Barms

Bitcoin...

81 posts in this topic

This came up in lot of casual conversations recently. I honestly didn't (and still dont) see the appeal or value in bitcoin. Other than the good old supply & demand, I don't see how its any better.

And good number of people are losing shirts on their back for investing in fake / hacked crypto-currencies that are popping up trying to ride on popularity of bitcoin. So buyer beware of any get-rich-quick schemes.

Note: I do understand the "restricted supply", "strong security" and "anonymity" of bitcoin.

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Know a lot of people who were very nearly hundred millionaires but we're too afraid to actually go in. The ship has maybe sailed on it now.

Bitcoin is hard for most to really understand. From what research I've done, the value is in purchasing illegal guns, illegal drugs, and child pornography. If you find anyone who seems to know a lot about Bitcoin then be wary as they are very likely to be in one of those 3 markets.

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26 minutes ago, Sevenshot said:

Know a lot of people who were very nearly hundred millionaires but we're too afraid to actually go in. The ship has maybe sailed on it now.

Bitcoin is hard for most to really understand. From what research I've done, the value is in purchasing illegal guns, illegal drugs, and child pornography. If you find anyone who seems to know a lot about Bitcoin then be wary as they are very likely to be in one of those 3 markets.

Be wary of people who do research into illegal guns, illegal drugs, or child pornography as they are probably trying to get involved in those markets. 

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bitcoin is not hard to understand, it's just been largely misrepresented. 

To summarize the technical bits simply, and not fully correctly, it's basically counting by a very very hard method that prevents you from skipping ahead. For every unit counted, another bitcoin exists. 

People would like you to think that because the scarcity is built in and enforced, it will be a stable currency. This is not true because for this to occur, the total valuation of the bitcoin supply would have to be immense. Right now at $10k a pop it is about $300 billion. This is small enough that you can effectively manipulate the market with about $120-300 million dollars. This means it isn't stable. 

People would like you to believe that it's awesome for paying for criminal goods. This is not true because it is anonymous. Hell, bitcoin is WAY more traceable to a person's bitcoin wallet than cash is to an individual. However, it does get you around bank's reporting laws. However, unless you got into them early and mined them, or traded a lot of material goods into them, you aren't able to really avoid them because most of the exchanges that will turn bitcoins into cash and vice versa are going to have a record of it, and have to report the large cash transaction. 

Having an understanding of bitcoin, or block chain in general doesn't mean you are involved in criminal endeavors. It probably means you are a geek, but that's about it. 

 

 

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53 minutes ago, Sevenshot said:

Know a lot of people who were very nearly hundred millionaires but we're too afraid to actually go in. The ship has maybe sailed on it now.

Bitcoin is hard for most to really understand. From what research I've done, the value is in purchasing illegal guns, illegal drugs, and child pornography. If you find anyone who seems to know a lot about Bitcoin then be wary as they are very likely to be in one of those 3 markets.

or they simply invest in it. guy that buys junk cars from me says he's making average of 300 bucks a day with this stuff.

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My guess is it sees $50k before back to $2k

CME futures trade in two weeks in it.   Wouldn’t be there if it was the playground of drug dealers.    Head of Blockchain.com said a Sovereign recognized digital currency will be in place within 2 years somewhere out of europe. The BOE already is asking them to keep on top of it.  

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8 hours ago, tattooo said:
10 hours ago, 1LtCAP said:
or they simply invest in it. guy that buys junk cars from me says he's making average of 300 bucks a day with this stuff.

Not sure if he us being completely truthful ...over 8k a month from bitcoin and he is scrapping junk cars ?

he may or may not be. he was scrapping cars before the bitcoin thing. i've been selling him my junk cars since back when you could get 500-600 a pop for them......

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7 hours ago, Barms said:

My guess is it sees $50k before back to $2k

CME futures trade in two weeks in it.   Wouldn’t be there if it was the playground of drug dealers.    Head of Blockchain.com said a Sovereign recognized digital currency will be in place within 2 years somewhere out of europe. The BOE already is asking them to keep on top of it.  

What makes you think 50k?

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Three problems with bitcoin, in my opinion:

(1) Governments want to be the only ones creating currency.  Since bitcoin is created without a central authority, they haven't been able to stop it...yet.  As soon as they figure out how to break it, they will.  I'm sure they're already working on it.

