The bitcoin crash of 2013: Don't you feel silly now? - Los ...

After seven years in Bitcoin, I have never been more confident that this network is now absolutely unstoppable. Nothing short of an extinction level event can stop Bitcoin from slowly but surely growing as a global, agnostic, alternative network for storing and transferring value.

Back in 2013 when the entire market cap hit $1 Billion for the first time, it was really scary to put a considerable amount of money in BTC. You might like Bitcoin and find it interesting but doubt would still creep up in your mind about its staying power and the fact that one bug could bring it all down. Mt. Gox got hacked, 800,000 BTC stolen, it crashed from $1200 to $190 by 2015, so how do you even believe that 5 years later it would be a sustained $200+ billion market? Yet here we are.
As long as the Bitcoin blockchain is churning out new blocks of unstoppable transactions, that's all that matters. Naysayers don't understand that this is all Bitcoin needs to do: Churn out new blocks every ten minutes. And with every new block, a monumental amount of energy and work is stacked on top of the previous block, and so on, and so forth, making it stronger. At 99.98% uptime for 11 years, it's sticky enough to now last much longer than that. This network will be transferring and storing trillions of dollars within this decade and beyond.
submitted by Godfreee to Bitcoin [link] [comments]

[ Bitcoin ] After seven years in Bitcoin, I have never been more confident that this network is now absolutely unstoppable. Nothing short of an extinction level event can stop Bitcoin from slowly but surely growing as a global, agnostic, alternative network for storing and transferring value.

Topic originally posted in Bitcoin by Godfreee [link]
Back in 2013 when the entire market cap hit $1 Billion for the first time, it was really scary to put a considerable amount of money in BTC. You might like Bitcoin and find it interesting but doubt would still creep up in your mind about its staying power and the fact that one bug could bring it all down. Mt. Gox got hacked, 800,000 BTC stolen, it crashed from $1200 to $190 by 2015, so how do you even believe that 5 years later it would be a sustained $200+ billion market? Yet here we are.
As long as the Bitcoin blockchain is churning out new blocks of unstoppable transactions, that's all that matters. Naysayers don't understand that this is all Bitcoin needs to do: Churn out new blocks every ten minutes. And with every new block, a monumental amount of energy and work is stacked on top of the previous block, and so on, and so forth, making it stronger. At 99.98% uptime for 11 years, it's sticky enough to now last much longer than that. This network will be transferring and storing trillions of dollars within this decade and beyond.
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"the price is fractal, so the pattern will repeat" (2015)

https://i.imgur.com/4HVvuHI.jpg
https://bitcointalk.org/index.php?topic=1043621.0
Do you think that we will experience a savage crash after a new ath of $25k to $28k? Followed by a new bear market until 2019?
Or will we break through the hyper-bitcoinization threshold and reverse gravity, propelling us upward - not back downward?
submitted by americanpegasus to BitcoinMarkets [link] [comments]

Bitcoin is Golden.

Bitcoin is Golden.
Blatant price guessing here, based on the golden ratio:

(log price)
Approximate previous highs: $32, $1000, $20K.
Approximate ratios (first derivative): 33 (1000/32) and 20 (20K/1000).
Approximate second derivative: 33/20 = 1/1.6 (or 1/phi for idiots like me).
If this holds, the next first derivative will be 20/1.6 = 12.5.
Then $20K x 12.5 = $250K.

(linear time)
Approximate dates of previous highs: May2011, Dec2013, Dec2017.
Approximate time spans between: 2.5yr, 4yr.
Approximate ratio: 1.6 (phi, or close enough lol).
If this holds, 4yr x 1.6 = 6.4yr
Dec2017 + 6.4yr = Apr2024, a few months before the next expected halving.

If this is true, the next top should be around $250K around Apr2024, violating expectations for that halving just like this one lol. (Personally, I think the top will likely be closer to the halving, but still before it. Possible reasons for this, beside the obvious, include the fact that the cryptomarket peak was a few weeks after the bitcoin peak - relative local market forces could cause the date to be other than the expected - and the fact that 1.6 is less than actual phi, lol.)

Just a guess: Smart money will "sell the news" at the time of the next halving, liquidating all the retail FOMO longs that anticipate the halving and the increase in the stock-to-flow ratio. Those liquidations will crash the market, eventually resulting in a relatively shallow bottoming in 2026 of around $20K, at which point the next halving will result in market action much like 2016-2017. The golden cycles of a natural market and the fixed 4 year cycles of bitcoin halvings are fundamentally at odds with each other, as are the dramatic changes in bitcoin due to the halvings. In nature, such disagreeing cycles find resonant behaviors that allow different parts to occasionally line up even while they are dissonant and chaotic at other times (think planetary orbits, lol). It is likely that, if bitcoin survives and remains dominant, such resonances will become common and studied, while it is similarly likely that if the cryptomarket in general survives and remains relevant, similar frequencies, along with a much great set of market golden cycles, will become fundamental to longterm market structure.

imho



PS, if the pattern above holds, which it is unlikely to do given so many competing currencies, bitcoin will next peak at $1.9M in Jul2034 (leaving it far below the expected stock-to-flow "fair value" at that point). But again, such massive golden cycles are much more likely to be much more relevant for the cryptocurrency market cap as whole than for bitcoin alone over such large and chaos-promoting time spans. And again, imho.

PPS, I think we will see a mini-peak sometime in 2022 between $40K and $90K, followed by the aforementioned top, somewhat like a spread out version of what happened in 2013. Alternatively, we may see two mini peaks, one in 2021 around $20-25K, with another bouncing off both $100K and the "fair value" line in Dec2022-Mar2023.

PPPS, this all assumes we don't see some crazy supercycle low sub-$1K (maybe $500-700 or $2100-2700 Oct2020-Apr2021), which while not necessarily invalidating the predictive utility of natural cycles and resonances like phi, may invalidate all specified date and price targets. lol

PPPPS, there are two major conflicting factors moderating these predictions (guesses, lol):

The first is relatively positive - that the 2014 bear market was exaggerated and lengthened due to the severity of Mt. Gox fiasco's effects on the market, thus potentially also taking the wind out of the 2017 bull market (hard to believe, I know, but the top probably should have been a bit over $30K (assumign the $+1K top in 2013 was correct)). And thus, this bull market may be relatively more powerful and faster than otherwise expected, evidenced in part by the (so far) relatively short duration of the bear market.

The second factor is negative and significant, which is that the growth of bitcoin and the crypto market will lie on a curve resembling in some sense a logistic, namely that there's a limit to the number of people on earth, and the more people that adopt the fewer there will be that haven't, and the harder and more reticent the remaining group will be relative to previous converts (even as that reticence is of course competed with by seeing wider adoption occurring, lol). This and related factors will cause bitcoin's growth curve to decrease it's slope and growth derivatives in all frames. imho. If that growth deviates enough, it will eventually pierce every projected support among moving averages and those big log/quadratic curves everyone uses to project major tops and bottoms.

PPPPPS, yah, this is partially here because I despise tradingview lmao



TL;DR: $250K in Apr2024

submitted by diadlep to Bitcoin [link] [comments]

Question for holders: What was your scariest dip?

I bought bitcoin before this last dip. I got so scared I was so tempted to sell but I hodled. Was this dip particularity scary or were there more scary dips in the past?
Would love to hear your stories.
submitted by BitfinexAndShill to Bitcoin [link] [comments]

Lesson - History of Bitcoin crashes

Bitcoin has spectacularly 'died' several times
📉 - 94% June-November 2011 from $32 to $2 because of MtGox hack
📉 - 36% June 2012 from $7 to $4 Linod hack
📉 - 79% April 2013 from $266 to $54. MTGox stopped trading
📉 - 87% from $1166 to $170 November 2013 to January 2015
📉 - 49% Feb 2014 MTGox tanks
📉 - 40% September 2017 from $5000 to $2972 China ban
📉 - 55% January 2018 Bitcoin ban FUD. from $19000 to 8500
I've held through all the crashes. Who's laughing now? Not the panic sellers.
Market is all about moving money from impatient to the patient. You see crash, I see opportunity.
You - OMG Bitcoin is crashing, I gotta sell!
Me - OMG Bitcoin is criminally undervalued, I gotta buy!
N.B. Word to the wise for new investors. What I've learned over 7 years is that whenever it crashes spectacularly, the bounce is twice as impactful and record-setting. I can't predict the bottom but I can assure you that it WILL hit 19k and go further beyond, as hard as it may be for a lot of folks to believe right at this moment if you haven't been through it before.
When Bitcoin was at ATH little over a month ago, people were saying, 'it's too pricey now, I can't buy'.
Well, here's your chance at almost 60% discount!
With growing main net adoption of LN, Bitcoin underlying value is greater than it was when it was valued 19k.
submitted by xcryptogurux to Bitcoin [link] [comments]

The Decade in Blockchain — 2010 to 2020 in Review

2010

February — The first ever cryptocurrency exchange, Bitcoin Market, is established. The first trade takes place a month later.
April — The first public bitcoin trade takes place: 1000BTC traded for $30 at an exchange rate of 0.03USD/1BTC
May — The first real-world bitcoin transaction is undertaken by Laszlo Hanyecz, who paid 10000BTC for two Papa John’s pizzas (Approximately $25 USD)
June — Bitcoin developer Gavin Andreson creates a faucet offering 5 free BTC to the public
July — First notable usage of the word “blockchain” appears on BitcoinTalk forum. Prior to this, it was referred to as ‘Proof-of-Work chain’
July — Bitcoin exchange named Magic The Gathering Online eXchange—also known as Mt. Gox—established
August —Bitcoin protocol bug leads to emergency hard fork
December — Satoshi Nakamoto ceases communication with the world

2011

January — One-quarter of the eventual total of 21M bitcoins have been generated
February — Bitcoin reaches parity for the first time with USD
April — Bitcoin reaches parity with EUR and GBP
June — WikiLeaks begins accepting Bitcoin donations
June — Mt. Gox hacked, resulting in suspension of trading and a precipitous price drop for Bitcoin
August — First Bitcoin Improvement Proposal: BIP Purpose and Guidelines
October — Litecoin released
December — Bitcoin featured as a major plot element in an episode of ‘The Good Wife’ as 9.45 million viewers watch.

