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Bitcoin Billionaires May Have Found a Way to Cash Out

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Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#41

Post by sillysaurus3 »

drtillberg wrote: post #40
zaroth wrote: post #32

Earlier quoted context omitted.

I think people massively underestimate the number of Bitcoin which are forever lost. I’d put it at well over 50%, and the true market cap is much less than we think it is because of this. IMO “Satoshi” coins are part of this unrecoverable set, but of course I have no data to base that on, just a hunch.

A coin that vanishes unpredictably would be the worst sort of money. Ironically, under Gresham's Law, such a currency would dominate other forms of money because everyone would be in such a hurry to exchange it for goods before it disappeared.

BTC can be divided into satoshis, which are extremely small units. If someone loses 1 BTC, the value of all the rest simply goes up.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#42

Post by jgrowl »

valuearb wrote: post #33
mtgx wrote: post #17

Earlier quoted context omitted.

People were spending tens of thousands of Bitcoins on stuff like pizza in the early days and there were significantly fewer Bitcoins back then. That's hundreds of millions of dollars today. So all some of them had to do is keep them around. Others just bought them later on. Winklevoss twins put $100 million in Bitcoin years ago. I imagine many rich Chinese people wanting to evade money transferring rules in China did…

Satoshi is dead, or in prison. No way they could go 10 years without spending a single coin.

This assumes they only mined into a single wallet. They could have easily switched personas as a normal early bitcoin enthusiast. I would suspect that if you wanted to track the real Satoshi(s) down, you would start with a list of the earliest adopters. I would also look at people that maybe weren't the most vocal as they probably wouldn't have wanted to bring attention to themselves. Maybe they really did just completely step back though.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#43

Post by drtillberg »

adventured wrote: post #18
justboxing wrote: post #6

> the approximately 1,000 people who hold an estimated 40 percent of all bitcoin, or an average of around $350 million each. I've seen this statement over and over again for the last few months in various news outlets and blogs, but I'm having a hard time wrapping my head around this statement. I understand these 1000 people are what are popularly known as the "Bitcoin Whales" but how did most of them come in possess…

You know the famous pizza for bitcoin story? The media always tells the story this way: Joe Person traded eg 10,000 bitcoins for some pizza, in what is believed to be the first commercial transaction. You know what they always miss in the story? Joe Person did that same deal several times, which you can see by reading the forum thread that still exists. Joe Person missed out on a billion dollars in Bitcoin value in e…

Wait 2, 10 or 20 years and a pizza may look like a good value again. Think of it like the Hindenburg or the Wright biplane. Yes, it works and demonstrates a principle. That doesn't mean it will keep flying.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#45

Post by jjeaff »

lend000 wrote: post #2

Lots of articles make this mistake -- they use the distribution of Bitcoin in wallets to determine the wealth distribution. This is extremely flawed not only because many miners hold their coins over multiple wallets (e.g. Satoshi) but moreso because exchange wallets are counted as single individuals.

Yes. And tons of articles and people are also making the mistake of thinking the sites tracking BTC transfers are actually transactions either purchasing or selling Bitcoin for cash. In reality, they are mostly internal transfers.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#46

Post by sitkack »

jcranmer wrote: post #22
arisAlexis wrote: post #5

Earlier quoted context omitted.

Past bubbles didn't involve an economic paradigm shift

Except for the dot-com bubble, the railway mania, canal mania, South Seas, and that's just the ones I can think off the top of my head. One of the classic warning signs of a bubble is people saying "but this time, it's different." Particularly in response to claims of a bubble.

I still wish I could have gotten in on the railway mania. Rail is truly amazing.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#47

Post by jjeaff »

modeless wrote: post #24
tytytytytytytyt wrote: post #20

Earlier quoted context omitted.

I thought 10's of thousands of transactions were pending. You mean just give someone your wallet for cash?

If you're a billionaire you can just pay the fee to have your transaction in the next block. The network works perfectly for anyone willing to pay fees. Selling a billion on exchanges without excessive slippage would be difficult, but perhaps not impossible considering that the daily volume is above 16 billion right now. Certainly something in the 10-100 million range would be pretty easy.

Daily volume of $16b according to what? The ledger? If coinbase moves 10,000 bitcoins to a different wallet, you see that as a transaction. If I move all my Bitcoin from coinbase to a private wallet then back to coinbase, you would see those as separate transactions on the ledger as well.

There is not $16b in daily liquidity in the BTC market right now.

Moving money from one pocket to the other over and over all day long is not a sign of liquidity.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#48

Post by jjeaff »

arisAlexis wrote: post #4

You can cash out with no problems

How? Where?

Coinbase has daily and monthly limits. And you have to build up to them.

You would either have to find a billion dollar buyer somewhere or somehow manage the logistics of selling to thousands and thousands of individual buyers.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#49

Post by jjeaff »

modeless wrote: post #24
tytytytytytytyt wrote: post #20

Earlier quoted context omitted.

I thought 10's of thousands of transactions were pending. You mean just give someone your wallet for cash?

If you're a billionaire you can just pay the fee to have your transaction in the next block. The network works perfectly for anyone willing to pay fees. Selling a billion on exchanges without excessive slippage would be difficult, but perhaps not impossible considering that the daily volume is above 16 billion right now. Certainly something in the 10-100 million range would be pretty easy.

Easy? Which exchange right now will let you sell millions of dollars at once? My coinbase account is aged, well used and verified. And I think I can't sell more than $10k a week.

Re: Bitcoin Billionaires May Have Found a Way to Cash Out

#50

Post by nske »

Clubber wrote: post #44

I think once people start cashing out a large amount of bitcoin, the value will drop (due to additional supply). I'm afraid with all the latest hype and new investors, a drop off would trigger a massive selloff.

It wouldn't be the first time in the history of Bitcoin and it might actually be a good thing. People should start seeing Bitcoin as something else than an easy profit highway.
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