Bitcoin giveaway! :)

[AdamA]

Is Mt Gox finished?

It sure seems like it. 

Has anything happened to the bitcoin price as a result of this whole thing?

[Ad Orientem]

I can't believe people are still seriously buying into this thing. It smelled a bit dodgy from the start. But recent developments just make me cringe.

[HB Reader]

Is Mt Gox finished?

It sure seems like it. 

Has anything happened to the bitcoin price as a result of this whole thing?

BTC is currently trading at $583.

I think the collapse of Mt Gox is just a hiccup.  It is probably a non-event in terms of the long term success or failure of bitcoin, but it makes for great media.  It is sort of like asking whether a bank failure will threaten the dollar or the collapse of an obviously distressed brokerage house will have a lasting impact on the S&P.  Anyone with bitcoin experience could tell by their repeated stumbles (and the self-serving "explanations" they posted) last year, as well as their continually eroding market share, that Mt Gox needed help.  When they couldn't straighten out their US$ dollar transfer problems after a reasonable period in the middle of the year, it should have been apparent (especially to any serious US participant) that they had nowhere to go but down.  My overall impression was one more of amateurish incompetence in certain areas like scalability and regulatory understanding than fraud.

Why anyone would keep any long or intermediate term BTC or cash holdings at an exchange is beyond me since it is so easy to transfer both in and out very quickly and BTC can so easily be stored safely at home, a safe deposit box, or in a dedicated wallet service online (if you trust the service, obviously).

As far as I can tell, none of this speaks much to the longer term viability of BTC.  From a technical perspective, I think until there are some additional internet/software "infrastructure" developments (such as the development of a killer app, like the browser was for the internet) it will largely remain the domain of geeks.  The rise in price over the last year has stimulated a lot of development in that area ("point of sale" applications for ease of use by retailers and customers, accounting and immediate fiat currency conversion applications, etc.).  Where or how fast this development will go is anyone's guess.

To me, the bigger issue remains the regulatory and tax issues. There is such a cross current of issues and interests involved that I wouldn't hazard a guess as to how that will all shake out.  Having worked for many years in an affected Treasury enforcement agency, I tend to ignore most of the opinions, whether pro or con, I hear bantered about on these issues in the press, on forums, or in everyday conversation.  The more confidently I hear some prognosticator without direct bitcoin and real world regulatory experience opine about what the US Government "thinks" (as if it were a single minded individual) or will do, the more quickly I discount their views.  Nobody knows at this point.         

[edsanville]

Buyers keep coming in to defend $550 but the bounces keep getting lower. At some point if these $550 buyers step out of the way the price could collapse quickly.

Is anyone selling the rips at this point?

Is anyone buying at $550?

I hope it stays low at least until my monthly bitcoin purchase this Friday.  I might be able to get an entire bitcoin this month .

I'm enthusiastic about the long-term prospects of cryptocurrencies, but bitcoin is actually only ~0.5% of my entire portfolio.

Is there a price where you will stop buying? I suspect there is but I'd like to hear what you're thinking, and any other people buying bitcoins as well.

While I find economics interesting and fundamental analysis as well, I find investor psychology fascinating.

Obviously I have my opinion on bitcoin's long-term prospect so I haven't bought....but I still want to hear from the owners what they're thinking at different stages of this ride. It is the wildest I've ever seen since I started observing markets.

A price where I will stop buying... do you mean in the upward or the downward direction?

After this latest "bitcoin crash,"  the 1-year price performance of bitcoin is now "only"....  wait for it....

1509%.

Yes, it's volatile.  It has relatively little volume compared to gold or the stock market, and it's very controversial (apparently).  It's a speculation on a new technology.  It stands to reason that it will be very volatile for some time until the volume increases.  We who are investing in bitcoin realize and understand that. 

I can tell you I'm not too freaked out about the bitcoin price movements or the news from the past month or so, because I'm not investing for the short haul, and I don't respect the media or the mob's opinion very much.  It's kind of entertaining how excitable the bitcoin-haters get every time a country bans bitcoin, or Apple removes a bitcoin wallet app, or a bitcoin exchange shuts down due to incompetence.

If Bank of America went bankrupt, would people immediately be proclaiming the end of the US dollar?  If not, then why do people proclaim the end of bitcoin because one large exchange shuts down?  Bitcoin != Mt. Gox, despite the media frenzy.

