Bitcoin - World's 30th largest Currency

[gerntz]

Interesting, if true:

"Bitcoin mining 'is using so much energy that it is causing electricity blackouts' amid fears it will consume more power than the world by 2020"

Bitcoin mining 'is causing electricity blackouts' | Daily Mail Online

 

[Totoro]

Crypto currency is not in a bubble, hardly anyone knows about it.

DM knows about bitcoin, a 65 year old retired pharmacist spending most of her time figuring out what to make for lunch that day. That's pretty much the definition of "anyone" in my book.

 

[dixonge]

Some perspective -- these people invested in Bitcoin. These aren't Joe Schmoe average investors riding a bubble.

Winklevoss Twins - own over 91,000 bitcoins - current value over $1Billion

Venture capitalists Barry Silber, Tim Draper

Satoshi Nakamoto - mysterious originator of Bitcoin. Current value $15Billion or so

Many other venture capital firms investing in cryptocurrency hedge funds here:

Bitcoin: Sequoia, Andreessen Back Cryptocurrency Hedge Fund | Fortune

 

[flintnational]

Seems folks are buying "possible" currency with "real" currency they don't have. Sounds right to me.

Some Bitcoin Investors are Mortgaging their Homes to Buy More Digital Currency

"As Bitcoin continues to soar in valuation, new investors are joining the craze, even if they don’t initially have the money to pay for the cryptocurrency."

If I mortgage my house, how many tulip bulbs can I buy?

 

[NW-Bound]

If I mortgage my house, how many tulip bulbs can I buy?

Right now, it's one bulb. But hurry! Wait till next week, you will have to pool with your neighbor for that single bulb.

It's crazy out there because of FOMO.

 

[Texas Proud]

Some perspective -- these people invested in Bitcoin. These aren't Joe Schmoe average investors riding a bubble.

Winklevoss Twins - own over 91,000 bitcoins - current value over $1Billion

Venture capitalists Barry Silber, Tim Draper

Satoshi Nakamoto - mysterious originator of Bitcoin. Current value $15Billion or so

Many other venture capital firms investing in cryptocurrency hedge funds here:

Bitcoin: Sequoia, Andreessen Back Cryptocurrency Hedge Fund | Fortune

From what I have read they think all of Satoshi Nakamoto's bitcoins have been lost...


Still, even smart investors bought tulips back in the day....

And, as my BIL pointed out when I was young... $100K is pocket change to someone who has $100 mill....

 

[flintnational]

Right now, it's one bulb. But hurry! Wait till next week, you will have to pool with your neighbor for that single bulb.

It's crazy out there because of FOMO.

I can also use my credit cards and margin loans on my stock. I think I can swing 2 bulbs. Even if I can only buy one, how can I lose? This thing is going to be big!

 

[Totoro]

Some perspective -- these people invested in Bitcoin. These aren't Joe Schmoe average investors riding a bubble.

Winklevoss Twins - own over 91,000 bitcoins - current value over $1Billion

Venture capitalists Barry Silber, Tim Draper

Satoshi Nakamoto - mysterious originator of Bitcoin. Current value $15Billion or so

Many other venture capital firms investing in cryptocurrency hedge funds here:

Bitcoin: Sequoia, Andreessen Back Cryptocurrency Hedge Fund | Fortune

• Winklevoss Twins are Richie Rich Schmoe. As in trust fund babies who lucked out by suing Mark Zuckerberg.
• Satoshi Nakamoto, well he's the founder, and indeed rumored to have thrown away his entire stash
• The mentioned hedge fund invests in several blockchain related protocols ('coins'), because they think the risk is too high for one coin and bitcoin is flawed. http://metastablecapital.com/
• Barry Silbert is a conman: https://medium.com/@charlescmackay/...-of-bitcoins-malfeasance-culture-f83d15ad07d1

I'll give you Tim Draper, however even he spreads his risks around. High risk/high reward model of investing.

