Bitcoin

[NorthStar]

Earlier today it went over $14,000 ($14,344.22)
• https://www.cnbc.com/2017/12/06/bitcoin-tops-13000-surging-1000-in-less-than-24-hours.html

And this, which is very normal for unsecured places:
• https://www.coindesk.com/62-million-gone-cryptocurrency-mining-market-nicehash-hacked/

NiceHash ... Harsh, not so nice after all. Sounds like they are selling some nice hashish. FBI hackers? Most likely.

Be ready to see more hackers stealing bitcoin, but be also ready for the "vertiginous" escalation on the value of bitcoin ahead.

 

[Folsom]

I do not think of Ethereum as a currency. I think of Ethereum as a brilliant way to use computers to program infinitely customizeable financial contracts.

In your view is the potential supply of Ethereum as limited as the potential supply of Bitcoin? On which one do you think a technology cabal could more easily change the existing rules and increase the supply?

Indeed, ETH is very cool.

Yes and no. Ethereum has no cap on it, and since the creators are still alive and known they carry enough weight that people have interest in their directions for the coin. The thing about that is Ethereum has been slated as being able to go to POS for a long time. POS is proof of stake, and it works by "staking" a certain amount of coin in order to act as a node that processes the blockchain, and gets paid a consensus defined fee in order to do the processing. The thing to note is ETH stops being mined and becomes finite when that happens.

Currently POW is driving the decentralization on Ethereum, and POS has been held back for awhile, out of sight. It's hard to say when it could come about but incentives look low to me currently. Talk has been more focused on a hybrid system potential - at least for the first go at POS. With a hybrid system we are not expecting to see a cap on the amount of ETH in the world.

Again, we won't hit the true cap on Bitcoin for over a hundred years... but that isn't why I see the only potential for it. As a representation of store of value it's still pretty small globally speaking. It sounds big to all of us who aren't billionaires, but it isn't really that big of thing yet.

 

[NorthStar]

No bubble, no bursting. If you play your cards right, and if you are not on the FBI list of most wanted, you should do just fine. Remember; don't play if you cannot handle the extensive heat. Bitcoin is for people who are ready to live in space, without their underwear, and wearing only a pair of jogging runners.

 

[Pb Blimp]

There are two distinct aspects to the bitcoin paradigm that IMO the market is wrongly comingling from a valuation perspective. One is blockchain technology (which is merely a form sophisticated encryption) and the other is its use as a currency. I have explained in Post #140 why its use as a currency is fraught with peril over the long term. As far as opportunities for value creation using blockchain technology goes (as I pointed out with regard to IBM in post #165) there are a multitude of (real life existing) technology companies looking at commercial applications for everything from processing transactions to project management and everything in between. To the extent that these companies develop products using blockchain technology to improve the efficiency of these activities they will be able to price these products to take share and create value. This process is a completely different thing than what is going on with bitcoin (or Ethereum for that matter). Their valuations are mistakenly attaching blockchain technology opportunities to the currencies as if they had some sort of a competitive advantage for its use over traditional technology companies that are deep into the encryption space. Nothing could be farther from the truth.

Even for the technology companies with huge armies of technologists evaluating these applications, there are minimal barriers to entry in encryption (i.e., limited from an IP standpoint) and the returns will be more about the effectiveness of the solution than the technology itself. Think of it as Blockchain being the internal combustion engine that all car companies will use. Value creation ultimately will be determined by whether you make a Ferrari or a Yugo. That said they both are at least car companies and have the potential to create value in the space. Bitcoin is nothing more than a speculative illusion that is being portrayed as the reservoir of value of a technology for which it has no proprietary claim. Furthermore, it employs the technology in a product (currency) attempting to compete in a tightly regulated and controlled market that is already fully satisfied by fiat money throughout the entirety of governed society.

 

[Ron Resnick]

Holy *#@!

BTC at 16,495

 

[ack]

Holy *#@!

BTC at 16,495

Yep, gambling pays off

 

[DaveC]

This is an interesting experiment in psychology, that's for sure.

