Bitcoin interest spikes in Spain as Cyprus financial crisis grows(wired.co.uk)
wired.co.uk
Bitcoin interest spikes in Spain as Cyprus financial crisis grows
http://www.wired.co.uk/news/archive/2013-03/20/bitcoin-spain-currency-run
14 comments
Do you have a source for this? I find it very believable, but would like to read more.
Go on localbitcoins.com and type in 'Tehran'.
There's also a very popular mailing list/forums for trading in Farsi I have to dig up the link when I leave my office.
Argentina has also embraced bitcoins en masse considering it's now illegal to transfer any money out of the country, and no Argentinian trusts their bank to not steal all their deposits. On payday in Argentina you see huge lines of people at the ATMs withdrawing everything they own to keep under a mattress, or smuggle to Uruguay to deposit in a stable bank.
Argentina has also embraced bitcoins en masse considering it's now illegal to transfer any money out of the country, and no Argentinian trusts their bank to not steal all their deposits. On payday in Argentina you see huge lines of people at the ATMs withdrawing everything they own to keep under a mattress, or smuggle to Uruguay to deposit in a stable bank.
Searching for Tehran does not actually come up with quality results.
As an Iranian with a few bitcoins stashed, i would really like to know more about this as well as links to mentioned mailing list/forums.
If it's illegal to transfer money out of the country, how are new bitcoins getting in to the hands of Argentinians? They could mine a small amount, but if they want to purchase bitcoins owned by someone overseas, they'll need to transfer money out to effect that purchase, won't they?
Tourists have bitcoins and are willing to trade them for pesos at a much better rate than the ATM.
If it's illegal to transfer money out of the country, why not use Hawala? https://en.wikipedia.org/wiki/Hawala
So the old saying goes that correlation does not imply causation. Why are spaniards, but no portuguese or italians or irish seeing this spike in bitcoin-related app downloads?
Theres a far more simple explanation that just sticking the "its Cyprus fault". Several popular spanish blogs and newspapers have run big stories about Bitcoin recently (Xataka, El Mundo...). That probably has sparked curiosity among spaniards on the Bitcoin phenomenon. Simple as that.
Theres a far more simple explanation that just sticking the "its Cyprus fault". Several popular spanish blogs and newspapers have run big stories about Bitcoin recently (Xataka, El Mundo...). That probably has sparked curiosity among spaniards on the Bitcoin phenomenon. Simple as that.
Spain's economy is in a pretty bad state at the moment. Worse than the other countries you mentioned as far as I'm aware.
In the town where I live the local police hadn't been paid for two months, so they made up their wages by setting up checkpoints and fining drivers.
When you're seeing that level of dysfunction it's not hard to see how the situation in Cyprus would make people question how safe their Euro accounts are.
In the town where I live the local police hadn't been paid for two months, so they made up their wages by setting up checkpoints and fining drivers.
When you're seeing that level of dysfunction it's not hard to see how the situation in Cyprus would make people question how safe their Euro accounts are.
I'm not at all surprised. The decentralized nature, extreme versatility, and optional anonymity of Bitcoin make it an ideal vehicle for storing value in the face of financial crises, collapsed economies, toppled governments, military conflicts, etc.[1]
--
[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...
--
[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...
Maybe better than a collapsing currency managed by a collapsing government, but hardly an ideal storage vehicle. Much too volatile.
The volatility will only increase with the introduction of professional speculators.
"First Bitcoin Hedge Fund Launches From Malta
Current assets under management in the Bitcoin Fund are $3.2 million (2.5€ million) and there is no performance-based fee. However, the fund charges an annual management fee o.5% of Net Share Value payable monthly in order to provide the sophisticated security and wallet management that one would expect with such large amounts at stake"
http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitc...
"First Bitcoin Hedge Fund Launches From Malta
Current assets under management in the Bitcoin Fund are $3.2 million (2.5€ million) and there is no performance-based fee. However, the fund charges an annual management fee o.5% of Net Share Value payable monthly in order to provide the sophisticated security and wallet management that one would expect with such large amounts at stake"
http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitc...
You're right that it is not ideal. There are strengths which make it better than many of the alternatives. If volatility does eventually diminish, while still not a platonic ideal, it would probably be strictly better than any of the alternatives.
the volatility will decrease as more people start using it
To expand on your comment: when a small number of users with a large store of bitcoin sell out, they are selling into the hands of hundreds of small scale owners who have diverse motives for holding the coins. The chance that they all cash out together diminishes because they are using the coins for individual purposes. You're witnessing the growing spurts that will shortly settle down.
What is a "bank run" then?
Bank run on bitcoin will happen when people feel it's totally broken. There were already a couple of major bugs in Bitcoin software itself: in 2010 a transaction was created with 184 bln BTC due to an integer overflow. Was fully fixed in 10 hours. Recent bug with a hard fork of the half of the network was fixed within a 3-4 hours.
