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The Bubbly Bitcoin Thread -- Merged Threads

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21 hours ago, GTFO said:

Seems to be mostly the Chinese buying though. So that is just an arbitrary number in CNY. Thats why all the recent round numbers have not had their usual effect.

These so called round number boundaries seem to exist mostly in the mind of deluded technical chartists and pundits rather than in a the real markets (whether its bitcoin or the FTSE or anything else for that matter). 

Edited by goldbug9999

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11 minutes ago, goldbug9999 said:

These so called round number boundaries seem to exist mostly in the mind of deluded technical chartists and pundits rather than in a the real markets (whether its bitcoin or the FTSE or anything else for that matter). 

I don't know much about trading or chartism, but it makes sense to me that people choose nice round numbers to implement stop loss limits and the like.

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39 minutes ago, goldbug9999 said:

These so called round number boundaries seem to exist mostly in the mind of deluded technical chartists and pundits rather than in a the real markets (whether its bitcoin or the FTSE or anything else for that matter). 

If numbers didn't matter to people then why do so many things get priced 99p, 49p, £1.99, £1.95 etc I'll trust years of the corporate machine adjusting to push out profit over some random guy on a forum. Perhaps there's just a lot of cool things people can see themselves buying with $1000, or maybe it's 1 btc = 1 oz gold or something else. Anyway GTFO's point about the Chinese is probably valid.

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1 hour ago, goldbug9999 said:

These so called round number boundaries seem to exist mostly in the mind of deluded technical chartists and pundits rather than in a the real markets (whether its bitcoin or the FTSE or anything else for that matter). 

What was happening with Bitcoin, and I assume most other markets, was that certain behaviours become self reinforcing. So if many people put a sell order at a round number, say 800usd, then the price would drop. If you expected this you could place a sell order at 800 and a buy order at 790. If it follows the pattern then you make a little profit. This was often observable and quite interesting to watch (I don't trade) the price would bounce around for a while below a round number, then suddenly breakout. That was another self reinforcing behaviour, because if it rose past the round number it would often rise fast, thus many would place a buy order just above the round number creating a self-fulfilling prophecy.

My point was that that behaviour has not been present recently suggesting that the majority of trading was not in USD.

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1 hour ago, adamLancs said:

If numbers didn't matter to people then why do so many things get priced 99p, 49p, £1.99, £1.95 etc I'll trust years of the corporate machine adjusting to push out profit over some random guy on a forum.

But these are prices specifically set for marketing purposes so not the same thing at all, look at any stock or commodity price history and youl see (at least to my eyes) no particular "stickyness" to round number prices. Markets actively adjust to remove such biases by pricing them in e.g. lets say there is a general perception that something will be sold off at x00 price then some traders will preempt that by setting a limit of x00-1 yet others will try to preempt the preempters and limit at x00-2 etc etc until the boundary is diluted. 

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3 hours ago, adamLancs said:

If numbers didn't matter to people then why do so many things get priced 99p, 49p, £1.99, £1.95 etc

Most shops would do this now for no reason other than most other shops doing so. But some argue that it's to reduce theft by shop staff - they have to open the till to get change, and this records the transaction so they have to put the customer's money in there so the till receipts reconcile. Otherwise they could just pocket money themselves.

Some traders and investors do care about milestones, so it probably isn't sensible to ignore them completely. I remember hearing that the NASDAQ exhibited features expected by chartists much more than the NYSE and this was thought to be because a much larger amount of trading on the NASDAQ was by amateurs who believed prices could be predicted using charts.

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4 hours ago, Kiwi Toast said:

Most shops would do this now for no reason other than most other shops doing so. But some argue that it's to reduce theft by shop staff - they have to open the till to get change, and this records the transaction so they have to put the customer's money in there so the till receipts reconcile. Otherwise they could just pocket money themselves.

Some traders and investors do care about milestones, so it probably isn't sensible to ignore them completely. I remember hearing that the NASDAQ exhibited features expected by chartists much more than the NYSE and this was thought to be because a much larger amount of trading on the NASDAQ was by amateurs who believed prices could be predicted using charts.

