Bitcoin currency (merged topics)

[David in MN]

That is, if Coinbase is actually working. The website tweeted 20 hours ago that users are experiencing delays and having trouble logging in to their accounts due to high traffic.

To be fair, a perfect "store of wealth" is a currency you can't buy anything with, can't afford to transact in, can't use due to lag times, and can't even be accessed by the owner. That's why I store my gold in an undisclosed Latvian garage whose owner doesn't have a phone or email account.

[FreeLancer]

It’s like those carved money stones that fell out of canoes and yet continued to be transferred back and forth between island tribes while laying at the bottom of the sea.

Coinbase is a worrisome central point of failure in what’s supposed to be a decentralized system, it’s like Gox was 4 years ago.  Store your coins in a wallet you fully control. If you don’t have the private keys you don’t actually own the bitcoin.

[Smurf Hunter]

Coinbase is a worrisome central point of failure in what’s supposed to be a decentralized system, it’s like Gox was 4 years ago.  Store your coins in a wallet you fully control. If you don’t have the private keys you don’t actually own the bitcoin.

Like David said about his gold in that Latvian garage, with 30 minutes notice he probably can't exchange that gold for a gallon of milk.

Coinbase has an interesting role here.  It allows e-commerce retailers (like my own employer) to accept BTC at their online retail point of sale, but then immediately exchange into USD.
I admit I was a little dismayed they did not plan on holding BTC just as any other foreign currency. Technically it's a stand-in for PayPal or a number of third party redirect payment providers.

As more merchants accept BTC, the proposition for holding BTC becomes more desirable, and Coinbase facilitates that.

[FreeLancer]

Coinbase just emailed this out to users:

We at Coinbase couldn’t be more excited by the explosion of interest in digital currencies. The last few weeks has seen an unprecedented increase in the price of digital currencies. More people are engaging with our platform than ever and that bodes well for the future of the digital currency. At the same time, it does create extreme volatility and stress on our systems. We take this very seriously and wanted to share some important thoughts.

We’re continuing to invest heavily to scale our platform

Over the course of this year we have invested significant resources to increase trading capacity on our platform and maintain availability of our service. We have increased the size of our support team by 640% and launched phone support in September. We have also invested heavily in our infrastructure and have increased the number of transactions we are processing during peak hours by over 40x.

There may be downtime which can impact your ability to trade

Despite the sizable and ongoing increases in our technical infrastructure and engineering staff, we wanted to remind customers that access to Coinbase services may become degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for periods of time. Despite ongoing increases in our support capacity, our customer support response times may be delayed, especially for requests that do not involve immediate risks to customer account security. You can read more in our Coinbase User Agreement.

Be an educated investor

We also wanted to remind customers of some of the risks associated with trading digital currency. Digital currencies are volatile and the prices can go up and down. Due to the rapidly changing price of digital currencies, some customers may not have sell limits that are sufficient relative to the value of total digital currency they are storing on Coinbase. Sell limits are one of the many measures Coinbase takes to protect client accounts and assets.

As a proactive measure, we encourage customers to check the following items on their accounts:


Ensure your email address is properly receiving all communications and notifications from Coinbase. To learn more about ensuring email delivery, please refer to this support article.

Ensure your two-factor authentication is updated and functional. If you have recently switched mobile devices, your two-factor authentication needs to be properly migrated to the new device. In addition, please migrate from SMS two factor to Google Authenticator to enhance the security on your account, if you have not already done so. To learn more about two-factor authentication, please refer to this FAQ.

Familiarize yourself with your buy and sell limits. They can be found here.

Complete any pending identity verifications. During times of significant volatility, ID verification may become degraded or unavailable. To learn more about identity verification on Coinbase, please refer to this FAQ.

Expect payments to take the maximum number of days indicated when making a deposit or withdrawal.
Stay up to date

We will continue to update customers for our website, our status page, in our apps, via email, on our blog and on Twitter.

We will keep you informed

We are committed to safety, security and transparency. We are working tirelessly to provide the best service and support but we can’t promise perfection during the periods of extraordinary demand. We will continue to do our best to keep our customers informed.

Thank you,

The Coinbase Team

A lot of public BTC personalities are increasingly vocal about their criticism of Coinbase for not rolling out SegWit addresses by now (which would decrease transaction fees), their enthusiastic support of the now cancelled SegWit2x fork, and their continued flat-footedness in dealing with surges in the market.  Many are urging a boycott of Coinbase, but it's a tough call because they're the easiest entry point for new cryptocurrency users at this point and there's no better alternatives yet. 

Coinbase needs to get their act together if they don't want to wind up as a footnote, especially if Square steps things up with their plans for entering the bitcoin exchange space.

