Author Topic: Bitcoin currency (merged topics)  (Read 248349 times)

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #690 on: March 28, 2019, 12:15:39 PM »
Cointelegraph, 3/19/19: New Report Warns 87 Percent of Cryptocurrency Exchange Volume Is Potentially Suspicious

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...Reporting on figures gathered from 97 exchanges, researchers found that the vast majority of the volume claimed to come from users may not in fact exist. ...

“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie wrote in social media comments on the findings. ...


Cointelegraph, 3/22/19: Bitwise Tells US SEC That 95% of Volume on Unregulated Crypto Exchanges Is Suspect

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95 percent of volume on unregulated exchanges appears to be fake or non-economic in nature, an analysis from cryptocurrency index fund provider Bitwise Asset Management has argued in a report dated March 20. ...

“Under the hood the exchanges that report the highest volumes are unrecognizable. The vast majority of this reported volume is fake and/or non-economic wash trading.” ...

Bitwise claims that roughly 95 percent of reported volume is fake and that the real market for BTC is thus “significantly smaller, more orderly, and more regulated than commonly understood” — amounting in reality to $273 million. ...

Suspect signs include an implausibly perfect alternating pattern of green and red [buy and sell] trades, and a lack of round number or small value trades. On Coinbene, buy and sell orders also appear in timestamped pairs, with one offsetting the other. Moreover, the spread on Coinbene at the time of Bitwise’s analysis was $34.74: “that compares to $0.01 on Coinbase Pro. It is surprising that an exchange claiming 18x more volume than Coinbase Pro would have a spread that is 3400x larger.”

Suspect exchanges also reportedly demonstrate consistent volume 24-hours a day, as opposed to regulated exchanges, where volume corresponds to waking and sleeping hours. ...

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #691 on: March 29, 2019, 02:16:33 PM »
Just work through the history here. Bitcoin went from a currency to a wealth storage device that was little more than a speculative bubble and then got its futures listed on Wall Street but us commoners could only buy calls so the banks held all the puts and miraculously the price tumbled. Now we find all the trading is rank bullshit so it's not hard to imagine the banks did a naked short and the development team (who belong in prison) probably played into their hands by restructuring Bitcoin to a non-usable currency that was little more than a speculation.

I believe we have witnessed a financial crime. How else could the banks only sell calls on a product that desperately needed puts? I would have bought puts had it been legal. I'm being told that when the price shattered only the banks made money and the bulk of trading was questionable? SEC? They found the only way to short Bitcoin just before it tanked and only they got the short?

Just put this in perspective... I can short or put FOOD. Wheat, corn, rice, oranges, etc. can all be bet against. But letting me bet against Bitcoin? Well, that could have been dangerous. Only the banks can bet against Bitcoin and its fictional trading.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #692 on: April 25, 2019, 04:21:55 PM »
WSJ:  Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Finds

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State Attorney General Letitia James said Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cover up the missing funds, which occurred in mid-2018 and hadn’t been disclosed publicly.

The attorney general’s office said it has obtained a court order directing iFinex to stop moving money from Tether’s reserves to Bitfinex’s bank accounts, halt any dividends or other distributions to executives and turn over documents and information. The coverup drained at least $700 million from Tether’s reserves, according to the attorney general’s office.


There's been speculation that Bitfinex and Tether are rotten to the core for over a year.  Sounds like there may actually be something to it. 

Don't trust any exchange, or any crypto tied to the dollar, ever!  Centralization is not your friend in this space.

Prices are falling off a cliff across the board, but BTC is hanging on to it's >50% dominance.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #693 on: May 09, 2019, 10:00:24 PM »
Interesting article that Jimmy Song recommended this week (which is weird because Jimmy doesn't ever analyze price): https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25


This author attempts to correlate bitcoin's scarcity to price and compares that with gold and silver.  Scarcity is defined as the Stock to Flow ratio. 



Bitcoin's SF is currently 25, but jumps to 50 in 2020.  Compare that with silver's 22 and gold's 62. 