(2) Buy low and sell high.  I'm not buying now.  

(3) I can't think of any world event that has caused the value of bitcoin to go up 10X in the last year.  That means the increase in price has been created only in people's minds.  That's a fragile thing.  

I know the bitcoin believers will have reasons that bitcoin has increased so much.   If so, please share your math that demonstrates the cause.  No math, no reason.

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100 thousand new account openings every single day at Coinbase.  And that’s just US customers.   The mania is just beginning.   The trend is up not down.   3x up.  4x up.  5x up pick a number.    Way up before back down.   Probably goes to zero someday.    How about I say 100% chance it goes to zero some day.   But for now the hype is on.   The table is hot,  do you increase the stack or go take a piss?

I’m okay with taking a shot at up 5x or zero.   I think that’s better odds than Atlantic City

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I admit (again) that I have been living under the rock. So went ahead and did quick read. Looks like lot of similarities to "Gold".

Its a computational algorithm that need to be solved (mined) to discover keys (gold nuggets).  The other side of algorithm has mechanism to check validity of the key (check chemical composition of gold piece).

Just like gold (and many other forms that depend on supply / demand), the algorithm is increasingly complex to solve and needs physical resources (computers, CPU cycles, electricity, time etc) contributing to the increasing cost. The more keys people discover (mine), more complex the task of finding next key. In that sense, its similar to gold mining.

As physical resources required to mine more keys continue to rise, costs go up, supply is constrained and perceived "value" goes up. But that would only be the case if the algorithm holds and mining costs continue to go up and supply is constrained.

What would happen if a volcano erupts and dump gazillion tons of gold onto surface ? We all will be sh*ting on gold toilets.

Same holds true for Bitcon. If the algorithm breaks, cracked or math behind it unleashes large number of keys, it will come down crashing.  Assuming the algorithm holds, I can see @Barms estimates coming to life.

Unfortunately (as far as I have read) there is no way to tell for sure how strong it is.  Its secure until it breaks.

Its a game and value persists as long as supply is constrained and enough people willing to play the game.

Additional challenge is, litter of competing algorithms hitting market. Some failing (cracked, weak math etc) and taking shirts behind backs and others diluting the market and causing further confusion around value, exchange rates etc.

 

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I like your volcano eruption. Its a good way of looking at the value of anything.

I'm not sure I see the need for bitcoin. If I want to be anonymous I can currently pay with cash.

But it seems like the latest craze. Some people will make lots of money and others will lose money. Reminds me of Dutch Tulips.

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Anybody who says “i don’t see the need” has never lived in a country where the banking system has been shut down.  Has never had to flee a country with only the shirt  on their back. (This does not mean drug dealers it can be any refugee situation)  They probably don’t travel much outside the US.  Bitcoin was not created for anybody reading this forum.  It was for the entire rest of the world that is seeking a decentralized currency system.   It’s not about anonymity or speed and ease of moving money.  It’s about not needing permission to do anything you want with your money. It will not replace FIAT.  It will be in addition to.  The people of the world want it.  And it’s coming.   Be in denial or not.   It’s about choice.   “But what if it goes down 50%?”    There are huge populous that are okay with the CHANCE of 50% down to guard against “no, you cannot have your money now”.

Miners are not mining for bitcoin.  They are maintaining the Blockchain.  Making the Blockchain is not hard. It’s easy.  But it needs multiple “nodes” to agree on the output for a decentralized system to work.  To just keep one super computer from doing all the work an extremely complex algorithmic Riddle is disbursed.  Whoever solves the riddle first is compensated with bitcoin.  Think of it as “my job is to maintain the Blockchain. And I get paid for it”

this is my attempt to tell you guys why this thing is the monster that is destiny.  (I’m not saying it won’t go down 75% on a glitch.  I’m just telling you it’s bigger than you think).   Is this thing called bitcoin the winner?  I dunno but a decentralized transactional currency system is here to stay.   And bitcoin is first out the gate.

I’ll go back to bad videos now.  Thank you for reading. 