2012

May — Bitcoin Magazine, founded by Mihai Alisie and Vitalik Buterin, publishes first issue
July — Government of Estonia begins incorporating blockchain into digital ID efforts
September — Bitcoin Foundation created
October — BitPay reports having over 1,000 merchants accepting bitcoin under its payment processing service
November — First Bitcoin halving to 25 BTC per block

2013

February — Reddit begins accepting bitcoins for Gold memberships
March — Cyprus government bailout levies bank accounts with over $100k. Flight to Bitcoin results in major price spike.
May —Total Bitcoin value surpasses 1 billion USD with 11M Bitcoin in circulation
May — The first cryptocurrency market rally and crash takes place. Prices rise from $13 to $220, and then drop to $70
June — First major cryptocurrency theft. 25,000 BTC is stolen from Bitcoin forum founder
July — Mastercoin becomes the first project to conduct an ICO
August — U.S. Federal Court issues opinion that Bitcoin is a currency or form of money
October — The FBI shuts down dark web marketplace Silk Road, confiscating approximately 26,000 bitcoins
November — Vitalik Buterin releases the Ethereum White Paper: “A Next-Generation Smart Contract and Decentralized Application Platform
December — The first commit to the Ethereum codebase takes place

2014

January — Vitalik Buterin announces Ethereum at the North American Bitcoin Conference in Miami
February — HMRC in the UK classifies Bitcoin as private money
March — Newsweek claims Dorian Nakamoto is Bitcoin creator. He is not
April — Gavin Wood releases the Ethereum Yellow Paper: “Ethereum: A Secure Decentralised Generalised Transaction Ledger
June — Ethereum Foundation established in Zug, Switzerland
June — US Marshals Service auctions off 30,000 Bitcoin confiscated from Silk Road. All are purchased by venture capitalist Tim Draper
July — Ethereum token launch raises 31,591 BTC ($18,439,086) over 42 days
September — TeraExchange launches first U.S. Commodity Futures Trading Commission approved Bitcoin over-the-counter swap
October — ConsenSys is founded by Joe Lubin
December — By year’s end, Paypal, Zynga, u/, Expedia, Newegg, Dell, Dish Network, and Microsoft are all accepting Bitcoin for payments

2015

January — Coinbase opens up the first U.S-based cryptocurrency exchange
February — Stripe initiates bitcoin payment integration for merchants
April — NASDAQ initiates blockchain trial
June — NYDFS releases final version of its BitLicense virtual currency regulations
July — Ethereum’s first live mainnet release—Frontier—launched.
August — Augur, the first token launch on the Ethereum network takes place
September — R3 consortium formed with nine financial institutions, increases to over 40 members within six months
October — Gemini exchange launches, founded by Tyler and Cameron Winklevoss
November — Announcement of first zero knowledge proof, ZK-Snarks
December — Linux Foundation establishes Hyperledger project

2016

January — Zcash announced
February — HyperLedger project announced by Linux Foundation with thirty founding members
March — Second Ethereum mainnet release, Homestead, is rolled out.
April — The DAO (decentralized autonomous organization) launches a 28-day crowdsale. After one month, it raises an Ether value of more than US$150M
May — Chinese Financial Blockchain Shenzhen Consortium launches with 31 members
June — The DAO is attacked with 3.6M of the 11.5M Ether in The DAO redirected to the attacker’s Ethereum account
July — The DAO attack results in a hard fork of the Ethereum Blockchain to recover funds. A minority group rejecting the hard fork continues to use the original blockchain renamed Ethereum Classic
July — Second Bitcoin halving to 12.5BTC per block mined
November — CME Launches Bitcoin Price Index

2017

January — Bitcoin price breaks US$1,000 for the first time in three years
February — Enterprise Ethereum Alliance formed with 30 founding members, over 150 members six months later
March — Multiple applications for Bitcoin ETFs rejected by the SEC
April — Bitcoin is officially recognized as currency by Japan
June — EOS begins its year-long ICO, eventually raising $4 billion
July — Parity hack exposes weaknesses in multisig wallets
August — Bitcoin Cash forks from the Bitcoin Network
October — Ethereum releases Byzantium soft fork network upgrade, part one of Metropolis
September — China bans ICOs
October — Bitcoin price surpasses $5,000 USD for the first time
November — Bitcoin price surpasses $10,000 USD for the first time
December — Ethereum Dapp Cryptokitties goes viral, pushing the Ethereum network to its limits

2018


January — Ethereum price peaks near $1400 USD
March — Google bans all ads pertaining to cryptocurrency
March — Twitter bans all ads pertaining to cryptocurrency
April — 2018 outpaces 2017 with $6.3 billion raised in token launches in the first four months of the year
April — EU government commits $300 million to developing blockchain projects
June — The U.S. Securities and Exchange Commission states that Ether is not a security.
July — Over 100,000 ERC20 tokens created
August — New York Stock Exchange owner announces Bakkt, a federally regulated digital asset exchange
October — Bitcoin’s 10th birthday
November — VC investment in blockchain tech surpasses $1 billion
December — 90% of banks in the US and Europe report exploration of blockchain tech

2019

January — Coinstar machines begin selling cryptocurrency at grocery stores across the US
February — Ethereum’s Constantinople hard fork is released, part two of Metropolis
April — Bitcoin surpasses 400 million total transactions
June — Facebook announces Libra
July — United States senate holds hearings titled ‘Examining Regulatory Frameworks for Digital Currencies and Blockchain”
August — Ethereum developer dominance reaches 4x that of any other blockchain
October — Over 80 million distinct Ethereum addresses have been created
September — Santander bank settles both sides of a $20 million bond on Ethereum
November — Over 3000 Dapps created. Of them, 2700 are built on Ethereum
submitted by blockstasy to CryptoTechnology [link] [comments]

Thoughts on the current downturn

From https://forums.prohashing.com/viewtopic.php?f=11&p=23082#p23082:
---------------------------------------------

The current downturn in the cryptocurrency markets itself isn't very surprising. There have been many bubbles before, and there will be at least one more bubble after this. What surprises me about this cycle is how quickly the market has collapsed. Whereas previous cycles fell slowly after the long middle period where prices stalled, this time the bottom fell out in the course of a week. This post will review the consequences of the new market reality.

Bitcoins are holding up well
Perhaps the biggest shock of this cycle is how the price of bitcoins has held up so well compared to that of other coins. In June 2017, when we were deciding whether this pool could be a profitable business and how many people we should hire if it could be. We determined that the average case where the coins would settle was bitcoins at $1574, ETH at $110, and LTC at $30. ETH and LTC have already surpassed the average case decline we had projected, while BTC is holding above twice the projected bottom.

The reason for BTC holding up so well isn't obvious. Almost every other coin is superior to BTC in some way. For example, LTC and BCH are much cheaper to send money with, ETH is used for contracts, and Monero has anonymity.

I don't think that bitcoins will hold up for much longer. I think that the capitulation to $980 is still ahead, and the price after capitulation will be $1500 or so. The BTC network still hasn't reckoned with the lack of a realistic plan to increase its block size. At some point, the lightning network is going to be shown as a technical marvel that works well when people are running nodes, but that it's too difficult for ordinary users and that money transmission regulations will not permit most businesses to run nodes. The Core developers are still pressing on with their effort despite the money transmission regulations.

Right now, growth is being driven by people willing to experiment. Eventually, the lightning network will run out of hobbyists to adopt it and its growth will cease, because normal businesses like us won't touch it due to the legal risks. At that point, people will realize that there is no "Plan B" for Bitcoin, and perhaps that will cause capitulation and force the Core to reevaluate their path forward.


We should reevaluate how coins are valued
Another change in this crash from the previous crashes is the complete lack of news to explain it. During the $32 -> $2 downturn, it was quite possible that nobody would ever adopt cryptocurrencies. During the $266 -> $69 downturn, many believed that Mt. Gox's unreliability and instability would lead to the death of the industry. During the $1160 -> $160 bubble, China banned bitcoins every week. But during the past two weeks, there has been no news of any importance.

In particular, ETH prices are absurd. I really don't understand how people think that ETH is priced anything close to its real value. Gas prices continue to rise and people think it's worth 6% of what it was a year ago? If I were paid in dollars, I would be changing them to ETH as fast as I could right now.

Since these prices don't make sense with what many people and I think are the fundamentals, then we need to reevaluate our views on how coins are valued. It's quite possible that the idea that things like transaction capacity and features [i]don't actually matter[/i].

There was one news article that caught my attention a while back. It proposed that, during 2017, a lot of the buyers into coins came from "ordinary people" who knew very little about cryptocurrencies. These people talked about coins at parties and bought what their friends bought. Someone like me, who spends most of his time at home writing code for this business, who is not married, and who has fewer friends than the average person, would not have been exposed to enough instances to make a connection if it were true that someone talked about bitcoins at every social event. I'd also venture that many of the people discussing bubbles in Internet forums also engage in less socializing than the average person, so reading theories about what happened from them leads to inaccurate conclusions.

During the next bubble, I'm going to more strongly consider social issues rather than technical issues and see whether that increases the accuracy of my predictions.


IPOs of mining manufacturers were too slow
One way to predict that this would not be a quick recovery into another bubble like the first 2013 collapse was to look at the IPOs from the mining manufacturers. Businesses don't issue IPOs when they have plenty of money - why would you give up potential profits to get money now if you don't need it? Instead, executives at the companies were really smart and saw that the writing was on the wall. Their problem was that they moved too slowly to sell their stakes. I don't think that the IPOs will be able to raise sufficient capital at this point and they will probably be cancelled. Bitmain or one of the other big mining manufacturers will likely go out of business.

Mining manufacturing is an interesting business because there is zero demand for your product during times like these. The industry basically resets every few years with new companies. The bitcoin difficulty just fell 15% during the last period, and the market is flooded with the miners that were just shut down. Why would anyone buy a new miner when all these old miners are being given away at any cost?

It doesn't make sense that anyone would ever invest in these IPOs or in the rumored Coinbase IPO. All of these stocks are 100% dependent on the cryptocurrency market recovering. If cryptocurrencies settle at these prices indefinitely, Coinbase will be unable to support its operations and will collapse, so you'll lose a lot more money than if you invested in coins (which have no chance of ever being completely worthless anymore.) If cryptocurrencies increase in value, they will go up by 100-1000x and Coinbase's stock will go up by 5x or 10x. In both cases, buying an IPO in the cryptocurrency world never makes as much sense as buying the coins themselves. Either buy coins or buy stocks in some unrelated industry to diversify.


"Manipulation" is a buzzword people use to explain things they don't like
Whenever prices fall, people start complaining about "manipulation." They experienced a huge drop, so the people selling must have been "manipulating" the market to cause them to lose money. The latest theory is that Bitfinex is not being honest with its Tether reserves. Bitfinex clearly violated the law by serving US customers and not shutting down when it was insolvent, but there isn't any evidence that Tether is going to fail due to fraud.

Note that Tether may fail due to banks discontinuing Tether's accounts, but that is different than fraud where a misrepresentation is being made.

I don't believe that the cryptocurrency markets are "manipulated" like most people think. There are some scams, especially those where people create ICOs and don't deliver a product. I doubt that the SEC will bring any charges against Bitfinex, and most of these complaints about "manipulation" are simply people complaining because they lost money.


Businesses will start to fail
Now I can get to the consequence that I think is the most important to understand in predicting how the next cycle plays out.

One of the reasons that the next bubble is a while away is because there have not yet been a lot of businesses that have failed. One of the unfortunate aspects of cryptocurrency, and one that significantly delays its development, is how the bubble cycle causes good ideas to fail. For example, the ETCDEV team, which contributed to Ethereum Classic development, recently folded due to bankruptcy. While I don't hold much love for people who are willing to overlook something as heinous as the DAO theft, the ETCDEV team did seem like it would be a significant contributor to developing ETC, and that won't happen now.

In fact, it's more likely that honest, ethical businesses will fail during this coming down cycle than scammers and fraudsters. It doesn't cost much to be a scammer - you just register some fake accounts and announce a new project, then disappear with all the money. Operating an honest business is expensive. It will cost us $15,000 just to comply with the 1099-MISC regulations next month. That's why, as prices fall, we should expect disreputable people to start to again outnumber law-abiding citizens in this industry. We can already see that happening as people with criminal records like Craig Wright, Roger Ver, and Charlie Shrem are dominating the conversation more and more.

As prices fall, businesses will need to make a decision. Many of them will decide to "pivot" - which essentially means that the company is shutting down and is creating a new firm in a different industry. This was common in 2015. Remember that the level at which a company should quit working in cryptocurrencies is not determined by whether they are making money, but by whether they are making as much money as they could in another field. Most of the time, companies that "pivot" don't return to whatever they were doing before, because they either find the "pivot" field to be lucrative, in which case it makes sense to keep at it, or they go bankrupt in that field too and close down permanently.

