Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[dhanson865]

Why would you want to convert large amounts of BTC into USD in the first place.

Because I can't pay my mortgage with bitcoin and I can't buy a car with it. My biggest need to spend funds is to items I can't use BTC to purchase.

For that matter 99.9% of the brick and mortar businesses won't take BTC in my metro area of ~1 million people.

I haven't found a single retailer that I want to buy from that will take my BTC so I have to convert it to USD to spend it.

But see I'm in the US, maybe for you in the EU it's easier to spend.

If I could spend BTC to pay my home mortgage or buy things off Amazon I'd have no reason to take the intermediary step of converting it to USD and I'd have no worry about the security issues I mentioned in my prior post.

Securing a wallet for online transactions and keeping it to myself isn't the hard part. The hard part is for me to turn it into something I can use to pay bills or buy stuff in the US. That is doable it just adds costs and risks that don't exist in a purely BTC transaction.

 

[ulrichard]

Because I can't pay my mortgage with bitcoin and I can't buy a car with it. My biggest need to spend funds is to items I can't use BTC to purchase.

I had to buy a used car, but then it worked wonderfully. There are a couple of car dealers that accept BTC, but unfortunately not in my country. I had a quick look at importing, but what I found was too discouraging. Is sure hope Tesla will accept BTC when my current car needs replacement. But I also hope it will last for a long time. So there should be enought time.

For that matter 99.9% of the brick and mortar businesses won't take BTC in my metro area of ~1 million people.

That may be the case now, but that can change sooner than you think:
Tim Draper On Bitcoin: 'In 5 Years If You Use Fiat Currency, They Will Laugh At You'

If I could spend BTC to pay my home mortgage or buy things off Amazon I'd have no reason to take the intermediary step of converting it to USD and I'd have no worry about the security issues I mentioned in my prior post.

You never heard of Purse ?

Securing a wallet for online transactions and keeping it to myself isn't the hard part. The hard part is for me to turn it into something I can use to pay bills or buy stuff in the US. That is doable it just adds costs and risks that don't exist in a purely BTC transaction.

I agree, the risky part is at the border. That is why I prefer businesses that acccept BTC directly.
As for paying bills, sometimes I use Pay Bills with Bitcoin & Load your BTC - VISA® debit card - Bitwala but only for EUR. The fees for CHF are too high at the moment. I would assume, a similar service should also exist for USD.

 

[dhanson865]

efer businesses that acccept BTC directly.
As for paying bills, sometimes I use Pay Bills with Bitcoin & Load your BTC - VISA® debit card - Bitwala but only for EUR. The fees for CHF are too high at the moment. I would assume, a similar service should also exist for USD.

My mortgage won't let me pay with a credit card. I can only use a checking account.

I use bitpay visa as the USD equivalent to your bitwala. And I can use it for Amazon and other random things that accept a Visa but I'd rather just pay with BTC directly if Amazon would take it.

As to purse.io I've heard of it and more bad than good. See Purse.IO robbed 0.82945693BTC from me by disabling my Purse account • r/Bitcoin as an example. Tons of stories like that on reddit about purse.io being a good way to lose money.

 

[Spidy]

Bitcoin Mining Now Consuming More Electricity Than 159 Countries

 

[dhanson865]

Bitcoin Mining Now Consuming More Electricity Than 159 Countries

Title gore.

To be clear it consumes more than the 159th country on the list. It does not consume more than hundreds of countries combined.

 

[pz1975]

Did Elon Musk Create Bitcoin? A Former SpaceX Employee Thinks So

Fun read.

 

[GoTslaGo]

Did Elon Musk Create Bitcoin? A Former SpaceX Employee Thinks So

Fun read.

Love the comments!

 

[ulrichard]

My mortgage won't let me pay with a credit card. I can only use a checking account.
I use bitpay visa as the USD equivalent to your bitwala.

I don't know what is special about a checking account. Maybe it is something that doesn't exist over here. But I can pay pretty much every bill with a SEPA wire transfer from bitwala.

 

[bkp_duke]

I don't know what is special about a checking account. Maybe it is something that doesn't exist over here. But I can pay pretty much every bill with a SEPA wire transfer from bitwala.

Wires are GOD AWEFUL expensive in the states. To the tune of $20-50 surcharge for every wire sent. This is why no one uses them here unless a payment MUST post within a few hours.

 

[dhanson865]

I don't know what is special about a checking account. Maybe it is something that doesn't exist over here. But I can pay pretty much every bill with a SEPA wire transfer from bitwala.

The bank that holds my mortgage literally won't accept any form of payment other than from a checking account. I'm sure if I called a service rep and said I wanted to pay off the loan I could use other methods but not for a monthly payment. I think the closest thing in the US system to what you mentioned is an ACH debit which is the same as writing a check minus the physical paper check. That's what they do when you tell them what checking account to use.

