I wonder how many people are aware of the ongoing and raging battle between big blockers who want a hard fork to upgrade block size, and small blockers, who want a soft fork that adds functionality to make side chains feasible. I am strongly biased for one of these, but won't say which to avoid being attacked.
Awaiting the propaganda wave in response to my comment...
A full mempool is by design. Without it, bitcoin can be used as a permanent secure distributed file storage system with massive redundancy. Thanks... I'd prefer to keep it as a non-censorable store of value.
There is no global mempool, it's a per-node thing. I think the default for Bitcoin Core is to hold 300MB of transactions, which means for most nodes the number of transactions in the mempool is constant. A better metric is transaction fees. Here's an example site: https://bitcoinfees.info/
It would be interesting to see a breakdown of WHAT Bitcoin are being trading for (e.g. pure investment, black market goods, standard commercial goods/services).
Without a good understand of what drives Bitcoin's use it is hard to tell if this is an investment bubble or legitimate organic growth. I will say I don't run across all too many sites that support payment via Bitcoin, I know they exist, but it hasn't expanded to be commonplace.
But I've read the drug market on e.g. Tor is alive and well. So maybe that drives a lot of this trading.
Check out Jim Epstein's article on how its used in Venezuela. Pretty great use case. As long as there are a few intermediary companies, i'm not sure it matters that most companies don't take btc.
Like many bitcoin users, Alberto, the miner who makes $1,200 daily, imports food from the U.S. through Amazon's Prime Pantry service. This would be impossible with bolivars because almost no one outside of Venezuela accepts them as payment, and the growing scarcity of U.S. currency has made purchasing foreign goods with dollars increasingly difficult. Though the Seattle-based retail giant doesn't accept bitcoins itself, plenty of intermediary companies do. Alberto purchases Amazon gift cards through the cryptocurrency-friendly website eGifter, using software to mask the location of his computer, and then routes his orders through a Miami-based courier service.
Personally, I've done a lot of dev work for Bitcoin for foreign nationals. It gets real annoying real fast to deal with PayPal or traditional international money transfer systems when you're talking contract work levels of money for a small company (too much for shitty remittance services, too little to make the overhead of more complicated bank-managed mechanisms worth it).
And yes, I do pay taxes on my Bitcoin payments. It's somewhat annoying to keep track of everything, but my accountant mostly takes care of it for me. I probably end up losing ~2% to overhead (very little of which is due to Bitcoin itself), which is unfortunate but comparable to even the cheapest traditional services.
You can really only speculate, but I think it's safe to say that the strong majority of trading is for speculation.
The darknet markets certainly bring some demand, but it's high-velocity. You don't need to hold BTC, only transact in it.
The remittance market does seem to be there, but it's still in its infancy. Maybe only a small fraction from this.
Similarly, actual e-commerce is quite limited. Bitcoin offers few advantages over PayPal and credit cards for the large majority of consumers. There's only a subset of international transactions and other fringe situations where it makes sense.
I think the other significant market, after the speculators, are those that are ideologically motivated to hold Bitcoin.
Most of the people around me are using it as a speculative investment / store of value. If my sample is not biased and this is the case for the whole universe, that alone should be driving the price up.
The amount of new bitcoins that are being made available is just 12.5 every 10 minutes, this is a mere 1,800 BTC a day, or around USD 2 million. If the main use for bitcoin is store of value or long investments, the available "old" bitcoins are not going to be that many. In my opinion this is the main driver of the price.
I'm pretty sure active trading with BTC is mostly regarding drug dealing through dark net market places. And the conversion mostly dealers selling BTC for USD to consumers, which buy drugs with BTC and those BTC will be sold back to the consumers for USD.
As far as I can tell there is simply nothing else to do with BTC as of now ... sure you can use it in some shops and you can buy plane tickets from Air Baltic with BTC - but those purchases are always actually more expensive to cover for the volatility of the BTC value and of interest only for users who think its fun to actually use BTC in the real world.
Probably it will either establish as an illegal clandestine super-national currency or it will be hijacked by banks for whatever weird theoretical purpose.
This is how Bitcoin must progress. Slow and steady. A platform like this can't be the result of rocket like growth and instantly transform marketplaces. Much of finance is based on stable assured systems.
This is a good sign overall. Even if BTC isn't the right answer as a currency.
I haven't seen a single bitcoin exchange that is stable and trustworthy enough to put your money in (Mt. Gox used to be the biggest and most reputable and we all know how that turned out). Converting from your real currency in to and out of bitcoin is still very difficult. Almost every exchange gets hacked sooner or later or gets shutdown due to government regulations.
