The Bubbly Bitcoin Thread -- Merged Threads

[Toast]

21 hours ago, jiltedjen said:

Frankly by now if you don’t own even a few pounds worth of bitcoin your either stupid, lazy or both. 

I'm stupid and lazy, but I also can't shake the feeling that anyone who profits from a bubble is just taking wealth from someone else, so I wouldn't want to be on the upside of this any more than the downside. I've lived most of my adult life in a world of bubbles, and I have seen the damage they do.

Now, I recognise that cutting banks and central government control out of the economic system might (only might*) have an economic and moral benefit for all in the end, but I still have a problem figuring out whether that economic benefit is a net gain for the median person in society, or will be more than hoovered up by the small proportion of early investors. Is this the kind of bubble we had for most of the worthless stocks in dot-com, or a 19th century railway bubble, which changed society as well as burning lots of late investors? Even if the latter, I'd rather reap the general rewards to society than get my hands on the disproportionate early ones.

5 hours ago, jiltedjen said:

(again wealth store is what bitcoin is, not a currency, and thats just fine!)

If bitcoin isn't a currency, but is just a store of value, then I don't see how any of its transformative effects of cutting out the central control of finance are going to happen.

* I think it is difficult to overestimate the ingenuity with which people manage to place others under debt obligations and so centralise power, no matter the kind of monetary system we have. Financial and debt crises happened before central banks and fiat currencies. Arguably they have been worse since, but extraordinary inequalities of wealth appear to be possible - or even inevitable - under hard currencies.

[Toast]

[...]

Edited November 5, 2017 by Toast
Duplicate post appearing 10 minues later. (How did that happen? Where is the guarantee of no double transactons when you need it?).

[adamLancs]

7 hours ago, jiltedjen said:

Bitcoin will destroy the boomers. Its a generational wealth transfer. Possibly humanities last chance to make the banks impotent.

Its the end of the 'banking era', which was after the 'industrial/modern era' which was before the 'post medieval period', now its the (possibly very dark period) the 'decentralised stateless era'

Yes and they will be last on board. It's like the PC or the internet, I remember businesses flat out telling me they didn't need a website, a few years later they were literally knocking my door down because all their competitors had one, that meant they needed one... people will generally fight change until it is forced on them in some way that affects them personally. 

I think alts have a role to play, but there are simply too many now, very few have working products and take-up is almost non-existent.

[jiltedjen]

2 hours ago, Toast said:

I'm stupid and lazy, but I also can't shake the feeling that anyone who profits from a bubble is just taking wealth from someone else, so I wouldn't want to be on the upside of this any more than the downside. I've lived most of my adult life in a world of bubbles, and I have seen the damage they do.

Now, I recognise that cutting banks and central government control out of the economic system might (only might*) have an economic and moral benefit for all in the end, but I still have a problem figuring out whether that economic benefit is a net gain for the median person in society, or will be more than hoovered up by the small proportion of early investors. Is this the kind of bubble we had for most of the worthless stocks in dot-com, or a 19th century railway bubble, which changed society as well as burning lots of late investors? Even if the latter, I'd rather reap the general rewards to society than get my hands on the disproportionate early ones.

If bitcoin isn't a currency, but is just a store of value, then I don't see how any of its transformative effects of cutting out the central control of finance are going to happen.

* I think it is difficult to overestimate the ingenuity with which people manage to place others under debt obligations and so centralise power, no matter the kind of monetary system we have. Financial and debt crises happened before central banks and fiat currencies. Arguably they have been worse since, but extraordinary inequalities of wealth appear to be possible - or even inevitable - under hard currencies.

