Bitcoin dying?

MrAgent

Looks like it may be on its way out. Thoughts?

Bitcoin exchange Mt. Gox disappears in blow to virtual currency

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Params7

its all about that dogecoin now.

DevilWAH

I think this will blow over, they question is will another upstart currency be able to make inroads before bitcoin really finds its feet.

this was always going to happen, when you have anything growing at the rate bitcoin was with out any real central management, there was always the chance it would burst at some point.

We cant have 1000's of digital currencies around as then none will be a serious alternative to what we already have as they will be to small. for digial currency to really take of you need just one or two like a Google or Facebook that lead the way and can take the knocks that come along the way.

I think Bitcoin will recover slowly, but how bit it ends up depends if the big investors stay with it. If you made a large investment in bitcoin when it was at £600 you might be considering walking away with it down at £130.

wallpaper_01

Well Mt. Gox was just an exchange website wasnt it? It was the largest but some other will pop up.

I don't think its dying, let it fall then buy in. I had 100 bitcoins not long ago when it was worth £5 each, I sold them for that price. Was a little annoyed when their price reached $1000 per coin haha! Never mind not making that mistake again! When they come down im buying in...

JockVSJock

I saw the news too...

Bitcoin exchange Mt. Gox disappears in blow to virtual currency | Reuters

I agree, I don't think it is dying. In fact, there are other alternatives that keep popping up. LiteCoin comes to mind as well.

Nine Bitcoin alternatives for future currency investments | Technology | theguardian.com

linuxlover

No wonder it's dying, it has no real value. It's a trend, a hype, just like many others. It works because people believe it works, that's what it's based on, once people stop believing in it, it will stop working. That's how virtual instruments work.

zxbane

Linuxlover,

Couldn't the same be said for any fiat currency as well, including the U.S. dollar since it is ultimately not backed by anything tangible? It just has perceived value essentially.

shodown

Crypto currency is here to stay. What will be the "STANDARD" remains to be seen. However the demand is here for it to be around for a long time.

JockVSJock

zxbane wrote: »

Linuxlover,

Couldn't the same be said for any fiat currency as well, including the U.S. dollar since it is ultimately not backed by anything tangible? It just has perceived value essentially.

+1

Exactly!

Alot of folks don't understand this, nor do they understand how money works and gets it value.

linuxlover

zxbane wrote: »

Linuxlover,

Couldn't the same be said for any fiat currency as well, including the U.S. dollar since it is ultimately not backed by anything tangible? It just has perceived value essentially.

It could be said, but not in the exact same way. As long as FED keeps releasing positive news, printing the money to sustain their acceptable levels, people buying that (USD still used as a reserve currency) and US economy keeps growing even at the smallest possible rate - the USD will stay where it is now. Because the general perception of USD is positive, whether that might be true or not doesn't really matter. What matters is what people believe in. Bubbles burst when people change their opinions, not because of some magical technical level.

It's similar to Bitcoin in a sense that they're both sustainable because of general positive outlook, but not quite the same in a sense that real economy plays a large role in the value of USD while Bitcoin is a completely virtual asset that can be destroyed at the first solar storm. USD wasn't created out of thin air, it was always backed by different metals and later Gold until Nixon ended that standard while Bitcoin was created virtually and it only works virtually, even its value is virtual. It has no real economy supporting the currency. Anything that has no REAL ECONOMY - PHYSICAL PRODUCTION is bound to collapse sooner or later. It only takes one major power outage for all these hyped up billion dollar worth trends to collapse in a split of a second while USD will still be worth just as much, even though it's essentially worthless.

DevilWAH

the difference is that USD has had 100's of years to mature and gain a stable trusted footing and digital currency has not. even a currecny backed by gold is no different as the value of gold its self is a subjective matter. What value is billions of $ of gold sitting in a vault, it only has value because the banks and governments think it has.

In this way digital currency is the same, there is a finite amount like there is gold in the earth, and you can make money either by trading what has been found of go looking for undiscovered stuff. All a currency needs to survive is a guarantee of its value, when that fails be it virtual or "real" the currency will suffer and fall. This is what happens when inflation runs out of control, the currency can no longer be garanteed and becomes worthless.

Hyperinflation - Wikipedia, the free encyclopedia shows how many times this has happened already with "real" money.

ratbuddy

Cryptocurrency is a staggering waste of computation resources which could be used curing diseases. The sooner the bubble bursts, the better.

