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Showing 20 of 112 results by SamS
Also known as how do you exit an illiquid market without destroying the price...
The beautiful thing with bitcoin is that you may never need to liquidate them, you just simply spend them if the acceptance is enough wide, means only money inflow, no outflow
i agree that's why i collect every kind of "coin" i can get>> get it?LOL
>>NICEEEEE
Nice to see reason simply oozing through these forums. You do realize the Winklevii have investments in other Bitcoin businesses, they will not shoot themselves in the foot and compromise their investment.
It just depends on where they think they will make the greatest return and what their exit strategy is. By selling out in an IPO at market through a securities offering, they get 100% out with no slippage -- other than the offering cost which might actually be priced in as well. It's quite smart if they can get it funded and represents an enormous return on investment for them.
Their other public Bitcoin investments are substantially smaller than their "currency" profits and so they get to take money off the table and continue to play for free. They're not flooding the market with Bitcoins either -- rather the opposite in fact. And of course, like the fund in Malta, they provide a way for traders to hedge their positions by shorting the EFT.
This all seems quite reasonable to me and doesn't involve shooting anyone in the foot.
I have the following issues with the idea of BTC retail transactions:
1. Confirmation Time: It takes @ 10 minutes to get the first confirmation that a transaction has been processed. How does that compare to a credit card swipe? Win for the existing system.
2. Price Volatility: The volatility is enormous relative to day to day transaction costs -- how would you like your paycheck to vary by 10% from day to day. Win for the existing system.
3. Wallet Security: Finding a secure wallet is not easy. Concepts such as hot and cold wallets don't inspire confidence. Why bother when I can just swipe or pay cash? Win for the existing system.
4. Regulatory Risk: Certainly an issue for fiat/crypto exchanges which may or may not apply to merchants in the long run.
5. Payment Risk: No recourse if you send payment to the wrong address
6. Public Key Length: No one can deal with the length of those keys, it's either an alias or the QR code. QR codes aren't really familiar to most people. Establishing alias's takes time and a little bit of sophistication.
It doesn't take more than one of these issues to turn 99% of people off. Until these basic problems are solved, I'm not surprised that the Bitcoin economy hasn't grown as rapidly as some would hope.
Where is the upside case?
1. Safe Haven: No way with all the volatility.
2. Transaction fees: Unclear when you add in the cost of converting to and from fiat. In any event, any savings are small potatoes, yes?
3. Time Savings: For domestic transactions, no. For international transactions, there is a real time saving in getting funds anywhere. However, once they're "there" they still need to be converted back to fiat to be of any real use.
On balance, I think it's amazing that BTC has come as far as it has given the above...
Re: Why are some international payment companies not allowing Americans to join?
Not allowing Americans to join? Not allowing Americans to join? Let's go kick their ass!
Team America World Police - Fuck Yeah!
Team America World Police - Fuck Yeah!
You know, I didn't know that...too funny.
one of my favorite: http://bitcoinrichlist.com/charts/bitcoin-distribution-by-address
this show that on 7 May, the majority (nearly 95%) of bitcoin addresses are worthless, more or less. Only around 1.5% of addresses hold any significant value (>1BTC)
this show that on 7 May, the majority (nearly 95%) of bitcoin addresses are worthless, more or less. Only around 1.5% of addresses hold any significant value (>1BTC)
If accurate, that's staggering.
There's not enough information on how the calculation is actually done -- is it a weighted volume weighted price or just an price average?, what about stale quotes?, etc... -- to tell if this is a "better" standard or not.
Will the Winklevoss twins be attending?
Yes, they were there.
The pre-seminar buffet was nearly the best part. Chris (Ripple) was clearly the most articulate person from the crypto-currency community and was respectful of the fact that it was a Bitcoin conference -- he also had an assistant give away 1,000 XRP to any and all comers. He didn't hit any new points and the whole conversation was really held at a beginners level. All questions were done through texting which really took nearly all energy away from the event.
The Stanford professor was really strong -- highly incisive and if there was video of her introduction that's worth your time. My main take-away, when the velocity of money is considered, Bitcoin could be deemed to be fairly valued. You'd have to see her presentation to dig into the criteria she used -- I didn't take notes. Of course, fairly valued today doesn't say anything about tomorrow -- i.e. if the velocity of BTC transactions drops then it's overvalued, etc...