I like a brain-fart now and then, this is me thinking out-loud. and should be skipped over for anyone after anything intelligent or even informed:

All forms of saving is taking wealth from future productive workers. Which can be OK if the social contract is not broken and the young can have the same chance of life as the old. Which is no way the case currently due to the horrid boomer generation or bankers abusing powers and holding the country to ransom with no comeback. Bitcoin is a bit of a nasty double edged sword in many ways, its a technology which much like the french revolution takes the heads off the worst of the current criminals for an unknown future. But the followers of bitcoin are already losers in the current economic situation, much like i am, much like most people on HPC. I myself don't feel like i have that much to loose. Happily salt the earth if at least the current criminals starve with me, rather not be their slave. its a self respect thing. 

bubbles are horrible, but part of the process, bitcoin is a money bubble, not a housing bubble, not a stock market bubble. Its confined to its own value, it doesn't punish those who don't want to take part like the housing crisis where your forced to by law and brute force. 

bitcoin is open for anyone to buy in any amount they see fit, its not like houses where your forced to spent at least X amount to get one (and take massive debt at the same time). I dont think its inevitable that all wealth will just stream to 1 person monopoly style with bitcoin. Currently those at the top own all the assets, then as soon as those at the bottom gain any tiny crumb of savings they devalue the currency to ensure their assets remain strong and keep the average person a slave. Currently the average person can get hold of the only asset which seem to hold value which is houses, thats allowed, but it will cost you 6 houses worth of interest and over-valued cost paid to the bankers and boomers to get one house worth of assets.

a lifetime as a slave. it worked for the boomers. but it wont work for anyone following as thankfully you can only take 1 or 2 life-times worth of work from a couple for your own gains, not more. 

your forced to play the current game where you always loose. either rent, sleep on the street, or be a slave. with bitcoin the access is open to anyone, even the unbanked. It cant just be printed to devalue the poors holdings. If the rich want to buy anything they cant anymore, just buy something, then devalue the currency they paid for it in, so in effect they get it for very cheap or free (like the boomers and bankers). In a bitcoin system you have X amount. thats what you have. to get more you have to be productive, or a rent seeker. But the system wont be gamed in your favour anymore. You cant stay a rent seeker for generations, as you need to actually buy things, and be productive, those who you seek rent off can actually for the first time have access to assets which cant be melted away. They have an escape over time, the first time in history when wealth stores are open to everyone.

if the first few buyers of bitcoin got a million bitcoin for £5, and they end up extremely rich powerful men. then ok. fine.  a small price to pay for some to be that wealthy to see the end of the bankers, they took the risk, i didnt. fair play.

i think for the average productive person it will be a good thing, labour and in demand skills will always be worth X amount due to demand. Those in productive not parasitic industries like manufacturing will do well. near an actual productive value stream. it all depends on how you see the average man. Will a moron move to london, get a banking job and get paid silly money due to money printing? that 'average man' actually suddenly finds out he is a worthless moron as it should be. do you see that as bad? i dont.

they will be winners and losers. but then if you set your life up without morals, or tie yourself to the current regime then expect to loose out when it all changes. 

the bit i struggle with is those weak in society, the poorly, the disabled. the ones who produce no value and draw a lot from society. These people morally need help, and i agree with that 100%. i dont want these people to suddenly find life very hard for the sake of justice levied against the bankers. But also is it fair that any feckless lasy moron gets an easy life in the UK while those in africa work themselves to death just for food?

a world when poor countries can actually build up wealth. It would be scary for us in the west. no more cushy non-productive council jobs. 

its a world which will be a lot different. But the greatest of human progress was achieved under a hard currency system, as your forced to be productive not a rent seeker. The industrial revolution and many other advances. When the whole of humanity pulls together for a better life, not just stealing from the next man.  

hard currency quote before gold's value was destroyed or kept down by 'paper gold'

“For the Western world, the gold standard era, defined say as 1815-1913, was arguably the greatest period of human advance ever, at least in matters of economics, culture, and technology.”

i have to think how we have wasted the last 100 years. what a dark stain the boomers and bankers have left on history, the real evil of the world. the history books will see the lack of growth and inequalities that happened in this era and feel a bit sick. 

Edited November 5, 2017 by jiltedjen

[GreenDevil]

2 hours ago, Toast said:

I'm stupid and lazy, but I also can't shake the feeling that anyone who profits from a bubble is just taking wealth from someone else, so I wouldn't want to be on the upside of this any more than the downside. I've lived most of my adult life in a world of bubbles, and I have seen the damage they do.

