I think the Winklevoss twins were rightly ridiculed for thinking they invented Facebook. However, they've made two prescient bets and deserve credit for those: (1) Getting Facebook stock instead of cash as part of their legal settlement; (2) Not only seeing bitcoin's future potential, but investing in it and sticking with it. While the final result on the second one is still TBD, they deserve credit for investing in something at a time when many thought they were stupid for doing so.
The deserve credit for what? For getting lucky on FB settlement and BTC rise? I mean, it's not like they actually built something meaningful and productive... Not sure how much "credit" they deserve.
They didn't just buy btc and sit on it. They also contributed greatly to the ecosystem. They built and run the Gemini Bitcoin exchange, they are trying to get a Bitcoin ETF approved, the CBOE bases their futures pricing on mechanisms they put in place. They have done a ton and built a ton.
I think the poster meant they should get credit for the investment decisions they made both in facebook stock and bitcoin, not credit for the success of those things
I know plenty of people with jobs that supported them just fine who were able to acquire a lot of bitcoin early. Most of them abandoned it, and it had nothing to do with privilege or immediate need.
There's a difference between "early" and 2013. In 2013 I knew one person who'd gotten wildly lucky and already retired from buying and mining Bitcoin early, but the people buying hundreds of bitcoin at that point, with the prices in the $100+ range already, were all pretty well-off to have that much disposable cash to toss on a gamble.
Investing 100K then to have 18M now or whatever is a gamble you can only take if you're already doing quite well.
At the time, did you (not) expect bitcoin to succeed in becoming a payment method, displacing paypal and credit cards, or did you (not) expect bitcoin to become "digital gold", of little use except for being something that most of the time more people want to buy than sell? If it was the former, there is very little to beat yourself up about.
Kind of my point: I never heard of a bitcoin early adopter who started out saying "sucks for payment, but I'll happily bet on it becoming a self-sustaining rally", but many who initially expected a currency seem to have unknowingly pivoted to the nice feeling of owning ever increasing virtual riches (that will only grow bigger and bigger as long as almost everybody sticks to the program of not touching that wealth, "just one more turn"), with no payment function at all.
Rich kids getting rich is an achievement how? That's expected. Rather, it means they didn't fail. I have more respect for someone like J. K. Rowling even though I despise Harry Potter series itself (not for religious reasons, FWIW, just a matter of taste I guess). Getting early in Bitcoin just means they're on the very top of the pyramid scheme. That's not an achievement either, and it remains to be seen if/when that bubble's gonna burst. For me, its just a proof of concept cryptocurrency, and the first. Nothing more. It has no value for me otherwise, just like a tulip.
While they started ahead of most, I think it's silly to dismiss their returns. They made significant money. Being early in Bitcoin with a significant investment even considering their wealth is very forward thinking.
Compared to whom? The other rich people, or all the poor who are the vast majority of this world who cannot even try this? If you compare it to other rich people you're going to need to provide some kind of in depth analysis.
Ah right, the complaining about moderation card plus the projecting card. You mistake jealousy for seeing something in its relevant context & circumstances.
A tennis player who reaches exactly the same goal as another one (e.g. winning a grand slam) yet without rich parents is more impressive. Their circumstances gave them a harder time in life within the sport, and outside of it. Think of material, training costs, quality of life (that goes far!), etc etc. There's some sports which are simply elitist while others are more free for all due to lower barrier of entry.
Speculating with Bitcoin, including starting a business around such speculation in order to stimulate your speculation (huh-huh, sounds less brilliant than it is now) requires savings. If you got 100M USD and you spend 100k (0,1%) on speculation there's virtually nothing you will lose. Because even if that 100k evaporates, you're still a multi-millionaire. Compare that to a poor, hard working woman from Bangladesh who's making our Nike shoes so Bob can win his grand slams. She can only speculate with say a dollar, and that's a huge cut in her budget which she'll feel for time to come. Oh wait, she doesn't even have a computer to start with. Even if she did, 0,1% of her entire savings is still essentially nothing cause like the vast majority of people on earth she either cannot afford to spend that 0,1% or it isn't much so doesn't yield much. Like, she can't even afford fee costs with that. So much for this world-wide cryptocurrency called Bitcoin.
The fact is that the vast majority of people on earth, and even the vast majority of people in rich countries such as the United States cannot afford to speculate with large sums of money. And if they did, they'd be belly up if their speculating would go wrong.
These factors make their achievements a lot less impressive. Note that I'm not saying "unimpressive"; (and I'll repeat once more): I am saying a lot less impressive. Subtle difference.
And fuck being reliant on luck. That is a silly excuse from losers which I heard in gaming all the time (the other one is "not having their day"). Skill is what matters. Good players work around bad luck turning the odds in their favor. They end up with a good long-term ratio or track record. Provided the playing field is equal. The playing field in life is not equal. Some people are born rich, and that gives them an ample amount of chances to score in life. The Winklevoss Twins are a perfect example of that, and that makes them a boring example. The life stories of personae who became rich and famous via hard work and who wasn't rich to start with, like J.K. Rowling, are much more inspiring for the general population.
People are trying their luck all the time in the lottery. They're losing, but false hope keeps that "game" alive. By ignoring the circumstances of the Winklevoss brothers whilst articulating their successes, you're doing the same. Please stop it.
(And that's a post written without going much into the problem of speculation regarding Bitcoin, ignoring issues like Mt. Gox and Tether.)
Anybody with a computer/graphics card and an interest in technology could have money on Bitcoin and countless other cryptocurrencies. Neets from /g made money on it without spending a dime. Where were you?
It isn't about me, it is about the average world citizen.
You assume one wanted to be part of this specific pyramid scheme. I already experimented with another in the '00s and figured that I'm not fit for MLM (it involved sales though), or pyramid schemes for that matter. I'm a terrible salesman because I am too honest and extensive. I didn't expect the world would fall for this pyramid scheme either. Cause frankly, I found it sucked, cause the various times I checked I couldn't use it as currency anywhere (still pretty much true). Which would mean I'm locked, sitting on gold nobody wants to have. What good is a currency you cannot use? You never know beforehand for which ones they're gonna fall for and which ones they won't. Furthermore, it isn't anonymous either, so you can't use it to avoid taxes. At this point, its still difficult to execute transactions due to latency and cost. Its also difficult to find a shop which accepts it as currency.
The only thing Bitcoin has going for it, is that its the first cryptocurrency. The flaws it has cannot be solved easily without a full reset, or consensus of a majority. Plus, the question is if people are responsible enough to own a hardware wallet.
So yeah, what I was doing with my savings is I was investing and I had it on the bank. Which are both luxuries a lot of people in this world cannot afford. And yet, we're talking pennies compared to what Winklevoss owned the moment they were born. All cause of mom 'n pop. You cannot just take that out of the equation.
