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Shorting Bitcoin

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Re: Shorting Bitcoin

#171

Post by jkepler »

arcticbull wrote: post #149
rorykoehler wrote: post #146

Earlier quoted context omitted.

Funnily enough my transferwise international payments are basically instant.

With Borderless/Multi-Currency it's even cooler, since it grants you local banking details in many different locales, so someone can pay you via ACH, FedWire, SEPA, EFT, etc and have that value reflected in your account almost immediately (depending on the transfer method) and (depending on the transfer method) without charge.

Isn't this convenience at the cost of trusting a third party, I.e. Transferwise, with your money? They can unilaterally hold, delay, or stop you from using your money.

Re: Shorting Bitcoin

#172

Post by ur-whale »

arcticbull wrote: post #169
ur-whale wrote: post #167

Earlier quoted context omitted.

> Disgusting Weird to hear you say this. Many of your HN comments on Bitcoin demonstrate a rather collectivist take on crypto. Yet this feature of Bitcoin (lost Bitcoin are effectively fairly shared among all participants) is probably the most "fair" feature of the system. It'd sure help if you gave some sort of rationale.

I'm sorry, I edited to clear up what I was referring to. I was taken aback by Pomp choosing to comment on Mircea's life in terms of how his death would personally enrich him. I've edited to leave this note. I suspect he realized the optics himself as he has since deleted the tweet. To me it read as "Mircea died huh? Well good news, our bitcoin's more valuable now." I've nothing against the mechanism Pomp was pointing…

Thanks for clarifying, your "disgusting" makes more sense now.

Re: Shorting Bitcoin

#173

Post by eventreduce1 »

midjji wrote: post #165
midjji wrote: post #87

Earlier quoted context omitted.

Banks are bad because they charge to much, but they aren't that bad. What kind of unbelievably shitty bank doesn't provide 24-7 money transfers through a convenient phone app? Those transfers always take 0 time within the bank and have legally forced waiting periods between banks and between regions. The time may be legally required to be higher for certain scales of transactions, but they are generally as fast as th…

Another curious thing to note is that the legal requirements on transaction delays are mostly regarding wealth control, scams and ensuring its difficult to launder money. Strictly speaking, if bitcoin was treated as a currency, or even a publicly traded derivative, internationally a lot of them would apply to bitcoin. Bitcoin of course cannot obey these by design, but the more popular it gets, the more countries will…

Having 51% of the network does not mean they can know your private key.

Re: Shorting Bitcoin

#174

Post by ciconia »

> My best guess is that pretty soon the supply of greater fools runs out.

“Two things are infinite, the universe and human stupidity, and I am not yet completely sure about the universe.” – Albert Einstein

Re: Shorting Bitcoin

#175

Post by tasuki »

femto113 wrote: post #85
lordnacho wrote: post #59

Derivatives guy here. Perfectly fine opinion, but two issues. Why now? This is a general investing issue. Trading costs money, holding a put costs money, so why will the market do what you think in this time frame? Why are the puts cheap? This could be substantiated with some numbers, esp implied volatility. Are they cheap vs history? I don't know, but the reasoning should show why you think so. Note I'm not looking…

Except if you believe, as the author does, that the entire market is just scams and insider manipulation there is no meaning to be gleaned from any of the numbers. If it's all a sham it will blow up at some point, it's just a question of when, but that will almost certainly be precipitated by some unpredictable external event.

> it will blow up at some point, it's just a question of when

The author's options expire around Christmas. A pretty clear deadline for the trade to be profitable.

Re: Shorting Bitcoin

#176

Post by jkepler »

jonny_eh wrote: post #54
xvector wrote: post #19

I'm of two minds. Cryptocurrency is a beautiful technology. But the current prices have absolutely world-changing speculation already priced in. I think the price is largely meaningless, and cryptocurrencies are likely to crash hard, but at the same time, I don't really care, because the price is not the beautiful thing about crypto. Crypto achieved its purpose as envisioned by the cypherpunks that created it, the mo…

> Cryptocurrency is a beautiful technology On the surface, ya, but the proof-of-waste at its centre should be reason enough to consider the technology more harmful than not.

Energy use promotes human flourishing. Look up fatalities from climate-related catastrophes in the past hundred years---floods, winter storms, hurricanes, heat waves, crop-failure induced famines---and you'll see a steady downward trend corresponding to increased use of machines. All these machines use energy. Humans are also increasingly capable of working to protect endangered species, especially after human well-being has been secured.