[FreeLancer]

https://www.bitsonline.com/antonopoulos-responds-donations-goodwill/

Roger Ver took to Twitter questioning why Andreas Antonopolous tells audiences he's not a BTC millionaire.  Andreas responded with all the personal reasons why and now he's being overwhelmed with contributions. 

Quartz:  A bitcoin booster got $1.5 million after being “bitshamed” for being poor

Amazing!  Good for him.  Nobody deserves this more than Andreas. 

[David in MN]

The Coinbase problem is stemming from having too many customers. It seems that the hordes need a "store of wealth" which seems odd because the latest numbers suggest the savings rate is down to almost 3%.

If you've ever wondered what it looks like when the "smart money" is selling and the "dumb money" is buying you have a front seat.

[David in MN]

It's D-Day. The futures markets are open. For the first time you can make money if Bitcoin loses value. That is if your broker allows access (most don't).

For me personally, this is the absolute failure of Bitcoin. The idea that Goldman Sachs now has a way to control it smacks in the face of the idea of decentralized. The whole point was to screw the banks and their predatory schemes after all.

When this all falls apart and decent people lose their shirts while the big banks cover shorts we will clamor for regulation. So in taking the worst crypto public and killing it easily the rest will be besmirched.

This is hard for me, I loved the dream of a decentralized currency. But this has been so mismanaged it's almost impossible to believe it.

[FreeLancer]

When this all falls apart and decent people lose their shirts while the big banks cover shorts we will clamor for regulation. So in taking the worst crypto public and killing it easily the rest will be besmirched.

How long do you predict it will take to fall apart?

[David in MN]

How long do you predict it will take to fall apart?

This is the curse of Austrian Economics. It's impossible to time. The market can stay irrational longer than the investor can stay solvent in a short. That's the rub.

The next few weeks will be telling. I think the major brokerages are afraid due to liquidity concerns (rightly so and never a good sign).

I don't understand this move. The claim that Bitcoin is limited to 21m is now off the table. I can print as much paper Bitcoin as I want and the futures contracts resolve in dollars, not even the Bitcoin itself (unlike gold). Further, it only hurts the price. If every gold contract came due tomorrow it would skyrocket because there is more paper gold than real gold. Why would a Bitcoin owner want this downward pressure?

Bitcoin owners: the development team is at least not looking out for your best interest. Now that it's listed they may be criminally liable for their decisions. I would consider the act of listing it as a violation of the prospectus (white paper). If Bitcoin is growing why does it need futures contracts? So glad we graduated from the guppy tank to the shark tank.

****My Opinion***** I don't think this is an accident. This is an organized strategy to kill a viable non-state money. Of course the big banks want to crush it. For some reason the development team wants to crush it. The .gov obviously wants to crush it. It's working in tandem. I suspect the bubble pops and the development team end up in the pokey.

[FreeLancer]

Weeks, months, years, decades....what’s your timeframe till BTC failure is obvious to everyone?

[David in MN]

Weeks, months, years, decades....what’s your timeframe till BTC failure is obvious to everyone?

From my perspective it's already obvious. There is no claim to a currency that can't be used based on a Marxist theory of value that now trades in futures.

I'm Austrian (both economically and ethnically  ) I can't guess when, I can only guess why.

Goes without saying this is not advice and I am not an advisor. I assume the same of every post and poster.

[FreeLancer]

Bitcoin owners: the development team is at least not looking out for your best interest. Now that it's listed they may be criminally liable for their decisions. I would consider the act of listing it as a violation of the prospectus (white paper). If Bitcoin is growing why does it need futures contracts? So glad we graduated from the guppy tank to the shark tank.

Who says the devs were for it?  It sounds to me like Wall Street wanted in on bitcoin, not the other way around.

Criminally liable?  How?  Who?  It’s a distributed system with no central authority. 

There is no claim to a currency that can't be used based on a Marxist theory of value that now trades in futures.

Marxist?

[David in MN]

Unfortunately, without a value claim as a usable currency, the value claim that "it took electricity to mine" is a Marxist labor theory of value proposition.

On Wall Street we have something called "fiduciary duty". In other words, it is a crime to act in a way that hurts shareholders. It's the highest form of legal responsibility.

Criminally liable?  How?  Who?  It’s a distributed system with no central authority. 

Don't you feel a little like the the "decentralized" claim has come off its wheels? We have factions and development teams and now if they break their fiduciary duty, they damn sure can be held liable. But I'm sure the .gov wouldn't want to scuttle Bitcoin and jail the programmers. That would be mean.

I'm getting a little  but it's an end I can see.

[Carl]

  I sold my BTC a week ago,I trust my instincts and ,had my surgery failed,the vapor of my BTC would have been lost in the wind.

[FreeLancer]

Don't you feel a little like the the "decentralized" claim has come off its wheels? We have factions and development teams and now if they break their fiduciary duty, they damn sure can be held liable.

No I don’t.