They do it for the age old reason.  £1.99 is cheaper than £2.00....the brain feels £1 v £2...reality shows virtually no difference, but it is people we are dealing with, not machines.

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On 21/12/2016 at 6:53 PM, jiltedjen said:

Bitcoin is flying. my first bitcoin i bought at £15 now they are worth £664 most good!

all bitcoin needs is time and it will go into a mega bubble many many times higher than this £60,000 (10 years time) a coin for example.

21 million bitcoins only, and we all know that when real bubbles get going they can go crazy.

Bitcoin is a bit like and endless bubble machine. People are sick of gold being manipulated with paper contracts.
Bitcoin has an open ledger so you can see how much the new 'paper bitcoin notes' are actually backed.

I will buy when this bubble bursts providing it surpasses the last bubble peaks (very bullish longterm).
Then i will back the truck up as the third bubble will be HUGE! 

keep them till it becomes currency and your holding will make you one of the richest people on the planet.

21 million BTC between 9 billion folks.....

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It sounds like some people here think Bitcoin can replace fiat. I'm not an 'expert' but I see some obvious obstacles which makes me think this is extremely unlikely. Please feel free to point out flaws in my arguments, have not had time to research any of this in detail.

Fundamental view: Like it or not, but most people believe in government as their ultimate authority. Anti-establishment sentiment has a long way to go before it becomes anti-government. I'm sure anarchy appeals to some but it has proven quite difficult to run a successful society that way. I'm therefore not going to try to adress the relevance of BTC in a world without governments (although I would rather invest in guns and bullets).

Obstacle 1: Governments won't like BTC, for obvious reasons, but at least in theory they have to answer to the people. For BTC, the question then becomes whether the 99% will be supportive of a currency already held by 1%? And, based on current trends, a mostly Chinese 1% at that. I find it very hard to believe Joe Plumber decide to endorse a system where some spotty workshy teenager all of the sudden has become one of the richest people in the country. Leads into the next one...

Obstacle 2: Tax and Legal. Surprised this is not discussed. If a government wants to kill Bitcoin then it can try to ban it (with varying degrees of success). They can definitely tax it - and demand payment in fiat or some other currency of their choice. For instance, a BTC holding/wealth tax could require conversion to fiat for payment, also incurring CGT equivalent. This will likely be a popular way to raise tax revenue / redistribute your (supposedly) enormous BTC wealth. Assuming you don't want to go to prison or spend your life on the run with unusable electronic funds hidden in some dark corner of the web, your wealth could quickly be reduced (at almost no political or administrative cost to the state). But I  imagine the currency will collapse long before you run out of BTC. Don't make the mistake of thinking Bitcoin is anonymous, transactions are perfectly traceable and addresses on the already existing 'rich list' will eventuality be mapped to people.

Obstacle 3: If BTC protocol could be changed or transferred into supposedly anonymous alternatives (Monero, ZCash), then it is tempting to think governments could not come after you. But it would mean a closed system, with no means of wealth redistribution or ensuring sufficient currency remain in circulation for the economy to function. Back to obstacle 1.

Obstacle 4: Governments will - and have started to - create their own digital currencies, possibly improving on the BTC protocol. Not sure the BTC first mover advantage will hold up against the might of government...

At best, I see a future where BTC remains relevant as a dark market currency, but easily exchanged with government-backed fiat or crypto alternatives. It may be in governments interest to keep the currency alive in an apparent show of free market and democratic openness. But the market cap would certainly not be in the stratosphere and quite possibly significantly lower than today.

Just my thoughts people! At the end of it, I like the cryptocurrency ideas and think BTC has been a tremendously successful experiment.

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On 21/12/2016 at 3:40 PM, doomed said:

It is beyond doubt now that we are going to have a global decentralised form of value exchange operating outside of government's control. At the minute Bitcoin looks locked in.

There are 7B people on the planet with only 21M coins ever to be produced so the current price is many orders of magnitude below where it will end up.

Each coin is divisible by a lot.  https://en.bitcoin.it/wiki/Units

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On 22/12/2016 at 1:55 AM, Marshmellow said:

What about alternatives to bitcoin?

