BITCOIN as an alternative to regular currency

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Zenyatta
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It seems that if you're going to get some crypto-, Ether is the one to pick. At least that does have some slight actual value, with a potential for more in the future. Ether doesn't pretend to be a currency...instead, it's a token that grants you access to a network of 'Smart Contracts' - apps built on the blockchain technology. So it seems like there's some potential for real value there, unlike Bitcoin, which has none.

Therefore, I've decided to sell my Bitcoin, gambling that it's close to it's peak, and I'm converting the lot to Ether, which I'm gambling will replace Bitcoin. My gamble is for an eventual Bitcoin crash to zero, and everyone to pile into Ether.
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northbound
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Zenyatta wrote:
Sat Dec 09, 2017 10:23 am
My gamble is for an eventual Bitcoin crash to zero, and everyone to pile into Ether.
Ether is a great project indeed.

As for Bitcoin price crashing, it will be interesting to see whether the predicted massive shorting will occur once Bitcoin futures are launched.
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Orixian
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Zenyatta wrote:
Sat Dec 09, 2017 10:23 am
It seems that if you're going to get some crypto-, Ether is the one to pick. At least that does have some slight actual value, with a potential for more in the future. Ether doesn't pretend to be a currency...instead, it's a token that grants you access to a network of 'Smart Contracts' - apps built on the blockchain technology. So it seems like there's some potential for real value there, unlike Bitcoin, which has none.

Therefore, I've decided to sell my Bitcoin, gambling that it's close to it's peak, and I'm converting the lot to Ether, which I'm gambling will replace Bitcoin. My gamble is for an eventual Bitcoin crash to zero, and everyone to pile into Ether.

I would not recomend you do this. Whilst I genuinely like crypto and the solutions many of the blockchains offer to real problems I think at current price of bitcoin when its bubble bursts everything goes. That is to say the risk in the short to mid term is the same accross all cryptos regardless of what they are trying to do. I would suggest , this being the case, that you pick the crypto with the highest potential for reward as the risk is the same. Id suggest something with real utility but with a lot of news flow over the next 6 months. Pick the right one and you could genuinley make 10x your money should the combination of bubble and news flow continue. Even with the unfathomable rise of btc over the last 6 months I have done better following the stratgey of picking more obsucre coins with a possible real use case scenario in the future than just holding btc.

If anything the case for holding btc is diminished in my mind as although its on its way to being a better version of gold in terms of its value storgare capability it is now clear it will never be a currecny as it can't get the transaction time down and everytime it implements a solution it causes half the network to split off. It also shows zero price stability. It needs to either stay where it is for a year or plumet and stay put for a year or two after that before it can be a decent value store but it will get there I think.
Zenyatta
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Orixian wrote:
Sat Dec 09, 2017 10:59 am
I would not recomend you do this.
Trade completed! I just exchanged all my Bitcoin for Ether using Blockchain, took about half an hour. Fingers crossed :P
Zenyatta
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I'm good! :D I think I correctly picked the Bitcoin high, and the crash has started. Bitcoin futures markets going live now, making it much easier to short Bitcoin - 'the big short' has indeed started.
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marksmeets302
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GXBT, CBOE's future on bitcoin is trading now. It will be interesting to see how much their prices differ from CMEs future. They have the same underlying (bitcoin) but one is settled at the level of the Gemini bitcoin exchange, the other on a mix of exchanges including Kraken. I guess we'll see how easy it is to manipulate them.

Apparently the CEO of interactive brokers has sent a letter to the CFTC asking the bitcoin futures to be cleared separately. https://www.businessinsider.nl/interact ... =true&r=US He seems to fear that a crash in bitcoin will hurt the financial stability of the system. The maintenance margin requirement is currently at 35% (initial something like 40%). In light of bitcoins volatility that doesn't seem overly excessive.
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Euler
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I also think there is a risk of Bitcoin infecting the real markets if they start linking them. Needs to be a safeguard or we end up repeating the same mistake of the past only quicker and on a larger scale.
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marksmeets302
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Slashdot has a nice article on bitcoin https://news.slashdot.org/story/17/12/1 ... g#comments
The gist: Do you have any idea what it costs, on average to make a bitcoin transaction? In dollars it's about $20-$26. That's right: buy a $5 pizza online and it will set you back $30. For any bitcoin transaction you initiate you can set the fee for validating it. Too low, and nobody will be interested and your transaction will expire. Now imagine what happens if bitcoin starts to crash: people will want to get out fast but in order to do so they will need to offer higher fees in terms of bitcoins just to get in front of the queue. This will only make sense if you have lots of btc in your wallet. Therefore, the people with small transactions will never get them validated.

Euler is right, you will not be able to get out once the bubble bursts. For more than one reason!

(Still I'm fighting the temptation to buy one or two bitcoins and sell an equal amount of futures. There's $1000 between the front month future and the spot price. Very easy money... until the exchange gets hacked)
xitian
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I think even if you had a large amount of bitcoins to sell to overcome the transaction cost, you’d need a counterparty wanting to buy that large amount of bitcoins at the same time, which is going to be unlikely during a crash.

The thing I’d like to know is the distribution of coins over the number of addresses. I’m guessing the majority of coins is owned by a small percentage of addresses who probably have enough external wealth to prop up the price during wobbles to maintain confidence. After all it seems there’s actually very little liquidity on the book from that link that LinusP posted.

