM (#55637975)
    I don't know what else to call them, but the kind of day trader types that play the stock market noticed the price going up. So now in addition to the drug traffickers, money launders and ransomeware authors we've got those jackals. I'm sure this will all end well.

    • Maybe this is all a government plot to burn the traffickers, money launderers, and ransomware authors. Lure them deeper into the market, then pull the rug out from under them. :)

  • aka (Score:5, Insightful)

    by grasshoppa ( 657393 ) on Tuesday November 28, 2017 @03:41PM (#55638003) Homepage

    These days, analysts with decent reputations have predicted the cryptocurrency's trading price could go as high as $50,000, $100,000, and even $1 million.

    In other words, they have no idea why it's doing what it's doing.

    I'm starting to think "expert" is someone who is physically unable to utter the words "I don't know".

    • Re:aka (Score:5, Funny)

      by Oswald McWeany ( 2428506 ) on Tuesday November 28, 2017 @03:45PM (#55638031)

      These days, analysts with decent reputations have predicted the cryptocurrency's trading price could go as high as $50,000, $100,000, and even $1 million.

      In other words, they have no idea why it's doing what it's doing.

      I'm starting to think "expert" is someone who is physically unable to utter the words "I don't know".

      I'm not an expert, but I don't know if you're right.

    • Re:aka (Score:5, Insightful)

      by Archangel Michael ( 180766 ) on Tuesday November 28, 2017 @03:52PM (#55638097) Journal

      They don't know, and there is a valid reason for it. The market is irrational. The market is as much about emotion as it is about fundamentals, maybe even more so. There will be a correction. The problem is, there are no forces that can take any of the irrationality out of the market. The real panic will happen when the BTC is worth 5 or 6 figures each, and corrects down to three or so. That's when people holding fair numbers of coins will start to panic, and sell off just like everyone else, trying to get any part of the profit they missed when it peaked.

      And then you'll see it normalized for a while, perhaps even disappear. People mocked when a guy bought a 20,000 BTC pizza, and now many of those same people are mocking $1000 BTC.

    • Re: (Score:2)

      by gweihir ( 88907 )

      I'm starting to think "expert" is someone who is physically unable to utter the words "I don't know".

      An actual expert has no problems with that at all. But these are "analysts", not experts. The difference is that an expert has some deep understanding and real knowledge of a thing. An "analyst" is a special form of short-term "futurist", i.e. somebody that was on occasion right by accident and is now revered as somebody that can predict the future by a group of morons of variable size.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      $1 million / coin works out to around 10 trillion dollars, assuming half the bitcoins are lost. That's about 1/6 of all the money (most of it electronic) that exists in the world. It's certainly going to suck when all of the money in the world is in a form that is limited to single digit numbers of transactions per second.

      This was a reputable person who made this estimate? Reputed for what?

  • That's not all that's spiking upwards (Score:5, Interesting)

    by timholman ( 71886 ) on Tuesday November 28, 2017 @04:04PM (#55638175)

    In related news .... the average BTC transaction fee is now at $6 USD, and climbing fast. Could be worse, however. Two weeks ago, it spiked above $19.

    Does anyone seriously think that BTC is being used for anything except speculation? It sure isn't being used for "money". You've got people buying BTC using their credit cards, and converting their savings to BTC. It's a classic bubble.

    It's gonna be nasty, and when the bubble pops the transaction backlog will be huge as people try to dump their BTC before they lose everything. Transaction fees will shoot through the roof. Boom or bust, the Chinese mining pools will make money hand over fist.

    • No, bitcoin is not money. It's digital gold. How much does it cost to transact a bar of gold ?

    • Re: (Score:3, Interesting)

      by gweihir ( 88907 )

      The mining-pool will just be as screwed as anybody else. The only ones that will win is those that get out early enough to actually have somebody buy their worthless merchandise. That point may already be in the past. There are indications that actually selling larger amounts of Bitcoin is already difficult.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      So you're saying it might be a good idea to buy some ASICs or GPUs and wait for the crash?

