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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • Bitcoin Discussion Forum 57 comments
    Jun 14, 2014 5:46 PM

    Welcome to the Bitcoin Discussion Forum. What are Bitcoins good for, if anything? What are they worth? What are your experiences in trading them, mining them or transacting with them? Please leave any contributions in the comments below.

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Comments (57)
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  • sheldond
    , contributor
    Comments (1442) | Send Message
     
    Ok so what is the obvious thing that should occur when the fed auctions off 18 million?

     

    Is that a lot of the currencies float?

     

    Can I take advantage?
    Are bit coins even real?

     

    Best,

     

    D
    14 Jun 2014, 06:53 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    The government is auctioning off a little less than 30,000 bitcoins. There are currently ~12,900,000 outstanding and the volume on the three largest USD exchanges is ~45,000 in the last 24 hrs. The largest Chinese exchange had ~109,000 in volume over the last 24 hrs, so the 30,000 the government is auctioning off is definitely a fairly sizable amount of bitcoins to be auctioned off all at once.

     

    The markets have already shifted downwards in anticipation of the auction. The government is auctioning off 3,000 bitcoins at a time and you'll need a $200,000 deposit of cash to be eligible to participate.
    15 Jun 2014, 12:54 PM Reply Like
  • kitstricker
    , contributor
    Comments (184) | Send Message
     
    Highly speculative and manipulated .... Most of the currency is held by just a few miners.

     

    Very expensive to trade compared to stocks or real currency.

     

    When MtGox went down, Bitcoin should have had insane volatility, but it was 'amazingly' stable at around $450 for about 50 days.

     

    The whole MtGox debacle basically proved that the currency was NOT safe or secure unless you store your coins on a physical drive and put them a safe deposit box.

     

    Almost every other asset known to man is insurable. Bitcoin is not....that should tell you something.
    14 Jun 2014, 09:04 PM Reply Like
  • kitstricker
    , contributor
    Comments (184) | Send Message
     
    Although still better than many government backed currencies! (such as the Ukrainian hryvnia)
    14 Jun 2014, 09:10 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    You must not follow bitcoin very closely. MtGox's issues were well documented and anyone who held bitcoins on that site was playing with fire.

     

    Bitcoin was 'amazingly' stable after the MtGox implosion because it was more or less expected by the big players in the community. Many had speculated about their insolvency due to their seemingly consistent liquidity issues.

     

    Bitcoin will be insurable very soon. A new bitcoin bank called Circle will be insuring ALL bitcoins held on their site.
    15 Jun 2014, 01:02 PM Reply Like
  • jaginger
    , contributor
    Comments (804) | Send Message
     
    What is the bid/ask spread and typical trade cost on bitcoin?
    17 Jun 2014, 12:48 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    Varies by exchange. I'd look at Bitstamp and Bitfinex as they are two of the larger US exchanges.
    17 Jun 2014, 01:52 PM Reply Like
  • A Runner
    , contributor
    Comments (5) | Send Message
     
    Currently, the BA spread at my exchange, CampBX, is a whopping $12. Ridiculous.
    24 Jun 2014, 02:41 PM Reply Like
  • JessePinkman
    , contributor
    Comments (159) | Send Message
     
    "When MtGox went down, Bitcoin should have had insane volatility, but it was 'amazingly' stable at around $450 for about 50 days."

     

    Indeed. I have no doubt that this thing is being manipulated by the same folks that want to bring it 'public' via an etf.

     

    Same racket as a near worthless penny stock thats walked up or made to trade in a way that implies 'value', even when that value is zero.

     

    imo, the whole thing is a mind game and a con , complete with images of gold colored coins, as displayed here . Of course, cons have a life of their own and can go on for a very long time.

     

    I would sooner light a cigar with a $100 bill, than pay some clown $500 for his bitcoin.
    14 Jun 2014, 11:41 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    People like you made the same arguments when bitcoin was at $1, $10, $100. The potential reward for the technology heavily outweighed the risks then and IMO, still does now. Even at $560/bitcoin the market cap is only $7.1 billion.