Re: Futures, I wonder how they go about pricing such a thing. Is there much of a bid/offer spread? I would have thought it would have to be massive for something so volatile and unpredictable.
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marksmeets302
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xitian wrote:
Tue Dec 12, 2017 11:13 am
I think even if you had a large amount of bitcoins to sell to overcome the transaction cost, you’d need a counterparty wanting to buy that large amount of bitcoins at the same time, which is going to be unlikely during a crash.
True, those people are screwed too.
xitian wrote:
Tue Dec 12, 2017 11:13 am
The thing I’d like to know is the distribution of coins over the number of addresses. I’m guessing the majority of coins is owned by a small percentage of addresses who probably have enough external wealth to prop up the price during wobbles to maintain confidence. After all it seems there’s actually very little liquidity on the book from that link that LinusP posted.
I don't have the link to back it up, but read somewhere that the distribution is very pareto-like; eg 90% of all coins is owned by 10% of the people, 99% by 1% etc.
xitian wrote:
Tue Dec 12, 2017 11:13 am
Re: Futures, I wonder how they go about pricing such a thing. Is there much of a bid/offer spread? I would have thought it would have to be massive for something so volatile and unpredictable.
Currently the bid/ask is 17800 - 17850. Both for size 1. Volume is only 453 today. I guess that's disappointing for the cboe.
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megarain
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I have used Bitcoin to pay for 3 seperate internet transactions in the last week.

I used an app called Blockchain, which is on my iphone.

I scan a VR code, supplied by the person i want to pay, put in the amount, (was about $50, each time), was told there would be a +/- $2 fee, and I press enter.

I get a ping sound, 3 secs later, and transaction is complete.

Hard to fault, ease of use. ok, buying the initial Bitcoin, costs 5% or whatever, and the service fee is something, but, it was v painless.
Zenyatta
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megarain,

Bitcoin completely fails all reasonable criteria for a currency.
It makes no sense to use Bitcoin to pay for something if the value of Bitcoin is going to double every few months or whatever (If $10 of Bitcoin is worth $20 in a few months time then you want to hold on to it, not spend it!).
The transaction volumes that Blockchain can handle are far too low to be usable on a large-scale, and transaction times are far too slow.
The transaction fees are now far too high.

There might be some base-level below which Bitcoin won't fall (the cost of 'mining' a coin perhaps - $US 1 000 for whatever), but I think it's highly likely it's going to crash hugely at some point.

Crypto-currency technology might be the future of money, but I really doubt that's going to be Bitcoin for the reasons I've given above. There are now many rivals , and chances are , one or two of these is going to displace Bitcoin.

Note my earlier posts in this thread were dead right. I picked the Bitcoin low of $200 and I strongly urged everyone to pile in with $10 000. Had you taken my advice, you'd now be a millionaire (although, unfortunately for me, I didn't have the balls to follow my own advice, and so I missed out).

I've picked Ethereum as being hugely superior to Bitcoin, and if anyone wants to gamble, I'm confidently asserting that Ethereum is the horse is to be on! Perhaps wait for the right time to get in. I'm picking a big Bitcoin crash sometime in the 6 months. Once the big short comes, all the other crypto-currencies are likely to fall as well, so you'll be able to get them on the cheap.

I'm advising all Betangel readers to pile into Ethereum right there! Don't hesitate! This time I'm backing myself!
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megarain
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Hi,

You make some fair points.

For small transactions, its just inconvenient if the price of BTC moves 5% in a day, but, if u had to pay someone a substantial amount,
someone would end up feeling they lost out.

Have you any thoughts about Iota ?

Bill Perkins, (poker player/oil day trader/philanthrapist) recently tweeted this was his favoured exposure to crypto, thou he admitted his had about 85 BTC.

Thx
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marksmeets302
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megarain wrote:
Tue Dec 12, 2017 7:23 pm
I have used Bitcoin to pay for 3 seperate internet transactions in the last week.

I used an app called Blockchain, which is on my iphone.

I scan a VR code, supplied by the person i want to pay, put in the amount, (was about $50, each time), was told there would be a +/- $2 fee, and I press enter.

I get a ping sound, 3 secs later, and transaction is complete.

Hard to fault, ease of use. ok, buying the initial Bitcoin, costs 5% or whatever, and the service fee is something, but, it was v painless.
Megarain, I'm not an active user of bitcoin anymore so I have to rely on articles like the one a posted. $2 is a lot more reasonable than $20-25. Three seconds is nice. I remember in 2014 there was a wild variation in times it took to complete a transaction. It could be 10 seconds, it could be 10 minutes. Largest I ever had was about half an hour. Aside from the withdrawal from mtgox which so far has taken almost 4 years :D Are the completion times stable at 3 seconds in your opinion?

Speaking of mtgox, the claim group I've joined is getting a lot of media attention these days https://www.ft.com/content/e741e792-df1 ... 1e63a52f9c. With an incentive to divide 2 billion there's a lot of pushing and pulling going on. The focus is on getting mtgox out of bankruptcy, in an orderly fashion. The creditors are pulling (we want our bitcoins!! Before they go to zero!) and the trustee is pushing back (you can't have it! there are still unsettled lawsuits!)
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megarain
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I have no real skin in the game, but, as a user, I am impressed.

If the person u are sending to, doesnt have a VR image, u are forced to copy/paste their Bitcoin address, or heaven forbid, key it in, manually, but, each transaction I did, was flawless.

I bought the Bitcoin thru the app. Am only allowed to buy £800 per day. For a purchase of £200 BTC, the fee is £6.The rate is guaranteed for 14 mins.

The app supports BTC or Ether. I think the 3rd party I am buying from, is Coinbase.
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