I'm not sure how "prescient" not accepting the first settlement offer is.
Also I'm not sure how "prescient" their seeing the potential of bitcoin was. They were literally sitting on a beach in Ibiza when a stranger approached them and told them about investing in bitcoin.
This same stranger fom the beach them puts them in the touch with the Bitinstant folks. When the brother meet Charlie Shrem and Erik Voorhes from Bitinstant they observe how much those two believe in the potential of bitcoin. See:
Early bitcoiners met with a lot of people with the means to invest. Almost all of them passed. Committing to investing and sticking with it through the ups and downs takes good judgement, courage, and healthy dose of luck.
It's no different from startups. A lot of investors were pitched by AirBnB and almost all of them passed. Fred Wilson from USV even had PaulG badgering him with emails telling him to invest and he still passed.
Please reread my comment. I was refuting this insistence that these two people were "prescient" when they weren't. They didn't have their finger on the pulse of crypto currencies and their potential. It was their dumb luck that some stranger talked up bitcoin to them while they sitting on a beach in Spain.
All this talk about how "prescient" they are and how they have now been "vindicated" is all pretty ridiculous. This is revisionist history. The NYTimes piece reads like a press release.
There 's a fair amount of luck involved in investing. They've been lucky twice. You notice there is no mention in this fluff piece about the investments they have made that have gone south because.
Yes, I really think that the Winklevoss twins deserve a prequel and sequel of The Social Network movie and also directed by David Fincher. There are two rare events. I assume the Winklevoss twins were exposed to less risky ventures in their life but they chose the risky ones.
Absolutely. The Social Network made them out to be moneygrubbing fools, but everything else I've read shows them to be actually quite intelligent and prescient.
They competed in the 2008 Olympics. In my book, that is, without a doubt, “proof of work”. You don’t get to the Olympics without a fantastic amount of work.
If I, or virtually the vast majority of people who aren't among the ~0,01% richest in the world, didn't have to work one day in my life in order to sustain myself I could also focus on the Olympics.
Ergo; in the context we discuss, that's less of an achievement for rich American kids than for poor people.
Therefore not a good delimiter.
And certainly not inspiring. The circumstances for the vast majority of people on earth are different. To start with, their financial circumstances.
Are you seriously saying that competing in the Olympics is not impressive?
Less impressive because they're rich, sure, I'm with you. It makes it easier. But dismissing it as not a good delimiter and not inspiring is pretty ridiculous.
Whether you or I find it impressive or not is a personal value you or I have.
For me, it depends on the sport. Some sports are simply elitist. Cricket is an example, tennis is another, hockey yet another. There's many more. You could even see the very notion of sport is elitist. Poor people need to focus on the bacon alone.
Furthermore, when I learn about the circumstances of certain sports(wo)men I get touched. Lance Armstrong was an example of that because of his illness. Unfortunately he was a fraud, and I watched him win the Tour de France 7 times. We had Sochi as well, where so many Russians suddenly were winning while normally that isn't the case, now is it?
Then there's the stories of poor people winning in sports. Those move me as well, but they seem to be rather rare.
These 3 realizations destroyed a lot of the respect I had for Olympics or sports in general. Even though I am a hobbyist sporter myself (jogging), and have been a competing gamer in the past (the same is true there: if you got rich parents you're one step ahead). Its a personal value, YMMV.
Accomplishing difficult things from a disadvantaged position is more impressive than those accomplished by someone without those disadvantages, but it doesn't mean the latter accomplishments are not impressive.
The world is full of people who want to tear down other peoples accomplishments - "Accomplishment X isn't that impressive because of starving people in country Y." Using that standard, nothing done by anyone who "won the ovarian lottery" by being born in a 1st world country would qualify as "impressive".
When faced with a beautiful sunset, you can say "Meh, I'm not impressed. The sunsets in Hawaii are much better." or you can appreciate the beautiful sunset for what it is. The latter approach is happier path in life I think.
> Accomplishing difficult things from a disadvantaged position is more impressive than those accomplished by someone without those disadvantages, but it doesn't mean the latter accomplishments are not impressive.
It means it gets lost like tears in the rain. At one point, one gets bored by the accomplishments and its about outliers within the winners. That's how an overstimulation of signal tends to work out.
> The world is full of people who want to tear down other peoples accomplishments - "Accomplishment X isn't that impressive because of starving people in country Y." Using that standard, nothing done by anyone who "won the ovarian lottery" by being born in a 1st world country would qualify as "impressive".
I'm arguing these [of the Winklevoss] are no accomplishments; they're expected. If something's expected of you, how is it an accomplishment if you reach that goal? You'd only be disappointed when you wouldn't reach the goal.
> When faced with a beautiful sunset, you can say "Meh, I'm not impressed. The sunsets in Hawaii are much better." or you can appreciate the beautiful sunset for what it is. The latter approach is happier path in life I think.
Moot comparison. At one point in your life, you've seen so many sunsets that it becomes pointless to care about them. You focus on different things, or on one of those sunsets which has something special. Such as that one time in Hawaii. Keeping caring about things which don't move you, seems like a one way ticket to endless depression.
Although everyone's free to enjoy sunsets, and I have no intention to take that liberty away from one, I am equally free to describe they're not that beautiful.
"I'm arguing these [of the Winklevoss] are no accomplishments; they're expected. If something's expected of you, how is it an accomplishment if you reach that goal? You'd only be disappointed when you wouldn't reach the goal."
I think you're just mistaken about the percentage of rich people who achieve something like participating in the Olympics. I don't think it's expected in the way you seem to think it is.
The term rich is relative, depending on the context, and we had various contexts throughout this thread's discussion. It seems you have a higher threshold for the term than I do.
I still can’t get my head around the fact that Mark stole their idea and ran with it, and it was the twins who were made to look evil. What if this happens to any of us?
Ideas are worthless. Undoubtedly he took their concept, but I sincerely doubt he developed a complete copy of their idea. Whether or not their idea would have worked is up for debate. But it's a pointless debate, because ideas are worthless... Unless of course, they are patented.
Knowing them, knowing him, having been there at the time, I can only confirm that they designed the entire rise of Facebook using the principle of exclusivity to build interest in users 1) outside Harvard, 2) outside the ivies, 3) outside colleges, etc. Zuckerberg was right (edit: correctly saw he was able, not morally right)toun with their ideas, and deserves credit for executing them to perfection.
At the time I thought they were foolish for not having a contract and for not having built up enough technical skill to understand that Zuckerberg was taking them for a ride. This is definitely true, but they corrected the problem and have recovered brilliantly.
That's the risk you take in software in general. What stopped Instagram from copying Snapchat? Nothing. Micrsoft used to snuff out competitors in the office suite space all the time. MSN copied AIM. IE copied Netscape. It happens. You either work with founders you can trust or you don't.
