Bitcoin

Now, what news on the Rialto?

Re: Bitcoin now legal tender in Japan

Postby Typhoon » Mon May 01, 2017 10:02 pm

Nonc Hilaire wrote:
Typhoon wrote:
Nonc Hilaire wrote:
Bitcoin has finally gained the recognition of a mainstream currency along the lines of other fiat currencies. The privilege follows the implementation of a new law in Japan which categorizes Bitcoin as a legal payment option within the country. The much-awaited law went into effect on April 1, 2017 (beginning of a new fiscal year in many countries).


http://www.newsbtc.com/2017/04/02/japan ... pril-2017/


Thank you for posting this bit of news.

You beat me to it :wink:

Not a currency in the US, just a capital asset. Currency would mean no capital gains tax.


The US govt does want any new competition to the US dollar?

Nonc Hilaire wrote:I'm still trying to get a conceptual handle on btc. It's kind of like a closed-end mutual fund composed of every currency. I'm trading the bollinger bands and getting a trade signal about once a month. So far, all profitable trades. It's easier than the 80's. Sell signal approaching.


Took off like a cat who fell into water during April 2017.
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Re: Bitcoin

Postby Nonc Hilaire » Tue May 02, 2017 1:08 am

I sold on the 27th. Bullish long term, waiting to buy back on a dip.
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Re: Bitcoin

Postby Nonc Hilaire » Thu May 11, 2017 11:35 pm

Put bitcoin on a dongle instead of holding it in an exchange.

https://trezor.io
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Re: Bitcoin

Postby Zack Morris » Sun Nov 12, 2017 6:55 pm

With Bitcoin futures about to be listed on the CME, it will now be possible to short the currency :)
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Re: Bitcoin

Postby Nonc Hilaire » Mon Nov 13, 2017 1:45 am

Zack Morris wrote:With Bitcoin futures about to be listed on the CME, it will now be possible to short the currency :)

Not up on this latest attempt, but the last try at a bitcoin etf failed. The whole point of bitcoin is supposed to be transactions audited in a public bitchain. Putting bitcoin on the CME sounds counterproductive when the whole point is being able to cash out in more than one currency without any ferrymen charges.

In the US, bitcoin is not a currency and not a commodity nor an equity. It is just an asset (IRS="We don't know what it is but we are taxing you on it).

Futures are not directly related to short sales. Why that connection?

Again, I do not understand all this and am looking for information. The only real advantage of bitcoin I can see atbthis time is avoiding FOREX and wire transfers. Futures may make sense for some tokens if they become acceptable, but bitcoin?
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Re: Bitcoin

Postby Zack Morris » Mon Nov 13, 2017 6:56 am

Nonc Hilaire wrote:
Zack Morris wrote:With Bitcoin futures about to be listed on the CME, it will now be possible to short the currency :)

Not up on this latest attempt, but the last try at a bitcoin etf failed. The whole point of bitcoin is supposed to be transactions audited in a public bitchain. Putting bitcoin on the CME sounds counterproductive when the whole point is being able to cash out in more than one currency without any ferrymen charges.


Bitcoin will not be exchange-traded. Bitcoin futures will be. This is nothing more than gambling. The underlying will not be transacted. It will be cash settlement based on Bitcoin price moves, which allows you to place directional bets. Maybe eventually there will be options on those futures, which will make it even easier. Want to bet on Bitcoin falling now that every Uber driver is trading it? Sell futures contracts.

Futures are not directly related to short sales. Why that connection?


You can take a short future position. Like all short selling, it's risky. But the idea is that you've sold a futures contract for some price, say $7000, at some future date T. When T rolls around and the price is now $6000, you've profited $1000 because you were paid $7000 and have to deliver $6000 of Bitcoin. It's actually a bit more complicated than this because there is a daily settlement mechanism I believe (I don't actually trade futures), where cash is pulled from your margin account and deposited into the counterparty's (if price goes up; vice versa if Bitcoin price goes down) daily. But that's the gist of it.

You can use futures to hedge or you can use them speculate. Just like with options.
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Re: Bitcoin

Postby Nonc Hilaire » Mon Nov 13, 2017 5:17 pm

The underlying bitcoin must be transacted or you have a fraudulent market. The whole point is to buy in with $ and later choose to cash out in $,€,£,¥ or RMB to maximize profit.

