back to article Bitcoin value breaks $1,000 barrier in FRENZIED HYPEGASM

Heavy trading on Bitcoin exchanges has pushed the price up to over $1,000 for the first time. Popular exchange Mt. Gox reported that the psychologically important price point on Wednesday morning US time, driven in part by strong interest in Chinese markets. In the past month the price of the digital currency has risen around …


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  1. Steve Knox

    Hardly Supporters

    The currency has its supporters in government, too. The Federal Election Commission looks likely to allow Bitcoins to be used for election campaign donations and last week the Senate Homeland Security and Governmental Affairs committee held an official discussion about the currency.

    Since the goal of both of these organizations w/r/t currencies is to monitor and regulate their use in specific cases, I believe "support" is not the correct description of their attitude. "Exploit" is closer, but not quite right either. Suggestions?

    1. Anonymous Coward
      Anonymous Coward

      Re: Hardly Supporters

      One way to get your name in the paper

      "On Wednesday Welsh IT administrator James Howells told The Guardian that he'd managed to throw away a stash of 7,500 Bitcoins he'd been keeping in an old disk drive and said it's now buried under a few feet of domestic waste landfill."

      As the value of said Bitcoins is now £7,500,000. Councils have reported an increase in metal detector s being used at landfill sites.

      Greatest hoax of 2013.

      Unless the value rises to £10,000 a Bitcoin.

  2. Ryan 7

    "Fundamental questions remain about what a virtual currency actually is"

    All currency is virtual.

    1. DainB Bronze badge

      Re: "Fundamental questions remain about what a virtual currency actually is"

      True. However countries behind them are not.

      1. Khaptain Silver badge

        Re: "Fundamental questions remain about what a virtual currency actually is"

        If you want to send me some of your Gold Soveriegns, Krugerands, a kilo of the finest Columbian marching powder , I will be happy to recieve them from you. There is not a lot virtual about them.

  3. HMB

    Ending In Tears?

    I love bitcoin, but it wasn't a finalised production piece of software, if only in distribution. Maybe that's changed now, anyone can feel free to update me, but when I was using it, the windows download was an unsigned executable. There are big chinks in the guarantee of the software's integrity on the client side (not disputing the impressiveness of the cryptography, but it's only as strong as it's weakest link).

    I think the biggest currency theft in history is not a question of if, but when.

    Serious concerns.

  4. JDX Gold badge

    How do you spend the darn things...

    ... if one unit of currency is worth $1000? Can you spend a fraction of a BC?

    It puts me in mind of the Triganic Pu...

    1. btrower

      Re: How do you spend the darn things...


      Yes. You can spend a fraction of a BitCoin. It is an intended part of the design.

  5. mafoo


    It strikes me that theres something amusing about bitcoins:

    If they keep on going up in value, then who the hell is stupid enough to spend them.

    But is no one actually buys stuff with them... then its just a commodity - not an actual currency.

    1. JustWondering

      Re: Value

      The only reasons I can see for bitcoins is to buy dope or get your data back. Right now, touch wood, I need neither.

      1. MrDamage Silver badge

        Re: Value

        Plenty of things you can use bitcoins on


        Off Road Vehicles

        Virgin Galactic Flights

        Or one of these places.

    2. Mark .

      Re: Value

      People who have already got stupidly rich will want to cash out - and one way to do that is to spend them.

      At the moment, it's more a case of people speculating for future value/use than its use today, but as the rate of increase drops in future years, it will be more viable as a currency.

      Can't it be both? Gold is both a commodity, and something that can be used as a means of exchange.

  6. btrower

    Me too

    It is easy to lose stuff like this. I only had 0.05 BitCoin given to me years ago and it should be recoverable somehow with a *ton of digging through terabytes of disk space, but even though it is nominally $50 bucks it is not worth the recovery effort given the risk of coming up empty.

    I expect that a large part of the BitCoins that existed are not actually in existence any more.

    I honestly do not believe that BitCoin will be the crypto-currency we end up with, but I am strongly of the opinion that the world's financial power will be shifting to crypto-currency of one sort or another. Arguably most of it is already, just in a very shaky fiat currency backed form.

    Crypto-currency is much more fragile than its adherents think it is. However, it is also much more robust than some of its detractors believe. Its great power is its theoretical ability to be an incorruptible store of value. Properly constructed a crypto-currency would be infinitely divisible and since productivity keeps improving what we can do with given resources and some loss of tokens is inevitable, simply holding ownership of the currency would provide a rate of return for savers.