You can't do a wire transfer online from any bank in my city of about 1 million people. You can't just walk into the bank and do a wire transfer using a random clerk. They'd send you to a manager or senior teller to do something as unusual as a wire transfer. And as posted above they'd charge you for it (since it would require one or more employees to assist you in doing it, meaning there is labor to pay for time billed).

 

[Bebop]

Can someone explain the satoshi fees?

So for example for average speed it might like 250 satoshi/byte.

What I’m confused about is the byte part. What constitutes as a byte?

So if I transferred say $100. Does each dollar count as a byte? I know satoshi is the smallest increments of bitcoin.

 

[dhanson865]

Can someone explain the satoshi fees?

So for example for average speed it might like 250 satoshi/byte.

What I’m confused about is the byte part. What constitutes as a byte?

So if I transferred say $100. Does each dollar count as a byte? I know satoshi is the smallest increments of bitcoin.

the bytes are controlled by how many times your source of bitcoin has been chopped into smaller pieces. It's cheaper to send money out of a big block than using a bunch of smaller blocks.

as an example I sent the same amount of money several times and have these stats

258 bytes - fee: 0.00001806 BTC (7 per byte) 6,922.15 exchange rate - fee ~$0.13 (1 hour 48 minutes to confirm, I could have paid less fee since I didn't need it that quick)
617 bytes - fee: 0.00004326 BTC (7 per byte) 5,222.83 exchange rate - fee ~$0.23 (>2 days to confirm, I should have paid more that time, I'm not comfortable with that sort of delay)
257 bytes - fee: 0.00010836 BTC (42 per byte) 4,599.10 exchange rate - fee ~$0.50 (4 hours to confirm, very nice time to confirm, felt good)
258 bytes - fee: 0.00018576 BTC (72 per byte) 4,331.68 exchange rate - fee ~$0.81 (20 minutes to confirm, definitely paid too much fee, could have waited longer on a lower fee)

Because I was sending a fixed amount of USD, the amount of BTC was going down as the price per coin went up. But even with a sizeable change in BTC value the transaction size didn't change.

just random luck that the 617 byte transaction came from a inefficient set of chunks of my bitcoin. All 4 of those transactions were for the same amount in usable delivered funds. The only difference in each transaction was the exchange rate and the fee rate. I chose lower and lower transaction rates as I got more comfortable reading about bitcoin and watching the fees at Bitcoin Fees for Transactions | bitcoinfees.earn.com

Of course the downside is what happens if you guess too low and a transaction doesn't complete.

I have one in limbo right now that I tried 3 per byte. If I could go back in time I might have tried 5 instead. If I was sending the same transaction today I'd go back up to 42 per byte. Keep in mind that is a relative fee. 42 per byte with $10,000 BTC is roughly double 42 per byte at $5,000.

For the kind of transfer I'm doing I don't care if it takes hours but it'd be more comfortable if it was less than 24 hours.

Other people want to buy something in real time want the transaction to complete in seconds or minutes. To do that with BTC you'd have to pay much higher rates than I do. Something on the order of 150+ per byte.

Paying a low fee is a gamble, paying a fee too high is wasting money. And every time you send money you have to make that gamble one way or the other. And you will guess wrong (or be oblivious to the fees and let the software pick a higher number than is needed in most cases).

essentially the though process is

* Do I want to send funds
* Do I need it to go fast or can I let it be slow
* Set a fee rate to hopefully get the right speed
* Start a transaction
- (at this point you can see how many bytes it was, after you've committed)**
* Wait to see how long it takes

** If you want at that point or any time later you can do the math to see what your fees were compared to USD at the time.

As to how many dollars you can send in a byte, I don't think there is a fixed ratio. It just depends on how fragmented your BTC is.

Transaction fees - Bitcoin Wiki says a typical transaction is 500 bytes but I have no idea where they picked that number from.

 

[ClownMouth]

So it seems like futures will be available for Bitcoin starting Dec 18: http://www.cmegroup.com/notices/clearing/2017/12/Chadv17-468.pdf

Can someone who is well-versed in futures please help explain if purchases of futures contracts (either long or short) directly result in buying or selling of bitcoins. For example, I have read that market makers typically want to remain delta-neutral so they will buy/sell common stock to balance their exposure of calls/puts. Is this also the case with futures contracts? I appreciate the help and apologize if I am using incorrect terminology - hopefully I'm at least getting my question across (I do not expect anyone to be able to tell me whether bitcoin overall is going up or down). Thanks.

 

[holysmoke17]

So it seems like futures will be available for Bitcoin starting Dec 18: http://www.cmegroup.com/notices/clearing/2017/12/Chadv17-468.pdf

Can someone who is well-versed in futures please help explain if purchases of futures contracts (either long or short) directly result in buying or selling of bitcoins. For example, I have read that market makers typically want to remain delta-neutral so they will buy/sell common stock to balance their exposure of calls/puts. Is this also the case with futures contracts? I appreciate the help and apologize if I am using incorrect terminology - hopefully I'm at least getting my question across (I do not expect anyone to be able to tell me whether bitcoin overall is going up or down). Thanks.

