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Sharing of ideas, tips, and strategies for increasing your Bitcoin trading profits
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I've been in since May 2017, lessons learned, and some real talk.

I've only been in the crypto game since mid 2017. I remember back then when I was assessing the market, BTC was below $1k a few months earlier, LTC was around $4 that January and by the time I finally got in BTC had more than doubled to around $2,500 and LTC was $30. I thought ETH and XRP (and everything else) were just shitcoins because I didn't know shit and I just listened to the herd (Back then the argument was "Bitcoin is digital gold and LTC is digital silver and everything else is a scam.") Now, I'm pretty invested in several coins, because this market is anything but rational.
Screw off if you think otherwise. Try to think logically in this market, and you're going to get smacked in the face.
After exchanging my first fiat for crypto, in the next couple of months the market "crashed" and I was fearful. By crashed, I mean BTC went from $2,800 to $1,800. I just decided to let my cryptos ride. I pretended that money was gone, but I'd check prices every day for whatever damn reason.
I wasn't even putting that much in. Hell, I would spend more eating out and going to the bars every weekend with friends or work colleagues than I was dropping into BTC. It was pretty common that I'd drop $100 a night on sushi, beers, and Sake Bombs. But, when money you could get back loses value, it makes you feel dumb for putting money in. Logic is out the window when I can't get that $100 back from my sushi and drink purchases, but my crypto dropped 30% that week, so I was dumb for investing in crypto but not for my $500+ per month on eating out and drinking with friends.
Several weeks later, I was back to even on my crypto investments. Well shit, that was fast. Then I was suddenly up 25%. "Fuck it, I'm just putting money in. I'm not missing out."
By the the winter of 2017, I was up over 10x with my crypto speculation. My initial LTC went from $30 to over $350; my BTC went from $2,500 to $20,000. I also just threw $300-$1,000 here and there on random sub-200 market cap coins only to see them 6x in a few weeks.
I remember thinking how stupid I was for not buying during that dip down to $1,800, but how good of an investor I was because my gains. What a fucking dope I was.
I was sitting there looking at my account on December 10th, 2017. I was about to sell because I could have paid off my car and 50% of my student loans. I wasn't even using my car because I was in another country traveling.
"Nah, I can't sell. This is just the beginning; let's wait until I can pay off all my student loans" my delusional self said.
I never cashed out. I remember sitting there with a dude who had his GDAX account open after BTC "crashed" from $20k to $13k two weeks later. We just got back from surfing.
He was still sitting at $250,000 in his account and was nervous as shit. "What should I do?" he asked rhetorically. Then immediately answered himself, "It will rebound," he said, "it always does." This guy had been through the MTGOX hack and gave me plenty of advice while we surfed.
And I listened as if he was prophetic.
What a fucking dope I was.
When hopium is in the air, we all get irrational.
I still wonder about that guy and his cryptos. He went north back home for the Christmas holiday, while I headed south for more traveling, and I've never seen him again.
February 2018 was both euphoric and scary as shit. "Holy shit! BTC is under $10k I never thought it would be down here again. But it could keep dropping. But it was just $20k a month ago."
I was skeptical that it wouldn't keep dropping so I waited. Then, I didn't want to miss out. BTC was making a run from $6,500 up to testing $10k. "If it breaks $10k, I'm getting back in."
A short time later, it did break $10k, only to be hit a wall at $12k, then again...then, the inevitable crash to $6,200 happened where it fluctuated in August - November of 2018 up until, what, November 10th-ish when BCH shitfork shat out and then BTC-Shit-Vision and BTC-LMNOP started paying miners to mine their forked fork of BTC and everyone shat themselves as the market tanked yet again.
That was it for me. That was the day I stopped caring. I remember thinking how stupid I was to invest so much time in this.
You can't predict this shit.
I didn't regret investing in crypto, I regret all the time spent looking at my portfolio, trying to time the market, pretending I was some guru in my head because I threw $300 at POE when it was less than a penny and weeks later it was selling for $0.21 and could buy another trip to whatever country I wanted.
Sure, you can use TA to see what support or resistance is there, but it's still a 50-50 chance whether Fake Satoshi is going to spoof trade or some rando is going to drop three 7,000 BTC market buys to break through resistance.
So, what did I learn through this whole experience?
Other than what I've already stated (You have no way to predict whether it's breaking through resistance or crashing through support).
I just remember the main thing that has persisted this last two years. "I wish I could go back in time to when BTC was around $3,000 and LTC was $30."
When BTC dropped below, $4k that was heaven. I never thought it would get back to when I was buying when I first got into the market in 2017.
So, I bought, and I bought hard.
This time around, I have strong buy strategies and sell strategies.
They are set; no question.
For me, I'm not selling until two weeks before the LTC halving in August.
Even then, I'm only selling my LTC for BTC. Then I'll sell 25% of my BTC for fiat 2 weeks before the BTC halving in 2020.
I will never have less than my preferred number of BTC's, ETH's, LTC's and a few others.
Don't follow my advice here, I'm just saying I know what I want and what my strategy is.
You need to have a strategy to buy and strategy to sell. Be reasonable. I previously had a "strategy." It was once I could pay off my student loans with all of my crypto gains minus taxes, I would sell. Yeah, well, looking back if I would have just sold when could pay off my car and 50% of my student loans, I would have been able to invest even more when BTC was down in $3,xxx range and LTC was $22-$35, etc from December 2018 through March 2019.
DCAing is the way to go. No question. You don't need to do TA, you don't need to check your portfolio, you don't need to do shit but either 1) setup an automatic buy order with your exchange or 2) login and buy whatever you want.
You have your buy strategy (DCA at x interval) and you have your sell strategy.
Figure it out. Don't pretend you're gonna time the market. Don't pretend you're some guru.
Those people, like me, learn the hard way.
No TA, no waiting for google searches of BTC to increase, no waiting for BAKKT, no waiting for Faktoshi to shut the fuck up.
Before November 2018, I would only throw money when BTC was on a run. "Oh, we're finally on the way up. It's time to buy!" Like when it went from $2,800 up to $6,200 in the summer 2017, then from $10k to $20k in late 2017. Or when it went from $6,200 back up to $10,000 then to $11,900 in February of 2018.
I would think I could time the market. What a pathetic loser, right?
Some people grow up in this market like the cable version of themselves only to transition to the directv version. Listen to us dopes that have been there and done that.
Learn from our mistakes, but also don't think that we have all the damn answers.
Anyone that comes in here acting like the 2nd coming of Craig Wright's dumpster twin, you can be rest assured they are as delusional as Justin Sun. The problem is, even if they are delusional, this market is anything but rational, so they might just be proven right enough for you to think you should follow their advice.
This shit is crazy. Stop acting like you've got it figured out.
Nobody does, but it feels good to have confidence in this random speculation, right?
I'm here to tell you this. My life has drastically improved since November 2018 when I started viewing Crypto investments like a bill. Every two weeks, I would send money from my paycheck to my exchange. Then, I'd buy a certain amount every single week after it had cleared.
That money, is all but "gone." It was a "bill" I paid.
When the market is going down, I send more fiat and I buy more crypto. When it is rising, I still buy, but not as much; I pull back. You may say I'm trying to catch a falling knife. I just learned that the way I was investing before was bad practice. I'd rather people think I'm trying to catch a falling knife than to feel that FOMO and only buy when the market is up.
Right now for example, I'm not buying this week. Not because I think I know what hell is going to happen, but because it's my strategy to not chase a run, and to spend more when it drops.
I'll wait until next weekend and see what the market is doing.
What happens in between now and next weekend, I don't give a shit.
Could I miss out on another run? Sure, but I don't give a shit. Maybe it's because I'm 2 years in and I've seen this shit before, or maybe it's because I've been buying BTC when it was around $3,000 both in 2017 and just about a month ago, so I feel fortunate to have gotten another chance at BTC at $3,xxx.
I also learned my lesson that fakeouts happen. I've been burned enough to not give a shit about being BTC going from $3500 to $5,200 in the last, what, 5 weeks?
Been here, done it, don't give a shit.
I don't know if this helps anyone, but seeing the last two years of this shit, I don't care about some random 30% pump. I also don't care that BCH is up 86%, or ADA is up whatever it is. I'm not into them, but if you made gains, I'm happy for you.
I'm serious too.
Maybe you're new to this game, or maybe you've only been in since $20k. If so, you're still here, and there are plenty others like you. I'm not a BTC maximalist, I don't think LTC is the truth, I don't think only ETH is the dApp platform.
I don't know shit. I'm just some speculator that is speculating on some of this sit.
There are also plenty of people that were like me in 2017 that are waiting in the wings, only to buy when the market is on the rise. There are plenty more that buy when it's rising then set stop losses that whales will fish for only to wreck the market in a day then to see a bounce back even stronger while those people FOMO back in.
Also, the turd version of satoshi could start shitting in public this week and the media could write about how Satoshi is literally shitting on a physical Bitcoin as we speak and some shitcoin creator then posts a Twitter video that goes viral about how the hashrate and energy consumption of the satoshi shit-pile is not sustainable and then some whale market sells down to below the new TA shit-support level of $4,400 and then all the dopes with stop losses in that range get shit fucked only to see a spoof limit order set at $4,400 of 10,000 BTC and everyone's dick shrinks into their stomach as they hurry to Tether as BTC drops back down to $3,500 before whale #2 shit fucks your emotions with a $1,500 green dildo in a 15 minute span sees the "sell wall" disappear which starts the next FOMO run on up to $6,200 a few weeks later while TAers say "We broke out on great volume" then other TAers agree and the self-fulling prophecy starts another run only to get hit with more whale fuckers.
You can't predict this shit. Give it up.
Market goes up, market goes down, can't explain that.
With the LTC halving in August, the BTC halving in May 2020, I think we are about to get into the 2017 euphoria again though. We are getting closeTM to the point you could just thrown money at any coin and get 10x your investment.
What does "close" mean? I have no idea. Eff anyone that thinks they know. Someone could predict it is this week, next month, or after this current fakeout bull run, or in December, or next Spring, and someone will be right.
The only advice I have is to do your best to not get emotional about your money or crypto. It's going to do the exact opposite of what you think it will. Even when you try to do the opposite, crypto will shit-fuck you in your sleep.
If you believe that the sentiment is changing, and let's be real, we are in speculation phase and this is all based on hopium and belief, then DCA at certain intervals.
This isn't some cult. It's all based on sentiment. If you think people are starting to get interested, then that is a sign speculation is about to be in our favor.
If you are putting money in that needs to be rent money, do yourself a favor and just walk into a casino and put it all on red. If you win, then put your winnings in crypto. If you lose, I saved you the anguish of checking your portfolio every hour only wish you would have done the opposite of what you did.
You're welcome...
Or, do the opposite. Check the market every hour for the next 12 months only to look back and realize that you kept buying on the way up, got scared and sold on the way down, and then FUD yourself in your sleep because of your stop loss sells were triggered while whales were fishing for fear.
So, there are all of my shit thoughts. What are yours?
What are your strategies?
There are plenty of people that have been in longer than me, what are your strategies?
Are we heading for a the next bull run? Is the bottom in? Do we still have a massive, short-lived capitulation event coming?
Let's chat.
TL;DR: You can't predict this shit, just DCA, live your life, get a buy strategy, choose a sell point, make this shit as simple as possible. If you try to complicate things by predicting the next run, the next drop, the next consolidation, then you're probably going to be wrong like 99% of people. And don't be that guy that ends up $250,000 in your account in the next bull run only to see it drop down $67,000 literally a week later.
submitted by KnownCoder to CryptoCurrency [link] [comments]