 

[dixonge]

• Winklevoss Twins are Richie Rich Schmoe. As in trust fund babies who lucked out by suing Mark Zuckerberg.
• Satoshi Nakamoto, well he's the founder, and indeed rumored to have thrown away his entire stash
• The mentioned hedge fund invests in several blockchain related protocols ('coins'), because they think the risk is too high for one coin and bitcoin is flawed. MetaStable – Long-term value investing crypto asset hedge fund
• Barry Silbert is a conman: https://medium.com/@charlescmackay/...-of-bitcoins-malfeasance-culture-f83d15ad07d1

re: Winklevii - I have found nothing on the internet regarding a trust fund. Their father is a professor. Perhaps their mother was rich? Any sources you have on this would be appreciated.

 

[Big_Hitter]

re: Winklevii - I have found nothing on the internet regarding a trust fund. Their father is a professor. Perhaps their mother was rich? Any sources you have on this would be appreciated.

their father founded a software company - google winklevoss software

 

[dixonge]

their father founded a software company - google winklevoss software

So he's an entrepreneur? Also, he founded the company the year his sons entered Harvard. Doesn't exactly seem like they started off with a trust fund...

 

[Running_Man]

This is what passes for "analysis" at CNBC for investigative journalism, right up their with the level of analysis Warren Buffet gave it: On the front proudly of their website:

I owned bitcoin for a weekend and here's what I learned
I bought bitcoin and held it for a weekend.
It fluctuated a lot, for reasons I couldn't always understand.
I sold my bitcoin and probably won't buy it ever again.

 

[Jerry1]

A guy I work with used to mine bitcoins. The whole time he was doing it, we would discuss it. He did it because he's a computer nerd and it was a fun project for him. It got to the point where the equipment in his house needed a separate 220 volt line. It was throwing off so much heat that the kitchen floor was comfortably warm in the winter (it was in the basement). In the summer, his DW (DW also works with us so I hear the stories from both sides) made him shut it off because the AC couldn't cool the house. He started out small and used bitcoins to buy the equipment as his operation grew. A year or so ago, he shut down because it wasn't worth the electricity to mine it any longer. It was probably in the $100's of dollars at the time.

Fast forward to today. Obviously it came up in our discussion. He and DW were selling bitcoins. It was a struggle, but he got the particulars worked out. DW was smiling and wondering if she could retire. She also mentioned because of the bitcoins they probably wouldn't get financial aid for their son's schooling because of the bitcoins. I didn't have the lack of manners to ask, but clearly, there was a large amount of money in play. Then, I'm talking to the guy and asking him about mining and he was describing how much harder it would be today and about the electricity problem still being a problem because he couldn't mine enough bitcoin to make it worth it even at today's prices. Then he said it. Something like "today I could only get a small fraction of a coin per day if I started back up - when I was mining, I was getting a coin per day" So, I have no way of knowing for sure, but if he was getting one coin per day I'm pretty sure he's a multi millionaire. Heck, 300 coins times $15,000 is $4.5M. He was mining for several years and while I don't think he was getting one coin per day the entire time, I'm sure he's got more than 300.

Today he said one of his friends said he should consult a lawyer and a tax attorney, cash out and retire. I somewhat agreed, but told him he should sell enough to be able to retire and keep the rest (anywhere from 1/3 to 1/2), clear his head, think about life and family, then do something to make him and them happy. He and DW are a couple of the most well grounded people I know. I'm happy for them. For them, bitcoin is real. The cash is hitting their account in $10K increments and once in that account, it's good old US dollars - to be spent/saved as they see fit.

 

[sengsational]

I learned about Bitcoin January of 2009, here: https://www.grc.com/sn/sn-287.pdf (a security podcast). Steve Gibson reported a few weeks later that he got 50 Bitcoin, and he wasn't even trying...just a lame desktop machine.

