Obv you don't understand. The hashrate number doesn't have anything to do with how big the network is. It's really about the amount of work/money/chips that's needed to make that number. According to you.. If I made a chip tomorrow for $10 that doubled the hashrate.. the network just grew a ton because the hashrate went up a ton.

It is simple thinking.. this **** really isn't that complicated.

The reward has been known and going on for a long time. How come the price went up and then down? Guess it's not as simple as you think.

Well if you figure a large % of people holding coins are in it for the long haul. So they aren't selling. So if the amount of buying for a day exceeds the number of oncoming mined coins.. the price rises. If a lot of buying comes in.. the price goes up a lot because nobody's selling and there are no more mined coins to be sold. You see a massive short term spike, and then either people start selling, or mined coins start to catch up with the short term demand.

In the end the law of large numbers wins.

Most merchants(the big ones anyway, to my knowledge) are using a 3rd party to instantly convert the BTC people buy stuff with into USD.

Unless these 3rd parties are constantly just accumulating BTC, then some % of them end up being sold for USD on an exchange.

Thus, anytime someone buys something with BTC they are basically executing a sell order for x% of their purchase.

This is what the poster was referring to.

That's been said about 1000 other times in this thread. So forgive me if I didn't address that part of it.

A higher percentage of coins were mined last year than this, and the year before. But hey, short term spike, long term spike, totally simple!

Yes, you do become a holder of the USD as a seller of goods, and then you spend the USD, you don't insta convert the USD to gold and then spend the gold on inventory and paying people, you use USD to do that. All the bigger merchants accepting btc aren't actually accepting them, it is just a gimmick that simplifies the process of a individual bitcoin holder selling btc in market for USD and then taking that USD and buying from a merchant. There is not a single legit large merchant that accept bitcoins with the intent of spending those bitcoins themselves.

BitPay, the largest and oldest bitcoin payment processor with a daily volume of $1 million bitcoin transactions supporting more than 44,000 merchants, stated in an email exchange to CCN that more than 4,400 of their merchants keep all of their settlement in bitcoin, almost 18,000 keep some of their settlement in bitcoin while the remaining 22,000 convert it all to fiat.
https://www.cryptocoinsnews.com/more...keep-bitcoins/

overstock has stated that they hope to be able to do this if their suppliers were to accept bitcoin. i think they also do retain a small % of their sales in btc.

That article even admits that amongst the "world renowned" companies accepting btc, only overstock is holding on to a percentage of their btc, and that is a paltry 10%. So 90% of any transaction overstock does with btc is dumped on the exchanges as a condition of executing the transaction.

Completely meaningless statistic.

Notice that they didn't give the more useful statistic- percentage of sales kept in Bitcoin.

I'm a merchant at BitPay with $0 sales (with a disabled website), and keep it all in Bitcoin, for example).

And keeping "some" could be as little as 1%! Completely meaningless and slanted, and designed to serve an agenda.

Tom is having trouble because a significant portion of his net worth is disappearing. I understand that

What % of my wealth was in Bitcoins (at the peak in my lifetime) do you figure?

Hint: My holdings may not be what you think.
Hint 2: I had several *days* where I lost more in poker than I have in a lifetime of Bitcoin
Hint 3: I've never had a day where I lost more in Bitcoin than I lost in the worst 100 days of my poker career.
Hint 4: I have enough that if Bitcoin explodes, I'll be happy, and if it doesn't, it makes virtually no difference in my life.
Hint 5: I'm acquiring Bitcoin every month, so cheaper prices is actually good for me!

ITT TomCollins reveals he has 3.5 bitcoins

For a long time TC was the "bear" ITT. After a time, the constant influx of bears pointing out the same issues has gotten old for just about everyone else posting who was bullish before him. Bitcoin works. People can play poker, sports bet, transfer money, and (multiparty) escrow on here without worrying about PayPal or neteller or site restrictions anymore. What else does a forum like 2p2 need?

