Bitcoin is coasting on name recognition and first mover advantage. At this point, the only thing it really has going for it is past familiarity and the "promise" of what lightning network will do. LN looks awfully convoluted and my personal expectation is it will be not be very widely understood and therefore not widely embraced. Ethereum had much more utility, being the ecosystem of smart contracts. I expect at some point before 5 years, some crypto will overtake Bitcoin's preeminence, but I'm agnostic about which one it will be.

While the percent of coins lost is smaller, the value is still eye popping and respresents the largest crypto hack to date. This on top of the fact that we know these exchanges are targets for hackers and yet they still employ weak cybersecurity protections or make stupid crypto decisions like housing all customer funds in a wallet that apparently required a single signature to access. To the extent the drop in price is directly attributable to this hack, it's because we still have inept operators causing massive harm to customers.

What was the last bank that has hacked for more than $500 million dollars? If something like that were to happen, the funds would be insured and customers would not experience a loss because banks are regulated. This doesn't exist in the Bitcoin world. It's unbelievable that there are startups that still take customer funds and don't have adequate security. Bitcoin is not as secure as fiat, and people want to pretend like it is.

Bitcoin is just a representation of value that already exists. People who had nothing before Bitcoin are going to have nothing after Bitcoin. It's not a magic solution that's going to make everyone equal or solve poverty, if anything it's going to increase disparity because the poor don't have access to it if crypto ever became a major means of value transfer.

That's not sound reasoning at all. Bubbles don't burst until they burst. The fact that a bubble is inflating doesn't mean that it has to burst at any particular point. It bursts when there is no longer an increasing mass of people accepting the delusion of the bubble. What is bitcoin worth right now? $10,900. What was it worth last month? $19,000. Has anything fundamentally changed in that time? No, except the consensus on what a bitcoin is worth. If more people thought it was worth more than that, the price would be increasing right now. It just so happened that when the price reached $19,000, far more people decided it was overpriced and would rather have $19,000 than a bitcoin, so they sold. Then again at $18,000 and $17,000 and so on until we reached a new equilibrium range between 10 and 11 thousand like right now.

Bitcoin matters much less what you think it's worth than what everyone else thinks it's worth. You can think it's worth $19,000 and so can buy as many as you can at $10,000, but that doesn't mean a thing if you can't find anyone else who also believes it's worth $19,000. And you're in real big trouble then if everyone suddenly decides it's still over priced and suddenly no one is willing to pay over $5,000 anymore.

A bubble is an asset whose price rises faster than the value proposition should dictate. Since bitcoin is an asset with no inherent value, the value ostensibly comes from one of two places: 1) utility to perform a useful function (value transfer or store of value) or 2) speculation that someone in the future will be willing to buy the asset off of you for more than what you paid for (the later idiot fallacy). Bitcoin was supposedly created to fulfill number 1, value transfer/store of value, but it is much MUCH more widely used for number 2, which makes it prone to inflated price due to hype, FOMO and the collective delusion that the price cannot go down for [insert any number of unsound reasons].

Because there is no reliable mechanism for shorting bitcoin (an equilibrium force in the market), price is pressure primarily builds in one direction without a reliable counter force (someone betting against the price by shorting), and this further tends to skew assets like this into bubble territory. The bubble pops much more violently in these cases than assets that can be shorted easily because the buying pressure suddenly disappears and then there is a rush to get out of the asset by dumping coins on a smaller pool of buyers.

Nothing here demonstrates that anyone has an ability to manage currency risk. You can manage your "currency risk" by not buying currencies that are highly volatile. Short of avoiding that, there's nothing anyone involved in a crypto company can do to mitigate your currency risk, the best they can do is make a hacker-proof environment so your coins can't be stolen from your account. These are two different types of risk, and cybersecurity will do nothing for currency stability.

 

Online wallets (at least the reputable ones) are constructed in a way so that you generate your private keys without the wallet service having access to it. So the online wallet service never has custody of your coins because they have no ability to access or move the crypto. Exchanges, on the other hand, do have custody because you send the coins to their address. That's also why you're seeing all these exchanges get regulated now by financial regulators, just like banks undergo regulatory supervision. Regulation increases confidence that the operators are legit and can't run away with funds because they'll be prosecuted for fraud and theft.

Why would it be the government's responsibility to teach anyone about something it didn't create, doesn't control, and doesn't endorse as a currency or payment eco system? Basic financial education like the obligations of credit and home ownership would not entail education about Bitcoin or cryptocurrency. There's no sinister plot to "keep people ignorant" by the government about crypto, there's just no mandate for that type of thing to be taught because it's not anything the government controls.

So it is primarily an asset and a terrible use of a currency. A good way to demonstrate is to ask people, especially the HODLers, if they would take their entire salary in Bitcoin if given the option. There are two people who might, those who are reckless/gamblers and those who aren't dependent on the income in the immediate term and can risk the volatility of having their income potentially locked up at a loss for an extended period of time. But you will find most people would not agree to this because most people cannot afford the uncertainty of not knowing what their income is worth, because there are real life financial obligations that are denominated in a stable value, and Bitcoin is not. It's a terrible currency.

