News - Bitcoin price plummets almost a fifth, hits 11-month low

[HEXUS]

The value of the cryptocurrency fell dramatically over the weekend.

Read more.

[shaithis]

Did any not expect this? When they went up to $1000 after some US politician made an announcement about it being a proper currency I thought that anyone who held onto them were crazy. Well it seems many did and are now trying to sell for less and less.

A currency that is limited and can be stolen without a trace, yeah that's really going to take off. Another bubble bursts.

[KrisWragg]

A currency that is limited and can be stolen without a trace, yeah that's really going to take off. Another bubble bursts.

A currency that is limited is a good thing, why would you want to be penalized for saving, which is effectively what inflation is.

Also how can it be stolen without trace? Unless you give someone your passwords... it's more secure than your bank who could clear your account any day they like and it be your word against theirs.

[semo]

A currency that is limited and can be stolen without a trace, yeah that's really going to take off. Another bubble bursts.

A currency that is limited is a good thing, why would you want to be penalized for saving, which is effectively what inflation is.

Also how can it be stolen without trace? Unless you give someone your passwords... it's more secure than your bank who could clear your account any day they like and it be your word against theirs.

Tell me about it. My mortgage deposit went into limbo for two weeks and both banks had no idea where the money was. They made me out to be unreasonable for demanding my own money back. Both accounts were in my name too! Got it all back in the end out of the blue. They didn't even tell me it was coming the day before. It just turned up!

The bitcoin blockchain would have have made it easier to trace the money but you'd have to be mad to replace a current account with a bitcoin wallet.

[KrisWragg]

Tell me about it. My mortgage deposit went into limbo for two weeks and both banks had no idea where the money was. They made me out to be unreasonable for demanding my own money back. Both accounts were in my name too! Got it all back in the end out of the blue. They didn't even tell me it was coming the day before. It just turned up!

The bitcoin blockchain would have have made it easier to trace the money but you'd have to be mad to replace a current account with a bitcoin wallet.

That was probably due to "anti money laundering" I have had large transfers (over £1000) go "missing" because it got flagged as suspicious by one of the banks. As you say, they can't / won't tell you what's happening until it eventually either goes where it was sent or returns back to the original account.

It's fine when it's between your own accounts, but when you are sending money to a relative / friend it can be very annoying (eg. loaned my brother some cash for a car, money took a couple of days and was a real hassle)

But yes, currently Bitcoin isn't the answer to day to day life, but the technology / ideas behind it are spot on and avoid so many issues with modern banking.

[herulach]

That was probably due to "anti money laundering" I have had large transfers (over £1000) go "missing" because it got flagged as suspicious by one of the banks. As you say, they can't / won't tell you what's happening until it eventually either goes where it was sent or returns back to the original account.

It's fine when it's between your own accounts, but when you are sending money to a relative / friend it can be very annoying (eg. loaned my brother some cash for a car, money took a couple of days and was a real hassle)

But yes, currently Bitcoin isn't the answer to day to day life, but the technology / ideas behind it are spot on and avoid so many issues with modern banking.

I strongly suspect it would have been anti fraud rather than aml. Most (if not all) banks will have behaivour based monitoring systems designed to detect erroneous fraudulent payments. If you suddenly start sending round £10k and your average payment is £10 its going to proc. I know of at least one bank where SOP is to just stick that in suspense for a couple of days to see if you report it missing.

The reason bitcoin avoids issues with modern banking are identical to the reasons why us all using gold nuggets does. because it isn't a currency and therefore isn't regulated properly.

It simply isn't realistic to operate economies of the scale that exist in the modern world with a fixed currency base. Doing so just puts you in insane boom/bust cycles with minimal policy levers to do anything about it.

[edzieba]

"Approximately every 10 minutes 25 new bitcoins are mined into existence, which works out to approximately 3,600 new bitcoins created every day. At current prices that's $1.2m in new supply coming into existence every day."

As has been he case since Bitcoin began. This isn't a new factor, it's one of the fundamental operating methods of Bitcoin.

[MoshinD]

The amount of people that try to hold on to there bitcoins after its peak was ridiculous. And after the Mt.Gox fiasco I don't see bitcoins making a comeback anytime soon if ever.

[Agent]

The amount of people that try to hold on to there bitcoins after its peak was ridiculous. And after the Mt.Gox fiasco I don't see bitcoins making a comeback anytime soon if ever.

But what do you mean by "comeback" and "hold on"?

These are terms that are in the mindset of using Bitcoin as an easy way to generate profit. It was never intended to be like that, but people saw it as an easy way to make some cash when it was constantly on the rise.

If you invest in Bitcoin, by buying coins you don't need, and then the rate falls, this isn't an issue of Bitcoin. That's a standard investment problem. The purpose of Bitcoin was to be able to send payments anonymously, via a shared network. Currently, it excels at this.

Bitcoin was never made as a way to generate free money. It was designed to be a volatile currency that facilitates anonymous payments. It does both of these well.

