Author Topic: Cryptocurrency -- Is anyone on-board?  (Read 19221 times)

0 Members and 1 Guest are viewing this topic.

Offline woody

  • Regular Contributor
  • *
  • Posts: 213
  • Country: nl
Re: Cryptocurrency -- Is anyone on-board?
« Reply #75 on: December 04, 2017, 07:13:39 pm »
As you state Bitcoin (or any other cryptocurrency) can have a number of advantages over paper based fiat currencies. The problem with it is getting people to use cryptocurrencies as a normal currency. To buy their daily bread, so to speak.

This is impossible with Bitcoin as the maximum number of transactions will never be high enough to become a widespread currency. IMO that means that Bitcoin will never be more than a 21st century version of the tulip bulb. A vehicle for speculation. Come to think of it, buying into tulips made more sense, as when they lose their value they still make beautiful flowers.

The one thing that kept me from using Bitcoin is the fact that something, somewhere, sits on at least a million Bitcoins; the first ones mined by the entity that invented them. Given the fact that there are only going to be 21.7 million BTC in total that means that if we would overcome the transaction problem and we all started to pay our way using Bitcoin that entity would own 5% of all wealth in this world. That would get us right back to square one, at the mercy of very few, unknown people. It comes down to a choice between the devil you know and the saint you don't.
 
The following users thanked this post: thm_w, ebastler

Offline Vtile

  • Frequent Contributor
  • **
  • Posts: 931
  • Country: fi
  • Ingineer
Re: Cryptocurrency -- Is anyone on-board?
« Reply #76 on: December 04, 2017, 10:03:40 pm »
I just did read that US official show green for bitcoin derived investment object. I get goosebumbs, glitnir anyone?
 

Offline Cerebus

  • Super Contributor
  • ***
  • Posts: 3318
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #77 on: December 05, 2017, 12:17:41 am »
Quite what is "US official show green" meant to mean?
Anybody got a syringe I can use to squeeze the magic smoke back into this?
 

Offline Vtile

  • Frequent Contributor
  • **
  • Posts: 931
  • Country: fi
  • Ingineer
Re: Cryptocurrency -- Is anyone on-board?
« Reply #78 on: December 05, 2017, 12:42:19 am »
 

Offline NivagSwerdna

  • Super Contributor
  • ***
  • Posts: 1493
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #79 on: December 05, 2017, 12:53:22 am »
 

Offline Cerebus

  • Super Contributor
  • ***
  • Posts: 3318
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #80 on: December 05, 2017, 12:56:17 am »
Quite what is "US official show green" meant to mean?
http://www.cftc.gov/PressRoom/PressReleases/pr7654-17#PrRoWMBL

So you meant that US officials had given 'something' a 'green light'? Well they haven't. From where you pointed that URL:

Quote
Today, the Chicago Mercantile Exchange Inc. (CME) and the CBOE Futures Exchange (CFE) self-certified [My emphasis] new contracts for bitcoin futures products, and the Cantor Exchange (Cantor) self-certified a new contract for bitcoin binary options.

Quote
As with all contracts offered through Commission-regulated exchanges and cleared through Commission-regulated clearinghouses, the completion of the processes described above is not a Commission approval [My emphasis]. It does not constitute a Commission endorsement of the use or value of virtual currency products or derivatives.

Three vendors of cryptocurrency derivatives self-certifying their products is not an official seal of approval. It's of no more worth than Mr. C.M.O.T. Dibbler self-certifying that his sausages-in-a-bun are the best sausages on open air sale in the town square today.
Anybody got a syringe I can use to squeeze the magic smoke back into this?
 

Offline Vtile

  • Frequent Contributor
  • **
  • Posts: 931
  • Country: fi
  • Ingineer
Re: Cryptocurrency -- Is anyone on-board?
« Reply #81 on: December 05, 2017, 01:06:50 am »
Quite what is "US official show green" meant to mean?
http://www.cftc.gov/PressRoom/PressReleases/pr7654-17#PrRoWMBL

So you meant that US officials had given 'something' a 'green light'? Well they haven't. From where you pointed that URL:

Quote
Today, the Chicago Mercantile Exchange Inc. (CME) and the CBOE Futures Exchange (CFE) self-certified [My emphasis] new contracts for bitcoin futures products, and the Cantor Exchange (Cantor) self-certified a new contract for bitcoin binary options.

