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Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

davidgerard.co.uk

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Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#221

Post by scott00 »

davidgerard wrote: post #133
scott00 wrote: post #40

Earlier quoted context omitted.

Crypto market cap doesn't mean the same thing as the market cap of a stock, but that doesn't mean it's meaningless. It approximates the total amount of wealth currently held in the form of a particular crypto, which is interesting to know in comparison to more traditional asset classes (stocks, bonds, gold, etc) as well as to other cryptos. If you also have some knowledge or an assumption about the velocity of money…

> It approximates the total amount of wealth currently held in the form of a particular crypto, I don't see how it does anything of the sort. * It's not the amount that was put in to it * It's not the amount you could get out of it It's a number that's easy to calculate and gets headlines, but I can't see what else it's good for in practical terms. Perhaps with a tiny altcoin it would be worth 51%ing it. But for anyt…

Your criticisms about it not being the amount that came in or that can come out also apply to stocks.

If all I know about a crypto asset is that it has a market cap of $100 million, I know it's a very niche asset in comparison to bitcoin or ethereum. It's small enough it's reasonably likely to be a scam. For me personally, it's small enough that I'm not interested in learning any more, which has practical use because my time is finite.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#222

Post by preinheimer »

neuro_imager wrote: post #203

From a post from r/ethereum: TLDR version: The author is a giant tool and his opinion in this space is basically worthless. David Gerard is a cryptocurrency antagonist and even a frequent contributor to /r/Buttcoin/. Outside of wiki, he writes satirical articles and snark-laden comments dismissing first Bitcoin as a libertarian scam and now Ethereum because I guess Bitcoin wore him out. He sees cryptocurrencies and t…

The venom in your TLDR makes it hard to be enthusiastic about reading the rest of what you have to say.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#223

Post by kemonocode »

You can indeed cash out Bitcoin and the number is reasonably accurate... up to a certain amount. $100? Sure. $1000? Yeah. $10k? That's alright too. $100k and upwards is when your order might actually start having an effect on your exchange to shift the price upwards or downwards.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#224

Post by kasey_junk »

sharemywin wrote: post #217
kasey_junk wrote: post #193

Earlier quoted context omitted.

Is there a way to verify this somehow? One of the biggest issues in the Bitcoin space seems to be counter party risk with the exchanges. How do large Bitcoin traders price that risk? With most modern financial exchanges the accounts are open, audited and they’ve had a long time to generate trust with their members so pricing the counter party risk is straight forward.

if your treating bitcoin as anything short of gambling, you probably in for a big surprise one day.

Professional gamblers price counter party risk into their bets as well. Using similar methods now that the bet takers are frequently public corporations.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#225

Post by dmichulke »

Gys wrote: post #171
runeks wrote: post #138

Earlier quoted context omitted.

> Exchanges are not even prohibited from doing their own secret trades and using their own internal database and full knowledge of all other players. Are we sure about this? The two largest USD-exchanges are Coinbase/GDAX and Bitstamp, which operate out of California and London, respectively. If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be…

> If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be unwilling to press charges? Based on what ? Because some people might think that is immoral ? Trading in most things is not regulated. So there is no law to be broken, expect very basic ones (you have to deliver if you receive fiat money). If I have a trading platform in art, then I can sti…

> are we sure that the authorities would be unwilling to press charges?

> Based on what ?

Fraud?

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#226

Post by madaxe_again »

lagadu wrote: post #183
madaxe_again wrote: post #158

Earlier quoted context omitted.

If cashing out is easy and reliable, why can’t I withdraw from Coinbase, six months after verifying my bank account? I’ll tell you: they don’t have the capital to pay anyone, so nobody can withdraw. It’s Mt Gox all over again.

I withdraw every month, usually in about ~1200€ worth: if you're having trouble with that you should contact coinbase support.

I did, in October. They send me an email every few week saying “is your query still important? Reply within 24h or we’ll assume it’s resolved.” Starting to think that there is no capital behind it and my money (>€100k) is gone.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#228

Post by Retric »

g09980 wrote: post #159
paps wrote: post #148

Earlier quoted context omitted.

> I think its also worth pointing out that less than 1000 entities owns 40% of the bitcoins. This is FUD. 1000 wallets own 40% of BTC. See here https://bitinfocharts.com/top-100-richest-bitcoin-addresses....

Many of these wallets are actually exchange cold storage wallets, so they hold the BTC but not per se "own" it

In practical terms exchanges do own these bitcoins in that they a physically capable of trading them.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#229

Post by lagadu »

syllogism wrote: post #92
anonu wrote: post #77

From the article: “Market cap” [...] is a bogus number that’s not actually applicable to anything — it’s not money that was put into the crypto, it’s not a realisable value like a company market cap. I am not sure what the author means by "realizable". If their intention is to say, "Ok, let's liquidate every single coin for fiat currency... and we expect to have the market-cap equivalent in that currency" Well, whats…

What would you pay to own every single bitcoin? The answer should be nothing --- if you owned all of them, they'd be completely worthless. What would someone pay for all of Apple's stock? Suffice to say, a lot --- because Apple has actual value.

Following the same logic: what would you pay to own all of a single currency? It'd be completely worthless as nowadays they're not backed by anything.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#230

Post by Retric »

g09980 wrote: post #131
omarforgotpwd wrote: post #128

Earlier quoted context omitted.

I think the point he’s making is that everybody could not cash out at the listed price at once if something were to happen that made holding bitcoin undesirable (such as say, a possible crack for their elliptic curve crypto implementation). However, the same is true for banks which only keep 10% of deposits. Bank deposits are FDIC insured up to $250,000 though.

But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Instead, the article seems like FUD that would confuse non-tech users into thinking they couldn't cash out their 0.5 BTC at the price they're seeing on their exchange (they can.)

They would however end up with more than 0$ because Apple has cash on hand representing real value. Bitcoin on the other hand is only worth bitcoins so it can crash to zero.

Historically, stock market corrections may be ~50% but they don't hit 95% because of underlying value. Other bubbles can be much harsher.

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