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The bursting of the Bitcoin bubble

BITCOIN, briefly the world’s favorite cryptocurrency, is in trouble. It plummeted from a peak of around $33 per unit in June to just $2.51. In May Rick Falkvinge, the founder of the Pirate Party in Sweden, famously blogged that he was converting all of his Swedish-crown savings to Bitcoins. Five months on, he tweeted that after “hoarding” Bitcoins until they hit $18 or so, he had moved to a “buy-and-sell pattern”. Mostly sell, it seems. “I currently don't hold any,” he admitted.

Bottom line: The world is going to be turned over by bitcoins unless governments step in and ban them by prosecuting individuals.

1. Bitcoin is a technologically sound project.
2. Bitcoin is unstoppable without end-user prosecution.
3. Bitcoin is the most dangerous open-source project ever created.
4. Bitcoin may be the most dangerous technological project since the internet itself.
5. Bitcoin is a political statement by technotarians (technological libertarians).*
6. Bitcoins will change the world unless governments ban them with harsh penalties.

Bitcoin has been all the rage lately. The stuff, or lack thereof, runs on peer-to-peer technology, is fully decentralized, has no patents, and is open source. Currently, there are almost 11 million bitcoin units in existence and the maximum amount of bitcoin units that will ever be created by the logic of its design are 21 million. For more details on how they work, see the recent Mises Daily “The Money-Ness of Bitcoins” by economist Nikolay Gertchev.

Bitcoin Conference London 2012

15-16 September, London

Call For Papers is now open: email proposals to genjix@bitcoin2012.com

After months of planning we are glad to announce we will be holding the Bitcoin Conference in London. The first conference was held by Mitchell Bourne in association with us. He set an amazing standard, showed us the ropes and bestowed us with considerable experience. This year he will be taking a diminished role as we take over the chariot. We hope to live up to the high standard he set last year.

Entrepreneur Taylor More listed his two-bedroom Alberta bungalow, asking 405,000 Canadian dollars (£261,000; $395,000) - or the equivalent in Bitcoins. Bitcoins are now a widely used alternative payments system and one Bitcoin is currently worth about £37.

New bitcoin trading site, Coinabul.com, is now accepting bitcoins in exchange for gold. Orders are currently live during the private beta. Coinabul is the only true Bitcoin-to-Gold exchange in the world. Bitcoin is a digital stored value vehicle, able to provide near-instant transaction capability in a global Internet economy. Bitcoin users are able to trade in bitcoins to their national currency via currency exchanges, but for users who prefer to save their money in gold, Coinabul provides instant gold purchasing capabilities.

The last time we wrote about Bitcoin, in October, the currency's future looked grim. A series of security incidents had created an avalanche of bad press, which in turn undermined public confidence in the currency. Its value fell by more than 90 percent against the dollar. We thought Bitcoin's value would continue to collapse, but so far that hasn't happened. Instead, after hitting a low of $2, it rose back above $3 in early December, and on Monday it rose above $4 for the first time in two months.

A Profit Instrument (PI), actually, is a tiny website that brings in tons of cash like a complete autopilot, which hardly takes about 2 hours to setup. Every Profit Instrument is focused around one single 'Product Name Keyword' (PNK), that is, the product that gets awesome rankings in the search engines, and hence gets tons of free traffic.

"How's this for a disruptive technology? Bitcoin is a peer-to-peer network based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government."

A growing list of merchants accept bitcoins.