Now, I recognise that cutting banks and central government control out of the economic system might (only might*) have an economic and moral benefit for all in the end, but I still have a problem figuring out whether that economic benefit is a net gain for the median person in society, or will be more than hoovered up by the small proportion of early investors. Is this the kind of bubble we had for most of the worthless stocks in dot-com, or a 19th century railway bubble, which changed society as well as burning lots of late investors? Even if the latter, I'd rather reap the general rewards to society than get my hands on the disproportionate early ones.

If bitcoin isn't a currency, but is just a store of value, then I don't see how any of its transformative effects of cutting out the central control of finance are going to happen.

* I think it is difficult to overestimate the ingenuity with which people manage to place others under debt obligations and so centralise power, no matter the kind of monetary system we have. Financial and debt crises happened before central banks and fiat currencies. Arguably they have been worse since, but extraordinary inequalities of wealth appear to be possible - or even inevitable - under hard currencies.

The point with bitcoin is it is a deflationary asset. Its not like fiat, where the supply is constantly increasing. Some is lost daily, and some is added but with increasing cost of mining.

What you have now will always have the same value relative to where you got in, either at 10$ or $7500. There will only every be 21 million in circulation. Bitcoin allows the man on the street to save in way that the bankers and polictians can't inflate it away. If you get paid your paycheck and save £500 this month in 10 years it will be worth half that in real terms or less. If you put that £500 in bitcoin every month deflation takes its hand and the price goes up. You may be many orders of magnitude wealthier than if you kept it in fiat for 10 years.

A deflationary asset freely available to the public for saving that cant be manipulated by bankers and politicans (ok they could turn of the internet but then that would kill business and communication too which wont happen).

If you think 7500 is expensive wait til the CME starts training bitcoin futures next year and btc goes mainstream. Prepare for moonshot.

Edited November 5, 2017 by GreenDevil

[Darby Ram]

4 hours ago, Toast said:

I'm stupid and lazy, but I also can't shake the feeling that anyone who profits from a bubble is just taking wealth from someone else, so I wouldn't want to be on the upside of this any more than the downside. I've lived most of my adult life in a world of bubbles, and I have seen the damage they do.

Now, I recognise that cutting banks and central government control out of the economic system might (only might*) have an economic and moral benefit for all in the end, but I still have a problem figuring out whether that economic benefit is a net gain for the median person in society, or will be more than hoovered up by the small proportion of early investors. Is this the kind of bubble we had for most of the worthless stocks in dot-com, or a 19th century railway bubble, which changed society as well as burning lots of late investors? Even if the latter, I'd rather reap the general rewards to society than get my hands on the disproportionate early ones.

If bitcoin isn't a currency, but is just a store of value, then I don't see how any of its transformative effects of cutting out the central control of finance are going to happen.

* I think it is difficult to overestimate the ingenuity with which people manage to place others under debt obligations and so centralise power, no matter the kind of monetary system we have. Financial and debt crises happened before central banks and fiat currencies. Arguably they have been worse since, but extraordinary inequalities of wealth appear to be possible - or even inevitable - under hard currencies.

I agree, mostly, with those misgivings. One of the attractions of Ethereum, at least in the early days before it got swamped by ICO fever, was that the inventors and early adopters explicitly talked about how the internet had started with the best of intentions (decentralisation) and yet ended up with information or economic monopolies (Google and Amazon) because the people involved were too naive about how networks formed. Bitcoin culture is intensely relaxed about plutocracy (and therefore far too naive about the potential for rent-seeking behaviours to develop on top of the network). But other crypto cultures are available, where decentralisation in the fuller sense of the term is held up as an ideal and the dangers of rent-seeking are pretty well understood.

***

And, here's the reason I clicked on this thread in the first place, a cool plot of number of Tethers in circulation vs Bitcoin price. Pretty sure that the 'Tetherisation' of the Bitcoin price has come up before on this thread, but this is the first time I've seen it set out so explicitly.

  

[Inoperational Bumblebee]

9 hours ago, Darby Ram said:

And, here's the reason I clicked on this thread in the first place, a cool plot of number of Tethers in circulation vs Bitcoin price. Pretty sure that the 'Tetherisation' of the Bitcoin price has come up before on this thread, but this is the first time I've seen it set out so explicitly.

Many apologies, but what does this mean?

