It's a currency according to whom? Not anywhere I ever go to spend money.

It's ridiculous to make it the government's fault if private parties don't accept it.

Now I don't defend the government when it should be criticized, the government ought to be criticized, but bringing in the government here isn't really the issue. This happening had nothing to do with the government. Bitcoin exchanges are currently not regulated, so it has nothing to do with the government. This is an unregulated market here doing whatever to itself.

just because you don't use it means it's not a currency?

there is a difference between legal tender and currency.

a currency is worth as much as whatever people will pay for it, whether that be with legal tender, a bag of doritos or ounces of gold. bitcoin is and will remain a currency.

the government is the issue, because people are complaining that bitcoin needs to be regulated.

the whole idea of governmental regulation defeats the purpose of bitcoin.

people will find a way to regulate bitcoin themselves, most likely through privately funded insurance.

I seem to remember a story from about a year ago where
what was it? laundry detergent? something like that,
was being used as currency by inner city crack dealers.
Weird stuff.

growing pains, it's here to stay....

The collapse of a bank does not imply the collapse of a currency or the value of what people store there. It only means the bank was run into the ground.

This was a really poorly run virtual bank with no ATMs or drive thru tellers that didn't use legal tender.



The Jedi Master

What I am getting at is that it helps a currency if it is commonly used. From a practical point of view, if few people accept it as currency, it doesn't function like it whether you call it currency. Even Bitcoin users aren't necessarily using it as currency, rather, speculators seem to be the biggest share of people interested in it.

Widespread use helps make the case more that it functions like a practical currency. But if just very few people accept it as currency, it's a bit overblown. It's even self limited by its own circulation cap of just 21 million Bitcoin, meaning it won't go into widespread use.

Finally, the volatility problem will need to be solved before it becomes a stable, reliable currency.

The problem is not so much that Mt.Gox was badly run, the problem is more that 1- it was the biggest and 2- it was subject to a number of successful attacks (and it is not the only bitcoin exchange targeted) on its holdings.

What confidence is there that its successor will be more secure? There are plenty of hackers out there, the risk is low and the rewards are great...

Mt. Gox officially files for bankruptcy,

http://www.bbc.com/news/technology-25233230

The funny part about that picture is that guy is like the ONLY protester there. The rest are press!



The Jedi Master

I see it as something endemic to the whole scheme:

These exchanges are not run by businessmen who understand market risks and business cycles. These are more technically minded go getters trying to cash in on something- something right now that exists because of speculators more than a mainstream desire for this so-called currency.

As in anything else, speculators are people who buy the Bitcoin and then hold them, waiting for an opportunity to resell them again at profit. That appears to account for the main volume of trading rather than you or I or anyone else walking into McDonald's with them or paying the neighbor's kid to mow the lawn.

Since the 'currency' is volatile and unproven, you may as well have sketchy exchanges to go with it.

Tulip Mania

"People were purchasing bulbs at higher and higher prices, intending to re-sell them for a profit. However, such a scheme could not last unless someone was ultimately willing to pay such high prices and take possession of the bulbs. In February 1637, tulip traders could no longer find new buyers willing to pay increasingly inflated prices for their bulbs. As this realization set in, the demand for tulips collapsed, and prices plummeted�the speculative bubble burst. Some were left holding contracts to purchase tulips at prices now ten times greater than those on the open market, while others found themselves in possession of bulbs now worth a fraction of the price they had paid. Mackay claims the Dutch devolved into distressed accusations and recriminations against others in the trade."

~400 years later and people are just as dumb...

This is essentially the same exact thing that happened with dot com stocks in the late 90's and the housing market a few years ago.

+1

Look at the price last 2 years, the bubble really took off since Nov:
http://bitcoincharts.com/charts/bitstampUSD#rg730ztgSzm1g10zm2g25zv



The the price took off in Nov not due to any change in intrinsic value, but due to the hype and speculative trading and the resulting demand.

Even now the price still has a long way to fall to be where it was just 6 months ago, but all the speculators caught up in the hype who bought in the last few months can't sell without taking a serious haircut so they are holding on hoping for the run on Bitcoin to stop...

Not much different than the price/value of tulips in 1637

There is probably no such thing as an unlimited ceiling. In a seller's market, at some point, there will be less and less buyers who can afford to buy in, sellers will have a harder time to find buyers who can afford the fair market asking price. That's generally the tipping point where the scheme comes crashing down. Buyers can at that point get back in the game once the commodity is cheap once more, then the cycle repeats itself- assuming the economy wasn't wrecked first.

The difference between bitcoin and tulips is that there actually are people using bitcoin to purchase physical goods or receive services.

also, because bitcoin is a digital currency, the price of goods can be adjusted on the fly to match whatever exchange rate is needed to withdraw to a different currency.

that means that a customer buying at my shop at 11:01AM may be required to pay 1bitcoin for an item, but at 11:01:10 they may have to pay 5bitcoins for the same item, yet the overall value of the transaction has not changed unless the person is funding their purchase with an external currency.

not everyone is funding their bitcoins with external currency. not everyone is a speculator. that is why bitcoin will succeed forever (or something based on it)

People are not using Bitcoin to purchase goods and services on a very wide scale- even your government doesn't consider them a currency, and it's likely not many businesses in Japan do, either.

It's behaving more as an investment than a currency, so people are buying them, betting on reselling them. That's not a currency.

Most trading is probably occurring because of speculators, people are buying them with the idea of reselling them, like say what people do with other property or assets. The few people actually using them as a currency are outnumbered by the speculators.

It's a currency the way there are certain forms of currency in a prison, it exists as a currency for relatively few people, to the outside world, not so much.

why does it matter if the government considers it a currency?

you're not getting it

cryptocurrency is a way to keep the government's hands off of things

why do people keep bringing government into the picture?

furthermore, why do people who don't use cryptocurrency try to tell people that DO use it, what we do and do not use it for?

whether or not YOU believe it's used on a wide scale, it IS used by SOME people, and we'll continue to use it for as long as we want, because it's convenient and it keeps government off our backs.

A simple php or javascript routine can calculate spot prices for bitcoins without any trouble at all. It is possible to buy goods in stores in large cities with bitcoin, if you look around.

On the internet the number of shops accepting bitcoin is getting larger every day.

Just because one "bank" fails means nothing.

Well, it doesn't draw good comparisons to other stable, First World currency that drops half of its value in two months.

The way someone acquires it isn't based on fiat power, that's true- but it's not based on anything at all.


Fred pays Ted $500 for 1 Bitcoin.

What is the currency is this transaction? It's the $500, it's not the Bitcoin. The Bitcoin sold for $500 for no intrinsic reason.

By the way, as for the government being on our backs for some reason, the alternative is that several Bitcoin exchanges have failed, vanishing the buyers' money with them. Mt. Gox is not the only one that failed, it's just that these other ones weren't really publicized.

And another bitcoin "bank" gets robbed and closes: article

funny that people keep missing the point

you leave your information (currency!) online, it's fair game for hackers

if you physically hold your bitcoins, or you're the only one with the key, it's EXTREMELY secure.

seems ridiculous that people would attack a currency for problems with the security measures of individual companies.

you don't go blaming VISA for Target's data breach now do you.