When stuff like that happens, some may freak out and sell their BTC. Speculators who still believe, will do the same and then buy at a lower price, recovering the market price. If the problem is fixed, in 24 hours no one will notice the difference. Luckily, Bitcoin is getting more and more decentralized and stable as more people are involved in development and more money is at stake. This motivates everyone to protect the system and act quick to fix the issues.
See more on incidents: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
When stuff like that happens, some may freak out and sell their BTC. Speculators who still believe, will do the same and then buy at a lower price, recovering the market price. If the problem is fixed, in 24 hours no one will notice the difference. Luckily, Bitcoin is getting more and more decentralized and stable as more people are involved in development and more money is at stake. This motivates everyone to protect the system and act quick to fix the issues.
See more on incidents: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
That hasn't been the case so far. It has become more volatile as more people enter the market.
Do not define consistent growth with volatility. As Bitcoin is getting more valuable in the eyes of more people, its price necessarily must grow. If it doesn't, it means only one thing: everyone bought (or didn't buy) all BTC they wanted and not much trade is happening.
Draw the trend line and see the variance of 2-day average around that trend. The volatility is silly compared to how much you can gain if you invest early.
Draw the trend line and see the variance of 2-day average around that trend. The volatility is silly compared to how much you can gain if you invest early.
By "volatile" do you mean "growing" here? Because that's very expected when more people are getting Bitcoin. Bitcoin's potential is probably millions of dollars per Bitcoin. That will only happen if a lot of people use it.
That's because many of the people entering the market are speculators, not users.
the larger the price per bitcoin the lower the volatility, over $100 and a $5 difference a day is 5%, if/when BTC reaches $1000 then even £10 variation a day is only 1% and is much easier to account for.
maybe we should define volatility...
A currency which changes value by more than 100% in 30 days (either up or down) is not an ideal vehicle for storing value.
If it consistently grows by 100% a month and a 2-day average oscillates within 5-10%, it sounds like a great way to store value. Even recent full-scale fork incident didn't drop the price more than 30% for a couple of hours and then the price fully recovered in two days.
I don't believe this bubble is any different to the 2011 bubble in Bitcoin (or indeed stock market bubbles in general). Consistent 100% month-on-month increases would make Bitcoin worth more than the world GDP in short order - that is not sustainable, and clearly indicates a bubble forming to me, particularly in the absence of any fundamental value backing the currency.
that is easy when the price is low, when the price reaches $1000 then we are talking about 1-2% differneces in a day, which is easeir to deal with as a store or as a currency
Maybe we should gather together a group of hackers and fly to Cyprus to launch a Bitcoin currency to help people restart their livelihoods. Opportunities like this don't come around too often.
What do you think HN community?
Edit: By launch bitcoin currency I mean raise awareness and tailor existing bitcoin tools to local needs
What do you think HN community?
Edit: By launch bitcoin currency I mean raise awareness and tailor existing bitcoin tools to local needs
ROFL, seriously? Feel free to try to get the Cyprian government to adopt Bitcoin as legal tender but be aware that putting the national reserves into a commodity that can be "stolen" in its entirety in about 30 seconds of computer footwork and it doesn't pass the sniff test. The original gold standard, flawed as it was, depended in part on the fact that it was infeasible to actually steal all the gold out of the reserves. (Hence Goldfinger's devious plan of simply making it unusable)
As a research project though this idea is fantastic, go through and figure out all the things that would have to be true to base the Cyprian economy on Bitcoin. Start with a solid Micro and Macro economic model of the economy, factor in reserves and currency transfers. There is a lot of data you can gather by going over Argentina's economic policies and their actions with regard to currency. A great way to learn from that is to say "This is what Argentina did, this is how you would/wouldn't do that with Bitcoin."
Economics is challenging because it seems very very squishy as a "science" (the gears in the machine are people after all) but there is a lot of really solid stuff which can inform on the question of what role currency plays in an economy, politics, and global trade.
As a research project though this idea is fantastic, go through and figure out all the things that would have to be true to base the Cyprian economy on Bitcoin. Start with a solid Micro and Macro economic model of the economy, factor in reserves and currency transfers. There is a lot of data you can gather by going over Argentina's economic policies and their actions with regard to currency. A great way to learn from that is to say "This is what Argentina did, this is how you would/wouldn't do that with Bitcoin."
Economics is challenging because it seems very very squishy as a "science" (the gears in the machine are people after all) but there is a lot of really solid stuff which can inform on the question of what role currency plays in an economy, politics, and global trade.
> Feel free to try to get the Cyprian government to adopt Bitcoin as legal tender but be aware that putting the national reserves into a commodity that can be "stolen" in its entirety in about 30 seconds of computer footwork and it doesn't pass the sniff test.
