Bitcoin Price Tumbles After Wall Street Selloff(wsj.com)
wsj.com
Bitcoin Price Tumbles After Wall Street Selloff
https://www.wsj.com/articles/bitcoin-price-tumbles-after-wall-street-selloff-11638621435
252 comments
> trying to make math illegal
This is a non-sensical but very common expression from crypto-bros. It's like saying that gun control is to "make steel illegal".
This is a non-sensical but very common expression from crypto-bros. It's like saying that gun control is to "make steel illegal".
I think a better metaphor to gun control is "trying to make physics illegal".
This is because you can ban people from buying guns. But you certainly won't be able to stop people from creating their own weapons. Obviously too little people have the capability, but yes, then can.
With bitcoin is more complicated, because trying to control self-custody is basically trying to ban maths. All you need is an internet connection and some google to find software capable of self-custody. Hell, you can do that with excel if you really want to.
So, as hard as trying to ban math.
This is because you can ban people from buying guns. But you certainly won't be able to stop people from creating their own weapons. Obviously too little people have the capability, but yes, then can.
With bitcoin is more complicated, because trying to control self-custody is basically trying to ban maths. All you need is an internet connection and some google to find software capable of self-custody. Hell, you can do that with excel if you really want to.
So, as hard as trying to ban math.
> With bitcoin is more complicated, because trying to control self-custody is basically trying to ban maths. All you need is an internet connection and some google to find software capable of self-custody. Hell, you can do that with excel if you really want to.
That would be a shame if the software you downloaded stole the coins from you wouldn't it? Or if your ECDSA implementation in Excel contained a typo and you lost everything.
The only reason cryptography ban in the 90s failed was because everybody in the business world needed to have access to strong crypto for to use security reasons. If people had to roll their own crypto, the NSA cryptanalysts would have had a really fun time because almost all of them would have been utterly broken.
That would be a shame if the software you downloaded stole the coins from you wouldn't it? Or if your ECDSA implementation in Excel contained a typo and you lost everything.
The only reason cryptography ban in the 90s failed was because everybody in the business world needed to have access to strong crypto for to use security reasons. If people had to roll their own crypto, the NSA cryptanalysts would have had a really fun time because almost all of them would have been utterly broken.
> The only reason cryptography ban in the 90s failed was because everybody in the business world needed to have access to strong crypto for to use security reasons. If people had to roll their own crypto, the NSA cryptanalysts would have had a really fun time because almost all of them would have been utterly broken.
You wouldn’t really need to roll your own crypto to post transactions to the Bitcoin network, a Bitcoin hash is basically sha256 done twice.
Bitcoin uses much the same cryptography that most banks, ssl certs and other internet cryptography use. Unless you plan to memory hole the entire topic of sha256 and bitcoin hash algorithms, it seems unlikely that any government operating on the premise of a citizenry with the right to free speech, could prevent it.
You wouldn’t really need to roll your own crypto to post transactions to the Bitcoin network, a Bitcoin hash is basically sha256 done twice.
Bitcoin uses much the same cryptography that most banks, ssl certs and other internet cryptography use. Unless you plan to memory hole the entire topic of sha256 and bitcoin hash algorithms, it seems unlikely that any government operating on the premise of a citizenry with the right to free speech, could prevent it.
> Hell, you can do that with excel if you really want to.
Looks like the parent was talking about rolling its own crypto, isn't it?
Looks like the parent was talking about rolling its own crypto, isn't it?
Its also illegal to make weapons yourself. “You can’t prevent it” is a silly standpoint to argue from. Should you make it legal for American school children to shoot their classmates simply because apparently the country can’t prevent it? No of cause not.
Crypto isn’t just math, and it’s subject to law just like everything else.
Crypto isn’t just math, and it’s subject to law just like everything else.
> Its also illegal to make weapons yourself.
Where? Not in the USA. And jstark, the guy who made the FGC-9, was rather conspicuously a resident of Germany [0], so it's not like making self-manufacture of firearms illegal made it impossible for him to do so.
0: https://www.thefirearmblog.com/blog/2021/10/12/jstark-passes...
Where? Not in the USA. And jstark, the guy who made the FGC-9, was rather conspicuously a resident of Germany [0], so it's not like making self-manufacture of firearms illegal made it impossible for him to do so.
0: https://www.thefirearmblog.com/blog/2021/10/12/jstark-passes...
The link seems to disprove your point, the police raided his house.
The point above was that even in the case of making something illegal, it doesn't stop people from physically doing it.
In the USA it is legal to make your own guns.
> The Legal Framework for Individuals: Making a firearm for personal use is legal. Making a firearm for personal use without a federal manufacturing license is legal. This has always been the case, even after the enactment of the Gun Control Act of 1968 ("GCA"). http://freedomblog.skylarklaw.com/2014/10/is-making-firearm-...
Interesting that this came up in a thread about Bitcoin.
In the USA it is legal to make your own guns.
> The Legal Framework for Individuals: Making a firearm for personal use is legal. Making a firearm for personal use without a federal manufacturing license is legal. This has always been the case, even after the enactment of the Gun Control Act of 1968 ("GCA"). http://freedomblog.skylarklaw.com/2014/10/is-making-firearm-...
Interesting that this came up in a thread about Bitcoin.
> The point above was that even in the case of making something illegal, it doesn't stop people from physically doing it.
Well, that’s precisely my point. You typically don’t ban anything by physically preventing people from doing it.
Well, that’s precisely my point. You typically don’t ban anything by physically preventing people from doing it.
Haha yes, banning physics is the perfect metaphor here!
I'm not a crypto-bro.
The crypto(graphy)wars of the 90s were doomed to failure. Restrictions on cryptography were ultimately about controlling algorithms with certain sized inputs. Its trying to make some math illegal. It seems nonsensical in 2021.
The crypto(currency) wars of 20s ARE doomed to failure. Restrictions on cryptocurrency were ultimately about controlling algorithms with certain inputs. Its trying to make some math illegal.
The crypto(currency) wars of 20s ARE doomed to failure. Restrictions on cryptocurrency were ultimately about controlling algorithms with certain inputs. Its trying to make some math illegal.
That's reductio ad absurdum ... a logical fallacy. It's like saying restrictions on digital child pornography are doomed to failure because they're about controlling certain bit strings. But as it turns out, people involved in that kind of stuff get identified; get arrested; go to prison; and society abhors and rejects their behavior.
I don't think reductio ad absurdum is normally considered a logical fallacy? Maybe it's more like the fallacy of composition.
You're right; it's only an informal fallacy; my bad!
It's not a fallacy of any kind. It's a form of logical argument. If A implies B and B is absurd then A is absurd.
Whats the fallacy called when CSAM is used as an argument by authoritarians wanting to ban math?
I have literally no idea what you're talking about; but the fallacy that's about implying someones argument is bad because they're a bad person is called ad hominem, HTH HAND.
I think you do. It's appeal to emotion, and appeal to authority. HAND
Do you not think it's possible some people genuinely don't want children to be assaulted, and perhaps (in some cases) care more about that then they do about the sanctity of mathematics or whatever? Perhaps I'm naive but it seems likely to me that there would be a lot more people like that than people who are cynically utilizing the CSAM argument to pursue a deep-seated loathing of mathematics.
Anytime somebody tries to illustrate the futility of banning math, they are confronted with this argument. It is the same argument that has been used for DECADES at this point to continuously erode digital freedoms. There are countless memes documenting this through the Internet ages.
https://en.wikipedia.org/wiki/Four_Horsemen_of_the_Infocalyp...
There is no good faith outcome that can continue from this, it shuts down the argument.
Good day.
There is no good faith outcome that can continue from this, it shuts down the argument.
Good day.
Well, I'm suspecting "CSAM is used as an argument by authoritarians wanting to ban math" wasn't really a good faith argument either. Either way good day to you too.
Is this really a proper analogy? Child pornography is the content and the internet is the medium. For what OP is talking about, cryptography is the medium, not the content. We're moving towards banning the medium here, and what types of legitimate content enabled by it will we be throwing out?
Restrictions on digital child pornography do seem doomed to failure. It's why the FBI et al keep asking for backdoors and anti-encryption, and why Apple is adding CSAM scanning on device.
You're missing the point. How many people would be "doing cryptocurrency" if it were as strong regulated against as child pornography? Some minuscule number, I would imagine; at which point how interesting or useful would it be?
You don't have to drive something to zero to restrict it successfully.
You don't have to drive something to zero to restrict it successfully.
Hmm good question.
Let's say Bitcoin was strongly regulated globally. Anyone caught running mining software or transacting in Bitcoin has their hands cut off. Ouch.
I can still download mining software and run it on my computer, and connect through the network through Tor. Blocks are 1 MB every 15 minutes, it's noise. I don't need to know anyone or have anyone's identities. It's really really hard to catch me. Like, wayyyyy harder than the child pornography example.
Well, ok but what's the incentive then for me to use Bitcoin in such a world? Not sure there, like what's the "USD price" per Bitcoin. Ya this part seems tough. If all countries strongly ban Bitcoin with harsh penalties, that seems like it would put a kabosh on my ability to turn it into real world currency. But still could be used for digital goods.
Let's say Bitcoin was strongly regulated globally. Anyone caught running mining software or transacting in Bitcoin has their hands cut off. Ouch.
I can still download mining software and run it on my computer, and connect through the network through Tor. Blocks are 1 MB every 15 minutes, it's noise. I don't need to know anyone or have anyone's identities. It's really really hard to catch me. Like, wayyyyy harder than the child pornography example.
Well, ok but what's the incentive then for me to use Bitcoin in such a world? Not sure there, like what's the "USD price" per Bitcoin. Ya this part seems tough. If all countries strongly ban Bitcoin with harsh penalties, that seems like it would put a kabosh on my ability to turn it into real world currency. But still could be used for digital goods.
> If all countries strongly ban Bitcoin with harsh penalties, that seems like it would put a kabosh on my ability to turn it into real world currency.
You're forgetting black markets. Drug dealers and gun runners and human traffickers are already breaking serious laws. They don't care about breaking other laws. If they get caught they're already going to jail whether they use illegal math or not.
The lack of utility also assumes that all countries would ban it, which seems unlikely, if only because some countries have the incentive to do anything they can to stick it to other countries they don't like. Then it still retains value globally because it can be turned into real stuff in those countries.
The real issue is this: You can't ban it for the "bad stuff" that gets used as the excuse to ban it, because those guys will just break the law, as they already do. You can ban it for innocent people using it for innocent things, but that's just stupid.
Or corrupt, because incumbents don't like the competition, which is the strongest driving force for such laws.
You're forgetting black markets. Drug dealers and gun runners and human traffickers are already breaking serious laws. They don't care about breaking other laws. If they get caught they're already going to jail whether they use illegal math or not.
The lack of utility also assumes that all countries would ban it, which seems unlikely, if only because some countries have the incentive to do anything they can to stick it to other countries they don't like. Then it still retains value globally because it can be turned into real stuff in those countries.
The real issue is this: You can't ban it for the "bad stuff" that gets used as the excuse to ban it, because those guys will just break the law, as they already do. You can ban it for innocent people using it for innocent things, but that's just stupid.
Or corrupt, because incumbents don't like the competition, which is the strongest driving force for such laws.
