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Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

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101–110 of 118 posts

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#101

Earlier quoted context omitted.

No, the forked coins and the original coins aren’t fungible. It’s more like me saying “show me your dollar bills at the time of the fork and I’ll give you an equivalent amount of Monopoly money”. It’s not going to be worth anything unless you somehow convince a bunch of other people it’s worth something, and even then it’s likely going to be worth far less than the original coins because fewer people will accept it a…

I'm not saying they'd be 1-to-1 off the bat. I'm asking do forks have their own supply, and are no longer limited by the supply of the previous coin? If so, my question is when BTC runs out of things to mine a) why would miners that needed to process transactions even stick around hashing and not just go to the fork where they could actually make money? b) and doesn't this just mean technically you could create widel…

Everything about Bitcoin is driven by emergent consensus. This includes the mining - there is no underlying fundamental mathematical entity that is being discovered or exhausted when people are “mining”. The only reason there is said to be a limited number of Bitcoin available is, well... because everyone says so! All Bitcoin clients agree that it is correct and proper to award yourself 25BTC when you mine a block. Since we all agree that’s ok, we all happily build on top of blocks that do this. We ignore blocks that try to break the rules by awarding themselves more. Eventually we will all suddenly change our mind and only associate with blocks that award the miner 12.5BTC, and then 6.25, etc until it reaches zero. That is the total extent to which the supply of BTC is limited. It’s completely driven by that wide social consensus.

If you tried to start a fork built off of older blocks with a bunch of your miner buddies, it would essentially be a 51% attack. You’d have to convince a quorum of miners and users to treat ledger entries in your fork like real Bitcoin transactions. If you have the power to do that, you have successfully attacked the network, and you may as well have just sat your new blocks with mining rewards on top of the extant main chain. It’s not like mining older blocks gives you more BTC in some mathematical sense - you’re always just earning whatever you think the network will let you get away with, based on the schedule that has been agreed upon a priori.

Hopefully this makes it clear that the question of whether a fork has a separate supply is confused. Neither the main nor the fork have a true finite supply - just a finite amount people will in practice agree to letting you mine. In the case of the fork, it doesnt’t matter whether you can convince them to let you go back to increased mining reward, because you have a much larger problem - nobody considers any transaction in the fork money in the first place. If at any time they do, you’ve attacked the network. Miners and users both equally dislike a state of the world where there is more than 1 version of history - it calls into question whether any wealth they have in chain A is real now that chain B is more popular. In practice they will quickly coalesce into considering one chain the true one, and changing everybody’s mind, especially long after the transactions have settled, would be a monumental task. Because everybody understands this, nobody would even try it, since it’s a waste of precious mining resources. This is why you didn’t see rogue forks forming when the reward decreased from 50 to 25 BTC.

I know that’s a wall of text, but feel free to keep asking questions if you’re interested.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#102

I have been trading crypto for 5 years now and it is a wet dream for rogue traders. There was a myriad of stories about traders and even banks that tried to pull of some shady statretgy in the stocks markets that the SEC shut down, those same strategies seem to be fair game in the crypto world, you just have to have pockets that are deep enough. My point is that if you are smart and think you can beat or even keep up…

> There was a myriad of stories about traders and even banks that tried to pull of some shady statretgy in the stocks markets that the SEC shut down OK, let's hear a few of the stories. Or at least a few links. (And I promise my pockets aren't deep enough to execute on them.)

He might be referring to some dark pool trading (eg private exchanges)

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#103

Earlier quoted context omitted.

I'm not saying they'd be 1-to-1 off the bat. I'm asking do forks have their own supply, and are no longer limited by the supply of the previous coin? If so, my question is when BTC runs out of things to mine a) why would miners that needed to process transactions even stick around hashing and not just go to the fork where they could actually make money? b) and doesn't this just mean technically you could create widel…

Everything about Bitcoin is driven by emergent consensus. This includes the mining - there is no underlying fundamental mathematical entity that is being discovered or exhausted when people are “mining”. The only reason there is said to be a limited number of Bitcoin available is, well... because everyone says so! All Bitcoin clients agree that it is correct and proper to award yourself 25BTC when you mine a block. S…

> Everything about Bitcoin is driven by emergent consensus.

