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lennier writes "Has Magic the Gathering Online Exchange tapped all its mana? MtGox, the first and best known Bitcoin exchange, has abruptly shut down, and CEO Mark Karpeles has resigned from the Bitcoin Foundation after rumors of ongoing theft related to the transaction malleability issue reported several weeks ago. According to the latest news reports, Bitcoin has hit a three-month low of $465 USD per coin."
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MtGox Shuts Down, CEO Resigns From BTC Foundation
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You are a fluke of the universe; you have no right to be here.
(Score: 4, Insightful) by Anonymous Coward on Tuesday February 25 2014, @06:23PM
(Score: 4, Insightful) by everdred on Tuesday February 25 2014, @06:37PM
> it does have some instrinsic value in that it has to be mined for with real world resources
I don't think that makes it intrinsically valuable. Can you eat a Bitcoin? Can you build something out of a Bitcoin?
(Score: 0) by Anonymous Coward on Tuesday February 25 2014, @07:25PM
I don't think that's much of a criterion for *any* currency. Unless you are eating chocolate dollars and building a house of dimes, what currency can you eat or build things out of?
(Score: 2) by everdred on Tuesday February 25 2014, @08:14PM
(Score: 5, Interesting) by snick on Tuesday February 25 2014, @06:48PM
This version of intrinsic value always leaves me stumped.
If I have a lump of gold, I can use it for all sorts of things, including building electronics. Gold has a very high intrinsic value. Because gold is usually used for its properties rather than as currency, its price is largely based on trading for its intrinsic value
If I have a dollar bill, I can use it for kindling, or patch a bicycle tyre with it. If I have enough of them, I can stuff them into a suitcase, and use that as a boat anchor. (hmmm.... perhaps not) In any case, paper money has very low (but non-zero) intrinsic value. Because dollar bills are seldom used for anything other than currency, their price is not at all based on their intrinsic value.
If I have a bitcoin I can ... I can .... I can brag that my chain is longer than yours? The "intrinsic value" that folks seem to be pointing to is its bit-coinyness.
Close all the exchanges and stop all use of bitcoin as currency. Would you bend over to pick a bitcoin off the sidewalk in that world?
(Score: 4, Informative) by snick on Tuesday February 25 2014, @07:04PM
If you find a pre-1982 penny, you are in luck. Its http://www.coinflation.com/ [coinflation.com]intrinsic value is 212% of its face value.
(Score: 4, Insightful) by Anonymous Coward on Tuesday February 25 2014, @07:11PM
No, that's not its intrinsic value, that's the current market value of the material.
(Score: 3, Insightful) by unitron on Wednesday February 26 2014, @09:34AM
"No, that's not its intrinsic value, that's the current market value of the material."
If you ignore the fact that it's a piece of currency and think of it just as a lump of metal, then the price you can sell it for if you melt it down *is* the intrinsic value.
It's the value of what it is, not what it represents.
Anything else is face value, transactional value, collector value, et cetera.
something something Slashcott something something Beta something something
(Score: 1) by Taibhsear on Wednesday February 26 2014, @02:42PM
And if you ignore the fact that melting it down is illegal...
(Score: 3, Insightful) by unitron on Wednesday February 26 2014, @02:58PM
But that's only going to hold true until there's no longer a government of the United States to enforce that law (or stand behind the face value of the coin, for that matter).
In our bleak, distant, post-apocalyptic future, the intrinsic value of the coin will remain whatever you can sell it for as a melted chunk of metal.
The only law that enforces intrinsic value is the law of supply and demand.
Which means that the basis of the intrinsic value remains unchanged, but what you can get for it can vary over time.
something something Slashcott something something Beta something something
(Score: 1) by ikanreed on Tuesday February 25 2014, @07:40PM
Eh... bitcoin is definitely still riding the fad wave, in spite of every "recovery" from this nice downward slide from a clear and obvious bubble. And being invested with the idea of libertarian ideals is always going to resonate with people who want their currency to comply with their politics.
It won't ever be worthless, because its value comes from a perception of value, which is quite self-sustaining. You won't see me advocating investing in it or using it as a medium of exchange, but you have to construct silly hypotheticals to make it "worthless" just like people do with US dollars.