Historically, US destroy any countries that dares to undermine USD. Given China now is on board, US has no stronger military opponent to crush. Russia is already very muted. That SAmerican country using crypto officially will see something happening soon. May God has mercy on their souls.
Historically = over the past 80 years since World War 2.
It's not all that long when you think about it.
It's not all that long when you think about it.
There is no banning crypto-currencies. Making the on and off ramps too hard for majority is a real possibility on other hand.
Unless people will eventually do without on and off ramps.
By that logic, there is no banning murder.
Getting away with murder isn't exactly simple. I think majority of cases are found out eventually and then there is whole process. So there is point banning it as it clearly results in less murders.
And banning cryptocurrency could be done just as effectively. If exchanging US dollars for crypto was illegal. The value would drop overnight because most of the investors would not be interested in doing something illegal.
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> Its trying to make some math illegal.
You don’t outlaw the maths. You outlaw people holding assets in wallets. Courts will have no trouble distinguishing that from a ban in maths.
You don’t outlaw the maths. You outlaw people holding assets in wallets. Courts will have no trouble distinguishing that from a ban in maths.
Efforts to control cryptocurrency may be doomed to failure but the reason would be because a critical mass of rich and powerful people own them and thus will not allow them to be de-valued.
Your reasoning that it's "the maths" that makes crypto unassailable shows a lack of understanding of how governments exercise power and control. The law does not care about your worldview and geeky conception of the abstract mathematical nature of cryptography—and guess what—they don't have to: it's purely a question of enforceability.
The different between encryption and cryptocurrency is that the former cannot be targeted, but the latter can. Consider the purpose of encryption: to make communication between 2 or more individuals private. This can happen in many different ways, from whispering in ones ear, to using postcards w/ one-time pads. It can't be regulated because there's no stable target, any group of people that needs privacy can rig up their own scheme independent of all others and change it as necessary. The value they derive is directly from the privacy and depends unqiuely on each situation. The only way for a government to defeat this is through oppressive totalitarianism with direct threat of violence and imprisonment.
Cryptocurrency on the other hand has no direct utility other than its monetary value, and that monetary value is a direct function of the global belief in that value. It would be exceedingly easy for a government to make a specific cryptocurrency illegal because the mechanisms are concrete and public—you can't just swap out the maths for a new implementation. In other words governments can outlaw and devalue cryptocurrencies faster than you can establish and build trust in them.
Not that I think this will happen in practice because governments are already taxing cryptocurrency and riding that gravy train as well. But the fact that they are able to tax it is clear evidence that cryptocurrency is not in fact above the law.
Your reasoning that it's "the maths" that makes crypto unassailable shows a lack of understanding of how governments exercise power and control. The law does not care about your worldview and geeky conception of the abstract mathematical nature of cryptography—and guess what—they don't have to: it's purely a question of enforceability.
The different between encryption and cryptocurrency is that the former cannot be targeted, but the latter can. Consider the purpose of encryption: to make communication between 2 or more individuals private. This can happen in many different ways, from whispering in ones ear, to using postcards w/ one-time pads. It can't be regulated because there's no stable target, any group of people that needs privacy can rig up their own scheme independent of all others and change it as necessary. The value they derive is directly from the privacy and depends unqiuely on each situation. The only way for a government to defeat this is through oppressive totalitarianism with direct threat of violence and imprisonment.
Cryptocurrency on the other hand has no direct utility other than its monetary value, and that monetary value is a direct function of the global belief in that value. It would be exceedingly easy for a government to make a specific cryptocurrency illegal because the mechanisms are concrete and public—you can't just swap out the maths for a new implementation. In other words governments can outlaw and devalue cryptocurrencies faster than you can establish and build trust in them.
Not that I think this will happen in practice because governments are already taxing cryptocurrency and riding that gravy train as well. But the fact that they are able to tax it is clear evidence that cryptocurrency is not in fact above the law.
I don’t buy the position that government bans automatically cause the market price to crash. See marijuana, alcohol, cocaine, heroine, etc. None of those saw market demand, nor price crash.
Also, unlike drugs and alcohol, Bitcoin is a digital good with no physical footprint, making enforcement much more difficult. With an open-source protocol running on some 12k nodes as well as thousands of miners, most running on Tor - it seems unlikely that a gov could take the network down or even prevent their citizens from participating in the network.
At best, governments could block fiat on/off ramps, pushing bitcoin trading to decentralized exchanges or p2p transactions for trading to/from fiat. There would also be black markets for Bitcoin just as there are black markets for many other things banned by governments.
Ultimately governments banning fiat on/off ramps for Bitcoin could help achieve a goal shared by Bitcoiners of a native Bitcoin currency-based economy. Governments banning bitcoin may even be good for Bitcoin adoption, though it would negatively impact price in the short term.
Also, unlike drugs and alcohol, Bitcoin is a digital good with no physical footprint, making enforcement much more difficult. With an open-source protocol running on some 12k nodes as well as thousands of miners, most running on Tor - it seems unlikely that a gov could take the network down or even prevent their citizens from participating in the network.
At best, governments could block fiat on/off ramps, pushing bitcoin trading to decentralized exchanges or p2p transactions for trading to/from fiat. There would also be black markets for Bitcoin just as there are black markets for many other things banned by governments.
Ultimately governments banning fiat on/off ramps for Bitcoin could help achieve a goal shared by Bitcoiners of a native Bitcoin currency-based economy. Governments banning bitcoin may even be good for Bitcoin adoption, though it would negatively impact price in the short term.
It was nonsensical in 1995 as well, and Gore’s key escrow bullshit cost him some votes. As you can guess I’m still salty about that.
Yes, this is missing the point that bitcoin isn't only about “Math”. Bitcoin is a peer to peer protocol even more than it is a cryptographic protocol. If you have a private key but no access to the peer to peer network, you're not gonna do much with your bag of bytes.
(Btw, the enormous majority of bitcoin usage already goes through exchanges, just because it's almost the only practical way to use it so I don't really think this law is gonna change anything in itself)
(Btw, the enormous majority of bitcoin usage already goes through exchanges, just because it's almost the only practical way to use it so I don't really think this law is gonna change anything in itself)
I would say that as long as there is a communication channel provided to a person, they can interact with the bitcoin network. That is the great invention, a boring grey (digital) metal that can be transmitted over a communication channel. Plaintext channel level censorship can be circumvented by encryption and steganography. The blocks can be received by satellite today.
Sending Transactions over SMS is a thing. This may exist today, but I assume in the future bots on WhatsApp will broadcast raw hex/base64 encoded transactions to the network for peers in restricted countries. Policing WhatsApp content is extremely difficult, we have seen in the recent years.
One can restrict the centralized exchanges. One cannot control every communication channel, or prevent every ECDSA signature from being signed.
Sending Transactions over SMS is a thing. This may exist today, but I assume in the future bots on WhatsApp will broadcast raw hex/base64 encoded transactions to the network for peers in restricted countries. Policing WhatsApp content is extremely difficult, we have seen in the recent years.
One can restrict the centralized exchanges. One cannot control every communication channel, or prevent every ECDSA signature from being signed.
Having full node connected to the chain through some whatsapp proxy is making exchange-less bitcoin usage even more cumbersome and dangerous than it already is.
And it assume you can get this whatsapp proxy from a reliable source because it would be a pity if it was in fact a honeypot run by the government to find you (EncroChat-like).
And it assume you can get this whatsapp proxy from a reliable source because it would be a pity if it was in fact a honeypot run by the government to find you (EncroChat-like).
> Sending Transactions over SMS is a thing. This may exist today, but I assume in the future bots on WhatsApp will broadcast raw hex/base64 encoded transactions to the network for peers in restricted countries. Policing WhatsApp content is extremely difficult, we have seen in the recent years.
If someone trusts a WhatsApp bot with their bitcoins, they brought it upon themselves.
If someone trusts a WhatsApp bot with their bitcoins, they brought it upon themselves.
It sounds like you may be missing some parts of how it works. A "transaction" is just a short string that includes a signature. It's impossible to manipulate or change. Therefore the only adversarial things the WhatsApp bot can do are
1. Not forward the transaction (I can tell relatively quickly by checking the mempool)
2. Doxx me/report me/etc by observing my IP, Whatsapp account name, and what wallet it is connected to.
Besides that, I can put my transactions up on a billboard for all I care.
1. Not forward the transaction (I can tell relatively quickly by checking the mempool)
2. Doxx me/report me/etc by observing my IP, Whatsapp account name, and what wallet it is connected to.
Besides that, I can put my transactions up on a billboard for all I care.
> 1. Not forward the transaction (I can tell relatively quickly by checking the mempool)
You mixing things up here, the mempool won't help you since your whatsapp proxy could tamper it. The only reliable thing is the chain itself once your transaction has been inserted in a mined block.
> 2. Doxx me/report me/etc by observing my IP, Whatsapp account name, and what wallet it is connected to.
But when doing direct crypto transaction is a crime in your country, this is a more serious threat than “tampering the transaction” or anything. Going to jail, or being tortured by some gang who want your private key, or both depending how corrupt the police is in that country.
You mixing things up here, the mempool won't help you since your whatsapp proxy could tamper it. The only reliable thing is the chain itself once your transaction has been inserted in a mined block.
> 2. Doxx me/report me/etc by observing my IP, Whatsapp account name, and what wallet it is connected to.
But when doing direct crypto transaction is a crime in your country, this is a more serious threat than “tampering the transaction” or anything. Going to jail, or being tortured by some gang who want your private key, or both depending how corrupt the police is in that country.
How can Whatsapp tamper with my transaction without my private key?
Not Whatsapp themselves, the proxying bot. And I'm not talking about tampering the transaction but the mempool (or at least the view you have about it) to make you believe they've forwarded the transaction.
But as I said, this is not what matters: the doxxing part is the deadly threat.
But as I said, this is not what matters: the doxxing part is the deadly threat.
Re #1: Not forwarding the transaction.
You can tell within about 15 seconds or so if a transaction hasn't hit the memepool. Just look up you wallet on blockchain.com/etherscan etc. It's a standard step that nearly every send/receive UI offers a link after submitting a transaction. These services mark mempool transactions as "pending" before they are inserted into a block.
For example, here's a wallet for Gemini, you can see pending transactions under the "Age" column as they hit the mempool [0]. They are "pending" while in the mempool and then are labeled with a time as they are added to blocks.
I'm continually impressed with how resilient the system is, even more-so after our thread about a hypothetical adversary.
(Again you can run your own mempool service on your own node, and publish transactions to it, but in our hypothetical situation you need to instead issue it out through a Whatsapp channel manually.)
[0] https://etherscan.io/address/0x056fd409e1d7a124bd7017459dfea...
You can tell within about 15 seconds or so if a transaction hasn't hit the memepool. Just look up you wallet on blockchain.com/etherscan etc. It's a standard step that nearly every send/receive UI offers a link after submitting a transaction. These services mark mempool transactions as "pending" before they are inserted into a block.
For example, here's a wallet for Gemini, you can see pending transactions under the "Age" column as they hit the mempool [0]. They are "pending" while in the mempool and then are labeled with a time as they are added to blocks.
I'm continually impressed with how resilient the system is, even more-so after our thread about a hypothetical adversary.
(Again you can run your own mempool service on your own node, and publish transactions to it, but in our hypothetical situation you need to instead issue it out through a Whatsapp channel manually.)
