Author Topic: Bitcoin currency (merged topics)  (Read 205278 times)

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #630 on: November 14, 2018, 02:30:31 PM »
After months of remarkable price stability around $6400, bitcoin is down over 12% today, along with pretty much all the cryptocoins, most of which dropped further percentage-wise than BTC.

Tomorrow is the date threatened for the Bitcoin Cash hardfork, so I suspect the big guys in that controversy are trying to manipulate the market to their advantage.

BTC still maintains >50% market share.

It’s looking like we’re in for a bumpy ride as fake satoshi and bitcoin Judas fight over the future of BCH.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #631 on: November 17, 2018, 03:15:02 PM »
Interesting new tool from CoinDesk for visually comparing cryptocurrency strength on the basis of Price, Network, Social, Exchange, and Developer activity.


Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #632 on: November 17, 2018, 03:49:02 PM »
BTC price over the years.....



Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #633 on: November 19, 2018, 11:33:34 PM »
The crypto blood bath worsened across the board today, with BTC hitting $4500.  I'm getting the impression that all but the hardcore HODLers are getting pretty spooked and fleeing the space en masse, and it could easily go to $2000 at this rate.  If this keeps up I might even be tempted to buy back what I've sold this year. 

Here's the top 6 mineable coins' performance YTD.......in log scale so it's not quite as vertiginous.


Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #634 on: November 21, 2018, 09:44:45 AM »
It looks like it's having issues but maybe support at $4k? But you can't shake the feeling that the thrill is gone.

Honestly I'm over and done with Bitcoin. For years I got mocked by friends and family for hawking "electric money" only to make bank and be told I should have bought more. Worse it has crushed some of my libertarian friends. I got daily emails a couple years back about the meteoric rise. Several people close to me went all-in and did crypto based businesses as I warned about the tulip mania. People I have done business ventures with stopped returning emails. The website I would post financial articles from time to time severed ties with me.

Nobody relishes the "my God, you were right, I lost my shirt" email. I mean some guys went all in and now are sitting on a 75% loss from the height of their wealth. Once in a while I get the "now I understand why you were ranting like a crazy person" email. That feels good but I also know the hurt behind it. As an anarchist libertarian (at the time) this fire tore through our community.

Bitcoin is a history of scorn and ridicule. First by people mocking for buying and then from friends who detested me for exiting. I have lost relationships and work because of my opinions.

Perhaps the oddest part is that I believe we witnessed a financial crime. Banks issued calls but no puts at exactly the top? At exactly the time the development team changes cost structure? And at the top you fork and double the amount of "strictly limited" currency? I don't know what the SEC is paid to do these days but I would have a lot of questions.

Putting aside my robotic German need for logic the hard part has been the relationships I damaged. I don't like the idea that friends got financially hurt. I actually wound up going to therapy and to add insult to injury when I brought it up my therapist asked my opinion on Bitcoin and didn't like my response.

A pox on Bitcoin. I wish I was oblivious. What money I made isn't worth the pain it's brought on me.

Offline scoop

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Re: Bitcoin currency (merged topics)
« Reply #635 on: November 21, 2018, 11:32:56 AM »
hard part has been the relationships I damaged...

David, I'm sure you didn't damage any relationships. You gave them advice they didn't want to hear. Not your fault they didn't heed your warning.

Offline surfivor

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Re: Bitcoin currency (merged topics)
« Reply #636 on: November 21, 2018, 03:42:16 PM »

 I just keep money in the bank with cash or buy some silver coins. I can't figure this stuff out or the stock market and it seems questionable to me. The banks could crash too but trying to figure out markets and all takes too much time and energy when I could be out surfing, playing the guitar or going to the gym

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #637 on: November 22, 2018, 02:02:57 AM »
At major inflection points in the BTC price I like to read through this entire thread from beginning to end and remind myself what was going through my mind as BTC evolved over time. 

So I read thru all this just now and I don't think my fundamental philosophy on bitcoin has really changed over the years.


Last week, there was a brief spike up to $19 per bitcoin, then quickly retreated to $16, and now it is playing with $18.  I have no idea how this will all play out in the long run, but I will continue to build my holdings.  There is a maximum number of coins that will be minted and each coin is divisible to 8 decimal places, so who knows where the value of a BitCoin will be in 10 years, it could be defunct, or it could be worth $100,000.  I certainly am not putting all my eggs in this basket, just as I'm not putting it all into metals, either, but I think it's an interesting concept that holds a lot of promise.