Inadequate energy supply (not enough at the right time in the right place) results in deaths. Energy consumption isn't bad ipso facta.

Developing a monetary system independent of government control and monopoly may be one of the most important human 'machine' systems ever built, at impartial price signaling at a societal scale enables people who don't even know each other to collaborate to solve common problems. Thus bitcoin's energy consumption may actually be one of the best uses of energy to date. Its certainly less destructive than the military power and state/central-bank coercion underpinning existing fiat monetary systems.

Re: Shorting Bitcoin

#177

Post by philjohn »

djhworld wrote: post #128
breck wrote: post #43

I love this sort of thing. He’s making a bet, explains his reasoning, and does it in the open! That’s great. I disagree that there’s no tech here. IMO public ledgers that never sleep are far superior(thanks to the hard work of many people over the past decade), and their advantage over retail banking will only increase. My online banks keep getting worse, crypto keeps getting better. Think about this: banks are CLOSE…

> Think about this: banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed Physical branches, sure, but I don't know of any online service that has ever closed, in the UK at least... We can send payments to other banks and they arrive almost instantly (or within 2 hours) any day of the week. For free. This is why I wasn't that impressed when US friends were excited about instant transact…

And with companies like Wise (previously trasnferwise) I can convert a USD balance into GBP in seconds, and then withdraw to a UK bank in a few more seconds.

Re: Shorting Bitcoin

#178

Post by tasuki »

errantmind wrote: post #34

Puts are fine but the swings will often get you liquidated if you use too much leverage. I personally wouldn't bet against Bitcoin knowing the state of the wider market (stocks at all time highs, inflation fears but also Fed rate hike fears). If inflation fears kick into high gear it could be enough to push BTC back to retest the ATH

> Puts are fine but the swings will often get you liquidated if you use too much leverage.

Isn't that the same as saying "swings will often get you liquidated if you use too much leverage"? Whether puts or whatever else, if you use too much leverage, swings will often get you liquidated.

Also, I don't think the author used any leverage. He just bought puts.

Re: Shorting Bitcoin

#179

Post by hgibbs »

drbacon wrote: post #45
mattmaroon wrote: post #14

Earlier quoted context omitted.

Yes. Stocks can’t drop below 0.

I think hgibbs is confused between puts (a contract for the ability to sell at a price) and shorting (borrowing to sell immediately and buy back later), but your comment isn't quite right either. Shorting has unlimited downside, since it may be arbitrarily expensive to buy back the shares/coins that you borrow. Puts, on the other hand, have a strike price. A contact to be able to sell Bitcoin for $30K is worthless on…

My question was in relation to the parent comments claim that buying puts can cause unlimited losses - I was pointing out that this was wrong. The original comment seems to be edited now

Re: Shorting Bitcoin

#180

Post by jkepler »

arcticbull wrote: post #60
vmception wrote: post #58

Someone that was predicted to own 5% (1mm) of all Bitcoins just died in Costa Rica I doubt they had a survivorship and secession plan for their bitcoins and I doubt Bitcoins become less scarce Shorting Microstrategy and Coinbase via puts are good ideas though. Microstrategy isnt overleveraged yet but its easy for them to be. Coinbase is just a share dump, thats the entire purpose of direct listings. This has nothing…

That is true, unless you believe that the scarcity isn't at all relevant to the price in your anticipated future state. After all, the sacks of garbage in my kitchen are scarce but you don't see people tripping over their shoelaces to pay $30,000 a piece.

You are confusing scarcity and monetary hardness. Its super easy to create more sacks of garbage, and if demand for them shot up, a ton of people would bring their own sacks to market, crashing the garbage sack price. This happened to silver between the two sold wars, and nations that abandoned bimetal standards late lost a lot of monetary value to those on just gold.

Monetary hardness is whether its easy or hard to introduce more supply of a commodity money when demand goes up. More dollars are printed in response to demand, more gold mined in response to rising gold prices, more sacks of rubbish if that's what people clamor for. Dollars are harder money than sacks of garbage (unless we're talking about the failed Zimbabwe dollar), gold is harder than dollars.

However, more bitcoin CAN'T be created than the predetermined, declining schedule. Today, bitcoin's stock to flow is roughly equal to gold, but at its next halving it will double its hardness, and that will double again at every subsequent halving. So, bitcoin will become exponentially the hardest money ever created.

Scarcity is only part if monetary hardness. But perhaps you're right regarding future price: in the future (as is true presently), one bitcoin will be worth exactly 100,000,000 satoshis.

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