[0] https://etherscan.io/address/0x056fd409e1d7a124bd7017459dfea...
If they wanted to make P2P protocols illegal, they will have to ban E2E encryption, I could be running the bitcoin protocol over Signal/Telegram/WhatsApp/HTTP. I could be transmitting signed transactions over the sneakernet over the border to a land where bitcoins are free North Korea style.
They can make it illegal and call it a day. The successful crackdown of BitTorrent usage is a good illustration of that. The protocol is still here and you can use it, but the general public doesn't anymore. In the case of torrent, it causes seeding issues and severely limit the availability of non-mainstream stuff (finding non-Hollywood movies is hard for instance).
In the case of bitcoin should the public don't use it anymore, the price would collapse, making the current mining unsustainable, and as the mining difficulty declines the robustness of the protocol reduces sharply, especially if state actors start buying the unused mining devices…
BTW, the sneakernet is unsuited for most uses of bitcoin transactions: you don't just want to be able to transfer the token from one address to another. Most of the time a transaction is an interactive process: you send the money and I give you something in return after I've checked that I actually received the funds. This usage simply doesn't work well on the sneakernet, because of the very high latency.
In the case of bitcoin should the public don't use it anymore, the price would collapse, making the current mining unsustainable, and as the mining difficulty declines the robustness of the protocol reduces sharply, especially if state actors start buying the unused mining devices…
BTW, the sneakernet is unsuited for most uses of bitcoin transactions: you don't just want to be able to transfer the token from one address to another. Most of the time a transaction is an interactive process: you send the money and I give you something in return after I've checked that I actually received the funds. This usage simply doesn't work well on the sneakernet, because of the very high latency.
"This is a non-sensical but very common expression from crypto-bros."
It is sensible.
Properly designed cryptosystems produce ciphertext that is indistinguishable from a random number.
So, at the very end of it all, the possession of random numbers would need to be regulated.
This is unenforceable (of course) and absurd.
The analogy you make to (physical goods) is a poor one. Regardless of how you feel about restrictions on physical items or how difficult they might be to enforce, it is at least plausible that these restrictions could be enforced.
Not so with a prohibition on random numbers.
It is sensible.
Properly designed cryptosystems produce ciphertext that is indistinguishable from a random number.
So, at the very end of it all, the possession of random numbers would need to be regulated.
This is unenforceable (of course) and absurd.
The analogy you make to (physical goods) is a poor one. Regardless of how you feel about restrictions on physical items or how difficult they might be to enforce, it is at least plausible that these restrictions could be enforced.
Not so with a prohibition on random numbers.
> Properly designed cryptosystems produce ciphertext that is indistinguishable from a random number.
It's also impossible to tell from a 100 dollar bill if it has been taxed or not, yet taxes are enforceable.
Almost no law enforcement relies on physically preventing something from existing, especially in any kind of automated manner.
So yes, they can't stop people from possessing private keys that correspond to wallets, or whatever, but they can stop banks from working with crypto related business, force google to block results, force ISPs to take down crypto sites, block any kind of crypto app from both app stores, etc etc. Even block foreign sites. Not to mention, jail people who touch crypto.
Not saying they will or that they should, but "crypto is math" is not a relevant argument.
It's also impossible to tell from a 100 dollar bill if it has been taxed or not, yet taxes are enforceable.
Almost no law enforcement relies on physically preventing something from existing, especially in any kind of automated manner.
So yes, they can't stop people from possessing private keys that correspond to wallets, or whatever, but they can stop banks from working with crypto related business, force google to block results, force ISPs to take down crypto sites, block any kind of crypto app from both app stores, etc etc. Even block foreign sites. Not to mention, jail people who touch crypto.
Not saying they will or that they should, but "crypto is math" is not a relevant argument.
Similar style of argument that was used for piracy back in the day. It's just copying bytes.
Exactly.
Governments will successfully ban Bitcoin, just like they successfully banned piracy.
Things like https://thepiratebay.org/search.php?q=category:401 are long gone now, successfully banned.
Governments will successfully ban Bitcoin, just like they successfully banned piracy.
Things like https://thepiratebay.org/search.php?q=category:401 are long gone now, successfully banned.
If this is sarcasm, then I'd point out that link doesn't work here.
If it isn't, I'd point out there are still numerous Pirate Bay mirrors I can access.
Either way, I wish it were generally easier to discern which comments on this page are intended literally and which are sarcastic.
If it isn't, I'd point out there are still numerous Pirate Bay mirrors I can access.
Either way, I wish it were generally easier to discern which comments on this page are intended literally and which are sarcastic.
You can easily imagine a situation though where the government bans crypto and as a result, Bitcoin crashes irrecoverably and trades for maybe a few hundred dollars a coin at best.
Think about it - all of the legitimate institutional money would have to divest, all of the loosely interested Coinbase users would sell because they don't want fines/jail, the only way to buy the coin would be with cash because your bank and credit card would report any BTC purchases to the feds...
It would be a much smaller and less liquid market. Bitcoin isn't going away obviously, but that doesn't mean it's worth $50k a coin in the event it's banned.
Think about it - all of the legitimate institutional money would have to divest, all of the loosely interested Coinbase users would sell because they don't want fines/jail, the only way to buy the coin would be with cash because your bank and credit card would report any BTC purchases to the feds...
It would be a much smaller and less liquid market. Bitcoin isn't going away obviously, but that doesn't mean it's worth $50k a coin in the event it's banned.
Oh, yes, very successfully.
This point is meant to be more about the futility of making Bitcoin illegal because it's just math and code. Similar to how strong encryption was an "illegal munitions export" from the USA in the 90s.
In a world where CNC machines were in every house, the same thing would apply re: gun control. People could just make their own guns.
I'm not saying it's a super effective point, but just making sure you get the framing.
In a world where CNC machines were in every house, the same thing would apply re: gun control. People could just make their own guns.
I'm not saying it's a super effective point, but just making sure you get the framing.
I guess the comparison breaks down when it comes to usability. If you could make a gun and bullets at home there’d be nothing stopping you from using it. But if India bans apps that allow you to pay with Bitcoin then it becomes a far less viable proposition.
How can you ban an app? Another way centralized app stores can backfire!
Anyone can make their own alcohol at home, without any kind of expensive machine, but in many places that's quite successfully outlawed.
willmadden(1)
That's a long list of things that looks hardly any different today than it did yesterday; unlike the price of BTC.
I don't get why someone would think that Bitcoin would have long-term viability. Seems like it's more of a question of when/how it'll fade out rather than if.
The only real unique property that Bitcoin would seem to have in the long-term would be its history, especially its initial-distribution that concentrates wealth in the hands of few. And that's not an advantage but a liability: if it went mainstream, most folks would probably just say, hey, let's use some alt-coin instead so we all have more wealth (which obviously wouldn't be true for the minority of people who are Bitcoin whales, but why would the majority of people who aren't care?).
Anyway, just commenting to ask:
> There are several things happening, which is reducing confidence. Of course, as a permabull, I believe that these things are transitory.
As far as I can tell, it's all transitory; that much seems plainly obvious. So if you're a permabull, well, why? What future might you imagine in which Bitcoin, specifically, remains a preferred system? In particular, what reason might you have to believe that a Bitcoin you might buy today would have any significant value in systems 20 years from now?
I'm not even asking for a reasonable prediction, but what's even a plausible best-case scenario? For example, let's say cryptocurrency goes mainstream, and everyone everywhere starts using it -- what sequence of events might lead to Bitcoins available today being relevant in such a future system?
The only real unique property that Bitcoin would seem to have in the long-term would be its history, especially its initial-distribution that concentrates wealth in the hands of few. And that's not an advantage but a liability: if it went mainstream, most folks would probably just say, hey, let's use some alt-coin instead so we all have more wealth (which obviously wouldn't be true for the minority of people who are Bitcoin whales, but why would the majority of people who aren't care?).
Anyway, just commenting to ask:
> There are several things happening, which is reducing confidence. Of course, as a permabull, I believe that these things are transitory.
As far as I can tell, it's all transitory; that much seems plainly obvious. So if you're a permabull, well, why? What future might you imagine in which Bitcoin, specifically, remains a preferred system? In particular, what reason might you have to believe that a Bitcoin you might buy today would have any significant value in systems 20 years from now?
I'm not even asking for a reasonable prediction, but what's even a plausible best-case scenario? For example, let's say cryptocurrency goes mainstream, and everyone everywhere starts using it -- what sequence of events might lead to Bitcoins available today being relevant in such a future system?
I can explain a few points for a long term view.
Bitcoin is a protocol, primarily, as well as an ecosystem, a unit of account and a new paradigm in digital value transfer. The cryptoeconomic model is to create new coins every 10 minutes until the year 2140. The energy committed to protect the ledger is unmatched, and thus it is the most secure. 8 Million of the 18M coins that exist moved in the last year. I don't think the concentration is quite what people believe. As the years go on, there are less and less large holders. Everyone gets antsy when seeing large swings to their savings.
The development philosophy is one of caution, of incremental and well tested changes. "Only soft forks", as opposed to forced consensus changes by developers (EIP1559 comes mind). Radical changes are rejected and even small upgrades take time to stick. This is a good thing, as the base layer of money needs to be simple, work reliably and be very secure.
I only trust a peer to peer monetary network that I can run myself. Most newer 'next generation' blockchains are for datacenters only. Being able to run a full Bitcoin Core node will remain within the reach of most users for quite some time, hopefully forever.
Inflation is a pressing concern for all countries and people right now. The 'Bitcoin Standard' scenario seems like less of fantasy in 2021. And this is still the beginning, we are quite early!
Bitcoin is a protocol, primarily, as well as an ecosystem, a unit of account and a new paradigm in digital value transfer. The cryptoeconomic model is to create new coins every 10 minutes until the year 2140. The energy committed to protect the ledger is unmatched, and thus it is the most secure. 8 Million of the 18M coins that exist moved in the last year. I don't think the concentration is quite what people believe. As the years go on, there are less and less large holders. Everyone gets antsy when seeing large swings to their savings.
The development philosophy is one of caution, of incremental and well tested changes. "Only soft forks", as opposed to forced consensus changes by developers (EIP1559 comes mind). Radical changes are rejected and even small upgrades take time to stick. This is a good thing, as the base layer of money needs to be simple, work reliably and be very secure.
I only trust a peer to peer monetary network that I can run myself. Most newer 'next generation' blockchains are for datacenters only. Being able to run a full Bitcoin Core node will remain within the reach of most users for quite some time, hopefully forever.
Inflation is a pressing concern for all countries and people right now. The 'Bitcoin Standard' scenario seems like less of fantasy in 2021. And this is still the beginning, we are quite early!
But why not a random Bitcoin clone?
I mean, we all get why folks with a lot of Bitcoin want it to be adopted: they'd get rich. The problem for everyone else is that they'd be the ones subsidizing that wealth. Which the majority could avoid by just adopting an alt-coin instead.
So why Bitcoin, specifically? This is, in Bitcoin's ideal scenario where it would win out globally and everyone would love it -- even in that extreme case -- why would everyone use Bitcoin instead of starting a new block-chain where they'd get more personal wealth?