The Winklevii were split as to whether it is a currency play or an infrastructure investment thesis. Since they've made a unrealized mint on the currency play already, it's easy to see how that point of view could dominate.
The Goldman guy from Coinlabs played his cards close to the vest. While he talked a lot, there wasn't a lot of take-away there (sorry dude.)
The Silicon Valley Bank compliance officer really didn't have much to say other than to note that her team spent more time on understanding the businesses brought to them to see where they would fit within the existing compliance regulations than they did on actually assessing compliance itself. And of course, she indicated that from her conversations, the IRS (or FInCen I was distracted at this moment) is less interested in stopping BTC than regulating it.
Kashmir Hill was fun. She briefly went through her week living on Bitcoin and did a good job as moderator.
Worth $30.00 plus travel time -- not really.
Re: VLAB Event - Virtual Currencies : Gold Rush or Fools' Gold - Rise of Bitcoin ...
If you're in the Silicon Valley area, there's a pretty cool VLAB event happening on June 18th
http://www.vlab.org/article.html?aid=469
It should be interesting, they will have a Stanford Economist provide a quick intro on Virtual Currencies (and Bitcoin). Kashmir Hill from Forbes Magazine, and the Tyler and Cameron Winklevoss (from Winklevoss Capital).
VLAB is a way to get entrepreneurs, industry experts, venture capitalists, and private investors together to exchange ideas and insights. Usually the panel consists of a moderator to lead the discussion, two small companies (doing something disruptive), an incumbent (larger company which might be threatened), and a venture capitalist or investor. Examples of small companies (which later became very big) include Google and Siri (bought by Apple).
If you're not in the Silicon Valley area, it will be videotaped, and available for viewing later.
I'll be there (Tony from Raspberry Coins - http://www.raspberrycoins.com)
http://www.vlab.org/article.html?aid=469
It should be interesting, they will have a Stanford Economist provide a quick intro on Virtual Currencies (and Bitcoin). Kashmir Hill from Forbes Magazine, and the Tyler and Cameron Winklevoss (from Winklevoss Capital).
VLAB is a way to get entrepreneurs, industry experts, venture capitalists, and private investors together to exchange ideas and insights. Usually the panel consists of a moderator to lead the discussion, two small companies (doing something disruptive), an incumbent (larger company which might be threatened), and a venture capitalist or investor. Examples of small companies (which later became very big) include Google and Siri (bought by Apple).
If you're not in the Silicon Valley area, it will be videotaped, and available for viewing later.
I'll be there (Tony from Raspberry Coins - http://www.raspberrycoins.com)
The economist was awesome. If anyone video'd that, it's worth watching all by itself. The rest....
...I believe they think that being valued over Bitcoin market cap is a fair price, or that they think they must maintain it to continue generating profits selling their coins.
Note that OpenCoin can't force anyone to buy XRP. The price is set purely through free market forces.
Except for the fact that OpenCoin currently controls the currency -- like a government -- and can more or less set prices...
What's elegant about keeping as much as you can get away with? It's profit maximizing for certain. Elegant though?
I'm not a Bitcoin Marxist Redistributionist. I see nothing wrong with private enterprise generating revenue / profit as long as they do not violate anyone's property rights. I hope the Ripple founders and company make a zillion dollars. If Ripple delivers on its promise, they deserve it.
We can agree on that point. It's a business like any other. I just find the argument that Ripple is keeping XRP's to altruistically fund development to be a bit much. By the way, have you ever met a "Bitcoin Marxist Redistributionist" -- that's a mouthful.
Bigg, you say you hold BTC, but you also say PoW is a big waste (and, correct me if I'm wrong, I'm pretty sure you've stated the opinion Bitcoin will be a failure). Do you have any real use for BTC? Are these holdings based on pure speculation that BTC price will go up in the short term?
Whoa...failure? No no...I never said Bitcoin would be a failure. Quite the contrary Bitcoin will be, and already is, a great success! Bitcoin will always fulfill a useful function for as long as it remains the king of proof of work based digital currency.
