Nasdaq Plans to Introduce Bitcoin Futures
bloomberg.com
bloomberg.com
I have no idea what to do with my 0.05 BTC. Just let them sit there, I guess as a curiosity of old days. I don't really feel that I fit into the moon community and I don't really feel I want to build anything around this tech just because it is not about tech anymore.
Had lots of Bitcoin sift through my hands. Anyone remember the Bitcoin faucets? Those were the times.
Sincerely, One of the first 1000 users of MtGox (proof in the leaked MtGox database :P)
Maybe I just bought a piece of something like the Berlin wall and when everything goes to shit and this whole train wreck evolves into something more sane later on in 100 years or whatever, my grand children can sell my 0.05BTC on Sothebys or something :D ..
Don't suppose there are any low-level wallet-finder tools out there in case it hasn't been overwritten? It's finally worth a couple days to give that a shot on all my old hard drives (I forgot which one it was long ago, which is part of why it hasn't been worth it so far).
I should ask her if she still has it next time I see her, but I am pretty sure she threw it in the garbage.
This could well end the Ponzi scheme in a victorious way because people that mined them from almost nothing could extract a lot of real money from people (mostly speculators) who bought recently while totally tanking the valuation.
Wait... maybe that was always the plan... Is bitcoin actually a huge planned «Robin Hood» bubble?
Of course, I am banned from Coinbase for an innocous bank mistake. There's literally no other options to buy coins at 1-2% in the US.
Bitcoin cash or something like etherium are worth a look at. Bitcoin cash, as the name implies, holds the value that bitcoin should be able to be used as electronic cash.
The median income for the world is $6/day. High fees are unaffordable and unadoptable. The Core team has done Bitcoin an enormous disservice; like setting autopilot into the terrain.
No one cares about the fees. If they did, they'd use litecoin. Blocks 4x the speed of bcash and bitcoin, and they have segwit too, so double the capacity of bcash.
You don't see how that might be a red flag? What vitamins could possibly be so important that you couldn't wait a little while, and would be unavailable from another source?
Plus, the rudeness of "I'm more important than everyone else in the queue, hurry up" can't have helped.
It is their job to do deal with slightly rude customers, and I don't think they should be banning anybody for something so small as "being asked to go faster".
If it's weird to me that you need to buy vitamins from a foreign company using Bitcoin (you couldn't get them for a month or two from a provider who takes PayPal/CC, and you couldn't go without for a little while?!), it's going to be really weird to the compliance department of a financial institution responsible for KYC stuff.
What vitamin is unavailable in the US but available internationally?
Is said vitamin legal to import to the US?
Why does the vendor not take anything but Bitcoin?
Why can't you wait a couple weeks to get it?
Where were you getting it previously without Bitcoin, given that it's so critical you can't go without?
[0] https://docs.google.com/spreadsheets/d/1NgvD2kFT69mSXuJPzPDu...
It was a spammer's post that was flagged not Coinbase.
(Gemini has been much better but they went down for a lot of today too.)
[1] When they had ~4 volume related outages.
[1] https://coinmarketcap.com/currencies/bitcoin/#markets [2] https://coinatmradar.com/
As a non-physical thing, it's a good place to go when you're not sure about where to put your money. That used to be the role of the dollar, but this is a good alternative that has cheaper forex fees.
I think the long-term value of bitcoin will not be buying groceries, but storing money while you wait for your the storm your grocery stores currency is in to subside. Probably not relevant to Americans right now, but I'm sure some people in Latin America can see the value.
It's got a pretty short, volatile history to be deciding that.
Seriously! A digital key is NOT easier to secure than a physical one. If anything, it's harder.
Gold only becomes hard to store if we're talking about huge quantities
Or etch the key on a piece of metal, seal it in plastic, and throw THAT in the ground, if your are that way inclined!
I don't see the difficulty.
The advantage of bitcoin is you can encrypt it and store it offline in as many locations as you want.
no reason it stores value outside of the fact that we all agree that it does, and we all accept it for curreny. Bitcoin is at that point. It's turning into digital gold.
I agree with the original commenter. Looking at Bitcoin as a currency with terrible UX kept me from investing for the past years. Now it's going past inflection point - it's a store of value that will be acceptable everywhere soon.
https://www.statista.com/statistics/274684/global-demand-for...
Gold has been valued from time immemorial for its unique aesthetic and practical properties entirely aside from its value as a currency.
That's clearly distinct from, say, paper dollars, which indeed have value only because we agree that they do (and because they're backed by the robust efforts of a government, of course).
As an example of the difference, look at oil or bananas. Demand for those is significant, but because storage is inconvenient, holdings are low compared with total commodity flow.
Transactions are necessary but insufficient for something to become a store of value. For example, steel is sold in great amount, but it is not a store of value.
For example, let's suppose that I made a deal with Porche to buy the first car off their assembly line each year. I take it and store it away as an investment. Is there an existing reserve of 2018 Porches? No, I have the first one. Does anybody else do this? Doesn't matter. It's still a good store of value as long as people keep wanting 2018 Porches.