     

    You just have to ask yourself, what is a protocol that can transfer value between two parties for nearly free and instantaneously worth? This technology has the potential to replace credit cards, remittance services and eliminate currency exchange fees.

     

    The services currently built on top of the protocol are just scratching the surface of the potential of Bitcoin. If you go back to 1994, how many people thought the Internet would be as huge as it is today? IMO, Bitcoin is in a similar place today as the Internet was then.

     

    Companies and individuals who ignore it will have their lunch eaten in front of them. Large companies like Walmart ignored the Internet when it was first coming into prominence. They're still playing catch-up with Amazon who had the prescience to see what the Internet could be and the impact that it could have.
    15 Jun 2014, 01:21 PM Reply Like
  • JessePinkman
    , contributor
    Comments (159) | Send Message
     
    That's why they call it the madness of crowds.

     

    PS I've been a technologist since the 70's.

     

    As for the internet being big , what took you so long?

     

    I have no problem with the concept of btc. I have a problem paying someone crazy money for it.

     

    What's avoided here, is the product is most popular among those seeking to do illegal business in drugs, guns, and other contraband.
    15 Jun 2014, 03:13 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    I think you're watching too much breaking bad. Bitcoin transactions involving drugs and other illicit goods make up less than 1% of total purchases.
    16 Jun 2014, 09:58 AM Reply Like
  • JessePinkman
    , contributor
    Comments (159) | Send Message
     
    really? i believe you.
    16 Jun 2014, 04:55 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Bitcoin can be priced by assessing the economic value of everything that is bought through it, and then estimating that buyers or sellers usually keep some percent of the economic value of those goods in the currency, before and after the exchange. This is hard to do.

     

    Another method is to simply take the ratio of the USD market cap and the USD transaction volume. This appears to weakly predict future prices.

     

    The target markets in my opinion are (in order of decreasing legitimacy):
    (1) International transfers
    (2) Cutting out the 2-3% payment processor fees involved in credit cards. This would require the Bitcoin ecosystem to develop its own security ecosystem and fraud countermeasures, or else customers will stay with Visa.
    (3) Tips or small exchanges of value by online services -- can be more lightweight than traditional banking
    (4) People who are paranoid or don't like central banking
    (5) Online betting markets. The IRS, Wall St, and casinos won't like this.
    (6) Circumvention of capital controls (Russia, China?)
    (7) Grey markets or black markets, as per the novel Alongside Night, or this whole Silk Road debacle

     

    Personally I'm bullish on Bitcoin price. Although I bought it too late because the security was quite a pain to get right. The major questions I'm monitoring in the Bitcoin marketplace is whether it becomes easier to use, and whether security improves. You can see the Living on Bitcoin author had some problems with ease of use:

     

    http://onforb.es/1ne00Gh

     

    For security, I would like to see widespread use of insurance for exchanges, easy to use multi-factor authentication, and easy to use conditional transactions which are subject to arbitration.

     

    Elliptic Bitcoin claims to be insured through an underwriter in London's insurance market, although I wouldn't actually trust them unless they stated which one and I had confirmation from the underwriter. Academic research indicates that a high percent of the exchanges fail in a few years, and customer funds are not infrequently lost. I would strongly prefer these exchanges hire computer science and finance security experts.

     

    There are also some technological problems such as scalability and 51% attacks. I believe these could be solved with small to moderate amounts of re-engineering the code. Gavin Andresen discussed engineering fixes for both of these. But I also monitor whether the Bitcoin devs are actually getting around to fixing these or not. Currently it seems they are not but I would prefer they do so, since these issues could cause less public faith in Bitcoin.