It’s not Silk Road, there’s no Ross to throw in jail.  Satoshi’s gone, the early devs have moved on.  Nobody’s in charge. 


B Cash, ethereum, and every other altcoin can’t say that.  There’s fraud and malfeasance aplenty there, and lots of people to pin it on, too. 

  I sold my BTC a week ago,I trust my instincts and ,had my surgery failed,the vapor of my BTC would have been lost in the wind.

Bummer, I was hoping you’d keep up your membership in the 21 million club.

[osubuckeye4]

I'm legitimately confused when it comes to Bitcoin's exponential growth. I've been digging into it and here is the information I've gathered:



1) It's been reported that about 1,000 users own/control almost 40% of all Bitcoin's.

https://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market

2) It's also been reported that anywhere from 20-30% of Bitcoin's are dead/unrecoverable or more commonly referred too as "float". (I owned about one coin that would qualify as float... the computer the wallet/ID was stored on was fried and can't be accessed anymore)

http://fortune.com/2017/11/25/lost-bitcoins/


3) Additionally, there are still about 4.5-5,000,000 coins that have yet to have been mined.

https://themerkle.com/80-of-all-bitcoins-will-have-been-mined-in-a-year-from-now/



---

Essentially... one could make the argument that these ridiculously high prices and growth may be sustainable (not necessarily the exponential growth... as I think you're starting to see "commoners" priced out, which was the jet fuel propelling everything), as long as the "whales" all play nicely amongst one another and continue to swoop in and buy the dips as they occur.

One could also make that argument that all it would take to send the entire market crumbling would be for a small percentage of the whales to no longer buy the dip, and no longer sell in small quantities but rather unload large quantities of their holdings all at once.



It's going to be interesting to see how it all plays out. Personally, I'll be watching from the sideline.

[osubuckeye4]

Bummer, I was hoping you’d keep up your membership in the 21 million club.

Wouldn't it be more like the 13,000,000 club?

5 million coins haven't been mined yet, and anywhere from 2.5-4 million have been lost forever.

[FreeLancer]

Wouldn't it be more like the 13,000,000 club?

5 million coins haven't been mined yet, and anywhere from 2.5-4 million have been lost forever.

All true.  But it’s still called the 21 million club if you want to google it.

[osubuckeye4]

All true.  But it’s still called the 21 million club if you want to google it.

I just wanted it to sound even more exclusive 

[FreeLancer]

I suspect the number of non-fractional owners worldwide, who still control their keys, is less than 5 million.

[osubuckeye4]

I suspect the number of non-fractional owners worldwide, who still control their keys, is less than 5 million.

It certainly seems that way... and that's why I'm not necessarily on board the, "this is tulips in the Netherlands in 1600s, GET OUT NOW!!! AHHHH!" train of doom and gloom.

If the whales are fully committed to playing the long game with Bitcoin, this could go on for quite some time due to the ability to divide Bitcoin into such tiny fractions.

The number of users/vendors looking to do business in full coins is doing to dwindle (if it hasn't already), but the number of users who just want to buy .000001 or less coins is pretty much infinite.



It also seems that the majority of the "whales" have two things common:

1) They are invested in not just becoming rich, but also in seeing Bitcoin become universally accepted.

2) They have very deep pockets which gives them unprecedented ability to manipulate the market... which isn't anywhere near as fluid/open/organic as it appears on paper due to the things I pointed out in my earlier post.


While I'm not in any way suggesting these whales are being altruistic (I'm sure every one of them has already hedged their initial investment and regardless of what happens will walk away a winner), I also don't think that they are your typical "rational" investors who are going to pump and dump.

A rational investor would have flipped their $11,000,000 investment that is now worth over a billion dollars by now. They would have done it long ago if their end game was just to become filthy rich. The fact that the Winklevoss' and Nakamoto's of the world aren't dumping leads me to believe that they are trying to go out of their way to see Bitcoin succeed in what most of us would view as an irrational way.

If the entities that own 75% or so of the industry are all on board to continuing the charade... it's possible to see sustained "growth" for years to come.

It's also possible that one of the early adopters decides to dump everything and buy their own island(s), and Bitcoin plummets tomorrow. If that was going to happen though... one could argue it would have happened a few weeks ago when the exponential increases were being reported almost hourly ($10000 to 12000 to 17000 in a span of days/hours, instead of weeks/year). The fact that it didn't plummet at that point moves it out of the "beanie baby/tulips in Netherland" territory and into something different.

What that ultimately is? I'm not sure, and I don't think anyone else does either.

[FreeLancer]

I can’t disagree with any of that.

[LVWood]

Well it's official.
Bitcoin is now the biggest bubble in world history.



http://www.zerohedge.com/news/2017-12-12/its-official-bitcoin-surpasses-tulip-mania-now-biggest-bubble-world-history

[Carl]

  WOW,even bigger than the bubbles in my tub....glad I sold out now as it will fall real soon ,and real hard !

