Failure, Chaos, & Bad Decisions: Why Dash's Horrible 2019 Means It Won't Survive 2020
I. Failure In 2019, LATAM scammers ripped off Dash's treasury for 1000s of coins while providiing fake adoption statistics and embezzling money intended to save poor starving Venezuelan babies. In 2019, Dash continued its free fall in marketcap rank, plunging to 27 from a high of 3. Once 5 times Monero's marketcap, Dash is by global free market consensus now valued at less than 50% of Monero, and may soon succumb to DogeCoin, a joke currency based on a dead 2013 meme. Measrued against the standard for altcoins, the once-hopeful 2 ETH for 1 Dash rate has surrendered unconditionally to Dash-breaking bearwhales - 1 Dash is worth less than 1/3 of an ETH now. In 2019, Dash shills tried changing the subject from the "existential crisis" caused by DCG's failed Evolution Roadmap to other coins' cryptowinter vacations or fake & gamed metrics like tx/day, ignoring the obvious fact that Dash's singularly weak fundamentals and price collapsed in terms of Bitcoin, gold, fiat, and all other Top 25 altcoins. In 2019, Dash shamefully abandoned tried-and-true Nakamoto Consensus with a cheap, gimmicky "Chainlocks" version of Peercoin's good old-fashioned checkpoints. In 2019, Dash Core's chosen PR firm, Shift Communications, was a huge disappointment as it failed to engage the community, mitigate public relations disasters like MooCowMoo, or direct attention to EvoNet Platform's Open House. Dash Core also suffered the humiliation of being forced to de-endorse their own Shift Communication proposal, asking MNOs to vote down yet another money-wasting, bloated-corporation-imitating Core brainchild. In 2019, Dash's identity as "Shitcoin of the year" was confirmed after being called out as a scam by the Crypto Vigilante Group due to the instamine, centralized mangement+control, and slow+broken privacy. In 2019, Dash's support from Jeff Berwick's Dollar Vigilante Group turned very bearish to to their increased awareness of Dash's instamine and broken privacy. In 2019, Dash was listed by Coinbase, raising hopes the Number might Go Up. But nobody actually cared about Dash on Coinbase, so nothing happened afterwards to change the market's opinion that Dash is worth less than a cold sack of puke. In 2019, Dash's PrivateSend feature-cum-liability was broken by crypto research specialist u/Flenst, just as many exchanges were delisting Dash beause of its prior marketing under the old Darkcoin brand. II Chaos In 2019, every week wealthy Masternode owners dumped their 7200 "free" Dash, without returning anything for it to Dash's primary buyers. As the compounded Instamine Masternode poopulation grew, the market's ability to bear that overhead simply imploded. In 2019, Dash went from weak to weaker as falling prices and severe reputation damage thanks to Macrochip & Moocowmoo resulted in budget shortfalls for Core Group Inc, intensifing toxic conflict over who must suffer additional austerity measures. Meanwhile Dash's competitors had great years and their devs wrote AND SHIPPED amazing code, such as Cardano releasing its (absolute madhouse of an) Incentivized Shelley Staking Testnet, Monero putting RandomX into production, and Decred adding state-of-the-art CoinShuffle++. In 2019, DASH became a nightmare of change discussion and negativity. Instead of an Evolution product demo at the Open House, CEO Ryan Taylor plopped out a FUD turd and then proceded to roll around in it while all 15 people watching recoiled in horror and disgust. Markets hate uncertainty, so Dash Core's confusing new mission of endless scope creep, bikeshedding, and self re-invention only exacerbated existing negative investor sentiment. III Bad Decisions In 2019, Dash's increasinly desperate and centralized management+control (AKA spork-key hodler) entity, DCG, having lost hope in ever being competitive with successfull PoW-backed hard money cryptoassets like BTC/LTC/XMR, annouced a shocking, narrative-abandoning pivot to exploring Proof Of Stake options (as well as stripping X11 miners of their fair share of coinbase asset allocation). In 2019, Dash's CEO ruined the years-overdue Evolution Open House by inciting a massive, controversial discussion after unilaterally declaring Dash is "overpaying" for Nakamoto Consensus PoW security. In 2019, Dash's long-awaited Evolution release Open House featured no actual product demo as Liz's embarrassingly cringe EvoNet slideshow openly annouced Evolution has devolved into a Zero-Calorie Nothingburger with Vaporware Fries and Lite Ketchup. In 2019, Dash's established coinbase reward allocation and PoW/PoSe consensus mechanism degenerated into a discussion of which Calvinhash Protocol would fix Dash's massive technical and cultural debt problems, thereby making its Number Go Up.
 Calvinhash is a protocol invented by Evan at Dash Labs during an especially intense and lavishly provisioned Psytrance party "research" experience/experiment. Calvinhash has no rules; the miners, stakers, and Instamined DCG Masternodes make up their own rules as they go along, ensureing no Calvinhash proof-of-work, block size limit, consensus mechanism, or block reward is like another.
Who dumps 50K coins on the market WITHOUT any significant news?
50K coins dumped on the market in 5 hours WITHOUT any significant news! Blockchain detectives get to work. We need to know whats going on. This kind of shit used to happen over news like "china ban", "mtgox hacked", or karpeles comments that bitcoin was broken (transaction malleability). But there was no significant news today. And I don't think that a lot of longs were squeezed as the price only budged about $30. So someone dumped a large number of coins today. Why? Is it the MtGox thief (or insider) dumping the last of the stolen booty? Or the SR auctioned coins buyers getting out? What happened today is unprecedented. We deserve to know the truth, who was behind today's dumping?