Many years later, the summer of 2011, it looks like mid-August, I bought $5 worth, put the wallet on a flash drive, then promptly lost the thumb drive, LOL! Well, at least I haven't found it yet. Haven't looked that hard, though. I don't know what fraction of a coin $5 bought. Unless I find the thumb drive, I don't want to know

 

[redduck]

I guess it would be prudent to wait for a dip before buying.

 

[Running_Man]

I learned about Bitcoin January of 2009, here: https://www.grc.com/sn/sn-287.pdf (a security podcast). Steve Gibson reported a few weeks later that he got 50 Bitcoin, and he wasn't even trying...just a lame desktop machine.

Many years later, the summer of 2011, it looks like mid-August, I bought $5 worth, put the wallet on a flash drive, then promptly lost the thumb drive, LOL! Well, at least I haven't found it yet. Haven't looked that hard, though. I don't know what fraction of a coin $5 bought. Unless I find the thumb drive, I don't want to know

In august of 2011 that was probably one bitcoin

 

[flintnational]

Bitcoin is now the biggest bubble in history

The article includes nice charts depicting historical bubbles and compares them to Bitcoin.

"And with that we can say that crypto pioneer Mike Novogratz was right once again when he said that "This is going to be the biggest bubble of our lifetimes." Which, of course, does not stop him from investing hundreds of millions in the space: when conceding that cryptos are the biggest bubble ever, "Novo" also said he expects bitcoin to hit $40,000 and ethereum to triple to $1,500."

It's Official: Bitcoin Surpasses "Tulip Mania", Is Now The Biggest Bubble In World History

 

[dixonge]

I learned about Bitcoin January of 2009, here: https://www.grc.com/sn/sn-287.pdf (a security podcast). Steve Gibson reported a few weeks later that he got 50 Bitcoin, and he wasn't even trying...just a lame desktop machine.

Many years later, the summer of 2011, it looks like mid-August, I bought $5 worth, put the wallet on a flash drive, then promptly lost the thumb drive, LOL! Well, at least I haven't found it yet. Haven't looked that hard, though. I don't know what fraction of a coin $5 bought. Unless I find the thumb drive, I don't want to know

I had .12 bitcoin at one point, then exchanged it for Dogecoin. Then I lost track of the wallet key. I have pieced together that I had around 150 Doge, which is worth less than 50 cents now. If I had kept my bitcoin it would be worth almost $2000. *doh!*

 

[NYEXPAT]

Fast forward to today. Obviously it came up in our discussion. He and DW
Today he said one of his friends said he should consult a lawyer and a tax attorney, cash out and retire. I somewhat agreed, but told him he should sell enough to be able to retire and keep the rest (anywhere from 1/3 to 1/2), clear his head, think about life and family, then do something to make him and them happy. He and DW are a couple of the most well grounded people I know. I'm happy for them. For them, bitcoin is real. The cash is hitting their account in $10K increments and once in that account, it's good old US dollars - to be spent/saved as they see fit.

I agree about the tax accountant but my advice would be a bit different, In addition to the 4.5 mil in Bitcoin, he is holding $556,000 in Bitcoin cash as well.

While i would prefer the Bitcoin cash (per Bitcoin Jesus arguments), Bitcoin cash can not be hedged other then synthetically. I would set up a hedge on the Bitcoin and then sell off the Bitcoin cash for income in the most tax efficient way.

 

[NW-Bound]

... when conceding that cryptos are the biggest bubble ever, "Novo" also said he expects bitcoin to hit $40,000 and ethereum to triple to $1,500. [/URL]

That still leaves room to double one's money if he buys now. Buy, buy, buy...

I saw somewhere that there are more than 1200 bitcoin knockoffs. They are just "bits", so how does one tell them apart? Why are some cryptobits more precious than others? For the same money, why one would not want to get more bits?

 

[Running_Man]

That still leaves room to double one's money if he buys now. Buy, buy, buy...

I saw somewhere that there are more than 1200 bitcoin knockoffs. They are just "bits", so how does one tell them apart? Why are some cryptobits more precious than others? For the same money, why one would not want to get more bits?