Nowadays there are quite a few extremely reputable and solid exchanges, insured, following all regulations, etc. For example Gemini run by the Winkelvoss twins, and Coinbase/GDAX (a YC-funded company.)
MtGox has never been reputable. It was the biggest, and it worked, but it has always been sketchy. I say this as a MtGox user through 2011-2013. And yeah I stopped using it about a year before it got shut down because other exchanges more reputable than MtGox started appearing and it was more and more obvious MtGox had serious internal issues (delays in processing transactions, one of their bank account seized by the feds in 2013, etc.)
That may be true, but we've come a long way. Coinbase insures all currency they store in online storage, and offline storage is significantly more secure and less hackable. USD in Coinbase accounts is FDIC insured too! It's not perfect, but we've certainly come closer to a safer exchange world.
What do you find unstable or untrustworthy about GDAX or Gemini? They're both American companies with a great deal riding on their reputations as mature platforms, Gemini in particular in light of the ETF.
I'm curious how others on HN feel: I think Bitcoin is an evolutionary dead-end and the future is Ethereum. Ethereum is more powerful and allows more development on top of it than Bitcoin. I think Bitcoin still holds sway because it was first, but I think Ethereum has a brighter future. Anyone have a good rebuttal, or am I on the mark?
> The SEC will decide by March 11 whether to approve one filed almost four years ago by Cameron and Tyler Winklevoss. If approved, it would be the first bitcoin ETF issued and regulated by a U.S. entity.
This would combine the ridiculous volatility of bitcoin with the all-day tradeability of an ETF. What could go wrong?
GBTC [0] has been trading since March 2015 [1], as of today is up 714% since inception [2]. My understanding is that nothing serious has gone wrong, so far, in nearly two years.
Also, for some, "ridiculous volatility" is a desirable feature for some portion of their portfolio.
We've been watching the ETF with interest. To gauge market sentiment, we launched an ETF approval binary contract (https://www.bitmex.com/app/trade/COIN_BH17). COIN_BH17 saw a jump from 35% to nearly 50% today. Optimism on the ETF is rising.
Even as a long-time holder of bitcoin, I don't see how the Coin ETF will be approved. There is so much risk in the ETF that your investment may be wiped out instantly. I wouldn't approve it.
My expectation is that it will be rejected, and the price of bitcoin will crash back to about USD$700 or so, and continue its long march upwards. It's important to recognize that that crash would still mean that bitcoin has almost doubled in value vs the US dollar in the past year. It has doubled in value over the past six months.
Bitcoin is within 0.4% of its all-time high (http://www.coindesk.com/price/ - peaked at $1165.89 in 2013). ATH breakout could and probably is going to happen any minute now... In fact many exchanges have already reached their ATH in the previous hours.
Do the article authors have at least 0.01% understanding of what bitcoin is? Or what web is? I'm very suprised of technical incompetence of authors writing about technical stuff in top newspapers.
If you mean that web == HTML + internet ports 80/443 etc., then it's a forgivable error. s/web/internet/ doesn't make the article any more or less effective at getting the main points across (price high, ETF rumors).
The BTC price really is crazy. There's no telling where it is going to end up. The long term chart is pretty amusing: https://cryptowat.ch/bitstamp/btcusd/1w
Bitcoin is surging because it's a globally accepted store of value and means of commerce, and the fixed quantity prevents devaluation. Unlike gold, all transactions can be done remotely and confidentially, an there are no storage cost, eliminating all the problems that are associated with storing large quantities of gold. IMHO, all dips will continue to be bought and the price will keep rising...$4,000/coin is possible...been long since 2013, so I am biased in that regard, but there are real fundamentals here too.
Foreign currencies have lost anywhere from 30%to 99% of their value against the US dollar since 2013. Beginning around 2002 and ending around 2011, many foreign governments carelessly amassed substantial infrastructure debts that now they are struggling to pay off (due to economic weakness for these foreign economies and the surging US dollar), creating a cycle of inflation and currency depreciation, making Bitcoin more attractive to own for people and businesses in these countries. Bitcoin is rising because citizens and businesses have lost faith in the competence of their governments, and rightfully so. America is an exception in that it's well-managed and strong economically and fiscally (especially relative to these foreign economies), which explains the flight to the US dollar, and also Bitcoin.
For example, in 2013, depositors at Cyrus' largest bank lost 48% of their savings above 100,0000 Euros:
NICOSIA, Cyprus (AP) — Depositors at bailed-out Cyprus' largest bank will lose 47.5% of their savings exceeding 100,000 euros ($132,000), the government said Monday.