They key issue with these "pivots" and outright bankruptcies is that talent leaves the industry and is permanently gone. It takes at least 6 months for a programmer to join a project and become familiar with a codebase, during which time that person's productivity is significantly reduced. The cost of training a new hire is often as much as that person's salary for an entire year, given that other people in the company need to slow down to train the new person. When people leave a company, they don't just come back if times get better. They get new jobs, with new responsibilities, and that knowledge is lost.

Suppose that there is a company that has created an amazing Ethereum-based marketplace that will eventually gain millions of simultaneous customers. The marketplace reaches completion, but in the downturn the company is forced to shut down until the market turns around again, because all their customers are gone. Even if the owner of the company retains the software and is available and willing to restart when the next bubble begins, years have passed and new employees are needed. It will take 6 months to get all the employees hired, another 3 to get them minimally trained, another 1 to upgrade all the development environments, packages, and tools that became obsolete during the stoppage to get everything up to current standards, and another 2 to redo the website design to do the same thing with different colors and designs because the Internet for some reason changed its mind on what makes "attractive" webpages again.

If the downturn lasts two years, then this project could have been out [i]three years earlier[/i] if it weren't for the bubbles. Not only that, but the project's suspension itself contributed to the long duration of the bubble cycle. There would have been more activity in cryptocurrencies if this system had been available.

This effect is why I believe that as prices decline, the length of the upcoming downturn will increase significantly. Over the next weeks and months, we're going to start to hear of promising projects fail, and that's going to reduce the value of coins, cascading into other projects' feasibility, and creating a ripple effect of "pivots" and bankruptcies.

This is why I think that the first 2013 bubble had a much different outcome than the second 2013 bubble. In the first 2013 bubble, prices never collapsed after the long period of stability, and businesses were able to keep moving forward during that time. During the second 2013 bubble, prices collapsed after that period of stability that ended in August 2014, and one can look back at news articles form the day listing failures and "pivots" that occurred in the subsequent months.

If it weren't for bubbles, the industry would be years ahead of where it is now. The smartphone, for example, rose from unknown to market saturation in 10 years. After 10 years, where are cryptocurrencies, which also arose in 2008? About 6 or 7 years behind where they could be, because every bubble requires a reset with new companies, given that most of the work from the previous bubble is wasted.


There will be a next bubble
Finally, there will definitely be a next bubble - of that, I'm 100% certain. If you're not sure of that, then consider a scenario where you live in a world that already uses cryptocurrencies for all transactions. One day, a government decides that it's going to create its own currency, which it will be able to inflate at will, and which will take hundreds of times longer to conduct transactions with.

Do you think people would use that currency?
submitted by MattAbrams to BitcoinMarkets [link] [comments]

The Future Of Cryptocurrency in 2019 and Beyond

A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques known as cryptography. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009. While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general and Bitcoin in particular. So, will these alternative currencies eventually supplant conventional currencies and become as ubiquitous as dollars and euros someday? Or are cryptocurrencies a passing fad that will flame out before long? The answer lies with Bitcoin.
The Future of Cryptocurrency
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs is a verified exchange traded fund (ETF). An ETF would definitely make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which some say may not automatically be generated with a fund.
Understanding Bitcoin
Bitcoin is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network. While this decentralization renders Bitcoin free from government manipulation or interference, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers. They are currently created at the rate of 25 Bitcoins every 10 minutes and will be capped at 21 million, a level that is expected to be reached in 2140.
These characteristics make Bitcoin fundamentally different from a fiat currency, which is backed by the full faith and credit of its government. Fiat currency issuance is a highly centralized activity supervised by a nation’s central bank. While the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit to the amount of such currency issuance. In addition, local currency deposits are generally insured against bank failures by a government body. Bitcoin, on the other hand, has no such support mechanisms. The value of a Bitcoin is wholly dependent on what investors are willing to pay for it at a point in time. As well, if a Bitcoin exchange folds up, clients with Bitcoin balances have no recourse to get them back.
Bitcoin Future Outlook
The future outlook for bitcoin is the subject of much debate. While the financial media is proliferated by so-called crypto-evangelists, Harvard University Professor of Economics and Public Policy Kenneth Rogoff suggests that the “overwhelming sentiment” among crypto advocates is that the total “market capitalisation of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”
The historic volatility of the asset class is “no reason to panic,” he says. Still, he tempered his optimism and that of the “crypto evangelist” view of Bitcoin as digital gold, calling it “nutty,” stating its long-term value is “more likely to be $100 than $100,000.”
Rogoff argues that unlike physical gold, Bitcoin’s use is limited to transactions, which makes it more vulnerable to a bubble-like collapse. Additionally, the cryptocurrency’s energy-intensive verification process is “vastly less efficient” than systems that rely on “a trusted central authority like a central bank.”
Increasing Scrutiny
Bitcoin’s main benefits of decentralization and transaction anonymity have also made it a favored currency for a host of illegal activities including money laundering, drug peddling, smuggling and weapons procurement. This has attracted the attention of powerful regulatory and other government agencies such as the Financial Crimes Enforcement Network (FinCEN), the SEC, and even the FBI and Department of Homeland Security (DHS). In March 2013, FinCEN issued rules that defined virtual currency exchanges and administrators as money service businesses, bringing them within the ambit of government regulation. In May that year, the DHS froze an account of Mt. Gox – the largest Bitcoin exchange – that was held at Wells Fargo, alleging that it broke anti-money laundering laws. And in August, New York’s Department of Financial Services issued subpoenas to 22 emerging payment companies, many of which handled Bitcoin, asking about their measures to prevent money laundering and ensure consumer protection.
Alternatives to Bitcoin
Despite its recent issues, Bitcoin’s success and growing visibility since its launch has resulted in a number of companies unveiling alternative cryptocurrencies, such as:
• Litecoin – Litecoin is regarded as Bitcoin's leading rival at present, and it is designed for processing smaller transactions faster. It was founded in October 2011 as "a coin that is silver to Bitcoin’s gold,” according to founder Charles Lee. Unlike the heavy computer horsepower required for Bitcoin mining, Litecoins can be mined by a normal desktop computer. Litecoin’s maximum limit is 84 million – four times Bitcoin’s 21-million limit – and it has a transaction processing time of about 2.5 minutes, about one-fourth that of Bitcoin.
• Ripple – Ripple was launched by OpenCoin, a company founded by technology entrepreneur Chris Larsen in 2012. Like Bitcoin, Ripple is both a currency and a payment system. The currency component is XRP, which has a mathematical foundation like Bitcoin. The payment mechanism enables the transfer of funds in any currency to another user on the Ripple network within seconds, in contrast to Bitcoin transactions, which can take as long as 10 minutes to confirm.
• MintChip – Unlike most cryptocurrencies, MintChip is actually the creation of a government institution, specifically the Royal Canadian Mint. MintChip is a smartcard that holds electronic value and can transfer it securely from one chip to another. Like Bitcoin, MintChip does not need personal identification; unlike Bitcoin, it is backed by a physical currency, the Canadian dollar.
The Future
Some of the limitations that cryptocurrencies presently face – such as the fact that one’s digital fortune can be erased by a computer crash, or that a virtual vault may be ransacked by a hacker – may be overcome in time through technological advances. What will be harder to surmount is the basic paradox that bedevils cryptocurrencies – the more popular they become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence.
While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they have to first gain widespread acceptance among consumers. However, their relative complexity compared to conventional currencies will likely deter most people, except for the technologically adept.
A cryptocurrency that aspires to become part of the mainstream financial system may have to satisfy widely divergent criteria. It would need to be mathematically complex (to avoid fraud and hacker attacks) but easy for consumers to understand; decentralized but with adequate consumer safeguards and protection; and preserve user anonymity without being a conduit for tax evasion, money laundering and other nefarious activities. Since these are formidable criteria to satisfy, is it possible that the most popular cryptocurrency in a few years’ time could have attributes that fall in between heavily-regulated fiat currencies and today’s cryptocurrencies? While that possibility looks remote, there is little doubt that as the leading cryptocurrency at present, Bitcoin’s success (or lack thereof) in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
submitted by Sasha__SAc to u/Sasha__SAc [link] [comments]

The Struggle of Dogecoin: A Lesson on the Importance of Community in Crypto

The Struggle of Dogecoin: A Lesson on the Importance of Community in Crypto

https://preview.redd.it/ww0g3r560r141.jpg?width=640&format=pjpg&auto=webp&s=e47dffcfa931461855aa71e89905346ff8dd02fd
When crypto began garnering mainstream attention, critics were quick to point out the lack of intrinsic value, an aspect of these assets that many believe made them doomed for failure. Of course, the immediate price crash of Bitcoin around the time of the Mt. Gox scandal served as proof for these individuals. That is, until Bitcoin gradually rebounded, soaring to heights that far exceeded our expectations.
A lack of intrinsic value is an interesting concept as those who utilize the argument forget that fiat currencies like the U.S. dollar, for example, have no true value but still manage to maintain their importance in the economies where they operate. While there are several factors supporting digital assets, there is one major factor that is easily forgotten: community.
A cryptocurrency only has the chance to survive and thrive if it has a community that supports it and seeks to further its growth. If one wants to understand the importance of community for digital assets, one need only turn their attention to Dogecoin.
What Is Dogecoin?
Unless you were an early adopter of Bitcoin, Dogecoin has likely flown under your radar. Developed in 2013 as a joke currency that used the likeness of the Shiba Inu as a result of the popular “doge” meme that was circulating at the time. When it was developed, many of these emerging coins followed the same layout as Bitcoin and Litecoin, meaning there was very little variation between altcoins at the time. Still, that didn’t manage to dissuade a community from developing around the coin. Whereas Bitcoin was serious and was designed to be a financial tool, Dogecoin was seen as a refreshing break and a perfect digital currency to experiment with if you were new to the industry.
What Happened to It?
While Dogecoin wasn’t meant to follow in the footsteps of major competitors like Bitcoin and Litecoin, the digital currency was faced with a slew of issues from its inception that greatly weakened its growth potential. From Alex Green, a man who stole hundreds of thousands of dollars from the community through an investment scan, to the draining of 30 million coins from Dogewallet, Dogecoin is no stranger to theft. However, while some markets have been able to grow despite these setbacks, Dogecoin simply never saw the growth that the community expected. That said, that doesn’t mean that the project isn’t successful in its own right.
Dogecoin Today
Even seven years after its release, Dogecoin still has a strong, active community that continues to take part in fundraising for special causes, share updates and encouraging news about Dogecoin, and enjoy doge-related topics and pictures. With a market capitalization of approximately $288 million and a price of $0.002 per coin at the time of writing, Dogecoin may not be one of the high-performing assets on the market. But when it comes to community, Dogecoin may very well be one of the strongest assets across the board.
Trakx is building a one-stop shop for Crypto Traded Indices. Discover more about our project on our website and social media channels, such as Telegramhttp://t.me/trakx_io.

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submitted by Trakx_io to Trakx [link] [comments]

Daily Discussion Threads around historically significant Bitcoin price motions 2014-2017: This may help you understand the sentiment around the times of great changes so you can know when turnarounds happen and what to watch for.