My protest at MtGox Offices - 5 to 7th February 2014, Tokyo, Japan.

Day 1 – Wednesday 5 February
After repeated and failed attempts to withdraw my BTC from MtGox, I decided to jump on a plane and pay them a visit in Tokyo.
After a 16 hr. flight from Australia I went straight to their offices, arriving at around 4pm. The receptionist in the lobby told me there was no one available to meet me and I should arrange an appointment.
I refused to leave and after about 15 mins or so, the receptionist handed me the telephone to speak with a member of MtGox support. The support person referred me to their website. After a ‘lively’ conversation I told him I wasn’t gong anywhere, I didn’t travel 16 hrs to read a website I could have read at home. I would wait for Mark Karpeles to come down.
Same thing happened 15 mins later, another call, more non-sense about technical issues, and a suggestion the authorities might have to be called. I told him great, I could lodge an official complaint against MtGox while they were here.
After some hours had passed, the building cleared out and the receptionists left for the night. I was alone in the lobby. Then at approximately 8 pm, I was suddenly greeted by Gonzague Gay-Bouchery, Manager Business Development, and Mark Karpeles right hand man.
I recognized him from some news articles. I thought great, and straight away put some burning questions to him:
Q1. What is causing the withdrawal delays?
• Well, because Gox is the best known of all the exchanges, we have been under the regulatory spotlight.
• This has created problems with government agencies, and also with our banking partners.
• There are also some ongoing investigations, which we cannot talk about.
Q.2 Sure, and this would explain the FIAT delays, but what about the BTC delays; you can’t blame that on anyone else.
• The BTC withdrawal issue is a technical one, and one that has previously affected the MtGox system, our engineers are working hard to resolve the problem.
• As of now, some BTC withdrawals were going through
• For those transactions that remain broken for a week, the balance of BTC will be returned to a customers MtGox account.
Q3. A great way to buy time for a liquidity problem?
• No, it’s a technical issue.
Q4. So why are so many of the input addresses feeding into transactions in the queue coming up empty?
• This is a complex technical issue to which neither of us know the answer
Q5. Try to explain it to me.
• Its technical
Q6. There are over 40,000 BTC in the withdrawal queue, isn’t that the electronic equivalent of a bank run?
• The 40,000 figure is not correct, and the goxreport isn’t accurate.
Q.7 But I actually obtained this data from Delerium’s website who is a gox employee / contractor / associate.
• I will have to look into that.
Q8. Why doesn’t Gox prove they are solvent by transferring a large quantity of BTC between two internal wallets like Mark previously did. Then we can all check it out on the blockchain and be reassured?
• The overwhelming majority of BTC are held in cold storage. Logistically and legally in would be difficult to replicate the transfer “trick” Mark previously employed at Gox to prove their solvency.
Q9. Try me, how hard is it, what exactly is involved?
• Obviously I can’t go into too much detail for security reasons, but it would involve physically obtaining them from 6 or more locations.
Q10. Well, why don’t u do it, isn’t this a critical situation?
• It’s not that straight foreword.
Q11. You do realize no-one believes the technical excuses for the delay in BTC?
• Mt Gox has the coins, it is a technical issue and we need people to be patient.
Q12. What is you view on the poll recently published by Coindesk on Mt Gox?
• Coindesk have a vendetta against MtGox.
Q13. But they one of the most trusted sources of news in the Bitcoin community.
• Some people have it out for Mt Gox.
Q14. How do you explain the vastly different prices that appear on Gox compared with other exchanges? It recently went to 25%.
• Some traders were responsible for the manufacturing the differential in an attempt to financially benefit from arbitrage.
Q15. But people exploiting the arbitrage opportunity would actually reduce the price differential, not widen it.
[I can’t recall receiving a response to this particular point]
Q16. Is MtGox manipulating the price by directly purchasing Bitcoins on their own exchange?
• No, MtGox is not permitted to do this.
[coincidently, almost immediately after this meeting the price on MtGox tanked]
Q17. People have a lot of money tied up in your exchange, and they don’t believe your excuses. All the evidence suggests something more serious going on at gox. You are playing with people’s lives here.
• All the coins are safe; this is merely a technical issue.
When I left the office that night, I wanted to believe that everything was indeed fine, and these were indeed some temporary technical glitches, but this view was somewhat influenced by the fact I still have BTC on their exchange. All the evidence appears to suggest something more serious.
For the record, I gave Gonzague an advance copy of this transcript and offered him the opportunity to have any of his answers amended if he felt I misrepresented him in any way. A member of his support team replied by stating he did not have any comment on my version of the conversation.
Day 2 – Thursday 6 February 2014
I arrived at MtGox early, approximately 8am, and stood outside with a sign reading “MtGox, where has my money gone”. I got some curious looks, and a lot of questions from passersby about my protest.
Then at approximately 9.20 am, Mark Karpeles himself came along carrying a large, and very fancy coffee in his hand that could have passed as a dessert. I immediately confronted him and told him we needed a chat. So he stopped to hear me out.
I told him he was playing with people’s lives, and some people stood to lose their entire savings. Like Gonzague told me the night before, he mentioned technical issues, and that he would look into my case.
Then 20mins later at around 9.40am Gonzague arrived. “Good news” he said, we have sorted out your account, go and check it online. After I got Wi-Fi connection back the hotel I discovered my failed BTC withdrawal transactions had been cancelled and all my BTC were put back in the one place in the world I didn’t want them: The MtGox website. Back to joining the queue of 40,000 other BTCs.
I think this was some sort of ironic joke. I quickly tried to withdraw them again; but surprise, surprise, stuck again.
By late evening, the majority of the other workers in the MtGox building had heard of my protest and were bringing me out sandwiches and beer, and inviting me to lunch. As it turns out, Japan is probably one of the better countries in the world to protest. Everyone is so friendly; I can see why the Goxies choose to set up shop here.
As the evening drew on, it looked like I would have do a late one to catch Mark again on the way out. However, at around 7.30pm, I was approached by a law professor from a local university who has written widely on bitcoin legal issues. He was on his way to a bitcoin “meet-up” and asked me to come along to tell my story to the other bitcoin enthusiasts. I was reluctant to leave the protest but was interested in what other Tokyo resident’s thought of MtGox.
When I arrived, everyone was very interested in hearing my story. There was a general consensus amongst the participants that MtGox was finished as an exchange. They acknowledged that MtGox had played an important role in propelling Bitcoin to what it is today, but its decline and ultimate closure was inevitable.
However, there was some divergent views on the reason for this, most people, including myself are of the view that bad business decisions and incompetence were primarily to blame, while others held the view that government restriction, and secret investigations were hampering MtGox’s ability to function efficiently. Who knows what the truth is, maybe it is a bit of both.
At the end of the day 2, there was a very worrying development, the data feed for the goxreport, and delerium’s MtGox transaction failure website were cut. Perhaps a final act of MtGox’s desperation to hide the truth.
Day 3 – Friday 7 February
I started my protest a little later today in the knowledge that most of the Goxies don’t start work until after 9am. Then there was an unexpected twist; another person showed up looking for Mark. He was an emissary of an early adopter and well known member of the bitcoin community, and was there to collect an eye watering amount of money.
My emotions were mixed on seeing this person; on one hand I was glad to see another protester to fight the good cause. On the other hand, my heart sank in the knowledge that if Mark isn’t paying off his old friends in the bitcoin community then what chance do small fry like me have?
As the emissary and I chatted, Mark Karpeles arrived, and we both confronted him, the conversation went on for some time and most of it conducted in French which I had trouble understanding. However I did mange to record the whole thing on video.
The episode only came to a halt when Gonzague appeared in the lobby and rescued Mark. Very soon after this point, MtGox released a statement announcing that all BTC withdrawals were suspended.
In conclusion, I think i just witnessed MtGox die today. I didn’t get my bitcoin, but glad I came and tried.
submitted by CoinSearcher to Bitcoin [link] [comments]

