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  1. #1
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    Why would anyone "invest" in Bitcoins?

    I find the whole run up in the price of Bitcoins amazing. For anyone who doesn't yet know, they hit a value of $266.00 today before dropping all the way back down to $105 or so. That all happened in ONE day btw! They are at around $150 right now. I just can't understand why anyone would be crazy enough to buy into something this volatile. It's been widely reported that the reason for Bitcoin's epic rise is the bailout crisis in Cyprus. Hmmm, I think I'd rather even take my chances with that currency than go into a "safe" haven like Bitcoins. Sheesh, imagine being one of those that paid $266 a BT, only to see it drop to $105 all in the same day!

  2. #2
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    Re: Why would anyone "invest" in Bitcoins?

    Quote Originally Posted by kbohip View Post
    I find the whole run up in the price of Bitcoins amazing. For anyone who doesn't yet know, they hit a value of $266.00 today before dropping all the way back down to $105 or so. That all happened in ONE day btw! They are at around $150 right now. I just can't understand why anyone would be crazy enough to buy into something this volatile. It's been widely reported that the reason for Bitcoin's epic rise is the bailout crisis in Cyprus. Hmmm, I think I'd rather even take my chances with that currency than go into a "safe" haven like Bitcoins. Sheesh, imagine being one of those that paid $266 a BT, only to see it drop to $105 all in the same day!
    Yeah, exactly how I feel about them. A lot of libertarian/archo-capitalist types like myself really like BitCoins because it's basically currency without any central bank or government. I have to disagree with them on this. There are inherent problems in fiat currency run by governments, but those currencies also have stability and security.

    The Cyprus thing is true, I've heard that European investment banks and other institutional investors are buying into BitCoin. There's rumors that hedge funds around the world (which can keep their investments secret, unlike mutual funds) are also buying into BitCoin. As evidenced today by the bitcoin "crash", the currency is extremely unstable and people don't know how secure the whole P2P system is.

  3. #3
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    Re: Why would anyone "invest" in Bitcoins?

    I don't Kevin, maybe we're just over thinking this. Some genius somewhere came up with a currency that can (as of right now anyway) best be "mined" using only the fastest AMD cards. If it hits $300 I'm going to tell my wife that I NEED to order a second 7950 so that I can "make" more "money". I wonder what effect all this craziness is having on sales of Radeons for AMD. The higher it goes, and the more people here about Bitcoins, the more will try to get in on it which might lead to more Radeon sales.
    Last edited by kbohip; 04-11-2013 at 02:05 AM.

  4. #4
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    Re: Why would anyone "invest" in Bitcoins?

    So you're saying Bitcoin is just a conspiracy by AMD to sell graphics cards.

    I don't know about the long term viability. The price crashed 25% yesterday because of a DDOS attack on two Bitcoin exchanges. Seems like it will always be a niche currency and inherently unstable to me.
    Last edited by Keven; 04-11-2013 at 08:35 AM.

  5. #5
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    Re: Why would anyone "invest" in Bitcoins?

    Good story from TC on what happened to BTC yesterday.

    http://techcrunch.com/2013/04/10/bitcoin-crash/

    Emphasis mine.

    Bitcoin is undergoing a classic correction after quintupling in price over the past 30 days. The currency, which was trading as high as $265 earlier today on Mt. Gox, plummeted and is now trading at around $150.

    We’ve reached out to one of the biggest exchanges, Mt. Gox, to see what happened. But another San Francisco-based exchange called TradeHill is saying that there are apparent distributed denial of service attacks on Mt. Gox and Bitstamp. A denial of service attack happens when an attacker overwhelms a target with external requests, so that it can’t honor regular requests from legitimate users.

    This also happened last week when Mt. Gox when Bitcoin reached $142 and hackers attacked the exchange. At that point, Mt. Gox said it had suffered ”its worst trading lag ever.”

    The Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”

    It looks like this may be happening again. Aside from that, any kind of 400 percent increase over 30 days is probably unsustainable from a technical point of view. A correction at this point would be healthy and natural.
    It happened before, it'll probably happen again, just because the infrastructure isn't as solid as the established central banks. While the P2P system used to generate BitCoins seems sound (although I did read something about people trying to send junk data in the system), these exchanges (Mt. Gox / Bitstamp) are still single points of failure.