I’m not trying to suggest any major price change is imminent or offer any trading advice because I can’t see the future, but you can see the past and perhaps learn from it. And thanks to the Internet, everything is nicely archived for everyone to see I’m just gathering it all into one place to make it convenient for everyone to see. Daily discussions courtesy of bitcoinmarkets
A week after all time high of the 2013 bull market. Jan 5 2014 (price just short of 1000 USD.) - https://www.reddit.com/BitcoinMarkets/comments/1ufv0m/daily_discussion_sunday_january_05_2014/
Nearly 2 months after the start of the 2014-2015 crash. 8 days before Mt. Gox filed for civil rehabilitation. Feb 20 2014 (price around 550 USD.) - https://www.reddit.com/BitcoinMarkets/comments/1yeycw/daily_discussion_thursday_february_20_2014/
Low of 2014-2015 crash. Jan 14 2015 (price sub 200 USD for the day) - https://www.reddit.com/BitcoinMarkets/comments/2sd4qy/daily_discussion_wednesday_january_14_2015/
When bitcoin finally found solid support at previous all time high. Jan 8 2017 (price holding steady at 1000 USD) - https://www.reddit.com/BitcoinMarkets/comments/5moxwdaily_discussion_sunday_january_08_2017/
Subjective beginning of the 2017 bull hype market. June 26 2017 (price around 2500 USD) - https://www.reddit.com/BitcoinMarkets/comments/6jivdx/daily_discussion_monday_june_26_2017/
Final push to current all time high. Dec 15 2017 (price around 18,000 USD) - https://www.reddit.com/BitcoinMarkets/comments/7jxaly/daily_discussion_friday_december_15_2017/
A week and a half after current bitcoin all time high. [Interestingly, #2 won’t find its high until Jan 13.] Dec 31 2017(price around 13,500 USD) - www.reddit.com/BitcoinMarkets/comments/7n6e7s/daily_discussion_sunday_december_31_2017/
submitted by UndeadWolf222 to BitcoinMarkets [link] [comments]

A Couple of Notes on the 2013/14 Bubble VS. 2017 Bubble

I'm seeing a lot of posts comparing the 2017 Bubble to the 2013-14 Bubble. I think the comparisons are fair. However, many people are mixing up what happened in 2013-14 and the timeline. One of the most common mistakes I'm seeing is that the 2013-14 bubble popped due to Mt. Gox insolvency. That is false.
The 2013-14 bubble was abrupt, even when compared to the 2017 bubble. The price skyrocketed from $200 USD to $1200 USD in one month. From November 1st to November 30th, BTC went up basically 6X. Back in 2013-14, there were basically two markets which were getting solid volume. BTC/USD and BTC/CNY. BTC/USD was mostly taking place on Mt. Gox, Bitstamp, Coinbase, and BTC-e. BTC/CNY was mostly taking place on OKCoin and BTCChina. There was no Korea or Japan back then, which definitely played a major role in the recent bull market.
And while Chinese exchanges were creating a lot of fake volume back in 2013-14 through 0% exchange fees, the fact was that China was leading the markets. [1] They consistently held a 10%+ premium over USD exchanges during the bull run. At the height of the bubble in China, before the PBOC stepped in with its clampdown on Bitcoin, China Telecom and Baidu announced support for Bitcoin. It was on the verge of literally replacing the CNY. [2]
On November 30th, 2013, a rumor emerged that the PBOC (People's Bank of China / China Government) was about to crack down on Bitcoin. A mass panic ensued. The price crashed from $1200 USD to $780 USD. In one day. That's a 35% crash in a single day. However, the market quickly bounced back as people argued that these rumors were fabricated. However, this rebound was short lived.
On December 5th, 2013, the PBOC made an official announcement. The government banned financial institutions from interacting with Bitcoin. They also clarified that products / services in China could not be priced in BTC (they must be priced in CNY). The markets went straight down on this news. From $1150 USD when it broke to $540 on December 7th. A 3 day drop of over 50%.
Where was Mt. Gox in all this? They were chugging along, delaying fiat withdrawals. Bitcoin withdrawals were working fine. Deposits too. For much of November and December there was very little noise about Mt.Gox actually being insolvent. The overwhelming market sentiment on the matter was that their banks were being disrupted by the US Government investigations into Silkroad. This was true to a very mild extent.
If you'd like to argue that people knew Mt. Gox was insolvent at the time of the 2013-14 bubble crash, I'd like to point out that Bitfinex basically had the exact same issues arise in 2017. Fiat withdrawals and deposits were basically turned off. Clearly Bitfinex was a different situation in hindsight (we hope!), but initially it was playing out just the same as Mt. Gox. The markets never really reacted to Bitfinex fiat issues, just as they didn't react to the Mt. Gox issues. There was so much money going through Mt. Gox that it had a Titanic feel to it. The majority of people bought their first BTC on Mt. Gox.
The Chart: https://www.tradingview.com/chart/BTCUSD/wlTsEFJ4-Reason-Behind-2013-14-Bitcoin-Bear-Market/
This chart outlines the dates of the key events in the 2013-14 bubble crash. The most significant event in the crash was absolutely the China ban. That is what kicked off the 2013-14 bubble crash, and it definitely had the most profound impact on price. While the Mt. Gox fiasco certainly did not help the markets, it's not the reason for the bubble and should not be quoted as the reason. [3]
So in conclusion, when people are comparing the 2014 bubble with the 2017 bubble, it should be noted that they are very different. But not for the reasons most people assume. They are different because the 2014 bubble was almost entirely based on the Chinese market, and it was squashed by the PBOC themselves by imposing big regulations.
Today, the markets are certainly more spread out and there are less single points of failure. There is no single event which turned the bull market to a bear market this time around, although I personally believe we ran out of gas this time around because of regulation in Korea and China.
[1] https://www.cnbc.com/2013/11/28/buyer-beware-bitcoins-fate-could-rest-with-china.html
[2] https://www.coindesk.com/baidu-stops-bitcoin-price-slumps-again/
[3] https://en.wikipedia.org/wiki/Mt._Gox
submitted by bitreality to BitcoinMarkets [link] [comments]

25 Tools and Resources for Crypto Investors: Guide to how to create a winning strategy

Lots of people have PM'd me asking me the same questions on where to find information and how to put together their portfolio so I decided to put a guide for crypto investors, especially those who have only been in a few months and are still confused.
This is going to be Part 1 and will deal with research resources, risk and returns. In Part 2 I'll post a systematic approach to valuation and picking individual assets with derived price targets.

Getting started: Tools and resources

You don't have to be a programmer or techie to invest in crypto, but you should first learn the basics of how it functions. I find that this video by 3Blue1Brown is the best introduction to what a blockchain actually is and how it functions, because it explains it clearly and simply with visuals while not dumbing it down too much. If you want a more ELI5 version with cute cartoons, then Upfolio has a nice beginner's intro to the blockchain concept and quick descriptions of top 100 cryptocurrencies. I also recommend simply going to Wikipedia and reading the blockchain and cryptocurrency page and clicking onto a few links in, read about POS vs POW...etc. Later on you'll need this information to understand why a specific use case may or may not benefit from a blockchain structure. Here is a quick summary of the common terms you should know.
Next you should arm yourself with some informational resources. I compiled a convenient list of useful tools and sites that I've used and find to be worthy of bookmarking:
Market information
Analysis tools
Portfolio Tracking
Youtube
I generally don't follow much on Youtube because it's dominated by idiocy like Trevon James and CryptoNick, but there are some that I think are worthy of following:

Constructing a Investment Strategy

I can't stress enough how important it is to construct an actual investment strategy. Organize what your goals are, what your risk tolerance is and how you plan to construct a portfolio to achieve those goals rather than just chasing the flavor of the week.
Why? Because it will force you to slow down and make decisions based on rational thinking rather than emotion, and will also inevitably lead you to think long term.

Setting ROI targets

Bluntly put, a lot of young investors who are in crypto have really unrealistic expectations about returns and risk.
A lot of them have never invested in any other type of financial asset, and hence many seem to consider a 10% ROI in a month to be unexciting, even though that is roughly what they should be aiming for.
I see a ton of people now on this sub and on other sites making their decisions with the expectation to double their money every month. This has lead a worrying amount of newbies putting in way too much money way too quickly into anything on the front page of CoinMarketCap with a low dollar value per coin hoping that crypto get them out of their debt or a life of drudgery in a cubicle. And all in the next year or two!
But its important to temper your hype about returns and realize why we had this exponential growth in the last year. Its not because we are seeing any mass increase in adoption, if anything adoption among eCommerce sites is decreasing. The only reason we saw so much upward price action is because of fiat monetary base expansion from people FOMO-ing in due to media coverage of previous price action. People are hoping to ride the bubble and sell to a greater fool in a few months, it is classic Greater Fool Theory. That's it. We passed the $1,000 psychological marker again for Bitcoin which we hadn't seen since right before the Mt.Gox disaster, and it just snowballed the positivity as headline after headline came out about the price growth. However those unexciting returns of 10% a month are not only the norm, but much more healthy for an alternative investment class. Here are the annual returns for Bitcoin for the last few years:
Year BTC Return
2017 1,300%
2016 120%
2015 35%
2014 -60%
2013 5300%
2012 150 %
Keep in mind that a 10% monthly increase when compounded equals a 313% annual return, or over 3x your money. That may not sound exciting to those who entered recently and saw their money go 20x in a month on something like Tron before it crashed back down, but that 3X annual return is better than Bitcoin's return every year except the year right before the last market meltdown and 2017. I have been saying for a while now that we are due for a major correction and every investor now should be planning for that possibility through proper allocation and setting return expectations that are reasonable.

Risk Management

Quanitifying risk in crypto is surprisingly difficult because the historical returns aren't normally distributed, meaning that tools like Sharpe Ratio and other risk metrics can't really be used as intended. Instead you'll have to think of your own risk tolerance and qualitatively evaluate how risky each crypto is based on the team, the use case prospects, the amount of competition and the general market risk.
You can think of each crypto having a risk factor that is the summation of the general crypto market risk (Rm) as ultimately everything is tied to how Bitcoin does, but also its own inherent risk specific to its own goals (Ri).
Rt = Rm +Ri
The market risk is something you cannot avoid, if some China FUD comes out about regulations on Bitcoin then your investment in solid altcoin picks will go down too along with Bitcoin. This (Rm) return is essentially what risk you undertake to have a market ROI of 385% I talked about above. What you can minimize though is the Ri, the aset specific risks with the team, the likelihood they will actually deliver, the likelihood that their solution will be adopted. Unfortunately there is no one way to do this, you simply have to take the time to research and form your own opinion on how risky it really is before allocating a certain percentage to it. Consider the individual risk of each crypto and start looking for red flags:
  • guaranteed promises of large returns (protip: that's a Ponzi)
  • float allocations that give way too much to the founder
  • vague whitepapers
  • vague timelines
  • no clear use case
  • Github with no useful code and sparse activity
  • a team that is difficult to find information on or even worse anonymous
While all cryptocurrencies are a risky investments but generally you can break down cryptos into "low" risk core, medium risk speculative and high risk speculative
  • Low Risk Core - This is the exchange pairing cryptos and those that are well established. These are almost sure to be around in 5 years, and will recover after any bear market. Bitcoin, Litecoin and Ethereum are in this class of risk, and I would also argue Monero.
  • Medium Risk Speculative - These would be cryptos which generally have at least some product and are reasonably established, but higher risk than Core. Things like ZCash, Ripple, NEO..etc.
  • High Risk Speculative - This is anything created within the last few months, low caps, shillcoins, ICOs...etc. Most cryptos are in this category, most of them will be essentially worthless in 5 years.
How much risk should you take on? That depends on your own life situation but also it should be proportional to how much expertise you have in both financial analysis and technology. If you're a newbie who doesn't understand the tech and has no idea how to value assets, your risk tolerance should be lower than a programmer who understand the tech or a financial analyst who is experienced in valuation metrics.
Right now the trio of BTC-ETH-LTC account for 55% of the market cap, so between 50-70% of your portfolio in low Risk Core for newbies is a great starting point. Then you can go down to 25-30% as you gain confidence and experience. But always try to keep about 1/3rd in safe core positions. Don't go all in on speculative picks.
Core principles to minimize risk
  • Have the majority of your holdings in things you feel good holding for at least 2 years. Don't use the majority of your investment for day trading or short term investing.
  • Consider using dollar cost averaging to enter a position. This generally means investing a X amount over several periods, instead of at once. You can also use downward biased dollar cost averaging to mitigate against downward risk. For example instead of investing $1000 at once in a position at market price, you can buy $500 at the market price today then set several limit orders at slightly lower intervals (for example $250 at 5% lower than market price, $250 at 10% lower than market price). This way your average cost of acquisition will be lower if the crypto happens to decline over the short term.
  • Never chase a pump. Its simply too risky as its such an inefficient and unregulated market. If you continue to do it, most of your money losing decisions will be because you emotionally FOMO-ed into gambling on a symbol.
  • Invest what you can afford to lose. Don't have more than 5-10% of your net worth in crypto.
  • Consider what level of loss you can't accept in a position with a high risk factor, and use stop-limit orders to hedge against sudden crashes. Set you stop price at about 5-10% above your lowest limit. Stop-limit orders aren't perfect but they're better than having no hedging strategy for a risky microcap in case of some meltdown. Only you can determine what bags you are unwilling to hold.
  • Diversify across sectors and rebalance your allocations periodically. Keep about 1/3rd in low risk core holdings.
  • Have some fiat in reserve at a FDIC-insured exchange (ex. Gemini), and be ready to add to your winning positions on a pullback.
  • Remember you didn't actually make any money until you take some profits, so take do some profits when everyone else is at peak FOMO-ing bubble mode. You will also sleep much more comfortably once you take out the equivalent of your principal.

