The Internet's Secret Currency

by Lurker Sat Apr 06, 2013 7:06 pm

Existing only as numbers on the Internet, bitcoins are not tied to any retailer or company or bank. They have no real-world value other than what people agree to. And yet, at the time of this writing, each of the 11 million or so bitcoins in the world could be exchanged for just over $130 in real money — for a total value for the "currency" topping a billion dollars.

http://www.nbcnews.com/technology/technolog/bitcoin-internets-secret-currency-makes-its-first-public-appearances-1B9237667

by Ben Reilly Thu Apr 11, 2013 6:37 pm

And just four days later:

On Wednesday afternoon, the Bitcoin bubble appears to have burst. As of this writing, its current value is around $160—down from a high of $260. (It fell as low as $130 today.) There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation. (Update 4:05pm CT: Bitcoin seems to have somewhat recovered and appears to be hovering around $200. Update 6:00pm CT: The exchange rate has fallen back to around $160.)

http://arstechnica.com/business/2013/04/bitcoin-crashes-losing-nearly-half-of-its-value-in-six-hours/?utm_source=howtogeek&utm_medium=email&utm_campaign=newsletter

by Lurker Thu Apr 11, 2013 6:39 pm

It all seems like smoke and mirrors to me.

by captain Fri Apr 12, 2013 9:13 pm

@Lurker.

Or maybe someone is trying to destabilize it? It could be a bit of a threat to governments and banks.

by Ben Reilly Fri Apr 12, 2013 9:48 pm

Well, it's all down to how many people use it, really. The more users of a currency, the more the price will stabilize. That's what keeps stuff like gold jumping up and down in value all the time -- not nearly as many people use it as dollars of the U.S., Aussie and Canadan varieties, or euros or yuan or whatever, all of which are basically interchangeable thanks to the fact that they're stable and can be converted easily to one another.

The only threat to any government-issued currency would be extremely long-range, most likely. It would be more likely that Bitcoins would simply become another "dollar/euro/yuan" (in the sense that they could be reliably converted) than the idea that they'd ever supercede or eradicate a government variety of currency.

by veya_victaous Mon Apr 15, 2013 1:17 am

well someone made a profit.
http://www.news.com.au/money/money-matters/bitcoin-crashes-hacker-currency-gets-wild-ride/story-e6frfmd9-1226618761314

no one heard of it all of a sudden it's the next big thing (queue scramble of uninformed investors) then Bust. all those new investor just got burnt. Shocked

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The Internet's Secret Currency

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I am starting to think the same.

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