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Drug Site Silk Road Says It Will Survive Bitcoin's Volatility

Soulskill posted about a year and a half ago | from the currencies-propped-up-by-druggies dept.

The Internet 293

Sparrowvsrevolution writes "Bitcoin's recent spike and then collapse in value has convinced many that it's too unstable to use as a practical currency. But not the founder of Silk Road, the black market drug site that exclusively accepts Bitcoin in exchange for heroin, cocaine and practically every other drug imaginable. Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence to issue a short statement that Silk Road will survive Bitcoin's bubble and bust. The market's prices are generally pegged to the dollar, with prices in Bitcoin fluctuating to account for movements in the exchange rate. And Roberts explained that vendors on the site have the option to also hedge the Bitcoins that buyers place in escrow for their products, so that they can't lose money due to Bitcoin's volatility while the drugs are in the mail. As a result, only about 1,000 of the site's more than 11,000 product listings were taken down during the recent crash."

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Speculation (5, Insightful)

Errol backfiring (1280012) | about a year and a half ago | (#43493303)

Why blame the victim? The rise and fall in price (PLEASE, not "value". There's a difference, you know) is due to speculation, not to the currency itself. Dollars, euros and other fiat currency are just as vulnerable.

Re:Speculation (4, Insightful)

Greyfox (87712) | about a year and a half ago | (#43493321)

And Gold. Fox news was the agent of a massive pump-up in the price of gold over the last couple years, looks like that bubble is now bursting too.

Re:Speculation (4, Insightful)

Anonymous Coward | about a year and a half ago | (#43493493)

Any time I listen to Glenn Beck or Rush Limbaugh or Hannity, there are constant commercials for people selling gold. I think it speak a lot towards the type of people that listen to these jacknuts that the advertisers have identified them as a target demographic. Those talk show entertainers should have their asses sued for ruining the life savings of many, many gullible old people.

Re:Speculation (5, Insightful)

tehcyder (746570) | about a year and a half ago | (#43493815)

There is a direct correlation between having insane rightwing views and believing that a return to the Gold Standard will usher in a new kingdom of heaven on Earth.

Re:Speculation (2, Insightful)

Archangel Michael (180766) | about a year and a half ago | (#43494277)

And leftwingers think that Taxing and spending brings Utopia and wealth.

See how easy it is to paint with broad strokes?

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43493745)

Unless you are referring to the commercials on the network, or the viewpoints of Glen Beck, who was once a host on FNC and did the gold circlejerk that he did on CNN, you are quite off base.

Re:Speculation (1, Insightful)

kcmastrpc (2818817) | about a year and a half ago | (#43493813)

A fool and his money are soon parted... This isn't a grand conspiracy by Fox, Hannity, Beck, Limbaugh, etc. They're advertisers, and they are paid for the service.

Re:Speculation (1)

BitZtream (692029) | about a year and a half ago | (#43493839)

Except Gold has value regardless of its use as a currency.

Gold is rare and useful. It will never 'bust' as long as those two things are the case. BitCoin, for example, wouldn't exist without Gold because there would be no CPUs worth mentioning, and nothing fast enough to due the required calculations in any meaningful sense of the word.

Gold is used in many things. Drugs. Electronics. Industrial processes. Medical devices. Jewlery. (the list is tremendously long) and ... as a form of currency universally accepted around the world by governments for tax purposes. and theres a limited supply of it as it requires far too much energy input to make Gold, so thats not a viable option. It has intrinsic value. People like the way it looks if nothing else. If you did entirely away with the concept of money ... people would STILL WANT AND NEED GOLD.

BitCoin is used ... ... ... by a few people as currency between themselves. It has no intrinsic value. There is nothing there.

BitCoin is like the Matrix.

Remember ... there is no spoon.

Re:Speculation (4, Insightful)

O('_')O_Bush (1162487) | about a year and a half ago | (#43494065)

That is mostly bullshit. Gold has some intrinsic value, but the vast majority of gold's value is inflated by speculators and wealth storage (bullion, futures, jewelry). What you are claiming is not dissimilar to saying the greenback with never hyperinflate because of the intrinsic value of the paper it is printed on.

Looking at historical gold prices, I'd estimate that if gold was priced on intrinsic value alone, cost per oz would be less than a tenth of what it is.

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43494129)

Why do central banks have so much of it?

99% of most people too. don't let it bother you. (2)

Thud457 (234763) | about a year and a half ago | (#43494611)

99% of the world's gold is sitting in a vault not being used.
So in terms of utility, it is useless^Wworthless.

Re:Speculation (1)

jxander (2605655) | about a year and a half ago | (#43494431)

What you are claiming is not dissimilar to saying the greenback with never hyperinflate because of the intrinsic value of the paper it is printed on.

It's cloth, actually.

Currency isn't printed on paper, it's roughly 75% cotton, 25% linen. [treasury.gov]

Re:Speculation (1)

magic maverick (2615475) | about a year and a half ago | (#43494555)

Except for the currency printed on plastic [wikipedia.org] .

Re:Speculation (1)

alexander_686 (957440) | about a year and a half ago | (#43494213)

Gold is rare and useful.

Not really. IIRC about 5% goes towards industrial use (CPUs and such).

