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

[julian071]

Yeah me too.... So lucky...

[AlexGR]

Peter Schiff is the only finance guy that I know that can be so right about the U.S. economy and world markets, and so wrong about what Bitcoin actually is.

Most of the audio is really good and worth a listen:
https://www.youtube.com/watch?v=AF2DDrEaSOg (starts talking about crypto @ 24:18)

It still mystifies him that Bitcoin becomes a new form of digital money and store of value because of people's belief in bitcoin's core attributes as money (i.e., permissionless, deflationary, scarce, utility, divisible, fungible, etc). It never occurs to him, or he's not willing to admit, that PMs got their value from the same power of belief over time.

Sure Bitcoins are not backed by anything. But PMs are not "backed by anything" other than thousands of years of belief that has accrued over time. In time it becomes a self-fulfilling feedback loop.

Sure you can duplicate a crypto, but you can't overnight duplicate the "belief".

I don't think even the biggest and more informed gold promoters understand bitcoin, when they try to rationalize the seemingly "pumped" price of BTC against gold without accounting for the fundamentals - and then claiming tulipmania, pump&dumps, etc etc. Same goes for other classes of investors.

Most of these guys wouldn't even care about Bitcoin if satoshi had made the choice to issue 21 billion coins instead of 21 million - with the consequence being that the price right now would be at 2.6$ instead of 2600$. The 2600$ "threatens" them because it simply sounds so high, while the 2.6$ wouldn't even raise an eyebrow. And that's the whole point really: Their objection is about what they perceive as a high price (!), which by consequence also affects the perception of what is considered "valuable". Something that costs 2.6$ doesn't sound so valuable vs something that costs 2600$, yet you can buy 1000 x 2.6$ - and it's precisely the same thing (mathematically speaking).

So this behavior is definitely irrational and based on psychological factors, biases, etc - rather than sound economic analysis. In the end of the day, Bitcoin is an asset that has a marketcap in the range of a successful internet application like whatsapp. It is nowhere near the precious metals marketcap. It's not even close to 4 months of gold mining production (annual mining production currently at ~110-120bn $).

When people don't even realize why Bitcoin has the price it has (low unit count), it's time to stop listening their "expert" opinions. It's like trying to explain to a stock market noob why berkshire has the share price that is has - and them insisting on it being overvalued because surely no stock can cost 250k USD.

[Qartada]

Bitcoin can still be a "master crypto" in price and usage in terms of merchants, but ETH's idea is to literally eat up every other new crypto by having them created on their platform, which puts them consistently in second place unless earlier coins like Litecoin take off more.

Sure the price is empty speculation, but some of the Bitcoin price is empty speculation as well.  The difference is that Ethereum is good at advertising, and Bitcoin finds this difficult due to actually being decentralised.  So ETH will be a secondary crypto for people who like ICO hype and couldn't care less about what Bitcoin actually does.

But if none of the ICO "applications" go anywhere and prove worth anything (which I believe nearly 99.999% will not), then ETH will go to zero. As it should, because it's worthless for anything else. No one is going to buy ETH just to use some type of dapp that doesn't make money nor even need a blockchain the first place.

I would say that the Ether price, and the price of all the tokens that are created via the Ethereum network, are not based on their use but people believing that they could have a use.  Shitcoins (e.g. Footballcoin, Marijuanacoin or Pepecash), can get somewhere, because they pull in everyone who loses all their logic in a desperate get-rich-quick scheme.  But when there's a dip in a currency that people think has actually done something with blockchain technology, it doesn't crash completely and it tends to stay stable, even though there's no actual point in having a new token for it.  This applies to Ether, and speculation like this can do some crazy things.

I think that ETH will stay stable as long as people keep pumping out shitcoins on it, which could be for another 3-4 months.  The idea is that the shitcoins die, but ETH stays for as long as more shitcoins are on their way which have not died.

[Torque]

When people don't even realize why Bitcoin has the price it has (low unit count), it's time to stop listening their "expert" opinions. It's like trying to explain to a stock market noob why berkshire has the share price that is has - and them insisting on it being overvalued because surely no stock can cost 250k USD.

Not disagreeing with you, but with Peter Schiff I don't even think it's that. It goes a lot deeper, to the psychological level. He seems to think that Bitcoin being backed by "nothing" (i.e., belief x 8 yrs) and precious metals being backed by "nothing" (i.e., belief x 3000 yrs) are completely different.

What he doesn't see is that they are EXACTLY THE SAME, the only difference is the amount of time that has passed to reinforce and strengthen the belief. As we move forward in time, the "belief" that backs Bitcoin will come up to the same level as the "belief" that backs PMs. Hence more people holding, using, and valuing it over time. And as fiat eventually fails and peoples' faith in fiat is shaken, this will begin to accelerate.