    Fractional reserve banking is not much more than just a complex ponzi scheme. I am on the fence as to whether or not it can have legitimate public utility but in its current form it is hard to see it as much more than a confidence trick that ultimately always fails and leaves someone other than banks holding the bag. I am not dismissing it. Given that it holds the entire world in thrall, It is a hell of a confidence trick.

    1. lorisarvendu

      Re: Me too

      I expect that a large part of the BitCoins that existed are not actually in existence any more.

      Since it is 100% certain that all data disappears eventually, the same will happen with Bitcoins. As drives with wallets on get damaged, and backups get lost or destroyed, larger and larger proportions of the Bitcoin total should become inaccessible. Which should be interesting decades down the line. Since Bitcoin doesn't support the concept of "quantative easing", no new coins can be minted, so the currency will eventually vanish.

      1. Brewster's Angle Grinder Silver badge

        Re: Me too


        But until they all disappear, those that remain will appreciate in value. Which makes bitcoin a very interesting game: part of it's value will be a bet on the number of coins that are now irretrievable. I can't think of any existing currency or commodity that functions like that; it's the ultimate game of poker. We may have created a monster.

    2. Brewster's Angle Grinder Silver badge

      Re: Me too

      @btrower "Its great power is its theoretical ability to be an incorruptible store of value."

      It's "value" is what people will exchange for it. Today that's a ~$1000, or equivalent in goods and services. A few months ago it was ~$300. Tomorrow everybody could get bored of it or a flaw could turn up in the crypto algorithms, and it's value could drop to $0. Value is an idea in your head (cf the early exchanges between indigenous peoples and European traders, where each side gave away something worthless and got something valuable) and you can't store an idea "incorruptibly".

    3. JP19

      Re: Me too

      "Fractional reserve banking is not much more than just a complex ponzi scheme"

      What other kind of banking do you think there is? Do you think a bank is going to put everyone's money under a giant mattress so they can give it all back at a moments notice? They would have to charge for the service and you would be better off keeping it under your own mattress.

      A bank is a third party helping you to lend your money to someone else in return for a cut of the interest charged. The problem is not what banks do it was the grossly incompetent way some of them did it.

      Your money should have been as safe as houses but the farcical level of property price inflation which banks knowingly supported meant houses were not very safe at all.

  7. JustWondering
    Thumb Down


    I find the government script dodgy enough. A "currency" that has increased its value by a factor of five in six months? I don't think so. Where do you go to throw a brick through their window when it goes sideways?

    1. Haku

      Re: Where do you go to throw a brick through their window when it goes sideways?

      An Apple store.

  8. Haku

    I'M RICH!!!

    I remembered I had 0.02 bitcoin, at it's current value that's about £12, I could use that to go on one of those trolley dashes at Lidl and still have change over for a pack of gum. :D

  9. SVV

    Gosh, ony "some" people "may" think it's a bubble

    To the rest, keep piling your money in, it's a revolutionary new paradigm that will absolutely not end up like the previous episodes of revolutionary new paradigms like tulips or, no sir.

    As for the guy who chucked away his laptop, how's that independence from the government and their dastardly guarantee of assets held in banks thing going?

  10. Anonymous Coward
    Anonymous Coward

    For $7.5 million

    It would be worth hiring a bunch of people to dig around in the landfill with metal detectors and find that hard drive.

    1. Anonymous Coward
      Anonymous Coward

      Re: For $7.5 million

      Since it is worth $7.5 million (today) it will never be "found" as one of the workers could just pocket it. They get paid to search for it and then get $7.5 million as well.

      1. Steve K

        Re: For $7.5 million

        Only if they have the key for the Bitcoin wallet - otherwise it's just Bits...

  11. DainB Bronze badge

    "On Wednesday Welsh IT administrator James Howells told The Guardian that he'd managed to throw away a stash of 7,500 Bitcoins he'd been keeping in an old disk drive and said it's now buried under a few feet of domestic waste landfill."

    Well, he deserves it only for the fact that so called "IT administrator" threw away disk drive without wiping data in it. Call it karma.

    1. Anonymous Coward
      Anonymous Coward

      "On Wednesday Welsh IT administrator James Howells "

      And that Australian exchange that said je'd been hacked, the servers that "just dissapeared".

      all this is too reminiscent of Ponzi, Time share selling and "I had a million but some big boys took it".

      lots of wishful "investors" and still no one can trace the "lost" coins

      least I can trade my bit of paper for food and still feed myself

  12. phil dude

    will nobody think of the skimmers...?

