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Comment by nlh | Hacker News Reader

Holy cow. It was worth $60 last time I checked (last time a story was discussed on HN). I'm not one usually to play Chicken Little, but doesn't a 50% rise in a matter of a week or two seem a bit unsettling? Unless adoption has risen similarly, which I doubt -- it's not like Amazon just announced they'll be accepting BTC.

Enjoy the run, speculators. But don't get greedy -- remember the tulips...

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Cyprus just announced they would be taxing peoples bank accounts, the EU said that was a fair resolution for the banking crisis and other nations (greece, ireland, spain and italy) could see similar action to cope with the bank problems. Adoption as a currency has been ocurring for a while, reddit, mega, bitmit etc, adoption for investment has been ongoing, adoption out of fear of state controlled banks is another viable reasonf or adoption but harder to quantify. So there is a reason behind the price surge we are currently seeing but it is difficult to label because it is about individuals adopting it for use and not big corporations.

That's the narrative of todays article on bitcoin on CNN:

http://money.cnn.com/2013/03/28/investing/bitcoin-cyprus/ind...

BTC is definitely finding a spectator audience outside of the tech world. The amount of PR it's been getting due to the price rise has to be playing a huge part in the recent wide-scale investment in it.

Maybe this is a misinformed question, but isn't the reason anyone is adopting it at all due to the fact they can later convert it back into actual currency?

"they can later convert it back into actual currency?"

Or final goods. Silk Road gives a final good endpoint for BTC

SR sure transits a large amount of btc, but what do you think the sellers are doing with the incoming bitcoins?

I believe the reasons are that it's A) decentralized B) portable C) easy for businesses to adopt

The liquidity part of it is a big factor, but we've had pretty good liquidity for a while if you're willing to do a bank wire or trade with someone in person.

Those features are all well and good, but the only reason a business would be interested in accepting them is because they can convert it back into <currency>. There aren't enough other businesses accepting bitcoins, especially ones providing complex/critical services, for them to simply accept bitcoins with the expectation of using the bitcoins themselves for further trade.

It depends, it's value is to some extent determined by an expectation of the amount of businesses that will begin to accept it for some things which is a factor again determined by it's expected value.

In other words it will hit an equilibrium value where the price modifiers in both directions balance each other, but nobody knows what that is.

Think it more like how the value of a futures contract might be determined.

That is likely why they are buying it.

But if you are business who takes money over the internet and is sick of the banking BS and you notice that there are a lot of people out there holding these strange coins which seem to have a rising value..

It has a rising value because you can convert it back into dollars. It's also worth pointing out that same banking BS protects not only often protects their business but their customers as well... are there bitcoin "banking" services that provide that same level of service to businesses? With that in mind, are there any serious businesses that exclusively accept bitcoins?

If it has a rising value then it's in your interest to hold at least some of it unless you think it's about to crash.

If you are a merchant then the easiest way to start holding it is to start accepting payments with it, which is easy enough to do especially if there are enough people holding it already.

At that point it has value not just because you can convert it , but because you can buy stuff with it.

If bitcoin price is to crash, I'll be the first one buying.

Which probably means that the price is not speculative. Speculative like "I hoard" but not like "Ponzi".

That's exactly why I don't foresee an immense crash unless several large holders cash out all at once. There's no doubt tons of people chomping at the bit for the price to drop any significant amount.

I hope those large holders are not so stupid to drop a large chunk at the market at once.

I will definitely buy in this case, tho.

If bitcoin price is to crash, I'll be the first one buying.

I get the impression plenty of people might buy if the price dropped to $35 or $30.

My question is: would you then sell if the price dropped a further $5 or $10?

Why sell for $10? It's pointless, not the kind of money I'm afraid to lose.

Nope. Already sold my initial investment!

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