     

    Bill Miller is long Bitcoin. Although it's not clear how much that means since the out/under-performance of value mutual funds has been shown to be pretty random. Then again, he's buying it in his personal accounts.
    15 Jun 2014, 03:05 AM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    I wrote to Elliptic Vault a Bitcoin storage service about their insurance. I thought people here might be interested in their response:

     

    Connelly: You are the only client-facing Bitcoin company that I am aware of that uses insurance. Do you have opinions on trends for demand of insurance in the Bitcoin ecosystem?

     

    Tom: This is a very new area for the insurance industry. They are being very cautious because they don't really understand the technology and there is not much of a claims history for them to price the risk from. So insurance is currently still very difficult to obtain. However, I think insurance will be essential for mainstream consumer confidence and will eventually become an essential feature of Bitcoin services. Not everyone will have insurance - I think we may see a few, central custodians holding insurance (with Elliptic as one).
    More thoughts on insurance here:
    http://bit.ly/1nhtkfe

     

    Connelly: Currently securing Bitcoins is a somewhat involved process. Do you think it will be easy for non-tech-savvy users to use Bitcoins securely in say 5 years?

     

    Tom: When individuals are responsible for safekeeping their own wealth, there is always a chance of loss - due to negligence, theft etc. Safekeeping will become easier, but there will always be a risk. Most people do not want to take this risk and will therefore entrust their funds to a central party. This goes against the decentralised ethos of Bitcoin and will be mitigated somewhat by multisig etc, but I think it's still human nature to want to trust some central authority to some degree. The important thing is that people have choice - they can store their own bitcoins extremely securely, if they are technically literate enough. However, for those who don't want to or cannot, there will always be parties willing to offer this as a service.

     

    Connelly: Who exactly are your London insurance underwriters?

     

    Tom: Our underwriters would prefer this to remain confidential, although we can share the policy wording and the identity of the underwriter with our customers, if they enter into an NDA with us.

     

    Connelly: Are the underwriters contractually obligated to refund the customer directly in the (hopefully unlikely) case that Elliptic experiences an adverse event?

     

    Tom: Yes, the underwriter can settle directly with our customers.
    17 Jun 2014, 01:24 AM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Mike Novogratz is also buying BTC:

     

    http://bit.ly/YWKZms
    26 Aug 2014, 08:17 PM Reply Like
  • JessePinkman
    , contributor
    Comments (159) | Send Message
     
    http://bit.ly/1p9W7p6

     

    being long bitcoin is a little like holding a stick of dynamite with the fuse lit.
    16 Jun 2014, 04:55 PM Reply Like
  • Ba1k3es
    , contributor
    Comments (682) | Send Message
     
    Bitcoin is currency designed like a gold-based one... stupid. Why is the rate of currency expansion determined by some irrelevant number (aka mining rates) instead of something based off the actual underlying economy? Stupid system, that is long term deflationary, which causes people to hoard until everyone else decides it isn't needed and it goes to zero.
    16 Jun 2014, 09:02 PM Reply Like
  • Bo Yang
    , contributor
    Comments (93) | Send Message
     
    What are Bitcoins good for ? I think bitcoin, and other cryptocurrencies, are actually good for transferring money conveniently and securely, when you can wait some time for the transaction to be confirmed. Unlike credit cards, you don't need to send the recipient your name and CC number.

     

    If you're selling goods and services for bitcoin, you don't need to worry about payment being reversed later. If online merchants only accept bitcoins, their prices should be a few percents lower.

     

    The other side of the coin is that if someone hacks into your computer and steals your bitcoin wallet (technically, they steal the private key of your bitcoin address), then all your coins are gone, and there's no bank or credit card company to call to reverse the charges.

     

    So if you have large amount of bitcoin, store them in "offline" wallets.
    17 Jun 2014, 12:07 PM Reply Like
  • JessePinkman
    , contributor
    Comments (159) | Send Message
     
    No prob with the concept.
    Prob paying a toll to miners and early adopters.