Portfolio Allocation

Along with thinking about your portfolio in terms of risk categories described above, I really find it helpful to think about the segments you are in. OnChainFX has some segment categorization to think about:
  • Currency
  • General Purpose Platform
  • Advertising
  • Crowdfunding Platform
  • Lending Platform
  • Privacy
  • Distributed Computing/Storage
  • Prediction Markets
  • IOT (Internet of Things)
  • Asset Management
  • Content Creation
  • Exchange Platform
I generally like to simplify these down to these 7 segments:
  • Core holdings - essentially the Low Risk Core segment
  • Platform segment
  • Privacy segment
  • Finance/Bank settlement segment
  • Enterprise Blockchain solutions segment
  • Promising/Innovative Tech segment
This is merely what I use, but I'm sure you can think of your own. The key point I have is to try to invest your medium and high risk picks in a segment you understand well, and in which you can relatively accurately judge risk. If you don't understand anything about how banking works or SWIFT or international settlement layers, don't invest in Stellar. If you have no idea how a supply chain functions, avoid investing in VeChain (even if it's being shilled to death on Reddit at the moment just like XRB was last month). Buffet calls this "circle of competence", he invests in sectors he understands and avoids those he doesn't like tech. I think doing the same thing in crypto is a wise move.
What's interesting is that often we see like-coin movement, for example when a coin from one segment pumps we will frequently see another similar coin in the same segment go up (think Stellar following after Ripple).
Consider the historic correlations between your holdings. Generally when Bitcoin pumps, altcoins dump but at what rate depends on the coin. When Bitcoin goes sideways we tend to see pumping in altcoins, while when Bitcoin goes down, everything goes down.
You should set price targets for each of your holdings, which is a whole separate discussion I'll go in Part 2 of the guide.

Summing it up

This was meant to get you think about what return targets you should set for your portfolio and how much risk you are willing to take and what strategies you can follow to mitigate that risk.
Returns around 385% (average crypto market CAGR over the last 3 years) would be a good target to aim for while remaining realistic, you can tweak it a bit based on your own risk tolerance. What category of risk your individual crypto picks should be will be determined by how much more greed you have for above average market return. A portfolio of 50% core holdings, 30% medium risk in a sector you understand well and 20% in high risk speculative is probably what the average portfolio should look like, with newbies going more towards 70% core and only 5% high risk speculative.
Just by thinking about these things you'll likely do better than most crypto investors, because most don't think about this stuff, to their own detriment.
submitted by arsonbunny to CryptoCurrency [link] [comments]

Crypto Investing Guide: Useful resources and tools, and how to create an investment strategy

Lots of people have PM'd me asking me the same questions on where to find information and how to put together their portfolio so I decided to put a guide for crypto investors, especially those who have only been in a few months and are still confused.
Many people entered recently at a time when the market was rewarding the very worst type of investment behavior. Unfortunately there aren't many guides and a lot of people end up looking at things like Twitter or the trending Youtube crypto videos, which is dominated by "How to make $1,00,000 by daytrading crypto" and influencers like CryptoNick.
So I'll try to put together a guide from what I've learned and some tips, on how to invest in this asset class. This is going to be Part 1, in another post later I'll post a systematic approach to valuation and picking individual assets.

Getting started: Tools and resources

You don't have to be a programmer or techie to invest in crypto, but you should first learn the basics of how it functions. I find that this video by 3Blue1Brown is the best introduction to what a blockchain actually is and how it functions, because it explains it clearly and simply with visuals while not dumbing it down too much. If you want a more ELI5 version with cute cartoons, then Upfolio has a nice beginner's intro to the blockchain concept and quick descriptions of top 100 cryptocurrencies. I also recommend simply going to Wikipedia and reading the blockchain and cryptocurrency page and clicking onto a few links in, read about POS vs POW...etc. Later on you'll need this information to understand why a specific use case may or may not benefit from a blockchain structure. Here is a quick summary of the common terms you should know.
Next you should arm yourself with some informational resources. I compiled a convenient list of useful tools and sites that I've used and find to be worthy of bookmarking:
Market information
Analysis tools
Portfolio Tracking
Youtube
I generally don't follow much on Youtube because it's dominated by idiocy like Trevon James and CryptoNick, but there are some that I think are worthy of following:

Constructing a Investment Strategy

I can't stress enough how important it is to construct an actual investment strategy. Organize what your goals are, what your risk tolerance is and how you plan to construct a portfolio to achieve those goals rather than just chasing the flavor of the week.
Why? Because it will force you to slow down and make decisions based on rational thinking rather than emotion, and will also inevitably lead you to think long term.

Setting ROI targets

Bluntly put, a lot of young investors who are in crypto have really unrealistic expectations about returns and risk.
A lot of them have never invested in any other type of financial asset, and hence many seem to consider a 10% ROI in a month to be unexciting, even though that is roughly what they should be aiming for.
I see a ton of people now on this sub and on other sites making their decisions with the expectation to double their money every month. This has lead a worrying amount of newbies putting in way too much money way too quickly into anything on the front page of CoinMarketCap with a low dollar value per coin hoping that crypto get them out of their debt or a life of drudgery in a cubicle. And all in the next year or two!
But its important to temper your hype about returns and realize why we had this exponential growth in the last year. The only reason we saw so much upward price action is because of fiat monetary base expansion from people FOMO-ing in due to media coverage. People are hoping to ride the bubble and sell to a greater fool in a few months, it is classic Greater Fool Theory. That's it. Its not because we are seeing any mass increase in adoption or actual widespread utility with cryptocurrency. We passed the $1,000 psychological marker again for Bitcoin which we hadn't seen since right before the Mt.Gox disaster, and it just snowballed the positivity as headline after headline came out about the price growth. However those unexciting returns of 10% a month are not only the norm, but much more healthy for an alternative investment class. Here are the annual returns for Bitcoin for the last few years:
Year BTC Return
2017 1,300%
2016 120%
2015 35%
2014 -60%
2013 5300%
2012 150 %
Keep in mind that a 10% monthly increase when compounded equals a 313% annual return, or over 3x your money. That may not sound exciting to those who entered recently and saw their money go 20x in a month on something like Tron before it crashed back down, but that 3X annual return is better than Bitcoin's return every year except the year right before the last market meltdown and 2017. I have been saying for a while now that we are due for a major correction and every investor now should be planning for that possibility through proper allocation and setting return expectations that are reasonable.
How to set a realistic ROI target
How do I set my own personal return target?
Basically I aim to achieve a portfolio return of roughly 385% annually (3.85X increase per year) or about 11.89% monthly return when compounded. How did I come up with that target? I base it on the average compounded annual growth return (CAGR) over the last 3 years on the entire market:
Year Total Crypto Market Cap
Jan 1, 2014: $10.73 billion
Jan 1, 2017: $615 billion
Compounded annual growth return (CAGR): (615/10.73)1/3 = 385%
My personal strategy is to sell my portfolio every December then buy back into the market at around the beginning of February and I intend to hold on average for 3 years, so this works for me but you may choose to do it a different way for your own reasons. I think this is a good average to aim for as a general guideline because it includes both the good years (2017) and the bad (2014). Once you have a target you can construct your risk profile (low risk vs. high risk category coins) in your portfolio. If you want to try for a higher CAGR than about 385% then you will likely need to go into more highly speculative picks. I can't tell you what return target you should set for yourself, but just make sure its not depended on you needing to achieve continual near vertical parabolic price action in small cap shillcoins because that isn't sustainable.
As the recent January dip showed while the core cryptos like Bitcoin and Ethereum would dip an X percentage, the altcoins would often drop double or triple that amount. Its a very fragile market, and the type of dumb behavior that people were engaging in that was profitable in a bull market (chasing pumps, going all in on a microcap shillcoin, having an attention span of a squirrel...etc) will lead to consequences. Just like they jumped on the crypto bandwagon without thinking about risk adjusted returns, they will just as quickly jump on whatever bandwagon will be used to blame for the deflation of the bubble, whether the blame is assigned to Wall Steet and Bitcoin futures or Asians or some government.
Nobody who pumped money into garbage without any use case or utility will accept that they themselves and their own unreasonable expectations for returns were the reason for the gross mispricing of most cryptocurrencies.