Its use is also at one of the highest points it's ever been, so no comeback is needed on that front either.

[[DW]Cougho]

Although I don't currently use it, I for one hope Bitcoin continues to be used - anything that wrests control from (or at least does not contribute to) Central banks is a good thing in my book.

[ZaO]

I'm no money expert. But isn't it a bit strange to define the value of Bitcoins by using the Dollar? Shouldn't it be defined by what Bitcoins can buy? Just because they might trade for less dollars right now, doesn't mean the value of Bitcoin has actually dropped. Why should Dollars decide its value? Again - I'm no expert on this stuff. Just seems odd to me.

[Agent]

I'm no money expert. But isn't it a bit strange to define the value of Bitcoins by using the Dollar? Shouldn't it be defined by what Bitcoins can buy? Just because they might trade for less dollars right now, doesn't mean the value of Bitcoin has actually dropped. Why should Dollars decide its value? Again - I'm no expert on this stuff. Just seems odd to me.

Presumably because the cost of the dollar would also change in relation to the same product. If they were delinked, then sure, but as it stands it's just much easier for people to relate to.

[ZaO]

Presumably because the cost of the dollar would also change in relation to the same product. If they were delinked, then sure, but as it stands it's just much easier for people to relate to.

I think they can operate independently from eachother. The price of something can change in one currency, and it doesn't mean it has to change in the other. It just dawned on me the other day, how I needed to change the way I looked at Bitcoins, and stop using the traditional currencies to define their value. If Bitcoins are always worth X amount of standard currency, and that's how we always look at them, then what's even the point in having them? I'm just trying to make sense of it. This is where I'm at right now. I've still been holding back from getting Bitcoins though. I might get some one day when I understand it better.

[Agent]

I think they can operate independently from eachother. The price of something can change in one currency, and it doesn't mean it has to change in the other. It just dawned on me the other day, how I needed to change the way I looked at Bitcoins, and stop using the traditional currencies to define their value. If Bitcoins are always worth X amount of standard currency, and that's how we always look at them, then what's even the point in having them? I'm just trying to make sense of it. This is where I'm at right now. I've still been holding back from getting Bitcoins though. I might get some one day when I understand it better.

Think of it another way: Bitcoins were designed to go from 'real world currency' -> Bitcoin -> transferred -> 'real world currency'. It was designed to stop the banks / whoever tracking the 'money' while being transfered. Most of the people I know that use Bitcoins do it in such a way that it follows that pattern. Few people actually hold coins long term - just look at the number of transactions per day.
For that reason over any other, it's probaby nice to know how much you're getting for your 'real world' cash. Most Bitcoin purchases are dynamic though - the prices change in relation to the market in real time, so the item always as a real world cost, as such.

I know products can alter in one currency and not another, but in the context of Bitcoin, could you provide an example of when this might happen? I'm struggling to think of any.

[ZaO]

Think of it another way: Bitcoins were designed to go from 'real world currency' -> Bitcoin -> transferred -> 'real world currency'. It was designed to stop the banks / whoever tracking the 'money' while being transfered. Most of the people I know that use Bitcoins do it in such a way that it follows that pattern. Few people actually hold coins long term - just look at the number of transactions per day.
For that reason over any other, it's probaby nice to know how much you're getting for your 'real world' cash. Most Bitcoin purchases are dynamic though - the prices change in relation to the market in real time, so the item always as a real world cost, as such.

I know products can alter in one currency and not another, but in the context of Bitcoin, could you provide an example of when this might happen? I'm struggling to think of any.

Was it designed for that? I thought it was designed so that people could leave the system that's currently in place, and move to something decentralised. It looks to me that a lot of people are just failing to think outside the box, and instead just use our standard currencies to define it. Using it as some kind of way to get more of the standard currencies. But I find that completely understandable, until Bitcoin becomes a more significant currency.

An example? Well, I guess a store might raise its price for a product in $'s, but not raise the price in Bitcoins because it believes that Bitcoins haven't devalued like the $. Things have whatever value we give them I suppose. If the value of Bitcoins depends on how many dollars they're worth, then I guess we're doing it wrong.

[DanceswithUnix]

...how I needed to change the way I looked at Bitcoins, and stop using the traditional currencies to define their value. If Bitcoins are always worth X amount of standard currency, and that's how we always look at them, then what's even the point in having them?

To be fair that is sort of the point of traditional currency. It gives everything a value to make bartering easier, so if you are a pig farmer you can easily carry a couple of pigs worth of value around with you without actually having to carry a couple of pigs. Also makes trading half a pig a lot easier too

So if we value everything in Sterling, then BTC is just bound to get sucked up into that framework.

While bitcoin is unstable, it won't be used as a reference though. I was told about 20 years ago that in Russia there were financial problems such that the standard currency in Moscow became the subway token. No matter what happened to their currency, a token was always worth one ride on the subway, so had a fixed and tangible value that everything else could be compared against.