The rest goes towards bullion or jewelry. In the past decade most of the gold jewelry has been sold to India and China for things like gold chains – which is sold by weight – no premium given for artistry. Both of those countries have a under developed banking / investment system, so I would trim the percentage going towards jewelry. And most gold is sitting in vaults as bullion. If released it would crush the market – so it is an artificial restriction in terms of useful industrial use.

Like fiat currency the only reason why gold has much in the way of value is that everybody values it. (It’s harder to debase then fiat currency which is a plus.)

Re:Speculation (1)

Mike Frett (2811077) | about a year and a half ago | (#43494017)

You didn't hear it from me, but Gold is going to completely burst in the next few years it's "At that point". Just the other day we saw the first drop in years.

Re:Speculation (1)

bobbied (2522392) | about a year and a half ago | (#43494137)

And Gold. Fox news was the agent of a massive pump-up in the price of gold over the last couple years, looks like that bubble is now bursting too.

Pump and dump has been a common technique throughout history for those "in the know" to make money. Buy low, talk up what you own, unwary investors look at the price rise and jump on, you slowly sell at a profit. Don't be fooled, bitcoin is subject to the same manipulation as gold, silver, stocks and the like. Actually, Bitcoin is MORE subject to such because it is by definition unregulated.

Go ahead and trade in bitcoin if you want, just don't be fooling yourself into thinking it is somehow better than dollars, yen, euros or what ever. I would contend that bitcoin is actually MORE risky than just about any other national currency out there.

Re:Speculation (1)

Anon, Not Coward D (2797805) | about a year and a half ago | (#43493437)

please mod up... finally someone nails the concept of fiat money. Many people here think that dollars are backed by something (gold??)

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43493557)

Fiat currencies also undergo much volatility as they fail, then get rejected as a currency due to loss of faith in it.

Re:Speculation (3, Insightful)

h4rr4r (612664) | about a year and a half ago | (#43493763)

They are, the full faith and credit of the USA.
Bitcoins have the network backing them as their source of value.

One of these is easy to replicate the other is not.

Re:Speculation (2)

Archangel Michael (180766) | about a year and a half ago | (#43494287)

"They are, the full faith and credit of the USA."

Buahahahah

Re: Speculation (0)

Anonymous Coward | about a year and a half ago | (#43494565)

I have more faith in the USA than those advocating Bitcoin.

Re:Speculation (1)

h4rr4r (612664) | about a year and a half ago | (#43494599)

Please elaborate.
So far the USD seems plenty spendable and far more useful than bitcoins.

You laugh at that, but I laugh at folks who think bitcoin should be anymore valuable than litecoin or any other replacement.

Re:Speculation (2)

nine-times (778537) | about a year and a half ago | (#43493803)

Which only raises the question: What's the value of gold backed by?

Re:Speculation (3, Funny)

Nadaka (224565) | about a year and a half ago | (#43494343)

Its backed by the value of the sexual favors your wife/girlfriend/hooker will perform in exchange for jewelry.

Re:Speculation (2)

betterunixthanunix (980855) | about a year and a half ago | (#43494113)

Many people here think that dollars are backed by something

Dolllars are backed by something:

https://en.wikipedia.org/wiki/Legal_tender [wikipedia.org]

https://en.wikipedia.org/wiki/Tax_law [wikipedia.org]

Now that we are past that, can you tell us what Bitcoin is backed by?

Re:Speculation (1)

Anon, Not Coward D (2797805) | about a year and a half ago | (#43494415)

BTC are backed by the very same trust that allows exchange for goods using US Dollars.

Using BTC is indeed a way to extinguish some obligations (if i want to buy a good, the buyer is obligued to give it to you and you are obligated to pay the price) between parties that allows them. Also i fail to see how tax law is related to this, since the whole point of BTC is being unregulated currency so taxes play no role whatsoever on any transaction involving bitcoins.

While I do recognize that the trust behind us dollars is greater than in BTC, the issues they face are common. They are just different in magnitude.

Re:Speculation (1)

betterunixthanunix (980855) | about a year and a half ago | (#43494589)

i fail to see how tax law is related to this

The question was, "What backs USD?" For a currency to be "backed," there must be some guarantee about the currency's utility. That is what a tax law does: it guarantees that you can use a currency to meet a legal obligation (tax payment).

It's not like people woke up one day and said, "Pieces of paper with pictures of dead presidents are a great currency!" The fact that the government will only deal in dollars and the existence of legal tender laws is the reason dollars are the currency of the US. The overwhelming majority of businesses that "accept Bitcoin" are actually accepting USD payments via an exchange service like Bitpay; those businesses need USD, because of the law, and have no real use for Bitcoin.

Really, your view of currency -- that it is just a thing that magically appears in a market once people agree on it -- is very much out of date: https://en.wikipedia.org/wiki/Modern_monetary_theory [wikipedia.org]

Re:Speculation (1)

Nadaka (224565) | about a year and a half ago | (#43494321)

Gold is also a fiat currency.

You want a currency with actual value? go back to using a currency you can eat.

Re:Speculation (3, Insightful)

alexander_686 (957440) | about a year and a half ago | (#43493555)

No they are not.

