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About 40 Percent of Bitcoin Is Held By 1,000 Users. If a Few of Them Want To Sell, That Could Tank Values (bloomberg.com)
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency. From a report on Bloomberg: Holders of large amounts of bitcoin are often known as whales. And they're becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year. About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
Show of hands if you are tired of the bitcoin stories?
I read at +2. If your post doesn't reach that level I will not see or respond to it.
Have held their value for THOUSANDS of years. Bitcoin, has been around a few years and is as VOLATILE as they come. Not to mention totally intangible. Anyone dumping REAL CASH into this BS that isn't one of those 1000 people... Is giving away all of their money to those 1000 people. Basically. Because WHEN it tanks, the little guy loses 100% of their investment while they try and scramble to sell. While the 1000 sell out using high powered brokerages during its fall, and keep up to 50%...
You have to take into account that this isn't a unique situations. If billionaires start dumping all of their dollars they could tank the whole US economy. They don't do that because it would be massively against their own interests, just as it would be against the whale's own interest to tank Bitcoin, they are the folks who have the most to lose in destabilizing it, and are going to do everything they can to stop that from happening.
https://support.bitfinex.com/hc/en-us/articles/115004555165-The-basics-of-Margin-Trading-on-Bitfinex
https://www.investopedia.com/news/short-bitcoin/
https://www.bloomberg.com/news/articles/2017-11-27/calling-a-bitcoin-top-here-s-how-you-can-short-the-digital-coin
https://www.thestreet.com/story/14414500/1/what-to-know-shorting-bitcoin.html
https://coincentral.com/short-bitcoin/
https://99bitcoins.com/short-sell-bitcoin-make-money-on-bitcoin-price-drops-thourgh-bitcoin-short-sale/
https://themerkle.com/top-7-ways-to-short-bitcoin/
http://www.telegraph.co.uk/investing/gold/can-short-bitcoin/
Even for beginners !
...because that's exactly what Bitcoin is. A pyramid.
An investment, but worse than any stock, because it's an investment in nothing.
And yes, it's also a "cryptocurrency" -- congratulations. Blockchain!
By a select few with large amounts who can manipulate things to cash out together at a certain point. This will leave everyone else holding the bag so to speak and the cycle will repeat as large groups left over try to recoup losses from the first group by doing the same thing.
It's harder for the big guys to get out (with a large % of their money) than the little guys. If you've got one bitcoin, you can sell it at any time. If you've got a few thousand bitcoin, you have to sell them slowly over a long period of time, or your sale of them will cause the price to drop dramatically and you get less of your "value" from the coins.
"That's the way to do it" - Punch
"I'm no whale but I've been buying small amounts since 2012 and my bitcoin net worth is greater than all my other assets + cash + stock, but I'm not selling."
Bit Coins are so valuable that they are worthless.
It is like having an infinity dollar bill. No one will be able to give you change so you cannot use it. Bitcoins are growing so fast, that a complete idiot would purchase anything with them. Because you cannot purchase anything with them, then it is just imaginary wealth.
You could sell them, but if the price next year goes up by a factor of 100 again, then you will be kicking yourself for buying that car or house where its value will not match to what you had spent.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Who the hell wants fiat? It's starting to become a time where if you want that house, that car, that drug then maybe you should inquire about paying in Bitcoin directly.
Who wants cash? Everyone has cash. Its riddled with debt.
Google 'slaying the bearwhale' for lolz; the last time a whale cashed out, Bitcoin nuts actually convinced each other to buy up the coins as fast as they were released in order to keep the coin value up. Obviously the smart move if you really believed in Bitcoin's long term viability would be to let the price crash and buy at the bottom, but the Bitcoin ecosystem isn't exactly chock full of rational players.
The other financial markets already have tons of techniques for making large sells without tipping your hand and getting picked off by front runners, just ask anyone dealing with institutional brokerage. The problem with BTC is, the ledger is public, so if a whale starts moving a large wallet into lots of smaller ones people will know. If I was holding BTC I would definitely want to start breaking it up into lots of smaller wallets just as a precaution. Maybe this whale is getting some professional financial advice and doing just that.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
That is quite possibly the worst and most self-incriminating response you could have given from a PR standpoint without crossing the line into cursing or misusing Slashdot records to seek retribution against the AC's post.
Because you cannot purchase anything with them,
I've been purchasing stuff with them since early 2014. That's actually the only reason I had any. I bought a handful at $500 and have been buying stuff twice a year with them.
