Who’s Buying Bitcoin?

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watchnerd
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Re: Who’s Buying Bitcoin?

Post by watchnerd » Sat Jan 18, 2020 9:51 pm

Enganerd wrote:
Sat Jan 18, 2020 8:57 pm


Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold.
Certainly this was true before we had gold ETFs.

I'm not sure I'd agree now.
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beehivehave
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Re: Who’s Buying Bitcoin?

Post by beehivehave » Sat Jan 18, 2020 10:09 pm

am wrote:
Sat Jan 18, 2020 5:18 pm
beehivehave wrote:
Sat Jan 18, 2020 2:55 pm
Digital gold? Twice cursed. Scarce and rare? So far.
The tulip mania lasted over 40 years.
Bernie Madoff's scheme lasted over 15 years.
Bitcoin is about 10 years old.
Bitcoin is well known and popular all over the world with thousand of coins traded every day.
Thousands of coins sold every day is not very many, considering there is a sucker born every minute.

TomCat96
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Re: Who’s Buying Bitcoin?

Post by TomCat96 » Sat Jan 18, 2020 11:00 pm

A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.

Rwsawbones
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Re: Who’s Buying Bitcoin?

Post by Rwsawbones » Sun Jan 19, 2020 4:20 am

Bitcoins are useful for paying ransom when a large institutions computer system has been hacked especially in health care such as the British National Heath Service. They are also useful in certain large drug deals so they clearly can be handy but Unlike tulips they are not a thing of beauty.

I am not a finance professional, nor a banking or legal professional so you need to take my views with a grain of salt and seek advice from appropriate professionals

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Wiggums
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Re: Who’s Buying Bitcoin?

Post by Wiggums » Sun Jan 19, 2020 5:39 am

The IRS classifies all cryptocurrencies as property. Buying Bitcoin is not a taxable event. ... If you "sell" some Bitcoin at a profit that you purchased within the last year, you will have to report short term capital gains on your tax return and pay ordinary income tax rates.

Not very tax friendly...

am
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Re: Who’s Buying Bitcoin?

Post by am » Sun Jan 19, 2020 10:04 pm

Enganerd wrote:
Sat Jan 18, 2020 8:57 pm
EnjoyIt wrote:
Sat Jan 18, 2020 2:40 pm
I read the article and honestly find the discussion very interesting. First things first it comes from a website that is named after the creator of bitcoin. We can only assume that anything coming from there will be 100% pro bitcoin propaganda. After all it is imperative to keep bitcoin disciples belief strong so that they can continue to evangelize. This can be clearly seen in the comments section.

There was also a comment in the article regarding improved bitcoin fundamentals. That makes absolutely no sense because there are no fundamentals. The value of the coin exists only in the minds of its believers. There is nothing backing up said coin. The US dollar is backed by the US government and the productivity of its people. This is a huge and massive difference between Bitcoin and Fiat currency. On the other hand Venezuelan Bolivar is backed by the Venezuelan government which is almost worthless. Yeah, fiat currency isn’t perfect.

Next there were continued discussions about bitcoin being a currency though I have yet to see any reasonable transactions happening with bitcoin. It does not function as a currency at this moment or 6 years ago when that article was written. That may change but for now it is an item held and to be sold to someone willing to buy it for a higher price. Kind of like a collectible. 100% speculation.

Bitcoin has a great sales pitch. All fiat fails eventually and we got this thing that is digital and can’t be tracked (which is false) that no government can debase through quantitative easing. This really appeals to those who are tech savvy because of its technological coolness. Add in a drop of FOMO and we can be seeing another rally. Price really may go up and up and up before people realize how little use a bitcoin actually has.

To this day I don’t see any real examples of it being anything more than a collectible. No different than some rare weapon in World of Warcraft or similar.

The real time to buy bitcoin was when no one knew about it. Now everyone knows what it is. The only people left buying are the evangelists and the few people they get to convince/convert into the Bitcoin cult how long will that last? As they say the market can be irrational far longer than one can stay solvent. This is a great example. Luckily, I don’t need to speculate in order to get wealthy. I can observe the show from the sidelines. The show has been very entertaining this far.
I agree it is 100% propaganda and not particularly good propaganda either. I do think the speculation run thought experiment concisely explains why proponents are so confident it is under valued. I did find the "Thiers' Law Good Money Drives out the Bad" section and the reference to the Greshan's Law paper interesting http://www.columbia.edu/~ram15/grash.html.

There is a massive difference between fiat and btc. It is funny that the bullish takes for btc discuss the fact that it is scarce and is too slow/ inefficient for small transaction is a feature and not a bug. But the btc white paper plainly states it is to be used as a currency for transactions.

Anyways now it is looked at more as digital gold. Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold. Gold's huge advantage is that its religion is old as history itself so although buying gold is still speculating I doubt the price has much of a chance of going to zero in my lifetime but also lower chance of massive returns. Btc on the other hand I could seeing going to zero or considerably higher than it is currently. And I could see btc surviving much longer than our lifetimes.

My question is what criticisms apply to the way btc is valued but do not apply to gold's valuation (higher than industrial use). Obviously gold has a long history of being valued but that in itself doesn't address criticisms such as "there is no inherent value, it is only valued at what other's will pay for it."

The proponents even have the data miners :D but I admit it is pretty interesting how effective this stock to flow model for btcs history and how close it is to gold. See the chart about halfway down, I tried to insert the image but it has too many pixels.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25.
Interesting paper. 55k per bitcoin MAy 2020. Why isn’t the market pricing this in?

EnjoyIt
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Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Sun Jan 19, 2020 10:15 pm

Enganerd wrote:
Sat Jan 18, 2020 8:57 pm
EnjoyIt wrote:
Sat Jan 18, 2020 2:40 pm
I read the article and honestly find the discussion very interesting. First things first it comes from a website that is named after the creator of bitcoin. We can only assume that anything coming from there will be 100% pro bitcoin propaganda. After all it is imperative to keep bitcoin disciples belief strong so that they can continue to evangelize. This can be clearly seen in the comments section.

There was also a comment in the article regarding improved bitcoin fundamentals. That makes absolutely no sense because there are no fundamentals. The value of the coin exists only in the minds of its believers. There is nothing backing up said coin. The US dollar is backed by the US government and the productivity of its people. This is a huge and massive difference between Bitcoin and Fiat currency. On the other hand Venezuelan Bolivar is backed by the Venezuelan government which is almost worthless. Yeah, fiat currency isn’t perfect.

Next there were continued discussions about bitcoin being a currency though I have yet to see any reasonable transactions happening with bitcoin. It does not function as a currency at this moment or 6 years ago when that article was written. That may change but for now it is an item held and to be sold to someone willing to buy it for a higher price. Kind of like a collectible. 100% speculation.

Bitcoin has a great sales pitch. All fiat fails eventually and we got this thing that is digital and can’t be tracked (which is false) that no government can debase through quantitative easing. This really appeals to those who are tech savvy because of its technological coolness. Add in a drop of FOMO and we can be seeing another rally. Price really may go up and up and up before people realize how little use a bitcoin actually has.

To this day I don’t see any real examples of it being anything more than a collectible. No different than some rare weapon in World of Warcraft or similar.

The real time to buy bitcoin was when no one knew about it. Now everyone knows what it is. The only people left buying are the evangelists and the few people they get to convince/convert into the Bitcoin cult how long will that last? As they say the market can be irrational far longer than one can stay solvent. This is a great example. Luckily, I don’t need to speculate in order to get wealthy. I can observe the show from the sidelines. The show has been very entertaining this far.
I agree it is 100% propaganda and not particularly good propaganda either. I do think the speculation run thought experiment concisely explains why proponents are so confident it is under valued. I did find the "Thiers' Law Good Money Drives out the Bad" section and the reference to the Greshan's Law paper interesting http://www.columbia.edu/~ram15/grash.html.

There is a massive difference between fiat and btc. It is funny that the bullish takes for btc discuss the fact that it is scarce and is too slow/ inefficient for small transaction is a feature and not a bug. But the btc white paper plainly states it is to be used as a currency for transactions.

Anyways now it is looked at more as digital gold. Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold. Gold's huge advantage is that its religion is old as history itself so although buying gold is still speculating I doubt the price has much of a chance of going to zero in my lifetime but also lower chance of massive returns. Btc on the other hand I could seeing going to zero or considerably higher than it is currently. And I could see btc surviving much longer than our lifetimes.

My question is what criticisms apply to the way btc is valued but do not apply to gold's valuation (higher than industrial use). Obviously gold has a long history of being valued but that in itself doesn't address criticisms such as "there is no inherent value, it is only valued at what other's will pay for it."

The proponents even have the data miners :D but I admit it is pretty interesting how effective this stock to flow model for btcs history and how close it is to gold. See the chart about halfway down, I tried to insert the image but it has too many pixels.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25.
For someone who understands that bitcoin is a speculative play, I wonder, who are you trying to convince otherwise is it you or the rest of us.

I have a feeling even owning a tiny amount of bitcoin is enough to get one to start becoming evangelical. It is like playing fantasy football and having the quarterback that is playing against your home team. You end up rooting against your home team in the hopes of winning $100.

This is one of the reasons I don’t even own $100 in bitcoin. My mind is to simple and I don’t want to risk it going astray.

Enganerd
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Re: Who’s Buying Bitcoin?

