Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[gentlemand]

Why is BTC at $1000 OTC, but you can actually BUY them from Coinbase for ~585?

It's Bitcoin based but its creation was very convoluted and only accredited investors could buy in and they had to hold for a year before being able to sell. Its existence is down to something of a regulatory hack.

It can be held in a tax sheltered fund which I presume is the main reason for the price differential. It's also way less liquid. And you're buying shares in the fund, not Bitcoin even though that's the underlying asset.

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[adamstgBit]

Please explain....http://finance.yahoo.com/q?s=GBTC

Closed today at $100. Why?   (that is $1000 per btc, right?)

that is $1000 per btc, right?

right LOL, probably its a fund with 0.1BTC shares

Yes,

http://www.otcmarkets.com/stock/GBTC/quote
site says.....Common Stock - Each GBTC share represents ownership of approximately 0.1 bitcoin

Why is BTC at $1000 OTC, but you can actually BUY them from Coinbase for ~585?

there is a huge tax benifit to buying bitcions that way i think
if buying bitcoin now means huge capital gains later down the line, then ya it makes sense to buy them with your 401k

[AZwarel]

What is ETH actually for? What's so good about it?

I no nothing about it apart from its premined right? And there is no cap.

What are the good points?

It can do everything that bitcoin can, plus can scale and do stuff that bitcoiners used to talk about, like smart contracts.
Oh, did I mention it's not a SHA256 coin, meaning it's not controlled by the Chinese exchange/mining cartel?

But, to be honest, that's just a backstory too, like people totally using BTC because it's simpler than using a CC. In truth, it's just a really profitable coin with good volume

Mind to give a proof about eth can scale ?

Bitcoin is a supersecure blockchain, other thinks can be bulid on top of it, e.g. rootstock or lightning .  No need for fancy feutures. Just a good secure protocol.

And if bitcoin enters the next hyper bubble the red candle in your eth chart will be EPIC.

Well, the basic idea was, to make a decentralized network computer executing smart-contracts (not especially for a currency function, more like automated "transactions", colour tokens (like open company shares), crowdfunding (like this DAO monstrosity:)), where ether is the "fuel" to run the scripts. So it is highly different from the Bitcoin network in regard of its purpose.

But, there are problems with this idea. Both technical and social:

1. it uses a Turing-complete scripting language, so it can create infinite loops - this is supposed to be negated by using ether for every processing cycle, but still can jam up the network for awhile in theory, it is an attack vector;

2. the problem of scaling: it can not, because, every script (smart contract) must be run by every node, or the network spilt, so it can get much-much-much more hardware heavy than processing a ~300 bytes bitcoin tx.
Also, the ORDERING is different (and uncontrollable) for different nodes - because how data propagates on a network, which can totally fukup the whole idea of interdependent contracting aka: the order how script I. or script II. occupies/operates in the next block can be paramount, if scI depends on the execution of scII., and they get implemented in a different time order, they crush (fail to run, since the dependency is behind the execution order for every node downloading the new block with executable scripts -"transactions").
In short, the interblock ordering of "transactions" are not necessarily interchangeable, while in bitcoin, they are! That is a key technical unavoidable difference. The proposed solution, to split the nodes to process different executable is against the basic idea, and creates more profound problems...

3. strictly speaking, Ethereum has no (yet) known enforceable, algorithmic monetary policy (we do not know if it is fixed at what number or what is the inflation rate if not, how exactly will it transform into the PoS consensus, also, PoS can not work on the long run, because it has too many attack vectors, especially with a script running environment). Also, pre-mined -huge red flag -, which means very strong centralization, and direct control over the protocol in few hands (remember, no anonym PoW random nonce mining took place, because, premining!!!).

In bitcoin, after and since the genesis block, anyone can see the unchangeable monetary policy: 21mil coins, reward drop after every 210,000 blocks, PoW consensus.

4. those who were studying the DAO made it obvious - even before the shameful "IPO" ended -, that you can not use the same token directly for financing actual projects, while the investor's tokens are both committed (frozen), and an external force (the market price of ETH) can interfere with those project's financial plans. (If the DAO commits say, 100k ether to a project, which is supposed to worth $100k, but suddenly ETH drops 10%, they won't be able to pay the contractors, and they already committed, and can not change their "votes", while can not have enough $ - unless the contractor takes ETH, but than he faces the same problem - DAO could work, IF crypto would only be the de facto world currency, but only than).

