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1481  Economy / Speculation / Re: Ways to Short BTC/USD on: March 17, 2013, 06:32:43 AM
(if I understand your post well)

I think this is an issue that is going to see an increase in the number of times it comes up.  The question to start out with is ... what is your functional currency?

When I buy bullion, in most practical instances I need to convert the metal back to my functional currency to spend the value from them.   So even though silver rounds could be used in commerce in some instances, they wouldn't be my functional currency.

Bitcoins now are what I consider to be my functional currency.  Because my spending comes from bitcoins (either directly if I can use bitcoins to pay for my purchase, or indirectly if I need to convert coins to dollars and make my purchase that way), then I might consider buying dollars for investment purposes as being one of my investment options.  When buying dollars I'm essentially going short on a currency (bitcoins) that I will return to after I close my investment position (when I sell my dollars, and obtain the proceeds from that transaction in bitcoins ... which are my functional currency.)  

But someone else who doesn't see bitcoins as the functional currency then wouldn't have the same viewpoint that holding a different currency (dollars in this instance) is a way to short bitcoin.

It would be the same as if someone would assert that I today am shorting the Japanese yen (simply because I don't have any).  Of course since I don't plan to hold any yen regardless if the yen's value goes up or down means I am not short the yen.   My purchasing power of my bitcoins versus yen might have changed, but I didn't profit from a move either up or down in the value of the yen.

As far as methods for shorting bitcoin, I just had read that EToro plans to support BTC in one or more currency pairs.  So there are more methods coming.

Right now, if you are looking to short, the BUJ3 futures contract on ICBIT is probably the most attractive method right now.   There are no ASK orders below $54.5.  That contract settles Apr 15, 2013.  So that means the BTC/USD doesn't even need to go down from today's level and you could still make money shorting it that way.    So let's say you put up an ASK for 100 BUH3 at a price of $54.   You would need to deposit about 4 BTC to make that offer (there is up to ~30X leverage available for the BUJ3 at this level).    Then let's say on April 15th at 20:00 UTC settlement at the 24 hour weighted average at Mt. Gox is $50.00.      You would gain 0.88 BTC after fees, on your 4 BTC investment in that short position, and the exchange rate didn't even need to drop.

The problem with using leverage at that level (30X) though is that even a small move the wrong way can cause you to get a margin call, and there's not a whole lot of liquidity.  When that happens you are at best able to buy back at a level above BTC/USD market price but if there aren't other ASKs that you can buy from (as there is a limited trading range) you could see your position end up being liquidated and depending on the liquidation price your entire balance of your account (4 BTC in that example) could go to zero.

You could use less leverage so that if there is volatility but still believe that on April 15th the exchange rate will be below the current ASK, then you would still be able to weather it out.      At 25X leverage where you sold 100 BUH3 at $54 with only 4 BTC in your account then if it hit into the low $60s you would be completely wiped out.   But deposit 8 BTC instead of just 4 BTC to sell that 100 BUH3 contracts (at $54), giving you about 12.5X leverage and you could weather a spike of the BUH3 up to the $70s without seeing a margin call but then as long as BTC/USD settles at $53.67 or lower on April 15th you've still made money.   If it drops -- say to where the BTC/USD settles at $45 on April 15th then you'ld make 3.1 BTC on that 8.0 BTC investment.

[These computations were made with only a rough calculation as to where the margin call comes into play.]
1482  Economy / Gambling / Re: PLAYTIN - HTML5 Bitcoin Casino - Provably Fair on: March 17, 2013, 05:13:24 AM
Click on your account name in the header,

I'm looking to see how I can change my password, as I initially used a relatively weak password and now want to use a strong password.  I was thinkin it would be on the /account# page but don't see it there.
1483  Bitcoin / Development & Technical Discussion / Re: Is the 21 million bitcoin limit unchangeable? on: March 17, 2013, 03:45:19 AM
Indeed. If only the people decide, who holds bitcoin, why wouldn't they abolish the coinbase tx completly, I mean now.

