Bitcoin price plunges

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TravelforFun
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Bitcoin price plunges

Post by TravelforFun »

sunnyday
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Re: Bitcoin price plunges

Post by sunnyday »

So are you saying now is a good time to buy :mrgreen:
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Re: Bitcoin price plunges

Post by Grt2bOutdoors »

You bit what? A biscuit? How was it? :P

Bitcoin reminds me of tulips and Madoff - one big scam.
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Re: Bitcoin price plunges

Post by Jack FFR1846 »

Circle of gold. Anyone else remember this?
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White Coat Investor
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Re: Bitcoin price plunges

Post by White Coat Investor »

That was a 21% drop yesterday, basically the same as Black Monday in the stock market. I was criticized recently for saying I didn't think I could personally handle the volatility of an "investment" like bitcoins. I suspect I'm in good company.

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Rayandron
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Re: Bitcoin price plunges

Post by Rayandron »

Just to play the other side of the table, that Marc Andreessen guy is pretty smart on the tech space and strongly pro-bitcoin as a currency and payment method (which is very different than being bullish on it as an investment).

http://dealbook.nytimes.com/2014/01/21/ ... blogs&_r=0

Note: I don't own any bitcoin or intend to buy any in the near future
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Re: Bitcoin price plunges

Post by barnaclebob »

I believe that bitcoin or something like it will eventually become a major player, not anywhere near competing with the dollar but something that a majority of people will use kind of like paypal without as high of fees. That being said I'm not a buyer at the current prices or volatility.
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greg24
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Re: Bitcoin price plunges

Post by greg24 »

If only I was smart enough to trade currencies.
sjain75
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Re: Bitcoin price plunges

Post by sjain75 »

I feel Bitcoins are great from a Merchant's view, compared to Credit Cards, because it means lower transaction fees, ~1% instead of usual 3%, and no Chargebacks!
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Watty
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Re: Bitcoin price plunges

Post by Watty »

I wonder if the "techincal problem" is that they don't have any dollars left to exchange.


I would expect that there might be a "run on the bank" if there is not one already.
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Ged
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Re: Bitcoin price plunges

Post by Ged »

Rayandron wrote:Just to play the other side of the table, that Marc Andreessen guy is pretty smart on the tech space and strongly pro-bitcoin as a currency and payment method (which is very different than being bullish on it as an investment).

http://dealbook.nytimes.com/2014/01/21/ ... blogs&_r=0

Note: I don't own any bitcoin or intend to buy any in the near future
It's too volatile to serve as a payment method right now. Many 20%/day events? Not going to work. You can't change your prices that fast, nor can you afford to hold assets or liabilities denominated in a currency with that characteristic except to speculate.

Maybe in the future a form of digital currency will be adopted. I don't think it will actually be bitcoin rather some other alternative digital currency.

As a currency to base an economy on the implementation is fatally flawed because if you adopt it, it forces you into deflation. Any economic system based on it will not be competitive with a system that permits the total amount of currency to grow with the economy.

Because of these characteristics I'm sticking with Chinese internet stocks and similar solid investments.
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Re: Bitcoin price plunges

Post by chaz »

Can you gamble with bitcoin in a casino?
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Jack
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Re: Bitcoin price plunges

Post by Jack »

Most people probably don't know that the Mt Gox exchange was originally set up in Tokyo in 2009 as Magic: The Gathering Online Exchange to trade fantasy game cards that are the equivalent of Pokemon. And not real cards but synthetic imaginary cards. Really. I'm not making this up.

Now pardon me while I transfer my life savings to the First National Bank of Beanie Babies.
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Re: Bitcoin price plunges

Post by sunnyday »

A couple interesting things that people often get mixed up: Bitcoin refers to the technology and protocol, bitcoin refers to the currency. The technology seems pretty amazing, the currency still has a ways to go. Also, transactions aren't completely anonymous, like most people think they are.

chaz wrote:Can you gamble with bitcoin in a casino?
Two casinos in Vegas accept them, but you can't use them to gamble. Also, I think a lot of online casinos accept bitcoin for gambling purposes.
jacoavlu
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Re: Bitcoin price plunges

Post by jacoavlu »

Decline probably related to Apple removing the Blockchain app from the App store.
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tadamsmar
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Re: Bitcoin price plunges

Post by tadamsmar »

chaz wrote:Can you gamble with bitcoin in a casino?
There are publicly traded bitcoin casinos:

http://www.forbes.com/sites/jonmatonis/ ... -earnings/
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Re: Bitcoin price plunges