     

    If it was up to me, they would be selling their ridiculous mining rigs for scrap, by the pound
    17 Jun 2014, 01:17 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » U.S. Marshals leak list of people who want to buy seized Silk Road bitcoins: http://bit.ly/1iHwCWi
    18 Jun 2014, 05:26 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    I thought you wanted to short Bitcoin?
    18 Jun 2014, 10:33 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Did. Both short and long depend on the price.
    18 Jun 2014, 10:54 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    You could also sell insurance to the exchanges and then invest the float :-).
    19 Jun 2014, 01:06 AM Reply Like
  • Nose Rub Investing
    , contributor
    Comments (30) | Send Message
     
    "Chris DeMuth Jr., Wrangeley Capital". Close enough.
    18 Jun 2014, 08:15 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Does anyone have experience shorting Bitcoins? How did you implement that investment?
    19 Jun 2014, 01:57 PM Reply Like
  • Bo Yang
    , contributor
    Comments (93) | Send Message
     
    Bitfinex is an exchange that allows margin accounts and shorting bitcoins, but I never used it.

     

    BTW, one thing about cryptocurrencies now is that anyone (with some programming knowledge) can start a coin-to-coin exchange, with practically no regulation and red tape.
    19 Jun 2014, 05:52 PM Reply Like
  • Omer Altay
    , contributor
    Comments (761) | Send Message
     
    I mined 100 or so bitcoins back when it was easier to do. Sold half at $30 after price rose from $2 to $30ish. It dropped to $8 or so and I thought I was a market timing genius. Still have some.

     

    My only word of advice on trading bitcoins is to be careful. The biggest risk is the exchange. Whenever possible DO NOT let a third party hold your bitcoins. Counter-party risk is huge since there is zero recourse in bitcoin frauds/theft/etc.
    25 Jun 2014, 12:14 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Thanks for the advice; very helpful.
    25 Jun 2014, 12:26 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Strongly agree. I talked to this guy Nicolas Christin who did a study on Bitcoin exchange risk. The risk is very high.

     

    http://bit.ly/UL75WU

     

    I would personally keep any large amount of Bitcoin air gapped as the Bitcoin "securing your wallet" guide recommends, and memorize/secure strong passwords with at least 128 bits entropy. Also I would also understand the rules of how often it is necessary to re-back up the wallet, which is necessary for some client software.

     

    I wouldn't short at all, but if shorting through an exchange, also consider that the exchange risk is present throughout that transaction.
    25 Jun 2014, 11:48 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Here is my Bitcoin valuation:
    http://seekingalpha.co...
    26 Jun 2014, 08:58 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Thanks, connellybarnes! Well timed given bids due tomorrow.
    26 Jun 2014, 09:07 AM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Fed panel opinions on Bitcoin (pages 10-12):
    http://1.usa.gov/1qMu5Qm
    Surprisingly, the Fed seems to like Bitcoin, and unsurprisingly wants to regulate it.
    1 Jul 2014, 04:05 AM Reply Like
  • A Runner
    , contributor
    Comments (5) | Send Message
     
    Some see BTC as revolutionary. Some see BTC as a trading vehicle. Im in the latter camp.
    24 Jun 2014, 02:44 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » This is an interesting opportunity:

     

    http://bit.ly/1lOAkn9

     

    How would you bet? Yes or no?
    24 Jun 2014, 02:51 PM Reply Like
  • A Runner
    , contributor
    Comments (5) | Send Message
     
    Well, frankly, I haven't a clue.
    I fubared my only foray into BTC last year, so as an "experienced voice", Id say do the opposite of what I do. That said, Im looking at a small re-enrty into BTC at a specific price. This time, I will just let it evaporate completely or wait it out for whatever is to come...
    BTC discussions are rarely dull. Seems everyone has strong opinions.
    24 Jun 2014, 03:02 PM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (1213) | Send Message
     
    Great link, I hope I will learn from this excercise.