“Dollars, euros and other fiat currencies” have central banks that can intervene and do try to manage the currency. When inflation / deflation spikes they can create / destroy currency, money, and near money. (Does this mean they can debase the currency, unlike BitCoin? Yes)

Gold, which I think is more like BitCoin, has the advantage of – for the lack of a better word – mass – that resists rapid changes. A wide user base, lots of the stuff gathering dust in vaults or grandma’s jewelry.

Both have deep forward and futures market they also lend long term stability. Maybe one day BitCoin will get there – but right now it is an interesting experiment in my opinion.

Re:Speculation (2)

BitZtream (692029) | about a year and a half ago | (#43493867)

Your commenting on a story about how bitcoin spiked and plummeted to worthlessness in the timespan of a day ... and your comment is about how stable BitCoin is?

What world do you live in where that makes sense?

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43493879)

worthlessness?

Re:Speculation (1)

Anonymous Coward | about a year and a half ago | (#43494181)

It went from about 15-30 dollars to 260, then crashed to about 50, and regained to 100.

It's significantly higher now than it was a month ago, and higher than the last peak (about 30 dollars).

I'm not particularly arguing about the stability (although 2012 was fairly flat on the graph), but it definitely didn't do this: "spiked and plummeted to worthlessness in the timespan of a day"

Re:Speculation (1)

rogueippacket (1977626) | about a year and a half ago | (#43493911)

The term you may be searching for is "confidence" - people will always buy, hold, and sell gold in many forms, and regardless of what the market does, perceive it to be a valuable possession and essential resource to many industries. Unlike BitCoin, however, gold has many, many practical uses as a raw material, and any work performed on it actually adds value - such as the creation of jewellery or use in an alloy. You can't add value to a BitCoin, and those who use it (such as Silk Road) clearly say it derives value directly from the stability of the U.S. Dollar.

Re:Speculation (1)

drinkypoo (153816) | about a year and a half ago | (#43494097)

âoeDollars, euros and other fiat currenciesâ have central banks that can intervene and do try to manage the currency.

Yes, but you're assuming their goal is stability. In reality, their goal is to cause more or less precisely timed instabilities from which certain parties can profit.

Re:Speculation (1)

Errol backfiring (1280012) | about a year and a half ago | (#43494597)

...have central banks that can intervene

Are you sure? Central banks only come after the fact, when regular banks have already poofed the money up. They can only play with some interest figures, which are not very influential. I am afraid you greatly over-estimate the power of a central bank.

Re:Speculation (5, Insightful)

sribe (304414) | about a year and a half ago | (#43493569)

Dollars, euros and other fiat currency are just as vulnerable.

Bullshit! Currencies backed by the economic activity of entire 1st-world nations are nowhere near as vulnerable.

Re:Speculation (3, Insightful)

petermgreen (876956) | about a year and a half ago | (#43493789)

Massive ammounts of contracts are written for pre-determined ammounts of dollars, euros, pounds etc. That makes the value of those currencies somewhat "sticky", yes it does change over time but usually fairly slowly. If it changes too rapidly governments will sometimes step in to halt the shift.(e.g. http://www.guardian.co.uk/business/2011/sep/06/switzerland-pegs-swiss-franc-euro [guardian.co.uk] )

Bitcoin has none of that, it just floats to whereever supply and demand take it. Speculators consistute some of that supply and demand but not all of it. Depending on their strategy they may either increase or decrease volatility

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43493827)

You have a poor grasp on the infrastructure, regulation and oversight that surrounds standard currencies. History itself is prove that bitcoins are less stable. In their short stay here on planet Earth they have shown far greater volatility than any standard currency. I'm not talking about one-off anecdotal stories - I'm talking about long term trends. No modern currency on Earth has shown the rapid, wild volatility that bitcoins have already shown.

Given that BTC also seem to be the currency-of-choice for things like SilkRoad (selling illegal drugs) I have serious doubts regarding the legitimacy of the infrastructure supporting BTC (given that it is pretty much entirely anonymous).

But go ahead and put your money into BTC - I have no problem laughing at you as the "currency" robs you blind...

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43493971)

When did the contrarian, tinfoil hat, Obama-hating morons all start referring to sovereign currencies as "fiat"? It seems like there was a wave where every douchebag spouting off ignorant opinions about macroeconomics and central bank policies all started calling it "fiat" within a week or two.

When was this distributed in the talking points? By whom?

Re:Speculation (0)

Anonymous Coward | about a year and a half ago | (#43494071)

It came from people from all around the world talking about trading bitcoin vs their local currencies. Fiat is just shorthand for any government currency in this context. Its more convenient for general conversation than stating the specific currency pair you are trading.

Re:Speculation (1)

bobbied (2522392) | about a year and a half ago | (#43494039)

Dollars, euros and other fiat currency are just as vulnerable.

Not exactly, dollars, Euros, Yen etc are not as vulnerable as bitcoin for a number of very important reasons. They certainly can be mismanaged to the point where they become worthless, but due to the world wide market and trade in say dollars it would take some time for any of the major currencies to go to totally worthless. Bitcoin could do that literally overnight.

