Bitcoin Billionaires May Have Found a Way to Cash Out • Hacker News Board

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

#51

Post by jameskegel » Fri, Dec 22, 2017, 2:12 AM UTC

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.

Don't go there, I got rid of them through my own actions. This isn't some serendipitous disappearance, this is not a takeaway from my anecdote, and certainly not something that should be used to detract from the value of BTC.

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

#52

Post by grondilu » Fri, Dec 22, 2017, 2:14 AM UTC

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…

> what is believed to be the first commercial transaction.

I'm pretty sure Alpaca socks were sold before that famous pizza.

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

#53

Post by caf » Fri, Dec 22, 2017, 2:14 AM UTC

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.

This isn't coins that have turned to dust when you take them out of your wallet to spend - this is coins that have been lost overboard from a cruise ship in the middle of the ocean.

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

#54

Post by nske » Fri, Dec 22, 2017, 2:15 AM UTC

sp332 wrote: post #21

tempestn wrote: post #16

"In turn, financial investors get a secure, levered exposure to bitcoin that is not hostage to an unproven price-setting and without the expense of setting up a system to hold physical bitcoin." I realize that securely holding bitcoin at scale isn't completely trivial, but isn't part of the value of bitcoin supposed to be that these costs are not large? Especially the use of the term, "physical bitcoin," seems a bit…

Bitcoin security is partly based on public-key crypto. So anything you would do to secure a private key, you can use to secure your BTC from being stolen. Encrypt it with a passphrase, or store it on a thumb drive and lock it in a safe, or print it out on paper and put it in your wallet to be scanned (e.g. in QR code format) only when needed, or even store it in a tamper-proof hardware dongle.

Plus the programmability features of Bitcoin open up some other interesting possibilities -such as setup multi-signature wallets each in a different physical location.

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

#55

Post by klenwell » Fri, Dec 22, 2017, 2:16 AM UTC

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.

Don't forget the housing bubble. The first time it occurred to me that housing was a bubble was when I heard the economist for the National Association of Realtors say on the radio this time was different because of a paradigm shift. It reminded me of what I had heard during the dot-com bubble.

Then I saw this map and was convinced:

http://graphics8.nytimes.com/images/2005/06/15/business/arm3...

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

#56

Post by richardknop » Fri, Dec 22, 2017, 2:22 AM UTC

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.

Satoshi could have also mined later when difficulty was still not so bad and have other wallets people don't know about. So in theory Satoshi could have cashed out couple millions from his later wallets already and be living on some island in Caribbean.

It's definitely conceivable that he/she would not be so greedy as to touch the origin coins. It's enough to cash out couple millions from later wallets, buy some nice house near beach and live very comfortably.

Of course, I still think much more likely scenario is that Satoshi is dead or lost his/her private key.

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

#57

Post by billmalarky » Fri, Dec 22, 2017, 2:27 AM UTC

sillysaurus3 wrote: post #41

drtillberg wrote: post #40

Earlier quoted context omitted.

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.

For those wondering, a satoshi is 1/100,000,000 of a bitcoin.

At the current bitcoin price of $14591, a satoshi is worth $0.0001459190.

The maximimum amount of minable bitcoins is 21 million.

Current global gold supply is ~ $7 trillion

If bitcoin completely replaces gold, bitcoins will be trading for about $333,333.33, so a satoshi would be worth ~$0.0033.

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

#58

Post by nske » Fri, Dec 22, 2017, 2:29 AM UTC

neffy wrote: post #27

arisAlexis wrote: post #5

Earlier quoted context omitted.

Past bubbles didn't involve an economic paradigm shift

Introducing new forms of exchange isn´t an economic paradigm shift - it´s something that keeps coming around, viz.: http://www.jstor.org/stable/2338493?seq=1#page_scan_tab_cont... Now the Star Trek replicator.. that would be a paradigm shift.

It's not just a new form of exchange, it's a new way of storing and transfering ownership and value in an immutable way -even by the most powerful entities of the world. For the first time in history the separation of state and economy is something conceivable. That's not only an economic paradigm shift, when materialised (and I firmly believe it will, because it makes so much sense), it will affect practically every aspect of society.

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

#59

Post by totalZero » Fri, Dec 22, 2017, 2:32 AM UTC

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.

Gresham's Law technically applies to nonidentical versions of the same legal tender. That's not applicable to Bitcoin, because there is no material difference in the manufacture of individual Bitcoins, and nobody is forced to use or accept it.

But to think this through, maybe there would be three components to the dynamics of such a theory.

1) Bitcoin will continue to vanish as holders die, forget about their bitcoin, or lose access to their wallets.

2) Up until a certain point, this will cause the value of Bitcoin to increase, as reduction of the Bitcoin supply is deflationary. Those who recognize that this deflation is occurring will hang on to their Bitcoin, because of the expectation that their holdings will appreciate in value.

3) After a certain point, people will realize that much of the total Bitcoin capitalization has been lost/forgotten, and they will be in a hurry to use Bitcoin (sell it for goods) before their holdings become too large in proportion to the total non-lost capitalization still in circulation. Proportionally large holdings are worthless if they cannot be liquidated or used. (Similarly, imagine a currency with two holders, half each; neither is incentivized to accept large transactions because if one sells out, the other is left owning the entire currency by himself.)

I predict that people will realize that Bitcoin is incapable of robustly facilitating a global amount of transactions without centralization in banks/hubs/wallets/exchanges, thus defeating its stated advantage of immediacy and anonymity, far faster than individual coins fall out of use.

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

#60

Post by ringaroundthetx » Fri, Dec 22, 2017, 2:32 AM UTC

jjeaff wrote: post #49

modeless wrote: post #24

Earlier quoted context omitted.

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.

Genesis

Cumberland

Goldman’s late to the party trade desk

Heck, even Circle.com is doing otc trades

Most of these have a minimum bitcoin order size of 100 btc

Coinbase is a tool for the naive.