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(Ars Technica)   A study finds that 45% of Bitcoin exchanges end up failing, taking their users' money with them. But, hey, at least Bitcoin isn't fiat currency, amirite?   (arstechnica.com) divider line 62
    More: Fail, Wired UK, bitcoins, empirical  
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3068 clicks; posted to Geek » on 27 Apr 2013 at 1:40 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-27 12:14:29 PM
images3.wikia.nocookie.net

Sees no problem here.
 
2013-04-27 01:44:03 PM
"But, hey, at least Bitcoin isn't fiat currency, amirite?"

WAT
 
vpb [TotalFark]
2013-04-27 01:48:28 PM

Kuroshin: "But, hey, at least Bitcoin isn't fiat currency, amirite?"

WAT


You know, made out of old Italian cars.
 
2013-04-27 01:50:50 PM
Can't wait to see how all my libertardian friends who invested in bitcoins find a way to blame this on the gub'ment...
 
2013-04-27 01:51:41 PM
I seriously doubt it's that high or we would have heard of it by now.
 
2013-04-27 01:59:35 PM
upload.wikimedia.org

/Buy me!
//I always go up, look at my trend!
 
2013-04-27 02:01:00 PM
Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.
 
2013-04-27 02:02:40 PM
Wouldn't the exchange have to fail mid-transaction for you to lose your money? If your wealth is stored in BTC, won't it just be sitting in your wallet.dat? It's not like a bank where you have to have them hold your money in an account.

Which does bring up a problem for Bitcoin. Can you do fractional lending with it? If you can't, that limits your ability to create a real banking system that can generate wealth.
 
2013-04-27 02:03:30 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


I don't think the majority of BitCoin users are investing in it as an alternative to the dollar.
 
2013-04-27 02:04:06 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


I thought it was just proof that people will do anything to get drugs and kiddie porn.
 
2013-04-27 02:04:17 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become are stupid.

 
2013-04-27 02:09:43 PM
I think bitcoin is a safe investment so long as you don't panic sell and the government doesn't crack down on it. Online drug sales are big business and bitcoin is the currency of choice to facilitate it.

Wild swings happen but the trend on BTC has been stratosphere, major crash, a period of relative stability, stratosphere, repeat.

Within 2 years I wouldn't be surprised if it peaks at $1000 before crashing back to $500.
 
2013-04-27 02:13:56 PM

Mad_Radhu: Wouldn't the exchange have to fail mid-transaction for you to lose your money? If your wealth is stored in BTC, won't it just be sitting in your wallet.dat? It's not like a bank where you have to have them hold your money in an account.

Which does bring up a problem for Bitcoin. Can you do fractional lending with it? If you can't, that limits your ability to create a real banking system that can generate wealth.


The problem is people need to withdraw their BTC from the exchange once they purchase it. If they fail to do that, or the exchange fails to allow it, they keep the BTC and the USD/EUR/whatever.
You could probably make a bank sort of thing with it, and bypass all the sending fees by only changing numbers in tables of who has what, but those points of failure are for another discussion.
From a technical standpoint, Bitcoin is fascinating to read about. From a usability and other standpoints, it's a nightmare.
 
2013-04-27 02:16:10 PM

FireNexus: I think bitcoin is a safe investment so long as you don't panic sell and the government doesn't crack down on it. Online drug sales are big business and bitcoin is the currency of choice to facilitate it.

Wild swings happen but the trend on BTC has been stratosphere, major crash, a period of relative stability, stratosphere, repeat.

Within 2 years I wouldn't be surprised if it peaks at $1000 before crashing back to $500.


There seems to be a lot of volatility, so I set up an account at Mt Gox to throw a few hundred at to see what it does. I wouldn't put my life savings in, but it would be good to throw some beer money at it.
 
2013-04-27 03:19:26 PM
alphavilleherald.com
/hot
 
2013-04-27 03:19:34 PM

NeoCortex42: Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.

I don't think the majority of BitCoin users are investing in it as an alternative to the dollar.


I think they do. At least on some of the websites I've seen that seems to be part of the purpose by most. But I say "seems" because I'm not sure what the hell they think they are doing with it. Frankly, I don't think they do, either.
 
2013-04-27 03:21:41 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.



Far more people invested in Beanie Babies than are currently in Bitcoins. It's not a sign people understand how the US currency works and are making an informed decision, it's a sign of idiots investing in an unproven commodity, but treating it like a sure investment.
 
2013-04-27 03:21:56 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


So let's replace with a currency that's even more unstable!
 
