Discussion in 'Digital Currencies' started by platinumdude, Dec 27, 2014.
wow $234 now but it hit $223.
$219 with a low of $216.
Why Bitcoin Is Failing
Bitcoin was dubbed the worst investment of 2014. As predicted however, 2015 has seen the continued fall in value of the currency that was supposed to fuel the digital age.
Picture: Harald Groven
In the last 10 days alone, it has lost 26% in value.
If 2014 was a bad year for the digital currency, 2015 looks like it will be even worse. Barely days into the year, UK-based Bitcoin exchange Bitstamp was “hacked” and 19,000 Bitcoin stolen. At the time, this loss was valued at $US5 million. Bitstamp has since come back online, with revamped security from BitGo. It may however, all be a bit too late.
Hacks of Bitcoin exchanges have come to characterise the Bitcoin world. It isn’t something that is necessarily inherent in Bitcoin itself, but more of a feature of the types of companies that have sprung up around the troubled technology. At best, the hack of one-time leading Bitcoin exchange Mt Gox, was a result of sloppy coding and business practices. At worst, it was an inside job, defrauding its customers of $487 million.
A more ominous problem has cast its shadow on the future of Bitcoin. Bitcoin relies on people to engage in “mining” to validate every exchange of the virtual currency. Miners, do some agreed calculations, and if they are fast, or lucky, enough, will succeed in winning some newly produced Bitcoin in exchange for adding the transaction onto the Bitcoin ledger called the Blockchain.
The strategy of mining has become Bitcoin’s achilles’ heel. The design of Bitcoin dictates that the difficulty of mining will increase as more Bitcoins are produced and more miners get involved. This has led to mining being dominated by companies that can scale to the point where they can guarantee to earn a certain percentage of Bitcoins created each day. As Bitcoin’s value has dropped, the economics of the mining operation have changed, to the point that mining ceases to be economically viable.
Cloud mining company CEX.io suspended their mining operations this week, declaring that it needed the price of Bitcoin to be at least $320 before it would be able to resume its operations. Unfortunately for them, the price has dropped even further since and the likelihood of it climbing back to $320 seems slim.
Another mining company, CoinTerra, is being sued by a data centre provider for $5.4 million for unpaid fees. The cost of power alone to run CoinTerra’s services was $12,000 a day.
The underlying protocol of Bitcoin does allow for the relative difficulty of mining to be eased if it becomes too hard for miners to stay in operation. In fact, this happened last month for the first time since 2012. It could theoretically continue to become easier as the Bitcoin price drops. The issue is however, that this wasn’t supposed to happen. Bitcoin’s price was supposed to keep increasing as more Bitcoins came onto the market.
Bitcoins value relies purely on the belief of the people who buy and sell it. There is no central bank or government around to support it in the case of its value crashing to zero. Once that belief is questioned, Bitcoin becomes unsustainable. Even if the price of Bitcoin doesn’t go to zero, the chances the Bitcoin community convincing the wider public, governments, and industry that Bitcoin really represents the future of the world’s digital economy will become extremely unlikely.
For the time being, Bitcoin still has enough devotees who believe that the currency will eventually recover and still claim the crown as the future enabler of all digital commerce. However, even they are having their doubts that this grand technological experiment may have run its course.
Wow, it hit $170 and bounced back to $190.
hum hum dee dee dum...
Anybody remember their Unca Walt saying to EVERYONE here -- when bitcoin was at parity with gold -- that...
YOU SHOULD SELL HALF OF YOUR BITCOIN AND MAKE A FABULOUS NON-TAXABLE PROFIT!!
Take the "money" and transfer that half to PM's.
Was it good advice?
As I recall, I received several answers, all of which indicated that bitcoin would either continue to go up in "value", or the few paltry thousand they had invested meant nothing.
Lessee... if someone had sold a thousand bitcoins at gold parity... what would they be looking at?
Isn't it a stone cold fact that each of these folks would now have a stack of PM's AND a half-pile of bitcoins?
Oh... Late Edit Add: And these people could TODAY take just a couple of the Krugerrands they got for nothing, and buy back ALL THE BITCOINS THEY HAD IN THE FIRST PLACE.
Then, these people, having followed their Unca Walt's pleading... would have ALL their bitcoins, and a completely no-cost stack of Krugerrands.
But alas, they din' lissen. Let's take a lookit what would been. We will use $1000 worth of bitcoins purchased in January, 2013. That's 75 bitcoins. ($13.36)
Lissen to yer Unca, and get rid of, say, 50 of them (easier math) in November. (Gold parity: $1124.76) That gives you $56,238.00. About 45 "FOUND" KRUGERRANDS.
