What the hell is (a) bitcoin?

[pioneer98]

Clickhole - Don’t Understand Bitcoin? This Man Will Mumble An Explanation At You

[ElAngelo]

Looks like they're worth crap today, compared to a while ago.

[ghostrunner]

So I guess now 1 bitcoin = $11,000

Should have bought a few.

[go birds]

peaked at around $19K yesterday.

This is just insane. I am really kicking myself for not getting more involved back in the day (i didnt have any sort of resources to actually minefor them). I kinda laughed at the idea but saw potential.

I'm investing in Litecoin and hoping for the best.

[Schlich]

This is really embarrassing to admit, but I lost about $2000 yesterday sending my bitcoin to the wrong wallet. It was an old wallet i had used which i lost the password for. Instead of deleting it, i kept it open, right next to my new wallet, in the hopes that i might be able to crack the password and get the .02 btc back. That was a mistake. Hoping some password cracking software will help. I remember a few characters...

[ghostrunner]

I threw a few bucks in all 3 of the e-coins the other day. Will be kind of fun to track if nothing else and I'm not out much if it all comes crashing down.

[Smith Corks One]

For reasons I won’t go into, I had ~40-45 bitcoins a few years ago. I think they were worth somewhere between $5 and $7 at the time. FML.

[go birds]

For reasons I won’t go into, I had ~40-45 bitcoins a few years ago. I think they were worth somewhere between $5 and $7 at the time. FML.

[Arthur Dent]

I'm kinda surprised people are messing with this stuff. Theoretically, you could make a bunch of money trading penny stocks too, but if you're not cheating, it's a really bad idea.

[AdmiralKird]

There is no other driver for this price except pure speculation, and the larger it grows the more dangerous it becomes. You shouldn't kick yourself for not getting involved in what is becoming a fast growing pyramidal pump and dump. All people see right now is a graph that keeps growing and growing, but they don't sit back and think what is causing it to grow in value. The only thing that's causing it to grow is your neighbor sees it going up and wants in. The usability of a bitcoin was the same this week as the last week as the last year. Major retailers and business will never accept it because of severe security concerns, high transaction costs, and assuming all inherent risk. It will only have a few niche market uses, yet people think this specific digital currency will be used everywhere in the future - it won't be, maybe some future digital currency, none of these for common business - yet the idea that bitcoin will, and others' desires to get rich quick, are driving the price ever higher.

This whole hype run is nothing different than a couple hundred people getting a couple of million people to hand them anywhere between $10-$100,000 on the hopes they strike it rich. If you're spending money when everyone else is you're just going to lose it. That's not to say Bitcoin as a whole is engineered by its creators as a get-rich scheme, no one is quite sure the intents of its creators, but the current bitcoin market is a giant gold rush perpetuated by hype. It's nearly the exact same thing as the dotcom boom and bust here the investment outstripped the valuations, except now you've got bitcoin exchanges getting a lot of the action.

Let me talk about bitcoin exchanges, you've got a business that sits at the perfect crossroads between both sides. They've got people coming to them with $100 saying "I want bitcoin" and they sell you part of a bitcoin (whatever the exchange is at that part of the hour), but not $100 worth, they sell $85 of a bitcoin to you for $100 and you'll take it, cuz you're gonna make so much money off your $85 of bitcoin. Then they turn around to one of the earlier adopters of bitcoin, who has $10,000,000 of bitcoin who wants to cash out and buy a mansion and lamborghini. The exchanges are like "woah woah woah, thats huge! We can't cash you out for that, how about for $6,500,000 all at once," and they're like "yes, I'll take it, now I have $6.5 million in actual usable money." So they keep taking bitcoin from the whales at a huge discount, giving them some of the common folk's money, then turning around and pocketing the difference that they can in turn reinvest by taking out ads on the internet, or putting up intrinsically useless bitcoin atms at random locations to bring common people into the fold. That's not to say that banks and financial institutions don't make money off fees in everyday transactions, but they pale in comparison to the fees these bitcoin exchanges make and how they can demand huge premiums from both sides of the equation.

It's a mess and everyone should stay away from it all. Problem is most boom and busts like this are constrained to a region or country. This one is worldwide, and there's no indication this hype run is going to slow down any time soon. This whole run could end and everyone could just sit on their coins in the market with no one cashing out and it wouldn't crash, and another boom run could kick in at a later date. It's fairly scary because as the amount being put into it grows, the larger real world impact a bitcoin crash will have.