And its not just with start ups. People who are more closer to work, generally tend to maximize returns for themselves above those are who are away from it.
This is true even in Big companies. Most product managers I know barely contribute anything to the product, most of the times its the engineers doing all the work and the product manager is just there to provide the validation 'This looks fine to me'.
There is a good reason why carpenters, plumbers, drivers, <skilled_worker> generally do better on the longer run than the supervisor ever does.
What if your game idea is half-baked, incomplete, and generally kinda crappy, the engineers realize you don't have a complete idea, but then go on and develop a fully-baked similar idea on their own later, and it becomes a hit?
Let's add some ambiguity to our "poor genius"/"brilliant thief" scenario :)
I don't think it made them seem unintelligent at all, I love that freaking movie, inspires me to write software every time. However, I do think it did make them look bad, even if they aren't but then again it was made from the POV of Facebook and not Winklevoss
I'm sure we will be worried with restoring the Bitcoin network in an apocalyptic event. All 153GB of it will be very useful to maintain. What incentive do the survivors have to preserve the history anyway?
>> They said they might look at selling when the value of all the Bitcoin in circulation approaches the value of all gold in the world — some $7 trillion or $8 trillion compared with the $310 billion value of all Bitcoin on Tuesday — given that they think Bitcoin is set to replace gold as a rare commodity. But then Tyler Winklevoss questioned even that, pointing out the ways that he believes Bitcoin is better than gold.
I found this to be the most fascinating part of the article.
- Both are in fixed quantity so none is more rare than other.
- Gold has practical use in industry which puts lower bound on its value. BTC has no lower bound.
- Gold is exchangeable virtually in any country and any culture regardless of how technologically advanced that society is.
- Thousands of years of history has proven that humans have almost natural lust for this shiny metal and it gets displayed as jewelry uses. This again further sets the lower bound for gold prices.
- Gold is not only rare but is virtually rust proof and can be stowed away without any advanced tech for 100s of years. BTC will be pointless if there was a natural or human made disaster and few people had electricity.
- Gold is far more unlikely to be made illegal by governments.
- There are no new rare metals popping up every day like whole slew of new cryptocurrencies which might fragment and trump each other. No one knows which cryptocurrency will end up dominating 10 years down the line.
- BTC has huge risk of getting stolen and hacked because someone exploiting zero day vulnerabilities in your system even if you did everything you possibly could to keep your system safe.
- Governments can start their secret operations to control the crypto market behind the scene, hack in to exchanges, find vulnerabilities or do dirty trades.
- Crypto exchanges are wild west without regulations which means clever deep pocketed traders would be exploiting them by techniques like frontrunning, wash trades, willybot, spoofing etc. This enables big investors to profit at the expense of small investors.
Above arguments should make it clear that btc has very real upper bound that it can rationally reach and its most definitely less than gold market cap. Of course, big investors can juice up things in the short term but it would be impossible to sustain irrational highs on long term.
That's a poor example, as it has in fact been the case that gold has been legal throughout the extreme majority of US history, including critically for the entire post gold standard era. Gold was partially illegal for only ~16% of US history, which fits very well with the term "unlikely."
Bitcoin has >200k [1] unconfirmed transactions in the mempool, summing up 4.3m us$ of fees alone. fee to get your transaction into the next block is around 22$ [2] right now.
Starting to look less and lesser like a currency, becoming more and more a security.
There are many outlier things that are only of a certain value because some group of people decide that they are: art, baseball cards, collectible postage stamps, brand label clothing goods ($3,000 purses or shoes), venture capital valuations, and so on.
Why is a new Ferrari so expensive? Ferrari could manufacture a lot more cars if they wanted to. They could also charge less, their margins are tremendous. It's an obvious function of supply and demand. The price is so high because people say it's worth paying that. It's that simple. If all of their customers suddenly decided it wasn't worth paying that, Ferrari would either lower their prices or go out of business.
Even bond ratings are often open to significant subjectivism that can swing their value considerably.
If enough people decide that a Bitcoin is worth $100,000, then that is what they will be worth. That is in fact how most things in the world are valued. Bitcoin's scarcity and the fact that in the near future it will become almost impossible to mine new coins, adds to the premise.
The question is: does Bitcoin's low utility value and ease of trading in proportion to its market cap, particularly open it up to dramatic whims of the mob? Yes, which you see in its volatility. That won't change until or unless it finds greater baselining usefulness.
Ferrari cars charge a premium, much like Apple does but they are a hell of a lot faster than a Honda Civic. Baseball cards started as a thing outside of rarity, they had information and a picture which was more valuable pre Internet.
Now you can argue that Antiques should not gain value from age, but old junk is not valueable, old pristine stuff is. So your argument is people overvalue something they have a rational reason to value, which is different than placing clause on something without inherent value.
I am not saying Bitcoins shpuld be worth zero today, I am saying they will be worth zero in 100 years after the fad ends unless they fix the inherent problems with the protocol so it can be used as a medium of exchange.
No, the 22+$ transaction fees are the problem. People are saying that it's no longer a currency because of them, but that just makes it a security. IMO it's currency or scam not currency or security, because there is no inherent value beyond currency.
It's become a scam because of the incentive structure. The miners control the currency and are trying to maximize the money they extract not grow the usage of Bitcoin.
I don't expect people in multi level marketing aka pyramid scheme to work for free either. But, their are plenty of incentive structures with good and bad rewards. One option for a hypothetical digital currency is to stagger payments so a miner gets say 1/2 of their reward in 10 years.
I am only saying the current structure ends up as a scam, not that the eventual successful currency can't solve these problems.
> One option for a hypothetical digital currency is to stagger payments so a miner gets say 1/2 of their reward in 10 years.
Who pays for the electricity costs till then?
I dont think you understand the meaning of the word scam, the miners are not cheating anyone with some false promise nor are they getting commissions if they bring other people under their fold like a pyramid scheme
The incentives are needed for miners to start mining in the first place, if you dont like it you are free to start your own currency.
That still boggles my mind. I thought the whole idea was to remove middle man that not only authorize (or not transaction) but also charge hefty fees? I was told for long time it is free to buy or sell with bitcoin. What am I missing?
The Bitcoin network doesn't do away with the concept of a middle man completely, it merely replaces one mutually trusted middle man (like the Visa card network) with several untrusted middle men (anyone that can afford a mining rig).
If one untrusted middle man produces a proof of work for a transaction request, the other untrusted middle men verify the PoW to be valid, if there is consensus §, they collectively agree to append the transaction to the next block on the blockchain. The untrusted middle man is then rewarded for their efforts by being paid the mining fee that was accruable for the transaction.
