Bitcoins in 2014?

[websaway]

25 more bitcoins purchased :lol:

congratulations
Tell me something which despite all my reading I have been unable to establish
Let's say you paid $10600 for those 25 coins.
You have 25 coins.
Where is your 10600 dollars now ?

 

[topcat]

congratulations
Tell me something which despite all my reading I have been unable to establish
Let's say you paid $10600 for those 25 coins.
You have 25 coins.
Where is your 10600 dollars now ?

In someone else's pocket.

 

[websaway]

In someone else's pocket.

Does the exchange have to match buyer and seller
or does the exchange take sold coins and hold them for future buyers.

 

[Edwin]

Does the exchange have to match buyer and seller
or does the exchange take sold coins and hold them for future buyers.

Neither is quite accurate, though it's more a case of matching than holding.
https://en.bitcoin.it/wiki/Currency_exchange

Most exchanges require you to deposit your side of the transaction first (either Bitcoin or real currency, depending on which way you're trying to go).

It will then match up the other side of the transaction, take a fee, and process the "trade".

So if you want to change £100 into Bitcoin:
A) Deposit £100 at WeAreNotAShadyExchangeHonestGuv
B) Enter a trade order for £100 worth of Bitcoin
C) Receive Bitcoin from a seller who wants to buy pounds (and who has deposited their Bitcoin)
D) Party like it's 1999
E) (Optional) withdraw your Bitcoin from WeAreNotAShadyExchangeHonestGuv into your Bitcoin wallet

 

[Retired_Member42]

Does the exchange have to match buyer and seller
or does the exchange take sold coins and hold them for future buyers.

Pretty much whatever trading method you can think of, somebody will offer it. Take MtGox (probably the most infamous) on that platform, you'd place a buy order or sell order meaning you'd load funds and set a buy order of X coins at a certain price. If it hit that price and there was a matching user with a sell order at that price, you'd buy them automatically - and vice versa.

But there are lots more options than that. You can also set a % loss / % gain and automatically sell based on those figures. So if you held X coins on the exchange, if it hit a 5% loss, you could automatically sell and get out, same with the gains.

Some exchanges also store the coins in encrypted "wallets" for trades.

The recent hacks and exchanges losing money is where people had left coins they've bought on the exchange instead of withdrawing to their "wallet". It's advisable to do this as soon as you've made a transaction and got your coins. Most people use an online wallet such as Blockchain to store coins they've bought away from the exchanges.

 

[Edwin]

Having said that, there are so many "exchanges" flooding into Bitcoin that other business models are springing up. The above is just the purest version, the one that the "official" wiki describes as its example model.

 

[Edwin]

BTW, if you think Bitcoin exchanges are confusing, spend a few minutes reading up about Bitcoin ATM and your mind will be blown! Basically they seem to be black boxes for shovelling real currencies in and getting "Bitcoin from somewhere" in return.

 

[topcat]

Having said that, there are so many "exchanges" flooding into Bitcoin that other business models are springing up. The above is just the purest version, the one that the "official" wiki describes as its example model.

You can even short Bitcoin, seems like something you should do Edwin!

 

[Retired_Member42]

You can even short Bitcoin, seems like something you should do Edwin!

I agree. If you're that sure it's going one way, put your money where your mouth is

 

[Edwin]

You can even short Bitcoin, seems like something you should do Edwin!

You can (and many people do) lose your shirt on shorting something extremely volatile even if it ultimately goes to zero. The margin calls along the way will see to that. There's no way (that I know of) to short something long term without having to ride up the short/medium term ups and downs, which in the case of Bitcoin will be wild.

But I am shorting them the best safe way I can by not buying any.

 

[Sound]

Edwin its very easy to for everyone to see what you are doing in this thread.

 

[disruptive]

Bitcoins are the aultimate in speculation. I would'nt put much store in it.

 

[websaway]

Neither is quite accurate, though it's more a case of matching than holding.
https://en.bitcoin.it/wiki/Currency_exchange

Most exchanges require you to deposit your side of the transaction first (either Bitcoin or real currency, depending on which way you're trying to go).

It will then match up the other side of the transaction, take a fee, and process the "trade".

So if you want to change £100 into Bitcoin:
A) Deposit £100 at WeAreNotAShadyExchangeHonestGuv
B) Enter a trade order for £100 worth of Bitcoin
C) Receive Bitcoin from a seller who wants to buy pounds (and who has deposited their Bitcoin)
D) Party like it's 1999
E) (Optional) withdraw your Bitcoin from WeAreNotAShadyExchangeHonestGuv into your Bitcoin wallet

So it's a matched buyer seller situation.
The exchange itself does not hold coins or cash.
But nobody knows who is selling.

 

[Retired_Member42]

You can even short Bitcoin, seems like something you should do Edwin!