I'm not a Bitcoin expert, but my understanding is that you can encrypt a wallet and store it offline somewhere protected, like a safe-deposit box at a bank. I'd expect any large scale and bureaucratic organization with Bitcoin reserves to have those kinds of safe guards.
I'm not a Bitcoin expert, but my understanding is that you can encrypt a wallet and store it offline somewhere protected, like a safe-deposit box at a bank. I'd expect any large scale and bureaucratic organization with Bitcoin reserves to have those kinds of safe guards.
The thing is that for a national currency, multiple sources have to agree that "yes, this money is not in this account anymore" for money to actually move from point A to point B. If I write a check, I can send it to person B. I can then go and put a stop payment on it, which prevents them from cashing it. Or, if they got my checkbook somehow and wrote themselves a check, I can go to my bank and say "This was a fraudulent check" and go down the legal road. These are things that happen many, many times on any given day, and the same goes for things like debit and credit cards.
Bitcoin, on the other hand, by it's own proselytes, is an "anonymous crypto-currency" with "no chargebacks" and "no way to recover a lost wallet", as if any of those things is a benefit to any nation, any consumer, or any person who's ever had to access a "recover password" form.
Bitcoin has it's uses, and is fantastic under certain circumstances. But this is not one of them.
Bitcoin, on the other hand, by it's own proselytes, is an "anonymous crypto-currency" with "no chargebacks" and "no way to recover a lost wallet", as if any of those things is a benefit to any nation, any consumer, or any person who's ever had to access a "recover password" form.
Bitcoin has it's uses, and is fantastic under certain circumstances. But this is not one of them.
You might want some redundancy in case the bank accidentally destroys your safety deposit box [1] or the bank is raided and valuables are confiscated from every single deposit box [2].
[1] http://www.dbs.com.hk/en/aboutus/newsroom/2004/041005/
[2] http://www.dailymail.co.uk/news/article-1362561/Bank-gangste...
[1] http://www.dbs.com.hk/en/aboutus/newsroom/2004/041005/
[2] http://www.dailymail.co.uk/news/article-1362561/Bank-gangste...
But then you can't use it. And you forget the password.
A bitcoin wallet can be stored offline, so if you want long terms storage you stick the bits in your vault right next to your gold. With a card punch and some gold plate you could store the bitcoin wallet in gold and the protect the gold the usual way! If that was your main concern -- which I don't think it is.
EDIT: I don't think that parent^ post is suggesting trying to make it legal tender either.
EDIT: I don't think that parent^ post is suggesting trying to make it legal tender either.
I was just reading about etching a key into a real ring http://www.wired.com/wiredenterprise/2013/03/bitcoin-ring/
Your response comes across as rude, and you're criticizing an idea that wasn't actually proposed.
How can it be stolen in it's entirety within 30 seconds?
I'm sure there are plenty of people who would genuinely love to know.
There have been a number of highly publicized Bitcoin thefts from various exchanges. Repudiation is something that is made harder by its design (not saying it isn't possible, just harder). So if you get inside access to the computers in that bank and you can effect legitimate transactions out, I've heard (but not witnessed) that it takes about 30 seconds to get enough confirmations back to make a transaction durable. (if this is not the case then I'd love to add that to my understanding of the protocol). A centrally managed currency like the dollar (as an example) doesn't have that issue because transferring assets from federal reserve might make you a trillionaire briefly but they would turn around and transfer them right back. Stealing gold (as a reference standard for currency) does have that issue, except that physics made such a theft much harder to pull off.
Offline storage of an encrypted wallet is fine, although in a functioning economy there will be pretty constant transactions flowing in and out of the depository bank but that is one of the cool things about doing the exercise, you can walk through the scenarios and say "Ok, if this were the case you would need maybe a 'fractional' offline wallet where you could bring a portion online and leave the bulk offline.
I'd love to read about a design for that. When you consider the steps that folks went to in order to penetrate Iran's nuclear facilities, there are similarly challenging places like banks, and depository banks are especially juicy targets.
Offline storage of an encrypted wallet is fine, although in a functioning economy there will be pretty constant transactions flowing in and out of the depository bank but that is one of the cool things about doing the exercise, you can walk through the scenarios and say "Ok, if this were the case you would need maybe a 'fractional' offline wallet where you could bring a portion online and leave the bulk offline.
I'd love to read about a design for that. When you consider the steps that folks went to in order to penetrate Iran's nuclear facilities, there are similarly challenging places like banks, and depository banks are especially juicy targets.
I would be willing to tip 1 bitcoin for anyone who can write a bitcoin guide for the country of Cyprus.