[§] If 2 or more untrusted middle men solve the PoW for a transaction request independently, i.e. they are competing to be rewarded with the same mining fee, then the untrusted middle man with the longest confirmations from other nodes on the network is the one whose block will be appended to the blockchain, the others will be discarded.
Would appreciate any corrections to my gross simplification.
> Gold has practical use in industry which puts lower bound on its value.
How did that work out for oil a couple years ago?
Yes there's some lower bound on gold, but if it turns out it's lower than you thought, or if the supply can be altered to manipulate the price and drive it even lower, it's not very useful.
Given that gold prices 20 years ago were somewhere around 1/6 the maximum price in that period ($300 vs $1800), it's reasonable to assert that this lower bound on gold lower than even that. Meaning if I invest in gold and people completely lose faith in it, I could lose 85%+ of my investment. Not a very helpful safety net.
Gold exploration had been going on for thousands of years which means every new piece of gold is being discovered at much higher cost. So while supply increases, prices don't go down.
Of the additional 80% gold I'd guess about half represents profit for gold miners or tax or mining royalties. So 40% of the gold supply has come at zero marginal cost.
Also keep in mind that a technological breakthrough could produce a sudden glut in gold supply, as we have seen recently with oil and gas fracking.
The main reason the price has gone up is that the world population is in aggregate far richer than in 1980. What's more, Indians and Chinese (who are culturally inclined to invest in gold) have seen their wealth grow particularly rapidly, so the proportion of world assets stored in gold has likely increased.
If you ask your Shaman to produce a poison and send it to every gold miner in the world and as a result no new gold will be mined, you still won't dig up much by simply putting shovel in your backyard. You would have to go to the last crust level they been at and start to dig from there, which makes it incredible expensive and complicated.
Meanwhile, if for any reason, including breaking a Bitcoin blockchain by state-sponsored actor (or someone powerful enough; or simply forcing ISPs to ban traffic on mining ports now that NN is gone), when miners stop or move to something else, you can pick up from where they left off of and alone mine one bitcoin a minute on your mediocre laptop.
Whether someone will pick up these coins from you at $15k per pop, that's a different story.
> or simply forcing ISPs to ban traffic on mining ports now that NN is gone
If the government can force ISPs to implement content-neutral routing, what on earth would stop the government from forcing ISPs to mandate content-neutral routing for everything except mining ports, or going even further to demand that DPI be used to investigate the content of all ports to prohibit mining activity?
Just because gold is better in some ways that bitcoin doesn't invalidate the GP's point that bitcoin is better than gold in some ways. One quick example among many is that you can transfer it nearly instantaneously without geographic bounds.
> Both are in fixed quantity so none is more rare than other.
"BitCoin" is just a particular name for a bunch of numbers. If every single wallet in the world disappeared today, you could restart a new block chain tomorrow, and would get numbers just as good as the bitcoins were (And in fact, the # of Bitcoins doubles every time there is a fork). Any scarcity is purely by fiat and consensus.
By allowing you to double spend, it reduces confidence in coins you buy to zero, which reduces the value of all coins to zero. You still have your coins, but they aren't worth anything.
Which is exactly why no one would spend the crazy amounts of money it takes to execute a 51% attack. It would be like self-immolation. Billions of dollars in equipment and energy and you'd have 51% of a worthless network. In practice, you would have to control much more than 51% of the network, because you'd have to catch up to the 49% that are still hashing away.
Unless they are a government, shorted bitcoins, or own a massive stake in a competitor etc.
PS: Remember the value of Bitcoin is limited as a function of the cost of that 51% attack. If the price increases by 10x the transaction fees need to also increase by 10x or Bitcoin becomes less secure.
This idea comes back many times... but I don't see a reason why government would want to short bitcoins or disturb the market to get their hands in it.
1. They have BEP printing press; instead of stealing or brute forcing into bitcoin and then selling the loot for $, the might as well ask Bernanke to print few thousands more sheets of 100 dollar bills (of course not legally but i'm sure there is some overprint like in any business).
2. screwing people out of bitcoins would mean screwing US citizens as well. Why would any part of government do that just to upset Congress and get themselves in front of bunch of congresspeople for grilling? Doesn't make sense.
Government is unrelated to shorting, Governments may chose to destroy Bitcoin for the same reason the may ban it. Basically, currency controls etc.
Someone shorting Bitcoin on the other hand has an economic incentive to destroy it. The cost benefit of doing so scales with the size of their short vs the current hashing power. But, a malware writer may have access to a 51% attack briefly without owning any equipment.
> Which is exactly why no one would spend the crazy amounts of money it takes to execute a 51% attack.
There was a recent paper shared here on an article about new type of currency or exchange system. Although I don't understand details, it explained that since 51% of coins are already mined by just a few pools, if these pools orchestrate together, then can break the chain. But unsure how true this is (cannot find the post anymore, sorry)
Just like why no one would spend $100s of billions on wars that just perpetuate violence.. surely there's no incentive or gain they'd have by causing such disruption.
This is false, you just have to wait for more confirmations. And if miners are censoring transactions there will be a fork where you can use your coins.
Technically, a 51% attack would allow one to confirm non-standard transactions and pretty much do anything. Granted, this would immediately be apparent to any of the other 49% of nodes and cause a fork, but still...
Whats the point of that ? A miner can confirm non-standard transactions right now when he mines a block but no one would accept it. Point of 51% attack is to surreptitiously double spend and nothing else.
You're off by a factor of 20. The current hash rate is 17.5 million terahashes per second. Ant Antminer S9 goes for $2800 and produces 13.5 terahashes per second. In order to get to 51%, you'd need a $2 billion dollar investment.
The US military budget is $600B. Not sure what your point is though. A 51% attack doesn't give a government control, it just allows it to double spend. And that's until a hot patch to increase the required number of confirmations resolves the issue.
Besides there's a huge supply problem here. ASICs need to be manufactured. You can't just buy several hundred thousand of them. The whole point of Bitcoin is that it's prohibitively expensive to just perform a 51% attack and impossible to entirely regulate.
A simple fork invalidating coins originating from the double spend would be enough. You've just spent $2B to achieve something that the network can invalidate with a dozen lines of code. It would set a bad precedent, but it did cost you a lot of money.
If I'm not mistaken, too, the $2Bn investment is just the beginning. The attacker would also have to cover the costs of at least 51% of the energy used in the network - much less find somewhere they can use that much energy without someone noticing.
The idea that a 51% attack on Bitcoin is plausible just isn't sound, imho.
Interesting. First time I'm hearing about these two. Anyone know of any real life instances where someone perpetrated this w.r.t. bitcoins / crypto trading?
"Gold is far more unlikely to be made illegal by governments"
I have nothing to say about bitcoin, or cryptocurrencies, but this statement is currently false because (AFAIK) bitcoin has not been made illegal by any government, whereas gold has:
> Both are in fixed quantity so none is more rare than other.
