Bitcoin Price Crashes 642
Beardydog writes "Bitcoin trading site MtGox.com has suspended operations for the rest of the day after illicit access to at least one account resulted in a steep drop in the price of Bitcoins on the site. Commenters to the support page for the event are reporting that a list of usernames and associated email addresses and password hashes have been posted online. MtGox are currently planning to roll back all of the day's trading, email notices to all affected users, and require replacement passwords for affected accounts."
Enough already (Score:4, Insightful)
Enough with this Bitcoin spam already.
Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.
Re:Bitcoin to revolutionise economy (Score:4, Insightful)
The Bitcoin system is robustly designed to continue past the collapse of the US dollar and the world economy, as the Internet, fast computers and reliable electricity are all expected to be readily available when barbarian hordes are wandering the burnt-out post-apocalyptic remnants of civilisation.
I think that you have missed the Fallout series of historic documentals.
Re:Enough already (Score:5, Insightful)
Enough with this Bitcoin spam already. Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.
To be fair, it's nice to hear news that predictions about bitcoins being crappy are indeed true. This story is somewhat of an anti-spam.
Re:Bitcoin to revolutionise economy (Score:3, Insightful)
I absolutely agree. These worthless, abstract encrypted computer bits are WORTHLESS.
Anybody who knows anything understands that REAL value is in small, green pieces of paper with pictures of dead people on them.
This Is Where Slashdot Fails Me (Score:1, Insightful)
I think the experiment has run its course. Now that some big player(s) have cashed out at the markets' expense, the faith in this currency/commodity should be just about dried up. "Illicit access to one account?" Your market teeters on the access to one account?! Yeah, I think that's the definition of volatile and holy hell that trader must have everyone else by the balls.
Re:Bitcoin to revolutionise economy (Score:5, Insightful)
The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.
(One good thing about Bitcoin threads on Slashdot: plenty of opportunity to beat Econ 101 into the heads of libertoonians who think they've got the perfect zinger for every situation.)
Is it just me? (Score:3, Insightful)
Is it just me, or does these comments, and everything surrounding this, AND THE FACT THAT THIS OCCURRED ON FATHER'S DAY, sound suspicious to anyone? I hate to sound like a conspiracy theories, but this sounds an aweful lot like a psy-op to me.
After all, Bitcoin" was not hacked, nor did "Bitcoin" crash (http://bitcoincharts.com/markets/ - they are STILL WORTH MORE than the U.S. dollar). It was a SINGLE WEB SITE that was hacked. If the pirate bay was hacked, would you say that "bittorrent" was hacked? Only if you're an idiot and don't understand how bittorrent works.
Re:Enough already (Score:1, Insightful)
No they don't.
Re:Bitcoin to revolutionise economy (Score:5, Insightful)
The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.
You realise that most dollars are not paper? They make up only about 6% of money. The rest is debt based.
There is only about ~900 billion paper and coin dollars.
There is about ~14 trillion dollars worth of credit supplied by banks.
There is about ~55 trillion dollars in total debt, again, supplied by banks.
What backs the dollar is the faith that the 14 trillion dollars will some day pay the 55 trillion dollars off.
BitCoins are simply a hobby, not a currency (Score:5, Insightful)
Usefulness as a currency is inversely proportional to potential as an investment. BitCoin fans, when you boast that your "currency holdings" have shot up in value by several hundred percent in a year, this is NOT A GOOD THING for BitCoins as a currency. You, Joe Merchant, would have to be a complete blithering idiot to set yourself up to accept BitCoins as a form of payment if deflation of several orders of magnitude is REQUIRED in order for your "currency" to be anything but a niche toy. In addition, credit, the lifeblood of any economy is completely impossible under such conditions; it would be the height of insanity to take out a loan if you had the potential of owing the equivalent of several hundred percent interest after a year. (As in, if you took out a loan for a thousand BitCoins a year ago, you'd be praying for an event like this to happen right now...)
An ideal currency remains relatively stable in value in relation to something you actually want to buy. An illiquid currency that gyrates wildly in value is useless, as it makes proper pricing of goods, services, and credit impossible.
In the end, BitCoins are no more a "currency" than Beanie Babies were. And at least Beanie Babies are cute. (And tulips were/are pretty flowers.) BitCoins are an interesting experiment in cryptography, nothing more.
Re:Growing pangs (Score:4, Insightful)
Anyone with an iota of common sense could see that.
I wasn't trying to extol myself as a genius--I was making an observation for those who haven't had much of a look at the history of the market.
What we need is a digital cash system that is run by banks -- yes, I know, we all like to hate on banks, but the truth is that banking is an important part of the economy and the majority of digital cash protocols call for a bank to issue the digital currency.
I think bank-issued digital currency would be worse than government-issued currency, because the government has at least some semblance of advancing the good of its people, whereas a single bank issuing a currency could do whatever it pleases to the market, having only profit motive.
A system like bitcoin where a very large number of users of the currency all have a stake it in with no single user selling all their bitcoins would cause more than a .1% fluctuation in value would be a system that would be very good at holding value for its users (assuming there are no design exploits and no organization with enough computing power to start playing games with the block chain).
The problem with the current bitcoin system is that I imagine there are hundreds of people who could crash the value of the currency because it's likely too concentrated with a few individuals and the market is not deep enough for them to sell their stakes to those who are willing to invest in it more. At the value of $17 US / bitcoin, there are $112,141,350 US in the bitcoin market. There are probably dozens of bitcoin "millionaires" (in USD) who would end up with probably only somewhere in the thousands of dollars if they sold, with the result being putting the bitcoin value back at something like $.10 - $.20 / bitcoin. The system is extremely intriguing, but the current ownership distribution and market seems like a disaster, either waiting to happen or already starting.
