If you put $1,000 in bitcoin in 2013, here’s how much you
If you put $1,000 in bitcoin in 2013, here’s how much you
Bitcoin's Price History - Investopedia
An Illustrated History Of Bitcoin Crashes
Bitcoin Profit Calculator
#1 Simple Bitcoin Price History Chart (Since 2009)
Bitcoin 11 Years - Achievements, Lies, and Bullshit Claims So Far - Tooootally NOT a SCAM !!!!
That's right folks, it's that time again for the annual review of how Bitcoin is going: all of those claims, predictions, promises .... how many have turned out to be true, and how many are completely bogus ??? Please post / link this on Bitcoin (I am banned there for speaking the truth, so I cannot do it) ... because it'a way past time those poor clueless mushrooms were exposed to the truth. Anyway, without further ado, I give you the Bitcoin's Achievements, Lies, and Bullshit Claims So Far ... . Bitcoin Achievements so far:
It has spawned a cesspool of scams (2000+ shit coin scams, plus 100's of other scams, frauds, cons).
Many 1,000's of hacks, thefts, losses.
Illegal Use Cases: illegal drugs, illegal weapons, tax fraud, money laundering, sex trafficking, child pornography, hit men / murder-for-hire, ransomware, blackmail, extortion, and various other kinds of fraud and illicit activity.
Legal Use Cases: Steam Games, Reddit, Expedia, Stripe, Starbucks, 1000's of merchants, cryptocurrency conferences, Ummm ????? The few merchants who "accept Bitcoin" immediately convert it into FIAT after the sale, or require you to sell your coins to BitPay or Coinbase for real money, and will then take that money. Some of the few who actually accept bitcoin haven't seen a customer who needed to pay with bitcoin for the last six months, and their cashiers no longer know how to handle that.
Contributing significantly to Global Warming.
Wastes vasts amounts of electricity on useless, do nothing work.
Exponentially raises electricity prices when big miners move into regions where electricity was cheap.
It’s the first "currency" that is not self-sustainable. It operates at a net loss, and requires continuous outside capital to replace the capital removed by miners to pay their costs. It’s literally a "black hole currency."
It created a new way for people living too far from Vegas to gamble all their life savings away.
Spawned "blockchain technology", a powerful technique that lets incompetent programmers who know almost nothing about databases, finance, programming, or blockchain scam millions out of gullible VC investors, banks, and governments.
Increased China's foreign trade balance by a couple billion dollars per year.
Helped the FBI and other law enforcement agents easily track down hundreds of drug traffickers and drug users.
Wasted thousands if not millions of man-hours of government employees and legislators, in mostly fruitless attempts to understand, legitimize, and regulate the "phenomenon", and to investigate and prosecute its scams.
Rekindled the hopes of anarcho-capitalists and libertarians for a global economic collapse, that would finally bring forth their Mad Max "utopia".
Added another character to Unicode (no, no, not the "poo" 💩 character ... that was my first guess as well 🤣)
Provides an easy way for malware and ransomware criminals to ply their trade and extort hospitals, schools, local councils, businesses, utilities, as well as the general population.
~~Bitcoin is "striking fear into the hearts of bankers, precisely because Bitcoin eliminates the need for banks. ~~, Mark Yusko, billionaire investor and Founder of Morgan Creek Capital, https://www.bitcoinprice.com/predictions/
"A bitcoin miner in every device and in every hand."
"All the indicators are pointing to a huge year and bigger than anything we have seen before."
"Bitcoin is communism and democracy working hand in hand."
"Bitcoin is freedom, and we will soon be free."
"Bitcoin isn't calculated risk, you're right. It's downright and painfully obvious that it will consume global finance."
"Bitcoin most disruptive technology of last 500 years"
"Bitcoin: So easy, your grandma can use it!"
"Creating a 4th Branch of Government - Bitcoin"
"Future generations will cry laughing reading all the negativity and insanity vomited by these permabears."
"Future us will thank us."
"Give Bitcoin two years"
"HODLING is more like being a dutiful guardian of the most powerful economic force this planet has ever seen and getting to have a say about how that force is unleashed."
"Cut out the middleman"
"full control of your own assets"
"reduction in wealth gap"
"cannot print money out of thin air"
"Why that matters? Because blockchain not only cheaper for them, it'll be cheaper for you and everyone as well."
"If you are in this to get rich in Fiat then no. But if you are in this to protect your wealth once the current monetary system collapse then you are protected and you'll be the new rich."
"Theres the 1% and then theres the 99%. You want to be with the rest thats fine. Being different and brave is far more rewarding. No matter your background or education."
"NO COINERS will believe anything they are fed by fake news and paid media."
"I know that feeling (like people looking at you as in seeing a celebrity and then asking things they don't believe until their impressed)."
"I literally walk round everyday looking at other people wondering why they even bother to live if they don't have Bitcoin in their lives."
"I think bitcoin may very well be the best form of money we’ve ever seen in the history of civilization."
"I think Bitcoin will do for mankind what the sun did for life on earth."
"I think the constant scams and illegal activities only show the viability of bitcoin."
"I think we're sitting on the verge of exponential interest in the currency."
"I'm not using hyperbole when I say Satoshi found the elusive key to World Peace."
"If Jesus ever comes back you know he's gonna be using Bitcoin"
"If this idea was implemented with The Blockchain™, it would be completely flawless! Flawless I tell you!"
"If you're the minimum wage guy type, now is a great time to skip food and go full ramadan in order to buy bitcoin instead."
"In a world slipping more and more into chaos and uncertainty, Bitcoin seems to me like the last solid rock defeating all the attacks."
"In this moment, I am euphoric. Not because of any filthy statist's blessing, but because I am enlightened by own intelligence."
"Is Bitcoin at this point, with all the potential that opens up, the most undervalued asset ever?"
"It won't be long until bitcoin is an everyday household term."
"It's the USD that is volatile. Bitcoin is the real neutral currency."
"Just like the early Internet!"
"Just like the Trojan Horse of old, Bitcoin will reveal its full power and nature"
"Ladies if your man doesnt have some bitcoin then he cant handle anything and has no danger sex appeal. He isnt edgy"
"let me be the first to say if you dont have bitcoin you are a pussy and cant really purchase anything worldwide. You have no global reach"
"My conclusion is that I see this a a very good thing for bitcoin and for users"
"No one would do such a thing; it'd be against their self interests."
"Ooh lala, good job on bashing Bitcoin. How to disrespect a great innovation."
"Realistically I think Bitcoin will replace the dollar in the next 10-15 years."
"Seperation of money and state -> states become obsolete -> world peace."
"Some striking similarities between Bitcoin and God"
"THANK YOU. Better for this child to be strangled in its crib as a true weapon for crypto-anarchists than for it to be wielded by toxic individuals who distort the technology and surrender it to government and corporate powers."
"The Blockchain is more encompassing than the internet and is the next phase in human evolution. To avoid its significance is complete ignorance."
"The bull run should begin any day now."
"The free market doesn't permit fraud and theft."
"The free market will clear away the bad actors."
"The only regulation we need is the blockchain."
"We are not your slaves! We are free bodies who will swallow you and puke you out in disgust. Welcome to liberty land or as that genius called it: Bitcoin."
"We do not need the bankers for Satoshi is our saviour!"
"We have never seen something so perfect"
"We must bring freedom and crypto to the masses, to the common man who does not know how to fight for himself."
"We verified that against the blockchain."
"we will see a Rennaisnce over the next few decades, all thanks to Bitcoin."
"Well, since 2006, there has been a infinite% increase in price, so..."
"What doesn't kill cryptocurrency makes it stronger."
"When Bitcoin awake in normally people (real people) ... you will have this result : No War. No Tax. No QE. No Bank."
"When I see news that the price of bitcoin has tanked (and thus the market, more or less) I actually, for-real, have the gut reaction "oh that’s cool, I’ll be buying cheap this week". I never knew I could be so rational."
"Where is your sense of adventure? Bitcoin is the future. Set aside your fears and leave easier at the doorstep."
"Yes Bitcoin will cause the greatest redistribution of wealth this planet has ever seen. FACT from the future."
"You are the true Bitcoin pioneers and with your help we have imprinted Bitcoin in the Canadian conscience."
"You ever try LSD? Perhaps it would help you break free from the box of state-formed thinking you have limited yourself..."
"Your phone or refrigerator might be on the blockchain one day."
The banks can print money whenever they way, out of thin air, so why can't crypto do the same ???
Central Banks can print money whenever they way, out of thin air, without any consequences or accounting, so why can't crypto do the same ???
It's impossible to hide illegal, unsavory material on the blockchain
It's impossible to hide child pornography on the blockchain
All Bitccoins are the same, 100% identical, one Bitcoin cannot be distinguished from any other Bitcoin.
The price of Bitcoin can only go up because of scarcity / 21 million coin limit. (Bitcoin is open source, anyone can create thir own copy, and there are more than 2,000+ Bitcoin copies / clones out there already).
immune to government regulation
"a world-changing technology"
"a long-term store of value, like gold or silver"
"To Complex to Be Audited."
"Old Auditing rules do not apply to Blockchain."
"Old Auditing rules do not apply to Cryptocurrency."