Here are a few from around the world:
* USA: http://howdoyoubuybitcoins.com/in/united-states/
* Mexico: http://howdoyoubuybitcoins.com/in/mexico/
* Malaysia: http://howdoyoubuybitcoins.com/in/malaysia/
* Russia: http://howdoyoubuybitcoins.com/in/russia/
* Germany: http://howdoyoubuybitcoins.com/in/germany
* Germany (translated): http://howdoyoubuybitcoins.com/de-de/deutschland/
More on http://howdoyoubuybitcoins.com/ - all the guides are free and updated regularly.
Here are a few from around the world:
* USA: http://howdoyoubuybitcoins.com/in/united-states/
* Mexico: http://howdoyoubuybitcoins.com/in/mexico/
* Malaysia: http://howdoyoubuybitcoins.com/in/malaysia/
* Russia: http://howdoyoubuybitcoins.com/in/russia/
* Germany: http://howdoyoubuybitcoins.com/in/germany
* Germany (translated): http://howdoyoubuybitcoins.com/de-de/deutschland/
More on http://howdoyoubuybitcoins.com/ - all the guides are free and updated regularly.
FYI http://howdoyoubuybitcoins.com/in/germany leads to a 404
Why the downvote? If you think this is a bad idea please give feedback!
Edit: Moved the discussion to it's own thread if people don't think it's suitable here: https://news.ycombinator.com/item?id=5418404
Edit: Moved the discussion to it's own thread if people don't think it's suitable here: https://news.ycombinator.com/item?id=5418404
"What do you think HN community?"
Terrible plan that serves mostly to enrich current bitcoin holders.
Terrible plan that serves mostly to enrich current bitcoin holders.
What does "launch a Bitcoin currency" mean? If they want to buy Bitcoins, all they need is an internet connection, a bank account and an account on Coinbase/MtGox/etc.
I guess you could start an exchange targeting those two countries, but that isn't a small undertaking.
I guess you could start an exchange targeting those two countries, but that isn't a small undertaking.
What I meant was launch publicity and education about bitcoin infrastructure to make it easier for local people to use. Would also need to do things like translate into local language, and probably build specific tools to make the currency work locally. It would be a unique opportunity to really engage with people, and understand their currency needs as users. I think there would be quite a lot of infrastructure to build to get a working ecosystem going.
You can actually "launch a Bitcoin currency" too, if you're not convinced check out LiteCoin, PPcoin, SolidCoin, Bitcoin Testnet coins, Rucoin, or any of the clones that are based on original Bitcoin source.
http://github.com/yebyen/testnet-debian
At one point I was able to find a blog or github from GavinAndresen that detailed a few more ways to make your bitcoin blockchain incompatible with the standard chain, but I think this kind of activity is frowned upon due to the risk of 51% attacks. Unless your coin is approaching the popularity of Bitcoin (or somehow you got there much earlier... time machine?), it is vulnerable to being taken over by a small fraction of large Bitcoin miners' community coming over and playing with their clocks and hashing your chain into oblivion.
This is not necessarily all bad, or worse than creating Bitcoin in the first place. You can lose money in banks when your government fails, too.
http://github.com/yebyen/testnet-debian
At one point I was able to find a blog or github from GavinAndresen that detailed a few more ways to make your bitcoin blockchain incompatible with the standard chain, but I think this kind of activity is frowned upon due to the risk of 51% attacks. Unless your coin is approaching the popularity of Bitcoin (or somehow you got there much earlier... time machine?), it is vulnerable to being taken over by a small fraction of large Bitcoin miners' community coming over and playing with their clocks and hashing your chain into oblivion.
This is not necessarily all bad, or worse than creating Bitcoin in the first place. You can lose money in banks when your government fails, too.
I love you guys.
1 year ago, top comment on Bitcoin article "worthless fad"
2 weeks ago "I will feel stupid if those guys were right"
Today "Im not at all surprised"
I guess this is how we see a community slowly come round to the idea of something. I am just suprised it took HN this long.
1 year ago, top comment on Bitcoin article "worthless fad"
2 weeks ago "I will feel stupid if those guys were right"
Today "Im not at all surprised"
I guess this is how we see a community slowly come round to the idea of something. I am just suprised it took HN this long.
Yep, it's basically the textbook trajectory of a speculation bubble.
Once you get 90-year-old grandmas wandering around trying to put their money in "coinbits like I heard about on Oprah" then you'll know the end is nigh.
Once you get 90-year-old grandmas wandering around trying to put their money in "coinbits like I heard about on Oprah" then you'll know the end is nigh.
to be fair the blogpost he wrote dates back to 2 years ago. It's the reason I bought some bitcoins then, and boy am I happy I did.
Central banks are losing credibility, fueling the market for Bitcoins.
http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-fo...
http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-fo...