Trying to get 40,000 BTC out of the MtGOX exchange... and failing.

Day 1 – Wednesday 5 February
After repeated and failed attempts to withdraw my BTC from MtGox, I decided to jump on a plane and pay them a visit in Tokyo.
After a 16 hr. flight from Australia I went straight to their offices, arriving at around 4pm. The receptionist in the lobby told me there was no one available to meet me and I should arrange an appointment.
I refused to leave and after about 15 mins or so, the receptionist handed me the telephone to speak with a member of MtGox support. The support person referred me to their website. After a ‘lively’ conversation I told him I wasn’t gong anywhere, I didn’t travel 16 hrs to read a website I could have read at home. I would wait for Mark Karpeles to come down.
Same thing happened 15 mins later, another call, more non-sense about technical issues, and a suggestion the authorities might have to be called. I told him great, I could lodge an official complaint against MtGox while they were here.
After some hours had passed, the building cleared out and the receptionists left for the night. I was alone in the lobby. Then at approximately 8 pm, I was suddenly greeted by Gonzague Gay-Bouchery, Manager Business Development, and Mark Karpeles right hand man.
I recognized him from some news articles. I thought great, and straight away put some burning questions to him:
Q1. What is causing the withdrawal delays?
• Well, because Gox is the best known of all the exchanges, we have been under the regulatory spotlight.
• This has created problems with government agencies, and also with our banking partners.
• There are also some ongoing investigations, which we cannot talk about.
Q.2 Sure, and this would explain the FIAT delays, but what about the BTC delays; you can’t blame that on anyone else.
• The BTC withdrawal issue is a technical one, and one that has previously affected the MtGox system, our engineers are working hard to resolve the problem.
• As of now, some BTC withdrawals were going through
• For those transactions that remain broken for a week, the balance of BTC will be returned to a customers MtGox account.
Q3. A great way to buy time for a liquidity problem?
• No, it’s a technical issue.
Q4. So why are so many of the input addresses feeding into transactions in the queue coming up empty?
• This is a complex technical issue to which neither of us know the answer
Q5. Try to explain it to me.
• Its technical
Q6. There are over 40,000 BTC in the withdrawal queue, isn’t that the electronic equivalent of a bank run?
• The 40,000 figure is not correct, and the goxreport isn’t accurate.
Q.7 But I actually obtained this data from Delerium’s website who is a gox employee / contractor / associate.
• I will have to look into that.
Q8. Why doesn’t Gox prove they are solvent by transferring a large quantity of BTC between two internal wallets like Mark previously did. Then we can all check it out on the blockchain and be reassured?
• The overwhelming majority of BTC are held in cold storage. Logistically and legally in would be difficult to replicate the transfer “trick” Mark previously employed at Gox to prove their solvency.
Q9. Try me, how hard is it, what exactly is involved?
• Obviously I can’t go into too much detail for security reasons, but it would involve physically obtaining them from 6 or more locations.
Q10. Well, why don’t u do it, isn’t this a critical situation?
• It’s not that straight foreword.
Q11. You do realize no-one believes the technical excuses for the delay in BTC?
• Mt Gox has the coins, it is a technical issue and we need people to be patient.
Q12. What is you view on the poll recently published by Coindesk on Mt Gox?
• Coindesk have a vendetta against MtGox.
Q13. But they one of the most trusted sources of news in the Bitcoin community.
• Some people have it out for Mt Gox.
Q14. How do you explain the vastly different prices that appear on Gox compared with other exchanges? It recently went to 25%.
• Some traders were responsible for the manufacturing the differential in an attempt to financially benefit from arbitrage.
Q15. But people exploiting the arbitrage opportunity would actually reduce the price differential, not widen it.
[I can’t recall receiving a response to this particular point]
Q16. Is MtGox manipulating the price by directly purchasing Bitcoins on their own exchange?
• No, MtGox is not permitted to do this.
[coincidently, almost immediately after this meeting the price on MtGox tanked]
Q17. People have a lot of money tied up in your exchange, and they don’t believe your excuses. All the evidence suggests something more serious going on at gox. You are playing with people’s lives here.
• All the coins are safe; this is merely a technical issue.
When I left the office that night, I wanted to believe that everything was indeed fine, and these were indeed some temporary technical glitches, but this view was somewhat influenced by the fact I still have BTC on their exchange. All the evidence appears to suggest something more serious.
For the record, I gave Gonzague an advance copy of this transcript and offered him the opportunity to have any of his answers amended if he felt I misrepresented him in any way. A member of his support team replied by stating he did not have any comment on my version of the conversation.
Day 2 – Thursday 6 February 2014
I arrived at MtGox early, approximately 8am, and stood outside with a sign reading “MtGox, where has my money gone”. I got some curious looks, and a lot of questions from passersby about my protest.
Then at approximately 9.20 am, Mark Karpeles himself came along carrying a large, and very fancy coffee in his hand that could have passed as a dessert. I immediately confronted him and told him we needed a chat. So he stopped to hear me out.
I told him he was playing with people’s lives, and some people stood to lose their entire savings. Like Gonzague told me the night before, he mentioned technical issues, and that he would look into my case.
Then 20mins later at around 9.40am Gonzague arrived. “Good news” he said, we have sorted out your account, go and check it online. After I got Wi-Fi connection back the hotel I discovered my failed BTC withdrawal transactions had been cancelled and all my BTC were put back in the one place in the world I didn’t want them: The MtGox website. Back to joining the queue of 40,000 other BTCs.
I think this was some sort of ironic joke. I quickly tried to withdraw them again; but surprise, surprise, stuck again.
By late evening, the majority of the other workers in the MtGox building had heard of my protest and were bringing me out sandwiches and beer, and inviting me to lunch. As it turns out, Japan is probably one of the better countries in the world to protest. Everyone is so friendly; I can see why the Goxies choose to set up shop here.
As the evening drew on, it looked like I would have do a late one to catch Mark again on the way out. However, at around 7.30pm, I was approached by a law professor from a local university who has written widely on bitcoin legal issues. He was on his way to a bitcoin “meet-up” and asked me to come along to tell my story to the other bitcoin enthusiasts. I was reluctant to leave the protest but was interested in what other Tokyo resident’s thought of MtGox.
When I arrived, everyone was very interested in hearing my story. There was a general consensus amongst the participants that MtGox was finished as an exchange. They acknowledged that MtGox had played an important role in propelling Bitcoin to what it is today, but its decline and ultimate closure was inevitable.
However, there was some divergent views on the reason for this, most people, including myself are of the view that bad business decisions and incompetence were primarily to blame, while others held the view that government restriction, and secret investigations were hampering MtGox’s ability to function efficiently. Who knows what the truth is, maybe it is a bit of both.
At the end of the day 2, there was a very worrying development, the data feed for the goxreport, and delerium’s MtGox transaction failure website were cut. Perhaps a final act of MtGox’s desperation to hide the truth.
Day 3 – Friday 7 February
I started my protest a little later today in the knowledge that most of the Goxies don’t start work until after 9am. Then there was an unexpected twist; another person showed up looking for Mark. He was an emissary of an early adopter and well known member of the bitcoin community, and was there to collect an eye watering amount of money.
My emotions were mixed on seeing this person; on one hand I was glad to see another protester to fight the good cause. On the other hand, my heart sank in the knowledge that if Mark isn’t paying off his old friends in the bitcoin community then what chance do small fry like me have?
As the emissary and I chatted, Mark Karpeles arrived, and we both confronted him, the conversation went on for some time and most of it conducted in French which I had trouble understanding. However I did mange to record the whole thing on video.
The episode only came to a halt when Gonzague appeared in the lobby and rescued Mark. Very soon after this point, MtGox released a statement announcing that all BTC withdrawals were suspended.
In conclusion, I think i just witnessed MtGox die today. I didn’t get my bitcoin, but glad I came and tried.
submitted by kkodaxeroo to Bitcoin [link] [comments]