Bitcoin now at $16,600.00. Those of you in the old school who believe this is a bubble simply have not understood the new mathematics of the Blockchain, or you did not cared enough to try. Bubbles are mathematically impossible in this new paradigm. So are corrections and all else", John McAfee, 7 Dec 2017 @ 5:09 PM,https://mobile.twitter.com/officialmcafee/status/938938539282190337
2013-11-27: ""What is a Citadel?" you might wonder. Well, by the time Bitcoin became worth 1,000 dollar [27-Nov-2013], services began to emerge for the "Bitcoin rich" to protect themselves as well as their wealth. It started with expensive safes, then began to include bodyguards, and today, "earlies" (our term for early adapters), as well as those rich whose wealth survived the "transition" live in isolated gated cities called Citadels, where most work is automated. Most such Citadels are born out of the fortification used to protect places where Bitcoin mining machines are located. The company known as ASICminer to you is known to me as a city where Mr. Friedman rules as a king.", u/Luka_Magnotta, aka time traveler from the future, 31-Aug-2013, https://www.reddit.com/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/
2018-12: Listen up you giggling cunts... who wants some?...you? you want some?...huh? Do ya? Here's the deal you fuckin Nerds - Butts are gonna be at30 grandor more by next Christmas  - If they aren't I will publicly administer an electronic dick sucking to every shill on this site and disappear forever - Until then, no more bans or shadow bans - Do we have a deal? If Butts are over 50 grand me and Lammy get to be mods. Deal? Your ole pal - "Skully"u/10GDeathBoner, 3-Feb-2018 https://www.reddit.com/Buttcoin/comments/7ut1ut/listen_up_you_giggling_cunts_who_wants_someyou/
2018-12: "Bitcoin could be at$40,000by the end of 2018, it really easily could", Mike Novogratz, a former Goldman Sachs Group Inc. partner, ex-hedge fund manager of the Fortress Investment Group and a longstanding advocate of cryptocurrency, 21-Sep-2018, https://www.youtube.com/watch?v=6lC1anDg2KU
2018-12: Bitcoin will end 2018 at the price point of$50,000, Ran Neuner, host of CNBC’s show Cryptotrader and the 28th most influential Blockchain insider according to Richtopia,https://www.bitcoinprice.com/predictions/
20 interesting facts about bitcoin that you may not have known. -The first transaction with bitcoin was made on January 21, 2009. -In total, 21 million bitcoins can be produced, which will be mined gradually due to the complexity of the mining process. The last coin will be mined in 2140. -It is still unknown who created bitcoin. There is a certain name – Satoshi Nakamoto-but no one knows whether it is an individual or a group of programmers. While the Creator of bitcoin remains anonymous. -The purpose of creating bitcoin is to decentralize the financial turnover, to withdraw it from the monopoly control of the States. Simply put, free money with easy and fast transfer. So far, this is not always successful: somewhere the technology fails, somewhere the state does not allow the development of progress. In addition, bitcoin transactions are not cheap. -More than half of the already mined bitcoins are now owned by 1000 people. -Most bitcoin wallets (~90%) hold no more than 0.1 BTC on their balance. -Only a third of the mined coins are actively involved in the turnover. The rest are inactive. Experts suggest that most inactive bitcoins are simply lost or forgotten by their users. Experts of Fortrader magazine remind that if the password from the bitcoin wallet is lost, it is impossible to restore it, this is how the system works. -For example, in 2017, a woman unsuccessfully tried to remember her password from a bitcoin wallet. She turned to magicians, healers, and hypnotists, but without success. These coins will be lost forever to the Network. -The highest bitcoin rate recorded at the time of writing was $20,042. This was in December 2017. Then there was a strong drop in the price of the coin. -The value of the cryptocurrency grew gradually. But bitcoin became more expensive than an ounce of gold in 2013. -The biggest dynamics of growth-the fall of the bitcoin exchange rate showed in April 2013, when the day fell immediately by 80%. -Most of the exchange transactions of bitcoins takes place no, not on the dollars on the yuan. -Now there are more than 3000 bitcoin ATMs in the world, the main share of which is in America, Canada and Europe. Moscow also has a small network of such ATMs. Government agencies in many countries have long accepted bitcoins as payments. -For the first time, 2 pizzas were purchased for bitcoins. This was done by the miner Laszlo in 2010, paying 10,000 bitcoins for food. It is easy to calculate, based on the bitcoin exchange rate, which small country he could feed pizza today. -Another annoying situation: a resident of the UK accidentally threw out a hard drive with a wallet that had 7500 bitcoins. This still needs to be experienced. -The most expensive transaction was the transfer of bitcoins by a certain user who inadvertently paid 80.99 BTC instead of 0.01 bitcoin. In 2013, it was $50,000. -In General, the bitcoin exchange rate is a reason for endless controversy. Someone believes that its rate is overvalued and predicts a fall to $1800, someone writes about the imminent growth of as much as $100,000. There are even schemes of collapse and catastrophes associated with bitcoin. -In the meantime, the capitalization of Bitcoin is greater than the GDP of some countries, such as Ukraine and Estonia. -Thailand is the first country that has actively taken up the regulation of bitcoin. First she forbade it, then she allowed it. Now many countries are in search of a solution to the question of how to make cryptocurrencies official and protect the population from possible fraud. -Cryptocurrencies are actively winning back the market from Fiat money. Many retail outlets and even state structures are happy to accept bitcoin and other coins for payment. However, what is important, most new cryptocurrencies do not achieve popularity-they appear and disappear. You have to be careful with that. More https://www.youtube.com/channel/UCmYpavSD9aALIt_lhde2Ewg?view_as=subscriber
https://preview.redd.it/i2ciepxqx3w31.png?width=800&format=png&auto=webp&s=6d9cb51b182d88ff981940c7c49b5095ba7e9434 Cryptocurrency Ethereum is a new digital currency, which, like Bitcoin, is built on the basis of a blockchain, where information about monetary transactions is recorded. Recently, Ether began to be considered as a competitor to bitcoin, which is quite justified. The technology of the platform, which uses the digital currency in question, is characterized by a unique opportunity to register transactions with various assets. This happens on the basis of contracts in the blockchain. The usual legal formalities are not used. We are talking about smart contracts, which are considered the newest era in blockchain financial technologies. A "smart contract" is a special computer code capable of facilitating the exchange of money, shares and other valuables. The computer program itself performs the underlying transaction under the prescribed conditions. New developments are combined with remote banking services implemented via SMS. Because of the low cost, the opportunity is particularly attractive to developing States. Ethereum is of particular interest due to its innovative capabilities, which involve not only settlements with other people, but also the exchange of various resources, as well as conducting various kinds of transactions with exchange and other assets. All this is made possible by means of "smart contracts" that allows you to implement transactions without the involvement of guarantors. All transactions are performed directly by the platform itself. In 2016, The Ethereum hard fork was observed, which led to its division into two different categories. In addition to the main Ethereum (ETH) appeared EthereumClassic (ETC). This had a significant impact on the value of the coin, as a result of which it fell. For a long time investors ignored Ethereum, but recently It resumed rapid growth again. At the same time, the price of both variants of digital currency has increased.
The history of
https://preview.redd.it/a98ayxkqs3w31.png?width=800&format=png&auto=webp&s=573ad133f0dbeed3c6e4809cbfcf9463450fa389 The Creator of Ethereum is considered a well-known Russian programmer Vitalik Buterin, who works and lives abroad. It was he who at the end of 2013 first described Ethereum in Bitcoin Magazine. In April 2014, the system was formally described by Gavin wood in the so-called "yellow book". Around the same time period, the platform was described as the next generation Bitcoin platform. Since mid-2014, we started to raise money for the development of the system. For this purpose crowdfunding was used — a method of collective financing, which is based on voluntary contributions. They could be made by anyone who wanted to become investors in this project. For financial development, Ethereum distributed the initial amount of ether through a forty-two-day initial public offering, receiving 31591 Bitcoins. This amount was large enough that a large amount of ether was obtained through an intermediate exchange for dollars. Ethereum has attracted the attention of numerous banks. It was seen as a testing platform for mastering smart contracts and bonds. The blockchain platform launched on July 30, 2015. Continuing to talk about the history of Ethereum, we note that on March 14, 2016, it stopped working in the previous alpha version, in which the developers could not guarantee the safety of users. The new version of the Protocol was called HomeSteade, also belonged to the previous, but more stable version. To date, the site is actively used and works in full force.
flexibility of the platform, ensuring the ability to interact with different applications;
rapid execution of operations, which requires only 20-30 seconds;
the high productivity of mining.
If we talk about the value of the Ethereum cryptocurrency, it is constantly changing and often in a big way. Today, the price of one unit ranges from 284-306 dollars. ETH is stored on wallets, the creation of which you will learn later. At the same time, information is under reliable protection, as well as money.
a block in Ethereum is generated in 15 seconds. In the case of Bitcoin cryptocurrency the time is 10 minutes;
economic benefit. the income from generating a Bitcoin block decreases 3 times every 4 years. Profit from mining of the ether remains at a constant indicators;
in order to organize Bitcoin mining, it is necessary to have a sufficiently powerful computer technology, to work as part of a pool. To produce a competing digital coin is much easier, you can do it yourself, without resorting to the help of pools;
Bitcoin was developed by individuals, and the first miners easily received the lion's share of coins. Cryptocurrency ETH only in 5 years will be mined in half of the total;
Ethereum has its own internal code that allows you to calculate the mathematical model of the system, having the necessary computing equipment and software.
No wonder cryptocurrency ETH is rightly called the main competitor of Bitcoin-it is much easier to produce, it opens up more opportunities, has good prospects for development.
How to create a wallet in the system
https://preview.redd.it/348arfhbt3w31.png?width=1000&format=png&auto=webp&s=8a91a5eeb216108726d45c7618619362a4ae7da5 To open your own Ethereum wallet, where the digital currency will be stored, you need to do the following: go to the website https://www.myetherwallet.com/ and choose on the main page of Russian language; after that, a form will immediately open where you can register a wallet. Here you need to come up with a fairly long and complex password that you need to enter in the free field; click the "Create wallet" button. It is better to save the password in a separate text file, so as not to forget; you need to download the Keystone file to your computer — you can use it to access your own wallet in the system. The red color will be highlighted warning that the site on which the registration is carried out, does not store the entered data. Therefore, if you do not save the password, access to the wallet will not be restored; after all the actions you need to press the button to continue the operation. Next, you will be shown the private key and the offer to save or print it. This key must be inserted into the above mentioned text document, because it can also be used to open the Ethereum wallet; press the button to save and continue. Registration does not require much time, the main thing is to save all passwords and access codes, so that you can easily open your wallet.
How to earn digital coins
https://preview.redd.it/j141ewfjt3w31.png?width=1280&format=png&auto=webp&s=e92bac2afb81b4e0b5cfb9bb20878e103d853ec8 If we talk about how to earn Ethereum, there are two main ways: You will need a powerful enough computer. We are talking about mining Ethereum. For its implementation, first of all, you need to make sure that your computer meets the minimum technical characteristics. Then you need to download special software and run it in the work. Above we said that mining Ethereum is much easier than mining Bitcoin or Litecoin cryptocurrency, earnings will not keep you waiting. The procedure can be performed independently, but with the help of pools, the amount of income will be much larger. Ethereum taps are another way to earn digital coins. They involve the need to perform fairly simple tasks for a fee. Depending on the type of crane tasks can be completely different: watching videos or advertising, passing simple free games and more. It is important to understand that Ethereum cranes do not assume too large earnings. To get the desired amount, you will have to work hard and spend a lot of time. In conclusion, we note that the most justified decision will be the extraction of Ethereum. In spite of the fact that it is necessary to invest money in equipment to receive necessary capacities, all expenses will be possible to recoup quickly enough. The main thing is to carefully study the materials on the topic, focusing on the requirements for the processor, video cards, motherboard. In this case, you can count on the successful extraction of Ethereum. If you are interested in large sums, impressive income, you should ask the question of cooperation with pools. The latter combine several units of equipment, so the total capacity will reach very high marks. Thus, it will become much easier to earn Ethereum. It should be noted that the participants of the pool work for a single result. The total number of coins mined during a certain period is divided among all those who took part in it. The percentage of parts depends on the capacity of the equipment provided by the person. One should not think that such Ethereum earnings are nothing but deception. Of course, there are scammers in the network, but most pool organizers are really interested in their long-term and transparent functioning, because their own income depends on it. In order not to make a mistake with the choice, give preference to proven pools. Useful information can be found in the reviews of people who personally organized the earnings of Ethereum in this way, made a profit.