(Score: 1, Insightful) by Darth Turbogeek on Tuesday February 25 2014, @08:40PM
To me, Bitcoin IS worthless. Look at all the stupidity - and blatant stupidity at that - that surrounds it, the technicla problems it has, the sheer instability and its obvious security problems, plus the amount of scammers that are hovering (Like Mt GOX.... a hack attack? Please, this is a straight out scam, they took the Bitcoins and ran), let alone how plain useless it actually is.
And I think a resonable debate can be made that apart from the true believers the rest of hte world also thinks it's utterly worthless too. Silly hypotheticals? No, that's just the reality here. Bitcoin to me and much of the world really is just worthless bits.
I'd say the reverse is true - prove to me it has ANY worth at all. Bitcoin enthusists are so far doing a pretty bad job of that to be honest and MtGOX going ass up just keeps the bad proof coming. Dogecoin was created as a joke, the users are in on the joke and treat it as just a thing to have fun with and yet it sells itself vastly better than Bitcoin does. Just think about that for a second - a joke currency created to mock Bitcoin is sellign itself as a crypocurrency better than the thing it is taking the piss out off.
For fucks sakes, Bitcoiners need to get a grip and see what a sad fucking laughing stock they are. Your "currency" is riddled with faults and a parody is more appealing. Worthless? You fucking better believe it.
(Score: 3, Insightful) by ikanreed on Tuesday February 25 2014, @08:43PM
To me, lots of things people pay money for are worthless. Diamonds? Worthless hunks of dense carbon, not discernibly different from glass for most purposes. But my opinion of their worth isn't what determines their worth.
Human gullibility does.
Bitcoins are diamonds.
(Score: 1) by Darth Turbogeek on Tuesday February 25 2014, @09:00PM
As jewelery, yes diamond is worthless. As an industrial tool however? It's quite useful so it can have value. Sure, the rest of your point stands tho, it would be perfect if you call Bitcoin tulips. Because that's exactly what they are.
(Score: 3, Insightful) by VLM on Tuesday February 25 2014, @09:08PM
OK OK they're worthless and useless. I'm a really nice guy so I'll help you out. If you come into possession of a couple thousand of those worthless useless things, you just send them on over to me and I'll make sure they don't bother you anymore.
(Score: 0) by Anonymous Coward on Tuesday February 25 2014, @09:10PM
> Please, this is a straight out scam, they took the Bitcoins and ran
Okay... then why didn't they run with them at $1000/BTC rather than waiting until they dropped below $200?
(Score: 1) by pogostix on Wednesday February 26 2014, @03:47AM
The value at the time the thiefs redeem/spend them is what counts
(Score: 0) by Anonymous Coward on Wednesday February 26 2014, @05:58PM
Uh, yeah, and stealing your customers' money and shutting down your exchange is a great way to drive up the price by killing investor confidence.
Did you even think this through, or are you just drawn to conspiracy theories?
(Score: 1) by Jerry Smith on Wednesday February 26 2014, @08:28PM
Because if caught, they can only be charged for the $200 value. If they manage to lay low long enough, the 'coin' will bounce back up and they will can sell for double or triple the initial value.
All those moments will be lost in time, like tears in rain. Time to die.
(Score: 0) by Anonymous Coward on Thursday February 27 2014, @07:29AM
That sounds like a really shitty plan.
(Score: 2, Insightful) by pogostix on Wednesday February 26 2014, @03:44AM
I think we should acknowledge the possibility the exchange has stolen the coins. It was fishy when they stopped withdrawals a while back... and it's fishy the way they've shutdown. Just a for example: did they get drained down to zero? Shouldn't they distribute whatever bitcoins remain amongst their account holders in proportion to their accounts book value?
(Score: 4, Informative) by Grishnakh on Tuesday February 25 2014, @07:42PM
There's very little that gold is really useful for. For electronics, it has crappy conductivity compared to copper; its only advantage is as an corrosion-resistant coating for contacts. It's also used in some spacecraft applications. The primary use of gold (besides currency) is jewelry, which isn't inherently useful at all (and is easy to fake by using other materials that look similar). It's completely a myth that gold has intrinsic value. It doesn't, it just looks nice and that's why people like it.
Silver has far more industrial uses than gold, but isn't valued nearly as highly.
(Score: 5, Funny) by dyingtolive on Tuesday February 25 2014, @07:53PM
Jewelry offers the highest intrinsic value. Happy women put out more.
Don't blame me, I voted for moose wang!
(Score: 1) by melikamp on Tuesday February 25 2014, @09:15PM
(Score: 5, Informative) by adolf on Tuesday February 25 2014, @08:39PM
Neither of these points are entirely true.