    Besides, like TC said in the last paragraph, nothing (except for maybe lifeboats on the Titanic) is sustainable at 400% growth over 30 days. The free market corrects. This is the mother of all (Bitcoin) bubbles. The more inflated the bubble gets, the more you'll have malignants trying to abuse the system for profit.

  6. #6
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    Re: Why would anyone "invest" in Bitcoins?

    This just too funny.

    Mt.Gox rushes to tell everybody that they weren't DDoS'ed yesterday. Just that their site was swamped in loads of new accounts being created. And that they were updating their servers to handle the load.

    Except, now they've issued a warning on their Facebook saying that they're now under a DDoS attack.

    They're stupid. Those new accounts probably was a DDoS attack. Creating new accounts (writing new arrays to the database) is probably what the DDoS'ers were doing.

  7. #7
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    Re: Why would anyone "invest" in Bitcoins?

    Quote Originally Posted by Keven View Post
    So you're saying Bitcoin is just a conspiracy by AMD to sell graphics cards.

    I don't know about the long term viability. The price crashed 25% yesterday because of a DDOS attack on two Bitcoin exchanges. Seems like it will always be a niche currency and inherently unstable to me.
    Huh? No, I don't think Bitcoins were invented to sell more AMD video cards. I was just wondering though, once more and more people find out they (maybe) can make money by having one of those cards and just leaving their computer on, what effect it might have on Radeon sales.

    As far as BTC being a viable currency, here in the US we can't understand for the most part why people would use it, but then we have the dollar, which is stable for the most part. I just read an article on Fox News where they talked about a guy in Argentina that liked to use BTC as he said it insulated him from his country's high inflation.

  8. #8
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    Re: Why would anyone "invest" in Bitcoins?

    Quote Originally Posted by kbohip View Post
    Huh? No, I don't think Bitcoins were invented to sell more AMD video cards. I was just wondering though, once more and more people find out they (maybe) can make money by having one of those cards and just leaving their computer on, what effect it might have on Radeon sales.
    Heh heh, I was joking.

  9. #9
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    Re: Why would anyone "invest" in Bitcoins?

    Another crazy few days for Bitcoin (and gold for that matter). It's currently at around $100 for right this second. On a note that may very well be related, both Amazon and Newegg have sold out of quite a few 7950's. I'm going to be very interested to see what kind of a quarter AMD has in the midst of all this horrible "PC sales dropped off a cliff" news. My guess is they probably won't get much of a boost from an uptick in Radeon sales that might be due to the Bitcoin craziness, but who knows.

    As for my Bitcoin mining adventure, I got an email tonight stating that my first payout has come through. Apparently I'm now the proud owner of exactly 0.10016465 BTC. That's roughly $10.00 It would have been more but I had my system off for about 30 hours during the week. According to my Kill-A-Watt, my system is using around 235 watts of power while mining. I burned through about 35kw/hr's of electricity for the week, which is about $2.80 at my rate of .08 a kw/h.

    There is a Bitcoin Calculator that calculates my system will make $10.50 a week after electricity costs if I was to leave it on 24/7. $40 a month isn't a life changer to be sure but heck, if I can make it while doing nothing I'll take it. I have no idea how efficient Crossfire is when it comes to mining, but if it doubled output that's $80 a month. I might even be able to talk my wife into that Crossfire system after all.

  10. #10
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    Re: Why would anyone "invest" in Bitcoins?

    ^^^Ahh I see the bitcoin/AMD conspiracy coming thru now. I knew there was a reason for Quadfire and I knew it wasn't for gaming!

  11. #11
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    Re: Why would anyone "invest" in Bitcoins?

    Quote Originally Posted by BlackDragon24 View Post
    ^^^Ahh I see the bitcoin/AMD conspiracy coming thru now. I knew there was a reason for Quadfire and I knew it wasn't for gaming!
    Quadfire you say! I hadn't thought of that one yet! Ah but my mobo will only support up to 3 video cards. This is how I'll run the whole spending $600 on video cards thing by my wife. "Honey, I know all you think I use my video card for is gaming, but this Bitcoin deal is really starting to pay out. It turns out the more video cards I have, the more money I'll make! As luck would have it, I can put up to 3 cards in my system and then I'll really start making bank! All I need to do is spend another $600 and...honey? Where are you going?"

  12. #12
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    Re: Why would anyone "invest" in Bitcoins?

    This seems to be a high tech Ponzi Sceme. I wouldn't touch it with firewalled mouse.
    FRH
    If more sane people were armed the crazy ones would get off fewer shots.

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