He claims the data shows a power law relationship between bitcoin's supply and price.  Where each halving of supply, which doubles the SF, results in a 10 fold increase in market value.


According to his model, he predicts BTC market cap will climb to $1 trillion, with a price of $55,000, as a result of the next halving.

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The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.

People ask me where all the money needed for $1trn bitcoin market value would come from? My answer: silver, gold, countries with negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.


Who knows?  This guy could be more FOS than I am, so don't invest what you can't afford to lose forever.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #694 on: May 10, 2019, 07:23:15 AM »
I will never understand the story arc of Bitcoin no matter how many times I have this conversation. In 2011 we thought Bitcoin was going to save the world when everyone used it and it saved us from transaction fees from Western Union and crippled central banking. A central bank can't compete with a capped currency and as all good libertarians know central banking = war. As in they invented central banking a couple years before WWI.

So the dream waas to have a global currency that transferred instantly at low cost, ended war, and forced the governments of the world out of inflationary fiat and into deflationary Bitcoin where people actually got wealthier by saving rather than lose every year in worthless bank accounts.

Those are some pretty lofty goals. But if achieved they provided massive value to the user who uses a deflationary currency with a healthy return of savings and low transaction fees and as a byproduct ends war. That's what we were talking about.

Fast forward to 2019. It's value is scarcity and few will use it. The thrill is gone. And when I read the few still in it I understand that they have no idea if they are currency traders or commodity investors.

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #695 on: May 10, 2019, 12:10:59 PM »
This author attempts to correlate bitcoin's scarcity to price and compares that with gold and silver.  Scarcity is defined as the Stock to Flow ratio.

I'm dubious.  He's got a simple equation that includes no terms for human action.

I'd like to see similar curve-fitting for gold and silver over time, as the stock and annual production changed (and using a CPI-corrected dollar for comparison).  But I'd still be dubious, because the demand for Bitcoin has only existed for a decade -- only twice as long as the Beanie Babies investment fad lasted.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #696 on: May 10, 2019, 03:23:35 PM »
Dubious is the best mindset for evaluating cryptocurrency.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #697 on: May 10, 2019, 03:56:04 PM »
I'd like to see similar curve-fitting for gold and silver over time, as the stock and annual production changed (and using a CPI-corrected dollar for comparison). 

I just noticed that someone in the comments section of the article posted these results for gold since 1850:  https://medium.com/@mouk.rvm/hi-planb-eb8f1179eb58

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I calculated SF and Market value from 1850–2018 for Gold. The combined Bitcoin Gold data points are shown in the chart below.

As you can see it does not fit the model.

I recalculated (using official US inflation numbers) all historic market values (Bitcoin and Gold) to reflect its purchasing power, denominated in 2018 USD. For Bitcoin the impact is limited, given its short history. For Gold the impact is massive.

The result is shown in the next chart. The Gold dots are now concentrated around the trendline. R squared is 0,91.




But I'd still be dubious, because the demand for Bitcoin has only existed for a decade -- only twice as long as the Beanie Babies investment fad lasted.

Were Beanie Babies scarce?

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #698 on: May 10, 2019, 07:12:19 PM »
Quote
The combined Bitcoin Gold data points are shown in the chart below.

I don't understand what that means.  He's thrown Bitcoin and gold data points together in the same graph without distinguishing them?

Were Beanie Babies scarce?

There was artificial scarcity of particular models, and collector/"investor" mania took care of the rest.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #699 on: May 10, 2019, 07:33:17 PM »
The solid line is is 9 years of BTC data, the data points are gold over 150+ years. Obviously not comparable in terms of the length of historical data, but it’s interesting to see the similarity in purchasing power at comparable levels of scarcity.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #700 on: May 27, 2019, 06:48:19 PM »
Interesting analysis on the feasibility of BTC sustaining sufficient network security via an increase in transaction fees as the block mining reward declines over the next twenty years.  The author compares the fees involved with other traditional stores of wealth, such as real estate, physical gold, fiat currency, and off-shore banking.