Of the metals that are useful for making wire, gold is between annealed copper and aluminum in terms of electrical conductivity. To say that gold is a lousy conductor compared to copper is to also say that everything except for silver is a lousy conductor compared to copper.
And while it's useful that it resists corrosion very well indeed, another thing that makes it very useful as a contact material is that it is very soft. This enables much closer mating of contact surfaces and tends to promote very low-resistance contacts, since there aren't as many of those pesky insulative air molecules in the way.
Of all of the metals and alloys we have, it is unique in these properties -- and I'm only talking about electrical contacts.
And though its monetary value is chiefly driven by the fact that it looks nice (50% of gold production goes into jewelry, 40% to investment, and 10% to industry, or so sayeth Wikipedia), the mere fact that it is considered pretty does not in any way diminish its industrial utility, or the intrinsic value of that utility.
Put differently: Just because gold is both pretty and perhaps overpriced does not somehow make it intrinsically valueless. FFS, even a singular toothpick has non-zero intrinsic value (I keep toothpicks around more to use as tools and materials, than for picking my teeth -- and they have a non-zero cost to produce).
If gold were cheap enough, I'd have (very heavy) solid gold dinner plates and salad bowls. And it would still have intrinsic value.
I'm wasting my days as I've wasted my nights and I've wasted my youth
(Score: 1) by Grishnakh on Tuesday February 25 2014, @09:08PM
I never said gold was valueless, only that it's not nearly as intrinsically valuable as many make it out to be. Yes, it's very handy for electrical contacts. Care to name any other uses? I suppose it'd be an OK wire material, but we already have copper for that, and copper is better. Perhaps for some specialized applications where you want wire that can be bent more, as gold is more malleable, but again there aren't many applications like this where copper isn't already sufficient.
For electrical contacts, you don't exactly need much gold, since it's used as a plating, and gold is so malleable it can be plated absurdly thinly.
And yes, if it were cheaper, you could feasibly make more stuff out of it, but that doesn't make it intrinsically valuable, it just means it could be used for that, even though there's other materials that are just as good if not much better (in terms of durability, energy usage to make, etc.). Given how hard gold is to find and its rarity in nature (driving up energy costs to produce), porcelain or even stainless steel are far superior materials for dinner plates.
If it weren't for jewelry and investment/currency, gold would not be worth very much (though not completely worthless; it'd probably still be more valuable than tin or lead, for instance). It's only highly "valuable" because it's shiny and pretty and people like to make baubles out of it.
(Score: 0) by adolf on Wednesday February 26 2014, @07:40AM
Gosh, it's feeling more and more like /. by the second:
That -was- you, wasn't it? *sigh*
I'm wasting my days as I've wasted my nights and I've wasted my youth
(Score: 1) by HiThere on Wednesday February 26 2014, @03:10AM
Gold is a lousy material for making dinner plates out of. It conducts heat too well. You want something that doesn't conduct heat for a dinner plate. It's also too soft, so it would rapidly accumulate nicks, bends, and bulges.
Please note, when gold has been used for dinner plates in the past it has been for the purpose of conspicuous display of wealth and power. This doesn't work of gold is cheap.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by adolf on Wednesday February 26 2014, @07:44AM
Your argument seems to be that having cheap solid-gold dinner plates would be impractical.
My counter-argument is much simpler: It's my house, and I can be as impractical as I want to be.
If the price of gold were to suddenly drop to a few dollars a pound before morning, I can assure you that I will be in the process of building a casting forge by the afternoon.
I'm wasting my days as I've wasted my nights and I've wasted my youth
(Score: 1) by Grishnakh on Wednesday February 26 2014, @02:40PM
That attitude is exactly why gold is expensive now: because it's shiny and pretty, rather than for its metallurgical properties. If everyone wants to make their dinner plates out of gold, then that drives up the prices, leading to it being ultra-expensive just like now. So this doesn't make sense in the context of this discussion, which is: what would it be like if no one cared about gold's shininess, and only cared about its metallurgical properties?
(Score: 1) by adolf on Thursday February 27 2014, @07:35AM
You're only considering demand, but the price of a commodity such as gold is also based on supply.
If supply were to increase such that there were plenty of gold to go around (just as there is currently plenty of iron or aluminum), people could still have their shiny and pretty things, and I can have gold dinner plates.
