I wrote my post before the major run up and there has been huge coverage in the last 36 hours, both good and bad. The currency popped 50% in 48 hours and that creates interest.
Here are a few items. Instawallet has folded after a hack at Bitcoin Central, who should themselves be back online in 48 hours, while Instawallet, a simple URL based wallet, might never come back. It will be interesting to see this unfold.
Mtgox is experiencing a major DDOS attack. They are fighting back and have a good post up.
There is a great post on Medium by Felix Salmon that you should read.
See this part:
On a good day, at the top of the bubble, the trading volume in bitcoins can be more than $20 million. But by the standards of global currency markets, those kind of figures aren’t even a rounding error. The foreign exchange markets see volume of $4 trillion per day. That’s 200,000 times greater than what we’re seeing in the bitcoin market, and it happens on a regular, day-in and day-out basis.
It really says what I said but in better words, unless bitcoins go up A LOT it won’t allow for speculation, hence no liquidity, hence no stability. It needs to grow a lot to really become a currency because otherwise there is too much fluctuation or rather a deflation. Of course he is saying that it will never work as a deflation means that you will not spend your money as it will be worth more tomorrow. He thinks it can’t work, I am still not sure but I agree here:
But whatever it looks like, in the end, we can be sure of one thing: it will owe a very large debt to Satoshi Nakamoto and his audacious attempt to invent a whole new currency. Bitcoin isn’t the future. But it has helped to light the way ahead.
Then there is a great post on Forbes to read that goes on the general discussion on what a currency has to be, which is an answer to this one by Denninger. Great reads.
Food for thought. All in all, Bitcoins need to appreciate in value and liquidity needs to rise for them to succeed. Will this happen?