I actually just sold off one to break even on my original buy and make everything in my non-MMJ state 'free' for the last 4 years.
Isn't this an anti-bitcoin story for once? This is the opposite of hype.
I'm a good cook. I'm a fantastic eater. - Steven Brust
Check the UID, you got trolled, bro.
I'm a good cook. I'm a fantastic eater. - Steven Brust
Speculators make money out of the volatility of bitcoin. They need its value to fluctuate a lot because they sell when it's high and buy when it's low, and if its value is going up and down by 20% a day then there's a huge opportunity to make money. As such, they have a vested interest in both positive and negative hype, as long as there isn't enough negative for everyone to try to cash out at once. A story like this may panic people into selling, letting them buy low and then sell again when the price peaks after the next bit of positive hype.
I am TheRaven on Soylent News
Isnt everything just imaginary wealth? My house is only worth what it is because everyone else around here is willing to pay X amount for any that come up for sale. Paper money is just an IOU from the govt.. and so on and so on..
They allow those special characters in usernames? Well hell, Slashdot ought to correct that and wipe the troll account.
Amusingly enough, all you have to do to my previous post is change the word 'worst' to 'best' and it applies to the troll perfectly.
The interesting thing is that the real story seems to be missed entirely. Everyone wonders if it's a bubble or if the valuation is too high. That's not the problem. Bit coin is, in its present algorithmic configuration, doomed by it's algorithmic desgin features. Perhaps it will change but there's two flaws of which I will point out one here.
1. Roughly 2000 transactions can be rolled up into each hash completion event. And by design the system equilibrates towards a difficulty where it take 10 minutes for a hash completion to occur. This means that when this becomes popular it becomes hard to directly record more than 2000 transactions (less due to over heads on side transactions) every ten minutes.
That merely makes it slow. But when it becomes oversubscribed in demand for transactions then people pay bounties to get their transactions at the top of the queue. Right now that bounty is about $20 per transaction.
let's compare this to a visa card. A visa merchant might pay 3% for the service. thus on a $666 transaction you would pay 3% or a $20 fee.
Ergo, for any transaction less than $666 bitcoin is ludicrously expensive.
thus it is slow, expensive and unsuited for ordinary purchases. It could be used to move large sums of money but not simple transactions or even micropayments.
I beleive it is this, not the valuation of the coin that makes bit coin doomed.
We saw the first high visibility retreat the other day when Steam stopped taking bitcoin.
Some drink at the fountain of knowledge. Others just gargle.
When have we seen a single anti-bitcoin story? They are all about the new price or someone stealing bitcoins. While that last one is "bad", it's not anti at all.
Bitcoin and anything remotely related to this fraud is doomed to fail and it's going to fail very hard. Fortunately no sector of the world actually relies on this fake currency so when it fails, it'll only be a handful of individuals who get totally and irreversibly fucked over. 99.9999% of the rest of the population will remain completely unfazed. When bitcoin along with all variations of cryptocurrency fails it's not going to be like a big stock market crash, or housing bubble burst. That is the good news, only a few extremely stupid and uneducated people trying to get rich quick will be harmed.
Bitcoin is the complete opposite of anonymity. Anyone on the planet can trace every transaction ever made by all wallets.
And as soon as an exchange associates a person to a wallet, which is needed when you want to cash out, you know that person's transactions history.
#DeleteFacebook
Not really.
You see, Monopoly money is printed by Hasbro, with no natural constraints, much like fiat currencies (e.g., the USD) is printed by their respective governmental institutions.
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
All money is artificial. I don't understand why this point is so hard for people to grasp. Money is worth whatever value people collectively ascribe to it. Bitcoin is no different in that regard.
Might makes right irrelevant.
You should read about diversification.
So exactly what part of "Pyramid Scheme" do these idiot "investors" not understand.
A large enough price dip would trigger a massive selloff among the market as a whole, including many of the "whales." Some irrational actors would indeed buy more, so the scenario assumes that they're a small enough minority not to derail the plan.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Bitcoin currently has about 15 million userrs. So 1000 of them is only 0.0067%.
1% of the world's population owns about half the world's wealth.
By creating a currency ostensibly free from the corrupting influence of government control of fiat currencies, bitcoin has managed to become a currency which is 150x even more corrupt.
Technically that is true for any appreciating asset. What you do is sell enough to cover your initial investment, and take money out periodically leaving some amount that can still grow.