But to answer your own hypothetical question: If people, tomorrow, began to universally consider gold ugly, and there were no investments in it (no hoarding of a relatively scarce, but useful commodity? yeah, right), the price would drop...some.
It's expensive to find gold, and it will remain expensive to find gold. If it became unprofitable to mine, people would stop mining it. This would increases scarcity, which I think would support a rather higher market price than might seem obvious at first.
I'm wasting my days as I've wasted my nights and I've wasted my youth
(Score: 2) by Grishnakh on Thursday February 27 2014, @03:11PM
Why would anyone hoard gold if everyone thought it was ugly? Just because it's rare? Uranium is rare too, but no one hoards that as in "investment". There's dozens of other elements that are rather rare, but no one bothers hoarding those as "investments".
If everyone thought it was ugly all of a sudden, the price would drop massively. It'd only be valuable for its industrial uses, based on its physical properties, and that's it. Lead isn't particularly attractive (quite dull actually), so it's only used for things where its properties make it attractive (and with the health problems, we've found alternatives for some of those). Of course lead is also not rare, but it also has a lot more uses than gold, even now in this age of RoHS: battery acid, solder for more critical applications (resists tin whisker growth), I'm sure there's lots more. Gold would probably still be a little more valuable just because of its rarity, but not much, due to its lack of useful applications (the gold-plated dinner plate from before would be out; people don't want ugly plates). It doesn't take much gold mass to plate connector contacts.
(Score: 1) by monster on Wednesday February 26 2014, @08:58AM
Yep, much better to use silver. It has antibacterial properties [wikipedia.org].
Just for the record, there were gold dishes in pre-Columbian Mesoamerica, because it was quite abundant. When the first european arrived, natives couldn't understand their fixation with gold, since it was so readily available.
(Score: 1) by Grishnakh on Wednesday February 26 2014, @02:37PM
Gold-plated steel (or stainless steel) plates might work, except for the heat-conduction bit. (Though I don't know if gold can be plated onto SS; let's assume it can.) This would eliminate the problem about nicks, bends, and bulges, since SS is quite study, while giving the plate the property of not affecting the food's taste (professional tasters use gold spoons, remember, because gold doesn't have any taste unlike other metals).
I do wonder how important the heat-conduction property is though. My understanding is that in India, for instance, SS is commonly used for dinnerware because it's cheap there (India manufactures a LOT of SS stuff), and they favor its ruggedness (SS plates don't shatter when you drop them). They think we're a little weird for using porcelain because it's so easy to chip or break.
(Score: 2, Informative) by Anonymous Coward on Tuesday February 25 2014, @08:48PM
I just walked in the door from playing with a forge made out of some old candy tins, which will reach temperatures high enough to melt gold, despite being about 3 inches in diameter, 5 inches high, and using a blowpipe instead of a bellows.
Its intrinsic value is based on the properties of the material itself. You can drop someone into the middle of the woods with absolutely no tools, and in a short time, they could mine and process gold. Find a stream. Crack two rocks together to get a sharp edge. There's plenty of flint, chert, quartz, etc. out there that's hard enough to strike sparks with. Use a stick or your hands to dig two holes. You can either use sparks to ignite a tinder bundle, and there's your fire, or you can use the sharp edge as a knife and form a bow drill. I think striking two rocks together is much faster, as opposed to an minimum of an hour to make a bow drill set and get a fire going, with lots of experience. Then, you find yourself a nice piece of wood, take a coal, and burn out the center. Voila, a gold pan. Just like South American gold miners.
Gold can be worked without the need for a sophisticated forge--a fire in a hole with another hole as an tuyere and improvised bellows or blowpipe (a bone, a reed, your lungs with your face in the tuyere hole) is all you need, although you might take the time to find some clay and form a crucible and mold (carve the item you want out of wood, cover it in clay, and burn it out). Tin is king in the easy-to-melt category, with lead a close second. Silver melts at a lower temperature than gold, but you won't be able to pan for silver in a stream because it tends to oxidize. Gold can be mined easily without sophisticated tools, as can platinum metals, tin, thorium, uranium, and titanium. Moreover, you can eat with utensils made of gold, unlike that other metal that causes you to suggest nominating your horse for consul.
If you have the basic tools for survival, you have the basic tools to work a particular set of metals which includes gold. The intrinsic value of something is a function of the physical/chemical properties of a material. Gold will continue to melt at 1945 °F, and it will continue to not corrode, and it will continue to be easily accessible (in terms of needed technology, not necessarily scarcity). A dollar bill also has intrinsic value as a piece of linen (tinder, rag, etc.) but the market value of the dollar is not a property of the material. Of course, you could argue that nothing has intrinsic value, since being dead makes it awful hard to mine for gold, thus intrinsic value is tied to the person it creates options for, by virtue of its physical/chemical properties.
