>"Bitcoin fell below the psychologically significant level of $10,000 on Wednesday morning..."
When exactly did $10,000 become "the psychologically significant" number for bitcoin? It's only been above 10K for less than 2 months and only above 1K for less than a year.[1]
I'm not sure if the dollar pricing is actually the most significant one when it comes to Bitcoin market, so I wouldn't actually put any significant meaning to round numbers in BTC/USD price.
As soon as a price goes above a round number like that and stays there. It isn’t any different than in technical stock trading (please note I’m explaining this phenomenon/belief and not condoning it.)
Bitcoin is a great prototype for something that people will actually want to use.
It has some utility, but there are armies of other cryptocurrencies with higher utility waiting to be used.
It may be that people will still assign value to Bitcoin in a couple of decades, like they do with gold. It may also be that you'll need 100 Bitcoin to buy a pizza.
> Bitcoin is a great prototype for something that people will actually want to use.
I agree so much with this. I tell this to everyone who will listen. Blockchain will be huge and Bitcoin was a pioneer. I think 10 years from now everyone will be using blockchain (either directly or indirectly) it just won't be through Bitcoin.
I'll be convinced when I get a satisfying explanation on how blockchain will scale to handle the rate of transactions in a real global economy (while keeping all it's advantages intact)
The answer is reasonably simple - a globally-agreed-upon time-ordered database can act as an anti-cheating layer for new protocols built on top of it. Lightning Network is a simplistic option, and I reckon there'll be more over time. These protocols may allow nodes to only watch transactions that they're interested in, and participate in a blockchain only indirectly - storing or even hearing about the whole chain becomes unnecessary for most nodes.
I do hope that proof-of-stake or a similar system come into being trustworthy systems, however, to decouple the security of a blockchain from its energy usage.
According to https://charts.bitcoin.com/chart/price it first reached today's price on the 6th of December and peaked on the 17th of December. It has now taken an entire month to fall to the 6th of December's price.
To say the fall was quicker than the rise is at best cherry picking price point data and at worst an outright lie.
On the contrary I think we will see the ATH again soon. Apparently no one knows what's going to happen, but there's just too much people, money, hash power and ecosystem for this to go bust.
After eyeing BTC charts for the past 6 months, there is virtually no price movement that would surprise me. $30k in a couple of months? Sure. $3k? Why not. However, I will believe the bull run is over only when I see it stay down for those couple of months.
Given how easy it is to manipulate bitcoin pricing, and the first set of futures expire today, it does seem very coincidental. We'll see if it starts moving upward after CBOE contracts expire today and CME contracts expire on Jan 26th.
Tether is busy printing new tokens to try and absorb the selling pressure. $100M on Monday and another $100M yesterday.
Articles like this thrive on schadenfreude. Cryptos go up and down much like the forex market but with exaggerated swings. 50% corrections are common. Will it eventually reach the highs of 100k - 1 million? Who knows but we are living the birth of a new technology and potentially a fundamental change in how currencies work and wealth is stored. Could it all go to zero tomorrow, sure but as with all investments if you only invested what you could reasonably afford, everything is going to be fine.
I'll see you here in a few months for the article crowing BTC at all time highs. Or maybe not :)
I'm excited for whats next, even if its nothing.
Edit: The price of BTC is not fluctuating wildly, Crypto currencies for the most part still follow the rules of Technical Analysis
You see, despite being volatile, Bitcoin still solves important issues. Fundamentally it gives people the ability to carry "digital cash" and encrypt it, protect it, back it up, in a way infinitely more robust than a banknote in your pocket, or digital numbers in a computerized bank account.
> Cyprus citizens who had their deposits confiscated in 2013 by their banks emphatically disagree with you
Insured deposits were un-affected--anyone with less than €100,000 lost nothing [1]. 47.5% of un-insured deposits converted to equity [2]. That was in the depths of a national financial crisis. Meanwhile, today is Wednesday and everyone in Bitcoin lost 50% of their purchasing power from peak mark.
Nothing. Governments do this kind of shit all the time, I know.