...which is a fancy word for a speculative bubble.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#104

Earlier quoted context omitted.

Everything about Bitcoin is driven by emergent consensus. This includes the mining - there is no underlying fundamental mathematical entity that is being discovered or exhausted when people are “mining”. The only reason there is said to be a limited number of Bitcoin available is, well... because everyone says so! All Bitcoin clients agree that it is correct and proper to award yourself 25BTC when you mine a block. S…

> Everything about Bitcoin is driven by emergent consensus. ...which is a fancy word for a speculative bubble.

Actually, what he was doing was explaining the concept of how nodes enforce nakamoto consensus in order to validate transactions. It had absolutely zero to do with valuation.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#105
I have no idea if Bitcoin is going to succeed or fail, but if anyone thinks the second guy in the video has no idea what the block chain is because he mumbled "block-coin", you have been fooled. Who the hell is that "reporter"? When would the CEO come out and boast this is all a joke. Of course Goldman has an very keen understanding of what's going on. They are almost guaranteed to have a position on BTC one way or another and be goading people into buying it. That doesn't mean smart or lucky people won't be able to ride their wave up if they are successful, but to think Goldman is dumb as those two guys seem is completely ludicrous, its obviously an act.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#106
post #30

Earlier quoted context omitted.

Futures markets reduce volatility.

Can you do an "Explain it like I'm 5" of this? I don't doubt you but I'm struggling to make the connection. Will futures affect the pricing of the underlying asset? (I don't think so?) I think you are saying "futures reduce volatility for the trader" but I'm not sure.

It helps price in future price shocks, and adds liquidity, which has a known dampening effect on volatility.

With respect to the latter, my own personal theory for why this is is that more liquidity means more individuals actively trading the asset, and that translates to more non-correlating factors affecting the price. This makes it less likely that a shock somewhere in the economy will have a significant impact on the price.

Modern economic scholarship properly offers a better explanation.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#108
post #11

Earlier quoted context omitted.

If you are short term day trading you're likely to be a victim of pump and dump groups and manipulation. Going long on high market cap coins with a longer timeline is a relatively safer bet.

There are fees to any position you hold so even though going long is indeed the safe bet, having a longer timeline requires deep pockets.

"Fees"

I see the margin lending rates on some exchanges right now being 0.003% daily. This is for coins that move 10% a day.

Probably fair to assume fees aren't what the traders lose sleep over.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#109
post #26

Earlier quoted context omitted.

> This should give the big Wall St banks the ability to muck with crypto prices however they choose, The current status quo is that large bitcoin holders can muck with crypto prices however they choose.

Futures exchanges will have to buy large sums of underlying assets (one reason for the recent spike.) So, in the end a lot of exchanges will be some of the largest crypto holders.

The futures are cash settled, none of the futures exchanges need to own any bitcoin at all.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#110

Earlier quoted context omitted.

It's where Goldman would net off trades between their own clients, effectively acting as an exchange for their clients using the prices on the official exchange. They say in the article they won't act as market-makers or hold their own positions. That means they won't perform their usual capacity for clients, where they act as middleman between the exchange and their own clients. ie they won't make a price for their…

So if the blockchain evolved such that it took 2 or 3 hours for a transaction to clear, and cost, say, $5,000 then during the same 2-hour block Goldman could let A sell 50,000,000 pretend bitcoins to B, B could sell 25,000,000 pretend bitcoins to C, and 25,000,000 pretend bitcoins to D, then the price could move up (or down) and A could buy back 25,000,000 from C and 25,000,000 from D, so that A, B, C, and D have the…

Neither CME or CBOE bitcoin futures are directly connected to bitcoins. Both will be cash settled (i.e. no bitcoin delivery). There will be no need for buyers, sellers or intermediaries dealing in bitcoin futures to buy/sell/own bitcoin.
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