Bitcoin at an all-time high
coinbase.com
coinbase.com
The volume of bitcoins bought with bolivars (Venezuela's currency) is inherently limited: you would only want to sell bitcoins in exchange for bolivars if you could spend the bolivars immediately. That basically limits the sellers to people already having bitcoin and living in Bolivia.
You can't say things like this without supporting them and expect to be taken seriously. Blockchains look to me like a brilliant approach to a real problem, but the approach is still not good enough to actually solve that problem. Also, most Bitcoin enthusiasts seem to misidentify the problem that it approaches.
There are major issues, volatility not being the least. And I'll be the first to admit I doubt many of its proponents more ambitious claims.
However, on a basic level, its capability to reliably store and transfer value has only grown and become stronger in the past 8 years.
If it's a bubble, it's certainly an incredibly long running, transparent bubble. There isn't hidden, crucial information, compared to assets like Madoff's fund and housing that were recent long-running "bubbles" (of a certain sort). In those cases, the hidden information becoming public would have ended those bubbles sooner.
> However, on a basic level, its capability to reliably store and transfer value has only grown and become stronger in the past 8 years.
It's been pretty terrible at storing value over the past 8 years, because of the volatility (though it's been pretty good as a speculative asset). Its capacity to transfer value has grown, but that's just because the ecosystem surrounding bitcoin has grown -- e.g. something like M-Pesa grew much more over the same time frame, just because more people accept it. This has nothing to do with the technology.
I agree it is difficult to determine how well Bitcoin has "stored value" over the past 8 years. But I don't think speculation should be casually dismissed, as continued speculation rarely happens for many years without reasonable fundamentals supporting the space. Short term bubbles can possibly be more noise/mob-mentality than meaningful signal. However, many bubbles over time, coupled with a strong underlying trend, is definitely a powerful signal that something interesting is happening. Additionally, the volatility is decreasing year over year, which is another point in favor of bitcoin as a value storage mechanism.
I think one big problem in discussing bitcoin is people get hung up on different things that are supposedly the "purpose" of bitcoin, and then argue in circles about that. There are definitely some questionable ideologies in the bitcoin space.
As no single group is in charge of bitcoin, I'd personally would rather not assume any specific predetermined purpose, and just look at how the system is functioning and what the fundamental characteristics and dynamics seem to be.
With Bitcoin however, assuming I believe that unregulated digital currencies are valuable, I'm still left with the question 'why is this one particularly valuable?'
The answers typically given include market adoption, support from companies, current value, and name recognition. These things have value, but none of them are intrinsic to bitcoin, and are all subject to rapid change.
For that reason, I don't consider bitcoin to be in any way 'stable,' especially since most of its value is driven by speculative investment rather than actual utility.
The gold bubble should pop
This usually comes after an exchange experiences a loss of service. I would be curious to see what drama unfolds this time, since the exchanges are more numerous and seemingly more robust at this point in time.
What is this supposed to mean? It sounds a bit like carving IOUs in stone but that is probably not what you were hinting at.
I would consider Rai Stones as a good analagy, given they also stored suffering in a trustworthy way: https://en.wikipedia.org/wiki/Rai_stones.
When I say "suffering" I'm referring to the amount of causality associated with a given amount of value stored, not the human emotion attached to it.
Mind you, there are a few downsides too - potential to create transactional race conditions if you control enough of the system; difficulty changing into other currencies; architectural decisions yet to be ironed out about how to scale to a mass audience.
Lack of ability to reverse a transaction could also be seen as a negative in certain lights -- no "visa, cancel this charge, they scammed me".
No. It has enabled the rise of ransomware.
I was pointing out why 'can only be a very good thing' might be wrong. If bitcoin's advantages are enough to offset its drawbacks (of which enabling ransomware is one), that is a good thing. That is not a given, though.
For previous spikes price leads the search popularity on the upswing but search popularity leads price on the downslope.
Does anyone know of a site that visualizes information that could add information to that hypothesis? I'm thinking something like trading volumes per geographical area.