Just like anarchy isn't the answer to a poorly run government, I don't think the answer to a poorly run central bank is to go to a currency which isn't supported by any central bank.
Your analogy doesn't ring true to me.
Anarchy isn't an answer to a poorly run government, but open elections and transparency may be.
Poorly run central banks are notoriously secretive and corrupt, Bitcoin is just the opposite.
Anarchy isn't an answer to a poorly run government, but open elections and transparency may be.
Poorly run central banks are notoriously secretive and corrupt, Bitcoin is just the opposite.
Your analogy would only be true if Bitcoin had an open and transparent central bank. Instead it has a set of rules that were established with the currency. It is true that this makes the monetary policy more predictable and less corrupt, but it is also less intelligent. There is no independent entity that can take an active role to help stabilize the wild swings in value that Bitcoin has and will continue to experience.
That's the point.
Markets are good at finding prices. Why not use a market to find the price of a currency?
Markets aren't good at finding prices for pseudo-"assets" that have no value. A bitcoin price of $0 is a valid market equilibrium, and a stable one.
Your argument is a rationale for a commodity currency. Markets are good at finding prices for high-volume competitive commodities such as wheat [0]. No one will ever turn down a wheat dollar: you can eat it.
[0] http://www.google.com/finance?q=WEAT.
Your argument is a rationale for a commodity currency. Markets are good at finding prices for high-volume competitive commodities such as wheat [0]. No one will ever turn down a wheat dollar: you can eat it.
[0] http://www.google.com/finance?q=WEAT.
Gold can't be eaten. Why is it so expensive?
Psychology. It could crash tomorrow: industrial gold consumption isn't driving the price.
Bitcoin has value as a cheap and censorship-resistant way of transferring funds.
When people stop using bitcoin, this value will disappear. It is not intrinsic value. It is value assigned by group psychology, like a bubble.
When people stop using bitcoin, this value will disappear.
That's true for everything. Whale oil was extremely popular for more than a century, now it's barely used. That doesn't mean it wasn't an useful thing at the time.
It is not intrinsic value.
There's no such thing. Value (market or use) is always relative to someone or some group of people. And even if the item is still useful in itself, the existence of better and/or cheaper alternatives may still drive its market value to zero.
It is value assigned by group psychology, like a bubble.
I think you're just not seeing Bitcoin with the right point of view. Instead of thinking of the speculators trading it like a commodity, think of it as a service, like Paypal.
When I want to send money to someone else online, how can I do it? I have to use it some kind of service (bank transfer, Paypal, etc), and those services can be "convinced" to prevent my transaction (like when the CC companies prevented WIkileaks donations), or it can freeze my funds (see Paypal again), etc.
Now, if people are willing to pay Paypal some percentage for that transfer, it means the service has some value. If Bitcoin can do the same, it stands to reason that it must have at the least some value as well.
Now, this is different from the (real or not) value one gets by trading and holding Bitcoins, but that's just part of the whole system. For the record, I have zero bitcoins.
That's true for everything. Whale oil was extremely popular for more than a century, now it's barely used. That doesn't mean it wasn't an useful thing at the time.
It is not intrinsic value.
There's no such thing. Value (market or use) is always relative to someone or some group of people. And even if the item is still useful in itself, the existence of better and/or cheaper alternatives may still drive its market value to zero.
It is value assigned by group psychology, like a bubble.
I think you're just not seeing Bitcoin with the right point of view. Instead of thinking of the speculators trading it like a commodity, think of it as a service, like Paypal.
When I want to send money to someone else online, how can I do it? I have to use it some kind of service (bank transfer, Paypal, etc), and those services can be "convinced" to prevent my transaction (like when the CC companies prevented WIkileaks donations), or it can freeze my funds (see Paypal again), etc.
Now, if people are willing to pay Paypal some percentage for that transfer, it means the service has some value. If Bitcoin can do the same, it stands to reason that it must have at the least some value as well.
Now, this is different from the (real or not) value one gets by trading and holding Bitcoins, but that's just part of the whole system. For the record, I have zero bitcoins.
There's no such thing. Value (market or use) is always relative to someone or some group of people.
Yes, but there's an important and qualitative difference between valuing something because it's useful, and only valuing something because a crowd of people value it, only because they know everyone else values it, only because... recursively.
This is what I mean by "intrinsic value": it has a utility value independent of pure psychological value.
Useful things like oil or wheat won't suddenly become useless. (They could be obsoleted, but that's not sudden or unexpected). But it's not that easy to reason about group psychology. Empirically, we know there have been many bubbles where everyone suddenly "agreed" something was actually worth much less than the going price and crashed it. We know psychologically can do that.
Yes, but there's an important and qualitative difference between valuing something because it's useful, and only valuing something because a crowd of people value it, only because they know everyone else values it, only because... recursively.