People could use steel as a store of value; it's just an inconvenient commodity to deal with because the value per gram is so low. You need to store a lot of it. But rarer metals will do fine.
Actually more than 10^6: http://bitcoin.zorinaq.com/price/
I'm not so sure about that. You could have bought BTC anytime before the past week or so and it would have appreciated significantly, regardless of whether you bought it in a peak or trough. It's just a question of magnitude. E.g. if you bought 1 BTC at the lowest or highest price in 2015 you would still have outrageous returns on it today.
This is not to say it will continue being the case going forward but it's crazy to look back at.
My point is that there have been skeptics and people saying it's a bubble or too volatile for nearly all of Bitcoin's history. But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter).
This isn't entirely true. If you bought Bitcoin anywhere near the height of the late-2013 mania (which is of course a lot of people, since that's why the price was so high), you lost half your value within a month or two and then had to hold until 2017 before you started to break even. You lost 70% if you held for a year and a half and gave up.
The market from June to November 2011 was even more disastrous, falling from $29 to almost $2 and not recovering until February 2013.
These are obviously cherry-picked dates, and you'd clearly have made a profit eventually if you kept holding, but it's still very possible to hold Bitcoin for years and lose money.
This is gambling.
Oh I can do that. I expect it to be 100x or more greater than what it is today. The reason why it is 16 as opposed to 8 or 32 is simply the speed of the uptake. It is going up in value because it is in the process of deflating the fixed-asset debt bubble. The only real question is, how big is that bubble.
> I would also spend some time understanding what "investing"
Investing is understanding what the value proposition is, and investing accordingly. You don't, and that's fine. Don't assume that other people have your understanding of the asset class in question though.
The question you should be asking is, why do you think it's important when other people invest in things that you don't understand.
In your opinion, what is the intrinsic value of Bitcoin?
I use the 1:10000 rule (https://xkcd.com/1053/) for this argument. It is my opinion that the intrinsic value of bitcoin is far far greater than anyone really comprehends. People generally are too focused on people just buying and selling the asset, but not about the cryptographic proof, and incentive structure that perpetuates the network functioning. So when people like to ask what the intrinsic value of bitcoin is, I say :
You are thinking of the store of value property without the cryptographic property that secures it. You are talking about it as one would talk about valuable shells, and even shell sellers, and not the security that separates it from all forms of value exchange before it. To understand the intrinsic value of bitcoin it is good to use the analogy of an envelope. So i ask you : does an envelope have intrinsic value?
If I have a letter that I need to send securely, would I prefer to send it open, and ready to be read? Or would I prefer for it to be sent within the confines of an envelope? Now let's think... would I prefer to just leave an open envelope, or would I think it necessary to put some seal across it to ensure that it isn't opened, and read whilst en-route. Does a sealable envelope have more intrinsic value than an unsealable one? Hmm... but what if someone can counterfeit the seal? I need some method of ensuring that the message I want to get to that person isn't read, and preferably, isn't even identified as a message. That's when you need to get lawyers involved. Sounds expensive. There's obviously something intrinsically valuable about such a service, because many people pay oh-so-very-much money for it.
Now let's imagine we're not talking about letters, we're talking about money. Would you address a $100 note through the mail to your child for their birthday? You'd pay for a stamp at least. Would you encase it in an envelope that you paid for at the local post-shop? Hmm... bill in the envelope. Anyone will be able to see that it is money. Perhaps encase it in a card? What if it is $1000? $10,000? $10 million? Does the protection service of an envelope somehow decrease because the value of the contents of the package increases? It's the opposite, isn't it? Bitcoin is both the cryptographically sealed envelope, and the network to deliver it.
What say you? Is an envelope intrinsically valuable?
There is intrinsic value in bitcoin. The two more important questions are:-
1. Can that value be measured?
2. Do the people buying bitcoin know the reasons behind why they are buying it? I think not.
I know so many of my friends who own bitcoin and they have no idea what the hell this thing is. They just bought it as it’s growing up in value. These are the people who would sell it when the value goes down and we all know how that ends...
Of course it can. Its price. Bitcoin is money. Its price is the only measure of value.
What I'm saying is that it doesn't matter what people want it for. It's money. It enables things. It is just better money, because it can't be seized, payments can be made to anyone, it can be transported anywhere easily and redeemed anywhere easily, and most of all, it can't be debased. Any of these reasons is enough to want to use it, and people might not know all of the details, but they certainly understand the effects on their wealth.
> 1. Can that value be measured?
Of course.
Sure it's cryptographically secure, but what is the difference between that and a regular bank using encryption on their money transfer network?
I think the reason it's hard to say whether or not Bitcoin is worthwhile is that there has never been a decentralized currency at this scale before, and for all we know, unless it can serve some kind of purpose that a regular currency issued by a country cannot serve, it's not that useful. This is why Bitcoin is used a lot by people from countries were their own currency is struggling.