Fears over the declining block reward are overblown:  https://blog.picks.co/bitcoins-security-is-fine-93391d9b61a8

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TL;DR — This article comprehensively addresses concerns around Bitcoin’s security model which is funded by the block subsidy and transaction fees. Key points:

-The larger the Bitcoin network grows, the more secure it becomes.

-Over the long term, an organic security tradeoff will occur between the block subsidy and transaction fees. As network effect becomes larger, demand for block space increases, thus decreasing the need for a block subsidy. We have empirical evidence that this is occurring, and future projections look optimistic.
   
-Bitcoin’s block space is a scarce and unique commodity. It will continue to accrue demand.
   
-The bull market of 2017 wasn’t millions of consumers suddenly using blockchains to transfer money around the world and seeking to minimize transaction, exchange, volatility, and coordination fees.
   
-The price elasticity of a Bitcoin transactor is high. Even in significantly higher fee environments Bitcoin block space demand will grow.



I liked this quote:  “I’m sure that in 20 years there will either be very large transaction volume or no volume.” — Satoshi Nakamoto

It's a reminder that even Satoshi saw this as a giant experiment.



This weekend the price pumped again, currently just below $9000.  All those who bought and held BTC in the last 12 months (not to mention anyone who bought the $3000 dollar low 6 months ago) is, for the moment, above water. 

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #701 on: May 29, 2019, 09:47:20 PM »
If you've looked at Coin Market Cap's BTC dominance metric lately you'll notice that it hasn't been above 50-60% for years now.  This analysis suggests if each currency is weighted by market volume that BTC actually demonstrates an 80% dominance and follows the 80/20 principle.


There's also a new site that tracks the equivalent number of blockchain confirmations required to produce a transaction with the security of 6 BTC confirmations.  Basically, this is another way of comparing the risk of a 51% attack between competing chains.

The BTC baseline is currently averaging 6 block confirmations every 48 minutes.  The equivalent hashrate (1,164 confirmations) for ETH takes 5X as long, with BCH taking third place at 21X as long (109 confirmations). 

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #702 on: June 21, 2019, 06:34:55 PM »
In the last hour BTC is back above $10,000 for the first time since March 2018.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #703 on: June 22, 2019, 02:26:27 PM »
Interesting return data from coinpaprika.com showing BTC trading-pair performance for coins with market caps  >$1 billion. 




The opportunity cost of forsaking BTC for altcoins has been substantial over this last year.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #704 on: June 24, 2019, 12:20:44 PM »
This was linked to on Jimmy Song’s newsletter today:  Principles of Bitcoin Maximalism

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1st Principle:  Everything that is not bitcoin is a scam.

2nd Principle:  Every attempt to change bitcoin is a scam.

3rd Principle:  Every attempt to push people to spend bitcoin is a scam.

4th Principle:  We shouldn’t be kind with scammers


Can’t say I found much to disagree with and it fleshed out a bunch of things I had vague gut feelings on since 2012.  And most important, it freely admits the experimental stage we’re in with crypto right now and success is far from inevitable.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #705 on: June 24, 2019, 10:35:13 PM »





I prefer Shitcoin Minimalist to Bitcoin Maximalist.



Jack had a good bit about cryptocurrency and the latest rise in BTC prices on the podcast today. 

Best line, "If anybody else says Tulip Mania to me again I'm going to slap 'em in the face with a dead fish."  Oh, how well I know that feeling....

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #706 on: June 25, 2019, 09:27:52 PM »
In the last hour BTC is back above $10,000 for the first time since March 2018.

Make that $12,000, first time in 18 months.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #707 on: June 26, 2019, 11:52:36 AM »
Blew thru $13,000 this morning.

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #708 on: June 26, 2019, 12:01:52 PM »
Blew thru $13,000 this morning.

Why?

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #709 on: June 26, 2019, 12:24:24 PM »
FOMO.

Right now it’s probably institutional, but retail investors will be piling in when it’s closer to 2017 highs. 

It’s hard to predict how far it will pump this halving cycle, but it’s typically several multiples of the previous one. It’s always a shock, no matter how many you live through.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #710 on: June 26, 2019, 07:14:17 PM »



Jack had a good bit about cryptocurrency and the latest rise in BTC prices on the podcast today. 