This is what I mean by "intrinsic value": it has a utility value independent of pure psychological value.
Useful things like oil or wheat won't suddenly become useless. (They could be obsoleted, but that's not sudden or unexpected). But it's not that easy to reason about group psychology. Empirically, we know there have been many bubbles where everyone suddenly "agreed" something was actually worth much less than the going price and crashed it. We know psychologically can do that.
I'm disappointed that you seemed to have skipped over half my post, where I tried to reason why I think Bitcoin might have some value besides a shared delusion.
I don't dispute the utility of Bitcoin transactions. But I don't see how this translates into BTC value.
Markets are used to find the price of major currencies, they are the foreign exchange markets.
I feel like that metaphor is kind of broken. One could argue that anarchy isn't the answer to a poorly run government because the benefits of governamental regulation and control outweigh those of anarchy (a position I disagree with, but that's just my opinion). What kind of benefits do central banks provide?
The most important function in this context is controlling the money supply and providing stability. If inflation or deflation of the US dollar gets too extreme, the Federal Reserve will adjust the money supply in order to prevent the problem from snowballing. There is no such entity that can serve that purpose for Bitcoin. This increases the odds for both runaway inflation or deflation (deflation is seemingly more like for Bitcoin). If either of those happen, the currency has the potential to collapse.
And at the all time high of $70/btc they couldn't have picked a better time to invest! Pump and dump in progress.
I assume you mean better for others? I'm afraid that anyone trying to jump on the bandwagon now will lose. If people on Cyprus can really affect the price there will be another price jump next week. And then many will sell, expecting a crash... people who are new to bitcoin will lose money on Tuesday unless the crazy prices continue for a couple more days. Casino may be more safe soon ;-)
Although I'm just a lowly programmer I feel that a swift and dramatic price crash is in the cards right now. And then; then I shall buy.
> And then; then I shall buy.
This is why it will not crash long enough to give you the opportunity. That's the nature of the market. Everyone else is going to be doing the same thing, especially speculators. It will probably crash soon enough, but some negative event will need to trigger it.
And it'll have to be worse than a website getting hacked or a hardfork, which were the kinds of things that caused crashes years ago when the market was younger.
This is why it will not crash long enough to give you the opportunity. That's the nature of the market. Everyone else is going to be doing the same thing, especially speculators. It will probably crash soon enough, but some negative event will need to trigger it.
And it'll have to be worse than a website getting hacked or a hardfork, which were the kinds of things that caused crashes years ago when the market was younger.
>And it'll have to be worse than a website getting hacked or a hardfork, which were the kinds of things that caused crashes years ago when the market was younger.
Actually, despite the market being older, there's still only one major exchange. If there were another competitor to MtGox that was moving the same volume, I'd agree with you; but as it stands we're still only a MtGox hack or crash away from some major changes in the BTC->USD prices.
Actually, despite the market being older, there's still only one major exchange. If there were another competitor to MtGox that was moving the same volume, I'd agree with you; but as it stands we're still only a MtGox hack or crash away from some major changes in the BTC->USD prices.
This is a big issue, the next biggest USD exchange has about a -10% price difference and I'm not sure what that means.
Are you talking about BTC-E? Because I noticed that as well, until someone pointed out that they're in Russia and it's nearly impossible to move USD out of there, making arbitrage just a nice idea that can't really happen.
The smaller exchanges lag behind due to a combination of low volume/liquidity and non-negligible transfer fees that prevent arbitration.
Are we forgetting the BTC crash of 2011? I think it was around the $2 mark in November, 2011 (down from a previous high of like $35).
In summer 2011:
1. Mining was creating a lot of new BTC in relation to existing stock.
2. No much services and shops accepting BTC.
3. Amateur security on MtGox and misc websites.
4. The biggest exchange was 6-7 months old.
In 2013: 1. Much lower inflation due to mining. 2. Many long-term investments in mining, payment processing and related services. 3. Multiple well-secured big exchanges. 4. General increase in number of hands holding BTC. 5. General increase in education on how to keep BTC safe and secure.
In 2013: 1. Much lower inflation due to mining. 2. Many long-term investments in mining, payment processing and related services. 3. Multiple well-secured big exchanges. 4. General increase in number of hands holding BTC. 5. General increase in education on how to keep BTC safe and secure.
This is much more likely to be the result of FinCEN ruling being favorable for the Silicon Valley Bank/MtGox partnership, paving the way towards easy bitcoin purchases in the future.
Europeans buying BTC because of the crisis seems unlikely to be driving the latest rally because EURBTC is rising similarly to USDBTC.
They always rise and fall together. If europeans are rushing in, so will the dollars price.
I am from Spain and I operate with USD only.