Maybe if the system were started again, with the current level of interest, the results would be different. I'd get involved in that. The market with the current ownership distribution? No way.
Re:Bitcoin to revolutionise economy (Score:5, Insightful)
Re:Enough already (Score:4, Insightful)
You cared so much, you wouldn't risk your precious slashdot karma. Therefore, bitcoins are worth less than slashdot karma.
Re:Enough already (Score:4, Insightful)
Re:BitCoins are simply a hobby, not a currency (Score:5, Insightful)
It wasn't until bitcoin that I understood the point of constant inflation: it makes credit feasible. You can only borrow safely if you can be almost certain money won't increase in relative value in the future, and to make a borrower feel truly safe currency value should have a near certainty of decreasing somewhat. With significant deflation a possibility you can't even take out a car loan without simultaneously risking indentured servitude; it would be insane to take home or business loans, and I don't mean figuratively insane, either.
Inflation also encourages lending and investing. It's like the Red Queen hypothesis: with inflation eating the valuation of your cash you have to put it to work somehow in hopes of earning more than the rate of inflation.
It seems no one makes loans or investment in bitcoins, and the scam artists - excuse me, properly rewarded early adopters - who minted thousands or millions of coins back when they cost 1/1000th as much processing time to generate still seem to be hoarding and not using them.
It's technically true that they're not a ponzi scheme, but they're still basically a confidence game that at the current trajectories don't seem like any benefit to people who weren't already in the market by mid-2010. Anyone who adopted after that could use them as money laundering and anonymous payments (like Silk Road), but couldn't efficiently generate or purchase them without wasting more fiat currency than the coins are worth in service fees or electricity.
Re:Bitcoin to revolutionise economy (Score:5, Insightful)
Pop Quiz: What was the Zimbabwean dollar backed by?
Ooh! Ooh! I know!
It was backed by the full faith and credit of the Zimbabwean government!
(which, unfortunately, didn't have a very good grasp of economics)
Re:Let's attempt some critical thinking. (Score:5, Insightful)
Imagine this headline: Forex.com hacked, concept of USD put into question. Doesn't that sound a bit ridiculous? This was a bad day for mtgox.com and bitcoin speculators, but it does not demonstrate inherent weaknesses in the system of bitcoin.
I agree, this does not "demonstrate inherent weaknesses" in the design or Bitcoin, per se, and I would add that an event such as this one could strangle Bitcoin in its cradle. Consider these points:
i) Unlike the USD, Bitcoin has still to establish legitimacy in the eyes of the serious investor.
ii) Sites such as Mt Gox, provide the primary (perhaps even exclusive) gateway to Bitcoin. FX dealing sites are very much down the list on how most people gain exposure to USD.
iii) The USD can be used by US citizens to settle their taxation debt. The USD can be used internationally to purchase oil. Within the US (and not only there), the USD can be used to purchase practically the entire range of goods and services.
If we apply critical thinking, it will be apparent that the analogy you propose with your headline, while appealing on the surface, cannot do justice to the differences between Bitcoin and the USD.
Bigoted much? (Score:5, Insightful)
Remember, most people are stupid
This is untrue, if you actually examine the world people, on average are VERY CLEVER. If "people" were stupid our species would have been wiped out long ago.
Now what people are, is selectively informed. They may not have chosen to be informed about topics you consider important, but it does not mean they are stupid...
I'm sure your average redneck ain't keeping his ammo dry, and your average gun nut (simply for lack of a better term) can't guarantee their storage spot is impervious to floods or broken water pipes
How "sure" are you? Because I'm damn sure you are wrong. Almost anyone I've ever seen keeps ammo in something like an ammo box, which is quite dry and mostly impervious to occasional water. The "redneck" that talks so funny probably knows quite a lot more than you about the care of ammo, and humorously would probably call you an idiot for not knowing the details on this better...
Grow up and realize that people who are different from you are not automatically stupid.
Re:Enough already (Score:5, Insightful)
Bah. Bitcoins represent a number of interesting concepts. Currency alone is a rather fascinating thing that touches on psychology, economy, history, and one of the earliest forms of information technology. Toss in some cryptography, peer-to-peer / decentralisation, etc. and there's no end to the facets of this subject.
That doesn't mean you have to buy in to Bitcoins. Keep in mind that these Bitcoin stories are more than simple "yay Bitcoin - buy buy buy" that you would expect from advertisements / spam. There are negative sides being covered by these stories. But if you have no interest in anything remotely related to Bitcoins, then by all means... don't click on the damn article that says it is, in fact, about Bitcoins.
Re:It's worse than that. Very flaky players (Score:4, Insightful)
Do they have the cash? Nobody knows. They're not audited by anybody.
And there's your problem - no transparency. Same problem as exists on Wall St.
One wonders why whomever stole the password file published it, but it may have to do with their needing help from others to crack the passwords.
Perhaps, but de-anonymizing BitCoin is sufficient for the purposes of BitCoin's biggest critics (and those who stand to lose the most from it succeeding).
You prove my point (Score:3, Insightful)
No, on average, people are around average intelligence.
Did I ever say anything about intelligence? No, I said Clever. As in, people can figure out the things that are most important to them pretty well.
It's just that may people have different priorities than your own. But by all means feel superior to them even though in different circumstances they would be laughing at you too.
I myself will maintain the awareness that all people are generally clever and avoid the impedance mismatch of thinking they are not and having actions taken I do not expect.
If you happen to be bless/cursed with an intelligence that puts you on the far right of the curve, life is extremely frustrating because almost everyone is a moron.
Well thank god you escaped that trap!
You do seem to have been given a double-helping of arrogance though.