Post by Enganerd » Mon Jan 20, 2020 8:14 am

EnjoyIt wrote:
Sun Jan 19, 2020 10:15 pm
For someone who understands that bitcoin is a speculative play, I wonder, who are you trying to convince otherwise is it you or the rest of us.

I have a feeling even owning a tiny amount of bitcoin is enough to get one to start becoming evangelical. It is like playing fantasy football and having the quarterback that is playing against your home team. You end up rooting against your home team in the hopes of winning $100.

This is one of the reasons I don’t even own $100 in bitcoin. My mind is to simple and I don’t want to risk it going astray.
You nailed it. I am friends with successful, persuasive, and intelligent btc proponents. In our conversations I am always the skeptic. I now own some btc, and I still take the skeptic role with them. However, when I read btc threads on bogleheads I find myself thinking I have had some of these same criticisms and have come to think they are not as strong as my first intuition. So now I find myself on the other side of the argument on this forum.

I don't fool myself into believing I have a crystal ball and am honest that it is pure speculation. But I also don't mind pointing out what appears to be flawed reasoning on both sides of the btc bull or bear conversations.

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watchnerd
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Re: Who’s Buying Bitcoin?

Post by watchnerd » Mon Jan 20, 2020 10:50 am

I bought $1000 of Bitcoin about 2 years ago as a joke on my nephews.

We regularly review its crazy state together.

I still think it's a joke.
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bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Mon Jan 20, 2020 8:46 pm

am wrote:
Sun Jan 19, 2020 10:04 pm
Enganerd wrote:
Sat Jan 18, 2020 8:57 pm
EnjoyIt wrote:
Sat Jan 18, 2020 2:40 pm
I read the article and honestly find the discussion very interesting. First things first it comes from a website that is named after the creator of bitcoin. We can only assume that anything coming from there will be 100% pro bitcoin propaganda. After all it is imperative to keep bitcoin disciples belief strong so that they can continue to evangelize. This can be clearly seen in the comments section.

There was also a comment in the article regarding improved bitcoin fundamentals. That makes absolutely no sense because there are no fundamentals. The value of the coin exists only in the minds of its believers. There is nothing backing up said coin. The US dollar is backed by the US government and the productivity of its people. This is a huge and massive difference between Bitcoin and Fiat currency. On the other hand Venezuelan Bolivar is backed by the Venezuelan government which is almost worthless. Yeah, fiat currency isn’t perfect.

Next there were continued discussions about bitcoin being a currency though I have yet to see any reasonable transactions happening with bitcoin. It does not function as a currency at this moment or 6 years ago when that article was written. That may change but for now it is an item held and to be sold to someone willing to buy it for a higher price. Kind of like a collectible. 100% speculation.

Bitcoin has a great sales pitch. All fiat fails eventually and we got this thing that is digital and can’t be tracked (which is false) that no government can debase through quantitative easing. This really appeals to those who are tech savvy because of its technological coolness. Add in a drop of FOMO and we can be seeing another rally. Price really may go up and up and up before people realize how little use a bitcoin actually has.

To this day I don’t see any real examples of it being anything more than a collectible. No different than some rare weapon in World of Warcraft or similar.

The real time to buy bitcoin was when no one knew about it. Now everyone knows what it is. The only people left buying are the evangelists and the few people they get to convince/convert into the Bitcoin cult how long will that last? As they say the market can be irrational far longer than one can stay solvent. This is a great example. Luckily, I don’t need to speculate in order to get wealthy. I can observe the show from the sidelines. The show has been very entertaining this far.
I agree it is 100% propaganda and not particularly good propaganda either. I do think the speculation run thought experiment concisely explains why proponents are so confident it is under valued. I did find the "Thiers' Law Good Money Drives out the Bad" section and the reference to the Greshan's Law paper interesting http://www.columbia.edu/~ram15/grash.html.

There is a massive difference between fiat and btc. It is funny that the bullish takes for btc discuss the fact that it is scarce and is too slow/ inefficient for small transaction is a feature and not a bug. But the btc white paper plainly states it is to be used as a currency for transactions.

Anyways now it is looked at more as digital gold. Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold. Gold's huge advantage is that its religion is old as history itself so although buying gold is still speculating I doubt the price has much of a chance of going to zero in my lifetime but also lower chance of massive returns. Btc on the other hand I could seeing going to zero or considerably higher than it is currently. And I could see btc surviving much longer than our lifetimes.

My question is what criticisms apply to the way btc is valued but do not apply to gold's valuation (higher than industrial use). Obviously gold has a long history of being valued but that in itself doesn't address criticisms such as "there is no inherent value, it is only valued at what other's will pay for it."

The proponents even have the data miners :D but I admit it is pretty interesting how effective this stock to flow model for btcs history and how close it is to gold. See the chart about halfway down, I tried to insert the image but it has too many pixels.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25.
Interesting paper. 55k per bitcoin MAy 2020. Why isn’t the market pricing this in?
Really good question. I wish I knew why. I know this guy has a lot riding on this prediction. My gut tells me that in such a young market, the sell-side pressure after the halving will be reduced while demand continues to be unknown. IF demand is stable price should go up.

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nisiprius
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Re: Who’s Buying Bitcoin?

Post by nisiprius » Mon Jan 20, 2020 9:10 pm

Claims that Starbucks and Whole Foods "accept bitcoin" seem to be based on the existence of SPEDN, one of the latest in an endless chain of payment processing services and apps that allow bitcoin owners to sell their bitcoin on an (centralized, trust-based) exchange for dollars, and then pay them to merchants who are willing to take dollars and willing to integrate their systems with the conversion service. The merchants are not accepting bitcoin or placing any faith in bitcoin, but certainly, if as many merchants accepted SPEDN as now accept Discover, it would make bitcoin close to being being useful for everyday personal transactions.

But as I write this, the SPEDN app has received a grand total of forty reviews on the App Store, and when I read all of them, they are either diffuse, generic praise with no specifics by people who do not say they have bought anything with it ("Simple and awesome! Love the app! Love what they’re doing. It’s worth a shot!")... or else they are like these. Not one of the forty reviewers reports being able to buy anything at Starbucks or at Whole Foods.
Works but doesn’t work
This payment method has worked at Nordstrom and Top Golf! That’s awesome. However, I went to Alamo Drafthouse and they wouldn’t take it. They were also pretty rude about it there. I wish they had grocery stores on here, that’s the most important thing for me. If they do add them and they actually accept Spedn as a form of payment then I could rate this app 5 stars.
Vendors can’t accept it
Both Alamo Drafthouse and Regal Cinema are listed as accepted vendors, I tried to use this to pay with bitcoin there and it didn’t work. They say that the app works like Apple Pay but that is false, it brings up a barcode that when the cashier scans it nothing happens. I now have bitcoin sitting in this app that I can do nothing with. They also took Whole Foods off the app. Only giving two stars because I am hoping that they will fix it.
No answers, horrible customer service
I asked several questions, but so far did not receive any answers. Is there even a customer service working? I don’t see Starbucks or Whole Foods as vendors, how can I pay with SPEDN app at these vendors?
Lots Of Hype
But not many merchants. Nothing new. I was really excited and couldnt wait to get this app. Was disappointed to see the selection.
Developer Response
Hi Pdx, sorry to disappoint you! Flexa’s only a few months old, but we’re bringing more merchants onto the network all the time—hopefully we’ll have something for you when you check back. In the meantime, please feel free to email help@spedn.io with any suggestions on where you’d like to see Flexa accepted.
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bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Mon Jan 20, 2020 9:27 pm

TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
This is the best post on Bitcoin within this thread. If I may piggyback on a few points:

1. I concede that Bitcoin is speculative. Money in your pocket is based on how much the next guy will pay you. Is this different from the price you get selling a share of $%&?

3. It's Bitcoin not s***coins. This is important for Bogleheads. There is no S&P 500 for investing in cryptocurrency. Invest in Bitcoin or nothing. Indexing into "cryptocurrency" doesn't work the same as for the stock market.

7. Yes, whatever Bitcoin is we don't understand. It's importance resonated with me to put some skin in the game, and I'm definitely ok with whatever happens.

EnjoyIt
Posts: 3554
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Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Mon Jan 20, 2020 9:33 pm

bitdocmd wrote:
Mon Jan 20, 2020 8:46 pm
am wrote:
Sun Jan 19, 2020 10:04 pm
Enganerd wrote:
Sat Jan 18, 2020 8:57 pm
EnjoyIt wrote:
Sat Jan 18, 2020 2:40 pm
I read the article and honestly find the discussion very interesting. First things first it comes from a website that is named after the creator of bitcoin. We can only assume that anything coming from there will be 100% pro bitcoin propaganda. After all it is imperative to keep bitcoin disciples belief strong so that they can continue to evangelize. This can be clearly seen in the comments section.

There was also a comment in the article regarding improved bitcoin fundamentals. That makes absolutely no sense because there are no fundamentals. The value of the coin exists only in the minds of its believers. There is nothing backing up said coin. The US dollar is backed by the US government and the productivity of its people. This is a huge and massive difference between Bitcoin and Fiat currency. On the other hand Venezuelan Bolivar is backed by the Venezuelan government which is almost worthless. Yeah, fiat currency isn’t perfect.

Next there were continued discussions about bitcoin being a currency though I have yet to see any reasonable transactions happening with bitcoin. It does not function as a currency at this moment or 6 years ago when that article was written. That may change but for now it is an item held and to be sold to someone willing to buy it for a higher price. Kind of like a collectible. 100% speculation.