This is a Business, Finance, Investing forum. I'm approaching bitcoin from an investing/speculating/trading perspective. I trade high risk derivatives so a high risk/reward investment in bitcoin would be wonderful. I'm looking for 1) an argument for the future worth of bitcoin/its likely adoption and 2)intelligent knowledgable investors who believe bitcoin will appreciate. I've found neither in this thread. So far, I've seen zero reason why further massive appreciation is likely (apart from an ETF being released). The bulls are horribly ignorant about bitcoin. Few of the bulls even know what they're talking about (for example, PickyTooth claims that Moore's Law is somehow relevant for reducing bitcoin transaction costs!!!!!!!, indicating he doesn't understand the most basic elements of the how the protocol works, that make Moore's Law irrelevant). So it's not looking good. People seem to be investing in bitcoin largely based on playing the lottery, irrationality and enabling illegal activities, things which won't work in the long run and aren't bullish for larger market caps (they're bullish at lower market caps however).

Bitcoin is horrible for those activities. Imagine if Neteller could randomly reduce your balance by 40% in a few days, with no recourse. No one would use them. Yet that's exactly what happens with bitcoin. 80% loss of value in a year. Bitcoin is only viable for those activities if you're willing to speculate on bitcoin at the same time and willing to lose 80+% of your bankroll.

Illegal activity has been a huge driver of appreciation to this point, but once it gets large enough - and it's getting closer to being large enough - they'll go after bitcoin gamblers and even bitcoin trading as well. On a bigger scale, miners could probably get prosecuted under a number of US laws including facilitating illegal transactions/money laundering, laws which have global reach and in which case bitcoin is finished. Copyrighted material or other illegal material can be put in the blockchain, making the blockchain itself illegal to hold. Major bitcoin gambling sites have already shut their doors to American over legal fears. So the bitcoin "illegal activity" bull case only works at low market cap/low turnover. Bitcoin survives at a reasonable market cap only while the law itself ignores it. Whether the law will intervene is an open question, but if the bulls are right about bitcoin's utitlity, there's trillions of dollars in banking interests (not to mention power) at stake.

In addition, the protocol itself is set up to have high costs for the intermediate future, burning a large percent of its market cap on electricity and hardware (this is a flaw of the protocol itself and a source of increasingly strong downward pressure if bitcoin spikes again).

So the investing case seems rather awful at this point. Is it useful for some people right now? Sure it is. No one is saying it isn't. But that's not what this forum is about.

Bitcoin have a potential upside of around $4M/BTC, if we could argue that to be likely do you think Bitcoin would trade for $200/BTC? You need to lower your standards for likelihood or just stay away from investing.

What we are claiming is on the line
1. Bitcoin works
2. Bitcoin is faster, cheaper, more pseudonymous or has lower barrier on entry for some purposes in the short term, which should lead to short term growth
3. Short term growth has been the case
4. Further short term growth seems likely based on 2
5. Long term bitcoin could be faster, cheaper etc than alternatives
6. 4 might lead to to 5

I do. At USD parity people were convinced it was hilariously overpriced. The investing pool is quite small, mining burns a truckload of money right now every day, and most people are risk averse.

I'm looking for at least 5% that bitcoin will be a 100 bagger.

Bitcoin does indeed facilitate secure transfer of its own units at its current scale without motivated attackers. Whether it will scale is yet to be seen. Whether this is something people will ever desire on a large scale is the question:
For international wire transfers to non merchants for participants already in the ecosystem, yes. For same country wire transfers, somewhat, but not particularly meaningful as there are lots of more stable, reliable alternatives already used by people who need this (i.e. PayPal, various apps). For everything else, no.

No. Bank transfers cost zero or close to zero. To exchange fiat to bitcoin costs money. Bitcoin fees are/will be higher than credit card fees. Visa processes trillions but only pulls in $10 billion/year in revenue and $2 billion/year in profit. Bitcoin will never beat that cost base due to its structure.
Absolutely
Agreed, although I'd argue that the barrier to entry for 95+% of people is very high...
You don't know that. It appears that growth has completely stopped and in fact reversed in the last year. Chinese transactions have grown to be 75% of the market, and many of these are believed to be wash trades:


Which means that bitcoin and even more so bitcoin transactions in entire Western world are heavily in decline at a time when bitcoin has entered mainstream public awareness. Also, gambling has exploded and the majority of transactions represent gambling. Nearly all of the 100 most popular addresses are gambling addresses. In addition, criminal activty has exploded (worth billions/year - the Silk Road seizure estimated that they made 633K bitcoins in commissions on 1.5 to 10% fees - you can work out the turnover in terms of market cap/daily volume and realize it comprises a large portion of the volume).