Hedgers must outnumber speculators, who ride on their coattails. There is no need to hedge bitcoin. Bitcoin itself is in one respect a hedge itself on international currency valuations.

Short sales are possible with Etherium or similar token riding the bitcoin blockchain. SALT and other tokens are coming out to loan bitcoin. This is what short sales will look like - a token based smart contract with no exchange necessary. The conventional exchange only makes sense in a highly transactional environment like Coinbase.
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Re: Bitcoin

Postby Zack Morris » Mon Nov 13, 2017 7:03 pm

It's not a fraudulent market. This is how futures work. Consider futures on indexes. Or on VIX, which is not a real underlier but a computed metric. Cash settlement is fine. You could implement a clearing mechanism but the net effect would be identical: you would buy Bitcoin at the lower price and then transfer them to your counterparty who paid you the higher price. You net $1000.

Hedging is absolutely necessary. You say Bitcoin is a hedge against physical currency. That's fine. People also hedge the price of gold with gold futures despite that being viewed as having a similar role. And for a hedge against Bitcoin to be useful, it ought to exist outside of the Bitcoin system.

Bitcoin will eventually collapse. Block chain is indeed a very awesome innovation but none of the current coins will survive. For starters, transactions are not easily reversible and Ethereum is immature. The energy demands of block chain transactions make it impossible to scale in present form.

You can disagree with me on these points of course. It's all speculative. But the validity of hedging with futures is hard to dispute. And it's also hard to dispute that Bitcoin is anything other than a bubble right now. Hardly anyone is buying anything with it. Literally everyone I personally know who is trading cryptocurrency is speculating. That's ok -- you can make a ton of money in a bubble if your timing is savvy. But apart from Roy Moore buying illegal photographs of teenage girls, I don't think there's much actual commerce with Bitcoin relative to speculators.
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Re: Bitcoin

Postby Nonc Hilaire » Mon Nov 13, 2017 10:18 pm

Lots of real activity in bitcoin. Chinese rmb to btc to cdn to real property in Vancouver is a well known btc market mover. Companies that accept btc typically convert out on a daily basis.

Agreed that bitcoin will not be forever. Asset backed cryptos are the future, but btc has such low adoption it's hard to call it a bubble. It is just a highly volatile market.
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Re: Bitcoin

Postby Zack Morris » Tue Nov 14, 2017 1:54 am

Yes, some people use it to bypass capital restrictions and for tax evasion purposes but this is miniscule in comparison to the speculative demand.
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Re: Bitcoin

Postby Nonc Hilaire » Tue Nov 14, 2017 2:33 am

Zack Morris wrote:Yes, some people use it to bypass capital restrictions and for tax evasion purposes but this is miniscule in comparison to the speculative demand.

Where did you find that data? I can't even imagine how one would collect it.
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Re: Bitcoin

Postby Typhoon » Fri Dec 01, 2017 5:47 pm

Well, bitcoin has been on a speculative run, recently read that it passed US $10,000.

Appears to be the opposite of a conventional currency.
The conventional currency is printed, the more it's purchasing power is [eventually] diluted.

Bitcoin. The more bitcoin is mined, the less is left to mine, the higher the value placed upon a unit.
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Re: Bitcoin

Postby Nonc Hilaire » Fri Dec 01, 2017 6:35 pm

Typhoon wrote:Well, bitcoin has been on a speculative run, recently read that it passed US $10,000.

Appears to be the opposite of a conventional currency.
The conventional currency is printed, the more it's purchasing power is [eventually] diluted.

Bitcoin. The more bitcoin is mined, the less is left to mine, the higher the value placed upon a unit.

"Mining" is not really about creating coin. It is payment in kind for verifing transactions. These payments are getting smaller and mining less profitable.
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Re: Bitcoin

Postby Typhoon » Sat Dec 02, 2017 2:12 am

Nonc Hilaire wrote:
Typhoon wrote:Well, bitcoin has been on a speculative run, recently read that it passed US $10,000.

Appears to be the opposite of a conventional currency.
The conventional currency is printed, the more it's purchasing power is [eventually] diluted.

Bitcoin. The more bitcoin is mined, the less is left to mine, the higher the value placed upon a unit.

"Mining" is not really about creating coin. It is payment in kind for verifying transactions. These payments are getting smaller and mining less profitable.


Thank you for clarifying.