Are Bitcoin-HODL'ers basically just praying that the majority of the world's population would just be oblivious to that possibility, choosing to instead buy into Bitcoin at their own loss out of sheer ignorance? (Sorry if that sounds dismissive, just, it seems so far-fetched to me; I don't get belief-system behind it.)
I mean, we all get why folks with a lot of Bitcoin want it to be adopted: they'd get rich. The problem for everyone else is that they'd be the ones subsidizing that wealth. Which the majority could avoid by just adopting an alt-coin instead.
So why Bitcoin, specifically? This is, in Bitcoin's ideal scenario where it would win out globally and everyone would love it -- even in that extreme case -- why would everyone use Bitcoin instead of starting a new block-chain where they'd get more personal wealth?
Are Bitcoin-HODL'ers basically just praying that the majority of the world's population would just be oblivious to that possibility, choosing to instead buy into Bitcoin at their own loss out of sheer ignorance? (Sorry if that sounds dismissive, just, it seems so far-fetched to me; I don't get belief-system behind it.)
Ahh. Its the energy consumed and security provided by Proof of Work. Anyone can fork the bitcoin source code. (thousands have). Anyone can fork the ethereum source code (handfuls have, and some are quite successful so far: BNB, AVAX, MATIC and TRON are all examples of this).
Proof of stake is a scam, and reinvents oligarchies, and introduces systemic censorship and consensus enforcement risks.
You can't clone Bitcoin, the network, the users or the ecosystem.
Proof of stake is a scam, and reinvents oligarchies, and introduces systemic censorship and consensus enforcement risks.
You can't clone Bitcoin, the network, the users or the ecosystem.
The majority of bitcoin movement happens on exchanges, and there's good evidence that a large proportion of exchange transactions are just wash sales, aka people transferring funds to themselves
> And this is still the beginning, we are quite early!
I've never understood this argument. Bitcoin's first software release is just shy of 13 years ago now, and the whitepaper and related discussions were even before that. That's an enormous amount of time in the technology world. As a comparison, the first iPhone came out 14 years ago, and 13 years before that, you could still buy a brand new Apple II from Apple.
I've never understood this argument. Bitcoin's first software release is just shy of 13 years ago now, and the whitepaper and related discussions were even before that. That's an enormous amount of time in the technology world. As a comparison, the first iPhone came out 14 years ago, and 13 years before that, you could still buy a brand new Apple II from Apple.
iPhone is a product.
Bitcoin is a protocol, a meme, a way of life (?). "Internet" is TCP/IP. It is a protocol, a meme, and a way of life.
TCP/IP was invented in 1983. SMTP was invented in 1981. The way we TCP/IP and SMTP are used today would be impossible to predict for their inventors.
13 years ain't much in protocol terms :-)
Bitcoin is a protocol, a meme, a way of life (?). "Internet" is TCP/IP. It is a protocol, a meme, and a way of life.
TCP/IP was invented in 1983. SMTP was invented in 1981. The way we TCP/IP and SMTP are used today would be impossible to predict for their inventors.
13 years ain't much in protocol terms :-)
Internet isn't TCP though, it's _just_ IP, and there's two internets, some computers have access to one, or the other, or both.
> The only real unique property that Bitcoin would seem to have in the long-term would be its history, especially its initial-distribution that concentrates wealth in the hands of few.
> let's use some alt-coin instead
The problem is that it's hard to agree on which one to use, with 15000 to choose from :-(
My vote would be for the one that doesn't concentrate wealth in the hands of few...
> let's use some alt-coin instead
The problem is that it's hard to agree on which one to use, with 15000 to choose from :-(
My vote would be for the one that doesn't concentrate wealth in the hands of few...
This seems like a massive question outside the scope of what this thread can deliver. Recommend reading "Mastering Bitcoin" by Andreas Antonopoulos!
Reading a pop-culture piece won't help; I get the technical stuff.
Rather, I'm curious why someone who appears to have followed Bitcoin a bit might self-identify as a "permabull".
Rather, I'm curious why someone who appears to have followed Bitcoin a bit might self-identify as a "permabull".
Ah okay! Well, in case the OP doesn't respond, and because this is a much larger question, perhaps there's another book that fits the bill.
I haven't read "The Bitcoin Standard" but believe it addresses some of your curiosities.
I haven't read "The Bitcoin Standard" but believe it addresses some of your curiosities.
If, say, India makes the apps illegal, some people will find them anyway, but they won't be as popular. (And they won't run on an iPhone.) This will give other kinds of financial apps and investments an advantage.
This all depends on how motivated people are and how readily they will switch to alternatives.
This all depends on how motivated people are and how readily they will switch to alternatives.
These are all good and totally valid points but in the end I don't think they explain why crypto is down.
I think it is pure risk off.
I think it is pure risk off.
I mean I'm sure that's right in some sense; when the only trade is the momentum trade it only takes a small amount of change in sentiment to trigger these kind of large moves. I guess? I just don't understand at all what the structure of the bitcoin market is supposed to be.
I think the biggest problem with crypto is leverage. Over 2 billion liquidated in 12 hours. This is how a normal 5% drop turns into a 20% drop.
One person selling a few million in Bitcoin can cause a few billion drop in the whole market lol.
I think regulations on leverage would be the best thing for the crypto market as a whole.
You can sign up for an account at an exchange and get 10x leverage without KYC or anything. That's insane.
One person selling a few million in Bitcoin can cause a few billion drop in the whole market lol.
I think regulations on leverage would be the best thing for the crypto market as a whole.
You can sign up for an account at an exchange and get 10x leverage without KYC or anything. That's insane.
Who is covering that credit risk?
Or is your point that no one is, and that if enough levered trades go the wrong way, the whole system is at risk?
Or is your point that no one is, and that if enough levered trades go the wrong way, the whole system is at risk?
Pretty much. Most exchanges will automatically sell your position at market price if you reach a certain percentage of margin. That how you get the massive dips that get bought very quickly. You have tens of thousands of Bitcoin being sold at market price.
It causes a domino effect across the whole crypto market because people are using leverage to buy any coin even shitcoins like Doge and Shib.
It causes a domino effect across the whole crypto market because people are using leverage to buy any coin even shitcoins like Doge and Shib.
Enforceable just not 100%. If they take out main investors, crypto will have a cap that will be way lower than now. Then control gpu where enforce gpu to stop working if it detects crypto usage, a bit like printers unable to print money. Next, stop all exchanges making crypto has no monetary exchange capabilities other than another crypto. Drive all crypto activities to underground and send in the law enforcers as hound to send ordinary citizens to mandatory 10+ years jail term. With math, you just need a pencil and some papers. With crypto you need gpus, electricity and exchange. You do the math how easy to crack down on crypto miners.
Bitcoin mining can be done with pen and paper: http://www.righto.com/2014/09/mining-bitcoin-with-pencil-and...
0.67 hashes per day!
0.67 hashes per day!
* Custodial Bitcoin loaning service reported losing (wrapped) Bitcoin when defi platform was compromised.
I don't remember a time they weren't compromised - https://rekt.news
I don't remember a time they weren't compromised - https://rekt.news
Friend: why is bitcoin down?
Other friend: why was bitcoin up to begin with?
Other friend: why was bitcoin up to begin with?
There's always a greater fool
Fools eventually will no longer be created at a rate sufficient enough to sustain current prices.
> "Fools eventually will no longer be created at a rate sufficient enough to sustain current prices."
The world population has been increasing by between 1.05% and 2.2% per year over the past 50 years[0]. Remember also that faith in cryptocurrency operates in the same way as the spread of infectious diseases[1], so some previously infected hosts can lose immunity over time and become reinfected.
[0] https://ourworldindata.org/world-population-growth
[1] https://www.theguardian.com/technology/2018/apr/10/bitcoin-s...
The world population has been increasing by between 1.05% and 2.2% per year over the past 50 years[0]. Remember also that faith in cryptocurrency operates in the same way as the spread of infectious diseases[1], so some previously infected hosts can lose immunity over time and become reinfected.
[0] https://ourworldindata.org/world-population-growth
[1] https://www.theguardian.com/technology/2018/apr/10/bitcoin-s...
Sometimes it goes down, sometimes it goes up - it's not the first time. History shows that it goes up more than it goes down.
Just like a bunch of pump and dumps... before they went down for the last time.
I’m not taking a stand on crypto here, just pointing out a logical fallacy, namely, the data is incomplete and we don’t know the future.
I’m not taking a stand on crypto here, just pointing out a logical fallacy, namely, the data is incomplete and we don’t know the future.
There is no logical fallacy, I did not said that it will continue to go up more that it goes down, I just said that history shows...
We’re on year 13 of a pump and dump?
The South Sea company bubble in the 1700s (arguably a similar circumstance) was ~9 years in, if I'm correct in my math. Tulip bubble was ~40 years in.
Tulip Mania: the classic story of a Dutch financial bubble is mostly wrong:
https://theconversation.com/tulip-mania-the-classic-story-of...
While the story itself might be inflated, it still shows that a bubble doesn't have to be at the start of the market.
And the South Sea company collapse far beyond its founding _definitely_ had ramifications.
And the South Sea company collapse far beyond its founding _definitely_ had ramifications.
I don't know if you read that link or have read elsewhere on the topic but modern economists argue the tulip mania thing wasn't even a bubble and if it was, it was far smaller than you probably assume. Even the wikipedia page covers these topics quite nicely.
According to https://en.wikipedia.org/wiki/Tulip_mania it was more like 3 years:
"contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels, with the major acceleration starting in 1634 and then dramatically collapsing in February 1637"
"contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels, with the major acceleration starting in 1634 and then dramatically collapsing in February 1637"
From the same page -- the Tulip market didn't start at the time of the bubble.
Their popularity and cultivation in the United Provinces (now the Netherlands)[32] is generally thought to have started in earnest around 1593 after the Southern Netherlandish botanist Carolus Clusius had taken up a post at the University of Leiden and established the hortus academicusthe tulip bubble lasted like 8 months
The dot-com bubble lasted around 10 years, increasing almost exponentially in the last 2-3. Subsequently dropped 80% and took 15 years to return to those prices.
At what point does that stop being a logical fallacy? We’re on year 13, is it year 30? 50? If there’s no end date then this can be said about everything and is therefore not a fallacy.
If we take the USD as an example:
1. Created in 1792
2. Gold standard in 1900
3. Abandoned gold in 1971
Not sure at what point USD was no longer a logical fallacy. If it's the 1971 non-gold-standard dollar to now, then it's exactly 50 years as of now. Or for the full history of the dollar it's 229 years.
1. Created in 1792
2. Gold standard in 1900
3. Abandoned gold in 1971
Not sure at what point USD was no longer a logical fallacy. If it's the 1971 non-gold-standard dollar to now, then it's exactly 50 years as of now. Or for the full history of the dollar it's 229 years.
[deleted]
Yeah I have these same concerns about the US dollar. People are like "oh but it's so stable yada yada". At most it's been that way since WW2. It's not THAT long. A blip in the history of human civilization at best.
You do take a stand with your pumpdump comment, BTC is behaving differently and has been doing this for quite a long time so I don't really see similarities with shcoin scams
The weight of farmed turkeys also rises very consistently from birth until a few days before Thanksgiving. Unless you know for certain why bitcoin went up in the past and also know for certain that those conditions have not changed I don't think the argument that "it went up in the past" should be used to justify future behavior.