Yes, gold is fixed by the limited amount of it in the world, solar system, and universe. We haven’t even mined most of the gold on earth. If you’re worried about supply shocks, gold is infinitely more vulnerable.
I was going to respond to more of your points but many of them are obviously the exact opposite of true. Are you being sarcastic?
> Gold is exchangeable virtually in any country and any culture regardless of how technologically advanced that society is.
Your other arguments are not bad (well, it varies), but this one is very weak. You do know that a lot of 3rd world citizens now have access to cell phones? Technology is pervasive nowadays.
The fact that even millions of people who earn a BTC transaction fee per week have access to dumbphones is rather irrelevant to the observation that cultures who are resistant to banking are likely to continue to value gold jewellery over exotic computer-based financial instruments that don't look good around their neck. And that's even assuming a hypothetical world where many developing world citizens actually have practical access to BTC and local markets for exchanging BTC for goods.
There's a difference about Gold's rarity and Bitcoin's.
Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity.
Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does.
I can agree with it being better (having more utility) than gold, though. So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone.
Bitcoin definitely isn't rare in kind as we've already seen how relatively "easy" it is to fork. Could just fork Bitcoin infinitely as one way to deal with its supposed scarcity.
Bitcoin isn't even rare in the abundance sense if you consider that how hard it is to mine new coins is merely a function of a mathematical curve that can be adjusted as a software change. Certainly any change to the mining difficulty and/or coin pool ceiling would be hugely controversial, but it's not like it's mathematically impossible merely politically improbable, for now.
The thing that is rare is the total amount of mining nodes behind bitcoin. That is what you are buying into, is mindshare. Of course the mining nodes are mostly profit driven. If another coin had a higher profit margin, the miners would switch over to that coin.
That rarity too is also software controlled based on the difficulty curve. Bitcoin doesn't have to boil the oceans, it could make mining easy enough again that transactions could be mined in a coffee break on an average person's smart phone's GPU.
As I said, the scarcity of Bitcoin is much more a political structure than an inherent nature of Bitcoin. The miners control Bitcoin so much as anyone does and it is their political intent as much as anything else that creates any scarcity in Bitcoin at all.
The philosophical and political reality of what makes a "real" Bitcoin that people can accept is outside of the question of scarcity. The fact that a Bitcoin can be endlessly "duplicated", at the whims of software developers and/or miners, regardless of how likely or improbable they may be able to be "spent" should definitely give people some pause in their Tulip mania that Bitcoins are not by their nature inherently a scarce commodity. They are scarce only so far as the political reality in which they are transacted continues to keep them scarce.
But they are in fact different. Maybe not as different as gold vs silver but similar in that gold and silver also have completely artificial values driven by hype.
What do you mean gold is rare on its own kind? Aren't there tons of other pretty metals? There doesn't seem to be any unique property of gold (other than sociological) that would help it defend against competitors like bitcoin or any other new asset.
Gold is rare in several senses: In addition to being a rare element, it is the most ductile metal, the most malleable metal, and one of the best conductors of heat and electricity. It is very stable and doesn't oxidize. It is easy to alloy and easy to refine back to pure state. It is one of three metals that naturally occurs in its elemental state. It is the easiest metal to work for jewelry and other purposes. It is also very dense.
All of these properties are what made gold valuable sociologically. Silver is nearly as easy to work and refine, but it is far more abundant and it also tarnishes easily, so it is two orders of magnitude less valuable.
Platinum is also far more abundant, but much harder to refine, which is the sole reason for its high price. It is also much harder to work, requiring much higher temperatures to melt. It is a far harder and tougher metal than gold, which is why it is often used for the crowns in which precious stones are set, and as a plating material for gold.
Bitcoin is just vapor, good for nothing in a practical sense. It doesn't even have attractive designs like paper money. Fiat money is susceptible to going to zero value; gold will never go to zero, even in some total societal collapse scenario.
You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity).
But i agree that's not enough to defend against competitors like Bitcoin, but the same cannot be said of Bitcoin. Other than sociological factors (that are arguably much stronger on gold), there's nothing that would help it defend against others e-coins.
>You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity).
platinum. i will agree that gold is easier to tell apart (it's yellow) than platinum. although realistically that's a moot point because you're going to want to do chemical tests when dealing in non-trivial amounts of precious metals.
Which is even more rare for when you need to deal with issues like environmental temperatures going over 800C.
The same argument applies to platinum: it has essential physical applications that are hard to replicate, so it will retain a high baseline value just on the merits of "we need it for essential hardware."
If a cryptocurrency manages to pull off the software equivalent of "essential engineering applications," then the conversation about cryptocurrencies will change dramatically. As it stands, blockchains will probably prove to be situationally useful, but blockchain =/= cryptocurrency.
Another critical difference is that there are commodity uses of gold. The price of gold will never go to zero; it might go to $100 or $10 per oz if all speculation and hoarding were removed from the market but it wouldn't go to $0.
Sure but what's the importance of that fact? If I buy an ecoin at $1500 and it goes to zero and if I buy gold at $1510 and it goes to $10 it's the same loss. I guess what's the real importance that gold has a floor which is marginally above zero and bitcoin doesn't if both of those floors are far below the current price level.
It's valuable because you can, if you do some research, make some pretty educated guesses about what the floor is in the gold market. That tells you whether you are risking 10%, 25%, 75%, or 90% of your money while speculating.
And, uhh, if you don't know why having a good idea of your potential downside is useful when investing, maybe consider finding a trustworthy financial adviser?
And what's that got to do with bitcoin? If you're going to assert that gold can't go to $0 and imply that bitcoin can, you need to also give a good reason why bitcoin can go to $0.
You are making the opposite claim to mine, they are not comparable. Try these on for size:
Before his birth, Mussolini was not alive. Therefore, it is possible that he could not be alive again.
At one point, there were no grains of sand in this glass. Therefore it is possible that there will be no grains of sand in this glass again.
Thermodynamics is really not the tool you should bring to bear in this conversation. Entropy dictates that eventually everything will be worthless, and that includes Bitcoin. The price of Bitcoin is not an irreversible product of entropy, despite what some investors might wish.
Are you really standing by your logic, or are you just arguing with me for sport? If it’s the latter we can continue but I’m not going to repeat myself if you’re not going to listen.
"So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone."
We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past.
So many tokens and blockchains are coming out with incremental improvements or niche capabilities, but in the end I think consolidation of market cap is inevitable. I think it ends up Bitcoin as store of value, Ethereum as contracts/api and a large amount of application specific token/chains. Most applications would be backed by ethereum (like most tokens are now), but ones like Ripple could definitely be top 5.
That bitcoin is a (sort-of) working cryptocurrency and that bitcoin has a history are basically the primary arguments for bitcoin's continued value.