Quote
As with all contracts offered through Commission-regulated exchanges and cleared through Commission-regulated clearinghouses, the completion of the processes described above is not a Commission approval [My emphasis]. It does not constitute a Commission endorsement of the use or value of virtual currency products or derivatives.

Three vendors of cryptocurrency derivatives self-certifying their products is not an official seal of approval. It's of no more worth than Mr. C.M.O.T. Dibbler self-certifying that his sausages-in-a-bun are the best sausages on open air sale in the town square today.
It seems so, my first source where I did see the news were referring that source (which I did quickly searched) wrongly. Let see what happens, but at least they aren't prohibiting these futures etc. for now. I'll assume these will be highly lucrative, but shady business for a short time. Hopefully I'm wrong, but I doubt it.
 

Offline Cerebus

  • Super Contributor
  • ***
  • Posts: 3318
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #82 on: December 05, 2017, 04:01:47 am »
[It seems so, my first source where I did see the news were referring that source (which I did quickly searched) wrongly. Let see what happens, but at least they aren't prohibiting these futures etc. for now. I'll assume these will be highly lucrative, but shady business for a short time. Hopefully I'm wrong, but I doubt it.

Financial derivatives are tricky things; some can stabilize markets, some can destabilize markets. Which they do largely depends on whether the buyers of those derivatives are speculating or are hedging against future price changes because they need actual protection against those price changes.
Anybody got a syringe I can use to squeeze the magic smoke back into this?
 
The following users thanked this post: CatalinaWOW, Vtile

Offline ebastler

  • Super Contributor
  • ***
  • Posts: 1983
  • Country: de
Re: Cryptocurrency -- Is anyone on-board?
« Reply #83 on: December 05, 2017, 05:20:18 am »
Financial derivatives are tricky things; some can stabilize markets, some can destabilize markets. Which they do largely depends on whether the buyers of those derivatives are speculating or are hedging against future price changes because they need actual protection against those price changes.

Agree. But it seems to me that there will be one qualitatively new possibility now, due to futures contracts: You can now bet on a falling Bitcoin. Up to now, one could only buy Bitcoin and speculate that it would rise, right? I wonder what that change will do to the Bitcoin price and its volatility...

As a side note, does anyone know whether those futures contracts will specify "physical delivery" or "cash settlement"? I.e., if I sign a "put" contract to sell you Bitcoins for a certain price two months from now -- do I actually have to sell you the Bitcoins then, or do we just settle the price difference in USD or some other currency?

With the latter type of contract (which is the more common type, I understand), one can finally speculate in Bitcoin without ever moving a Bitcoin! Given the fact that 99% of Bitcoin transactions are probably speculative today, that will make Bitcoin a truly "virtual" currency... Heck, we might even shut down the whole blockchain and mining infrastructure, and just have people take bets on a virtual something called Bitcoin!  :P
 

Offline Galenbo

  • Super Contributor
  • ***
  • Posts: 1470
  • Country: be
Re: Cryptocurrency -- Is anyone on-board?
« Reply #84 on: December 05, 2017, 09:05:18 pm »
With the excess money you have, you can choose to speculate, to save defensively, (or combinate both)

Cryptocurrencies are a bad way for defensively saving, because after a (serious) stock/govt crash, electricity/networks could fall down, or could be put down/limited.
When the value of money goes down in a hyperinflation, BTC goes relatively up, but you can't access/use it, whitch will make it crash too.
If you try and take a cat apart to see how it works, the first thing you have on your hands is a nonworking cat.
 

