Buying bitcoins

pH

scamalert wrote: »

as for btc future if i had any or access to trade it id go in all short now or cash out,since this is second spike in almost two decades,and dont believe it will continue just to go up without people actually cashing out into fiat.and all this said dont think it will disappear any time soon since them 95% transaction totals dont have any other ways yet to deal anonymously,but dont see it adapted beyond that,people would actually come to idea that btc somehow is easier to use in daily life,when presented with so much random things that can go wrong,and volatility,which is suited only if one is able to gamble on cash not having rely on it on day to day basis.

And this has been your position (sell now it's going to tank soon) since 16-04-2013 when you made your first post in this thread, when a bitcoin could be bough for $68. I'm genuinely curious, given your predictions and postings for the last 4 years, why you're so sure now that this is the end?

At what stage does someone who's been consistently wrong for 4 years start to admit they might in fact actually be wrong, or are you as convinced as ever that bitcoin is failing any day now?

makeorbrake

I maintain an open mind - as I'm far from competent in this arena. However, whatever happens to bitcoin (and there may be other potential issues awaiting it in the long grass), the days of saying that it's exclusively the preserve of the underworld is long gone. There are some serious people involved with this cryptocurrency now. Social networking & Internet Entrepreneurs, the Winklevoss twins (behind one of the bitcoin ETF license applications) and paypal co-founder Peter Thiel (involved with the Trump Administrations transition team) as examples.

I'm not immodestly invested in btc - and whilst I'm not confident of where it will end up, I'm equally not confident that it's doomed....

scamalert

pH well done on your research,its amazing isnt it 68$,when its now 1269$,4+ years later and yet seems it was ridiculous price back then.1200$ risen in ~5years.

Your post just proves that one like me can be wrong 100 times in a row.yet i think many would never seen it going so high twice now.As said im neither pro or against since attitude changed and yes btc has its own uses and market place,while i could disagree with some arguments it just shows that patience and interest can pay off good for someone who has more positive outlook.

cnocbui

georgiecasey wrote: »

this thread was dead last year when the price was pretty stabilised while i was buying bitcoin the whole time to actually buy things. i suppose this is the investments forum. but i find it hilarious people trotting out reasons for the increase in price. in truth, nobody knows. but if i'd to guess, all price fluctuations lately are sophisticated pump and dump schemes

I would disagree, there would seem to be a strong consensus that the current appreciation in value is due to speculation that the current application by the Winkelvoss twins to create a Bitcoin based ETF will get approved. The reasoning goes that approval would create a surge in demand and would take Bitcoin more mainstream. Of course some rate the chances of approval at only about 35%, but where there's hope, there's investors.

pro_gnostic_8

Hi, a quick question for you folks if I may.
In the event IF the ETF was rejected by the SEC and assuming in that case that there would be a resultant price-drop, at what rate would you buy back in?
I.E., by how much (roughly) would you expect the price to drop -- $200, $300, $500, or more?
What price level per coin would it need to dive to before you would buy back? What would be your baseline?

I am interested to know your reckonings.
Thanks in advance.

zulutango

This is pure intuition on my part (and it's as good a guess as anybody's) but I reckon €750 - 800 is the floor. People's confidence in bitcoin is becoming very solid, so I don't see this ETF thing as being a make or break for the currency. After all, we can still continue to hold and trade bitcoins irrespective of the result, and everybody knows this. And the supply is dwindling while at the same time usability is increasing, and knowledge of it is also increasing. The thing that would really damage it would be if a flaw in the protocol was discovered, or serious, persistent security issues, or the rise of a more effective cryptocurrencies.

pH

The problem with bitcoin at the moment is that all the 'positives' for the digital currency have a negative downside. There is no real central authority, so getting anything done in terms of progress of the technology requires two things, the developers to design, code and test it and then the miners actually using the code.

Bitcoin is at its current transaction limit, to actually get a transaction added to the blockchain now costs an average of 60c, which is a long way from the promised almost free transactions of a couple of years ago. Any attempts to change this, from a simple increase in blocksize to more complicated things like the lightning network (which needs segwit) are being blocked by some group or another for various financial and self-interested reasons.

There is a lot of disillusionment currently in the core bitcoin community, whether bitcoin can move forward and overcome the self interest of a powerful few (mainly Chinese miners and coredevs promoting schemes designed to make them money) is an interesting question. Bitcoin is still in my opinion in the number one spot to be the global worldwide money of the future, but every day of infighting reduces that a tiny bit.

cnocbui

Bitcoin is probably just a flash in the pan, a fad. It simply can't work as a currency or currency alternative. It more closely resembles a static wealth store like gold bullion. It's easier to acquire, transfer and have stolen, than gold bullion, I'll give it that, but that's about it. If you are using electricity from a gas fired power station, then each bitcoin mined at the current difficulty, would be responsible for just over 2 tonnes of CO2 produced and almost double that if the energy was from coal. Of course that gets progressively worse as time goes on and the difficulty rises.

pro_gnostic_8

cnocbui wrote: »

Bitcoin is probably just a flash in the pan, a fad. It simply can't work as a currency or currency alternative.

