Bitcoins - about to hit $5,000 per coin today!

[Slapper]

They hold customer funds and bitcoins.

Here is Bitfinex exchanges customer bitcoin storage address:

https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r

They are holding 1.7 billion dollars worth of customer bitcoins under the control of  their exchange.

Methinks we're talking about two different things... Jr was talking about the exchanges having enough cash on hand for a massive sell-off, the issue is that those funds are the client's money, not money that can be used to grease a massive sell off. Kinda like segregated securities deposited in the client's name, they don't belong to the firm, they just happen to reside there for the time being. THIS is the rabbit hole Jr was going into... I think.

I can have money deposited in a brokerage account in the form of cash and the broker can't use those funds for shit.

[gib]

Methinks we're talking about two different things... Jr was talking about the exchanges having enough cash on hand for a massive sell-off, the issue is that those funds are the client's money, not money that can be used to grease a massive sell off. Kinda like segregated securities deposited in the client's name, they don't belong to the firm, they just happen to reside there for the time being. THIS is the rabbit hole Jr was going into... I think.

I can have money deposited in a brokerage account in the form of cash and the broker can't use those funds for shit.

This is correct, at least for regulated exchanges like Coinbase. There is however the risk that that a regulated exchange is misusing a customers assets. This can happen with banks and stockbrokerers too, although if regulated and audited etc it should not happening. The other risk of course is theft (either internal or via a hack). Regulated exchanges like Coinbase are (at least in theory) fully ensured and covered in the event of a theft/hack. I’m not comfortable with having any substantial amounts with an exchange, nor are any of my friends who are more active. Pretty much the golden rule is to get whatever you have off any exchange and into cold storage.

[gib]

Correct me if I'm wrong but... the exchange doesn't actually hold anything. When two entities want to trade, let's say fiat to BTC in this case, all the exchange does is facilitate the trade, but nothing more. The trade happens almost simultaneously. The issue, I reckon, has to do with extreme high volume of transactions and the lack of computing power, which is the real issue.
 

Depends of the exchange. For many they actually do take custody and “hold coins” for clients and also “hold cash” clients. This is especially so for clients who want cash on hand to buy and/or coins on hold to sell.

For larger transactions 50k USD above, many people prefer to go direct peer to peer. No middle man, no exchange, and no money trail. 

[gib]

Exchanges and their poor service and inflated pricing as the gatekeeper are a huge weakness right now. At one point a few days ago Coinbase was quoting thousands over per Bitcoin. That sort of thing won't fly for long. Either a better exchange option will come along or a truly de-centralized workaround will pop up.

That is correct. Over time competition will bring margins down. As for a better exchange option, that of course exists - is called peer to peer. Zero commission.

[gib]

If you post every time it loses $100, that would be funny.

It would indeed. In fact I was just waiting for you to start doing this Mr A! Especially if it got to $4900 again - I think you could quite rightfully, and with relish, end a post with “...oh and $4900”’. That would be well deserved justice and vindication!

[gib]

Billions huh?  This type of thinking is why bubbles form.  The idea of getting rich by not working for it is very seductive. The dumb money always buys close to, or at the top.  Prudent investors buy assets when they are undervalued, not overvalued or when they are a bubble.  

Yes, it could go up higher, but it will eventually end badly.  All the people jumping in at the top get wiped out.  That's not my opinion, history has proven this over and over again.

I thought $5000 was the top based on the price/chart action at the time.  Yep, I was wrong (I'm certain someone if having an orgasm reading that).  These speculative bubble manias are quite irrational.  They can (and often do) go on for longer than most people expect.  It's mostly due to the fantasy of getting rich without doing any real work.  It almost hit $20,000 intraday, but the price is now $15,000 as I write this.  That's a -25% difference.  

Futures trading starts on Sunday 6pm EST.  The price has been relatively flat because the whales (1000 people own 40% of the total bitcoin market) are waiting to see how futures trading will affect the price.  I expect the volatility to increase very dramatically on Sunday night, maybe sooner.  Should be fun to watch.  

Just has my orgasm lol. Seriously though props for admitting you were wrong (and nothing wrong in being wrong by the way. What is wrong though is failing to admit when you are).

I agree with the first paragraph of Mr A.