     

    Intuitively the odds (yes or no) are 50-50. Actually if a lot of bitcoins are sold that may lower the price, so "no" might be more likely than "yes". But "no" pays out almost 3 times the bet amount and "yes" only 1.25 times. So I suppose "no" is the best bet. Unfortunately the payout will rapidly decrease if you bet a large amount. This bet is not scalable.

     

    Another way of looking at this is that buyers of large amounts may want to pay a premium above the market price, just as with stocks. So in that case "yes" might be the way to go. But in that case I would pass: the margin of safety of "yes" is too small and if everybody talks about a certain asset it must be overvalued anyway.
    24 Jun 2014, 03:48 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » What would your bidding strategy be for this week's US Marshal auction? What do you predict it would take to win?
    25 Jun 2014, 07:03 AM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (1213) | Send Message
     
    I was about to ask this to you. Since everybody talks about bitcoins they are probably overvalued. OK, bitcoins could be valuable because it's mafia money, but I am not a member. And bitcoins won't be the last financial innovation either. So I wouldn't be interested in a long bet: in buying bitcoins for a premium on top of the market.

     

    So what you can try is bidding less than the market and hope you get some. The next thing I would do is selling these for a quick profit. If you feel that the auction has depressed the bitcoin price you could also wait a couple of months. They might go up during the next financial crisis in October/November.

     

    Now suppose you get nothing. And suppose they publish who got how many bitcoins. Then you can phone these lucky winners and ask them if you can borrow their bitcoins. This might be the cheapest way to implement a short bet. If they don't announce the winners you might still be able to phone everybody on the now public list of bidders.

     

    I hope to hear/read the outcome of your bitcoin bets some time.
    25 Jun 2014, 07:44 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Tim Draper Wins Gov’t Auction, Partners With Vaurum to Provide Bitcoin Liquidity in Emerging Markets: http://bit.ly/1rYMtW6

     

    Draper intends to put newly purchased bitcoins to good use
    We’re delighted to announce that Tim Draper has won the US Marshals bitcoin auction and is partnering with Vaurum to provide bitcoin liquidity in emerging markets.
    Tim offered this in a statement:
    “Bitcoin frees people from trying to operate in a modern market economy with weak currencies. With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.
    Of course, no one is totally secure in holding their own country’s currency. We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.”
    Vaurum has launched trading platforms in emerging markets, and we will be partnering with Tim to leverage the pool of ~30,000+ bitcoins as a liquidity source. It’s still quite difficult to get access to bitcoin in these developing economies — and that’s exactly where it is needed the most. Our goal is to build reliable infrastructure and increase liquidity, which are two major challenges in the ecosystem.
    How the partnership came about:
    Vaurum was incubated by Boost last summer which is where we met Adam Draper and Tim Draper, who are both early investors in us. Collectively, we’ve been brainstorming to come up with new ways to help grow global bitcoin adoption, and what we came up with is a way to leverage our exchanges and utilize the auctioned pool of bitcoins, as well as market making strategies, to help provide liquidity in these underserved markets.
    Many thanks to the United States Marshals Service for their facilitation of the auction. We’re excited about the opportunity to put these coins to good use and are looking forward to working with Tim in such a unique way.
    Avish Bhama
    CEO | Vaurum
    2 Jul 2014, 03:16 PM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (1213) | Send Message
     
    Thanks for letting us know. Smart guy, this Tim Draper. I wonder how much he has paid for these bitcoins, I suppose more than the market price? His bitcoin promotion plans in emerging markets could be good news for bitcoin longs.
    2 Jul 2014, 04:03 PM Reply Like
  • jaginger
    , contributor
    Comments (804) | Send Message
     
    Draper talking bitcoin on CNBC right now
    7 Jul 2014, 11:22 AM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    If I ever make a fund it would be cool to tell my clients that I own "drug money Bitcoins." Hopefully Draper can pimp those Bitcoins.