But with the central banks of many first-world countries printing money uncontrollably, some even bringing about negative interest rates, many fear the collapse of large economies in the near future. If that happens, Bitcoin will be a way to store your wealth and prevent all your money from becoming worthless pieces of paper.
Other ways of doing the same would be buying gold or some other form of valuable goods and storing it in your house or have someone else store it for you somewhere, but obviously the fact that Bitcoin is digital makes it a much easier to use and viable option.
But, we don't know if that will ever happen. Bitcoin itself also has so many problems. It's also arbitrary as to which digital currency to use since there are so many to invest in, some more popular than others, some have evolved to fix problems with previous versions, so it's really hard to say if all of this will amount to something useful.
Bitcoin is the network to deliver it too. I say that right there.
You don't have to trust a bank. A bank can't interfere with your transactions.
See? It's all speculative bullshit, where people who took a bet on bitcoin increasing price and expect to profit from this price increase are trolling other fools to keep pumping the bubble until they cash out.
Bitcoin is quite clearly a pump-and-dump scheme, and here we see some users cheering fools to keep on pumping the bubble with their cash.
The only intrinsic value that bitcoin has is it's use in money laundering deals, and only in short time scales. That's it. The rest is just speculative fraud.
Any truth-holder (on both side) is a blatant liar.
PSA: I generally can't give you advice about specific crypto investments as much as I want to for multiple reasons related to my job.
This is my one statement on the market: It is loud.
Crypto is moving very quickly and I regard it as the riskiest asset class that is available today. To invest in crypto is to accept that currency can be narrative driven and that juxtaposition requires accepting that currency can be simultaneously worth any amount and no amount. The things that favor crypto as an asset class are that there is lots of positive news, a reasonable long-term narrative, and some of the largest assets are deflationary in design. The things that are unfavorable to crypto are that the pricing is uncorrelated to observable reality, the regulatory risk, and the cryptographic risk.
Overall, it is a bizarre, whimsical space to be in right now, but it is also terrifying. Don't tread lightly, and please don't invest more than you can afford to lose.
Thar be Dragons.
______
For clarity, the reasonable long-term narrative is that bitcoin is easier to work with than existing banking infrastructure for some transactions. In particular, if you are a high net-worth individual negotiating with a nation state or a person of low means who conducts low-trust transactions, bitcoin serves you better than most other means of payment. For the vast majority of people who don't fit in those two categories, bitcoin isn't really useful.
Strictly speaking "intrinsic value" does not exist, there is only subjective value placed on things based on their properties and usefulness to humans.
Gold only has "intrinsic value" because we value that we can use it to build machines or shiny jewellery. But that is only valuable because we value machines and shiny things. Even air is only valuable to us because we require it to survive, but anaerobic lifeforms don't care. So the value is not intrinsic, but only subjectively "intrinsic" because most people value staying alive.
So the subjective value of Bitcoin is based on its its properties. Humans happen to use money, and the properties of Bitcoin could theoretically make it "better" money than any money that has existed so far.
Anything can be money, but is judged on how "good" a money it is depending on several criteria such as:
1.) Scarcity: Only a select group can create money.
2.) Durability: Should be resistant to aging and natural elements.
3.) Divisibility: Can be divided into smaller sub-units.
4.) Transportability: Easy to transport and transact in.
5.) Recognizability: Should be difficult to counterfeit.
6.) Fungibility: Any $1 bill is equal to any other $1 bill.
Bitcoin could theoretically be better in every category.
However, it is still suffering from lots of problems.
Currently "portability" is often suffering due to network congestion and high fees, which also impacts "divisibility" as it becomes impractical to move small amounts.
However, there's still a good chance that either Bitcoin Core or Bitcoin Cash or any other of the current cryptocurrencies will find a way to scale and retain good portability and divisibility.
tl;dr Bitcoin has no "intrinsic value", nothing does, but the subjective value is that it could be better money than any other.
This is the reason why the price is exploding.
https://trends.google.com/trends/explore?date=all&geo=NG&q=b...
(it's for Nigeria)
And the global map for since 2004:
https://trends.google.com/trends/explore?date=all&q=bitcoin
With the search term being most popular in Nigeria.
Ponzi schemes are similarly profitable but for some reason they are frowned upon.
Even so, I don't believe that it's a Ponzi scheme. Maybe someone controlling Mt Gox accounts orchestrated the 2013-2014 bubble. Mt Gox had huge market share back then. But now, I doubt that any player dominates enough to run a Ponzi scheme.
That's pretty much the definition of a pump-and-dump scheme.
Bitcoin is perhaps the most commonly stolen store of value the world has ever seen. It has its advantages, but being difficult to steal (or lose permanently!) is not one of them.
If you printed 50 new blank ledgers, they wouldn't have value because they don't have the history and our mutual agreement.
Bitcoin is the worldwide ledger (WWL).