Bitcoin also suffers from being backed by nothing more than the willingness of folks to trade for them. All real currencies in circulation have government backing, have been traded for hundreds of years (or in the case of Euros, based in currency that had long histories) and would have at least *some* scrap value (coins as scrap metal, paper for recycling or fuel). Bitcoin has none of this. Some say that the lack of government backing is a plus, Some say being "new and virtual" is a plus too. Don't be fooled, there are benefits to being "real" and government backed if you are a currency.

Trade in Bitcoin is subject to unregulated manipulation and is by definition much more risky than trading in other currency. If you are aware of the risks and still want to invest in bitcoin, knock yourself out. I would suggest that bitcoin traders think long and hard about how the great depression got started and how stock trading by "big money" fleeced the little guys because bitcoin trade has many of the same features. Don't repeat history.

Re:Speculation (1)

sarysa (1089739) | about a year and a half ago | (#43494463)

Why blame the victim? The rise and fall in price (PLEASE, not "value". There's a difference, you know) is due to speculation, not to the currency itself. Dollars, euros and other fiat currency are just as vulnerable.

Once again, the pro-bitcoin problem takes a massive problem and attempts to diminish it. The combination of unregulated markets and deflationary currency creates a huge problem with regards to human nature. If we were all robots and behaved how the currency wants us to, it wouldn't be a problem. But we're not. We will speculate. We will hoard. We will look at the currency late and go "fuck you, I'm not going to make the early adopters rich" which was one of the flaws of the original design. The problems with Bitcoins and its alternatives was in the design phase. I'll be the first to admit (as a certifiable hater) that it was brilliantly engineered, from a technical standpoint alone. It was poorly socially engineered.

sadly we might need some entity with a record on privacy (i.e. EFF) to regulate a currency similar to a fiat for some of the benefits of Bitcoin to be in a future viable currency, but sadly EFF is in love with Bitcoins. I guess part of the reason I'm a hater is because Bitcoins are holding back the alternative(s) we truly need.

Re:Speculation (1)

sarysa (1089739) | about a year and a half ago | (#43494525)

Damnit sladhdot, phone users like me need an edit function.

"...the pro-bitcoin crowd takes a massive problem..."

I like big black negro booty (-1)

Anonymous Coward | about a year and a half ago | (#43493311)

I like big black negro booty, i tap that fine ass like it's a beer keg.

Mods are racist (-1)

Anonymous Coward | about a year and a half ago | (#43493559)

N/T

Re:I like big black negro booty (0)

Anonymous Coward | about a year and a half ago | (#43494013)

Hey, Sirmixalot is on slashdot!

I sell actual things in Bitcoin (2, Interesting)

dada21 (163177) | about a year and a half ago | (#43493353)

I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. While it's only a tiny percentage of overall sales, it's still exciting to see a currency that can actually become a true bartering agent that is freed of non-market forces.

If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency. It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.

I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal [2abd.com] . It would be a great step in reducing volatility and decoupling BTC from the regulated markets.

Re:I sell actual things in Bitcoin (5, Insightful)

Wookie Monster (605020) | about a year and a half ago | (#43493477)

So, you like BTC being unregulated, but you want governments to make certain activities illegal. How is this not regulated?

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43493595)

Because if trading some currency for bitcoins is illegal, then they can't effectively regulate other bitcoin transactions.

If you're already committing one crime just to buy bitcoins and bitcoins aren't valid currency, then you aren't likely to worry about the various regulations that country has about financial transactions(reporting large transfers, moving them across borders, paying taxes, etc).

Re:I sell actual things in Bitcoin (2)

dada21 (163177) | about a year and a half ago | (#43493671)

Bingo. I may be aligned with the anarcho-capitalists, but I also have no issue with government regulating the people who want government.

I don't care for money stability, I just want a bartering medium that is freed from the pressures associated with money. Bitcoin is unlikely to fund government programs -- and if the day comes that a commodity currency becomes official, it will certainly restrict government to acting within their means.

I also appreciate that Bitcoin doesn't have the money multiplier effect of credit (cards, loans, etc). People have to live within their means with Bitcoin.

Re:I sell actual things in Bitcoin (1)

smooth wombat (796938) | about a year and a half ago | (#43493721)

I just want a bartering medium that is freed from the pressures associated with money.

So you want to back to what, 4,000 B.C? Yeah, that will work out well.

Re:I sell actual things in Bitcoin (1, Insightful)

dada21 (163177) | about a year and a half ago | (#43493765)

I'd be happy to throw back just to the 1800s or so -- when poor people could actually save their way to wealth, where credit addiction didn't lead to thrill-seeking behavior addiction, and where the money supply wasn't a medium to fund warfare and welfare entitlements benefiting the rich and powerful.

Business regulations, money regulations and savings dilution aren't modern in any way, but they've become the norm. I'd rather see all 3 go away, or at least just become part of the nanny-state economy, not my economies.

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43493845)

Wow, rarely is the faith in a mythical past more clearly expressed.

Re:I sell actual things in Bitcoin (2, Insightful)

tehcyder (746570) | about a year and a half ago | (#43493895)

I'd be happy to throw back just to the 1800s or so -- when poor people could actually save their way to wealth

That is the funniest thing I've read all day, thanks, it makes a change from the death and bombs.

I'd rather see all 3 go away, or at least just become part of the nanny-state economy, not my economies.

There is no separate economy that belongs to you. You are either in society and the actual economy, or you can live on a desert island somewhere and rot.