Finally, bear in mind that the last year of your graph represents number of transactions at a time when bitcoin has lost 80% of its value - USD transaction volume has actually been flat to declining over the past year!


With that USD volume, effective transaction cost is running at 2% ($1 million/day sunk into mining and lost from the bitcoin ecosystem).

All the evidence is that growth is going backward and mainstream growth is simply not happening. This is at time that bitcoin exploded into public awareness and there were a large of number of adoptions by mainstream large scale merchants as well as better payment solutions. Contrary to what you believe, the statistics indicate that bitcoin is in major mainstream decline.
This seems to me to be an enormous stretch. The above have been drivers for bitcoin, but they're reaching levels where saturation and regulation occurs. The poker industry is only so large. The tech savvy illegal transaction market is only so large. The gambling industry is only so large. All of these things have reached the order of magnitude of their upper limit, whereas in previous years, they were orders of magnitude below their limit. These uses are also unrelated to the main thesis for bitcoin, a thesis that requires mainstream adoption. By the numbers above, mainstream adoption is practically non existent - entries into the system are nearly all illegal activity or gambling (the rest are probably speculation), which bodes horribly for bitcoin's future this late in the game if it has the utility you guys claim it does.
In the future it won't ever be faster or more secure than a centralized solution (what's quicker than tapping "send" on your phone, of which a number of banks/payment providers/apps will do in the future as the desire grows), and it won't be cheaper due to the nature of public mining, and the requirement that network security can only come from burning a meaningful percentage of bitcoin's market cap on electricity and chips every year (this is on top of the cost of same security/infrastructure layer that banks/cards/money changers already need to provide). In terms of speed, Ripple for example smokes this clown and will only grow stronger and more connected to the existing network where the volumes of existing money are transacted.
I see very strong evidence against this this late in the game, and the protocol itself is such that it's not suitable for mainstream applications (and will always be more expensive due to the necessary cost of mining on top of all the same infrastructure that banks and payment networks need to provide - a buildout which will introduce yet more enormous startup costs into the bitcoin network which will ultimately come out of bitcoin's value).

Anyway, it's really nice to see a rational, correct argument laid out, so thanks. Two years ago I'd agree with you and probably buy in. I think the market has spoken now, though - beyond a small pool which is now saturated, the market has shown it has no interest in what bitcoin offers, and that bitcoin offer no useful utility for anything that's not illegal.

Oh and further to that point: This kind of thing - wallets now following regulations in order to stay in operation - is going to put a curb on new money coming in for gambling and illegal transactions. Look at the reactions of lots of regular bitcoin users in that thread. All this stuff is a big disincentive that hasn't existed before. Bitcoin is now big enough that this stuff is going to bite more and more. And with all this going on, as well as Russian and China and eventually other countries moving hard against bitcoin, a million new US dollars still need to come into bitcoin each day just to stop it dropping due to mining burn. No where near that much money has come in in the past year, in fact quite the opposite, given that it's dropped 80% in a year...what is going to make it happen now?

Definitely more than this, but under 350.

Guys, bitcoin will not go above $220 again. It will continue to fall to aprox $90 within 3 months, I will bring my post up once this happens. Thanks.

if you are so sure about this, please post screenshots of your current short positions

I wouldn't go anywhere near that prediction (I'd probably bet against it), but cmon, there's no reliable way to short bitcoin, particularly with the price of bitcoin falling so much; there's a substantial risk these places will go belly up.

Bitfin*x is quite secure in my opinion. The software of course could be improved and is in no way comparable to a real trading platform, but the site is well funded and the operators are basically sitting on a cashcow. Therefore I really doubt that the operators will run of with the customer funds / start running a fractional reserve business.

(the BTC price itself should be quite irrelevant to the security of your funds on there, even though I admit that a very low price may effect their trading volume (and therefore their earnings))

However I agree with you that shorting bitcoin is still a quite risky endeavour (irrespective of the BTC price development)