Because Bitcoin is a classic network effect, a positive feedback loop. The more people who use Bitcoin, the more valuable Bitcoin is for everyone who uses it, and the higher the incentive for the next user to start using the technology. Bitcoin shares this network effect property with other prior created systems such as the telephone system, the web, and popular Internet services like eBay and Facebook.

There are four groups that participate in expanding the value of Bitcoin as a consequence of their own self-interested participation expanding the network. Those constituencies are (1) consumers who pay with Bitcoin, (2) merchants who accept Bitcoin, (3) “miners” who run the computers that process and validate all the transactions and enable the distributed trust network to exist, and (4) developers and entrepreneurs who are building new products and services with and on top of Bitcoin.

The more Bitcoin runs the higher the price the larger the network the harder for any other crypto currency to overtake. Eventually when people are required to use Bitcoin in order to purchase anything on the web - think of an article to read on a news site, instead of paying a monthly fee you might pay the equivalent of 1 cent of a bitcoin to read an article, something that is so impractical with electronic payment systems today that it is functionally impossible.

 

[NW-Bound]

I dunno. A bitcoin transaction can take several hours to clear. Right now, bitcoins are exchanged between traders, and I don't think too many transactions are really in exchange for merchandise or services (it is not a real currency). Even so, the number of bitcoin transactions is a minuscule fraction of the total business and commerce exchanges in a day.

I will never say never, but the only way I will get a cryptocurrency is when it is a real currency, meaning the exchange rate is well-known and stable with respect to fiat money and real assets. Getting any "bits" before that is established is speculating, and I would rather speculate in other things that are less risky and better defined.

 

[Texas Proud]

Because Bitcoin is a classic network effect, a positive feedback loop. The more people who use Bitcoin, the more valuable Bitcoin is for everyone who uses it, and the higher the incentive for the next user to start using the technology. Bitcoin shares this network effect property with other prior created systems such as the telephone system, the web, and popular Internet services like eBay and Facebook.

There are four groups that participate in expanding the value of Bitcoin as a consequence of their own self-interested participation expanding the network. Those constituencies are (1) consumers who pay with Bitcoin, (2) merchants who accept Bitcoin, (3) “miners” who run the computers that process and validate all the transactions and enable the distributed trust network to exist, and (4) developers and entrepreneurs who are building new products and services with and on top of Bitcoin.

The more Bitcoin runs the higher the price the larger the network the harder for any other crypto currency to overtake. Eventually when people are required to use Bitcoin in order to purchase anything on the web - think of an article to read on a news site, instead of paying a monthly fee you might pay the equivalent of 1 cent of a bitcoin to read an article, something that is so impractical with electronic payment systems today that it is functionally impossible.

Just curious, from what I read the chain has history back to the beginning... therefore at some point in time there will be too many transactions to process.... in your example you use 1 cent... do you know how much processing power would have to be used to track every purchase that used 1 cent when it is cumulative?

This leads me to believe that at some point bitcoin will fail due to amount of electricity needed to verify it is legit... IOW, if it cost $1 to verify a 1 cent transaction, nobody is going to be doing verification....


OR, do I have it wrong on how this stuff works...

 

[Jerry1]

This leads me to believe that at some point bitcoin will fail due to amount of electricity needed to verify it is legit... IOW, if it cost $1 to verify a 1 cent transaction, nobody is going to be doing verification....


OR, do I have it wrong on how this stuff works...

I believe they bundle the transactions, so the amount verified would be much larger than the 1 cent in this example. I could be wrong, but I've been trying to understand this myself and I think that is how it would work.

 

[redduck]

... In addition to the 4.5 mil in Bitcoin, he is holding $556,000 in Bitcoin cash as well.

I don't understand Bitcoin (at all). Therefore, I have some very basic questions.

1. What is Bitcoin cash?

2. How do you sell, let's say 2 Bitcoins, and can you get actual dollars (real money you can spend at Kroger's) for them?