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Bitcoin Madness - Price Doubles in 72 hours - Rumors lead to more increases

January 6, 2012

The price of bitcoins start spiking roughly a week ago, then over the past 3 days they literally doubled.

Of course there are rumors, with the most wide spread being “we’re in another bubble” such as another June / July 2011 where bitcoins hit briefly $35 dollars before they crashed in price to 2.x levels.

The other reason stated for the price increase is that bitcoin mining levels are close to a reset of 25 added instead of 50 added by the end of the year. This means new bitcoins are about to be twice as hard to obtain. This of course is logical and if demand was similar would lead to a price increase. However this doesn’t explain the rocket ship trajectory that occurred over the past few days.

The real underlying rumor that is starting to gain strength, a unnamed party is adopting bitcoins for a NON-currency application.

Some are floating “Bitcoin DRM” for a large video game maker. Where (if you believe the rumors) each video game is shipped with (for example) 5 bitcoins, each install sends out a single bitcoin, since double spending is impossible, the most that CD can be installed is 5 times before it cannot send out a bitcoin to activate it.

If one wants to install the game for the 6th time, a bitcoin must be funded, hence the publisher is paid for the 6th install.

Flexcoin, the bitcoin bank made this statement on the developers forum this week. “We are asking for request for features regarding DRM, Mobile Apps and other technologies being built on Bitcoins so the Flexcoin API has the proper functions to accommodate the growing demand.”

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Written by TheFounder · Filed Under Featured 


Comments

  • http://twitter.com/ErikVoorhees Erik Voorhees

    The most reasonable explanation for the change in price is simply a change in sentiment - Bitcoins may have been oversold. Additionally, people might be realizing that Bitcoin is the real deal, that it works beautifully, and there willing to risk some money to profit from this and/or to help it grow.