Incidently, PMs have nothing to worry about, as the "belief" in their eternal value has been indoctrinated over thousands of years, and they will never lose that status as being valuable on some level.

[AlexGR]

When people don't even realize why Bitcoin has the price it has (low unit count), it's time to stop listening their "expert" opinions. It's like trying to explain to a stock market noob why berkshire has the share price that is has - and them insisting on it being overvalued because surely no stock can cost 250k USD.

Not disagreeing with you, but with Peter Schiff I don't even think it's that. It goes a lot deeper, to the psychological level. He seems to think that Bitcoin being backed by "nothing" (i.e., belief x 8 yrs) and precious metals being backed by "nothing" (i.e., belief x 3000 yrs) are completely different.

What he doesn't see is that they are EXACTLY THE SAME, the only difference is the amount of time that has passed. As we move forward in time, the "belief" that backs Bitcoin will come up to the same level as the "belief" that backs PMs. Hence more people holding, using, and valuing it over time.

I see it like this:

Fiat => backed by debt (money is issued as debt which has to be repaid with interest - which then requires more money issuance to infinity, thus increasing the ratio of money supply vs finite assets)

Gold* => backed by the expenses to extract it

BTC =>  backed by the expenses to extract it


* Same for other metals. If it costs 0.02$ of energy to extract copper the size of a penny, then obviously you can't use copper for the penny anymore - and have to copper plate zinc (USA) or steel (EU) to make a penny or eurocent.

[Dabs]

It still mystifies him that Bitcoin becomes a new form of digital money and store of value because of people's belief in bitcoin's core attributes as money (i.e., permissionless, deflationary, scarce, utility, divisible, fungible, etc).

Since when is Bitcoin fungible? Since every transaction is public, coins can and have been red flagged. Ever try to transfer coins to or from a gambling site to Coinbase? 

True, and they would be fungible without such censorship. I don't approve of what Coinbase is doing (or any other exchange for that matter). They're only going to strengthen the use of tumblers and tech like Mimblewimble in the future.

But tbh, just go try selling some PMs at a coin shop without being asked where you got it from, or without having to show proof of purchase. 

1. Don't use Coinbase.
2. CoinJoin or JoinMarket.
3. If you must use Coinbase, just send it to your wallet first, then bounce it a couple of times.

[bitserve]

It still mystifies him that Bitcoin becomes a new form of digital money and store of value because of people's belief in bitcoin's core attributes as money (i.e., permissionless, deflationary, scarce, utility, divisible, fungible, etc).

Since when is Bitcoin fungible? Since every transaction is public, coins can and have been red flagged. Ever try to transfer coins to or from a gambling site to Coinbase?  

True, and they would be fungible without such censorship. I don't approve of what Coinbase is doing (or any other exchange for that matter). They're only going to strengthen the use of tumblers and tech like Mimblewimble in the future.

But tbh, just go try selling some PMs at a coin shop without being asked where you got it from, or without having to show proof of purchase.  

Even FIAT money is not 100% fungible. For some reason they do have serial numbers.

[Karpeles]

It still mystifies him that Bitcoin becomes a new form of digital money and store of value because of people's belief in bitcoin's core attributes as money (i.e., permissionless, deflationary, scarce, utility, divisible, fungible, etc).

Since when is Bitcoin fungible? Since every transaction is public, coins can and have been red flagged. Ever try to transfer coins to or from a gambling site to Coinbase? 

True, and they would be fungible without such censorship. I don't approve of what Coinbase is doing (or any other exchange for that matter). They're only going to strengthen the use of tumblers and tech like Mimblewimble in the future.

But tbh, just go try selling some PMs at a coin shop without being asked where you got it from, or without having to show proof of purchase. 

1. Don't use Coinbase.
2. CoinJoin or JoinMarket.
3. If you must use Coinbase, just send it to your wallet first, then bounce it a couple of times.

Or just use a Mixer for Coinbase, or send to another exchange.

I don't think Coinbase has something against mixer. Or do they?

[bones261]

It still mystifies him that Bitcoin becomes a new form of digital money and store of value because of people's belief in bitcoin's core attributes as money (i.e., permissionless, deflationary, scarce, utility, divisible, fungible, etc).

Since when is Bitcoin fungible? Since every transaction is public, coins can and have been red flagged. Ever try to transfer coins to or from a gambling site to Coinbase?  

True, and they would be fungible without such censorship. I don't approve of what Coinbase is doing (or any other exchange for that matter). They're only going to strengthen the use of tumblers and tech like Mimblewimble in the future.

But tbh, just go try selling some PMs at a coin shop without being asked where you got it from, or without having to show proof of purchase.  