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41 minutes ago, Barms said:

Anybody who says “i don’t see the need” has never lived in a country where the banking system has been shut down.  Has never had to flee a country with only the shirt  on their back. (This does not mean drug dealers it can be any refugee situation)  They probably don’t travel much outside the US.  Bitcoin was not created for anybody reading this forum.  It was for the entire rest of the world that is seeking a decentralized currency system.   It’s not about anonymity or speed and ease of moving money.  It’s about not needing permission to do anything you want with your money. It will not replace FIAT.  It will be in addition to.  The people of the world want it.  And it’s coming.   Be in denial or not.   It’s about choice.   “But what if it goes down 50%?”    There are huge populous that are okay with the CHANCE of 50% down to guard against “no, you cannot have your money now”.

Miners are not mining for bitcoin.  They are maintaining the Blockchain.  Making the Blockchain is not hard. It’s easy.  But it needs multiple “nodes” to agree on the output for a decentralized system to work.  To just keep one super computer from doing all the work an extremely complex algorithmic Riddle is disbursed.  Whoever solves the riddle first is compensated with bitcoin.  Think of it as “my job is to maintain the Blockchain. And I get paid for it

this is my attempt to tell you guys why this thing is the monster that is destiny.  (I’m not saying it won’t go down 75% on a glitch.  I’m just telling you it’s bigger than you think).   Is this thing called bitcoin the winner?  I dunno but a decentralized transactional currency system is here to stay.   And bitcoin is first out the gate.

I’ll go back to bad videos now.  Thank you for reading. 

Depends on how you look at it. The "miners" do get paid for finding (for lack of better non technical word) "new bitcoins".  That "finders fee" gradually decreases over time while the difficulty of finding "coins" increases. Could be a good thing, because that translates into increase "cost", hence "value" of currency, just like in physical world. There is secondary reward system in terms of "transaction fees" a.k.a verification.

I am not doubting if cryptocurrency will be the future. Neither there is doubt about practical use in refugee situation. But buyers beware of security of original bitcoin and litter of copy cats being dumped into the market. No one knows how secure they are until they fail.  Same could be said of traditional "money".

Risk does correlated to reward.

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The value that Bitcoin provides, and crypto + blockchain in general, is that there is a transparent ledger.  You can reliably transfer large and small sums of money anywhere in the world with speed and ease.  This problem has existed for as long as there has been finance.  Ever perform a bank wire?  Not the most secure way of moving money around.  Not exactly fast either.

The infrastructure is being built right now.  In a couple more years we will have businesses being built on this technology.  Existing businesses will also adapt and improve their services.

Long(er)-term, governments and banks regulate the market and provide their own proprietary form of blockchain technology.  Bitcoin and other de-centralized crytpo currencies will have laws that make their use either extremely inconvenient or outright illegal. 

Are we in a mania right now?  Bubble territory?  Quite possibly.  I think it is far more likely that bitcoin continues to increase in value from here, significantly, before we see any type of bubble popping.  

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Be careful.  The bitcoin investors have websites popping up all over to get in on the action.  $300 per day for beginners, which sounds like a familiar number if you read the posts above.

 

I stay away from any investment where the touts come out of the woodwork.  Look at all the gold sellers.  After doing ziltch for 2 years, they switched to silver, which is also stagnant as of late.

 

It is tempting at any rate.  I'd certainly kick myself if the predictions come to fruition.

 

Also, there is talk of the keys being close to cracking, which would be the end of it within a day.  And lastly, some wallets are found to be lacking in security, and if someone makes off with your balance, you are done with zero recourse.  In my experience with international bank fraud, the protection is not exactly stellar, but at least it is something if you put some fight in it.

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JohnRyan.  By you making this statement:

“Long(er)-term, governments and banks regulate the market and provide their own proprietary form of blockchain technology.  Bitcoin and other de-centralized crytpo currencies will have laws that make their use either extremely inconvenient or outright illegal. “

Yo do not “get it”.   The entire bitcoin experience is NO regulation.   Everybody is so caught up in the idea that it’s fast and anonymous.   That is not why it is taking over.   It’s taking over because people don’t want a REGULATOR.    The regulator in Venezuela sunk the currency 30%.  The regulator in Zimbabwe said “no yiu cannot remove your money from your account.”   Bitcoin is not exploding because of just Blockchain.   It’s exploding because it is freedom

Jack: I still disagree with you about the mining.  They are not “looking” for bitcoin. They are adding on the additional hashes from all the tractions.   They are using all that computing 

Jack.  I still disagree with your statement “they are mining for bitcoin”.  Do you know what a nonce is?   