I really have nothing more than a vague idea how this stuff works.  Don't they say not to invest in anything you don't understand?  This is the bleeding edge of a new technology, there's certainly risk to investing in this currency, so don't trade in any of your existing wealth if you would feel bad about loosing it forever down the rat hole of cyberspace. 

I don't pretend to fully understand all the nuts and bolts of this experiment, but I do think it holds promise as a novel way to secure and transfer wealth without the intrusion of third parties (theft by taxes) and figure the best way to learn the system is to dive in and put some skin in the game.  But realize this is a speculative risk, don't bet the farm on it.

1 BTC = $73.75 at this very moment.  I can't believe it was briefly below $37 just 10 days ago and it's really not in my nature to be this speculative with cold-hard cash.  Who knows where it will go from here, some (Max Keiser on Alex Jones ::)) are saying $100,000, or more.  But I wouldn't bet the farm on it.  Farms aren't likely to just disappear into the cyber-ether, like bitcoin could do tomorrow.

With BTC, my goal isn't to make money in the short-term by trying to time the ups and downs, but rather the accumulation of wealth, betting on the likelihood of the scheme's long-term success as a unique store of value. 

.......but there will be exploits by the hacker crowd to manipulate the price to their advantage.  That's part of being on the bleeding edge of a crypto/anarchist currency, there are no referees or do-overs.  It's the wild, wild west, so you've got to be aware of the risks.

The volatility is scary as heck in both directions, but the technology has proved itself far beyond what many could ever have dreamed. A decentralized shared ledger documenting ownership is a potentially revolutionary concept that could rival internet protocol in its ability to shatter the status quo. But there will be many white-knuckle moments before we get to $40,000.

Gox froze bitcoin withdrawals early yesterday after mounting complaints by account holders unable to withdraw first fiat, then bitcoin.  Prices across all exchanges are down, with Mt. Gox leading the pack to the bottom.  I should have removed the small amount I was playing with, but now will have to ride out the storm.

And people were just starting to crow about how stable bitcoin prices have been lately.  Volatility is a given in this market, get used to it.  Cryptocurrency is the wild, wild, west.  There are no referees, no timeouts, and no do overs.

It's wise to be cautious and start slow.  But, honestly, I think goofing up somewhere along the line is pretty much par for the course.  All us early adopters are facing the risks that come with being on the bleeding edge of technology.

All the exchanges are under heavy attack in the last few days and are hunkering down, several are now not allowing bitcoin transfers out of accounts until things calm down.  Apparently the "malleability" issue brought up by Mt. Gox is the focus of these attacks.  Honestly, I don't understand the issue well enough to know how much of a factor it will be, but I doubt that it will be more than just a bump in the road. 

Society has never been down this road before and it's hard for us to know what we don't know about trusting ownership to a distributed ledger protected by cryptology.  There will be mistakes on the part of individuals, incompetence on the part of companies, and malice on the part of government, all of which makes this a risky arena in the short-term.

Of course, there's always the chance bitcoin could totally fail or succumb to a superior crypto currency, so I'm not recommending betting the farm on it, but I think more likely than not it will survive and thrive.  But it may always remain as more of a niche financial instrument, kind of like a digital form of gold, where mainly large institutions, wealthy individuals, and assorted cranks and others working on legal edge hold them.



2013: Enthusiasm

2014: Capitulation

2015: Despair

While I think everyone should own some cryptocoin, please don't trade more cash for it than you are prepared to lose forever. It's still the Wild West and violent volatility will continue to be the rule for years to come.

It's the wild west out there in the cryptocurrency economy.  You can't count on .gov for redress of grievances and any losses incurred fall squarely on your own shoulders. 

Turns out, being your own bank is a big responsibility.  If you use weak passwords, reuse the same password for multiple accounts, aren't familiar with 2FA, and don't understand PGP encryption practices for verifying downloaded files, you should really rectify those deficiencies before jumping into the cryptocurrency space.  Even then you could still lose everything.  Plenty of super smart people have outsmarted themselves and lost control of their private keys, so it can happen to anyone.