POS coins on the other hand, are a different animal. If you own a POS coin, you get paid transaction fees for helping verify transactions. Thus, POS coins make fundamental sense, can be valued accordingly and create a reason to actually own the coin - and should, therefore, prove a better store of value than POW coins. Of course, POS is somewhat theoretical, but if Ethereum can pull it off, it should supersede bitcoin. Now, ELI5 why I am wrong, please.
http://www.truthcoin.info/blog/pow-cheapest/
Definitely not ELI5 material though.
The incentives of a pow coin align with the users, not the owners, so there's no reason any user would prefer to use another incentive structure.
> There is a reason, independent of speculation, to own a POS coin.
It is not trustless. You are reliant upon the owners not re-writing the consensus rules to your detriment.
Biggest owner wins. That's why it is not trustless. The only long-term game-theory outcome for the system is a monopoly. Owners own the miners, and dictate the rules to the users. Otherwise known as our world financial system.
> In the POW case, what underpins the value of the coin?
The network effect of the decentralization, i.e. the nodes. It is the nodes that are peers in the peer-to-peer cash of bitcoin. It is they who hold the blockchain, validate transactions, and validate blocks. Because there are so many of them (185,000 and counting) unless you can effectively convince all of those nodes to adopt consensus changes, the existing consensus rules apply.
PoW alone doesn't make something valuable. Its successful implementation does.
Biggest owner can steal smallest owners money because biggest owner controls the consensus rules. So no, the incentives aren't aligned.
> what is the force
The only one that matters : Supply and demand, and no ability to cheat the system. The only thing that is happening is more and more people are recognizing it.
This entire episode over the past year has demonstrated this again and again. Miners talk a big game, but in the end, they do as they're told.
For example, if you own the most of a particular POW coin, it is not in your interest to corrupt the ledger because you will suffer the loss of faith in the currency worse than anyone.
I think a lot of people hear "Digital Currency" and think 'something like Apple Pay', when Bitcoin's competition is closer to ACH/wire transfers.
It's not a tech that everyone needs to use, and most people will pay an expert to use it for them. But if successful, could be a valuable medium for receiving payments from low-trust entities.
For example, if a stock exchange accepted Bitcoin for funding accounts, you could get your account up, funded and ready to trade in less than an hour. Most stock exchanges now take several days for funds to clear.
If/when your stock exchange starts accepting bitcoins, they may still continue to take days to clear things.
I could see holding a portion as 'pending' until many confirmations, or perhaps until the Bitcoin can be liquidated on the market, but both of those seem like they could still resolve an order of magnitude faster than the 'competition'.
The reason you don’t get that as an end user is because of compliance, fraud, etc.
Could be an interesting aspect to look into?
This claim is absurd. Bitcoin is patently bad as a store of value, and that's perhaps bitcoin's worse and and most ill-suited applications. Even ignoring the speculative pressures and value manioulation being conducted, just look at how much bitcoin's market value has been fluctuating. Even yesterday it suffered a 10% drop for no reason at all. Who in their right mind believes it's a good idea to store value in a highly volatile service subjected to such speculative pressures?
Nowadays bitcoin sounds a whole lot like a pump-and-dump scheme, where shills come out of the woodwork praising bitcoin's magic and supernatural properties to fool unsuspecting fools to keep pumping money into the fraud.
Please can we move beyond commodity currency?
Hindsight 20/20 I guess
Don't kick yourself for spending when you did, because as I'm sure you're aware, it's just as likely that you could be now saying "Thank goodness I used those Bitcoins when they still worth something".
I bought a bunch at ~$1, then they jumped to $10 and it started to be fun, because I had a bunch more value to play with, then they jumped to $100, I thought screw this. This is not why I bought them and if they keep up this volatility, then they're not going to be useful for what I want to use them for (ie. buying/selling online).
I don't regret selling them when I did, and I don't think you should either.
How is that in any way useful or going to improve future decisions? Bet on black, because you know, that's where the trend line is going?
Case in point: Do you short Bitcoin now or not? Who freaking knows...
As I said I bought VPN with it when this stuff was in baby stages. Now at 10k USD valuation the real world usage hasn't grown all that much from there...certainly nothing like the price growth. So I'm staying really fkin far away from this.
People called it right & made a killing of it - more power to them. Realistically this can't going though without some monster sized improvement in the underlying non-speculative transaction volume.
Real world utility and pricing have to converge at some point. Right now they seem to be growing apart exponentially and all I can think of is RIP whoever is on the wrong side of that when it returns to reality.
Not true, see Segwit recently, soon https://en.wikipedia.org/wiki/Lightning_Network
edit: -3 in an hour, why?
[0] http://segwit.party/charts/
[1] https://blockchain.info/charts/transactions-per-second?times...
Those days are gone for Bitcoin, but I've found a cryptocurrency community elsewhere that reminds me of those early Bitcoin days. I jumped in full-time and I'm having a blast.
I don't think Ethereum is the only cryptocurrency community like this, it's just the one I'm involved in.
> hard fork because people didn't want to honor smart contract
Does not compute.
https://twitter.com/VitalikButerin/status/931323377008046080
https://www.yours.org/content/a-new-model-for-bcf-project-or...