5. Assmaster, i disagree. Bitcoin is scaling, BECAUSE it is a dumb network (LN for example). Just like Ethernet, or tcp/ip, they are dumb, but additional layers can use the easy, secure, simple basis of it. Ethereum is too complicated in itself to be layered on, forces way too complicated and self-conflicting goals to nodes, and never actually was designed to be a currency (it is a script running network platform, not designed to be an immutable, decentralized trust network with several exahash/s security power).

[DaRude]

There is nothing theoretically preventing the price from dropping and miners going bankrupt, inducing lower difficulty.  

Theoretically everything is possible but not always!

I'd even accept this argument over marcus's logic where miners can't go bankrupt.

Listen you lying, slippery little piece of shit ... no part of my argument ever said " ... miners can't go bankrupt..." ??

Do not try and put words in my mouth again. If you don't want to learn then just stfu and stop making the world a worse place for others who might want to learn.

BTC price can't fall below cost of production = miners always make profit
Miners make profit = miners won't go bankrupt

And seems like i'm not the only one who can't follow your logic, maybe we're all dumb here and can't learn from you? And one more name calling and on ignore you go, you'd be the first "legend"

Can't we all just get along?   Rodney king said that, no?    And, Britney Spears had her own rendition of that, too?

 I don't really see big differences in the speculations that have been going on regarding various miner incentives.  Surely some of those speculations make more sense than others, and we all should realize that sometimes miners have a complex set of incentives based on the fact that they are both engaging in businesses and speculating regarding future price.  Accordingly, sometimes their speculation may cause them to operate at a loss for a considerable amount of time, in a kind of gambling way, expecting that the speculation aspect of their BTC holdings is going to cause them to move from the red to the black (and with any gambling, such speculation may or may not pay off), but the bitcoin community as a whole will frequently benefit from such ongoing speculations and investments into bitcoin.

Once miner decides to hoard coins instead of selling it's not the mining side of business that handles it but the investment/trading side so. For all purposes at that point it's an investment. Which just muddies up the argument if price follows the hashrate (indirect cost of production), or hashrate follows the price.

[DaRude]

Dumping is strong on finex. Think we found some whales cashout point, or a price some miner is better of selling on market rather than OTC. $600 won't be easy. The dragon doesn't seem to care much though, $13 spread between finex and whoboi

[AZwarel]

There is nothing theoretically preventing the price from dropping and miners going bankrupt, inducing lower difficulty.  

Theoretically everything is possible but not always!

I'd even accept this argument over marcus's logic where miners can't go bankrupt.

Listen you lying, slippery little piece of shit ... no part of my argument ever said " ... miners can't go bankrupt..." ??

Do not try and put words in my mouth again. If you don't want to learn then just stfu and stop making the world a worse place for others who might want to learn.

BTC price can't fall below cost of production = miners always make profit
Miners make profit = miners won't go bankrupt

And seems like i'm not the only one who can't follow your logic, maybe we're all dumb here and can't learn from you? And one more name calling and on ignore you go, you'd be the first "legend"

Can't we all just get along?   Rodney king said that, no?    And, Britney Spears had her own rendition of that, too?

 I don't really see big differences in the speculations that have been going on regarding various miner incentives.  Surely some of those speculations make more sense than others, and we all should realize that sometimes miners have a complex set of incentives based on the fact that they are both engaging in businesses and speculating regarding future price.  Accordingly, sometimes their speculation may cause them to operate at a loss for a considerable amount of time, in a kind of gambling way, expecting that the speculation aspect of their BTC holdings is going to cause them to move from the red to the black (and with any gambling, such speculation may or may not pay off), but the bitcoin community as a whole will frequently benefit from such ongoing speculations and investments into bitcoin.

Once miner decides to hoard coins instead of selling it's not the mining side of business that handles it but the investment/trading side so. For all purposes at that point it's an investment. Which just muddies up the argument if price follows the hashrate (indirect cost of production), or hashrate follows the price.

Yepp.
They already hoard coins. I doubt any serious mining business "has to sell to pay electricity" - well if they has to, they already went bankrupt. These are multi million dollar investments, setting up an airport size ASIC farm, the investors can easily go years without selling a single BTC, they plan for long term - buying electric bill plans for 6-12 months ahead, the hardware is an already sunk capital, and makes no sense to turn it off anyway, the ROI is already calculated in 1-2 years. The notion that miners must sell every week/month is ridiculous.