Risk Management

Quanitifying risk in crypto is surprisingly difficult because the historical returns aren't normally distributed, meaning that tools like Sharpe Ratio and other risk metrics can't really be used as intended. Instead you'll have to think of your own risk tolerance and qualitatively evaluate how risky each crypto is based on the team, the use case prospects, the amount of competition and the general market risk.
You can think of each crypto having a risk factor that is the summation of the general crypto market risk (Rm) as ultimately everything is tied to how Bitcoin does, but also its own inherent risk specific to its own goals (Ri).
Rt = Rm +Ri
The market risk is something you cannot avoid, if some China FUD comes out about regulations on Bitcoin then your investment in solid altcoin picks will go down too along with Bitcoin. This (Rm) return is essentially what risk you undertake to have a market ROI of 385% I talked about above. What you can minimize though is the Ri, the aset specific risks with the team, the likelihood they will actually deliver, the likelihood that their solution will be adopted. Unfortunately there is no one way to do this, you simply have to take the time to research and form your own opinion on how risky it really is before allocating a certain percentage to it. Consider the individual risk of each crypto and start looking for red flags:
  • guaranteed promises of large returns (protip: that's a Ponzi)
  • float allocations that give way too much to the founder
  • vague whitepapers
  • vague timelines
  • no clear use case
  • Github with no useful code and sparse activity
  • a team that is difficult to find information on or even worse anonymous
While all cryptocurrencies are a risky investments but generally you can break down cryptos into "low" risk core, medium risk speculative and high risk speculative
  • Low Risk Core - This is the exchange pairing cryptos and those that are well established. These are almost sure to be around in 5 years, and will recover after any bear market. Bitcoin, Litecoin and Ethereum are in this class of risk, and I would also argue Monero.
  • Medium Risk Speculative - These would be cryptos which generally have at least some product and are reasonably established, but higher risk than Core. Things like ZCash, Ripple, NEO..etc.
  • High Risk Speculative - This is anything created within the last few months, low caps, shillcoins, ICOs...etc. Most cryptos are in this category, most of them will be essentially worthless in 5 years.
How much risk should you take on? That depends on your own life situation but also it should be proportional to how much expertise you have in both financial analysis and technology. If you're a newbie who doesn't understand the tech and has no idea how to value assets, your risk tolerance should be lower than a programmer who understand the tech or a financial analyst who is experienced in valuation metrics.
Right now the trio of BTC-ETH-LTC account for 55% of the market cap, so between 50-70% of your portfolio in low Risk Core for newbies is a great starting point. Then you can go down to 25-30% as you gain confidence and experience. But always try to keep about 1/3rd in safe core positions. Don't go all in on speculative picks.
Core principles to minimize risk
  • Have the majority of your holdings in things you feel good holding for at least 2 years. Don't use the majority of your investment for day trading or short term investing.
  • Consider using dollar cost averaging to enter a position. This generally means investing a X amount over several periods, instead of at once. You can also use downward biased dollar cost averaging to mitigate against downward risk. For example instead of investing $1000 at once in a position at market price, you can buy $500 at the market price today then set several limit orders at slightly lower intervals (for example $250 at 5% lower than market price, $250 at 10% lower than market price). This way your average cost of acquisition will be lower if the crypto happens to decline over the short term.
  • Never chase a pump. Its simply too risky as its such an inefficient and unregulated market. If you continue to do it, most of your money losing decisions will be because you emotionally FOMO-ed into gambling on a symbol.
  • Invest what you can afford to lose. Don't have more than 5-10% of your net worth in crypto.
  • Consider what level of loss you can't accept in a position with a high risk factor, and use stop-limit orders to hedge against sudden crashes. Set you stop price at about 5-10% above your lowest limit. Stop-limit orders aren't perfect but they're better than having no hedging strategy for a risky microcap in case of some meltdown. Only you can determine what bags you are unwilling to hold.
  • Diversify across sectors and rebalance your allocations periodically. Keep about 1/3rd in low risk core holdings.
  • Have some fiat in reserve at a FDIC-insured exchange (ex. Gemini), and be ready to add to your winning positions on a pullback.
  • Remember you didn't actually make any money until you take some profits, so take do some profits when everyone else is at peak FOMO-ing bubble mode. You will also sleep much more comfortably once you take out the equivalent of your principal.

Portfolio Allocation

Along with thinking about your portfolio in terms of risk categories described above, I really find it helpful to think about the segments you are in. OnChainFX has some segment categorization but I generally like to bring it down to:
  • Core holdings - essentially the Low Risk Core segment
  • Platform segment
  • Privacy segment
  • Finance/Bank settlement segment
  • Enterprise Blockchain solutions segment
  • Promising/Innovative Tech segment
This is merely what I use, but I'm sure you can think of your own. The key point I have is to try to invest your medium and high risk picks in a segment you understand well, and in which you can relatively accurately judge risk. If you don't understand anything about how banking works or SWIFT or international settlement layers, don't invest in Stellar. If you have no idea how a supply chain functions, avoid investing in VeChain (even if it's being shilled to death on Reddit at the moment just like XRB was last month).
What's interesting is that often we see like-coin movement, for example when a coin from one segment pumps we will frequently see another similar coin in the same segment go up (think Stellar following after Ripple).
Consider the historic correlations between your holdings. Generally when Bitcoin pumps, altcoins dump but at what rate depends on the coin. When Bitcoin goes sideways we tend to see pumping in altcoins, while when Bitcoin goes down, everything goes down.
You should set price targets for each of your holdings, which is a whole separate discussion I'll go in Part 2 of the guide.

Summing it up

This was meant to get you think about what return targets you should set for your portfolio and how much risk you are willing to take and what strategies you can follow to mitigate that risk.
Returns around 385% (average crypto market CAGR over the last 3 years) would be a good target to aim for while remaining realistic, you can tweak it a bit based on your own risk tolerance. What category of risk your individual crypto picks should be will be determined by how much more greed you have for above average market return. A portfolio of 50% core holdings, 30% medium risk in a sector you understand well and 20% in high risk speculative is probably what the average portfolio should look like, with newbies going more towards 70% core and only 5% high risk speculative.
Just by thinking about these things you'll likely do better than most crypto investors, because most don't think about this stuff, to their own detriment.
submitted by arsonbunny to CryptoMarkets [link] [comments]

Predicting Value of Crypto

Almost every day, I hear the same sentiment expressed: the value of cryptocurrencies is impossible to predict, and therefore they cannot be considered an investment. Just last week, President Donald Trump hinted at this idea in a series of Tweets.

So, is Trump right? Does Bitcoin’s volatility mean that its value is just a roll of the dice, or is there a way to determine (with reasonable certainty) when to buy and sell? Can Metcalfe’s Law or another formula be used to determine when a currency may be over- or under-valued? Can assets that aren’t touched by banks have a true value at all?

Metcalfe’s Law: A Brief History

In the 1980s, Robert Metcalfe, the inventor of Ethernet, proposed that the value of a telecommunications network is proportional to the square of the number of nodes (or users), N, in the network. Put another way, the value of a network is proportional to the number of connections between users, assuming that all users are connected to each other; the more people I can contact, the more valuable the system will be to me.
In 2015, Zhang et al. discovered that this same principle applies to Facebook and Tencent (China’s largest social media network) when the number of monthly active users is used as N.
In 2017, Ken Alabi demonstrated that the law also applies to three different cryptocurrencies (Bitcoin, Ethereum, and Dash) fairly well. Just one year later, Wheatley, et al. proposed a modification to the formula for cryptocurrencies, N^(1.69), that fit the data better and accounted for the fact that not every user is connected to or interested in connecting to every other. The researchers estimated that each user is connected to N^(2/3) other users.

What About Bubbles?

Following a series of major crashes in the price of Bitcoin, many in the crypto community lost faith in the ability of Metcalfe’s Law to accurately predict the value of cryptocurrencies. After all, the number of users did not fall as dramatically as the price after Mt. Gox was hacked in 2011, a major Ponzi scheme involving Bitcoin was discovered in 2012, Mt. Gox collapsed in 2013 or South Korea threatened regulation in 2017.
However, Didier Sornette proposed that a market is bound to crash if its value is growing at a super-exponential rate (if its rate of growth is itself growing), unless there is an infinite supply of people to join the market. This idea is widely accepted, but it does not postulate exactly when the market will crash, only that it will eventually. The wise investor will be aware of this condition and, when the price starts tumbling, will sell immediately.

Sornette goes on to argue that the exact timing of each of these crashes was determined by the outside events affecting the market and that any market disruption would have caused similar effects due to this super-exponential growth. Each event was just the straw that broke the camel’s back (before the camel regenerated, only to have its back broken again).

Network Value to Transactions (NVT) Ratio

Popularized by Willy Woo and Chris Burniske, the Network Value to Transactions ratio is another formula that aims to determine when the price of a crypto asset is over- or under-valued.

NVT = (Daily Market Cap)/(90-Day Moving Average of Daily Transaction Volume)

Kalichkin suggests that any NVT over 20 indicates that a coin is overvalued and a correction is likely. However, as with the other models, one cannot use this to determine exactly when a correction will occur. In addition, it can be challenging to find accurate data on daily transaction volume, limiting the practicality of this metric.

Final Words

According to Edward Fricker, co-founder of the lightning wallet TrustlessBank, attempts to determine the objective value of Bitcoin and other cryptocurrencies miss the mark: " Metcalfe’s Law and NVT have been promoted by analysts who struggled to find some way to determine an objective value [of Bitcoin] that is outside the market price, but in doing so, they failed to see the truth that was right in front of them: the market price is exactly the same as the objective value because Bitcoin is the most liquid asset in the world.”
submitted by thinker111111 to CryptoTradersRoom [link] [comments]

Chromapolis FUD: Stop the nonsense. (RE: The Ian Balina Scandal)

Chromapolis FUD: Stop the nonsense. (RE: The Ian Balina Scandal)
This piece was originally posted here by an anonymous writer, but I thought that it hadn't received enough views to truly defend the team. I'm sure many of you saw the Ian Balina ICO pool scandal here, but I thought it unfairly dragged down Chromaway's name with it.
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There has been massive amounts of FUD going around the ICO community–some accusations are well-founded, and I understand the confusion and anger. I’m not here to defend the actions of the team, and I’m not here to say that they have reacted in the best way possible. Nor am I here to defend the actions of Ian Balina. I am, however, here to defend the characters of the ChromaWay team and the accomplishments and contributions they have made to the blockchain industry.
First of all, Alex Mizrahi has contributed more to the development of this fascinating industry than 99.99% of ICO participants. The ChromaWay team, led by Alex, were the first to create a protocol capable of issuing tokens, called “colored coins” at the time (circa 2011~2012). The concept was so new at the time that he even had to quote Meni Rosenfield on what “colored coins” were:

By the original design bitcoins are fungible, acting as a neutral medium of exchange. However, by carefully tracking the origin of a given bitcoin, it is possible to “color” a set of coins to distinguish it from the rest. These coins can then have special properties supported by either an issuing agent or a Schelling point, and have value independent of the face value of the underlying bitcoins. Such colored bitcoins can be used for alternative currencies, commodity certificates, smart property, and other financial instruments such as stocks and bonds.

His role in the propagation of the idea of what we now call “tokens” played a huge role in expanding the blockchain industry into what it is today. In fact, when Vitalik introduced the concept of Ethereum to the world onstage at Bitcoin Miami 2014, he praised colored coins and its potential to radically change the scope of blockchain applications.

Above: Slide from Vitalik’s presentation in BTC Miami 2014 on the applications of blockchain and distributed consensus, following Satoshi’s creation of digital currency and blockchain in 2009. Vitalik described colored coins by saying, “the idea behind [colored coins] is okay, you have a blockchain and you have a currency on it, but what if you could put other currencies on the blockchain as well.”

Above: Jimmy Song, one of ChromaWay’s early hires, explains Colored Coins and ChromaWallet back in 2014 in Zug, Switzerland.
We’ve come a long way from the small grassroots and enthusiast developer communities in 2011, to now multimillion dollar companies appearing out of thin air during 2017-18. If the ChromaWay team were only in it for the money, wouldn’t they have thrown together a whitepaper and raised $30 million when ICOs were all the rage last year? No, they waited for a breakthrough in lowering the barrier of entry for developers that want to create dapps: Postchain.
The implications of their breakthrough in Postchain is huge. The internet as we know it today, “internet 2.0” was created on the backbones of relational databases and improved protocols. Postchain, very simply put, allows relational blockchains. This means that any developer, blockchain experienced or not, will be able to create dapps using SQL queries that they are already familiar with. If more people cared about the core technology and its potential to truly make dapps mainstream and less about getting “hyped up” coins at a higher price, these recent waves of FUD would not have been given much attention--what Ian decides to do with his allocation is his decision. Again, I am not defending his actions nor the team’s response to the FUD. Quite frankly, the Chromaway team has never had to deal with situations like these, and I’m sure stress played a huge part.
So what else has the team been doing since 2011? Short answer: a lot of research, ideas, and development, that we take for granted today.
What were you doing to help this revolution? They may have made mistakes--after all it is their first ICO. But it’s not fair to attack their character based on miscommunications and mistakes, that ultimately have no long-term effects on the project.
If you have a problem with the way they have communicated with the community and investors that is completely reasonable. But do not start acting out character assassinations on people that have been building infrastructure in the space for years simply because you are unhappy with their inexperience in PR relations and communications. Come at them with your concerns not your vitriol. Creating anonymous posts where all you do is bash on them without providing constructive criticism will only create more problems.
To add onto this, this article has been making the rounds and makes a lot of assumptions and straight out unfounded accusations. To be more specific near the end they call out an influencer known as “TheGobOne” as having been fined $400,000 by the SEC because of pooling. First of all TheGobOne is a Canadian citizen and is not governed by the SEC. And by his own word has not been in contact or been contacted by them in regards to pooling funds. To create entirely false talking points to support your narrative is as disingenuous as possible. Why the author felt the need to spread lies to try and support his point shows a clear alterior motive in trying to character assassinate influencers and team members associated with the project, rather than coming at them with purely fact based concerns.