Abstract Cryptocurrencies, based on and led by Bitcoin, have shown promise as infrastructure for pseudonymous online payments, cheap remittance, trustless digital asset exchange, and smart contracts. However, Bitcoin-derived blockchain protocols have inherent scalability limits that trade-off between throughput and latency and withhold the realization of this potential.This paper presents Bitcoin-NG, a new blockchain protocol designed to scale. Based on Bitcoin's blockchain protocol, Bitcoin-NG is Byzantine fault tolerant, is robust to extreme churn, and shares the same trust model obviating qualitative changes to the ecosystem.In addition to Bitcoin-NG, we introduce several novel metrics of interest in quantifying the security and efficiency of Bitcoin-like blockchain protocols. We implement Bitcoin-NG and perform large-scale experiments at 15% the size of the operational Bitcoin system, using unchanged clients of both protocols. These experiments demonstrate that Bitcoin-NG scales optimally, with bandwidth limited only by the capacity of the individual nodes and latency limited only by the propagation time of the network. References  Andresen, G. O(1) block propagation. https://gist.github.com/gavinandresen/#file-blockpropagation-md, retrieved July. 2015.  Aspnes, J. Randomized protocols for asynchronous consensus. Distributed Computing 16, 2-3 (2003), 165–175.  Back, A., Corallo, M., Dashjr, L., Friedenbach, M., Maxwell, G., Miller, A., Poelstra, A., Timn, J., and Wuille, P. Enabling blockchain innovations with pegged sidechains. http://cs.umd.edu/projects/coinscope/coinscope.pdf, 2014.  Bamert, T., Decker, C., Elsen, L., Wattenhofer, R., and Welten, S. Have a snack, pay with Bitcoins. In Peer-to-Peer Computing (P2P), 2013 IEEE Thirteenth International Conference on (2013), IEEE, pp. 1–5.  Bellare, M., and Rogaway, P. Random oracles are practical: A paradigm for designing efficient protocols. In Proceedings of the 1st ACM conference on Computer and communications security (1993), ACM, pp. 62–73.  Bitcoin community. Bitcoin source. https://github.com/bitcoin/bitcoin, retrieved Mar. 2015.  Bitcoin community. Protocol rules. https://en.bitcoin.it/wiki/Protocol_rules, retrieved Sep. 2013.  Bitcoin community. Protocol specification. https://en.bitcoin.it/wiki/Protocol_specification, retrieved Sep. 2013.  BlockTrail. BlockTrail API. https://www.blocktrail.com/api/docs#api_data, retrieved Sep. 2015.  Bonneau, J., Miller, A., Clark, J., Narayanan, A., Kroll, J. A., and Felten, E. W. Research perspectives on Bitcoin and second-generation cryptocurrencies. In Symposium on Security and Privacy (San Jose, CA, USA, 2015), IEEE.  Buterin, V. Slasher: A punitive proof-of-stake algorithm. https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof-of-stake-algorithm/, January 2015.  CNNMoney Staff. The Ashley Madison hack...in 2 minutes. http://money.cnn.com/2015/08/24/technology/ashley-madison-hack-in-2-minutes/, retrieved Sep. 2015.  CoinDesk. Bitcoin venture capital. http://www.coindesk.com/bitcoin-venture-capital/, retrieved Sep. 2015.  Colored Coins Project. Colored Coins. http://coloredcoins.org/, retrieved Sep. 2015.  Corallo, M. High-speed Bitcoin relay network. http://sourceforge.net/p/bitcoin/mailman/message/31604935/, November 2013.  Decker, C., and Wattenhofer, R. Information propagation in the Bitcoin network. In IEEE P2P (Trento, Italy, 2013).  Decker, C., and Wattenhofer, R. A fast and scalable payment network with Bitcoin Duplex Micropayment Channels. In Stabilization, Safety, and Security of Distributed Systems - 17th International Symposium, SSS 2015, Edmonton, AB, Canada, August 18-21, 2015, Proceedings (2015), Springer, pp. 3–18.  Dwork, C., Lynch, N. A., and Stockmeyer, L. J. Consensus in the presence of partial synchrony. J. ACM 35, 2 (1988), 288–323.  Eyal, I., Birman, K., and van Renesse, R. Cache serializability: Reducing inconsistency in edge transactions. In 35th IEEE International Conference on Distributed Computing Systems, ICDCS 2015, Columbus, OH, USA, June 29 - July 2, 2015 (2015), pp. 686–695.  Eyal, I., and Sirer, E. G. Bitcoin is broken. http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/, 2013.  Eyal, I., and Sirer, E. G. Majority is not enough: Bitcoin mining is vulnerable. In Financial Cryptography and Data Security (Barbados, 2014).  Garay, J. A., Kiayias, A., and Leonardos, N. The Bitcoin backbone protocol: Analysis and applications. In Advances in Cryptology - EUROCRYPT 2015 - 34th Annual International Conference on the Theory and Applications of Cryptographic Techniques, Sofia, Bulgaria, April 26-30, 2015, Proceedings, Part II (2015), pp. 281–310.  Garcia-Molina, H. Elections in a distributed computing system. Computers, IEEE Transactions on 100, 1 (1982), 48–59.  Hearn, M., and Spilman, J. Rapidly-adjusted (micro)payments to a pre-determined party. https://en.bitcoin.it/wiki/Contract, retrieved Sep. 2015.  Heilman, E., Kendler, A., Zohar, A., and Goldberg, S. Eclipse attacks on Bitcoin’s peerto-peer network. In 24th USENIX Security Symposium, USENIX Security 15, Washington, D.C., USA, August 12-14, 2015. (2015), pp. 129–144.  Kosba, A., Miller, A., Shi, E., Wen, Z., and Papamanthou, C. Hawk: The blockchain model of cryptography and privacy-preserving smart contracts. Cryptology ePrint Archive, Report 2015/675, 2015. http://eprint.iacr.org/.  Kroll, J. A., Davey, I. C., and Felten, E. W. The economics of Bitcoin mining or, Bitcoin in the presence of adversaries. In Workshop on the Economics of Information Security (2013).  Lamport, L. Using time instead of timeout for fault-tolerant distributed systems. ACM Transactions on Programming Languages and Systems 6, 2 (Apr. 1984), 254–280.  Le Lann, G. Distributed systems-towards a formal approach. In IFIP Congress (1977), vol. 7, Toronto, pp. 155–160.  Lewenberg, Y., Sompolinsky, Y., and Zohar, A. Inclusive block chain protocols. In Financial Cryptography (Puerto Rico, 2015).  Litecoin Project. Litecoin, open source P2P digital currency. https://litecoin.org, retrieved Nov. 2014.  Meiklejohn, S., Pomarole, M., Jordan, G., Levchenko, K., McCoy, D., Voelker, G. M., and Savage, S. A fistful of bitcoins: characterizing payments among men with no names. In Proceedings of the 2013 Internet Measurement Conference, IMC 2013, Barcelona, Spain, October 23-25, 2013 (2013), pp. 127–140.  Miller, A., and Jansen, R. Shadow-Bitcoin: Scalable simulation via direct execution of multithreaded applications. IACR Cryptology ePrint Archive 2015 (2015), 469.  Miller, A., and Jr., L. J. J. Anonymous Byzantine consensus from moderately-hard puzzles: A model for Bitcoin. https://socrates1024.s3.amazonaws.com/consensus.pdf, 2009.  Miller, A., Litton, J., Pachulski, A., Gupta, N., Levin, D., Spring, N., and Bhattacharjee, B. Preprint: Discovering Bitcoins public topology and influential nodes. http://cs.umd.edu/projects/coinscope/coinscope.pdf, 2015.  Moraru, I., Andersen, D. G., and Kaminsky, M. Egalitarian Paxos. In ACM Symposium on Operating Systems Principles (2012).  Nakamoto, S. Bitcoin: A peer-to-peer electronic cash system. http://www.bitcoin.org/ bitcoin.pdf, 2008.  Nayak, K., Kumar, S., Miller, A., and Shi, E. Stubborn mining: Generalizing selfish mining and combining with an eclipse attack. IACR Cryptology ePrint Archive 2015 (2015), 796.  Pazmino, J. E., and da Silva Rodrigues, C. K. ˜ Simply dividing a Bitcoin network node may reduce transaction verification time. The SIJ Transactions on Computer Networks and Communication Engineering (CNCE) 3, 2 (February 2015), 17–21.  Pease, M. C., Shostak, R. E., and Lamport, L. Reaching agreement in the presence of faults. J. ACM 27, 2 (1980), 228–234.  Peck, M. E. Adam Back says the Bitcoin fork is a coup. http://spectrum.ieee.org/tech-talk/computing/networks/the-bitcoin-for-is-a-coup, Aug 2015.  Poon, J., and Dryja, T. The Bitcoin Lightning Network. http://lightning.network/lightning-network.pdf, February 2015. Draft 0.5.  Sapirshtein, A., Sompolinsky, Y., and Zohar, A. Optimal selfish mining strategies in Bitcoin. CoRR abs/1507.06183 (2015).  Schneider, F. B. Implementing fault-tolerant services using the state machine approach: A tutorial. ACM Computing Surveys 22, 4 (Dec. 1990), 299–319.  Sompolinsky, Y., and Zohar, A. Accelerating Bitcoin’s transaction processing. fast money grows on trees, not chains. In Financial Cryptography (Puerto Rico, 2015).  Sompolinsky, Y., and Zohar, A. Secure high-rate transaction processing in Bitcoin. In Financial Cryptography and Data Security - 19th International Conference, FC 2015, San Juan, Puerto Rico, January 26-30, 2015, Revised Selected Papers (2015), pp. 507–527.  Stathakopoulou, C. A faster Bitcoin network. Tech. rep., ETH, Z¨urich, January 2015. Semester Thesis, supervised by C. Decker and R. Wattenhofer.  Swanson, E. Bitcoin mining calculator. http://www.alloscomp.com/bitcoin/calculator, retrieved Sep. 2013.  The Ethereum community. Ethereum white paper. https://github.com/ethereum/wiki/wiki/White-Paper, retrieved July. 2015.  Wikipedia. List of cryptocurrencies. https://en.wikipedia.org/wiki/List_of_cryptocurrencies, retrieved Oct. 2013.
Starting with almost nothing, I made almost $500,000 gambling with Bitcoin. I then lost it all in about 60 seconds. I am now $50k in debt and will most likely lose my job, my visa status, my fiancee. AMA.