I've been hodling and adding to my stash since 2012. Went through the Gox debacle, Silk Road, inputs.io, slaying of the bearwhale, BitLicense, ETF, and countless ups and downs. In the beginning, I tried trading on Gox, but always got lost in the FUD, emotion what I began to realize was manipulation. And I realized that I had no skill in playing that game. Except one skill. I had faith based on a deep understanding of what bitcoin was. I read the whitepaper. I understood the implications and bought in. (Thank you Orlin Grabbe, RIP) So I bought more. I bought in through dwolla/Gox, bit-instant/ZipZap, localbitcoins, etc. And I kept buying. I mixed my coins (losing a chunk to Coinlender), traded gold for coins on Agora, and kept building my hodlings while putting them in cold encrypted storage. Never sell was my motto, and I watched what was about a $20K gamble/investment grow to much much more. Enough to retire. I watched the price constantly. Wake up at night, check the price. Wake up in the morning, check the price. And I read all of the news, the blogs, reddit (both /btc and /bitcoin, and others). I invested my Roth in GBTC. My wife's as well. I told my mainstream friends about bitcoin. All who told me I was crazy. Maybe a little I admitted. Satoshi said it would either be worth 0 or be very valuable. I chose to believe the latter. But recently I got discouraged. The civil war was real. Both sides bloodied, with hidden agendas following hidden money. Sock puppets manipulating opinion, threats by miners to fork and jump ship. Doom and gloom. Price crashes, big bear predictions, doom is nigh! And I almost gave up. Almost imported my cold coins to sell. Then I saw through the fog of war. Bitcoin is anti-fragile. ANTI-FRAGILE. Weak hands sell. Traders and whales sell/buy. Manipulators buy/sell. Maybe after the next halving, I'll sell. But not now. I'll continue to hodl. Maybe even buy some more. Just thought I'd share.
Hi everyone! I’m back with the fifth monthly Bitcoin news recap. I seriously can’t believe all of this stuff happened in ONE month. For those unfamiliar, each day I pick out the most popularelevant/interesting stories in bitcoin and save them. At the end of the month, I release them in one batch, to give you a quick (but not necessarily the best) overview of what happened in bitcoin over the past month. You can see recaps of the previous months on Bitcoinsnippets.com If you're on mobile and can't see the links below, check the web version. A recap of Bitcoin in May 2017
Probably the most interestong news to me in the past few weeks was about the ledger of the mysterious BearWhale who was selling off at an rapid rate and was to be expected to hit 0 within the next few days. Can we get an update? @ knowledgable Ripple researchers <3 Also since that one reddit Ripple dude kinda predicted wacky dates that correlate for these times. Just thought it was interesting. But I think the BearWhale news is more important than seeing good news atm since the market and Bitcoin are really pushing the market down. Though if the Whale is Solely responsible for influencing a low Ripple price than normal, we should follow that with all our resources! Just what I think! Thoughts?
The fact a Mt. Gox selloff and Silk Road old wallet selloff crashed the market means Bitcoin suffers from the very thing it swears to destroy: centralization.
The fact that 3% of all Bitcoin wallets hold over 97% of all the Bitcoins should be a red fucking flag to any potential investor. And three times we've had this affect the price negatively. First was the Bearwhale who said he would crash the price 90%, and did it. Then we've had the Mt. Gox trustee selloff. And now we've had the old Silk Road wallet whale sell off. What's next? Satoshi wallets move one Bitcoin and everyone panics? This is beyond reasonable. The tech is "solidy" (can't forget those 50$ fees now can we) but the way its shaped is nothing but a piramid scheme where any of the old guys can fuck every single new guy and buy back in at a better price.
"Inside ChangeTip: A Special Buttcoin Investigative Report," -- All this and more, plus Andy Rooney, Tonight on 6 Blocks
Good Evening, I'm Lesley Stahl. Mike Wallace is out tonight. Notice! If you just want to get to the most interesting part, skip to IV. Shill Bots
In the world of Bitcoin, one startup has taken the community by storm. ChangeTip, a service that allows users to "tip" minute fractions of a cent to one another on online social media, has been rapidly accumulating a rabid, loyal fanbase of people spamming thinly-veiled bot-generated advertisements, in a decidedly clumsy attempt at native advertising. More interestingly, ChangeTip doesn't even actually use Bitcoin -- it maintains a centralized, internal ledger of "who" has "how many bits" and then, when the user is ready to cash out, pockets the ledger-balance of "bits" and delivers dollars to their banking account. At no point in the entire process is a user does a user ever actually have to touch bitcoin, and at no point in the entire process of tipping is any money actually being moved around on the blockchain. Essentially, ChangeTip is a Bitcoin-based startup that in no way utilizes Bitcoin, save for the fanatical frenzy of the community of bagholders.