2013-04-27 03:31:46 PM
Libertarians get a chance to relearn the lessons of Wildcat Banking
 
2013-04-27 03:32:19 PM
If I understand correctly, bitcoins have taken off because they're scarce, easy to verify, and hard to counterfeit--not unlike a precious metal, except made possible by algorithm instead of nature. And they have the advantage over gold in that they're very conducive to online transactions.

But what's to stop "clone" algorithms from popping up, thereby undermining the scarcity? No, they wouldn't be exactly bitcoins, but for all purposes they'd perform the same function. At least with silver vs. gold, the two metals have different chemical properties, but nobody cares about Style A of long unique bit string vs. Style B. Am I overlooking something here?
 
2013-04-27 03:49:27 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


So some internet currency used by a fringe minority of internet users backed by nothing controlled by no one is now experimentally equivalent to the legal tender of a nation state with the highest GDP in the world. ...  That's the dumbest shiat I've ever read.

Almost forgot:RON PAUL
 
2013-04-27 03:51:18 PM
News Flash for investment-for-the-fall-of-the-economy morons:

When the economy collapses, it won't matter if you have gold, silver, platinum, or bitcoins. The moment money completely fails and government collapses, the only things of actual value will be skills, talents, food, water, clothing, and various means of protection. Who is going to want to trade food for gold? You can't eat gold. You can't drink gold. You can't do ANYTHING with it in a fallen civilization. It's just pretty metal with some handy non-corrosive qualities.

When I'm at relatives' homes and they have Fox News on, the ads are all about investing in gold or silver. Buying gold, filling a safe with gold, and awaiting the collapse of civilization? Seriously?

How about instead of investing in gold, you take that money and buy yourself some classes in how to sew your own clothes or preserve food? Because if civilization and the economy collapse, it won't be long before you'll be looking to trade for clothing or food that won't spoil in a few days because there's no electricity and no Walmart anymore.

Having a safe full of gold is only useful in a world where the economy IS working. If the economy fails completely, gold and all other "precious" metals will only be worth anything to people who need them for projects that require them as components.

Gold is only valuable because people assign value to it. After civilization collapses you'll find that a can of sardines is probably worth more than ten times its weight in gold.

And all this can be said about Bitcoins, too. It's just an "investment game" to keep people busy, but in the real world they have ZERO value- Even less than gold or other precious metals and gems. You can't build anything out of Bitcoins.
 
2013-04-27 04:13:45 PM

ZeroCorpse: News Flash for investment-for-the-fall-of-the-economy morons:

When the economy collapses, it won't matter if you have gold, silver, platinum, or bitcoins. The moment money completely fails and government collapses, the only things of actual value will be skills, talents, food, water, clothing, and various means of protection. Who is going to want to trade food for gold? You can't eat gold. You can't drink gold. You can't do ANYTHING with it in a fallen civilization. It's just pretty metal with some handy non-corrosive qualities.


^
The only value gold has to anyone is feudal lords and tribal chiefs to display their status. But libertarians/anarcho-capitalists love everything about feudalism/tribalism, so I can't say they're being intellectually dishonest.
 
2013-04-27 04:17:22 PM
Isn't BitCoin just a web 2.0 version of flooz?
 
2013-04-27 04:20:50 PM

Kuroshin: "But, hey, at least Bitcoin isn't fiat currency, amirite?"

WAT

ask this guy

4.bp.blogspot.com
 
2013-04-27 04:35:58 PM

Ray_Peranus: Can't wait to see how all my libertardian friends who invested in bitcoins find a way to blame this on the gub'ment...


Wow, only four comments until someone made it political.
 
2013-04-27 04:52:39 PM

Pete_T_Mann: NeoCortex42: Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.

I don't think the majority of BitCoin users are investing in it as an alternative to the dollar.

I think they do. At least on some of the websites I've seen that seems to be part of the purpose by most. But I say "seems" because I'm not sure what the hell they think they are doing with it. Frankly, I don't think they do, either.


FWIW, I read that only 25-33% of Bitcoins are being used in transactions for goods and services, the rest held by speculators.
 
2013-04-27 04:54:06 PM
Those Winklevi have lots of bit coins.
 
2013-04-27 05:00:58 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become P.T. Barnum was right.



FTFY.
 
2013-04-27 05:02:38 PM
All I know is, because of the Bitcoin bubble that little bit of coin I had left over in my Silk Road account bought me some sweet, sweet hash.
 