My main motivation isn't the crisis, but don't asume that all europeans are trading in EUR ;)
My main motivation isn't the crisis, but don't asume that all europeans are trading in EUR ;)
Wouldn't any significant difference between the two create an arbitrage opportunity that would immediately correct them back to where they were? Any imbalanced triangle in exchange rates can't last long.
I have been building an arbing program for bitcoin over the last couple of weeks, you need about $3000 US for liquidity and size (and not to get eaten up by fixed fees etc) over exchanges. So far I've made 2.5K NZD. (42BTC)
This is over and above the monstrous returns in BTC over the last month!
This is over and above the monstrous returns in BTC over the last month!
That's less than I was estimating. Is this custom development? Do you need more capital?
Any chance you would like to collaborate? I've done a fair bit of arbitrage in my day. Hit me up, my email is in my profile.
There are actually lots of arbitrage opportunities in BTC. Check out the difference between BitFloor and MtGox.
It's easier to deposit USD into bitfloor through BoA than it is to deposity USD into MtGox. So customers of a certain site use bitfloor to buy BTC with USD.
Thinking about it now you're probably right about the USD/EUR prices.
It's easier to deposit USD into bitfloor through BoA than it is to deposity USD into MtGox. So customers of a certain site use bitfloor to buy BTC with USD.
Thinking about it now you're probably right about the USD/EUR prices.
I looked into it. Problem is transaction cost. Currently, the deposit and cash-out fee's plus the trading fee's of various BTC exchanges just do not justify the arbitrage profits.
I hope someone could create a BTC ETF that allows people to trade BTC to USD on the conventional market.
I hope someone could create a BTC ETF that allows people to trade BTC to USD on the conventional market.
I'm fairly certain that that correlation is due to day trading.
You're probably right.
Speculators buy btc for usd to sell for eur and thus keep the same usd/eur ratio as outside btc exchanges.
Arbitrageurs, not speculators.
I've been to Spain multiple times. A lot of places didn't even take credit card. Good luck getting people to use an internet currency.
Bitcoin is not ready for prime time yet. I can't wait for some malware to empty everyone's wallets...
I'm guessing most USA based commenters here know nothing about Spain.
Bitcoin is not ready for prime time yet. I can't wait for some malware to empty everyone's wallets...
I'm guessing most USA based commenters here know nothing about Spain.
While it's true that a lot of (small) shops don't accept bank cards, this is mostly immaterial. The threat in Cyprus was that the government could seize a good percentage of all the money deposited, including whole life savings.
In that view, keeping most of your money in a non-seizable currency (Bitcoin or not) and just some "hand money" in the bank makes perfect sense. As a Portuguese, I'm considering it myself.
In that view, keeping most of your money in a non-seizable currency (Bitcoin or not) and just some "hand money" in the bank makes perfect sense. As a Portuguese, I'm considering it myself.
If what you say about the gov seizing money is true, why wouldn't they try and take some sort of legislative control over BTC? Why wouldn't they make it illegal or do some other thing with the law to make it harder to use without running the risk of a knock on the door? No country is just going to stand by and let a new currency disrupt them.
If what you say about the gov seizing money is true
Well, it's not exactly a conspiracy theory, it's all over the news about Cyprus that the Parliament voted (and rejected) that measure[1], which was proposed by the Eurogroup (and others, IIRC).
why wouldn't they try and take some sort of legislative control over BTC? Why wouldn't they make it illegal or do some other thing with the law to make it harder to use without running the risk of a knock on the door? No country is just going to stand by and let a new currency disrupt them.
My argument wasn't just about Bitcoin, but in any case, I certainly wasn't suggesting a situation where half the population or so would suddenly turn to BTC.
That said, while they could illegalize Bitcoins, preventing people from actually using them would be much harder than just telling a few banks what to do. To buy Bitcoins you just need to make an online payment to some exchange (e.g. Mtgox) - you don't even need to run the Bitcoin client.
So to enforce that illegalization, it would take up much more time and effort to implement the technical and legal counter-measures, and it would either be largely ineffective (see "fight against file sharing") or politically hard to implement (e.g. very large number of arrests).
Finally, this is all mostly irrelevant, because the real reason this measure was proposed wasn't because the money from Cypriots, but because there's a lot of money from wealthy Russian business men which would get seized as well, and which definitively won't be using Bitcoins.
[1]: http://www.washingtonpost.com/business/plan-to-seize-deposit...
Well, it's not exactly a conspiracy theory, it's all over the news about Cyprus that the Parliament voted (and rejected) that measure[1], which was proposed by the Eurogroup (and others, IIRC).
why wouldn't they try and take some sort of legislative control over BTC? Why wouldn't they make it illegal or do some other thing with the law to make it harder to use without running the risk of a knock on the door? No country is just going to stand by and let a new currency disrupt them.