EDIT: 01/12/14 EDIT: Thank you all for taking the time to read this. The overwhelming majority of your responses have been very supportive, and I feel that I got a lot of perspective. I am in tears right now, because in my self-loathing state I really did not expect so much positive feedback. I need to come clean to my fiancee, because that is the one variable that I can control. This is a story of luck, hope, greed, despair, stupidity. Over the past 10 days I have gone one a rollercoaster ride of the full spectrum of human emotion. I am trying to live down what happened, and maybe this AMA will help me. I feel this can work both ways too, and I am grateful for any advice I receive. Hopefully also it will help you! I say that I hope my story will help you and I really mean that any of you, because let me start off by saying that I am not a gambler, and I have never even exhibited gambling tendencies before. I am a risktaker and I enjoy new experiences, but I have always considered myself responsible and I have a sound understanding of the maths behind gambling. I know that the house always wins. But after what happened to me, how quickly I got sucked in, how much money I made, and how it all ended just days later, I honestly do not feel that I was fully in control of my actions. If it happened to me, it can happen to you too, and I sincerely hope that after reading this, it never will. Let me give some more specific details, so that you have a more complete picture. I will fill in the rest in response to your questions. EDIT: I ran out of space for proof, please see comments.
My name is Bob. I am a grad student in math, living in California1 .
I got into Bitcoin as an investment. The last 15 days or so have been extremely tempestuous for Bitcoin, and the events of this AMA coincided with the biggest crash in Bitcoin's history.
Around late march I started learning how to play blackjack, just as a fun hobby. I am a multi-faceted person with many interests, and this was just another mini-hobby that I took up. I was very interested in basic strategy, and was hoping to use it at a casino on our 2-year anniversary with my fiancee. She loves to "gamble" in a very innocent sense of the word: she and her girlfriends will go to a casino, have some drinks and have fun losing a bunch of $25 promotional vouchers. I wanted to come with her and impress her by scraping a small profit with basic strategy2 .
I then discovered bitZino (www.bitzino.com), and I realized that the best way to learn basic strategy is to have a small financial stake to motivate me. I played for small stakes, made some money, then took a couple of bad beats. I lost most of my investment profits and was down to about $4,000. Then I switched to roulette3 . I quickly recouped my losses, and began to lose myself. This was the beginning of the end.
On April 1, Bitcoin broke $100 for the first time. I played more and more, and the value of my winnings increased more and more. I was suddenly into big money.
By April 10, I had worked my way up to almost $500,000. I realized how lucky I was to have this amount of money. It was Bitcoin, but it was one click away from being in my bank account: this was real money.
That morning, the crash began. I kept playing. On April 10 I lost all my profits. (I don't want to clutter the summary with specific details, but if you are interested, I posted them below.)
At this point I was in full-tilt mode. Mt.Gox was closed for a 24-hour cooldown following the crash, but even this 24-hour period was not enough for me. A part of me just shut off, and this was when I made the Really Big Mistake. I dipped into my student tuition loan (around $50,000). I turned into an animal, and I lost everything.
I literally went almost mad at this point. Out of grief I contacted bitzino and exchanged some pitiful emails. They were very supportive, emotionally4 . I am not even sure what I hoped to achieve (I did not sleep for 2 days, drank and took a lot of anti-anxiety meds, which can make you act in weird ways).
My fiancee knew I was upset, and I owned up that I lost a lot of money. I said it was due to the crash (which did happen on the same day). She could see the charts so she believed me, but she does not know that I lost every single cent. Lies, but I felt that I did what I had to do (her dad had a major gambling and alcohol problem, so I really could not break her heart like that.)
The money that I lost is for tuition. It's just under $50k as I already said. The most immediate payment is due end of May, which is around $5k (the remainder of this academic year). The rest ($40k) is due over the following academic year (13/14). If I can pay off the $5k I will at least survive until the summer and maybe nobody will notice. I have not told anybody what happened, except my flatmate who I have known since high school and am pretty close with.
The reality is I will most likely be forced to withdraw from the program, because the payments are due September and Christmas and my visa status does not permit me to work part-time. I will have to return home to England and I will lose my fiancee (who is also on a student visa).
So this is pretty much my story. I meant for this to be short, but I now I'm almost at the word limit. I hope there is still room for questions! I realize that there are a lot of people who will say that I had it coming, and I fully accept that. The truth is that I am a bad person, and it was not even some conflict of good and bad, this was just all bad. I lose as a human being, and I deserve nothing but the worst of what life has to offer me in the future. And if I sound incongruently cheerful, it's probably because the gravity of the situation has not fully sunk in yet. Trust me, I am not cheerful. I have literally lost everything, I am suicidal, and there is literally no silver lining here. So please reserve your judgment; I will be judged to the fullest extent over however long a time I have left to live. Gambling details:
By April 10, I had gambled my way up to almost $500,000. That morning, the crash began. I foresaw the crash, but like most speculators, I did not know where the top was going to be. It was at $266. I put in a sell when the price went below $230, which was my stop, but Mt.Gox (the main Bitcoin exchange) was lagged so badly that my order would not go through.
Not being able to sell, I got greedy and decided to "top up" one more time with roulette. I felt justified in this somehow because it was Mt.Gox's fault that I could not cash out my ridiculous profits. I started with a $100 bet I believe. I bet on red. What followed was a run of about 20 occurences of black5 . There must have been two reds in between the stream of blacks. After hitting the max bet I just kept hitting red, and it kept turning black. Once you hit the max bet, the martingale essentially turns into a random walk. So a single red does not save you. Instead you rely on more red than blacks, within a certain safety margin. I failed both the martingale and the random walk. I lost ~1800 BTC (~$380,000 and depreciating quickly) in less than 1 minute.
I still had $50,000 left in USD. After the crash died down, I immediately bought in BTC to make up the losses. I kept betting red, and hit another run of about 12-15 black5 . I lost the $50,000 the same way.
April 12: at this point I was in full-tilt mode. I figured if I can just double up, then I can at least make up for the previous bullet point, if not the one before that. I kept betting on red, as a matter of stubborn principle (surely not again). And I swear you could not make this shit up: another run of 10+ black5 . I lost it all.
1 Some of the names and places may be fictitious. 2 I was never a gambler, but I do have a degree in math: there's around a 90% chance that you will top up by 10% if you combine basic strategy with martingale. The inherent variance, 3/2 payouts and doubling makes the whole process very confusing to an untrained eye, and it's not that obvious that you are using a cheap and flawed betting system. Scraping a small profit is very easy and fun. I guess I just wanted to impress my fiancee and her friends. 3 The bad beats with Blackjack were mainly due to variance. The problem with Blackjack is that the house edge is calculated by considering a large number of hands with the same starting bet. But with martingales, getting a 3/2 payout is more beneficial with higher bets; likewise having to split/double is good with higher bets, but not good if you're up against the max bet. So the luck further compounded by variance of the bet amount with respect to the starting hand. In roulette the house edge is worse, the but game is a lot more homogeneous. 4 I gave bitZino about 6 months of their earnings from last year in just under one minute: http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ 5 The probability of a run of 7 black is just under 1%, which is a number that we can relate to, it's 1 in 100. Pretty unlikely. If your luck sucks you might hit it a few times. The probability of 10 blacks is just under 0.1%. So if you hit one of the above, then only count is 1 in 10 times. Your luck has got to really suck to hit that more than once. The probability of an initial run of 12 black is around 0.02%, which is just ridiculously low. The probability of 20 black is about 0.0001% which is astronomically low. Disregarding the 2 reds, since I hit the max limit, so not really a fair account, but still. This is almost impossible.
I am a tax attorney, here are my answers to common questions about bitcoin losses and the rule against wash sales.
Introduction Hey guys, you might remember my post on bitcoin taxation last year, and a couple follow up posts I made on 1099s, FBARs, and the IRS Notice. I've been getting a lot of questions about losses on bitcoins and other virtual currencies. So, I thought I'd share some answers here with all of you. I hope this post is helpful given that bitcoin is hovering around 12 month lows and you might be holding bitcoins that have dropped substantially in value or have already sold those coins and realized a loss for the year. Keep in mind this post is intended for a layman audience. If you are a tax professional or want a detailed examination of this topic, you find this post lacking. Please don't nit pick this post with technicalities or narrow exceptions, I purposely excluded such nuances for the sake of readability. Legal Disclaimers This post was created for general guidance on matters of interest only, and does not constitute legal advice. You should not act upon the information contained in this publication without obtaining specific advice from a tax professional. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this post, and I do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this post or for any decision based on it. CIRCULAR 230 DISCLOSURE To ensure compliance with requirements imposed by the IRS, I inform you that any U.S. federal tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. THE AUTHOR Tyson Cross is a tax attorney licensed in California and Nevada. He represents individuals and businesses with tax issues related to Bitcoin and other cryptocurrencies , including tax return preparation, tax planning, and FinCEN compliance. He can be reached at Tel: +1 775-376-7306 or Email: [email protected]. (this information is required by attorney advertising rules). Topic 1: Losses Beginning Assumption: This post deals only with "capital losses." If your bitcoin losses are characterized as "ordinary losses," then these rules wouldn't apply. However, very, very few people will have "ordinary losses" from bitcoin. Unless you qualify as a "day trader" (which is not easy to do) and have elected to use the mark to market method for determining your gains/losses, it's very likely that your bitcoin losses are "capital losses." If you're unsure, talk to a tax professional to determine whether your losses are ordinary or capital. #1 Do capital losses offset capital gains? Yes. We'll get more into the mechanics of calculating gains and losses below, but for now all that matters is that capital gains are determined on a net basis. This means that all your gains and losses for the year are added against each other to reach either a "net gain" or a "net loss." So, yes, losses do offset gains. Example: Bob owns three bitcoins and sells all of them in 2014. He had a gain of $600 on coin #1, a gain of $400 on coin #2, and a loss of ($900) on coin #3. Bob has a net gain of $100 for the year. #2 What about long-term vs. short-term? Do these apply to losses also? Yes. This is where the mechanics of the calculation start to come into play. Remember that when calculating gain or loss, all gains and losses are sorted into either "short-term" or "long-term" depending on whether the underlying bitcoin was held for more than one year. So, this means that there are actually four categories of gains and losses: (1) short-term gains, (2) short-term losses, (3) long-term gains, and (4) long-term losses. The short-term