And "bitcoin mining" is still not a production. https://bitcointalk.org/index.php?topic=178336.msg15108324#msg15108324
There is no consumable good mining produces. All bitcoin already exists in a fixed 21mil coin supply, mining only releases them for transacting.

EDIT: and the same bitcoin can be mined with 1 notebook, or 100 mega asic farms, just a matter of difficulty (which in the algorithmic sense is totally independent of $/BTC), it remains the same bitcoin. So no there is no minimum production cost. Investment (=hash rate) in mining follows market value, not the other way around.

[pariahbit]

583. Buy high sell at 32,000 in < 2 years  

Adam? Is the pump still on?
Getting a little nervous here

Tell me everything will be alright. Hold me, bitbros.                                             
http://s33.postimg.org/7dfemtm8f/Capture.gifhttp://s33.postimg.org/xzwx8wwr3/Capture.gif
http://s33.postimg.org/orsqshhan/satteans.png                http://s33.postimg.org/7dfemtm8f/Capture.gif              http://s33.postimg.org/xzwx8wwr3/Capture.gif

[adamstgBit]

583. Buy high sell at 32,000 in < 2 years  

Adam? Is the pump still on?
Getting a little nervous here

Tell me everything will be alright. Hold me, bitbros.                                             

                             

lol

[adamstgBit]

[adamstgBit]

Next stop, the moon.

[adamstgBit]

[adamstgBit]

i solemnly swear

that i will take bitcoin to the moon.

Honey badger dont care.

[adamstgBit]

[DaRude]

583. Buy high sell at 32,000 in < 2 years  

Adam? Is the pump still on?
Getting a little nervous here

Tell me everything will be alright. Hold me, bitbros.                                             

                             

lol

Wait till we hit 666.66 on the way down lots of walls popped up at that price

[DaRude]

Are you saying that Chinese are throwing large brown dildos in space?

[JayJuanGee]

There is nothing theoretically preventing the price from dropping and miners going bankrupt, inducing lower difficulty.  

Theoretically everything is possible but not always!

I'd even accept this argument over marcus's logic where miners can't go bankrupt.

Listen you lying, slippery little piece of shit ... no part of my argument ever said " ... miners can't go bankrupt..." ??

Do not try and put words in my mouth again. If you don't want to learn then just stfu and stop making the world a worse place for others who might want to learn.

BTC price can't fall below cost of production = miners always make profit
Miners make profit = miners won't go bankrupt

And seems like i'm not the only one who can't follow your logic, maybe we're all dumb here and can't learn from you? And one more name calling and on ignore you go, you'd be the first "legend"

Can't we all just get along?   Rodney king said that, no?    And, Britney Spears had her own rendition of that, too?

 I don't really see big differences in the speculations that have been going on regarding various miner incentives.  Surely some of those speculations make more sense than others, and we all should realize that sometimes miners have a complex set of incentives based on the fact that they are both engaging in businesses and speculating regarding future price.  Accordingly, sometimes their speculation may cause them to operate at a loss for a considerable amount of time, in a kind of gambling way, expecting that the speculation aspect of their BTC holdings is going to cause them to move from the red to the black (and with any gambling, such speculation may or may not pay off), but the bitcoin community as a whole will frequently benefit from such ongoing speculations and investments into bitcoin.

Once miner decides to hoard coins instead of selling it's not the mining side of business that handles it but the investment/trading side so. For all purposes at that point it's an investment. Which just muddies up the argument if price follows the hashrate (indirect cost of production), or hashrate follows the price.

They can establish their business model in any way that they want, whether that means cashing out on a daily basis or holding coins for years.  It does not matter, and the whole bitcoin infrastructure does not give a shit about what they decide to do on an individual basis.  If those coins are not available for circulation, then the bitcoin community will use whatever coins are available. 

In the end if the behavior of the miners causes there are not enough coins, the price of bitcoins will go up, and if there are too many coins the price of bitcoins will go down... so who gives a shit whether miners hoard coins or liquidate them immediately.. the market will adapt to whatever the supply is... and for the most part, bitcoin works the same, if the price is $1 per bitcoin or $1million per bitcoin, even though the interaction with other financial systems is going to differ whether there is a $20 million market cap or a $10 trillion market cap. 

Ultimately, each of the miners decide for himself/herself how many coins s/he is going to sell, if any, and the miners are a diverse of enough of group, at least so far, that they are likely not coordinating their decision(s) regarding selling/holding.  If for some reason, the bitcoin market creates a space in which miners are able to coordinate their decisions, then likely the space is going to need to be reconsidered at that time.