Well, no miner is forced to claim the block reward subsidy.   So anyone can start reducing the amount of bitcoins (and thus increasing the value of existing bitcoins) by mining (solo) but not claiming the subsidy.

Now if you are suggesting to change the protocol so that starting with the next block (or at some point in the future) there is no more block reward subsidy, you can try that right now.  You just change one line of code and release your hard-fork variant of the Bitcoin-Qt/bitcoind client and start a campaign to get the economic majority to switch to using it.

Users aren't stupid though -- they know that fees are insufficient currently to incent enough miners to protect the network.    So adopting your fork would be crypto-currency suicide.        So the limit stays at 25 BTC per block, until block 420,000 and then 12.5 BTC per block, until block 630,000 and then 6.25 per block, etc.  

Now let's say it is year 2024 and fees alone are seen as being way more than sufficient enough to support the level of hashing necessary to protect the network, so the fear of the loss of subsidy impacting hashing capacity is not a limiting factor.   However, people who hold bitcoins include people who have lent their coins out to those who have borrowed bitcoins and need to repay loans (denominated in bitcoins).    

Presumably anyone borrowing bitcoins would require a clause in the loan agreement that if the subsidy were to be reduced (change in the money supply were to occur) that their principal and/or interest would be adjusted appropriately.   If the subsidy is discontinued there would be little gain for those who have lent out their coins.  And who lends bitcoins?   The economic majority, that's who.  So it is not in the best interest of any of the economic majority to change the rules as far as the rate of Bitcoin issuance -- towards either direction up or down.

[Edited: for clarity and readability]
1484  Bitcoin / Project Development / Re: ICBIT Derivatives Market (USD/BTC futures trading) - LIVE on: March 17, 2013, 01:54:24 AM
That the contract settled at 8pm UTC was far from clear.

That's because it didn't settle at 8pm UTC.     [That was confusing.  The contract specifies 20:00 UTC.   08:00 PM UTC is 20:00 UTC.

It appears to have settled at the correct time.  I think you are seeing 08:31:58 PM UTC which was the time of Fireball's forum post and somehow are thinking that was when the settlement occurred.   I didn't have any BUH3 at settlement so I don't have a print in the log showing the timestamp for when it settled, but at a minimum at 20:29 UTC this was posted on Twitter:

BTCUSD-3.13 (BUH3) was just settled at $47.0764. Total volume for this contract is $754550. Happy trading! #bitcoin

I don't remember the exact 24 hour weighted average number at Mt. Gox after I saw the tweet but when I did look it was some low 47.?? number and I hadn't given it another thought.
1485  Bitcoin / Bitcoin Discussion / Re: Dangerous precedents set on March 12 2013 on: March 17, 2013, 01:04:37 AM
I think the alert system should be moved into a plugin so people can subscribe to the Bitcoin Foundation alerts if they want.  That way if some other entity wanted to send alerts they could develop their own plugin and users can decide which plugins to download.

That's a pretty decent suggestion.

[Edit: Not that alerts from mutliple parties are sent out necessarily but that the client can subscribe to alerts from outside sources and that it would have the ability to go into safe mode or require manual approval for payments as a reaction to certain alerts.]
1486  Bitcoin / Technical Support / Re: using instawallet - sent btc not showing up on: March 16, 2013, 04:27:15 AM
and where the heck did over 2000$ of my coins go!?!?!?!?

Whoah ...

InstaWallet at one point in time preferred the term "low security wallet" to describe what service they offer.

That's because these Instawallets don't have security features that other EWallets offer, including username and password (for low value storage) and two-factor authentication (for when amounts stored will be of greater value).

With InstaWallet, all you need is the URL and you can spend the funds.  That makes it essentially a "bearer instrument", just like the cash in your pocket -- spendable by whomever has physical possession.

I'm not sure why you'ld send from one Instawallet to another, but but hopefully both were ones that you created and nobody else has access to the URL.

Just as a sanity check, look up your destination wallet and make sure the Bitcoin address for that matches exactly the Bitcoin address that you sent payment to.

its been over 7 confirmations too..