But at least with the Cyprus bank case and those like it, all it involved was legislation (or maybe not even that; not sure of the particulars) plus compliant lapdog banks, plus the unspoken understanding that the government "owns" all the official money anyway and just lets us use it from time to time.
Yes, as long as we are subject to a government, we are subject to its theft and violence. We can at least not make it so easy for them, though.
Considering the U.S. Government has already seized millions of dollars worth of bitcoin I can't believe anyone would try to float "safety from gubberment theft" as a feature.
People in bitcoin who are government proof are about as common as people running console emulators and not violating any copyright laws in the process.
It isn't a feature, but its an established trait of crypto.
But not only that, its not even that volatile compared to other things like startup stock. IF employees were able to sell their options/stock at their company you would see startups also fluctuate insanely like this on each little announcement.
Its a relatively small market, with no central figure to make the rules. Its what it is, but once you accept its volatile, a 50% jump is not significant, specially on such an incredible upward trend.
Perhaps I shouldn't have been snarky, but my point is that being able to buy a very limited amount of items in sparse areas throughout the world with Bitcoin is at odds with the idea that Bitcoin has value for people in countries with volatile, spiraling economies, which was the original point being made. I felt that was a substantive enough point to be made. But I apologize regardless.
> Can you use bitcoin to pay for some food? Or to get your roof fixed?
This is a bit of false argument. One of the most universally recognized value stores is gold. Yet, can you use gold to pay for some food?
Try marching into Tesco, grab some groceries, drop the gold bar on the counter and expect change...
Yes, if you overpay it 50-times (a 1 oz gold bar for 20 EUR groceries), someone (cashier, other customer, anybody) will accept it on their personal risk (maybe it is fake? who in sane mind would pay with gold at grocery store?), pay for you, take your gold and give you the groceries.
But by definition: no, you cannot pay for food with gold/Bitcoin/diamonds/stocks/land/weapons/tobacco/alcohol/other food... At most, you can barter it.
One of the most ridiculous cases I have seen lately is comparing Bitcoin fees with paying for coffee. Do you pay for coffee with gold bars? Do you pay for coffee with international non-SEPA bank transfers (expect 30 EUR fee, more than BTC, and weeks-long fulfillment)?
Yes, Bitcoin was originally intended as "pay-for-coffee" currency. No, it isn't that anymore, it shifted more towards value store, settlement money between large entities, alternative to global bank transfers.
My favorite counterexample is: Can you run from war conflict with money or gold under your shirt? You will be searched, stripped from cash and possibly detained. Or learn 20 English words, run naked and input those 20 words into the computer on the other end of the world.
Do you think this is a overinflated example applied only to the worst parts of the world, where nobody have the money with them anyway? We, in the civilized world don't have any of such oppressions, right? Try leaving European Union with more than 10 000 EUR...
During my business flights (especially to Arabic countries, where people were returning from shopping trips in Vienna etc.), I have seen quite a few folks detained just because of the cash they had on person.
...which can be electronicaly moved without giving away control of your funds to a company/government who can easily seize, devalue, or prevent you from accessing your funds.
That's the important issue that bitcoin solves. Do you understand what being decentralized & permissionless mean? And the power shift it implies on a social level?
There is a difference between currencies and stores of value -- its viability as the former is weak at best but it is formidable in the latter.
Now, that said, its worth as a speculative investment vehicle is proven. Low cost to acquire, low cost to sell, abundant, minimally appreciates in value over an 18-month period (much less a quarter-century), resistant to tampering (setting aside external price manipulation), high popularity -- few other speculative investment vehicles outside of the finance industry have had such success.
Granted, its staying power is an unknown and whether it will be around when it reaches its 25-year age is something else to consider.
A store of value is the function of an asset that can be
saved, retrieved and exchanged at a later time, and be
predictably useful when retrieved.
Bitcoin is crappy as a store of value, you cannot predictably sell your position in BTC to any other currency for the same or greater amount that you put in before.
Actual stores of value include real estate, bonds, currency (real currency, not crypto"currency" that can't be used as a currency), and collectibles.
Stocks are not stores of value. Their prices are too volatile.
Cryptocurrencies, presently, are not stores of value. Their prices are too volatile.