I wouldn't recommend doing it with your 401k, but if the guy has put in $100/month for the last 5 years instead of going out for a nice meal then that is his decision.
"Never [invest | gamble] more than you are comfortable losing."
But if you were the vendor and you got an infinite dollar bill to pay for something, and you had to give it back then you would had given it away for free, and you wouldn't be compensated for the effort. So the money is no good.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
The big difference is that currencies don't rocket up and down by a factor of 12. That's what speculative instruments do.
Until the bitcoin value stabilizes, it by defintion cannot be properly used as a currency and will not be accepted as such by the public.
It's a fun roller coaster ride, but not a practical means of travel, to extend a metaphor.
On Triskelion, just 3 gamesters held 100% of the quatloo supply.
I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
But no, that's not the issue. The issue is that an inherently deflationary currency such as bitcoin, any other cryptocurrency, or indeed any commodity with a strictly limited, unmanaged supply, such as gold, is a seriously crappy means of exchange. Nobody would want to spend bitcoin, or invest it, or even use it to buy merchandise for resale, because it will be worth more tomorrow. Better to hoard it. This is a recipe for a deflationary spiral, and a depression. It's just basic macroeconomics.
On principle, I'm no Keynsian, but I have to admit, I don't really see a way around this issue. The only answer seems to be some sort of monetary policy.
OTOH if it goes down by 100% in the next week, you will be kicking yourself as well.
Hindsight is 20/20. If I only had played that lotto numbers I saw on TV, I would have turned 2,50EUR into 25.000.000EUR.
It went up 4.000USD in 1 hour. Going down will be even faster. And if you are not awake and sell above buying price, the few minutes it takes could mean the difference between stepping out rich and getting out broke, having lost all you invested.
I wish you and everybody else their wealth. I trust it less than the average share on Wallstreet.
On a non-related point, are you interested in Tulips?
Don't fight for your country, if your country does not fight for you.
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
Yes, we get the theory, thanks.
All money is artificial. I don't understand why this point is so hard for people to grasp. Money is worth whatever value people collectively ascribe to it.
Real money is worth what important people/organisations/countries ascribe to it.
The only people ascribing any value to Bitcoin so far are the the people who own enough to think they're going to be magically wealthy, for free.
No sig today...
>So exactly what part of "Pyramid Scheme" do these idiot "investors" not understand.
"Shut up you're just jealous because you didn't get in early and I'm going to be rich for doing nothing while you work like a sucker".
I think that about covers it.
Using my new South Seas Flowercoin algorithms, I have cornered the world market in Tulips, and it will never stop going up up up!
-- Tigger warning: This post may contain tiggers! --
they sell when it's high and buy when it's low
The "highs and lows" are only apparent in hindsight.
It is easy to see patterns in past data (even if there are none), but if you try to guess tomorrow's price, you will usually do no better than chance.
If you think otherwise, then please explain why everyone isn't rich.
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange.
Mostly; the online exchanges just aren't equipped to handle massive volumes, as we witnessed Coinbase crashing. If they REALLY wanted to unload such a massive amount, rather than simple trading...... the most efficient way to get the most bang for their $, would likely be to find a large buyer directly ---- for example, sell 25,000 BTC to a major bank or investment firm at a small discount to the exchange price, rather than trying to dump it on the exchange, and getting a lot less $$$, because the price goes down on the exchange the more units you sell, and before you know it the buyer-demand is exhausted and short term price is less than you want to sell for.
silkroad v3.1 is doing just fine apparently, Ulbrict must be running it from his cell.
I've been making money all week. Don't know why everyone here calls it a pyramid scheme or even scam. Don't forget its also a bubble that is going to pop! Said everyone when it hit $100, then $1000, then $10,000. Almost hit $20k but self corrected down to $15k now.
Only the State obtains its revenue by coercion. - Murray Rothbard
Some people are worse at guessing than others?
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Holders of large amounts of bitcoin are often known as whales.
Not to be sub-classist, but everyone knows cetaceans are trouble makers, especially dolphins. I'm worried that their laissez-faire attitude toward life may infect monetary stability, solvency and policies.
It must have been something you assimilated. . . .
I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
No, Bitcoin is the volatile one, not USD, because USD remains relatively stable against all other currencies such as GBP, the Euro, or the Yen. Bitcoin fluctuates wildly against all of them... and it is the odd one out... bitcoin IS the one wildly swinging compared to the others.