In fairness, Bitcoin was not primarily envisioned as a currency alternative to fiat. It is not architectured, nor ever was, to buy a coffee in Starbucks or a pint down in McCarthy's Pub. Even at the outset back in 2009 it would still take 10 minutes to get a transaction onto a new block on the chain making it unsuitable for immediate payment at the shop till. Similar to gold ( since you mention gold) ....... try paying for your weekly shopping with an ounce-fraction of gold. Good luck with that.
Where it does come into its own is as a payment settlement method across national borders. There's really no better way to send a remittance from Canada to, say, The Philippines than with bitcoin.

On the environmental aspect -- electricity CO2 emissions etc -- I'm inclined to wonder what the physical, biological or chemical effects of gold mining is having on the areas where it is performed. I honestly don't know, but I would guess the aftereffects are not inconsiderable.

zulutango

Mining of bitcoin is increasingly likely to be done using renewables anyway. The costs of these are plummeting, especially photovoltaics.

cnocbui

pro_gnostic_8 wrote: »

In fairness, Bitcoin was not primarily envisioned as a currency alternative to fiat. It is not architectured, nor ever was, to buy a coffee in Starbucks or a pint down in McCarthy's Pub. Even at the outset back in 2009 it would still take 10 minutes to get a transaction onto a new block on the chain making it unsuitable for immediate payment at the shop till. Similar to gold ( since you mention gold) ....... try paying for your weekly shopping with an ounce-fraction of gold. Good luck with that.
Where it does come into its own is as a payment settlement method across national borders. There's really no better way to send a remittance from Canada to, say, The Philippines than with bitcoin.

On the environmental aspect -- electricity CO2 emissions etc -- I'm inclined to wonder what the physical, biological or chemical effects of gold mining is having on the areas where it is performed. I honestly don't know, but I would guess the aftereffects are not inconsiderable.

Once an ounce of gold has been mined, it can be exchanged thousands of times over the next 10,000 years with no additional CO2 production, so I don't think bitcoin compares well.

One of the things that attracted me to bitcoin was to investigate it's use to transfer value internationally. I found it doesn't stack up even there as a substitute for fiat currency exchange, working out costing at least 1% of the value transmitted vs 0.25% for fiat.

People used to have no problem exchanging gold and silver for goods and services. It could still be done and would be more viable than bitcoin.

cnocbui

zulutango wrote: »

Mining of bitcoin is increasingly likely to be done using renewables anyway. The costs of these are plummeting, especially photovoltaics.

That's as much a nonsense as Apple claiming they use renewable energy. The vast majority of bitcoin mining occurs in China because that is where energy is cheapest. 57% of China's electricity comes from coal so 57% of the energy used to mine bitcoins comes from coal, but 36% does come from low CO2 sources, so at least that is something.

zulutango

cnocbui wrote: »

That's as much a nonsense as Apple claiming they use renewable energy. The vast majority of bitcoin mining occurs in China because that is where energy is cheapest. 57% of China's electricity comes from coal so 57% of the energy used to mine bitcoins comes from coal, but 36% does come from low CO2 sources, so at least that is something.

While traditionally a major polluter and dependent on coal, China is making huge inroads in renewables. Coal, in all countries, won't be used for generating electricity for a whole lot longer.

pro_gnostic_8

cnocbui wrote: »

I found it doesn't stack up even there as a substitute for fiat currency exchange, working out costing at least 1% of the value transmitted vs 0.25% for fiat.

I'll need that explained to me because I don't understand it.
If I've got you right it costs approx $12.7 per bitcoin to transmit? Really, I'm paying a fee of around 22 cents on my bitcoin transfers.

pro_gnostic_8

cnocbui wrote: »

Once an ounce of gold has been mined, it can be exchanged thousands of times over the next 10,000 years with no additional CO2 production,

So too can bitcoin ! The electricity usage associated with bitcoin is during the mining process, not on whatever subsequent transactions the particular bitcoin is involved in.

zulutango

pro_gnostic_8 wrote: »

So too can bitcoin ! The electricity usage associated with bitcoin is during the mining process, not on whatever subsequent transactions the particular bitcoin is involved in.

