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If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

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Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#111

Post by Acrobatic_Road »

bduerst wrote: post #99
Acrobatic_Road wrote: post #97

Earlier quoted context omitted.

The landlord does not need to settle the transaction on the Bitcoin network to spend the money I have payed him. He could spend it anywhere within lightning. This is the crux of your misunderstanding. I really wish people would take more time to understand the things they criticize. There are real problems with lightning, this isn't one of them.

>The landlord does not need to cash the check to spend the money I have payed him. He could spend it anywhere as a third party check . This is the crux of your misunderstanding. Ask your landlord why they won't spend third party checks and you have your answer as to why they won't spend unsettled IOUs on a lightning network. You're free to pull the, "Lightning too complicated for you to understand" but I think you're…

When the landlord spends the funds, he is not spending equivalent to a third-party IOU.

Suppose you and your landlord share the A-B channel. When he wishes to spend the rent money he pays you back in the A-B channel in return for your paying the same amount in another channel to party C (who is likely a node).

For the record, this process is trustless in the sense of the word that no trust is required. Nobody can wander off with anyone's funds.

When party C (or party D, E, F, whoever receives it) actually gets the money he doesn't have to care about the state of things in in the original A-B channel. His money came from the other party is his channel and that's the only transaction he needs to watch. It's not like a third party IOU at all. And, of course because the Bitcoin network can enforce ownership, calling lightning an IOU does not really do it justice.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#113

Post by Melting_Harps »

kelnos wrote: post #73
account73466 wrote: post #48

Earlier quoted context omitted.

Not my definition but the accepted one is price times number of bitcoins mined so far. Of course by selling 1% of all bitcoins you would clean all order books. However, George Soros used only a few billions to bet against the British pound.

> Not my definition but the accepted one is price times number of bitcoins mined so far. Right, but that's essentially a lazy re-definition of the term. I get that it's a bit wordy to always say, "the current total value of all bitcoins is $X billion", but market cap is specifically about the total value of a security's outstanding shares . If people want bitcoin to be treated seriously as a currency , they should st…

> To put it another way, no one would reasonably talk about something like the "market cap of the Euro"[0], so why would you do that for something else claimed to be a currency?

Oh, but they do:

https://www.dailysabah.com/finance/2017/12/06/bitcoin-renews...

And while Market Cap may be on its surface misleading, its mere semantics, and is really in reference to what you've described; its just that as you said, its a currency and itself cannot have a strict Market-Cap but its a succinct way to describe the totality of its valuation for all issued satoshi's--which again, is misleading because of the 21 Million, its likely several million are lost forever.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#114

Post by danans »

whack wrote: post #68
mikeyouse wrote: post #38

Earlier quoted context omitted.

There's no such thing as a "market cap" for Bitcoin - seriously, give me a definition of "market cap" for Bitcoin that makes any sense at all compared to something like the future value of cash flows from UNH equity.

The market cap for UNH isn't calculated using future cash flows. The market cap for any security, by definition, is price-per-security * number-of-securities. Similar valuations also exist for gold-funds, which also have no cash flows. You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless. But that has nothing to do with the formula for c…

> You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless.

Which points to what IMO underpins whatever Bitcoin's underlying value is: a fear - or for some a hope - that typical vehicles investments will have precipitously declining future cash flow.

In that way it's like gold (minus the part about being pretty and useful for selling overpriced audio cables - is that still a thing?).

Unlike gold, though, it's in a way harder to secure, either by individuals or governments, because it isn't held behind physical security measures. Rather it's subject to the same large scale attacks as any other information on the Internet.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#115

Post by bitreality »

hammock wrote: post #40
account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

Bitcoin is not a stock though. Forex markets do $5 trillion in daily volume against an $80 trillion base. For example.

I mean, Bitcoin isn't a fiat currency, either. Banks trade forex for completely different use cases than people/orgs trade Bitcoin.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#116

Post by hinkley »

account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

All three of those stocks pay dividends. Doesn't that tend to reduce volume vs float?

Also, if you're going to compare Bitcoin to stocks, does that mean you accept that Bitcoin's value is in speculation and not as a currency?

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#117

Post by account73466 »

tuesdayrain wrote: post #100
toomim wrote: post #69

Earlier quoted context omitted.

Market Capitalization : The amount of capital allotted an asset in the market . This can be computed as number-of-coins x price-per-coin.

This could result in the common misconception that market cap is equal to the influx of money into an asset. E.g. market cap increasing by 5bil doesn't mean that 5 billion worth of currency was invested into it.

It could. However, you average Joe crypto hodler from reddit understands this phenomenon, e.g., after reading about Tether & friends.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#118

Post by xur17 »

DennisP wrote: post #19
scrooched_moose wrote: post #8

Earlier quoted context omitted.

Because Bitcoin is (at least theoretically) a currency. You're comparing it to a commodity or store of value. The power of a currency is the ability to trade it for goods and services. If that is no longer happening with Bitcoin it has morphed into something else entirely.

Yes, it has morphed. The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now. Other cryptocurrencies are working hard on scaling to the point of being workable currencies.

> The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now.

I don't think they abandoned the idea of it being a currency, I think they just have different ideas about how exactly to go about scaling it. The block size limit (and therefore the transactions per second limit) was raised 2x rather than significantly more because they don't think scaling onchain is a viable long term solution [0].

Lightning, and other second layer networks have always been discussed as the solution to this scaling problem, and while they are still very early, there's already a fair amount of usage. I work at a company that accepts Bitcoin, and as of today, > 90% of our transaction volume is via lightning.

[0] https://en.bitcoin.it/wiki/Block_size_limit_controversy#Argu...

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#119

Post by account73466 »

Melting_Harps wrote: post #108
shepardrtc wrote: post #39

Earlier quoted context omitted.

I have a hard time believe its anything other than market makers providing the illusion of trades. Have you seen the price swings? If there was real volume and real transactions asides from trades, how would such insane swings be possible?

> I have a hard time believe its anything other than market makers providing the illusion of trades Can you elaborate? I'm guessing you mean whales? Also, how is this any better or different for that matter, for the most stock exchanges like NYSE when most of it is Algo based bit trading? Bitcoin definitely suffers from volatility, how much you can attribute that to large holders (whales) is incredibly difficult; con…

Market Maker is a well defined term, see my comment below. . I believe that he was not aware that reputable crypto exchanges don't pay market makers.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#120

Post by jhatemyjob »

bduerst wrote: post #90
jhatemyjob wrote: post #32

Earlier quoted context omitted.

This is why I think "decentralization" will never work. It's just a power vacuum, that will be filled/abused one way or the other.

Precisely. It turns out that despite some of it's flaws, having your currency managed by a central organization that is incentivized for stability tends to work better than a handful of data miners stealing electricity in China.

And whoever owns the domain https://bitcoin.org.
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