The New Crypto Order & Escaping Financial Repression

The Vigilante’s View
It is our first issue in months that bitcoin hasn’t hit an all-time high! And it’s the last issue of the year. And what a year for cryptos it was.
To put it in perspective, bitcoin could fall 90% from current levels and it will still have outperformed stocks, bonds and real estate in 2017.
Bitcoin started 2017 at $960.79.
At the time of this writing it is near $13,000 for a gain of 1,250% in 2017.
And, bitcoin was actually one of the worst performing cryptocurrencies in our TDV portfolio in 2017!
Ethereum (ETH) started 2017 at $8. It has since hit over $800 for a nice 10,000% gain in 2017.
That’s pretty good, but not as good as Dash which started the year at $11.19 and recently hit $1,600 for a nearly 15,000% gain.
I hope many of you have participated in these amazing gains! If not, or you are new, don’t worry there will be plenty more opportunities in the years ahead.
It won’t all be just home runs though… in fact, some of the cryptos that have performed so well to date may go down dramatically or collapse completely in the coming years.
I’ll point out further below why Lightning Network is not the answer to Bitcoin Core’s slow speeds and high costs. And, I’ll look ahead to 2018 and how we could already be looking beyond blockchains.
Yes, things are moving so fast that blockchain just became known to your average person this year… and could be nearly extinct by next year.
That’s why it is important to stick with us here at TDV to navigate these choppy free market waters!
New Years Reflection On The Evolution Of Consensus Protocols
Sooner or later crypto will humble you by its greatness. Its vastness is accompanied by a madness that is breathtaking, because you quickly realize that there is no stopping crypto from taking over the world. The moment you think you have everything figured out, is the moment the market will surprise you.
We are for the first time living and witnessing the birth of the first worldwide free market. Throughout this rampage of innovation, we all are implicitly aiming for the best means of harnessing consensus. As we leave this bountiful 2017 and aim at 2018, it is important for us to meditate and appreciate the progress we have made in transforming the world through the decentralization of consensus. It is also important to reflect on the changes in consensus building we have partaken in and those yet to come.
Consensus is the agreement that states “this is what has occurred, and this is what hasn’t happened.”
Throughout the vastness of history, we humans have only really had access to centralized means for consensus building. In the centralized world, consensus has been determined by banks, states, and all kinds of central planners. As our readers know, any centralized party can misuse their power, and their consensus ruling can become unfair. In spite of this, many individuals still praise the effectiveness of consensus building of centralized systems.
People from antiquity have had no other option but to trust these central planners. These systems of control have created still-water markets where only a few are allowed to compete. This lack of competition resulted in what we now can objectively view as slow innovation. For many, centralized consensus building is preferred under the pretense of security and comfort. Unfortunately, these same individuals are in for a whole lot of discomfort now that the world is innovating on top of the first decentralized consensus building technology, the blockchain.
Everything that has occurred since the inception of bitcoin has shocked central planners because for the first time in history they are lost; they no longer hold power. We now vote with our money. We choose what we find best as different technologies compete for our money.
What we are witnessing when we see the volatility in crypto is nothing more than natural human motion through price. The innovation and volatility of the crypto market may seem unorthodox to some, because it is. For the first time in history we are in a true free market. The true free market connects you to everybody and for this reason alone the market shouldn’t surprise us for feeling “crazy.” Volatility is a sign of your connection to a market that is alive. Radical innovation is a sign of a market that is in its infancy still discovering itself.
In juxtaposing centralized consensus building with decentralized consensus building, I cannot keep myself from remembering some wise biblical words; “ And no one pours new wine into old wineskins. Otherwise, the new wine will burst the skins; the wine will run out and the wineskins will be ruined.” – Luke 5:37
The centralized legacy financial system is akin to old wineskins bursting to shreds by the new wine of crypto. Decentralized consensus building has no need for central planners. For example, think about how ludicrous it would be for someone to ask government for regulation after not liking something about crypto. Sorry, there is no central planner to protect you; even the mathematical protocols built for us to trust are now competing against one another for our money.
These new mathematical protocols will keep competing against one another as they provide us with new options in decentralizing consensus. As we look unto 2018, it is important that we as investors begin to critically engage and analyze “blockchain-free cryptocurrencies.”
HASHGRAPHS, TANGLES AND DAGS
Blockchain-free cryptocurrencies are technologies composed of distributed databases that use different tools to achieve the same objectives as blockchains.
The top contenders in the realm of blockchain-free cryptos are DAGs (Directed Acyclic Graphs) such as Swirlds’ Hashgraph, ByteBall’s DAG, and IOTA’s Tangle. These blockchain-free cryptos are also categorized as belonging to the 3 rd generation of cryptocurrencies. These technologies promise to be faster, cheaper, and more efficient than blockchain cryptocurrencies.
Blockchains were the first means of creating decentralized consensus throughout the world. In the blockchain, the majority of 51% determine the consensus. The limits of blockchains stem from their inherent nature, whereupon every single node/participant needs to know all of the information that has occurred throughout the whole blockchain economy of a given coin.
This opens up blockchains to issues akin to the ones we have been exposed to in regards to Bitcoin’s scaling. It is important to make a clear distinction in the language used between blockchains and blockchain-freecryptocurrencies. When we speak about blockchains it is more proper to speak about its transactionconsensus as “decentralized”, whereas with blockchain-free cryptocurrencies it is best if we refer to transaction consensus as “distributed.”
Swirlds’ Hashgraph incorporates a radical and different approach to distributing consensus. Swirlds claims that their new approach will solve scaling and security issues found on blockchains. They use a protocol called “Gossip about Gossip.” Gossip refers to how computers communicate with one another in sending information.
In comparison to the Blockchain, imagine that instead of all of the nodes receiving all of the transactions categorized in the past ten minutes, that only a few nodes shared their transaction history with other nodes near them. The Hashgraph team explains this as “calling any random node and telling that node everything you know that it does not know.” That is, in Hashgraph we would be gossiping about the information we are gossiping; i.e., sending to others throughout the network for consensus.
Using this gossiped information builds the Hashgraph. Consensus is created by means of depending on the gossips/rumors that come to you and you pass along to other nodes. Hashgraph also has periodic rounds which review the circulating gossips/rumors.
Hashgraph is capable of 250,000+ Transactions Per Second (TPS), compared to Bitcoin currently only allowing for 7 TPS. It is also 50,000 times faster than Bitcoin. There is no mention of a coin on their white paper. At this moment there is no Hashgraph ICO, beware of scams claiming that there is. There is however a growing interest in the project along with a surge of app development.
IOTAs DAG is known as the Tangle. Contrary to Hashgraph, IOTA does have its own coin known as MIOTA, currently trading around the $3 mark. There are only 2,779,530,283 MIOTA in existence. The Tangle was also created to help alleviate the pains experienced with Blockchain scaling. IOTAs Tangle creates consensus on a regional level; basically neighbors looking at what other neighbors are doing.
As the tangle of neighbors grows with more participants the security of the system increases, along with the speed of confirmation times. IOTA has currently been criticized for its still lengthy confirmation times and its current levels of centralization via their Coordinators. This centralization is due to the fact that at this moment in time the main team works as watchtower to oversee how Tangle network grows so that it does not suffer from attacks.
Consensus is reached within IOTA by means of having each node confirm two transactions before that same node is able to send a given transaction. This leads to the mantra of “the more people use IOTA, the more transactions get referenced and confirmed.” This creates an environment where transactional scaling has no limits. IOTA has no transaction fees and upon reaching high adoption the transactions ought to be very fast.
Another promising aspect about IOTA is that it has an integrated quantum-resistant algorithm, the Winternitz One-Time Signature Scheme, that would protect IOTA against an attack of future quantum computers. This without a doubt provides IOTA with much better protection against an adversary with a quantum computer when compared to Bitcoin.
ByteBall is IOTA’s most direct competitor. They both possess the same transaction speed of 100+ TPS, they both have their own respective cryptocurrencies, and they both have transparent transactions. ByteBall’s token is the ByteBall Bytes (GBYTE), with a supply of 1,000,000; currently trading at around $700. ByteBall aims to service the market with tamper proof storage for all types of data. ByteBall’s DAG also provides an escrow like system called “conditional payments;” which allows for conditional clauses before settling transactions.