(Score: 4, Insightful) by Thexalon on Tuesday February 25 2014, @08:03PM
No it isn't. Not even close.
One way to look at it is to compare its price with substitutes like copper (for electronics) and brass (for jewelry) as of this writing:
- Gold: $43181/kg
- Copper: $7/kg
- Brass: $5/kg
I'll grant you that gold is better than copper and brass in some ways: Gold is more conductive than copper, and brass can tarnish in a way gold doesn't. But still, you'd be hard-pressed to explain why anyone would pay 6000 times more than a conveniently available substitute commodity for most purposes.
So why is gold so expensive?
- Because of its social value as a sorta-currency. Gold jewelry is more prestigious than brass jewelry, precisely because of the expense and difficulty of acquiring gold. The reason that kings started wearing the stuff is the exact same reason that gang leaders wear bling - if you can sit there with great wealth and nobody tries to steal it, you must be powerful.
- The fears of goldbugs (people who are thinking that owning gold will save them when the revolution comes). These fears are stoked by people like Glenn Beck, who just so happens to have a financial interest in gold trading companies.
- The greater fool theory - Commodities traders can always sell gold to the general public, who are more easily hoodwinked than other professionals.
But none of this has anything to do with gold's actual uses.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by adolf on Tuesday February 25 2014, @08:44PM
Nope. Gold is worse than copper -- it is between copper and aluminum.
This, by most measures, makes it a very fine conductor indeed. But the top of the chart rests with silver.
I'm wasting my days as I've wasted my nights and I've wasted my youth
(Score: -1) by evk on Tuesday February 25 2014, @08:15PM
If all gold that is currently locked into vaults, would be released on the open market. You probably wouldn't pick up a piece of it from the ground. Just like you don't pick up other metal scrap from the ground.
(Score: 1) by EvilJim on Tuesday February 25 2014, @10:06PM
around my parts if you leave any metal outside it'll be gone the next morning and you'll find it at the local scrap merchants. some people aren't willing to get a job but they seem quite happy to recycle scrap metal for cash even if they're stealing said scrap.
(Score: 3, Informative) by lennier on Tuesday February 25 2014, @08:17PM
"If I have a lump of gold, I can use it for all sorts of things, including building electronics. Gold has a very high intrinsic value."
Not especially. Gold is a great electrical conductor, but so are aluminium and copper. It doesn't corrode, but neither does titanium or chrome steel. And gold's far too heavy and soft to make good long-distance wires or be useful structurally. You can't make cutting tools with it. It just really is not a particularly industrially useful metal; without exchange value, it seems like it would be a marginally nicer non-toxic replacement for lead plumbing.
Delenda est Beta
(Score: 1) by naubol on Wednesday February 26 2014, @01:51AM
Yes, but gold was originally chosen because it doesn't tarnish or degrade, and neither does bitcoin. Back then, nobody knew it would be so useful in semiconducting.
(Score: 0) by Anonymous Coward on Wednesday February 26 2014, @03:02AM
but what about the intrinsic value of an object that cannot be duplicated? sure one cannot duplicate a gold atom just as one cannot duplicate a bitcoin. but gold is a physical object whilst bitcoin is information -or- a non physical idea with the a special property: it cannot be duplicated. surely this construct has a use and thus an intrinsic value?
(Score: 0) by Anonymous Coward on Tuesday February 25 2014, @06:59PM
What intrinsic value? I would have to burn energy to obtain BTC, but there's nothing else to show for it.
In the real economy, I pull a rock out of the ground, spend energy on it to process it, and sell the processed good for a fungible value store, while the purchaser has the processed rock, which he in turn will obtain value from.
No value add is produced in bitcoin mining.
(Score: 5, Insightful) by Anonymous Coward on Tuesday February 25 2014, @07:06PM
You are confusing cost with value.
Bitcoins have absolute zero intrinsic value: If no one accepts them any more, there's absolutely nothing useful you can do with your precious bitcoins. Dollar bills have more intrinsic value, I can use them as fire starter for example, or to make notes on them.
Of course the dollars on your bank account have exactly as much intrinsic value as your bitcoins, namely none at all.