RE: digital money beating gold. If it wasn't for the religion of gold throwing so many smokescreens up around the issue, it would be generally considered as obvious as the fact that the internal combustion engine beat horses as a transportation provider. Yes, I tell people that Bitcoin is the first engineered sound money. In analogy if you cut down a forest for firewood, gold is like an axe. Its the best refined-but-mostly-natural solution. Bitcoin is a chainsaw. It uses scientific knowledge, and complex technology to optimize the solution across multiple criteria. Fiat is like the king choosing to relabel all thermometers. |
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lol, wtf. the shorts on finex are still there in their full 11k beauty...?!? wouldn't have thought.
This is awesome because it shows that this wasn't a covering rally like the last one. RE: digital money beating gold. Cypherdoc I think that this is one of the smartest things you've said on this forum so far. You observed that digital money makes transmission instant and therefore can be deployed rapidly to calm panics, etc. That is, the physical act of deployment can happen quickly. I'd like to extend this a tidbit to also observe that unbacked money has the advantage that social/political advantage that the decision to transfer can be made quickly and in a centralized fashion. That is, deciding to pull gold out of Fort Knox and send it to god knows where would probably require an act of congress and freak out the general public. But telling some bank that they can add a couple of zeros to their balance sheet, especially given that that money needs to STAY on the balance sheet to meet additional solvency regulations, seems to be done by a couple of people sitting in a conf room with no oversight or public knowledge of the situation. This may not be GOOD, but it let fiat beat gold... |
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Man that guy is unlistenable. It takes him several minutes just to say price went down in 2014, then he compares it briefly to the price going up the year before, as if those two moves are comparable in magnitude. Then he picks the dumbest explanation for the drop and proceeds to say that it is dumb. Then I couldn't take anymore.
What is his dumb explanation for the drop? sry ppl selling to invest in alibaba. |
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Man that guy is unlistenable. It takes him several minutes just to say price went down in 2014, then he compares it briefly to the price going up the year before, as if those two moves are comparable in magnitude. Then he picks the dumbest explanation for the drop and proceeds to say that it is dumb. Then I couldn't take anymore.
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pffft forget it. I wont tell you any absolute numbers. I also dont need to know if and how rich you are.
Fact is that I outperformed B&H by factor 1.5-2.0.
Orders of magnitude is wrong as I mistyped this and corrected it already in the original thread.
Ok, since B&H from $0.60-$1200 is a 200,000% return, then your out performance amounts to 300,000-400,000%, or with a not unreasonable 10000BTC, $1.8M-2.4M? notice that 10000 BTC at the top (1200) would be 12M to 24M not 1.2M to 2.4M... I don't care about S3052's personal performance, I'm more aiming my comments at some of the extremely vocal ppl who inhabit the wall observer. Personally, I don't think that it has been very hard to beat B&H in this market. I did so with the extremely small % I was willing to put in bitfinex and bitstamp... You can even look back into my post history to show this (if you want to torture yourselves) b/c I have made about 5-10 posts that imply a trade in 3 years. TBH I think wall street on average is a bunch of idiots -- or more accurately, they lack the edge of actually knowing something other than finance. For example, I avoided the tech bubble b/c I am in tech, bought stocks post 9/11 and all the way down the 08 rabbit hole. Lol, you're right, 12M. I guess I am so blown away I can't think straight.  But I think that personal investment in Bitcoin from 2010 to 2012 had a lot to do with personal risk appetite and time to figure out how to acquire coins than any reasoned % of salary or net worth. So likely S3052 invested well under $6000 as that amount is not "throw away" money for anyone who is still salaried. EDIT: ok let me qualify that to "working for a salary" as opposed to working b/c you want to and incidentally receiving a salary. |
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pffft forget it. I wont tell you any absolute numbers. I also dont need to know if and how rich you are.
Fact is that I outperformed B&H by factor 1.5-2.0.
Orders of magnitude is wrong as I mistyped this and corrected it already in the original thread.
