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Bitcoin Exchange Had Too Many Bitcoins

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Re: Bitcoin Exchange Had Too Many Bitcoins

#101

Post by mikeschmatz »

NelsonMinar wrote: post #85
devrandomguy wrote: post #76

Earlier quoted context omitted.

They are just exploring the solution space, with minimal baggage to hold them back. The real problem, is that people are trying to make a living off of something that is still experimental / alpha level maturity. Seems like the people who do understand banking history are unwilling or unable to make any kind of improvements, at least in regards to the issues that digital currencies are working to address.

Sure, but their youthful experiments are involving billions of dollars worth of money. Or at least they claim it does.

Not sure if there are billions of dollars involved. For all we know, it could be just speculators trading crypto between each other.

I could not find any stats on the amount of fiat flowing in and out of these "exchanges", which, by the way, have zero oversight and tend to disappear every few months or so.

Re: Bitcoin Exchange Had Too Many Bitcoins

#103

Post by brownbat »

gregschlom wrote: post #91

"There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: not the immutable code of the blockchain, but just humans sitting around and trying to figure out which approach would cause the fewest complaints. In that, it's a bit like the Dole settlement process -- only instead of a neutral judge making decisions based on written contracts and…

I like that rule, but I would extend ever so slightly:

If existing providers are anticompetitive, blockchains allow you to bootstrap an alternative without the same capital requirements you might need to compete with, say, VISA or Wells Fargo.

I'd also note that transacting across borders can easily make legal remedies cost prohibitive, especially for smaller transactions, even if both countries have mature legal systems. So I expect cross border activity to be more typical than the illegality example in the long run. But that fits your conditions as written, so this is just a quibble.

Re: Bitcoin Exchange Had Too Many Bitcoins

#104

Post by gnaritas »

Twisell wrote: post #96
NelsonMinar wrote: post #40

It is hilarious watching people try to reinvent financial institutions without any knowledge of or respect for history.

Maybe I'm too "left wing", but if you ask me short selling, complex products and high frequency trading are among technological "improvements" that have led actual stock exchange to an ugly mess where biggest profits are made by "scamming" efficiently other users. Should regulators forbid (or tax more) some (or all) of this mechanisms markets will quickly resume to what they should be, places for people to invest mon…

I'd say you don't really understand what you're critiquing; you think those things are bad because you heard they were, from someone else who likely doesn't understand it either. There's absolutely nothing wrong with short selling or high frequency trading. Short sellers help keep prices fair and companies honest, HFT makes trading cheaper for everyone.

The markets are worse without them, the market was worse before HFT which is the only thing new here, trades used to cost way more due to wall street middle men taking a big cut of every trade, far far bigger than HFT's take now. The only people who have a logically valid reason to hate HFT are the old school manual traders who were displaced by them and can no long make a living trading chart patterns. As late as the 70's and 80's there were people getting rich with strategies as stupid simple as buy the 10 day high and sell the 10 day low. Those people hate HFT, it took away their cash cow.

HFT is a sign of a healthy free market, better traders came in and offered to take your trades for far less money than the manual traders could, and took over; that's healthy competition, and they competed with each other driving the prices lower and lower until they hit the penny. Now they all fight over that penny to see who can be fastest because congress won't let them compete on price anymore (the sub penny rule) so they compete on speed instead.

Re: Bitcoin Exchange Had Too Many Bitcoins

#105

Post by rrdharan »

Twisell wrote: post #96
NelsonMinar wrote: post #40

It is hilarious watching people try to reinvent financial institutions without any knowledge of or respect for history.

Maybe I'm too "left wing", but if you ask me short selling, complex products and high frequency trading are among technological "improvements" that have led actual stock exchange to an ugly mess where biggest profits are made by "scamming" efficiently other users. Should regulators forbid (or tax more) some (or all) of this mechanisms markets will quickly resume to what they should be, places for people to invest mon…

Short selling is an incredibly important piece of any reasonable stock exchange. It also dates back to 1609 so it's not exactly a new technological innovation.

https://en.wikipedia.org/wiki/Short_(finance)

Re: Bitcoin Exchange Had Too Many Bitcoins

#106

Post by mabbo »

bduerst wrote: post #97
tpallarino wrote: post #77

Earlier quoted context omitted.