Best line, "If anybody else says Tulip Mania to me again I'm going to slap 'em in the face with a dead fish."  Oh, how well I know that feeling....

So those who called a top were wrong and now we're going to proclaim legitimacy with violence? Hmm definitely not fiat. That would require worthless money backed by violence. To be fair I've had to beat up a lot of people to make them appreciate gold.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #711 on: June 27, 2019, 02:01:08 PM »
Bitcoin almost hit $14,000 yesterday and then promptly fell off a cliff, now it’s heading to $10,000.  There’s been reports of some exchange outages and thefts coinciding with the crash, so there’s plenty of FUD going around to freak out those who just barely FOMO’d in. 


Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #712 on: June 29, 2019, 05:42:10 PM »
Article on Forbes today:  Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility

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Bitcoin as a System: Designed for Systemic Stability, Not Price Stability

Bitcoin, by contrast, is a system that prioritizes security over price stability. Bitcoin’s systemic stability stems from the security of its network. This week, as bitcoin’s price volatility was capturing headlines, I was watching core bitcoiners get excited about something else entirely—the network’s hash power hit an all-time high, and its “difficulty” also adjusted to an all-time high.

Translation: Bitcoin’s network security hit an all-time high.

It's true, just look at these comparisons between the top altcoins in terms of the amount of energy required to attempt a 51% attack on the bitcoin blockchain. 

BTC's network security, measured in terms of mining difficulty and hashing power, has never been higher.  Nothing else is even close.


Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #713 on: July 08, 2019, 01:45:05 AM »
US News & World Report:  What's the Best Bitcoin Wallet? 

#5 Coinbase, #4 Blockchain.info, #3 Electrum, #2 Leger or Trezor, #1 Paper wallet.


I'm pretty much in agreement, but currently I think I prefer the Electrum software wallet in cold storage mode over the Trezor or Ledger, mostly because I just recently started playing with hardware wallets and feel like I can understand and better control how my keys are being stored and accessed with Electrum.

Electrum really does a lot of things very well, and it works on Windows, macOS, Linux, and Android, and can be used with a hardware wallet, as well.  I've used it on several Macs, as well as in the Tails Linux distribution (I personally wouldn't trust Windows with significant amounts of bitcoin).  It provides the ability to generate and store wallet keys on an airgapped computer that you never allow online ever again and export a master public key to a second online computer to generate a watch-only wallet.  This second computer will interface with the network for transactions, but when you need to send a bitcoin transaction that requires a signature with the private keys it will save an unsigned copy of the transaction to a file that can be opened by the airgapped computer, which signs and save the transaction file to be transferred back to the online machine for broadcasting to the network.  It sounds complicated but Electrum makes it easy to do.  A couple youtube vids and you're good to go.

The other nice thing about having an airgapped computer is the fact that it makes the perfect platform for generating secure paper wallets using the bitaddress.org webpage, too.  Get an old basic printer that doesn't have any wireless connectivity to print out the paper wallet address and keys and you're good to go.

Remember, whatever method you choose, you must start slow and experiment with small amounts before committing significant amounts of coin.  Make sure you can reliably perform all the steps necessary to get your coins back out of the wallet after you've put them in there.  And practice the steps a few times over a few days so it really sinks in.  Otherwise, you might wind up outsmarting yourself in the process of trying to keep your coins safe.  It's like burying gold out in the back forty, you need to take some steps to make sure you can find it again when you really need it.


Going on two years, it's probably worth revisiting the wallet issue, especially at the pace that this technology improves at.

First off, paper wallets are a no go for me at this point, mostly because they take too much diligence in terms of preventing leaks of information in the process of creating the private key on an air-gapped computer.  It's hard, it's expensive, and it's complicated.  If you want to go balls to the wall on this concept you need to go with Glacier Protocol.  I've researched it, and I don't have the confidence in my ability to pull it off successfully.  This adds several extra layers to the precautions I took in 2017 and I don't have it in me to go down that route anymore.