Like IOTA, ByteBall is also designed to scale its transaction size to meet the needs of a global demand. ByteBall provides access to integrated bots for transactions which includes the capacity for prediction markets, P2P betting, P2P payments in chat, and P2P insurance. ByteBall’s initial coin distribution is still being awarded to BTC and Bytes holders according to the proportional amounts of BTC or Bytes that are held per wallet. IOTA, ByteBall and Hashgraph are technologies that provide us with more than enough reasons to be hopeful for 2018. In terms of the crypto market, you don’t learn it once. You have to relearn it every day because its development is so infant. If you are new to crypto and feel lost at all know that you are not alone. These technologies are constantly evolving with new competitive options in the market.
As the technologies grow the ease for adoption is set to grow alongside innovation. We are all new to this world and we are all as much in shock of its ingenuity as the next newbie. Crypto is mesmerizing not just for its volatility which is a clear indication of how connected we are now to one another, but also because of the social revolution that it represents. We are experiencing the multidirectional growth of humanity via the free market.
Meanwhile Bitcoin Is Turning Into Shitcoin
It is with a great degree of sadness that I see bitcoin is on the cusp of destroying itself. Bitcoin Core, anyway. Bitcoin Cash may be the winner from all of this once all is said and done.
Whether by design or by accident, bitcoin has become slow and expensive.
Many people point out that IF the market were to upgrade to Segwit that all would be fine. I’ll explain further below why many market participants have no incentive to upgrade to Segwit… meaning that the implementation of Segwit has been a massively risky guess that so far has not worked.
Others say that the Lightning Network (LN) will save bitcoin. I’ll point out below why that will not happen.
Lightning Networks And The Future Of Bitcoin Core
If you’ve been following bitcoin for any length of time, you’re probably aware of the significant dispute over how to scale the network. The basic problem is that although bitcoin could be used at one time to buy, say, a cup of coffee, the number of transactions being recorded on the network bid up the price per transaction so much that actually sending BTC cost more than the cup of coffee itself. Indeed, analysis showed that there were many Bitcoin addresses that had such small BTC holdings that the address itself couldn’t be used to transfer it to a different address. These are referred to as “unspendable addresses.”
In the ensuing debate, the “big blockers” wanted to increase the size of each block in the chain in order to allow for greater transaction capacity. The “small blockers” wanted to reduce the size of each transaction using a technique called Segregated Witness (SegWit) and keep the blocks in the chain limited to 1MB.
SegWit reduces the amount of data in each transaction by around 40-50%, resulting in an increased capacity from 7 transactions per second to perhaps 15.
The software engineers who currently control the Bitcoin Core code repository have stated that what Bitcoin needs is “off-chain transactions.” To do this, they have created something called Lightning Networks (LN), based on an software invention called the “two-way peg.” Put simply, the two-way peg involves creating an escrow address in Bitcoin where each party puts some bitcoin into the account, and then outside the blockchain, they exchange hypothetical Bitcoin transactions that either of them can publish on Bitcoin’s blockchain in order to pull their current agreed-upon balance out of the escrow address.
Most layman explanations of how this works describe the protocol as each party putting in an equal amount of Bitcoin into the escrow. If you and I want to start transacting off-chain, so we can have a fast, cheap payment system, we each put some Bitcoin in a multi-party address. I put in 1 BTC and you put in 1 BTC, and then we can exchange what are essentially cryptographic contracts that either of us can reveal on the bitcoin blockchain in order to exit our agreement and get our bitcoin funds.
Fortunately, it turns out that the video’s examples don’t tell the whole story. It’s possible for the escrow account to be asymmetric. See:. That is, one party can put in 1 BTC, while the other party puts in, say, 0.0001 BTC. (Core developer and forthcoming Anarchapulco speaker Jimmy Song tells us that there are game theoretic reasons why you don’t want the counterparty to have ZERO stake.)
Great! It makes sense for Starbucks to participate with their customers in Lightning Networks because when their customers open an LN channel (basically a gift card) with them for $100, they only have to put in $1 worth of Bitcoin. Each time the customer transacts on the Lightning Network, Starbucks gets an updated hypothetical transaction that they can use to cash out that gift card and collect their bitcoin.
The elephant in the room is: transaction fees. In order to establish the escrow address and thereby open the LN channel, each party has to send some amount of bitcoin to the address. And in order to cash out and get the bitcoin settlement, one party also has to initiate a transaction on the bitcoin blockchain. And to even add funds to the channel, one party has to pay a transaction fee.
Right now fees on the bitcoin blockchain vary widely and are extremely volatile. For a 1-hour confirmation transaction, the recommended fee from one wallet might be $12 US, while on another it’s $21 US. For a priority transaction of 10-20 minutes, it can range from $22-30 US. Transactions fees are based on the number of bytes in the transaction, so if both parties support SegWit (remember that?) then the fee comes down by 40-50%. So it’s between $6 and $10 US for a one hour transaction and between $11-15 for a 15 minute transaction. (SegWit transactions are prioritized by the network to some degree, so actual times may be faster)
But no matter what, both the customer and the merchant have to spend $6 each to establish that they will have a relationship and either of them has to spend $6 in order to settle out and get their bitcoin. Further, if the customer wants to “top off” their virtual gift card, that transaction costs another $6. And because it adds an address to the merchant’s eventual settlement, their cost to get their Bitcoin goes up every time that happens, so now it might cost them $9 to get their bitcoin.
Since these LN channels are essentially digital gift cards, I looked up what the cost is to retailers to sell acustomer a gift card. The merchant processor Square offers such gift cards on their retailer site. Their best price is $0.90 per card.
So the best case is that Lightning Networks are 600% more expensive than physical gift cards to distribute, since the merchant has to put a transaction into the escrow address. Further, the customer is effectively buying the gift card for an additional $6, instead of just putting up the dollar amount that goes on the card.
But it gets worse. If you get a gift card from Square, they process the payments on the card and periodically deposit cash into your bank account for a percentage fee. If you use the Lightning Network, you can only access your Bitcoin by cancelling the agreement with the customer. In other words, you have to invalidate their current gift card and force them to spend $6 on a new one! And it costs you $6 to collect your funds and another $6 to sell the new gift card!
I’m sure many of you have worked in retail. And you can understand how this would be financially infeasible. The cost of acquiring a new customer, and the amount of value that customer would have to stake just to do business with that one merchant, would be enormous to make any financial sense.
From time immemorial, when transaction costs rise, we see the creation of middlemen.
Merchants who can’t afford to establish direct channels with their customers will have to turn to middlemen, who will open LN channels for them. Instead of directly backing and cashing out their digital gift cards, they will establish relationships with entities that consolidate transactions, much like Square or Visa would do today.
Starbucks corporate or individual locations might spend a few USD on opening a payment channel with the middleman, and then once a month spend 6 USD to cash out their revenues in order to cover accounts payable.
In the meantime, the middleman also has to offer the ability to open LN channels for consumers. This still happens at a fixed initial cost, much like the annual fee for a credit card in the US. They would continue to require minimum balances, and would offer access to a network of merchants, exactly like Visa and MasterCard today.
This process requires a tremendous amount of capital because although the middleman does not have to stake Bitcoin in the consumer’s escrow account, he does have to stake it in the merchant’s account. In other words, if the Lightning Network middleman wants to do business with Starbucks to the tune of $100,000/month, he needs $100,000 of bitcoin to lock into an escrow address. And that has to happen for every merchant.
Because every month (or so) the merchants have to cash out of their bitcoin to fiat in order to pay for their cost of goods and make payroll. Even if their vendors and employees are paid in bitcoin and they have LN channels open with them, someone somewhere will want to convert to fiat, and trigger a closing channel creating a cascading settlement effect that eventually arrives at the middleman. Oh, and it triggers lots of bitcoin transactions that cost lots of fees.
Did I mention that each step in the channel is expecting a percentage of the value of the channel when it’s settled? This will come up again later.
Again, if you’ve worked in the retail business, you should be able to see how infeasible this would be. You have to buy inventory and you have to sell it to customers and every part that makes the transaction more expensive is eating away at your margins.
Further, if you’re the middleman and Starbucks closes out a channel with a $100,000 stake where they take $95,000 of the bitcoin, how do you re-open the channel? You need another $95,000 in capital. You have revenue, of course, from the consumer side of your business. Maybe you have 950 consumers that just finished off their $100 digital gift cards. So now you can cash them out to bitcoin for just $5700 in transaction fees, and lose 5.7% on the deal.