Is there such a thing?
Oh, it's way worse than that. Now, a small country's worth of electricity is consumed every day to no end at all, except "mining" Bitcoins.
The "small country" comparison is deceptive as the energy is equivalent to just a single nuclear power plant: 15 TWh/yr = 1.7 GW
In contrast with proof of stake there is quite literally nothing at stake.
The end is existence of bitcoin as solution to fairly important problem of decentralized and censorship-resistant consensus mechanism over open ledger that everybody can transfer value within (and soon with convenient atomic swaps - across multiple chains). And that is just the lowest layer of operation.
Anybody claiming bitcoin mining is wasting energy assumes the solution to said problem is worthless or the problem doesn’t exist. Both of which I (and the market) disagree with.
As for whether there could be more “efficient” way to line bitcoins - this is irrelevant, because for every jump in efficiency there will be similar jump in mining difficulty by design.
I logged in to my Coinbase account for the first time in years this week.
What was $0.01 worth of Bitcoin from a faucet is now worth $0.20. Incredible ROI!
There are a few things going against them.
- The CBOE and CME are both much larger futures exchanges and are going to be offering futures first
- since you can't net out futures contracts from different exchanges this means they tend to become winner take all
> One way Nasdaq seeks to differentiate itself seems to be in the amount of data it uses for pricing the digital currency contracts. VanEck Associates Corp., which recently withdrew plans for a bitcoin exchange-traded fund, will supply the data used to price the contracts, pulling figures from more than 50 sources, according to the person.
This might be interesting as one of the things that everyone is worried about is price manipulation.
If you haven't thought about how futures work with respect to margin and marking at the end of the trading day you need to know that you can be required to deposit more money into your margin account if the futures trade moves against you on any given day.
This means the marking price is very important and lost of institutional money is worried that the exchanges are easy to manipulate.
see: http://openmarkets.cmegroup.com/3785/understanding-margin-ch...
> Nasdaq’s product will reinvest proceeds from the spin-off back into the original bitcoin in a way meant to make the process more seamless for traders, the person said.
This is awesome,, right now the CBOE and CME both have punted on the question of forks saying, they'll have a best efforts to figure it out.
What planet do you live on?
Just go out to a target and ask 5 people... Unless you live on mars already.
Midwestern US city (not Chicago).
> Seeing NASDAQ is adding it will add to the hype.
Alright, I see your point. You’re considering how this announcement will affect the bitcoin price.
BitMEX bitcoin futures are already online. IDK how many price sources they pull?
Aren't there a few other companies already selling Bitcoin futures?
Well John McAfee thinks bitcoin will hit 1 million by 2020.
Is there a term for this?
No Bitcoin pumpers can give a proper value analysis because its actual value is something approaching 0. It has no use for which it is better than alternatives, even among cryptocurrencies. It is a classic bubble where people buy assuming that a greater fool will come along and buy at a higher price.
Doesn't mean other people don't understand this though, and that number increases every day.
Also, the Byzantine Generals Problem was solved multiple times in the paper that introduced it.
You were somebody's greater fool. You believe that there will be more greater fools to come. Eventually, you will run out of fools.
No you don't, which is why you're still talking about it the way you are.
> you have failed to mention any counterexample.
What we have now. Inflation debasing your money.
This is actually a game theory problem. There are three groups in bitcoin. The users, the holders, and the miners. To understand the way that relationship works, you have to understand what keeps everyone separated and honest. That requires an understanding of the incentives of bitcoin, and that requires understanding what proof-of-work (https://en.wikipedia.org/wiki/Proof-of-work_system) is.
Proof-of-work aligns consensus with the users, because it is the users that are paying the miners through transaction fees. Even holders require users, and more importantly, node owners. Therefore, it is users that are incentivizing the miners. Proof-of-stake (https://en.wikipedia.org/wiki/Proof-of-stake) aligns consensus with the holders, who are paying the miners. That is an incentive structure that reflects our current financial system. But bitcoin changes this through incentive structures and cryptography. In bitcoin, it is the incentive of the payers, not the paid, that imo is the wild invention of satoshi, and enacted through cryptography.
PoS fails because there is only one outcome given that incentive structure. Holders being miners, and then controlling the users. PoW overcomes this because the outcome is the constant tension between all three.
At the heart of the solution is what was previously thought to be the unsolvable byzantine generals problem. (https://en.wikipedia.org/wiki/Byzantine_fault_tolerance) It is a variation on the two generals problem. The problem is "if you are a number of generals surrounding a castle, how do you coordinate an attack date and ensure that the message to attack is correctly received, when you know that the message may be altered along the way?". There's game theory around what is possible, but that's the gist of it. In the problem, a bad actor can game the system so that everyone loses. I have reduced it to three. Given you know one is a traitor, how do you deliver the message to attack?