[gib]

You fellas need to be ready for corrections and not pull out based on emotions. Getbiggers don't pull out!
 

Yes, but are they cautious and do use protection? Or do they just stick it into anything and everything at any chance they get?

[El Diablo Blanco]

Most getbigers prefer Buttcoin

[Mayday]

we all know how bitcoin ends because its not money.

Zcash could be the big one. that might just become money. JPMorgan are in on it. plan to make it 'money'. if this holds true, it will make bitcoin gains look primitive as you will have a system endorsed by the Fed Res because they are in bed with JPM.  ill be dumping 10k into zcash.

[Griffith]

I don't think so as they are private companies.

There is some evidence that one of the biggest exchanges named "Bitfinex" is engaging in questionable activites.

Do a google search with the keywords: bitfinex tether

Just read about bitfinex tether....quite a few worrying articles about them and they're one of the biggest exchanges even in Bitcoin.

Here's one: http://business.financialpost.com/investing/theres-an-814-million-mystery-near-the-heart-of-the-biggest-bitcoin-exchange

[gib]

Just read about bitfinex tether....quite a few worrying articles about them and they're one of the biggest exchanges even in Bitcoin.

Here's one: http://business.financialpost.com/investing/theres-an-814-million-mystery-near-the-heart-of-the-biggest-bitcoin-exchange

Yep - I would not be keeping any money or coins with bitfinex. Remember the coins you have are fine if you have control of them. If you don’t then you are at risk.

[Ted SuperSet]

People make fun but Vince Goodrum was right and way ahead of everyone. It was what, over a year ago he made his famous bitcoin thread. If we listened to Vince we would all be rich now.

2x so true

[Mr Anabolic]

It would indeed. In fact I was just waiting for you to start doing this Mr A! Especially if it got to $4900 again - I think you could quite rightfully, and with relish, end a post with “...oh and $4900”’. That would be well deserved justice and vindication!

Nah, I would never stoop to your level.  Besides posting every $100 loss takes up too much of my precious time.




I'll post every -$1000 loss instead.   

[Mr Anabolic]

Just read about bitfinex tether....quite a few worrying articles about them and they're one of the biggest exchanges even in Bitcoin.

Here's one: http://business.financialpost.com/investing/theres-an-814-million-mystery-near-the-heart-of-the-biggest-bitcoin-exchange

The whole thing is a Ponzi scam.  Most do not want to accept this because they are seduced by the idea of getting something for nothing.  People are selling their homes to buy bitcoins and bitcoin mining equipment.  People sold their homes in 1637 to buy tulip bulbs... that worked out well. 

When it's all said and done, there will be LOTS of bag-holders and people jumping off tall buildings.

[gib]

The whole thing is a Ponzi scam.  Most do not want to accept this because they are seduced by the idea of getting something for nothing.  People are selling their homes to buy bitcoins and bitcoin mining equipment.  They did the same thing during tulip mania in 1637. 

When it's all said and done, there will be LOTS of bag-holders and people jumping off tall buildings.

I have a explained earlier in this thread why these terms are not appropriate to describe bitcoin. Let’s talk this through and let me start by asking you why you think this about bitcoin but not gold ...

[gib]

The whole thing is a Ponzi scam.  People are selling their homes to buy bitcoins and bitcoin mining equipment.  People sold their homes in 1637 to buy tulip bulbs... that worked out well. 

Many also did this to join the gold rush back in the day. And that also worked out well for many.

[Mr Anabolic]

I have a explained earlier in this thread why these terms are not appropriate to describe bitcoin. Let’s talk this through and let me start by asking you why you think this about bitcoin but not gold ...

I have explained it, but for some reason you either ignore it, or maybe have reading comprehension issues.

Bitcoin is digital vaporware.  It is not tangible.  It is a speculative tech nerd fad.  It is a get rich quick mania based on the greater fool principle.  It can be hacked, deleted, destroyed and traced.  It has counterparty risks.

Gold has been a store of wealth, labor and value for the last 5000+ years.  It cannot be hacked, or deleted or destroyed.  When you own physical gold, there is no counterparty risk.  It doesn't tarnish or rust.  Bury it in the ground for thousands of years, dig it up, it's still gold.

I don't see how you can debate any of this, but I'm sure you'll try your best.

