Cryptocurrency thread: Bitcoin, Bitcoin Cash, Ethereum, Monero, Dash, etc - discuss it all here.

Discussion in 'Off-topic Discussion' started by JesusGreen, Sep 1, 2017.

  1. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    Is no-one else seeing a parabolic lift-off here?


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  2. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    Possible parabolic spike to 60,000 for Xmas.


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  3. JesusGreen

    JesusGreen Fapstronaut

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    +$2.5k in under 24 hours.

    We are likely seeing an adoption s-curve here. My conservative estimate for the end of 2018 is around $33K. This figure would have BTC reaching slightly less than 10% of gold's market cap, and seems very reasonable to achieve based on the current price.

    We could even see a six figure price (and will if growth continues at it's current rate) but that depends on adoption of Bitcoin continuing to grow at this rapid rate - which it might, or it might slow down and take a few more years to get there.

    I look forward to the coming year to find out.
     
  4. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    That 33,000 could be possible by the end of this year. Yes, you read that right. We are currently in a parabolic spike as I predicted earlier.

    At the start of the month, it was moving up a $1000 a week, now it's moving up a thousand dollars a day. Give it a few more days, and by the time it takes to write a post, and post a chart, the price could rise $1000.

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  5. gottagetback

    gottagetback Fapstronaut

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    I've been researching but I can't seem to find a real answer... How little can you invest in BTC? I'm gonna get some money for XMAS and I'm thinking of making a profit off of it.

    EDIT: Any tips? :)
     
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  6. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    Buy buy buy...
     
  7. JesusGreen

    JesusGreen Fapstronaut

    It's possible, but Bitcoin futures come out in 2 days time, and there's a good chance that this current rapid increase in growth was related to that. Similar to the price spikes we saw prior to the S2X fork that never happened, and the spikes prior to Segwit in August, and the halvening in 2016.

    With Wall Street money coming into the picture, I think we can expect a decrease in volatility, which may slow this bull run right down. $20K is also another large psychological barrier where we may see many people taking their money and see another correction.

    You're certainly right though about it being possible, but don't be surprised if the rally slows down or faces some difficulty and it takes a little longer. As I said though, the $33,000 is a conservative estimate, meaning I cannot see the price by the end of 2018 being any lower than $33,000, in pretty much any situation. I can definitely see it being a LOT higher (6 digits) though.

    Tl;dr: I'm very bullish as always, but I'm keeping my estimates at the lower end. It's always fun when Bitcoin outdoes my expectations massively.

    I mean, I predicted $2-3K for 2017. I predicted $11.5K for the end of December. Already massively exceeded both of those predictions :D

    You can invest as little as you like. You don't have to buy a whole Bitcoin, you can trade in millionths of a Bitcoin if you like, although the network has some congestion and so transaction fees are a little higher right now. So keeping that in mind, a $5 Bitcoin purchase is probably silly. If you can invest $30+ though, go for it.
     
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  8. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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  9. My exchange has a minimum of $10 but others allow a lower purchase I believe.
     
  10. JesusGreen

    JesusGreen Fapstronaut

    Ignore the broken chart, but:

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    Das it mane. :D
     
    Buzz Lightyear likes this.
  11. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    For a little more context:

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  12. Can someone please explain to me why crypto currency is even worth anything? Did people just believe the hype and bought it and then suddenly there’s a market for it?
     
  13. JesusGreen

    JesusGreen Fapstronaut

    For the longest time, people were trying to solve the issue of how to handle payments online without a middle man. In real life, you have cash, you hand it to someone, and that's it, no middle man. Online, that was never possible. You had to have some kind of website or financial authority in the middle to check the transactions and ensure no-one was cheating the system in some way. This is all well and good, but, said middlemen often lead to problems. A personal example of this I can relate to, is how one of my neighbours lost close to $20,000 after Paypal froze his account. He didn't break any of Paypal's TOS, but the same guy filed multiple complaints against him from multiple accounts, and no matter what he tried, he was never able to get his account back. Using middlemen is safe most of the time, but things like what happened to my neighbour do happen.

    Over the years people have been proposing ideas for "digital cash", and over the past 20 years, many such sites have sprung up, offering digital currencies. The thing is, every single attempt, used a middle man. The website themselves were still the ultimate authority of your currency, so if the website owners skipped town, your money was now worthless.

    The blockchain technology that Bitcoin is built on finally solves this issue. It uses cryptography and distributed computing to test whether transactions are correct or fraudulent. There is no need for any middle man anymore. In essence, cryptocurrencies finally fill the role of digital cash, as you send money directly to another person, without needing to trust any authority in-between. They've resolved a problem that people have been attempting to work out for 20+ years with no luck.

    Now Bitcoin in particular, is gaining value as something different: A store of value. For the longest time gold has been the standard store of value for anyone wanting to get away from fiat currencies. The supply of gold is limited, meaning that unlike fiat currency, it can't experience hyperinflation. You can also hold your gold yourself without relying on a middle man, so if the banks in your country experienced a crisis, and the government didn't bail them out, you'd still have your gold (assuming you kept it at home and not in a safety deposit box).