But it seems implausible to claim that this will allow bitcoin to become a store of value investment. I think it's clear those buying bitcoins today either are doing so with an eye to increase their investments through bitcoin's rise or are trying to get money out of some nation which prevents capital exports.
As a thought experiment, if a person knew for certain that bitcoin would have the same price in six months, would that person ever prefer bitcoins to a us savings account with the same amount of money? It seems to me no one would.
Moreover, if bitcoins are essentially always going to be speculative, this leaves that possibility of them always being possibly displaced by an equivalent.
If you were in Venezuela you would certainly prefer to own Bitcoin if it had the same buying power in 6 months than keep local currency. Could be said of rubles and other currencies as well.
Even in the US, holding Bitcoin at the same buying power would be a hedge against inflation.
Of course the Bitcoin price in USD would still fluctuate, if it were pegged to USD there wouldn't be much use other than easier to move around.
Or, as a much more probable alternative, the whole blockchain fad dies out as it should. The blockchain is a solution in search of a problem. It is cumbersome, slow, and an absolutely ginormous energy pig. The only thing it is good for is speculation and giving a particular type of libertarian an-cap a hardon. It is useless for mainstream anything.
75% of all searches are Google, 10% Baidu, and 8% Bing.
Youtube represents the vast majority of online video content. Netflix the vast majority of on demand television.
I only mean to say a handful will capture the vast majority of market share/cap.
Google is losing market share of searches last I looked.
Baidu searches have doubled in percentage marketshare.
Youtube and netflix are both on demand television as are amazon instant, modern cable tv subscriptions, and a variety of specific channels (hbo, showtime, etc).
There will definitely be use case dominance, but they may not be the same whales as we currently see.
We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past.
I would have put that the other way around ("like gold, bitcoin ...") but even so the scale of the relevant histories are not even in the same ballpark. Bitcoin has had held value for seven years. Gold for more than seven thousand years.
> Gold has had some ridiculous swings along the way too...
The Spanish pulled a large amount of gold out of their New World colonies. It reduced the price of gold in Europe... by 20%. That seems to me to be not much of a swing, given the magnitude of the event.
The biggest swing that I know of was when the US allowed the price of gold to move. The US held the price of gold at $35/oz from (about) 1932 to (about) 1975. When they allowed gold to float, it went to $200/oz, dropped to $100/oz, then went to $800/oz. But I'd ascribe that set of "ridiculous swings" to government messing with the market, not to gold itself.
Off topic, but too fun not to mention: An ounce of gold weighs more than an ounce of feathers. This is because an ounce of gold is a troy ounce (1/12 of a pound), and an ounce of feathers is an avoirdupois ounce (1/16 of a pound).
Off topic, but too fun not to mention: An ounce of gold weighs more than an ounce of feathers. This is because an ounce of gold is a troy ounce (1/12 of a pound), and an ounce of feathers is an avoirdupois ounce (1/16 of a pound).
As a native from a country that uses the metric system, this sentence is both amusing and saddening.
> Musa's generous actions inadvertently devastated the economies of the regions through which he passed. In the cities of Cairo, Medina, and Mecca, the sudden influx of gold devalued the metal for the next decade. Prices on goods and wares greatly inflated. To rectify the gold market, on his way back from Mecca, Musa borrowed all the gold he could carry from money-lenders in Cairo, at high interest. This is the only time recorded in history that one man directly controlled the price of gold in the Mediterranean.
That doesn't make much sense. I think you set up a rather arbitrary definition for this.
Here's my attempt: Gold is just a "metal" just like Bitcoin is a "cryptocurrency." There are many types of metals and other materials. Some can directly replace gold while others have way different uses - just like cryptocurrencies.
If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is.
1. The claim of "rare" doesn't exactly hold true.
Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price).
The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people.
Best estimates are that there are about one million
holders of Bitcoin; 47 individuals hold about 30 percent,
another 900 hold a further 20 percent, the next 10,000
about 25% and another million about 20%, with 5% being
lost. So 1/10th of one percent represent about half the
holdings of Bitcoin and 1 percent close to 80 percent
(http://www.businessinsider.com/927-people-own-half-
of-the-bitcoins-2013-12). The concentration of Litecoin
ownership is similar
(http://litecoin-rich-list.blogspot.com).
Most of the big wallets have been in place from early on,
so sitting back and watching your capital grow has been a
very successful strategy.
The distribution of Bitcoin holdings looks much like the
distribution of wealth in North Korea and makes the
China’s and even the US’ wealth distribution look like
that of a workers’ paradise
3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will cease to function. Maximalists will attempt to offer an emergency fork, in any attempt to save their "investment", just as they have developed the lightening network to create centeralized payment hubs, so "investors" can act as liquidity providors and take fees, instead of miners.
>as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will cease to function.
I don't think the network would cease to function. If that happened, the difficulty for the network would drop drastically, and GPU miners would come back online, similar to the early days of BTC
On 1) the exchanges may be unregulated, but there's dozens, if not hundreds of exchanges. Implying that exchanges are manipulating the spot price across the board is ludicrous. There's also exchanges like EtherDelta, which are entirely run by a smart contract on the Ethereum block chain, so it's independently verifiable that the trades are fairly executed.
2. BTC is being used as the reserve currency for almost all exchanges. BTC has a vast network and even as popular as ETH has gotten, it has some ways to go before it's accepted at the same level as BTC. The others, like LTC & XMR also rarely have trades delimited in their currency.
1) Unregulated exchanges are likely operating as fractional reserve pools. Also notice how historic charts show steep, often 90° falls in spot price? Low liquidity and high latency allows exchanges to take in new deposits and delay withdraws while they shuffle funds from new deposits to pay withdraws.
EtherDelta is only compatible with Tokens generated within the Ethereum network, i.e. digital "assets" produced not by mining but by writing a separate contract that immediately creates or "pre-mines" millions of Tokens.
Pre-mined Tokens are a gimmick that amounts to a gift card for a Business, but the marketing tries to claim this is a magic software network where a limited amount of giftcards are released into the wild and you need to horde the giftcards to use the services offered by the business. Please feel free to show proof where this is not the case.
2. BTC is not a "reserve currency", it's merely referenced in the form of a ratio for other crypto-assets. BTC could fall to $0.001 USD and you would simply see the ratio as
BTC 6 : 1 OTHER-CRYPTO
1) Many existing networks, including the Qtum network were sold on ERC20 contracts (https://qtum.org) originally as an ICO method before moving to their own network where they trade the tokens for coins on the network. In that case, Qtum continues to issue new coins on a proof-of-stake basis. There's other examples out there, this is just one I'm familiar with.
If you can point to 90° drops on GDAX, I'd be interested to see them.