The figure comes four months after Cyprus agreed on a 23 billion-euro ($30.5 billion) rescue package with its euro partners and the International Monetary Fund. In exchange for a 10 billion euro loan, deposits worth more than the insured limit of 100,000 euros at the Bank of Cyprus and smaller lender Laiki were raided in a so-called bail-in to prop up the country's teetering banking sector.
A second factor may be the rise of global authoritarianism, unrest, and unease, reducing confidence in keeping money in banks, and assets that face geopolitical risk...Bitcoin, because it's decentralized, is immune to geopolitical risk. As long as you have your wallet, you have your wealth.
[+] [-] out_of_protocol|9 years ago|reply
Over 100k transactions in mempool (waiting to be confirmed)
https://jochen-hoenicke.de/queue/all.html
[+] [-] colordrops|9 years ago|reply
Awaiting the propaganda wave in response to my comment...
[+] [-] Frogolocalypse|9 years ago|reply
[+] [-] TD-Linux|9 years ago|reply
[+] [-] Someone1234|9 years ago|reply
Without a good understand of what drives Bitcoin's use it is hard to tell if this is an investment bubble or legitimate organic growth. I will say I don't run across all too many sites that support payment via Bitcoin, I know they exist, but it hasn't expanded to be commonplace.
But I've read the drug market on e.g. Tor is alive and well. So maybe that drives a lot of this trading.
[+] [-] thomasthomas|9 years ago|reply
Like many bitcoin users, Alberto, the miner who makes $1,200 daily, imports food from the U.S. through Amazon's Prime Pantry service. This would be impossible with bolivars because almost no one outside of Venezuela accepts them as payment, and the growing scarcity of U.S. currency has made purchasing foreign goods with dollars increasingly difficult. Though the Seattle-based retail giant doesn't accept bitcoins itself, plenty of intermediary companies do. Alberto purchases Amazon gift cards through the cryptocurrency-friendly website eGifter, using software to mask the location of his computer, and then routes his orders through a Miami-based courier service.
http://reason.com/archives/2016/11/28/the-secret-dangerous-w...
[+] [-] Exofunctor|9 years ago|reply
And yes, I do pay taxes on my Bitcoin payments. It's somewhat annoying to keep track of everything, but my accountant mostly takes care of it for me. I probably end up losing ~2% to overhead (very little of which is due to Bitcoin itself), which is unfortunate but comparable to even the cheapest traditional services.
[+] [-] Obi_Juan_Kenobi|9 years ago|reply
The darknet markets certainly bring some demand, but it's high-velocity. You don't need to hold BTC, only transact in it.
The remittance market does seem to be there, but it's still in its infancy. Maybe only a small fraction from this.
Similarly, actual e-commerce is quite limited. Bitcoin offers few advantages over PayPal and credit cards for the large majority of consumers. There's only a subset of international transactions and other fringe situations where it makes sense.
I think the other significant market, after the speculators, are those that are ideologically motivated to hold Bitcoin.
[+] [-] mrb|9 years ago|reply
No data supports this. For some reason articles occasionally still make this claim, but no sources support this.
In fact I am aware of a study that reports the opposite: that Bitcoin commerce is no longer driven by "sin" activities but instead by legitimate enterprises: https://papers.ssrn.com/sol3/papers2.cfm?abstract_id=2808762
[+] [-] josu|9 years ago|reply
The amount of new bitcoins that are being made available is just 12.5 every 10 minutes, this is a mere 1,800 BTC a day, or around USD 2 million. If the main use for bitcoin is store of value or long investments, the available "old" bitcoins are not going to be that many. In my opinion this is the main driver of the price.
[+] [-] bookbinder|9 years ago|reply
[+] [-] eip|9 years ago|reply
[+] [-] mr_green_tea|9 years ago|reply
As far as I can tell there is simply nothing else to do with BTC as of now ... sure you can use it in some shops and you can buy plane tickets from Air Baltic with BTC - but those purchases are always actually more expensive to cover for the volatility of the BTC value and of interest only for users who think its fun to actually use BTC in the real world.
Probably it will either establish as an illegal clandestine super-national currency or it will be hijacked by banks for whatever weird theoretical purpose.
[+] [-] legulere|9 years ago|reply
[+] [-] wslh|9 years ago|reply
[+] [-] dkincaid|9 years ago|reply
[+] [-] dmix|9 years ago|reply
This is a good sign overall. Even if BTC isn't the right answer as a currency.
[+] [-] cjbprime|9 years ago|reply
[+] [-] toephu2|9 years ago|reply
[+] [-] mrb|9 years ago|reply
MtGox has never been reputable. It was the biggest, and it worked, but it has always been sketchy. I say this as a MtGox user through 2011-2013. And yeah I stopped using it about a year before it got shut down because other exchanges more reputable than MtGox started appearing and it was more and more obvious MtGox had serious internal issues (delays in processing transactions, one of their bank account seized by the feds in 2013, etc.)