Of course they could. But its an extra step compared to just having the bank seize all of your accounts. At the end of the day the government can do whatever it wants, crypto currencies just add a little extra layer of personal security. However cursory it may be.
Not necessarily. You could destroy all copies of the wallet. The value would be lost. Certainly, knowing that those were 'all copies' would be a challenge, but you could then monitor that wallet and hold a person in contempt if there were later transactions from that wallet.
The pros and use cases are all theoretical though. With nothing to stabilize the price it will continue to fluctuate wildly.
From the examples you provided: if that man deposited his savings into Bitcoin last week, and had to withdraw today, he would be at an enormous loss. Not everyone is in a position to 'hodl'.
If Venezuelans deposit their weekly paycheck into Bitcoin, but have no way of spending it on tangible goods - they still need to convert back into their domestic currency. The only thing that changes is now they pay transaction fees.
Yes - the technology can solve some issues. But not how it is currently implemented.
Most users aren't going to practice the ideal security to prevent their crypto-currency for being seized. We know this because we have decades of experience knowing how careless and cavalier users are towards digital security. The currency isn't going to do it for them, so it's not a feature. Period.
3. When Bitcoin is shockingly volatile, so much so that you have to compare it with one of the worst failing economies in the world to make it seem less bad, well, that's a compelling argument. Call me up when there's a serious challenge to something like the USD or EUR.
4. Bitcoin is an interesting experiment. And under ideal conditions could address some issues you've mentioned. But conditions aren't ideal, it appears to be a mess really. Governments can still seize bitcoin. Governments can still regulate it. Half the things you tout have fallen flat on it's face and the other half certainly don't outweigh the glaringly obvious faults.
But hey, if you get in at the right moment, cha-ching. Which begs the question, you now hold $10 million USD in bitcoin, how many millions do you convert into banknotes or digital numbers in a computerized bank account to protect your wealth from the volatility?
> Cyprus citizens who had their deposits confiscated in 2013 by their banks emphatically disagree with you.
The same could happen to Coinbase etc. Sure, you can store it yourself in a wallet, just as Cyprus citizens could put money under their mattresses.
> A man who was moving across states carrying his savings in cash and who had everything confiscated by police under civil forfeiture law emphatically disagree with you.
If he'd had the same amount in Bitcoin on a hardware wallet, there's a decent chance they'd have taken that as well. Hell, they managed to get DPR's coins and sell them for nearly $50M.
> Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you.
> The same could happen to Coinbase etc. Sure, you can store it yourself in a wallet, just as Cyprus citizens could put money under their mattresses.
Assuming eventual widespread adoption of bitcoin or a competing coin, storing your own funds in your own wallet has basically the same advantages as storing money in a bank, but without the same risks (of the bank or the mattress).
> If he'd had the same amount in Bitcoin on a hardware wallet, there's a decent chance they'd have taken that as well. Hell, they managed to get DPR's coins and sell them for nearly $50M.
Cash out of your hands is cash you no longer control. Hardware wallets can have pin codes and other measures to prevent the funds from being used and help you recover them later.
> Bitcoin lost half its value this month...
Was the drop in the Venezuelans currency preceded by a huge run-up in value as was Bitcoins? Who has lost more value?—people holding bitcoin over the last few years or people holding Bolivars over the same period?
Look, if your case for Bitcoin is "it's a bit better than a hyperinflationary currency", that's great and all...
The Bolivar is regular currency's version of Bitconnect, not Bitcoin.
> Assuming eventual widespread adoption of bitcoin or a competing coin, storing your own funds in your own wallet has basically the same advantages as storing money in a bank, but without the same risks (of the bank or the mattress).
That's a big assumption. Are you also assuming the FDIC will extend its coverage to personal wallets, that the FBI will automatically involve itself when yours gets stolen/hacked, etc.? The banking system involves a lot of consumer protections that aren't present when you store stuff at home.
> Cash out of your hands is cash you no longer control. Hardware wallets can have pin codes and other measures to prevent the funds from being used and help you recover them later.
Sure, if you want to spend the rest of your life in jail for contempt of court.
