Seeking Alpha

Bitcoin plunges as Mt. Gox halts withdrawals

  • An "increase in the flow of withdrawal requests” has caused technical issues says Mt. Gox, which promises an update on the situation on Monday.
  • Apple's (AAPLdecision on Wednesday to pull bitcoin (BITCN) wallet app Blockchain.info from the App Store could be a reason behind the sudden boost in withdrawal requests, suggests TechCrunch. Bloomberg reports of several posting videos of themselves destroying their iPhones in protest. "I'm switching," says SecondMarket CEO Barry Silbert. This isn't the first bitcoin wallet app removed by Apple which may see the virtual currency as a competitor for its yet-to-be announced payments system.
  • Bitcoin's value dove from $831 yesterday to $658 this morning.
Comments (19)
  • Randal James
    , contributor
    Comments (2311) | Send Message
     
    How ex-iFans make iNews: "The ouster of Blockchain is causing a backlash, and some are going to extreme measures to show their displeasure. Several people posted videos online destroying their iPhones. One user shot his iPhone with a sniper rifle, another smashed it with a metal bar and another threw it down a flight of stairs."

     

    So far no reports of filings for divorce.
    7 Feb, 11:22 AM Reply Like
  • steven russo
    , contributor
    Comments (161) | Send Message
     
    Bitcoin is a fraudulent attempt by the Chinese to remove the USD as the worlds reserve currency.
    7 Feb, 11:23 AM Reply Like
  • techy46
    , contributor
    Comments (5448) | Send Message
     
    The Chinese are using gold more then Bitcoin to devalue the USD and it's working too.
    7 Feb, 03:17 PM Reply Like
  • Mike Spelman
    , contributor
    Comments (44) | Send Message
     
    @Steven lol. Did Rush tell you that?
    7 Feb, 11:26 AM Reply Like
  • pat45
    , contributor
    Comments (287) | Send Message
     
    I dont trust other currency. I don't believe this aapl stock price move..am worried nobody other than AAPL and icon buying this stock.
    7 Feb, 11:48 AM Reply Like
  • calikym
    , contributor
    Comments (226) | Send Message
     
    @pat45 - I bought some. ;)
    7 Feb, 12:10 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (827) | Send Message
     
    Oh really? I bought some too! At $240 a piece a long time ago. Btc was on my radar long before it was on yours evidenced by my discussion of it in my SA article 'Could Apple Be Working On iBank?' (I wish I had bought it then at around $17 ..... sort of.....).. To continue. The contents of my Btc Wallet disappeared. From where, when and how, I have no idea. I didn't take every one's best advise and store my wallet on a zip drive but still.

     

    Btc thrives in a world of computer jockeys decryption experts and computer geeks. If you don't thin Apple didn't find specific, unresolvable security issues which compelled them to remove Btc before initiating their Banking system. You are naive.

     

    One more thing Since Mtgox is in lock down it means all of the trading in a downward trend is being done within mtgox. How can it be otherwise? So, a lot of really freaked out people will be trying to withdrawal their cash from MtGox and end their affair with BTC forever. I wouldn't assume that by Sunday midnight it was a lot lower at least on the Mtgox index.My advise? If you want to stay in sell now and watch it like a hawk on Monday try to buy as low as it goes but don't buy it until you see positive trades of 100 BTCs. When it turns around it will be fast! I don't know how long you have been watching BTC trade but it can be pretty wild!!
    8 Feb, 09:21 AM Reply Like
  • primeafk
    , contributor
    Comments (14) | Send Message
     
    Well btc is up to $743 as I write this. I wish they would wait for an actual plummet. You know when it drops to like $5
    7 Feb, 12:16 PM Reply Like
  • User 13425902
    , contributor
    Comment (1) | Send Message
     
    Apple is aggressively converting me into a hater!
    Quickly transitioning from the beacon of creative disruption to the bulwark of conservative monopoly!
    7 Feb, 12:36 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8130) | Send Message
     
    Why gamble on bitcoin when you can just buy gold and/or silver?
    You don't need to rely on a mysterious network, you don't need a telco line or a cell connection. Heck, you don't even need electricity!!
    Gold and silver are globally recognized, easily convertible into ANY fiat currency, mobile and (relative to the crypto-currencies) highly stable.
    You can even trade it anonymously.
    Gold and silver for the win when it comes to freedom currencies!
    7 Feb, 01:08 PM Reply Like
  • dellis915
    , contributor
    Comments (5) | Send Message
     