I'm also curious what role bitcoin could play in mitigating currency risk. Are people using it to buy foreign currencies and keep them in secret bank accounts? Are they attempting to use Bitcoin as a store of value?
https://coinmarketcap.com/currencies/bitcoin/#markets
Sort by volume. It's not as accurate as you requested but it's close enough.
Also as a side note it's typically very difficult to make bank accounts in other countries if you are not a resident.
Bitcoin is not ideal for remittance in practice.
Speed: If you use your own wallet, waiting for the blockchain to propagate might actually be slower than currency through a remittance company. I don't know what the clearing process is for Bitcoin wallets SaaS, but Bitcoin is equal to if not slower than normal remittance tech startups. After all, speed is one of the factors these remittance startups are tackling to disrupt Western Union.
Rate: I can't speak universally, but doing remittance in or out of Vietnam with Bitcoin was too high last year. ~5% if we go USD -> BTC -> VND. ~10% in the reverse. These rates are indicative of the local currency being worthless. I also remember transferring Bitcoin internally in the U.S. last year through SaaS would eat out half a percentage.
Foreign workers who remit to their loved ones are price sensitive. That leaves Bitcoin as remittance viable to people who aren't price sensitive, at the asset of more anonymity. IMO, dirty money is not price sensitive. 10% fee to launder money is cheap. If you're already going down this road though, Vietnam mom and pop shops offer practically free remittance. They are unlikely to be regulated. And again, local Vietnam currency is useless. It's not stable or a good store of value. The government sets artificial exchange rates. People in Vietnam desperately want to exchange their money for USD, and are willing to pay a premium, which is still better than the governments rate, and so the remittance shop is able to offer people sending USD to Vietnam a free service.
A Bitcoin provider will have to exchange to and from the local currency if it's to be used for remittance. In the case of Vietnam, the exchange must exchange Bitcoin for the more worthless local currency, and hence charge the higher exchange rate. The provider in Vietnam has an underlying market exchange, actually, where there is no liquidity because people with Bitcoin expect a huge premium to exchange it for local currency.
I think Vietnam's situation can be generalized to other remittance countries where the local currency is undesired, and the government has locked down people exchanging it for USD.
https://www.washingtonpost.com/news/wonk/wp/2017/01/03/why-b...
(Not a very strong correlation, in my opinion. Note the short arbitrary time period chosen.)
There are a number of exchanges in China with zero cost trades, which distorts volume figures.
Most of the volumes do come from China.
Edit: I was incorrect. See below, it seems this doesn't apply for this website as they aren't using volume data from exchanges.
[1] https://en.wikipedia.org/wiki/History_of_bitcoin#Prices_and_...
At that time, you could not get any money, USD or BTC, out of the exchange. Those were not USD, those were GOXUSD because they could not be transacted with anywhere but the exchange nor transferred.
Same for the BTC there, they were GBTC, not real BTC.
http://www.eltiempo.com/tecnosfera/novedades-tecnologia/bitc...
Can someone with 4 Titan-X cards even mine anything worthwhile? Given municipal electricity is very cheap, etc?
No.
It seems you really need a huge hardware investment to mine anything and you must mine long term to even pay for the investment you made.
What are current miners like, hardware wise?
The current reward for a block is 25 bitcoins, plus whatever fees are included in the transactions which are relatively small at the moment, as I understand it. A block is mined roughly once every 10 minutes, so that's 3600 bitcoins/day mined. At $1100, that's about $4 million/day.
You could expect to see, on average, an amount relative to the proportion of total hashing power you bring. That would be $4 million * 8e8 / 2.5e18 = 0.13 cents/day, approximately. (Note, not $0.13, but $0.0013.)
So, yeah, not really worthwhile.
If I may offer a slight correction: the reward per block halved to 12.5 bitcoin in July 2016 [0]. Doesn't materially change the results [1], but probably worth mentioning for posterity.
[0] http://www.bbc.com/news/technology-36763524
[1] 1800 bitcoin / day mined @ $1100/BTC is $2MM/day, so one would gross $2MM * 8e8 / 2.5e18 = $0.00064/day. And at today's ~$900/BTC, $0.00052/day.