
One of the Biggest Bitcoin Exchanges Just Added 100,000 Users in a Single Day - rayuela
https://www.bloomberg.com/news/articles/2017-11-02/bitcoin-exchange-added-100-000-users-in-a-day-as-price-exploded
======
purephase
As someone not invested in any of this at all, its fascinating to watch as
people jump in completely oblivious to risk involved.

I've listened to friends and family discuss investing "only $100" or "only
$1000" for fractional amounts of bitcoin with the idea that they're sure fire
bets for making money.

I feel a bit like a rube sitting it out on the sidelines (and they're
chastising me for not acting) as the price keeps going up-and-up and for most
of them, these small investments (some quite large) have paid off for them.

When does this bubble burst? And, what is it going to look like? 100k people
in a single day is crazy to me as a layperson, but if this was to be compared
to a stock run (disregarding dilution) what type of alarm bells should be
ringing for those with the most to lose? Or, are we past that point now?

~~~
komali2
I haven't been convinced that this has happened before, so other than "not
diversifying is dumb," anybody that says with any authority "you should not be
investing a small amount of money in cryptocurrency" has an equally strong
argument as someone that says "you should be investing a small amount of money
in cryptocurrency."

I say as long as you follow centuries-old investment advice (diversify, always
have a backup plan, have enough cash for a crash), there's no reason not to
explore a new investment instrument. AKA, "fuck it, why not?"

Depending on how much you make I don't see why not invest "only $1000," as
long as your other tested investment instruments are already qualified
(emergency savings, 401k/roth/whatever, stocks, bonds, int'l investments).

~~~
saas_co_de
gambling is gambling. if you want to gamble for fun then by all means enjoy
yourself. but don't pretend it is an "investment."

~~~
DaiPlusPlus
But not all gambling is "gambling": Insurance is gambling, for example.
Picking mutual funds and ETFs for your retirement plan is gambling.

"Gambling" has connotations of immoral behaviour, especially in zero-sum or
always-lose scenarios like poker and casinos. I don't think it's fair to
describe educated and informed investment or buy-ins with words like that. I
think "risky venture" is a less loaded, more neutral, term to describe it
instead.

As it is, I don't see Bitcoin and other currencies as true investments - just
yet - I see the surge in Bitcoin mainly as a "distributed Ponzi-scheme"
instead: those who are cashing-out now are those who bought-in early and being
paid by the people buying it now - and the people buying it now expect more
other people to buy into it later, pushing the price higher while supply and
availability dwindle (owing to BTC's 28M cap). However, unlike a Ponzi-scheme,
Bitcoin, Ethereum and others do have utility as a means of moving money around
independently of existing, often state-controlled, bank networks or remittance
services - and eventually Bitcoin will be the tool of choice for that - and
when the tens of millions of people wanting to move money around do so is when
we will know the real, unhyped, value of Bitcoin - until then, the question is
if $7,000 USD/BTC is an obscene over-valuation, or is still comically low -
and I don't know which side to believe.

We'll get a better idea when, or if, legacy companies like Western Union and
SWIFT get involved - or when real-time BTC transactions cost less than a VISA
or Mastercard transaction (say ~3%). Right now a 250 byte transaction will
cost 54,240 satoshi ($3.83) and take 30 minutes to get the first confirmation
- making it totally unacceptable for retail purchases, for example. Hopefully
when the Lightning Network or other solutions get finalized we'll start to see
some real traction, but how many bubbles will burst before then?

(Disclaimer: I'm a HODLer of BTC and ETH).

~~~
Sangermaine
>"Gambling" has connotations of immoral behaviour, especially in zero-sum or
always-lose scenarios like poker and casinos. I don't think it's fair to
describe educated and informed investment or buy-ins with words like that. I
think "risky venture" is a less loaded, more neutral, term to describe it
instead.

This is not a repeat from every bubble ever. This time it's different!

~~~
ac29
All GP is saying is that some gambling, such as on casino slot machines has a
mathematically defined (and legally regulated) payout of less than 100%. Same
for state lotteries.

Bitcoin may well be in a bubble, but it isnt mathematically and legally
guaranteed to decrease in value overall as compared to what most people
consider traditional forms of "gambling".

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seanalltogether
I'd be curious to know at this point what amount of bitcoin transactions are
actually retail focused. There was a big push a couple years back by users
wanting to make actual purchases with bitcoin and helping to build the
infrastructure around that. Does this retail side of bitcoin still exist, or
is everyone just mining and selling -> buying and holding?

~~~
apthnz
As far as I know, most Bitcoin transactions take ~10mins to get confirmed, so
I'm not sure the current infrastructure would work for retail.

