The Canadian Senate hearing on Bitcoin = Awesome!

[Adeptus]

Some of you might remember the New York hearings on Bitcoin several months back and how informative that was. I think this one, one-up's it by a few notches. Today (Oct 8, 2014), for almost 2 hours Andreas Antenopolous, a well known bitcoin spokesperson and tech security guru from the states, answered some pretty tough questions from Canadian Senators on Bitcoin. The hearing is primarily focused on government regulation & consumer protection - IMHO, Andreas absolutely nailed every single answer. It was amazing thing to witness!

Andreas is a clear thinker, very knowledgeable on bitcoin, and has the unique skill to provide articulate answers on the spot. Worth your time even if you only have a passing interest in Bitcoin & related crypto currencies.

With his testimony, Canada it seems, is on track to do what it normally does. That is: Wait & watch what the USA is going to do, contemplate it, fix the problems, then execute on it. With any luck (possibly a LOT of luck) Canada will be a regulatory free region for bitcoin for a few years to come.

[aaron]

Re: The Canadian Senate hearing on Bitcoin = Awesome!

Bitcoin was a nifty idea. RIP

[Adeptus]

Re: The Canadian Senate hearing on Bitcoin = Awesome!

Bitcoin was a nifty idea. RIP

Let's try to stick to the facts, shall we?

[aaron]

Bitcoin is headed to the 'ash heap'

It is interesting to have witnessed a bubble after having read iTulip for several years now. I did not "get it" when silver bubbled up and crashed. This one I witnessed and understood. The next one I will profit on!

Getty

The Swiss Franc might be the currency getting all the attention, but the real blood bath is in Bitcoin.
Remember how Bitcoin was supposed to change everything? And the dollar was dead? Boy, was that ever wrong. The value of Bitcoin is in absolute freefall – as the U.S. dollar strengthens and looks even more promising given the Fed’s stance on rates.
Talk about a bust. Today you can buy a Bitcoin for $196.546, says currency tracker Oanda. That’s means the digital currency – that was supposed to render the greenback obsolete – has lost two-thirds of its value in just six months. Ouch.

Chart source: Oanda

Some are suggesting that the precipitous decline in the currency is probably its death knell. “Remember Bitcoin,” asked widely respected money-manager Jeffrey Gundlach at DoubleLine Capital during his annual forecast with investors this week. “It’s pretty much on its way … to the ash heap of alternative currencies,” he told investors.
Maybe someone is already working on Bitcoin 2.0?

http://americasmarkets.usatoday.com/...-the-ash-heap/

[Adeptus]

Re: Bitcoin is headed to the 'ash heap'

If I had a satoshi for every time I read a news article that said bitcoin was dead...

The bigger question is do you understand all the reasons why bitcoin has gone down in price recently? If you can name 10 of the main ones, then I will conclude you understand bitcoin, not otherwise. If you understood ~10 reasons, you'd also understand why this is not over by a long shot.

[dcarrigg]

Re: Bitcoin is headed to the 'ash heap'

If I had a satoshi for every time I read a news article that said bitcoin was dead...

The bigger question is do you understand all the reasons why bitcoin has gone down in price recently? If you can name 10 of the main ones, then I will conclude you understand bitcoin, not otherwise. If you understood ~10 reasons, you'd also understand why this is not over by a long shot.

I'm no expert in any of this. But for what it's worth, I actually made some money off being a (very) early adopter of some of these online currencies, then forgetting I had some sitting in a wallet, and realizing they were worth bank. But I sold every last one I had in the parabolic curve back in 2013. Not perfectly timed, but well enough I turned $30 into about $2,100 by accident. Easy to think, "If only I had more," but really, I was never doing any sort of real transactions anyways, just playing with an emerging tech.

