Bitcoin is tumbling – Off almost 40% from its high
businessinsider.com
businessinsider.com
The author fails at basic math: this is a decrease of (2999.97 - 2161) / 2999.97 = 28%, not 40%.
https://medium.com/@jimmysong/examining-bitmains-press-relea...
This forking of Bitcoin is a required trial that the chain must go through to prove how resilient it is to this type of attack. It is unknown which chain will win in the event of a fork, maybe Ethereum will win, probably not PotCoin.
The miners fork winning will be a bad thing if you value the decentralized aspect of the currency and want bitcoin to succeed. Not everyone does.
https://medium.com/@nopara73/explain-uasf-like-im-five-ae879...
It is not a simple topic with two sides. It has very technical details as well as economic incentives for both sides which leads to a lot of game theory.
It 'tumbles' and then 'skyrockets' quite frequently. Incredibly volatile.
I bought in at $16 for ETH right after the EEA announcement, pulled out my principle at $54, and now I'm just watching this crazy roller coaster ride. It's fun.
But I sure as hell am keeping my retirement in my 401k. I cannot imagine the stress on people who have a substantial investment in BTC or ETH, but they probably have a totally different mindset than I do when it comes to cryptocurrency.
The network relies on having a large ecosystem of miners to prevent anyone from mounting coordination attacks. Those miners are paid either by new bitcoins (out of the finite supply), or by tx fees.
It really can't be, though.
First the selling point was that "the USD can never be a reliable store of value because it's evil fiat currency controlled by a central bank, use Bitcoin instead!". This has quietly faded as the volatility of Bitcoin continues to exceed that of the US dollar by orders of magnitude.
Then it was about "decentralization", another argument that went away when people realized that Chinese mining pools control the whole thing.
Then it was all about the low transaction fees and freeing you from the tyranny of payment processors, until the fees went higher than PayPal, and now /r/Bitcoin will call you stupid for complaining about fees.
I don't even know what the current arguments in Bitcoin's favor are anymore, but I'm sure they'll be different next year.
And of course, in all of these cases, there's never any acknowledgement that the shift happened - "We're at war with Eurasia; we've always been at war with Eurasia"
It would be nice if those who hold/held this idea would come out and critically evaluate this position in public forums like this one.
Different people are attracted to different aspects of crypto currency.
You realize this is exactly what I'm talking about, right?
There's no legal, useful application of it. Just none. Every time I ask, people come and say but... but... international transfers! and I point it out that for that transfer the sender needs to buy bitcoins, transfer and the receiver needs to sell them because there is no legal, useful application of it :) And this is untenable, you can't have the receiver go through hoops to receive money. And when I compare this to how Transferwise combines a fantastic user experience with favorable rates (which I actually compared to an FX company not to a bank) then I am a Transferwise shill despite it's usually not me who brings up the transfer argument so I now I did just so we don't need to have that conversation again and again.
When you exchange at at bank you are done now. With Transferwise you might be done now, or maybe tomorrow, or maybe they'll cancel the deal because the market moved.
It's a fine product, but the difference in risk profile needs to be taken into account when considering the price.
I have never heard anyone outside of the deepest idiot-evangelists call it a "stable store". I've heard it call a good investment, but that is a wholly different beast.
The only goalpost moving going on here is you hoisting the intention of Bitcoin as a "store of value" rather than the stated goals (decentralized currency, universal ledger) and practical uses (speculation, Chinese currency escape).
A few friends and I also wrote an application to help us invest. We just launched a beta:
If anyone's interested, feel free to reach out to me directly: contact-at-projectpiglet.com. We just launched it so it's pretty rough, so we're in a beta testing phase. Thus, we are providing the service for free, provided you fill out a feedback form once a month.
The fork issue makes it clear that the future of Bitcoin is controlled by about five mining companies in China. Could be worse; at one point two companies had more than half the hash rate.
Nope, it's a convention in journalism.