    Think about the "friction" on your dough. Not just taxes , but the X % off EVERY transaction siphoned off because of a bit of plastic. Even changing bitcoins gets skimmed!! And govt's wonder why it is gaining popularity...

    Let's face it credit cards are a cartel, and whatever you may think of the politics of bitcoin, it shows that in the internet era all things can be replaced. I'm just not sure with what....

    Beer, because there is at least one pub that takes milli-bitcoins...


    1. I ain't Spartacus Gold badge

      Re: will nobody think of the skimmers...?

      You do realise that Bitcoins are also a cartel, by the very design of the system. You get given Bitcoins for 'mining', which is the computation of building the blockchain that holds all the Bitcoin transactions.

      I'm not quite sure how it's supposed to work after all the coins are mined though, as surely there's no further incentive for processing all the transactions? Plus the number of people doing it will presumably continue to get smaller, as the computational difficulty increases.

      Anyway, there will always be someone skimming off the top. Do you think that the enormous credit card infrastructure should be free? Because it can't be. If government does it, we'll get taxed. If it's done privately, then we'll get skimmed. The alternative is to use cash. But that also costs shops (as they have real security risks) and us - as taking £1,000 out in your wallet is a bigger risk than a card with an unknown PIN. And of course minting coins and printing notes isn't free either, that comes out of our tax too.

  13. Anonymous Coward
    Anonymous Coward

    Oompa Loompa Dollars!

    Get ya Oompa Loompa Dollars here!!

    Totally worthless, but hey, that doesn't stop Bitcoins!

    1. Spoddyhalfwit

      Re: Oompa Loompa Dollars!

      They aren't totally worthless if I can buy things with them. And I can.

      I suspect the current price is a bubble - bitcoin price has been a series of bubbles.

      But the system has real merit

      - easy to send around the world without relying on third parties (like Paypal who won't deal with some users due to US sanctions, or just decide to put holds on accounts for arbitrary reasons)

      - low transaction costs (free in many cases)

      - finite - no mass printing by government inflating away your savings

      I suspect therefore that over time (perhaps a few years) the price will stabilize somewhat and bitcoins will be ever more widely accepted

    2. Erika G

      Re: Oompa Loompa Dollars!

      As long as people are buying them they're worth something. Bubble or not, the only things that count are the facts on the ground. And right now people are buying them at 1000 USD a pop.

      1. I ain't Spartacus Gold badge

        Re: Oompa Loompa Dollars!

        Erika G,

        How many people are buying them though?

        Say that 20 Mt Gox are only processing 1,000 transactions per day from currencies to BTC. That might theoretically mean that my stock of 1,000 Bitcoin would now be worth 1 million. But if I tried to sell them all at once - that would double the daily transactions from Mt Gox. It's rather unlikely that the price would remain the same if I chose to sell. That would probably collapse it for a few days.

        Valuing illiquid assets is always harder than liquid ones. Just because liquid ones trade more frequently so it's both easier to find someone to buy them, and the market is more stable becuase people are less likey to be in a desperate hurry to either buy or sell - and so willing to pay/take silly prices.

        I spent £10,000 on an only slightly nicer flat last year because of this. One was in a popular estate with relatively steady prices and regular sales. The other in a small development mostly owned by corporate property investors. None had been sold since building in 2005 - so there was no possible way to know the reasonable price - and if one company decided to sell 4 at once just as you needed to sell yours, you'd have to take a big loss or give up on moving.

        This is the risk you take with Bitcoin. If you were to take your salary in it, and rely on it for all your needs then at the moment you'd be a very happy bunny. Something (possibly that malware that ransoms people's data?) has caused a spike in value. So you're quids in. But if there's a halving in value, as happened overnight a couple of months ago, you've still got to eat, pay your rent/mortgage and bills each month. So you're going to have to make your exchange at crap rates, or starve.

        As someone who worked in Europe during the conversion to the Euro, but was paid in sterling, I can tell you about this. My salary dropped by 18% over about 3 months, as the Euro appreciated against the Pound. I was expecting it, but it still didn't stop me from feeling sad - and put a severe dent in my beer and restaurant funds.

  14. Anonymous Coward
    Anonymous Coward

    By accident I turned £40

    into £360. And that's *after* spending £15 (which was the subscription to the NZB site which only took BTC).

    I thought I'd have a little play with some cash I could afford to lose.

    Yesterday I bought £60 worth of LTC at $20/LTC from my £360, and today it's worth £120.

    So cashing in at £420 for £40 outlay. That's Christmas sorted !

