Hackers Strip Flexcoin Almost Bare, Bitcoin Bank Closes

[DjinnFor]

Unrelated to the robbery itself (thought it's still sad that people got robbed), but I have a question; how can a single Bitcoin be worth $691?

Value of a currency on exchange is roughly equivalent to the size & value of the market of goods and services you can buy with it, over the amount of said currency in circulation, in comparison to the other currency.

Bitcoin has a relatively small market by U.S. standards but an extremely limited number of currency to go around. The U.S. has a large market but a MASSIVE amount of currency going around compared to bitcoin.

As people have more money, they're willing and able to pay more for the same things. On the net, and all else being equal (no productivity increases, for example) people will have more money if said money is inserted into circulation. Since the size of the US monetary supply is so large relative to the size of the market that accepts USD for goods and services, the value of any one unit of it is small.

Conversely, for all those who buy and sell in bitcoin, one bitcoin is a significant chunk of that market.

Think of Bitcoin less as a currency, and more as a commodity, like stocks, or gold. Currency values relative to other currencies are relatively stable, unless one of the issuing governments gets into serious economic trouble elects to print excessive amounts of currency to pay its bills.

Commodities are worth whatever people are willing to pay for them. Bitcoin is effectively an extremely volatile commodity, with major price swings over very short periods. A lot of the price ups and downs are actually driven by that aspect of it: there are many people who see it in the news, and view it as a way to make money quickly, much like similarly volatile stocks. And much like their counterparts in the stock market, a lot of those people are getting burned.

No, bitcoin is a currency. It's not comparable to a commodity by any stretch of the imagination. The value of a commodity is intensely intertwined with its supply, not just its demand. Bitcoins supply is not volatile at all, ergo Bitcoin is not a commodity. This is why commodities based on agriculture shoot up in price during droughts, and why oil shoots up in price after oil spills.

Bitcoin isn't stable because the size of the bitcoin market is expanding rapidly every day. Currencies issued by governments, conversely, don't see such rapid changes in the size of the markets where it is used. If everyone in the world started using USD to make daily purchases, the price of USD would shoot up far faster than bitcoin. This would not make it a commodity.

 

[Raesvelg]

No, bitcoin is a currency. It's not comparable to a commodity by any stretch of the imagination. The value of a commodity is intensely intertwined with its supply, not just its demand. Bitcoins supply is not volatile at all, ergo Bitcoin is not a commodity. This is why commodities based on agriculture shoot up in price during droughts, and why oil shoots up in price after oil spills.

Gold isn't exactly subject to a volatile supply either, yet fluctuates in value fairly drastically depending on market conditions. Metals in general tend to have fairly steady production, yet fluctuate depending on demand, and in the case of gold can fluctuate almost as wildly as Bitcoin.

Regardless.

The phrase was "think of it like a commodity", not "Bitcoin is a commodity". Its value fluctuates in a similar fashion, in no small part because of speculators treating it like a commodity.

 

[DeaDRabbiT]

IN COMES THE GOVERNMENT!!!!

Hey internet people, you like your Bitcoin! So do we! But to stop the hackers we need to pass these draconian regulations which used to be called SOPA and PIPA under different names to do it!

Get behind us!

 

[Saulkar]

I have heard many sides of the argument over bitcoin and while I am not on-board with it I hope that it actually gets somewhere however I sure as shit wish they would get their shit together and fix security holes like this.

 

[NuclearKangaroo]

It's a damn shame, but let's face it: with a digital currency just getting it's first bank, there are gonna be bank robbers, especially since there's a lot less risk in an attempt to rob a digital bank then a physical one since you don't have to actually BE at the bank

that is until the FBI knocks at your door


while im not convinced of this whole bitcoin idea, i say people shouldnt fret that much over this, is the begining of a new kind of tecnology or rather concept, flaws and exploits are to be expected and theres plenty of reasons to believe things will get better, instead of worse

True, it's new but there are plenty of things that wee new and eventually found to be not worth pursuing. Remember Zipdrives? Superdisks? Those were new once...but those ideas failed. They were beaten by better ideas.

Bitcoins are pretty much the same really.

im not sure, as you said those were ideas that were beaten by better ones, what would be the competition for bitcoins? regular currency? i think bitcoin tries to be something different

 

[Strazdas]

that is until the FBI knocks at your door

the problem is, as Japanese officials ahve clearly demosntrated lately, is that government does not want to do that to begin with. It basically is removal of their concurent and they can always throw around lack of regulation accepted as an excluse. there is no incentive for FBI to get involved. actually, there is incentive for FBI to not get invoved, as bitcoin demise helps stnregten Dollar and other similar currencies.

While it sucks that people have lost money it is not a bad thing in one way if it puts the nail in the coffin of this whole digital currency nonsense. Heck people might be able to buy AMD GPUs at reasonable prices again then.

you mean, at prices that almost made AMD go bankrupt? Unlikely.

The value of the dollar is protected by the trust you can place in the US Mint and by extension the USA as a nation.

The value of the dollar is protected by the trust

The value of the dollar is trust

Hence, fake. Trust is not inherently valuable. Trust is "i think i can trade it in". In that senes, it is exactly the same as bitcoin.

