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Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

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Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#211

Post by setecgastronomy »

Havoc wrote: post #87

The concept of layering futures on top of BTC is equal parts crazy and promising on the entertainment front. All we need now is someone adding leverage and hilarity shall most certainly ensue

It's like speculation on top of speculation. Reminds me of the MBS/CDOs of the housing crisis. Speculative loans of speculative loans.

> All we need now is someone adding leverage and hilarity shall most certainly ensue

Oh, it's already starting. Believe me.

Usually when you start hearing of "record setting" purchase of art, you start your clock on the next recession. I guess this could be that moment. Wouldn't be surprised if we have a recession in the next 2 or 3 years.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#212

Post by anonbanker »

jerguismi wrote: post #160
user5994461 wrote: post #73

Earlier quoted context omitted.

>>> case 1: Bitcoin price shoots to $25,000 >>> case 2: Bitcoin price drops to $8,000 case 3: one of the exchanges canceled your order shortly after they were done. case 4: the exchange refuses to pay you out for whatever reason they invent. case 5: the exchange goes bust, either seized by the police, hackers or the owner outright left with all the money. In all these cases. You are likely to loose 100% of the sum yo…

> In all these cases. You are likely to loose 100% of the sum you invested. Nah, for example in case 3 you don't lose your full capital. You just have either position open without hedging the risk whatever reason. Case 4, case 5, for you to lose your full capital it has to happen for both exchanges. There are risks and I'm not saying that it might make sense to take those risks, just saying that you are now giving eq…

sshhhhh. We're not supposed to say anything positive about BTC on HN.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#213

Post by pbhjpbhj »

mattm wrote: post #169
pbhjpbhj wrote: post #130

Earlier quoted context omitted.

Presumably you can watch the exchange's wallets and see anomalous behaviour relatively easily?

Do exchanges publicize their main wallets? Is there a listing somewhere?

If you buy bitcoin, I assume it works that you receive btc from a wallet, and that wallet belongs to the exchange. If you sell at an exchange then you send your btc to a wallet, and ...

They could hide transfers by making new wallets, but that's strikes me as massive red-flag behaviour that an exchange wishing to continue in business is unlikely to take part in?

Someone step in and correct me?

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#214

Post by nawtacawp »

Qub3d wrote: post #143
nawtacawp wrote: post #125

Earlier quoted context omitted.

Just want to add for those new to btc, these are not far fetched scenarios — they have all happened in the past.

I personally just lost $200 on NiceHash; not a big sum, but enough to give me a scare. Its frustrating, because I've had concerns about this happening before, but its so difficult to find a good service outside Coinbase.

SFYL

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#215

Post by marshray »

bunderbunder wrote: post #161
mathgenius wrote: post #102

Earlier quoted context omitted.

The bitcoin exchanges have plenty of liquidity, and executions happen in less than one second. The real risk for arbitrage is with the crypto exchange itself: these can go bust, or disappear overnight. You wanna keep $1M sitting on one of these exchanges?

Wrong kind of liquidity. Trading firms, hedge funds, etc. care care about liquidity of the "Can I convert this into the kind of money I use to pay taxes and employees and investors?" kind. BTC has basically zero of that, as evidenced for the fact that there isn't a deliverable version of this contract. I'm not sure a sensible institution would even consider BTC held at exchanges to be real BTC, just a kind of IOU. Th…

> BTC has basically zero of that, as evidenced for the fact that there isn't a deliverable version of this contract.

How can anyone claim Bitcoin is a useful currency if it's less practical to deliver than, say, KC Winter Wheat?

> And 20 minutes...is an eternity

This is for a futures contract one month out. You would close your position at the same time that you agreed upon the rate for the blockchain transaction. When you sold the BTC you could verify receipt of the USD quickly (fiat FTW), whereas the blockchain propagation time is more of a risk to the BTC buyer.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#216

Post by thinkmassive »

traderThrowAway wrote: post #128
LrnByTeach wrote: post #40

I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…

If someone wanted to borrow US$1m from you, and gave you Bitcoin as collateral, what interest rate would you require?

Crypto-collateralized loans are being launched by a startup called Salt Lending. I’m expecting rates to start around 10%, although I’m unsure where I heard that. https://www.saltlending.com/

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#217

Post by brokenmachine »

etr-strike wrote: post #158
aninhumer wrote: post #117

Earlier quoted context omitted.

I'm not really sure how a small block size prevents centralisation?

An increase in blocksize means an increase in propagation delay. Too much delay and miners who are closest to the most recent block get a head start mining the next block. Mining is suppose to be a lottery, not a race. Research done on the matter shows that for each kb above the current 1mb block, 80ms of delay propagation is added.

Couldn't/Wouldn't the difficulty be adjusted down in that case so the blocks are mined faster?

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#218

Post by knowThySelfx »

nawtacawp wrote: post #206
knowThySelfx wrote: post #183

Earlier quoted context omitted.

Does this remind us of some glorified Ponzi scheme? How does Bitcoin get hacked? It certainly isn't easy unless you are an insider. And perhaps NSA, since they created SHA-256. https://bitcointalk.org/index.php?topic=291217.0 The bubble will burst - some people will make money out of this and a whole lot of others will lose.

I believe the hacks OP was referencing doesn’t have to do with SHA, but more to do with bitcoin exchange security and not protecting their btc correctly.

I agree, it may not have to do with SHA, yet.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#219

Post by Erlich_Bachman »

banderman wrote: post #146
Erlich_Bachman wrote: post #120

Earlier quoted context omitted.

You can already trade cryptocurrencies with leverage on many major crypto exchanges.

Correct. All of the big unlicensed and unregulated exchanges that provide no transparency of their ownership, or as to how customer balances are held allow significant margin trading. And they have no impartial 3rd party proof of reserves.

Many major exchanges have financial institution licenses. It's not a banking license, but it's a license that still means a lot of regulation. (Also the history has shown that a banking license is in no way a guarantee that a bank cannot fail.)

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#220

Post by londons_explore »

JanSt wrote: post #8
sliverstorm wrote: post #5

Earlier quoted context omitted.

Just the next step from the Bitcoin economy, to the Bitcoin Standard economy, to the eventual Bitcoin Fiat economy. Seriously, the Lightning network looks a lot like the old Gold Standard, and the arc of Bitcoin seems to be reinventing modern currency, so I'm trying to figure out what's next.

To me, the Lightning network looks like a terrible idea. It achieves nothing that an increased blocksize would not have done on-chain yet wraps a faster-layer around the slower, deliberately crippled (1MB) blockchain and does require multi-hop liquidity that must be provided by interested parties. My understanding would be that the slower layer (like TCP) would be stacked on the faster layer (like IP). The lightning…

The lightning network allows the payer and the payee to be anonymous from each other, which could be useful for some things, like for example anonymous charity donations.
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