Re:I sell actual things in Bitcoin (1)

BitZtream (692029) | about a year and a half ago | (#43493979)

...

Why would you go back to the 1800s to do that when you can ... just do it today?

You're blaming optional things that you don't have to participate in on your reason for not being able to save.

If you want to save your money ... SAVE IT. If you don't like credit cards ... DONT USE THEM. They are not required.

You're just whining about shit you're too lazy to actually use.

Re:I sell actual things in Bitcoin (1)

Archangel Michael (180766) | about a year and a half ago | (#43494383)

Saving money is worthless. Name a safe secure means of saving money, that doesn't lose value over time due to inflation. Stocks aren't safe, high risk bonds are not safe, savings in a bank loses value over time. In order to save, AND not lose value, you have to place large portions of your wealth into things that either are intrinsic value (like Real Estate, Gold etc).

The problem is, that there isn't any "safe" place to put money that doesn't lose value over time. Bitcoin WILL change this, even as volatile as it is. Yes, there is risk, as bitcoin is new, and there is the chance that it becomes worthless. BUT as long as the trend is upwards, it is no riskier than any other high risk investment.

IF you don't want to risk your money, great, stick it in your passbook savings account that is FDIC insured and get your 1.5% interest while inflation is 3-6%. You'll only lose 2+% in value every year.

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43494201)

Poor people could never "save their way to wealth". The American dream was never more than a myth for 99.99% of people.

It turns out that currency is a small factor in the contribution to poverty. The real problem is employers paying employees 1/10th the value they create for the company. If you work for me and your work makes my company $100 per hour but I only pay you $10 per hour, then I have cheated you into working for less than you deserve.

Re:I sell actual things in Bitcoin (2)

Nadaka (224565) | about a year and a half ago | (#43494489)

yes, finally someone gets it. LABOR is the primary source of value in the economy. Stabilize the economy by increasing the value of labor, not just by increasing pay, buy by increasing pay as a percentage of corporate income.

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43493501)

I haven't heard any merchants complain actually... mostly people who don't use bitcoin, or are involved in an different coin project complain about it.

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43493515)

I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal [2abd.com] . It would be a great step in reducing volatility and decoupling BTC from the regulated markets.

That's like trying to shave with a chainsaw.

Re:I sell actual things in Bitcoin (4, Insightful)

mooingyak (720677) | about a year and a half ago | (#43493527)

I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.

That sounds to me like a sure way to kill bitcoins. If I accept bitcoins as payment, and no one who sells something else I want to buy accepts them, then the bitcoin has no value for me.

Re:I sell actual things in Bitcoin (0)

cyborg_monkey (150790) | about a year and a half ago | (#43493607)

your whole story is complete bullshit.

Basically, you want the company store (2, Insightful)

SmallFurryCreature (593017) | about a year and a half ago | (#43493701)

I own my sole to the company store has deeper meaning then just a song lyric. Mine companies used to pay people not just not enough to survive (so they had to borrow credit from the company store and then be forever in debt) but often in company currency, that could only be spend in the company store. It is a way to enslave people, not free them.

But ah... it was the GOVERNMENT that freed these people by enforcing that salaries should be payed in fiat currencies. So basically, you want to reverse that. Here are your wages, in bitcoins. No you can't convert them anywhere, you can only use them to buy goods from my friends, at whatever prices they set.

Nice.

When you meet a libertarian, remember, the oppression of government is not what he objects to, it is that it is the government doing the subjugation and not him. Remember what the south was really about, it was about freedom from a government that told them to stop denying freedom to other people. When a republican wants to make government so small, he can drown it in a bathtub, ask him what is going to replace it. Ten to one he thinks it is going to be him waving the biggest gun around. Libertarians are all against the government because they want to be the one doing the telling. And frankly unless you own a VERY big gun, no matter how bad the government may be, a local warlord is going to be even worse.

Re:Basically, you want the company store (2)

chill (34294) | about a year and a half ago | (#43493761)

I own my sole to the company store...

That is funny on so many different levels.

Re:Basically, you want the company store (1)

tehcyder (746570) | about a year and a half ago | (#43493939)

You just broke the first rule of slashdot: government is always bad.

Re:Basically, you want the company store (1)

drinkypoo (153816) | about a year and a half ago | (#43494073)

You load sixteen tons and what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

(etc.)

Owing your soul to the company store has been transitioned from a condition of debt to a single company to a condition of debt to multiple parties. Instead of debt to the mine it's now debt to a variety of banks for a variety of purposes, like medical expenses, student loans, and mortgages. The government didn't object to people being in a condition of economic slavery. It objected to not getting a piece.

Re:Basically, you want the company store (0)

Anonymous Coward | about a year and a half ago | (#43494161)

Thank you for articulating this point so well that it irritated Libertarians into modding you +2 troll. Anything that Libertarians dislike is probably correct.

Re:Basically, you want the company store (1)

Nadaka (224565) | about a year and a half ago | (#43494581)

Not really. A lot of libertarian ideology is actually decent. Its just the economic aspects that are fucktarded. Unfortunately many libertarians only care about the economic aspects, liberties be damned.

Re:Basically, you want the company store (1)

Entropius (188861) | about a year and a half ago | (#43494215)

When you meet a libertarian, remember, the oppression of government is not what he objects to, it is that it is the government doing the subjugation and not him.