Post by roymeo »

greg24 wrote:If only I was smart enough to trade currencies.
Then you'd probably be smart enough to know better and to know what was a better investment.
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Re: Bitcoin price plunges

Post by nisiprius »

On the one hand, on a log scale it doesn't look so bad:

Image

On the other hand, holy cow wouldja lookit the graduations on the vertical axis of that thing?
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Re: Bitcoin price plunges

Post by nisiprius »

https://www.mtgox.com/press_release_20140207.html
Statement Regarding BTC Withdrawal Delays

Tokyo - JAPAN - February 07, 2014

Dear MtGox Customers,

In our efforts to resolve the issue being encountered by various bitcoin withdrawals, it was determined that the increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state.

In order for our team to resolve the withdrawal issue it is necessary for a temporarily pause on all withdrawal requests to obtain a clear technical view of the current processes.

We apologize for the sudden short notice. All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers. 



Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).



We deeply apologize for the inconvenience caused, and thank you for your kind support and considerations. 


Sincerely,

The MtGox Team
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rongos
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Re: Bitcoin price plunges

Post by rongos »

MtGox has not been the top BitCoin exchange for some time now. Other exchanges like BitStamp and BTCE are consistently more active.

MtGox's reputation has become shady even before this latest development; there have been many reports of difficulty withdrawing funds. Bitcoin's identity is so wrapped up with the disreputable MtGox that one should expect the currency to fluctuate along with MtGox's fate or demise.
ourbrooks
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Re: Bitcoin price plunges

Post by ourbrooks »

MtGox could be just an isolated problem or it could be indicative of some deeper problem. Under the covers, all of the bitcoin exchanges rely on existing banking infrastructure to accomplish exchanges with other currencies. What if there is some fundamental problem with accomplishing this, say, SWIFT refusing to honor transactions? This is highly unlikely, but who knows? If I held a lot of bitcoins, I might well consider exchanging them for some other currencies.

This, of course, raises some difficult questions. Which other currencies? Are lightcoins or dogecoins or deutchemarks going to be any safer? The best bet might be to do what investors around the world have done for centuries: buy gold.

Then, there's the problem of when to go back into bitcoins again. The market timing problem in a new guise!
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Re: Bitcoin price plunges

Post by chaz »

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Re: Bitcoin price plunges

Post by manwithnoname »

sjain75 wrote:I feel Bitcoins are great from a Merchant's view, compared to Credit Cards, because it means lower transaction fees, ~1% instead of usual 3%, and no Chargebacks!
How does the merchant know this if the price of a bitcoin changes with each transaction?
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Re: Bitcoin price plunges

Post by jacoavlu »

I think it's more the customer that has to worry about the fluctuating value or exchange rate of a bitcoin, as the exchange typically happens from bitcoin to USD or whatever currency at the time of the transaction, so the business isn't accepting and holding bitcoin.
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Re: Bitcoin price plunges

Post by Harold »

jacoavlu wrote:I think it's more the customer that has to worry about the fluctuating value or exchange rate of a bitcoin
Yeah, when I started thinking more about this it seemed more and more like when I'm in a foreign country using a credit card. I'd already done my research about the credit card company having the "best" exchange rate -- but from that point on, it seemed I was totally at the mercy of whatever exchange rate they wanted to use. The bitcoin exchange would seem to work the same from a consumer perspective, reliance on the exchanger providing a fair rate.
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Re: Bitcoin price plunges

Post by LadyGeek »

This thread is now in the Investing - Theory, News & General forum (cyber currency).
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kenyan
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Re: Bitcoin price plunges

Post by kenyan »

Further problems and price drops on February 10. The low was near a 50% drop in two weeks.

http://www.pcworld.com/article/2096060/ ... fraud.html
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bargainhuntingking
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Re: Bitcoin price plunges

Post by bargainhuntingking »

Last night was an excellent opportunity to tax loss harvest bitcoin, while buying more at a deep discount, as the wash rule does not apply to bitcoin since it's neither a stock nor security. And yes, the volatility of bitcoin does make even the more volatile equity indices seem rather boring.
Last edited by bargainhuntingking on Tue Feb 18, 2014 5:31 am, edited 1 time in total.
Professor Emeritus
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Re: Bitcoin price plunges

Post by Professor Emeritus »

bargainhuntingking wrote:Last night was an excellent opportunity to tax loss harvest bitcoin, while buying more at a deep discount, as wash rules do not apply to bitcoin since it's neither a stock nor security. And yes, the volatility of bitcoin does make even the more volatile equity indices seem rather boring.

