Oh yes, I also have the seed of my hardware wallet conveniently stored... But I prefer not to talk much about how. I guess that's something everyone can figure the better way for them.

Ok, not bad, you basically have a DIY hardware wallet. Still not as much secure (physical access to phone and chip-off technique among others) and certainly not as convenient to use as a commercial hardware wallet.... But yes, its ok.

Hardware wallets are now less than $100 anyways.... That's also cheap, and easier.

You are missing my point. Paperwallets also have its use case but... HOW DO YOU PLAN TO CONVERT THEM BACK TO BTC (MOVE THEM) WITHOUT USING A SOFTWARE WALLET?!??!!?

For god's sake, why can't people just follow my advice and buy a damn hardware wallet!

Well, you are describing it perfectly. I can have better security with my hardware wallet without needing any special security measures. I could even use it on "public" computer.

I say "better security" because no matter how many layers of encryption you may be using... at some time you would need your computer to access the wallet in "plaintext" to sign the transactions and that opens an attack vector.

It's much better to have the signing be done inside a specialized hardware....

Plus it is amazingly more convenient to use.

What software wallet are you using?

Also, if you have 12BTC on a software wallet my advice inmediately changes to: Buy a hardware wallet NOW!

Either Ledger Nano S or Trezor.

And for your current problem, make sure you have copy of the seed words and/or backup the wallet. Wait for transactions to settle as any time you keep sending new transactions using your unconfirmed change you are making the problem worse (no coin loss though, except for the fees).

At this point you need to stop sending more transactions until the previous ones settle. The problem here is that you have sent a transaction that used coins that you just received but were not confirmed before sending again.

Maybe someone has a better solution for this, but I would just wait and next time don't use unconfirmed coins as inputs for sending.

At this rate... are you so sure in a few years 21 BTC won't be "enough"?

I think you are sending unconfirmed transactions as inputs for your transaction. Can someone please confirm this?

Ok, I thought you were refering to something new.

Also I wouldn't consider it a "fiasco". I mean, are you sure the problem isn't in the exchange end?

Have you checked the transaction in blockchain explorer to see if it is already confirmed but the exchange is not acknowledging it?

Did the transaction include a proper fee? Unless you set it up manually, it should be ok though.

Anyways, yes, Bitcoin needs to solve the scaling problem asap. But that is already "discounted" in current price. Once that get solved expect the price to skyrocket.

Which fiasco? I am trading all day long and have several feeds open... Haven't read anything about a "fiasco". Source?

Ok, I can agree on that. Bitcoin obviously wasn't, as it has been shown. But it certainly was a case of unsustainable mania, like it is happening right now with many alts. Time will tell.

Oh, it was. And it took almost two years to start recovering.

That was correct when BTC was responsible of the majority of the volume and liquidity, but now "deposits" can come from other alts, withdraws can go to them too. And funds on trader's accounts can go to Bitcoin or other altcoins. ie: a trader may chose to buy bitcoin instead of ethereum if he sees the spread makes it "cheap".

As I said, its more complex than that, but the dynamics of the liquidity flow has changed greatly in the past months.

It's more complex than that. If we would experience a BIG pump on BTC you would see it more clearly. ALTS are continually pumping and dumping and there is always traders with liquidity on their BTC-e accounts. There's no need to be an inmediate connection between a rise in Bitcoin and a dump in altcoins.

Yes. They used to lag behind because it was extremely dificult to make deposits there.

What has changed?

Well, now there is a LOT of money coming from other coins (eth, dash, ltc, ...) so trader there are faster reducing the spread.

Yes, but now swap that altcoins market cap graph for the one of Bitcoin until november 2013.

In fact that's exactly the comparison they used to do.

Even though I mostly agree... I find it quite funny and ironic that we are here talking about Tulips when that is the same they all were saying about Bitcoin some years ago

Kraken. But it only hapenned on the USD/ETH trading pair, not on ETH/EUR.

Kraken USD order books are very thin as its mainly EUR.

And this is exactly what I was talking about a few hours ago when I posted my wall of text about free-float and liquidity of altcoins vs Bitcoin.

I don't blame them... They buy any shit and see it rise, and buy and see it rise higher, and....

This goes to our lesson today, for those who don't already know: Free-Float and liquidity.

Free-Float: "Free float is a term in stocks trading. It describes the proportion of shares of a publicly traded company that is traded in the stock market. Note that not all free float shares may be actively circulating on the market at any given time as many traders purchase shares as a long-term investment."

Liquidity: "In the market, liquidity has a slightly different meaning, although still tied to how easily assets, in this case shares of stock, can be converted to cash. The market for a stock is said to be liquid if the shares can be rapidly sold and the act of selling has little impact on the stock's price."

So what do these two terms have to do with recent boom of the altcoins?

Let's just take Ripple as an excellent example of this... Ripple has one of lowest free float of all cryptocurrencies. That means that even if there is a gigantic numbers of coins (38 billions!) almost all of them are in the hands of the issuers/partners.

Only a minuscule amount of that 38 billion coins are in the exchanges for trade. How many XRP's do you or people you know have? Exactly... not much, if any. Yet the market cap has risen from around 200 million to around 5 billion now. That is an impressive 25x price increase in a couple of months!

How is that possible then? Well, as I said, only a very small of those 38 billion coins are being traded. So the price keeps rising while there is more people demanding that "scarce" coins that the issuer is offering to the market.

But, I can hear you: a 25x price increase? Fuck that, I am doing BIG money on it! Who cares about that free-float thingy?

Well, you should care, because that's where Liquidity comes to give you a reality lesson. As soon as the demand is higher than the offer, price can keep rising, but when that happens and more people want to sell, the ridiculous small free-float turns into a gigantic volatility that can easily undo most of the artificial and unrealistic high price. Not to mention what would happen if the issuer decides to sell some additional chunk on the market causing an epic dump.... but they won't probably do, cause that would be pointless considering the low liquidity.

This is where Bitcoin differs from most altcoins because:

1) The free-float, after all this years maturing in the market, is orders of magnitude bigger. And the only "scarcity" that there might be is NOT artificial, as it comes from LONG TERM investors. That is healthy.

2) The liquidity is also orders of magnitude higher. As this long journey has taken good care of most weak hands and short time holders.

Market cap means nothing unless we are comparing assets with similar free-float and liquidity.

In the short term you can profit greatly in altcoins, but in the long term everything comes back to an equilibrium point.

So yes, you could perfectly create a PokemonCoin tomorrow and fool everyone into believing its the next big thing.... until people want its money back and the castle crumbles.


* Not all altcoins are the same. There are also some fundamentals behind, and also some coins whose free-float is not that bad, but none compares to Bitcoin. Also, it is very possible to make some big bucks trading altcoins, even the shittiest PokemonCoin... but you can lose it equally fast. It's your game.