Ironically, the best strategy for securing a totally digital asset is to generate a set of keys on a clean offline operating system, print several copies of this cold storage wallet to old fashioned paper, laminate them to prevent water damage, and store them in a secure metallic container, the same way you would with an equivalent amount of gold or cash.  We've got thousands of years of cultural experience in regards to securing physical assets, but only a couple decades when it comes to digital assets.  Better to go with the one you know.

But who knows, it could all disappear overnight. Crypto is an experiment, not an investment plan. Never risk more than you can afford to lose forever.  And don't bother if you're not willing to learn how to keep digital assets a secret. That's the biggest risk, in my opinion, losing control of the private keys that are the only way to prove you own the assets recorded on the blockchain. That's what keeps me up at night. Many days I think it would almost be better for my sanity if it all crashed to zero tomorrow and I could just go back to relying on the government backed banking system to keep my wealth safe and sound.

WARNING:  Just because I have personal exposure to bitcoin does not mean I'm comfortable with anybody else reading this thread and putting hard earned USD into BTC, which is currently trading between $5-6k, and then waking up tomorrow and finding it's all gone.  I'm really not comfortable with that at all.  And I think if you read this thread from the beginning you will see that I've been pretty consistent about the speculative nature of investing in this space.  You're on your own.  I'm on my own.  We each are free to suffer the consequences of our own decisions.

We've been through 80% drops before, there's no guarantee it won't happen again.  It might go to zero or, as some hedge fund guys have been saying lately, it might hit $40 per mBTC by the end of 2018.

Yes, I think he stands apart from the rest of the shills in the cryptocurrency space by focusing on evangelism, rather than making a quick fortune.  And, while he's an enthusiastic believer that this technology will revolutionize the way the world stores and transfers value, he is also quite frank about the extremely high risks associated with investing in crypto and keeping it secure in the present time.

I agree, that's just one of the big unknowns, and I am not risking my entire life and fortune on crypto like Andreas has.

It’s a few months old but $5900 is close to where the price fell this weekend, so the numbers and perspective are still useful.




I thought really hard about it, and I can't think of a single person I have ever persuaded to get into cryptocurrency.  Nobody.

However, there's at least a dozen I scared away from crypto.  But then I've also talked more people out of buying guns, too.  Good thing I'm not in sales.....

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #638 on: November 22, 2018, 04:00:05 PM »
However, there's at least a dozen I scared away from crypto.

Yeah, I'm one of 'em. ;D  I mean, not solely because of your comments, but they were certainly a factor.

I can be a bit annoyed with myself for not buying at $16, but what the heck.  There's investment, and there's speculation -- and granted, the line between them is very vague, but cryptocurrencies have always been way out at the speculation end of the spectrum.  There are no "fundamentals" to research, there's no price/earnings ratio, there's no annual report -- there's only a demand created by other speculators, and a supply created by software that hardly anybody understands.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #639 on: November 23, 2018, 01:11:59 AM »
Another recent convert throwing in the towel:  11/22 ANDY HOFFMAN (CryptoGoldCentral.com): My Updated View of Bitcoin and Cryptocurrency, In the Context of a Long Financial Markets Career

Quote
This is not the first time this has happened to me, by the way – as in my previous career in mining stock investor relations, I lost faith in the sector while still in the business of promoting it…which I made crystal clear in my blog postings, to the chagrin of my then employers.

Then came cryptocurrency – in which, like mining stocks and bullion before it, I generated extraordinary windfall profits early on, only to see them erode away. My levels of conviction in all three were strong – but I’m now 48 years old, with far more risk aversion, given my dwindling career opportunities and responsibility to my 6-year old daughter. Also, I’m tired from 20 years of fighting the investment wars; be they broad, mainstream battles like the 2000 and 2008 crashes -or the added risks, and frustrations, of siding with sound money against a status quo deadset on destroying it.

Quote
The way I see it, I’m too old to engage in another multi-year war with malevolent actors seeking to destroy my financial well-being. In that manner, Craig Wright is joining a long list of horrible people including Ver and Wu, Jamie Dimon, Bernanke/Yellen/Powell, and countless others. And I’m WAY too old to continue engaging with bad actors within my own community – like Rickards and Armstrong within the “gold community,” and Tone Vays and others in Bitcoin. Not only don’t I WISH to fight such wars anymore – which bring me no profits, but plenty of angst; but NEED to anymore, either…and at 48 years old with a family to support, I don’t see the upside to “fighting to the death” for gold, Bitcoin, or any sound money cause.