Change that found money into PM's and HOLD. Anybody notice that $1000 got multiplied by exactly 56.238?? Tax free? Hm?
Oh... and buy back all bitcoins until you have 75 of them again. (About 7 of your 45 "FOUND" free krugerrands).
The $162.68 price appeared to be the low for Bitcoin (for now) at the moment and it is currently rallying off of that. It is at $214.38 as I type this. In an earlier thread, I mentioned that I was done buying Bitcoin when it hit $275 and was thinking that it would rally off of that low but I was wrong and it kept going way down. When I was the price under $200, I decided to buy some bitcoin. I bought 0.31 BTC on coinbase when the price was $191 (total was $59.90 including fees) and will make another purchase if/when it gets below $150.
Who knows what will happen, It could continue to rally off the $162.68 low or retest that low. We will find out very soon.
Now it's at $290.
Bitcoin is currently back above $300 for the time being. Currently at $310.91 (Coindesk.com quote). I am making a WAG that this run is fueled by the deepening crisis in Greece.
My personal update since it has been a while (until recently that I posted on GIM2): All of the Bitcoin that I bought with FRNs on Coinbase many months ago, I sold at $241 and $283 and used the proceeds (slight profit from sale since I made my last coinbase purchase when BTC was $191) to buy '70's silver art bars and ATB pucks. I still have some Bitcoin left in my wallet. I currently have 0.1109 BTC left in my wallet. This 0.1109 BTC represents my total bitcoin earnings (as of July 12, 2015) that I have earned from the various internet bitcoin faucets since Summer 2014. At this point, 0.1109 BTC = ~$34.47 (based on $310.91 bitcoin $ price). I do not plan to buy any Bitcoin from Coinbase with FRNs. I will continue to earn bitcoin from the Bitcoin faucets on the internet to slowly rebuild my Bitcoin savings.
Ha, yeah, with the Greek deal it's going back down.
lol, bitcoin much funny asset
Put them on BitFinex and earn intrests, they are lent for gearing.
Sorry, I can't wrap my head around this bitcoin religion. I have enough diversity in my portfolio. If I'm wrong then, oh well
What could some 100.000.000 Shatoshies harme in a portifolio?
Now its back around the $200 mark.
Bitcoin come close to $500 but did not make it. It went as high as $492 before the Chinese backed off of it and went down to a current price of $363.00 (Coindesk quote). As for me, I have bitcoin that I have earned from the various bitcoin faucets on the internet. As of yesterday, I have a total of 0.16876508 BTC. That equates to ~$61.26 at current BTC $ price.
I already know what I am going to spend my BTC faucet earnings on and where I am going to spend it at. I am going to buy a oz (or two or three) of silver on Provident metals since Provident accepts Bitcoin as payment. However, I am not going to do it now since I am waiting for spot silver to hit $8, however, I plan to continue to earn more bitcoin from the various bitcoin faucets on the internet since I do not expect silver to hit $8 until sometime before March 2017. Of course, all of that is subject to change and if the Chinese decide to push bitcoin to $600 (or more), then I will pull the bitcoin trigger at that time.
In the meantime, I will continue to earn more BTC from the Bitcoin faucets since the payouts have doubled on some of them and there are a lot more bitcoin faucets to earn more BTC on a daily basis.
QWAK,Silver Art,Reminds me of a plan I had at 6 years old to catch birds.:thinkey:
I took a box and propped it up with a stick and tied a long string to the stick then spread bread crumbs under and around the box!:2:
Never did catch a bird :thumb.aspx:
the DUCK :s11:
It is true that waiting for silver to drop at [insert price here] does carry a risk (i.e. never getting that low), I am willing to take that risk of waiting to buy regular silver, however, my addiction for '70's silver art bars is still strong as ever and I will continue to buy those regardless of where spot silver is currently at.
As for spending some of my bitcoin earnings on silver, I could actually do that right now through Provident metals since they accept bitcoin as one of the payment options and I have earned (accumulated) enough bitcoin to buy at least 2-oz of silver (with some BTC left over) . I prefer to wait until $8 silver but I might go ahead and "test it out" by making my 1st small silver purchase with bitcoin in the very near future. My 1st silver purchase with bitcoin will probably going to be a 2016 Chinese Panda and maybe another 1-oz silver. I have not decided anything yet at this point but I will continue to earn more bitcoin in the meantime.
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