Bitcoin has a great sales pitch. All fiat fails eventually and we got this thing that is digital and can’t be tracked (which is false) that no government can debase through quantitative easing. This really appeals to those who are tech savvy because of its technological coolness. Add in a drop of FOMO and we can be seeing another rally. Price really may go up and up and up before people realize how little use a bitcoin actually has.

To this day I don’t see any real examples of it being anything more than a collectible. No different than some rare weapon in World of Warcraft or similar.

The real time to buy bitcoin was when no one knew about it. Now everyone knows what it is. The only people left buying are the evangelists and the few people they get to convince/convert into the Bitcoin cult how long will that last? As they say the market can be irrational far longer than one can stay solvent. This is a great example. Luckily, I don’t need to speculate in order to get wealthy. I can observe the show from the sidelines. The show has been very entertaining this far.
I agree it is 100% propaganda and not particularly good propaganda either. I do think the speculation run thought experiment concisely explains why proponents are so confident it is under valued. I did find the "Thiers' Law Good Money Drives out the Bad" section and the reference to the Greshan's Law paper interesting http://www.columbia.edu/~ram15/grash.html.

There is a massive difference between fiat and btc. It is funny that the bullish takes for btc discuss the fact that it is scarce and is too slow/ inefficient for small transaction is a feature and not a bug. But the btc white paper plainly states it is to be used as a currency for transactions.

Anyways now it is looked at more as digital gold. Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold. Gold's huge advantage is that its religion is old as history itself so although buying gold is still speculating I doubt the price has much of a chance of going to zero in my lifetime but also lower chance of massive returns. Btc on the other hand I could seeing going to zero or considerably higher than it is currently. And I could see btc surviving much longer than our lifetimes.

My question is what criticisms apply to the way btc is valued but do not apply to gold's valuation (higher than industrial use). Obviously gold has a long history of being valued but that in itself doesn't address criticisms such as "there is no inherent value, it is only valued at what other's will pay for it."

The proponents even have the data miners :D but I admit it is pretty interesting how effective this stock to flow model for btcs history and how close it is to gold. See the chart about halfway down, I tried to insert the image but it has too many pixels.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25.
Interesting paper. 55k per bitcoin MAy 2020. Why isn’t the market pricing this in?
Really good question. I wish I knew why. I know this guy has a lot riding on this prediction. My gut tells me that in such a young market, the sell-side pressure after the halving will be reduced while demand continues to be unknown. IF demand is stable price should go up.
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Mon Jan 20, 2020 9:54 pm

EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Mon Jan 20, 2020 10:25 pm

bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
So mining productions will he cut in half. Does that also mean that the cost of transactions will increase as well.

The supply is what is out there. There are currently over 18.17 million bitcoins in existence. With 1800 coins mined per day. The next halving will occurs after the next ~200k mined coins. At this point, most of the coins in existence have already been mined. A few extra coins will not change the supply side all that much. Halving it to 900/day will make a slight difference, but what will really happen is that miners will be making less coins through their efforts and will therefor want higher fees to process transactions which may very well decrease demand.

I hope you understand the total supply side of the equation before assuming that the next halving will automatically equal a higher price.

As for my comment about “manipulation scheme.” It refers to how the price was manipulated in 2017 causing the FOMO frenzy of buying before its collapse. Don’t you think there is a good chance someone will come up with another scheme? I think it is very plausible. The question remains is; will that scheme work and cause prices to rise and another FOMO frenzy or will it get caught early and cause the price to drop more?

Isn’t The Bitcoin show fun?

The time to buy was when no one knew about it. Back in the day when Silk Roads was around and maybe a few years after when only the tech people were involved. Today my 70 year old parents have an idea of what Bitcoin is.
Last edited by EnjoyIt on Wed Jan 22, 2020 5:38 pm, edited 1 time in total.

Plz
Posts: 116
Joined: Tue Oct 09, 2018 10:26 pm

Re: Who’s Buying Bitcoin?

Post by Plz » Tue Jan 21, 2020 5:34 am

bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
Do you think the halving is priced in?

Plz
Posts: 116
Joined: Tue Oct 09, 2018 10:26 pm

Re: Who’s Buying Bitcoin?

Post by Plz » Tue Jan 21, 2020 5:42 am

TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?

Topic Author
Jon_PassiveInvestor
Posts: 272
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Wed Jan 22, 2020 4:15 pm

Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?
Coinbase.com that's where I invest.
100% VTSAX in taxable and Roth IRA.

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Wed Jan 22, 2020 5:36 pm

Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?
I'm not TomCat but I would like to share some info. People who say bitcoin is not traceable are just repeating what others have told them. Bitcoin is indeed trackable. There are ways to make it harder and harder to track buy making many purchases, jumping through multiple crypto currencies and then returning back to bitcoin but I suspect with enough patience, personel and money those can eventually be tracked as well. Check out this article. It may help answer some of those questions.

https://www.sciencemag.org/news/2016/03 ... nd-bitcoin

A few years back Mt. Gox was considered the place to buy and hold your bitcoins that is now down because of embezzlement. Today Coinbase appears to be the choice location to purchase your bitcoins. I strongly suggest if you are to buy any, to keep your own wallet on your hard drive, backed up by a USB flash drive (at the very least.) Check to make sure both are working once every few months. It is suspected that there are over 3 million bitcoins lost. Gone forever because people can't access them.

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nisiprius
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Re: Who’s Buying Bitcoin?

Post by nisiprius » Wed Jan 22, 2020 5:59 pm

One of the things I find troublesome about bitcoin is the constantly shifting claims and descriptions made by enthusiasts. At one point it was flatly stated in many places that bitcoin is anonymous. I'm too lazy to look it up but, yeah, it really was.

But not by Satoshi himself:
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the "tape", is made public, but without telling who the parties were.
One presumably authoritative description says:
Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Who’s Buying Bitcoin?

Post by TomCat96 » Wed Jan 22, 2020 6:11 pm

nisiprius wrote:
Wed Jan 22, 2020 5:59 pm
One of the things I find troublesome about bitcoin is the constantly shifting claims and descriptions made by enthusiasts. At one point it was flatly stated in many places that bitcoin is anonymous. I'm too lazy to look it up but, yeah, it really was.

But not by Satoshi himself:
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the "tape", is made public, but without telling who the parties were.
One presumably authoritative description says:
Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy.

Bitcoin is both anonymous and completely non-anonymous. Fundamentally, because it is not centralized, no single authority has the ledger of all prior transactions. No single authority, not even Satoshi himself can declare it.

Therefore, a copy of the ledger must exist on every single node in the network. If you spent .05 bitcoin on a coffee, it is not enough for one node to record it. Otherwise, that node would be the central authority, capable of declaring your beverage transaction is legitimate. The recordation of your transaction must be propagated to all nodes. Every node must know and record that you spend .05 bitcoin on a coffee.

For that reason, it is difficult for bitcoin to scale. For that exact same reason, it is the complete opposite of anonymous. Not only does every node on the network know of your transaction, they know of all your prior transactions. They know of every single transaction that has ever taken place on the bitcoin network since its inception. How's that for anonymous?

Yet, no one knows the identity of who exactly bought the coffee. As long as you maintain this number and never reveal it to anyone, you are anonymous.

After all, the ledger simply records bitcoin in and bitcoin out of addresses. Nothing in the address per se is linked to your personal information, unless of course you so will it.

If for any reason your identity becomes linked to your address, then every transaction you have ever engaged in on the bitcoin ledger becomes traceable to you.

Such is the anonymity of bitcoin.



In the case of buying bitcoin, these vendors take care of everything for you, including managing your addresses, the private keys needed to send bitcoin to and fro. They also require all manner of personal information from you. If you have purchased bitcoin from these third parties like coinbase, you are not anonymous. The addresses they assign you are fundamentally linked to your personal information.

If you were for example to give me your bitcoin address, and I were to send you bitcoin, I could check all future activity from your bitcoin address, including any additional funds you receive and/or spend. The ledger is after all public.
Last edited by TomCat96 on Wed Jan 22, 2020 6:22 pm, edited 4 times in total.

Ferdinand2014
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Re: Who’s Buying Bitcoin?

Post by Ferdinand2014 » Wed Jan 22, 2020 6:12 pm

I would never "buy" bitcoin. Ever.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Who’s Buying Bitcoin?

Post by beehivehave » Wed Jan 22, 2020 6:12 pm

Who is buying bitcoin?
Mostly suckers.

EnjoyIt
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Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Wed Jan 22, 2020 6:31 pm

nisiprius wrote:
Wed Jan 22, 2020 5:59 pm
One of the things I find troublesome about bitcoin is the constantly shifting claims and descriptions made by enthusiasts. At one point it was flatly stated in many places that bitcoin is anonymous. I'm too lazy to look it up but, yeah, it really was.
Don't forget all those people claiming it was a currency and how it can be used for simple transactions like buying coffee. Now that story has changed also. Today the sales pitch is that it is "digital gold" or a "store of wealth."

Didn't you try buying coffee with Bitcoin a few years back?

TomCat96
Posts: 1040
Joined: Sun Oct 18, 2015 12:18 pm

Re: Who’s Buying Bitcoin?

Post by TomCat96 » Wed Jan 22, 2020 6:33 pm

Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?

Is there a mechanism which tracks all transactions since the beginning? Yes. The bitcoin blockchain ledger tracks every transaction since the beginning. In fact that is the mechanism that tells how much is in your account.