Yes important to understand. What is the fundamental value of Bitcoin?
And Gwei almost hit $1k! Triggered by the rush of eth holders to the exit. None of the proposed eips do anything to de-incentivize "surge pricing" in mining rewards during "bank panics". It would be counter-productive to growing the network. But an interesting economic phenomenon to watch in real time just the same. Akin to price gouging gasoline during a hurricane ;)
> And Gwei almost hit $1k!
You mean Ethereum gas prices almost hit 1k Gwei?
> None of the proposed eips do anything to de-incentivize "surge pricing" in mining rewards during "bank panics".
I'm assuming that you're talking about gas price surges, as gas prices don't directly correlate with mining rewards (since EIP-1559 was implemented).
What sort of mechanism would you propose to disincentivize surge pricing? Block space is a limited resource that's auctioned off, so a naive price cap would come with its own whole set of problems. I have never heard of a fair way to disincentivize surge pricing, but if you have an idea, I would love to hear it!
You mean Ethereum gas prices almost hit 1k Gwei?
> None of the proposed eips do anything to de-incentivize "surge pricing" in mining rewards during "bank panics".
I'm assuming that you're talking about gas price surges, as gas prices don't directly correlate with mining rewards (since EIP-1559 was implemented).
What sort of mechanism would you propose to disincentivize surge pricing? Block space is a limited resource that's auctioned off, so a naive price cap would come with its own whole set of problems. I have never heard of a fair way to disincentivize surge pricing, but if you have an idea, I would love to hear it!
Well, even the NYSE uses "circuit breakers". But that's no solution ;)
https://www.nyse.com/network/article/nyse-increases-resilian...
https://www.nyse.com/network/article/nyse-increases-resilian...
It's much different to shut down the trade of assets than to shut down a cloud computing service (Ethereum). That would be very counterproductive, like shutting down the freeway because of a traffic jam, or stopping a train service because the seats are sold out.
It just means that the backbone has to work even harder to clear the backlog once it's back online.
It just means that the backbone has to work even harder to clear the backlog once it's back online.
[deleted]
EIP4488 on call data expansion would result in cheaper rollup transactions.
1559 means that in mad rushes, excessive fees get burned instead of given to miners.
Both of these things help combat gas prices and dampen runaway auctions. But ultimately there’s not a lot you can do to stop people who want to outbid others for faster inclusion, without introducing other ordering rules which are hard to agree on and seem to usually introduce dos vectors.
1559 means that in mad rushes, excessive fees get burned instead of given to miners.
Both of these things help combat gas prices and dampen runaway auctions. But ultimately there’s not a lot you can do to stop people who want to outbid others for faster inclusion, without introducing other ordering rules which are hard to agree on and seem to usually introduce dos vectors.
Eventually, it will crash all the way down and will be mostly forgotten.
This “crash” however is unlikely to be the beginning of it.
This “crash” however is unlikely to be the beginning of it.
I would say next proper stock market crash. Now when will that happen is not easy question, but I'm certain something will happen at some point.
At this point the end of human civilization and the end of the chain of technologies that began with Bitcoin probably will be the same event.
As long as the chain of technologies that began with Bitcoin doesn't hasten the end of human civilization (cryptocurrency mining is consuming ever more and more of the world's resources, pyramid scheme collapses have led to war in the past[0], etc.)
[0] https://en.wikipedia.org/wiki/Albanian_Civil_War
[0] https://en.wikipedia.org/wiki/Albanian_Civil_War
Three scenarios might make it crash:
1. Big institutional investors (Tesla, Microstrategy) pull out or face crashing their stock as well - they bought Bitcoin directly or indirectly with borrowed money https://www.youtube.com/watch?v=st3KJN_DzCg
2. Crypto community panics and claim their money en masse
3. "Satoshi" and other insiders secretly cash out
Since it is mainly a stakeholder manipulated market, regulation had not much impact so far...
As long as the narrative keeps perpetuating belief & demand, it will live.
1. Big institutional investors (Tesla, Microstrategy) pull out or face crashing their stock as well - they bought Bitcoin directly or indirectly with borrowed money https://www.youtube.com/watch?v=st3KJN_DzCg
2. Crypto community panics and claim their money en masse
3. "Satoshi" and other insiders secretly cash out
Since it is mainly a stakeholder manipulated market, regulation had not much impact so far...
As long as the narrative keeps perpetuating belief & demand, it will live.
I suspect Tesla used bitcoin as an "indirect stock buyback" like microstrategy's CEO did to cause the short squeeze. Both are manipulating the market using crypto.
1-hr interview youtube video above of Michael Saylor with Fox's Tucker Carlson where he bragged about doing this removed recently- VERY SUSPICIOUS.
1-hr interview youtube video above of Michael Saylor with Fox's Tucker Carlson where he bragged about doing this removed recently- VERY SUSPICIOUS.
Fount it: manipulation @45:37
https://youtu.be/wdJFeSY8UVk?t=2737
Wait are you making a case for or against Bitcoin?
The crypto community selling out after all the years of "hodl"? I would pay to see that!
Satoshi "secretly" cashing out....what? How could that even happen it's literally impossible for those coins to move. Maybe Satoshi simply sells his private key off-chain, is that what you mean?
The crypto community selling out after all the years of "hodl"? I would pay to see that!
Satoshi "secretly" cashing out....what? How could that even happen it's literally impossible for those coins to move. Maybe Satoshi simply sells his private key off-chain, is that what you mean?
What makes it "literally impossible" for those coins to move? I think it is incredibly unlikely but don't see why it is impossible.
Oops left out a word: it's literally impossible for those coins to move in secret. Public ledger and all. Does that answer your question?
I don't think his point is that he will move them secretly, that's why he put quotes around, which I understand as just not publicly announced, or let's say, discreetly. The point is that if Satoshi starts selling, that's enough to start a crash considering how many BTC he has.
>The price of bitcoin seesawed later Saturday after El Salvador President Nayib Bukele, whose country adopted bitcoin as a national currency in September, said in a Twitter post that the country had bought 150 coins for an average of $48,670 each. “El Salvador just bought the dip!” he said. He later wrote that the country had “Missed the f**ing bottom by 7 minutes,” followed by a laughing emoji.
El Salvadore needs to be cut off from the world financial markets; or at least USD markets. World Bank and IMF need to refuse to do transact with the country at all. This bitcoin experiment is going to end in disaster.
El Salvadore needs to be cut off from the world financial markets; or at least USD markets. World Bank and IMF need to refuse to do transact with the country at all. This bitcoin experiment is going to end in disaster.
> El Salvadore needs to be cut off from the world financial markets; or at least USD markets. World Bank and IMF need to refuse to do transact with the country at all
I fail to see how that would improve their situation.
I fail to see how that would improve their situation.
Probably. And that may be beneficial to everyone. IMF aren't the good guys most of the time anyway.
On another note, it’s nice to see ETHBTC ratio going up
It wasn’t a simple sell off.
Some not to be named hedge funds that were very long spot started selling aftermarket Friday to test the liquidity while taking out short positions.
Then when they felt the market was illiquid enough after probing it for a few hours, they quickly dumped their long positions, liquidated the leveraged longs, cashed in their shorts, and bought back into the ensuing panic sell off.
Some not to be named hedge funds that were very long spot started selling aftermarket Friday to test the liquidity while taking out short positions.
Then when they felt the market was illiquid enough after probing it for a few hours, they quickly dumped their long positions, liquidated the leveraged longs, cashed in their shorts, and bought back into the ensuing panic sell off.
Are you able to share how someone could see that this is what happened? I'm not agreeing or disagreeing, I am genuinely interested.
Look at the leaderboards on FTX and Bitfinex while it’s happening. They’ll show you the most profitable recent traders. You won’t see it now but I’m sure there are screenshots on Twitter if you follow trading.
Edit: this is also a great resource to see whales moving funds from their wallets, which telegraphs their trades: https://whale-alert.io/
Also, watch short positions. If you see them ratcheting up when the market is calm and trading is thin, lookout below.
Edit: this is also a great resource to see whales moving funds from their wallets, which telegraphs their trades: https://whale-alert.io/
Also, watch short positions. If you see them ratcheting up when the market is calm and trading is thin, lookout below.
Where is the data on this move?
Both FTX and Bitfinex have leaderboards that show the most profitable traders. The people doing it show up there but only for a short time (and only if they dump open market and not OTC- this was open market).
Also this is a great resource to predict these sorts of manipulations before they happen: https://whale-alert.io/
Also, watch those short positions!
Also this is a great resource to predict these sorts of manipulations before they happen: https://whale-alert.io/
Also, watch those short positions!
You can’t be long and short at the same time unless you mean long volatility. But then you can’t be both long and short volatility at the same time. Unless you have second derivative options, and there isn’t much liquity in bitcoin first degree options even. So you are net long or short, not both. You can stupidly / unethically / illegaly trade with yourself, but you won’t move the needle through business hours on bitcoin, not with a hedge fund. Shorting bitcoin seemed like the right short term play on Friday, that’s about all.
What? Yes, you can hold long and short positions simultaneously. Yes, there net position went from long to short to long very quickly, but that’s not the point. I can see you aren’t a trader. The point is that they forced the price down when the market depth was thin to liquidate other people’s leveraged long positions to drive the price way down, which triggered panic selling and more liquidations before buying back around the bottom…
Net positions are the ones that count. Going from long to short to long, isn’t being long and short simultaneously, unless you mean to transcend time in the block universe.
With the incoming Evergrande fiasco and eventual explosion of omicron cases it's gonna be a good winter for bears.
More like half price for bulls.
The coindesk article from 10 hours earlier:
https://news.ycombinator.com/item?id=29439049
The primary value proposition of bitcoin is as a “currency” but the technical limitations on transaction throughput mean it will never be a viable currency at scale. Also the volatility of bitcoin value also makes it a terrible currency.
Thus it boils down to just some random thing that people have arbitrarily decided has value, like we did with tulip bulbs centuries ago.
This “story” has been told many times thought history and we know how this story ends. The technology is interesting, but the “value” of the coins seems built on a house of cards just waiting to collapse. Although like anything in that space, including tulip bulbs, those that can get in and out at the right time can make a killing while the suckers are left holding the bag at the end.
Thus it boils down to just some random thing that people have arbitrarily decided has value, like we did with tulip bulbs centuries ago.
This “story” has been told many times thought history and we know how this story ends. The technology is interesting, but the “value” of the coins seems built on a house of cards just waiting to collapse. Although like anything in that space, including tulip bulbs, those that can get in and out at the right time can make a killing while the suckers are left holding the bag at the end.
Unless you think the price dipped because everyone was ignorant of that yesterday but all collectively realized it today, this comment isn't really timely or novel.
Fair point, but judging from what I’ve seen out there many still don’t realize/understand this and are case studies of the old adage of “there’s a sucker born every minute.” They’re into it because it’s the thing to be into… not because they understand it and are making a rational investment decision.
When the supply of suckers starts to dry up that’s when the value that nobody can explain in real terms starts to become very interesting to watch.
When the supply of suckers starts to dry up that’s when the value that nobody can explain in real terms starts to become very interesting to watch.
In terms of suckers, there was a big shift in the last year or two, as big corporations, banks, and even nations started to buy Bitcoin.
