Bitcoin on the rise

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white belt
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Re: Bitcoin on the rise

Post by white belt »

The BTC correction continues. Even so, it’s still doubled over the past 6 months and tripled over the past 12 months.

I wonder if this will temper enthusiasm about BTC, especially as other coins are starting to gain in popularity.

ETH is also down but still net positive over the past month. I might buy this ETH dip.

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Ego
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Re: Bitcoin on the rise

Post by Ego »

Bitcoin mining will be integrated into solar roofs / powerwalls converting intermittent excess power in bitcoin and funding adoption. Distributed, decentralized systems.

https://wintonark.medium.com/bitcoin-mi ... 91c5aa9be0

SavingWithBabies
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Re: Bitcoin on the rise

Post by SavingWithBabies »

As an update on my Chia effort, I filled up a couple of old hard drives and called it good. I'll keep the software running in the background to see if I get lucky although my estimated time to luck is now at 4 years (with 38 ~100gb plots or 3.76 TB of plots). I read a bit more about Chia and I'm not that excited about it anymore almost purely because the proof of work concept -- these huge files -- are just that. Only proof of work. There is no other side benefit to making all these files except for being ready to take a series of tests to see if you've won some coin. The actual crypto chain is separate from these big proof of work files. I'm just a bit disappointed that there wasn't some interesting use case with the proof of work space consumption that would be beneficial in some way beyond just proving you did something and are taking up some space. It just seems like a big lack of imagination.

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giskard
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Re: Bitcoin on the rise

Post by giskard »

SavingWithBabies wrote:
Tue Jun 15, 2021 11:47 am
As an update on my Chia effort, I filled up a couple of old hard drives and called it good. I'll keep the software running in the background to see if I get lucky although my estimated time to luck is now at 4 years (with 38 ~100gb plots or 3.76 TB of plots). I read a bit more about Chia and I'm not that excited about it anymore almost purely because the proof of work concept -- these huge files -- are just that. Only proof of work. There is no other side benefit to making all these files except for being ready to take a series of tests to see if you've won some coin. The actual crypto chain is separate from these big proof of work files. I'm just a bit disappointed that there wasn't some interesting use case with the proof of work space consumption that would be beneficial in some way beyond just proving you did something and are taking up some space. It just seems like a big lack of imagination.
The locked up resources that do nothing else: it's kinda the point though. Proof of work (in this case proof of space) is just a mechanism to bind resources from the physical world into the digital world. You prove you did something in one world to be rewarded proportionally in another. It's harder to do that than you might think just initially encountering this problem, it's been successful for a reason.

jacob
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Re: Bitcoin on the rise

Post by jacob »

Bitcoin really needs to solve the problem of "if anyone can just make up another currency, doesn't it ultimately come down to popularity". I mean, I can print up some baseball cards in a limited number, but that doesn't make them valuable beyond what kind of price other people are willing to pay me. And since everybody can start a limited run of some other cards, what's the meta-mechanism that makes other people desire mine (and not some other variant).

Everybody is talking about value from mathematical rarity, but what really matters is the price people are willing to pay for that rarity. Otherwise, crypto is just a weird idiosyncratic collectible, like gold, stamps, art, ... was at the end of the 1970s.

To be more specific and demonstrate some Gen-X life lessons, crypto feels a little bit like trading card games. MTG was the original and people who bought in at alpha and beta (Moxes!) won the lottery. Seeing this effect, many other trading card games were invented and some saw similar speculation. (I still have a shrink wrapped box of LOTR booster packs if anyone is interested?). However, most if not all of these lost the popularity contest and turned out to be worth nothing or only "game play" value.

Anyway, I offer this not to argue the brilliance of a brand new crypto future but to elucidate why some dinosaurs like me have yet to buy in. (No need to explain how block chain can be used for many other wonderful things.)

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Chris
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Re: Bitcoin on the rise

Post by Chris »

@jacob:

There are certainly other crypto projects out there (and more to come). Any of them can be used as a currency, and all can prove mathematical rarity. But crypto is now starting to be used as the basis of small economies around open source software projects. Users provide the infrastructure (servers) needed to run the project, and are compensated via the project's altcoin. Startups can avoid needing VC funding pay for cloud infrastructure by creating a market where their community provides it. Those providing the service are compensated with block rewards in the project's own crypto. Users of the system pay with the project's crypto coin. The project's crypto will have value if the project becomes popular, and demand is created.