Correct me if I am wrong but aren't the miners still required to verify transactions? So, even after all the bitcoins are mined there'll still be a need for miners? The ins and outs of what happens after bitcoins have all been mined is something I don't know much about.

cnocbui

pro_gnostic_8 wrote: »

So too can bitcoin ! The electricity usage associated with bitcoin is during the mining process, not on whatever subsequent transactions the particular bitcoin is involved in.

That isn't how I understand it. It seems the 'mining' is actually a misnomer and is actually the effort required to process blocks of transactions. The bitcoins are given to the miners as a reward for processing blocks of transactions. The electricity required to process a block of transactions is simply prodigious. I think the reward is 12 bitcoins for a processed block so a block requires 54 megawatts of electricity to process. This just gets worse with time, as the blockchain gets continually bigger and so the computational difficulty and electricity consumption just keeps growing.

The system can't scale and the whole thing just seems impractical beyond the initial growth phase. Imagine the impracticality of driving a car where the fuel economy declined 20% per year.

BrokenArrows

cnocbui wrote: »

That isn't how I understand it. It seems the 'mining' is actually a misnomer and is actually the effort required to process blocks of transactions. The bitcoins are given to the miners as a reward for processing blocks of transactions. The electricity required to process a block of transactions is simply prodigious. I think the reward is 12 bitcoins for a processed block so a block requires 54 megawatts of electricity to process. This just gets worse with time, as the blockchain gets continually bigger and so the computational difficulty and electricity consumption just keeps growing.

The system can't scale and the whole thing just seems impractical beyond the initial growth phase. Imagine the impracticality of driving a car where the fuel economy declined 20% per year.

I think his point was that once 21 million coins are reached there is no incentive for anyone to "mine" and hence there will be noone to verify the transactions which means the coins become worthless.

Also the chances are they it will become impractical to mine long before the 21 million is reached.

pro_gnostic_8

zulutango wrote: »

Correct me if I am wrong but aren't the miners still required to verify transactions?

When a miner finds a correct hash for a block, it/he broadcasts that informational data to the network ( about 6,000 -- 7,000 nodes running Bitcoin-Qt). These nodes then do a hash check on the broadcasted block; this checking is relatively easy, fast and doesn't demand much electricity ......... it's a bit like making a hash in reverse -- checking that 214 x 200 = 42800 rather than trying to find the multiplication components of the 42800.
When 51% of nodes agree that the hash is correct, the block will then be added to the chain.
The amount of electricity required to verify is miniscule in comparison to that needed for mining.

pro_gnostic_8

cnocbui wrote: »

The electricity required to process a block of transactions is simply prodigious.

Yes, but what I am saying is that once a particular bitcoin or block is mined then that is the end of electrical consumption by that particular bitcoin block.
You seemed to be inferring in your gold reference that bitcoin is a continual leech of electrical energy and an emitter of CO2 as in "Once an ounce of gold has been mined, it can be exchanged thousands of times over the next 10,000 years with no additional CO2 production, so I don't think bitcoin compares well."
Once a particular bitcoin is mined, it neither is a producer of further CO2

pH

cnocbui wrote: »

That isn't how I understand it. It seems the 'mining' is actually a misnomer and is actually the effort required to process blocks of transactions. The bitcoins are given to the miners as a reward for processing blocks of transactions. The electricity required to process a block of transactions is simply prodigious. I think the reward is 12 bitcoins for a processed block so a block requires 54 megawatts of electricity to process. This just gets worse with time, as the blockchain gets continually bigger and so the computational difficulty and electricity consumption just keeps growing.

The system can't scale and the whole thing just seems impractical beyond the initial growth phase. Imagine the impracticality of driving a car where the fuel economy declined 20% per year.

Well seeing as you mention cars, some rough back of the envelope figures ...

The block rewards for bitcoin are 12.5 coin, there are 6 of these an hour so 75 bitcoin an hour is the reward (plus fees obviously). At current rates this means there's about €91,000 per hour to be made. So obviously a large proportion of this is electricity cost, but there is profit and other costs (like ASIC hardware) so let's say €60,000 per hour being spent on electricity.

So if we take an average cost per km figure for a car of 50c per km, running a car on the road costs about €30 per hour. (depending on speed, this is a low-ball estimate).

So let's put this energy usage and cost into perspective:

The entire energy costs for the global bitcoin 'mining' operation per hour is something like 2,000 cars driving around. Which in global terms, is a tiny and barely noticeable pittance.

pro_gnostic_8

BrokenArrows wrote: »

Also the chances are they it will become impractical to mine long before the 21 million is reached.

By that time, miners will be making their money from transaction fees.

BrokenArrows

pro_gnostic_8 wrote: »

By that time, miners will be making their money from transaction fees.