My argument wasn't just about Bitcoin, but in any case, I certainly wasn't suggesting a situation where half the population or so would suddenly turn to BTC.
That said, while they could illegalize Bitcoins, preventing people from actually using them would be much harder than just telling a few banks what to do. To buy Bitcoins you just need to make an online payment to some exchange (e.g. Mtgox) - you don't even need to run the Bitcoin client.
So to enforce that illegalization, it would take up much more time and effort to implement the technical and legal counter-measures, and it would either be largely ineffective (see "fight against file sharing") or politically hard to implement (e.g. very large number of arrests).
Finally, this is all mostly irrelevant, because the real reason this measure was proposed wasn't because the money from Cypriots, but because there's a lot of money from wealthy Russian business men which would get seized as well, and which definitively won't be using Bitcoins.
[1]: http://www.washingtonpost.com/business/plan-to-seize-deposit...
When I lived in Chicago back in 1998 I distinctly remember feeling that the common use of credit cards (and mobile phones) was much more primitive compared to Spain. 10 years later, I needed to use cash way more often the 3 years I lived in Vancouver than the 3 years since I came back to Madrid. Heck, I haven't visited an ATM in at least 3 months.
That said, you are probably right that the technical education and trust needed to embrace bitcoins is much less common in Spain. I first heard of bitcoins in, of all places, an episode of "The Good Wife" couple years ago, and have only found a handful of people who know about them. I imagine this will be changing rapidly in the following months, just like it's doing everywhere else.
That said, you are probably right that the technical education and trust needed to embrace bitcoins is much less common in Spain. I first heard of bitcoins in, of all places, an episode of "The Good Wife" couple years ago, and have only found a handful of people who know about them. I imagine this will be changing rapidly in the following months, just like it's doing everywhere else.
mmm...
What do you mean with 'A lot of places didn't even take credit card'? Are you sure you've been in Spain?.
I guess YOU know nothing about Spain.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...
What do you mean with 'A lot of places didn't even take credit card'? Are you sure you've been in Spain?.
I guess YOU know nothing about Spain.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...
I was in Madrid three weeks ago for work. I took my clients out to dinner and had to pay in cash... It happens often.
The GDP of the country has little to do with credit card use. I was surprised when I went to Australia and discovered that Debit cards are a new thing that required marketing to spread. Credit cards were in wide use but paying for things directly out of your bank account with a card is still relatively new.
Are you one of the many Americans that don't even have a passport never mind exploring anywhere that doesn't take your cheap money?
http://www.theexpeditioner.com/2010/02/17/how-many-americans...
The GDP of the country has little to do with credit card use. I was surprised when I went to Australia and discovered that Debit cards are a new thing that required marketing to spread. Credit cards were in wide use but paying for things directly out of your bank account with a card is still relatively new.
Are you one of the many Americans that don't even have a passport never mind exploring anywhere that doesn't take your cheap money?
http://www.theexpeditioner.com/2010/02/17/how-many-americans...
Well, half my family is Spanish, and I travel there every year for a few weeks, and at least in Galicia, small shops that don't accept bank cards are still reasonably common, yes. Even in Vigo, which isn't exactly that small, it's not hard to find a few.
Oh, and that was certainly true of Lloret de Mar as well, just a few years ago. Supermarkets and such all accept cards, but the bazaars (run mostly by easterners, from what I could tell) mostly didn't.
Oh, and that was certainly true of Lloret de Mar as well, just a few years ago. Supermarkets and such all accept cards, but the bazaars (run mostly by easterners, from what I could tell) mostly didn't.
Is there an easy way to buy bitcoins? I tried coinbase and it said it had hit the 24 hour rolling limit whatever that means.
I then signed up for mtgox but all of the funding options look really onerous. Why can't I use ACH or a credit card?
I then signed up for mtgox but all of the funding options look really onerous. Why can't I use ACH or a credit card?
There is a simpler reason. The biggest blog of web/apps in Spain (http://www.genbeta.com) has written several articles about Bitcoin this week so there have been more downloads thanks to that.
Don't overthink ;)
Don't overthink ;)
and not only technical blogs have written about bitcoin. also more general-interest newspapers have recently published articles about it.
and also it turns out that this article only speaks about the apps downloads but not about how much money has been exchanged, so imho it's a little bit unfair to speak about correlations or capital flight as others articles suggested
I would buy gold before I invested in bitcoin. At least I could use gold to make something. The value in the end lies in utility I suppose.
The value that gold derives from industrial uses is minimal today and practically non-existent historically. Assuming you are talking about jewelry? In that case it's important to consider how much of it's popularity in such matters depend on its ability to be scarce and store value making its value derive from a very similar psychological circle as bitcoins.
I'd rather buy Euro then I would buy bitcoin
Bitcoin is going to kill a lot of money transfer companies eventually