The way that this is managed is that miners order the transactions, and race to hash them to an algorithm (the work in proof-of-work), which is in bitcoin, SHA-256, until they get an answer that will be accepted by the nodes (proof). They are incentivized to become more and more efficient, and spend more resources as the price increases. The nodes provide the proof in proof-of-work. They say "this block is valid", and all nodes that follow consensus will come to the same agreement. For that work, the nodes award miners bitcoin. The nodes can prove which miner spent more work, but it sometimes takes a few blocks to get it right, which is why you have to wait for a few confirmations.
The only real thing that miners can threaten to do is stop users (the people paying them) from receiving blocks. Users and holders, after all, control their own cryptographic proofs to the tokens. But the current miners are only miners of SHA-256 pow algorithm blocks. In an adversarial condition, the miners will have just stopped coming to the party, so the users say 'fuck this' and change the pow. They get a new set of miners, mining a new algorithm, and the holders go 'holy shit, do I wanna spend my cash with a bunch of numpties that couldn't behave themselves?'. And they start spending their cash on the chain that the users say is the real one, and everyone just goes about their business again. Old miners get crushed. New miners think happy days. If the nodes change their software, that's the end of the story. Because the nodes define the consensus, they can. The remaining node owners get to decide whether they want to be owned by the miners, or whether they actually want to still remain users. The holders decide whether they are more likely to be able to realize their money with the miners that now control a drastically centralized subset of nodes, or to continue on in the system that led to them being holders in the first place.
Users can't attack the system, because then they would become holders, and users would no longer trust them for the reasons already stated, and they don't hold the cryptographic proofs of the holders. If the holders do that, they lose all of their users, so the only thing they game-theory-wise would do, would be to instate a pow. Why would anyone prefer a system in which the people with the money have all of the power? Otherwise known as the world financial system.
Whoever attacks loses, and there's no real way to cheat the system. That's the brilliant solution to the byzantine generals problem. It is a self-sustaining financial system that rewards everyone for participating in it, where incentives are perfectly aligned for its longevity, with an ever reducing supply of tokens that are effectively infinitely divisible, increasing their value per-capita. And no, there isn't any other system in the world that shares these properties. Without these properties, the byzantine generals problem can't be solved, and decentralization can't be achieved. It is a fiendishly clever system, akin to an anti-body to debt-fueled inflation.
Like I said, SN was/is/will be a genius.
> Eventually, you will run out of fools.
That is what is happening to the fixed-asset debt bubble. Bitcoin is its reckoning.
See the original paper on The Byzantine Generals Problem by Lamport et al, where the authors present multiple solutions. Many more solutions have been successfully used in production. People who need to solve that problem do not need to hold any Bitcoin, so the Byzantine Generals Problem does not put any floor on the value of Bitcoin.
Not interested in arguing with strawmen. I've been clear enough.
This was your sole example of a problem that Bitcoin solves better than any other. If you now disavow that example, do you concede that Bitcoin solves no useful problem better than other systems?
I’m all for the technology, but the technology itself doesn’t solve any systemic financial issues, not directly. It’s the adoption itself, and how it may be used for legit commerce, say 5-10 years down the road, that would potentially do so. And this would be facilitated by technology evolution from now until then. Bitcoin may be at the center of that evolution, but it’s not assured just yet.
People are buying or holding on speculation for various reasons but most with a common speculation: They believe that the price will continue to rise relative to their cost basis. That’s it. Some of these folks have a fundamental belief about bitcoin’s future as a currency, but that future isn’t enabled directly by the technical details that you’ve offered. Most newcomers don’t care about the revolution, they’re just trying to hop aboard a rocket ship.
You have a solid understanding of bitcoin’s technical details. Just pointing out that such details don’t directly solve any economic / debt related issues, for many reasons. One of its key limitations is that the technology of bitcoin cannot facilitate commerce at scale, not currently.
Price of bitcoin will go up or down directly as a result of decisions of buyers and sellers, nothing less or more. Greater fools applies to bitcoin just the same as other open markets.
Fixed assets, goods and services, etc., are stable relative to fiat, at least USD. So bitcon isn’t deflating any bubbles.
> Fixed assets, goods and services, etc., are stable relative to fiat, at least USD.
Not house prices. As bitcoin gets larger and larger, you will see those prices stabilize and start to fall. What i think will happen, is that when the people who own all of those empty houses around the world that are used as a capital appreciation asset, start finding that that capital appreciation isn't increasing anymore, they will either sell them or rent them out. Feds ain't gonna take that lying down of course. They can't afford to, as the gfc proved. I expect an acceleration of qe.
Let's be clear, it is the price of these houses vs bitcoin that matters. If your capital appreciation of bitcoin is greater than housing, you will choose the one that has the best return. Bitcoin compared to the fixed asset market right now is a fraction of a fraction. But that is changing and it is changing fast. When bitcoin is 100 times the asset value of today, that metric becomes apparent.
And frankly it doesn't matter what people think. That's the beauty of the bitcoin design. It works because it doesn't rely upon questioning peoples motives, it relies on just working. And it is working. Oh is it working.