In order to make money in that kind of scenario, you have to charge LN transaction fees. And because your loss is 5.7%, you need to charge in the range of 9% to settle Lightning Network transactions. Also, you just closed out 950 customers who now have to spend $5700 to become your customer again while you have to spend $5700 to re-acquire them as customers. So maybe you need to charge more like 12%.
If you approached Starbucks and said “you can accept Bitcoin for your customers and we just need 12% of the transaction,” what are the odds that they would say yes? Even Visa only has the balls to suggest 3%, and they have thousands and thousands of times as many consumers as bitcoin.
The entire mission of bitcoin was to be faster, cheaper and better than banks, while eliminating centralized control of the currency. If the currency part of Bitcoin is driven by “off-chain transactions” while bitcoin itself remains expensive and slow, then these off-chain transactions will become the territory of centralized parties who have access to enormous amounts of capital and can charge customers exorbitant rates. We know them today as banks.
Even for banks, we have to consider what it means to tie up $100,000/month for a merchant account. That only makes sense if the exchange rate of bitcoin grows faster than the cost of retaining Bitcoin inventory. It costs nothing to store Bitcoin, but it costs a lot to acquire it. At the very least the $6 per transaction to buy it, plus the shift in its value against fiat that’s based on interest rates. As a result, it only makes sense to become a Lightning Network middleman if your store of value (bitcoin) appreciates at greater than the cost of acquiring it (interest rate of fiat.) And while interest rates are very low, that’s not a high bar to set. But to beat it, Bitcoin’s exchange rate to fiat has to outpace the best rate available to the middleman by a factor exceeding the opportunity cost of other uses of that capital.
Whatever that rate is, for bitcoin, the only reason the exchange rate changes is new entry of capital into the “price” of bitcoin. For that to work, bitcoin’s “price” must continue to rise faster than the cost of capital for holding it. So far this has happened, but it’s a market gamble for it to continue.
Since it happens because of new capital entering into the bitcoin network and thus increasing the market cap, this results in Bitcoin Core becoming the very thing that its detractors accuse it of: a Ponzi scheme. The cost of transacting in Bitcoin becomes derived from the cost of holding bitcoin and becomes derived from the cost of entering bitcoin.
Every middleman has to place a bet on the direction of bitcoin in a given period. And in theory, if they think the trend is against Bitcoin, then they’ll cash out and shut down all the payment channels that they transact. If they bought bitcoin at $15,000, and they see it dropping to $13,000 — they’ll probably cash out their merchant channels and limit their risk of a further drop. The consumer side doesn’t matter so much because their exposure is only 1%, but the merchant side is where they had to stake everything.
If you’re wondering why this information is not widely known, it’s because most bitcoin proponents don’t transact in bitcoin on a regular basis. They may be HODLing, but they aren’t doing business in bitcoin.
Through Anarchapulco, TDV does frequent and substantial business in bitcoin, and we’ve paid fees over $150 in order to consolidate ticket sale transactions into single addresses that can be redeemed for fiat to purchase stage equipment for the conference.
For Bitcoin to be successful at a merchant level via Lightning Networks, we will have to see blockchain transactions become dramatically cheaper. If they return to the sub-$1 range, we might have a chance with centralized middlemen, but only with a massive stabilization of volatility. If they return to $0.10, we might have a chance with direct channels.
Otherwise, Lightning Networks can’t save bitcoin as a means of everyday transaction. And since that takes away its utility, it might very well take away the basis of its value and bitcoin could find itself truly being a tulip bubble.
One final note: there are a some parties for whom all these transactions are dramatically cheaper. That is the cryptocurrency exchanges. Because they are the entry and exit points for bitcoin-to-fiat, they can eliminate a layer of transaction costs and thus offer much more competitive rates — as long as you keep your bitcoin in their vaults instead of securing it yourselves.
Sending it out of their control lessens their competitive advantage against other means of storage. It comes as no surprise, then, that they are the least advanced in implementing the SegWit technology that would improve transaction costs and speed. If you buy bitcoin on Poloniex, it works better for them if it’s expensive for you to move that coin to your Trezor.
In fact, an exchange offering Lightning Network channels to merchants could potentially do the following…
1) Stake bitcoins in channels with merchants. These coins may or may not be funds that are held by their customers. There is no way to know.
2) Offer customers “debit card” accounts for those merchants that are backed by the Lightning network
3) Establish middle addresses for the customer accounts and the merchant addresses on the Lightning Network.
4) Choose to ignore double-spends between the customer accounts and the merchant addresses, because they don’t actually have to stake the customer side. They can just pretend to since they control the customer’s keys.
5) Inflate their bitcoin holdings up to the stake from the merchants, since the customers will almost never cash out in practice.
In other words, Lightning Networks allow exchanges a clear path to repeating Mtgox; lie to the consumer about their balance while keeping things clean with the merchant. In other words, establish a fractional reserve approach to bitcoin.
So, to summarize, Bitcoin Core decided increasing the blocksize from 1mb to 2-8mb was “too risky” and decided to create Segwit instead which the market has not adopted. When asked when bitcoin will be faster and less expensive to transfer most Bitcoin Core adherents say the Lightning Network will fix the problems.
But, as I’ve just shown, the LN makes no sense for merchants to use and will likely result in banks taking over LN nodes and making BTC similar to Visa and Mastercard but more expensive. And, will likely result in exchanges becoming like banks of today and having fractional reserve systems which makes bitcoin not much better than the banking system of today.
Or, people can switch to Bitcoin Cash, which just increased the blocksize and has much faster transaction times at a fraction of the cost.
I’ve begun to sell some of my bitcoin holdings because of what is going on. I’ve increased my Bitcoin Cash holdings and also increased my holdings of Dash, Monero, Litecoin and our latest recommendation, Zcash.
Other News & Crypto Tidbits
When bitcoin surpassed $17,600 in December it surpassed the total value of the IMF’s Special Drawing Rights (SDR) currency.
Meanwhile, Alexei Kireyev of the IMF put out his working paper, “ The Macroeconomics of De-Cashing ,” where he advises abolishing cash without having the public aware of the process.
Countries such as Russia are considering creating a cryptocurrency backed by oil to get around the US dollar and the US dollar banking system. Venezuela is as well although we highly doubt it will be structured properly or function well given the communist government’s track record of destroying two fiat currencies in the last decade.
To say that the US dollar is being attacked on every level is not an understatement. Cryptocurrencies threaten the entire monetary and financial system while oil producing countries look to move away from the US dollar to their own oil backed cryptocurrency.
And all this as bitcoin surpassed the value of the IMF’s SDR in December and in 2017 the US dollar had its largest drop versus other currencies since 2003.
And cryptocurrency exchanges have begun to surpass even the NASDAQ and NYSE in terms of revenue. Bittrex, as one example, had $3 billion in volume on just one day in December. At a 0.5% fee per trade that equaled $15m in revenue in just one day. If that were to continue for 365 days it would mean $5.4 billion in annual revenue which is more than the NASDAQ or NYSE made this year.
Conclusion
I never would have guessed how high the cryptocurrencies went this year. My price target for bitcoin in 2017 was $3,500! That was made in late 2016 when bitcoin was near $700 and many people said I was crazy.
Things are speeding up much faster than even I could have imagined. And it is much more than just making money. These technologies, like cryptocurrencies, blockchains and beyond connect us in a more profound way than Facebook would ever be able to. We are now beginning to be connected in ways we never even thought of; and to some degree still do not understand. These connections within this completely free market are deep and meaningful.
This is sincerely beautiful because we are constantly presented with an ever growing buffet of competing protocols selling us their best efforts in providing harmony within the world. What all of these decentralized and distributed consensus building technologies have in common is that they connect us to the world and to each other. Where we are going we don’t need foolish and trite Facebook’s emojis.
As we close a successful 2017 we look with optimism towards a much more prosperous 2018. The Powers That Shouldn’t Be (TPTSB) can’t stop us. As we move forward note how much crypto will teach you about ourselves and the world. In a radical free market making our own bets will continue to be a process of self discovery. Crypto will show us the contours of our fears, the contours of our greed, and will constantly challenge us to do our best with the knowledge we have.
Remember, randomness and innovation are proper to the happenstance nature of a true digital free market.
Happy New Year fellow freedom lovers!
And, as always, thank you for subscribing!
Jeff Berwick
submitted by 2012ronpaul2012 to conspiracy [link] [comments]

