Posted on 04/03/2013 9:36:48 AM PDT by SeekAndFind
The price of Bitcoin, the bizarre digital currency, has been skyrocketing. And everyone's calling it a bubble. But it's not like most other bubbles.
Art Cashin, UBS' man on the New York Stock Exchange trading floor, contrasts the Bitcoin bubble to the Dutch tulip mania of the 17th century. Here's Cashin: Trading Tulips In Real Time – It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time. Usually it's kind of regional aggregate pricing like real estate reports. But, all that may be changing – before our very eyes – quite literally. The bubble du jour may be something called a "bitcoin."
Business Insider's Joe Weisenthal made this same point earlier today.
"You can go here and watch Bitcoin trade tick-by-tick, which is not something you could ever do with these other unconventional micro-bubbles."
Everyone's trying to figure out what's going on with Bitcoin.
Without explicitly arguing for causation, Cashin points to a correlation.
The bidding for Bitcoins has turned a bit more aggressive since the Cyprus "bailin" and the seizure of a portion of bank deposits. The Bitcoin recently traded at an amazing $100 (it had been $50 just two weeks ago).
We have yet to see Bitcoin make a major down move.
(Excerpt) Read more at businessinsider.com ...
http://www.gutenberg.org/files/24518/24518-h/24518-h.htm
CONTENTS.
Volume I.
Contents.
List of Engravings.
Preface.
The Mississippi Scheme.
The South-Sea Bubble.
The Tulipomania.
The Alchymists.
Modern Prophecies.
Fortune-Telling.
The Magnetisers.
Influence of Politics and Religion on the Hair and Beard.
Volume II.
Contents.
List of Engravings.
The Crusades.
The Witch Mania.
The Slow Poisoners.
Haunted Houses.
Popular Follies of Great Cities.
Popular Admiration of Great Thieves.
Duels and Ordeals.
Relics.
RE: So what asset backs bitcoins?
From Wikipedia:
Unlike fiat currency, Bitcoin has no centralized issuing authority.
The network used for this digital currency is programmed to increase the money supply as a geometric series until the total number of bitcoins reaches 21 million BTC, by issuing them to nodes that verify transaction records through intense brute force hashing with computing power.
Currently, 25 bitcoins are generated every 10 minutes. This will be halved to 12.5 BTC within the year 2017 and halved continuously every 4 years after until a hard-limit of 21 million bitcoins is reached within the year 2140.
As of March 2013 over 10.5 million of the total 21 million BTC had been created; the current total number created is available online.[49] In November 2012, half of the total supply was generated, and by end of 2016, three-quarters will have been generated. By 2140, all bitcoins will have been generated with the last one consisting of fractional parts. To ensure this granularity of the money supply, clients can divide each BTC unit down to eight decimal places (a total of 2.1 × 1015 or 2.1 quadrillion units).
Excellent!
No doubt, though I'm sure it would require "marinating a few ice cubes" first...as Art likes to say.
Bitcoins are blips of data but so is most of our money. At least Bitcoins are less easily manipulated than “electronic” U.S. dollars are.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.