     

    But I should say that this whole sequence of events makes me sad, because I think the Silk Road offered a valuable market service, arguably lowered violence [1], and I don't approve of civil forfeiture laws.

     

    [1]. http://bit.ly/1j8OKxO
    7 Jul 2014, 12:00 PM Reply Like
  • hrumfik
    , contributor
    Comment (1) | Send Message
     
    check this out: kryptologika.com
    Silver-backed GH/s in the best prices !
    13 Aug 2014, 05:35 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    If I can opine: The economic value of anything is derived from its mathematical scarcity and demand. If shares are scarce and in demand, they have value. Same with bitcoin. Same with gold. Same with oceanfront houses.
    26 Aug 2014, 08:41 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    A Bitcoin arbitration service that is interesting -- Bitrated. I think it's too complicated for mass adoption but still cool. In my opinion arbitration would work best if it were integrated directly into exchanges such as Coinbase.
    https://www.bitrated.com
    16 Oct 2014, 10:49 PM Reply Like
  • Jack Treme
    , contributor
    Comments (180) | Send Message
     
    As a devil's advocate, I'm wondering if bitcoin itself is destined to succeed or only the underlying technology (the blockchain, etc.). You're seeing the blockchain technology already being used to support other cryptocurrencies and cryptosecurites (Reddit example).

     

    I agree that there are many advantages to cryptocurrencies, like anonymity, micropayments, international remittance, serving as an international currency, and serving as the currency of the internet, and of the digital and virtual world.

     

    But if some fraction of traditional currency can be transitioned to the blockchain (for example, cryptodollars/bitdollars) then what advantage does bitcoin really have, other than serving as an international currency? I realize this is a big if, but just thinking out loud here.

     

    From the investor's viewpoint, the question is should one invest in bitcoins or just the blockchain technology?
    3 Nov 2014, 02:24 AM Reply Like
  • kitstricker
    , contributor
    Comments (184) | Send Message
     
    The biggest problem I see with any crypto currency (or coded money transfers) is insurance.

     

    Unless someone is able to insure the transactions, mass adoption is out of the question.
    3 Nov 2014, 12:46 PM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (582) | Send Message
     
    You can have insurance if you own bitcoins. Use circle.com's website and learn more.
    3 Nov 2014, 01:16 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    The Bitcoin transaction volume has doubled since Sept 2014 and the price has halved.

     

    As usual recent Bitcoin news has a very high drama factor:

     

    (1) There is a big political split between the miners and exchanges about block size changes, with different core developers joining one or the other faction. The two groups have different incentives -- miners want Bitcoin to stay stable like some digital gold, whereas exchanges want it to grow like crazy:
    http://bit.ly/1F2c3EJ
    One company is even stressing the network by flooding it with tiny amounts of free money to prove that the block size needs to increase:
    http://bit.ly/1F2c4IK

     

    (2) As usual there are more Bitcoin startups funded by VCs, including an interesting proposal by Chain Inc to use blockchain technology inside Wall St banks for faster settlement:
    http://bit.ly/1F2c3UZ
    This is explored in more depth on an article on Wired, where NASDAQ's CTO is quoted as saying blockchain technology can transform the stock market:
    http://wrd.cm/1F2c4Z2

     

    (3) A few months ago there was much talk about Sidechains, which allow many different decentralized Bitcoin-like networks to all be glued together by having exchanges that peg the value to some fixed quantity of Bitcoin (the article discusses how this could be used for e.g. assets like stocks):
    http://tcrn.ch/1F2c4Z5

     

    (4) Former Mt Gox CEO arrested and charged with embezzlement:
    http://read.bi/1F2c3V2

     

    (5) Agora marketplace, a "darknet" for exchanges of goods similar to Silk Road, went offline last month because of anonymity vulnerabilities in the Tor anonymity network:
    http://wrd.cm/1F2c3V5

     