Ok, since B&H from $0.60-$1200 is a 200,000% return, then your out performance amounts to 300,000-400,000%, or with a not unreasonable 10000BTC, $1.8M-2.4M? notice that 10000 BTC at the top (1200) would be 12M to 24M not 1.2M to 2.4M... I don't care about S3052's personal performance, I'm more aiming my comments at some of the extremely vocal ppl who inhabit the wall observer. Personally, I don't think that it has been very hard to beat B&H in this market. I did so with the extremely small % I was willing to put in bitfinex and bitstamp... You can even look back into my post history to show this (if you want to torture yourselves) b/c I have made about 5-10 posts that imply a trade in 3 years. TBH I think wall street on average is a bunch of idiots -- or more accurately, they lack the edge of actually knowing something other than finance. For example, I avoided the tech bubble b/c I am in tech, bought stocks post 9/11 and all the way down the 08 rabbit hole. |
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Shutting off miners will reduce supply, and likely indicate a bottom since utility (as measured by metrics like transactions to new addresses) is still increasing.
I don't understand how would shutting down miners reduce supply as a whole. 3600btc/day will still be mined. This is a common misconception, and requires a background in control theory to intuitively grasp. But in essence the difficulty adjustment trails hash rate changes. So for example for the past year or more 4000+ btc/day have been mined on average because lots of hashing power has been entering the network, but the difficulty only adjusts approx every 2 weeks. So the transient extra hash power results in a faster block confirmation time. The opposite will happen if mining capacity goes offline. |
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This is unusual to have a crypto media source that does not have excuses in the back pocket to explain BTC crash (exactly crash, not up) events that are certainly going to happen. I always thought the media already knows who will be the scapegoat. Price dropped. However, this sort of thing could be a fore taste of things to come. Market manipulations happen. Nowadays you can trade BTC on a leveraged basis. This give people that hold a lot of BTC a huge amount of power. They have enough BTC to move the market any time they want.
So what they can do, for example, is open a “short” position on a leveraged BTC exchange, then DUMP a load of BTC on to the market. Their dump forces the price of BTC down. They “win” their short bet, and (if they so desire) can slowly buy back their BTC at a cheaper price. They can even increase their holding. Remember, the trade is leveraged, which means that they can get 10x or even (in some cases) 100x the percentage move. So if the % move was 2%, they can get a 20% return, or even a 200% return, which can be an incentive for people to play dirty. If you look at a 4 year logarithmic chart you’ll see that the huge bull runs are almost perfectly 8 months apart
Price highs and lows run in a well defined sequence. We are now upon the next 8 month increment also the previous huge bull runs were preceded by unusually long periods of price stability in similar triangle patterns. All of this would lead you to believe the price will go into another huge bull run till the end of a year.
Sure they can do that and no doubt they have recently but in actuality these types of trades are extraordinarily difficult and risky to pull off especially on foreign exchanges with unknown owners who could run with your money at any moment. As with any other trades, timing is paramount. If you're wrong about sentiment there could be a bull whale lying in wait to squeeze the hell out of your short. You also never know if the exchange owner himself is looking to screw you. I've never left a dime on any of these sites and am so glad I didn't which is also why im so skeptical of people who claim they sold out their 100% BTC position @1200. How the hell could they have done that since the only real exchange they would likely have used was gox back in December. And that's when they weren't wiring any USD out so even if you were good enough to have picked the top how could you have gotten the money out. I don't wish any theft on anyone but if some whale is trying to short the price down it would serve him right to get nailed. Now is not the time to try that.
People who have sold at 1200 $ like me did not need to be stuck at mtgox. bitfinex was running smoothly at the time and withdrawals were smooth as well.I didn't see 1200 on bitfinex, although it could have happened briefly. But between 1000 and 1100 was certainly possible on both bitfinex and bitstamp. At the same time, I think that most people who claim to have sold out at those prices are more commenting on the small size of their stash then their investing acumen. As Cypherdoc was implying, a typical large holder would not accept the risk of trusting these sites with 1000s of coins or the fiat equivalent. Of course, YMMV, nothing ventured nothing gained. And a whale professional investor may be flying to HK/UK to personally meet the exchange owners, have a staff researching the past history of said owners, etc. |
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Has anyone else here ever tried to buy something on Alibada? All I ever get is a list of wholesalers.