These futures are cash settled so they won't require any direct buying/selling of bitcoins.

 

[bkp_duke]

Bitcoin futures. . . . that's like betting on a bet on a bet.

 

[anticitizen13.7]

I have relatives who know nothing about crypto or technology who are now desperate to buy bitcoin because of FOMO.

 

[Bebop]

I have relatives who know nothing about crypto or technology who are now desperate to buy bitcoin because of FOMO.

Well they will miss out in general because only 21mil will only ever be minted. Literally about enough for everyone in New York City to have 1 and no where else on the planet to put it in perspective. But they may miss out at the current price...

the fact that the CME will be listing futures and other institutional investment firms plan on getting into bitcoin once that launches after December 18th. Thus a big influx of institutional money going into bitcoin, thus increasing liquidity, increasing price value, decreasing the overall limited supply.

Christmas Surge? Possibly...

 

[Ulmo]

I threw in a "play money" amount a few years ago, some in BTC and some in ETH. I read a good amount about both of them, but I have no clue what's going to happen. I just cashed out 25% of my holdings for a nice 4x my original investment. Now I feel much better that even if they absolutely bust, I made a good payoff, and at the same time I can continue to root for their appreciation.

Perfect. Long term holders can do this: get >2x returns on their entire initial input with only a partial exit and yet keep a significant portion still in for super long times. This is still possible with Bitcoin (BTC) on a multi-year trajectory for the initial partial exit and again for the super-long-term holdings. I don't see Bitcoin being replaced within a decade, and predict that it will be about 15 to 20 years before better cryptocurrencies start to make it drop at all. There will be many huge valleys to spook you, some with teeth, but none lasting until something better comes along.

This strategy will NOT work with sub-year holdings and/or active trading; just get it and hold for super long times.

I have relatives who know nothing about crypto or technology who are now desperate to buy bitcoin because of FOMO.

FOMO is bad, but if they made the mistake of FOMO, tell them to hold 5 years and not freak out during the many drops. Then, at that point, get out more than their initial input and then hold on to the rest, like I just posted. This thing will not be like that forever, but it still has long term life in it as of today, and for a while yet.

===

FUD will be strong; ignore it. Only in about a decade start looking at super smart logic and facts; until then, don't even bother with the naysayers at all.

Long term drops can be:

1. Better cryptocurrency (unlikely for a long while)
2. Better cryptocurrency + medium length hashing 51% attack
3. Sustained long term hashing 51% attack

The last two drops (#2, #3) will be mitigated by developers, so even those are hold situations as long as you already got your 2x initial partial exit out before (and maybe even if not). The first drop (#1) is one that will be obvious as it is happening, and you'll still have time, since most the world will still be adopting Bitcoin and the price will still be going up while the new better cryptocurency is coming into focus, and during the transition both will be viable. Only dumb people who don't pay attention will be caught bad on that one.

There's a low probability I'm wrong about something above. In a probabilistic strategy, if I were you, I'd just stick to the above plan and take the losses in the low probability I'm wrong, but that's me, so whatever.

 

[neroden]

This is looking like a pretty serious tulip bubble. Obviously people who got in early and get out in time will do fine, but people getting in NOW?!?! Nope.

There's a fundamental problem with Bitcoin's design -- the maximum number of bitcoins mineable -- which, like any deflationary currency, makes it nonfunctional as a medium of exchange. (It is "splittable" but since fees and overhead go *up* with tinier subdivisions it gets less and less usable.) As a store of value, it suffers from the hoarding problem. I've watched the demonetization of other non-government-backed currencies with better designs.

Bitcoin was designed by people who don't understand what the fundamental characteristics of a currency *are* (which is, to be fair, most people). The most likely fate for Bitcoin is something like gold, except without the mining and without the underlying electronics & jewelry demand.

 

[ZeApelido]

Perfect. Long term holders can do this: get >2x returns on their entire initial input with only a partial exit and yet keep a significant portion still in for super long times. This is still possible with Bitcoin (BTC) on a multi-year trajectory for the initial partial exit and again for the super-long-term holdings. I don't see Bitcoin being replaced within a decade, and predict that it will be about 15 to 20 years before better cryptocurrencies start to make it drop at all. There will be many huge valleys to spook you, some with teeth, but none lasting until something better comes along.

With recent highs giving me 20x returns (I put in July 2016, 1/2 in btc, 1/2 in ether), I've now sold 75%. Simple diversification. But the 25% still in will be for longer term (unless massive appreciation happens again). Now I would like to take this "play money" and invest across other riskier assets. Thoughts on where to explore?