But but by that time the chain is going to be so large that transactions take a huge amount of time and people will need to pay large fees to get processed in a reasonable amount of time.
Its a failing concept.

pH

BrokenArrows wrote: »

But but by that time the chain is going to be so large that transactions take a huge amount of time and people will need to pay large fees to get processed in a reasonable amount of time.
Its a failing concept.

sorry, that's wrong. The size of the blockchain has no impact whatsoever on how new transactions get on it. The blockchain is designed to add approximately one block every 10 minutes and this is regulated with the difficulty mechanism. A 1GB (or 100 TB) existing chain makes no difference.

alb

The most common way people have predicted bitcoins failure over the years is to fail to see how the market and the technology will change over time - by taking one aspect of it now and magnifying it in the future without taking into account other things that may change

For example years ago people were saying "Sure bitcoin works now, but over time the blockchain will grow to be gigabytes in size and the casual user won't be able to download or store it all".

What actually happened: Internet connection speeds increased a LOT, disk space got cheaper, SPV wallets that don't require the whole blockchain were invented.

Once an ounce of gold has been mined, it can be exchanged thousands of times over the next 10,000 years with no additional CO2 production,

hmm, assuming the gold never needs to be transported or divided? Seems an unlikely scenario.

cnocbui wrote: »

I think the reward is 12 bitcoins for a processed block so a block requires 54 megawatts of electricity to process. This just gets worse with time, as the blockchain gets continually bigger and so the computational difficulty and electricity consumption just keeps growing.

It doesn't inherently require it, it's what the miners are currently volunteering to spend on chasing that reward. The difficulty and electricity usage only keeps growing if the demand and value keeps growing. Difficulty can also reduce if less mining power is being used. With this design Bitcoin always trends towards an 'appropriate mining cost' for the value the system provides.

Coming back to my first point, I don't want to really nitpick on details like this though. I think bitcoin (or whatever cryptocurrency becomes the leading one) will change in every imaginable way before it will resort to failing completely.

In the future the blockchain may not be secured by proof-of-work mining, every transaction may not need to be in a block and stored permanently, but you may not see these changes until they are needed. Bitcoin is still working 'well enough' that it has not been forced into a severe change yet, but I think it will if it needs to.

pro_gnostic_8

alb wrote: »

I think bitcoin (or whatever cryptocurrency becomes the leading one) will change in every imaginable way before it will resort to failing completely.

In the future the blockchain may not be secured by proof-of-work mining, every transaction may not need to be in a block and stored permanently, but you may not see these changes until they are needed. Bitcoin is still working 'well enough' that it has not been forced into a severe change yet, but I think it will if it needs to.

This is absolutely correct.
I'm hearing all the time how Monero has anonymity, how Dash has coin-mixing ability,how Ether has smart-contract integration.
My answer is that when one (or more) of these attributes becomes provably beneficial and needed, then, it will be incorporated quickly into the Bitcoin protocol by the core devs. That is a given.

alb

Coincidentally I was just listening the to a16z podcast where Marc Andreessen was interviewing Reed Hastings, the CEO of Netflix. at about the 26 minute mark of the podcast he starts talking about Jeff Bewkes, long time CEO of Time-Warner and how he got caught off guard by Netflix, here are some direct quotes from it:

"He missed the Netflix thing, what happens to people is they associate you as you are instead of what you can become if the technology matures. Ok, and so he looked at Netflix in 2002 and would say things like 'The Internet can't do video at scale' and it was like OK narrowly that's true but broadly that's not true because that's going to change.....
.... and investors kept hitting on what are you going to do about Netflix? and he would say 'come on, it barely runs'"

pro_gnostic_8

A bit surprising -- surprising to me at any rate.
Accepting, of course, that polls are in no way accurate indicators -- as amply demonstrated over the past couple of years with British election, Brexit and Trump.

http://www.strawpoll.me/12492748/r

zulutango

pro_gnostic_8 wrote: »

A bit surprising -- surprising to me at any rate.
Accepting, of course, that polls are in no way accurate indicators -- as amply demonstrated over the past couple of years with British election, Brexit and Trump.

http://www.strawpoll.me/12492748/r

Who is answering the poll and wtf do they know about anything!? If it is a poll of seasoned bitcoin investors only, then I'd say it's got some relevance!

pro_gnostic_8

zulutango wrote: »

Who is answering the poll and wtf do they know about anything!? If it is a poll of seasoned bitcoin investors only, then I'd say it's got some relevance!

Yep, the only true poll of professional/expert sentiment is the market -- the price.
However, accepting that there has been significant volatility over the past 24 hours, BTC does seem to have a support level around the $1,130 mark -- same price as it was a week ago, and is again trending upwards this morning.
I'm inclined to revise my previous total pessimism about an ETF approval success and would now pitch it at a 50/50 chance. A coin toss.