You could get the value of a CDO back by simply selling the CDO.
OK, I give up trying to explain it to you. Furthermore, you could get the value back in the actual houses themselves, which were selling at crazy values. By that standard, the “value” was there. The issue was that the houses weren’t actually worth that much despite the fact that you could find some schmuck who would take out an adjustable rate mortgage and pay you a crazy amount of money for it, and then turn around and sell that mortgage to a bank who puts it in another CDO. The market was willing to pay that much, but that doesn’t mean the houses are worth that much.
No, the problem really was that you couldn't sell the assets for anywhere what they were valued at in the CDOs. That’s what I fear will happen with bitcoin as people start trading derivatives and using leverage. I don’t think bitcoin is any different in the sense of the underlying asset potentially being overvalued.
It's totally different. You can sell a bitcoin instantly for its publically known price. The value of properties in the CDOs was unknown to the investors and assumed to be far greater than it actually was. As to your second point, I could see the crypto market reaching trillions as a whole at some point, but I don’t think it will be justified.
The value a market gives to something is the sum of the opinions of all of that market's participants. Individual opinions will vary. Whether you or I think it is justified is irrelevant on its own. It is what the market as a whole thinks is justified that matters. |
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It is entirely possible that the money actually exists.
The money does exist, it has been audited by a reputable accountancy firm. Nonetheless, there are various possibilities tinfoil hat conspiracy theories
Fixed that for you. that could cause huge disruptions for the cryptocurrency markets even if the outstanding supply of Tether is actually 100 % backed. I have mentioned a few of these a few posts back in this thread (e.g. the possible involvement of BTC-E funds, the misrepresentation of the business nature to the banks and the local regulatory bodies...).
There is not one shred of evidence to support any of this. It is just the ramblings of bloggers and other weirdos that have nothing better to do with their time. Interestingly, BTC is flirting with another ATH at the moment.
That news from the CME about the futures contract sure has been good. More institutional money flowing into crypto, more great news. Another thing that is increasing my scepticism is the fact that the cryptocurrency media entities (e.g. Coindesk) are very vocal about people like Novogratz investing 10-20M $ into cryptocurrencies (not even all of it is going into BTC, parts of it are flowing into ETH) and yet are completely quiet regarding the mysterious creation of 175M $ of Tether just in the last 2 weeks.
They would be quiet because it is no mystery and not a story. |
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Yes, I am saying that the value of the underlying asset is not there.
....
Also, just because someone is willing to pay x amount of dollars for an asset does not mean it is worth that much. People paid crazy amounts for tulips, just like they did for CDOs.
We're getting somewhere now. The difference is that you can actually sell Bitcoins for the price they are quoted at. You could not get the value of a CDO back either from the people who held the mortgages or from selling the foreclosed property. Actually, the very definition of value (in the market sense) is exactly that. What someone is willing to pay for it. Futures and options that are backed by something you can sell at the value the contract trades at don't cause a financial collapse. As to your second point, Bitcoin is innovative and crypto is a very interesting idea, but it is nowhere near the scale of the internet. The internet has impacts on all areas of our lives and bitcoin only pertains to money. Blockchain technology has a lot of potential, but not bitcoin itself (at least compared to the internet). I’m not saying the bitcoin bubble is going to burst tomorrow or that it is near its peak, but to say it will go into the trillions is ridiculous IMO.
The internet bubble wasn't the internet, that had been around a lot longer. It was a whole bunch of startup companies that saw the potential to use it to launch innovative new businesses. Most were completely useless and fell by the wayside, a few of the biggest corporations that now exist survived. The analogy is that blockchain is the internet. Bitcoin is analogous to a major infrastructure company providing the backbone to host the internet. That will come more apparent in coming years when things like Lightning Network happen. As for my prediction of trillions, it's just that a prediction. None of us can claim to know really what will happen. I may be over-optimistic and be proved wrong, but it certainly isn't ridiculous. |
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Of course the CDO ratings were a problem but CDOs alone didn’t crash the economy. You are right that synthetic CDOs magnified the effect, but they magnified it massively. That is why it had such a massive impact. Synthetic CDOs cause what would have been a large problem in the housing market into a massive once-in-a-lifetime world wide economic collapse.
