I hate to mention the possibility that Coinbase could be insolvent, but 10 days ago I initiated a wire withdrawal from Coinbase to my investment account. Coinbase has debited my account 25k and labels the transaction as "completed" but my financial advisor has seen neither hide nor hair of the wire. Coinbase does not provide the fed number for the wire and has given absolutely zero response to my ticket. There are MANY MANY others in the same boat.

And why don't they provide us with the fed number for the wire? It's the first thing my financial advisor looked for, so he could troubleshoot and see if it's caught up somewhere. One might wonder whether Coinbase doesn't want us to be able to troubleshoot. Maybe they just want to delay delay delay.

I know that they're flooded with new customers yadda yadda, but there's no excuse for holding tens of thousands of dollars of someone else's money. This is how it ALWAYS starts. It is our duty as citizens of bitcoinlandia to consider the possibility of Coinbase insolvency, until they make sure that their customers' withdrawals go through without a hitch.


Case ID: 3496424

Edit: I will gladly update this thread once my wire goes through.

I have been trying to determine whether the real compromise behind the SegWit2x Working Group (spearheaded by Barry Silbert, Jeff Garzic among others working on the code) has nothing to do with the 2MB blocksize increase, but is instead a compromise over ASICBoost. In other words: Core's version of SW destroys ASICBoost, which is the real reason why Jihan is against it. Jihan will support SW, but only if it preserves his ASICBoost advantage. And that's what the compromise is all about.

So my speculation is that the SegWit2x Working Group will devise code which, lo and behold, will be ASICBoost-friendly.

I hope I'm wrong, but I dunno yet. Looking for some solid info. Comments?

Discovery of the covert use of ASICBOOST means that we now understand previously hidden motivations of miners who benefited from statemate in the scaling debate. Now that we know, we will almost certainly figure out a way forward. Don't know how exactly yet, but segwit will almost certainly be implemented one way or another.

This should be very bullish for the price of bitcoin.

Discuss.

Right now on Bitfinex, the market is pricing the hypothetical post-split BU coin BCU at $240, with BCC at $810 (and BTC price at $1050). That is, BU coin is priced at 23 % of the total, with BTC (Core) priced at 77%. However, relative hash power tells a different story:

http://xtnodes.com/#blocks_pie_graph

Going by hashpower, it would appear that miners value BU + Classic at 36%, Core at 64%.

36% is a lot different that 23%. The ether split teaches us (as Vitalik has discussed) that hash power follows price. If the split were to happen today, and the market gave Core's coin 77% the value of BTC + BCC, then hash power would quickly follow suit. (Mining one chain at a loss for ideological reasons will be short lived.)

So the question is this: does it make sense to wait for the miners to achieve 95% consensus before activating SegWit? maybe we should use something like Chain Split Tokens to tell us when it's time to activate.

Perhaps this is the idea behind the user activated soft fork ... ?

Has anyone been using Bitcoin.tax lately? It's working more or less for me although there are a few snags and I'm wondering whether there is any competing software that I should be looking into.

Also, there's no interface with OKCoin. Any idea what would be the most appropriate way to enter gains/losses from futures trading?

To all the TA experts out there (masterluc, RyNinDaCleM, chainsaw, chessnut, and the many others I am leaving out!), I am wondering whether it makes sense to talk about the time frame that a given trader is working in, in the context of a single trade.
- When trading, do you consciously pick a timeframe? i.e. do you pick a candlestick time interval and stick with it for the duration of the trade?
- Suppose a trader makes a buy based on a pattern in the hourly charts, but then makes a sell based on a pattern based in the 5-minute charts. (Or vice versa). Would that be considered poor practice? Would it be evidence of an undisciplined trader? Or would you encourage a trader to look at multiple timeframes within a single trade? Or does it matter one way or another?

Currently, the bitcoin price is $1042 on Coindesk.

And kwukduck has 1595 posts.

When will the price catch up to and exceed the number of kwukduck's posts? And if/when that happens ... what will be the implications?

Over the past week, the entire Greek economy was held hostage due to bank closures. This gave the EU a great deal of leverage in their negotiations with Tsipras. If Greek citizens had known how to use bitcoin, then it wouldn't have totally saved the day, but it would have eased the impact bank closures had on the economy, and this would have given the EU less leverage and therefore helped Tsipras to get a better deal with the EU. And remember this: when everything is back to normal and running smoothly, the average Greek citizen would continue to use the Euro and Greek banks and all that, even if they are using blockchain technology under the hood. So the Greek government would have little reason to fear or to oppose this payment rail system.

Tsipras should encourage a bitcoin payment rail system, and start NOW, so that if we have to do this all over again 3 years, the Greeks will be able to get a better deal with the EU.