    • Re: (Score:2)

      by dj245 ( 732906 )

      In related news .... the average BTC transaction fee is now at $6 USD, and climbing fast. Could be worse, however. Two weeks ago, it spiked above $19.

      Does anyone seriously think that BTC is being used for anything except speculation? It sure isn't being used for "money". You've got people buying BTC using their credit cards, and converting their savings to BTC. It's a classic bubble.

      It's gonna be nasty, and when the bubble pops the transaction backlog will be huge as people try to dump their BTC before they lose everything. Transaction fees will shoot through the roof. Boom or bust, the Chinese mining pools will make money hand over fist.

      Even $100 is pretty cheap for a large international transaction. Arguable $1000 is a cheap for certain transactions that someone would want to hide. You won't be using bitcoin to buy a pack of bubble gum, but certain people will use it.

  • Enough already! (Score:4, Insightful)

    by hackertourist ( 2202674 ) on Tuesday November 28, 2017 @04:39PM (#55638545)

    this is the fifth story in as many weeks with no more substance than "bitcoin hits $x!". Comments from the fist story can be copied verbatim to all the others, there's nothing new to be said on the subject. Can we please find a more interesting subject to talk about?
    If I wanted to know the day price for Bitcoin, I'd use a stock ticker.

  • This is great insider info! (Score:3)

    by NEDHead ( 1651195 ) on Tuesday November 28, 2017 @04:41PM (#55638559)

    How can I get in before everybody hears about it?

  • Didn't happen (Score:2, Interesting)

    by slashmydots ( 2189826 )
    According to charts on websites that people actually use, it didn't quite hit $10,000. Anyway, this is very uncommon during the winter when people don't have to offset the insane energy costs of mining hardware with cooling. In fact I'm heating my apartment and shop with minres. So I also don't have to play for heat (or electricity for the miners depending on how you look at it). People are willing to sell their bitcoins for a much lower price in the winter because of this so that's odd. Yes I know the sout

  • Ok, I am not well versed in economics but may be someone here can answer these questions :
    With roughly 250B$ market cap between the 4 first crypto-currencies, would a collapse of Bitcoin send significant ripples through the "real" economy?
    Do we know how much of this value was really invested in the currencies versus how much comes from the speculation?

    • Re:Question (Score:4, Informative)

      by orlanz ( 882574 ) on Tuesday November 28, 2017 @05:39PM (#55639211)

      If Bitcoin totally collapsed in a short enough time frame (say 2 weeks), it would be noticeable but hardly damaging to the economy at large. Google has $700B as its cap. The SPY ETF from one company that links to the S&P 500 (meaning its a small percent of the total) is ~$250B. A loss of either wouldn't significantly impact the economy*. Bitcoin's collapse would be even more minor.

      The primary impacts we would notice would be any highly leveraged hedges that would collapse too and rip out funds from proper investments to cover the losses. Basically people who borrowed to pay interest on loans to buy coins would now have to liquidate stable assets to cover the required payments. If they can't pay, then the lender would need to do the same to cover lost operational cash flows.

      It is quite difficult to ascertain between speculation and investment. Society has been trying to do it for centuries to curb bubbles, recessions, in/deflations, gold rushes, etc and hasn't gotten anywhere. Any interventions have resulted in worse outcomes.

      * = Thou in Google's case we wouldn't lose the services totally, they would be bought up cheap and serviced by someone else. We would see service degradation and no new stuff, but it would still work.

  • I bought $500 worth this summer. Won't ever buy more, can afford to lose it all. Having fun watching it go up, expecting it to burst at any moment. Obviously this is a bubble. When will it burst? At this point Bitcoin can't be used as currency as its becoming more valuable that the product you want to buy with it.

  • In related news ... (Score:5, Funny)

    by PPH ( 736903 ) on Tuesday November 28, 2017 @06:03PM (#55639465)

    ... the US dollar dropped to 0.0001 BTC.

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