So why don't other futures cause economic collapses? Why not gold, oil, wheat, Euro, bonds... there are futures in almost all commodities and financial instruments. The simple answer is that they are all backed by the value of the underlying asset being traded in. Only in CDOs did it turn out that the underlying asset wasn't really there. The properties the loans were secured on didn't support their value. That was the cause, derivatives were the means. Unless you are telling me that Bitcoins don't really exist and can't be sold in exchange for dollars to value they are quoted at there is no similarity. You say that derivatives of bitcoin won’t cause investors to throw an irresponsible amount of money at bitcoin because they’ve already done that, and you also say it attracts a new class of investor... but you fail to mention that the new classes of investors being brought in are institutional, and derivatives allow them to throw even MORE money into bitcoin. Just because it is already overhyped doesn’t mean it can’t get even more overhyped.
Which is all good. The market cap of Bitcoin is $130Bn right now. In 1999 the internet bubble was in the trillions and that is where this is going. There probably will be a bursting of the bubble one day but it's a long time off yet. When it happens the best will survive and surpass their bubble peaks a few years later in the same way the best internet companies did. |
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You missed the word “synthetic”, which completely changes what you are talking about. Synthetic CDOs are a derivative of CDOs. There is nothing wrong with CDOs and they themselves did not cause the economy to collapse... its the derivatives of them that did this. Futures and options both allow vastly more money to be invested in something than the intrinsic value of the underlying asset. This is a quality of synthetic CDOs too, and it will allow people to throw irresponsible amounts of money into extremely volatile assets backed by bitcoin, which is really dangerous.
No, that really doesn't change anything. It was the CDOs that had no actual value. The loans they were made up from were sliced and diced so as hide the fact that most of them were subprime and worthless. The rating agencies gave them AAA ratings which then allowed funds to invest in them that couldn't have done without the AAA rating. Derivatives may well have magnified the effect but they were not the underlying cause. The obfuscation of the intrinsic value was the problem, not the leverage. In the same way, a Bitcoin futures contract will not cause "people to throw irresponsible amounts of money" at Bitcoin, that happens already. It just allows a new class of investor to get involved through a trusted exchange. There will be full transparency of what the underlying asset is and what it is worth at any time as it is Bitcoin. |
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Hi guys, as I logged in my Coinbase account, transactions has temporarily been disabled since the Segwit2x is expected to occur in the next 6 hours. I am really clueless regarding these terms.
1. What would happen during these times?
2. What would happen to the value of bitcoin?
Thanks in advanced.
Regards,
Absolutely nothing will happen because Segwit2x fork has been canceled. No other exchange or service that I know of have taken any action. It's just Coinbase being useless. You should consider getting your own wallet so you own and control your coins rather than use a service like Coinbase. |
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Where has trading derivatives of securities that hold no intrinsic value caused problems before? Just take a look back at the synthetic CDOs that allowed billions of dollars to be invested in mortgage securities that contained nowhere near that value in assets.
That's a misunderstanding of what futures and options are compared to CDOs. Futures and options are deliverable, that is you can hold them until they expire and then take delivery of whatever the contract is for. Or if you hold a short position then you can settle it by delivering whatever the contract is for. So they do indeed have intrinsic value. CDOs are just a means of selling debt in packages, there is no comparison at all. |
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It's actually 0.002 now. That's the highest I've seen on any exchange. I haven't tried withdrawing yet, but I bet they are pooling the withdraws too for maximum profit. Should be at least instant with such a fee.
That is very high indeed. For reference, Bittrex is 0.001 and Bitfinex 0.0005 so it may be better to exchange for another currency to withdraw. If it's a small amount and you have accounts on other exchanges, that could work out cheaper. |
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DarkStar_, Sorry to trouble you but I guess now forking season is over everyone will be doing the new wallet thing. I would like to change my payment address. My old address 1BqqMvqVebYzgDogA9WTUgXLhzCuLUq4Tm (Freebitco.in deposit adddress so I can't sign from) My new address either bc1q94c5auxrxzhgk5uyuee0e2nu2xwf5wz8r67sj5 if you use Electrum v3.0.1 and can send to bech32 addresses or otherwise 16uZb1m8qBoxrdcKXWZf6SUwjop8d3c5PXSigned message from my staked address1N29LhXC49PzW4H4RyvpKM1n48CDYy8UxT ------------ This is TheQuin changing the payment address for ChipMixer's signature campaign to either bc1q94c5auxrxzhgk5uyuee0e2nu2xwf5wz8r67sj5 or 16uZb1m8qBoxrdcKXWZf6SUwjop8d3c5PX on 17th November 2017. ------------ H9RbSW2BTKs4IrCIPjCTKpqZ8I1e+h4T1VQ7D9cJVMYnQSAju3nT1v/lHaT5cDQe8HcHqSi1mk9hwp+2xAmu7p0= |
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Someone said unverified accounts in the USA can still use Bitfinex for as long as they want, is there any truth to this?