Greek banks have been closed for a week under threat of 30-50% haircut. Now, it looks like the can will be kicked down the road one more time with yet another bailout but few real structural changes.

http://www.theguardian.com/business/2015/jul/09/greece-debt-crisis-athens-accepts-harsh-austerity-as-bailout-deal-nears

If you were Greek, would you be talking about whether this could just happen all over again in 1-2 years? Bank closures, ATM lines, paypal not working, no access at all to your money.

If you were Greek, what would you do differently the second time around?

One of the narratives in the media these days is that lots of people are saying that they believe in bitcoin the technology, even if they are not necessarily believers in bitcoin the currency. I have the impression that it is the conservative approach in some circles -- it is a way to ease into bitcoin (professionally speaking) without sounding like one of the early adopter nut jobs.

Indeed, there are more and more stories about financial institutions and even governments making use of bitcoin the technology, not necessarily bitcoin the currency. Notable examples include: Overstock issuing the first ever crypto-bond; Nasdaq building a mechanism to record trades on the blockchain; Honduras working with Factom to record land titles on the blockchain. Even the idea that Greece may somehow make use of the blockchain is sounding less like a joke, and more like a serious proposal by serious people.

And yet, the bitcoin market cap remains just a few billion dollars, which makes it vulnerable to attack.

At some point, I can envision the US government waking up to the fact that the bitcoin blockchain MUST be kept safe and secure for the sake of regional or even worldwide political and economic stability. The last thing they would want would be for someone (China?) to spend a few billion dollars in computing power and take over the blockchain in some attempt at economic terrorism. So, how can the US protect the blockchain? In the time-honored tradition of course: they bail it out. IOW it may become official US (and other nations) policy to prop up the value of bitcoin in the name of worldwide stability. Some will oppose this policy. Others will argue that this will turn out to be a lot less expensive than maintaining a gigantic military, and guess what -- more effective.

What do you think, oh ye citizens of bitcointalk? Is this what the future has in store?

Has anyone proposed any schemes that would provide economic incentives for mining pools to fragment into smaller groups? I'm thinking something along the lines of a Prisoner's Dilemma scheme that would be applicable to any pool that is larger than some threshold percentage (5 or 10% perhaps) of the network.

Has anyone ever analyzed how complex it is to process the purchase of something as simple as a cup of coffee, using a credit card? This one purchase triggers a complex flow of money between customer, credit card company, merchant, and the merchant's POS (like square or whoever). Not sure whether a bank gets involved in an individual transaction like this or not. I'm guessing that the number of different ledger entries that correspond to this one number must be pretty large.

One of the basic principles of database normalization is to eliminate redundant storage of data -- that is, storing the same data in more than one table. Our current financial system, when looked at as a single giant database, suffers greatly due to lack of normalization. Then bitcoin comes along and BAM! suddenly, the Financial Database of the World is normalized.

I bet it will be a couple more years before accountants around the world start to think of and appreciate bitcoin from this point of view. When they do, it will make them want to invest -------> BULLISH


See, e.g.:
http://en.wikipedia.org/wiki/Database_normalization
http://databases.about.com/od/specificproducts/a/normalization.htm

[So we can conclude, based on these calculations, that at current prices ($230/BTC), about 10% of bitcoin's value is justified as its fundamental value based on current usage as a payments system, and the remaining 90% is speculative.]

I have seen lots of people attempt to calculate how much one BTC should be worth based on various assumptions, e.g. that within X years a certain percentage of transactions will be performed using bitcoin instead of fiat, or using MV = PQ, the equation of exchange from the quantity theory of money. (http://en.wikipedia.org/wiki/Quantity_theory_of_money#Equation_of_exchange). There are a number of difficulties, one being that it is hard to get a meaningful measurement of bitcoin's velocity. So, I thought of another method that is a little more tractable.

First, separate the demand for bitcoin into two categories: 1) using it as a currency and/or payments system ("fundamental" value), and 2) using it as an investment / store of value ("speculative" value). I will be proposing a way to calculate its fundamental value alone, without taking into consideration what its speculative value is.

I am going to make a simplifying assumption: that whenever anyone uses bitcoin in a transaction, three things happen:
1) person A (e.g., the customer) converts fiat to bitcoin in the precise amount needed for the transaction;
2) person A transmits bitcoin to person B (e.g., the merchant); and
3) person B converts bitcoin immediately to fiat.
(These assumptions break down if you assume person A is an early adopter who is cashing out bitcoin bought long ago; but that assumption cannot hold forever, bc eventually the early adopters will deplete their stash. )

Note that two things are happening here simultaneously: person A is buying bitcoin at market value, and person B is selling bitcoin at market value (not necessarily on the same market, although we are assuming they do it simultaneously). If you were to execute simultaneous buy and sell orders (market orders, not limit orders) on an exchange, you would lose money through slippage. I'd estimate this comes to about 1% (assuming the size of the transaction is not large enough to move the market or generate lots of slippage). Essentially, what that means is that person A and person B are collectively "paying" a fee of 1% of the transaction that goes directly into the market. In terms of moving the market, it would be equivalent to buying bitcoin. Buying how much bitcoin? The amount that you lose through slippage. Note that I am not taking into account miner fees or exchange fees, because those amounts do not get injected into the market as demand for bitcoin, so to speak.