That said, it smells like a Minsky moment to me. I think the the bubble might go like this:

Step 1: Bitcoin's initial rise in popularity and limited supply leads to increased prices. (Spring 2013)

Step 2: Early adopters reap the benefits. They hold bitcoin and can now use it as an asset against which to borrow. (Summer 2013)

Step 3: Some of the more enterprising among them essentially do this to set up or rent servers to farm more bitcoins. (Fall 2013)

Step 4: They get additional server capacity on margin and essentially place a bet that it's worth margin/debt financing bitcoin mining operations assuming the price continues its upward trend. (Winter 2013)

Step 5: Scams. Price trends downward. (Winter 2014)

Step 6: Margin players leasing are forced out or sweating. (Spring 2014)

Step 7: Continued decline as speculators leave. (Summer 2014)

Step 8: Decline leads to value of bitcoin dropping below the electricity cost to mine the next 25. (Fall 2014)

Step 9: Bitcoin mining operations worldwide have to sell their bitcoin holdings to stay solvent as they begin to go belly-up. (we are here).

Step 10: Markets continue to get flooded, mining operations go out of business, confidence is shaken in all but the most die-hard players. (Spring 2015)

Step 11: Maybe some people see a bottom and they put a floor under this thing, but mining operations are dead and few will venture out on exactly the same scheme as the one that burned them last time. (Summer 2015?????)

Step 12: Prolonged price floor lower than before until some market change or innovation hits. (??????)

Is blockchain dead? No. Is Bitcoin dead? I doubt that too. Will it hit $1,000 any time soon? I seriously doubt that. Could it fall 90% still, even by this summer? I think so.

It's all speculation. Take it for what you will. It was fun when I was watching a friend mine and explore with any old surplus hardware back in 2011. Now it's a serious business with people buying super high-tech mining rigs on margin. And they have to either rent them or pay the electric bill for some serious hardware horsepower sucked up by GPUs. And once you're buying anything on margin to speculate, you're in bubble land. And bubble behavior is anything but rational.

[vt]

Re: Bitcoin is headed to the 'ash heap'

Ecuador becomes first country to adopt digital cash:

http://www.cnbc.com/id/102397137

This is not bitcoin; it's digital cash.

[don]

Re: Bitcoin is headed to the 'ash heap'

from the Far East - has the bit slipped?

Bitcoin investors claim $3b losses

Jasmine Siu

Monday, February 09, 2015

More than 30 bitcoin investors, who claim they lost up to HK$3 billion, will report to the police on Wednesday following the sudden disappearance of their investment platform's office and manager in December. The investors are among a group of Hong Kong and mainland individuals buying and exchanging the virtual currency bitcoins through Kryptogroup and its Hong Kong-registered transaction platform, mycoin.hk.

Under Kryptogroup's system, bitcoin investors would sign "head contracts" with the group to buy 90 bitcoins at the beginning and accumulate 0.64 bitcoins a day for 12 months.

Their gains would multiply when they signed subcontracts, usually with appealing bonuses.

However, as Kryptogroup allegedly began changing the conditions on December 7 without issuing proper notices, some investors found themselves suddenly unable to invest in new subcontracts under the previous terms or exchange their bitcoins into Hong Kong dollars in accordance with the international market rate.

While the mycoin.hk website remains operational, its phone line is directed to voicemail, and its Tsim Sha Tsui office is closed for "internal renovation," with the company name taken off the building's directory.

An investor surnamed Chan, 81, said she tried contacting the four sales staff who approached her in the first place but to no avail. Many investors were introduced to the investment platform through professionals such as legal executives and property and insurance agents.

An investor surnamed Lau alleged she was tricked by her legal executive to join the platform as she recalled telling him she needed time to think about it, yet her bitcoin accounts were set up in just hours, without her official approval.

Lawmaker Leung Yiu-chung, who is helping the investors, said they were lured by the professional backgrounds of the sales team.

Chan said she pooled her savings of about HK$3 million last June to buy bitcoins after her property agents told her she could earn enough money to buy two flats in Quarry Bay.

She earned HK$1.88 million from signing multiple subcontracts. But she realized in November that she was not going to get back the rest of her money. "I was greedy. We were all greedy," she said.

The investors now plan to report the alleged scam to the Wan Chai Police Station and approach the Hong Kong Monetary Authority to see if bitcoin operations are legal. Bitcoins are outside of the Monetary Authority's regulatory framework.

http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=154088&sid=43856110&con_type=1