[gib]

I have explained it, but for some reason you either ignore it, or maybe have reading comprehension issues.

Bitcoin is digital vaporware.  It is not tangible.  It is a speculative tech nerd fad.  It is a get rich quick mania based on the greater fool principle.  It can be hacked, deleted, destroyed and traced.  It has counterparty risks.

Gold has been a store of wealth, labor and value for the last 5000+ years.  It cannot be hacked, or deleted or destroyed.  When you own physical gold, there is no counterparty risk.  It doesn't tarnish or rust.  Bury it in the ground for thousands of years, dig it up, it's still gold.

I don't see how you can debate any of this, but I'm sure you'll try your best.

OK - let me respond:

"Bitcoin is digital vaporware" - this a non-nonsensical phrase that actually means nothing - I could respond that gold is basically just "a rock in the ground" (or as Buffet puts it "a useless lump of metal that just sits there and does nothing except costing money to transport and guard" - but that would also be irrelevant - so lets move on - name calling will get us nowhere in working this out

"It is not tangible" Correct - and neither is most of the gold traded over exchanges nor indeed is any publicly traded stock neither is the money you keep in the bank - so all in all correct but not a great argument to support the view that btc is a scam

"It is a speculative tech nerd fad." - Every single investment is inherently "speculative" - "tech nerd" = name calling (see above) - "fad" - time will tell - on a long enough continuum of human history gold is also "fad" though more of a caveman fad than a "tech nerd" fad

"It is a get rich quick mania based on the greater fool principle." This is not what BTC is - BTC is an asset and an mathematical algorithm - it inherently cannot be a "mania" but yes arguably these is a rush to invest into this asset (just as in times past there has been a rush to invest into gold)- so call that "mania" if you wish - again name calling - I could give it a much more positive sounding name for what is taking place like "financial revolution" - reality is that money is flowing into this asset (and indeed this has to happen if the BTC really is going to attain a significant market cap comparable to gold - so its a catch 22 - to become like gold its necessary for more money to flow into this asset - you call it "mania" others might call it the gradual legitimization of BTC as a gold-like asset

"It can be hacked, deleted, destroyed and traced.  It has counterparty risks." Nope not correct BTC has never been hacked - this is what makes it so very popular and trusted - exchanges can be hacked though just like banks who hold gold can be broken into - BTC cannot ever be deleted (but if you forget where you hid it you will never get it back - just like gold) - but again no BTC has ever ever been deleted - its impossible - Also cannot be destroyed - not sure what you mean by traced but transactions are anonyous (which is why hacker thieves cannot be caught) - again though as I have explained before if you trade via a regulated exchange who follows KYC principles then yes just like any banking transaction the trades on an exchange can be traced by whatever records the exchange keeps

"Gold has been a store of wealth, labor and value for the last 5000+ years.  It cannot be hacked, or deleted or destroyed.  When you own physical gold, there is no counterparty risk.  It doesn't tarnish or rust.  Bury it in the ground for thousands of years, dig it up, it's still gold." Sounds lovely but is not relevant to your claim that BTC is a scam

And perhaps most importantly there is no fraudulent intent behind the creation of BTC (the existence of which would be essential in order to call BTC a scam or a Ponzi scheme

[Mr Anabolic]

OK - let me respond:

"Bitcoin is digital vaporware" - this a non-nonsensical phrase that actually means nothing - I could respond that gold is basically just "a rock in the ground" (or as Buffet puts it "a useless lump of metal that just sits there and does nothing except costing money to transport and guard" - but that would also be irrelevant - so lets move on - name calling will get us nowhere in working this out

"It is not tangible" Correct - and neither is most of the gold traded over exchanges nor indeed is any publicly traded stock neither is the money you keep in the bank - so all in all correct but not a great argument to support the view that btc is a scam

"It is a speculative tech nerd fad." - Every single investment is inherently "speculative" - "tech nerd" = name calling (see above) - "fad" - time will tell - on a long enough continuum of human history gold is also "fad" though more of a caveman fad than a "tech nerd" fad