That's what I was thinking. Maybe they're going to go legit. yes I have bought stuff... but only wholesale :-). IDK what they are trying to become but I thought they started as ebay for b2b from China to the rest of the world... |
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Are we feeling the pain yet?  This is what I think; its total speculation. Miners have been holding a significant portion of their supply hoping for an upwards bounce. But those coins eventually needed to be sold to make ends meet. Essentially you can think of it like these miners were leveraged long (borrowing $ from their own bills that must be paid). As the price slowly dropped, we approached the line where certain miners had to sell to make sure they could keep the electricity on. This became a cascading effect, driving a rapid price descent. I'm waiting for the hash rate graph to flinch. This will indicate that some miners are shutting off units, which will tell me that we are approaching the marginal cost to produce a coin. Shutting off miners will reduce supply, and likely indicate a bottom since utility (as measured by metrics like transactions to new addresses) is still increasing. I like this theory! So you figure the cost is in the $300's somewhere for the more efficient mining setups? Idk it depends a lot on the cost of electricity and a little on the production cost of the HW. Anyone have the latest stats? |
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Are we feeling the pain yet? This is what I think; its total speculation. Miners have been holding a significant portion of their supply hoping for an upwards bounce. But those coins eventually needed to be sold to make ends meet. Essentially you can think of it like these miners were leveraged long (borrowing $ from their own bills that must be paid). As the price slowly dropped, we approached the line where certain miners had to sell to make sure they could keep the electricity on. This became a cascading effect, driving a rapid price descent. I'm waiting for the hash rate graph to flinch. This will indicate that some miners are shutting off units, which will tell me that we are approaching the marginal cost to produce a coin. Shutting off miners will reduce supply, and likely indicate a bottom since utility (as measured by metrics like transactions to new addresses) is still increasing. |
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...
I maintain my earlier point, however, if there are means to identify problems (such as manipulation, if it is taking place in ways that are outside of "acceptable" limits) and then to figure out the least intrusive ways to resolve such problems - sometimes that may mean that the best way is to establish some kind of an oversight body... that has teeth that will minimize and/or prevent the problems (if manipulation rises to such level to be deemed a problem).
Sure. Bitcoin community is slowly reinventing the wheel. Unregulated markets caused problems, that's why people invented regulations and regulated them. Maybe we are saying, more or less, the same thing but using slightly different wording and emphasis? Regulation is NOT some foreign outside force that comes in and ruins the party - frequently what happens with any kind of community intervention (if you want to call it regulation) is that a problem evolves and is identified. Sometimes problems are identified as similar to earlier problems and the same (or similar) rules, policies and/or practices can be used to address the new problems, and other times complete rethinking needs to take place in order to address the newly evolving circumstances - and sometimes, through this whole process, communities will come to realize that their previous rules and/or practices were all fucked up... Surely, with bitcoin there is both new and old mixed in and there are a variety of mixed public policy incentives, including whether the government should consider bitcoin to be a friend or a foe.. and there can be both good and evil driving forces that are affecting the direction... regarding what actions should be taken, if any. Surely, it is really cruel and evil if somebody like Mark Karpeles runs off with your coins (if that is what really happened), but it also could be cruel and evil if the US government was involved in manipulating and or stealing those GOX coins or having some kind of hand in what happened with GOX. It may take some time before we find out, that is if the full and true story ever comes out. I wonder where would we be if not collapse of mtgox. $2000 ? or more ? Maybe some day we will know ... something tells me its better that it imploded sooner rather then later. Yeah, even sooner would have been better. If willybot hadn't been buying it might have slowed the bubble down enough so China would not have seen a need for such strong regulatory announcements (for example). |
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Boom. usually the first move is the wrong move.