Here's a site that tracks it: https://bitcointreasuries.net/
Again, if you know deeply that Bitcoin is a fraud then this probably just further confirms how crazy wacky the world is and doomed for a fall. I get it.
To me it's something else.
Here's a site that tracks it: https://bitcointreasuries.net/
Again, if you know deeply that Bitcoin is a fraud then this probably just further confirms how crazy wacky the world is and doomed for a fall. I get it.
To me it's something else.
It's not novel - crypto-skeptics have been saying this for a decade. And crypto-believers and speculators have been ignoring it for just as long.
But I don't think the comment was aimed at explaining this specific correction, I think it was aimed at predicting a future, more precipitous fall.
But I don't think the comment was aimed at explaining this specific correction, I think it was aimed at predicting a future, more precipitous fall.
> the technical limitations on transaction throughput
https://lightning.network/
> random thing that people have arbitrarily decided has value
It has value because it's a fixed-supply currency that can't be manipulated like state currencies, allows for near-instant transactions of arbitrary amounts, is open 24/7, gives banking to billions of people who otherwise wouldn't have it, makes it possible to transact with anyone all over the world without an intermediary, and prevents exactly what's happening right now with inflation.
https://lightning.network/
> random thing that people have arbitrarily decided has value
It has value because it's a fixed-supply currency that can't be manipulated like state currencies, allows for near-instant transactions of arbitrary amounts, is open 24/7, gives banking to billions of people who otherwise wouldn't have it, makes it possible to transact with anyone all over the world without an intermediary, and prevents exactly what's happening right now with inflation.
But hasn't it been pretty trivially manipulated by people tweeting?
Sure, I could manipulate USD by seizing control of the Federal Reserve, but BTC can be manipulated by tweets from laser-eyes
Sure, I could manipulate USD by seizing control of the Federal Reserve, but BTC can be manipulated by tweets from laser-eyes
> prevents exactly what's happening right now with inflation
Seems like a funny time to be making the inflation hedge argument. Say what you will about USD inflation, but it's never lost ~30% of its buying power in a month, as Bitcoin has in the past month.
Seems like a funny time to be making the inflation hedge argument. Say what you will about USD inflation, but it's never lost ~30% of its buying power in a month, as Bitcoin has in the past month.
The part you're not talking about: USD inflation is permanent and accumulative over long term (year+).
Simply stated, purchasing power of $dollar has been going down, consistently, over the last 200 years.
Bitcoin is a more volatile asset but over long term (year+) it's going up.
By a lot.
Hugely.
This might change in the future but the historical performance of bitcoin crushes historical performance of a $dollar.
Simply stated, purchasing power of $dollar has been going down, consistently, over the last 200 years.
Bitcoin is a more volatile asset but over long term (year+) it's going up.
By a lot.
Hugely.
This might change in the future but the historical performance of bitcoin crushes historical performance of a $dollar.
Of course, if goods and services were priced in bitcoin then that would be part of a good argument that bitcoin is actually a currency.
Whenever Bitcoin is an option I pay in Bitcoin. Standard Notes for example, allows you to pay in Bitcoin or any other cryptocurrency.
Check out the Lightning network, it's much more about currency/goods/services as a Bitcoin service.
Check out the Lightning network, it's much more about currency/goods/services as a Bitcoin service.
Buying something with BTC doesn't mean it's priced in BTC.
With the possible exception of dark web drugs/gun/murder-for-hire/WHY every case I've seen of BTC being used for goods and services involves dynamic currency conversion. i.e. the price is in, say, USD and the amount it costs in BTC is derived from the USD spot price of BTC.
It's like I swipe my credit card in Japan; the price is in JPY but I pay in USD.
I would be interested to see any counterexamples.
With the possible exception of dark web drugs/gun/murder-for-hire/WHY every case I've seen of BTC being used for goods and services involves dynamic currency conversion. i.e. the price is in, say, USD and the amount it costs in BTC is derived from the USD spot price of BTC.
It's like I swipe my credit card in Japan; the price is in JPY but I pay in USD.
I would be interested to see any counterexamples.
Right, and Standard Notes doesnt appear to be a counterexample: https://standardnotes.com/plans (all prices are in dollars). They appear to use coinpayments.net, which does the exact sort of dynamic pricing you're talking about - it costs significantly more today to purchase in Bitcoin than it did 24 hours ago.
Agreed! OpenSea is a good example of native crypto pricing -- replied above about that.
Oh good point, I see what you mean. Where are things priced natively in Bitcoin or Ethereum, no matter the USD value? Standard Notes is not an example in that case, it just converts BTC to USD.
Everything on OpenSea is priced in cryptocurrencies natively: https://opensea.io/
By USD OpenSea's contract transacted an estimated 8% of Amazon's revenues.
Everything on OpenSea is priced in cryptocurrencies natively: https://opensea.io/
By USD OpenSea's contract transacted an estimated 8% of Amazon's revenues.
To flip it around, yes, the USD has lost 30% of its buying power in a month before.
To Bitcoin.
When you define the USD as stability, then yes, USD is stable. It seems like circular logic.
To Bitcoin.
When you define the USD as stability, then yes, USD is stable. It seems like circular logic.
It only makes sense to talk about "buying power" when you can actually exchange a thing for goods and services which are priced in that thing. That doesn't apply to bitcoin, but it does to the dollar. This isn't arbitrary.
You’re defending a currency that fluctuates wildly in value by saying it’s better than a traditional currency seeing a few percent inflation. Tell me more.
I would still prefer something that appreciates in value over long term, like bitcoin (https://www.statista.com/statistics/326707/bitcoin-price-ind...) over something that looses value over long term, like $dollar (https://www.officialdata.org/us/inflation/1800?amount=1)
This might change in the future but as long as we're sticking to the past performance, bitcoin doesn't need defending. It's vastly superior to $dollar.
This might change in the future but as long as we're sticking to the past performance, bitcoin doesn't need defending. It's vastly superior to $dollar.
I just did. Your focus it too shortsighted. Right now Bitcoin is in a speculative phase because it's new and people don't understand its real point: freedom from artificial government control over prosperity.
People trust fiat over Bitcoin because they don't understand economics. In simple terms: given a currency X that can be traded for some fixed amount of resources, the more of that currency that exists, the more competition there is for the fixed amount of resources.
As governments continue to back themselves into a corner by printing more and more money, we will hit an inflection point (multiple historical examples of this) where inflation goes near-parabolic. When that happens, there are a few options: starving people, asset forfeiture (either direct by force or via high taxes), or, the issuance of a "new" state controlled currency (see discussions on Central Bank Digital Currencies for a modern version or the Rentenmark for a historical version).
Those CBDCs (what I think is most likely) will be the same exact grift replayed, but this time, with even more strict controls over your money because the technology enables it (money that expires, money that can be taken from you instantly and permanently, etc).
Why I defend Bitcoin ultimately is that it gives freedom back to people and restores the potential for a real economy (exchanging value for value). Not a debt-based economy where the government steals money from the productive via taxes and entraps the poor with inflation (all the while accomplishing absolutely nothing but more suffering via bad policy).
To not defend Bitcoin means to blind oneself to the reality that they are, in effect, property of their government. They just don't realize it because they're free range.
People trust fiat over Bitcoin because they don't understand economics. In simple terms: given a currency X that can be traded for some fixed amount of resources, the more of that currency that exists, the more competition there is for the fixed amount of resources.
As governments continue to back themselves into a corner by printing more and more money, we will hit an inflection point (multiple historical examples of this) where inflation goes near-parabolic. When that happens, there are a few options: starving people, asset forfeiture (either direct by force or via high taxes), or, the issuance of a "new" state controlled currency (see discussions on Central Bank Digital Currencies for a modern version or the Rentenmark for a historical version).
Those CBDCs (what I think is most likely) will be the same exact grift replayed, but this time, with even more strict controls over your money because the technology enables it (money that expires, money that can be taken from you instantly and permanently, etc).
Why I defend Bitcoin ultimately is that it gives freedom back to people and restores the potential for a real economy (exchanging value for value). Not a debt-based economy where the government steals money from the productive via taxes and entraps the poor with inflation (all the while accomplishing absolutely nothing but more suffering via bad policy).
To not defend Bitcoin means to blind oneself to the reality that they are, in effect, property of their government. They just don't realize it because they're free range.
I hear your argument, but if global confidence in government and central economic control collapses then bitcoin isn’t going to save you. That’s when you hunker down and prepare for global chaos.
> I hear your argument, but if global confidence in government and central economic control collapses then bitcoin isn’t going to save you.
We don't know that. Nothing like Bitcoin has ever existed. And I'd imagine most people would prefer the short-term uncertainty and pain of reorienting their usage of money over starving or fighting to the death.
If people take off the goggles, they will realize that it's all an illusion. The government is just other people like you and me with access to violence and the ability to indirectly control/manipulate other systems we depend on (e.g., banks, housing, etc). Their ceasing to exist doesn't preclude civilization collapsing long-term; they've just convinced people that it would.
We don't know that. Nothing like Bitcoin has ever existed. And I'd imagine most people would prefer the short-term uncertainty and pain of reorienting their usage of money over starving or fighting to the death.
If people take off the goggles, they will realize that it's all an illusion. The government is just other people like you and me with access to violence and the ability to indirectly control/manipulate other systems we depend on (e.g., banks, housing, etc). Their ceasing to exist doesn't preclude civilization collapsing long-term; they've just convinced people that it would.
> Nothing like Bitcoin has ever existed.
Physical gold?
Physical gold?
That can be confiscated. Bitcoin cannot. And as soon as SpaceX et al. start doing space mining, gold (and most precious metals) will no longer be rare.
The government can mandate that all entities that wish to legally transact in Bitcoin, must do so with a publicly-registered wallet (e.g. held on an exchange).
They can also ban transacting with any wallet that is not publicly registered. Any private wallet becomes, by fiat, illegal for the citizens of that country to transact with.
Thus, any such "blacklisted" wallet is as good as confiscated, since no one can (or will) trade with your tainted coins. Your wallet's coins are, effectively, permanently banned. (It's as if they confiscated your gold and locked it in a vault, never to be used again.)
Perhaps some other blockchain protocol has solved this issue, but Bitcoin hasn't, since Bitcoin wasn't designed with privacy in mind.
They can also ban transacting with any wallet that is not publicly registered. Any private wallet becomes, by fiat, illegal for the citizens of that country to transact with.
Thus, any such "blacklisted" wallet is as good as confiscated, since no one can (or will) trade with your tainted coins. Your wallet's coins are, effectively, permanently banned. (It's as if they confiscated your gold and locked it in a vault, never to be used again.)
Perhaps some other blockchain protocol has solved this issue, but Bitcoin hasn't, since Bitcoin wasn't designed with privacy in mind.
They can mandate anything they want, sure, but there are ways around all of that.
And frankly, if they do, they're essentially admitting that they want to enslave you and your complicity with that is tantamount to self-immolation. Why in the world would you do that to yourself (or wish it on others) if you had an escape?
And frankly, if they do, they're essentially admitting that they want to enslave you and your complicity with that is tantamount to self-immolation. Why in the world would you do that to yourself (or wish it on others) if you had an escape?
Look into an alternate story on the whole tulip bulb story sometime. It's fascinating.