Offline hamster_nz

  • Super Contributor
  • ***
  • Posts: 1670
  • Country: nz
Re: Cryptocurrency -- Is anyone on-board?
« Reply #85 on: December 07, 2017, 02:40:30 pm »
FWIW, Bitcoin just hit $15,000. Those 5,000 bitcoin pizzas made somebody very rich!

edit: Opps - false alarm. It's only $13,801
« Last Edit: December 07, 2017, 02:54:01 pm by hamster_nz »
 

Offline hamster_nz

  • Super Contributor
  • ***
  • Posts: 1670
  • Country: nz
Re: Cryptocurrency -- Is anyone on-board?
« Reply #86 on: December 08, 2017, 07:45:05 am »
FWIW, Bitcoin just hit $15,000. Those 5,000 bitcoin pizzas made somebody very rich!

edit: Opps - false alarm. It's only $13,801
My post was a bit early... it's broken $16,600 today.

Hummm... +14% in a day. How long until somebody blinks, and $262,000,000,000 (a little bit bigger than the GDP of Finland, Chile or Pakistan) becomes nothing.
 

Offline hendorog

  • Super Contributor
  • ***
  • Posts: 1249
  • Country: nz
Re: Cryptocurrency -- Is anyone on-board?
« Reply #87 on: December 08, 2017, 09:53:08 am »
Bitcoin transaction fees are a bit of a fun killer as I have just discovered.

I have been saving $20/week for the last couple of months in bitcoin just for interest sake. Now I have 9 small bitcoin amounts in my wallet and it's worth more than double what I have put in. So I decided to sell it.
However, dun dun, dunnn:- to convert it back into cash right now would cost me $100 in fees to get $200 in cash back!

This is partly because the transaction fees are quite high at the moment because there is a backlog. However even if they were normal I would be paying 10% or more in fees.

What I believe I needed to do is 'prep' for selling these by offering a small fee to combine the small transactions into one at a time when there is no backlog. To get it done cheaply, that transaction would take an long time to go through and therefore my ability to sell is out of my control.

Logically this makes a savings plan in bitcoin a bad idea if you are investing regular small amounts. It's a pretty big downside.

 

Offline MadTux

  • Frequent Contributor
  • **
  • Posts: 444
Re: Cryptocurrency -- Is anyone on-board?
« Reply #88 on: December 08, 2017, 10:43:28 am »
Bitcoin transaction fees/limits will also interesting in case of an/the upcoming crash.
What happens if everyone wants to sell, but can't due to limited transactions/time? Guess the fees go up and the biggest players sell relatively cheap (in % of their bitcoin assets), while the ones who got fooled into the bitcoin craze will have to pay more fees than what their bitcoins are worth.

Apart from that, any guesses/estimates on when it will crash? I say it will have crashed by Christmas ;D. Will be funny, since those 160-250*10^9 USD worth of Bitcoin is about 50-100USD for like every person that has internet on this world. Since not everyone owns bitcoins and some are certainly in dept due to creed of owning more bitcoins/money, some creedy persons  certainly will fall hard  ;D
 

Online TopLoser

  • Supporter
  • ****
  • Posts: 1660
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #89 on: December 08, 2017, 10:51:37 am »
Comparing it to investing in shares it looks like a 0.2 trillion dollar company with a horrific 5-10% buy/sell spread and up to an hour to confirm a deal??? Really? Let’s see what happens when panic selling sets in and the trades start taking hours to be confirmed.

 

Offline thm_w

  • Frequent Contributor
  • **
  • Posts: 816
  • Country: ca
Re: Cryptocurrency -- Is anyone on-board?
« Reply #90 on: December 08, 2017, 10:54:11 am »
Bitcoin transaction fees are a bit of a fun killer as I have just discovered.

I have been saving $20/week for the last couple of months in bitcoin just for interest sake. Now I have 9 small bitcoin amounts in my wallet and it's worth more than double what I have put in. So I decided to sell it.
However, dun dun, dunnn:- to convert it back into cash right now would cost me $100 in fees to get $200 in cash back!

This is partly because the transaction fees are quite high at the moment because there is a backlog. However even if they were normal I would be paying 10% or more in fees.

What I believe I needed to do is 'prep' for selling these by offering a small fee to combine the small transactions into one at a time when there is no backlog. To get it done cheaply, that transaction would take an long time to go through and therefore my ability to sell is out of my control.