That's not always true. There actually are some people out there who don't want to reduce the power of government because they want it instead; they want less coercion all around, and would prefer nobody to be waving guns at all. Maybe theirs is a mad quest, maybe it isn't, but not all of them want to be the boss instead.

Re:Basically, you want the company store (1)

zanderz (813270) | about a year and a half ago | (#43494257)

"You have to ask yourself: Do you want to have a government? Yes and no. There's no society on earth that doesn't have one; if you didn't have one you'd be invaded and pay taxes to someone else's government." - Robert H Frank, author of The Darwin Economy

Re:Basically, you want the company store (1)

idunham (2852899) | about a year and a half ago | (#43494469)

Ahem...what about Somalia?
(Yes, they nominally have one. But when it lacks the power to actually enforce anything, I'd say that nominal is pretty close nonexistent)

Re:Basically, you want the company store (1)

Anonymous Coward | about a year and a half ago | (#43494297)

That's an interesting viewpoint. I'm a conservative republican, so I'll give you my take. I'm not in a big hury to tell other people what to do. I do think that a government big enough to give you everything you need is big enough to take it away if you don't do their bidding. Increasingly it seems that the government is more interested in socioglogical engineering enforcing a progressive paraigm and that's what I find frightening. Far more worrysome than a local warlord. When you have the spirit that this country was founded on the people will speak and the will of the people will be done. When the government tells the people what to think, eat, manage their finances, and interferes with every decision in thier lives those people are no longer free in my mind. So instead of the company store you're now indentured to the government. How does that make the outcome any different. Ever try to live on unemployment, welfare, or social security? It's quite inadequate. Just enough to stay alive, but not enough to have any meaningful quality of life. The government has a long running history of taking maximum tax revenue to provide half assed solutions.

Slavery was a terrible thing, but keep in mind that it was embraced by both sides of the political isle, and it's very likely that you have been fed only half the truth. Do you know that some people sold themselves into slavery in order to keep their families from starving? Do you know that some slave owners treated their slaves the same as their own children? These are the stories you don't hear about because they don't fit the narrative of the left. I readily acknowledge that there were whole families rounded up in the middle of the night and sold off, and that there was rampent and systemic abuse of slaves as well. Yes that happened. It's just not the whole story. And now coming up on 100 years later, the people who were subjected to that abuse are not even alive anymore. I certainly didn't do it, and don't feel I should be responsible for it. The descendents of those who were slaves have more opportunity than ever before. Not just from the government but from private organizations as well. It is far past time to move on.

You may have a point about bitcoin. I don't see it as a viable currency in the long run. But the dollar is not all it once was either, and while it's not subject to the same fluctuations as bit coin the government still uses it to devalue private worth over time with inflation, tax increases, and deficit spending. It's a complicated shell game in essence where the government wins and everyone else loses.

Re:Basically, you want the company store (1, Insightful)

Archangel Michael (180766) | about a year and a half ago | (#43494429)

Instead, we are in debt to our government, to the tune of 55K per person. And you seem okay with it, or are ignorant of that fact. There is no way to tax the rich enough to cover that debt. The Company Store is now the Federal Government.

Re:I sell actual things in Bitcoin (4, Insightful)

Registered Coward v2 (447531) | about a year and a half ago | (#43493735)

I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. it's only a tiny percentage of overall sales...

That is because your risk is very limited. If you had a significant amount of your sales in Bitcoin you'd probably think differently; since your risk exposure would be much higher.

If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency.

No, they should immediately convert it so they assume no volatility risk.

It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.

That's called market forces.

Re:I sell actual things in Bitcoin (1, Interesting)

dada21 (163177) | about a year and a half ago | (#43493797)

Since my financial stability for the future doesn't correlate with income nor even profit, I think my risk is pretty low. Even if volatility continues, and even if my businesses took in 50% of their revenues in BTC, I still wouldn't see any actual harm. The businesses have been around for decades, and they're self-sufficient and stable.

Converting BTC to fiat currency puts a sell-pressure on BTC. Holding BTC would reduce the selling supply, thereby reducing volatility from the sell side. It's the same with dollars: I hoard my dollars in cash "under the mattress" rather than put it in a bank to get loaned out as debt (money multiplier effect).

The "market forces" in BTC right now are pretty unique because only a small number of BTC holders are actually transacting. Most people are "long game speculators", and are neither buying things with BTC nor selling it to liquidate for fiat currency. As the number of BTC users goes up (which will likely happen when volatility is reduced), I believe we'll see a more stable platform.

Re:I sell actual things in Bitcoin (1)

tehcyder (746570) | about a year and a half ago | (#43493853)

I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. While it's only a tiny percentage of overall sales, it's still exciting to see a currency that can actually become a true bartering agent that is freed of non-market forces.

There is but one god, and that god is the market.

Re:I sell actual things in Bitcoin (1)

sunking2 (521698) | about a year and a half ago | (#43494267)

And I'm pretty sure he doesn't dress like that.

Re:I sell actual things in Bitcoin (1)

Archangel Michael (180766) | about a year and a half ago | (#43494457)

Or the Government .. depending upon your point of view.