[Frizzers]

I have bitcoin worth £4million that I bought five years ago for £5,000. Will I have to pay tax if I sell?

Read more: http://www.thisismoney.co.uk/money/experts/article-5019947/Do-pay-tax-sell-bitcoin-big-profit.html#ixzz4xeZ6hl4G 
 

 

[ubuntu]

13 minutes ago, Frizzers said:

I have bitcoin worth £4million that I bought five years ago for £5,000. Will I have to pay tax if I sell?

Read more: http://www.thisismoney.co.uk/money/experts/article-5019947/Do-pay-tax-sell-bitcoin-big-profit.html#ixzz4xeZ6hl4G 
 

 

Seems fictitious - so has just HODLed all that time? Could've sold some and retired a few years ago.

[doomed]

1 hour ago, ubuntu said:

Seems fictitious - so has just HODLed all that time? Could've sold some and retired a few years ago.

Not really that far fetched given the dramatic rise in a short period of time. There are many in such a position.

[Darby Ram]

6 hours ago, Inoperational Bumblebee said:

Many apologies, but what does this mean?

Short version: Tethers are allegedly being used by Bitfinex to run a fractional reserve/hold dollars with multiple claims on them in their exchange. Long version, follow the trail from this post: https://medium.com/@bitfinexed/the-mystery-of-the-bitfinex-tether-bank-and-why-this-is-suspicious-a8a6407a1241

Tethers are...suspicious.

[GreenDevil]

3 hours ago, ubuntu said:

Seems fictitious - so has just HODLed all that time? Could've sold some and retired a few years ago.

Move to a tax haven. And live like a king.

[ChumpusRex]

10 hours ago, Inoperational Bumblebee said:

Many apologies, but what does this mean?

Tethers are intended to be a pegged and collateralised cryptocurrency. Rather than being produced by mining, they can be produced or destroyed by an issuing authority, in this case by being collateralised by USD.

You pay $100 USD to the issuer, and they issue 100 tethers; and vice versa. The tethers can then be transacted in the same way as any other cryptocurrency. 

The intention was to make trading of cryptocurrencies easier, so a small exchange does not need to deal with cash, and instead just deals in tethers, which can be redeemed or deposited by customers. This moves a ton of AML/KYC overhead out to the issuer of the tethers. 

As tethers are a reasonably convenient method of entering the crypto market, it is not that surprising that the quantity outstanding has increased with the value of cryptos in general.

The concern is that tethers are the worst of both fiat and crypto: central control, unlimited supply, regulatory uncertainty, no real consumer protection against loss/fraud/theft, and more. Additionally, there is a counter party risk, as you trust that the controlling entity has properly collateralised the tethers and correctly accounted for them, and will be willing to exchange them for cash. On top of that, there have been some allegations of dubious behaviour with tethers, including fractional reserve lending or somewhat dodgy accounting by some institutions.  It is hard to know how much truth there is in these allegations. 

I'd view them as a marker of small and relatively unsophisticated consumer entry into the crypto market. However, they are anathema to crypto purists, and even for pragmatists, while they may have utility, like custodial crypto services/wallets, they bring additional risks that may not be desirable.

[Inoperational Bumblebee]

Thanks @Darby Ram and @ChumpusRex, much clearer now.

[Errol]

India's central bank rejects bitcoin & other cryptocurrencies as legal tender

The Reserve Bank of India (RBI) has sent another signal that cryptocurrencies like bitcoin are not welcomed in the country, reports India's financial daily Money Control.

https://www.rt.com/business/409067-india-central-bank-rejects-bitcoin/

[Inoperational Bumblebee]

On 04/11/2017 at 4:37 PM, leonardratso said:

im not reading very good things about bitstamp, still people having trouble cashing out to SEPA or getting choaded by the bank on fees.

I know coinbase just take in money but wont verify to get it out, is it same at bitstamp?

I sent a SEPA transfer from Revolut to Bitstamp on Friday, and it turned up successfully on Monday. First time, so no real vested interest on my behalf, just sharing info.
To be fair, the bit in bold will be bank dependent too.