This website surfs the bitcoin blockchain:
https://www.blockchain.com/explorer

Is every bitcoin trackable? As far as I know, yes.

If you satisfy KYC requirements at exchanges, you are 100% trackable. Every transaction you do is trackable. Every bitcoin in and out of your account is trackable.

Why do people say bitcoin transactions are not trackable? Because as long as you never link your personal information with your bitcoin address there is no way of attributing that address to you. You lose this "anonymity" the moment you sign up with any party that has your personal information. You further lose your anonymity if for any reason your bitcoin addresses are linked to your personal information for any reason.

That being said, if you never link such information, you are untrackable. All anyone else knows is the funds going in and out of your bitcoin account. They don't know who it belongs to.

Seeing is believing. This website shows the top richest 100 bitcoin addresses.
For most of these, we do not know who they belong to.

Yet you can follow all their inflows and outflows for fun.
https://bitinfocharts.com/top-100-riche ... esses.html

This exercise will show how bitcoin is "not trackable"
Randomly chosen:
Bitcoin address: bc1q2raxkmk55p000ggfa8euzs9fzq7p4cx4twycx7
97th richest address. Currently contains 10000 bitcoin, market value around 85 million.

according to
https://bitinfocharts.com/bitcoin/addre ... 4cx4twycx7

On 5/1/2019, 10000 bitcoin were moved into it.
On 5/29 of the same year another 8 bucks USD was moved into it.
On 11/15/2019 about 10 cents was moved into it.
On 11/19/2019 about 5 cents was moved into it.

Who owns the 97th richest address? Don't know. They're anonymous.

What happens if we find out who owns it? Then we know who owns the 85 million.

What if their identity is out and they move their bitcoin to another address? The bitcoin ledger will record a bitcoin outflow from their former address. If they're sending all 85 million to their new bitcoin address, you can probably guess that new address belongs to them as well.

What if they split up sending their 85 million into 10 different new recipient addresses? The bitcoin ledger will record all of that as well. Each subsequent recipient address will show funds received from the previous 97th richest address.

What if from the subsequent 10 addressees, we transfer funds into 10 additional address for a total of 100 addresses? The bitcoin ledger records all this as well. Every transaction is recorded on every node in the bitcoin network. period.




If you want to buy bitcoin for fun what would I recommend?
Coinbase is the most user friendly. When it comes to the wild world of crypto you're looking for a legitimate exchange. Exchanges (Mt. Gox) have come and gone for various reasons. Hacks occurring, founders of exchanges absconding with your funds, exchanges closing down for no reason.

If you want to buy material amounts of bitcoin, probably still coinbase, unless you're making a truly massive order.
(For this latter scenario, it is well known that if you do purchase bitcoin, never leave your funds in the addresses of the exchange. )

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Wed Jan 22, 2020 10:44 pm

nisiprius wrote:
Wed Jan 22, 2020 5:59 pm
One of the things I find troublesome about bitcoin is the constantly shifting claims and descriptions made by enthusiasts.
Why is it troublesome that a new form of money would evolve over time?

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Wed Jan 22, 2020 10:47 pm

Ohh look. A Bitcoin evangelist has joined our forum to spread the joys of Bitcoin ownership to all.

Ohh blessed art thee that owns Bitcoin. Good fortune and wealth will be upon thee.

viewtopic.php?p=4971172#p4971172

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Wed Jan 22, 2020 10:55 pm

EnjoyIt wrote:
Mon Jan 20, 2020 10:25 pm
bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
So mining productions will he cut in half. Does that also mean that the cost of transactions will increase as well.

The supply is what is out there. There are currently over 18.17 million bitcoins in existence. With 1800 coins mined per day. The next halving will occurs after the next ~200k mined coins. At this point, most of the coins in existence have already been mined. A few extra coins will not change the supply side all that much. Halving it to 900/day will make a slight difference, but what will really happen is that miners will be making less coins through their efforts and will therefor want higher fees to process transactions which may very well decrease demand.

I hope you understand the total supply side of the equation before assuming that the next halving will automatically equal a higher price.

As for my comment about “manipulation scheme.” It refers to how the price was manipulated in 2017 causing the FOMO frenzy of buying before its collapse. Don’t you think there is a good chance someone will come up with another scheme? I think it is very plausible. The question remains is; will that scheme work and cause prices to rise and another FOMO frenzy or will it get caught early and cause the price to drop more?

Isn’t The Bitcoin show fun?

The time to buy was when no one knew about it. Back in the day when Silk Roads was around and maybe a few years after when only the tech people were involved. Today my 70 year old parents have an idea of what Bitcoin is.
I learned a couple of things from you post. I now understand you like the words "manipulation" and "scheme."

By price "manipulation" in 2017 you mean the time where Bitcoin demand was greater than supply, causing price to go up?

Yes there may be another "scheme" in the future, only time will tell.

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Wed Jan 22, 2020 11:04 pm

watchnerd wrote:
Sat Jan 18, 2020 9:51 pm
Enganerd wrote:
Sat Jan 18, 2020 8:57 pm


Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold.
Certainly this was true before we had gold ETFs.

I'm not sure I'd agree now.
watchnerd,

Can you please explain the difference between gold ETFs and holding physical gold in your hand? I honestly don't know but suspect it's similar to the Bitcoin phrase "not your keys, not your coins."

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Wed Jan 22, 2020 11:09 pm

bitdocmd wrote:
Wed Jan 22, 2020 10:55 pm
EnjoyIt wrote:
Mon Jan 20, 2020 10:25 pm
bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
So mining productions will he cut in half. Does that also mean that the cost of transactions will increase as well.

The supply is what is out there. There are currently over 18.17 million bitcoins in existence. With 1800 coins mined per day. The next halving will occurs after the next ~200k mined coins. At this point, most of the coins in existence have already been mined. A few extra coins will not change the supply side all that much. Halving it to 900/day will make a slight difference, but what will really happen is that miners will be making less coins through their efforts and will therefor want higher fees to process transactions which may very well decrease demand.

I hope you understand the total supply side of the equation before assuming that the next halving will automatically equal a higher price.

As for my comment about “manipulation scheme.” It refers to how the price was manipulated in 2017 causing the FOMO frenzy of buying before its collapse. Don’t you think there is a good chance someone will come up with another scheme? I think it is very plausible. The question remains is; will that scheme work and cause prices to rise and another FOMO frenzy or will it get caught early and cause the price to drop more?

Isn’t The Bitcoin show fun?

The time to buy was when no one knew about it. Back in the day when Silk Roads was around and maybe a few years after when only the tech people were involved. Today my 70 year old parents have an idea of what Bitcoin is.
I learned a couple of things from you post. I now understand you like the words "manipulation" and "scheme."

By price "manipulation" in 2017 you mean the time where Bitcoin demand was greater than supply, causing price to go up?

Yes there may be another "scheme" in the future, only time will tell.
From the Wall Street Journal

Large Bitcoin Player Manipulated Price Sharply Higher, Study Says
‘Stablecoin’ tether, Bitfinex exchange reportedly used to drive up cryptocurrency’s price in 2017 and 2018


https://www.google.com/amp/s/www.wsj.co ... 1572863400

Yes, price manipulation can affect price and synthetically make it appear as if there is demand where little exists.
Please let us keep the discussion cordial.

TomCat96
Posts: 1040
Joined: Sun Oct 18, 2015 12:18 pm

Re: Who’s Buying Bitcoin?

Post by TomCat96 » Wed Jan 22, 2020 11:23 pm

EnjoyIt wrote:
Wed Jan 22, 2020 11:09 pm
bitdocmd wrote:
Wed Jan 22, 2020 10:55 pm
EnjoyIt wrote:
Mon Jan 20, 2020 10:25 pm
bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
So mining productions will he cut in half. Does that also mean that the cost of transactions will increase as well.

The supply is what is out there. There are currently over 18.17 million bitcoins in existence. With 1800 coins mined per day. The next halving will occurs after the next ~200k mined coins. At this point, most of the coins in existence have already been mined. A few extra coins will not change the supply side all that much. Halving it to 900/day will make a slight difference, but what will really happen is that miners will be making less coins through their efforts and will therefor want higher fees to process transactions which may very well decrease demand.

I hope you understand the total supply side of the equation before assuming that the next halving will automatically equal a higher price.

As for my comment about “manipulation scheme.” It refers to how the price was manipulated in 2017 causing the FOMO frenzy of buying before its collapse. Don’t you think there is a good chance someone will come up with another scheme? I think it is very plausible. The question remains is; will that scheme work and cause prices to rise and another FOMO frenzy or will it get caught early and cause the price to drop more?

Isn’t The Bitcoin show fun?

The time to buy was when no one knew about it. Back in the day when Silk Roads was around and maybe a few years after when only the tech people were involved. Today my 70 year old parents have an idea of what Bitcoin is.
I learned a couple of things from you post. I now understand you like the words "manipulation" and "scheme."

By price "manipulation" in 2017 you mean the time where Bitcoin demand was greater than supply, causing price to go up?

Yes there may be another "scheme" in the future, only time will tell.
From the Wall Street Journal

Large Bitcoin Player Manipulated Price Sharply Higher, Study Says
‘Stablecoin’ tether, Bitfinex exchange reportedly used to drive up cryptocurrency’s price in 2017 and 2018


https://www.google.com/amp/s/www.wsj.co ... 1572863400

Yes, price manipulation can affect price and synthetically make it appear as if there is demand where little exists.
Please let us keep the discussion cordial.
+1

I can't find it, but Hawkeye(sp?) from this forum reported on this months ago in a very excellent post. Moreover, it was pretty well known in the cryptocommunity in at least August of 2017 that tether, aka USDT was being used to massively inflate bitcoin prices.