ChangeTip manipulates the bitcoin bagholders into shilling. These bagholders try to encourage new recruits into the cult by tossing an inconsequential amount of money -- say, $0.0001 (or 1/100th a penny) at a potential recruit. The relationship is mutually beneficial & serves two purposes:
ChangeTip: gets an excuse to post its thinly-veiled native advertisement anywhere on social media (especially reddit)
Bitcoiners: get a way to try to indoctrinate other people into the cult at virtually no expense to them, thus potentially driving up demand and thus the price of a bitcoin (since supply is roughly fixed)
III. Privacy Concerns
Bitcoin is, of course, heralded by renowned sources such as /bitcoin as being an anonymous / pseudonymous way to send "money" to anyone, anywhere, instantly*. ChangeTip, however, requires you to "link" your social media accounts to ChangeTip to function. Essentially, this means that with minimal effort and a few database queries, ChangeTip is able to create an online "fingerprint" of anyone using the service. For example, I could know that TulipCoins is also "Mike Hockhertz" on facebook, and can be found under the twitter handles @JIDF_4_LIFE and @WellsFargoCustomerSupport. Why is this so alarming? Because ChangeTip doesn't actually seem to have any business model. From the time the company began til the present, ChangeTip has generated a whole $0.00 of revenue. There is an appropriate adage to cite here: "If you're not paying for it, you're the product." I will note that ChangeTip suggests that at some point in the future they will start taking a 1% cut of all "tips", however, as we will show later, this is probably a red herring. To compound this problem, ChangeTip also enables users to "link" their banking account, and thus "cash out". As you can imagine, the possibilities are limitless for abuse here -- a single company knowing your entire social media makeup, and your bank account, and thus knowing your true identity as well. Needless to say, it is surprisingly accepted in bitcoin services for a service that connects-the-dots so much as it were given the anonymity/pseudonymity-intense community of bitcoin. "But wait!" I hear you say -- you don't have to cash from from ChangeTip. You can send your money to another wallet and later cash it out at a Bitcoin Exchange. Yes, this is true, but forgetting an important key detail: the company that just invested $3.5 million in & effectively owns ChangeTip ("Pantera Capital") also has invested heavily in 2 of the biggest Bitcoin exchanges -- those being the Slovenian-run BitStamp and US-based Circle. The point is, even if you make the effort to move over to either of these exchanges, you can still be tracked (and rather easily at that). *Yourexperiencesmaydifferbyupto6hrs.Numerousmiddlemanfees&preposterousvolatilitymaywillapply.Drinkthekool-aidresponsibly.
IV. Shill Bots
ChangeTip seems to employ 2 kinds of Shill bots, in addition to their main ChangeTip bot. Important to note, ChangeTip has already been outed for running what I call "Giver" shill bots recently.
"Giver" bot: initiates the following chain of events
"Giver" bot initiates: Hey loofa, Your comment has recived a RANDOM TIP! 100 bits changetip I am a bot, going round Reddit sharing the news and joys of Bitcoin and ChangeTip . If you've never heard of ChangeTip, it's a cool Micro-Tipping service avaliable across a variety of social networks, including Reddit. I do hope you'll accept this tip, and I hope to see you in the /Bitcoin and /ChangeTip communities soon! Happy Tipping!
That's what I got from going through 6 pages of the bots history. I can't even do this anymore, the shilling is just so fucking pathetic & what's even more pathetic is that its pretty goddamned obvious who is running it. Gee, I wonder who has experience writing reddit bots & trying to sneakily advertise their spamware through reddit comments? The bot owner (aka, ChangeTip) apparently deleted all their posts after someone figured out what they were doing (click context on any of the posts in the user history). Fortunately, the idiots behind said bot didn't realize that if you just click "delete" on a comment in a thread, it deletes it from that thread, not from the user account, so we now have a living testament of the sad extents of shillery one very sad company will go.
V. ChangeTip's Balance Sheet
This is what I originally was writing this post about before assuming the whole 60 minutes schpiel. As has recently been pointed out elsewhere in /buttcoin, the founder of ChangeTip Nick Sullivan recently claimed to the New York Times that ChangeTip had transmitted approximately ~$250,000 USD as of February 1, 2015. Numerous users pointed out that this was more than double the previously reported amount (as displayed on their front page) of $90,000 USD. However, for the sake of argument, I am going to make the following assumptions, which are extraordinarily optimistic and represent a "best case" scenario for ChangeTip.
Suppose Nick Sullivan is correct that they have transmitted $250,000 USD (again, actually it's $90,000 USD)
Suppose that ChangeTip has had a 1% fee in place from Day One (actually, they still charge no fee, i.e. 0%)
Suppose that ChangeTip has one employee (actually, they have at least 4 employees)
Suppose that ChangeTip has only been operating for 3 months (actually, its closer to >12 months)
Using the above suppositions, we can deduce the following:
Best Case Total Revenue:
$250,000.00 * (1% fee) = $2,500.00
Best Case Monthly Revenue:
$2,500.00 / (3 Months) = $833.33/mo
Best Case Yearly Revenue:
($833.33/mo) * (12 Months/Year) = $9,999.96/yr
Best Case Employee Salary:
$9,999.96/yr OR $4.81/hr
// Employee Annual Salary ($9,999.96/year) * (100% Yearly Revenue) = ($9,999.96/yr) // Alternative: Employee Hourly Rate ($9,999.96/year) / (52 weeks/year) / (5 days/week) / (8 hours/day) = $4.81/hr // again, this is assuming there is only 1 employee who receives all the money the company brings in over a year
Best Case Employee Salary VS Federal Minimum Wage:
$-5,800/yr OR $-2.44/hr
Federal Minimum Wage = $7.25/hr = $15,800.00/yr ($9,999.96/year) - ($15,800.00/year) = $-5,800.00 ($4.81/hr) - ($7.25/hr) = -$2.44/hr // again, this is assuming there is only 1 employee who receives all the money the company brings in over a year // as you may notice, ChangeTip cannot afford even a single employee being paid the federal minimum wage
At this point, I need to point something out to make it exceptionally clear. We've already used the absolutely-most-positively-exaggerated-and-optimistic figures conceivable to look into ChangeTip's balance sheets and we've found that even using those incredibly one-sided figures, ChangeTip couldn't even possibly pay for a single employee who works for minimum wage. What I wanted to make clear was this: mind you, we're not even taking into account business expenses such as: taxes, office space, infrastructure, marketing, human resources, developers, testers, requirements, customer support, business planners, accounts payable, executives, dividends to shareholders, reinvestment in the company, etc. You know, what a business actually costs to run.