Is anyone pricing housing indexes in bitcoin? You could maybe come up with one yourself.
This is ridiculous because Bitcoin is arguably much more vulnerable to centralized manipulation than fiat money. You only need to compromise 2-3 of the major mining pools and suddenly a 51% attack isn't so unfathomable, and that's just one potential attack vector. The pools obscure the real source of the mining power -- wouldn't it be funny if it was a nation-state who had a backdoor, or even one who was just interested in promoting bitcoin because it makes it so much easier for them to track their citizen's activities and exchanges? What happens if a bitcoin core dev gets compromised? What about MtGox^WCoinbase? What if you wanted to destroy bitcoin, and blew up a hotel where the central bankers^W^Wmajor pool operators were all meeting at the same time, as they've been known to do? etc. Could go on for a long time.
If I wanted to disrupt the Federal Reserve the same way, where do I start? Can I get the interest rate changed by phishing Janet Yellin's Gmail password?
Bitcoin as an experiment in a democratized, decentralized mechanism of exchange that normal people could use as an alternative to conventional payment methods has completely failed. This is, in large part, due to the short-sighted design of the difficulty mechanism, which makes it impossible to mine on commodity hardware. As soon as someone releases affordable hardware that is useful for mining, it defeats itself on the next difficulty bump.
Bitcoin is something weird right now, but it's assuredly not what it was meant to be, because a central cartel of power brokers have it wrapped around their finger and the average citizen can't do anything about it, exactly the circumstance that most early adopters were hoping bitcoin could help solve.
Nodes control consensus in bitcoin, not miners. If miners ever 51% attack, the nodes simply change the pow algorithm. Miners get crushed. That's why they don't dare.
You should probably learn how bitcoin works. It's great.
2. When everybody forks off of the compromised chain, haven't we effectively created an altcoin? What is the value of this nascent altcoin?
3. I'm thinking the value can't be very much, otherwise it would be way out of proportion to the difficulty considering there are not yet any ASICs for the new algorithm. Wouldn't it then be very much worth it for someone to attack it again using, say, a botnet?
It's actually not very complex.
If an attacker manages to gain control of 51% of the processing power, he can either a) choose to earn ~$350,000 per hour playing by the rules (mining to his own address) or b) perform a double spend attack on someone (in which case he needs to own over ~$350,000 and find someone willing to pay him in cash before either the mining pool or the network discovers the attack). Which will he realistically choose? The settlement time for USD is in the order of days. Will he risk a USD transfer being aborted before he can get his money, or play it safe and generate 12.5 bitcoins (~$100,000) within 20 minutes to his own address?
Also, exchanges and nodes can easily see that a fork is ongoing, with just barely half the hashing power on the honest chain. Chances are exchanges would shut down, clients would warn of a 51% attack, and the attacker would be left with the only option of mining honestly on the longest chain to his own address, thus taking money from poorly secured mining pools, but not affecting the stability of Bitcoin.
> What happens if a bitcoin core dev gets compromised?
I don’t know. What do you suggest would be the consequences of a single Bitcoin Core dev getting comprised? I highly doubt any code of his would even be merged into master, much less make it into a release.
There’s no guarantee that the market won’t start buying into the whale’s sell, because the market thinks the price is low. But if it works, it’s the leveraged traders who have a problem, and they deserve to be wiped out, in my opinion.
Furthermore, it’s already possible to go short on several exchanges, so if this worked like magic it would be happening right now.
* Do futures markets typically stabilize the price of a commodity?
* Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)?
Kind of. It doesn't necessarily stabilize the prices of the commodity so much as allow the transferring of the risk associated with price movements.
> Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)?
The exchange acting as the clearing house is on the other side of each contract so they'd be left holding the empty bag. Exchanges deal with this by settling futures daily (so net cash movement based on current price) and by setting margin requirements on the members buying or selling contracts. The margin requirements vary based on the volatility of the future and for something like Bitcoin I wouldn't be surprised if was 100%.
What's particularly cool / safe (and interesting if you're a finance nut) about futures vs. actual trading of Bitcoins is that there is zero crypto involved. Everything is cash settled in dollars.
100% is really farfetched more like 30%
I certainly find this interesting, but I don't think it's a good vote of confidence for Bitcoin just yet, even if it's structurally safer for the exchange. For the most part futures are not cash-settled, or only cash-settled when it is very inconvenient for the buyer or exchange to settle them physically. If you buy futures, you are usually trying to gain speculative exposure to something that is otherwise very difficult to hold (e.g. oil futures vs oil barrels).
If there is no structural obstacle to settling futures physically, that implies there is another reason the market or the exchange doesn't particularly want to. This can mean various things; in the case of Bitcoin futures specifically, I interpret this to mean that the exchange would rather not handle Bitcoin directly, because historically holding a large amount of Bitcoin at once invites hackers to try and steal them.
That's pretty savvy and does seem good for overall safety, but from the perspective of financial stability, I think it's bad for Bitcoin's overall market confidence long term. My concern is that since Bitcoin is convenient to purchase and trade directly through existing exchanges, people who are long on Bitcoin should just buy Bitcoin directly, instead of Bitcoin futures.
