Hoarding cash is pretty stupid in my opinion, it can be hyperinflated very quickly... seems the average $600m is just amount for few month of expences for the billionaires instead  Hyperinflation is actually pretty rare. Even more so in the industrialized world. With the exception of the last 5ish years interest earned on bank deposits would earn all of, if not more then the amount "lost" from inflation. Billionaires are hoarding cash because there are not investments that carry an appropriate level of risk and expected return. ... as you can clearly see fiat money is a huge CONfidence game. If a certain 0.000033 % decided over a short period that US dollar "cash" holdings would be devaluing, then they would ... drastically. As it is right now those holdings are losing value due to negative real interest rates. The US Federal Reserve Dollar has become the biggest Ponzi scheme the world has ever known and in the process gutted the real, productive economy. |
|
|
|
It would be even greater if wealth wasn't distributed so disgustingly skewed toward the 0.1% In a world of 7 billion people, 2,325 makes up approx. 0.000033 % of the population. The 0.1% total 7,000,000 in number. |
|
|
|
The reason they are holding so much cash is because they do not want to take investment risks with their money. Bitcoin is anything but a sure thing so I would say it is unlikely that someone holding cash would want to take the risks of price declines of bitcoin.
The longer bitcoin stays around, the more widespread it becomes and the higher it goes in price the greater risk switches over to a risk of being left holding endless, worthless fiat promises ... network effect of money is covered by game theory (store of value function not medium of exchange). |
|
|
|
My hypothesis is weakened a bit with this chart which shows transaction quantity relatively surpassing market cap in the summer of 2012, without a major new bubble. That was Satoshi Dice running it's network transaction quantity "stress test" I think you'll find ... I see now. For this reason and to filter out other non-economic transactions, Blockchain excludes the 100 most popular addresses when calculating the data series that I follow. yeah, that was the TXS data series I used ... didn't satoshi dice generate random addresses on demand? |
|
|
|
|
Frank Abagnale is scam artist, one of the best, that's a fact. Why would/does anybody believe him?
Because DiCaprio played him in a moive?
|
|
|
|
|
What happens when 10,000 ancaps change their legal names to Satoshi Nakamoto I wonder?
|
|
|
|
To the IRS Bitcoin is a commodity. To the rest of the government it is potentially a money and thus you would not be protected by stating that you are simply selling a commodity. If you are going to be exchanging a lot of bitcoins/USD you really need a money transmitting license and you WILL need to comply with KYC-AML laws otherwise they will nail you to the wall, if for nothing else but to make an example of you. It's not worth jail time. Just don't do it, and if you're going to do it, make sure its on a very small scale and with trustworthy people. IE selling a few coins to a friend probably won't land you in a federal prison  sad days when people are too scared of their govt. to trade a few bits of harmless electronic data between them without threat of jail time ... is it really this bad? |
|
|
|
My hypothesis is weakened a bit with this chart which shows transaction quantity relatively surpassing market cap in the summer of 2012, without a major new bubble. That was Satoshi Dice running it's network transaction quantity "stress test" I think you'll find ... |
|
|
|
this is gonna be great.
the shorts are mostly punks who have no idea how much pain Bitcoin can inflict on the upswing. orders of magnitude type pain.
This thought has crossed my mind more than few times. In the early days of commodity derivative trading there used to be these long periods of flat pricing and then sudden discontinuous events, particularly spot electricity and precious metals. All these massive losses (Enron, LTCM) were be papered over by CB's pumping enough fiat to slosh around and the actual deliverable good had long enough lag time delay on expected delivery. Bitcoin is the first digital commodity where immediate delivery is not only expected but immediate fail-to-deliver is a loud market signal of an insolvent counterparty. Futures and derivative markets in a digital commodity available for immediate delivery seem foolhardy, but the massive speculative mania that has engulfed financial markets for the last 30 years on the back of easy fiat money has given rise to any number of hare-brained speculative secondary markets. Bitcoin derivatives could turn out to be the final denouement for the speculative manias, almost like the fiat speculators graveyard. The proof-of-solvency measures being rolled out by bitcoin counterparties are an interesting phenomena all in themselves. |
|
|
|
 Total BTC value (CAP) and number BTC TXS squared excluding popular addresses (with a simple exponential fit line). Data from Blockchain.info. On current trend of ~4years, CAP ~$100 billion Aug. 2015, $1 Trillion Aug. 2016 (after next halving) ... unless TXS hit some limit. |
|
|
|
using total BTC (network) value not price (which is only proxy for total network value) ... and correlates with txs^2, (completely unadjusted) |
|
|
|
lol, wtf. the shorts on finex are still there in their full 11k beauty...?!? wouldn't have thought.
... or they never intend to pay those BTC back ... just settle up in fiat, like has been done on gold futures for the last 20 years ... gee, noone saw that one coming  anybody stupid enough to lend out BTC for shorting deserves to lose ALL of them. |
|
|
|
This is my falsifiable hypothesis: if the 7-day average of the number of transactions excluding popular addresses as calculated by Blockchain.info exceeds 76394, e.g. reaches 80000, then bitcoin price will be rallying into a new bubble. Obviously you are aware of Peter R's work re: transaction volume, Metcalfe's law, network value and market cap. I'd be interested to know how far off the log trend of capital value growth, i.e. not price growth, that we are at present ... and what the previous largest deviation was using the capital value metric (not price). |
|
|
|
So why aren't they presently taking those actions? One possibility is that 0.1% hedges are simply too small to bother. This may happen but only at some 1% or higher level. This is a great point too. 0.1% hedges are perhaps too small to bother with; on the other hand, should the market-cap significantly increase, 10% hedges would be painful. The "hedging dynamics" will get interesting around the 1% level I think (as you implied as well). The bitcoin game has the interesting property that incentivises/allows easier access for smaller (yet more knowledgeable) players to get in first ... the entrance only grows large enough for the next larger level of players at each stage ... the biggest position takers in fiat terms will probably be the last to arrive under this logic. |
|
|
|
|
I want to see some good analysis of the thermodynamics behind all this ...
... and if you cannot bring entropy, the second law and the irreversibility of information flow into it I'll probably dismiss it.
|
|
|
|
I don't think the original poster realize the amount of resistance bitcoin will get from the government and banking industry.
When all rules and regulation are put in place for bitcoin, it will be little different from fiat and wire transfer.
... you don't really understand how a computer works do you? |
|
|
|
The market cap is now below both "Metcalfe Value" estimates (num TXs / num addrs)--something that hasn't happened since early 2013. Note that I'm taking the 7-day moving average of each time series, so the recent drop in price hasn't been fully "averaged in" (i.e., if the price stays low, the divergence between Metcalfe value and market cap will grow).   Peter R. much appreciated for this update Have you considered fitting onto a long term network adoption curve? Like say a sigmoid with final market cap at $2 trillion? Or similarly with a final target saturated transaction network or similar? |
|
|
|
2^11 is 2016?
it's 2048 on my calculator )  edit: 2^11 - 2^5 |
|
|
|
|
Show Posts