  15. Danny 5


    Why does virtual currency confuse so many people? Have we gotten so used to our paper money, that we no longer realize that's virtual currency as well? Somehow people have gotten so confident that their 10 dollar/pound/euro note actually represents that monetary value, that we no longer see printed money for what it is? Do we really think that piece of paper with a 10 on it is actually worth 10 dollar/pound/euro?

    All currencies are virtual, so why are bitcoins so hard to grasp?

    1. Khaptain Silver badge

      Re: why?

      >so why are bitcoins so hard to grasp?

      Because there is nothing tangible.

    2. I ain't Spartacus Gold badge

      Re: why?

      Danny 5,

      Because our currencies are backed by something. Partly it's just inertia. 60-odd million other people are using the Pound too, and there's safety in the herd. If they all suddenly don't trust it, then you can get problems. But the problems in the Euro show just how powerful that inertia is. Even though it's almost a certainty that Italy, for example, will have to leave the Euro or partially default (debt at 135% of GDP and rising, an ageing and falling population, and an average economic growth rate of under 1% for the last 15 years) - still no-one believes it will happen and so the markets are stable and nobody's panicking.

      But those currenvcies go with the states, and are backed by them. So that's 63 million people, the UK government, one of the world's top 5 economies and a few nukes that say that the Pound will probably still be worth something tomorrow. All of whom have to pay their taxes in it (apart from the nukes), so will almost certainly accept it for transactions.

      What's backing Bitcoin? Maybe a few thousand (tens of thousands) of people, most to of them dabbling in it for fun, and a very large chunk of them waiting for it to go up in value some more because it's so exciting. So they might be willing to sell them to you for the right price, but how many are confident enough to take them from you in exchange for real things of value to them? How many businesses near you will sell you stuff for Bitcoin? How many people are brave enough to take their salary in it? It's a chicken and egg situation.

      Also there's compulsion. No-one will ever force you to use Bitcoin. David Cameron can send scary men round to take my house away if I refuse to give him a certain amount of sterling each year. Or lock me up, or both. He can also tell shops that they have to accept sterling from me, in exchange for goods. If there's a crisis of confidence, the government can do various things to try to help. No-one is in charge of Bitcoin. This means you can't be compelled, but it also means you can't be bailed out. Both options are available to governments.

      1. Mark .

        Re: why?

        I don't think anyone claims Bitcoin is as stable as UKP.

        The point is it's not an either/or - the trustworthyness of a currency is a sliding scale. For early adopters, Bitcoin is risky to hold (though accompanied by a reward if the currency goes mainstream). But there is nothing magical that makes the worth of a ten pound note fundamentally different to Bitcoin.

        There is the difference of state-backed currencies - those do indeed have the advantages you describe.

    3. btrower

      Re: why?

      @Danny 5:

      Lots of stuff like this is actually beyond the grasp of many people, perhaps the majority. All fiat currency is destined to be worthless. Originally $20 USD bought an ounce of gold. It now buys about 0.016 oz. Long term, that number is not going up. At less than 2% of its original value, the USD is already essentially worthless relative to its original value.

      Any 'store of value' qua 'store of value' will have an artificial price based on supply and demand. Paper fiat currency can be inflated almost indefinitely:$100_trillion_2009_Obverse.jpg/1024px-Zimbabwe_$100_trillion_2009_Obverse.jpg

      Eventually you run out of meaningful numbers to print and/or the dupes convinced to trade real things for worthless paper promises come to realize: When something becomes worth less than a trillionth of its original value, that value has essentially been taken away.

      Ultimately, Zimbabwean hyper-inflation and USD or Euro or GBP inflation are only different in amount (velocity/acceleration), not in kind. Both types end up making the unit of value worthless in the end.

      Crypto-currency like BitCoins cannot be inflated. The trend is always toward deflation because the supply cannot, over the long haul, ever meet even a constant demand.

      The vast majority of the population are either numerically or logically challenged and usually both. To some extent this is by design, but to some extent we have to accept the fact that over the long haul most people just simply are not going to be able to ever construct a proof of the Pythagorean Theorem.

      I have a theory that people whose capabilities are a couple of standard deviations removed from one another have incommensurate views of those capabilities. They are sufficiently removed to find communication and mutual assessment difficult or impossible. Most of the Commentardia are more numerate and more logical than average and I would expect that the 'fat' part of the curve would be more closely spaced than the general population. However, my time here convinces me that there are plenty of inter-commentard gaps large enough to make given pairs mutually distal enough that they cannot understand one another.