Thus, when the Hoffman Line broke last week, I sold the vast majority of my Bitcoin. I have no idea if this will turn out to be a brilliant maneuver or a horrible mistake – but given the risk to the financial security I had worked so hard for; for a cause that may or may not pay out - late in my investment career, when the stakes are highest; it was the obvious choice to make. I have no regrets at all – and for the first time in years, am not living in fear of what Bitcoin – and before it, Precious Metals – will do at any given moment. That said, I continue to believe it is only a matter of when, not if, Bitcoin returns to favor – yielding a price surge that will ultimately take out last year’s highs, taking it to much, MUCH higher levels.





2017:  Enthusiasm

2018:  Capitulation

2019:  Despair

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #640 on: November 24, 2018, 05:33:19 PM »
Excellent recent YouTube video interview with a traditional finance guy:  The Hidden Value In Crypto (w/ Ari Paul) | Skin in the Game | Real Vision™

Covers a lot of questions/topics in a very level-headed manner, unlike so many of the wild-eyed shills in this space, and I can't disagree with much of anything he presents here.

Custody
Valuation
Censorship
Confiscation
Side-Chains
Off-Shore Banking
Refugee Use-Case



Price plunged well below $4000 today and I'm thinking about pausing my automatic biweekly sell program and holding tight until things come back.   I suspect we'll be seeing prices a lot closer to $2000 before all the "When Moon/Lambo?" morons are flushed out.  I don't know if it's going to take a couple years, like it did following the 2013 bubble, but it's certainly possible.

I should also mention that BCH is trading lower than it ever has, since it forked from BTC in August 2017, in terms of its valuation in both USD and BTC.  Civil wars are costly.
« Last Edit: November 24, 2018, 05:39:21 PM by FreeLancer »

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #641 on: November 25, 2018, 03:13:27 PM »
For all the brain wallet fans out there, it's not as safe as you think.

http://www.wired.com/2015/07/brainflayer-password-cracker-steals-bitcoins-brain/

Random beats "clever" every time.



Along this same vein, from one of my favorite thinkers/developers in this space, Jameson Lopp:  Bitcoin Seed Security Analysis


Quote
Vires in Numeris

Hopefully the above scenarios have helped you understand how bitcoin users are protected by large numbers. There are so many possible private keys that could be used to secure bitcoin that even if someone set up a large cluster of computers to search through as many keys as possible, it’s unlikely that they’d ever find a key that is being used during their lifetime.

These large numbers can be manipulated to your benefit or to your detriment — it’s easy to accidentally do the latter if you aren’t well versed in the technical underpinnings of the system!





Lopp's focus is long-term secure management of private keys and the degree of personal responsibility required if you truly desire to "be your own bank" without FDIC insurance.




And he's been physically threatened, too.


Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #642 on: November 27, 2018, 01:28:06 AM »
Forbes:  The Immutability Of Blockchain Is Useless When It Comes To Easy Crypto Thefts And Hacks

Quote
[Disclosure: I used to have a small amount of Ethereum (Ether), but now I have absolutely zero Ether]

Your eyes are not deceiving you, the disclosure above is usually printed at the end of any article by any Forbes writer when the subject matter is about cryptocurrencies.

In this case, I am confirming that I now have no Ether, but I did have some until my crypto wallet was hacked around six weeks ago.

In the interim period, I know now more than most about the lack of crypto security and how it's virtually impossible to retrieve funds after they've been stolen. It's an interesting story, it's just highly annoying that it happened to me.


This is a prime example of why the average bear needs a hardware wallet.  For every minute spent worrying about price movement spend the remainder of the hour worrying about securing your private keys.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #643 on: November 30, 2018, 03:47:19 PM »
Clear and concise analysis by Andreas Antonopoulos on Why "energy consumption" math sucks in the arguments that blockchain mining is wasteful:  https://youtu.be/uvFqEofdAZ0

Confirms much of my thinking on the topic, specifically that the Department of Defense (the ultimate backing of US fiat) is the largest energy consumer in the nation, and that blockchain mining is extremely portable and moves to the cheapest energy sources that would otherwise be wasted or undeveloped.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #644 on: November 30, 2018, 04:30:41 PM »
It looks like it's having issues but maybe support at $4k? But you can't shake the feeling that the thrill is gone.

