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Bitcoin - Part 2

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jhunter1163 said:
I don't see how that follows at all. If faith in the baht, for example, falters, why would anyone go to something that is even less stable and backed by even less than the full faith and credit of some tottering government?
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I don't know about third world currencies but that is exactly what happened in Europe in the wake of problems with Cyprus and the PIIGS.
 
psionl0 said:
Go back through the old thread. You will find plenty of references to bitcoin prices during the period in question.
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That isn't what I asked for. I asked for evidence for your assertion that money fled from unstable currencies (although it's not clear which currencies, euros maybe?) to Bitcoin during the period in question.
 
jhunter1163 said:
That isn't what I asked for. I asked for evidence for your assertion that money fled from unstable currencies (although it's not clear which currencies, euros maybe?) to Bitcoin during the period in question.
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I don't know if you think that is somehow different to saying, "If faith in a national currency wavers then the demand (price) for bitcoin will increase" (in which case you have constructed a strawman argument) or if you are denying that there were meteoric price rises during the Cyprus crisis.
 
jhunter1163 said:
That isn't what I asked for. I asked for evidence for your assertion that money fled from unstable currencies (although it's not clear which currencies, euros maybe?) to Bitcoin during the period in question.
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You've got a short memory:
http://www.theguardian.com/technology/2013/apr/03/bitcoin-reaches-record-high-currency

Now, it could be coincidence, or a reaction by those other than Cypriots (it's thought to have involved Russians as well as those in the PIGS states, not just Cypriots), but it seems fairly clear the Cypriot crisis is reflected in the Bitcoin price.
 
Tolls said:
You've got a short memory:
http://www.theguardian.com/technology/2013/apr/03/bitcoin-reaches-record-high-currency

Now, it could be coincidence, or a reaction by those other than Cypriots (it's thought to have involved Russians as well as those in the PIGS states, not just Cypriots), but it seems fairly clear the Cypriot crisis is reflected in the Bitcoin price.
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The dynamics there was not necessarily about faltering faith in the currency itself, the euro, but in the scare that you're in for a haircut – i.e., a faltering faith in domestic financial institutions. Those who could, moved their deposits via TARGET2 to other banks within the EMU. Some chose Bitcoin. Bitcoin need not have been their first alternative.
 
Tolls said:
You've got a short memory:
http://www.theguardian.com/technology/2013/apr/03/bitcoin-reaches-record-high-currency

Now, it could be coincidence, or a reaction by those other than Cypriots (it's thought to have involved Russians as well as those in the PIGS states, not just Cypriots), but it seems fairly clear the Cypriot crisis is reflected in the Bitcoin price.
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I can certainly see why the Russian Mafia might not want to move their money from Cypriot banks to other banks within the EU. To those types, Bitcoin da, rubles nyet.
 
lupus_in_fabula said:
The dynamics there was not necessarily about faltering faith in the currency itself, the euro, but in the scare that you're in for a haircut – i.e., a faltering faith in domestic financial institutions. Those who could, moved their deposits via TARGET2 to other banks within the EMU. Some chose Bitcoin. Bitcoin need not have been their first alternative.
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International confidence in the Euro doesn't seem to have wavered too much during the crisis. There was a small drop in the value of the Euro during the early part of 2013 but it wasn't great. http://www.xe.com/currencycharts/?from=EUR&to=USD&view=2Y

However, local confidence is a different matter. If you need to use financial institutions (that you have lost confidence in) to use the Euro then it is probably hair-splitting to distinguish between loss of confidence in the financial institution or the currency itself.

Bitcoin need not be the first alternative but it only takes a small percentage of the population to turn to it in times of crisis to have a significant effect on its price.
 
jhunter1163 said:
I can certainly see why the Russian Mafia might not want to move their money from Cypriot banks to other banks within the EU. To those types, Bitcoin da, rubles nyet.
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Yes.
It was well known that Cyprus was a banking destination of choice for some less than savory elements of Russian society.
 
Tolls said:
Yes.
It was well known that Cyprus was a banking destination of choice for some less than savory elements of Russian society.
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I think that the developers of Bitcoin saw it as kind of a digital "Swiss bank account", to replace the actual Swiss bank accounts which got legislated out of existence. It might still become something like that, although if sufficient demand exists I suspect some entity in, say, the Cayman Islands might develop a BTC clone denominated in USD.
 
jhunter1163 said:
I think that the developers of Bitcoin saw it as kind of a digital "Swiss bank account", to replace the actual Swiss bank accounts which got legislated out of existence. It might still become something like that, although if sufficient demand exists I suspect some entity in, say, the Cayman Islands might develop a BTC clone denominated in USD.
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:dl:
 
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Let's think this through, shall we?

I'm a, shall we say, less than honorable character. I have $1 million that I need to stash somewhere safely. A guy in a floppy hat at Los Banco de No Preguntas in the Cayman Islands offers to store it for me in his spanking-new USD-denominated BTC clone. It's secure, and I can go get my million any time I need to make a, ahem, purchase.

Another guy offers me $1 million in BTC. It's kinda secure, assuming I don't lose the thumb drive it's stored on or the exchange I use isn't hacked. I can use it to make purchases, assuming the other party wants BTC and not that filthy USD. If not, I have to go someplace and try and sell my BTC for $1 million; maybe I'll get my million (in a few weeks or so), maybe I'll get $600K and some dodgy Starbucks cards.

Which would you use?
 
Belz... said:
311 and dropping. I wonder what happened this time to trigger this.
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There doesn't appear to be any clear trigger but a Forbes Magazine article makes a couple of interesting (though not necessarily definitive) points:

One is the ".........old adage that people tend to overestimate the possibility of technology in the short run but wildly underestimate it in the long run" and the other is that the more businesses that accept bitcoin as payment, the more businesses that want to to cash out those bitcoins (putting downward pressure on the bitcoin price).
In 2014, Bitcoin has become much more real. It’s usable at Dell and Overstock and 30,000+ other merchants. PayPal is cozying up to Bitcoin and will eventually make it a form of payment for the many online merchants that use its Braintree platform. That there are finally places to use Bitcoin is part of the reason the price may be declining. When the currency was entirely in the hands of speculators who had nothing much to do other than hold it, the market was somewhat static. Now, as Bitcoin is spent, merchants tend to convert it back to dollars rather quickly. That puts more Bitcoin out there, which tends to depress its value — at least in the short run.

http://www.forbes.com/sites/markrog...yt-pundit-takes-a-very-premature-victory-lap/
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