Logically this makes a savings plan in bitcoin a bad idea if you are investing regular small amounts. It's a pretty big downside.

That doesn't sound quite right. Are you saying, you have 9 different addresses? If you have all the money in one address, then only need to pay the fee once ($15 right now) plus a currency conversion fee.

It looks like these guys are offering ~2.7% fees: https://localbitcoins.com/ad/571105/cash-out-your-bitcoins-bank-all-banks (but I think min is $300).
 

Offline hendorog

  • Super Contributor
  • ***
  • Posts: 1249
  • Country: nz
Re: Cryptocurrency -- Is anyone on-board?
« Reply #91 on: December 08, 2017, 11:15:01 am »
Bitcoin transaction fees are a bit of a fun killer as I have just discovered.

I have been saving $20/week for the last couple of months in bitcoin just for interest sake. Now I have 9 small bitcoin amounts in my wallet and it's worth more than double what I have put in. So I decided to sell it.
However, dun dun, dunnn:- to convert it back into cash right now would cost me $100 in fees to get $200 in cash back!

This is partly because the transaction fees are quite high at the moment because there is a backlog. However even if they were normal I would be paying 10% or more in fees.

What I believe I needed to do is 'prep' for selling these by offering a small fee to combine the small transactions into one at a time when there is no backlog. To get it done cheaply, that transaction would take an long time to go through and therefore my ability to sell is out of my control.

Logically this makes a savings plan in bitcoin a bad idea if you are investing regular small amounts. It's a pretty big downside.

That doesn't sound quite right. Are you saying, you have 9 different addresses? If you have all the money in one address, then only need to pay the fee once ($15 right now) plus a currency conversion fee.

It looks like these guys are offering ~2.7% fees: https://localbitcoins.com/ad/571105/cash-out-your-bitcoins-bank-all-banks (but I think min is $300).

I'd be really happy if it wasn't right :)

All of the bitcoin is in one wallet, and I think one address - at least they all came from the same institution to the same wallet so I think that is the case.

I initially tried to send close to the full amount in the wallet and then kept reducing it after getting 'Insufficient funds to pay fee' type messages. The wallet is Copay and it has a 'Send Max Amount' function, so I tried that. It tells me that the fee is $100 NZD which is 30% of the sending amount. Reducing to 'super economy' drops it to about $90 NZD. Obviously the lower I go the longer it will take to happen.

On the faq they mention this:
Quote
Copay requires high fees for low amounts transactions?

The parameter used for the fee calculation is the TX size, not the output amount. So, this could happen when you have many small inputs in your wallet, so you need to use all (or most) of them to build the transaction and your fee will be increase significantly. For a more detailed explanation check this contributor comment: https://github.com/bitpay/copay/issues/5164#issuecomment-265569494. This could be useful too: https://github.com/bitpay/copay/issues/4803#issuecomment-254496226.

I think this is part of how Bitcoin works, and probably not a well understood part.


 

Online Marco

  • Super Contributor
  • ***
  • Posts: 3748
  • Country: nl
Re: Cryptocurrency -- Is anyone on-board?
« Reply #92 on: December 08, 2017, 11:20:49 am »
I'd learned long ago that the existing national currency systems are entirely faith-based

Only in failed states, in functioning states they are partly force based. You generally have to pay taxes for instance to preserve your ownership of real estate. Those taxes have to be paid in national currency, hence to a certain extent force backs the value. In fact legal tender laws can make other means of exchange illegal for normal commerce as well, through more force.
 
The following users thanked this post: Galenbo

Online Marco

  • Super Contributor
  • ***
  • Posts: 3748
  • Country: nl
Re: Cryptocurrency -- Is anyone on-board?
« Reply #93 on: December 08, 2017, 11:26:19 am »
Come to think of it, buying into tulips made more sense, as when they lose their value they still make beautiful flowers.

You can also eat them, the bulbs that is.
 