"reserve currency" may be the wrong word, but the fact remains that for the vast majority of exchanges, you add value by depositing in BTC and you trade in terms of BTC (not USD). So any crypto you want to sell usually has to be converted to BTC first before your native currency.
So rather than just assume ulterior motives here (which I agree should be considered as a possibility whenever a big stakeholder is discussing a major investment of theirs), I wonder if there's a different question to ask.
Specifically, how does the game theory play out for his comments? Does it point towards him being genuine? Or does it point to him trying to do something else?
Just now Bitcoin is down 11% (to $17k) and Bitcoin Cash up 55% (to $3.4k) as people look to it as an alternative. I'm not convinced Bitcoin will last thousands of years as a major asset the way gold has.
Interesting. What are the economics arguments for Bitcoin replacing gold? Does the “ease of transaction” of Bitcoin provide an implicit value over gold and is that factored into the price of Bitcoin as maybe a fixed value?
> Does the “ease of transaction” of Bitcoin provide an implicit value over gold...
I know this doesn't answer your question but it's still relevant. Currently Bitcoin is the most expensive, least convenient currency available. According to estimatefee.com it would take about a $25 fee in order to get your transaction through in an hour.
My point is that nothing about Bitcoin will ever really be "implicit" like it is with gold. Gold exists as it exists, cryptocurrencies only have the properties that are created by the developers, and/or are run on machines by participants in the network. In Bitcoin's case, the developers and the network have not been able to handle the load of all the transactions.
I used to be in the "Bitcoin is the new gold" camp. But after seeing what's happened with Bitcoin, I'm certain it's not that simple.
Should the slowed clearing rate actually reduce the value? Increased perceived value driving the price up / speculation actually causing a drop in value due to the system underlying Bitcoin?)
Gold is just non-scalable and is bound to die eventually. If you think about it, if you're going to start a new country and a new federal reserve, how much sense does it make to ship tons of gold to Mars for example?
Any store of value that makes sense for humanity in the long term has to be both digital and reflect the work/real value creation process that matters in the future. I'm not sure it's going to be bitcoin but it's definitely not gold.
Literally nobody knows what Bitcoin is going to do, so comments like this are not only blatantly false (you have no idea what's more likely), they serve zero purpose.
can someone explain why bitcoin is rare? there are COUNTLESS cryptocurrencies out there. The only reason bitcoin is believed to be rare is blind belief, much like believing in santa claus.
There will only ever be 21 million BTC. I mean, it's right there in the code for Bitcoin. Yes you can fork or create new cryptocurrencies, but they don't have the mining power of BTC, and they are inherently NOT BTC. So Bitcoin is rare, cryptocurrencies are not.
Does anyone know the actual value of the money put into bitcoin so far vs this market cap of recent sale price x count? I'm keen to know actually how many people could withdraw at similar sale prices to now before it evaporated.
Because it's so exponential, I would imagine a rapid sale of 5% would remove 90% of the value, but I'd love to know the specifics.
Money isn't "put into" Bitcoin. Every USD "put into" an exchange in exchange for Bitcoin was simultaneously taken out by the person on the other side of the trade.
The future value of Bitcoin in USD is entirely dependent on people in the future wanting to buy Bitcoin for USD; if no one wants to, it is not worth any USD.
I guess the question should be rephrased then as "how much have the current owners of bitcoin collectively exchanged for their coins?" This question also becomes more interesting when you factor in every coin that has been mined but not yet exchanged for money. I believe the GP is correct in guessing that the number will be much smaller than the current market cap of BTC
The number is without question much smaller than the current market cap of BTC. The current price and number of shares traded on the exchanges is not very meaningful since exchanges are unregulated and you have behavior such as wash trading where you can manipulate the price and inflate volume.
What I would like to know is how much money has actually been transferred into the exchanges. That is what matters. If Coinbase has 12 million accounts, and on average only $100 was invested (I'm assuming there are MANY opened yet unfunded accounts), then we're talking about $1.2billion at play moving back and forth on that exchange. (this is just a hypothetical number, I would love Coinbase to produce statistics, but know they have no incentive to.)
If no new accounts get opened and no more money flows in, That $1.2b will slowly drop to zero as Coinbase and the miners eat up that pool with fees.
You do put money into a company when you buy its shares ... during an IPO. Meanwhile, owning shares of a company convey fractional ownership of it, its assets, and its future earnings. People will consider the stock price of a company relative to its assets and earnings (P/E) as an indicator of whether the company is overpriced or under-priced.
No one really notes the "total volume" of the trades of stocks, which is what you're asking for for Bitcoin; it isn't really a meaningful number. If people pass a stock
- or a Bitcoin - back and forth for 10 trades for [$99, $101] or for 100 trades for [$99, $101], it isn't really meaningful.
The best you can do for Bitcoin is to try to gauge the "depth of the market" right now, ie, how many "buy" and "sell" orders are out at what prices, how much Bitcoin you could buy or sell right now and what the average price you could buy or sell a large quantity of Bitcoin at. (Eg, if you wanted to sell X Bitcoin, you might be able to sell X/2 Bitcoin at $PRICE and X/2 Bitcoin at $PRICE/2, for an average price of $PRICE*3/4.)
AAPL buying/selling itself is a direct link between the assets inside AAPL and its stock price. Money can literally be "put into" and "taken out of" AAPL.
Those "assets inside" AAPL are still dollars. User payed dollars for AAPL share which ended up in a dollar account or a treasury bond. Stop being so obtuse.
Otherwise I can also say the same thing, that you can literally put dollars into Bitcoin by buying GBTC shares, since the dollars become "assets inside" the Bitcoin Investment Trust company.
Sure, the Bitcoin Investment Trust is no different than any other stock. Buying shares of GBTC entitles you to a share of its assets and earnings, same as any other company.
But what are those assets worth? AAPL owns patents, inventory, raw material, real estate, subsidiaries, investments (stocks, bonds, commodities, T-bills, the whole shebang) and straight-up cash. You can add all those together and you can evaluate each of them based on how their value can change over time and under different market conditions.
What assets does GBTC hold? If the answer is "Bitcoin", you've just recursed on "What is the value of a Bitcoin?"; if the answer is "Bitcoin, cash, other cryptocurrencies, and a whole lot of other assets", great, you can evaluate each of them independently and add them all together. But again, you're recursing on the value of cryptocurrencies without really coming any closer to an answer.
I was never discussing what AAPL or Bitcoin is worth or not.
Just the claim that "you can't put dollars into Bitcoin, because there is a seller on the other side which takes the dollars" somehow applies to Bitcoin in a special way. My claim is that this is true for most assets out there, stocks, commodities, or financial contracts.
So let's imagine you buy $1000 worth of AAPL, $1000 worth of pork bellies, and $1000 worth of BTC. Then, simultaneously, AAPL decides to close up shop, no one is interested in buying pork bellies anymore, and the Bitcoin network shuts down.
