Via CNN Money:
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The value of Bitcoins has exploded. Again.
FT Alphaville takes you through the latest news as well as the history of Bitcoin, and also we get a bit philosophical about what it all means. Jump in and join the discussion!
Or something like it. We’re not, after all, physicists. Though, feel free to read about the Hubble Bubble theory here. What we probably should be referring to is Hubble’s flow, the rate at which expansion of the universe occurs.
All of which is a whimsical way of suggesting that perhaps Larry Summers has a point. Perhaps bubbles are part of our collective universal nature? A phenomenon that should be embraced as an unstoppable physical force, one that will find a way no matter what.
The proof is out there if we look hard enough. Latest manifestation: Bitcoin.
If we go with that notion, then perhaps inflating asset bubbles one after the other isn’t such a bad idea. Perhaps it’s even necessary? Read more
Some are betting that Beijing will eventually endorse Bitcoin. This week Lightspeed Venture Partners of San Francisco and a China-based sister fund announced a $5m investment in BTCChina…
– Financial Times, November 22
An interesting thing happened on the way to Sheep Marketplace — the online market for illicit goods which rose to prominence after Silk Road, the dominant site for illicit goods trading, was apprehended by the Feds in October.
The interesting thing is not that after a couple of months in the limelight the site closed down because a hacker allegedly made off with $5m worth of Bitcoins. Nor is it that the Bitcoin community failed to buy the story because they noticed that all withdrawals from the site were being blocked by the site’s operators — promptly branding the entire website a scam from the beginning.
What is interesting are the “capital controls” the community is now effectively enforcing on the Bitcoin wallet address they suspect is responsible for the theft. In fact, an entire community of Bitcoin vigilantes has sprung up on the Reddit website, dedicating themselves to chasing the money across the open peer-based Bitcoin ledger. Read more
We noted that the shift from Bitcoin into other crypto alternatives, which give early adopters a better chance at pilfering wealth from suckers, had already begun.
A couple of things worth noting, for those interested in the virtual pump-and-dump campaign that is Bitcoin.
1) The Chinese Bitcoin premium has seemingly abated. Read more
When things get too expensive, imperfect substitutes become increasingly appealing.
It happened to oil with natgas and shale. It happened to gold with copper and silver. Now it seems to be happening with Bitcoin as well.
So while Bitcoin traded through $1,000 on Wednesday (depending on which exchange or service you use to acquire Bitcoin: it was $1,035 on MTGox, $922 on BTC-e at pixel time), more interesting is the recent surge that’s taking place in the value of alternative crypto currency Litecoin: Read more
In a bid to brush off criticisms that we don’t know what we’re talking about, FT Alphaville decided to take the plunge this weekend and buy some dreaded Bitcoins to check out claims that BTC really is an efficient payments system.
We had approximately $10 to spend. Read more
More evidence is emerging in the case against Ross Ulbricht, the alleged criminal mastermind behind the Silk Road illicit goods digital marketplace and keeper of the Dread Pirate Roberts pseudonym.
Court filings refer to computer files seized by the Feds that show, amongst other things, that Ulbricht was a meticulous bean-counter with a tendency to account for assets and liabilities as exotic and incriminating as hacker bribes and server rent. Read more
Bitcoin had its day in front of the Senate Committee on Homeland Security and Governmental Affairs 0n Monday, promptly roofing the price to over $900 per BTC on the back of the hearing, then crashing by 30 per cent and then recovering once again.
At pixel time the crypto currency was fetching about $690 on the MTGox exchange, with the community no doubt preparing for another day of extreme volatility. Read more
So the Feds have finally busted Silk Road, the digital black-market platform which happily brokered everything from LSD and cannabis to heroin and computer-hacking services online, most frequently in exchange for the crypto-currency Bitcoin.
The value of which did take a beating, but perhaps not as much as might have been expected: Read more
Kate and her friends discovered they could magic cash out of nearly nothing, simply by building bitcoin mining machines housed in plastic crates and letting them do their money-making stuff. She then learned about the world of virtual stock exchanges…. Read more
The Telegraph’s Willard Foxton notes the online black market portal Silk Road has been experiencing some serious outages the last few days. The problems may be linked to a hacker and extortion attempt. The portal, rather ironically for an illicit website, is now offering a reward for information leading to the arrest and conviction of whoever is behind the attempt.
Though Silk Road has been experiencing other problems too, not least the hyperdeflationary effects of the Bitcoin rally: Read more
If the meteoric rise and fall of the cyber crypto currency Bitcoin this month teaches us anything, it’s the degree to which a market can be influenced by internet hysteria, viral marketing and propaganda.
There is no intrinsic value to a Bitcoin. Read more
Economists, anthropologists and historians have debated the nature of money for generations. It is fair to say there are many conflicting opinions.
In 1997, Narayana Kocherlakota, the current president of the Federal Reserve Bank of Minneapolis, however, made an enigmatic observation. He argued money was not, as commonly understood, a store-of-value, a unit of exchange or even a unit of account, but rather “a primitive version of memory”. Read more
A quick update to our latest Bitcoin post, since it seems that some have an issue with the virtual unit being described as a fiat currency.
So here’s our rationale for calling it that.
The term fiat is foremost used in the post to differentiate a faith-based non-collateral-backed currency system from a collateral-backed currency system. Bitcoin, however, is described as the “fiat of all fiats” due to its decentralised fiat nature and because its value lies in the mutual interests of its users rather than a collateral pool. It is, in that sense, a fiat that supersedes all other fiats, because it depends on an algorithmic self-dictated “law” for authority. Read more
Requests have been made, so here is a quick “story so far” on Bitcoin. Consider this a perfect dinner party cheat.
First off, Bitcoin is best described as a virtual crypto/digital parallel currency that is completely decentralised and unregulated (for now) by the current powers that be. It is understood to be the brainchild of one Satoshi Nakamoto, whose identity is alleged to be an alias in its own right. Many people believe the paper behind the Bitcoin system to be some anarchic manifesto purposefully designed to disrupt and destabilise the current economic status quo. Read more
Here’s something to ponder.
Which of the following do you think is the latest Bitcoin price chart and which is the latest Google Trend indicator of Bitcoin Google Search interest? Read more