Maidsafe is the main alternative interest for me. Safe net is genuinely different to the rest and doesn't even use a blockchain. Instead, it is being designed to provide a distributed network, over which you can layer various data. As the network has an address space, creating unique data as a currency then becomes trivial (I.e. Safecoin).

Safe net is still under heavy development, but if they pull it off, it will be a beautiful thing!

https://maidsafe.net/

 

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I mined a couple of bitcoins in 2009, or something. I've still got my wallet.dat file and last time I checked blockchain.info they'd not been nicked. I would like to make sure they're securely stashed so I won't lose them, not sure how I go about that? Advice welcome :) .

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What I don't understand... why is BitCoin worth real money? There seems to be a huge number of clones ThisCoin,ThatCoin, SomeotherCoin and all work on same blockchain crypto mumbo jumbo don't they? So why are all the others worthless?

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34 minutes ago, Funn3r said:

What I don't understand... why is BitCoin worth real money? There seems to be a huge number of clones ThisCoin,ThatCoin, SomeotherCoin and all work on same blockchain crypto mumbo jumbo don't they? So why are all the others worthless?

Network effect. If two people are using the same protocol, it's worthless; if 2000 people are using the same protocol, it's an experiment; if 2,000,000 people are using the same protocol, then it starts to get interesting and maybe it's worth something.

Bitcoin's network effect is that it was the first mover and so it has a huge user-base, name-recognition and a lot of vested interests. Ethereum, at number two, also has a decent network effect because it has a big start-up ecosystem and a lot of developer interest. Other protocols that complement, rather than compete, with those two (like IPFS or Maidsafe) have a better chance of getting their own network effect going than displacing the big two, barring some huge technical innovation out of left field. 

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12 hours ago, Rave said:

I mined a couple of bitcoins in 2009, or something. I've still got my wallet.dat file and last time I checked blockchain.info they'd not been nicked. I would like to make sure they're securely stashed so I won't lose them, not sure how I go about that? Advice welcome :) .

For a couple of coins, try a Ledger Wallet...

https://www.ledgerwallet.com/

...really easy to use, and pretty secure.

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15 hours ago, doomed said:

What does that have to do with what I said?

My interpretation of one of the points (s)he was making was there are not enough coins to go around, just on the basis of the global population; and this potential demand creates scarcity to ensure price increase.  So my counter point is the current tokens are designed to be divided up more than the usual 1/100 we use today.

 

What we need is a crypto currency, rooted on global energy production.  Citizen income where tokens in energy production are handed out.  Those tokens have a lifetime and can not be hoarded significantly.  You have to use that energy or lose that energy or exchange tokens for other things (like manufactured stuff that used the energy).

 

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4 hours ago, Funn3r said:

What I don't understand... why is BitCoin worth real money? There seems to be a huge number of clones ThisCoin,ThatCoin, SomeotherCoin and all work on same blockchain crypto mumbo jumbo don't they? So why are all the others worthless?

You should do some reading around the subject. What I can figure is its a scam. It was set up by some guy satoshi or something who rigged it so he could mine a certain number of coins easily. Using his PC. If the output of mined coins goes up the time taken to mine the coins increases is the complexity. Every 4 years the mining reward drops by half. The number of coins was also limited to 21 mill. All to ensure the inventor got a load upfront.  There a mining calcuilator out there. Right now if can min at 100T hash( current asics can do 800M hash) you can make 1000 a month. Next year its 500. The inventor was lucky it was adopted and he'd rigged so he could mine all the easy coins...

Edited by GreenDevil

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16 minutes ago, GreenDevil said:

You should do some reading around the subject. What I can figure is its a scam. It was set up by some guy satoshi or something who rigged it so he could mine a certain number of coins easily. Using his PC. If the output of mined coins goes up the time taken to mine the coins increases is the complexity. Every 4 years the mining reward drops by half. The number of coins was also limited to 21 mill. All to ensure the inventor got a load upfront.  There a mining calcuilator out there. Right now if can min at 100T hash( current asics can do 800M hash) you can make 1000 a month. Next year its 500. The inventor was lucky it was adopted and he'd rigged so he could mine all the easy coins...

Hmmm. I think it is you that needs to do some more reading.

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