That's my two satoshis about bitcoin right now. 

[Kshartle]

So no there's no price?

Thanks for your perspective.

[edsanville]

So no there's no price?

Thanks for your perspective.

I wouldn't say that there's a price that would scare me out.  Circumstances might shift my viewpoint in the future, depending on what happens with the various competing cryptocurrencies.  If another cryptocurrency takes substantial market share away from bitcoin, I would consider moving my investment into that cryptocurrency.

Anyway, in my opinion cryptocurrencies are here to stay, and will only gain more traction in the coming years.  There will be ups and downs, as there are with anything, but holes will be patched, mistakes will be fixed.  Eventually, human innovation will win out, as it always has in the past.

[Reub]

Are you certain that cryptocurrencies are here to stay? I am not. Especially when every powerful government in the world wants them dead. Tread carefully!

[Ad Orientem]

Are you certain that cryptocurrencies are here to stay? I am not. Especially when every powerful government in the world wants them dead. Tread carefully!

+1

[edsanville]

Are you certain that cryptocurrencies are here to stay? I am not. Especially when every powerful government in the world wants them dead. Tread carefully!

Not every government wants cryptocurrencies dead.  Can you point me to a statement by the United States government where they state that they want cryptocurrencies dead?  So far, I don't think the United States has made any such statement.  Ben Bernanke, of all people, even mentioned bitcoin in a positive light at some point.  I am not a fan of Ben Bernanke or the Federal Reserve, but there it is:

http://qz.com/148399/ben-bernanke-bitco ... m-promise/

Even if every powerful government wanted cryptocurrencies dead, I'm not sure the governments would be able to destroy them due to their decentralized nature.  I think most governments are antagonistic toward bittorrent and The Pirate Bay, and yet those two things still function to this day.

[portart]

You have money and ten zillion choices of where to invest or speculate with it to make more. So where do your parameters lie?
In terms of Bitcoin vs gold...like any speculation, it is all about risk reward. In my mind both carry risk with one exception...a rather significant one..  Bitcoin can go to zero which gold cannot. It is your money, you choose..

[Kshartle]

They just dug up that old fossil Greenspan on CNBC. The last question they asked him was about the viability of bitcoin. His answer really surprised me. It was a little rambly and comes across differently when you hear the nuance and umms which are tough to annotate.

"I perhaps am sufficiently embued with the notion of behavioral economics these days. To say that a.... what fundamentally attracts money or people to hold it (money in general, not bitcoin) as a transactional currency is either it has intrinsic value like gold and silver or it is convertable essentially into that. The dollar for example is the means by which everyone settles in a crisis. They all rush into the dollar. Why? Because we have the most gold."

I thought he was going to praise the dollar because of the US economy, the stability of the government etc. Nope. He said the dollar is the safe haven because we have the most gold.

Interesting that he never coached the Bernanke who thinks central banks hold gold for "tradition". He never explained the concept of intrinsic value to the professor.

[moda0306]

They just dug up that old fossil Greenspan on CNBC. The last question they asked him was about the viability of bitcoin. His answer really surprised me. It was a little rambly and comes across differently when you hear the nuance and umms which are tough to annotate.

"I perhaps am sufficiently embued with the notion of behavioral economics these days. To say that a.... what fundamentally attracts money or people to hold it (money in general, not bitcoin) as a transactional currency is either it has intrinsic value like gold and silver or it is convertable essentially into that. The dollar for example is the means by which everyone settles in a crisis. They all rush into the dollar. Why? Because we have the most gold."

I thought he was going to praise the dollar because of the US economy, the stability of the government etc. Nope. He said the dollar is the safe haven because we have the most gold.

Interesting that he never coached the Bernanke who thinks central banks hold gold for "tradition". He never explained the concept of intrinsic value to the professor.

So having a yellow metal at our central bank is more important than the guns we might point at the middle east if they stop accepting U.S. dollars as payment for oil?

In the end, I think it's guns and productivity more than gold, but it probably helps, as it IS an improvement on our country's stock of assets.

[edsanville]

I love how Bitcoin is like a Rorschach test to determine one's opinion about the source of "value."