Plz
Posts: 116
Joined: Tue Oct 09, 2018 10:26 pm

Re: Who’s Buying Bitcoin?

Post by Plz » Wed Jan 22, 2020 11:41 pm

TomCat96 wrote:
Wed Jan 22, 2020 6:33 pm
Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?

Is there a mechanism which tracks all transactions since the beginning? Yes. The bitcoin blockchain ledger tracks every transaction since the beginning. In fact that is the mechanism that tells how much is in your account.

This website surfs the bitcoin blockchain:
https://www.blockchain.com/explorer

Is every bitcoin trackable? As far as I know, yes.

If you satisfy KYC requirements at exchanges, you are 100% trackable. Every transaction you do is trackable. Every bitcoin in and out of your account is trackable.

Why do people say bitcoin transactions are not trackable? Because as long as you never link your personal information with your bitcoin address there is no way of attributing that address to you. You lose this "anonymity" the moment you sign up with any party that has your personal information. You further lose your anonymity if for any reason your bitcoin addresses are linked to your personal information for any reason.

That being said, if you never link such information, you are untrackable. All anyone else knows is the funds going in and out of your bitcoin account. They don't know who it belongs to.

Seeing is believing. This website shows the top richest 100 bitcoin addresses.
For most of these, we do not know who they belong to.

Yet you can follow all their inflows and outflows for fun.
https://bitinfocharts.com/top-100-riche ... esses.html

This exercise will show how bitcoin is "not trackable"
Randomly chosen:
Bitcoin address: bc1q2raxkmk55p000ggfa8euzs9fzq7p4cx4twycx7
97th richest address. Currently contains 10000 bitcoin, market value around 85 million.

according to
https://bitinfocharts.com/bitcoin/addre ... 4cx4twycx7

On 5/1/2019, 10000 bitcoin were moved into it.
On 5/29 of the same year another 8 bucks USD was moved into it.
On 11/15/2019 about 10 cents was moved into it.
On 11/19/2019 about 5 cents was moved into it.

Who owns the 97th richest address? Don't know. They're anonymous.

What happens if we find out who owns it? Then we know who owns the 85 million.

What if their identity is out and they move their bitcoin to another address? The bitcoin ledger will record a bitcoin outflow from their former address. If they're sending all 85 million to their new bitcoin address, you can probably guess that new address belongs to them as well.

What if they split up sending their 85 million into 10 different new recipient addresses? The bitcoin ledger will record all of that as well. Each subsequent recipient address will show funds received from the previous 97th richest address.

What if from the subsequent 10 addressees, we transfer funds into 10 additional address for a total of 100 addresses? The bitcoin ledger records all this as well. Every transaction is recorded on every node in the bitcoin network. period.




If you want to buy bitcoin for fun what would I recommend?
Coinbase is the most user friendly. When it comes to the wild world of crypto you're looking for a legitimate exchange. Exchanges (Mt. Gox) have come and gone for various reasons. Hacks occurring, founders of exchanges absconding with your funds, exchanges closing down for no reason.

If you want to buy material amounts of bitcoin, probably still coinbase, unless you're making a truly massive order.
(For this latter scenario, it is well known that if you do purchase bitcoin, never leave your funds in the addresses of the exchange. )
How does one buy bitcoin without tying their identity to an address?

They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Wed Jan 22, 2020 11:48 pm

It appears a bitcoin evangelist has joined our forums to spread Bitcoin joy to all.

viewtopic.php?p=4972265#p4972265

It just goes to show how important evangelical work is necessary to prop up Bitcoin demand. The whole opening post looks like a Bitcoin ad.

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Wed Jan 22, 2020 11:53 pm

Plz wrote:
Tue Jan 21, 2020 5:34 am
bitdocmd wrote:
Mon Jan 20, 2020 9:54 pm
EnjoyIt wrote:
Mon Jan 20, 2020 9:33 pm
For the price to go up demand must increase not be stable. If the demand is stable, price is stable.

To increase demand what may help is a significant rise in price so that the media can report on it and get everyone into FOMO mode. Some good ol’ price manipulation in 2017 created that. That was one hell of a frenzy.

I remember a few weeks before the collapse I was eating lunch and was overhearing some high school, maybe college kid trying to convince his parents why Bitcoin is the greatest thing since sliced bread. I remember telling my wife how ridiculous this kid sounded and my wife agreeing. I did not realize it back then, but it was the modern day equivalent of the shoe shine boy giving stock tips.

That’s what you need for another rally. Some crazy hype to get the FOMOs out in droves. I have a strong suspicion some future price manipulation scheme will make it happen.
It seems there are some who don't understand the supply side of Bitcoin. The flow of Bitcoin (new Bitcoin minted) will be cut in half in May. ASSUMING stable demand and less sell-pressure from miners, price should go up.

Sorry I don't accept antidotes as arguments. And what does "future price manipulation scheme" even mean?
Do you think the halving is priced in?
Excellent question and I have thought about it. When it comes to stocks, I have always been an efficient market guy. With Bitcoin, one would think it should be priced in because everyone knows about the halving. But the Bitcoin market is so small that the reduction in sell-pressure should cause price to go up. It will lag the halving though, maybe end of 2020 or 2021. Who knows.

TomCat96
Posts: 1040
Joined: Sun Oct 18, 2015 12:18 pm

Re: Who’s Buying Bitcoin?

Post by TomCat96 » Wed Jan 22, 2020 11:57 pm

Plz wrote:
Wed Jan 22, 2020 11:41 pm
TomCat96 wrote:
Wed Jan 22, 2020 6:33 pm
Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?

Is there a mechanism which tracks all transactions since the beginning? Yes. The bitcoin blockchain ledger tracks every transaction since the beginning. In fact that is the mechanism that tells how much is in your account.

This website surfs the bitcoin blockchain:
https://www.blockchain.com/explorer

Is every bitcoin trackable? As far as I know, yes.

If you satisfy KYC requirements at exchanges, you are 100% trackable. Every transaction you do is trackable. Every bitcoin in and out of your account is trackable.

Why do people say bitcoin transactions are not trackable? Because as long as you never link your personal information with your bitcoin address there is no way of attributing that address to you. You lose this "anonymity" the moment you sign up with any party that has your personal information. You further lose your anonymity if for any reason your bitcoin addresses are linked to your personal information for any reason.

That being said, if you never link such information, you are untrackable. All anyone else knows is the funds going in and out of your bitcoin account. They don't know who it belongs to.

Seeing is believing. This website shows the top richest 100 bitcoin addresses.
For most of these, we do not know who they belong to.

Yet you can follow all their inflows and outflows for fun.
https://bitinfocharts.com/top-100-riche ... esses.html

This exercise will show how bitcoin is "not trackable"
Randomly chosen:
Bitcoin address: bc1q2raxkmk55p000ggfa8euzs9fzq7p4cx4twycx7
97th richest address. Currently contains 10000 bitcoin, market value around 85 million.

according to
https://bitinfocharts.com/bitcoin/addre ... 4cx4twycx7

On 5/1/2019, 10000 bitcoin were moved into it.
On 5/29 of the same year another 8 bucks USD was moved into it.
On 11/15/2019 about 10 cents was moved into it.
On 11/19/2019 about 5 cents was moved into it.

Who owns the 97th richest address? Don't know. They're anonymous.

What happens if we find out who owns it? Then we know who owns the 85 million.

What if their identity is out and they move their bitcoin to another address? The bitcoin ledger will record a bitcoin outflow from their former address. If they're sending all 85 million to their new bitcoin address, you can probably guess that new address belongs to them as well.

What if they split up sending their 85 million into 10 different new recipient addresses? The bitcoin ledger will record all of that as well. Each subsequent recipient address will show funds received from the previous 97th richest address.

What if from the subsequent 10 addressees, we transfer funds into 10 additional address for a total of 100 addresses? The bitcoin ledger records all this as well. Every transaction is recorded on every node in the bitcoin network. period.




If you want to buy bitcoin for fun what would I recommend?
Coinbase is the most user friendly. When it comes to the wild world of crypto you're looking for a legitimate exchange. Exchanges (Mt. Gox) have come and gone for various reasons. Hacks occurring, founders of exchanges absconding with your funds, exchanges closing down for no reason.

If you want to buy material amounts of bitcoin, probably still coinbase, unless you're making a truly massive order.
(For this latter scenario, it is well known that if you do purchase bitcoin, never leave your funds in the addresses of the exchange. )
How does one buy bitcoin without tying their identity to an address?

They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Great questions.

How does one buy bitcoin without tying their identity to an address?

I honestly don't know. As far as I know the only way to do it is to get a private party to agree to send you bitcoin for dollars exchanged.
No honest public business in compliance with the law can do this to my knowledge. During bitcoin's inception, people acquired bitcoin through mining it. The addresses they mined to or subsequently transferred to were anonymous because it did not require third party exchanges. This ship sailed long ago.


They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

I dont think this really matters. People say it. But as you can see in the top addresses with hundreds of millions worth of bitcoin, some addresses simply sit there. Every address has a public and private key. (your bitcoin address is in fact a hash of your public key) In cryptography, the public key is used to encrypt data while the private key is used to decrypt data. In the case of bitcoin, the private key is used to transfer funds from a particular address.
I suppose there was some argument to be made concerning sitting on an address for too long, but this is more a failure of personal security that on the part of bitcoin. As per evading, I suppose its possible that a person with multiple bitcoin receipt addresses will be more difficult to track. There is after all no way of knowing just how many bitcoin accounts a person has.