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I will leave the above post but after that I won’t reply anymore about this stuff. either you are on board with the next thing bigger than the internet or not.  Me personally I am positioning myself for when ten years from now this is all normal that I’ve made a boat load of money from it.   I didn’t have the foresight to see it in 2000.   I’m not missing this one. 

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53 minutes ago, Barms said:

.....

Jack.  I still disagree with your statement “they are mining for bitcoin”.  Do you know what a nonce is?   

Yes sir. I may be slightly familiar with salts and hashing concepts extensively used in data security, some parts of encryption, commerce etc. Except the concept of salting is extended further requiring computing resources (depending on strength being enforced) while keeping the "validation" side relatively easy.  Required "strength" of that salt is growing exponentially.

Your usage of "maintenance" of block chain and "its easy to maintain" gives impression of "linear" nature of work participants gets paid for. That is not the case.

The "mining" (sorry if that doesn't sit well with you) has become quite time (and resource) consuming. There are now dedicated hardware processors being marketed to people. Someone quoted $300 / day here few times. Interestingly I was talking to a person (not from this forum, not from NJ) and he also quoted this magical $300/day that his friends are making after investing few grand in dedicated hardware purchased from China. Something is fishy.

I certainly wish everyone good luck .

Note: I actually agree with you on traditional currencies being demonetized across the world as speak. I was talking a colleague from India and am told that Indian Govt scrapped certain currency notes in 2016 essentially declaring them worthless. All under guise of fighting corruption and flushing black market. I am not surprised Gold went up after that and Bitcoin is heading north.

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1 hour ago, Barms said:

JohnRyan.  By you making this statement:

“Long(er)-term, governments and banks regulate the market and provide their own proprietary form of blockchain technology.  Bitcoin and other de-centralized crytpo currencies will have laws that make their use either extremely inconvenient or outright illegal. “

Yo do not “get it”.   The entire bitcoin experience is NO regulation.   Everybody is so caught up in the idea that it’s fast and anonymous.   That is not why it is taking over.   It’s taking over because people don’t want a REGULATOR.    The regulator in Venezuela sunk the currency 30%.  The regulator in Zimbabwe said “no yiu cannot remove your money from your account.”   Bitcoin is not exploding because of just Blockchain.   It’s exploding because it is freedom

Hi Barms,

The bitcoin experience does not involve regulation at present, but what is preventing that from changing in the future?

I do not see how bitcoin can be directly regulated due its decentralized design.  Although not the case now, it is possible that in the future the financial entities that provide an efficient flow of capital to and from the cyrpto market will be subject to specific bitcoin/crypto regulation. 

Coinbase, for example, is headquartered in San Francisco.  They have to abide by local, state and federal regulations.  

Not directly related, but Coinbase made news for being ordered to fork over Individual's account data to the IRS:

https://www.cbsnews.com/news/bitcoin-coinbase-ordered-to-hand-over-customer-data-to-irs/

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On 12/1/2017 at 10:29 AM, NJGF said:

I like your volcano eruption. Its a good way of looking at the value of anything.

I'm not sure I see the need for bitcoin. If I want to be anonymous I can currently pay with cash.

But it seems like the latest craze. Some people will make lots of money and others will lose money. Reminds me of Dutch Tulips.

And the shares of any just about any retail business with a web site in 2000.

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On 12/1/2017 at 3:14 AM, maintenanceguy said:

(3) I can't think of any world event that has caused the value of bitcoin to go up 10X in the last year.  That means the increase in price has been created only in people's minds.  That's a fragile thing.  

As I said before, the market is small enough you can manipulate it with a few hundred million. Banks are getting into it, and they have the cash to manipulate it it. 

What hasn't been reported on nearly as widely as "OMFG!!!! IT'S AT $XBAJILIONTY!!!!!" is that the few primary entities doing bitcoin exchange have been ramping up their fees in addition to this spike in pricing. So.. the people who warehouse bitcoin and have huge piles of cash, and thus the tools to manipulate the market are profiting off the bubble to an increasing proportion while possessing the tools to manipulate the market to cause a further feeding frenzy. I'm sure this is entirely above board like deutschebank and price fixing metals, and goldman sachs who performed the EXACT same service for metals and were delaying disbursements and front running customer orders into the market. 

 

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