Is it possible for the payments to become so small that mining becomes unprofitable?
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Re: Bitcoin

Postby Nonc Hilaire » Sat Dec 02, 2017 3:15 am

Typhoon wrote:
Nonc Hilaire wrote:
Typhoon wrote:Well, bitcoin has been on a speculative run, recently read that it passed US $10,000.

Appears to be the opposite of a conventional currency.
The conventional currency is printed, the more it's purchasing power is [eventually] diluted.

Bitcoin. The more bitcoin is mined, the less is left to mine, the higher the value placed upon a unit.

"Mining" is not really about creating coin. It is payment in kind for verifying transactions. These payments are getting smaller and mining less profitable.


Thank you for clarifying.

Is it possible for the payments to become so small that mining becomes unprofitable?

At the outer limits of my understanding, but I believe the recent forks of bitcoin gold and bitcoin cash are related to the miners concern over profitability. The Etherium token requires a micropayment (gas) to be used to fund the verifiers.

Aantonop is a good resource on youtube. Lots of touts and bad info online these days so be careful choosing info resources. All the cheerleaders make it look like a blowoff top is a possiblity.
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Re: Bitcoin

Postby Typhoon » Sat Dec 09, 2017 4:25 am

Have to wonder how bitcoin futures will work for an underlying instrument that is so volatile.
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Re: Bitcoin

Postby Nonc Hilaire » Sat Dec 09, 2017 5:05 am

Typhoon wrote:Have to wonder how bitcoin futures will work for an underlying instrument that is so volatile.

I think the phrase "force majure" will be heard sooner rather than later. I bet they force longs to accept delivery in frn instead of btc.

I have been doing nothing but selling off the top since spring. No buy indicators, and the account just keeps reinflating like bread dough in a silent comedy.

My brother started asking me about btc last week. Met some receptionist on his delivery route touting it. He hopes to gamble enough to pay off his credit cards. :roll:
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Re: Bitcoin

Postby Zack Morris » Sat Dec 09, 2017 5:10 am

Is everyone ready to lose their shirts Monday morning? :)

Nobody really knows what's going to happen but there's a good chance that there will be significant downward pricing pressure beginning Monday as a result of Bitcoin futures trading on CBOE. The legitimacy that this lends Bitcoin could have the reverse effect for a while but word in the financial press is that there is more short than long interest. There will not be any market makers and counterparties will have to be matched directly. Some traders I know (who will not be handling Bitcoin at their banks but all of whom have some personal Bitcoin holdings) have been speculating what impact futures will have and no one is certain of anything. However, the best thesis seems to be that there will be downward pricing pressure because there is no incentive for anyone going long a futures contract to ultimately buy the underlying asset (Bitcoin). There is plenty of incentive for sellers of futures contracts to sell actual Bitcoin: miners and people who have amassed large Bitcoin portfolios will want to lock in a selling price to unload some serious coinage.

I don't think the volatility is much of a problem in and of itself unless I'm missing something. The problem is the difficulty of transacting in Bitcoin. These futures will be cash settled, so no Bitcoin actually needs to be exchanged. This is great for speculators, which accounts for nearly all Bitcoin ownership. Now, more people can speculate without touching the stuff directly. However, normally, one hedges a futures contract by buying or selling the underlying commodity. This is required for market makers to participate and provide liquidity. Unfortunately, Bitcoin is particularly unwieldy and cannot be used for instantaneous hedging. That's the problem. It's going to be impossible to hedge Bitcoin because it's not correlated to anything (except time :lol: ). Seems to be a market for speculators and large Bitcoin holders/miners.

I got in on Bitcoin late and opened a position two weeks ago. Today, I sold enough to recoup my initial investment, and have kept the profits (well over 100% at this point) in Bitcoin, although I expect a lot of that to evaporate next week. Hopefully temporarily. I'm tempted to buy Ethereum and hold. One of the better-informed people in this space described the advantages of Ethereum as a platform. His argument is that those making the case that Bitcoin will act as a cryptocurrency "store of wealth" should probably look to Ethereum instead, which has a better chance of outlasting Bitcoin. Energy consumption is lower, the protocol is more flexible, and here's the important part: it's way easier for US Bitcoin holders to convert falling BTC into ETH than cashing out. Anyone who tried to log in to Coinbase the other day (which is what I use; the E-Trade of Bitcoin, basically) found the site to be down due to congestion. And when price movements are very large, it has been reported that Coinbase has a nasty habit of reneging on its "guaranteed" prices. Exchanges outside of the US, especially Bitfinex, are downright toxic.