gains and short-term losses are added together to reach a net short-term gain or a net short-term loss. The long-term gains and long-term losses are also added together to reach a net long-term gain or a net long-term loss. Finally, the long-term and short-term gain/loss are added together to reach one final number: your "net capital gain or loss." #3 So what does that even mean? Can long-term losses be used to offset short-term gains? Or visa-versa? Yes. The above calculation boils down to one important point: If you end up with a net loss in one category, that loss will carryover and offset your gains in the other category. So, yes, long-term losses can be used to offset short-term gains. Keep in mind that this is all handled by your tax preparation software, so if your head is spinning a little bit, don't worry about it. All you need to remember is that losses offset gains of the same character first, and then any excess will carryover to offset gains of the other character second. Example: Bob sold 2 bitcoins in 2014 that he's owned for 2 years. He had a gain of $1,000 on this sale. Bob also sold 3 bitcoins that he's owned for 13 months. He had a loss of ($1,500) on this sale. Finally, Bob sold 1 bitcoin that he's owned for 9 months. He had a gain $750 on this sale. Bob has a long-term loss of ($500).Bob has a short-term gain of $750. * *Bob will report a net capital gain of $250 on his tax return (characterized as short-term). note: For the sake of simplicity, I'm going to purposely disregard the short-term/long-term distinction for the rest of this post since it has very little impact on the issue of losses and would unnecessarily complicate the examples. #4 Can bitcoin losses offset gains from other types of assets? Yes. Bitcoins are a capital asset (except in a few limited circumstances), and therefore gains and losses from bitcoins are mixed together with the gains and losses from other capital assets. Example: Bob sold 2 bitcoins in 2014 for a total loss of ($1,000.) Bob also sold shares of stock in Apple Corporation for a gain of $600 and shares of stock in Netflix for a gain of $400. Bob has zero capital gains in 2014.Note: Bob still needs to include a Schedule D with his tax return, which will show these transactions and the calculation of his $0 net capital gain. #5 What happens if my losses exceed my gains? If you had more losses than gains during the taxable year, then the above calculation will result in a "net capital loss." A net capital loss is reported on your tax return as a negative number. However, there is a ($3,000) limitation on capital losses. No matter how big your capital loss ends up being, you can only use $3,000 of it on your tax return. Example: Bob decided that he made a bad investment in bitcoins and decided to cash out entirely. He sells all of his bitcoins for a loss of ($12,000) at the end of the year. Bob also sold some shares of stock for a $2,000 gain earlier in the year. When Bob calculates his capital gains for the year, he ends up with a ($10,000) net capital loss for the year. However, he can only take ($3,000) of the loss on his tax return. The remaining ($7,000) of losses are put on hold and again carried forward to future years. #6 What do I do with carried losses in the future? Can I use them to offset future gains? Yes. Any losses in excess of the $3,000 limitation are carried forward and included in the net gain calculation in future years. There is no limit to how long you carry your capital losses. *Example: Bob has ($7,000) of carried losses from 2013. In 2014, Bob sold shares of stock for a gain of $7,000. * Bob will include his carried losses of ($7,000) in the calculation of his net capital gain for 2014. So, Bob has zero capital gains for 2014.Remember: bitcoins are a capital asset, and therefore gains/losses are combined with other capital assets like shares of stock. Suppose instead that Bob had carried losses of ($15,000) from last year. When Bob's carried losses are included in the calculation of his net capital gains, he'll end up with a capital loss of ($8,000). Bob can report ($3,000) of this loss on his tax return, and the remaining ($5,000) becomes a carried loss and will be carried forward once again. #7 Can I carry losses backwards to earlier tax years? Unfortunately, the answer is no. Capital losses can only be carried forward. So, for example, losses realized in 2014 from the price collapse in bitcoin cannot be used to offset gains in 2013 (when bitcoin hit all-time highs). Topic #2: Wash Sales #8 What is a Wash Sale? A wash sale is a transaction where an investor sells stocks or securities for a loss, but then repurchases the same stocks or securities within 30 days. The investor gets to claim a capital loss for tax purposes, but he or she is in essentially the exact same economic position. The loss really only exists on paper, nothing else about the investors position has changed. Wash sales are prohibited by Section 1091 of the Internal Revenue Code. If a transaction qualifies as a "wash sale," it is essentially disregarded and the investor is not allowed to use the loss it generated (I'm choosing to skip the mechanics of the wash sale rule and how exactly it disallows the loss for the sake of simplicity). This led to a lot of gamesmanship over the years to get around the rules, with the result that Section 1091 and the Regulations cover just about every possible trick you can imagine. Example: Bob owns 100 shares of Apple stock. On May 1st, Bob sells 50 shares for a loss of ($500). Three weeks later on May 21st, Bob purchases 50 shares of Apple stock. This second purchase of Apple stock triggers the wash sale rule under Section 1091 and Bob will not be allowed to use the $500 loss when calculating his gain/loss at the end of the year. Note that the rule also applies backwards. So, if Bob tried to get around the 30 day rule by buying the 50 shares of replacement stock ahead of time on April 15th, the wash sale rules would still apply. #9 Do the wash sale rules apply to bitcoin? Probably not. The wash sale rules under Section 1091 apply only to "shares of stock or securities." Therefore, they do not apply to bitcoins unless bitcoins (and virtual currencies in general) qualify as "shares of stock or securities." This qualification would seem highly unlikely. There's just really no argument that bitcoins are "shares of stock or securities." The definition for these terms (taken from Section 1236, for example) is "any share of stock in any corporation, certificate of stock or interest in any corporation, note, bond, debenture, or evidence of indebtedness, or any evidence of an interest in or right to subscribe to or purchase any of the foregoing." Bitcoins would not appear to meet this definition. So, as it's currently written, it does not look like Section 1091 applies to bitcoins and other virtual currencies. That could change in the future of course, but for the moment it seems to be the case. #10 So can I use a wash sale to generate losses on bitcoin? Yes. If bitcoins do not qualify as "shares of stock or securities" under Section 1091, then the rules do not apply. This mean that you can sell bitcoins to realize a loss, and then buy them back again to preserve your investment. However, that's not the end of the story. The IRS can attack this transaction with the "economic substance" doctrine, discussed below. Example: Bob has capital gains from the sale of stock in Apple. He also has some bitcoins that he purchased for $1,200 each last November, but are worth only $300 currently. In order to offset the gains on his shares of stock, Bob sells his bitcoins for a loss of $900 each. He immediately repurchases the same amount of bitcoin, thereby creating a tax loss but not actually giving up his investment in bitcoin. #11 What is the Economic Substance Doctrine? The "economic substance doctrine" is a doctrine in US tax law that says a transaction must have economic significance aside from it's tax effects. Basically, a transaction that does nothing else but generate tax benefit is invalid under this doctrine. The parties to the transaction must actually incur some economic benefit or suffer some economic loss in order for it to be recognized by the IRS. A transaction that does neither, but still manages to generate some kind of tax benefit, will be invalid under this doctrine. It's become a very powerful tool for the IRS in attacking tax shelters and the courts are generally pretty supportive of the doctrine. Because a bitcoin wash sale leaves you in the same economic position, but has generated a tax loss for your benefit, I wouldn't be surprised to see the Economic Substance Doctrine used to invalidate wash sales of bitcoins that would otherwise avoid Section 1091. Example: The IRS audit's Bob from the previous example and discovers that he sold bitcoins in order to generate a tax loss, and then immediately repurchased the same amount of coins just moments later. The IRS will claim the transaction lacked economic substance and will disallow the loss. #12 Is it possible to generate tax losses without running afoul of the Economic Substance Doctrine? It's possible, yes. There is a tried a true principle of the Economic Substance Doctrine under which a transaction has "economic substance" if it exposes the parties to "market risk." This is true even if the market risk doesn't end up doing anything to change the economic position of the parties. As long as the parties put their economic interests at risk, the transaction has economic significant apart from the tax benefits it created. So, this means that you can avoid the economic substance doctrine by waiting to repurchase your bitcoins. This waiting period exposes you to market risk due to the fact that you might be forced to repurchase at a higher price, and therefore it adds economic substance to the transaction. **** Continued Below ****
AE: New Generation Blockchain Network | [ONETOP Rating]
By Nanjiang He ONETOP Rating April 29, 2018 Statement: the content of this assessment is for reference only. It claims no responsibility for any investment behavior made according to the contents of this assessment. The project is risky and the investment must be prudent. Introduction At present, investment in the blockchain market continues to heat up, with many startup teams joining in one after another, and many traditional companies package themselves and crowd into the ranks. In this situation, investors of all stripes also are rolling up their sleeves for the battle of entering the market. However, as a new thing, blockchain projects at home and abroad are uneven with good and bad mixing together, and there is even a lack of relevant information to identify and judge projects in China, which is confusing and difficult for the investors to get started. Integrated professional mathematical model and economic model, ONETOP rating team, developed version 1.0 of the Market rating model for the blockchain project, as a reference to help investors analyze blockchain projects comprehensively, systematically and objectively, make better investment decisions, and also introduce overseas high-quality projects into China. I. Project Overview Aeternity, known as a new generation blockchain network, was launched in 2016 by Yanislav Malahov, a German computer scientist and the "godfather" of Ethereum, Zack Hess, former core developer of Augur and Jack Pettersson, former core developer of Synereo. Aeternity gathers together many disruptive innovations to restore the underlying protocols of today's smart contracts. Aeternity's technical highlights are Turing Complete State Channels and Oracles. II. Project Evaluation 1 Market analysis Weight: 30%, Total score: 3 points, Score: 2.35 points 01 Market space Digital currency's total market cap is 2174.781 billion yuan until April 19, 2018, of which ETH's tradable market cap is 330.4 billion yuan. The virtual currency has built a vast ecosystem under the ETH-based smart contracts, but ETH is not flawless since the problems such as high transaction cost and slow transaction speed have not been solved. Aiming at this market, many public blockchain projects emerged at the right time, of which AE, as the most competitive public blockchain project in Europe with a current market cap of 2.7 billion yuan, stand a great chance to replace the status of Ethernet, and the market space is judged to be at level of 100 billion. According to the model algorithm: The market is tiny: 0 - 2 points, The market is small: 3 - 4 points, The market is medium: 5 - 6 points, The market is big: 7 - 8 points, The market is enormous: 9 - 10 points, AE gets a score of 7 points for this item. 02 02 Market Pain Points ETH, today’s most mainstream public blockchain, has plenty of shortcomings. For instance, the Ethernet blockchain is bloated and unstable, as well as high transaction cost with slow transaction speed and many other inadequacies. The seriousness of these problems has been revealed when In 2017 ETH got clogged up by the popular ETH based