It's a brave man who can predict what the IRS will do with bitcoins.
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Re: Bitcoin price plunges

Post by bargainhuntingking »

Under the current regulatory structure, the tax code prescribes that the wash sale rules only apply to stock and securities.

Ref:

http://www.law.cornell.edu/uscode/text/26/1091

http://www.bitcointax.info/#h.9tlsfvwovs71
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Re: Bitcoin price plunges

Post by Random Musings »

For all you RBD fans out there, another great opportunity today. Just like Friday.

With all the volatility since inception, I'll call this an emerging market currency.

RM
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Re: Bitcoin price plunges

Post by Professor Emeritus »

bargainhuntingking wrote:Under the current regulatory structure, the tax code prescribes that the wash sale rules only apply to stock and securities.

Ref:

http://www.law.cornell.edu/uscode/text/26/1091

http://www.bitcointax.info/#h.9tlsfvwovs71
And if the IRS declares bitcoins "securites"?
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Re: Bitcoin price plunges

Post by nisiprius »

This looks bad to me:

http://www.pcworld.com/article/2096060/ ... fraud.html
Bitcoin software has a bug that allows fraud, Tokyo-based bitcoin exchange Mt. Gox said Monday.... “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur,” Mt. Gox said in a statement. “Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.” The flaw, called “transaction malleability,” is already known to some of the core Bitcoin software developers, Mt. Gox said....
The protection was supposed to be that, being open source, the code was open to inspection, and "given enough eyeballs, all bugs are shallow." In this case, it appears that despite there being enough eyeballs, and despite the bug already being known, it was not corrected quickly and has not been corrected yet.

So, bitcoin is subject to fraud, and the more successful it becomes and the more value is at stake, the higher motivation for clever people to discover more such exploitable bugs.

Where is the open-source, distributed reserve requirements, the open-source, distributed examiners, and the open-source, distributed deposit insurance?
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Re: Bitcoin price plunges

Post by beammeupscotty »

nisiprius wrote:This looks bad to me:

http://www.pcworld.com/article/2096060/ ... fraud.html
Bitcoin software has a bug that allows fraud, Tokyo-based bitcoin exchange Mt. Gox said Monday.... “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur,” Mt. Gox said in a statement. “Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.” The flaw, called “transaction malleability,” is already known to some of the core Bitcoin software developers, Mt. Gox said....
The protection was supposed to be that, being open source, the code was open to inspection, and "given enough eyeballs, all bugs are shallow." In this case, it appears that despite there being enough eyeballs, and despite the bug already being known, it was not corrected quickly and has not been corrected yet.

So, bitcoin is subject to fraud, and the more successful it becomes and the more value is at stake, the higher motivation for clever people to discover more such exploitable bugs.

Where is the open-source, distributed reserve requirements, the open-source, distributed examiners, and the open-source, distributed deposit insurance?
It sounds more like a MtGox rather than a bitcoin problem, and they're just trying to deflect blame. As I understand it, MtGox relies on unconfirmed transactions, which they shouldn't be doing.
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Re: Bitcoin price plunges

Post by mnaspbh »

It's even more scary that this "issue" (which triggered a massive drop in bitcoin value) "wouldn't make the top ten list of dangers" according to the core Bitcoin developer (from the previously-linked article). So there are at least 10 additional issues that are more serious than this one? (granted, the issue that a sufficiently-large mining pool [which already exists] can effectively control the currency and its value is enough of a deal-breaker for me)
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Re: Bitcoin price plunges

Post by rongos »

From what I've read, the reason this "bug" or "weakness" is such a low priority is because it is easily fixed with well written wallet software. You'll notice that other exchanges are continuing to process Bitcoin transactions without interruption. Mt Gox's software, apparently, is not written to avoid the known problem, and is such a mess that Mt Gox is leaning on and publicly blaming Bitcoin rather than fix their own wallet software to avoid the problem.
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Re: Bitcoin price plunges

Post by nisiprius »

rongos wrote:From what I've read, the reason this "bug" or "weakness" is such a low priority is because it is easily fixed with well written wallet software. You'll notice that other exchanges are continuing to process Bitcoin transactions without interruption. Mt Gox's software, apparently, is not written to avoid the known problem, and is such a mess that Mt Gox is leaning on and publicly blaming Bitcoin rather than fix their own wallet software to avoid the problem.
It doesn't matter where the problem is. To an ordinary retail currency user, they can't just use the bitcoin protocol itself in isolation, they need to use exchanges and wallets and bitcoin-related infrastructure. Are you suggesting it is their own fault for not inspecting bitcoin's wallet software as well as the bitcoin protocols themselves?

bitcoin is the entire system you need to use in order to make a practical transaction in the real world. To say this doesn't matter because it's Mt. Gox's fault is like saying a plane crash doesn't matter because it wasn't the aircraft that failed, it was the engines.
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Re: Bitcoin price plunges

Post by rongos »

Many are saying that there is no bug. They are saying that Mt Gox is using a "shortcut" in their software to verify transactions that is against standard practice. This standard practice that avoid the problem was documented in 2011, but Mt Gox still has not implemented standard practice.