Therefore, every bitcoin transaction can be conceptualized as market demand for bitcoin, currently about 1% of the value of the transaction itself. IIRC, BitPay recently stated they process $1million per day in transactions. Let's assume that BitPay accounts for one fifth of all transactions-as-payment-system, so there are $5million per day total. That translates into $50,000 of bitcoin demand per day, or $18M per year; at current prices, this is an effective demand for 217 bitcoins per day attributable to its fundamental value.

Clearly a demand of 217 bitcoins per day is small potatoes compared to 3600 bitcoins generated per day. But that number was certainly a lot smaller a year ago, and will almost certainly be a lot larger a year from now. If we assume bitcoin usage triples every year, then in about 2 years, the fundamental effective demand will be roughly equal to, and will roughly cancel out, the supply from miners -- and that's assuming that miners dump 100% of their coins immediately. (This calculation also assumes price is constant.)

To sum up, the current "fundamental" value of bitcoin is equal to that which would be (hypothetically) generated by a demand of $18 million worth of bitcoin per year. I'm not sure if this comparison makes sense, but if you think of this as analogous to earnings of a company (clearly it's not the same thing, since bitcoin is not a company; the question is whether it makes sense for our purposes to make the analogy), and plug in the typical P/E ratio of 20, then we get a total valuation of about $360 million. The current valuation (market cap) of bitcoin according to http://coinmarketcap.com is $3.2 billion, roughly 10 times that. So we can conclude, based on these calculations, that at current prices ($230/BTC), about 10% of bitcoin's value is justified as its fundamental value based on current usage as a payments system, and the remaining 90% is speculative.

What do you guys think? Does this approach make sense to you?

very bullish

Coinbase, a software company that allows people to buy bitcoin and enables businesses to accept it as payment, has closed a giant $75 million investment. In real U.S. dollars.

The round is by far the biggest investment in a bitcoin company to date. Beyond its size, the funding is sure to make waves in financial services thanks to the participation of three industry investors: the New York Stock Exchange, USAA Bank, and BBVA, a multinational bank with a large presence in Spain and Mexico. Former Citigroup CEO Vikram Pandit also personally invested in the company.

With its latest financing round, Coinbase has also received a nod from the established financial sector. New investors in Coinbase include the New York Stock Exchange, the financial services firm USAA and the Spanish bank BBVA. Vikram S. Pandit, a former chief executive of Citigroup, and Thomas H. Glocer, a former chief executive of Thomson Reuters, also invested in the round.

[or buy government bonds]

No, not James Bond.

This is an idea for a new coin that issues bonds.

I got the idea when I read this:

unlike Bitcoin, it [the US Dollar] has the backing of the U.S. government and Federal Reserve. You need dollars to pay U.S. taxes or buy government bonds, for example.

and I thought: what if bitcoin (or an alt coin, i.e. "BondCoin") could issue bonds?

It would work like this: The core client would issue bonds for 24 hour, one week, 1 month, 4 month, 1 year, 3 year, 10 year, and 30 year Notes. (The time frames would actually be denominated in blocks; for a 10 minute block generation time, a 24 hour bond would mature 144 blocks in the future.) Each time frame would have its own interest rate which gets periodically readjusted according to some algorithm -- for example, it would increase or decrease the rate of return depending on what percentage of bitcoin is tied up in bonds at that instant in time. Longer term bonds would give higher rates of return than shorter term bonds.

The mechanics might work something like this: for each bond, there would be a corresponding address (or maybe a large block of addresses; for example, an address starting with B). If a user sends 1 bitcoin from address X to an address corresponding to a 24 hour bond, and the current yield is 0.01% per day, then the transaction, in order to be considered valid, would include:
1 btc from address X to address B (now)
1.01 btc from address B to address X, set up so that the outputs could not be used until ~ 144 blocks in the future. (I'm not sure how this would work from a technical standpoint. Is it possible to create an output that is "frozen" until a given block?)

Why would this be useful to the community at large?
1. People are often wondering to what degree people are using bitcoin as a store of value versus using it as a currency. This would give us one tool for addressing that question, because it would be public knowledge what % of bitcoin is tied up in bonds (broken down into time frames) at any given point in time.
2. It would stabilize the value of a bitcoin by providing a market mechanism to increase and decrease the available "money supply" (the amount of coin not currently tied up in a bond).

