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Bitcoin Exchange Had Too Many Bitcoins

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Re: Bitcoin Exchange Had Too Many Bitcoins

#111

Post by Twisell »

Lazare wrote: post #109
Twisell wrote: post #96

Earlier quoted context omitted.

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 outsi…

Ok so how on earth does the fact that derivatives permitted the tulip Bubble is an argument in favor of derivatives?

It might a question of point of view. Maybe you focus more on tulip frenzy financial opportunities while I focus more on people that have been burned by it...

And yeah if you want to trace it back to 1500 no problem with that, old does not always equal good. It like copyright laws written prior to widespread of computers. Is it right to let them unchanged because they are old while humankind could technically share knowledge and arts at a scale never envisioned just 10 years ago?

Re: Bitcoin Exchange Had Too Many Bitcoins

#112

Post by [deleted] »

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.

[deleted]

Re: Bitcoin Exchange Had Too Many Bitcoins

#113

Post by dnr »

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…

Regular stocks almost always go up after a split, due to price anchoring. Doesn't that throw up a red flag about the stock market? That's not how healthy markets work...

Seriously, though, there's all sorts of weird psychological stuff like that going on in all markets. This isn't really any stranger. (Plus, the $700 seems to be illusory. Hardly anyone (or no one) managed to sell them at that price.)

Re: Bitcoin Exchange Had Too Many Bitcoins

#114

Post by thisisit »

tpallarino wrote: post #48
panarky wrote: post #33

Earlier quoted context omitted.

Matt sums it up well in a footnote: Imagine if I announced tomorrow that I had created a new blockchain, called Bitcoin Matt, and that everyone who owned a BTC today will tomorrow own both a BTC and a BCM. Fine, great, you all own BCMs, congratulations. But also anyone short a BTC today will be short a BCM tomorrow, and will be forced to go buy in those BCM shorts. Even with no economic support for BCM -- with nobody…

Except your clone doesn't have miner support, community support, and get listed by major exchanges. I hate that people are acting like anyone can just go and make a fork for free money.

Oh, but they can. Here's what this whole drama has proven:

Any one can fork a coin. Then attach a significant market value to the given fork by promoting it heavily. Or if required they can do it after the fact - They can be on the buy-side and creating an ever increasing bid to pump the fork.

As for the support, you will have human greed play a big role. Everyone holding x coin gets 1 x coin + 1 fork coin with significant value which means it will create some market as well as intice miners to mine a coin with much smaller difficulty.

Re: Bitcoin Exchange Had Too Many Bitcoins

#115

Post by Buge »

bduerst wrote: post #107
mabbo wrote: post #106

Earlier quoted context omitted.

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.

If you don't share blockchain history, then you don't automatically get some of the new coin by holding some of the previous coin. So there are no issues with exchanges and shorts.

Also if you do share history, it is much much harder to start, because you start off with the previous difficulty which is very hard to mine on. If you start a new altcoin with a clean history, the difficulty starts off very low.

Bitcoin Classic and Bitcoin XT have not actually forked the blockchain. So they are not separate coins yet.

Re: Bitcoin Exchange Had Too Many Bitcoins

#116

Post by [deleted] »

bduerst wrote: post #107
mabbo wrote: post #106

Earlier quoted context omitted.

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.

[deleted]

Re: Bitcoin Exchange Had Too Many Bitcoins

#117

Post by goodplay »

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…

>they're very valuable if and only if you cannot use the protection [..]

I don't think that's entirely fair. They're also valuable to those who want to transfer money without ridiculous fees, excessive bureaucratic friction, and many mandatory middlemen.

What other system would allow you to instantly be able to accept payments without giving an exorbitant portion of your revenue?

Re: Bitcoin Exchange Had Too Many Bitcoins

#118

Post by Twisell »

rrdharan wrote: post #105
Twisell wrote: post #96

Earlier quoted context omitted.

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)

From the very article you reffered to me :

Short sellers were blamed for the Wall Street Crash of 1929.[15] Regulations governing short selling were implemented in the United States in 1929 and in 1940.[citation needed] Political fallout from the 1929 crash led Congress to enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule, and this was in effect until 3 July 2007 when it was removed by the Securities and Exchange Commission (SEC Release No. 34-55970).

So one is actually entitled to wonder if regulations are not needed. While the article fail to explain categorically in which way it is "incredibly important".

Re: Bitcoin Exchange Had Too Many Bitcoins

#120

Post by dclowd9901 »

panarky wrote: post #33
jstanley wrote: post #4

Great writeup. Almost anything written by Matt Levine is worth reading. This is a concise and accurate description of the fun that occurred with Bitfinex's handling of the BCH fork. At least, it's fun if you weren't involved. If you naively held BTC on Bitfinex and were hoping to receive an equal amount of BCH you probably didn't think it was fun. If you carefully read Bitfinex's statements and decided to take advant…

Matt sums it up well in a footnote: Imagine if I announced tomorrow that I had created a new blockchain, called Bitcoin Matt, and that everyone who owned a BTC today will tomorrow own both a BTC and a BCM. Fine, great, you all own BCMs, congratulations. But also anyone short a BTC today will be short a BCM tomorrow, and will be forced to go buy in those BCM shorts. Even with no economic support for BCM -- with nobody…

Couldn't you just set the value to 0 and allow a grace period for those who are long-ing or short-ing the currency to trade before "starting" it?
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