In case you think that this has all been the work of a crazed know-nothing anti-bitcoiner sheep, feel free to peruse the knowledgable pro-Bitcoin(er) position on ChangeTip: http://hackingdistributed.com/2014/12/17/changetip-must-die/ A selection from said great article that was part of the inspiration for this post:
Back to ChangeTip: on its current trajectory, it is not a viable company. I am certain that the people who work for it are well-meaning, reasonable people. But the lack of a revenue stream is an inescapable fact. The math portends an unsustainable cash flow; they will ultimately have to fold or else change their business model. When the music eventually stops, our identities will be up for sale. Even if the company manages to stick to its current avowed business plan until bankruptcy, there is no telling what others will do with the ChangeTip data.
Feel free to double check calculations, but I think it's a pretty safe bet to say that ChangeTip is a gigantic PII-vacuum waiting to explode. I would feel bad for the changetipping bitcoiners, but in all honesty: this is the free market -- this is what they asked for -- this is what they deserve. Maybe the next ChangeTip will want to work on its reputation, amirite guiz? Oh, and where there's credit due, there's credit due -- even /bitcoin seems to somewhat be acknowledging that ChangeTip is an insolvent spam-machine: https://www.reddit.com/Bitcoin/comments/305dco/changetip_statistics_coming_soon/ Please let me know if there are any errors & I'll try to correct them.
tl;dr lol ChangeTip
edit: updated some grammar & redid the bit about shill bots to show the process more fully
Long time crypto trader: BTC and LTC manipulated and so is Dogecoin - 1Ð should be $0.005
Dogecoin's price is very undervalued and I believe it will reach new all time highs within the next few months as long as development and infrastructure in the community and marketplace continues to grow. Some of you may not have noticed whats going on in /Bitcoin but they have just realised the extent and reasons why the Bitcoin price has been declining in the face of 6 months of positive news: manipulation by some whales This is not limited to Bitcoin but also Litecoin and what I have been seeing the last 2 months in the Dogecoin price too. So why is there manipulation? greed, plain and simple! In a downward price manipulation the actors drive the price lower by selling at that high price to create fear and panic which scares others into selling too and then buy the same number or more coins at a much lower price and making a profit and potentially a lot more profit when they price rises again. Thats also the key - their intention is for the price to rise eventually. They are just loading up. I have always argued to many sceptics that manipulation is the fuel for the Bitcoin price to move up and down and despite that Bitcoin is undervalued according to available supply, its applications and its ability to solve real world problems for the rest of the 3 billion people that are unbanked around the globe. Now lets look at Dogecoin and its price. Several months back I posted that the price decline of Dogecoin is due to the the 180 million+ a day of new Dogecoin generated was the reason for the price decline and that supply couldn't meet demand. While that is partly true several months ago I have been observing 40-100 million Dogecoins being dumped at a single time 40-60million Dogecoin sell walls at the slightest indication of Dogecoin moving up this is not auto selling. While some auto dumping occurs from multipools which is normal it doesn't explain the uncontrollable yet coordinated timing at which it is being carried out whenever a breakout appears like happening. This is more obvious this past month since the february manipulation. Right now we are currently seeing Dogecoin sell walls placed to prevent a price rise above 100 satoshi, for how long I don't know? But what I do know is that Dogecoin is undervalued and I believe each Dogecoin should be worth at least $0.002 and upto $0.005. This puts the market cap between $188m - $470m. I based these figures on the metrics which determine the Bitcoin (and to some degree Litecoin) price in its first year of wide scale media attention and the time it takes 70,000 people to use it for goods and services. Bitcoin reached that threshold last year in spring when the total number of Bitcoins generated was around 12million and price rose to around $50 and so many online shops were using it as well as silk road. This put the market cap of Bitcoin at $600m so Dogecoin with its market place, large user base and lots of media attention would make it reasonable to suggest, despite its inflation rate and no cap to be somewhere between $188-470 million. This means 1 doge would be worth $0.002-0.005. In fact Coingecko.com tells us Dogecoin is the number two crypto-currency by all metrics but it doesn't tell us how big the marketplace is and the fact there are over 200 businesses atleast that accept Doge and numerous ATMs, secure network, growing userbase, reducing supply rate of new Dogecoins generated and 35% of current supply is held in cold storage by most of the top 30 wallets. I should know I have one of them and I don't plan on selling! I'm waiting for Dogecoin to become universal and very liquid to be able to spend my doge to buy, rent and send to anyone, any company any charity that I choose. With all that said it will just be a matter of time before the floodgates open and the price rises to new all time highs. But don't invest more than you can afford to lose this is still a speculative technology! Finally, Im very impressed that demand for dogecoin has been so formidable the past several months in the face of such downward manipulation in price! Well done to you all, keep up the good work and enthusiasm and continue to spend, save and tip doge where you can :) To the moon! EDIT: As of right now (11.30 GMT) there is a 80 million sell wall on cryptsy EDIT 2: 70 million now as 10 million was just bought: the manipulators are smelling a breakout hence the 80 million (http://imgur.com/FHV5A3J) EDIT 3: if you want to see how manipulation can be defeated check this out https://www.youtube.com/watch?v=-uX_bB_4VJk&feature=youtu.be (thanks to Voogru and his post in /bitcoin today) EDIT 4: while I'm here can you please sign this petition to get doge on the major exchanges if you agree. Thanks! EDIT 5: More manipulation - 107 million doge sell wall @90 after a 85million sell wall @88 got bought up - this is unprecedented in Dogecoin market history and goes to show how much demand there is. (http://imgur.com/9QG9nOf)