(2999 - 2161) / 2161 = 38.8%
It would be hard to believe that nobody has tried writing arbitrage bots. I would probably be overreaching to say that this effect is due to a large number of arbitrage bots (and likely also non-robots), but it seems like there are clear opportunities for arbitrage and likely that there are skilled individuals taking advantage of these chances on the regular.
So, while you are correct, the causality flows in both directions. It's really quite difficult to value any currency. Doubly so for a crypto currency.
This is a direct result of physical limits of production. As people hoard worthless tokens, their price increases which causes people to hoard them even more instead of investing in real businesses with real production capacity. This causes production capacity to eventually drop which means there is less things to buy with all the tokens. If people start buying real things with their stock of tokens, these tokens will be chasing fewer goods which means prices will rise (tokens will lose value). This might happen suddenly when people notice that token value is droping and that there are tons of tokens waiting on the sideline ready to make it drop even further. People will try to get rid of them all at the same time before they're worthless which will cause their worthlessness. This drop will bring them closer to their natural intrinsic value of zero. The cycle can then start again, such is aggregate economics. The 1920s and 1930s suffered from this type of cycle but with gold instead of cryptocoins. It's important for the world's sake to not let deflationary currencies become too popular.
When savings or financial promises are insufficiently tied to future production or to accumulation of real goods, there will be disappointment when people try to exchange them for real stuff. That is true for crypto currencies as well as government currencies (that is why the system is designed to make banks invest people's money in real businesses and minimise the amount of money that is stockpiled idly).
Certainly this does not work - all economic activity would be spent to make the money bills, and no activity was done to produce food or build the power plants that are busy producing energy to calculate the next "coin".
So the price of Bitcoin may be related to mining costs in the short term, as miners quit when it gets too expensive. Ultimately the price would have to be much lower to be practical, or higher if it turns out Bitcoin becomes highly useful for something. Or Bitcoin takes over the world and replaces all other currencies - then the 21 million Bitcoins would equal the entire human wealth - if you believe this then you should buy right now.
This is wrong. Supply does not decrease when mining gets too expensive and it does not increase when mining gets cheaper. This is the very special property of Bitcoin. See my other post.
> "then the 21 million Bitcoins would equal the entire human wealth"
Not necessarily. There are lost coins. And likely not all remaining coins will participate on the market. More precisely bitcoins supply offered on the market times velocity would be equal to the entire wealth offered on the market.
bitcoin is a digital commodity with a very unique property: the supply of newly minted coins is pre-determined and does not rely on market forces (because hash-rate retargets to achieve the plan regardless).
In general the price of any commodity is determined by supply and demand. Aggregated supply is S0+S1, where S0 are newly mined coins (known) and S1 is market supply (unknown). Aggregated demand is generated by the market (unknown).
So in the price equation you have two unknowns which are unlikely to be stable in the future. The cost of mining should not affect the price in the late game.
Here is what Satoshi had to say about this: http://satoshi.nakamotoinstitute.org/posts/bitcointalk/65
Regardless, and apologies for the dumb BTC meme, I am HODLING!
Maybe what you're thinking of is the fact that it's deflationary unlike fiat: there's a finite number of coins that will ever be created. In other words, if you own exactly one dollar, over time, the percentage of total dollars you own will decrease, whereas with bitcoin, one bitcoin represents a constant fraction of the total bitcoin that will be created. This says nothing about how many gallons of milk one dollar or one bitcoin will buy you though.
Value is another question altogether.
It's decentralized nature
That it can be anonymous, and by default is more "anonymous" than other online payments. For example, you would only know my wallet address, while something like Paypal/Venmo would give you my full name and email and maybe even physical address. You could probably do some digging with that wallet address and find my real info, but it's certainly tougher than having it emailed to you.
That payments work like a "push" rather than "pull". A store/vendor gives you an address and you send them BTC, they then wait for the funds to land in their wallet. But with a credit card, I give the store my credentials and trust them to only take as much as promised and not charge me multiple times.
Also, it's definitely used more for investing/hoarding at the moment than it is as an actual currency, though more and more companies and payment processors are beginning to accept bitcoin as payment.