Admittedly I don't know what would need to be changed to speed up transaction
confirmations to the point where you could use it in retail situations.

~~~
seanalltogether
When I say retail I mean things like buying steam games or buying web hosting,
not actual brick and morter store purchases.

~~~
Plnt
You can buy games on Steam with Bitcoin.

[https://www.theverge.com/2016/4/28/11525482/bitcoin-steam-
va...](https://www.theverge.com/2016/4/28/11525482/bitcoin-steam-valve-bitpay)

------
golangnews
"I can calculate the movement of stars, but not the madness of men,"

\- Newton after he lost everything investing in the south sea bubble for a
_second_ time, just before it popped.

This has gained mainstream attention and no-one knows what they’re investing
in any more, there is no there there to justify the price. Consider the
trajectory of chain - a bitcoin startup that has gone from being about bitcoin
to about block chains to about distributed ledgers to being about distributed
applications (note these last things don’t care what they’re denominated in).

A founder wrote one of the best write ups of this space I’ve seen, and even he
is pretty skeptical:

[https://blog.chain.com/a-letter-to-jamie-dimon-
de89d417cb80](https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80)

All it needs now is for ordinary people to get nervous and start trying to
realise their gains all at once for prices to plummet once again.

------
kasperni
One bitcoin transaction already now uses as much energy as your house in a
week. I really have trouble seeing how this can scale in the long run?

[https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-
mi...](https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-
electricity-consumption-ethereum-energy-climate-change)

Bitcoin - The new coal

~~~
enobrev
This has been my issue from the start. I generally feel like I've missed a
boat I certainly could have gotten on to early enough, But it's so terribly
wasteful, I have a hard time supporting the thing at all. Admittedly I don't
follow the subject very closely, but I haven't seen this argument mentioned
nearly enough.

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jhspaybar
My dad just texted me today asking if I owned bitcoin and if he should pick
some up. I described it as uninsured highly volatile fine art(can be
destroyed/lost) with a huge counter-party risk if he doesn't have the
technical ability to store his own coins. Does anyone out there have a better
analogy to scare family/friends away from it?

~~~
nnfy
Why are you trying to scare them? Just explain to them that it is high risk.

But there is a strong potential future for btc, and in spite of all the fear
mongering, BTC has so far come back from every crash. You're not just throwing
away money if you spend a couple hundred of your otherwise disposable income
on some btc. Buying at any point in the past would have yielded a payoff
today.

~~~
komali2
Can people elaborate why they are downvoting this? I hold a similar opinion -
as long as your other investment instruments are intelligently diversified and
filled-out, why not spend a small % on bitcoin? As nnfy has said, _any_ amount
in the past would have yielded payoff today.

"But a crash!" is not an argument alone. Every single other investment
instrument I'm aware of has had a crash.

~~~
allenz
Investing in Bitcoin to diversify is fine. Buying Bitcoin because it's been
rising? That's the definition of speculation. Most people are not qualified to
be speculators because they are insufficiently critical. It's easy to imagine
potential, and difficult to gauge risk. See also "most investors lose money".

------
dogruck
I’ve got my popcorn out.

I keep encountering more and more everyday people who are investing serious
money in Bitcoin. Uber drivers, barbers, baristas.

~~~
52-6F-62
I'm not into FUD because I like the technology and I have money in it -- but
come mid-month you might see some heads turn at the 2x fork. I haven't been
following closely to what community tone seems to be, but if there ends up
being a sudden correction because of the split, it will be interesting to see
what happens. It bodes well for the tech itself, but it might shake a few weak
hands pretty good. Especially if they're just getting in now...

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jayess
I've tried opening a business account. I provided all of the required
documentation weeks ago (probably more than a month ago). Still not able to
trade. I entered a help ticket a week or so ago and just got a response that
they are very busy... Still waiting.

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synicalx
I'm curious and I can't work out how to phrase this as a Google search, so I'm
hoping someone smarter than me can answer this:

At the moment we refer to BTC as being worth $xUSD, but without another
currency to compare it to, is it worth anything? Or is it just not designed to
be used in isolation?

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pjc50
That's a lot of users. How many of them are distinct human beings? How would
that be verified?

~~~
xapata
Probably a tiny fraction. I'd guess that an algorithm recognized that buying
100 Bitcoin spread across 100k accounts is better than from 1 account.

~~~
6nf
You need ID verification to trade on the account, I dont think you can make
100s of accounts for one trader

~~~
xapata
That's interesting. I thought the Bitcoin folks were all about anonymity.