Offline Cerebus

  • Super Contributor
  • ***
  • Posts: 3318
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #94 on: December 08, 2017, 12:15:57 pm »
I'd learned long ago that the existing national currency systems are entirely faith-based

Only in failed states, ...

The level of function of the state doesn't have any effect on whether the currency is faith-based or not, it merely affects the amount of faith that people will have in that currency. Fiat currencies only ever have the value that people place in them, pretty much by definition. If the state dictates that, for its purposes, a currency has value and coerces behaviour to enforce that, it doesn't alter the quintessential nature of a fiat currency.
Anybody got a syringe I can use to squeeze the magic smoke back into this?
 

Online Marco

  • Super Contributor
  • ***
  • Posts: 3748
  • Country: nl
Re: Cryptocurrency -- Is anyone on-board?
« Reply #95 on: December 08, 2017, 12:50:17 pm »
In a functioning state, if everyone loses faith in fiat currency does it lose all its value? It does not, people will want it to relinquish their debts to government (or simply to facilitate trade with restrictive legal tender laws). There is demand, thus it will have value. Your lack of faith can not remove that utility, thus it can not be the full basis of its value.

Force is a more fundamental basis for the value of fiat currencies than faith.
« Last Edit: December 08, 2017, 12:55:03 pm by Marco »
 

Offline TerraHertz

  • Super Contributor
  • ***
  • Posts: 3389
  • Country: au
  • Why shouldn't we question everything?
    • It's not really a Blog
Re: Cryptocurrency -- Is anyone on-board?
« Reply #96 on: December 08, 2017, 01:47:07 pm »
Marco, you're neglecting to factor in cases where the State decides, for whatever reason, to de-monetize the existing fiat currency.
This happens often, historically speaking. For instance recently in India. Also Nth Korea a few years ago. You can go to any coin collectors store, and cheaply buy a bundle of assorted de-monetized paper currencies from around the world. It's an educational experience.

'Fiat' means 'by command'. If you are holding currency (either physical cash or numbers in bank accounts), your store of value retains its value entirely at the discretion of the government. Hence the 'faith' involved isn't just on the part of the People. It also depends on good faith from the powers that be.

Whereas holding a currency that is literally in the form of physical gold and silver, isn't faith based. Doesn't matter what anyone (the people, the government, or you) believes. You still hold something of material value. There might be some argument over the exact value (eg loaves of bread per ounce of gold), but this actually remains remarkably stable over history. In Roman times you could buy a fine set of clothes for about an ounce of gold. Today, you can get a fine set of clothes for about an ounce. The dollar value of gold is more an indicator of the value (or lack of it) of the dollar, not of gold.

I'm waiting to see if the mathematical uniqueness and non-reproducibility of bitcoin and other crypto currencies will serve to give cryptocurrencies the permanency and allodial attributes of precious metals. I suspect not. But only time will tell.

It's very relevant that the number of different cryptocurrencies seems to be exploding. There's obviously no limit on the number of algorithms possible, which puts us right back into infinite printing press territory.
Collecting old scopes, logic analyzers, and unfinished projects. http://everist.org
 

Offline Cerebus

  • Super Contributor
  • ***
  • Posts: 3318
  • Country: gb
Re: Cryptocurrency -- Is anyone on-board?
« Reply #97 on: December 08, 2017, 01:54:53 pm »
In a functioning state, if everyone loses faith in fiat currency does it lose all its value? It does not, people will want it to relinquish their debts to government (or simply to facilitate trade with restrictive legal tender laws). There is demand, thus it will have value. Your lack of faith can not remove that utility, thus it can not be the full basis of its value.

Force is a more fundamental basis for the value of fiat currencies than faith.

You argument only works where there is coercion. If there is free choice (say the black market, or a foreign market) then faith in a currency is all that matters.

One can get most results with enough coercion; if I put a gun to your head I could make you recant your position, but fortunately I'm more inclined to use rhetoric and logic.

The problem is that people are so inured to fiat currencies that many fail to see them for what they are and continue to believe that they have some intrinsic value. So much so that purely financial crises can bring the world to its knees despite the fact that the resources, workers, factories, demand and all the other elements of the economy continue to exist just as they did before said crises. That could not happen in a barter economy or one where money only had real intrinsic worth, except for some real physical disaster.