The reason it matters is that you'd be silly to purchase anything with bitcoin at the moment, not just because of the charges involved ($20... has to be a fairly big purchase before $20 charge becomes negligible), but also because with bitcoin going up so much, what buys you a burger today will buy you a supersized combo meal tomorrow. A Ford Festiva today or an Aston Martin next week.
At the moment bitcoin is an investment instrument, not a usable currency. That doesn't mean it always will be. It will stabilize eventually... the question is- will it pop before stabilizing or will it plateau gracefully. No-one really knows. Once it's stable- it could be a meaningful exchange for large purchases... fees will probably be too much to use on a trip to Tesco for a bag of mushy peas- but if you're exchanging a million dollar transaction between two major corporations *cough drug dealers* then a $20 fee is chump change.
"That's the way to do it" - Punch
The stories saying Bitcoin is rocketing in value are also anti-bitcoin, it's just the apparently "positive" language obscures the fact that what's happening is a net negative. Currencies need to be stable to work as currencies, with, at worst, a little inflation over time. "Rocketing in value" is inherently bad news.
The value in the blockchain is the group delusion that the value will continue to go up forever. This is the same logic that drove the tulip craze, florida land speculation boom, beanie babies, and i'm sure there's tons more examples. The benefit of BTC and such is their use as a currency, but this speculative nonsense renders it useless for that purpose. Until the volatility subsides, all that's left is a gigantic pool of people playing chicken via greater fool theory.
As for the banks, they could absolutely make a side bet with their pocket lint, and make gobs of money. BTC doesn't hurt their core business in the least.
(Also, the irony of posting:
...The value of blockchain currencies is in the complete absence of centralized regulation and manipulation, and complete immunity to tampering...
In a thread entitled "40% of bitcon is held by 1000 users...." is not lost on me btw)
Most of the stories are anti-Bitcoin. If Slashdot ever posts "Bitcoin price stable for over six months, retailers flock to adopt new currency", then they'll be publishing a positive story about Bitcoin.
"Bitcoin's value fluctuates by 1000% in a single month" is objectively terrible news for Bitcoin, even if it's great news for speculators who got in early.
You are not alone. This is not normal. None of this is normal.
It has also been said about
Enron
Bre-X
Beanie babies
Pets.com
Housing in 2007
And myriad examples that didn't even get that big. There's bad ideas every day that fail and everyone knows are going to fail, then it fails. And nobody is surprised.
Well... if you "get the theory", then why did you ask "wth is bitcoin"? .
He didn't
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
"Bitcoin's value fluctuates by 1000% in a single month"... ...Is objectively 1000% good news when trying to find more bag holders in a pump and dump scheme. It surely applies here as well.
Your describing rational actors, not the droves of uninformed people who can only see the upside potential: "1,000% in one month? That's like 12,000% a year potential return!"
There's a reason the casino is filled with "jackpot" machines and not blackjack tables.
It would mean imports would become more expensive, and other countries would find our exports cheaper. That means that the US standard of living would decline. If people from other countries wanted to invest in the US, they'd get more for their money.
It would be a fairly gentle way to force some austerity and stimulate the economy. If we didn't need austerity or economic stimulation, it would just mean we got less stuff, depressing our standard of living.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
You have just listed things that have real value. You can read books, drive cars, ride on trains, fly in airplanes, listen to radio and TV broadcasts, and Facebook and do on-line banking. Okay, mostly listed things that have real value. If you want to toss in my prediction that this web thing wouldn't catch on, feel free.
Bitcoin has no value except as a vehicle for speculation, and limited use as a currency. Right now, its use as a currency is seriously limited by high transaction fees and tremendous volatility. If Bitcoin goes down hard, there's no reason why it should come back up.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
BTC will NEVER be currency because of the inherent problems with the block-chain (ledger). BTC as its own form of crypto is relegated to nothing more than a "digital gold standard" of soft. But this implementation is nothing more than a ponzi scheme rich mans fight club. It's primarily the wealthy that are slugging it out with other wealthy people. AKA, the "Whales". For the other people that aren't one of the 1000 whales out there, don't play in. One or more will simply devour you this late in the game.
Life is not for the lazy.
Sure. However, my house is good for keeping stuff around, inviting friends and family over, showering, using the toilet, sleeping, etc. It's also a permanently scarce resource that is in demand for its practical use. USD in the US are good for paying off the government. Moreover, since I'm required to have some accounting in USD, I may as well just do my accounting in USD. All merchants in the country will accept my dollars. (Paper money is not an IOU from the government. It used to be; an old silver certificate would say that the government would pay you a dollar in exchange for the piece of paper. A modern federal reserve note is that money.)
