from Hacker News

Bitcoin Tops $50USD on MtGox

by kenthorvath on 3/18/13, 11:31 PM with 90 comments

  • by frisco on 3/19/13, 12:33 AM

    Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency?

    A few reasons I can think of why it would:

    * The current banking system is inherently insecure. If you have an account number and a routing number (written on the bottom of every check), you can pull money. Bitcoin is potentially much more secure.

    * It's way too difficult to send money today, especially internationally, and fraud is a huge issue. We shouldn't need something like PayPal. Bitcoin solves this.

    * If you don't have faith in banks or central governments, Bitcoin doesn't require trust in any third party to function. You aren't dependent on any bank.

    A few reasons it might not:

    * It requires too much technical knowledge to use and is unapproachable for mainstream users.

    * It's too tied up with illicit interests and won't break out of that image, leading it to an untimely demise in culture. A fax machine is no use if no one else has one.

    * There are lurking fatal flaws in the underlying technology. Maybe a blockchain fork is much more possible than currently assumed, or there's found to be an error in the cryptographic scheme.

    * Mining power ends up concentrated in the hands of few when ASICs are in full swing and transaction fees aren't enough to keep individuals at it, giving power over the blockchain to a few (potentially malicious) actors. There's no guarantee transaction fees will actually pick up the incentive slack.

    If you think that Bitcoin will ultimately be widely adopted, buy now. $50 / btc is very cheap in that world. If you think Bitcoin will fail, then any price is too much. Any mumbling that "it's doubled in a month and therefore is set up to come back down to earth" is just hand waving.

  • by obiefernandez on 3/19/13, 12:25 AM

    If 500 million people were to embrace Bitcoin to the point where they own on average $100 worth, then it would represent $50 Billion in value (500 Million x $100). With only 20 Million Bitcoins in circulation, each Bitcoin would be worth $2500.

    That's discounting other deflationary factors.

    I think it would be nuts to put all your savings in Bitcoin, but as a hedge against fiat currencies and interesting place to put play money: time to buy!

  • by zwtaylor on 3/19/13, 12:33 AM

    This recent spike may have a lot of do with this just-issued repot from the Treasury department.

    http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G...

  • by habosa on 3/19/13, 12:12 AM

    Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

  • by trg2 on 3/18/13, 11:51 PM

    Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

  • by arasmussen on 3/18/13, 11:57 PM

    It's literally doubled in a month. This is out of control.

  • by unix-dude on 3/19/13, 12:23 AM

    Really interesting stuff. I was expecting a crash or at least "return to normal" in that period where the price jumped to around $25 (before a mini-crash to like $16, and then the subsequent takeoff to the 40s).

    Personally, I dont think they're worth $50, but heck, thats a horrible reason for you not to buy them. A more objective reason not to buy now is that there are people holding thousands of bitcoins. If a few of them (or maybe even one big player) sells tons of them, it could cause a crash like last time, when the price fell from $33ish to almost 0.

    Interesting times for bitcoin either way.

  • by cstrat on 3/19/13, 12:12 AM

    I originally put about $500 dollars into Bitcoin to play with. Have withdrawn about $2000 cash and still have about 35 BTC worth left. Would have loved to get in on this back in the early days...

  • by stcredzero on 3/19/13, 12:49 AM

    What is the proportion of BTC volume due to speculation vs. due to buying transactions?

  • by ohashi on 3/18/13, 11:46 PM

    Time to sell