Nope. Looking at support at $3500. Maybe.

David, I'm sure you didn't damage any relationships. You gave them advice they didn't want to hear. Not your fault they didn't heed your warning.

You're kind to say it but wrong. I sat on conference calls with investors who called me an idiot for not buying in to their store of wealth. When I came back with "if banks would sell me the short I'd buy it" I lost friends. This is such a contentious issue I don't even want to go near it anymore. Yes, I was right. Did it do me a service?

Nobody finishes the story. Yes, Noah built an ark and convinced his family to get on board. But after the flooding when he lost his whole community he wound up a lonely drunk who got raped by his own son.

I have a lot of survivor guilt. I have friends who have been sunk. And on the other side I have family who lambasted me at first and then wondered why I didn't hang in for the high. This one got lost on both sides.

I hope it rebounds. Some people close to me need it. But the chart looks like Hell. No trader would follow it. And now that the store of wealth has been revealed as a tulip (without the value of being a pretty tulip) so what value does it have? People who bought in at $10k would have been better off buying paperclips. Paperclips were a better wealth store than Bitcoin in a paperless world.

Never have I more hated being right. I convinced a few and they send cards about saving money but too many got devastated.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #645 on: December 04, 2018, 02:43:34 PM »
Long conversation today with a former trading friend. Bitcoin lost 37% in November. I had to look it up to believe.

https://www.cnbc.com/2018/11/30/bitcoin-fell-37-percent-in-november-erasing-70-billion-from-industry.html

Bad news. Now I see why the capitulation is happening. No support.

Offline slingblade

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Re: Bitcoin currency (merged topics)
« Reply #646 on: December 06, 2018, 12:35:36 AM »
So was anyone who is investing/mining NOT see this coming?  If not, maybe we should start posting it somewhere?  This was about as telegraphed a punch as the housing bubble.  At the end of the day... it all still works and the fundamental reasons crypto is not going away are still in place.  I view this as a buy opportunity either in gear or currency.

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #647 on: December 06, 2018, 12:52:31 PM »
Four Days Trapped at Sea With Crypto’s Nouveau Riche

UK jounalist gets sent on a Mediterranean cruise with cryptocurrency zillionaires and hucksters and true believers. This article won't teach you anything about cryptocurrency, but it has lots to say about the culture of this group.

Author Laurie Penny is a UK journalist with a strong feminist and socialist bias, but this isn't a political article, it's an up-close social critique. Fair warning, it's really long, but her writing style is enjoyable.

Quote
...I was anticipating evenings spent listening to crypto-hippies describe the angel-faced space elves they met when they took DMT. I was expecting to fetch water and painkillers for half-conscious corporate executives with dust in their perfect hair and no idea how to get home. I was expecting to get a bit carried away and end up shouting about the government and chalking poetry all over the walls. I was expecting to hear very rich men talk without blinking about tax planning and sacred geometry. I was expecting corporate-branded swimwear. I was expecting to meet smug Californian polyamorists, about whom smug European polyamorists like me are relentlessly judgy. Reader, all of these things transpired, but by the time they did they were a blessed relief. ...

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #648 on: December 06, 2018, 01:54:25 PM »
That’s a really great article.  She nailed it. 

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #649 on: December 07, 2018, 09:44:42 AM »
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. 


Mining Firm Sues Roger Ver, Bitmain and More for ‘Hijacking’ Bitcoin Cash

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Florida-based United Investment Corp. filed a federal lawsuit in the U.S. District Court, Southern District of Florida claiming that Roger Ver, bitcoin.com, Bitmain and co-founder Jihan Wu, crypto exchange Kraken and founder Jesse Powell, and Bitcoin ABC developers Amaury Sechet, Shammah Chancellor and Jason Cox centralized bitcoin cash and manipulated the price during its contentious hard fork.

The suit claims that bitcoin.com and Bitmain (and their respective founders) “hijacked the [bitcoin cash] blockchain,” especially by dedicating mining power in theory assigned to mining the bitcoin blockchain to mining what was then referred to as the Bitcoin ABC chain.