IMO BC is doing far more harm than good. We're allocating a lot of resources towards something that is providing no benefit. Investing in BC isn't helping the economy or anyone besides those holding BC. It isn't investing in your economy in the same way as investing in a real company that actually generates something of true value. And it uses enough energy that it's an environmental disaster, it is most certainly driving climate change on a very high level and it's only getting worse. Saying this drives renewable energy is pure and utter BS as well, because right now, as we speak BC is contributing to our climate issues in a huge way.

 

[KeithR]

up 30% today to 17.5k lol. for a "currency"

 

[ack]

Nope. At 19,300 right now. Someone please stand up and call this an investment

 

[KeithR]

and right back down to 17k - lol

vol explodes near tops, this will be no different.

 

[NorthStar]

1 Bitcoin equals
20877.52 Canadian Dollar
___

• https://www.cnbc.com/2017/12/07/bil...d-have-bought-bitcoin-when-it-was-at-300.html

I'm listening to some jazz music on the r.a.d.i.o. right now...everything's real smooth and cool.

 

[Folsom]

Nope. At 19,300 right now. Someone please stand up and call this an investment

Who's denying that?

 

[NorthStar]

I thought it would hit $20,000 tomorrow, Friday. Wow, today it was scary because it was certainly ahead on its way already. But tomorrow is not here yet, @ least not in this time zone.
___

I don't think bitcoin will have much of an impacting effect on climate change.
But it will certainly liberate us from the slavery we have been enduring for centuries.

 

[ack]

Who's denying that?

Hmmmm, it does feel like you are in the very small minority

 

[NorthStar]

Billionaires are also in very small minority. :b

° https://www.forbes.com/billionaires/#6aeab450251c

 

[Folsom]

Hmmmm, it does feel like you are in the very small minority

A lot of people believe it is more than just "buying stock" because of so many implications. And that I wouldn't deny that, either. You are investing in something new that has potential, and doesn't pay dividends like a traditional stock, or have that purpose.

But surely you've ran into a twitter bitcoin maximalist that gets all weird, for some reason, at some point. It happens.

 

[Folsom]

Hmmmm, it does feel like you are in the very small minority

A lot of people believe it is more than just "buying stock" because of so many implications. And that I wouldn't deny that, either. You are investing in something new that has potential, and doesn't pay dividends like a traditional stock, or have that purpose.

Sorry if you've ran into some sorta Bitcoin maximalist that simply argues with you to argue, since you're not a Bitcoin type person.

 

[ack]

A lot of people believe it is more than just "buying stock" because of so many implications. And that I wouldn't deny that, either. You are investing in something new that has potential, and doesn't pay dividends like a traditional stock, or have that purpose.

Sorry if you've ran into some sorta Bitcoin maximalist that simply argues with you to argue, since you're not a Bitcoin type person.

Well. I don’t buy real stock, backed by real products services and revenues, at $1000/share, and I surely won’t spend 20k for a share of anything, especially when the only going for it is speculation. I’d rather go to Vegas and play BJ where I know how to beat the system with card counting

 

[Pb Blimp]

Ok, I can't take this any more. I must get in but wow this thing is hard to short. The only Puts I have seen are on Deribit and you gotta buy and settle in bitcoin! I know CME is coming with futures contracts but I prefer the sanctity of an option contract as opposed to a margin trade.

The Deribit options book is grossly illiquid with enormous spreads. In addition to that, even when the market crashes and you end up with a gazillion bitcoin by the time you settle your Put sale in bitcoins at Deribit, move them back to an exchange and sell them for cash, the profit may well be lost since the price of your gazillion bitcoins will likely still be collapsing.

I understand this is approach is a complete mess but I just want to play for fun. It's too hard to stand by and just watch.

Anyone else short this thing and have a smoother plan?

 

[Ron Resnick]

I hope CBOE will list options contracts. But will they list 1/10th contracts? It would be very interesting to see put premium versus call premium!

I tried to short GBTC when it was at something like an 80% premium to NAV, but I could not get any borrow.

I do not know if there is any stock borrow available but the two or three companies whose stock prices rose a few hundred percent simply because they changed their names to include the word "blockchain" would seem to be good shorting candidates.