    Now gold has some issues that have made it unappealing to a lot of people. The first is storing it. If you do want to hang on to your own gold, you need to figure out how to hide it, or you're at risk of losing it if your house is broken in to. Alternatively, you can put it in one of the aforementioned safety deposit boxes at a bank, but you're now not fully in control or ownership of it.

    Gold also physically needs to be moved around if you decide to sell it, and the process of selling it and getting money back out of it, if you decide to do that, is slow-winded and tricky.

    Bitcoin resolves all of these issues. Just like gold, the supply of Bitcoin is limited. The addition of Bitcoin to the system drops its speed by half every 4 years, meaning that it eventually halts completely, at just under 21 million Bitcoins in circulation. I know what you're thinking: 21 million Bitcoins? What? That's not very much, that's certainly not enough to be used as a currency. Well, Bitcoin, unlike the dollar or euro, can be split MILLIONS of ways, not just hundreds. A Bitcoin can be divided down to 8 decimal places. The lowest amount of Bitcoin that can be used in a transaction is 0.00000001 BTC. So it was never intended for people to use whole Bitcoins like dollars. Fractions of Bitcoins are what people should be holding and using. This is why the price is getting so high. If you think of a Bitcoin like a euro, then the price seems absolutely fucking ridiculous, why would someone pay close to $20,000 for a single euro? The truth is though, a euro is more like 1/10,000th of a Bitcoin. When you realise that, the real price of a unit of transaction of Bitcoin, is more like $1.95. So it's not such a crazy price after all.

    Bitcoin cuts out the middle man, but without the storage issues that gold faces. With Bitcoin, if you're using a hardware wallet like a Trezor or Ledger Nano S, the only thing you need to keep hidden and safe, is a 12-24 word seed phrase that can be used to recover your wallet. It's much easier to hide a sequence of words than it is to hide a big bag full of gold. In fact, you can even commit the phrase to memory, or separate it out into 12 different locations so that no-one can ever steal it. You can also have multi-signature wallets, that require the okay from two or more separate individuals before a transaction can happen. In this manner, you can pass one of the keys over to a trusted relative in another country, and unless someone were to break into both your houses and combine the two keys, no-one would ever be able to touch your Bitcoin, even if they broke into your house and robbed you blind.

    As Bitcoin also doubles as a currency, if you lose confidence in Bitcoin and prefer to exchange it for fiat currency, the process is easy and can be completed in less than a couple of hours - or sometimes even minutes. Or, you can even just spend some of your Bitcoin immediately, since unlike gold, many vendors actually accept Bitcoin for their goods or services.

    The only real downside Bitcoin has versus gold, is that if the world's power grid collapsed and we stopped using electricity around the entire world, Bitcoin would no longer be usable. If that happens though, we have bigger problems than whether or not we can use our currency - and good luck using your gold in such a world either.

    What about if governments block Bitcoin? Well, Bitcoin, by not requiring a middle-man for transactions, is censorship resistant. It doesn't matter if governments ban Bitcoin, because transactions can happen completely outside of banks and financial institutions, and so there is no real way for a government to prevent access to your Bitcoin. Well what if they went crazy and shut off internet access entirely while they searched for a way to block Bitcoin? No problem, you can make Bitcoin transactions over the phone networks, and you even can keep your Bitcoin wallet in touch with the rest of the world over satellite.

    Based on all of this, I think it's very likely that cryptocurrencies will become the main medium of exchange online over the next 10-15 years, replacing visa/mastercard and paypal etc.

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    So what about value? How do make predictions about the true value of Bitcoin? Well, due to Bitcoin's limited supply, it's actually REALLY easy to make calculations about the price of Bitcoin.

    All you have to do is estimate how much total money would enter the Bitcoin ecosystem, divide it by 21,000,000 (the maximum total coins in circulation), and write that number down. Then take that total money amount again and divide it by the CURRENT Bitcoins in circulation (at the time of writing this, that's 16,746,963). Now you have a price range for the coin.

    So for example, let's say Bitcoin gets 1/10th as many investors looking to use it as a store of value like gold. There is $7 trillion dollars invested in gold currently. That means at least $700 billion dollars invested in Bitcoin.

    700 billion divided by 21,000,000 = 33,333.33*
    700 billion divided by 16,746,963 = 41,798.62

    So if Bitcoin were to only see as much money put into it as 1/10th of the money invested in gold. The price would be somewhere in the range of $33,333 to $41,798 per Bitcoin.

    More optimistic? Think Bitcoin can ever overtake gold? Then we're talking $7 trillion+ in Bitcoin. That would give a price of at least $333,333-$417,980, and more if Bitcoin exceeded gold's investments.

    In short, those people saying Bitcoin will reach $1M or $5M or $10M dollars or whatever? Seems a bit of a reach, at least currently.. but is the current price of Bitcoin high? Not at all IMO. I think there's not a chance in hell of BTC being any lower than $33K by the end of the decade. Most likely it'll reach that number some time in 2018.