2013-04-27 05:09:01 PM

I Like Bread: ZeroCorpse: News Flash for investment-for-the-fall-of-the-economy morons:

When the economy collapses, it won't matter if you have gold, silver, platinum, or bitcoins. The moment money completely fails and government collapses, the only things of actual value will be skills, talents, food, water, clothing, and various means of protection. Who is going to want to trade food for gold? You can't eat gold. You can't drink gold. You can't do ANYTHING with it in a fallen civilization. It's just pretty metal with some handy non-corrosive qualities.

^
The only value gold has to anyone is feudal lords and tribal chiefs to display their status. But libertarians/anarcho-capitalists love everything about feudalism/tribalism, so I can't say they're being intellectually dishonest.


Gold is actually pretty damn useful in electronics.
 
2013-04-27 05:18:11 PM

Ed Willy: Libertarians get a chance to relearn the lessons of Wildcat Banking


And the rest of us get to laugh at them even more.
 
2013-04-27 05:19:09 PM
img401.imageshack.us

This sort of thing is why I'm hedging my bets: half my money is in Flooz, and half is in Beenz.
 
2013-04-27 05:47:25 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


I suppose going from ten to thirty to fifty people is a "growing number".
 
2013-04-27 06:10:39 PM

NeoCortex42: Gold is actually pretty damn useful in electronics.


If you're in Asia where you've got a chance of having access to an electronics factory after the apocalypse it will serve you well. For the rest of us it's just for dental work and convincing libertarian prostitutes to sleep with us in Bartertown.
 
2013-04-27 06:18:22 PM
I much prefer my currencies to be easily bugged and mysteriously managed by unknown individuals in unknown counties as opposed to being universally accepted and managed by economic professionals in the public eye who are appointed by elected officials.
 
2013-04-27 06:25:33 PM

Yankees Team Gynecologist: But what's to stop "clone" algorithms from popping up, thereby undermining the scarcity? No, they wouldn't be exactly bitcoins, but for all purposes they'd perform the same function. At least with silver vs. gold, the two metals have different chemical properties, but nobody cares about Style A of long unique bit string vs. Style B. Am I overlooking something here?


Assuming you mean a way to find another algorithm which does the same thing more efficiently, I don't think that is likely. I would imagine the bitcoin developers were smart enough to use a NP-complex algorithm, in which case a solution to it would mean solving the bitcoin mining problem would be the least of the world's problems.

If you mean another kind of bitcoin with a different algorithm, I doubt that would take off due to the fact one already exists.
 
2013-04-27 06:43:16 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.


Yeah, not so much. The fact that anyone is using it at all is only proof that people will resort to any kind of shady work-around to buy drugs anonymously.
 
2013-04-27 06:53:52 PM

Foxxinnia: I much prefer my currencies to be easily bugged and mysteriously managed by unknown individuals in unknown counties as opposed to being universally accepted and managed by economic professionals in the public eye who are appointed by elected officials.


This still doesn't rule out Bitcoins.
 
2013-04-27 06:57:36 PM

machoprogrammer: If you mean another kind of bitcoin with a different algorithm, I doubt that would take off due to the fact one already exists.


There are issues with this one, however. First off, the total number of bitcoins is capped- not simply throttled, but absolutely capped.  And they're throttled, in such a way that each mining makes future mining harder. And the validity of a bitcoin is proven by the entire chain of ownership the bitcoin has ever had.

Everything about that is built to make exchanging bitcoins less worthwhile than hoarding them.

There will be a meaningful digital currency algorithm in the future, but this one isn't it.
 
2013-04-27 07:00:08 PM

platedlizard: [alphavilleherald.com image 850x627]
/hot


Ahahaahah I've been following the bitcoin thread on SA and it's endless entertainment. It's like a group of people who are all trying to scam each other.

This is one of the best things http://listentobuttcoin.com/ . There's even a Cosby mode. Also I find it farked up that the only things bitcoin is good for is buying drugs,childporn,guns or laundering money. What a great currency that is sure to replace USD.
 
2013-04-27 07:35:19 PM

Animatronik: Bitcoin is flawed, but the fact that anyone is using it at all is proof that a growing number of people realize how unstable U.S. currency could become.



No, it is proof that a lot of people are gullible.
 
2013-04-27 08:19:18 PM

Dragonflew: Ray_Peranus: Can't wait to see how all my libertardian friends who invested in bitcoins find a way to blame this on the gub'ment...

Wow, only four comments until someone made it political.