What did the FOMC say? Can anyone summarize? tldr: tapering to $5 bill mortgage purch, $10bill treasuries. ...that economic activity is expanding at a moderate pace. On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective. Longer-term inflation expectations have remained stable. The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions... Beginning in October, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $5 billion per month rather than $10 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $10 billion per month rather than $15 billion per month. |
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well, here's the good news.
in terms of instantaneous reactions, Bitcoin hasn't budged an inch.
which may, in the broader picture, argue for Bitcoin as the ultimate hedge against mayhem in the broader markets. and also argues against gold & silver as well, as we see it whipping around like a stuck pig right along with everything else. Some proof that Bitcoin is a noncorrelated asset is going to encourage certain classes of investment so that is great news. Unrelated: Do any of you understand the variability of the hash rate graph (posted a few msgs ago)? Are those machines really being turned off and on? Instead, I'm thinking that it is an artifact of the data collection methodology -- if you imagine that this difficulty graph is extracted from block discovery rates, normal variation in block discovery times would cause artificial jitter in the hash rate graph that is proportion to the hash rate. Anyone have a graph of hash rate shares submitted to a large pool? Does it also show these jitters? If this is the case, blockchain.info should really average the values to remove this artifact... |
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the one counter argument is that BTC's hype cycles seem so transparent and the payoff really good. If a quant back-tested an algorithm that looks at twitter FB reddit traffic and could predict the ramp there would be the "edge" described in the article. A player could expect a 10 bagger with bitfinex leverage getting you to 50x in one year. This kind of payoff could justify a small investment. This could be what happened in the recent BFX leverage to 32M. Likely this kind of player would look for momentum, so we will not see him entering until there is a clear uptrend...
But this kind of person would try to dump at the top, so actually not really the sort of adoption we want anyway. Best to not worry about Wall St and just look at and encourage international adoption.
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from the Boston Fed:
Second, the resource cost of mining is becoming increasingly unaffordable, not to mention the inefficiency associated with this aspect of the system design. Again, it is possible that within a few years it will become infeasible to rely on this distributed model, however consolidated, to verify transactions.
if it's so unaffordable, then why does it keep doing this?:  Why can no one understand that we don't need this hashing power to secure this network? I doubt we need 1% of what we have today, given the impact destroying it would have. Obviously a major govt could (at great cost) 51% it. But most governments that have the means are ultimately responsible to the people and killing BTC by 51% attack is not the legal approach they would take (as opposed to a ban). Therefore hashing only needs to secure against a private enterprise. When you realize that 51%ing does not allow you to steal other people's coin -- it only can be used to stop them from spending, to reap all the mining rewards and to double spend, you quickly realize that economically this is a losing proposition. |
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The bold part, can someone ELI5 please?
You are buying 100 THS for 3 months. Let's say you think that you would get X BTC in that time. So today you might be willing to pay about X for this contract. But in 1.5 months, you would only pay X/2 because there is only half the time left. in 2 months X/3 in 3 months less 1 minute you'd be willing to pay nothing for it. EDIT: it will be interesting to see what traders value these at... |
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So, if we ignore for a minute, the properties of gold that make it less attractive than bitcoin, and purely focus on the limited nature of each one; Why isn't gold acting as a store of value in a QE economy? Why is it not guaranteed profit to take out a huge low interest loan, and buy gold?
If there is an answer to that, why doesn't it apply to bitcoin?