1. Don't use Coinbase.
2. CoinJoin or JoinMarket.
3. If you must use Coinbase, just send it to your wallet first, then bounce it a couple of times.

Or just use a Mixer for Coinbase, or send to another exchange.

I don't think Coinbase has something against mixer. Or do they?

How exactly is that fungible then, if I have to send extra transactions at additional expense and time to spend the coins at a venue of my choosing? Also, I just used Coinbase as an example. Any service can red flag any coins for whatever reason they feel "necessary". If they word their Terms of Service correctly, they can also refuse to let you have back any coins you happen to have on deposit at the time. "Clean" or not.

[HI-TEC99]

Ugh, had a run-in with a car that ran a red light. The bike I bought with my BTC profits is most probably a total loss. I'm reasonably fine physically tho, and of course the woman who ran the red ligth will have to pay for all damages. If it is a total loss, I am undecided on whether to get a Panigale 959 next or a Multistrada Pike's Peak.

If I remember right you sold the Bitcoins to buy the bike immediately before a big dump. Did you manage to buy back in at the bottom of the dump?

[Torque]

 

When people don't even realize why Bitcoin has the price it has (low unit count), it's time to stop listening their "expert" opinions. It's like trying to explain to a stock market noob why berkshire has the share price that is has - and them insisting on it being overvalued because surely no stock can cost 250k USD.

Not disagreeing with you, but with Peter Schiff I don't even think it's that. It goes a lot deeper, to the psychological level. He seems to think that Bitcoin being backed by "nothing" (i.e., belief x 8 yrs) and precious metals being backed by "nothing" (i.e., belief x 3000 yrs) are completely different.

What he doesn't see is that they are EXACTLY THE SAME, the only difference is the amount of time that has passed. As we move forward in time, the "belief" that backs Bitcoin will come up to the same level as the "belief" that backs PMs. Hence more people holding, using, and valuing it over time.

I see it like this:

Fiat => backed by debt (money is issued as debt which has to be repaid with interest - which then requires more money issuance to infinity, thus increasing the ratio of money supply vs finite assets)

Gold* => backed by the expenses to extract it

BTC =>  backed by the expenses to extract it


* Same for other metals. If it costs 0.02$ of energy to extract copper the size of a penny, then obviously you can't use copper for the penny anymore - and have to copper plate zinc (USA) or steel (EU) to make a penny or eurocent.

Agreed. However, the expenses to extract something is not enough by itself to give something value relative to fiat. You still need buyers that value it at the extraction price and rate to take it off the market so that miners can get paid for their effort.

And what is the motivation for buyers to buy? Simply "belief" that it has today and future value, for themselves and to others as well. That's the only way it can be money, as a proxy for stored value.

"Belief" is a sort of external confirmation. I.E., I do not care what it cost to mine Gold today, only that if I buy it, that one day in the future I can likely sell it for the same cost that I bought it for or more. Or that I can exchange it and get the same relative value or more for it.

[BurstIncomeAsset]

Ugh, had a run-in with a car that ran a red light. The bike I bought with my BTC profits is most probably a total loss. I'm reasonably fine physically tho, and of course the woman who ran the red ligth will have to pay for all damages. If it is a total loss, I am undecided on whether to get a Panigale 959 next or a Multistrada Pike's Peak.

If I remember right you sold the Bitcoins to buy the bike immediately before a big dump. Did you manage to buy back in at the bottom of the dump?

He bought the bike, so no money to buy the dip and get richer after the pump

[r0ach]

Peter Schiff is the only finance guy that I know that can be so right about the U.S. economy and world markets, and so wrong about what Bitcoin actually is.

Most of the audio is really good and worth a listen:
https://www.youtube.com/watch?v=AF2DDrEaSOg (starts talking about crypto @ 24:18)

Peter Schiff is 100% right about bitcoin and metals, he just lacks the knowledge of how bitcoin works to explain why.  For instance, it's impossible for bitcoin to be a store of value because it's cost of production is self referencing based on it's own demand and not a derivative of an external variable like oil.  In other words, if the cost of production of an ounce of gold is $1000 and nobody is buying gold at the time, the cost of production isn't really affected.  It's still going to cost people a truckload of money if they want to bring any gold to market.  This is what allows it to be a store of value, it's floor is not derived from finicky market sentiment.

For bitcoin on the other hand, if nobody is buying bitcoins at the time, some miners will then have to shut down which has a 100% direct correlation with lowering cost of production and hence price floor.  Since bitcoin is an open entropy system and anyone can mine it, there is no reason for anyone to buy your older, higher cost of production coins.  They simply go pluck new coins from the never ending block reward tree for a lower price, and those coins never dry up since fees are recirculated.