On 04/11/2017 at 11:17 PM, leonardratso said:

hmm cheers for that, looks damn good, ive signed up and got verified in under 30 mins, ill load it with btc, flog em off and try a clawback, lets see how that goes.

might just chuck some back in as well as a test. grand minimum looks painful, could go the gdax route i suppose.

Im not too bothered by the price gouging (fx++, fees, whatever) if its transparent and is a one or two off, its the constant fee adding fees that irritates me plus the really crappy support, enough to hack anyone off.

 

£1000 minimum doesn't apply if you use their Express Buy option, where you buy from a marketplace seller. Yes there are fees, but it still looked reasonably competitive when I looked on Friday.

[Frizzers]

Some $100,000 bitcoin port for you on this cloudy morning  https://moneyweek.com/three-reasons-why-bitcoin-could-go-to-100000

Edited November 8, 2017 by Frizzers

[Errol]

Apparently Roubini doesn't like Bitcoin:

 

Bitcoin is a 'gigantic speculative bubble' that will end - 'Dr. Doom' Nouriel Roubini

The man who predicted the 2008 financial crisis is skeptical about bitcoin. Nouriel Roubini warns the cryptocurrency will become so regulated it will “find its end.”

“In my opinion, there is a gigantic speculative bubble related to the bitcoin because this is neither a serious method of payment nor a good way to store capital,” the economist told Business Insider. He explained that “bitcoin feeds on itself” and there are no fundamental reasons for its price to reach such levels.

https://www.rt.com/business/409174-bitcoin-speculative-bubble-roubini/

[Saving For a Space Ship]

Bitcoin mining uses more energy than Ecuador – but there’s a fix

https://www.newscientist.com/article/2151823-bitcoin-mining-uses-more-energy-than-ecuador-but-theres-a-fix/

Quote

Bitcoin has an energy problem. The cryptocurrency and the blockchain it runs on, have long been heralded as shining examples of the future of transactions, replacing people with an array of number-crunching computers. But the considerable energy impact of this approach is starting to become clear just as the blockchain and cryptocurrencies are exploding into the mainstream.

That realisation has spawned a host of strange workarounds, from heaters that warm your home with the blockchain to renewable mining. Now, the creator of one of the world’s biggest cryptocurrency networks has announced a major change to address the problem.

We’ve known for a while that bitcoin hogs energy. That’s down to the way it works with the blockchain. Each transaction starts with a user broadcasting the details of that transaction to a network of linked computers, where it is duplicated in thousands of identical unfalsifiable ledgers. “A blockchain, including bitcoin, has to operate on the assumption that no other computer can be trusted,” says Teunis Brosens, economic analyst at ING.  So instead of trusting anything, each computer independently verifies part of the transaction, in a process called mining.

 

 

Mining prevents computers creating fake ledgers. They need to show “proof of work”, a gruelling cryptographic puzzle that takes so much processing power that generating false entries becomes prohibitive.

All that processing guzzles a lot of electricity: one of the latest estimates put the annual electricity consumption of bitcoin mining at 23.07 terawatt hours, roughly the amount of electricity used by Ecuador each year.

Peanuts compared to internet

That’s still peanuts compared to the energy use of the internet. Still it’s more than enough to be useful, so a number of enterprising bitcoin miners made space heaters that can turn all processing into useful warmth. The Russian cryptocurrency start-up Comino is hoping to make a business of it. However, outside the mining community in cold places few people have given much thought to bitcoin’s energy use.

But things are changing. In the past year, rival cryptocurrencies have sprung up to challenge bitcoin, and an increasing number of companies are actually beginning to build long-promised business models on the blockchain from real estate to voting. “I don’t think finding uses for the produced heat is a realistic solution [anymore],” says a bitcoin miner who goes by the name of OgNasty.

If bitcoin were to suddenly double in popularity overnight, the network would consume the energy of 5 million US households.

To offset the electrical burden of trading operations, when OgNasty started mining in 2012, he set up the Green Energy Bitcoin Mining Project, which uses solar and wind power to mine bitcoins.

But is offsetting enough? “Using renewables is nice, but given that the supply is still scarce, this crowds out other energy uses which benefit society at large much more than competitive bitcoin mining,” says Brosens.