Where Art Thou, Bullwhale? Or, Why I Am Disappointed in the Markets Lately
I have to say, I'm a bit disappointed in the markets lately. In order to be able to say that here, though, I'll have to include a paragraph or two's worth of disclaimers throughout to head off some of the most popular retorts. Please, allow me to elucidate, and in the process indulge in a lazy Sunday thought experiment: I'm disappointed, not because the Bearwhale entity is back (after smartly waiting for the market to unwind some pent-up bullish exuberance), but mainly because the market isn't doing a damn thing about it. Again. I've bemoaned this situation in the past, but I don't think I clarified my views well enough. If I may, I'd like to take another shot: The Bearwhale's strength seems to be that that their actions, when present, serve to either establish or reinforce the prevailing downtrend. That trend is then followed by the herd, who have been conditioned so many times that "the trend is their friend" that most don't even think twice about it. While this seems to be the main feedback loop that the Bearwhale relies on, the downtrend is also further exacerbated by the constant selling pressure from miners, as well as hodlers loaning their BTC out for crumbs (not realizing that their collective actions serve to devalue their holdings way more than those crumbs they receive in return). While the Bearwhale entity's goals are nearly impossible to determine with any confidence, their tactics are certainly to be admired. They are taking great advantage of some very powerful market forces—the reflexivity of the market, combined with the "tragedy of the commons" inherent in two areas: mining, and availability of margin—to effectively corner the market downwards for their benefit. To be clear: this isn't the part I'm disappointed in, though. The fact that they're back and are continuing doesn't surprise me, either, given not only that they've been doing it so effectively and for so long, but also that exactly this sort of behavior was predicted almost three years ago:
Bitcoin takes the monetary system back essentially a hundred years. We know how to beat that system. In fact, we know how to nuke it for profit. Bitcoin is volatile, inherently deflationary and has no lender of last resort. Cornering and squeezing would work well - they use mass in a finite trading space. Modern predatory algos [...] would rapidly wreak havoc.
So, while I am weary of the effects of the Bearwhale's actions this year, I am neither disappointed nor surprised by them. After all, as Right_In-The-Pussy astutely pointed out, "free market something something". What I am disappointed by, though, is that no entity or entities in this glorious free market, throughout all this time, have deemed the situation worthy of responding by putting the screws to the Bearwhale in return. (At this point, a commotion is heard as a hundred traders rush to leave comments filled with scathing retorts of smart-assery.) Now, hear me out here, folks. Let's first take a step back, and examine the situation at large: If we surmise that the Bearwhale operates roughly as laid out above (and more or less as speculated throughout this forum) it is probably fairly safe to assume that "the beatings will continue until morale improves"; that is, that they will probably keep up their dumping scheme unless and until the market pushes back strongly enough to convince them that the support is no longer worth fighting at that level. This is a grim prospect for Bitcoin, because the longer this keeps up and the lower we go, the less likely it will seem to be that the Bearwhale is benevolent (i.e. manipulating out of self-interest or related motives, but ultimately interested in and aligned with Bitcoin's long-term success). It becomes exceedingly likely that they are purely profit-driven, and will have no qualms about trying to drive the price straight into the ground. As has been noted many times on this forum and elsewhere, this can and will wreak havoc on the entire ecosystem: mining, merchants, VC investments, adoption, exchanges...you name it. Which is why, when the Bearwhale continued to push the market downwards into the lower $300s and beyond (with more and more traders gleefully shorting alongside them), I posted this:
It's really less about profit, and more about the ratio of profit vs. progress. These days, there's too much of the former going on at the expense of the latter, and nobody seems too worried about offing the golden goose in the process.
At these price levels, we are starting to exceed certain tolerances; Bitcoin may be Honey Badger, but Honey Badger can't continue to lose this much blood without feeling some very negative long-term effects. As we continue to slide, Bitcoin's prospects (first growth, then viability in general) increasingly come into question. So, the question that should be on the mind of all Bitcoin faithful is: what can be done about this? The situation is grim: hodlers are stuffed to the gills and despondent, miners are only as faithful as the protocol forces them to be (100 blocks), margin trading is toothpaste that can't be put back in the tube, and the ten-month downtrend is a positive feedback loop that almost ceaselessly continues to spread pain and suffering....