By the way, I also love the fact that some idiotic Newsweek reporter claims to have "uncovered" the true identity of Satoshi Nakamoto, the pseudonymous creator of Bitcoin...  and the guy himself says that she completely misrepresented his statements during their "interview,"  and he has nothing to do with Bitcoin:

http://news.cnet.com/8301-17938_105-576 ... right-now/

I love how worthless the media is.

It reminds me of the story told by Jimbo Wales (the creator of Wikipedia), about how our wonderful media completely misrepresented everything he told them about the supposed "Wikipedia Bush/Kerry Controversy."  Watch his story here:

http://www.youtube.com/watch?v=WQR0gx0QBZ4&t=5m50s

The mainstream media is truly abysmal garbage when it is covering new, scary things that it doesn't understand.  Remember guys, the media is only there to stir up controversy that doesn't exist, so it can get as many viewers as possible for the "stories" it creates.  Pay no attention to the dumbasses behind the curtain and the media frenzies they cultivate about Bitcoin or anything else, (especially things that are new and scary).

P.S.  Sorry for all the scare quotes...  I just don't know how to write about our shitty media without them.

[Kshartle]

They just dug up that old fossil Greenspan on CNBC. The last question they asked him was about the viability of bitcoin. His answer really surprised me. It was a little rambly and comes across differently when you hear the nuance and umms which are tough to annotate.

"I perhaps am sufficiently embued with the notion of behavioral economics these days. To say that a.... what fundamentally attracts money or people to hold it (money in general, not bitcoin) as a transactional currency is either it has intrinsic value like gold and silver or it is convertable essentially into that. The dollar for example is the means by which everyone settles in a crisis. They all rush into the dollar. Why? Because we have the most gold."

I thought he was going to praise the dollar because of the US economy, the stability of the government etc. Nope. He said the dollar is the safe haven because we have the most gold.

Interesting that he never coached the Bernanke who thinks central banks hold gold for "tradition". He never explained the concept of intrinsic value to the professor.

So having a yellow metal at our central bank is more important than the guns we might point at the middle east if they stop accepting U.S. dollars as payment for oil?

In the end, I think it's guns and productivity more than gold, but it probably helps, as it IS an improvement on our country's stock of assets.

Moda.

You're a good guy. What drink do you like? Doesn't matter....I'd pour it if you were here.

Ponder the concept of intrinsic value.

What surprised me about Greenspan's words was he actually had a kernal of truth in them. He went back to his roots. He was a gold bug back when he was honest and showed an understanding of money.

Slips of paper aren't money....they are a fraud.

[Kshartle]

Calling a slip of paper money is worse than calling a jar of poo money.

If the government declared jars of 5h1t money it would literraly have more backing than the $.

We live in world dominated by monopoly money and wonder why people get rich for no reason and so many are poor. It's so obvious.

[moda0306]

Slips of paper aren't money....they are a fraud.

Shouldn't we define as money anything that we use as money?  Are roads not "mediums of transportation" because they only exist as a result of government monopoly?  Of course, it's obvious that "the private sector could do it better" to .5% of the population that qualifies as anarcho-capitalist , but does that not make them roads?  Are they just concrete prisons?  What about rail, boat and planes that use public rail, ports, and airports?  Not really mediums of transportation?

We live in world dominated by monopoly money and wonder why people get rich for no reason and so many are poor. It's so obvious.

1) We live in a world with lots of different units of "money," and a financial system that allows a sick amount of investment in foreign currencies at the click of a mouse, as well as the good ol' stand-by, Gold.  You don't have to have more than a bit of spending money in actual US dollars at any one time.  The rest of your savings can be in equities, inflation-indexed bonds, gold, foreign currencies, real estate investment trusts, silver, bitcoin, and beaver pelts for all the government cares.  Courts may require you to settle certain debts in U.S. dollars if they come to court, but you can not only barter if you (and the other party) wish to, but you can index your contracts to something, hedge your bets with future/options contracts, or just have them be short-term in nature, if you fear that much about the stability of the U.S. dollar.

Our options are so abundant in 2014 in terms of how to hold our savings.  It's almost laughable to complain, when you think about it.

2) It's certainly not obvious that a "money monopoly" is why rich are rich and poor are poor.

[Kshartle]

It's certainly not obvious that a "money monopoly" is why rich are rich and poor are poor.