cat game CryptoKitties. Many public blockchain projects were generated from the market pain point mentioned above, among which EOS, NEO, BTM, and a few others have made improvements in different aspects, but most of them are slow in progress and have some defects in the technical team and the basic structure, which is also a big pain point. According to the model algorithm: the pain point is tiny: 0 - 2 points, the pain point is small: 3 - 4 points, the Pain point is moderate: 5 - 6 points, the pain point is big: 7 - 8 points, the pain point is enormous: 9 - 10 points. AE gets a score of 8 points on this item. 03 Application Scenario Scenario 1: Information Market Recently, we have seen many developers pushing for a decentralized prediction market, which combines what academics call feasibility theories to match the decision-making with the direction of the market. In the field of small payments, Aeternity puts forward the prediction market to a new level. Aeternity's technology combines prediction markets with smart contracts, such as weather forecast betting contracts and event betting contracts in the field of gambling. Scenario 2: Crowdfounding Projects It’s a new attempt to raise a crowdfunding project based on an absolutely secure smart contract. These specific smart contracts can be used to finance many projects, while meanwhile protecting investors' funds from risks, because if a project fails in the end, then investors' money can be returned. Through Oracles, Aeternity can also realize such a function: only after the project has completed the delivery of the products or services can it receive the reward. Scenario 3: Competitive Game Bonus The game industry is a massive market with rapid development in the blockchain ecosystem given its specificity. Because there are no middlemen, users can fully control the transactions inside the game, and the consideration of the transactions are the lowest price. This is an anti-fraud network. The irreversible trading features brought by blockchain technology deliver a trusted and safe user interaction experience to the game industry. From simple games to high-end electronic games, users can rely on Aeternity to achieve swift transactions and enjoy the game in a happy and relaxed mood. Scenario 4: Trustfree Exchange Aeternity supports cross-chain, trustfree atomic level interchange, such as exchange AE token with Bitcoin or other digital currencies. Aeternity supports cross-chain, trustfree atomic level interchange, such as exchange AE token with Bitcoin or other digital currencies. Scenario 5: Micro-payment and Ultramicro-payment Aeternity's unique processing mode, able to process payments offchain through state channels, has brought the transaction mode up to a new level. The transaction can be confirmed immediately, and privacy can be protected. According to the model algorithm: The reasonable level of the application scenario is tiny: 0 - 2 points, the reasonable level of the application scenario is small: 3 - 4 points, the reasonable level of the application scenario is moderate: 5 - 6 points, the reasonable level of the application scenario is big: 7 - 8 points, The reasonable level of the application scenario is enormous: 9 - 10 points. The score AE gets on this item is 9 points. 04 Token Mechanisms Total supply of tokens: 273,685,830 pieces Token name: AE Token distribution: 82% for sale, 17% for foundation and founding team, 1% for the bounty program. Tradable token : 233,020,472 pieces Tradable market cap: RMB 2,739,350,453 According to the model algorithm: the reasonable level of the token mechanism is tiny: 0 - 2 points, the reasonable degree of the token mechanism is small: 3 - 4 points, the reasonable degree of the token mechanism is moderate: 5 - 6 points, the reasonable degree of the token mechanism is big: 7 - 8 points, the reasonable degree of the token mechanism is enormous: 9 - 10 points. The score AE gets on this item is 8 points. Overall score of this dimension: 7 * 10 % 8 * 10 % 9 * 5 % 8 * 5 % = 2.35 points. 2 Activity Level Weights: 10 % Total Score: 1 Point, Score: 0.6 Point The way we judge activity is mainly from the social channels of the project, such as the number of users and the activity level of Telegraph, Twitter and Facebook and so forth, which are the main social media of Aeternity. 01 Twitter 390 followers on Twitter and only one tweet. So we can tell it have no activity level at all. 02 Youtube 2421 Followers on Facebook, 2027 liked. 03 Telegram In the Telegram, 8,600 people in the official group, and 500 of average daily conversations. Among all the various communities, Aeternity has a relatively high number of fans and activity level in the group of the telegraph, but gets low attention on Twitter and Facebook. According to the model algorithm: Activity level is tiny: 0 - 2 points, Activity level is low: 3 - 4 points, Activity level is moderate: 5 - 6 points, Activity level is high: 7 - 8 points, Activity level is enormous: 9 - 10 points. The score AE gets on this item is 6 points. Overall score of this dimension: 6 * 10 % = 0.6point 3 Risk Assessment Weights: 10 %, Total Score: 1 Point, Score: 0.62 Point 01 Project Development Difficulty AE has four points of innovations, and we will talk about them one by one: 1. State Channels The smart contracts of Aeternity is an unmixed function option only existing in the state channel. Like a digital court with self-determination ability, this particular method can effectively reduce the congestion level of the parent blockchain and enhance the transaction efficiency. 2. Decentralized Oracles The so-called " oracle" means that everyone can set up a valuation adjustment mechanism ( VAM ) on AE and decide the success or failure of it in the future, thus implementing the market forecast. There will be a great chance to apply this technology in ICO and gambling.
" Aeternity Blockchain" achieves consensus creatively through a dual algorithm that combining proof of work (PoW) with proof of stake (PoS) method." ” Aeternity blockchain achieves consensus through a highly innovative dual algorithm, combing PoW and PoS. Based on this algorithm, even smartphones can dig up new coins, which would be the extreme of decentralization. PoS will be applied in scenarios such as predicting the market on the blockchain. 4. Unparalleled Technology Management On the blockchain of Aeternity, the data information needed to predict market type projects will be straightforward to obtain. These predicted markets will be represented by any number from 0 to 1, which means to miners that which version of blockchain needs to be mined. Such a technical management mechanism is also applicable to the error correction of oracles. This mechanism can also be used to set some variables of the blockchain ( such as to calculate reward, block size, etc. ). This set of technology is very innovative, but it also greatly increases the difficulty of development. According to the model algorithm: the development is extremely difficult: 0 - 2 points, the development is difficult: 3 - 4 points, medium development difficulty: 5 - 6 points, the development difficulty is small: 7 - 8 points, the development difficulty is tiny: 9 - 10 points. The score AE gets on this item is 7 points. 02 Competition At present, the industry competitors are EOS, ETH, XAS, ETP, ADA, QTUM, NEO and so on. From the data on Feixiaohao.com (a website specialized in big data analysis of digital currency quotation), the total amount of currencies in the smart contracts module has reached 25, and the competition is fierce. According to the model algorithm: competition is extremely high: 0 - 2 points, competition is high: 3 - 4 points, moderate level of competition: 5 - 6 points, low level of competition: 7 - 8 points, a minimal level of competition: 9 - 10 points. The score AE get on this item is 5 points. 03 Other Risks Two CTO of early days in the project team have resigned, and there were rumors of dissension in the team, which makes people to worry about the team's stability. According to the model algorithm: very high risk: 0 - 2 points, higher risk: 3 - 4 points, medium risk: 5 - 6 points, less risk: 7 - 8 points, minimal risk: 9 - 10 points. The score AE gets on this item is 7 points. Overall score of this dimension: 7 * 4 % 5 * 4 % 7 * 2 % = 0.62 point 4 Key technology Weights 15 %, Total Score: 1.5 points, Score: 1.35 points 01 Technological Innovation
The smart contracts of Aeternity is an unmixed function option only existing in the state channel. The user only interacts on the sidechain. Only when there is disagreement, code and smart contracts will involve blockchain. The whole model is like a digital court with self-determination ability. 2. Deconcentrated Oracle Mechanism Oracles can provide public data that cannot be tampered with and can execute contracts according to the setting of the oracles. The core content of these mass commercial application such as election results, asset prices, or weather conditions, will apply to Aeternity's oracles. 3. Consensus Aeternity blockchain achieves consensus through a highly innovative dual algorithm which combines PoW with PoS. The “cuckoo bird” proof method, which promoted the development of random access memory (DRAM), is more efficient with its effect appearing indirectly. Based on this algorithm, even smartphones can dig up new coins, which will be the extreme of decentralization. PoS will be applied in scenarios such as predicting the market on the blockchain. 4. Unparalleled Technology Management Aeternity brings about a future society in which miners will vote, and value holders will make decisions together. On the blockchain of Aeternity, the data information needed to predict market type projects will be straightforward to obtain. These predicted markets will be represented by any number from 0 to 1, which means to miners that which version of blockchain needs to be mined. According to the model algorithm: the degree of technological innovation is extremely low: 0 - 2 points, the degree of Technological innovation is lower: 3 - 4 points, the degree of technological innovation is medium: 5 - 6 points, the degree of technological innovation is higher 7 - 8 points, The degree of technological innovation is higher 9 - 10 points. The score AE gets on this item is 9 points. 02 Code Status According to information on https://github.com/aeternity, Aeternity has submitted 1601 pieces of codes so far, which ranks 33rd in the number of updates. Compared with other projects horizontally, the efficiency of AE’s update is relatively higher. According to the model algorithm: the code has not published: 0 - 4 points, Code status medium: 5 - 6 points, the code is in good condition: 7 - 8 points, the code is in excellent condition: 9 - 10 points. The score AE gets on this item is 9 points. Overall score of this dimension: 9 * 10 %+9 * 5 % = 1.35 points 5 Execution status Weights 15 %, Total Score: 1.5 Points, Score: 1.2 Points According to the officially released route map: · 2017 Q1-Q3-Starting Period · 2017 Q1-Testing and Launching · 2017 Q1-Q2-Complete and have some backing campaign · 2017 Q3-Building essential Apps · 2018 Q1-Security Audit · 2018 Q2 - Mainnet launch The project is currently in 2018 / Q1 with a high degree of performance. According to the model algorithm: extremely low degree of implementation: 0 - 2 points, lesser degree of implementation: 3 - 4 points, medium degree of Implementation: 5 - 6 points, A higher degree of implementation: 7 - 8 points, extremely high degree of implementation: 9 - 10 points. The score AE gets on this item is 8 points. Overall score of this dimension: 8 * 15 % = 1.2 points. 6 Team evaluation Weights 20 % Total Score: 2 points, Score: 2 points 01 Team member
Yanislav, a person of authority in the field of blockchain, has participated in the development of blockchain technology in the early days, and have exchanged technology and ideas with many “old gods” in the field. In 2013, Yanis Lav envisioned to establish smart contracts on the blockchain, which predates the emergence of ETH, so Yanislav is called " Godfather of Ethereum." Now, as he grows older, a new version of his vision becomes a reality again.
Since the beginning of 2014, Marion has been particularly interested in integrating technology into the community due to the influence of blockchain technology. She mostly specializes in studying the social-economic impact, disseminating information and taking care of the efficiency of Aeternity’s operation. Before that, she worked in Silicon Valley in the field of marketing and business development.
As the founder of a publishing media company ( Proud ), a restaurant ( Beuster ) and two technology start-up companies ( Dropspot and Abend ( 30 employees )), Emin has been an active entrepreneur since 2008. He is a C-level IT product and engineering manager. In the field of blockchain, he was an early adopter, a former Bitcoin miner, and an Ethereum investor. Emin is the CPO and Operations Manager of Aeternity blockchain.