    Also some things to keep in mind about the price. One thing that is currently slowing down the adoption of Bitcoin, is high transaction fees. Due to congestion on the network, some transactions are requiring fees of $10-15 to go through. This is making it difficult to use Bitcoin as an actual currency currently, and so it's seeing more use as a store of value. However, in 2018, two new updates to the network: The Lightning Network, and Rootstock are coming that will allow for hundreds or thousands times the current transaction rate. Potentially processing transactions faster than Visa. At this point, a lot of new money will come into Bitcoin and we could see some meteoric price jumps, so 2018 is set to be a very bullish year for the price.

    Then in 2020 we have the next block reward halving. Tl;dr the amount of Bitcoin being produced gets cut in half again. The last one happened in 2016, and you can even see on the charts when it happened because when the block reward halved, that's what started this massive bull run Bitcoin has been on for a year and a half. Rising up from $300-400 to $19,500~. The block reward halving before that back in 2012 also resulted in a similar immense increase in Bitcoin's price, and so one can expect the one in 2020 to do some wonderful things for the price too.

    Tl;dr: I firmly believe Bitcoin is actually undervalued currently.

    As for other cryptocurrencies. Many of them are just money grabs, hoping to make a quick buck from the popularity of the big ones like Bitcoin.

    That said, there are also some other really great ones out there. Iota is doing a better job at the whole currency/transaction thing that Bitcoin currently, with zero transaction fees and lightning fast speeds. Ethereum enables smart contracts, programmed agreements that happen across the blockchain without middlemen (search up smart contracts and read a little for why this is amazing tech) - although these smart contracts are also coming to Bitcoin in 2018 when Rootstock comes out. Monero is perhaps the most anonymous of the coins, providing completely untraceable currency for those looking to hide their funds from the government, from the divorce lawyers, etc. There are some other notable mentions too like Litecoin, Ripple, Dash, Cardano, etc.
     
  14. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    How do we give anything a monetary value? Price discovery is found practically in the marketplace not in some abstract idea of the 'fundamentals'. Now add to that that Bitcoin can itself function as money, where it could also become a means by which to price things, and you have something potentially very valuable... should the market deem it so. And it is deeming it so....
     
  15. UKSD

    UKSD Fapstronaut

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    Any advice on LTC? Looking to HODL for at least 6 months.
     
  16. Wow that's alot of information!!

    Okay, I can see and understand the need to get rid of the middleman problem, but what I am stuck on is that Bitcoin has to be somewhat backed up by the dollar right? Because companies and people can go around accepting each other's Bitcoins in exchange for goods and services, but what good is the Bitcoin if a person can't buy something somewhere that doesn't accept Bitcoin? So he would have to sell the Bitcoin to people in exchange for cash or is that how it is already working? So Bitcoin, like @Buzz Lightyear has said, has to be deemed valuable in order for it to work and for the people to keep on believing it is valuable in order to be able to make it work.

    Am I thinking right? :)
     
  17. Buzz Lightyear

    Buzz Lightyear Fapstronaut

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    Yes, this is how it is already working. Bitcoin has gone mainstream in the markets. By the time it hits the streets, it will most probably be valued much higher.

    What you are seeing now is the capitalization of Bitcoin [the store of value function in a currency]. Once it is capitalized and stabilized, it can function as a pricing mechanism, means of exchange.
     
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  18. JesusGreen

    JesusGreen Fapstronaut

    Technically you can actually buy anything from places that don't accept BTC, with BTC as long as they accept debit cards, as you can buy a Bitcoin debit card, and basically what happens is you top up your account with BTC, and it automatically converts it to USD/Euros/whatever other currency for any transaction you make. At the moment this is still dependent on Bitcoin being valuable in other currencies, but the idea is that as Bitcoin adoption increases and more and more stores/services accept Bitcoin, it will become less and less dependent on its value in other currencies, as people will transact more and more online in BTC and less and less in other currencies.

    That said with the current ridiculous transaction fees and price volatility, using BTC as a currency for small transactions isn't the best of ideas, but that's something that further improvements to the network like the Lightning Network and Rootstock (designed to help with transaction congestion and increase transaction speeds/lower fees) should solve.

    The scarcity makes it fantastic as a store of value right now, but the core developers are trying to get scaling right, as doing it wrong (like simply massively increasing block sizes, like competing coins like Bitcoin Cash are trying to do) could lead to centralisation and removes the trustless element from Bitcoin. So as they have to find the correct way to do it, it's a slow process, so don't necessarily expect it to be the perfect currency tomorrow, it could take a year or two.
     
  19. Baroque

    Baroque Fapstronaut

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    What do you guys recommend for wallets?

    I opened a Coinbase account a few months ago but couldn't get verified. I gave it another chance recently but no dice.

    I've heard hardware wallets are the safest. I looked into the Ledger Nano S but I find it too expensive after shipping costs are factored in.
     
  20. gsherman100

    gsherman100 Fapstronaut

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    Probably the best thing I’ve put my money into is bitcoin.
     
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