They are saying Bitcoin is not broken, Mt Gox is.
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Re: Bitcoin price plunges

Post by bargainhuntingking »

by Jack » Fri Feb 07, 2014 1:21 pm

Most people probably don't know that the Mt Gox exchange was originally set up in Tokyo in 2009 as Magic: The Gathering Online Exchange to trade fantasy game cards that are the equivalent of Pokemon. And not real cards but synthetic imaginary cards. Really. I'm not making this up.

Now pardon me while I transfer my life savings to the First National Bank of Beanie Babies.
Jack,

While you may make fun of Mt. Gox's origins, and yes it does sounds absurd to an adult who isn't a gamer, just realize that these types of exchanges existed long before bitcoin, and were already dealing in an enormous virtual money market of the video game industry.

As a 2008 article from Wired magazine describes an aspect of this industry here (http://www.wired.com/gaming/virtualworl ... ntPage=all):

"...That industry is known to insiders as real-money trading, or RMT, and .... there are people who might pay as much as $1,800 for an eight-piece suit of Skyshatter chain mail made entirely of fiction and code. Or that there are millions more—players of World of Warcraft, Age of Conan, EverQuest, EVE Online, and other massively multiplayer online role-playing games (MMORPGs, or MMOs)—who have given other players real money in exchange for the virtual weapons, armor, currencies, and other sought-after items around which these games revolve. Or that despite the game companies' widespread prohibition of such transactions, their number has grown to support an estimated $2 billion annual trade, a half dozen multimillion-dollar online retail businesses, and an enormous Chinese workforce earning 30 cents an hour playing MMOs and harvesting treasure to supply the major retailers..."

Realize that this $2 billion virtual industry was described in this article in 2008. Now I am sure that it has grown considerably. Here is more info on this surprising phenomenon:

http://en.wikipedia.org/wiki/Virtual_economy
Last edited by bargainhuntingking on Tue Feb 18, 2014 5:35 am, edited 1 time in total.
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kenyan
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Re: Bitcoin price plunges

Post by kenyan »

Lots of attacks on other exchanges in the past week. Definitely not a problem just with Mt Gox, though it's had the most serious issues. Now this -

http://www.businessinsider.com/bitcoin- ... gox-2014-2

Bitcoins on Mt Gox trading for far less than other exchanges. Any fire yet, or is this still just a bunch of smoke?
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Re: Bitcoin price plunges

Post by nisiprius »

Not being able to get money at a bank is a big deal. Not being able to get money at any of the leading banks seems like a very big deal. At what point does "confidence" become a problem?

If bitcoin were a currency, it would be so widely accepted for buying stuff in the real world that it wouldn't be a problem. You wouldn't bother converting bitcoins to dollars, you'd just buy stuff with bitcoins directly. Yes, I know about overstock.com, but man cannot live by overstock alone. And I am willing to bet that at the moment, the only reason some leading-edge retailers are accepting bitcoin payments is because they are confident they can exchange them for fiat money. Because at the moment, I don't think the Dubai Pizza Guys can buy tomatoes and cheese directly with bitcoins.
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Re: Bitcoin price plunges

Post by beammeupscotty »

nisiprius wrote:If bitcoin were a currency, it would be so widely accepted for buying stuff in the real world that it wouldn't be a problem. You wouldn't bother converting bitcoins to dollars, you'd just buy stuff with bitcoins directly. Yes, I know about overstock.com, but man cannot live by overstock alone. And I am willing to bet that at the moment, the only reason some leading-edge retailers are accepting bitcoin payments is because they are confident they can exchange them for fiat money. Because at the moment, I don't think the Dubai Pizza Guys can buy tomatoes and cheese directly with bitcoins.
I too wonder how far it will ever go as a currency, but I think it does have the potential to drive down e-commerce fees. I am considering integrating BitPay into my web site's purchase options -- 1% (or less) fees and no chargebacks vs. around 3.5% for accepting credit cards or PayPal, and it can settle directly into your bank account in US dollars each day. I can see why overstock is excited about it.
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Re: Bitcoin price plunges

Post by Jack »

bargainhuntingking wrote:While you may make fun of Mt. Gox's origins, and yes it does sounds absurd to an adult who isn't a gamer, just realize that these types of exchanges existed long before bitcoin, and were already dealing in an enormous virtual money market of the video game industry.