In a separate statement sent to CoinDesk, UnitedCorp said the defendants perpetrated “a scheme of fraud” by colluding to control the network.

UnitedCorp claims that it “justifiably relied on Defendants’ misrepresentations by investing millions of dollars in development and deployment of infrastructure specifically for the mining of bitcoin cash,” and has suffered damages as a result.

Further, the suit claims that “Bitmain, Bitcoin.com, and Ver have been unjustly [enriched] by the conduct described above.”


Another fascinating development arising from the Bitcoin hardfork (first into Bitcoin Cash last year and then Bitcoin SV last month) civil wars.  I suspect this won't be the last of the challenges altcoins that are controlled by a cabal of developers, mining outfits, and activist investors like Ver will face in this declining market, and it exposes a risk of tampering with Bitcoin's decentralized topology.  If a critical mass of developers can be sued for changing the code to their advantage, thrown in jail, or killed if they all go down in same plane crash, it's not a decentralized cryptocurrency and it loses that fundamental factor in Bitcoin's resilience.

There is an upside to a crashing crypto bubble (BTC is approaching $3k today, on its way below $2k), it's a stress-test that weeds out the fragile, fraudulent, and otherwise unworthy shitcoins.  This time around, it will also make people think twice about the wisdom of hardforking existing chains as a method of creating a new altcoin.

Offline CharlesH

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Re: Bitcoin currency (merged topics)
« Reply #650 on: December 07, 2018, 03:23:04 PM »
http://www.thesurvivalpodcast.com/crypto-2017
 
It’s kind of fun to look back and see what we were saying about Bitcoin this time last year.  The comments from this episode ran all the way into late January.  There was also quite a bit of discussion about CryptoGulch from around the same time, but I didn’t copy those links.  Easy to find, though.
 
I’m less a skeptic of the staying power of blockchain technology than I was a year ago, but I still question it as a monetary-like store of value.  I predict the real value of the technology will come from its being a method of transferring information in a way that governments can not interfere with.  There is a value to that, and I’m sure someone smarter than I will figure out how to monetize it.
 
Like they say, “time will tell”.  Looking back at what like minded people here had to say a year ago helps provide a look at where attitudes toward the value of the technology is going.  What do we still believe that we believed then? I’d be skeptical of someone who said there are no lessons for them from the way blockchain valuations have changed in the last 12 months.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #651 on: December 07, 2018, 04:22:31 PM »
Well I'll try to put my thoughts out. Bear in mind that I was the Bitcoin bear a year ago.

From a viewpoint of a product producer you always look at the "value proposition". We live in a world where you can drive a Ferrari or a Suburban. You can buy local organic ingredients or a TV dinner. We might be happier with one or the other depending on our life.

What value does Bitcoin currently provide? When I got involved it was a lightning quick low cost money transfer. That's exciting. At that time it had the potential to defeat credit cards and Western Union. That's disruptive tech. But it's not quite there anymore. Nowadays the "value" is that it's hard to mine. And being hard to come by doesn't make anything valuable. There are millions of artists who go unknown whose work is hard to find but die penniless. Their paintings don't have value because they're rare and hard to come by. My toenails are scarce... but not quite money.

Until there is a concrete use for Bitcoin it fails for me. When I was into it I offered to do work in crypto to save on the ~2% credit card charges with clients. Nobody used it. I saw that people believed that their currency, bank account, and investment portfolio were all one and the same. That's a bubble. Yes, I called it. I also get nervous when people who have no experience currency trading tell me they will be billionaires by using a new currency. If you don't know the game you're playing...

It's also important to note that I could have been wrong. I'm usually not when it comes to futures because it's kind of my thing but I could have been. Eh.

I'll just say there was a very weird shift from when Bitcoiners boasted about all the new companies using it to when they started to boast about holding and not using it. Even the goldbugs will do business in gold.

I don't know if this helps. But from those who will still talk to me it's at least plausible.

Offline CharlesH

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Re: Bitcoin currency (merged topics)
« Reply #652 on: December 07, 2018, 05:04:28 PM »
Quote
There are millions of artists who go unknown whose work is hard to find but die penniless. Their paintings don't have value because they're rare and hard to come by. My toenails are scarce... but not quite money.
 