I should have said "good money" rather than saying slips of paper are not money if you want to be extremely literral. You know what I meant though.

You don't think it's obvious when a group of people have the power to run money off a printing press and force everyone to accept it in exchange for things of real value that most of the items of real value will end up in the hands of a few people? It seems extremely obvious to  me.

Prented that the government stopped the presses completely and for whatever reason could not start them up again. Further suppose you have a printing press in your basement and there is no possibility that anyone could stop you from printing.

Is it obvious that you would become richer and so would your friends and family and people who provide you things you want? It would be exclusively at the expense of everyone else who would become poorer on a relative basis.

[moda0306]

Kshartle,

Since "the government" can't be rich or poor, only its agents or preferred constituents can be (and most government agents are hardly "rich"), any "theft" that occurs by government has to either be allocated to individuals (either agents or preferred constituents, and we've mostly ruled out agents (even the president only makes $400k)), destroyed (they spend the confetti on destroying things rather than building them), or "held in trust" (national parks, public land, etc).

If I am the only agent of "my house," and money printed from "my house" was essentially all given initially to me, this would be the equivalent of the money Janet Yellen prints going into her bank account to spend, rather than being exchanged in pre-explained ways with the banking system.  It's a fraud if I do it because there's no honesty in the system whatsoever.  The fed is pretty clear and consistent on how it manages the balance between employment and price stability.

This isn't all good by any means, but certainly isn't the sole means for unearned income by the wealthy, or un-deserved destitution for the poor.  There was plenty of that in the gilded age as well.

[Kshartle]

If I am the only agent of "my house," and money printed from "my house" was essentially all given initially to me, this would be the equivalent of the money Janet Yellen prints going into her bank account to spend, rather than being exchanged in pre-explained ways with the banking system.

You pointed out in the other thread that parties can't be racist, only individuals. Same thing with the government and the resources it steals/controls.

The ultra wealthy use the government to get the property of the rest. You know this. The ablility to print people's property away and get it for you and friends is only one mechanism. It is very effective since it's far less obvious than outright confiscation (taxes).

Please, you know the average government worker has nothing to do with this conversation. That's a diversion.

The money the Fed prints ends up in the government's hands via interest free borrowing. We've gone over all this. How do you think they can run their deficits so cheaply, do think it's because they're such a good credit risk? Why?  It's because they print and can print.

When money is run off a printing press the price of assets goes up. The people with the marjority of the assets get richer on a relative basis. Cheap money also allows greater use of leverage.

Anyway, for all the predations of the state that I despise, the monoploy money is probably the worst, though war is right up there. Of course without the monopoly money it'd be a lot harder for them to wage war.

It always cracks me up when I hear about how printing more monoploy money is going to help the poor.

Government is always and forever a tool of the ultra wealthy. It's the mechanisim by which they fleece the rest of the population. When government has at it's disposal the tool of a printing press and the guns to force everyone to accept slips of paper in exchange for items with real value.....it's blazingly obvious how this widens the gap between the wealthy and the poor. The more they print the worse it gets. You can see this in action right here in the US.

[moda0306]

You pointed out in the other thread that parties can't be racist, only individuals. Same thing with the government and the resources it steals/controls.

The ultra wealthy use the government to get the property of the rest. You know this. The ablility to print people's property away and get it for you and friends is only one mechanism. It is very effective since it's far less obvious than outright confiscation (taxes).

If the printed money is being used to spend on "safety hammocks," how is that helping the rich?

When money is run off a printing press the price of assets goes up. The people with the marjority of the assets get richer on a relative basis. Cheap money also allows greater use of leverage.

To the last part, yes.  To the first, it helps asset prices in nominal terms, but not real.  It has a REAL affect on debt levels for borrowers.  So, yes, if done beyond expectations, cheap money will "punish" savers and "reward" borrowers.  However, the fed is NOT doing this beyond expectation.  Unemployment is high and inflation is low.  Their options are obvious given what they've set market expectations to be when everyone signed their contracts with guesses about future inflation/growth.  It would be theft to now generate deflation after setting the opposite expectation of the market.

The money the Fed prints ends up in the government's hands via interest free borrowing. We've gone over all this. How do you think they can run their deficits so cheaply, do think it's because they're such a good credit risk? Why?  It's because they print and can print.