John specializes in board games, artificial intelligence, algorithmic information theory, distributed computing, and computational biology, etc. Recently, he has been designing a new workflow verification system called "Cuckoo Cycle," which will apply blockchain technology. John is providing advice on the integration of the "Cuckoo Cycle" mining algorithm. 02 Other members According to the information obtained from its official website, the team has a large group of members including many developers, technicians, and marketing staffs. We do not introduce all of them here due to limited space. According to the model algorithm: team strength is extremely weak: 0 - 2 points, team strength is weak: 3 - 4 points, team strength is medium: 5 - 6 points, team strength is high: 7 - 8 points, Team strength is extremely high: 9 - 10 points. The score AE gets on this item is 10 points. Overall score of this dimension: 10 * 20 % = 2 points Evaluation To sum up, M dimension 2.35 points, A dimension 0.6 points, R dimension 0.62 points, K dimension 1.35 points, E dimension 1.2 points, T dimension 2 points. The total score is 8.12. The total score 8.12 points, investment grade A, the project has a strong comprehensive ability. Attached: score rating scale
Have you ever wondered why you can not find order books and graphs of Bitfinex on BTCUSDT pair on the web? At present, 2,507,140,814 Theter from Bitfinex have been issued in circulation (or better, by a company created by Bitfinex) Let's take a few steps back .. 2012 - iFinex, the company that becomes the parent company of Bitfinex and Tether, is founded in Hong Kong. 2013 - Bitfinex incorporates in Hong Kong. Phil Potter runs the company together with CEO Jan Ludovicus van der Velde and CFO Giancarlo Devasini. July 2014 - Director of the Bitcoin Foundation and former child actor Brock Pierce announces Realcoin a cryptocurrency supported by the value in US dollars. Realcoin is built on Mastercoin (now called Omni), a protocol that works on Bitcoin. Pierce founded the company together with software engineer Craig Sellars and entrepreneur Reeve Collins. September 2014 - Bitfinex operators Potter and Devasini establish Tether Limited in the British Virgin Islands but tell the public that Bitfinex and Tether are completely separate. November 20, 2014 - Realcoin rebrands in "Tether", stating that he wants to avoid the association with "altcoins". At the same time, the company announces several partners, including Bitfinex. A few questions if Bitfinex actually bought Realcoin and simply wanted to hide the fact that an exchange was issuing dollarized tokens. February 25, 2015 - Tether starts trading but the amount of USDT in circulation remains relatively flat throughout 2015 and 2016. May 22, 2015  - Bitfinex loses 1,500 bitcoins, worth $ 400,000 at the time, when its hot wallets, connected directly to the Internet, are hacked. The amount represents 0.06 percent of the company's total holdings. Bitfinex indica will absorb losses. June 2, 2016 - The United States Futures Trade Commission (CFTC) fines Bitfinex $ 75,000 for the offer of off-exchange financed off-exchange retail products in bitcoins and other cryptocurrencies and for the non-registration as a merchant of a Futures Commission as required by the Commodity Exchange Act. In response, Bitfinex transfers its money from an omnibus account into multi-protected portfolios protected by BitGo. August 2, 2016 - In the second - the biggest digital currency robber in history at the time, Bitfinex is hacked when a thief manages to escape with nearly 120,000 bitcoins, worth approximately $ 75 million at the moment. Bitfinex never reveals all the details of the hack but BitGo, the security company that had to sign the transactions, states that its servers have not been hacked. 6 August 2016 - Bitfinex "socializes" its losses from theft by announcing a 36 percent cut for almost all of its customers. In return, customers receive BFX tokens, initially valued at $ 1 each. Tokens can be exchanged or used to buy shares in iFinex, Bitfinex's parent company. Since no third-party verification is conducted, it is unclear whether Bitfinex is solvent at this time or simply trying to stay afloat. September 2016 - Bitfinex announces Ledger Labs, a forensic blockchain company, to investigate the theft and perform a complete financial audit of its cryptocurrency and fiat assets; only public nevers see the results of the survey, and months later, Bitfinex admits that he has never actually hired Ledger Labs to perform an audit to begin with. October 13, 2016 - Bitfinex allows customers to convert BFX token at a value of $ 1, into equities in iFinex. For many, who had seen the value of their BFX tokens fall well below $ 1 (a Redditor reported the price dropped to $ 0.30), the deal seems too good to be abandoned. Approximately one-third of all BFX tokens are converted from 1: 1 to RRT token. March 31, 2017 - Wells Fargo, the last bank willing to process Bitfinex transactions, discontinues all services to Bitfinex and Tether, according to court documents in a lawsuit against Bitfinex against Wells Fargo later. Bitfinex is not a direct customer of Wells Fargo but a customer of four Taiwan-based banks that use Wells Fargo as its correspondent bank. 3 April 2017 - Bitfinex announces that it has paid off all the debt incurred in the August hack, redeeming all the dollarized BFX tokens issued during the haircut. BFX trading is stopped and all remaining BFX tokens are destroyed. April 5, 2017 - Two days after announcing that the debt has been paid, Bitfinex files a lawsuit against Wells Fargo for interrupting his wire transfer. Tether is listed as a plaintiff. In addition to an injunction order, Bitfinex claims more than $ 75,000 in damages. 6 April 2017 - A pseudonym character known as "Bitfinex" debuts online. Start twisting accusing Bitfinex of creating bonds from nothing to pay debts. (In January 2017 only 10 million tether were in circulation, now there are 55 million. 11 April 2017 - Bitfinex and Tether voluntarily reject the case against Wells Fargo. Potter, the director of Bitfinex, admits later that they only hoped to gain time. 17 April 2017 - Following an announcement on cable delays, Bitfinex announces that it has been closed by its main banks in Taiwan. At this point, Bitfinex has lost all links with formal banking services and is being moved between a number of banks in other countries. May 5, 2017 - After stating that he never actually hired Ledger Labs for an audit, commissioning Bitfinex Friedman LLP to complete a full audit of the financial statements. "A third-party audit is important for all Bitfinex stakeholders, and we are thrilled that Friedman will help us achieve this goal" - - - - - Bitfinex started blogging. His first blog post introduces a character calling "Spoofy." A video shows a trader (Spoofy) who makes a large bitcoin order on Bitfinex just to cancel the order as soon as the price of the bitcoin starts to go up. Mt. Gox, an exchange that managed 70% of all Bitcoin transactions worldwide before going bankrupt in 2014, was also accused of manipulating markets. November 7, 2017 - leaked documents dubbed "Paradise Papers" reveal Bitfinex and Tether are managed by the same individuals. Until now, Tether and Bitfinex have insisted that the two operations were separate. November 19, 2017 - Tether is hacked and $ 31 million (equivalent in US dollars) is moved from Tether's treasury portfolio and sent to an unauthorized Bitcoin address. Tether starts a difficult fork to prevent those funds from being spent. December 1, 2017 - Bitfinex takes over the 5W in New York as a new public relations company. December 2, 2017 - In a quarterly report, Bitfinex announces that it will no longer serve US customers because it is too expensive to serve them. However, the move, which began in August, follows a US crackdown on the Securities and Exchange Commission (SEC) on tokens generated by initial coin offerings (ICOs) that could be securities. December 4, 2017 - Bitfinex takes over the Steptoe & Johnson law firm and threatens legal actions against critics. Bitfinex does not specify who exactly could sue, but the individual in question seems to be Bitfinex'ed the blogger who continues to accuse Bitfinex of manipulating markets and printing more cables than it can redeem. 6 December 2017 - The CFTC sends subpoenas to Bitfinex and Tether, Bloomberg Reports. The actual documents are not made public. December 21, 2017 - Without making any formal announcement, Bitfinex suddenly seems to have closed all new account registrations. Those seeking to register for a new account are required for a mysterious code of reference, but there does not seem to be any reference code. January 12, 2018 - After a month of closure to new registrations, Bitfinex announces it is reopening its doors, but now requires new customers to deposit $ 10,000 in fiat or cryptocurrency before they can start trading. January 27, 2018 - Five months after the confirmation of the imminent verification, Tether starts with the Friedman LLP auditor. "Given the extremely detailed procedures that Friedman was undertaking for Tether's relatively straightforward balance sheet, it became clear that an audit would be unattainable within a reasonable time," says Tether from CoinDesk. January 31, 2018 - In the first month of the year, Tether issues 850 million new tether, more than every month before. Now 2,507,140,814 Theter.... Thanks to some calculation algorithms we managed to analyze the movements and transactions carried out on Bitfinex in greater detail and we discovered the following: 1) The pumps of the last weeks are initialized through the purchase of BTC made with the USDT exchange 2) BTC pump (due to the numerous existing BOTs, altcoins exchange pairs with BTC and the "enzyme mechanism") stimulates the purchase of altcoins! 3) attained certain price levels (and volume) the altcoins and bitcoins are deflated starting from Bitfinex on the market (the first sales take place on this platform causing a domino effect on other exchanges). 4) emptying takes place in fiat currency !!!!!!!!! 5) Bitfinex is liquidating its BTC: has sold 40,000 BTC in just 14 days (The ghost of Mt.Gox is a cover)! You do not have to believe me, you have to open this link https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r In practice with this mechanism it is possible to produce a non-existent digital currency (theter = 1 $?????), inflate prices with it and then empty investor's funds (fiat currencies). Recent investigations (by SEC) on some ICOs could reveal that one or more altcoins were put into circulation by Bitfinex with indirect correlations. PAY ATTENTION: The authorities are working on it and soon they could block these activities and you could find yourself with a handful of flies in your hand .. Welcome to the biggest scam scheme in history!