It would be inflationary but could be designed to have only a small amount of inflation.

Comments? Has anyone worked on anything like this before?

What do you think Lawsky's latest comments means for the market?

Ben Lawsky announced the latest revisions to the draft BitLicense today in Washington, DC, announcing a host of changes in response to reactions from its public comment period.

The New York State Department of Financial Services (NYDFS) superintendent made the announcement this morning in a keynote speech delivered at a panel event hosted by think tank Bipartisan Policy Center, where he spoke about the regulatory landscape around bitcoin and other payment technologies.

Lawsky first clarified which players in the digital currency community and industry would be required to obtain the BitLicense, specifying that the NYDFS intends to regulate only financial intermediaries.

Software developers, miners and those who issue loyalty and rewards schemes and gift cards denominated in fiat currency will not be required to obtain a BitLicense – nor will sole individuals who buy and hold virtual currency for personal investment, virtual currency-accepting merchants or their customers.

Lawsky also announced that the NYDFS has shortened the proposed record-keeping requirement for licensees from 10 to seven years, and eliminated a requirement that licensees must obtain addresses and transaction data for all parties in a transaction.

Licensees now only need to obtain that information "for their own customers or account holders" and, to the extent possible, for "counterparties to the transaction", according to the superintendent.

Lastly, the updates allow for a more broad range of financial assets that includes virtual currency that can be counted towards licensees' capital requirements.

Unleashing innovation

The changes address and clarify the many concerns submitted by the bitcoin community around the degree of regulation proposed potentially being too restrictive for innovation to thrive.

However, Lawsky presented a bullish position on digital currency's place in the US payments system and the need for banks and regulators to adapt to and encourage NextGen payments in a digital world.

"Virtual currency could eventually cause some amount of self-reflection in the legacy financial system," he said. "If banks continue to torpedo even modest updates to the payment system, they ultimately do run at least some risk of facing the Blockbuster Video problem."

He added:

"At a certain point, enough is enough – and four decades of slow-to-non-existent progress in the bank payments system seems like fair warning."

The news comes almost a year after the initial hearings on the BitLicense took place, in New York in January. The full text of the revisions will be available in the coming days and will open another 30-day comment period.

A final version of the BitLicense framework is expected in January.

[not]

For bitcoin to succeed, there needs to be a reason for the average Joe to use it. The best evidence that this may eventually come to fruition is seeing it used as currency (as opposed to a store of value) by people who are not permabulls, early adopters, HODL'ers or crypto investors, bitcoin enthusiasts, etc. People who have no ideological reason to believe in or to promote bitcoin. People who have no emotional investment in its success. Better still, people who are the opposite: people who believe that bitcoin is not destined to succeed.

fewcoins is one of those people. He bashes bitcoins left and right in this forum. But then he comes out and says ...

... I own two businesses that accept bitcoin ...

But it doesn't end there. As if to prove that he is using bitcoin as currency -- not as a store of value -- he adds:

... we dump everything right to fiat.

So there we have it: a non-believer who nevertheless uses bitcoin as a currency. Q.E.D.

I think we should all say a big fat Thank You to fewcoins for providing what really is the most convincing evidence that bitcoin can and will spread eventually to the average Joe. Intentional or not, you have restored my faith.



(I actually think this was his secret purpose all along ...  )

I wonder whether the price drop today (around $590 to $570 in the past few hours) could be related to the nascent OKcoin futures market. My thought process is that the availability of bitcoin futures has the same effect as increasing the supply of bitcoins. Or to think of it differently, it has the same effect as decreasing the demand of actual bitcoins: instead of buying a real bitcoin today, I might decide to buy bitcoin futures (however many units is equivalent to one bitcoin) instead.

If the volume of trading on the futures market shot up today, that would support my hypothesis, although I don't know whether OKcoin publishes that data. (Currently available settlement dates, btw, are 8/15, 8/22, and 8/29. I presume more will open up if all goes well during the initial beta testing period.)

(An alternate explanation for the price drop is that it is because of news reports that the Consumer Financial Protection Bureau put out a warning on bitcoin today. The timing seems to fit. Although I don't know why this would have a big effect on price, except for the fact that it seems to have been picked up by about a million different news agencies.)

Thoughts?

[1.6 million bitcoins.]

Some of the mistakes that still crop up in bitcoin news reports are incredible.

a 1.4 acre site near Lake Tahoe in California has been sold in exchange of 1.6 million bitcoins.  The transaction marks one among the latest series of real estate deals, but has set a record in terms of its price, where the bitcoins were priced at 2,739.  

I'm in the process of learning how futures works in OKcoin and have not yet figured out all the costs involved. For anyone who understands it better than I, I wonder if you would care to comment on the question: If your goal is to go long on bitcoin, which is better / cheaper: futures on OKcoin or margin trading on bitfinex?