"It is a get rich quick mania based on the greater fool principle." This is not what BTC is - BTC is an asset and an mathematical algorithm - it inherently cannot be a "mania" but yes arguably these is a rush to invest into this asset (just as in times past there has been a rush to invest into gold)- so call that "mania" if you wish - again name calling - I could give it a much more positive sounding name for what is taking place like "financial revolution" - reality is that money is flowing into this asset (and indeed this has to happen if the BTC really is going to attain a significant market cap comparable to gold - so its a catch 22 - to become like gold its necessary for more money to flow into this asset - you call it "mania" others might call it the gradual legitimization of BTC as a gold-like asset

"It can be hacked, deleted, destroyed and traced.  It has counterparty risks." Nope not correct BTC has never been hacked - this is what makes it so very popular and trusted - exchanges can be hacked though just like banks who hold gold can be broken into - BTC cannot ever be deleted (but if you forget where you hid it you will never get it back - just like gold) - but again no BTC has ever ever been deleted - its impossible - Also cannot be destroyed - not sure what you mean by traced but transactions are anonyous (which is why hacker thieves cannot be caught) - again though as I have explained before if you trade via a regulated exchange who follows KYC principles then yes just like any banking transaction the trades on an exchange can be traced by whatever records the exchange keeps

"Gold has been a store of wealth, labor and value for the last 5000+ years.  It cannot be hacked, or deleted or destroyed.  When you own physical gold, there is no counterparty risk.  It doesn't tarnish or rust.  Bury it in the ground for thousands of years, dig it up, it's still gold." Sounds lovely but is not relevant to your claim that BTC is a scam

And perhaps most importantly there is no fraudulent intent behind the creation of BTC (the existence of which would be essential in order to call BTC a scam or a Ponzi scheme

I've gave my reasoning, thoughts and opinions, which is what you asked me for.  Gold is real wealth backed by  thousands of years of history, bitcoins are digital 1's and 0's backed by nothing.  It's that simple.  

The main point people use to validate themselves for bitcoin being so fantastic is the PRICE, everything else is pretty much technical babble stories they read on the internets.  1000 people own 40% of bitcoins in existence... that is not a good thing.  When a few of these whales sell, the price will come tumbling down.  

You really enjoy going back and forth.  You seem to thrive off it.  I wonder how you'd be in person?  

[SF1900]

An article just stated that bitcoin can potentially turn into a multi trillion dollar industry.

[Mr Anabolic]

An article just stated that bitcoin can potentially turn into a multi trillion dollar industry.

I'll take a wild guess the person that wrote the article has a vested interest. 

[Slapper]

Is everyone here aware of the fact that the Federal Reserve requires banks to hold ONLY 12% as required reserve ratio? Do you know what that means? It means that if the bank is holding $100,000,000 in deposits, BY LAW (,) they are only required to have $12,000,000 in the vault on a just-in-case basis. Meaning that if 80% of the people holding deposits at that bank were to go there and try to withdraw their money they would be told to come back on a later date, if ever. It would then become an issue that would have to be settled with the FDIC which, in a deposit-withdrawal frenzy/panic, would go bankrupt in less than a day.

That people look at the current cryptocoin world and find nothing by issues when our current banking scheme is the most fucked up and one-sided in the history of mammals...

   

[Griffith]

Is everyone here aware of the fact that the Federal Reserve requires banks to hold ONLY 12% as required reserve ratio? Do you know what that means? It means that if the bank is holding $100,000,000 in deposits, BY LAW (,) they are only required to have $12,000,000 in the vault on a just-in-case basis. Meaning that if 80% of the people holding deposits at that bank were to go there and try to withdraw their money they would be told to come back on a later date, if ever. It would then become an issue that would have to be settled with the FDIC which, in a deposit-withdrawal frenzy/panic, would go bankrupt in less than a day.

That people look at the current cryptocoin world and find nothing by issues when our current banking scheme is the most fucked up and one-sided in the history of mammals...

   

To be fair, massive runs on the banks are not very common.

People trying to rapidly cash out their shares at the same time is far more common.

[Slapper]

To be fair, massive runs on the banks are not very common.

People trying to rapidly cash out their shares at the same time is far more common.

We have had massive stock sell offs from which we have rebounded without a problem.

However, the last time we had a run on deposits, we ended up in a depression. 

Anyone heard of soup lines? Yeah, that was because of cash.

[Slapper]

Remember this?



It wasn't because their stocks became worthless, people were forced to stand in line to get soup because the banks holding their cash went belly up.