.... there are people who might pay as much as $1,800 for an eight-piece suit of Skyshatter chain mail made entirely of fiction and code. Or that there are millions more—players of World of Warcraft, Age of Conan, EverQuest, EVE Online, and other massively multiplayer online role-playing games (MMORPGs, or MMOs)—who have given other players real money in exchange for the virtual weapons, armor, currencies, and other sought-after items around which these games revolve.
If you are trying to convince people of the seriousness of bitcoin, I might suggest that the above isn't be best way of doing that.

We've grown used to the tired old argument that an ounce of gold buys a well-tailored suit -- but bitcoins for imaginary Shyshatter chain mail?
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Re: Bitcoin price plunges

Post by Oicuryy »

Bitcoins are currently selling for half price at Mt. Gox. Why aren't bitcoin owners taking advantage of this arbitrage opportunity to double their holdings? Is it because of the difficulty of transferring dollars from one exchange to another? Are they worried that the price at Mt. Gox will rebound before their dollars get there?

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Re: Bitcoin price plunges

Post by macchiato »

If Bitcoin ever becomes a mainstream thing, it'll work its way into VXUS or VTI, and only then will I be participating.
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Re: Bitcoin price plunges

Post by beammeupscotty »

Oicuryy wrote:Bitcoins are currently selling for half price at Mt. Gox. Why aren't bitcoin owners taking advantage of this arbitrage opportunity to double their holdings? Is it because of the difficulty of transferring dollars from one exchange to another? Are they worried that the price at Mt. Gox will rebound before their dollars get there?
Because there is a risk you'll lose it.
https://bitcointalk.org/index.php?topic=469936.0
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Re: Bitcoin price plunges

Post by nisiprius »

beammeupscotty wrote:
Oicuryy wrote:Bitcoins are currently selling for half price at Mt. Gox. Why aren't bitcoin owners taking advantage of this arbitrage opportunity to double their holdings? Is it because of the difficulty of transferring dollars from one exchange to another? Are they worried that the price at Mt. Gox will rebound before their dollars get there?
Because there is a risk you'll lose it.
https://bitcointalk.org/index.php?topic=469936.0
Oh, they are delaying direct BTC withdrawals, not just exchanges into ordinary currencies? I guess I misread their press release. What does "The trading platform will perform as usual for the needs of our customers" mean? What kind of "trades" are being executed?
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Re: Bitcoin price plunges

Post by beammeupscotty »

nisiprius wrote:Oh, they are delaying direct BTC withdrawals, not just exchanges into ordinary currencies? I guess I misread their press release. What does "The trading platform will perform as usual for the needs of our customers" mean? What kind of "trades" are being executed?
I have no idea, but something must be wrong when their price is half of the current price on other exchanges.
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Re: Bitcoin price plunges

Post by Oicuryy »

As I understand it, MtGox has suspended outgoing bitcoin transfers until they put in a new method to verify that transactions have been confirmed by the Bitcoin network. They are still allowing withdrawal of dollars and deposits of dollars and bitcoin. They are still allowing trades back and forth between dollars and bitcoin.
https://support.mtgox.com/home

But maybe I am missing something. Why aren't bitcoin speculators willing to accept 2 to 1 odds that MtGox will get a workaround to the transaction malleability bug in place? Prices are still falling at MtGox on fairly heavy volume.
http://bitcoincharts.com/charts/mtgoxUS ... zm2g25zvzl

Ron
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Random Musings
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Re: Bitcoin price plunges

Post by Random Musings »

beammeupscotty wrote:
Oicuryy wrote:Bitcoins are currently selling for half price at Mt. Gox. Why aren't bitcoin owners taking advantage of this arbitrage opportunity to double their holdings? Is it because of the difficulty of transferring dollars from one exchange to another? Are they worried that the price at Mt. Gox will rebound before their dollars get there?
Because there is a risk you'll lose it.
https://bitcointalk.org/index.php?topic=469936.0
So, the question is, where is the cash going? Are the bitcoins real or just imaginary? Or is Mt. Gox a fraudulant operation?

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
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