By actually holding Bitcoin and not spending them, you in fact will collect "interest" per say. You're confusing the concepts of interest and commodity speculation. |
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Coinbase, what is the claim procedure and where is the fineprint pease?
Right. Is Coinbase, the company, insured, or are Coinbase's customers insured? This is a huge difference. If Coinbase goes broke, like Mt. Gox, and only the company is insured, you lose. If the customer's balances are insured for the benefit of the customer (as is the case with US banks (FDIC, up to $250K) and brokers (SIPC, up to $500K), you get paid back. If the customers were actually insured, they'd have the insurance terms and carrier publicly posted. They don't. |
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Interesting post.
But would all this be valid once we have derivatives in the market?
I don't think the market is going to consider a bitcoin derivative to be the equivalent of a bitcoin. Time will tell. Derivatives require counterparties that reliably pay up when they lose big. That's not something the Bitcoin world does. |
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Harrison charges a 5% fee for an OTC trade. Wow. 5% fee on a large trade. That's huge for a simple transaction. That's about what you pay to sell a house. Normal trading fees for large stock, bond, and option transactions are well below 1%. |
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Basically you're asking for a miner crowd-funded ASIC development that runs as a non-profit. Any profits would be divested back to miners who would be considered shareholders.
AsicMiner started off this way - not sure how they're really standing at present.
The community does have the resources but I don't know if we have the energy to fight the very monsters that we have created.
Such a project would run too slowly. To compete in ASIC mining, you now have to go from new design to huge mining farms in months. Any delay reduces ROI, and significant delay (months) makes it negative. So to compete, you have to throw money at the problem and go for time to market, even if it raises costs. It's also late to be getting into this. By Q1 2015, all miners will probably be losing money due to huge overcapacity. |
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I don’t understand the calculation behind the marketing of this companies.
My calculation is that: if i buy i contract for 6 months I pay 1995 $. In 6 months i make about $1037 . HOW is this profitable ?
Can somebody explain to me if I am wrong?
There is absolutely nothing wrong with your calculations, and you've discovered exactly why cloud mining is a money making machine for the provider of the service - not for you. It's a deal for the "Bitcoin will go to the moon" suckers believers. |
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Not only that, the electricity price for industrial facilities is even more heavily subsidized than for consumer use. The industrial rate is about $0.0035/KWH. Kuwait is trying to encourage industrial development. |
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Technically, the big problems with Bitcoin in its existing form are:
- Confirmations are too slow.
- The block chain is too big.
- Micropayments are too expensive to process.
- Mining is too centralized.
All are technically fixable, and fixes have been proposed. All of those, though, are incompatible with the present blockchain.
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By 2016, nobody will be making money entering Bitcoin mining, but people with sunk costs may still be doing it.
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Where, exactly, is Coinbase? From the user agreement on their web site: "Coinbase, Inc., 548 Market Street, #23008, San Francisco, CA 94104." That's a mailbox store. It's the same one Tradehill used. From FinCen registration: "1811 Silverside Rd, Wilmington, DE 19810". This is the address of Chabad Lubavitch of Delaware, which is a religious facility. From their SEC filing: "1 BLUXOME STREET, APT. 410 SAN FRANCISCO CA 94107 415-843-1515". That's an apartment. Dun and Bradstreet has the apartment address. California Sec. of State has the Market St. mail drop. Be suspicious, especially since people are reporting withdrawal problems. |
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This is all true at the current Bitcoin price. However, power consumption is a function of price.
There seems to be very little relationship between Bitcoin mining difficulty and price. In the last six months, difficulty has increased by a factor of 7, while price has declined a little. The cost of mining does not drive price. Price drives the level of mining activity. |
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That's not the problem. The problem is that it's just another "hosted wallet", which in the Bitcoin world usually means "we're going to steal your money". |
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The Coin Foundry has 3.6MW of available capacity right now in Texas at 5 cents The Coin Foundry web site is hosted on shared hosting at 31.170.160.112, which is shared free hosting at 000webhost.com. They didn't even pay the $4.84/month to make the ad banner go away. It's probably a kid in their parents basement. |
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If TSMC is booked up well then 28nm it is. The hash rate is rising so fast that by the time 14nm ASIC fab capability becomes available, fabbing the parts will be uneconomic. We're headed for 1 exahash around the beginning of 2015, about 4x the current hash rate. By Q1 2015, all miners will be losing money. Then what? Difficulty will go to the moon! |
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So withdraw all funds from Coinbase now.
That's silly. No, it's not silly. If they're legit, and they have 100% of customer assets, it doesn't hurt them at all. |
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Those companies need to change their names. The idea of exchange cannot get along with the idea of fractional reserve, and this is just another reason not to leave any money at an exchange. Exchanges are made to trade, nothing else. I guess some people haven't learned anything from the MtGox fiasco.
Right. A big problem with Bitcoin exchanges is that they act as broker, custodian of assets, transfer agent, and exchange. In the real world, those functions are separated. The NYSE does not itself handle money or stocks. It's just an order-matching service. |
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Coinbase's purported address is 548 Market St, SF CA. That's "Earth Class Mail", a mail drop service. Same one Tradehill used.
One Bluxome St, Apt #440 is the home address of Brian Armstrong, which he lists as the principal place of business for Coinbase with the SEC.
VCs funding Coinbase include Andreessen Horowitz, FundersClub, IDG Ventures SF, Ribbit Capital, Union Square Ventures, and Andreessen Horowitz, and Y Combinator. If you're not a jerk, you can contact some of them and ask them if Coinbase is in financial trouble.
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A possible third party service could be envisioned:
A card, bought on airports and shopping centers, which has a public bitcoin address and a magstripe or chip or whatever is needed for the shop. If you have to buy a stored value card, Bitcoin just gets in the way. |
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I would also like to know what "white label" means and who "officially" determines such a qualification? "White label" means that one party provides the software and server-side processing, while another provides the financing, marketing, and branding, takes all the risks and assumes all the liabilities. |
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Read the terms. The funding for the "Bitcoin drop" is from suckers people who donate money for it. The people behind the "Bitcoin drop" aren't putting up the money.
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