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Bitcoin Continues Winning - Up 8% in Aug, YTD 2012 Now Up 115%

A monthly report about Bitcoin and about noticeable developments around it's ecosystem:

August 2012 became the sixth month in a row that the BTC/USD exchange rate ended higher than the level it was at when the month had begun. It has been quite a rally. Since November 2011, where the closing price was $2.75, every month except one has resulted in a net gain.

August’s closing price of $10.16 is an 8% gain over July’s close and means that so far this quarter (Q3 2012) there has been a 51% gain. For 2012, where the price opened at a $4.72 level, the price rise from January 1st now exceeds an eye-popping 115%.

Full blog: http://www.bitcoinmoney.com/post/30706441112/august-2012-res...



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Cyril's picture

Just thought I could share

Just thought I could share :

"BitCoin CryptoCurrency -- How it works in details"

http://www.youtube.com/watch?v=mrlgw5KpkXM

(45 minutes)

'HTH

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Hey everyone

Bitcoin really is a true friend to liberty, and may change the world. People who really learn about it come to understand this.

Both Dr. Ron Paul and Bitcoin are attacking the same problem - governmental monopoly control over money - from different ways.

I encourage everyone to just try learning about it. You can explore on your own starting at http://www.bitcoin.org. However, I recommend this article titled "Bitcoin - The Libertarian Introduction" written by Free Stater, libertarian, and Bitcoin enthusiast Eric Voorhees:

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-in...

It's kind of long, but it really gives a comprehensive overview. You might also view this video of a Bitcoin Q&A panel, hosted by Eric Voorhees for Porcfest Chronicles:

https://www.youtube.com/watch?v=088le0gCh-0

Sounds great but... can you

Sounds great but... can you hold it in your pocket? Can you bury it and hide it from the FEDS?

Southern Agrarian

Yeah..

..actually you can.

https://www.casascius.com/

Cyril's picture

Nice ! Thanks for all these

Nice !

Thanks for all these pointers. I definitely need to check them out ASAP.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

lol look i will wager haze and rpcongress 10 silver coins each

conditions are if some unforeseen misfortunate did not leave me relatively poor, i will make good on my promises. you don't have to do anything. if bitcoins plunge you will be broke anyway, from the need of making a living in the first place by pushing this. remember my account and come ask me for 10 silver coins if bitcoin becomes the most dominant international reserve, black market or otherwise. like i said, i will make good on my promise if i am fairly affluent. you don't have to do anything anyway, even if bitcoin plunges. i suspect the day when gold and silver replace the dollar as international reserve and legitimate money ties itself to commodities, is when bitcoin will lose all its legitimacy

bitcoin's not even traded on the most well recognized trading platforms, meaning you don't have millions of participants from around the world bidding on the asset, both buying and shorting to ensure relative price stability -in comparison- to if there were only a couple pump and dumpers in the market. true market is unstable these days, but it's a 10, 20% fluctuation compared to something potentially going near 0 overnight via one simple dump. in terms of 100% return, you can do that with near term options trading anyway. it's quite possible and i have done 1000% returns with a 700 dollar deposit just for fun because i thought there was a chance of that happening, and it did. you can easily leverage your bets on big trading markets, why care how much bitcoins have gone this year. option only limits your losses to premiums too. if you had to use margin aka borrow money to buy bitcoin, you're gonna lose your house and not just the money you put down, if one of these pumpers decide to dump.

i would rather buy something that a multi-billion hedge fund currently have a short position in, knowing whatever goes down will have shorters buying the shares back to cover, for long term price stability, than a market that is all buyer (or schemer) and no shorter to put a price check. ya, it's volatile alright. 100% each gain, 90% each drop, no part of that negates what i am saying

Regarding your edited text

about bitcoin currency exchange. Remember Bitcoin is still in early stages of adoption. However, it absolutely is bidded on by partcipants around the world. Just take a peek at this site for an idea of 24 hour BTC global currency exchange:

http://bitcoincharts.com/markets/

As for making a return/profit on Bitcoin, that's not what it's about, although it can be. People usually get into Bitcoin for one or more reasons:

-to speculate/profit on its price
-for its ease of use / unique payment opportunity it provides
-to support it on libertarian grounds, because it essentially behaves as a digital version of gold - enabling payment anonymity, and non-manipulated inflation

No offense

but you are showing faulty reasoning.

You assume that I (and haze) store all of our wealth in bitcoins, and none in gold and silver. I don't put all my eggs in one basket. I put wealth into precious metals and bitcoins. No matter what the future holds I'm covered if either becomes more valuable. You are the one that would miss out if one (bitcoins) becomes more valuable.

Keep your 10 silver coins. I wouldn't feel right taking them from you if/when I turn out to be right.

In fact

I sold all my bitcoins a few days ago because I anticipate a short term drop in their value and am waiting to buy them back once I think this danger has passed.

But that doesn't mean I wont use them as a medium of exchange if I needed to..

I respect the creators of

bitcoin, but one thing scares me away from it, and the one thing is it is all done electrally. What happens if my power goes out, or something of that nature?