This would be misleading. Bitcoin has value in Venezuela because btc's price is supported by stable fiat currencies that make it hold its value (well, relative to the Bolivar). That's not Bitcoin being tested by a financial crisis, it's just btc being used in an area already under crisis while the rest of the world that supports btc's price is not in crisis. If the rest of the world experienced a crisis, the price stability (to the extent you can call this volatility "stability") that btc experiences would be directly affected.

Thanks mate. So essentially, there's interoperability between SegWit and legacy addresses, so there should be no issue transferring coins from an one to the other (including sweeping, which is just a method of on-chain transfer), right? If I had coins on a SegWit address and wanted to sell, I could just transfer them to an exchange if it it hadn't implemented SegWit yet?

The thing on opensource is I'm not a coder, so I have no ability to evaluate if the either of the services listed in point 1 are legit or sketchy. I'm really relying on other people with the expertise to know there.

I've been told I need to upgrade to a SegWit address in order to help the adoption and help cut down on tx fees, but it appears most online wallets don't support it yet. I have found a few places to generate a paper wallet, and have a few questions surrounding this.

• Are https://segwitaddress.org/ and https://coinb.in/#newSegWit reputable places to generate a SegWit address?
• Once I transfer btc from a non-SegWit address to a SegWit address, can a SegWit addresses send transfer back to a legacy address? (Reason being if I needed to sell, my exchange currently doesn't support SegWit, so I assume the only way to sell would be to transfer to a legacy address and then transfer to the exchange?)
• Are SegWit addresses and legacy addresses on the same blockchain, or are they two different chains?
• As online wallets adopt SegWit, I assume if I were to generate an address with either of the above websites (provided they're legit), I would be able to use the private key to sweep the coins into them?
• Is it possible to sweep coins from a SegWit address to a legacy address?

Any help and insight is appreciated.

One of the worst things you can do is to just start acting without a sound plan. A written business plan that anticipates the business, how the business makes money, the costs, and the market needs of the business is a good starting point. People who just start a business without regard to the details will often fail. Detail-oriented people are far more likely to succeed because they've planned accordingly, including taking into account the market need for whatever business it is they want to start.

Sometimes panic selling saves you money. If you sold when the price dropped from $19000 to $15000, then you're currently up $5000 per coin than if you continued to hold now that the price is at $10000. By panic selling then, you then have the option of buying back in now that it is at $10000 if you think the price will recover, whereas you may have not been concerned about the price recovering if you just held, but now you can make more money riding the price back up.

I'm not saying panic selling is a good thing, but saying panic selling is a bad thing is demonstrably false, as are many absolutist statements. There is an opportunity cost to every action.

I've been expecting the bubble to "pop" or for the price to crash, but perhaps a slow deflating is what we're going to get instead. Could be what we're experiencing right now with the price hovering around 50% of all time highs, or the price could rebound and we resume the crazy upward trek into more bubble territory. One thing that is promising is the mempool was been clearing somewhat and transaction fees are coming down. People are attributing this to SegWit being more fully adopted. Taking that as true, that might help make Bitcoin in its current iteration run more smoothly, but it is still a hard cap on capacity in that it can't really grow any larger. It's going to take a lot more to address that issue. People say Lightning Network is the solution. I don't know enough about it right now to have a good feel about whether or not that is likely to be true. LN seems like a centralized solution to me, which is what people were complaining about with raising the block size to scale.

I wouldn't trust this in the least. It's supposed to be backed by real USD to maintain it's stable price, but where did the USD to act as a reserve currency come from? Their transparency page (https://wallet.tether.to/transparency) lists 2.15 billion tether in circulation, which means they have to have a reserve of 2.15 billion USD to hold in reserve. Does it seem likely to you that they have two billion dollars in reserve to keep the price stable?

It doesn't to me. Avoid like the plague. This has scam written all over it.

The US says it has a "voluntary" tax system, which completely obliterates the meaning of the word "voluntary." Anything that is enforced through with prison or the threat or use of force is not a voluntary action. It is compelled. There are additionally financial penalties for not paying taxes, which are similarly enforced through the use or threat of use of force. If it was truly voluntary, it wouldn't be called taxes; it would be people donating money to the government so it can afford to function.

Isn't the corollary to that that newbies will buy anything when the price is increasing fast for no reason? It seems everyone trading crypto is absolutely certain they know what they're doing despite the fact that they're just jumping on a bandwagon they don't really understand. People who are noobs are always convinced they're far more skillful than they actually are at whatever task it is they're undertaking. There's a 0% chance all the people who just got into crypto because they heard about it from a neighbor or on the news knows nearly as much as they think they do, but that's not going to stop them from taking on reckless risk. The problem is that they're not knowledgeable enough to know what they don't know. They're just operating blindly.

Unless you're going to do something that creates value somehow, you're not going to get rich doing anything in crypto starting with nothing. People think that trading is going to make them rich without recognizing that all they're doing is haphazardly buying and selling and riding momentum that has nothing to do with them. There's no value created in trading like that. If you create a business, that creates value (assuming the market wants whatever it is your business is selling). If you create something that others are willing to pay for, that creates value. Short of that, you're not going to do anything to make money in crypto.