CoolAsAFan

Cryptocurrencies are likely here to stay. Venture Capitalists all over the world have poured millions into bitcoin startups. The service(s) that cryptocurrencies offer are much needed and are an amazing paradigm shift from fiat/central bank controlled currencies.

The only thing in the bitcoin industry that is dead/dying is Mt. Gox! They screwed up with how they implemented their exchange and now they are paying for it. I mean c'mon, Mt. Gox is just a re-branded card trading platform, what did people expect? Every major exchange is now distancing themselves from Mt. Gox, including even the Japanese government! The CEO just stepped down and now they are in the process of re-branding yet again to just Gox, but they are essentially dead in the water because how much money a lot of people had lost on their platform.

Judging by the responses on here, it is quite clear the most of these guys have no clue how bitcoin works...To those guys, please just keep using your banks and paying thousands in fees and charges while having your every purchase tracked and leave the digital currency revolution to the guys trying to make the world a better (more secure/private) place.

linuxlover

Digital revolution to make a better world

)) is that what you call something which value fluctuates 50% in a day? Crypto-currencies are here to stay, I agree, but without regulation the only purpose for virtual currencies will be speculation and a mean to launder money, nothing else.

ratbuddy

Sorry, but disapproval = misunderstanding is just not true. I understand bitcoin (and the copycats) perfectly well, I just dispute the need, and deplore the waste of resources.

wallpaper_01

CoolAsAFan I agree, a lot of people have a short sighted view when it comes to crypto. Its brand new, 2009 or something? The US dollar has been used for years and years its obviously now stable. At the end of the day bitcoin is best compared to gold. Gold is just a rock, it looks pretty so people buy it and because its rare it has a value to people... BTC is the same. Its mined and there is a limit. As long as people want it, it has a value. Not really that hard to understand and is no less real than 'real money'.

It will stabilize eventually. Large companies are starting to accept it as payment, the more that do the more it will go up in value and get recognised. I do agree that it will eventually need to be regulated. I sold some and didn't get payment, there was no way of getting that back, some may say anonymity is a benefit but its not really to big companies.

What I will say is, get in on it now. I regretted not doing it last year. Even this bad press is still getting it recognition, more people will buy in, it will grow.

f0rgiv3n

To give proof that bitcoin isn't going anywhere, it already bounced back from this bad news. When Mt.Gox went down the price dropped to the 400s. It's back up above 500 now. What does this mean?

It means that people value it enough to invest in the currency despite a major exchange website going down. To me this means that the currency will weather any single company failures because people believe in it.

the_Grinch

It's taking a hit, but definitely won't be dying. I use Bitcoin at least once a month and it has been fantastic. Like anything new it will take time to get where it needs to be. Right now I am considering expanding my mining operation since the prices are so low people will begin to sell off their equipment.

Claymoore

CoolAsAFan wrote: »

Judging by the responses on here, it is quite clear the most of these guys have no clue how bitcoin works...To those guys, please just keep using your banks and paying thousands in fees and charges while having your every purchase tracked and leave the digital currency revolution to the guys trying to make the world a better (more secure/private) place.

No, I understand how currencies work, which is why I do not support Bitcoin. I understand that it really tickles the Libertarian pleasure centers on some folks, much in the same way goldbuggery does. It's great if you want to dodge taxes, buy drugs or pay for assassinations, but not very useful for everyday things.

There are plenty of economic reasons why Bitcoin is doomed to fail. It's deflationary because the amount of bitcoins that can be mined is fixed. There is no central bank - part of the appeal for some - that manages the currency to prevent deflation or tame inflation. Gold at least has industrial or ornamental uses, and I can always pay my taxes with dollars, but bitcoins are worthless if nobody will accept them for payment.

You may think that sitting on bitcoins is a great store of value. A bitcoin is worth that is worth $100 today but worth $200 next month seems like a good thing, but that adds to the deflationary aspect. Nobody spends bitcoins because they are afraid of buying a $7 million pizza. This is where a central bank steps in and creates more currency to stimulate spending. The DC Babysitters Club is a simple example of the role of a central bank. You don't want to hold debt denominated in bitcoin if the value is going to increase dramatically over the life of the loan. Without credit and loans in bitcoin, there is no banking infrastructure to support the currency. That means it's only worth what people are trading it for at that precise moment in time. Like Dutch tulips or beany babies.

Venture capitalists throwing money at crypto currencies is another bad sign. Starting your own country with its own currency takes work. Creating a hash algorithm as the basis for a new crypto currency isn't the same barrier to entry as creating a new country. New currencies could pop up every day. If everyone ditches bitcoin and goes to dogecoin, you are left holding some worthless files on a hard drive.