Tulip Mania - the classic story of a Dutch financial bubble is mostly wrong:
https://theconversation.com/tulip-mania-the-classic-story-of...
Tulip Mania - the classic story of a Dutch financial bubble is mostly wrong:
https://theconversation.com/tulip-mania-the-classic-story-of...
Would love if you can elaborate on your bitcoin tulip equivalency with the methods that were used to make tulips durable, scarce, programmable, fungible, verifiable, divisible, transferrable at global distances and portable within a human mind. Please be sure to include primary document citations in your explainer and thank you!
Being a more technologically advanced vehicle for speculation doesn't make it less of a vehicle for speculation.
The value proposition has long been rephrased as digital gold, with ETH being silver.
BTC is gold, LTC is silver, (dogecoin is copper?)
ETH is oil.
The world is transition from oil to other things. Oil gets expensive near the ends of its life tho! ;-)
The world is transition from oil to other things. Oil gets expensive near the ends of its life tho! ;-)
Things which can be made into physical objects which are pleasing to look at, have large-scale industrial applications and exist in limited quantities on this earth: gold, silver.
Things which have none of those properties: cryptocurrencies.
Things which have none of those properties: cryptocurrencies.
I believe that smart contract settlement systems will more or less grow into "large-scale industrial applications" before the decade's end.
Silver doesn't power systems of contracts or broker exchanges of assets. ETH is more like oil in that regard.
People are using Bitcoin as currency, today, at scale in El Salvador.
https://twitter.com/BitcoinMagazine/status/14658601494704496...
You can pay for a Starbucks coffee by waving your phone next to a terminal because Visa solved the issue of instant, "virtual" payment that doesn't involve dealing with non-scalable technology of dollar bills.
Building similar overlay instant payment network over bitcoin is obviously doable.
https://twitter.com/BitcoinMagazine/status/14658601494704496...
You can pay for a Starbucks coffee by waving your phone next to a terminal because Visa solved the issue of instant, "virtual" payment that doesn't involve dealing with non-scalable technology of dollar bills.
Building similar overlay instant payment network over bitcoin is obviously doable.
I'm not sure that posting a tweet from Bitcoin Magazine that may or may not show someone actually paying for a single meal is evidence that Bitcoin is being used "at scale" as a currency.
> The primary value proposition of bitcoin is as a “currency”
That's the story people tell themselves, not the value proposition. The actual value proposition is/was it's an appreciating asset and FOMO.
That's the story people tell themselves, not the value proposition. The actual value proposition is/was it's an appreciating asset and FOMO.
>it will never be a viable currency at scale
Uh... this has been said over and over for the past decade-plus, and yet it seems to already be a viable currency at scale. Unless you want to append a bunch of no-true-Scotsman caveats onto the definition of "currency".
Uh... this has been said over and over for the past decade-plus, and yet it seems to already be a viable currency at scale. Unless you want to append a bunch of no-true-Scotsman caveats onto the definition of "currency".
Where did all this money go? It can't disappear just like that, can it?
I can't withdraw more than a few K per week with crypto exchanges. How can $300B evaporate just like that?
I can't withdraw more than a few K per week with crypto exchanges. How can $300B evaporate just like that?
Because $300B was never there. A quantity of a certain thing times its most recent sale price per unit was calculated to be a proxy of the trade-able value of what could have been there.
well the blockchain won't agree with this. All transactions can be verified. Maybe I missed something.
If I start a bogus company, issue a million shares to myself and then sell a single share to my buddy for $1, then my company is "worth" $1M. The assumption is that the sale is a fair price and indicative of what other shares would sell for. If he then sells that share on for $50, the company is "worth" $50M. If that share is then sold for a penny, the company is now worth $10K. The $50M didn't "disappear", it didn't really exist in the first place.
The blockchain tells you who owns the bitcoin, but it has nothing at all to do with the price at which people will exchange money for bitcoin.
Exact same amount of BTC is still around, or more actually. What it is valued in dollars is different...
Valuation was lost. Not actual coins. That works with any stocks...
Valuation was lost. Not actual coins. That works with any stocks...
USD transactions aren’t on the blockchain. You have no idea how much liquidity there is. Wash trading coins is known to be rampant, so even the smallest sell off to USD may cause a massive price drop.
Don’t worry, the unregulated exchanges can wash trade the prices right back up again. Just don’t be left holding a bag when the USD liquidity runs dry.
Don’t worry, the unregulated exchanges can wash trade the prices right back up again. Just don’t be left holding a bag when the USD liquidity runs dry.
The record of transactions are only of BTC Wallet->BTC Wallet transactions. They say nothing about how much they're worth in other currencies or materials. And even if they did, like we can get essentially all stock market transaction data (stock X sold for Y at time T), it doesn't prevent the value from going down (or up) independently of that historical price. It just creates certain points of resistance where it's harder for it to move beyond, but it can still happen. See the various stock market crashes in the past.
The blockchain tracks bitcoin transactions not USD. The USD price of Bitcoin can change without any on chain transactions.
Market cap is last price times total supply. Only a few coins are sold each day compared to the total supply so changes in price have a magnified affect on market cap.
For example a blockchain has 10 coins and a fixed price initial sale at 1$ per coin. All coins are sold so the market cap is 10$ which refects the total money sunk into the coin.
But now someone sells their coin for 2$. The market cap is now 20$ but only 11$ we're spent on the coins.
Market cap is last price times total supply. Only a few coins are sold each day compared to the total supply so changes in price have a magnified affect on market cap.
For example a blockchain has 10 coins and a fixed price initial sale at 1$ per coin. All coins are sold so the market cap is 10$ which refects the total money sunk into the coin.
But now someone sells their coin for 2$. The market cap is now 20$ but only 11$ we're spent on the coins.
Well all this price action only happens in the databases of the exchanges, not on the blockchain. And on the exchanges only a miniscule share of all coins get traded. The "market cap" is then only extrapolated. E.g. Bitfinex, which seems to have the most volume, only saw 40k bitcoin traded, in sum, for today, which was less than $2B USD.
The blockchain has nothing to do with dollars. The "value" that disappeared has always been illusory.
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he's talking about a philosophical idea and you're talking about a technical one
No, I am talking about the technical one. $300B technically did not evaporate because $300B technically were never there.
Its like a stock market crash, one day everything is fine, the next its the beginning of the great depression. Welcome to the world of speculation, I hope you enjoy your stay in the house of cards.
House of cards or not it's the only house left after moneyprinting destroyed the soundness of cash/bonds
The "only" thing left? Housing/land has long been the most durable store of value in history and that wont change. It's not as liquid as Crypto and requires laws to enforce private property. But if society collapses, we'll have bigger things to worry about and even Bitcoin can be "seized" via violence/coercion.
> and that wont change
depends on location/country etc. Houses are out of reach for most millenials worldwide and i don't see that changing either
depends on location/country etc. Houses are out of reach for most millenials worldwide and i don't see that changing either
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It didn't "go" anywhere. The price of a financial asset is just the price at which the last exchange took place. I could buy a Bitcoin for $100K right now, and that would be the price, at least until the next transaction. Likewise, someone could sell one for $10K and that would now be the price.
In a thick market, one with many buyers and sellers and lots of transactions happening all of the time, you can be reasonably confident that if you go to sell something you will receive something reasonably close to the current price. In a thin market you may get a very different price when you go to buy and sell.
A persistent criticism of crypto markets is that they APPEAR to be thick but that most of the trades happening are just bots buying and selling on behalf of a very small number of actual participants in order to give the appearance of high volumes and that people will be in for a rude awakening if they ever try to exit out of a substantial position (the price they receive may be a fraction of the current market price, assuming they are even able to find a buyer at all).
In a thick market, one with many buyers and sellers and lots of transactions happening all of the time, you can be reasonably confident that if you go to sell something you will receive something reasonably close to the current price. In a thin market you may get a very different price when you go to buy and sell.
A persistent criticism of crypto markets is that they APPEAR to be thick but that most of the trades happening are just bots buying and selling on behalf of a very small number of actual participants in order to give the appearance of high volumes and that people will be in for a rude awakening if they ever try to exit out of a substantial position (the price they receive may be a fraction of the current market price, assuming they are even able to find a buyer at all).
Oh interesting, so it's all bot trading? Any reason this wouldn't apply to the NYSE or NASDAQ as well?
NYSE and NASDAQ are regulated exchanges with stable transaction prices (ie- regulatory taxes and fees). Unscrupulous crypto exchanges can generate "volume" out of thin air without any repercussions.
Oh so you mean it's not bot trading, it's actually exchanges lying about volume and transactions?
I could see this. Somewhere else it was pointed out during this "crash" that it was all off-chain, blocks and mempool were relatively empty, so the crash was on exchanges.
I could see this. Somewhere else it was pointed out during this "crash" that it was all off-chain, blocks and mempool were relatively empty, so the crash was on exchanges.
it does
Because: <Market Cap> = <Number of Shares> * <Price per share>
Market cap can change a lot, using very little money, depending on how many units or shares there are.
For example: 1 million MC = 1 million shares * 1$ cost per share
If one person is suddenly able to sell 1 share at 2$, market cap immediately doubled to 2 Million, using only 2$.
Market cap can change a lot, using very little money, depending on how many units or shares there are.
For example: 1 million MC = 1 million shares * 1$ cost per share
If one person is suddenly able to sell 1 share at 2$, market cap immediately doubled to 2 Million, using only 2$.
A block of gold is worth $1k today, tomorrow it's $500. Where did that money go? It's just the price people are willing to pay. Maybe the seller found 100 more blocks of gold and is running out of storage.
Money doesn't need to go anywhere. There could still be same amount of both dollars and bitcoins on accounts in exchange. Just the price of the trading pair moved. It is not like when you move either bitcoin or dollars to exchange you have to immediately trade with it or convert it to other.
Monetary transfers aren’t what create the valuation in the first place, so it stands to reason the value can also fall without monetary transfers taking place.
If just a few parties trade one-trillionth of an asset at $1, then we say that asset is worth a trillion dollars because we extrapolated. If the next trillionth sells for $2, we’ve just doubled the valuation to two trillion dollars, but that amount never changed hands, and at worst only one person only ever valued the asset above a trillion dollars. If the next trillionth sells for $0.50 all of a sudden we’ve wiped $1.5 trillion in valuation off the face of the Earth but only two dollars and fifty cents has changed hands in this example. In broad terms, that example explains what is going on here.
The $300B that “evaporated” mostly never existed in the first place. The order books are not very deep and the valuation of Bitcoin looks great as long as everyone hodls and refuse to let the price go down- at the expense of trading volume. Once people get nervous and decide they want to try to turn their imaginary crypto gains into real money to cover losses in the slightly less imaginary stock market, the selling price tumbles because there aren’t that many bids at the previous price. So the price moves down without much volume being traded.
If just a few parties trade one-trillionth of an asset at $1, then we say that asset is worth a trillion dollars because we extrapolated. If the next trillionth sells for $2, we’ve just doubled the valuation to two trillion dollars, but that amount never changed hands, and at worst only one person only ever valued the asset above a trillion dollars. If the next trillionth sells for $0.50 all of a sudden we’ve wiped $1.5 trillion in valuation off the face of the Earth but only two dollars and fifty cents has changed hands in this example. In broad terms, that example explains what is going on here.