As a novice programmer, I find it terrifying that these people's bugs are costing them hundreds of thousands of dollars. When I write buggy code, I usually just get a good laugh out of it.

well, bad code had actually earned money for paypal. they wrote a buggy code and somone abused it. so they sued these people and instead got not only compensation but these people have to cover the costs of upgrading paypals security. they "forced paypal to investn in security" and thus have to pay paypal for our security. buggy code is a business model!

currencies should be backed by tangable wealth, or hell barter systems. all way better currencies than these invent value shell games, not just these crypto currencies but of these global government currencies.

too bad none of them are then?

Digital money, always a risky business. I know if I were ever to run a business, I wouldn't do it with a currency that could be hacked away overnight while I was sleeping or something.

Kinda saw this one coming eventually.

what woudl you use then? small diamonds?

Surprise! This is why banks are regulated: to prevent you from losing all of your money.

You take away those regulations, you take away the safeguards.

Banks are regulated to prevent bank robbers? can you show any evidence of this?

This just reinforces my theory that bitcoins are a massive scam developed by some ex-EVE Online players who were bored with scamming/stealing money that could only be used to by internet spaceships and spaceship accessories.

only as much as Bonnie and Clyde proves that american banking system is a scam.

Unrelated to the robbery itself (thought it's still sad that people got robbed), but I have a question; how can a single Bitcoin be worth $691?

because somone is willing to pay that many dollars for a single bitcoin?

 

[FalloutJack]

This was always going to happen.

*Currently using a hammer and chisel on a marble slab*

The question of whether or not the Bitcoin holds up under weight has been answered. Of course, naturally, people will debate it like Disco coming back, Elvis Presley being alive, and most government conspiracies (which were obviously done by the NHK). But the truth is that the things in life that are to carry on and be a 'thing' don't collapse under their own weight so easily. Unfortunately, the whole thing was crooked, questionable, and very possibly as reliable at winning it big in Las Vegas. In short, you wouldn't exactly hold your breath on it.

People have argued with me (not many, mind you) on this account, but the events and evidences before me say it clearly: Bitcoin was pretty much the Beta-Max of the era. It was the wrong horse to back, the wrong bet to make, the investment with poor returns, and so on. The fact is that fell due to REAL internet piracy, actual maliciousness for which it had no safeguards, it seems. You just can't have that sort of thing. If even the stock market was that easy to tip over, we'd have alot of trouble on our hands, but at least that and banks are insured.

Well, it's done, an experiment with an unsound theory executed poorly and sunk faster than a concrete sailboat.

*Finishes his work*

[HEADING=1]RIP[/HEADING]​

[HEADING=3]BITCOINS[/HEADING]​

 

[DjinnFor]

Gold isn't exactly subject to a volatile supply either, yet fluctuates in value fairly drastically depending on market conditions.

Metals in general tend to have fairly steady production, yet fluctuate depending on demand, and in the case of gold can fluctuate almost as wildly as Bitcoin.

In the case of metals, you see supply shocks on other goods affecting their prices more than supply shocks on the metals themselves... but you do see changes in supply subtly affecting their prices over time. Not exactly volatile (I was being hyperbolic), but still closely related.

The phrase was "think of it like a commodity", not "Bitcoin is a commodity". Its value fluctuates in a similar fashion, in no small part because of speculators treating it like a commodity.

It's not that speculators treat it as a commodity. It's than favorable news about its features drives people towards it and unfavorable news about it's flaws drives people away from it. The only speculation going on is the potential size of the bitcoin market, which shrinks when major bitcoin organizations like MtGox collapse, and expands when federal reserve officials comment on it in a positive light.

But the truth is that the things in life that are to carry on and be a 'thing' don't collapse under their own weight so easily.

Are you being sarcastic? Bitcoin is still around. There's probably some joke I can make about writing a living man's eulogy and sending it to him via post card but I can't think of how it goes.

The fact is that fell due to REAL internet piracy, actual maliciousness for which it had no safeguards, it seems.

You're confusing bitcoin with the people who use it. This is natural. It's like confusing the telephone with a telephone company, or the internet with an internet service provider. Just because your internet service provider fucks up does not mean the internet is a scam.

It has plenty of safeguards. Your private key is your writ of ownership and password; whoever has the key owns the bitcoins. Protect it at all costs or else you will lose them. You can post your private key online if you'd like and watch the bitcoins attached to it disappear in seconds. You can also lock your private key written on a piece of paper in a padlocked safe. Just because some people who leave their housekeys under their doormat have their house broken into doesn't mean the concept of a deadbolt on your front door is bunk.

Well, it's done, an experiment with an unsound theory executed poorly and sunk faster than a concrete sailboat.

The theory has yet to be disproven and the network was implemented correctly. The people who use the network, conversely, are not infallable.

There have been exactly zero successful attacks on the bitcoin network. All attacks so far have targeted users who made mistakes whilst using the bitcoin network. Key theft is still the only way to steal bitcoins and this was shouted from the rooftops since the dawn of bitcoin.