Silk Road forums
Discussion => Philosophy, Economics and Justice => Topic started by: AlistairCook on January 21, 2013, 10:13 am
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So being pretty new to this (YES!, I HAVE done a search for this topic already) I noticed that when I began exchange rate was about USD1:13.50. That was only in late December. Now we are getting over 16bucks. WTF. This thing is bolting. Is there a bubble in the bitcoin market, is this market subject to manipulation
Any simple explanations or links to good resources that can explain the economics of this thing would be appreciated. Even better if you can posit a theory for the relative strengthening of the currency against all the majors.
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In 2011, the price for a single BTC hit $35.00 USD. It then shattered and fell all the way to a buck or two. My feeling is that it was due almost entirely to several high profile hacks of bitcoin services (not the protocol or currency itself, just sites that manage your wallet and stuff like that). Hundreds of thousands were stolen. Multiple times in a short period. Kind of puts people off, especially when it takes better than average knowledge to recognize the currency itself is as sound and unlikely to be cracked as ever, and it was only a few web sites with bad management that cost people all their coins.
It managed to survive, though. It's been crawling its way back up ever since. 6 months ago they were about $5 a coin. I expect it to continue rising for the foreseeable future. Evidence suggests it's not just a bubble, but actual trust in the currency itself. There are a lot of problems with Bitcoin (the currency as a whole -- capitalized, not lowercase), but it's a really cool idea and somehow it caught on and just won't die no matter what seems to happen.
Whether it'll be around in a century or not I can't really say, but I will tell you this: I'm betting on them. Not massively, but hey, every day that you own a bitcoin you make a few cents basically. If that continues, then you've got a profit -- that's better than publicly traded companies (stocks) or foreign currency trading the past few years, right.
http://bitcoincharts.com is nice; bitcointalk.org is the real place to go, but it's not as active or informative as I often want it to be.
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Thanks for that information and its good to hear from someone who has been tracking this for a while. I guess my first concern was really about the price of my drugs. If Bitcoin hits USD35 or something like that why would I bother buying off silk road? Maybe for the quality which is def more transparent here. Especially for the casual buyer who doesnt want to be in constant contact with street sellers. I have always found if you have to be in contact with street sellers just to keep those sales channels open you inevitably begin to use more which can be an issue.
Anyway that to one side I am curious about the exhange rate going up. I dont have a sound technical knowledge of what bitcoin even is being so new to it ... but I invest in shares and this looks interesting to me. I even found myself thinking today 'well if my money doubles would I just sell back out of it?' Still not sure what my answer is cause I do love my MDMA and its virtually impossible to get in my country ... [rant] because the stupid government controls precursors so tightly that everyone has switched to meth ... yeah smart fucking move you idiots ... cause meth is soooo much better. [/rant] There has been a lot of debate in the last few years with the devaluing of the USD about what might replace it as the world standard, one option was some derivative of special drawing rights but now digital currencies seem to be coming into their own as well.
Cheers for the link.
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Like another thread pointed out this might have been an increase in BTC exchange rates due to preparation for the release of the new AISC miner units that on low end are hashrates of 2ghz+ (High end expensive GPU's were getting 500mhz).
I think those released yesterday (1-20-2013) and have begun shipping. There will probably be a rise again in price due to speculation followed by a small dip as the new miners create coins for the market (Unless they just hoard their findings which the price will continue to just rise)
The Bitcoin convention happening in Germany making news headlines also contributes to the strength and confidence in the currency.
If Amazon moves to accept Bitcoins as a payments then hold on to your boots boys cuz this rocket will be taking the fuck off.
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Thanks for that information and its good to hear from someone who has been tracking this for a while. I guess my first concern was really about the price of my drugs. If Bitcoin hits USD35 or something like that why would I bother buying off silk road? Maybe for the quality which is def more transparent here. Especially for the casual buyer who doesnt want to be in constant contact with street sellers. I have always found if you have to be in contact with street sellers just to keep those sales channels open you inevitably begin to use more which can be an issue.
Anyway that to one side I am curious about the exhange rate going up. I dont have a sound technical knowledge of what bitcoin even is being so new to it ... but I invest in shares and this looks interesting to me. I even found myself thinking today 'well if my money doubles would I just sell back out of it?' Still not sure what my answer is cause I do love my MDMA and its virtually impossible to get in my country ... [rant] because the stupid government controls precursors so tightly that everyone has switched to meth ... yeah smart fucking move you idiots ... cause meth is soooo much better. [/rant] There has been a lot of debate in the last few years with the devaluing of the USD about what might replace it as the world standard, one option was some derivative of special drawing rights but now digital currencies seem to be coming into their own as well.
Cheers for the link.
Well FYI, some prices on SR are hedged and some aren't. Hedged prices mean the cost in BTC dynamically fluctuates to stay as close to the vendor's USD price as possible. Unhedged prices are based solely on a BTC value and what happens to the price of a bitcoin doesn't change it (except that it changes the USD equivalent of however many bitcoins the vendor is charging, naturally).
So if it's hedged and the price goes up, basically either you break even by buying at that price and using them on the listing in question... or you lose or win (either), because you bought your bitcoins at a lower price and they're now worth more USD than they were, so the price of the listing goes down in BTC if the value of a bitcoin went up -- and the price goes up in BTC if the value went down. Basically hedged prices are based in USD, and unhedged are based in BTC. That's the reason for all this.
But really, it's hard to lose by buying bitcoins because they've steadily gone up (practically straight up for the last few months, as you noticed). So whether the price of some drugs goes up or down, you still bought in lower and they're now worth more. That's a nice, simplistic way of seeing it :)
I don't think Bitcoin is poised to take over the de facto currency of the international financial institutions or anything, but it actually is getting some surprising attention from international banking associations and government reports on its viability and volatility (as in danger as a money laundering route). That's about all I have to say on Bitcoin; hope it filled in a gap or two that you were looking for.