That, and the same reason stable countries can borrow during recessions at modest rates.  Excess supply of productive capacity.

Further, if they use these deficits to give poor people "safety hammocks," how does that help the rich?  They're not using this money to give $1 Billion SS checks to Bill Gates.

It always cracks me up when I hear about how printing more monoploy money is going to help the poor.

There is no monopoly.  You just think there is because you're in the U.S. and you feel like you have no options because other parties don't want your bitcoins for payment.

Government is always and forever a tool of the ultra wealthy. It's the mechanisim by which they fleece the rest of the population. When government has at it's disposal the tool of a printing press and the guns to force everyone to accept slips of paper in exchange for items with real value.....it's blazingly obvious how this widens the gap between the wealthy and the poor. The more they print the worse it gets. You can see this in action right here in the US.

So we can either get rid of it (never going to happen), or advocate for government to serve not just the wealthy's interests, but everyone else's, in some ways, and have taxes be higher on the uber-wealthy. 

Why wouldn't the latter work to a better benefit than advocating for something that will NEVER happen?

[Pointedstick]

If the printed money is being used to spend on "safety hammocks," how is that helping the rich?

It's basically vote-buying, along with divisive social wedge issues. In these ways, the rich and powerful can get poor and disadvantaged people to continue voting for them despite the fact that after their election, they will usually turn around and screw those very people, secure in the knowledge that political ignorance will shield them from most of the blowback and they can engage in further divisiveness and vote buying to regain any lost votes from their plutocratic policies.

I mean, we are talking about the American government here, right?

[Kshartle]

There is no monopoly.  You just think there is because you're in the U.S. and you feel like you have no options because other parties don't want your bitcoins for payment.

It is monopoly money. It has no real value just like monopoly and they have a monopoly on the printing of it.

And you are forced to accept it as payment of debts here, so there's another monopoly.

BTW- I've never owned a bitcoin and will never own one.

[moda0306]

If the printed money is being used to spend on "safety hammocks," how is that helping the rich?

It's basically vote-buying, along with divisive social wedge issues. In these ways, the rich and powerful can get poor and disadvantaged people to continue voting for them despite the fact that after their election, they will usually turn around and screw those very people, secure in the knowledge that political ignorance will shield them from most of the blowback and they can engage in further divisiveness and vote buying to regain any lost votes from their plutocratic policies.

I mean, we are talking about the American government here, right?

What do you mean by "screw them?"  SS?  Medicare?  Public education?  Or moreso stuff like wars and fractional-reserve banking?

[Kshartle]

If the printed money is being used to spend on "safety hammocks," how is that helping the rich?

It's basically vote-buying, along with divisive social wedge issues. In these ways, the rich and powerful can get poor and disadvantaged people to continue voting for them despite the fact that after their election, they will usually turn around and screw those very people, secure in the knowledge that political ignorance will shield them from most of the blowback and they can engage in further divisiveness and vote buying to regain any lost votes from their plutocratic policies.

I mean, we are talking about the American government here, right?

They buy the votes of the poor with their handouts and promise to steal for them. They then steal from productive people, some of which we classify as wealthy even though they are victims of the system.

They promise they will steal from the 1% or something.....they end up stealing from anyone who produces more than he consumes though by taxing him and inflating away his savings. This way the middle class is prevented from becoming wealthy and the poor are trapped in their hammocks and used as a weapon against them.

I think safety net is a better term than hammock now that I've pondered it. Animals get trapped in nets.

[Kshartle]

If the printed money is being used to spend on "safety hammocks," how is that helping the rich?

It's basically vote-buying, along with divisive social wedge issues. In these ways, the rich and powerful can get poor and disadvantaged people to continue voting for them despite the fact that after their election, they will usually turn around and screw those very people, secure in the knowledge that political ignorance will shield them from most of the blowback and they can engage in further divisiveness and vote buying to regain any lost votes from their plutocratic policies.

I mean, we are talking about the American government here, right?

What do you mean by "screw them?"  SS?  Medicare?  Public education?  Or moreso stuff like wars and fractional-reserve banking?

Destory their opportunites with things like the min wage and regulations that discourage people from getting jobs or starting businesses. Discourage them from saving by inflating the value of their money away. Trap them in the saftey nets.......