Bitcoin discussions are inherently political, because without the libertarians  bitcoin would still only be used for its intended use:  a proof-of-concept exercise for a research paper, traded by computer guys for a laugh. The creator was very active in the maintenance of the protocol until the anti-government hyperinflation crazies seized upon it, then (s)he severed all ties.

It was never intended for actual large scale commerce use and is not going to take over the world, as evidenced by the the hard-coded limit of ~5000 transactions per block (~10 minutes), the fact that a single moderately-successful business is bringing the protocol to its knees and fracturing the community, and the fact that any user currently has to download 2 GB of data to start using the protocol, and that number grows by ~36 MB every day.

There are proposed ideas for changing some of those, but those can't be done without getting a majority of libertarian speculators to each agree that the change would be in their own personal interest.  (Not happening).   Bitcoiners are repeating all the economic mistakes the world has known over the past few centuries to relearn lessons that the economists already know. It's like living history in fast forward.
 
2013-04-27 08:33:38 PM

lewismarktwo: I seriously doubt it's that high or we would have heard of it by now.


Stupid article. By exchanges they mean 45% of website/companies that are setup as "bitcoins exchanges" end up going out of business, often taking some of their users money/bitcoins in the process.
 
2013-04-27 08:34:00 PM

Yankees Team Gynecologist: At least with silver vs. gold, the two metals have different chemical properties, but nobody cares about Style A of long unique bit string vs. Style B. Am I overlooking something here?


No, you have correctly identified one of Bitcoin's major flaws. For example there's Litecoin which is the same thing but different. Sort of. Nobody's really sure.
 
2013-04-27 08:42:14 PM
There really is nothing more hilarious than listening to a bitcoin proponent espousing the finer details of the worlds next great currency

It's like listening to someone go on and on about the healing powers of mercury.
 
2013-04-27 08:43:39 PM

Yankees Team Gynecologist: But what's to stop "clone" algorithms from popping up, thereby undermining the scarcity? No, they wouldn't be exactly bitcoins, but for all purposes they'd perform the same function. At least with silver vs. gold, the two metals have different chemical properties, but nobody cares about Style A of long unique bit string vs. Style B. Am I overlooking something here?


If you mean, what's to stop people from faking (or almost faking) Bitcoins, the math is actually really tight. At least, plenty of math and crypto types who DON'T own Bitcoins have said so. The problem has always been the infrastructure, or lack thereof.

If you mean, what's to stop people from inventing "ByteDollars," nothing. And if they build in some souped-up math, or some system of verification that works better than P2P, or whatever, then nothing's stopping everyone from deciding their Bitcoins are crap and selling them off like they were stale Beenz. Since there are a finite number of possible Bitcoins, they probably would have to be replaced way down the line regardless.

Personally, I think Bitcoins are interesting but not quite Financial Electro-Jesus, and if you want to speculate, there are more interesting things to do it with. (Hell, at least the people who lost zillions of guilders in the tulip bubble got some cool flowers.) Wake me when Amazon.com, Visa, and the Federal Reserve are using them.
 
2013-04-27 10:29:37 PM

FireNexus: I think bitcoin is a safe investment so long as you don't panic sell and the government doesn't crack down on it. Online drug sales are big business and bitcoin is the currency of choice to facilitate it.

Wild swings happen but the trend on BTC has been stratosphere, major crash, a period of relative stability, stratosphere, repeat.

Within 2 years I wouldn't be surprised if it peaks at $1000 before crashing back to $500.


It's a currency that is easily manipulatable through rogue generation and market flooding. The flood defenses (like lowering the value of new blocks on the block chain) are just as bad to the valuation. Economic warfare on bitcoin is completely anonymous and distributed. There is nothing safe here.
 
2013-04-27 10:38:26 PM
45% of bitcoin exchanges fail.

Exchanges are the companies who exchange bitcoins for cash.

95% of all new businesses fail.

Sounds to me like the industry is doing well, no?
 
2013-04-27 10:44:24 PM

machoprogrammer: If you mean another kind of bitcoin with a different algorithm, I doubt that would take off due to the fact one already exists.


That is exactly what I meant--some other system with a name like "ByteBills" that does not claim to have anything to do with the bitcoin chain, but is equally effective in coming up with long unique numbers that are verifiable, counterfeit-resistant, and conducive to online transactions.

Why does the fact that one already exists prevent a clone from being developed?  I would think the scarcity of bitcoins would give incentive to start a new system.  Isn't the bitcoin methodology fairly well-known?
 
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