The question becomes, how does a user buy the cryptocoin of the project? This is where Bitcoin has an advantage over all other cryptos: there's a BTC market for everything. This is because:

1) the market cap for BTC is relatively huge, so there's a lot to go around; almost anyone who has some crypto hold BTC,
2) the bitcoin millionaires from the early days are very likely to be interested in investing in new crypto projects,
3) buying coin via USD brings regulatory problems for smaller exchanges,
4) buying crypto with crypto allows transactions to clear quickly

So one of BTC's qualities is its bigness; 3x the size of Etherium. It's big because it was first. We're quite far from mainstream popularity, so another crypto currency could overtake it in marketcap. But being the default currency to buying altcoins isn't replicated by anything else.

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Jean
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Re: Bitcoin on the rise

Post by Jean »

From my readings, BTC is by far the safest crypto. If one think that huge portion of économic interaction are going to happen over blockchain, thén BTC safety combinéd with his status as biggest, makes it a good candidate to bé thé ground on which most human interaction will happen in thé future.
It's like buying a part of rotterdam's port, except it's thé only Big port jet, and there is some incentive for only one port to exist.

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giskard
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Re: Bitcoin on the rise

Post by giskard »

jacob wrote:
Sat Jun 26, 2021 2:18 pm
Bitcoin really needs to solve the problem of "if anyone can just make up another currency, doesn't it ultimately come down to popularity". I mean, I can print up some baseball cards in a limited number, but that doesn't make them valuable beyond what kind of price other people are willing to pay me. And since everybody can start a limited run of some other cards, what's the meta-mechanism that makes other people desire mine (and not some other variant).

Everybody is talking about value from mathematical rarity, but what really matters is the price people are willing to pay for that rarity. Otherwise, crypto is just a weird idiosyncratic collectible, like gold, stamps, art, ... was at the end of the 1970s.
Two points - firstly, yes it does just come down to popularity and that's a huge deal. Try to make another Facebook, try to make another Microsoft, build another linux flavor (sorry, debian/ubuntu will probably just keep getting bigger). Most of the alternative blockchains have failed because nobody cares about them and they have few users. There are a small handful with additional unique properties that people do care about but most of these are trying to solve different problems entirely. And at this point that's basically just Ethereum & Ethereum clones (which are not trying to be digital gold), they have different goals.

Secondly, I agree a weird alternative asset with some rarity is not normally that useful, but in a period of deeply negative real rates it's more like we are entering the decade of the 70s again. At some point these collectibles are not going to be as useful because we will have real positive interest rates, actual financial growth and less financial repression, but that doesn't seem to be on the horizon any time soon until debt / GDP metrics are reduced.

WFJ
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Re: Bitcoin on the rise

Post by WFJ »

Try to make another AOL, Friendster, another Myspace, etc... 100% of "network effect" companies are replaced by better, faster, cheaper, more popular networks. One has to be able to predict when, how, why, the network will be supplanted to be a successful investor in these fields. I remember being told and hearing tech "experts" proclaim "People will always pay to use/be included in AOL channels because they were the first mover and have the benefit of network effects, just like the telephone...". When was the last time someone used an AOL channel (I'm dating myself with this one).

Jacob: When is the ICO for the ERE coin coming? How many ERE coins will we received for doing 10, 100,1000 pull-ups "proof of work"? Do I submit the video of me doing pullups to Jacob or will there be a "community verification process" that can't be faked? What is the current pull-up hash rate? How many ERE coins will be created and how many future forks will there be? (see how much fun it is to make up new corrupto currencies :) What is the current price of the NFT for your book, blogposts, used bicycle?

Bitcoins will retain their value without popularity as well as the rare and fixed supply of Sammy Sosa, Mark McGuire rookie cards did after their popularity faltered.