Re:I sell actual things in Bitcoin (1)

BitZtream (692029) | about a year and a half ago | (#43493947)

If you wanted to see a currency made up, sell gift certificates for your products. Look, you made a new bartering system without making yourself part of a scam. Playing monopoly is pretty much the same thing as well. Might as well use monopoly money rather than bitcoin, even it has more intrinsic value than bitcoin.

If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency. It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.

And what does that tell you about BitCoin? What should you take away from this? Since you clearly don't get it I'll answer for you ... NO ONE TRUSTS THE SCAM.

I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal [2abd.com]. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.

So if no one can exchange real money for your monopoly money ... how exactly is your monopoly money worth anything?

Best part of your post is how it self contradicts itself repeatedly. You don't know what you want, you just want to pretend you were part of the start of something big.

Re:I sell actual things in Bitcoin (1)

h4rr4r (612664) | about a year and a half ago | (#43494243)

That would make bitcoins worthless overnight.

Stores would simply stop accepting them.

Re:I sell actual things in Bitcoin (2)

roman_mir (125474) | about a year and a half ago | (#43494341)

...sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.

I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.

- you really don't want that, you think you want it, but you don't.

Having people on both sides of a transaction is important, imagine if there was nobody to sell bitcoins on exchanges, and so the volumes would thin out completely and you would have just a few thousands or (hundreds) trades a day.

So the bid and ask would be pushed higher and higher and higher, however the moment anybody appeared with a non-trivial amount of bitcoins, prices would crash.

Why would you want intraday variations in other currency prices of that magnitude?

Buying a bitcoin in the morning of a day for 40 dollars and buying it at the end of the day at 2 dollars, buying a bitcoin during the day at 260 dollars, buying another one a few hours later at 2150 dollars and then buying another one at 5.25.

This is what you are asking for, a normal market should have more volume and more people trading and this requires people who want to buy and to sell.

In fact to stabilise prices I would suggest implementing a way to borrow and short bitcoins rather than preventing the market from working with legislation.

Re:I sell actual things in Bitcoin (0)

Anonymous Coward | about a year and a half ago | (#43494405)

Do tell, do you refill your stock for bitcoins/do you get all raw materials for bitcoins? Somehow I rather doubt it's the case.

As it is now, if some government gave you what you want (hard), you'd simply be out of business.

Addicted (1)

Black Parrot (19622) | about a year and a half ago | (#43493391)

to bitcoin?

looking to research the market (0)

Anonymous Coward | about a year and a half ago | (#43493445)

updated silk road url? anyone have a current one?

Re:looking to research the market (0)

Anonymous Coward | about a year and a half ago | (#43493603)

It's a .onion so you need TOR to access it. I think the address is in the Wikipedia article, or the history of it.

Re:looking to research the market (1)

GameboyRMH (1153867) | about a year and a half ago | (#43494105)

Hit up tordir and search for it:

dppmfxaacucguzpc.onion

In the other corner ... (0)

Anonymous Coward | about a year and a half ago | (#43493573)

Paul Krugman is chirping about how any currency which doesn't come with built-in, simmering inflation must inevitably bring commerce to a standstill because all users will hoard it in anticipation of further increases in price. This explains why there was no business done in the United States at all in the years 1865-1913.

Re: In the other corner ... (2, Interesting)

Anonymous Coward | about a year and a half ago | (#43493927)

Uhh. There were a flaming ton of bank crashes during that time, and still more until the dollar was decoupled from metal prices.

The Age of Gold was no golden age, financially speaking. It also gave too much financial sway to gold producers (mine owners) who could control the rate of production and have disproportionate power over financial markets because of this.

Everybody already read this article on Forbes... (0)

Anonymous Coward | about a year and a half ago | (#43493673)

...three days ago. This isn't news. It's old as fuck in Internet time.

Alternatives (0)

Anonymous Coward | about a year and a half ago | (#43493687)

Me and a friend have just been talking about this while playing Minecraft (of all things).

There was that Litecoin site, as well as a few others.
Litecoin seems to be promoting itself as a more general lower-priced goods system since it is easier to mine coins overall.

Even if one of these systems fail, others could replace it in time.
There are sites for trading between different virtual currencies growing every month.

As more of these currencies come about, just that fact alone will allow virtual currencies to be more stable as there will be trading between all of them.
Currency falls, everyone rushes to it to get it low price, it grows back up to good levels as another falls, and it repeats.
It will happen much much faster than current backed currencies like dollars and pounds, but that fact will also allow it to flourish and evolve much faster.

Word of mouth can increase and decrease the value of each currency alone since they are basically virtual bartering systems.
Implied worth will make things fluctuate far more than fiat currencies, but that will also be its best feature since smart people could make money off it if they sell at the right times.
And as these events happen more and more, it will allow for more people to enter the market, strengthening the system with time.
So I am all for more systems to be added. The more, the better.