As far as blockchain.info (now blockchain.com), despite the fact that it served me well for many years in the early days, I just can't recommend a web based wallet these days.  Apparently they recently introduced a variant of the Ledger Nano S that can be linked to their online wallet, which undoubtedly increases the security, but it's a proprietary implementation that locks you in to that wallet.  I'm less and less comfortable with being locked into a proprietary wallet solution.

Coinbase, believe it or not, I still use regularly and am very happy with.  I've been selling on a regular basis for the last two years and 95% of those sells have been processed by Coinbase.  Their Vault solution works well and basically freezes any bitcoin that you deposit into it for at least 2 days before you can spend it.  It takes confirmations from two different email accounts and a wait of 48 hours to move it from the vault to the wallet before it can be spent.  Coinbase insures the dollar and BTC amount, so for checking account sized balances I have no hesitation recommending Coinbase's Vault solution for storage.  Also, I have no complaints with bank transfers following the BTC sales on their site.

Ledger and Trezor, or most any hardware wallet, are extremely good options.  I have used the Ledger Nano S, Ledger Blue, Trezor One, Trezor Model T, as well as the KeepKey, and all of them work.  At its essence, a hardware wallet is a minimalist computer that is able to generate a random private key for signing transactions without leaking information when it's connected to a smarter online device like a computer, tablet, or smartphone.  A hardware wallet is a much simpler way to generate secure keys for cold storage than an air-gapped computer.  There really is no better sweet spot in terms of security and ease of use.  However, it's certainly not perfect, yet.  I think every single one of these hardware wallets has experienced publicized vulnerabilities and they all require that you securely store the 12 to 24 word seed phrase so the wallet can be regenerated in case of loss or failure.  And seed storage is no trivial issue.  Just look at the cottage industry in physical metal plates that will secure a seed phrase from being destroyed in a house fire.  However that seed phrase introduces another risk factor, because anyone who gains access to those words now can spend all the coins in that wallet. 

That brings us to Electrum, which continues to impress me as time marches on in this space.  This free software runs on Windows, Mac, Linux, and Android, and I've used them successfully on each of those operating systems.  This wallet solution provides the best combination of ease of use and control over BTC transactions.  It can be set up to operate in cold-storage mode, where an air-gapped machine generates keys, stores them indefinitely and then signs transactions offline for broadcast to the blockchain on an online computer that doesn't store the private keys.  It's much easier that it sounds, and it works.  In my experience, I've had the air-gapped machine go down and was able to rebuild the wallet offline on a new computer with the seed words.  The system works.  Plus you can set the fees and monitor the transaction progress like no other wallet I've used.  Electrum is a wallet worth learning about for anyone in this space.  It's not fancy looking, but it works, and it works very well.

Currently, in by opinion, the best wallet system combines the strengths of the hardware wallets with Electrum.  Set up an Electrum wallet with a hardware device, like the Trezor, holding the private keys and you've got a very powerful and secure system.  The Electrum file on your computer contains no private keys so the concerns about that computer being online are greatly minimized.  Should the computer with the Electrum wallet go down or get stolen, if you still have the Trezor you haven't lost your funds and can access them easily on Trezor's wallet application.  If you lose both Electrum and the Trezor you can rebuild the wallet from the seed phrase.  If you want to go even better, generate a multisignature wallet scheme on Electrum that utilizes 2 out of 3 hardware wallets for signing transactions.  Or go big and do a 10 of 15 multisig scenario.  Electrum will do that.  It's incredibly versatile, I recommend everyone try it.


For no skin in the game, try Electrum for free on the bitcoin testnet:  https://electrum.org/#download

Start up in testnet mode:  https://bitzuma.com/posts/a-beginners-guide-to-the-electrum-bitcoin-wallet/#testnet-mode

Get some free testnet BTC:  https://coinfaucet.eu/en/btc-testnet/

And experiment without any fear of losing real BTC that could be worth thousands in the coming years. 