“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James

About Power Outage

To use bitcoins it is highly recommended that users backup their wallet in at least two places. This can be done easily because Bitcoin wallets are simply files. You can back the wallet file up on CDs, USB sticks, or even print them out (the private keys) on paper.

If you properly backup your Bitcoin wallet it's pretty much impossible to lose your coins.

As far as a wider power outage is concerned, as long as someone anywhere in the world has a copy of the blockchain and runs bitcoin, then the network can continue.

I forgot to say

you only need to backup your wallet.dat file once due to the way Bitcoin works (which is based on public/private key cryptography). You don't need to keep backing it up.

Cyril's picture

Do you mean temporarily or extended period of time ?

Do you mean temporarily or for an extended period of time ?

1. if temporarily and in the middle of a transaction, I suppose it can be answered easily : the transaction won't be validated anyway, so it's like you hadn't initiated it; you should back up to a phone call, or mail, or etc, to alert the other party that you'll have to use some other means to pay/be paid, if urgent;

2. if for an extended period of time, where you don't use Bitcoins, I think it has been answered elsewhere below that there is a good point in savings of Bitcoins ... now I'm not sure if that means you cannot lose anything or you might (?) I'll let the Bitcoins experts answer that.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Correct me if I'm wrong

but I read that there is a fee for every bitcoin transaction. If this is true then like you I say WTF. At least I can do a cash transaction without having to pay a middle man first.

You can send

bitcoins without fees.

The thing to remember is nobody controls Bitcoin. That means it's open to be used in silly non-productive ways. Bitcoin uses a public ledger (the blockchain) to record every Bitcoin transaction going back to the first transaction. That increases memory to store the blockchain.

Let's say I buy 1 bitcoin. Bitcoins are divisible to 8 decimal places. That means I can send 10,000,000 transactions to myself for no reason at all except spamming/polluting the chain.

To cut down on spammy transactions the network uses fees to identify which transactions should get priority for verification. If you are sending a decent amount (anything over say .01 BTC I think) then your transaction will be confirmed (by miners in a block) pretty quick without any fee. But if you send a very small value (like .000001 BTC) then your transaction will be very low priority and may take a very long time (like days) to be confirmed by the network without any fee.

A typical fee is .0001 BTC I believe, very insignificant cost (and you can adjust it to any amount you want).

Cyril's picture

Thank you.At least, this

Thank you.

At least, this answers my questions on fees.

So, basically, fees are primarily used to compensate for the computing energy (over the network) dissipated over "the too many and small transactions" (so to speak). Well, we use electricity just for that, after all.

I can anticipate the next question from the skeptical : and what proves me that there is nobody making pure profit/accumulation of the .000...1 n-th decimal of small fees subsets (say, into some single Swiss Bank account...) ?

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Any transaction fee

you include goes to the miner that includes your transaction in the block they mine. Nobody can control who wins the next mined block, just as nobody can control which miner is the next to find gold in the real world.

With Bitcoin you can see everything that happens for the process, and the code. It's all open-source. You don't have to trust anybody. Nobody controls where fees go or how many bitcoins there are, etc., not even the developers working on it, because all of how Bitcoin works was established when the protocol first started. Anybody that does something different is not using the Bitcoin people agree to use and will be rejected by the network.

Cyril's picture

Thanks !

Thanks !

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

A more relevant question

A more relevant question would maybe be : what is that fee USED FOR.

I don't like (do hate) the income tax because it's a fee on my sweat AND I DO NOT KNOW how it is used (unless someone shows me ALL THEIR BOOKS).

Hence : Income Tax = THEFT

But I am perfectly fine with paying fees for a bridge I cross, because I didn't build the bridge. So, if the bridge has a budget VISIBLE and which can be PROVABLY balanced after some time (i.e., paid back, and maintenance covered), I have no problem paying the fee each time I use the bridge, if I can afford it.

If I do not use the bridge, on the other hand, I DO NOT WANT to pay anything for that bridge.

Let's keep things comparable and fair in this brainstorming.

Shall we ?

(I know close to nothing to Bitcoins. I try to bring constructive criticism.)

'HTH

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Any fees included

on transactions go to the miner that wins the cryptographic puzzle for solving that block. This is added monetary incentive for the miner in addition to the newly mined coins.

Mining is an important function of the network, as that is how currency creation, network security, and transaction verification takes place.

You are not wrong

There is a fee of currently a fraction of a cent.

;-))

Ok
You say they would need to shut down all internet??\
No they would not only YOUR service provider.
Government & Big business could still run through their hook up.
Main Trunk.
If you pass a TEST you can hook up!! for a FEE!! haha Fascist LOL
Don't worry they can do anything & Will ;-)))

You think the government

can just go around blocking people's Internet connections?

Maybe in China. Well, yes, the U.S. might try that, but the day that happens I think there are bigger things to worry about (and do)...

mesh networking

it would be a good idea to learn how mesh networking works. and then teach your neighbors how to set it up. and come up with an alternate dns scheme. if the internet went down, you could fire up the mesh network and keep the bitcoin network going in your block/neighborhood/town/city/etc. however big the mesh gets.