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giskard
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Re: Bitcoin on the rise

Post by giskard »

WFJ wrote:
Sun Jun 27, 2021 3:37 pm
Try to make another AOL, Friendster, another Myspace, etc... 100% of "network effect" companies are replaced by better, faster, cheaper, more popular networks. One has to be able to predict when, how, why, the network will be supplanted to be a successful investor in these fields. I remember being told and hearing tech "experts" proclaim "People will always pay to use/be included in AOL channels because they were the first mover and have the benefit of network effects, just like the telephone...". When was the last time someone used an AOL channel (I'm dating myself with this one).

...

Bitcoins will retain their value without popularity as well as the rare and fixed supply of Sammy Sosa, Mark McGuire rookie cards did after their popularity faltered.
I'll again say: I'm in agreement with this take that popularity is what matters. But the tech is not the most important thing at all, it's the size of the user base and the adoption.

MySpace did not fail because of the tech, if failed because the users left. Maybe bitcoin will not retain it's value, but at this point given that there are scaled layer 2 solutions, integrations into many existing financial networks and it is legal tender in a country it probably will. I don't see a lot of other good alternative solutions to bitcoin's digital gold use case. It has the largest network with the most trust in it.

You can make ERE coin but nobody will care including most of the people on this board. I just don't agree with the conclusion of the point you are trying to argue.

Edit: I wanted to add something just to make the point more clear. In some ways Dogecoin is a legitimate threat to bitcoin because it has a lot of users and name recognition and it still has some scarcity (less, and its more inflationary but it has similar characteristics). But it is missing 3 key communities - dedicated miners, developers, and financial institutions willing to integrate with it and take it seriously. If it had all of these things it would be another story, but look at just about every alt coin other than Ethereum (which again is doing something different), and you will see a lot of these ingredients are missing or totally dwarfed by bitcoin.

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Seppia
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Re: Bitcoin on the rise

Post by Seppia »

I am curious what the opinion of the BTC fans here is on the Tether situation.
In short, tether is a stablecoin that is supposed to be backed by actual usd reserves 1:1, that is used on exchanges to trade Bitcoin and other stuff.
Meaning that in practical terms, people go:
Usd -> Tether -> Bitcoin when buying and the other way around when selling.
Tether is owned by the exchange Bitfinex.

What the critics say is that Tether isn’t at all backed by usd 1:1.
This seems to be a fact once you dig a bit, which seems only logical once you think there are 63 billion tethers in circulation.
This seems fairly worrisome once you read the terms of service that state:
Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.
https://tether.to/legal/

The underlying thesis/risk is that Tether (Tether is connected to Bitfinex) is used for a bunch of price manipulation on BTC.
Ie: BTC is down? Issue millions of tether out of thin air and buy BTC to prop up the price.

For more digging:
This guy/gal has been on tether since 2017 or so https://twitter.com/bitfinexed?s=21

A simple explanation of how the above works

https://doomberg.substack.com/p/a-crypt ... -of-dreams

Other fun reading from the same blog

https://doomberg.substack.com/p/coin-printer-go-brrr
https://doomberg.substack.com/p/instability-coins

On El Salvador
https://doomberg.substack.com/p/el-salv-a-door

Qazwer
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Re: Bitcoin on the rise

Post by Qazwer »

I read tether like fractional reserve bank. So I googled that and found that was exactly the concept. So you might want to consider tether like a bank prior to federal deposit insurance. So it is a lot about the confidence the depositors have in it. If there is ever a run on the bank, make sure you are the first one out.

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Seppia
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Re: Bitcoin on the rise

Post by Seppia »

Couple of issues with that:
1/ tether doesn’t claim they’re a fractional reserve bank. They claim they’re 100% backed. If they are not, it’s a problem.
2/ tether won’t get their reserves audited and the only thing they released is a laughably vague statement. https://www.coindesk.com/tether-first-r ... eport-usdt
3/ banks are heavily regulated and there’s a certain level of transparency. Tether operates in a vastly unregulated environment and this may change in the future https://www.nasdaq.com/articles/us-fed- ... 2021-06-25

They have been found to lie repeatedly about their reserves https://ag.ny.gov/sites/default/files/2 ... signed.pdf (my favorite part is where they had no bank account anywhere but still managed to issue 400M of tethers)

This blog post is also great https://www.singlelunch.com/2021/05/19/ ... zi-scheme/

So I personally would not be very comfortable with equating Tether lack of reserves to a fractional reserve bank like JPM

Qazwer
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Re: Bitcoin on the rise

Post by Qazwer »

They might not call themselves a fractional reserve bank, but they are acting like one. You have to consider them like a fractional reserve bank from the 1800’s in the US. There was state currency. US dollars were not the only one until post Civil War. There were intermittent bank runs. There were intermittent state regulations not always enforced about any concept of auditing. Hence what I meant they are acting like a fractional reserve bank prior to federal insurance.