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Good question and frankly good point. You would have to spend it in a way that its not trackable to you. If you go to a vendor and they say would you like a coffee mr. Plz, and exchange services to you, then the address you are sending bitcoin from is trackable to you. Whats more is that any and all transactions to and from that address will be trackable forever. Still furthermore, the transactions of all the addresses that ever transacted with you have all their transactions recorded as well.

bitdocmd
Posts: 113
Joined: Fri Oct 04, 2019 11:24 pm

Re: Who’s Buying Bitcoin?

Post by bitdocmd » Thu Jan 23, 2020 12:36 am

TomCat96 wrote:
Wed Jan 22, 2020 11:57 pm

Great questions.

How does one buy bitcoin without tying their identity to an address?

I honestly don't know. As far as I know the only way to do it is to get a private party to agree to send you bitcoin for dollars exchanged.
No honest public business in compliance with the law can do this to my knowledge. During bitcoin's inception, people acquired bitcoin through mining it. The addresses they mined to or subsequently transferred to were anonymous because it did not require third party exchanges. This ship sailed long ago.


They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

I dont think this really matters. People say it. But as you can see in the top addresses with hundreds of millions worth of bitcoin, some addresses simply sit there. Every address has a public and private key. (your bitcoin address is in fact a hash of your public key) In cryptography, the public key is used to encrypt data while the private key is used to decrypt data. In the case of bitcoin, the private key is used to transfer funds from a particular address.
I suppose there was some argument to be made concerning sitting on an address for too long, but this is more a failure of personal security that on the part of bitcoin. As per evading, I suppose its possible that a person with multiple bitcoin receipt addresses will be more difficult to track. There is after all no way of knowing just how many bitcoin accounts a person has.

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Good question and frankly good point. You would have to spend it in a way that its not trackable to you. If you go to a vendor and they say would you like a coffee mr. Plz, and exchange services to you, then the address you are sending bitcoin from is trackable to you. Whats more is that any and all transactions to and from that address will be trackable forever. Still furthermore, the transactions of all the addresses that ever transacted with you have all their transactions recorded as well.

1. It's far from perfect, but a start: https://bisq.network

2. If you obtain your Bitcoin from a KYC/AML institution such as Cash App or Coinbase (I recommend Cash App) and decide to transfer to a hardware wallet, consider a coinjoin. Look up Samourai whirlpool and Wasabi regarding coinjoins. Here you can mix your coins with others to further anonymity. And no I have nothing to hide, I am not using my Bitcoin for nefarious purposes - but I value privacy. After mixing, don't send to the same address because this basically undoes the mixing.

3. Samourai Wallet has a way to spend with increased privacy, but with Bitcoin TODAY nothing is truly anonymous.

Addendum: Remember Bitcoin is not for buying coffee tomorrow morning or buying your girlfriend useless overpriced flowers in February.

User avatar
happyisland
Posts: 495
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Re: Who’s Buying Bitcoin?

Post by happyisland » Thu Jan 23, 2020 7:10 am

bitdocmd wrote:
Thu Jan 23, 2020 12:36 am
Addendum: Remember Bitcoin is not for buying coffee tomorrow morning or buying your girlfriend useless overpriced flowers in February.
What IS it for again? I honestly can't remember.

It seems like it can't really be used to buy and sell things in any kind of efficient way.

It seems like the value fluctuates to the extent that you would be crazy to use it as a store of wealth.

Is the idea just that you hope it appreciates based on other people valuing it more highly in the future?

z3r0c00l
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Contact:

Re: Who’s Buying Bitcoin?

Post by z3r0c00l » Thu Jan 23, 2020 7:16 am

happyisland wrote:
Thu Jan 23, 2020 7:10 am

What IS it for again?

Is the idea just that you hope it appreciates based on other people valuing it more highly in the future?
As you say, it is primarily for speculation and secondarily, befitting any hard to trace currency, for crime. The easiest crime is to simply steal bitcoin from others which takes place it seems yearly at this point. For a spell, it was also good for buying and selling drugs. Now I wouldn't discount it for that reason alone, since the paper dollar is still the reigning king of crime and theft, but at least the dollar has primarily legitimate use and I can lock my dollars up in a safe to prevent theft. Bitcoin has proven particularly hard to secure, strange considering all the promises about distributed ledgers and how great they are. Worse, someone can just forget the password or die with it, and lose your money too. https://www.independent.co.uk/life-sty ... 63676.html

EnjoyIt
Posts: 3554
Joined: Sun Dec 29, 2013 8:06 pm

Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Thu Jan 23, 2020 7:59 am

happyisland wrote:
Thu Jan 23, 2020 7:10 am
bitdocmd wrote:
Thu Jan 23, 2020 12:36 am
Addendum: Remember Bitcoin is not for buying coffee tomorrow morning or buying your girlfriend useless overpriced flowers in February.
What IS it for again? I honestly can't remember.

It seems like it can't really be used to buy and sell things in any kind of efficient way.

It seems like the value fluctuates to the extent that you would be crazy to use it as a store of wealth.

Is the idea just that you hope it appreciates based on other people valuing it more highly in the future?
I think you nailed it. Today, Bitcoin only has one purpose and that is to hope that you will get to sell it to someone else for more money. It is pure and simple gambling.

You can watch it from the sidelines, or you you can throw the dice and hope there are more people out there to convince that Bitcoin is “digital gold” or some other sales pitch.

The thing is, there are a lot of people in the world and The value of Bitcoin can be irrational for a very long time.

It definitely is fun to watch and talk about.

TomCat96
Posts: 1040
Joined: Sun Oct 18, 2015 12:18 pm

Re: Who’s Buying Bitcoin?

Post by TomCat96 » Thu Jan 23, 2020 3:04 pm

bitdocmd wrote:
Thu Jan 23, 2020 12:36 am
TomCat96 wrote:
Wed Jan 22, 2020 11:57 pm

Great questions.

How does one buy bitcoin without tying their identity to an address?

I honestly don't know. As far as I know the only way to do it is to get a private party to agree to send you bitcoin for dollars exchanged.
No honest public business in compliance with the law can do this to my knowledge. During bitcoin's inception, people acquired bitcoin through mining it. The addresses they mined to or subsequently transferred to were anonymous because it did not require third party exchanges. This ship sailed long ago.


They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

I dont think this really matters. People say it. But as you can see in the top addresses with hundreds of millions worth of bitcoin, some addresses simply sit there. Every address has a public and private key. (your bitcoin address is in fact a hash of your public key) In cryptography, the public key is used to encrypt data while the private key is used to decrypt data. In the case of bitcoin, the private key is used to transfer funds from a particular address.
I suppose there was some argument to be made concerning sitting on an address for too long, but this is more a failure of personal security that on the part of bitcoin. As per evading, I suppose its possible that a person with multiple bitcoin receipt addresses will be more difficult to track. There is after all no way of knowing just how many bitcoin accounts a person has.

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Good question and frankly good point. You would have to spend it in a way that its not trackable to you. If you go to a vendor and they say would you like a coffee mr. Plz, and exchange services to you, then the address you are sending bitcoin from is trackable to you. Whats more is that any and all transactions to and from that address will be trackable forever. Still furthermore, the transactions of all the addresses that ever transacted with you have all their transactions recorded as well.

1. It's far from perfect, but a start: https://bisq.network

2. If you obtain your Bitcoin from a KYC/AML institution such as Cash App or Coinbase (I recommend Cash App) and decide to transfer to a hardware wallet, consider a coinjoin. Look up Samourai whirlpool and Wasabi regarding coinjoins. Here you can mix your coins with others to further anonymity. And no I have nothing to hide, I am not using my Bitcoin for nefarious purposes - but I value privacy. After mixing, don't send to the same address because this basically undoes the mixing.

3. Samourai Wallet has a way to spend with increased privacy, but with Bitcoin TODAY nothing is truly anonymous.

Addendum: Remember Bitcoin is not for buying coffee tomorrow morning or buying your girlfriend useless overpriced flowers in February.

On point #2, Hackers a few years back went to website which allowed anonymous coin exchanges. Forget the name. They converted their bitcoin into Monero, and that was basically the end of the hunt by law enforcement.

Dash, Monero, and other privacy coins can effectively assure anonymity once within the cryptospace.

Plz
Posts: 116
Joined: Tue Oct 09, 2018 10:26 pm

Re: Who’s Buying Bitcoin?

Post by Plz » Fri Jan 24, 2020 6:21 pm

Thank you, I always appreciate your perspective.
TomCat96 wrote:
Wed Jan 22, 2020 11:57 pm
Plz wrote:
Wed Jan 22, 2020 11:41 pm
TomCat96 wrote:
Wed Jan 22, 2020 6:33 pm
Plz wrote:
Tue Jan 21, 2020 5:42 am
TomCat96 wrote:
Sat Jan 18, 2020 11:00 pm
A few notes based on my observations after fairly extensive research into bitcoin and related cryptocurrencies:

1. Bitcoin is at its heart, speculation. Someone has to come along in the future and pay you more for it than what you paid. Investments however can grow without the need for someone else to come along and pay you more for it. Example: ownership of stock. Companies grow and can generate value for themselves over time.

