Bitcoin: A new and fast growing currency


#1

I’ve known about them for a while but now they are sweeping the news waves.

Digital ‘bitcoin’ currency surpasses 20 national currencies in value | Fox News

More than $1 billion dollars worth of a digital currency known as “bitcoins” now circulate on the web – an amount that exceeds the value of the entire currency stock

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of small countries like Liberia (which uses “Liberian dollars”), Bhutan (which uses the “Ngultrum”), and 18 other countries.

Politicians and bankers are panicking in the name of money laundering. Real reason: it threatens their money making monopoly on currency and taxation.

Here is my understanding of how it works: It is a virtual currency; it is not physical. It is also a finite currency. A bitcoin is produced every 6 hours and production will cease at 21 million bitcoins. This is designed to replicate something like a gold standard, like the rate of mining and then the running out of the resource.

So while it is produced out of thin air, it is stable and not inflationary(at least very minimally until it hits its production cap).

The way it is set up, bitcoin is anonymous. People make transactions through their accounts using digitial signatures.

I am not ready to put money into it right now, but I have yet to find any flaws in my limited exposure to it, other than it being digital which would be a problem if the internet went down.


#2

the main reason that bitcoins keep rising in value is they enable illegal activities with ease on the internet, it gives them much less risk than the illegal act in person so they are willing to pay more for the anonymity


#3

Lately it is rising in wake of the Cyrpus incident, but yes that is a reason. Though I don’t know that they have to pay more for anonymity.


#4

Well paying more in the sense that you need bitcoins to make the transactions and people are mostly selling them above their value. So the value rises only because of the monopoly of the currency if a secondary bitcoin like currency becomes popular the value of bitcoins will plummet


#5

The federal government is trying to regulate it, and that will ruin it. Stay away from the bitcoin.


#6

I think they’re still quite easy to buy in the US.

I used to buy them directly on the market on mtgox, by far the largest trading site, then their UK bank account closed and I don’t want to pay £25 to make a transfer to their Japanese account. Then I was buying at around 4% commission off blockchain.info, but all of their UK/EU funding options recently got shut down. Now basically the only options are private exchangers at around 8-10% above market price, very annoying.

There are small crashes quite regularly which correct themselves quickly so there is some easy money to be made, potentially. On May 3rd the market price was around $80, now it’s up to $116


#7

I’d say that last part is good advice regardless of regulation.


#8

I think Bitcoin reached its bottom after the crash and will only progress from there based on this chart.


#9

Two good sites for anyone interested in either mining or markets:

Bitcoin Block Explorer - Blockchain.info <- Stats and charts on market data and technical stuff (even the amounts of electricity being consumed by miners)

bitcoinity.org/markets


#10

From what I’ve read (on discussion forums and such, no credible source to post) it was caused by people who had been hoarding coins since the very early stages finally releasing them.

The only way I see the price dropping long-term is if one of the big illegal markets gets shut down.

This happened just recently but I think Silk Road would have to go down to make a serious dent in bitcoin’s value.
Tor-hidden online narcotics store, ‘The Farmer’s Market’, brought down in multinational sting | Naked Security


#11

If a 2nd competing bit coin like currency came out it would plummet the value of bit coins because the value is artificially inflated by its monopoly.


#12

Well there is already Litecoin, I just don’t see why many people would switch when Bitcoin works perfectly well.

I don’t see how this is “artificial” inflation. The monopoly wasn’t created by any government or central bank, prices are set on an unregulated market.


#13

Its artificial because its created by a monopoly