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Seppia
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Re: Bitcoin on the rise

Post by Seppia »

Oh ok. I would consider this suboptimal from a user perspective.

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giskard
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Re: Bitcoin on the rise

Post by giskard »

Seppia wrote:
Sun Jun 27, 2021 6:47 pm
I am curious what the opinion of the BTC fans here is on the Tether situation.

...

What the critics say is that Tether isn’t at all backed by usd 1:1.
This seems to be a fact once you dig a bit, which seems only logical once you think there are 63 billion tethers in circulation.
The Tether situation is concerning but it's unclear how things might eventually play out.

Tether is almost certainly doing something shady - why are more than half of their reserves "commercial paper" but nobody in the bond market has heard of them? I'm more inclined to believe that it has more to do with Chinese money avoiding capital controls than an outright scam. Or it could have started as a legitimate project, lost their reserves in covering up a hack/theft, then become co-opted by Chinese millionaires and billionaires moving money out of China. There definitely are redemptions from what I've read.

The fact is that most US based stable coin transactions, on ramps, DeFi applications are all using USDC coin issued by Circle. They are heavily audited. A LOT of the more trustworthy parts of the crypto industry have attempted to pre-emptively firewall themselves from Tether. Many other DeFi applications are using DAI which is algorithmically issued and is more than fully backed which can be verified on-chain.

Going back the unclear endgame: Tether has lost it's peg before and guess what happened? People dumped it and bought bitcoin, it caused a flash rally (https://www.youtube.com/watch?v=YPSP__YsUZY). IMO it's going to be very bad PR when Tether collapses, I'm mentally prepared for it and it makes me want to have less allocation to the space but it's been going on for years and probably will continue. It's going to damage things for a while and probably there will be a flash rally in bitcoin and ethereum and then everything will sell off hard in the aftermath. The whole situation sucks, but that's the fun of crypto.

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Seppia
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Re: Bitcoin on the rise

Post by Seppia »

Thanks for your reply

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Ego
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Re: Bitcoin on the rise

Post by Ego »

giskard wrote:
Mon Jun 28, 2021 12:00 am
IMO it's going to be very bad PR when Tether collapses, I'm mentally prepared for it and it makes me want to have less allocation to the space but it's been going on for years and probably will continue. It's going to damage things for a while and probably there will be a flash rally in bitcoin and ethereum and then everything will sell off hard in the aftermath. The whole situation sucks, but that's the fun of crypto.
One of the things I find fascinating about this space is how a particular event can have 180 degree opposed meanings to people who have different perspectives on what a particular crypto project is. When people think of it as an investment the Tether stuff is a disaster. When they think of it more like a country or a movement, it is the anti-fragile equivalent of a shock that strengthens the system.

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mouseyo22
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Re: Bitcoin on the rise

Post by mouseyo22 »

I don't trust it, though I don't blame people for falling into the pits. Even Mark Cuban got burned with his Titan coin and he's now calling for regulations to "define what a stable coin is and what collateralization is acceptable". I think when enough people lost money the government will step in to regulate or shut it down entirely.

According to Gemini Report, about 14% of U.S population owns crypto or 21.2 mil U.S adults. Out of these, 69% say they "buy and hold cryptocurrency for the long-term investment potential". Gemini also predicts that 14% to double within a year so we might have 1/3 of the U.S population buy and hold Bitcoin. It's an optimistic prediction but if it comes true I think it might be in the Fed's best interest to let the bubble grow big for 1-2 years before bursting it. The excess dollars they have printed out will be sucked into the Crypto bubble as it gets bigger and people use more leverage/margin trading. Ironically, the big anti-regulation/anti-government festival ends with people calling in the government and the Fed not losing much.

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Jean
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Re: Bitcoin on the rise

Post by Jean »

And how will thé fed burst thé Bubble?

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