    Regardless of what Apple did. Who wants to own a currency that can loose 20% based upon a minor decision by a tech company?
    7 Feb, 01:11 PM Reply Like
  • techy46
    , contributor
    Comments (5448) | Send Message
     
    Most US citizens do ;)
    7 Feb, 03:19 PM Reply Like
  • kmi
    , contributor
    Comments (3975) | Send Message
     
    Not most not even many. Bitcoin volume is infinitesimal.
    7 Feb, 04:55 PM Reply Like
  • LongT
    , contributor
    Comments (10) | Send Message
     
    I'll be glad when Bitcoin finally dies off. It's ridiculous. But, I have enjoyed some perks in my stocks that sell GPU's and hardware for tech heads to go mining for it. There's your first clue that bitcoins are a joke...nothing of value is free. What's that about? You can not establish trade with something so volatile. The whole idea of secret transactions and money without inflation is child-like thinking. First, why worry about someone knowing if you bought a book at the store or a cheeseburger at McD's? How would bitcoins make any difference here except the fact that the bitcoin itself fluctuates so much that a business couldn't afford to hold it very long in fear that it might bottom out. And as far as the anti-inflation concept associated with bitcoin goes...look at the value of bitcoin itself. $1 = $100, now $200, oh no...$400, $800....it just keeps inflating. Why? IDK. Apparently there's a growing nerd herd that fears they'll be left out with no bitcoins to buy comic books in the near future.

     

    BitcoinS will be remembered as the BS currency that failed.
    7 Feb, 01:11 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3144) | Send Message
     
    Why is Bitcoin going up? Because it's a Hotel California! You can easily buy in, but you can't easily buy your way out. The Bitcoin exchanges like Mt. Gox have been making you wait months in line to get US dollars, and now they've cut off withdrawals completely. So people have spent hundreds of dollars buying bitcoins, thinking they could be easily converted back to dollars, and now they find that they can't sell them and get their dollars back. Supposedly they're still worth hundreds of dollars each, but practically speaking their as worthless as ever unless you can find another schmuck to take one off your hands.
    7 Feb, 04:00 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (827) | Send Message
     
    GLENWAY’S IDEA OF AN INDEX CURRENCY EXPLAINED IN FULL.

     

    FORWARD:I began formulating this idea when writing my article, “Could Apple Be Working On iBank?”

     

    For the sake of explanation I am going to call the Index Currency “iCoin”; both as a tribute to Apple, who could actually pull it off, and because conveniently “i” stands for index. The same holds true for the term iBank. (Index Bank). The main function of an index currency is to distribute wealth and risk over a broad spectrum of currencies and precious metals according to your preferences.

     

    BRIEF EXPLANATION: An index currency would be operated and owned by a single Global brokerage entity (iBank) who would be responsible for backing iCoin with the correct blend of assets, (much like any other index fund), and assessing and publishing the iCoins value. The value of the currency would be dictated by the proportion of all assets deposited by the depositors and held by iBank. The iCoins value would be backed by assets held by iBank in matching proportions of all Assets held by all depositors. If 3% of the depositors assets are iCoin then iBank would hold in a partitioned account 3% of it’s assets in order to back iCoins value. These assets would reflect the proportion of assets owned by the depositors. If 100% of depositor’s assets of the depositors were held as i coin all of iBanks assets would be held in an account and would be owned by all of the holders of iCoin.

     

    On the original deposit, depositors would be able to chose what percentage of each asset , he would hold in his account. For instance he could choose to have a deposit be all in gold or he could chose a complex balance of assets. On subsequent deposits he would have the option to transfer his deposit into any available asset or just let it remain in the currency the deposit was in. There would be fees attached to transfers and other transactions. (There are lots of possible scenarios here and I am not sure which would be feasible).

     

    INDEXED ASSETS: The possible assets indexed would be all world currencies including local currencies and emerging currencies, and all precious metals. ( I am unsure what qualifications would be required for local currencies and other small non time proven currencies).

     

    EXAMPLE FOR DESCRIPTION PURPOSES: Let us assume that there are only two depositors each depositing $100.

     

    “DEPOSITOR 1” chooses to balance his account: $25 USD, $25 EUROS, $50 GOLD

     

    “DEPOSITOR 2” chooses to balance his account: $25 YUAN, $25 iCoin, $50 GOLD

     

    Because there are $25 Dollars in iCoin in the balance,( all held by “DEPOSITOR 2”), iBank must deposit $25 worth of assets in the partitioned account to back the value of the iCoin. These assets must be balanced proportionally to all non iCoin deposits made.Therefore, The iCoin is balanced at 14.286% USD, 14.286% EUROS, 14.286% YUAN and 57.143 % GOLD which equals 100% of the $175. in non iCoin deposits. The $25 dollars of iCoin is backed by $ 3.572 USD, $ 3.572 EUROS, $3.572 YUAN and $ 14.286 GOLD all of which are held in a secure partitioned Account.

