Bitcoin trading halted after massive crash
One of the largest exchanges for the digital currency blames panic selling, tamping down speculation about a hacker attack.
The trading freeze comes after Bitcoin's price plunged from an intraday peak price Wednesday of $266 to $105. Thursday afternoon, the price dropped to $55 (you can see the live price here). Just two months ago, Bitcoins were valued at $20, The Guardian reports.
Observers had been predicting that the Bitcoin bubble would burst, particularly as word of the alternative currency spread in the mainstream media. (Click here for our explainer.)
There are about 11 million Bitcoins in circulation, The Guardian notes. One of the largest trading exchanges, Mt.Gox, announced Thursday that it would halt trading until 2 a.m. GMT Friday to allow the market to cool down.
Speculation abounded that major Bitcoin trading sites had been hit by hackers in a distributed denial of service (DDoS) attack. But Mt.Gox said that was not the case, blaming instead a widespread hiccup caused by too much activity. Bitcoin users panicked after a flood of new accounts caused the overall system to lag, Mt.Gox said in a statement. People started selling Bitcoins, and the increased activity ultimately froze the site's trading engine.
Mt.Gox said that about 20,000 new accounts are being created on the site each day, up from just 60,000 new accounts opened in March.
Bitcoin users took to Reddit to grouse about the drama. "Speculators have turned this into a freak show," one user said. "I want (Bitcoins) to stabilize and get boring again so we can reliably engage in commerce."
Two key observations surfaced on Twitter and other sites about Bitcoin Thursday. First, why the need to halt? If Bitcoin is truly a reliable, strong alternative currency, then just let it go and let the chips (or is it coins?) fall where they may. Second, there needs to be a good way to short Bitcoins to keep speculation down more organically.
It doesn't matter if anything is "limited" or not. The fact is: there is no "there" there. There is no intrinsic value to anyone, as there might be if the formulas were patented and valuable in chemistry, materials, etc. But no one is claiming that, just that there is value because they are "limited".
And before you compare this to actual gold coins--as the pictures of Bitcoins try to imply--it's true that gold has few industrial uses beyond jewelry. But anyone who has held a real gold or silver coin in his hand knows that there is something intrinsically appealing about the experience beyond any other use. And by intrinsically, I mean it's part of being human. See if Bitcoins will ever elicit this response. And what exactly have you got? Nothing when the electricity goes off.
Gee, what a big surprise (not). As I said before, Bernie Madoff is kicking himself that he didn't think of this first.
seems like he was right.
wonder what all those math equations are trying to solve.
a) Iranian nuclear bomb equations
b) Amount of energy and direction to move an asteroid to hit Tehran
c) The precise time and place for a butterfly to move it's wings to stop global warming
d) The ultimate answer to the oldest riddle in the world - why were we created
e) The expansion of the value of pi until it repeats.
f) When the stock market is going to collapse
e) How many angels can dance on the top of a pin
g) How fast is the national debt growing
h) How many times will Madonna get married
Back in the 1920s the big rip-off was selling swampland in Florida, sight unseen, to people who were sure that Florida real estate could only go up. You could certainly say that Florida real estate was "limited", no one could make more of it. But of course it was way overpriced and people lost money. But at least there was something there, and in fact if they had held onto the land for 40 years they would have actually made money.
With Bitcoins there is nothing there, not valuable patented formulas, not overpriced land, nothing. It is the ultimate in selling something for more than it's worth, because there is no worth at all. Maybe the founders meant to teach people something about paper money, I don't know. Let's be charitable and say that's what it's all about.
A Bitcoin and $5.00 will buy you a cup of coffee.
Sovereigns produce currency. The Franklin Mint produces "bitcoins." Barter trade doesn't use either of them.
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