Bitcoin doubles in weekend trading

Bitcoin Chart - 6/2 to 6/5

I was planning on getting some Bitcoins and looked at the price on Thursday when it was trading around 10, up from the 8 or so jump after the Gawker article.  I decided I would get ready,  see what happened and either way buy today.  Until I checked the price this afternoon.  It went from 10 on the 2nd to 19 on the 4th.  That’s a pretty big move in any market.

I have been planning on buying from MT Gox. The pair trade I have been looking at is the USD/Liberty Reserve.  Since I don’t know what a Liberty Reserve note is I had to do some reading: “Liberty Reserve is a private currency exchange system issued by Liberty Reserve S.A. of San José, Costa Rica.” I feel safer already!

The forums are buzzing about who is ok to trade with and the rest of the crowd alternates between specing mining rigs and wondering if its too late 😉

But its got to be safer than dollars, right?

A recent article in MIT’s Technology Review asked the question: “Isn’t a fixed supply of money dangerous?

It’s certainly different. “Elaborate controls to make sure that currency is not produced in greater numbers is not something any other currency, like the dollar or the euro, has,” says Russ Roberts, professor of economics at George Mason University. The consequence will likely be slow and steady deflation, as the growth in circulating bitcoins declines and their value rises.

“That is considered very destructive in today’s economies, mostly because when it occurs, it is unexpected,” says Roberts. But he thinks that won’t apply in an economy where deflation is expected. “In a Bitcoin world, everyone would anticipate that, and they know what they got paid would buy more then than it would now.”

About Daniel Davenport

Daniel is a digital media executive with internet and broadcast experience. Daniel is currently the executive strategy director at THINK Interactive.

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