Bitcoin is absolutely useless except as a currency or speculative vehicle. There's nothing I have to do in bitcoin. Few merchants in the country will accept bitcoin (Steam just dropped it).
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Since an infinite dollar bill is equal in value to two infinite dollar bills, the merchant would make an infinite amount of money on each transaction. The merchant does need to send someone to the bank with an infinite dollar bill to get enough to make change.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
They aren't completely arbitrary, and can't be manipulated on a whim.
A bond is a promise to pay me money at a given time. As long as the issuer doesn't go out of business, and you can buy bond funds to smooth out the risk, you get money. Stocks are ownership in a company, and as long as the company is profitable somebody's going to want to buy your stocks. Stocks often pay dividends. Options are the ability to buy or sell X for $Y at some point in the future. If X has real value, the option has real value. Unlike stocks and bonds, options are very likely to be useless. If I buy the ability to sell X for $Y next year, and next year it's selling for $Y+$Z, I can just throw away the option and sell at a higher price. They're a lot more speculative. I'm not going to say anything about CDRs.
Bitcoin doesn't promise anything. It doesn't provide a claim on anything. It doesn't promise anything in the future.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Attempts by the government to tax Bitcoin will either make it harder to transact Bitcoin or land people in debt or jail. Currently, it's taxed as a commodity. However, if you do deals in it, buying something essentially counts as cashing out, so you have to keep track of which bitcoin you're using in what purchase and what its basis value was.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Question: if I pay for something from ten wallets, are the transaction fees different from if I use one? One problem with Bitcoin right now is that individual transactions are expensive.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Maybe you are feeling a bit bitter because you missed the boat?
I'm not feeling bitter, I'm worried. Many of us naysayers are people who have been investing for a long time and have healthy portfolios. Bitcoins as an investment was too risky for me when I first heard of it and it's too risky for me today. It's for that reason I have no regret.
It doesn't matter how much your bitcoins are worth today if you don't sell at least some of them. I see is a huge potential for a lot of people to lose a lot of money. I don't want to see that happen. I genuinely hope I'm wrong.
Bit Coins are so valuable that they are worthless.
Just like Berkshire Hathaway shares...
Re: the Monopoly money analogy, like digital commodities such as Bitcoin, Monopoly money has no government and tax paying population to back it up. You can't have a currency without these.
Macroeconomics 101: All currency is actually debt which a government promises to pay back based on the labour and resources (i.e. tax paying population) under its control. A government issues currency (debt) and allocates it according to national and political interests. The working population then pay off that debt through labour, trade, and natural resources. That's how countries work. In essence, it's the nation that is the security underwriting a currency.
There's no such security underlying Bitcoin, which is a virtual commodity, so it can vaporise in seconds without any consequence for people who don't hold Bitcoin. Nobody can be held to account to re-inflate the value of Bitcoin. Which government or bank is going to do that?
Debate is a form of harassment. Do not question my truth.
I have listed things that have value now, but back then when they were a concept or novelty, they were perceived as valueless.
Only time shall tell whether cryptocurrencies have value or not.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
I think the last month there has been a covert media campaign against BTC ... not really my problem since i got fucked out of it since mtGox, its too much at once however, suddenly everywhere there's stories from how its not green (as if cows or biodiesel or farting human babyspawn is) and how nobelprize winners shout that escobar couldnt have done it without cryptocoke ... its all too sudden and all too much
... globally it really makes no dent at all
not yet ... if you go down to the eight satoshi however ... i once tried doing the math (but im not the numbers guy), i think if the last satoshi would be worth $2000something and all BTC was mined (and none would have been lost) the total value would equal the total dollar value in the world.
Which must be a scary concept to the united lobbies of the free world and CEO Nwabudike Lehmann
so i'll consider this just another part of the media anti-campaign by the ancientt vampires that be ... STRIGOOIIIIII
either its an assault by the hasbeen powers that be or an attempt at coordination to dump the price (for obvious reasons if you're a holder and get in on the first wave of massive selloff and buy back in right after) HOWEVER
and that was 2015 : https://www.theguardian.com/mo... compared to that , this is not a bubble but a drop of already steemed on a hot sizzling plate
Free speech was meant to be free for all... how can anyone grow up in a nanny state ?
so it's pretty much the same as with 'real' money, where the top 1% has 50% of the whole worlds wealth.
On a long enough timeline, the survival rate for everyone drops to zero.