Enter the Bullwhale: the Hero We Don't Deserve, but the One We Need Right Now
Ok, fine...we don't need a Bullwhale—the markets at large could (and probably eventually will) coalesce like a school of fish around some "way too low" price point, establish unyielding support, and send a resounding message (as happened recently at $300). In the meantime, we could all wait around and see how low the Bearwhale will take us, and what sorts of very unfortunate things happen in the interim as a result. One way or another, Bitcoin will most likely survive...and the scars will add character, right? But gosh, we certainly could use a Bullwhale's help here. We could use some now more than ever, but really, we needed one ever since the Bearwhale got started putting their boot to the market's neck earlier this year. Hell, a Bullwhale's job would have been much easier back then—having at their disposal a vast army of bubble believers and lunar lunatics which has since then gradually eroded. In the interim, bulls have not just been decimated, but almost put on the endangered species list at this point. So, who could save Bitcoin from the beatings and turn the market around? A variety of actors could step in, and like the Bearwhale, the most important factor is the scale at which they can operate—their intentions could be benevolent, selfish, or a combination; it doesn't so much matter, as long as the effected direction is up. This could be someone from the idealogical crowd like Byrne & Co., wanting to stick it to the entrenched market establishment; maybe Soros, wanting to further an Open Society (and in the process, lending more credence to his theories of fallibility and reflexivity); or Draper, the Winklevii, Silbert, et. al., wanting to protect their investments and further their Bitcoin-related aspirations; or perhaps one or more early adopters with some choice connections for fiat liquidity, weary of watching their beloved protocol get beat down and their holdings depreciate. It could be an entity with potentially mixed motivations...like Google, for example: they could adopt Bitcoin in a flash and spark a rally, positioning themselves as the market leader of an open ecosystem of the kind that they like, while also raking in a boatload of money in the process. Paypal, Amazon, etc. could make similar plays, though I suspect they're less likely to do so. Or, it could be an actor every bit as selfish as the Bearwhale entity—just a mirror image of them. Someone who realizes that there's more to be made in the long term supporting Bitcoin's growth rather than sabotaging it. After all, the powerful market mechanics harnessed by the Bearwhale can be harnessed equally well by a Bullwhale. Those that have been around long enough know what it looks like when these kinds of forces finally turn around. All it takes is a convincing reversal on high volume (like we had at $300), followed up by some continued encouragement (which we didn't have, in turn giving the Bearwhale the encouragement they needed to start messing around again). If timed right, not much encouragement is even needed; just enough to convince the market that the Bearwhale has been neutered. How? Send some chunky wires to all the major exchanges, and then simply wait to reverse the playbook on them. 400 BTC is dumped in a minute? Buy up 600 the next. 800 follows, ten minutes later? Enter a 2,000 BTC market buy. How long until the Bearwhale gets the message? And even if they don't, more critically: how long until the market does? Traders may be hard to convince at first—and the skepticism can't be blamed at this point, given how long this has been allowed to drag on. But again, a few plays straight from the Bearwhale's playbook (but reversed) will do the trick: a couple of three- or four-digit BTC buys in the morning, two or three hours apart...a couple more buys of similar magnitude in the evening...and some salubrious support in the meantime—say, a 300 BTC wall, with another 1,000 not far behind it?—will turn bears into bulls faster than you can say "irrational exuberance." The first-mover advantage will be massive. Sooner than one might think, the artificial trend will have morphed into a real one. Daily Discussions will once again be filled with traders quibbling about whether $3k or $8k will me a more appropriate cash-out point in the oncoming bubble. Miner selling will dry up, and margin longs will break the stratosphere. Potential Bearwhale-like attacks just need to be quickly countered for a little while longer, and inevitably rabid, foaming-at-the-mouth FOMO will take over, a rush of new participants will flood in...and, well, we know what happens from there. At this point in this and any related scenario, it would appear that the ceiling becomes a lot higher than the floor; that is, that we'd likely go up a lot higher than we could have ever possibly gone down (about $350, as of this writing). So...why hasn't it happened? Where art thou, Bullwhale? I am disappointed by thine absence. As always, constructive discussion is welcomed and appreciated.
Also, let's talk about bitcoin's potential killer apps:
In-store payments. Nope. Credit/debit cards, apple pay, google wallet are all way easier to use, available in most place (and faster in most cases) for the consumer. For BTC you have to first buy BTC which is annoying given verification requirements and bitcoin ATMs have way to large spreads. For credit cards you might even get cash back/rewards (though mostly US only).
Online payments. Obviously better prospects than in-store. Paypal announcement is very positive. Lots of recent progress. But most stores sell BTC immediately. For early adopters it's now easier to spend their BTC fortunes - downward pressure. To have new customers, it has to be easy to buy BTC then pay in BTC. Which will mean most new consumers will keep a small BTC balance (especially given the volatility) with which to make BTC payments - negligible price effect.
Remittances. Has a lot of potential. But the effect on the price will be minimal. Most remittances are of medium value, a few thousand dollars max. If it becomes even easier to send money it will be done in multiple smaller payments. Furthermore, nearly every single recipient will spend the money in full monthly or will need it in their local currency. Thus, for quite a while, bitcoin prices between 50-300$ will be enough to support remittances. And as demand for transactions increases, the velocity of the current money supply will go up to match - it's very cheap to do BTC transactions and will be until at least the halving of 2016.
Edit: OpenBazaar. Currently in beta. Will probably need a couple months for launch and at least another few until adoption wide enough to affect price. Don't think will be early enough to stop the likely incoming crash, but price effects will be promising after that since holding BTC will be needed.
Edit: Across border salary/freelancing payments. A global currency that's really fast and easy to transfer is advantageous in this case. But I haven't seen any news/action on this so adoption won't be quick enough to prevent another short term crash. Longer term it sounds very promising price wise.
No other killer apps (with > million users) in sight.