[+] [-] AlphaWeaver|9 years ago|reply
[+] [-] Obi_Juan_Kenobi|9 years ago|reply
[+] [-] ozmbie|9 years ago|reply
[+] [-] mr_green_tea|9 years ago|reply
[+] [-] delegate|9 years ago|reply
People bought drugs on SilkRoad back when the price was $2 / bitcoin. Those must have been some of the most expensive drugs in history !
[+] [-] sputknick|9 years ago|reply
[+] [-] pdog|9 years ago|reply
This would combine the ridiculous volatility of bitcoin with the all-day tradeability of an ETF. What could go wrong?
[+] [-] mrb|9 years ago|reply
[+] [-] npongratz|9 years ago|reply
GBTC [0] has been trading since March 2015 [1], as of today is up 714% since inception [2]. My understanding is that nothing serious has gone wrong, so far, in nearly two years.
Also, for some, "ridiculous volatility" is a desirable feature for some portion of their portfolio.
[0] https://grayscale.co/bitcoin-investment-trust/ [1] http://www.investopedia.com/articles/investing/073015/bitcoi... [2] https://grayscale.co/bitcoin-investment-trust/#market-perfor...
[+] [-] STRML|9 years ago|reply
[+] [-] Frogolocalypse|9 years ago|reply
My expectation is that it will be rejected, and the price of bitcoin will crash back to about USD$700 or so, and continue its long march upwards. It's important to recognize that that crash would still mean that bitcoin has almost doubled in value vs the US dollar in the past year. It has doubled in value over the past six months.
[+] [-] timeal|9 years ago|reply
[+] [-] vocatus_gate|9 years ago|reply
[+] [-] ungzd|9 years ago|reply
Do the article authors have at least 0.01% understanding of what bitcoin is? Or what web is? I'm very suprised of technical incompetence of authors writing about technical stuff in top newspapers.
[+] [-] sowbug|9 years ago|reply
[+] [-] gigatexal|9 years ago|reply
[+] [-] cjg|9 years ago|reply
[+] [-] Aqueous|9 years ago|reply
[+] [-] artursapek|9 years ago|reply
[+] [-] timeal|9 years ago|reply
[+] [-] Frogolocalypse|9 years ago|reply
http://data.bitcoinity.org/markets/price/2y/USD?c=e&t=l
And you can download the data-points if you want.
[+] [-] paulpauper|9 years ago|reply
Foreign currencies have lost anywhere from 30%to 99% of their value against the US dollar since 2013. Beginning around 2002 and ending around 2011, many foreign governments carelessly amassed substantial infrastructure debts that now they are struggling to pay off (due to economic weakness for these foreign economies and the surging US dollar), creating a cycle of inflation and currency depreciation, making Bitcoin more attractive to own for people and businesses in these countries. Bitcoin is rising because citizens and businesses have lost faith in the competence of their governments, and rightfully so. America is an exception in that it's well-managed and strong economically and fiscally (especially relative to these foreign economies), which explains the flight to the US dollar, and also Bitcoin.
For example, in 2013, depositors at Cyrus' largest bank lost 48% of their savings above 100,0000 Euros:
NICOSIA, Cyprus (AP) — Depositors at bailed-out Cyprus' largest bank will lose 47.5% of their savings exceeding 100,000 euros ($132,000), the government said Monday.
The figure comes four months after Cyprus agreed on a 23 billion-euro ($30.5 billion) rescue package with its euro partners and the International Monetary Fund. In exchange for a 10 billion euro loan, deposits worth more than the insured limit of 100,000 euros at the Bank of Cyprus and smaller lender Laiki were raided in a so-called bail-in to prop up the country's teetering banking sector.
http://www.usatoday.com/story/money/business/2013/07/29/bank...
A second factor may be the rise of global authoritarianism, unrest, and unease, reducing confidence in keeping money in banks, and assets that face geopolitical risk...Bitcoin, because it's decentralized, is immune to geopolitical risk. As long as you have your wallet, you have your wealth.
[+] [-] spcelzrd|9 years ago|reply
[+] [-] ns8sl|9 years ago|reply
Wrong!
[+] [-] jankotek|9 years ago|reply
[+] [-] jcslzr|9 years ago|reply
[+] [-] jcoffland|9 years ago|reply
[+] [-] kobeya|9 years ago|reply
[+] [-] dang|9 years ago|reply
We detached this comment from https://news.ycombinator.com/item?id=13716677 and marked it off-topic.
[+] [-] unknown|9 years ago|reply
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