Good point.  This is applicable to more than just Bitcoin, too.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #653 on: December 07, 2018, 08:19:29 PM »
What value does Bitcoin currently provide? When I got involved it was a lightning quick low cost money transfer. That's exciting. At that time it had the potential to defeat credit cards and Western Union. That's disruptive tech.

As far as speed goes, BTC transactions are confirmed through the mining process, which adjusts the proof of work difficulty such that a new block of transactions is mined every 10 minutes on average (been that way forever), and each confirmation by succeeding blocks decreases the probability of that transaction being reversed by getting orphaned on a rejected chain.  Usually 6 confirmations is the accepted minimum number of blocks before most transactions are considered irreversible, although more is always better.  So we've been dealing with an hour wait for transactions to clear since Satoshi fired up the blockchain a decade ago.  This was the impetus for LiteCoin (the silver to Bitcoin's gold) way back, with a faster block time of 2.5 minutes at the expense of decreased network security.

As for fees, those frequently fluctuate with network load and early on many were waived or extremely cheap because the block reward was so high.  But by using a wallet (like Electrum) that allows you to specify a customized fee, say like <10 satoshis per byte for the average 250 byte transaction, and you're looking at <0.000025 BTC or less than $0.10 at today's rates to transfer millions of dollars worth of value to anyone on the planet without having to use a "trusted" intermediary like a bank.  Granted, you might be waiting a day before someone finally accepts your lowball offer, but such are the laws of supply and demand.

What's the cost to wire $1 million to Switzerland, and how long does it take for the banking system to confirm and release the funds?  And how would you do a large transaction like that without the banks taking their cut?

Bitcoin offers the possibility of being your own bank and storing and moving money that is resistant to censorship and confiscation, but those benefits come with burdens and responsibilities that are not inconsequential.
« Last Edit: December 08, 2018, 03:06:25 AM by FreeLancer »

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #654 on: December 08, 2018, 07:41:55 AM »
But the problems solved aren't problems and they more show the weakness. Trust me, people sending $1 million to Switzerland don't care about the fees. Or the lag. It's a Hoppian "low time preference".

Expense and lag hurt when you're buying milk on the way home from work or stuck at the pharmacy with a screaming kid. That's where the rubber meets the road.

Don't get me wrong. I'm one of the few Americans with the "I'm not allowed to do what with my money?" experience at the bank. And you realize the mess you step in as currency is regulated by something like 7 agencies aand you need to report this that and the other to all. I'm no fan of the greenback. But by the time you get there you have enough money to make it work.

In the case of low cost long lag transfers... Do you trust the stability of pricing to use them? I'd sweat that one.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #655 on: December 08, 2018, 06:05:56 PM »
Trust me, people sending $1 million to Switzerland don't care about the fees. Or the lag. It's a Hoppian "low time preference".

I have a hard time imagining a low time preference person, someone who's generated their wealth diligently over time, sneering at saving thousands of dollars to move that wealth around the world.  Nobody understands better the effort that went into creating that wealth or the drag fees exert on their net worth over the long haul.


Expense and lag hurt when you're buying milk on the way home from work or stuck at the pharmacy with a screaming kid. That's where the rubber meets the road.

Base-level Bitcoin transactions can't compete with credit cards or cash at an acceptable level of network security, that's the price you pay for eliminating a "trusted third party" in between the buyer and seller.  But another layer running on top, like the Lightning network, could potentially provide that level of service at some point in the future. 

Bitcoin Cash says that's what their mission is, but in the process optimizing their chain for Starbucks purchases they've broken the decentralization model that protects against censorship, confiscation, and inflation.  They're also now mired in a costly civil war with SV, who believe they have the purist model or Satoshi's Vision, and that whole mess is already spilling over into a legal war between the big money and personalities behind those two chains. 


Also, remember that since BTC is designed as a deflationary asset, a low time preference HODLer isn't inclined to spend it to buy diapers if they've got inflationary fiat money.
 

In the case of low cost long lag transfers... Do you trust the stability of pricing to use them? I'd sweat that one.

The fiat price volatility in cryptocurrency at this early stage of development is overwhelming, so you can't trust it will be worth the same amount of dollars at the other end of a transaction that clears even within an hour.  But low time preference HODLers don't sweat the fiat price, they're more concerned with hanging on to as much BTC as possible for the long term.



