Bitcoin - World's 30th largest Currency

I just hope some of you guys got a piece of this bubble. I missed it totally. But I'm just happy somebody made this kind of return. Phenomenal!
 
Maybe I'll play with a couple grand - :)
 
Texas Proud said:
From what I have heard on TV, there is a limit to the number that can be mined in total... so the supply will be constrained to that number...
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The constraint is the "magic". That, and the way it's processor hard which allows more units, but only in a trickle. The constraint isn't a problem because right now I can send you a tiny amount ... a hundredth of a millionth BTC. In other words, I can send you ten thousand of the smallest units, and it will would be like a buck or two. Even in the future, should the price rise dramatically, the protocol could be updated to allow further subdivisions, should they be needed.
 
Running_Man said:
.....
The early adopters fell into two categories .. rich geeks buying for long term seeing the value of the bitcoin technology and relatively poor people with no other means to have their money saved because it becomes worthless and they did not have access to the world government banking system to have their money saved.

Reminds me of the sage Warren Buffet telling Katy Perry last May that Bitcoin was a fraud and not to put any money into it, up 20X since then about a 30 year BRKA run to earn that amount.
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I hope a bunch of relatively poor folks got in on it, as I know they will be able to spend the money if they can cash out before it (if) collapses.

I missed the tulip bulb $$$ due to birth date, and now I missed the bitcoin due to lack of enthusiasm :(
 
The way bitcoin transactions are recorded in the block chain, what kind of infrastructure it will take before bitcoin holders can use it to buy a soda at a vending machine, pay for parking at a booth, get a stick of chewing gum?
 
NW-Bound said:
The way bitcoin transactions are recorded in the block chain, what kind of infrastructure it will take before bitcoin holders can use it to buy a soda at a vending machine, pay for parking at a booth, get a stick of chewing gum?
Click to expand...


As someone pointed out on TV, you are looking at it wrong...

Do not think of it as replacing US dollars (or any other major currency).... but think of it as replacing gold... it is a storage of value just like gold... you do not go into a store expecting to buy a soda using gold... so why would you think that you can buy using bitcoin?


But, we do know that some places are starting to accept bitcoin as a replacement for money, so in a way it is a bit better than gold... however, I would bet that with the huge price swings that fewer people will be willing to accept it for payment... taking an FX risk (is it an FX risk?) is not what companies want to do....
 
Guess I'm a see it touch it person. Gold has been desired for thousands of years. People melt it, lose it, hide it, bury it - and other people are overjoyed to refind it no matter how many decades or centuries have passed. Not convinced that will be the case with block chain billions.
 
NW-Bound said:
The way bitcoin transactions are recorded in the block chain, what kind of infrastructure it will take before bitcoin holders can use it to buy a soda at a vending machine, pay for parking at a booth, get a stick of chewing gum?
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I didn't know the answer to this (probably still don't, hehe!), but I did a bit of reading just now.

The bottom line appears to be that it is certainly something that needs to be addressed, but isn't at a critical point at the moment, as the size of the current block chain will fit on a cheap drive, and "anyone" can be a "full node", if they want. As the block chain grows, maybe the price of moving and storing those bits gets cheaper too so that "anyone" can still be a "full node". I don't quite buy that argument, though.

There is differing opinions on whether the block-chain can be safely pruned. Even if this were true, the biggest players probably wouldn't buy-in, so I wouldn't hold out hope on this front.

There are things called "lightweight nodes", which exist now. They help, but don't solve the problem; there always needs to be the ability to go back to the very beginning. In other words, there will always be a need to have "full node", and if only the richest entities have one, then it's no longer decentralized and Bitcoin becomes something else.

Probably the most likely scenario is akin to what happened with the IP space. Remember when everyone was saying "the last IP address" will be used up and we'd crash and burn? Then we realized that using NAT, not every light bulb needed it's own publicly addressable IP address, and we're fine again. There's a concept where a separate network can combine millions of small transactions into a single bitcoin transaction. That separate network isn't bitcoin, but would be a separate intermediary. So imagine we transfer a bit from our bitcoin wallets into this intermediary, then pay out of the intermediary. All my transactions to Joe's Pizza, along with your transactions to Joe's Pizza would be sent by the intermediary into Joe's bitcoin wallet once a month.
 