The scariest thing about crypto is the responsibility that comes with generating, storing, and signing transactions with private keys.  Learning how that process works and developing the necessary comfort level is absolutely critical if you're interested in acquiring and hodling cryptocurrency.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #714 on: July 09, 2019, 07:32:35 PM »
Presentation linked to yesterday on Jimmy Song's Newsletter:  The Case for a Small Allocation to Bitcoin

Quote
Bitcoin is a fascinating experiment but it is still just that: an experiment. It still has a chance of failing. But after 10 years of infrastructure development and uninterrupted functioning, with more than 60 million holders, adding more than 1 million new holders every month and moving more than $1 billion every day worldwide, it has a good chance of succeeding.

If Bitcoin does succeed, 1 Bitcoin will at least be worth $2 million in 7 to 10 years. That is 250 times what it is worth today (at the time of writing the price of Bitcoin is ~ $8,400).

Quote
In today’s world where every asset seems priced for perfection, it is hard, if not impossible, to find an asset that is so mispriced and where the possible outcomes are so asymmetrical. The current state of Bitcoin is similar to the state of the Internet in 1992. Back then, Internet was very nascent and experimental. Just like the Internet, Bitcoin offers a unique opportunity for a non-material exposure to produce a material outcome.

It is reasonable to assert that the long term risk-reward ratio of Bitcoin is currently most favorable of any liquid investment in the world.

Quote
The stage is set for mass market adoption in the coming 5 years. In our assessment, during this phase (its “Windows moment”) Bitcoin will become widely recognized as a portfolio hedging instrument and reserve asset.


No idea who or what jodobear is, but I concur.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #715 on: July 11, 2019, 08:41:26 PM »
Trump knocks bitcoin, Facebook cryptocurrency: 'Not a fan'

Quote
"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity," Trump tweeted Thursday night.


Quote
"Similarly, Facebook Libra’s 'virtual currency' will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International," he tweeted.

"We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable," Trump continued. "It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!"


 :rofl:

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #716 on: July 12, 2019, 03:57:10 AM »
Fed Chairman Jerome Powell Compares Bitcoin to Gold

Quote
During Powell’s testimony before the Senate Banking Committee on Facebook’s planned Libra cryptocurrency, he said: “The size of Facebook’s network means it could be, essentially, immediately systemically important.”

Though the initiative raised “a lot of serious concerns,” including privacy, money laundering, consumer protection, and financial stability, he began to speak favorably about other cryptocurrencies.

“Almost no one uses bitcoin for payments, they use it more as an alternative to gold,” he said Thursday afternoon. “It’s a speculative store of value.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #717 on: July 13, 2019, 01:27:56 AM »
Just listened to Jack's replay of the Vin Armani piece on BTC as a system of personal sovereignty, starts around 54 minutes in:  http://www.survivalpodcast.net/audio/2019/07-19/epi-2469-experts-7-12-19.mp3

New take on "Render unto Caesar that which is Caesar's...."

Googled him and found he's had a much more interesting life than your average bitcoin evangelist.


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Re: Bitcoin currency (merged topics)
« Reply #718 on: July 26, 2019, 02:14:09 PM »
Since Coinbase is US based, and has made a point of following regulations, you can expect them to fully embrace any reporting requirements this IRS decision will bring. For those just getting into crypto, I don't think you need to be too concerned at this stage about accounting for every millibit worth of capital gain realized with small transactions.

The people who need to be most aware of this are the ones who acquired coin when it was selling at single digit prices and are now thinking about paying off their mortgage with their gains after seeing it run up to three and four digits. I don't think it's realistic to think the IRS won't come poking around asking questions about large USD transactions suddenly popping up on their radar.


IRS:  IRS has begun sending letters to virtual currency owners advising them to pay back taxes, file amended returns; part of agency's larger efforts


WSJ:  IRS Sending Warning Letters to More Than 10,000 Cryptocurrency Holders

Quote
“Taxpayers should take these letters very seriously. The IRS is expanding efforts involving virtual currency, including increased use of data analytics,” said IRS Commissioner Chuck Rettig.