Gold truly is the barbarous relic. It can be shorted to hell with naked contracts (big banks can sell what they don't own) and it is very inefficient in the digital age. How can it compete with instant and cheap value transfers like bitcoin (for which naked short selling does not currently exist)? As we've said before, bitcoin is assuming the position historically held by gold. Bitcoin is Gold's Black Swan. Just remember to take possession of your private keys. Appreciate the response Steve. To delve a little deeper, I realize that gold is a "barbarous relic" and inconvenient to use, which is why I was ignoring those facets for this particular comparison. Surely a clumsy, less efficient, hassle of a commodity will still rise in value relative to a paper currency issued in unlimited supply? If naked shorts really are the answer to what keeps gold value in check, then my next question would be what keeps bitcoin protected from entities offering naked short selling? I realize that if everyone acts responsibly, that won't be a possibility, but that's never happened before, so I'm not counting on it. Also, just to clarify a bit, I wasn't trying to compare gold to bitcoin, I believe bitcoin is superior in this role. I was comparing each to dollars, and wondering how we can expect bitcoin to clear the hurdles that gold failed to do, when they are both using the same approach. Gold can only function properly if the majority of people demand delivery of physical metal. If the majority do not demand delivery of physical then it becomes possible to fractionalize gold and artificially increase supply by selling paper. Essentially the scarcity property of gold breaks down unless the majority of people take physical delivery. This is why FDR's executive order banning physical possession was so effective at breaking the gold standard, after 2 generations the majority no longer demanded physical possession, but see paper products as "gold". It also is why the "gold bugs" vision is never realized, you need the majority of the population to demand physical and reject paper. If only 1% of the population regularly buys gold eagles, then banks can continue to sell paper for a long time. The advantage for bitcoin is it is just so easy to take delivery. Any smartphone app can do so in seconds, and there is no reason not to. If people who adopt bitcoin for the most part use bitcoins directly then we just might fix the problems gold ran into. My suspicion is this is how bitcoin will be attacked though, with regulation that drives adoption out of individually held wallets and into coinbase type online services by making compliance easier with online services. From there it becomes easier for online services to fractionalize bitcoin same as gold... It is much easier to demand delivery of Bitcoin, or at least proof of reserves.
Thanks rocks and notme. You both agree that the simplicity of taking delivery of bitcoin is what is going to protect it from the same fate as gold. I think it's a reasonable observation, but so far we've seen no evidence of that happening. The general public, and even some outstanding members of our early adopter community, have repeatedly lost bitcoin entrusted to a third party. The general feeling I get from normal folk when I talk about bitcoin is that it's too complicated, and they'd rather have someone else holding it for them and allowing access with a nice GUI or credit card analogue. This is what gave me pause; Outside of the people in threads like this, everyone wants a 3rd party to hold their bitcoin, and they may or may not care about solvency or audits. These are things that they don't really have a grasp of. With the majority of the world made up of people like this, how can we expect the industry NOT to capitalize on them? We can shout about private keys and audits all day long, but to an outside observer, we sound like the gold bug stackers ranting about physical coins. I agree that most people are fools and they will continue to entrust their asset to third-parties but I also think that it will be very difficult for entities to conduct naked short sales of bitcoin without being called on the carpet for it (squeezed). The assumption is that most of the bitcoins are already in private hands and not bankster hands making it much harder for the manipulations to take place. Of course, I could be wrong. My optimistic opinion is that counterparty risk failures in the legacy banking system will drive bitcoin adoption along with the awareness of the importance of taking possession of one's assets. Someday entrusting Bitcoin to third parties will not be such a disaster. In fact it will be a sound redundancy strategy to store some of your wealth that way just in case your computer and your backups die or someone tries to physically beat the coins out of you. For example, large retail stock brokers in the USA have generally been pretty responsible safeguarding stock shares (of course there have been some issues, especially in mutual funds). However, this is very different from trusting a recently incorporated company with 5-20 employees operating halfway around the world in a different legal jurisdiction with an asset that has still not been unambiguously recognized worldwide as property. |
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Wow this is not good  No, it certainly is not. I especially don't like the implications for future GABI and COIN impact. (I know, they're not the same type of investment vehicle, but I'm not sure either if they're different enough to make a completely different buying behavior likely at the moment). I remain long-term bullish, but I am also starting to get myself used to the idea that we could be in for a substantially longer bear market, to the order of another year, of no substantial and lasting price increase. Let's not put too much into one sale. Could very easily be a single investor taking profits or even just covering his/her initial investment. Really, the lack of new purchasing is what is worrisome. However, even that is not a big issue. The truth is that BTC has always had periods of quiet because most people are momentum investors whether they know the term or not. And so we should not expect much investment right now...instead we should be looking at merchant adoption and use transaction metrics which still look pretty good. |
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