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Bitcoin - The Big Short?


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Bitcoin - The Big Short?

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  #1 (permalink)
london
 
 
Posts: 166 since Jan 2012
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So this Bitcoin sounds like it will solve the worlds problems created with fixed fractional banking and fiat currency.

Interested, I look in to Bitcoin. The first thing that hits home is the fragmented market place of various exchanges. Immediately I think of arbitrage. The spreads seem ridiculously wide between platforms:

https://bitcoinaverage.com/

https://bitcoin-analytics.com/ (click on arbatrage - 2nd tab top left)

However it seems the market is 'frontier' at best, and the liquidity will not support the volume necessary to make it worth while. Feel free to disagree....

So how about trading or investing?

No point in trading - there are enough markets already right!

How about investment?

The market will be limited to 21 million bitcoins:



It would seem, they have already 'made' half the supply we will see.

Who accepts these bitcoins?

https://en.bitcoin.it/wiki/Trade

Basically, a few rinky dink retailers you've probably never heard of.

This leaves bitcoin as a speculative play as you really cant do much with them. With 50% of the balance already in circulation, and no one really accepting them - other than i-net nerds, where's the value beyond novelty?

How can I short? The 'exchanges' dont seem to allow short selling?

What am I missing?

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  #3 (permalink)
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Use the existing thread please:



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  #4 (permalink)
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@TheDude,

Now that I have created a new subforum on the site for Bitcoin Trading (expanding from it's single thread previously), I have re-opened this thread if you wish to continue your posts.

https://futures.io/bitcoin-trading/

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  #5 (permalink)
Pittsburgh, Pennsylvania
 
 
Posts: 563 since Jan 2013
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The big unknown with bitcoin is when/if the US government is going to outlaw it. And that is more a when than an if. It could be pretty much anytime. Now the bitcoin trading seems to be moving to China, so although a US ban (for retailers) would cause a huge drop in price, I think it would somehow recover and keep going on, but on a much lower level.
The security is still so complicated that I don't see Average Joe using it (without being ripped off) anytime soon. Also volatility is so high, that it is still a specualtion/investment vehicle than a currency. Until volatility dies down it can't function as a currency well....

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  #6 (permalink)
Pittsburgh, Pennsylvania
 
 
Posts: 563 since Jan 2013
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For bitcoin newbies, the best source of info and answers would be Reddit's bitcoin subforum. On Mondays, you can ask any kind of basic question and they will answer it:

Moronic Monday: Ask all your bitcoin Questions! : Bitcoin

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  #7 (permalink)
Pittsburgh, Pennsylvania
 
 
Posts: 563 since Jan 2013
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And this is why I don't trust bitcoin. How to lose all your savings even with using 2 steps authorization:

I just lost 301BTC ($70,000+) on blockchain.info. USE 2FA / Cold wallets! : Bitcoin

"Today, as I was halfway through my workout at the gym, I get a notification on my Android phone: "You have transferred 301 BTC to 1HJ3tECDZA4Zpgux1qK9AXKpRYZWjXXK4"
Ugh. My entire savings gone. I put nearly every paycheck into buying bitcoins through Coinbase - not one of the early gpu miners =(
I had used 2 factor authentication with Coinbase, but did not have it enabled for blockchain.info, where I had transferred the coins to."

An analogy with banking:

"Think about how much a lot of you hate banks for a moment. Now pretend your bank no longer has FDIC insurance, has only been in existance for a couple of years, and there's no way to dispute a transaction. That's what an online wallet is.

There's literally nothing you can do if your account gets hacked, the online wallet service goes bankrupt (perhaps due to legal trouble or if their whole infatructure gets hacked/compromised somehow), or they simply decide they can make a fuckton of money by running off with everyone's coins."

-----------------------------------------------

The higher BTC's value is, the bigger the incentive for hackers to mess with your account.

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  #8 (permalink)
london
 
 
Posts: 166 since Jan 2012
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Pedro40 View Post
And this is why I don't trust bitcoin. How to lose all your savings even with using 2 steps authorization:

I just lost 301BTC ($70,000+) on blockchain.info. USE 2FA / Cold wallets! : Bitcoin

"Today, as I was halfway through my workout at the gym, I get a notification on my Android phone: "You have transferred 301 BTC to 1HJ3tECDZA4Zpgux1qK9AXKpRYZWjXXK4"
Ugh. My entire savings gone. I put nearly every paycheck into buying bitcoins through Coinbase - not one of the early gpu miners =(
I had used 2 factor authentication with Coinbase, but did not have it enabled for blockchain.info, where I had transferred the coins to."

An analogy with banking:

"Think about how much a lot of you hate banks for a moment. Now pretend your bank no longer has FDIC insurance, has only been in existance for a couple of years, and there's no way to dispute a transaction. That's what an online wallet is.

There's literally nothing you can do if your account gets hacked, the online wallet service goes bankrupt (perhaps due to legal trouble or if their whole infatructure gets hacked/compromised somehow), or they simply decide they can make a fuckton of money by running off with everyone's coins."

-----------------------------------------------

The higher BTC's value is, the bigger the incentive for hackers to mess with your account.

Good points.

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  #9 (permalink)
Exeter, UK
 
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Bitcoin more than doubles in value over a month | Mail Online

thought this article may interest you. if it starts becoming more widely accepted then the only way is up because of the lack of new supply.

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  #10 (permalink)
Kyoto, Japan
 
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suko's Avatar
 
Posts: 1,290 since Oct 2013
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Fascinating interview with Brad Rotter on Bitcoin.

Trend Following with Michael Covel: Ep. 177: Brad Rotter Interview with Michael Covel on Trend Following Radio

In his opinion it's too late for governments to stop it, because it is basically the same thing as the Internet.
Also, the German government has now authorized it for use in some kinds of payments and Chinese Google
BaiDu is now accepting payments in it. Which is why it's skyrocketed.

Rotter thinks it will go up parity with the dollar, retrench and then head up further as "the biggest
financial instrument in our lifetime." hmmmmmm

Then he says it's all about finding a way to secure your Bitcoins, which is why he's investing in Net
security companies.

So maybe the smart money Bitcoin play is picks'n'shovels?

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