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rb808
Coinbase so dominates cryptocurrency accounts in the US they should just have
a way to do internal $ payments between accounts without going through any
blockchain. Would be much quicker and cheaper.

~~~
mattpk
Yeah, only apply the transaction to the block chain when it leaves their
system, e.g. PayPal.

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mattpk
I'd rather endure the FOMO when I don't understand its value than lose money
when I had my doubts. Feels like it'll be the former for a while...

------
bb88
So are they truly 100,000 distinct users or just 20 users creating 5,000
accounts each to create a money laundering machine?

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lossolo
Trading volume of bitcoin from last 24h is almost 1.7 billion dollars. I don't
remember to see it that high.

Bitcoin just hit 7000 dollars.

------
loki0505
writing is on the wall gentlemen.

------
rb808
I want to make some money buying bitcoin it just keeps going up! Which is the
best exchange I should use? Is Coinbase best?

~~~
olympus
Two tips:

1\. Don't keep your BTC in any exchange account for very long, and check the
popular forums for people complaining about transactions being held up before
transferring BTC into your account. Lots of people got screwed by MtGox, and
it can happen on any exchange.

2\. Don't spend any money other than money you would be willing to give away
for free (totally discretionary money). The bottom has fallen out of markets
before, and BTC is not immune. BTC has a lot of similarities to tulips,
houses, Beanie Babies, and .com stocks in the late 90's.

~~~
komali2
Hmm, I have a problem with comparing BTC to tulips, houses, or beanie babies,
because there never was a powerful and active market for exchanging beanie
babies for real world product (i.e. functioning as currency) as we have seen
for BTC and buying drugs or software. I also don't like the comparison to .com
stocks because those are already an instrument (stocks), which represent
company values, and the collapse of an industry doesn't necessarily reflect
upon the likelihood of an entirely new investment instrument collapsing.

I would think maybe a comparison to other forms of currency would be a better
metaphor - i.e. gold or something. Inherently value-less (gold is pretty and
historically been used for currency, that's about it - it's not traded as a
commodity for its usefulness as a raw good like Oil or whatever) but still
valued.

~~~
olympus
I didn't say they were identical, but there are some important similarities:

To tulips and beanie babies: There were direct substitutes (other flowers and
other stuffed animals) in terms of the actual utility, but tulip prices shot
up in 1637- even investors bought tulip contracts not because they needed
them, but because they were speculating on the value. Eventually demand
leveled out, and the prices stopped going up. When the prices stopped going
up, the speculators got out, and prices went down fast. The premium status of
being the preferred flower or the preferred toy didn't help any more. How
could this be like BTC? There are cryptocurrencies that are direct substitutes
like LTC, but BTC is preferred and has a lot of investors purely for
speculation. Once demand levels off (it must, there are a max of 7 billion
people that can buy it), the speculators will get out, and prices will come
down. Why hasn't it happened yet? BTC is artificially scarce due to block
difficulty increases and fixed BTC being added for each block. The limited
supply is maintaining price support for now, but like I said, once demand
levels off, the fixed supply won't be as big of a price driver.

Similar to houses and .com stocks: Houses have real utility (you can use it
for shelter). Stocks have real utility (you own a piece of a profit making
entity). BTC has some real utility (you can transfer wealth outside of the
regulation of governments and banks). However, these bubbles happened because
instead of trading on a firm foundation value, people started expecting
profits. The castle in the sky theory does work, but only if enough people
believe in it. Once confidence faltered (either that people would continue to
buy houses or that .com stocks would continue to print money), the castles in
the sky fell, and prices fell back to their firm foundation value (a house in
Las Vegas that I looked at went from $400k down to $100k- basically the price
of raw materials and cheap labor). BTC's price right now is WAY over it's firm
foundation utility of being a wealth transfer vehicle. It does have some
value, but if enough people decide that a couple other cryptocoins can do the
job with less risk than BTC, then prices for BTC will go down to it's
intrinsic value- mostly related to the price of energy. It's hard to tell
where this will settle, because ASICs are getting more efficient, and the
block difficulty changes. But I guarantee you it will be way under $6k.

So these things aren't exactly the same, but there are lots of similarities
with previous bubbles in the past. I'm not saying to stay away from BTC, but
you had better be willing to lose your investment. There are a lot of people
in the market that are only looking for a quick buck, and if they get out
before you do then you are going to lose most of your investment. If you
aren't desperate to make money off your investment, you will be happy with
closing a position early instead of riding the crash into the ground. Closing
early makes you the person with the quick buck and makes someone else the fool
that lost their shirt.