No one is arguing that fiat currencies have no utility, just no intrinsic value and what value they have is based on a collective belief in their value. Even the most debased fiat currency has utility, even if only as a source of combustible heating material,  on a nail in the lavatory or as a collectable keepsake of the foolishness of governments - the Zimbabwean Dollar comes to mind.
Anybody got a syringe I can use to squeeze the magic smoke back into this?
 

Offline hamster_nz

  • Super Contributor
  • ***
  • Posts: 1670
  • Country: nz
Re: Cryptocurrency -- Is anyone on-board?
« Reply #98 on: December 08, 2017, 02:08:04 pm »
Bitcoin transaction fees are a bit of a fun killer as I have just discovered.

I have been saving $20/week for the last couple of months in bitcoin just for interest sake. Now I have 9 small bitcoin amounts in my wallet and it's worth more than double what I have put in. So I decided to sell it.
However, dun dun, dunnn:- to convert it back into cash right now would cost me $100 in fees to get $200 in cash back!

This is partly because the transaction fees are quite high at the moment because there is a backlog. However even if they were normal I would be paying 10% or more in fees.

What I believe I needed to do is 'prep' for selling these by offering a small fee to combine the small transactions into one at a time when there is no backlog. To get it done cheaply, that transaction would take an long time to go through and therefore my ability to sell is out of my control.

Logically this makes a savings plan in bitcoin a bad idea if you are investing regular small amounts. It's a pretty big downside.

To quote Adam Chalmers? (@adam_chal)
Bitcoin was supposed to demonstrate the power of a true free market. Instead it's full of scams, rent-seekers, theft, useless for real purchases and accelerates climate change. Mission accomplished,[/]
 

Offline sleemanj

  • Super Contributor
  • ***
  • Posts: 2174
  • Country: nz
  • Professional tightwad.
    • The electronics hobby components I sell.
Re: Cryptocurrency -- Is anyone on-board?
« Reply #99 on: December 08, 2017, 02:58:36 pm »
but this actually remains remarkably stable over history. In Roman times you could buy a fine set of clothes for about an ounce of gold

But why?

In practical terms, gold generally speaking, isn't astoundingly useful in an large scale, even less so in modern life than in antiquity, it's not really that rare really is it.  There's piles of gold to satisfy demand, I don't think any industry (semiconductors for example) has trouble buying gold if they need to buy some.

I think gold, and silver, and diamonds etc are valuable mainly because they are desirable things to have, and that's purely because people, for no good reason have decided they are desirable things to have.

Diamonds are an even bigger case in point, gem diamonds have essential zero practical use in any sort of scale that matters, and yet they are assigned by the people such fantastic monetary equivalence that they are used, much the same as bitcoin in fact, for exchanging value when you don't want to exchange money (ie, blackmarket).  Industrial diamonds, the ones we actually use, have all the practical applications, but none of the value.  Neither gem diamonds nor industrial ones are rare, hell we can manufacture them.

All it takes is for the people to decide that gold, silver, diamonds really are not "all that" and whoosh, there goes the market, there would be piles of supply to satisfy the actual users of them in practical applications for a long time.

Bitcoin isn't really that much different, in fact the parallels with diamonds especially are really close if you think about it - an artificially constrained supply of a not-rare thing, where the valuable type has little practical purpose (ie, bitcoin) and is valuable because people say it's valuable, and the non-valuable type has lots of practical purpose (eg various altcoins due to low fees/bigger blocks/segwit etc...) and probably should be more valuable because it's more useful but isn't more valuable because the people say it's not valuable.

People are strange.
~~~
EEVBlog Members - get yourself 10% discount off all my electronic components for sale just use the Buy Direct links and use Coupon Code "eevblog" during checkout.  Shipping from New Zealand, international orders welcome :-)
 
The following users thanked this post: Bassman59


Share me

Digg  Facebook  SlashDot  Delicious  Technorati  Twitter  Google  Yahoo
Smf