      For people who found the above hard to follow: Bitches be Crazy

      1. I ain't Spartacus Gold badge

        Re: why?


        I found your post came over rather on the arrogant side for my tastes. Ironically given the way you chose to say it, I also think it showed quite a serious lack of understanding of the issues involved too.

        All fiat currency is destined to be worthless. Originally $20 USD bought an ounce of gold. It now buys about 0.016 oz. Long term, that number is not going up. At less than 2% of its original value, the USD is already essentially worthless relative to its original value.

        I think you might want to re-assess your choice of comparison there. Not that I'm arguing their hasn't been inflation, but the measure of inflation used is a basket of goods that people buy, not an extremely volatile asset class such as gold, for a good reason. So the dollar is worth less, but not as catastrophically as you say - partly because you've measured at a time when gold is just off the top of a rather big bubble.

        You example of Zimbabwe is even sillier. They collapsed the economy. Inflation was both cause and symptom. Had Zimbabwe been using Bitcoins, so that Zanu-PF weren't able to print them, the economy would probably still have collapsed becuase they'd have simply seized the assets they were buying with printed money instead. A massively corrupt and disfunctional government was the problem there. Bitcoin won't save you from a goverment that could always torture you for the password to your wallet, and if you don't hand it over they can just shoot you, so no-one gets it.

        A well-run economy can deal with some inflation, if it's predictable. At low levels, it even has some good side-effects. It makes hoarding cash cost, thus incentivising people to invest it. At varying degrees of risk. That means others can borrow it. If you can't borrow, you will struggle to build capital goods, without that investment your economy will stagnate. But with deflation, borrowing is madness, becuase the amount you have to pay back is more than the amount you borrowed, even before you've accounted for interest. Extreme Example Time:

        In January I borrowed 1,000 bitcoins for a year to buy a 3d printer. Planning to sell 1,000 3d printed gubbins at 2 BTC each for Christmas and pay back the loan with 10% interest. Plus yummy profit for me.

        Now Bitcoins aren't worth the same $100-odd of January, they're up to $1,000. So Bitcoins are worth 10 times as much as before. My printer can now be bought for BTC100, and I can only sell my gubbins at 0.2 BTC each. Thus even if I sell the full thousand, I end the year with assets of 120 Bitcoin, and a debt of 1,000 Bitcoin. Oops! Bankruptcy ahoy!

        This is obviously ridiculous, but only because no-one seriously uses Bitcoin for everything - and it represents a tiny economy. It shows the problem of the debt denominator effect in deflation though. Debt becomes a crushing millstone, if asset values fall in money terms. Now I've heard some people say this is a good thing, because debt is bad. But debt isn't bad. It's just a thing. It can be either good, bad or indifferent. It can allow growth, investment, social mobility and improvemtent. If handled sensibly, obviously. It's logical for me to buy my flat. I've got to spend £800 a month to live in it anyway, so I may as well borrow the cash to buy it and make sure that money goes to me (plus profits to the bank of course). This is a perfectly prudent use of debt, even though I now owe the bank loadsamoney. If I was borrowing because I couldn't afford to pay for my dinner (or holiday), that would be a different matter.

  16. gibman70

    One of the major flaws in these kind of stories is liquidity (or lack thereof) on the exchanges. Try selling anything more than a few 'coins' at once at these kind of prices and see the price fall. Mt Gox rate was halved in price briefly last week by the sale of ONE HUNDRED bitcoin. This $1000 thing is a false price, elevated as much by hoarding and lack of large scale trades as anything.

    Lots of luck trying to cash in $4M worth, you'd bring the price down to single figures all by yourself before you were anywhere near.

    And that's apart from the difficulties in getting out any real cash you've managed to trade BTC for. MT Gox are only allowing withdrawals in dribs and drabs, and they'll probably be regulated out of existence altogether before long. And in the UK, there's really no practical way to get out large amounts at all.

    GO Bitcoin. To the Moon etc etc

    1. TakeTheSkyRoad

      One hundred coins resulted in a 50% drop ? I'm not sure where you are getting your information from but I'm seeing regular trades of hundreds of coins with little noticeble change in value. Ok, a few thousand coins would move the price by a hundred dollars or so but at current prices ($1184) that's barely a 10% change.

      In fact at the moment on MtGox 4,000 coins would have to be sold just to move the price to $1,000

      Have a look for yourself..

  17. ijbp2468


    Why the hell would you throw a PC away with data still on it?

    Surely an IT Administrator would have more damn sense than that.

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