    (6) And of course we have the usual cybercrime, FBI arresting criminals, and in a unusual twist, a secret service agent admitted to stealing Bitcoin: "In court on Monday Bridges admitted his theft had made Ulbricht [the former Silk Road founder, who is now sentenced to life in prison] believe that another individual was stealing from Silk Road and helped lead Ulbricht to try to hire someone to kill that person."
    http://bit.ly/1F2c4Z8
    http://bit.ly/1F2c3V7
    11 Sep 2015, 01:40 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    The OTC fund GBTC appears to own Bitcoin. The company's website and an investment blog have covered this:

     

    http://bit.ly/1JCKD6X
    http://bit.ly/1LDyRaG

     

    Thus far it has generally traded at a significant premium to NAV. This poses the opportunity of being short the fund and long Bitcoin directly.*

     

    Also, accredited investors can buy directly at NAV, but then "shares are subject to significant resale and transfer restrictions."

     

    * I am not a lawyer not investment advisor, and make no recommendations regarding Bitcoin or Bitcoin funds.
    18 Sep 2015, 08:29 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    21 Inc releases Bitcoin computer, with the aim of facilitating machine-to-machine and programmatic Bitcoin transactions:

     

    http://on.wsj.com/1KPPnrU
    23 Sep 2015, 02:34 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    VC firms have invested $1 billion in Bitcoin startups now. Its market cap is ~$7 billion:

     

    http://cnnmon.ie/1NBJCfn

     

    Mergers or bankruptcies of the startups are likely unless it takes off for consumers. However, transaction volume continues to grow rapidly, so more mainstream adoption is a possibility:
    http://bit.ly/1NBJAUT

     

    Plotting Bitcoin transaction volume against date on a logarithmic plot shows that early growth was more rapid than recent growth, with relatively linear growth of log(volume) since roughly May 2012. However, doing a linear regression of log(transaction volume) against date from May 2012 to Dec 2015 reveals a fairly good fit and a yearly growth rate in transaction volume of about +235%.

     

    I personally think Sidechains are important for the future of this ecosystem, because they will allow for more innovation in cryptocurrencies and also allow for alternative cryptocurrencies to be pegged to Bitcoin. One of the technologies implemented in a sidechain, Segregated Witness, has been discussed recently as a method for fixing a block size problem in Bitcoin. A sidechain cryptocurrency network called Liquid was also recently released, which aims at international money transfers and increasing liquidity on exchanges:

     

    http://bit.ly/1NBKaSs
    http://bit.ly/1NBKeBL
    http://bit.ly/1Idta8k
    18 Dec 2015, 11:54 AM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Lead Bitcoin developer Mike Hearn on his decision to leave the community due to his belief that Bitcoin will fail:

     

    http://bit.ly/1Zu7Z4p

     

    I think there are some good takeaways here on how to run an effective organization.

     

    One lesson is to make sure that key contributors feel they are being listened to and can contribute, under a rational decision-making process, rather than just being shut out of decisions for no clear reasons. Another lesson is to be careful that incentives are not introduced that cause civil wars between people who should really be working together. A third lesson is to make sure that decisions are never made based on finding a cheery middle ground that protects different parties' feelings, but rather to ensure that all decisions make minimal errors with respect to the collection of all substantiated facts and evidence.
    17 Jan, 02:57 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Bitcoin block size controversy potentially resolved at a Hong Kong conference on February 20 (2016):

     

    http://bit.ly/21oiZTC
    23 Feb, 12:54 PM Reply Like
  • connellybarnes
    , contributor
    Comments (551) | Send Message
     
    Interesting article on Ethereum vs Bitcoin, and how Ethereum's smart contracts can be used for customized betting and hedging:

     

    http://tinyurl.com/jy5...
    24 May, 06:57 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10652) | Send Message
     
    Author’s reply » Thanks. I always enjoy your links. I have a piece coming out on bitcoins shortly.
    24 May, 09:16 PM Reply Like
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