     

    A DYNAMIC BANK ACCOUNT: Because currencies fluctuate in value relative to each other the value of one’s iBank account relative to any single currency would constantly be in flux. For instance if the USD crashed, “DEPOSITOR 1” would loose 1/4 of his assets or $25, where ‘DEPOSITOR 2” would loose only 14.286% of the $25 lost in the value of his iCoin or $3.572.

     

    SERVICES OFFERED:

     

    1: IBank would act as an online commodity and currency exchange broker.

     

    2: One could balance their portfolio at you leisure to meet their needs.

     

    3: If a customer did not have an accepted currency for a transaction his Smart phone or computer would let them choose which single asset they would want to select for conversion into an accepted currency. It would also give the user a choice to transfer only the amount required for that single transaction or one could select, “Choose Amount” from a menu.

     

    4: All conventional Banking services.

     

    All Transfers and transactions would ,of coarse have fees of various amounts. I was thinking that on the original deposit the depositor could choose up to 10 assets with no charges with which to get started.

     

    THE REALLY BIG PROBLEM: Here is what can be know about iCoin

     

    1: The total value of all existing iCoin relative to any currency or commodity
    2: The total value of iCoin in any account relative to any currency or commodity.
    3. A Fractional breakdown or the all the currencies and commodities that establish iCoins value.

     

    The really big problem is revealed by the following Questions: 1. How many iCoin are there? 2. What is the value of one iCoin? The most elegant answer is the simplest. There are only fractions of iCoin. There will never be more than 1 iCoin because iCoin cannot equal more than 100% of iBanks Holdings.The next best solution would be to deflate the units by powers of 100 . In this case iBank would start off declaring the value and quantity of iCoins as follows:

     

    ‘There will be 1 coin for each percent, (and fractions there of), of iBanks assets currently held in iCoin. Each iCoin will be valued at 1% of iBanks total holdings.’

     

    When the numbers that formula yielded became too cumbersome iBank could move to higher divisions of it’s total value by multiples of 100: 10,000, 1,000000 etc.Understand that this is not comparable to inflation or a stock split. It is simply a unit conversion whose purpose is to keep the units in a range that is easily usable and comprehendible.

     

    Needless to say, even with this simple model, huge hurdles exist.

     

    CONCLUSION: Banking is on the verge of a global revolution; Macro changes and Micro changes are demonstrated by the rise of Bit Coin. Macro because of it’s a World wide, politicly neutral currency. Micro because it is what one might find in their digital wallet. There are literally hundreds of models for digital currencies most of them imitating Bit Coin in that they are Crypto-currencies. There are also other emerging currencies like local currencies. An Index currency is the only model that encompasses all currencies. The value of iCoin will be dictated by “group think” by all of it’s users because it is they that dictate the assets that back it. iCoin would therefore be a Global, Democratic, digital currency which may or may not be embraced even with the implementation of an iBank. The iCoin could end up just being the symbol under which one could look up the commodity mix of iBank, but I doubt it.
    7 Feb, 01:45 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (827) | Send Message
     
    Apple is preparing to launch iBank. iPhones will need to be extremely secure. Direct streams to Bitcoin block chains and Bitcoin trading floors are a known security risk. iWallet migh have Bitcoin in them but there will be a security buffer of some sort ..... or not..... The reason for not allowing Bitcoin will not be because Bitcoin is competing with icoin.
    7 Feb, 02:27 PM Reply Like
  • doctrjack
    , contributor
    Comment (1) | Send Message
     
    apple simply doesnt want to be involved in a unprotected, unregulated currency that only hackers and criminals value. this has nothing to do w anything else. i don't blame them. its a huge conflict of interest. any person on wall st or any other finical institution laughs at bit coin. buy apple stock before you buy bit coin, i can honestly say its a more stable investment than bit coin and apple is far from stable. and you can sell w the push of a button and the ask to buy ration is within a penny. oddly enough all the bitcoin buyers only want to pay 10% BELOW THE POSTED VALUE. ITS A SCAM!
    7 Feb, 05:31 PM Reply Like
  • DanoX
    , contributor
    Comments (2575) | Send Message
     
    A Fool and his money are soon parted, Bitcoin is a SCAM!!!!
    9 Feb, 04:19 PM Reply Like
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