> That's a big assumption. Are you also assuming the FDIC will extend its coverage to personal wallets, that the FBI will automatically involve itself when yours gets stolen/hacked, etc.? The banking system involves a lot of consumer protections that aren't present when you store stuff at home.
The assumption of widespread adoption is necessary to have any meaningful discussion about the advantages of cryptocurrency over traditional currency supply controlled by a central bank. Of course the currency must be adopted to actually matter!
I do not assume that FDIC will extend coverage, or that FBI will automatically investigate or recover hacked funds. That said there is nothing stopping this from happening and it may happen if one or more cryptocurrencies are largely accepted and used. It's also possible that private insurance plans become available, which undoubtably will come with more choice and control than the FDICs protection.
Storing money your own wallet has risks too, but they are not the same as those of storing money in a bank or at home. As crypto adoption grows, I believe the number of people making this choice will also grow.
> Sure, if you want to spend the rest of your life in jail for contempt of court.
The original post, and my reply, was about civil forfeiture.
> Cyprus citizens who had their deposits confiscated in 2013 by their banks emphatically disagree with you.
Yes, and plenty of people have also lost their bitcoin to their exchanges/online wallets/hackers. And yes, with adequate security and personal cold storage, some of this can be avoided, but if you want to actually transact with Bitcoin these days, you have to convert to fiat since using Bitcoin as an actual currency right now is a train wreck, which means you have to interact with an exchange. And if you do use personal storage, and were to lose your keys or passwords, there is no recovering your money. Its gone forever.
> A man who was moving across states carrying his savings in cash and who had everything confiscated by police under civil forfeiture law emphatically disagree with you.
I'm sorry, how is this related to a bank? The entire problem is that the man had his savings in cash and not in a bank. If your issue is with the government seizing his money, the government has seized Bitcoins as well.
> Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you.
I fail to see how this is worse than a currency that is as volatile as Bitcoin is, which is also subject to manipulation by anonymous institutions, investors, and governments, if not directly then indirectly.
> Venezuelans who see the value of their currency evaporate and inflate 4000% yearly because of incompetence from their central bank emphatically disagree with you.
Customers of Mt Gox are likely to emphatically agree with him.
I am empathetic to your point, and the constant state of 'surveillance' of my monetary actions is something that I always take issue with. On the other hand, I don't think these are compelling points:
1. If we were using cryptocurrencies as real currencies, bet your bottom dollar that your local government will have a way to control the use of it. A government is defined by its ability to use (possibly deadly) force to achieve its goals; if your local government legislates (or dictator dictates) that bitcoin is tantamount to money laundering, how useful is your BTC in a jail cell?
2. The same could have happened if they confiscated his laptop with his wallet info on it. What the police did was horrible and not justified; I am only claiming that btc would not have helped any more than a savings account. In fact, the savings account is insured!
3. Instead they invest in a cryptocurrency that is subject to the incompetence of people who do not have a single thought about the plight of the Venezuelans.
Bitcoin does not permanently solve any issue that is created by malevolent governance. It is the same issue with saying that people can circumvent laws by using VPCs; it might be working for now, and it might work in the future, but it mostly depends on the ignorance/incompetence of government to regulate or enforce. If your government feels helpless in enforcing laws, it will resort to physical force.
1. There's $160B of BC out there and it's still a pretty novel thing.
2. People say this every time there has been some volatility in BC. There's been a bubble that is bursting. It doesn't mean that the currency doesn't have worth.
3. Just because BC and its mechanics don't end up working out doesn't mean that a central bank is necessary.
4. Nothing is "proved" at this point.
Printed 7 months ago. Steam and Microsoft have stopped accepting bitcoins. I don't know offhand but suspect many of the other ones probably have as well.
That has nothing to do with the current crash. The price has been going up for a long while even when everyone knew about this.
Also this "nobody accepts BTC anymore" phenomenon is something artificially caused by the BTC devs. They could have increased the block size even to just twice the size and tried to figure out the real solution in the meantime, but instead they decided to be stubborn and kick out everyone who disagreed with them.
This is not a "proof" that the Bitcoin model itself has failed. It's just that one implementation has failed, and that's fine.