An IRS spokesman declined to say whether the letters stem from information turned over by digital-currency platform Coinbase. In mid-March of 2018, Coinbase provided data—under a federal court order—on about 13,000 accounts requested by the IRS.

One version of the letter recently uploaded to the IRS website asks recipients who believe they have followed the law to sign a statement declaring, under the penalty of perjury, that they are in compliance with tax rules. It also says the recipient should understand the IRS may be in touch with them.

In recent weeks, IRS criminal investigations chief Don Fort has announced that the agency is also building criminal tax-evasion cases involving cryptocurrency that are expected to be made public soon.

The Coinbase customers whose information was turned over bought, sold, sent or received digital currency worth $20,000 or more between 2013 and 2015.

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Re: Bitcoin currency (merged topics)
« Reply #719 on: July 28, 2019, 03:24:35 AM »
Currently, in by opinion, the best wallet system combines the strengths of the hardware wallets with Electrum.  Set up an Electrum wallet with a hardware device, like the Trezor, holding the private keys and you've got a very powerful and secure system.  The Electrum file on your computer contains no private keys so the concerns about that computer being online are greatly minimized.  Should the computer with the Electrum wallet go down or get stolen, if you still have the Trezor you haven't lost your funds and can access them easily on Trezor's wallet application.  If you lose both Electrum and the Trezor you can rebuild the wallet from the seed phrase.  If you want to go even better, generate a multisignature wallet scheme on Electrum that utilizes 2 out of 3 hardware wallets for signing transactions.  Or go big and do a 10 of 15 multisig scenario.  Electrum will do that.  It's incredibly versatile, I recommend everyone try it.

Hold up, I think I've finally found the best of all possible currently available hardware wallets, Coldcard by Coinkite.  Yeah, it looks like a calculator kit from intro to electronics class, but it's what's inside that makes this one special.

Coldcard combines the unique elements of the Trezor and Ledger products and combines them into a single device that never has to be plugged into a computer.  Never, ever.  Trezor's claim to fame is it's based on an open source hardware and software design, which theoretically provides more insurance that the design has been audited by outsiders to see if it's actually secure.  Ledger's deal is that it uses a secure element hardware chip for performing cryptography and secure storage of secrets, however, it's design is not open source so there's more concern about backdoors and unforeseen security bugs.  Neither provide much in the way of alerting you if they've been tampered with and can be vulnerable to evil maid attacks. 

Coldcard uses both a secure element for secrets and is completely open source, plus it contains all the sofware on the device necessary to generate keys, perform signing, and read and write to a MicroSD for transfer or backup purposes.  That's huge.  The icing on the cake is it natively supports the Electrum desktop software and allows one to securely transfer a skeleton watch-only wallet from Coldcard to any computer running Electurm via the MicroSD.  You can plug it in to the computer and interface directly with Electrum for signing transactions, which is what is required when using Trezor or Ledger, but it's far safer if you can keep a hardware wallet from ever touching a computer.

For me the biggest advantage is it allows me to run Electrum on any computing platform without having to worry about downloading the dependencies necessary for Electrum to work with the various hardware wallets, which is a big stumbling block when trying to use Electrum on Linux or Windows platforms.  Having had to restore Electrum wallets on an airgapped computer is nerve racking enough without having to worry about downloading the dependencies necessary to communicate with a hardware wallet that's holding all your funds.  Also, not having to connect to a hardware wallet manufacturer's front-end software via computer to update firmware or initialize the device is much appreciated..  And, Coldcard can build a multisig wallet between multiple Coldcards by transferring the necessary xpub info between themselves using the MicroSD.  It's really incredible.

Some guy has apparently signed bitcoin transactions, written them to MicroSD, strapped the cared to a homing pigeon, which carried it to a guy in another country for broadcast to the internet.  That's the ultimate in sneakernet for bitcoin transactions at this point.  The designer is the guy who broadcast a transaction via ham radio last year and he's looking to integrate unique wireless interfaces in the future.  It's serious cypherpunk stuff that's 100% designed, manufactured, and shipped from Canada.