Much of the rise in value in BTC this year was really due to other coin offerings. To purchase them, one had to exchange for Bitcoin, which drove up Bitcoin demand. If Bitcoin starts to collapse, ETH is the likely beneficiary by way of a similar mechanism. It's arguably the better platform, too.
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Re: Bitcoin

Postby noddy » Sat Dec 09, 2017 5:19 am

its one great big lesson on if government intervention in the banking is good or bad.
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Re: Bitcoin

Postby Zack Morris » Sat Dec 09, 2017 7:56 am

Is it?

Some argue the crypto bubble is the consequence of easy money chasing too few legitimate investments. But who is buying crypto? It's not the bond holders and large asset managers that were most directly impacted by QE. It's mostly young folks who are choosing this and avocado toast over traditional investments.

Maybe the counter argument is that QE jacked housing prices into the stratosphere beyond the reach of Millennials, so they're buying crypto out of desperation but I don't think that's what's going on here. I think it's simply hip to encrypt. Totally orthogonal to monetary policy.

The only political connection I see here is to the bountiful prosperity the Obama years brought (record job growth, stock market rally, and corporate earnings) -- we can invest in this stuff because we've got the play money to burn.
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Re: Bitcoin

Postby noddy » Sat Dec 09, 2017 8:05 am

sorry, i didnt mean to trigger.

its much simpler than bipartisan merkin lavender smearing contests - unlike regular currencies and banks their is no government central bank stepping in and stopping the speculation/manipulation etc throwing the currency around, so its volatile.

its all happening laissez faire, a free market of currencies , it will be interesting how it pans out.
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Re: Bitcoin

Postby Zack Morris » Sat Dec 09, 2017 4:24 pm

Every libertarian experiment ends in tears and government regulation. Cryptocurrencies have been around for years and there has been seemingly no end to the scams, no effective self-policing, no consumer protection or reliable auditing. The most exciting thing that has happened to the community is getting the government's blessing to trade derivatives on boring old commodity exchanges.

Government is as natural as the air we breath and humanity cannot exist without it.
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Re: Bitcoin

Postby Simple Minded » Sat Dec 09, 2017 10:32 pm

noddy wrote:sorry, i didnt mean to trigger.



BS! (20C slang for Bollocks!)

I've read about people who post troof on the internet to trigger snowflakes. They are the new Nazi's! They do it intentionally and internationally.

In 21C slang they are called Trazi's! That's why they often say "The troof hurts!" It's a WMD! (Weapon of Mass of Delusion) :P
Sometimes other people "trigger" me. More often than not though, I do it to myself.
Kinda like Marxist sex.
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Re: Bitcoin

Postby noddy » Sun Dec 10, 2017 3:17 am

Zack Morris wrote:Every libertarian experiment ends in tears and government regulation. Cryptocurrencies have been around for years and there has been seemingly no end to the scams, no effective self-policing, no consumer protection or reliable auditing. The most exciting thing that has happened to the community is getting the government's blessing to trade derivatives on boring old commodity exchanges.

Government is as natural as the air we breath and humanity cannot exist without it.
'

what does that have to do with the price of tea in china ?

more importantly, what does it have todo with your previous post on the positive aspects of bitcoin and why you bought into it.
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Re: Bitcoin

Postby noddy » Sun Dec 10, 2017 3:21 am

Simple Minded wrote:
noddy wrote:sorry, i didnt mean to trigger.



BS! (20C slang for Bollocks!)

I've read about people who post troof on the internet to trigger snowflakes. They are the new Nazi's! They do it intentionally and internationally.

In 21C slang they are called Trazi's! That's why they often say "The troof hurts!" It's a WMD! (Weapon of Mass of Delusion) :P


in this case not so much :P


i dont actually trust bitcoin in the medium/longer term because without government enforcement its likely to become viewed as a black market - so im actually on the opposite side of the fence to his rant.

... and i dont have enough money to waste a decent amount on get rich quick schemes of dubious stability.

the price is volatile because the lack of regulation lets the bigger players manipulate the market with the kind of tricks that have long been illegal elsewhere.
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