Things you should look for in a cryptocurrency exchange

“Let’s say you want to buy 1 Bitcoin, sign up on an exchange and wait for 3 days. A few days later you receive an e-mail saying ‘Our servers compromised… all funds stolen. We are sorry’. Now where to go? ,"
Recent volatility in cryptocurrency space has created a new customer base looking for profit and quick money, these customers are new investors or rookies can take part due to the open nature of cryptocurrency. It is important to choose with which exchange you are buying and selling cryptocurrency.
Many major exchanges have faced various potential threats in the past such as hacking, regulatory issues, bad business practices due to messy combination of poor management, neglect, and raw inexperience.
Attacks
Number of exchanges attacked and many million of dollars stolen, MtGox was the first one where a group of hackers compromised the servers due to the central nature of the service provider. It is easy to gain access and take control of private keys which controls your bitcoin, so you should always keep your private keys in your control. There are multiple ways to do that, such as hardware wallets, or keeping it in your laptop, mobile phone, etc.
Liquidity
Another problem with many exchanges are lack of liquidity, which means when one wants to withdraw a big chunk of bitcoin, for example,1000 BTC at current price is about $17 Million, exchanges don’t have that much cash available and ready to move, and therefore the entire BTC market can fluctuate in seconds.
Accessibility
There is no such thing as an instant in these exchanges as you have to first verify (KYC and AML) your account which can take 10 minutes to 3 days depending on your region. Only after such long waiting you can transfer real cash from your bank account, but that is also unlikely, because many local banks are not supporting these kinds of exchanges. The solution to this problem is to buy using an escrow mechanism and get crypto in the same region where one pays using local currency in the same region, such service provider being known as LocalBitcoins.
Support
Another approach to the above mentioned problem is to reduce the cost of switch for traders, so the users can convert token to token without leaving the wallet. It is only in decentralized exchanges which lacks support for a commodity, ease of use and overall lacks user support.
Due to financial transaction exchanges were always under scrutiny, Bittrex came under radar for an incident in which a handful of user documents merged into one support ticket and released in a public forum.
Once again, there is no support when you do not understand something of the website of the exchange or you need to know certain things about the fees. So, you will have to create the support ticket yourself and wait for the answer an hour depending on the volume of tickets. The support system of exchanges is dingy and the company like ‘Coinbase’ does not even have a live chat or a phone number where one can call and get help.
Manipulation
Cryptocurrencies are speculative and bound to manipulation - there have been many incidents on these central exchanges where “Spoofing” is seen. With ‘spoofing’, one puts large buy or sell orders driving traders in one direction and then cancels the order before execution. This implies that anyone who can gain access to trading with large amount of BTC can drive prices to go crazy.
As a precaution many exchanges are locking down a number of accounts if any suspicious activity seen, resulting in distress within the community and customers. Similar incidents reported by community, where whenever ‘Tether’ currency denomination released on Blockchain, there was a sudden surge in the value of the Bitcoin. ‘Tether’ is a cryptocurrency which backed by $1 and it is one of the subsidiary of ‘Bitfinex’. ‘Bitfinex’ banking relationship jeopardized due to a DDOS hack. This gives rise to the question: is Tether a cryptocurrency or just a scam. Newcomers to Blockchain may notice the irony — in an industry obsessed with decentralization, some of the biggest exchanges are centralized, trusted institutions.
Future
“Decentralized exchanges are the way of the future,” said Hugh Madden, technical director for ‘openANX’, a decentralized exchange infrastructure protocol. With the new model in decentralised exchanges you have no order book — buy and sell orders are matched peer-to-peer. There is no central authority where hackers can attack and drain money.
Exchanges have to address these problems in future:
  1. Accessible - faster KYC process , international banking support and integration.
  2. End-to-End Security – Exchanges need to scale , better security for customers to their own data centers.
  3. Cold Storage – Storing all bitcoins, cryptocurrency in cold storage reduces the risk of hacking coins.
  4. Technology Architecture – Right now the exchange architecture is straightforward and the insecure REST API exposed to the world. Using service such as Apache Kafka can reduce I/O throughput.
  5. Banking – The banks do not understand cryptocurrency, if the exchanges want to stay, they have to work together with the bank to provide full transparency within the system .
  6. Liquidity – Right now every exchange lacks liquidity,one of the solution to this problem could be the introducing of new services - for example, the user can spend coins from the exchange for some service or asset.
  7. Easy – It is easy to use.
These protocols are still in development phase, but as we continue to see the threats on centralised exchanges, it is imminent that decentralised exchanges will take over. The answer lies in technology development and complete use of tokens.
In conclusion, as a crypto user one has to be very careful what exchanges they are dealing with and make sure the exchange has a valid banking setup or relationship, verification process and resolution mechanism and meets all the terms and conditions; make sure also, that in case of hack or solvency, you will get your money back or at least a part of it .
Do your own research before engaging in the cryptocurrency space.
submitted by tradxwrite to CryptoCurrencies [link] [comments]

I've been following and trading on the entire Mtgox episode and doing my best to piece together the clues - Here is my theory from what I can gather.

First of all, if gox is well and truly insolvent and does not recoveget bought out, I lose 10% of what I'm worth.
Yes, I was one of those people 'stupid' enough to have bitcoin on mt gox. I had them there to trade with and profit off arbitrage. This entire thing caught me off guard.
Even after suspended withdrawals, I continued to bet against mt gox solvency - essentially doubling my initial potential loss - because I believed the potential theft would be minimal; and even in the event of a catastrophe - mtgox would be bailed out. I personally emailed Roger Ver, who I saw buying up Gox BTCs in the bitcoin talk forums and I asked him whether he thought Gox was solvent; he said he didn't know but believed they still were. I took this as a solid signal to profit from an irrational/overreacting market. It seems that I am wrong and that the market rate at bitcoinbuilder.com prices the chance of mtgox insolvency at 89% or at least the probability that mtgox is insolvent and doesn't get acquired is 89%; assuming everyone now believes that mtgox is insolvent.
I believe that people constantly berating and insulting others with no empathy for having money on exchanges is partially unfair. These people have no money at Mtgox threatened and only care about their own interests in bitcoin. Stop being so selfish and thinking of yourselves. There are reasons to have money on exchanges for people who are not certifiably retarded HODLERS. For one, you (at least in theory), offload the risk of storing bitcoins on a dodgy windows computer without having to go through the complicated, scary and annoying process of creating paper wallets. Secondly, in the event of a major bitcoin crash, you don't have to wait to sell your bitcoins - you can instantly sell them and reduce your losses.
As to the situation at hand and what I believe is really going on. I have sat in the mtgox irc channels, I've read reddit and bitcointalk for hours.
The clues: - The leaked crisis 'document' - The IRC MK chat records with the reporter - The latest "letstalkbitcoin" with charlie shrem - E87 - The captive and the mountain.
Most recent speculation - Charlie believes that the document is real and authentic - based on his superior knowledge of the situation (a live skype call with certain bitcoin foundation members with MK's lawyer who's is not a native english speaker; this is how he attributes the language mistakes and any errors in the crisis document) - In this call, on sunday night, it had been agreed that MK would step down as CEO and resign as a bitcoin foundation member; and that Roger Ver would champion/lead/facilitate a deal with prospective buyers of MtGox - However, the crucial point is that Charlie cannot reconcile the math of the document and that it says 742,000/744,000 of the bitcoins were stolen - this would amount to 400-500 coins been stolen a day since Mtgox opened. In this long period of stability after the $266 bubble - this means that $50,000 a day is been stolen at an average price of $100 a BTC - this is not possible to not notice. - Hence Charlie, I believe correctly concludes that there is some missing variable or piece of the puzzle obviously.
The missing piece: - In the IRC chat with the reporter, "[12:02] How much did you lose yourself? [12:04] Well, technically speaking it’s not “lost” just yet, just temporarily unavailable"
This could mean anything. As with everything else that has come out of MK's mouth - it's tells nothing atm.
Why is it temporarily unavailable?
My personal speculation and theories. Sort of chronologically. 1. I don't believe they lost 742,000/744,000 or 99.7% of the btc they owned without realising it through a 'leak' in the cold wallet. By definition a cold wallet cannot leak. Furthermore, with m of n signatures required to access a cold wallet separated into multiple locations - one would definitely notice. 2. Mt Gox lost a heap of coins due to theft or incompetence and were operating fractional reserve just before the massive coin appreciation of $120 - $1200 - all of a sudden, they owed alot more than they realised. They got caught offguard by bitcoin volatility. 3. Perhaps they were then operating at fractional reserve of 10-30% ( that's when we saw massive mtgox premiums as insiders were exiting mtgox with their bitcoins at 20-30% losses just before all of this began) and then when everyone lost confidence in mtgox simultaneously, it was the bank run and a self-fulfilling prophecy that caused mtgox to collapse. They were hoping to operate long enough to make up their fractional reserve disappear with profits obviously. 4. They may have lost access to 30-80% of their cold wallet storage btc due to a technical glitch, and that's where some of the 772,000 btc are. 5. They created the crisis document in order to save themselves. Charlie believes that they are trying to market the gox acquisition to outsiders by framing as Gox is "too big to fail" and that a gox failure may lead to a complete bitcoin failure. (I don't believe this obviously). They were probably trying to leverage a consortium of big bitcoin players to band together and save mtgox - the other major exchanges, and the bitcoin foundation members. The 772,000/774,000 loss must be a complete lie or the document was edited in a way by a malicious entity to conceal the cold wallet balances. Of course, MK has not refuted this.......... 6. Somehow the document gets leaked by one of the parties involved in the acquisition of mtgox; someone that either hated mtgox, and probably shorted bitcoin for alot of money prior to mailed it to two bit idiot. 7. Mtgox suspends trading and takes his website offline, 5 min after the document releases; adding authenticity to the document. 8. Joint statement from major exchanges and players; they were all in talks behind the scenes; trying to work out how to bail mtgox out probably until the document leaked. 9. The leaked document essentially prevented the bail-out plan from every happening - it forced people to backtrack behind the scenes and perhaps may force the collapse of mtgox instead of the proposed bail-out. ...
I have no idea what happens now.
Concluding thoughts: I am sorry for anyone who lost money at mtgox and I am sorry that any of this every happened in general.
I dont believe that there is no hope and that the chance of any recovery of any funds at mtgox is zero.
I believe bitcoin will survive this and will become stronger from it - Andreas is already talking about exchanges cryptographically proving that they are solvent through the bitcoin being possible - we're back to the same thing that started bitcoin then - trustless exchange - trust being completely distributed; I don't need to trust a big exchange if they can mathematically and provably show that they have a positive net worth on the blockchain.
I bought bitcoin after all of this bullshit to replenish what I lost. I actually believe the massive negative publicity may spark the next boom and that the price is being suppressed by negative sentiment.
Remember, mtgox =/= bitcoin and bitcoin is anti-fragile and comes back stronger each time.
Apologies for any errors and lack of references, I wrote this quickly at 3 am in sydney, australia!
Good luck to you all, Wit
submitted by Wit22 to Bitcoin [link] [comments]