;-)))

We already got bigger things to worry about!!!
WE all Know that;-(

They will make " Terrorist attack" Shut down complete.
Reboot> WE SAVED YOU!!!!
ALL Computers scanned and a RE HOOK UP FEE.
Com cast & All make more money. minus kick back to the GOVERNMENT!
Like i said they CAN & Will do anything to hold power!!!;-))
Fascists Government are so much fun!!

Cyril's picture

Well, I tend to be a pessimist

Well, I tend to be a pessimist too, by default, and by profession. ;)

However, one might argue:

1. True : "No they would not only YOUR service provider.
Government & Big business could still run through their hook up.
Main Trunk.
"

But ... They tried with SOPA and PIPA. And they are still trying. People stood up and are still standing (against).

2. Likely, yes : "If you pass a TEST you can hook up!! for a FEE!! haha Fascist LOL
Don't worry they can do anything & Will ;-)))
"

But ... we thus (see #1) know their tricks, now. At least, they don't have the advantage of surprise over Bitcoins after that precedent.

'HTH

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

okay i went to read up on bitcoin's mechanics and my suspicion

confirmed--thank you prompting me to waste 5 minutes of my life to confirm my 80% pre-existing suspicion. a little background--i am an active trader (with my own money) and i had a 100% return with my investment with options just last week with the commodity surge--didn't put much down, only made near 10k or so. most of my money is long term. bottom line is i analyze both trading technicals as well as long term macro, economic theories--i know wtf i am talking about most of the time.

in a google search i seem to find these two bullet points that try to establish bitcoin's feasibility

1. Bitcoin is automatically transferred to the recipient through an encrypted transaction that ensures Bitcoins can’t be hacked or created artificially

2. New Bitcoins are added to the market through the “Bitcoin Mining” — a process where individuals run servers that handle Bitcoin transactions and get paid in Bitcoins for doing so

let's address 2. first because the attempt to break 1. will only come when there is enough incentive. aka when profit return ratio and risk justifies it. a proficient thief won't bother with a poor person's house, in essence.

what "individuals run servers that handle Bitcoin transactions and get paid in Bitcoins for doing so" does is in essence new money and credit creation, just like the current federal reserve system, but instead you have a simpleton of some computer science degree determining what degree of newly created credit should be released into the market, instead of someone who at least vaguely have an idea of wtf he is doing when he sets interest rates--not much more, but at least better than a regular computer geek.

since money is created through running servers only, this is in essence like paying banks to run banks and print money but not pay savers who actually deposit the money--i don't know wtf that kind of system is. there's not even incentive to save. even in the fantasy scenario where everybody uses bitcoin, the economy's expansion or contraction rate would then depend on the credit creation rate aka interest rate set by bitcoin company, when they decide what % they pay their server runners and HOW MANY runners because math's infinite sequencing--the fractional reserve system. whatever rate you print or issue credit is going to be amplified and come running back at you as inflation, via the velocity of money. ya a dozen computer geeks at a table is going to determine this country's national interest rate and HOW MANY banks to run at this interest rate, instead of a dozen bald head bernankes who at least aren't some 20, 30 year old and don't spend rest of his day out of the table playing computer games. so ridiculous it's actually funny

now let's move to the 1. claim that it is uncrackable-- that's only true until the incentives become great enough. when the whole great country of america decides to use bitcoin and you can buy ferrari's with bitcoin, again, a fantasy scenario that you wish, trust me, the *real* incentive will start and we can then put your claim to test, when there's incentive for smart people to actually try to crack it. it's laughable anyway.. some company comes out and declares itself the smartest person on the planet--nobody can crack his products. ridiculous on its face

let me add a final point.. the reason why gold and silver can't be fabricated is because it's much harder to create one extra element on the periodic table to mirror gold and silver's density, which can be easily tested if you ever trade physical. if you can create objects at an atomic level--go ahead, congrats, you just broke the gold safe and turned mankind's 5k years of commodity money into history. just by pure science, it's much easier to crack some encryption, if that system hasn't self destructed already, than to *physically create a new atom not in existence before. you might even have to over-write the physical law of the universe to do that, lmao. try it.. i am somewhat excited to see what might happen, actually.

what happens if we run a system whereby credit creation is purely arbitrary, namely interest rate is arbitrary and no market determined--like what we have now, only with rates even less skillfully determined-- and it only pays the bankers but not the savers. how does bitcoin company know the current real estate market should run on a 3% interest instead of 5, 10%. how does it know american government is worth a 1% interest rate instead of 10, 20. how does a computer geek know all of this and play the role of bernanke? something to ponder about.

i must have a lot of time this morning cus it's stock market holiday (labor day), man.

great post

This haze guy, when confronted, never admits he is a bitcoin salesmen. But his entire existence is to push this crap.

thx

this push is indeed dangerous.. i thought dp'ers might at least have a generally adequate degree of financial knowledge to know this system is ridiculous on this face without the need to go into technical depths.. but judging from the lack of financial common sense from some of these posts i may be wrong

sometimes i think we might be getting too big too fast. not that it's a thing to feel unhappy about. this user haze is a 4 year member anyway, so i may be wrong again

not to mention the great lesson

Of all the great austrian economists on what is money.

These people haven't studied a single page