Given this, while I'm sure there will be more bubbles, I'm not expecting any in the immediate future. Furthermore, I'm expecting an even worse crash since all those buyers at 300$ will sell if the price bounces back under 300 in the next few days. I'm currently sitting on the sidelines with 0 BTC left and I'm waiting for the <100$ crash. Unfortunately I have neither the right type of account nor the confidence that the market 'exuberance' after the whale harpooning won't go for longer than I can keep a short open. Edit: Please note that I'm mostly talking about the short term here: 1 week to 3 months. Longer term anything might happen. Edit: I'm down to 0 BTC. Edit: The more I think about this the more sure I become of the coming second crash. Also, and thanks to your comments, I'm also more sure of bitcoin's bright future (long term, at least 6 months before price start to reflect it again). Back to trading - be on the lookout for waning exuberance. If price gets 'stuck' or starts going back down there won't be a floor until maybe 100. The previous 260/275$ floor has moved to 300$ as a bearwhale unloaded 30k there. Most of those who bought @300$ won't want to be bagholders and will sell if it hits 300$. And 30k is a lot to sell! Some will even sell early to take profits. And the books are very thin back to 300$.... Edit: They can't say they haven't been warned: http://www.reddit.com/Bitcoin/comments/2ih1us/psa_please_dont_invest_more_than_you_can_lose/
Dear Bitcoin community (all of it), I've been investing in Bitcoin since 2012 and have seen many ups and downs over the past 5 years. I was a big believer for a while, I stuck around during the last hardfork, during the Mt. Gox collapse, during the dark days of the Bearwhale, during the Paycoin/GAW scam, after Mike Hearn's rage-quit — point is, I've been around. Like most people, I have a pretty minimal understanding of the underlying cryptography and code of Bitcoin itself. I'm in this for two reasons:
I like the idea of a currency that is governed by math, not governments.
I have so far made money on it and believe I can make more as the idea takes deeper and deeper root.
Now, here's the thing: Bitcoin is getting harder and harder to use. I can't just send Bitcoins to someone anymore. I've stopped evangelizing about it because I don't want to get embarrassed by a 40-minute transaction and because I don't want to pay a dollar to send a dollar. I don't care what fixes it. But right now, it's broken as far as the average user concerned. Segwit, to be honest, sounds like an unnecessarily complex 'solution' that may or may not address the issue. But raising the block size limit (ideally making it dynamic) just sounds like the best, most practical solution to a person like me who does not have the time or inclination to read through scores of scientific whitepapers or scour line after line of code. My point is this: I'm not buying Bitcoins anymore. In fact, I'm shorting them heavily. Ethereum is the new game in town, and right now, it's on track to win out long term. Because: 1. It's not broken. If I send Ether, it arrives. 2. The fees aren't out of control. A few cents — as it should be. I'm not being punished for actually using the coin. 3. Devs listen to the community. Not the other way around. 4. They had the balls to fork. The DAO incident and the ensuing debate over Ethereum Classic were settled. The Ethereum blockchain is fine and Ethereum Classic is becoming a footnote for the hardliners to rally around. So, to the BU/Classic devs, I say the time has come. This has gone on entirely too long. Quit waiting for permission from the Chinese miners. They are after a fee market and will draw it out as long as they can. The first rule of economics: "People will do what they are incentivized to do.". The power of Bitcoin's persuasion does not lie in its hashing power. It lies in investors and users like me. If we have a useful coin, we will turn it into a profitable coin, which will make it a coin worth mining. We're not going to settle this with anything other than a fork. "Consensus" will only come when there are actually two options. So, let's do it. Let's take the short term hit to the price by releasing this thing into the wild. The better coin will win out eventually. Be it Segwit, BU/Classic, or Ethereum, or Monero, or Litecoin, or any other coin out there. I personally think it may already be too late, but the time has long since come. Bitcoin must evolve now or die a slow death.
Price has basically been flat since early April and tightly range bound since January. This recent run of stability (below 2% on BTCVol.info for 20+ days) is setting the foundation. The current quiet period may extend for another 3-4 months but after that me thinks we're headed up. Everything is in place: - Steady stream of good news (continued VC investment, effectiveness of the blockchain meme/reframing, more infrastructure in place (buy/sell/trade/remit/etc..)) - No major bad news - Increasing distance between Mt Gox, Silk Road, etc... = toxic memories fading (esp in mainstream media) - Price has stabilized/floor set - Global financial markets look set for a pull back in the next 6-12 months (China/Greece-EU/US) and some of that money will find it's way to bitcoin - Next halving is within sight Lots of good things and only a few lingering negatives (it'd be nice to have the blocksize debate fully resolved). We're on the launch pad and once the price clearly breaks upward ($275? $300? $350) the bull will start to run. Traders who have been shorting for the last 18mos will be converted into longs. Bearwhales will be rechimerized as Bullwhales. Mainstream media (always desperate for a story) will start to pick up on bitcoin's rise (did you see how fast they jumped on a tenuous BTC price rise-Grexit connection?). Once it's clear to everyone that we're in bull territory... liftoff. A lot of crow is going to get eaten. Krugman, Prof Bitcorn and all the rest. and maybe the ETF comes out at just the right time (early 2016) to give every mainstream investor in the US the ability to diversify their portfolio by adding this new asset class. So enjoy this time of relative quiet. Because it won't last.
