The Bitcoin Beat Tuesday, April 9, 2013

Apr 9, 2013 | djf

[djf]

BTC High $240.11 Low $189.60 Current $231.60
LTC High $5.00 Low $4.18 Current $4.85

[djf]

This is a first thread of sorts. I will try to have a new thread daily. Since I am generally awake and attached around midnight, I will try to summarize the days activity about that time.

I am busy bookmarking sites and setting up conversion scripts, etc, and plan to add the other (relevant) virtual currencies to the list.

[Jet Jaguar]

Bump

[Mount Athos]

A daily update of an obscure currency’s value is only interesting to the tiniest percentage of freepers who can readily find it elsewhere.

How about only posting stories where some surprising change makes it particularly relevant to conservatives.

[Former MSM Viewer]

Bitcoin may be the “surprising change...particularly relevant to conservatives” that you speak of..,,

It’s early in the evolution, but keep an eye on this.

[Mount Athos]

I own a tiny bit of bitcoins, I just feel a daily trade posting is noise here.

[Vermont Lt]

Can we have a tulip update as well?
At least many of the dot cons are still around.c maybe we can recall stories about thing like when Qualcomm went up $40 overnight. Boy those were the days.....

[Former MSM Viewer]

Maybe so, but it does warrant our watching.

[djf]

Current:

BTC High $249.00 Low $193.81 Last $249.00
LYC High $5.00 Low $4.18 Last $4.81


For those who don't know what Bitcoin is, let me explain. But before that, to those snarks who will say "You missed the boat!" (even though it's DOUBLED since then!!) I will say this, I have talked to two people in the last three days who have substantial investments (one greater than a Mill) who both said "What?" when I mentioned Bitcoin.

Bitcoin is virtual "computer money". It gets created at a fixed rate (well, somewhat fixed.) The current number of Bitcoins out there are about 11,000,000.
When all bitcoins are created, there will be about 21,000,000. This is due to happen about the year 2140.

So what is special about Bitcoins?
Bitcoins are worth zero. Maybe, bitcoins are worth a billion dollars. It's up to the people who buy/sell/trade bitcoins how much they are worth. So in a sense, it is a true free market economy. It cannot be artificially inflated/deflated by the amount of Bitcoins in circulation, or any such thing as an "interest rate" that attaches to the Bitcoin.

Who says how many Bitcoins you have?
Nobody.
Bitcoins are contained in a "Wallet", a computer file that lives on your computer. Nobody else has access to that info unless you give them a copy of your "wallet" file. The security amounts to multi-level hashing security, and it would take literally millions of years of supercomputer time to un-encode your wallet.
So how do transactions happen?
A simple client interface you can run on your home PC allows you to buy/sell/trade Bitcoins. A growing number of vendors accept Bitcoins as payment for merchandise. When you start the Bitcoin interface on your machine, it verifies the contents of your wallet, and synchronises your local copy of the Bitcoin Database with the database out on the net. Any Bitcoin transaction you do is automatically pumped out to eight (if not more) other nodes of people who use bitcoin. ALL transactions are verified across the node pool, along with all the other encryption security benefits.

Can Bitcoin be hacked?
Yes.
Will it drastically affect the value of Bitcoins?
Maybe. But I tend to think not. The reason being the encryption. Even though it was announced over the weekend they had been hacked, it was a DDOS attack, and AFAIK, no accounts were pilfered. Bitcoin is unlike any other centralized, brokered account in history. You Bitcoins EXIST IN YOUR WALLET, NOT on some database at a bank or money market firm, etc. There exists no centralized place, no focus, that has a database that says you have X bitcoins.

Can I lose money with Bitcoins?
Many will. Many people right now are saying Bitcoin is in a massive bubble. But they are worth what PEOPLE decide they are worth, not what the governments and banks try to decide. So in a sense, it is truly free market, because as long as no one can hack and decode the Bitcoin transactions and database chain, there is no way to steal or counterfeit Bitcoins.

Are you saying there are no problems with Bitcoins?
No.
The database for Bitcoins is large, and growing every day. Currently, at around 7 Gigabytes, you need to have it downloaded before you can start. After you have downloaded it, the Bitcoin program will run, but if you shut off your machine for a while, you will have to download the additional blocks of data.
Earlier today I turn off one of my machines running Bitcoin for about 6 hours, and when I restarted it, it took about an hour for it to get synchronized again.
For desktop type users, the download times can be a pain.
For mobile users, the size of the DB is going to be daunting.
So it is easy to see that Bitcoin might lose value if a more efficient and even more secure way of handling the DB is developed.
If you think even a tiny bit you might like to invest in Bitcoin, you need to be prepared to follow the developments closely.

[PGalt]

Thanks for posting. Very interesting. I’ve been following this “bitcoin” discussion at zerohedge. I have no bitcoins.

[Moltke]

So WTH is LTC and LYC? BTC is obvious enough, but you’d think it wouldn’t be too hard to provide some explanations to the casual reader for the rest...

[djf]

LTC is another “virtual” currency called Litecoins. It is similar to Bitcoins, and uses much the same code. But the number of Litecoins that will eventually be created is capped at 84,000,000. And because of that, Litecoins come into existence four times faster than Bitcoins. (one every 2 1/2 minutes instead of one every 10 mimutes).

Chill, dude.
Get rich, not rude!

[PGalt]

It just so happens...today on zh...

Guest Post: Bitcoin: Money Of The Future Or Old-Fashioned Bubble?

http://www.zerohedge.com/news/2013-04-09/guest-post-bitcoin-money-future-or-old-fashioned-bubble

[djf]

U can’t eat Bitcoins!
Can’t eat gold either!

But then you can’t spend dandelions...
the reason I say that is most people do not know dandelions are perfectly edible and originally were imported to America as a food crop...

[Moltke]

Thanks.

[djf]

It’s all good.

LYC was a typo, sposed to be LTC.

There are right now about six or seven other virtual currencies competing.

And when I say “competing”, I mean exactly that.
Expect one of them to be the “money” of the future.
Not under government control. Not based on banks or interest rates or war or peace.

The technical details might be what says one wins out.

[kenmcg]

Probably a stupid question but how do yo cash them in?

[djf]

There are online Bitcoin exchanges that will buy them back.

You can always simply use them to buy merchandise you need.

Personally, I think it is just a matter of time before the banks realize they are losing possible profits if they do not deal in Bitcoins, so they will start buying/selling them.

There are actually a few countries/places that are talking about, if not completed, creating/using what amounts to Bitcoin ATM’s.

[thackney]

most people do not know dandelions are perfectly edible and originally were imported to America as a food crop

One of the farmers I worked for as a youngster made a fine dandelion wine.

[djf]

Dandelions are part of the Aster something family that includes sunflowers.

Close to the ground plants with yellow flowers, many of the family are considered weeds, the nickname is DYC for Damned Yellow Composites.

Some have flowers not yellow. I think chicory is in the group, and regular stinging thistle with the purple flower atop is also.

And the one we eat the most, the Lattucia group, common lettuce.

All have a milky white sap. I read that it contains latex and that during WWII the gov was thinking about growing lettuce to use the latex to make rubber, but I’m not sure how accurate that is...

There are about 5 wild lettuces that grow here near me in the Pacific Northwest. But just like regular lettuce, if you don’t get them in the early, early spring, before they have bolted and ready to go to seed, they get tough and bitter and not very good to eat.

[thackney]

Bitcoin Suffers A Correction Amid Apparent DDOS Attacks On Some Exchanges
http://techcrunch.com/2013/04/10/bitcoin-crash/

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.