That should be enough for it to be credited.   I'm not sure there is anything anyone here can do to help you.  
At the bottom of their site is a link with their e-mail address for support.
1487  Other / Beginners & Help / Re: Dwolla -> BitInstant transfer failure on: March 16, 2013, 04:09:39 AM
I did a transfer from Dwolla > MtGox last week, the automated process said it failed.  Emailed Bitinstant, in one and a half days they had it rectified.  I am satisfied with the result, but it certainly was not instant.  It was not a large amount either.

Is the reason you didn't do Dwolla -> Mt. Gox directly due to Mt. Gox's verification requirement?     Otherwise, it is $0.25 per transaction, rather than a % of the amount transferred.
1488  Bitcoin / Development & Technical Discussion / Re: Is the 21 million bitcoin limit unchangeable? on: March 16, 2013, 03:10:06 AM
Assume the 0.8 miners had 70% of the hashing power and most of the merchants wanted 0.8.  Also suppose 30% of the nodes are 0.8 and 70% are 0.7 or below because most people don't fully understand what is going on and didn't upgrade yet.  How would this play out?

In the short term (hours after fork begins) it plays out poorly.     Most larger merchants and exchanges would halt processing until there was a pretty good idea of which side already had support of the economic majority or which side was more favorable to the economic majority and let that determine which side to support.  Smaller merchants not using a payment processor would see the alert and hopefully halt processing as well, but if not it probably shouldn't be too bad as customers could still be able to spend -- their transactions get mined on chains on both sides.  Merchants taking payments who are on the "wrong" side will start getting confirmations for payments that didn't yet get a confirm on the other side.

So then once this economic majority concludes that they are sticking with 0.7, miners using the pools that are mining on the 0.8 side have to wonder how those pools are going to pay out if their revenues will no longer be spendable (as those merchants and exchanges won't acknowledge blocks from the v0.8 side), and thus miner proceeds have no value.

So as a result you have individual miners start defecting to pools that are on the v0.7 side.  And hours later this problem no longer exists, because the pools that thought they could force a switch to v0.8 no longer have the hashing power to do so, and their side eventually no longer remains the longest chain.  

In this instance, eventually the chains converge and any blocks generated on the v0.8 side get orphaned.  

And as a result the pools come to realize who wears the pants in this relationship.  It is the economic majority -- the people who will buy their production of coins.
1489  Bitcoin / Development & Technical Discussion / Re: Is the 21 million bitcoin limit unchangeable? on: March 16, 2013, 02:52:13 AM
So it kind of seems like really the economic power is in those who want to hold bitcoins, a[...] rather than in those who already hold them...

Glad I'm not the only one to think that theory needs revision.

I raised a question on StackExchange on that:

Is Bitcoin's Economic Majority those who already own coins or those who will buy or keep coins?

I also added that to the Wiki article's discussion page:
1490  Economy / Speculation / Re: The Weekend Dip Myth on: March 15, 2013, 11:59:07 PM
This weekend dip theory may be something that cannot be traded reliably anymore.  Who knows.  We'll see.

Unfortunately whatever happens on this weekend will make us none the wiser regarding reliability of this strategy. Just one more datapoint in a long series that is and will keep allowing statistically rather insignificant conclusions only.

There was a lot of buying volume to push the exchange rate up to this level.  That buying volume is petering out.   Right now the 24H volume is an amount showing a relatively low 20K BTC  (relative to volume over the past two months).  


Combine that with an exchange rate drifting lower means buyers are not anxious to buy more at this slightly lower price.

But right now there are 48 hours before the next wire transfers will be credited at Mt. Gox.    This isn't anything new, but if there is a further dip, it can be pressed a bit because there's no new wires that will be credited for a couple days.  That's a property that only happens on the weekends, and this weekend could very well be one where a dip happens again.
1491  Economy / Speculation / Re: Ways to Short BTC/USD on: March 15, 2013, 11:42:17 PM
I'm looking for ways to profit in USD terms, not BTC terms, if the BTC/USD exchange rate goes lower.

You can try to borrow BTCs from someone. 

