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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tpatt100

Apple is supposed to do something with iTunes since they have so many people using that as their Apple payment system. "Imagine a future" where you go to pay for something and you have to sit through an ad....

apr911

JDMurray wrote: »

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.

No JD, I dont buy and sell baseball cards either.

I used to collect them and still have a collection of them but I have never tried to use that collection as a form of currency. Maybe someday (or even today) some of those cards will be worth something and Ill strike it rich as a result but its not why I collected them in the first place. Also, any value that my cards appreciate is going to be due to the rarity of the card for every card that appreciates in value I probably have 99 or more that have no value.

Beanie Babies come to mind as a perfect example of what happens when people try to use something as a currency that has nothing (no government, no economy, no business-production) to back up its value. Wild speculation, huge price swings followed by an increased demand (as people try to cash in on the speculation) further fueling speculation and price swings until eventually the bottom falls out.

The bottom falls out for any number of reasons but most likely the sunk cost and gain effect starts to take hold, people begin holding their items expecting values to return to previous levels or continue to soar until eventually the free "flow" of currency stops and prices crash. Now days you'd be lucky to get the original retail price for a beanie baby or even the raw material cost back.

Tulip Mania saw the same thing.

Even the US dollar experiences the same thing... If you look at both the "Great Depression" and the "Great Recession" although the underlying cause of both were different (that's actually somewhat debatable too), they both saw the free flow of money stop in and out of the economy stop. In the Great Depression, even the governments participated in the stoppage which caused serious devaluation of the currency and stocks and runs on the bank.

The Great Recession saw the same stoppage initially and that's when we took the biggest hits and had the biggest company failures. It could have been far worse without central banks (and the FDIC/other similar institutions) to push money into the economy while the FDIC likely prevented bank runs and the removal of money from the economy. Lehman Bros went under because they over extended themselves and were unable to repay loans when the flow of money stopped and like dominos Lehman's failure caused a further lockup of the money supply which in turn caused other overextended banks to fail... In a healthier economy, Lehman probably could have secured the loans required and continued to function. Its similar to how the US Gov't continues to function, financing against their current value to repay loans financed against their previous value.

Even so, my baseball collection, beanie baby collection and tulip collection, regardless of their value or non-value have a tangible good to accompany. Even if they have no resale value, I enjoyed collecting baseball cards, my non-existent beanie baby collection makes for a pretty cool "leave" pile year round and my tulips look nice in the spring time. Bit Coin will probably be some file sitting on some long unused harddrive somewhere collecting dust. With any amount of luck, the harddrive itself will have more value than the 1's and 0's stored on it.

Bit Coin is/was most definitely a speculative bubble. It was from its very start. Bit coin has no intrinsic value as it is nothing; just bits of computer code. In economics, a bubble occurs when the price of an asset (defining bitcoin as an asset is a bit of a stretch) becomes unhinged from the intrinsic value of the asset.

Id also point out how easy it is to lose your bit coin fortune since its just 1's and 0's on a disk... If you delete the file, have a hard drive crash or corruption, or any number of things that modern computers are prone to without multiple backups (a backed up corrupted file is still a corrupted file) and poof you have nothing.

apr911

I also collect defunct "real" currencies. French Franc's, German Deutchmarks, Spanish Pesetas, etc.

Most come from places Ive traveled so they have a certain keepsake/memento value to me but they have no real value to anyone else.

They may never have a value ever again or they might one day be collectors items of a bygone era (whether that era be the end of paper money, the end of individual currencies in Europe or the fall of some government remains to be seen) and have some or great value either way, the value or non-value requires a physical item which I posses. The same cant be said for bit coin and I honestly struggle to see the 1's and 0's of my bitcoin private/public key ever having value to anyone else.

Again its like stocks... I can buy a stock at $1 and still have it at $2 and claim to have $2 and 100% profit but until I actually sell the share, its just 1's and 0's on someone else's harddrive. Even the IRS recognizes this and your gain/losses aren't assessed until after you've converted the share back to USD.

JDMurray

Asif Dasl wrote: »

I'd be surprised if something didn't rise out of the ashes of BitCoin.. remember Napster?

The lesson learned from Napster was not to have a P2P file sharing network with a centralized directory server that the authorities could take offline and bring the whole network down. In this way Napster lead the way for decentralized, true P2P networks, like BitTorrent, eDonkey, Kad, and Gnutella.

And the Beanie Babies boom/bust is a very good analogy to Bitcoin.

DevilWAH

Lets be really clear about some thing, Value is a human thing. Applying basic logic, nothing has value, nothing has meaning and nothing actually, or on the flip side, every thing has value, everything has meaning and every possible thing exists in every possible place.

So yes any currency or object only has a value because some one gives it that value. As long as it is trusted then it will work, the UK currency only works because I trust that I will be given the value of the money as it promises. But I know that should every one actually claim there money that is "rightly" there's the whole currency would crumble away.

the_Grinch

I still wouldn't say dead, but definitely weaker. New currency can and probably will take it's place. It's a new world and I don't think digital currency will ever go away...just a matter of what will actually win out.

JDMurray

Looks like it may be open season on Bitcoin repositories: Bitcoin bank Flexcoin closes after hack attack | Technology | theguardian.com

f0rgiv3n

Yep, it's over. At least it better be after all these attacks surfacing. Flexcoin, Poloniex, Mtgox, who else will show up next?

SanEr

Bitcoin has become more popular, especially after the increase of its price. I should say, I was very suspicious about it when it appeared. But now I regret that I didn't invest it at once. Speaking about the title of the thread, I'm surethat Bitcoin is not dying. I've recently read Bitcoin reviews on revain.org/projects/bitcoin, and noticed that people stay positive and are crossing their fingers as the price might reach more than $20k soon.

NetworkNewb

apr911 said:

Id also point out how easy it is to lose your bit coin fortune since its just 1's and 0's on a disk... If you delete the file, have a hard drive crash or corruption, or any number of things that modern computers are prone to without multiple backups (a backed up corrupted file is still a corrupted file) and poof you have nothing.

You mean like how almost all currency transactions are done today???

Also, since it is on the blockchain and is distributed that argument doesn't really hold anyways. Unless all computers on it crashed. I don't think Bitcoin is the future or anything for other reasons, just that argument doesn't really hold.

GregHops

The fact that bitcoin is dying is a natural course of things.

JDMurray

What you are perceiving is a natural (organic) cycle that occurs in all financial systems. BTC is too much of a sweetheart virtual currency to truly die. For people getting into virtual currency trading, it's the only thing they will recognize. There's just too much marketing appeal in that name.