So, since today was a planned sell day for me, I decided to experiment with an extremely lowball fee on a transfer to Gemini from a Ledger hardware wallet.  I specified a 1 satoshi per byte fee in the Ledger Live software interface and expected it might sit (or get trapped) in the mempool for hours or days. 

Amazingly, the first confirmation was within 14 minutes, and twenty minutes later Gemini allowed me to trade after just 3 confirmations (Coinbase makes you wait for 6).  Since my wallet utilized two addresses on the input side of the transaction it had a larger than average byte size but still I only paid a fee of 330 satoshis, which at current prices is $0.011. 

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #656 on: December 09, 2018, 09:04:10 AM »
I hope you're right. But I still have nagging questions that I've laid out before.

I did have hope for Bitcoin Cash but it definitely ***feels*** like something went hinky there.

Bear in mind when I got on board with Bitcoin it was nothing but computer nerds and weirdo anarchists (and I was a little of both) and we thought it would be the future of money because of high speed low cost transactions that could span the globe. As a modern example we would have predicted that Venezuelans would be using it right now as their currency crumbles. Bitcoin was the answer to Weimar.

Today I'm not really sure what it is. Store of wealth? I've never understood that. Investment? Internet currency? Useless bubble? I don't really know. I'm also confused about the "hold" advice. No financial planner on earth would tell you to hold a currency. You invest or use it to start a business or buy a franchise or leverage it to get a bigger loan to buy something with cash flow.

I could see a world where it is the currency of the internet and right now that's the best proposition. It could have value there. But you then need to convince the uncle with a lazy eye to have 2 currencies he tracks and use one in person and one online. Maybe? I'm not sure where this shakes out.

I'll close with a little whimsy. As bad as this has been for people close to me also remember the banks DIDN'T LET ME BUY THE SHORT. 2018 would have been the most profitable year of our lives. C'est la vie. Lots of that going around.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #657 on: December 09, 2018, 02:57:03 PM »
No financial planner on earth would tell you to hold a currency. You invest or use it to start a business or buy a franchise or leverage it to get a bigger loan to buy something with cash flow.

Because every other currency on earth is manipulated by central bankers to be inflationary in order boost spending and investment and discourage stuffing savings under the mattress.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #658 on: December 09, 2018, 07:11:45 PM »
Because every other currency on earth is manipulated by central bankers to be inflationary in order boost spending and investment and discourage stuffing savings under the mattress.

I guess. So all your savings is in Bitcoin and gold? Will all wealthy people become Scrooge McDuck? I've heard this "hard asset" thing before.

I'm no stranger to this. We've bought and sold artwork and rare wines. But a 2008 Beringer Knight's Valley Cabernet (yes I had cases from Sam's Club) isn't currency. I bought because at the time I liked the wine (I've lost my passion for Cabernet) and when the price went crazy we sold it rather than drink it.

This is the bit that the gold bugs never get. Yes, that silver quarter buys roughly the same amount of gas as in 1964 due to metallic value. But if you'd bought shares of Exxon Mobil instead of sitting on gold your kids would take a helicopter to school. Off the dividend.

Even if money was fixed and even if it was slightly deflationary we'd all be better off using it as some form of investment. And even if you added Bitcoin to Harry Brown's "Permanent Portfolio" you would have rebalanced during the spike. Even as an asset I don't understand rigidly holding it.

I could well be wrong but as I talk to friends the "I don't understand" line comes up a lot and with the recent plummet their answers get confusing.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #659 on: December 11, 2018, 06:30:16 PM »
Excellent 20 minute collection of video clips from Andreas Antonopoulos on the realities of bitcoin technology as a store of value, medium of exchange, unit of account, comparisons to gold, and HODLing.

Bitcoin Q&A: What is the appeal of sound money?

Quote
What functions of money does the current stage of bitcoin fulfill? What is the current popular use case? Why will unit of account be the last function we achieve? Which use cases will accelerate bitcoin adoption in western countries (ex. Germany)? Why should we not be so hard on speculation and hedging against devaluation? What is the appeal of sound money? Will bitcoin become a world reserve currency? Why is gold not a good medium of exchange? How do we incentivize spending of bitcoin, when the current trend is to hold? Why is HODLing simultaneously hard? Why do mainstream economists call it "hoarding" instead of "saving"?