[undefined0]

Bitcoin's price is mostly backed by speculation, if there is bad news or a lack of 'faith' it will go down, if there is good news and faith is restored the price will go up. The organic bitcoin economy hasn't dramatically improved from my impressions, I would love to use bitcoin, personally, but there lacks ad networks (for generic audiences) or payment processors (for credit cards) which pay in it which means I can't keep every aspect of the webmaster payment cycle within bitcoins so I continue to use fiat. However, finding server providers and domain registrars who accept bitcoin is very easy.

[Ologn]

> Bitcoin's price is mostly backed by speculation

Bitcoin's price is 100% backed by speculation.

Bitcoins are worthless. They are worth $0. They are useless hashes. Their value is $0, and their price is destined to be closer to that than its current $265.

This scam has been over for over a year. The hucksters who created this fraud bailed out for the most part once they hyped the price up to over $1000 in November 2013.

People are still suckered into the Nigerian scam, and are also still suckered into this scam, for reasons unknown to me. The creator, "Satoshi Nakamoto" turns out not to be a real person. Mt. Gox is busted for fraud. The main ASIC makers, Butterfly Labs, are busted for fraud. The coins have no value. What signals do people need to realize to not spend their hard-earned cash on these worthless hashes?

Of course, some high faluting types in Silicon Valley have put their imprimatur on Bitcoins. But they did the same thing to Pets.com, Flooz and other worthless dot-bombs 15 years ago. Just like major banks and Wall Street peddled worthless subprime real estate and mortgages 8 years ago. Caveat empor, before you trade your cash for a Bitcoin hash, ask yourself, cui bono?

[jamez1]

How did it get value to begin with? Can you explain that mechanism? Someone had to be the first to put their money into it.

All fiat currencies are driven by the speculation that someone may want to trade with you in the future. They are useless 'pieces of paper'

You seem to think promotion has stopped because it hit $1000? Such an arbitrary figure. It could be much higher if it was adopted further.

[yen223]

There are two kinds of people who buy bitcoin - those who genuinely find bitcoin useful in conducting transactions, and those who are trying to make money off the first group.

It turns out bitcoin's rapid price growth was driven by people from group 2, not group 1.

[Ologn]

> How did it get value to begin with?

It never had value. It had a price. The price of silver in 1980 was $33 an ounce, by 1981 it was under $10 an ounce. Pets.com had a market cap of $220 million in early 2000, by November it was bankrupt. Subprime mortgages, Dutch tulip bulbs, history is replete with prices temporarily overshooting their values. The difference between Bitcoin and silver, or Bitcoin and underwater real estate, is that Bitcoin is a useless hash, whereas silver and real estate have some value.

> All fiat currencies

The discussion of the price and value of fiat currencies is too complex to really cover completely in an HN comment.

The question about fiat currency also doesn't mean too much for Bitcoins. The argument seems to be "it doesn't seem to make much sense that this piece of paper is worth anything, but since it is, that means that Bitcoin is worth something". I'm not really sure how that follows. If it did make sense, it would also make sense for Dogecoin and Stellar and Litecoin and Ripple to have million dollar market caps, which in fact, they all do (technically any how).

Technically, dollars had no value even before 1971 when you could exchange them for gold. They weren't gold, they were just papers one could exchange for gold. They were an abstraction of gold.

After 1971, the US closed the window on the 10,000 tons of gold it stores at Fort Knox and elsewhere. At this point the dollar becomes an abstraction of an abstraction.

A simple announcement from the president that the gold window is open again would always put a floor under the dollar. It's the reason the US spends so much to store 10,000 tons of gold. If not, why does the US store all that gold? Wouldn't it make sense to liquidate it and pay down US debt? Fort Knox et al store that gold to give value to the dollar.

[pkulak]

> Bitcoins are worthless.

So is the US dollar.

[bbcbasic]

To act as a good currency, the currency should be almost worthless (or worth a lot less than the value it represents).

USD and Bitcoin are both good currencies, in part because they are worthless.

To flip it on it's head - if a currency is worth more than the value it represents then no one would spend anything.