[TERA]

There's a slight difference: If the price is high due to scarcity, then there is more slippage and volatility versus if the price is high without scarcity. Also the holders have to fear a drop that would occur if the hoarded coins suddenly became available.

[DaRude]

There is nothing theoretically preventing the price from dropping and miners going bankrupt, inducing lower difficulty.  

Theoretically everything is possible but not always!

I'd even accept this argument over marcus's logic where miners can't go bankrupt.

Listen you lying, slippery little piece of shit ... no part of my argument ever said " ... miners can't go bankrupt..." ??

Do not try and put words in my mouth again. If you don't want to learn then just stfu and stop making the world a worse place for others who might want to learn.

BTC price can't fall below cost of production = miners always make profit
Miners make profit = miners won't go bankrupt

And seems like i'm not the only one who can't follow your logic, maybe we're all dumb here and can't learn from you? And one more name calling and on ignore you go, you'd be the first "legend"

Can't we all just get along?   Rodney king said that, no?    And, Britney Spears had her own rendition of that, too?

 I don't really see big differences in the speculations that have been going on regarding various miner incentives.  Surely some of those speculations make more sense than others, and we all should realize that sometimes miners have a complex set of incentives based on the fact that they are both engaging in businesses and speculating regarding future price.  Accordingly, sometimes their speculation may cause them to operate at a loss for a considerable amount of time, in a kind of gambling way, expecting that the speculation aspect of their BTC holdings is going to cause them to move from the red to the black (and with any gambling, such speculation may or may not pay off), but the bitcoin community as a whole will frequently benefit from such ongoing speculations and investments into bitcoin.

Once miner decides to hoard coins instead of selling it's not the mining side of business that handles it but the investment/trading side so. For all purposes at that point it's an investment. Which just muddies up the argument if price follows the hashrate (indirect cost of production), or hashrate follows the price.

They can establish their business model in any way that they want, whether that means cashing out on a daily basis or holding coins for years.  It does not matter, and the whole bitcoin infrastructure does not give a shit about what they decide to do on an individual basis.  If those coins are not available for circulation, then the bitcoin community will use whatever coins are available. 

In the end if the behavior of the miners causes there are not enough coins, the price of bitcoins will go up, and if there are too many coins the price of bitcoins will go down... so who gives a shit whether miners hoard coins or liquidate them immediately.. the market will adapt to whatever the supply is... and for the most part, bitcoin works the same, if the price is $1 per bitcoin or $1million per bitcoin, even though the interaction with other financial systems is going to differ whether there is a $20 million market cap or a $10 trillion market cap. 

Ultimately, each of the miners decide for himself/herself how many coins s/he is going to sell, if any, and the miners are a diverse of enough of group, at least so far, that they are likely not coordinating their decision(s) regarding selling/holding.  If for some reason, the bitcoin market creates a space in which miners are able to coordinate their decisions, then likely the space is going to need to be reconsidered at that time.

Right i'm sure most of them carry some inventory or sell them OTC at some preset price. But how does it matter if i as investor obtained those coins from mining them or buying them on the market? The minute the coins are mined i own them and carry the coins on my balance sheet, and the only thing that matter is the spot price and my perception of the market whether i feel it'll go up or down and the risk i associate with it. Portfolio new worth is evaluated on a daily if not by the minute for publicly traded funds. I don't care what my base price was (or my production price if that's how i obtained them), my decision doesn't depend on whether i got those coins at $10 in 2011 or $1200 in 2013 at least it shouldn't if emotions are not involved.

JJG are you also saying that BTC price depends on the hashrate (production costs) and not the other way around???

[JayJuanGee]

There's a slight difference: If the price is high due to scarcity, then there is more slippage and volatility versus if the price is high without scarcity. Also the holders have to fear a drop that would occur if the hoarded coins suddenly became available.

Yes.. those are great additional points regarding how liquid is the market, and each person is going to assess the value of his/her hoarding or liquidating based on his/her assessment of these kinds of dynamics.

Even if the miner's assessment of the liquidity dynamics is not correct, there is a certain level of speculation involved in considering can I make more money (or get more utility from my action) if I sell my coins today or if I sell them one month from now or one year from now or some other projected convenient time period, and these are not likely to be all or nothing calculations but instead calculations on the margins concerning the selling or hoarding of portions of their BTC holdings and their overall cash flow circumstances.

[Mrpumperitis]

http://www.marketoracle.co.uk/Article55413.html
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