JDMurray

Some semi-random thoughts and predictions about virtual currency (crypto or otherwise):

Bitcoin is a fiat currency whose value is only created by the holders that have faith in its worth. People will quickly point out that the US Dollar is also a Fiat currency, but it is one that has the backing of legal tender laws of a very powerful government that require and enforce its use in many situations.

Virtual currency will need legal tender laws to raise it above its current bid-ask model that make it more of a stock than a true currency.

Many large (i.e., "too big to fail") financial institutions are seriously developing their own virtual currency systems. The faith and trust people have in these institutions will allow virtual currency to continue as a part (big part? small part?) of the global economic system.

Just as most banks do not control enough money to provide 100% withdrawals to 100% of their customers, Mt Gox can't possibly provide 100% pay out on all Bitcoins in circulation. When a "run on the Mt. Gox bank" begins, that will finish the BitCoin exchanges and Bitcoin in its present form. The world banks will cause this to happen when they have launched their own virtual currency, yet still see people still clinging to Bitcoin because of its perceived transaction anonymity, which would not exist with a World Bank virtual currency.

Historically, Bitcoin and Mt.Gox will be seen as the first successful, evolutionary step in virtual currency, and quite possibly the first new piece of technology to be born in the 21st century (or did the Tesla come first?).

wes allen

Mt. Gox bankrupt, almost all bitcoin gone.

Mt. Gox files for bankruptcy, blames hackers for losses | Reuters

JDMurray

This reminds me of one of Warren Buffett's primary rules: "Never invest in anything that you don't understand."

DevilWAH

Acourding to this 7% of the global Bitcoin was stolen. My question is can a start up currency really be taken seriously when now about 10% of its total value is known to have been taken by criminals? For Bitcoin to carry on and knowing there is on a finite about of it then it must continue to grow in value.

Yes I know all currencies have a lot of there money in criminal hands but this is a huge chunk so early on.

f0rgiv3n

While I agree with you DevilWAH, I think people believe in bitcoin to religious status at this point. Basically, the ones who are keeping this currency alive now are get-rich-quick folks. It's basically like a modern-day gold rush if you think about it. Some will (and have) get lucky and strike it rich while others will waste $$ throwing it at the chance to get in on it.

It's those few high-profile stories that keep people coming back to buy more bitcoins. I don't think this will deter enough people to make a big difference in the long run.

I mean hell, I categorize myself in with the get-rich-quick. If the price comes down even more I'll consider buying in.

tpatt100

I appreciate the technology behind BitCoin and I see it becoming something more widely used eventually "someday". The issue I have with it was that it seems so "pyramid scheme" like. It gets harder to mine as more is made, so the early holders got the bulk of the wealth, even if it is not infinite eventually it's value benefits the early developer/developers. So while it's use and transactions are decentralized it's initial wealth accumulation is very regressive in nature.

When something's "value" is based on speculation and holding the currency itself rather than the use of it in exchange for goods and services then it's not a very useful currency. I get the idea of investing money but that is usually tied to something else, even stocks it's not the currency that holds value.

JDMurray

It looks like Bitcoin may be officially dead, only if through the lack of confidence of its users. However, there are many other virtual currency systems that have started up because of it, and they have the example of Bitcoin for lessons learned about what to do and not to do. Those systems will carry on with the backing of stable financial institutions, and investors will continue to speculate in virtual currency as they so now in stocks and commodities.

JDMurray

tpatt100 wrote: »

When something's "value" is based on speculation and holding the currency itself rather than the use of it in exchange for goods and services then it's not a very useful currency.

You just described investing in precious metals.

apr911

wallpaper_01 wrote: »

CoolAsAFan I agree, a lot of people have a short sighted view when it comes to crypto. Its brand new, 2009 or something? The US dollar has been used for years and years its obviously now stable. At the end of the day bitcoin is best compared to gold. Gold is just a rock, it looks pretty so people buy it and because its rare it has a value to people... BTC is the same. Its mined and there is a limit. As long as people want it, it has a value. Not really that hard to understand and is no less real than 'real money'.

Actually, the US Dollar as it exists today has only been around for about 40 years (1971-2014) now. Prior to that, the currency was backed by gold and thus was not a fiat currency and we were one of the last countries to break from the "gold standard."

The Euro has been around for 15 years (1999-2014). Prior to that it did not even exist.