[David in MN]

If I was a broker at a major investing house and I knew that I could swing this market with a trading volume of only $3 billion dollars I would do everything in my power to bid it up prior to it going public and then buy the shorts only to sell the original position.

Allowing a futures market was a big mistake. One major player could trigger a mass sell-off. The trading houses might be playing chicken right now.

[osubuckeye4]

If I was a broker at a major investing house and I knew that I could swing this market with a trading volume of only $3 billion dollars I would do everything in my power to bid it up prior to it going public and then buy the shorts only to sell the original position.

Allowing a futures market was a big mistake. One major player could trigger a mass sell-off. The trading houses might be playing chicken right now.

I'm legitimately confused by the, "allowing a futures market" statement.

To my knowledge (I'm sure I'm getting something wrong, please clarify for me)... Bitcoin doesn't have an owner who is giving a yes/no on futures trading by these exchanges. The exchanges are essentially just accepting bets around an existing entity/technology, much like a lot of offshore online casinos accept wagers and set up wagering lines around something like The Oscars.

The Academy isn't giving the green light for Oscars wagers... they are taking place because offshore books think they can make a profit off of them.



I agree that it's foolish on the part of the CME to allow wagers on Bitcoin futures... but, these wagers are going to be made with dollars, not Bitcoins.

Bitcoin really has no exposure at all, all the (massive) exposure is in the derivatives market... though it is definitely possible that someone who owns a considerable amount of Bitcoin could create a massive conflict of interest by purchasing shorts at favorable rates and then dumping a boatload of coins before their futures contract is up.

That's not really Bitcoin's problem though, is it? It's these exchanges problem.


I guess what I'm saying is... I agree with you in that this is almost certainly going to end in catastrophic fashion, but I don't understand how or what anyone "representing" Bitcoin (is there such a person?) could have done anything to prevent futures being traded around Bitcoin?

[David in MN]

Totally agree, this is a wonderful ploy by the investment houses. The CBOE and CME should have never made the choice.

Look what futures markets have done to metals. We have far more paper gold and silver than actual. You may not be able to print a Bitcoin but you sure can write a new contract that resolves in dollars.

The banks even wrote that this is a mistake to do. There's not enough data to begin writing a futures contract.
http://money.cnn.com/2017/12/07/investing/banks-bitcoin-futures-trading-cftc/index.html
Explains it pretty well.

Why would a Bitcoin holder want me to trade the futures anyway? He'd much rather I buy the coin and raise price and volume.

In other words, I am blaming the boards. Really blaming the bought-off regulators who should have known better. With volume levels so low and hype so high it's a big target for foul play.

[FreeLancer]

I don’t think Wall Street really understands that BTC is owned by koolaide drinking hodlers who’ve been through a couple Bitcoin bubbles already.

[osubuckeye4]

Totally agree, this is a wonderful ploy by the investment houses. The CBOE and CME should have never made the choice.

Look what futures markets have done to metals. We have far more paper gold and silver than actual. You may not be able to print a Bitcoin but you sure can write a new contract that resolves in dollars.

The banks even wrote that this is a mistake to do. There's not enough data to begin writing a futures contract.
http://money.cnn.com/2017/12/07/investing/banks-bitcoin-futures-trading-cftc/index.html
Explains it pretty well.

Why would a Bitcoin holder want me to trade the futures anyway? He'd much rather I buy the coin and raise price and volume.

In other words, I am blaming the boards. Really blaming the bought-off regulators who should have known better. With volume levels so low and hype so high it's a big target for foul play.

Gotcha, I was trying to make sure I understood.

We're 100% on the same page. CME is crazy for even proposing this, and the regulators who monitor CME and who signed off on this are out of their collective minds.



I've just been reading a lot of articles about how futures trading is going to "destroy Bitcoin", and they all confuse me.

Bitcoin itself isn't in play when it comes to the futures market... regardless of if Bitcoin plummets to $25/coin in 6 months, or skyrockets to $100,000/coin in 6 months... there is still going to be 21,000,000 of them in existence and available for purchase (minus the unmined coins and inaccessible float). Bitcoin itself isn't going anywhere, what is really at stake is the derivatives market and these brokerages/exchanges that are ponying up all this currency on these positions which are sitting ducks for manipulation.

Manipulation in which direction? That's the $64,000 question. If I knew that, I'd bet on it myself  I don't, so I'll just enjoy watching potential financial Armageddon on the sideline.

[David in MN]

I don’t think Wall Street really understands that BTC is owned by koolaide drinking hodlers who’ve been through a couple Bitcoin bubbles already.

I try to stay away from the unproductive slurs. I don't think Wall Street has any grip of crypto at all. One of the things that scares me the most is the gulf between people who understand economics and the people who understand tech. Very few people understand both and both groups are making mistakes.