I'm an idiot for using PayPal. I was scammed, badly. Is there any hope for getting my $ back..? Desperate.

So someone on this subreddit was offering bitcoin for sale, he offered the options of PayPal, and a couple of others. He was verified on "bitmit.net", and he has a history of being active in other bitcoin forums, though not for several months. I have his full name, I know which country he lives in. He uses the same username across several different sites.
So anyway - he agreed to send me 10 bitcoin for $275, when it was trading for $300. It seemed like a good deal, but not too good to be true, as I figured he wanted out. So we chatted on Skype (text) - he sent me a screenshot of his MTGox account, I can see that he had the # of btc that he claimed to, and his username was the same that he was using everywhere else (including reddit).
So, I figured it was legit enough.
I very, very stupidly agreed to do this without escrow, and I purchased 10 coin.
He told me that he sent the coin and it should show up in my public key in an hour or so.
It's been over 36 hours and nothing =(
I sent the money on PayPal as "to family and friends" instead of "Services and goods", which may have f*cked me over as well.
I don't know what to do. I keep waiting thinking maybe MTGox is just really slow, and it will show up, but with every passing hour I'm believing that I've been had.
Am I just screwed? Is there ANYTHING I can do? Claim fraud to PayPal? To my bank? Please help.
(UPDATE: The plot thickens. I've been given access to his phone number, his real name, and his address from BitMit.net. What should I do with this? Now I know that he lied about his name, and that he's seen my messages...)
submitted by was-scammed to Bitcoin [link] [comments]

Order from bitinstant made almost two weeks ago. Still no coin.

So, on Tuesday December 11th, a friend of mine and I made a purchase through bitinstant for some coin. It was supposed to be a bitinstant -> bitcoin addy transaction. Athough I admit that I was in a hurry when making the order and might not have selected the correct option. Anyway, I received the confirmation e-mails and didn't think anything of it. Three days later, I still hadn't gotten the coins in my wallet. So I went back to look at the confirmation and double check the wallet address. That's when I noticed something strange, I had a MtGox coupon in the e-mail. Ok, I think, maybe I just selected the wrong options. When I log into MtGox (I have a verified account) and try to put in the code, it returns a "Unrecognized or already used code" error. I tried to contact bitinstant support to explain my situation, and was told by a representative named Rachel (via e-mail) that support would be handling my situation. Three days later and I hadn't heard from them. So I went back to the support page to see if I could get in touch with someone. Well, their "live" tech support is a joke and their live chat option is mentioned on their "contact us" page, but I can't figure out how to access it (maybe I'm just retarded). As a last resort, I've PM'd bitinstant on here this morning and am awaiting a reply. I honestly don't know what to do and I am getting tired of the run-around. Is there anything that you guys can think of that I can do differently (other than double checking everything before I submit, which I'll be doing from now on). Any help would be greatly appreciated.
EDIT: Bitinstant got back up with me and issued me a new MtGox code. It's a Christmas miracle...or some shit like that. Anyway, MERRY CHRISTMAS!
submitted by akbyrner92 to SilkRoad [link] [comments]

There are lots of nice communities on IRC with rooms for discussing various topics and people giving free support for problems

You can access the Freenode IRC channel through your web browser here: http://webchat.freenode.net/
Channels begin with # and you can specify multiple ones using a , between them. i.e #bitcoin, #electrum, #coinbase
submitted by genjix to Bitcoin [link] [comments]

Tech Talk: Bitcoin Exchange MtGox Closes After $500m Cyber Theft Вечерний Радченко: Будущий рост Биткоина. MtGox Возвращение. Why Bitcoin crashed today ! Mt. Gox $400 mill dump.. Bitcoin Crash Over? Mt Gox Selloff? BTC + Cryptocurrency Charts & Chat Live The Bitcoin Group #18 (Live) - Mt. Gox (part III ...

help chat. Bitcoin Meta your communities . Sign ... MtGox Live is a quite pretty live market depth graph. For some reason it only shows prices in USD. Does anyone know an equally good alternative which supports EUR instead? mtgox charts. share improve this question follow edited Sep 21 '11 at 13:37. Stéphane Gimenez. 4,814 2 2 gold badges 28 28 silver badges 36 36 bronze badges. asked ... Furthermore, MtGox credit claims are subject to a few benefits, courtesy of Kraken: – 100,000 KFEE credits redeemable for up to $1 million in free trading volume at the lowest fee tier of 0.1% – Creditor claim and payout support with live chat and email – Option to receive funds in the form of Bitcoin Mt. Gox, genannt "Mount Gox" oder einfach "Gox", war der am häufigsten verwendete Bitcoin-Devisenmarkt von kurz nach seiner Gründung im Jahr 2010 bis zu seiner Insolvenz Ende 2013.Der Markt wurde am 25. Februar 2014 geschlossen und hat Insolvenzschutz angemeldet in Japan und den Vereinigten Staaten nach dem Verlust von 640.000 Bitcoins. use the following search parameters to narrow your results: subreddit:subreddit find submissions in "subreddit" author:username find submissions by "username" site:example.com find submissions from "example.com" Slack Live Chat. I already have an account (Login) Rules. Be excellent to each other. You are expected to treat everyone with a certain level of respect. Discussion should relate to bitcoin trading. Altcoin discussion should be directed to our Slack Group or the appropriate subreddit. No memes or low effort content. Posts that are solely comprised of memes, irrelevant youtube videos or similar ...

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Tech Talk: Bitcoin Exchange MtGox Closes After $500m Cyber Theft

This video is unavailable. Watch Queue Queue. Watch Queue Queue Mt. Gox is still creating issues for cryptocurrencies, Korea is about to allow ICO's to operate, and John Oliver chats about Bitcoin and Blockchain. Thank yo... Troubled bitcoin exchange MtGox was forced to close and file for bankruptcy protection this week, after bitcoins worth almost $500m were apparently stolen from its servers. Gebruikersvragen: * Wanneer komt de volgende munt? Waarom geen Ripple? * Is gebruik van privacy coin zoals Monero meteen verdacht? Nieuws: - MtGox claims update - Jack Dorsey neemt Bitcoin ... #crypto #bitcoin #livestream 👨🏼‍🏫 Get 14 days of Signals Profit Group for ONLY $7: https://bit.ly/2QlS7mB ️ Join the BitSquad on Telegram: t.me/BitSquad ...

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