Now that that drug selling website bitcoin was mostly used on has been shut down I'm not sure there's much of a reason for anyone to hold bitcoin. Its value was bumped up a lot by silicon valley libertarians who bought a lot of it as an investment, but now people are pulling their money out of bitcoin and its value is dropping a lot. I'd stay away from it.
Oh, so is that the main factor for the drop? I mean, drugs would indeed bring in a lot of money for the currency. And with the steep drop, I guess more and more people are selling it so the lack of demand makes it go down more. But wow, they were able to shut down a drug-selling website huh? Which government/police did this? Do you know?
Bitcoin is dropping because the TOR network which allowed sites to run annoymously has been compromised. That means even if the transactions are anoymous, people visting these sites are not anoymous. There where rumors that TOR had serious flaws in it, but it was not proven till recently. TOR was originally setup as a government project, whether or not these security flaws where intentional is debatable. Until an alternative to TOR and Onion sites (what the anonymous sites are called) can be found, bitcoin will continue to drop.
It was very much flavor of the month last year, but as with many speculative investments it can lose a bit of it's appeal when people realize that it's not a one way bet. That's not to say that we won't say a recovery in the demand. It's just that other speculative areas are probably attracting interest at the moment.
But Tor has never been that anonymous for people that didn't know what they were doing. The average person that just downloaded and got started with Tor wasn't anonymous at all, despite what they believed. I don't know if they'll find a solution to this issue, but strengthening economies in the world aren't really that good for cryptocurrencies either.
That is crazy. Bitcoins are not a commodity, there is no actual value to them. They are EXACTLY like the currency of a 3rd world country. They are not a commodity because their is no use for them, you can barely even spend them. Gold is used for jewelry and electronics, along with silver and copper. Other commodities include food that is eaten. Bitcoins are going to go down to almost nothing very soon. The problem is that all those people who started mining them are losing money now because the cost of servers/month is more than bitcoins are worth. So what you are seeing is people who signed 12 month leases actually losing money to mine their bitcoins, and they are being forced to sell the ones they had to pay their obligations. I asked this on another forum, and the response was basically that all the cloud-miners are losing money on anything less than $250, and the people who leased servers are probably not much lower than that. All of these people are being forced to sell their bitcoins for real $$ in order to pay those contracts. There is no real value to Bitcoins, similar to the currency of 3rd world countries, it could easily go down to 1 bitcoin per dollar, and because there is a cost to produce bitcoins, the lower it goes, the more people will be forced to sell out to pay for the equipment they rented to mine.
This is crazy because I always heard that the Bitcoin was going to be the new online currency and people would be stupid for not investing in it. I never learned enough about it to get any myself and it looks like I made the right decision.
The problem is that it will never, and has never been a real currency. It is a shadow speculative investment. I consider it right up there with penny stocks and investing in 3rd world currencies. It will never be a currency because the price fluctuates way to much. Supermarkets have like 5% profit margins. Do you think they could accept a currency knowing that tomorrow the value might be 20% less than it was today? If you had an apartment to rent, would you rent it for 1 bitcoin... $210 might be a fair price this month, but in 11 months, your tenet could be paying you $25. For any meaningful cash transaction to happen using a currency, both parties need to know the value of the currency and what it will be at the time of sale. Do you want grocery stores to have to change price labels on food every day? It will never be a real currency. The reason most people like to talk about it is because they are treating it like a speculative stock.
Most people should stay away from these things as long as there is so much risk and uncertainty and lack of oversight involved. Even the more advanced should only dabble lightly if at all in such highly speculative things.
There isn't much use for gold either yet we still hold it in vast quantities. Bitcoin's value is determined by how much demand there is for it. I suppose there will always be a demand for currencies you can anonymously trade with.