JDMurray wrote: »

Bitcoin is a fiat currency whose value is only created by the holders that have faith in its worth. People will quickly point out that the US Dollar is also a Fiat currency, but it is one that has the backing of legal tender laws of a very powerful government that require and enforce its use in many situations.

As JDMurray said, the US Dollar and Euro are both fiat currencies. But they are stable not because they are backed by precious metals or the "people," they are stable because they are backed by very powerful economies and governments. Really, the people have less to do with the backing of modern day fiat currency than does the underlying economic system driving that currency. Its why you see currency exchange rates (fiat-to-fiat and fiat-to-gold) fluctuate so radically when the markets go up in one country but down in another.

Fiat Money is by definition money that derives its value from government regulation or law.

Bit-coin as an unregulated currency, with no legal standing is by definition not a fiat currency. In fact, given that it does not have the full faith and backing of any government entity and is does not having an underlying economy to derive value, Bitcoin is more akin to owning shares of stock in a company than owning precious metals or other fiat currencies. Even stocks though are backed by the production capacity of the company you are investing in whereas BitCoin lacks even that backing.

It truly is a currency that derives its value from the faith people put into it. Sadly, people are fickle. There's a reason governments chose to move away from the gold standard. All one needs to do is look at any of the "Panic of <YEAR>" when the stock markets crashed, loan markets evaporated, etc. As bad as the "Great Recession" and the "Savings & Loan" crises were, historically, Panics prior to fiat currencies and central banks were deeper and more devastating due to the associated affects of uncontrolled currency that often followed (ie. inflation/deflation and stagnate growth). Often times, such as in the Panic of 1907, it required the "creation" of a Psuedo-central bank in the form of personal backing of the banks by the wealthiest individuals to calm the masses and stem of inflationary/deflationary spirals.

I think Bitcoin is/was a social experiment with mixed results. I think some of the ideas put forth by BitCoin for the exchange of money by using crypotgraphic keys to "securely" transfer and offer non-repudiation of those transfers are great while other things about BitCoin are not so lasting.

Personally, I am anti-bitcoin. Im not saying the central banks are perfect, they clearly arent, but Im not about to start speculating on something that has no value backing other than what "people" are willing to give it.

JDMurray

apr911 wrote: »

but Im not about to start speculating on something that has no value backing other than what "people" are willing to give it.

So I take it that you do not buy and sell baseball cards either?

Sports cards are just like speculating in Bitcoin, but their prices aren't nearly as volatile.

tpatt100

MtGox code posted by hackers as company files for bankruptcy protection | Ars Technica

MtGox code posted by hackers as company files for bankruptcy protection

As MtGox CEO Mark Karpeles and his lawyers officially filed for court-supervised restructuring of the Bitcoin exchange, someone posted a chunk of code to Pastebin that would appear to lend credence to Karpeles’ contention that his company was hacked. The block of PHP code appears to be part of the backend for MtGox’s Bitcoin exchange site, and it includes references to IP addresses registered to Karpeles’ Web hosting and consulting company, Tibanne.

In an update to the MtGox website late Monday, the company reasserted its claim that it had been hacked through an exploit of a weakness in its exchange website code. “Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared,” the company’s spokesperson said in the latest update at the MtGox website. “We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.”

That loss was discovered on February 24. On the same day, the company found “large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary, but they approximate JPY 2.8 billion [$27 million US].”

But that may not be the full extent of the loss. “Since there are probably a variety of causes, including hacking by third parties, we need to investigate a huge amount of transaction reports in order to establish the truth,” the company said in its statement. “As of this date, we cannot confirm the exact amount of missing deposit funds and the total amount of bitcoins which disappeared.”

The 1,719 lines of commented PHP code posted over the weekend include code to access individual customers’ Bitcoin wallets and to process transactions. MtGox’s Bitcoin node IP address is hard-encoded in the server code, as are SSH keys used to connect to MtGox’s transaction processing server. Anyone who had access to the server running this code could have easily redirected transactions or pillaged the Bitcoin wallets of customers.

Asif Dasl

I'd be surprised if something didn't rise out of the ashes of BitCoin.. remember Napster? It filled a void that the market had not thought of, only when people caught on and authorities cleaned things up a bit did something as successful as iTunes emerged and then Netflix and countless others followed.

Just imagine in another year or three - Visa, Mastercard or PayPal developing their own digital currency, I can see that happening. The world is globalised with increasingly a single business language of English, why not a global digital currency? BitCoin was out there in the wild west of capitalism but that doesn't mean that it was totally wrong. If we step back a bit, I think something is there to be developed and polished without the illegalities that was associated with BitCoin.