The problem is finding someone who will lend their coins to you and not want a usurious interest rate.
1492  Other / Beginners & Help / Re: Will I ever see my bitcoin? on: March 15, 2013, 11:34:10 PM
That was a few days ago, and now it is close.

If you are on an older version of the client (pre v0.Cool that was a big problem.  It is mostly resolved with v0.8.

If you have a screensaver (or worse, sleep mode), Bitcoin-Qt might not get the full resources it would benefit from and thus syncing isn't happening as quickly as it could.
1493  Bitcoin / Project Development / Re: Bitcoin Vouchers on: March 15, 2013, 11:13:27 PM
Thanks for letting me know about the fee's for both in and out on Mt. Gox and the rest are to much in fee's also.

New development:

MtGox generation of USD redeemable codes will stop at 10 Apr 2013
1494  Economy / Service Announcements / Re: MtGox generation of USD redeemable codes will stop at 10 Apr 2013 on: March 15, 2013, 11:08:48 PM
Just a bit more on this.

Does that mean I can still create and redeem a MTGEUR code after April 10th?

I just got this answered on #mtgox IRC:

<MagicalTux> as US customer, it will not be possible to have a balance in anything else than BTC/USD/CAD

So, after April 10th, if you are in the U.S. you will have the ability to send MTGox BTC redeemable code, but not MTGUSD, MTGEUR, or any other currency.

Also, I see that AurumXChange (issuer of VouchX codes) is now handling redeemable codes issued by BTC-E and BITSTAMP as well.

Also related:

MTGUSD Redeemable Code - The End Is Neigh
1495  Bitcoin / Technical Support / Re: Email Message from Tibanne Co. Ltd. ( on: March 15, 2013, 10:58:01 PM
Do they manage one of the bitcoin exchanges?? what's going on

More on this:

MtGox generation of USD redeemable codes will stop at 10 Apr 2013


MTGUSD Redeemable Code - The End Is Neigh
1496  Other / Beginners & Help / Re: Security Test Fail? on: March 15, 2013, 09:25:27 PM
Aaaa, so it decyphers only in RAM when im doing transaction? It is kept cyphered on the disk all the time, so the lock is unneeded?

You only need to enter the passphrase when generating a new address or when spending.

Because it can be discovered which Bitcoin addresses are yours from seeing the wallet.dat, some people use an encrypted filesystem for the Bitcoin directory (or at least for where the wallet.dat is stored).
1497  Other / Beginners & Help / Re: How to run bitcoin on the command line? on: March 15, 2013, 07:23:30 PM
Right now I am having the most basic problem: figuring out how/where bitcoin is installed.

And for the data directory:
1498  Economy / Speculation / Re: Ways to Short BTC/USD on: March 15, 2013, 02:59:15 PM
Are there any good ways to profit in USD terms if BTC/USD goes down?

Technically, buying dollars with them is shorting bitcoin.  But you are probably looking for leverage to do a trade.

1499  Other / Beginners & Help / Re: Unconfirmed Transaction | Installed Python/Pywallet... need help on: March 15, 2013, 02:45:51 PM
I'll still gladly take any advice on the previous question in the case that this happens again? -LCM

Ya, pay the fee so it doesn't happen again.

An unconfirmed payment from you means a miner hasn't included it into a block.   

Your bitcoin client will notice if a transaction has not confirmed, and will re-broadcast it periodically.   If you delete the transaction, your client won't rebroadcast it.

Just because you delete it from your wallet doesn't mean the transaction won't eventually confirm later.

Incidentally, pywallet does not have any way to delete the transactions, nor delete the private keys.  It can be used to export the private keys, and then later you can create a new wallet and import those keys.  But bitcoin-Qt has a Debug console where you can do all that from now anyway.
1500  Bitcoin / Technical Support / Re: Creating ultra-safe paper wallet (Did I do this correctly?) on: March 15, 2013, 02:31:30 PM
4)  Close down my browser, reconnect to the Internet, and reopen my browser.

Upon reconnecting to the internet, the malware that earlier had been taking a screenshot every quarter second uploads the photo payloads it had been queued up ever since it had lost Internet connectivity for a short while.
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