Above: TheGobOne refuting claims he was fined by the SEC in his Discord Announcements channel earlier today.
Everyone in the blockchain space has been a bit on edge lately because of the serious market downturn. If you’re an investor you’ve been feeling the heat of the giant -70%+ losses on altcoins. Feeling frustrated at that is completely natural but in the end we have to make sure we don’t explode at projects and people that have little to do with our own down investments. There are teams and projects that are simply trying to build something they believe the space needs. Let’s try to make the crypto community stronger and come together to help these developers make the best projects they can. Without bombarding them with negativity for every mistake they make on the way there.
Ending on a lighter note, you can see Alex’s true character in a funnily relevant thread from 2012 titled “fuck this shit, I want my own blockchain!” where he says:
I understand that many community members won't like some of these features, but the goal here is to try new things, not to get some people rich. If you don't like it, then forget about it. If nobody likes it, I have other things to do.
submitted by cryptohan to CryptoCurrency [link] [comments]

Sharing my story and questioning how things are now, in regards to Bitcoin in general

First the story, and this will be raw and unedited and I have no idea how long it will be (which means it'll prob be a lot) Can't promise all my dates and time-frames of when things happened and such will be right but it's a relatively ok estimate:
I've been around for a while, more or less a lurker more than anything. Still young, I heard about, discussed with my dad of all people, and together we invested and made some money off of mining bitcoin back in 2013/2014, used some of that money to buy my first car actually. Which at that age, never having done anything else with money in my life, was actually amazing to me. Not to mention this was honestly really lucky.. I had heard some rumors about Mt. Gox and there was a several month period before the "incident" that the site was having some trouble which I thought to be strange, so combined with the rumors I decided to not leave my money there. First chance I got when this started,I looked for and I moved everything to another exchange called BTC-e. (Yes this was also dumb, but young and stupid me was still learning "how to computer"). My bitcoin lived there for a while, had great conversations with some others in the chat there. I really trusted that exchange. Future looked bright for bitcoin even after the price fell. I had sold some before it fell, which bought the aforementioned car, and put a nice chunk in a savings account for myself, which literally got my life started. I only left a small amount of bitcoin in the account. You see, for our mining we had actually bought some butterflylabs machines, which if anyone remembers... ended up being an amazingly scandolous company. Should have just bought bitcoin instead, but we were one of the first ones to order.. so there's that. We got our machines before most did, and we actually MADE money. Twice lucky! not nearly as much as we would have made had we just purchased bitcoin however(if I remember correctly the day we made the decision to buy BFL units bitcoin was like $13 and change... maybe not though.. I just remember seeing $13 it's significantly ingrained in my memory, that may have been a bit before BFL). So I was left dissapointed in the end after the price fell from it's high of like $1200 or something, and I had kinda moved on. Year went by, price still "low". I stopped watching bitcoin altogether. Just went through my college life, ended up studying systems administration (I love computers.. still do.. love my job now).
Then it was like one day I woke up and bitcoin was 10 grand. Geez. I logged into my surprisingly still there btc-e account and saw how much my "small amount" of bitcoin was worth. Made me smile. Then literally the next day...BAM guy gets arrested, claims he works there, they get raided. It's gone. done. I could do nothing but laugh. "well that was fun" was pretty much my thoughts.. of course it ends for me with an exchange failure like it has for so many others... More time went by, the site came back, they had tokens or whatever. (I think this was around the time BCH became a thing.. but I wasn't paying attention to that) I immediately withdrew to a wallet the amount they actually gave back.. the tokens I left hoping them "paying them back" would actually come through. Fast forward a few months, token value was up to like 80% of the bitcoins value, and they were just going to slow.. so I sold the tokens, got 80% of the bitcoin I had lost from them, withdrew to a wallet, closed the account and said goodbye. They died shortly after. I really miss that exchange. That bitcoin is still sitting in a wallet. Price went up/down dont really care it's of no risk to me. I'm really just watching, learning, and seeing what happens. I have used bitcoin for some small transactions, buying it and then immediately purchasing an item with it.. I've bought a few gift cards with it. I've done the opposite too, having some gift cards I didn't want that I sold for bitcoin. But I still find I can't really truly *use it* like I want to (literally everything).
So now to the btc/bch part
So as time went on keep hearing about "BCH", keep hearing about "BTC vs BCH" too. I hate drama. I really do, like with a passion. I asked about it a couple times on /bitcoin to see if I could get some answers.. trying to just understand what this all about. Couldn't get a real answer really, nothing but drama, drama everywhere. Yuck. I didn't want to hear it. Gave up, moved on in my usual silence... basically not caring about anything anyone said or told me, I didn't want to hear either side of the story if it was just going to be people yelling nonsense to get me to "Support" something. I don't support anything outside of the technology itself and moving forward really... I'm not one to pick favorites.
While I knew about this reddit thread too.. didn't bother asking.. I've always lurked /bitcoin.. that's just.. it's what I've done. it was/still is the normal. Whatever.. moving on. Market Price fell, people stopped talking about it.. as they always do, It's like weird I knew the price would fall eventually and when it did, how all of this was going to happen... chaos and eventual silence.. been through it before albeit on a smaller scale.
Anyway.. I follow @bitcoininfo on twitter.. and almost like a lightswitch one day he starts talking about BCH. I look in the timeline and see he made some big donation here, and since it's been basically all he talks about.. Bitcoin Cash. Decided to look up bitcoin vs bitcoin cash.. read the investopedia article on it.. now I finally understand. So BTC had the whole segwit2x thing.. which I remember.. I didn't look into it a lot though. It seems to have started there.. you BCH people basically said no to this and would rather have increased the blocksize.. so you forked and did exactly that.
I get the basics of the underlying technology. Or well, the benefits really. Transaction verification, confirmation, knowing where your money comes from, then the benefits of the currency... a limit of how many can be made.. whats lost is well.. lost.. oh well, we're not printing more lol.. This to reduce inflation. And also to an extent anonymity, though it seems that is less of a thing now. One of the bigger things is throwing the banking system out entirely. Still honestly not sure how I feel or where to stand on that last bit. But both BCH/BTC seemingly offer all that. I feel like the community is a bit.. well divided now. It makes me really wonder how this is going to play out in the end. Will it end in Abe Lincoln's words of "A house divided cannot stand" or will we actually get to that mass adoption goal that bitcoin has always needed.
Another problem I see is people like me.. people who want to use it but just kind of lurk in the background basically waiting for things to play out and see if we get an excuse to USE bitcoin are in the middle of all this. Now my thoughts are "oh god which one do I pick.. do I just invest in both? do I pick one? what if something happens and it forks AGAIN and now we have a community divided three ways.. four ways.. five ways?" Honestly if that happens and there is equalish support for each currency.. I think this is all done. Will come crashing down way faster than it came up. I can think of soooo many scenarios where this ends badly. It will greatly sadden me if this happens, seeing how bitcoin went from a seemingly great community of people looking to move Fintech forward in what has to be the most creative way I could ever imagine, to just a bunch of divided people fighting each other on what they think is right and getting nowhere because of it. I don't want to see that. Fighting really is non-nonsensical and useless.
Soo I leave you with a question.. why did this happen? why has the community been ripped in half? I do see BCH growing some so it looks like we'll continue this "War" of which one is best. I don't really know what I want to pick, the people who will want to adopt will not know what to pick, if this continues. In the long run this can't be good for ANYTHING. What will be reading in the history books? How bitcoin came, got popular, torn to pieces, and went? Or are we actually going to read how this technology changed the world for the better? Or are we going to read about how it came, got popular, was torn to pieces, and some other cryptocurrency came along that somehow avoided this issue, took over and became the norm? This will be a fun one to watch.. that's for sure. If it's finished before I'm dead anyway..
submitted by bcredeur97 to btc [link] [comments]

How to get smarter during a raging bull market

I've personally experienced the 1987 stock market crash, the dot-com bubble, the 2008 bear market, and the Mt. Gox rocket up and down in 2013. This makes me too old to be cool. But it also means that I've been around long enough to be puzzled by how markets work and don't (!) work. While ethtrader is a fantastic source of news, the fact of the matter is that news is not the best source of wisdom. Wisdom, unfortunately, requires the hard work of learning and introspection which is really, really hard to accomplish during the adrenaline rush of the bull market in ether that we've been having. So, for those of you who want to broaden your perspective and gain a deeper understanding of the market I'd like to recommend the five books that have best helped me understand trading markets: (1) Devil Take the Hindmost: A History by Edward Chancellor. Why? When bitcoin was new, the bitcoin reddit was flooded with accusations that it was just tulip mania all over again. Yet very few people actually understand what caused the market for tulips to go crazy (like ether) in the Netherlands. What made tulips go to the moon and come crashing back to earth? This along with other manias is covered in this super interesting book. (2) When Genius Failed: The Rise and Fall of Long Term Capital Management by Roger Lowenstein. These guys had multiple Nobel prize winners! They were invincible! Yet they totally crashed and burned? WTF happened? Can it happen again in crypto where there are also lots of amazingly smart people? What are the underlying risks to watch for? (3) Money: The Unauthorized Biography--From Coinage to Cryptocurrencies by Felix Martin. So, we're all talking about getting out of "fiat" money and into "cryptocurrency". What exactly are we getting out of and into? What is money? Honestly, this is one of the most interesting books I've read in the past five years. (4) Common Stocks and Uncommon Profits by Philip A. Fisher. You may think that cryptocurrency is completely new, but even if it is you are trying to do something very old: make money for yourself. How do you know what to buy, when to buy, when to sell, how to judge if you've bought the right thing? This is a small(er) book in the investment field. But it's one of the best if you want to maximize your chances of getting to the point where you need to decide what color Lambo to buy. (5) Berkshire Hathaway Letters to Shareholders by Warren Buffett (paperback version). Sitting at a desk without a computer and just using his brain, Buffett has become the second wealthiest person in the world. Here, Warren drops serious knowledge. I think there's more wisdom and trading smarts to be gleaned here than from a full MBA course. Also, I'd like to invite you to recommend your favorites to me. Although I'm getting the recommendations started, I'm no Warren Buffett or George Soros. I'd like to continue learning and -- just maybe -- get a bit smarter.
submitted by superleolion to ethtrader [link] [comments]

A little history...

I am going to try and shed some light on these dark times. Let us go back to the early days... No, I'm not talking 2013 Mt. Gox bear market, I am talking 2011. Due to this recent crash, and the massive amounts of negative sentiment I have seen on this sub (although, their have been some positive ones), I decided to try and lift peoples spirits. I know I will be met with opposition, but this is just a viewpoint from a single viewer. Take it for what it's worth.