2. Bitcoin for the most part is not accepted "anywhere" It has not and cannot yet gain serious adoption for usage by ordinary consumers.

3. The other cryptocurrencies should not judged on the merits of Bitcoin--especially ETH and other smart contract capable "currencies". Whether or not they have merit is a completely different question. But they are different enough to warrant their own analysis.

3a. That being said, most other cryptocurrencies are complete junk. That's not an exaggeration either--nonsensical white papers, zero coder
support, founders are known cheats, etc.

4. Blockchain technology has mixed merits.

4a. Its claim to fame is that it solved the double spending problem. In order to understand this, you have to distinguish between centralized
and decentralized systems. Take for example Visa. Why doesn't Visa suffer a double spending problem?? Because Visa controls all its own
transactions. A cashier knows if shes given you back change twice.

4b. Bitcoin is a technology that built a functional currency between disparate computers that all want to screw each other. Remarkable stuff
considering you have to get all nodes to agree that party A has x amount of bitcoin in his/her account. How do you get all nodes to agree to
such a thing, especially when parties are not necessarily cooperative. Bitcoin solved it. Crypto protects it. Hashing allocates it and
protects.

4c. There is no obvious way to "port" this tech to other contexts (i.e. to make it the way of the future) How do we use blockchain in other
areas? Dunno. Inherently it is and forever will be vastly more inefficient than any centralized database. If its so inefficient, why do we
need it? Because on that off chance you need to get a bunch of people who want to screw each other over to cooperate to agree to a
currency (or perhaps another purpose), they've done it.

5. Mt. Gox is not bitcoin. It is however reflective of the reality however that bitcoin is simply not ready to be adopted by the normal joe. It's reflective of the fact that cryptos are the wild west right now. Screw something up and you will get hacked, lose everything, get defrauded, etc.

6. Satoshi Nakamoto. Be wary of anyone who claims to be Nakamoto, or who the media is giving clout to. The paper is brilliant. But it is a gross mistake to follow media on what "Nakamoto" says, and begin to appeal to him as some kind of authority on bitcoin. The community cannot verify who Nakamoto is, if he exists, or anything beyond the contents of the paper. If you go into it thinking you're going to listen to Nakamoto on bitcoin the same way you listen to Bogle on investing, chances are you are listening to a fraudster instead of the real Nakamoto. Another word. Satoshi Nakamoto does not in any way control bitcoin, its direction, etc. Bitcoin is operated by anonymous individuals globally. See 4b. In short, don't go searching for a bitcoin "expert". That's not how this works. Yes I know its how everything else in life works. Not this time.

7. Currency. Just because bitcoin has not succeeded as a currency does not mean it will fail as a project. Yes I know, everyone says bitcoin is a currency. Everyone is just parroting everyone else. A better analogy would trying to explain why computers are necessary to people living in 1920. There were no set of available buckets in the 20s you could have put computers into, and effectively argued for its transformative potential. The same goes for judging the merits of bitcoin on its success as a currency. It's clearly not just a currency. Whatever else it is: a world computer, blockchain, immutable database, and whether or not that has value is a separate question.

8. All blockchains are fundamentally limited by issues of scalability--propagation of the ENTIRE DATABASE to all other nodes in the network, at EVERY INTERVAL. This problem must be solved before cryptos can truly expand. It has not been solved. A few attempts have been made however: special nodes, centralization, lightning network, non-linear chain structures. None are compelling as of yet.
Hi again Tomcat96,

We chatted about bitcoin in the past and it was a pleasure. I could be wrong (and please correct me if I am), but it seems your stance has changed slightly since then - you seem a bit more measured now and less bullish. May I ask, what caused this shift?

Also, I wanted to ask you about the ledger/blockchain. If there’s a mechanism that tracks all transactions since the beginning, isn’t bitcoin very trackable? Especially if you have to satisfy KYC requirements at exchanges? Why then do people say that bitcoin transactions are not traceable?

Lastly, if I wanted to buy $10 of bitcoin just for fun, what would you recommend as the safest and most convenient way to do so? What if I wanted to buy material amounts of bitcoin? What if I wanted to short $10 or a material amount of bitcoin?

Is there a mechanism which tracks all transactions since the beginning? Yes. The bitcoin blockchain ledger tracks every transaction since the beginning. In fact that is the mechanism that tells how much is in your account.

This website surfs the bitcoin blockchain:
https://www.blockchain.com/explorer

Is every bitcoin trackable? As far as I know, yes.

If you satisfy KYC requirements at exchanges, you are 100% trackable. Every transaction you do is trackable. Every bitcoin in and out of your account is trackable.

Why do people say bitcoin transactions are not trackable? Because as long as you never link your personal information with your bitcoin address there is no way of attributing that address to you. You lose this "anonymity" the moment you sign up with any party that has your personal information. You further lose your anonymity if for any reason your bitcoin addresses are linked to your personal information for any reason.

That being said, if you never link such information, you are untrackable. All anyone else knows is the funds going in and out of your bitcoin account. They don't know who it belongs to.

Seeing is believing. This website shows the top richest 100 bitcoin addresses.
For most of these, we do not know who they belong to.

Yet you can follow all their inflows and outflows for fun.
https://bitinfocharts.com/top-100-riche ... esses.html

This exercise will show how bitcoin is "not trackable"
Randomly chosen:
Bitcoin address: bc1q2raxkmk55p000ggfa8euzs9fzq7p4cx4twycx7
97th richest address. Currently contains 10000 bitcoin, market value around 85 million.

according to
https://bitinfocharts.com/bitcoin/addre ... 4cx4twycx7

On 5/1/2019, 10000 bitcoin were moved into it.
On 5/29 of the same year another 8 bucks USD was moved into it.
On 11/15/2019 about 10 cents was moved into it.
On 11/19/2019 about 5 cents was moved into it.

Who owns the 97th richest address? Don't know. They're anonymous.

What happens if we find out who owns it? Then we know who owns the 85 million.

What if their identity is out and they move their bitcoin to another address? The bitcoin ledger will record a bitcoin outflow from their former address. If they're sending all 85 million to their new bitcoin address, you can probably guess that new address belongs to them as well.

What if they split up sending their 85 million into 10 different new recipient addresses? The bitcoin ledger will record all of that as well. Each subsequent recipient address will show funds received from the previous 97th richest address.

What if from the subsequent 10 addressees, we transfer funds into 10 additional address for a total of 100 addresses? The bitcoin ledger records all this as well. Every transaction is recorded on every node in the bitcoin network. period.




If you want to buy bitcoin for fun what would I recommend?
Coinbase is the most user friendly. When it comes to the wild world of crypto you're looking for a legitimate exchange. Exchanges (Mt. Gox) have come and gone for various reasons. Hacks occurring, founders of exchanges absconding with your funds, exchanges closing down for no reason.

If you want to buy material amounts of bitcoin, probably still coinbase, unless you're making a truly massive order.
(For this latter scenario, it is well known that if you do purchase bitcoin, never leave your funds in the addresses of the exchange. )
How does one buy bitcoin without tying their identity to an address?

They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Great questions.

How does one buy bitcoin without tying their identity to an address?

I honestly don't know. As far as I know the only way to do it is to get a private party to agree to send you bitcoin for dollars exchanged.
No honest public business in compliance with the law can do this to my knowledge. During bitcoin's inception, people acquired bitcoin through mining it. The addresses they mined to or subsequently transferred to were anonymous because it did not require third party exchanges. This ship sailed long ago.


They say never use an address more than once, but if every transaction is recorded, what does it matter? (Just like your example of sending your bitcoin to 10 different accounts)

I dont think this really matters. People say it. But as you can see in the top addresses with hundreds of millions worth of bitcoin, some addresses simply sit there. Every address has a public and private key. (your bitcoin address is in fact a hash of your public key) In cryptography, the public key is used to encrypt data while the private key is used to decrypt data. In the case of bitcoin, the private key is used to transfer funds from a particular address.
I suppose there was some argument to be made concerning sitting on an address for too long, but this is more a failure of personal security that on the part of bitcoin. As per evading, I suppose its possible that a person with multiple bitcoin receipt addresses will be more difficult to track. There is after all no way of knowing just how many bitcoin accounts a person has.

How do you spend the bitcoin without revealing your identity? It seems like it’s only anonymous if you never spend it?

Good question and frankly good point. You would have to spend it in a way that its not trackable to you. If you go to a vendor and they say would you like a coffee mr. Plz, and exchange services to you, then the address you are sending bitcoin from is trackable to you. Whats more is that any and all transactions to and from that address will be trackable forever. Still furthermore, the transactions of all the addresses that ever transacted with you have all their transactions recorded as well.

Enganerd
Posts: 135
Joined: Wed Apr 15, 2015 8:22 pm

Re: Who’s Buying Bitcoin?

Post by Enganerd » Fri Jan 24, 2020 10:04 pm

am wrote:
Sun Jan 19, 2020 10:04 pm
Enganerd wrote:
Sat Jan 18, 2020 8:57 pm
EnjoyIt wrote:
Sat Jan 18, 2020 2:40 pm
I read the article and honestly find the discussion very interesting. First things first it comes from a website that is named after the creator of bitcoin. We can only assume that anything coming from there will be 100% pro bitcoin propaganda. After all it is imperative to keep bitcoin disciples belief strong so that they can continue to evangelize. This can be clearly seen in the comments section.