Re:Alternatives (1)

bobbied (2522392) | about a year and a half ago | (#43494593)

Go read about the stock market just before the great depression. What you are seeing is the market makers doing "pump and dump" just like stocks In the 1920's. It was common to see large investors buy up some stock, start talking about how it was heading up (and having recent history to show) then as the small investor piled on, slowly sell their shares at huge profit. Once the big guys where all out, they'd start the cycle again on another stock and leave the small fish to take the risks. Eventually, the prices started to drop and everybody wanted to sell at once and you have the crash of October 29, 1929. Problem was that there was no *real* value in all these stocks, it had been a lot of hype, so the prices fell rapidly. Where many of the big fish got caught with their money in the market and lost too, nearly ALL of the little guys lost. Remember you make money on stocks by buying low and selling high.

I see much the same thing going on here with BTC, only without *any* regulation or controls. The question right now is who is trying to manipulate the market? Follow the money, not the BTC, but the REAL money...

There is still need for a decentralised exchange (3, Interesting)

Jesrad (716567) | about a year and a half ago | (#43493731)

With the very recent forceful closing of the BitFloor BitCoin exchange, and the inavailability of bitcoin-24, another (european) exchange, there seems to be a crackdown on BitC exchanges going on.

What is needed, is a decentralised method for trading BitCs for other currencies, or else BitCoins can be made to be worthless by shutting down the current centralised, easily identified exchanges. I'd suggest Ripple but that technical solution seems to be going nowhere at the moment, alas.

Re:There is still need for a decentralised exchang (0)

Anonymous Coward | about a year and a half ago | (#43494007)

Where did you get the BitC nomenclature? That is a new one.

Re:There is still need for a decentralised exchang (1)

bobbied (2522392) | about a year and a half ago | (#43494351)

Ahhh Yes.. Without an exchange willing to convert my bitcoin to some other currency, there are few retailers who will be accepting payment in bitcoin for much of anything. Once folks realize that bitcoin cannot be easily converted, they will become valueless.

Of course, they have huge value to those who engage in illegal trading exactly because there is no government backing, but is that the kind of thing I want to be indirectly involved in?

I wonder if this is an effort to shut down the currency or is it an effort to control the market? Either way, the little fish had better be wary. The big sharks are obviously on the move and this thing could go south quickly. (or not...)

Shhh! (4, Insightful)

Bob9113 (14996) | about a year and a half ago | (#43493877)

Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence

Yegads, man! You're going to scare the horses. Your usual media silence is a wise practice. The general public doesn't know you exist, and doesn't know you use Bitcoins. Those are good things. The first rule of drug dealing is you do not talk about drug dealing. Just 'cuz I don't use your service doesn't mean I want to see more scrutiny aimed at you, or at Bitcoin.

Re:Shhh! (2)

drinkypoo (153816) | about a year and a half ago | (#43494111)

If your only goal is short-term profit from illegal activities, that's true. If you want long-term legitimacy, you must engage in politicking. Ultimately, the practice of governments telling citizens what they may do with their bodies is an evil one which must be combated.

Re:Shhh! (0)

Anonymous Coward | about a year and a half ago | (#43494585)

Ultimately, the practice of governments telling citizens what they may do with their bodies is an evil one which must be combated.

The problem is that many drugs cause you to lose the capacity for rational thought while intoxicated and directly cause you to do things that you would probably never do sober. Things like rape and murder people. Additionally drugs cost money. Drug addicts generally have a difficult time finding employment thanks to drug screens. Tobacco users are starting to feel this pinch as well yet tobacco is totally legal so no blaming the government here, businesses want sober healthy employees that cost as little health insurance as possible.

There are benefits and problems with both sides of the argument on drug legalization. I agree it is wrong for anyone to limit you from harming yourself, but if by harming yourself you increase your likelihood of harming others, then for their sake you need to be denied access to the ability to harm yourself in that way.

A viable solution might be to legalize drugs and severely increase penalties for drug-related crimes and domestic violence. Personally I'm undecided on the legalization of most drugs considering that many of them ARE legal so long as they came from a legitimate pharmacy with a prescription. That said however, we should legalize and tax marijuana the same as we do with alcohol and tobacco only with a mandate that all commercially available pot be grown and packaged in the USA. It creates jobs, harms the cartels, and raises much needed revenues for domestic spending on things like prisoner rehabilitation. A USA-grown and packaged mandate is necessary to ensure quality standards for health and safety. After a few decades when the rest of the world develops similar laws and regulations then we could ease and be more accepting of imports.

Re:Shhh! (0)

Anonymous Coward | about a year and a half ago | (#43494203)

That's alright, then; he or she is not a drug dealer.

Re:Shhh! (0)

Anonymous Coward | about a year and a half ago | (#43494381)

Well you've outed yourself now, and the FBI has taken notice. Your phone is now tapped, and that van that will be following you everywhere you go is in no way connected with the federal authorities. Of course they already knew anyway when you went shopping and only bought 3 tv dinners, all the mtn dew in stock, and several cans of lighter fluid.

There is a great explanation. (4, Interesting)

TsuruchiBrian (2731979) | about a year and a half ago | (#43494607)

There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation.

The price of bitcoin rose much higher than the cost to mine bitcoins (i.e. price of computers and electricity). While some people got caught up in speculating, others saw this and started mining and selling instead, causing a crash. Bitcoins are volatile because people don't understand it yet. If they did, they'd realize that the value can not go far above the price of mining. Having said that, the price of mining is continually going up.

Once a few websites start publishing indices of the average cost of mining a bitcoin at any given time, I think that will keep this sort of speculation in check.

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