Skip to comments.The Bitcoin Beat Monday, Apr 15, 2013
Posted on 04/16/2013 1:57:59 AM PDT by djf
BTC High 100.90 Low 50.01 Current 55.83 LTC High 2.70 Low 1.30 Current 1.41
All quotes in USD
Bitcoin took a beating today, price-standpoint-wise. On one hand, you can't not expect markets to be disrupted based on the news of the hour. On the other hand, it didn't go to zero, surprisingly, Bitcoin is still breathing!
But IMHO we discovered something over the last ten days or so. Let me sum it up this way:
Bitcoin has failed.
Huh? There are tons of people out there who bought Bitcoins when they were under a dollar. Even if someone bought in at ten dollars, they have still made a healthy return.
But that's just it. Bitcoin, as shown the first weekend of April and today, along with the news from Boston has showed us something. It is being treated as a commodity, NOT A CURRENCY.
And the distinction between the two can only be expected to cause the inevitable fall of Bitcoin.
As long as it is being treated as a commodity, and suffer wild swings because of news that's not under the buyer/sellers control, it will NEVER gain wide acceptance as a currency. No vendor worth his cash register would accept payment in something that can lose value not in the days and weeks we see the currencies fluctuate, but at the speed of light! And we in truth can't blame them for having that opinion.
And such is the great failure of all modern money systems. There is simply NO GUARANTEE that what you have and are trying to spend can BUY YOU ANYTHING! What we need is something similar to bitcoin in security, but which is absolutely, positively tied to a real thing! Call it a Horsecoin, always redeemable for one live horse, call it whatever you like, but something that doesn't float with the winds of world news and turmoil.
As a commodity, there is one thing in bitcoins favor. A limited number of bitcoins exist (currently about 11 million), and will top out at about 21 million in the year 2140. This means you have an ever increasing number of fiat dollars, Euros, etc, etc, etc chasing a slowly increasing number of bitcoins. If you were to measure the US debt in bitcoins I haven't done the math, but it wouldn't surprise me if it came down to millions of dollars per bitcoin.
Time will tell. Until and unless bitcoin stabilizes or at the very least starts to trend along with some real commodity, it's chances of being accepted as a currency or medium of exchange are about as likely as that of mining a bitcoin! (that means very, very close to zero!)
Thanks for the post. What about litecoin? http://litecoin.org/
Full disclosure: I have two computers pool-mining litecoins
So far, I have earned about one ten-thousandth of a litecoin!
Hot time in the big city tonite, eh?
Cool. It’s like printing money at home, only legally.
Well, the only ones who really win in this mining stuff is the electric companies. And the hardware vendors.
I didn’t buy any specialty hardware, just using some old laptops I had laying around.
The value of a fiat currency is based on its acceptance by government in payment of a substantial tax rate.
How much does your increased energy consumption cost you, due to your computers continuous mining?
Does your litecoin percentage offset your power expenditure?
Really, it’s such a trivial amount I don’t try to compute it... I’ve never cashed in any litecoins, I still don’t have any because there is an earnings base before any payout occurs, and I’d need to run my computers for like the next six months to reach the base, and then it would be worth maybe 15 cents!
I’m just testing and playing around and getting familiar with things.
More worried about burning up the computers/power supplies than any litecoins I might earn.
There are tons of people out there who bought Bitcoins.
Mr Madoff smiles.