In 2011, the price of bitcoin crossed 1 dollar, and peaked at roughly 1.09, then dropped down to roughly .68 cents. A crash of roughly 37%, no biggie, right?
Later in 2011, the price of bitcoin crossed 10 dollars, and peaked at roughly 29.60, then dropped again to roughly 2.05. A crash of 93%, something a bit more drastic.
In April of 2013, the price of bitcoin crossed 100 dollars, and peaked at roughly 230, then dropped to roughly 66 dollars. A crash of 71%, a little less than the crash before, but still a pretty steep drop.
This is where the territory gets more familiar...
In November of 2013, the price of bitcoin crossed 1000 dollars, and peaked at roughly 1100, then dropped to roughly 180 dollars, a crash of 83%. This is where the modern day reddit legends earned their metal and stuck through the precarious bear market/wintedeath of bitcoin.

Now, with all of those numbers said and done... How has this cycle of bitcoin been any different than the previous ones I just listed?

It crossed 10,000 in November of 2017, only to drop down to what we see today. At the writing of this post, I used the 19600 high and a 4500 low (which is obviously still subject to change, and yes I know we have seen 4100). With the 19660 and the 4500, this is a crash of 77% from the previous ATH.

This is no different than before. Sure, in 2013 there was Gox, sure in 2011 there were only undergrounders who knew about it, sure in 2017 you have the whales, the institutions, CSW, Ver, Tether and anything else you want to label as the cause of this. The cycles have repeated, not exactly the same as the last, but this is not the death of bitcoin.

Sure, it may crash to sub 3k, and I wouldn't be surprised if it does, but this isn't the end.
submitted by Mooki07 to Bitcoin [link] [comments]

340 BTC

October, 2011 was when I first heard about Bitcoin. A friend excitedly told me about it, that the price had crashed, that it could be 'mined', and that it could be purchased on exchanges. He didn't own any, but he found it interesting, and so did I. I was instantly interested in acquiring some coins. That the price had 'crashed' meant a buying opportunity, and I further saw it as evidence that the system was somehow free, and had a life of its own. I did not purchase any right away, regretfully, since the coins were about $3 each. I did do some initial research, calculating mining profitability, and looking into the process for buying coins on MtGox. I also read about the thefts and hacks. I found it intuitive these incidents were matters of endpoint-security, and not reflective of a systemic weakness. Yet I would have much to learn if I was to avoid becoming a victim. I continued to casually follow Bitcoin developments, and occasionally checked the price.
Eight months later I came across a Timothy B. Lee article in Forbes that detailed the Bitcoin Richlist. It was my catalyst. It was time for a technical deep dive, time to understand what gave people the confidence to entrust millions of dollars of value to the system. Of everything I read that day, it wasn't the proof-of-work that seemed revolutionary, but simply the fact that a lost private key meant the coins would be irrecoverable. That signified Bitcoin put true and total control of money into the hands of users, and for that it was different and worthwhile. I decided to invest. All that was left was working out the mechanics of the transaction. And security. I was determined to not fall victim to a hack. An offline, paper wallet seemed like the easy choice. The price was in the $6 - $7 range.
My first purchase went though MoneyGram and Coinapult, with MtGox as my receiving wallet. I put in $150, and got out $130 worth of coins. The price had surged in the few days since I decided to buy, to slightly under $10 per coin. I transferred the coins off of MtGox and onto my paper wallet, and it all felt very real! I wanted to buy more, and settled on CoinFloor to avoid the hefty fees I paid the first time. CoinFloor also allowed for instant fiat funding via a deposit at a bank teller window. Depositing $900 directly into a bank account was not without risk, but CoinFloor came through and the money was credited within 5 minutes. It all went flawlessly, and soon with my 100 coins spread out over a few different paper wallets, I could rest easy, without fear of a hack.
Edit - I meant BitFloor, not CoinFloor
I occasionally checked the price, tested out Satoshi Dice, and read a little more on the technical underpinnings, but other than that, I mostly forgot about my Bitcoin investment for the next 6 months. Then, in early 2013, I read about a few seed rounds in Bitcoin startups, and I saw pictures of a Bitcoin booth at the CES is Las Vegas. Somehow that booth, with the Bitcoin logo, made it all seem even more legitimate. The price had climbed into the $14 - $15 range, and I wanted more coin. CoinFloor had been hacked and was out of commission. This time I would use the Dwolla to MtGox method of funding. I found myself seriously regretting not having done Gox's verification the previous summer, as the price quickly climbed while I waited. When my verification finally cleared, the price had shot up to $19, and I transferred in several thousand dollars and bought another ~150 coins. Over the next few months I kept buying until the price crossed $100 per coin. In total, I had put in about $10,000 for 340 coins. I worked part-time, with an annual income of about $25,000, so that $10,000 felt substantial.
The rise to $266 was exhilarating, as was the following surge to $1242. I mostly held, but sometimes tried to time the market with a small position (always 10% of holdings or less). I sold some coins the first time Bitcoin passed the $400 mark to recoup my initial investment, and I arbitraged when it was profitable. I lost a then-painful amount of fiat on MtGox, but not any coins. I held tight during the long bear market, with absolute confidence that the price would find a non-zero bottom, and it would only be up from there. The ecosystem was growing, the technology was maturing, and investment money was pouring in, and yet the price continued to decline. I would have loved to buy more, but doing so would have been truly irresponsible from a diversification perspective.
I have largely stayed away alt-coins, but I did mine-and-dump those I found annoying, and mined and held the one that I found interesting - Ethereum. I reluctantly pushed some BTC into Ethereum early this year, which turned out to be a good move. In total, over the past 5 years, I have returned about 200x on my initial investment, in the current form of about 250 BTC, about 700 ETH and approximately $300k of other liquid assets. The result is almost identical to a pure buy-and-hold from the beginning, but I felt the need to hedge as valuations changed over time. I feel no pressure to sell more coins, though I probably would convert a few in the $20k-$40k range, prices which I have long seen as likely, if not inevitable.
I am in my early 30's. Ask Me Anything! Though I might only have time to answer a few…
submitted by ThrowAway_OfCourses to Bitcoin [link] [comments]

Never give up hope friends, NANO is a good project!

Yes, the NANO team has been dealt a bad hand with the firano thing, but think about it this way. Bitcoin is the biggest currency and it had Mt.Gox, litecoin had drama in the early days and crashed down to just $3, Ethereum used to be 60 cents and had a major hack and there are so many other coins out there that rose from the ashes of drama and turmoil. I don't believe that NANO will be any different. In due time, this project will eventually hit new ATHs I believe. If it's any further consolation, just look at the myriad of projects that were founded in 2013 and 2014 and hit new unimaginable ATHs during the last bullrun :)
TLDR : NANO team is still working hard and giving great updates, consider this project a "sleeper" similar to a lot of projects before the previous bullrun.
submitted by fallenkeith1990 to nanotrade [link] [comments]

Why I believe we're on the cusp of the 3rd great Bitcoin bubble

We've recovered from the last crash
You might think it's a bit early (based on the time frame for the last recovery), but things are looking a lot different than in 2011. I would suggest its because the last bubble popped prematurely due to Mt. Gox's failure of a trading engine.
Interest in buying Bitcoins has gone up to its highest point since the last bubble.
There's a similar spike in general interest. Partly helped along by the Silk Road news.
The network is being used at the same rate as during the last bubble.
The Bitcoin ATM story (see below) is causing Bitcoin to trend in Canada on Google (was #1 for a bit). The $27 story (see below) will almost certainly cause a large spike worldwide in Google trends once they're updated up to yesterday.
Lots and lots of new businesses now accept Bitcoins
One legitimate criticism of Bitcoin last year was the lack of places to spend them. We basically just had Alpaca Socks, Reddit and Wordpress, we've grown a lot since then!
Charities and others are taking donations
The first Bitcoin I ever spent was to donate to Wikileaks. More and more places are setting up Bitcoin donation buttons, because why not?
The $27 story is going massively viral
I think the attention this story is getting took a lot of us by surprise. We're thinking "of course if you bought Bitcoins in 2009 you're rich" and it didn't make much of a splash. But to the rest of the world it's a very novel and interesting story.
The first Bitcoin ATM has been installed
Easier way for people acquire Bitcoins with cash. Lots of free publicity. More machines are on their way and will generate more and more news.
Institutional money is coming
Afraid with the price at $200 that it will be hard to find enough moms and pops to keep money coming in faster than miners are selling? Don't be, there are individuals out there with a net worth higher than the entire Bitcoin ecosystem.
Interesting new developments
Cool things that didn't exist before the last bubble (as far as I remember).
Governments are explicitly saying it's not illegal
More and more governments are either saying Bitcoins are legitimate currency, or releasing guidelines for exchanges to comply with anti-money-laundering laws.
New generation of exchanges
Mt. Gox's terrible trading engine was a huge factor in the last crash. They couldn't keep up with all the new interest.
This time around there are more exchanges in more countries, and not a single point of liquidity.
submitted by DTanner to Bitcoin [link] [comments]

Why Bitcoin crashed today ! Mt. Gox $400 mill dump.. GREAT NEWS! Mt. GOX To DUMP 150,000 BITCOIN. Market CRASH ... MtGox Bitcoin Price-Manipulation 2013-06-02 Mt. Gox Crash 11/20/2013 GREAT NEWS! Mt. GOX To DUMP 150,000 BITCOIN. Market CRASH ...

#5 The crash of the Great Bubble of 2011. On June 8th 2011, after a 2 month rally from a price of $1 Bitcoin’s price peaked at $32, setting a new all time high. November 2013 – Januar 2015: Im Schatten von Mt.Gox. Bitcoins erster großer Bärenmarkt dauerte etwas über ein Jahr an, genauer gesagt 411 Tage. Zwischen dem 30. November 2013 und dem 14. Januar 2015 sackte der Bitcoin Kurs erheblich ab. Von ansehnlichen 1.1163 USD führte der Absturz zu einem Kurs von 152 USD. Das bedeutete einen ... At about 4:25 UCT an extremely large market sell order of about 4,000 bitcoin was placed, this caused the price to drop nearly $100 USD in under 2 minutes. The MtGox trading engine began to lag as the 4,000 bitcoin order hit all the corresponding buy orders as the price fell. According to MtGox, protection had been put in since the April 2013 crash, this protection canceled and rolled back all ... Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all ... Für den zweiten großen Bitcoin Crash ist Mt.Gox erneut verantwortlich. Die Bitcoin-Börse setzte im April 2013 den Handel aus, nachdem der Preis auf über 266 US Dollar anstieg. Der Bitcoin Preis sollte sich “beruhigen”. Der Trading-Engine von Mt.Gox lief heiß, und wahrscheinlich hatte Mt.Gox schon zu dieser Zeit Probleme mit US Dollar ...

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Why Bitcoin crashed today ! Mt. Gox $400 mill dump..

Bitcoin crash on mtgox exchange ( timelapse ) April 10 2013(music by Klute - Buy More Now!) - Duration: 6:11. Crypto Coinz 17,478 views. 6:11. Blame it on MT.GOX - Duration: 3:54. TheKoziTwo ... Mt. Gox is still at it 4 years later, As much as $400 million in cryptocurrencies was sold in the past few months by the bankruptcy trustee of the now-defunct Japanese bitcoin exchange Mt Gox. As ... Clip taken from Digital Asset News Channel - ️ https://youtu.be/fdrWwnNpQOo GREAT NEWS! Mt. GOX To DUMP 150,000 BITCOIN. Market CRASH or BIG OPPORTUNITY? ... This is a short recording of what happened 9 hours before the big manipulated flash-selloff later on. Mt Gox still haunts us and is contributing to the panic sell-off happening in the market right now. Mix that with fear and uncertainty about what happens next for Bitcoin and you have the perfect ...

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