Texas Proud said:
As someone pointed out on TV, you are looking at it wrong...

Do not think of it as replacing US dollars (or any other major currency).... but think of it as replacing gold... it is a storage of value just like gold... you do not go into a store expecting to buy a soda using gold... so why would you think that you can buy using bitcoin?


But, we do know that some places are starting to accept bitcoin as a replacement for money, so in a way it is a bit better than gold... however, I would bet that with the huge price swings that fewer people will be willing to accept it for payment... taking an FX risk (is it an FX risk?) is not what companies want to do....
Click to expand...

As bitcoins cannot be readily exchanged for merchandise and services, they are not a real currency, but have to be exchanged for a real one before they can be spent.

I guess I can understand a bit about the allure of something being rare having some values (the bit coins are designed to be more and more difficult to mine). However, for storing values, there are other assets in the real world I'd rather own. A rare painting or archaeology artifact can get really expensive, yet they are not commanding the price that these "bits" do now. I'll pass on bitcoins.

The way I see it now, a bit coin represents the value of all the electricity, the kWh, expended to mine them. Well, I have burned a lot of electricity myself writing software, creating bits that are unique. However, they are now worthless. :) Bitcoins are only worth what a group of people think they are worth, and their intrinsic value if any is ethereal.
 
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The reason Bitcoin has value is the same as why any fiat currency has value... because enough people believe it has value. If there is friction in using the value of a currency (aka spending it), that reduces the usefulness and so some of it's value. Seems to me, doesn't knock it out of being a real currency. But we're probably working with different definitions of the word.

The idea that the value is tied to the cost to create a coin must not be correct because there will be a time when there are no more coins to be mine (this is by design). At that point, the cost to mine the next coin is infinite, and I don't expect the value of a coin to change much on that day.
 
Bitcoin is now trading on a futures contract today. I notice that Jamie Dimon is now no longer calling bitcoin a fraud but a security in need of government regulation. Interesting change in interpretation, after originally stating just two months ago he would fire anyone in his company that got involved with bitcoin JP morgan has now stated that it forsees bitcoin as the next gold
Bitcoin could be the new gold, says JP Morgan*

It was interesting to read the take on bitcoin by Steve Wozniak who bought some at $700, saw the price drop to $350 merely as a means to see how bitcoin worked and how the transactions worked. In the end he likes it and feels it is superior to Central Bankers and is a supporter after looking at the technology and following the actual transactions he conducted on the bitcoin block chain postings.

Bitcoin trading up with the new futures, will be interesting to see if prices stabilize with the large traders getting involved or if volatility continues in this explosive way.
 
The value of bitcoin futures?

As a former( Oil and S&P) futures trader (30 years retired), I still have a smidgen of knowledge on futures markets and I have a basic understanding of "block chain".

What i do not understand is how you can have a functioning futures market that will not let traders short or more importantly miners and holders hedge their bitcoin or create synthetic hedges for other cryptos? I believe the value of bitcoin has already been established, until you get a fully functioning derivatives market established pricing will remain volatile and prone to the upside.

I have not seen anything on when this situation will change and I only hope it will be different with the CME and Nasdaq.
 
Threads merged so there's only one discussion on Bitcoin.
 
Running_Man said:
Bitcoin trading up with the new futures, will be interesting to see if prices stabilize with the large traders getting involved or if volatility continues in this explosive way.
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Large traders and institutions can not get in as block trades are limited to 50 contracts ( a contract equals 1 bitcoin) I believe. Also you can not hedge your existing bitcoin or short bitcoin. Jim Cramer who predicted bitcoin would get creamed today has ether on his face.
 
NYEXPAT said:
Large traders and institutions can not get in as block trades are limited to 50 contracts ( a contract equals 1 bitcoin) I believe. Also you can not hedge your existing bitcoin or short bitcoin. Jim Cramer who predicted bitcoin would get creamed today has ether on his face.
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You information is not correct as posted on CNBC you can short a bitcoin, it will cost you 30% of a bitcoin to short a futures contract but you can do it.

https://www.cnbc.com/2017/12/08/with-bitcoin-futures-set-to-trade-heres-how-its-going-to-work.html And as they state on CNBC it is expected to be institutional traders that will be working this market. As this is just starting at this point volume will be small but it should grow with time.

