Daily Archives: January 17, 2015

In any case, the experiment is new and most Bitcoin Whales got in early and cheap. The way you feel about a $177 Bitcoin has a lot to do with what you paid for it. If you bought in January 2011 you paid just $0.38. A year later you spent $15.11, and a year from that youd have been stung for $854.

So, whats causing this crash? Bitcoin exchanges are unregulated and market fluctuations can be as unusual as they are unexplainable. A cryptography nerd who mined coins as an experiment in 2010 could have found himself a millionaire many times over in 2013, holding so many coins that cashing-out moved markets.

Other manipulations occur which are more intentional and less benign.

Some suggest that the recent Bitstamp hack could be behind losses, which is probably true to some extent. But the exchange honoured all lost coins and has since re-opened for business, so it seems unlikely to be the only cause. Especially as the price was already sliding before it happened.

The crux of the issue, the important point which should be made, is this: Bitcoin the currency may be dying, but it doesnt matter because Bitcoin the technology is thriving.

The currency is just one application of the Blockchain which powers it. It has served a purpose, in that it has established the infrastructure on which a flotilla of new services will launch in coming months.

Essentially, Bitcoin runs without any central authority. Instead there is a Blockchain, a digital ledger of all transactions. Each and every payment made in Bitcoin is encoded into this Blockchain by miners by performing some mathematical and cryptographic heavy-lifting.

These miners could be an individual on a laptop or a warehouse full of dedicated machines in China. But they power Bitcoin and are rewarded for their efforts with new coins that are periodically created.

Benefits of that become clear when you imagine a social network free of shareholders, advertising or privacy intrusion, or a voting system that's mathematically impossible to manipulate. Or perhaps a whole new internet outside the reach of governments who want to censor, filter or delete information?

All of that is being worked on, right now. Hundreds of millions of dollars in venture capital investment has been poured into Bitcoin startups like these in recent years, and they are only now beginning to bear fruit.

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Bitcoin might be dead. It doesn't matter. - Telegraph

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The Swiss Franc might be the currency getting all the attention, but the real blood bath is in Bitcoin.

Remember how Bitcoin was supposed to change everything? And the dollar was dead? Boy, was that ever wrong. The value of Bitcoin is in absolute freefall as the U.S. dollar strengthens and looks even more promising given the Feds stance on rates.

Talk about a bust. Today you can buy a Bitcoin for $196.546, says currency tracker Oanda. Thats means the digital currency that was supposed to render the greenback obsolete has lost two-thirds of its value in just six months. Ouch.

Chart source: Oanda

Some are suggesting that the precipitous decline in the currency is probably its death knell. Remember Bitcoin, asked widely respected money-manager Jeffrey Gundlach at DoubleLine Capital during his annual forecast with investors this week. Its pretty much on its way to the ash heap of alternative currencies, he told investors.

Maybe someone is already working on Bitcoin 2.0?

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Bitcoin is headed to the ash heap | America's Markets