What do you now own in each case?
AAPL liquidates all of its assets, pays off its debts, and distributes the balance to its former shareholders. You probably don't get $1000, you probably get something like $50 or $100.
Someone delivers some number of physical, frozen pork bellies to you.
And from Bitcoin you get nothing.
This is what I mean when I say all of the buying doesn't actually "put money" into Bitcoin: it is an investment with no underlying value. With all other markets, what you think of as a two-party trade, between the buyer and the seller, is actually a three-party affair, between the buyer, the seller, and the company or asset being traded. "Putting money" into a company ultimately results in that company having more money to build out their business with; "putting money" into a commodity ultimately results in more producers producing more of the commodity. "Putting money" into Bitcoin ultimately results ... in nothing.
That applies to currencies too. I can "put money" into USD (from AUD) which actually does generate X for Y (for example, it creates more purchasing power for all importers in the USA).
One thing we know is that the USD exchange volume for the last 30 days was about $295 billion [0] (or almost 100% of the market cap). However, a lot of this volume is due to the same group of traders circulating the same coins back and forth.
Ultimately and as other commenters pointed out, it doesn't really matter. It is possible that people who bought BTC with "hard earned cash" are statistically more unwilling to sell at a loss but that's about how much you could infer from that statistic in my opinion.
Bank of America and Bitcoin both have market caps of ~$290 billion. Bank of America usually sees huge trading volume for a stock and it traded about $1.8 billion of volume today. BTC/USD alone has done $3 billion today.
I realize it's not a perfect comparison, but I think it highlights the fact that large sales aren't going to just decimate bitcoin's value.
Given those figures come from the completely unregulated, unaudited, incredibly sketchy exchanges themselves, I would take that with a huge grain of salt. Odds are good a vast majority of that $3 billion is trades using funny money or, for all you know, made up out of thin air. Easy to just trade with yourself all day...
This seems like a good indicator of a bubble. Everyone and their uncle knows a crash is coming, and these guys are shooting nonsense about regret and disappointment.
> Everyone and their uncle knows a crash is coming
A crash is always coming. Be it stock market or bitcoin. Everyone knows that but nobody knows when. It is just like saying we all are gonna die. Nobody knows when.
The question is how soon is soon. I remember saying the exact same thing 3, 4 yrs ago when these 2 same guys were then saying bitcoin would go to $10000. It was something like $600 then and I thought they were totally nuts and that was a sign of a bubble if anything. Now I wish I had bought a few coins back then
This kind of regret is exactly how you know it is a bullshit scam. No real-world investment behaves like bitcoin. It is massive, souped up penny stock designed to suck in libertarians and tech nerds.
Plus, who the fuck wants to adopt a "currency" where only the early investors get to be rich? Like, a vast majority of the BTC wealth is in a tiny, tiny fraction of people who were mining BTC way back in the day. How in the holy heck is that something you'd want in a mainstream currency?
> Like, a vast majority of the BTC wealth is in a tiny, tiny fraction of people who were mining BTC way back in the day.
Isn't that also true of fiat currencies though? Most of the wealth is concentrated in the hands of a few, and passed down through families as inheritance over centuries.
How will quantum computing impact crypto currencies? Isn't the scarcity based on the slow rate of mining, aka crypto hashing? Seems like its going to be due for some serious future disruption.
Until we can find a way to manufacture gold atoms on a mass scale at least gold will continue to be scarce.
I had the same thought as you but then have a look at the Etherium fork, the Bitcoin fork etc.
Bitcoin isn't the original white paper, to be carried on into infinity. Bitcoin is a brand. The white paper(s) and code can change (while honouring historic transactions) and adapt to changes in crypto, but you are still holding bitcoin, you are still buying and transaction bitcoin.
The word Bitcoin is essentially a "pointer" to the current accepted bitcoin implementation.
There are a few quantum resistant cryptocurrencies out there already. Bitcoin isn't one of them but it's well understood how to change it to be quantum resistant. When it becomes a genuine concern they'll no doubt upgrade the crypto.
Novogratz sold $250M of Ethereum earlier this year when the market cap was $25-35B.
Bitcoin market cap is $291 billion right now and the trade volume an order of magnitude higher. So pretty sure they wouldn't have much problem unloading their position.
They are linked very closely, especially with a volatile market like crypto. Besides, the volume is 10x what it was when Novogratz unloaded $250M on a smaller market cap. A billion would certainly move the price, but it doesn't appear it would crash it.
I was playing around with automated trading algorithms this summer on GDAX. With a bankroll of only $2.5k USD I was routinely contributing $500k+ worth of trading volume each day (that's only 100 r/t trades with $2.5k).
Surely there's a lot more sophisticated high-volume trading algorithms taking place than what I did.
Take a look at GDAX's full book [1] -- Even going all the way down to a BTC price of $8600 (-50% current prices), there's only outstanding buy orders to consume 5169 BTC if someone entered a market sell order. Obviously that would trigger a lot of automated trades that don't live on the book but I think the assumption that "trading volume" == "liquidity" is very dangerous.
It’s been so crazy to see things like that just papered over in thread after thread. People talk about trading volume as though they have the faintest idea what the true, non manipulative volume is. The term “market cap” being thrown around as though anything remotely close to the figure could be realized.
I’m starting to lose sympathy for the people who are ultimately going to get hurt when this crashes. The signs are not hard to see at all.
Seriously though, given all these trades occur on god knows what kind of sketchy exchanges for all we know half that stuff is literally random inserts in a database with no bearing in reality at all. Toss in "innovative" things like Tether and who really knows what the true value of BTC is.
This stuff is gonna fail, and fail hard. Hopefully for good. BTC and the whole crypto bandwagon is a massive, massive waste of energy.
I don't disagree necessarily, but it's a very useful if somewhat flawed proxy I think? Any changes to the book are going to get arbed away pretty quickly, so a market sell is almost never a good idea with volume.
We've seen those and the price jumps back almost immediately because BTC trades on many exchanges and currency pairs.
If you wanted to measure the current book, I think you'd have to sum up the various fiat books across exchanges to get a good sense of what the market can bear at the moment.
edit: Thank you for forcing me to clarify my thinking, I shouldn't have directly linked volume to liquidity but absent good data I tend to associate them.
The hilarious thing is, they're not liquidating. So they may in fact lose it all in the end. Not diversifying at the current prices can only be seen as insane.
Also, selling this many bitcoin at this time is a delicate thing. The sane thing to do is offload the tulip bulbs before the market collapses, yet offloading all of the bulbs at once might flood the market and trigger the collapse.
No matter what, they'll not be able to exchange all of their imaginary wealth to real wealth but they'll definitely make a killing. Unless they really intend to go down with the ship which would be poetic in its own way.