There was also a comment in the article regarding improved bitcoin fundamentals. That makes absolutely no sense because there are no fundamentals. The value of the coin exists only in the minds of its believers. There is nothing backing up said coin. The US dollar is backed by the US government and the productivity of its people. This is a huge and massive difference between Bitcoin and Fiat currency. On the other hand Venezuelan Bolivar is backed by the Venezuelan government which is almost worthless. Yeah, fiat currency isn’t perfect.

Next there were continued discussions about bitcoin being a currency though I have yet to see any reasonable transactions happening with bitcoin. It does not function as a currency at this moment or 6 years ago when that article was written. That may change but for now it is an item held and to be sold to someone willing to buy it for a higher price. Kind of like a collectible. 100% speculation.

Bitcoin has a great sales pitch. All fiat fails eventually and we got this thing that is digital and can’t be tracked (which is false) that no government can debase through quantitative easing. This really appeals to those who are tech savvy because of its technological coolness. Add in a drop of FOMO and we can be seeing another rally. Price really may go up and up and up before people realize how little use a bitcoin actually has.

To this day I don’t see any real examples of it being anything more than a collectible. No different than some rare weapon in World of Warcraft or similar.

The real time to buy bitcoin was when no one knew about it. Now everyone knows what it is. The only people left buying are the evangelists and the few people they get to convince/convert into the Bitcoin cult how long will that last? As they say the market can be irrational far longer than one can stay solvent. This is a great example. Luckily, I don’t need to speculate in order to get wealthy. I can observe the show from the sidelines. The show has been very entertaining this far.
I agree it is 100% propaganda and not particularly good propaganda either. I do think the speculation run thought experiment concisely explains why proponents are so confident it is under valued. I did find the "Thiers' Law Good Money Drives out the Bad" section and the reference to the Greshan's Law paper interesting http://www.columbia.edu/~ram15/grash.html.

There is a massive difference between fiat and btc. It is funny that the bullish takes for btc discuss the fact that it is scarce and is too slow/ inefficient for small transaction is a feature and not a bug. But the btc white paper plainly states it is to be used as a currency for transactions.

Anyways now it is looked at more as digital gold. Obviously it is more convenient, secure, and inexpensive to store and trade btc than gold. Gold's huge advantage is that its religion is old as history itself so although buying gold is still speculating I doubt the price has much of a chance of going to zero in my lifetime but also lower chance of massive returns. Btc on the other hand I could seeing going to zero or considerably higher than it is currently. And I could see btc surviving much longer than our lifetimes.

My question is what criticisms apply to the way btc is valued but do not apply to gold's valuation (higher than industrial use). Obviously gold has a long history of being valued but that in itself doesn't address criticisms such as "there is no inherent value, it is only valued at what other's will pay for it."

The proponents even have the data miners :D but I admit it is pretty interesting how effective this stock to flow model for btcs history and how close it is to gold. See the chart about halfway down, I tried to insert the image but it has too many pixels.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25.
Interesting paper. 55k per bitcoin MAy 2020. Why isn’t the market pricing this in?

My initial simple skeptic response was well we know that btc has increased in value and that the stock to flow has increased so is it really that surprising you can draw a best fit line through the data points? But looking at the chart and how close gold is to the best fit line was interesting. However, the author states: "Fitting a linear regression to the data confirms what can be seen with the naked eye: a statistically significant relationship between SF and market value (95% R2, significance of F 2.3E-17, p-Value of slope 2.3E-17). The likelihood that the relationship between SF and market value is caused by chance is close to zero." I do not know enough about statistics to evaluate that claim. Can someone explain that in plain English and maybe offer thoughts whether it may or may not be significant.

Even assuming that claim is correct I would not assume that trend must continue for bot EMH reasons and the fact that eventually the flow will be 0. I am simply curious about that model because some people I know put a ton of faith in it.

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DiscoBunny1979
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Re: Who’s Buying Bitcoin?

Post by DiscoBunny1979 » Fri Jan 24, 2020 11:28 pm

In my opinion, an approach to 'invest' in Bitcoin is to Dollar Cost Average the same way You would buy into an S&P Index fund. But my holdings in Bitcoin is not for 'investing'. I treat my Bitcoin like Gold/Silver. It's insurance against the unknown - like the collapse of the dollar. And because of that, the only crypto holding I needs is Bitcoin (although I also hold some Litecoin). Diversity for insurance purposes is then Gold, Silver and Bitcoin.

Enganerd
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Re: Who’s Buying Bitcoin?

Post by Enganerd » Wed Jan 29, 2020 10:14 am

bitdocmd wrote:
Mon Jan 20, 2020 8:46 pm
am wrote:
Sun Jan 19, 2020 10:04 pm
Interesting paper. 55k per bitcoin MAy 2020. Why isn’t the market pricing this in?
Really good question. I wish I knew why. I know this guy has a lot riding on this prediction. My gut tells me that in such a young market, the sell-side pressure after the halving will be reduced while demand continues to be unknown. IF demand is stable price should go up.

I am still looking for a knowledgeable take on this text from the article
Fitting a linear regression to the data confirms what can be seen with the naked eye: a statistically significant relationship between SF and market value (95% R2, significance of F 2.3E-17, p-Value of slope 2.3E-17). The likelihood that the relationship between SF and market value is caused by chance is close to zero.
https://medium.com/@100trillionUSD/mode ... fa0fc03e25

Does that mean a random number generator of n events would not produce a best fit line with each of the events falling so close the line? Or does it mean, given that both stock to flow and price have increased it is still almost impossible for them to follow this mathematical relationship so closely?

bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Sun Feb 09, 2020 9:26 am

I wanted to make sure you saw PlanB's follow-up article:

https://medium.com/@100trillionUSD/effi ... 17f40e6107

JakeyLee
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Re: Who’s Buying Bitcoin?

Post by JakeyLee » Sun Feb 09, 2020 11:45 am

Just wanted to add an interesting tid-bit to the untraceable/anonymous side of the bitcoin story. We (law enforcement) are starting to hear more cases of naredowells selling access to their digital wallet or third party "coin holder". Often its for illegal goods and services It is almost always predicated on a discount price (.50- .80 cents on the dollar for the BTC). Often the exchange goes bad..and when two nefarious parties do act in good faith with the transaction, the seller, just claims they were hacked, or had their computer stolen. It makes we wonder how many of the stories we see/hear in the last few years concerning hacks and losses are even true. The fact is, we may never know.

For the record: I am not anti- BTC. I'm just not interested in investing in such a "product". For those that do, be careful out there.

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StormShadow
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Re: Who’s Buying Bitcoin?

Post by StormShadow » Sun Feb 09, 2020 12:47 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
What % allocation are you going with?
I plan to allocate 0% to cryptocurrency.

What do you think?

EnjoyIt
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Re: Who’s Buying Bitcoin?

Post by EnjoyIt » Sun Feb 09, 2020 12:54 pm

JakeyLee wrote:
Sun Feb 09, 2020 11:45 am
Just wanted to add an interesting tid-bit to the untraceable/anonymous side of the bitcoin story. We (law enforcement) are starting to hear more cases of naredowells selling access to their digital wallet or third party "coin holder". Often its for illegal goods and services It is almost always predicated on a discount price (.50- .80 cents on the dollar for the BTC). Often the exchange goes bad..and when two nefarious parties do act in good faith with the transaction, the seller, just claims they were hacked, or had their computer stolen. It makes we wonder how many of the stories we see/hear in the last few years concerning hacks and losses are even true. The fact is, we may never know.

For the record: I am not anti- BTC. I'm just not interested in investing in such a "product". For those that do, be careful out there.
Very interesting experience. Thanks for sharing.

bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Sun Feb 09, 2020 1:42 pm

JakeyLee wrote:
Sun Feb 09, 2020 11:45 am
Just wanted to add an interesting tid-bit to the untraceable/anonymous side of the bitcoin story. We (law enforcement) are starting to hear more cases of naredowells selling access to their digital wallet or third party "coin holder". Often its for illegal goods and services It is almost always predicated on a discount price (.50- .80 cents on the dollar for the BTC). Often the exchange goes bad..and when two nefarious parties do act in good faith with the transaction, the seller, just claims they were hacked, or had their computer stolen. It makes we wonder how many of the stories we see/hear in the last few years concerning hacks and losses are even true. The fact is, we may never know.

For the record: I am not anti- BTC. I'm just not interested in investing in such a "product". For those that do, be careful out there.
Bitcoin defaults to very little privacy. For the U.S., most are bought on KYC/AML exchanges. From here unless you coinjoin it is very easy to trace transactions to a specific identity. Anyone who says Bitcoin is truly untraceable/anonymous is wrong. I have heard of Bitcoin described as "prosecution futures." If the value proposition of Bitcoin for you is use for illicit activities, use cold hard cash instead. This is not investment advice.

Despite our treasury secretary saying he does not believe the U.S. dollar has been used for illicit activities I think it has.

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Wiggums
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Re: Who’s Buying Bitcoin?

Post by Wiggums » Sun Feb 09, 2020 2:05 pm

bitdocmd wrote:
Sun Feb 09, 2020 1:42 pm
Despite our treasury secretary saying he does not believe the U.S. dollar has been used for illicit activities I think it has.
We know that both bitcoin and the US dollar have be used in conjunction with crimes. It doesn’t matter what “they” say since people lie all the time. I don’t the US is prepared to deal with privacy, encryption, electronic crimes, spam calls, etc.

If you want to buy bitcoin, buy bitcoin at your own risk.

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