The $300B that “evaporated” mostly never existed in the first place. The order books are not very deep and the valuation of Bitcoin looks great as long as everyone hodls and refuse to let the price go down- at the expense of trading volume. Once people get nervous and decide they want to try to turn their imaginary crypto gains into real money to cover losses in the slightly less imaginary stock market, the selling price tumbles because there aren’t that many bids at the previous price. So the price moves down without much volume being traded.
Crypto “market cap” is fiction. In a blink of an eye 25% is lost, and not because 25% of the market cap was withdrawn.
Most fun thing is to think how much of the underlining thing for marketcap is even on market... With bitcoin it is known that decent fraction hasn't moved in years. So why is this even included in calculation?
Might even make sense to calculate how much is on cold wallets of known entities and then add to those how many actual coins have moved in let's say in year. Then multiply this number by price to get more realistic idea of market cap.
Might even make sense to calculate how much is on cold wallets of known entities and then add to those how many actual coins have moved in let's say in year. Then multiply this number by price to get more realistic idea of market cap.
All market caps of all assets are "fiction" in the sense that they don't measure the total amount of money that all units of the asset could fetch on the market.
True. Also leverage further distorts the true market cap. With Bitcoin $100k can easily be used to buy $800k worth of Bitcoin or more in some platforms.
And yes, same is true for the stock market. Everything is made up. Nothing is real.
And yes, same is true for the stock market. Everything is made up. Nothing is real.
The price of bitcoin is just the most someone's willing to pay for it right now.
If it dropped to zero it wouldn't mean any bitcoin or USD disappeared, just that no one wants to buy it; mathematically everything still adds up.
The 300B number comes from market cap. Take the current price of BTC, multiply it by the number of BTC, and call that the value of bitcoin as a whole. But that's just an overly simple guess to the total value, not a mathematical fact.
Reality is of course more complicated: Imagine the BTC market as an order book. Maybe there's 10 people with an order to buy for 6k or less, 3 people with an order to buy at 5.7k 5 people with an order to buy at 5.5k or less, etc.
Then if someone sells 18 bitcoin they'll get 6k for the first 10, 5.7k for the next 3, and 5.5k for the rest; while causing the price to lower from 6k to 5.5k. Since there's way more BTC than this hypothetical person sold, it causes the market cap to lower much more than the amount of money they made.
And of course this too isn't static in the real world. Some people may sell when they see the price going down, some people may _buy_ when they see the price going down, and general unregulated chaos.
If it dropped to zero it wouldn't mean any bitcoin or USD disappeared, just that no one wants to buy it; mathematically everything still adds up.
The 300B number comes from market cap. Take the current price of BTC, multiply it by the number of BTC, and call that the value of bitcoin as a whole. But that's just an overly simple guess to the total value, not a mathematical fact.
Reality is of course more complicated: Imagine the BTC market as an order book. Maybe there's 10 people with an order to buy for 6k or less, 3 people with an order to buy at 5.7k 5 people with an order to buy at 5.5k or less, etc.
Then if someone sells 18 bitcoin they'll get 6k for the first 10, 5.7k for the next 3, and 5.5k for the rest; while causing the price to lower from 6k to 5.5k. Since there's way more BTC than this hypothetical person sold, it causes the market cap to lower much more than the amount of money they made.
And of course this too isn't static in the real world. Some people may sell when they see the price going down, some people may _buy_ when they see the price going down, and general unregulated chaos.
It can move into stablecoins or the exchange's fiat accounts.
At the same time however you can't outright move a bunch of money off an exchange unless your account is rated for that. I don't particularly move a lot of value in cryptocurrency (I'm not remotely close to wealthy, just a SWE in an east coast, non-FAANG job) but I have a 250k USD daily withdraw limit on my exchange account.
At least on my main exchange, if you set up certain security restrictions(2FA, wallet quarantine periods, etc), do KYC, and have an active account for X duration in time, you get larger withdraw limits and access to higher trade volume tiers. It's all about how much risk you present to the exchange and the associated financial organisations. I represent a very low risk level (I'm very boring and generally risk adverse) so I get access to pretty high withdrawal and deposit volumes. I don't leverage them but if I wanted to I could.
At the same time however you can't outright move a bunch of money off an exchange unless your account is rated for that. I don't particularly move a lot of value in cryptocurrency (I'm not remotely close to wealthy, just a SWE in an east coast, non-FAANG job) but I have a 250k USD daily withdraw limit on my exchange account.
At least on my main exchange, if you set up certain security restrictions(2FA, wallet quarantine periods, etc), do KYC, and have an active account for X duration in time, you get larger withdraw limits and access to higher trade volume tiers. It's all about how much risk you present to the exchange and the associated financial organisations. I represent a very low risk level (I'm very boring and generally risk adverse) so I get access to pretty high withdrawal and deposit volumes. I don't leverage them but if I wanted to I could.
A significant portion is sold into stablecoins which are other cryptos. If the stablecoins go above their peg, then it is more profitable to mint the stablecoin at the issuer with dollars you own on the exchange, and sell the stablecoin immediately to the panic sellers clamoring for stable value.
Many other assets are merely priced in bitcoin and their dollar value can fall without a single trade occurring. This needs to be fixed sector wide.
And finally, people have unlimited withdrawal limits to fiat or crypto from exchanges. You need to convince your exchange to raise yours or get another exchange. OTC desks have no limit which is what institutional traders use.
Many other assets are merely priced in bitcoin and their dollar value can fall without a single trade occurring. This needs to be fixed sector wide.
And finally, people have unlimited withdrawal limits to fiat or crypto from exchanges. You need to convince your exchange to raise yours or get another exchange. OTC desks have no limit which is what institutional traders use.
Market cap is not real money
As I understand it, the market cap of an asset is the marginal price times the quantity. But the total value is the integral of the marginal price * d(quantity).
These can differ greatly.
If I buy one Bitcoin on the market for $1, and then another Bitcoin on the market for $100, I now have two Bitcoins, with a market cap of $200, which I only paid $101 for. It's like $99 just appeared out of thin air! But that $99 might disappear again when I sell my bitcoins. After selling one of them, the market price might plummet back down to $1.
When someone on your street sells their house for $1 million, the paper value of the neighbourhood might shoot up by $10 million, just from all the nearby houses being revalued at that latest price, despite only $1 million actually changing hands. The same can happen in reverse, too.
These can differ greatly.
If I buy one Bitcoin on the market for $1, and then another Bitcoin on the market for $100, I now have two Bitcoins, with a market cap of $200, which I only paid $101 for. It's like $99 just appeared out of thin air! But that $99 might disappear again when I sell my bitcoins. After selling one of them, the market price might plummet back down to $1.
When someone on your street sells their house for $1 million, the paper value of the neighbourhood might shoot up by $10 million, just from all the nearby houses being revalued at that latest price, despite only $1 million actually changing hands. The same can happen in reverse, too.
Market capitalization is a reflection of the total number of outstanding shares (i.e., Bitcoin) times the last price someone paid to by a single share (i.e., market value). There is no inherent relationship between market capitalization and the total "value" of all of the assets, as might be indicated by, say, the total money spent by each Bitcoin holder to acquire their share of Bitcoin (call this, say, "total capital basis").
Note that this applies to all asset classes, although many asset classes do have some rules of thumb that can indicate if the current market value seems overvalued or undervalued. (It should be noted that as of late, these rules of thumb suggest that many asset classes range from "overvalued" to "holy hell, where is this valuation coming from‽").
Bitcoin is somewhat unusual in that many people invest in Bitcoin primarily, if not solely, expecting to make money only by selling it off to somebody else later for a higher price--holding Bitcoin doesn't offer any kind of dividend like holding money in stocks, real estate, bonds, or even the miserly rate offered in a bank account. Thus, compared to other assets, you should be extremely skeptical that the actual "total capital basis" has any close relation to the market capitalization. (I personally suspect that the market capitalization is several multiples of the "total capital basis", and I suspect there's even less money sitting in the cryptocurrency ecosystem than even the "total capital basis").
Note that this applies to all asset classes, although many asset classes do have some rules of thumb that can indicate if the current market value seems overvalued or undervalued. (It should be noted that as of late, these rules of thumb suggest that many asset classes range from "overvalued" to "holy hell, where is this valuation coming from‽").
Bitcoin is somewhat unusual in that many people invest in Bitcoin primarily, if not solely, expecting to make money only by selling it off to somebody else later for a higher price--holding Bitcoin doesn't offer any kind of dividend like holding money in stocks, real estate, bonds, or even the miserly rate offered in a bank account. Thus, compared to other assets, you should be extremely skeptical that the actual "total capital basis" has any close relation to the market capitalization. (I personally suspect that the market capitalization is several multiples of the "total capital basis", and I suspect there's even less money sitting in the cryptocurrency ecosystem than even the "total capital basis").
The price of Bitcoin on any given day is simply the price someone is will ping to exchange dollars for it. No value appears or disappears due to a currency price swing, Bitcoin like the dollar isn’t backed by gold or corn in silos. It’s value is only what people are willing to trade for it, and that isn’t steady day by day.
Always fun to see HN hot takes on bitcoin. Similar to browsing the buttcoin subreddit. But apparently this group of people is much more enlightened than everyone else.
Am waiting a moment where Bitcoin will go to zero, the market and all that is bullshit.
Bitcoin has gone sky-high or fallen off a cliff? That's normal.
It's going to zero folks. Sell now.
Crypto is a monetary game, and bitcoin is an original game piece. You have to at least give it some weird collectible value
I'm find myself agreeing with this more and more. Packy McCormick's framing as "The Great Online Game" seems like the best way to approach crypto and web3, to me. Go in for enough to play, if you're interested (it's honestly pretty fun), but you better have pretty extreme conviction if you're risking anything you can't afford to lose (I don't).
This is basically why I still hold a whole BTC.
I'm something of a collector of bullshit hype tech
I'm something of a collector of bullshit hype tech
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> The global crypto market cap is $2.33T, a 4.85% decrease over the last day.
not that bad...
not that bad...
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> Bitcoin and other cryptocurrencies are notoriously volatile and often plunge for mysterious reasons.
There is nothing mysterious about Alameda making money from it triggering margin cascades.
There is nothing mysterious about Alameda making money from it triggering margin cascades.
* India may try to make self-custody of crypto assets illegal, requiring all coins be given to exchanges. [A totally unenforceable law, trying to make math illegal, in this case storing 256-bit integers and performing the ECDSA/Schnorr signature algorithm.] Everyday Indian folk will lose their coins when the inevitable happens and the exchanges are compromised.
* Europe considering how to put the genie back in the bottle. Also thinking about custody regulation and reporting.
* US trying to develop (further) regulations around exchanges, trading, KYC/AML, derivatives and accounting.
* Uncertainty over the CSW lawsuit. The jury is still deciding the verdict, possibly next week.
* Custodial Bitcoin loaning service reported losing (wrapped) Bitcoin when defi platform was compromised.
* Larger market uncertainty due to new variants.
Its going to be bumpy. It always is. Maybe I have been watching too much Michael Saylor lately, but I think he is right about a great many things. It is too easy to look at systems from the inside and shout about bubbles. A more systematic appraisal of other large asset classes, the source/sink nature of money creation and capital flows is prudent.