Here is why I think we saw a Bitcoin price correction in 2014
First of all I'd like to say these is my opinion and by no means universal truth. In case you disagree with some points please be so kind to present your reasoning in comments. So the list of factors pushing the price down are:
Over 1,3 million newly mined bitcoin. Because the price of bitcoin reached crazy hights at the end of 2013, all the newly mined bitcoins are suddenly worth a fortune. Since miners have huge electricity costs and require return on money invested in mining hardware and equipment (we're talking big millions), we can safely assume majority of bitcoins mined will hit the market. Also, the effective supply of coins increased significantly more than it seems at first glance since many of the pre-existing coins are dormant, even lost, and not actively consisting the supply on the market. Newly mined coins are more likely to be dealed with caution (less coins lost forever) and more likely to be used actively (higher amount of speculators, traders, shorting,...).
Profit of bitcoin businesses. Any exchange fees or payment processor's profits are essentially the dollars invested into the crypto world being sucked out of bitcoin purchases. This includes the money to finance all the business activities, rents, salaries etc. of those companies. Consider this plain example. Investor invests 10k and channels it on the exchange. In the process of buying bitcoin total fees (buyer's, seller's, FX rate..) amount to 1k. The amount bitcoin and the market actually receives is 9k usd only as he could buy 18 btc at 500 usd for example.
(unlikely)mtgox and many stolen coins of 2014 hitting the market. Also, point 1 and 2 should be amplified by all the altcoins, not just bitcoins alone because of the connections in the markets.
What do you guys think? I personally believe 2014 was a success for the bitcoin. With the strength of network we have and the amount of btc daily mined we are doing pretty good. The slaughter of a bearwhale especially was a total confidence booster. Happy New Year!
r/bitcoin, can you help answer these reporter's questions so a new article can be written about Bitcoin's future in Russia?
This is the message I received. I thought it might be better to get the opinion/thoughts of everyone before answering her so she gets a more well-rounded view of things: "My name is Svetlana Alexandrova, I'm a reporter with Sputnik international News Agency that provides services in more than 4 languages. We are currently working on a piece related to the Bitcoin future in Russia. Earlier this year, the Ministry of Finance has developed a draft law on the introduction of responsibility for handling cash equivalents after President Vladimir Putin's request in March. Howether, just recently Russia's Ministry of Economic Development has reacted negatively to the bill to ban cash equivalents, including electronic money, such as bitcoins. According to the Ministry of Economic Development, the proposed definition lacks precision. Basically, any cash equivalents, such as gift cards and certificates, could be ambiguous, the ministry said. So, the future of Bitcoin in Russia is still unclear. In this connection, knowing your strong ties with Bitcoin comunity, we would like you to help us with providing answers to the following questions (or just the ones you find comfortable answering):
This year Russian authorities started to draft law to outlaw cryptocurrency in the country. Can you briefly describe the Asian goverments' official position on Bitcoin or any other cryptocurrency today?
Recently, the People's Bank of China (PBOC) has once again privately warned banks and payment companies to restrict customers' access to bitcoin exchanges, reports indicate. Can these warnings lead potentially to the legislation initiatives in this sphere?
Despite the warnings Asia is now the fastest growing region for the venture capital investment in Bitcoin.
What is the biggest advantage of Bitcoin? Is there a way to legalize their official trade in banks? According to your knowledge, do banks want to join cryptocurrency's boom?
Earlier this year the Dutch Prosecution Service leaked the documents about its plans for Project to hinder the development of the deep web's online marketplaces, which happens to also sell drugs among other things and use Bitcoin as a form of payment. Is the propensity for crime the biggest issue with the cryptocurrency's use?
Over the past 12 months, the bitcoin price has been buffeted by a diverse array of factors, ranging from adoption by payments giant PayPal and technology goliath Microsoft to the massive sell-order from the 'BearWhale' and rumored clampdowns by the Chinese authorities. The price of bitcoin opened the year at $770, according to the CoinDesk Price Index. By mid-December, it was trading in the mid-$300 range. This represents a drop of more than 50% from the start of the year.
Can you summarize and review the Bitcoin performance in 2014?
Let’s assume that the law to outlaw cryptocurrency in Russia is adopted. How bad can it be for Bitcoin price and credibility?
Looking forward to your reply. Best regards, Svetlana Alexandrova Special reporter of Sputnik International"
The BearWhale held onto the huge cache of coins through years of scandals and other bad news and was worth at least $37 million dollars at the end of 2013, the height of the MtGox bubble. He then ... I am the BearWhale. After a series of bad experiences with the banking system, I invested most of my life savings into bitcoin when the price was fairly low, around $8. For years I was a HODLer. I was holding when Trendon Shavers ripped everyone off. I was holding when the price was over a thousand, and I held after MtGox imploded. I believe strongly in Bitcoin’s decentralized promise of ... As Bitcoin’s pre-halving rally began to get traction recently, driving the price of BTC closer to $10,000, J0E007’s fortune started to reverse. Somewhere between May 7 and 8, his unrealized loss on Bitfinex grew to exceed $21 million. “Now JOE007 is REKT $20mln loss on his short position,” tweeted popular crypto enthusiast PlanB on April 30. . Shorting is a trading strategy based on ... I am the BearWhale. After a series of bad experiences with the banking system, I invested most of my life savings into bitcoin when the price was fairly low, around $8. For years I was a HODLer. I was holding when Trendon Shavers ripped everyone off. I was holding when the price was over a thousand, and I held after MtGox imploded. I believe strongly in Bitcoin’s decentralized promise of ... In an epic battle, bitcoin believers slayed a $9 million BearWhale on Monday morning. If none of that made sense, here's the skinny: Someone posted a limit order to sell 30,000 bitcoins at $300 ...
Bitcoin History: Slaying of the Bear Whale - Resist and Bite
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