"Nothing stops me from just announcing that I've cloned a copy of the bitcoin blockchain for BCM" You can't just make random forks and have them be worth something. This is the culmination of years worth of debate and has a significant community following.

Aren't all the alt-coins examples of this happening? That anyone can fork a blockchain and give it their own rules? The market value of a coin isn't limited to a strict mathematical function of mining power or exchanges backing it. That's the point Matt is making.

Before Bitcoin Cash, all (afaik) other alt-coins weren't based on BTC's blockchain history. Ethereum, for example, raised development money by selling off the early coins on the chain.

Re: Bitcoin Exchange Had Too Many Bitcoins

#107

Post by bduerst »

mabbo wrote: post #106
bduerst wrote: post #97

Earlier quoted context omitted.

Aren't all the alt-coins examples of this happening? That anyone can fork a blockchain and give it their own rules? The market value of a coin isn't limited to a strict mathematical function of mining power or exchanges backing it. That's the point Matt is making.

Before Bitcoin Cash, all (afaik) other alt-coins weren't based on BTC's blockchain history. Ethereum, for example, raised development money by selling off the early coins on the chain.

What about Bitcoin Classic and Bitcoin XT?

Also isn't that splitting hairs about requiring the blockchain history? I don't think Matt said that.

Re: Bitcoin Exchange Had Too Many Bitcoins

#108

Post by sowbug »

matt_wulfeck wrote: post #88

> But BTC hasn't really lost any value since the spinoff, still trading at about $2,700. So just before the spinoff, if you had a bitcoin, you had a bitcoin worth about $2,700. Now, you have a BTC worth about $2,700, and also a BCH worth as much as $700. It's weird free money, if you owned bitcoins yesterday. Doesn't this throw up any red-flags to the btc/crypto apologist? This type of behavior is not how healthy mar…

If you're thinking of this event as a split, dividend, or spinoff, then it doesn't make sense. But it's more like a company cloning itself but adopting a different vision/mission, and awarding shares to all existing shareholders.

They could have started fresh like the zillion other cryptocurrencies that have started up since 2009, some of which appear to have real value. You wouldn't look askance at those, at least from a healthy-market perspective. The only difference here is they distributed initial currency fairly perfectly to the best possible audience of Bitcoin fanatics -- without a single spam email!

Cloning a company makes no sense in the physical world. But when it's a purely digital asset, it can be copied very cheaply.

Why isn't this zero-sum? Because it increases the TAM, rather than competing with its doppelganger in a saturated market. Maybe one ends up killing the other, but for now there's room for both.

Re: Bitcoin Exchange Had Too Many Bitcoins

#109

Post by Lazare »

Twisell wrote: post #96
NelsonMinar wrote: post #40

It is hilarious watching people try to reinvent financial institutions without any knowledge of or respect for history.

Maybe I'm too "left wing", but if you ask me short selling, complex products and high frequency trading are among technological "improvements" that have led actual stock exchange to an ugly mess where biggest profits are made by "scamming" efficiently other users. Should regulators forbid (or tax more) some (or all) of this mechanisms markets will quickly resume to what they should be, places for people to invest mon…

I wouldn't call your views "left wing", just a bit ignorant of market theory, history, and practice.

I mean, the Dutch Tulip Bubble was driven by derivatives (and in particular, a law change forced by the politically connected that retroactively changed some future contracts into option contracts), so if you're looking for some halcyon age prior to "complex products", bailouts, and people using lobbying to reap outsize profits, you're apparently thinking of the 1500s, if not earlier. :)

Similarly, short selling is integral to markets correctly performing their role of allocating investment. Saying "we should ban this thing required for A to work so we can get back to having A work" is...not a compelling argument.

Re: Bitcoin Exchange Had Too Many Bitcoins

#110

Post by Fej »

spectrum1234 wrote: post #90
matt_wulfeck wrote: post #88

> But BTC hasn't really lost any value since the spinoff, still trading at about $2,700. So just before the spinoff, if you had a bitcoin, you had a bitcoin worth about $2,700. Now, you have a BTC worth about $2,700, and also a BCH worth as much as $700. It's weird free money, if you owned bitcoins yesterday. Doesn't this throw up any red-flags to the btc/crypto apologist? This type of behavior is not how healthy mar…

The market expected BTC to fall by about as much as BCH increased. It did not. The market was wrong by about ~25%. At least in that moment.

That is a massive jump in a very short period of time.
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