Proof of work is only wasteful in the sense that Ripple uses a different solution which doesn't require mining. However, the mining in Bitcoin serves a function which is to decentralize the distribution of newly minted coins. Is it possible to distribute coins in a decentralized fashion without proof of work? I'm not so sure that it is. I think this was the genius of Bitcoin.
Ripple solves the problem a different way, and quite elegantly at that. They give themselves all the XRP so that they can fund the company and the software's development. The sequestration effect of ledger reserves allows them to give away billions of XRP without flooding the market (since reserves can't be spent). Ripple provides additional functionality that makes the network useful without having to hoard XRP. The only downside is that it could get people upset.
My main use for BTC is to protect my savings from confiscation and the effects of monetary inflation.
What's elegant about keeping as much as you can get away with? It's profit maximizing for certain. Elegant though?
Anyway, just to reiterate, Ripple could have and still could raise capital like any other company through a variety of mechanisms that wouldn't require them to keep all the XRP's to "fund" development. I actually find this argument hilarious. If you think about it, Ripple is keeping potentially billions of dollars to "fund" said development. Llet's be honest here, Ripple kept the XRP's to make a truckload of money. Good for them -- if that's the way you think.
All i have to say is Liberty Reserve...same fate for Ripple.
Completely different situation.
Opencoin operates in the US under US law.
Opencoin is in the US and under US law, thus it will be even easier for the US to shut them down than it was for LR. Look at how easy it is to open an anonymous ripple account: they don't even ask you for a name and email address.
As OpenCoin has stated, even if that would happen today before the source code was released, they would just at that moment, release it. Wouldn't matter what happens to OpenCoin after that, as it relates to the Ripple network.
I'm skeptical that that is true -- mostly because I think they might absorb some legal liability from knowingly releasing something the US government has told them not to. However, I'm not an attorney and don't know this for certain. Having said that, I wouldn't wish that kind of problem on anyone...
Re: Bitcoin 2013: The Future of Payments - San Jose, CA - May 17-19, 2013
where are videos of Dan Kaminsky from the conference?
Someone kindly posted this recently:
https://bitcointalk.org/index.php?topic=219519.0
Kaminsky was on the security one (at least...that's the only one I saw live.)
After midnight when my bandwidth become free I'll watch some of the ones I missed in person. Satellite connection. Bummer because I just got bitcoind (along with openssl, boost, berkeleydb, etc) compiled and I would like to be running it to see how it does on a high latency connection.
Cool. Thanks.
Re: What does Bitpay do to avoid the fluctuation risk of exchange rate?
I don't know what they actually do, so I'll write about what they might do.
1. When user clicks I want to buy, they lock a BTC-denominated price for him for the next 15 minutes. Since now, risk of exchange rate changes is on their side.
2. User can complete the transaction at any time between now and 15 minutes from now. They really can't know when. Or he may not complete and just drop out.
3. If they exchange BTC to fiat after user completes the payment, they risk more than their commission fee because BTC price is so volatile.
So I'd do it this way:
1. When user clicks I want to buy, they lock a BTC-denominated price for him for the next 15 minutes. Since now, risk of exchange rate changes is on their side.
2. They exchange BTC for fiat immediately after that, without waiting for the customer to actually pay. In bulk, eg. six times per minute, so every 10 seconds they exchange BTC to fiat for all transactions that were started within these 10 seconds.
But of course they don't exchange total volume of these started transactions as lot of these orders will drop out and will never be paid. They process fairly significant amount of transactions, so they can predict to some degree what percent of transactions will drop out and what percent will actually be finalized with a payment. They can segment that basing on website, transaction amount, time of day, and lot of other factors, to get pretty accurate.
So if they have 100 started transactions for total 200 BTC in the last 10 seconds, they should be able predict pretty accurately what BTC volume will actually go through. So they immediately exchange that amount of BTC which they think will be finalized for these started transactions.