After reading this, ANYONE should be able to easily see why metals have a somewhat functional price floor and bitcoin does not at all.  The only thing bitcoin has is a ponzi element called "the halving" which is a ghetto bandaid to try and fix the terminal problem of no price floor.  The "halving" is not actually a fix since the halvings are finite, though.  They mostly serve as a combination of get rich quick scheme and a way to try and bootstrap an unsound money system where nobody will figure out it's unsound until it's too late when the halvings dry up.

[gentlemand]

SameOldSameOld. 

You earned the one note poster badge a long, long time ago. Anyone engaging now must have one of those head injuries that destroys your memory beyond five minutes.

Why not devote your energy to tackling the imaginary menace of yiddisher far from here?

[Torque]

For bitcoin on the other hand, if nobody is buying bitcoins at the time, some miners will then have to shut down which has a 100% direct correlation with lowering cost of production and hence price floor.  Since bitcoin is an open entropy system and anyone can mine it, there is no reason for anyone to buy your older, higher cost of production coins.  They simply go pluck new coins from the never ending block reward tree for a lower price, and those coins never dry up since fees are recirculated.

r0ach, go back and look at the data from Nov 2013 to Jan 2015. Bitcoin demand (and thus price) fell for 14 months, but hashrate never fell. In fact it continued to climb the whole time.

And I suspect other previous prolonged bear markets were the same.

[yefi]

Hm, they've cycled back into ETH again. Trying to push it over USD ATH to ignite yet more fomo.

[r0ach]

For bitcoin on the other hand, if nobody is buying bitcoins at the time, some miners will then have to shut down which has a 100% direct correlation with lowering cost of production and hence price floor.  Since bitcoin is an open entropy system and anyone can mine it, there is no reason for anyone to buy your older, higher cost of production coins.  They simply go pluck new coins from the never ending block reward tree for a lower price, and those coins never dry up since fees are recirculated.

r0ach, go back and look at the data from Nov 2013 to Jan 2015. Bitcoin demand (and thus price) fell for 14 months, but hashrate never fell. In fact it continued to climb the whole time.

And I suspect other previous prolonged bear markets were the same.

It's solely because there's a state-subsidized ASIC cartel mafia in place.  Every one ASIC miner you buy from them allows them to build 10 more for themselves, making your purchase self defeating.  Then they outsource cost of mining to the collective on top of that by either being subsidized by the state with low price China energy or just flat out stealing it.  

You can then derive two possible outcomes:

1)  either this is the new normal and the only miners that will survive will be state sponsored or the state themselves by outsourcing costs to the collective, making bitcoin pretty much pointless since it would be state owned/run

or

2)  This is not the new normal and there won't be cases of people mining for what would be a loss while outsourcing cost to the state or collective.  They would have to turn miners off if price goes below break even like how KNC went bankrupt.  In this context bitcoin would be a god awful store of value in comparison to things like gold since the bitcoin floor can literally go from $10,000 to $1 overnight unlike metals.

TLDR:  the more people who steal energy, the more it "appears" bitcoin is a store of value

[Torque]

In this context bitcoin would be a god awful store of value in comparison to things like gold since the bitcoin floor can literally go from $10,000 to $1 overnight unlike metals.

Only a trust-breaking exploit in the code could maybe do that (hence open source and code reviews), and that would be fixed pretty quickly. Otherwise, no it could not. Even if hash rate fell in response to weak demand, ASIC miners and exchanges still control the source/flow of coins to market and thus control price, until mining was profitable again. Just like the precious metal cartels.

[r0ach]

Just like the precious metal cartels.

Mining bitcoin is an actual permissioned based system at this point.  You can technically go in your own backyard and attempt to mine gold or silver by hand, or just walk around the desert somewhere, etc.  This is relatively easy to do with copper and there's plenty of youtube videos where people do it, while also being doable with silver or gold, just requiring more effort.  For bitcoin, if there's only one guy on the planet who has invented the magic ASICboost racket, you now have to pay him royalties or extortion fees to even touch bitcoin.  

Bitcoin is far more prone to cartel centralization since there's only a tiny amount of foundries on earth in the first place like Intel, Samsung, GlobalFoundries, and TSMC.  Bitcoin can only be as decentralized as those gatekeeper corporations allow...

Like I said before, bitcoin is a ponzi scheme created by "some guy".  Gold and silver are a ponzi scheme created by *god.  The latter is obviously going to be better.

[Torque]

Gold and silver are a ponzi scheme created by *god but manipulated to hell by bullion banks through collusion and rampant multiple leasing, naked shorting, price raid bombing, fraudulent accounting practices, etc.

FTFY