So it's a matched buyer seller situation.
The exchange itself does not hold coins or cash.
But nobody knows who is selling.

The exchanges can and do hold coins. If you placed a buy order, the coins you've bought would stay on the exchange until you withdrawn them to your bitcoin wallet.

 

[websaway]

The exchanges can and do hold coins. If you placed a buy order, the coins you've bought would stay on the exchange until you withdrawn them to your bitcoin wallet.

I am investigating more the selling than buying and wondering where the money comes from for the seller if there are no buyers.
There are buyers at the moment below 450 dollars. I expect the reason being that one exchange owner predicts a single coin will be worth between half and one million dollars in a decade. Who would not consider having a punt at that, it's better than the lottery where you probably lose 450 dollars every year.
Where I am though is that the early investors could now be selling globally in small batches to cash in on their gains and, when they have taken their money out the realisation will dawn and there will be no buyers to allow investors out. That may not be for a while because obviously a catchment of 7 billion people could take a long time to exhaust, so plenty of time to cash in.

Or maybe I'm just cynical.

 

[Retired_Member42]

I am investigating more the selling than buying and wondering where the money comes from for the seller if there are no buyers.
There are buyers at the moment below 450 dollars. I expect the reason being that one exchange owner predicts a single coin will be worth between half and one million dollars in a decade. Who would not consider having a punt at that, it's better than the lottery where you probably lose 450 dollars every year.
Where I am though is that the early investors could now be selling globally in small batches to cash in on their gains and, when they have taken their money out the realisation will dawn and there will be no buyers to allow investors out. That may not be for a while because obviously a catchment of 7 billion people could take a long time to exhaust, so plenty of time to cash in.

Or maybe I'm just cynical.

I guess it depends how BTC takes off as a currency. Sure the trading now is primarily from an investment standpoint but as people use it to actually buy/sell things, people are going to want to convert their coins to cash and vice versa. There can be no market without the currency being active which it is. Lots of things can be bought with BTC and I can only see this increasing. People seem to be looking at it solely from the trading standpoint and not as a currency to actually use for a purpose - which it is.

The BTC price is ultimately determined by what people are willing to buy it for, if nobody is buying, sellers will lower the price until there is a buyer. There will always be a buyer so long as BTC remains a usable currency.

 

[Edwin]

This article explains where most of the demand is coming from on the buy side: China
http://www.theguardian.com/technolo...-exchange-closes-after-central-bank-clampdown

 

[Retired_Member42]

This article explains where most of the demand is coming from on the buy side: China
http://www.theguardian.com/technolo...-exchange-closes-after-central-bank-clampdown

There is always some indicator for a +10/-10% drop. This week it's the central bank clampdown, next week it will be something else.

Day to day trading is increasing both buying/selling overall -

https://blockchain.info/charts/n-tr...ageString=1&show_header=true&scale=0&address=

Growth like this on an ultimately (within reason) finite amount of stock.

The number of unique BTC addresses is also increasing each day too -

https://blockchain.info/charts/n-unique-addresses

Whether you like it or not, the market has interest in this currency and will continue to do so despite negative bad press.

 

[Edwin]

There is always some indicator for a +10/-10% drop. This week it's the central bank clampdown, next week it will be something else.

Day to day trading is increasing both buying/selling overall -

https://blockchain.info/charts/n-tr...ageString=1&show_header=true&scale=0&address=

Growth like this on an ultimately (within reason) finite amount of stock.

The number of unique BTC addresses is also increasing each day too -

https://blockchain.info/charts/n-unique-addresses

Whether you like it or not, the market has interest in this currency and will continue to do so despite negative bad press.

It's very interesting to watch http://fiatleak.com/ for a few minutes. It's super obvious that most of the Bitcoin are being bought by China.

For example, I've run it for just over 4 minutes and the breakdown I am seeing:
US$: 6.4 Bitcoin
CAD: 0.4 Bitcoin
CNY: 1,163.4 Bitcoin

That's the actual trail left by Bitcoin transactions in real time (and nothing whatsoever to do with whether I happen to like it or not)

NOTE: You will always see different numbers, because the counter starts for you when you load up the http://fiatleak.com/ site.

 

[Retired_Member42]

It's very interesting to watch http://fiatleak.com/ for a few minutes. It's super obvious that most of the Bitcoin are being bought by China.

For example, I've run it for just over 4 minutes and the breakdown I am seeing:
US$: 6.4 Bitcoin
CAD: 0.4 Bitcoin
CNY: 1,163.4 Bitcoin

That's the actual trail left by Bitcoin transactions in real time (and nothing whatsoever to do with whether I happen to like it or not)

NOTE: You will always see different numbers, because the counter starts for you when you load up the http://fiatleak.com/ site.

Can I ask why you're so interested in this thread and BTC in general if you're sure it's a doomed project both from an investment and currency standpoint? What's the point in even giving it a second thought?