I don't know who the source of this information is or where they got it from but there is no official statement from Bitfinex to that effect. I can't really see Bitfinex spending any time trying to track down and ban unverified USA accounts as it is not really in their interest to do so. The reason they made the decision to close those accounts is to protect themselves from any possible legal action. If they can show that they made "reasonable" attempts to stop customers from the USA by asking them to leave that would be enough legally in my opinion. |
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Is it price per lottery minimum one Satoshi even though price go very high from current level?
Price of one lottery ticket stays the same, it doesn't moves up or down.  But earlier used to pay 2 satoshi or 3 satoshi per lottery right? That is correct. Like all the prizes on Freebitco.in, the cost of lottery tickets is linked to the BTCUSD exchange rate. I wonder if Wetsuit plans to start using fractional satoshis if the price keeps going up? |
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Why? Because of the advantages. I can't even participate in signature campaigns?! It's like saying to someone leaving university to start with cleaning work or sweeping streets.  Because the signature campaign would be renting your advertising space under false pretenses. You would be pretending to be someone you are not and defrauding them. That is why people in this community would not trust you. But I understand that trust has nothing to do with the forum rules but everything with what users think of one another. Correct? Does that also mean that there are no forum rules, no sanctions, and that it's a wild West and anarchy around here?
You seem confused, these two sentences directly contradict each other. The rules have nothing to do with trust, that is a matter for the community to police. The forum rules can be found in the stickies in this board and are enforced by the moderators. Aside from that running your monetary system is a bit anarchic I suppose. |
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I think it is pretty obvious that "Copper Member" is still a low rank, unlike VIP or Donator. However, I do agree that this thread should be stickied. I had someone PM me today asking me to post images for an ICO and I just replied telling them about this and they paid for the upgrade. |
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..
Exactly the same number of transactions as it does now.
...
how is it possible? Only 3 miners will mean a lot less block, and less block will be less transactions. How can be no difference? You really need to do some research and find out how Bitcoin works. For someone with a 2013 Hero account, I'm very surprised you don't know the basics. The difficulty of finding a block is calculated to always keep block generation constant at 6 blocks per hour. If there is less hashpower on the network then difficulty will be reduced and the same number of blocks will be found. That is just the opposite of what happens everytime miners add more hashpower, the difficulty goes up and the same number of blocks are found. Edit: Trust summary for asdlolciterquit This user's password was reset recently. This user's email address was changed recently. Oh, you bought the account that explains it. |
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Also, what happens when rainbot wins the lottery? Do his payout rates increase with the added balance?
I'm pretty sure Rainbot is a she, check out that avatar on her profile, quite a cutie  From the faq Within a 24 hour time period, RainBot will give away a maximum of 30% of its balance. In each rain interval, RainBot will give away a maximum of 10% of its daily funds.
So yes, when Rainbot wins the lottery or receives a large tip the rainfall is much heavier. |
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Where is Bitcoin in this picture?
I hear you, I'm as frustrated as anyone else, but as always I'm an optimist. I think we could actually have some significant progress in the next 6-12 months. I'm highly disappointed with Core for failing to make Segwit transactions available, but then I see Electrum coming out with native Segwit using bech32 addresses. If Core won't do it then others will and this being Bitcoin everyone is free to use what they want. |
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If nothing is done to correct the code, bitcoin will die by itself.
A lot is being done, even though the pace of progress is frustratiing to say the least. Now with less than 1% of the population using it it is more and more expensive to use and it takes more and more time to complete transactions.
Imagine if 5% of the population start using it... its going to be more expensive than wire transfer and its also going to take more time than a wire transfer so people will stop using it, the value will decrease and nobody will be interested to mine it anymore.
With the advancements coming up with LN and Atomic Swaps the network will scale. Off-chain transactions will be common and it will be possible to directly exchange altcoins for Bitcoin on-chain. only three nodes...ok well, but how many transaction can them handle? How much until the network will work so slow to seem blocked?
Exactly the same number of transactions as it does now. No miner = no more bitcoin.
With fewer miners, the difficulty decreases resulting in exactly the same number of blocks being produced at the same rate and with the same capacity for transactions. As long as Bitcoin has any value at all then it will attract enough miners just like it did when it was worth fractions of a cent and a handful of people mined it with CPUs. A blockchain is pretty much indestructible for that reason. |
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i have got more than 120 posts and activity is not rising , how long should i wait to see activity rising on my bitcoin profile?
How about looking at the table in the post directly above yours? |
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