A central bank may not be necessary if there's an alternative that provides equal or better stability. Bitcoin certainly doesn't provide a stable alternative.
Yeah, who knows what entities may arise to support crypto currencies. Perhaps, multiple governments, conglomerates, or cooperatives may participate in stabilizing a crypto currency.
Instead of a central bank, a currency may develop a "decentralized central bank" whereby those independent entities take uncoordinated actions to keep a shared currency stable.
It's hard to say at this point. We've really only been thinking about this problem for a short while.
> People say this every time there has been some volatility in BC.
Kind of like how people are pretending this is like when Bitcoin first hit $1,000 and then fell back to $200x. It's just the same thing, right? It's all just volatility.
Except, that didn't involve a third of a trillion dollars of on-paper wealth being vaporized in a week across all cryptos, with tens of millions of new speculators getting smashed around the world. Slightly different than if $10 or $12 billion similarly goes missing, contained to a tiny group of people who mined it or purchased it at extremely low cost.
I think this depends on the ubiquity of merchants that accept Crypto currencies as payment. Fiat currencies fluctuate against one another all the time and for the most part no one panics because over short periods of time it does not affect the man on the street. The price of bread remains unchanged for the most part. The man on the street can still take his dollar and go to the store and buy what he wants because all the vendors he uses accepts dollars as payment.
This of course breaks down in periods of extreme volatility such as with Zimbabwe and Venezuela.
If it gets to the point that Cryptos are accepted as payment across the board I believe the volatility will decrease to those seen in standard forex markets. Currently though it is seen as a novel investment and as such is traded as one. In addition it still needs to figure out its "True value" in order to establish a baseline.
Relatively, it's still a very recent technology and still being developed. Just like when gold was first traded and suffered many huge highs & downs, these crypto assets are undergoing the same volatility of sentiments. Still, for the long term, 100% sure we will have fiat currency replaced by crypto currencies in one way or another.
"Just like when gold was first traded and suffered many huge highs & downs"
Huh? Do we have a lot of data on the volatility of gold coinage when it was first introduced to the world? Also, the difference is that kingdoms could stamp their gold/silver and make their citizens use it. "Render unto Caesar the things that are Caesar's". . .
>"Just like when gold was first traded and suffered many huge highs & downs"
The 4 years after Nixon took the dollar out of the gold standard (1971), gold had huge volatility even today gold doesn't have low enough volatility to be used as currency.
You are absolutely right, Bitcoin will never achieve the same stability of strong government controlled Fiat currencies, in my opinion it only makes sense to use it as a currency in regions were Fiat is very bad like for example Venezuela.
Yes, it might not even be a bubble. It might be the end of bitcoin and the adoption of some other criptocurrency that doesn't take that long to confirm small transactions. But, during the times, people might not recognize the bubble, and people might call "bubble" things that weren't.
I disagree on the bubble comment. Rightfully so only of the two camps will eventually be right as to the current potential state of bubble. Splitting the difference between the two opinions because the two sides felt strongly about it is the age old centrist trap that gets us nowhere.
As for the end of bitcoin/cryptos - I hope not. A bursting of this bubble is hopefully just a rite of passage so that they can mature and gain adoption. Basically everyone knows what they are now.
The main thing is, why would I buy a sandwich with Bitcoin if the BTC it costs could suddenly be worth $10,000?
Bitcoin is a bad currency because it's too volatile. I don't expect it to replace conventional currencies without a regulating force, and since that's complete anathema I think the status quo will persist.
When will people (journalists with a juvenile understanding of systems behind crypto-currencies) start to understand that writing about price fluctuations really isn't valuable as news and offers almost no sentiment whatsoever?...
Yesterday, I setup a slack channel for technical discussion of crypto and like blockchain projects. Like there aren't that many good sites for this. Reddit overall is all about lambo memes, twitter is shit for this too and hn is a little too "it will all go to zero". No enough consensus protocol discussions.
When exactly did $10,000 become "the psychologically significant" number for bitcoin? It's only been above 10K for less than 2 months and only above 1K for less than a year.[1]
[1] https://www.buybitcoinworldwide.com/price/