Here is Warren in 2014 comparing Bitcoin as a better way to cash a check, lol didn't put too much effort into finding out what Bitcoin actually was.....

https://www.cnbc.com/2014/03/14/buffett-blasts-bitcoin-as-mirage-stay-away.html
 
I thought it was bananas today to learn that there's no regulation of Bitcoin pricing with the futures market now open. Something to the effect of you can buy Bitcoin on one marketplace and immediately sell it on another for a totally different (higher) price and turn a profit with next to zero risk. All you need is access to two market places, interlinked, and an internet connection. Have to think that's going to change a real quick.
 
nash031 said:
I thought it was bananas today to learn that there's no regulation of Bitcoin pricing with the futures market now open. Something to the effect of you can buy Bitcoin on one marketplace and immediately sell it on another for a totally different (higher) price and turn a profit with next to zero risk. All you need is access to two market places, interlinked, and an internet connection. Have to think that's going to change a real quick.
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Don't forget to link your bank account too!
 
I can't envision Bitcoin as a widely used currency, because its supply is fixed, transactions are slow, exchanges have been readily hacked, and (at least so far) Bitcoin is too volatile to rely on.

I can't envision it as a gold-like collectible either, because, unlike gold, it has absolutely no intrinsic value (gold has some industrial uses), and especially because Bitcoin doesn't have the primordial hypnotic effect on the human mind that gold has demonstrated over spans of time that make you and me look like specs of cosmic dust.

So methinks Bitcoin most resembles a prized tulip bulb.

Disclaimer: events of the last 30 yrs have shown I'm really lousy at predicting the future.
 
Crypto currency is not in a bubble, hardly anyone knows about it. I clearly remember the dot com run up, everyone was trying to get rich in the market and it was a real frenzy. You talk to 10 people on the street and you’d be lucky to get a couple that even heard of bitcoin, people that have geard of it are leery, I was one just until 3 days ago, now I am on board, not afraid and pressing bets

I heard a guy say “when my gardener accepts bitcoin then I’ll get in” by then he is buying into the top of the bubble, right now it is still in its infancy stage with lots of legs to stretch
 
97guns said:
...I heard a guy say “when my gardener accepts bitcoin then I’ll get in” by then he is buying into the top of the bubble, right now it is still in its infancy stage with lots of legs to stretch
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That was me. :) And by that, I meant that bitcoin will not be a currency until the guy I hire off the street corner accepts it as payment for his service. Is that not the definition for currency?

From Merriam-Webster:

Currency: something (such as coins, treasury notes, and banknotes) that is in circulation as a medium of exchange​


I did not think of the case where he could be speculating in it too. :facepalm:

Anyway, there's something everyday about bitcoins all over all the Web. In fact, some financial sites have multiple articles about bitcoin on their home page.
 
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Running_Man said:
You information is not correct as posted on CNBC you can short a bitcoin, it will cost you 30% of a bitcoin to short a futures contract but you can do it.


Maybe cnbc should check it's sources? The only brokerage that is approved
to clear bitcoin contracts on the CBOE is Interactive Brokers. According to their website:

Will there be any restrictions on trading?

Due to the extreme volatility of cryptocurrencies, clients will only be able to assume a short position if part of a spread that meets the following conditions:
The spread must be one-to-one
The short leg must have the earlier expiry so that once it expires the surviving leg will be long
In addition, trading will not be offered in retirement accounts or for residents of Japan.



What is the Margin Requirement?

Our margin requirement on long positions will be at least 50%. This compares to the exchange initial requirement for the CFE and CME of 44% and 35%. Note that while margin requirements on futures products are commonly quoted in terms of dollars, with the fixed dollar rate subject to periodic adjustments to maintain the desired percentage coverage, IBKR will be adjusting the dollar rate daily to reflect changes in the underlying price and to maintain the 50% minimum. Note that the 50% margin rate will be based upon the lead future last settlement price and will be updated once daily, at the during the overnight system reset.

Also, my comment regarding block trades was incorrect. The maximum position one can hold is 5,000 contracts.
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