3. After 15 minutes, when all these orders will be either paid or expired, they do additional exchange of some very fractional amount to correct what they missed. E.g. they exchanged 49 BTC for fiat based on their expected final volume from this 200 BTC started volume, but after 15 minutes it turned out, that 50 BTC were actually finalized. So they sell additional 1 BTC. Now their actual currency rate risk was much less than if they exchanged everything only after the fact. They actually risked changed rate for 1 BTC of 50 BTC transacted, so for 2% of traded volume. If price changed 2% in the wrong direction during these 15 minutes, they lost 2% of 2% = 0.04% of total. If they didn't convert BTC to fiat at the moment of starting orders and waited for finalizing these transactions, they would lost 2% of all 50 BTC so 2% of total volume, which is more than their fees.
This is just a statistics game. The more accurately they're able to predict transaction volume that will go through, basing on past performance and advanced segmentation, the lower their exchange rate risk is.
That is, assuming they do something like this. I would design it this way if I worked for them.
1. When user clicks I want to buy, they lock a BTC-denominated price for him for the next 15 minutes. Since now, risk of exchange rate changes is on their side.
2. User can complete the transaction at any time between now and 15 minutes from now. They really can't know when. Or he may not complete and just drop out.
3. If they exchange BTC to fiat after user completes the payment, they risk more than their commission fee because BTC price is so volatile.
So I'd do it this way:
1. When user clicks I want to buy, they lock a BTC-denominated price for him for the next 15 minutes. Since now, risk of exchange rate changes is on their side.
2. They exchange BTC for fiat immediately after that, without waiting for the customer to actually pay. In bulk, eg. six times per minute, so every 10 seconds they exchange BTC to fiat for all transactions that were started within these 10 seconds.
But of course they don't exchange total volume of these started transactions as lot of these orders will drop out and will never be paid. They process fairly significant amount of transactions, so they can predict to some degree what percent of transactions will drop out and what percent will actually be finalized with a payment. They can segment that basing on website, transaction amount, time of day, and lot of other factors, to get pretty accurate.
So if they have 100 started transactions for total 200 BTC in the last 10 seconds, they should be able predict pretty accurately what BTC volume will actually go through. So they immediately exchange that amount of BTC which they think will be finalized for these started transactions.
3. After 15 minutes, when all these orders will be either paid or expired, they do additional exchange of some very fractional amount to correct what they missed. E.g. they exchanged 49 BTC for fiat based on their expected final volume from this 200 BTC started volume, but after 15 minutes it turned out, that 50 BTC were actually finalized. So they sell additional 1 BTC. Now their actual currency rate risk was much less than if they exchanged everything only after the fact. They actually risked changed rate for 1 BTC of 50 BTC transacted, so for 2% of traded volume. If price changed 2% in the wrong direction during these 15 minutes, they lost 2% of 2% = 0.04% of total. If they didn't convert BTC to fiat at the moment of starting orders and waited for finalizing these transactions, they would lost 2% of all 50 BTC so 2% of total volume, which is more than their fees.
This is just a statistics game. The more accurately they're able to predict transaction volume that will go through, basing on past performance and advanced segmentation, the lower their exchange rate risk is.
That is, assuming they do something like this. I would design it this way if I worked for them.
Interesting. Thanks for the explanation. The key is the reliability of your forecasting system. I'd assume they'd have to stop making a market in volatile times as their likely to get swamped -- unless they have a metric for that as well.
All i have to say is Liberty Reserve...same fate for Ripple.
Completely different situation.
Opencoin operates in the US under US law.
I disagree. The stated issue for Liberty was not following KYC and AML thereby allowing money laundering. My personal opinion is the ATM heist funds allegedly being routed through Liberty was a stake through the heart. That was a big deal for the banks and for government's ability to manage the system.
This could easily happen if Ripple gateways and exchanges fail to comply with these regulations and "hot" money moves through the system. Of course, the same could be said for bitcoin or any other crypto-currency's exchanges or gateways, so I don't think the issue is Ripple specific.
You can't be a regulator if you can't regulate and I don't see the US in particular but really any government in general not wanting to control their currency and keep out competitors. There was actually a decent length discussion of how this plays out at a recent meet-up I went to. I don't think it's at all obvious that any crypto-currency avoids regulation at the crypto/fiat interface. Others do...