The latest solution is a radical one: change the way blockchain works altogether. Vitalik Buterin, the creator of cryptocurrency network Ethereum, a platform that lets anyone build blockchain applications, announced last month that he would adopt a completely different way of doing transactions, known as “proof of stake”.

He joins a growing chorus of voices who think that instead of proving a computer is trustworthy by taking out a “proof of work”, they could vet themselves by placing a small amount of money into a fund, which they get back if the validation turns out to be real. “By showing they have resources invested, they show their work can be trusted,” says Brosens. In a similar way to proof of work, it’s difficult to replicate by fraudsters.

 This approach could have serious downsides, says Brosens: proof of stake could lead to biases towards those with more money. But no one’s had a better idea yet. “In my opinion, the key really is to find ways of verification or mining that are less energy intensive,” he says.

 

[jiltedjen]

all the 'young people' at my work get it. and want to buy. which is concerning for me, considering they are the people least able to take a finical hammering if/when it crashes. 

i would say maybe 1 more year before we hit shoe-shine moment. I'm not encouraging anyone to buy, i'm only highlighting the risk. Im quite uncomfortable talking about it when faced with 'it can only ever go up, like houses yeah' 

as i am well positioned in bitcoin i cant help to wonder if i will get resentment when it crashes. The newer people getting interested are plain gamblers, with little or no understanding of bitcoin.

i hope they learn and do buy and hold. I just hope they understand the temptation to sell when it crashes will be very strong. 

The positive is that the new generation are fully on board with bitcoin, and likely will be very long term holders. The young will inherit the earth i guess, perhaps this is the start of poverty stricken boomers finally. 

At least people do value my opinion on bitcoin, back in 2013 no-one took me seriously. So bitcoin is slowly becoming more serious.
Still think we will reach £6,000 on reducing volume then its crash-time.

who knows. 

[guest_northshore]

1 hour ago, Frizzers said:

Some $100,000 bitcoin port for you on this cloudy morning  https://moneyweek.com/three-reasons-why-bitcoin-could-go-to-100000

100k may/may not be right, but once upon a time you focused on what decentralised change could achieve for broader economic/social opportunity rather than what the price could be. Perhaps I'm still missing the point on forecast and paying the bills vs qualification and preferences, but price-thinking is frustrating experiments in progress.

(By progress I mean univeral & liquid options to bypass or undermine authority, not fiat determined and measured personal accumulation)

[tomandlu]

Oops...

https://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether

Quote

The user, “devops199”, triggered the flaw apparently by accident. When they realised what they had done, they attempted to undo the damage by deleting the code which had transferred ownership of the funds. Rather than returning the money, however, that simply locked all the funds in those multisignature wallets permanently, with no way to access them.

“This means that currently no funds can be moved out of the multi-sig wallets,” Parity says in a security advisory.

Effectively, a user accidentally stole hundreds of wallets simultaneously, and then set them on fire in a panic while trying to give them back.

 

[goldbug9999]

1 hour ago, Saving For a Space Ship said:

Bitcoin mining uses more energy than Ecuador – but there’s a fix

https://www.newscientist.com/article/2151823-bitcoin-mining-uses-more-energy-than-ecuador-but-theres-a-fix/

 

I don't like POS. At least with POW acquiring new money is equally difficult for everyone, with POS the more money you already have the easier it gets, I just cant see any way that can end well in the long term. Also POW keeps the vested interest of large holders and miners separate.

[goldbug9999]

11 minutes ago, tomandlu said:

Oops...

https://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether

 

Interesting, only the other day I was watching one of richard hearts videos where he was saying how etherium is fundamentally flawed from a security perspective and I though at the time that he was laying it on a bit strong, oh how wrong I was.

[tomandlu]

Just now, goldbug9999 said:

Interesting, only the other day I was watching one of richard hearts videos where he was saying how etherium is fundamentally flawed from a security perspective and I though at the time that he was laying it on a bit strong, oh how wrong I was.

heh - if you can steal (and lose) $3,000,000,000 by accident, I'd say "fundamentally flawed" just about covers it... (in fairness, it looks like this was a flaw they introduced whilst trying to deal with another flaw, so... err. That doesn't really help, does it?)