Bitcoin Naysayers Jump On Bandwagon
On Wednesday, April 17, 2013 the Bitcoin trading on the Tokyo-based exchange saw it price hit US$266 at one point and then fall to as low as $105. The surge in interest in Bitcoin overwhelmed the network.
Gonzague Gay-Bochery heads Mt. Gox the leading Bitcoin exchange company. In last Thursday’s interview he said, “We are trying to do everything by the book and trying to make everything work smoothly.”
Mt. Gox and other exchanges that allow people to buy Bitcoins all appeared to be having varying degrees of problems. This illustrates how small Internet companies often have trouble managing newfound success.
Earlier this month Mt. Gox gained 75,000 new users. And in a recent three-day period added some 20,000.
“Bitcoin will go up and down,” Gay-Bouchery said. “If there is a lag, don’t panic.”
Mt. Gox has spent “enormous” amount of money on new servers for its Bitcoin trading engine. The new servers, which have solid-state drives for faster data input and output, are due to arrive soon.
Let’s have a little perspective. Bitcoin was not even imagined until 2009. The network must verify individual blocks “Proof Of Work” to be considered valid. Thus a sudden surge in business can overwhelm the rapidly developing network. The follow chart represents Bitcoins trend line.
Boincoin Trading Trendline
Clearly, as Bitcoin is more accepted in the marketplace, the price is rising.
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References: Forbes, “Bitcoin’s Volatility Is A Disadvantage, But Not A Fatal One.” April 12, 2013: Bitcoincharts.com; NetworkWorld, “Bitcoin Volatility Caused By Surge In Demand, Slow Software,” April 10, 2013