Southwest did something similar with oil a few years ago. Fuel is one of the biggest costs to an airline, so when the price of oil spiked a few years ago, many airlines had to raise ticket prices + add fees to make up for the loss. Southwest, on the other hand, had oil futures betting on the cost of oil going up. When the spike happened, their costs went up too, but they could make up for it with the futures.
Uhhh, no
For anyone interested:
The term "hedge fund" originated from the paired long and short positions that the first of these funds used to hedge market risk.
> Conveniently GDAX (and Coinbase), Gemini, and other exchanges all went down at the same time
There are various, arguably valid, orthogonal aspects that motivated the technology behind distributed ledgers. And when those utopian dreams are subjected to the cold hard facts (of this world) it elicits a non-rational response. That is the positive view of this group-mind phenomena. The negative view would posit that voices that point out that "the emperor has no clothes" can derail what very much appears to be a pyramid scheme.
how like is being down planned? could there be more to this coicident?
And if not DDOS, it's entirely possible that these exchanges are not able to handle the rush of people logging in to buy the dip. I don't think any of these exchanges have the throughput of something like NASDAQ, not yet anyway.
Prefer buy and ignore for a decade. Still a trade rather than an investment but at least you can only lose what you put in.
BTC moved 20% down in the last 24 hours. That's like a market crash in old money. Leverage that and life will get exciting, fast.
That's pretty big. A couple years ago people were very skeptical that the big players would ever start dabbling in Bitcoin.
https://en.wikipedia.org/wiki/Weather_derivative
E.g., the CME's weather futures and options:
http://www.cmegroup.com/trading/weather/
It's not like the Merc is really involved in weather. They just let people gamble on the weather.
Each time it grows I fear bigger damages... But I also hope I'm wrong and I'll be just proven to be a fool for not having a bigger amount of bitcoin (I mined some back in the days)
Especially considering how easy it is to make a bitcoin transaction (compared to things like wheat, or oil...) it really should be "bitcoin settled".
Even still, cash settlement is terrible.
The majority use case for Bitcoin isn't using Bitcoin at all. It's speculating on Bitcoin. Those people definitionally don't care about Bitcoin for its own sake.
I'm pretty sure the exchanges are offering these not because anybody actually has forward needs to buy or sell Bitcoin, as they would with, say, wheat. People just want to speculate. For those people, cash settlement is exactly what they're after.
Sorry but you can't have futures on bitcoins that are settled in bitcoins.
It definitely makes it a pain for post-settlement management, and would likely prevent a lot of people from trading those futures, but why exactly is it not possible?
But whither bitcoin, you say? Moving those is easy! Yes, but holding them is hard. Who wants Your Favorite Mutual Fund to hold bitcoins? Not them, that's for sure. There's much more risk there than necessary.
But yes I can see that some people/businesses would want to outsource that risk by trusting someone else to do it properly.
There may also be a regulatory angle here. ETFs that are backed by Bitcoin have been repeatedly smacked down by the SEC, but futures that merely bet on the price while not touching actual Bitcoin seem to be OK. I can imagine that this probably infuriates true believers.
It does if you only want to be exposed to price movements. With futures you can get that exposure with a much lower initial outlay than if you bought (or sold) the underlying. Leverage, in other words.
That's pretty much the point of them. Whether it's something that you'd find value in is somewhat beside the point. As well as speculation, I'd expect there is probably a market for people who actually want to use bitcoin as a medium of exchange. The current price fluctuations are a pain in the arse.
This is one of the complexities of the ETF filings, where the filers stated their intention to determine which fork the ETF represented by things like hashpower, market cap or other temporal data points. This is dangerous for many reasons, thus it is best for the contracts to represent all possible future forks and not make a decision on them, allow the private keys to be delivered and allow the party who the coins are delivered to take split as they see fit. While this condition could be represented in a cash settled contract, there are infinite possible forks and CME could not possibly keep up with them all, thus the only practical way to solve the problem is physical delivery of private keys.
Of course I'd have to have got in early and had the balls not the sell, not lose the keys, not get hacked and not leave them on an exchange, for years.
Perfectly buying at the bottom of a dip and selling at the top are both very RISKY trades, particularly if trading with your whole stake: you don't have much information to indicate that the market is changing and could have been very wrong.
I think the healthiest perspective is just to compare investment vs. return in dollars. If you're beating the broad market, you're doing fine and should be happy. If you think about what you could have done with perfect hindsight, you'll just make yourself miserable.
I don't think anything else has had that levels of "returns"
Man we should instead of trading bitcoins trade fish in World of Warcraft. Insane times we live in.
If you feel differently about them than you do Bitcoin futures? Why?
Besides which, there's nothing underlying the US dollar either. Sure you can pay taxes, but that's about it. The rest of the economy is a shared belief, an illusion if you will.
Shocking alert: your existence is due to the permission of others.