Good morning all, I am submitting our Altcoin Assembly Weekly two days early because of some prior committments this coming Sunday. Enjoy! And as always, looking forward to some great discussion around this. Our focus this week is on Blockchain Capital. Blockchain Capital (www.blockchain.capital) (formerly Crypto Currency Partners) is a venture capital company that invests in blockchain related companies. It is headquartered in San Francisco, California. It was founded in October 2013 by Bart Stephens, Bradford Stephens and Brock Pierce. To say they invest in blockchain related companies is an understatement. They ONLY invest in ventures inside the space. As of now anyway, who knows if that may change in the future. They are one of the few VCs that do this. Bart and Brad are brothers who have been involved in the financial sector for quite some time. Bart started his career at e-trade in the FinTech sector while his brother was a former hedge fund manager at Fidelity. They also ran one together for ten years. Brock Pierce is someone that you may know as Chairman of the Bitcoin Foundation. All three combined bring a wealth of experience to the venture. Having a quick look at their advisory board, it reads names like Vinny Lingham, Bobby Lee and Charlie Lee among traditional financial corporate heavyweights. Entrepreneur and self titled Disruptepreneur, Jeremy Gardner resides at Blockchain Capital as well. He is an Augur co-founder. They are currently invested in 40+ companies and have a proven record of exits as well. See below this post for their current holdings and past acquisitions which are publicly available. Another part of their business is money management, usually for family offices, high net worth individuals including 25 Bitcoin CEOS. The aim of Blockchain Capital is to invest in early stage fundraising, meaning they will meet with teams that may only have a small group of devs and a PowerPoint presentation. That’s a great position to be in since this is where the most money can be made if prospects can pass their criteria. Primarily, they want to see strong engineering teams with a proven track record of success. The opportunities need to lie in places where there is a large total available market, have an engineering advantage or a new business model that sits overtop free to use hardware/software models. Go big or go home right? Investing in A, B or C round is something they don’t ignore either. Their ICO has happened already (April 10 to May 17, 2016) and it was successful. Their ticker is BCAP, an Ethereum based smart contract token. They raised $10MM in 6 hours, self-proclaiming they were oversold. This is 20% of the total funds they are raising. The rest will come through traditional channels and will not have a token. Though their token supply is also 10MM, valuing each $1.00. As of this (Sunday, June 4, 2017, the value of BCAP is currently $1.73. The token represents an indirect fractional non-voting economic interest in Blockchain Capital. The sales were only available to accredited investors. Interested parties had to submit documentation to confirm their identity and net worth/income. A complete turnaround from how ICOs are usually currently conducted. They could be setting the way for how future sales happen. Keep in mind this isn’t a completely new concept. From what I know, they have been in touch with the Federal Reserve on how to structure this so I feel it wasn't done blindly or without guidance. What they did here was disrupt the very industry they work in. And why wouldn’t they try to? It makes perfect sense. Why wait for someone else to do it? Your local cab company didn’t start Uber. Netflix isn't owned by Blockbuster. Look where those two are now. One is struggling to catch up and the other is defunct. This is a perfect example of a firm who sees blockchain technology as both a threat and an opportunity. The funds raised from their ICO will be split 50/50. Half will be for new ventures. The remaining for follow-up investments. Their token grants holders a portion of the profits earned by their investment fund. They wish to spread $500,000 per investment which means 20 deals at that rate. Blockchain Capital will take a 2.5% management fee from that plus a 25% performance fee calculated on the returns. The remainder of the profits will be distributed to the token holders. Further, a token buyback provision will also enable them to purchase tokens on the open market. This would be in the event that their market value tumbles below their net asset value. I’m curious to hear your thoughts on this. As mentioned, this isn't an ICO we're used to seeing although this isn't the first of its kind. I do not own any BCAP and I’m hoping u/laughncow can add something here given that he met and spoke with Brock Pierce at his party in NYC during Consensus 2017. Portfolio includes: o Coinbase – (https://www.coinbase.com) o ABRA - (https://www.goabra.com/) o AlphaPoint -(https://alphapoint.com/) o Bitaccess - (https://www.bitaccess.co/) o BitFury - (http://www.bitfury.org/) o BitGo - (https://www.bitgo.com/) o Blade - (http://www.bladepayments.com/) o BitPesa - (https://www.bitpesa.co/) o BLOCKCYPHER -(http://www.blockcypher.com/) o Blockstream - (http://www.blockstream.com/) o BTCC - (https://www.btcchina.com/) o Chain - (https://chain.com/) o Civic - (https://www.civic.com/) o ETHCORE - (https://parity.io/) - Led by Gavin Wood, with Fenbushi who VB is a partner in o Expresscoin - (https://www.expresscoin.com/) o Gem - (https://gem.co/) o Go - (https://www.gocoin.com/) o itBit - (https://www.itbit.com/) o Kraken - (https://www.kraken.com/) o LedgerX - (https://ledgerx.com/) o Noble - (http://noblex.io/) o PEERNOVA - (http://peernova.com/) o Ripple - (https://ripple.com/) o SFOX - (https://www.sfox.com/) o SNAPCARD – (https://www.snapcard.io/) o Stampery - (https://stampery.com/) o Stem - (http://stem.is/) o String - (http://string.technology/) o TIERION - (https://tierion.com/) o WAVE - (www.wavebl.com/) o Xapo - (https://xapo.com/es/) o zenbox o zipzap - (http://zipzapinc.com/) o ShapeShift - (https://shapeshift.io/) o Ox - (https://0xproject.com/) Exits include: o Authy – Acquired by Twilio o Bex.io - Acquired by Klinch o Bitnet - Acquired by Rakuten o ChangeTip - Acquired by Airbnb o Coinsetter - Acquired by Kraken Side note: Had you not participated in the ICO for whatever reason, they also have an AngelList network that allows smaller investors to get in on their deals with as little as $1K. I think this is smart on their part to extend and flex their financial reach. You can visit their page here, (https://angel.co/blockchain-capital) Edit: Formatting
The recent rapid growth in Chinese interest in Bitcoin could not be coming at a better time. In late September, SecondMarket (in the U.S.) launched the Bitcoin Investment Trust (the "BIT") for accredited investors (people with a net worth of over $1 Million or high income (over $200K/year for at least two years, I believe). Finally there was an easy way for money to enter the Bitcoin space (when I first tried to purchase Bitcoin in March 2013, it took me about ten days to purchase, and I was trying HARD to get in). From what I understand, new money gets invested in the BIT by an investor, and shares are issued to that investor after Bitcoin is purchased on the open market by the BIT to back them. Great, but what would be the catalyst to get ordinary rich people interested in this space that are neither tech savvy nor know about, care about or understand the Bitcoin phenomenon? The catalyst, my friends, is what rich people who trade stocks can easily understand and will quickly motivate them. How about an almost 70% gain in less than a month? Here is the historic net asset value (NAV) of the BIT since inception (taken from the BIT website): *Historical Net Asset Value The Net Asset Value (NAV) of the Bitcoin Investment Trust is calculated daily at 4pm ET. Historical NAV: • October 22, 2013: $19.10 • October 21, 2013: $17.90 • October 18, 2013: $15.20 • October 17, 2013: $14.55 • October 16, 2013: $14.86 • October 15, 2013: $14.31 • October 14, 2013: $14.27 • October 11, 2013: $13.03 • October 10, 2013: $13.14 • October 9, 2013: $13.03 • October 8, 2013: $12.52 • October 7, 2013: $12.77 • October 4, 2013: $12.63 • October 3, 2013: $11.70 • October 2, 2013: $11.86 • October 1, 2013: $13.22 • September 30, 2013: $13.26 • September 27, 2013: $13.35 • September 26, 2013: $12.67 • September 25, 2013: $12.88 NAV per share for the BIT (capitalized on September 24, 2013) is calculated based on the historical price of bitcoin.* Even though most people are oblivious to the recent price rise (since the media really hasn't caught on yet), I think many people outside of our space are hearing about the stellar returns of this fund, and I suspect are falling over themselves to get in. Many thanks to the Chinese people who apparantly have sparked this recent rise and helped the NAV of the BIT get off to a spectacular start. I think this recent rise has been more than enough to attract some real money to the BIT (by "real money", I mean tens of millions of dollars, from hedge funds, rich people, etc.), and if you understand how tight the Bitcoin exchange markets are, you don't need me to tell you what that could mean for the Bitcoin price. So, make some popcorn, pull up a seat, and enjoy the entertainment. I think we are about to witness an epic jump that may make the April "bubble" seem like the warm-up act. It will be East vs. West, China started the fun, the other exchanges (bolstered by BIT purchasing) will respond, China will push further, more investment into the BIT, so on and so forth. I can't wait. Now if I can only get some sleep again.... TL;DR - China started it, the SecondMarket Bitcoin Investment Trust (BIT) will raise the stakes, raise by China, raise by BIT, so on and so forth.
More information on the Renewable Energy consumption of Bitcoin and the environmentally friendly alternative BlackCoin TL:DR
The amount of electricity required to maintain Bitcoin’s security is legendary. Its miners are scouring the globe searching for areas with the least-expensive electricity rates. Unfortunately, these areas are where the least expensive renewable-energy resources exist in the world. Links are provided below to the references to back up the claims made here. This document will be updated as needed based on your comments below. It has been estimated that the additional electricity required to maintain BlackCoin’s cooperative minting network is much less than three one-thousands ( 3 / 1000 ) of what is now used to run an equivalent sized competitive Bitcoin mining network. Bitcoin’s current electrical consumption equipment arms race is gobbling up irreplaceable, renewable-energy resources in areas where they provide the less expensive renewable energy options bar none. A recent study cited in the Wall Street Journal shows that the hash rate required for Bitcoin’s security last fall was one one-sixtieth (1 / 60) of what it is now. This hash rate inflation has been fueled by the tremendous profitability of large scale corporate mining operations, which have produced the mining technology arms race. The largest known corporate Bitcoin mining operation is reported to be housed in a warehouse in Central Washington State where it takes advantage of the US’s lowest electricity rates bar none. The Spokane Review recently reported that a handful of additional competitors are now about to pop up. Washington State is the leader in hydroelectric generation with 29% of the total national capacity according to the US Energy Information Administration. It is 10th in wind energy production. Nevertheless, the whole state still has the lowest residential electric rates in the country. The New York Times reported on a similar setup in Iceland, which may have the least expensive electricity of any country in the world. It is powered by hydro and geothermal resources. These corporate mining operations compete against each other for the right to enter the next ledger page into the Bitcoin blockchain. The startups that produce the otherwise useless mining equipment are forced to make outrageous claims for their latest drawing board designs to get preorder payments to finance their production as has been well documented by CoinDesk in numerous articles. Are we about to repeat the environmental disasters that followed the 1849 California Gold Rush and the wildcatting boom that began with the Spindletop oil gusher? This trend will continue as long as the Bitcoin mining technology continues to improve at breakneck speed driven by the profitability resulting from the squandering of these irreplaceable resources. It took three and a half years after Satoshi Nakamoto launched Bitcoin in January 2009 before Sunny King in August 2012 to launch Peercoin, the first environmentally friendly cryptocurrency. However, Peercoin is designed to be the savings account complementing the best environmentally friendly checking account cryptocurrency. The market has been trying since then to settle on the best environmentally friendly challenger for Bitcoin. The Russian crypto developer rat4 launched BlackCoin on February 24, 2014 at 6:00 UTC after making the customary announcement on February 16 on the Bitcoin Forum. Startup crypto exchange Mintpal quickly recognized the potential of rat4’s improvement of the design of the innovative Mintcoin protocol. This helped catapult BlackCoin into 19th place in market cap by the start of April. BlackCoin obtained its current 10 th place position after Coinkite chose Blackcoin to add to its terminals in June joining Bitcoin and Litecoin. Sunny King’s protocol has now been tested on many environmentally friendly alternatives. The market has now chosen BlackCoin to be checking account to Peercoin’s saving account. The Bitcoin MIT Project will provision every undergraduate at that institution with $100 worth of bitcoins in the fall semester as an experiment. The proposed BlackCoin MIT Airdrop is currently being discussed by the Blackcoin Community on its reddit page. The proposal calls for provisioning each MIT graduate student with $100 of the best environmentally friendly alternative to Bitcoin in the best technology crucible in the world. It appears from the MIT announcement that the MIT Kerberos & Internet Trust Consortium may have been used as the vehicle for obtaining tax exempt fiat donations. Therefore, should the newly formed BlackCoin Foundation ask the Trust to set up a donation account and let the environmental community try to raise the less than $1 million required to fund the MIT Airdrop. If you have arrived here from somewhere else and are interested in learning more about BlackCoin and the MIT BlackCoin Project, please join the discussion with us at the BlackCoin subreddit: reddit.com/BlackCoin/ Please report proofreading and editing corrections in comments below. References Electricity requirement calculations needed to maintain the BlackCoin network http://www.reddit.com/blackcoin/comments/25a4fq/if_you_are_good_at_science_or_if_you_are_an/ Wall Street Journal Article on Bitcoin hash rate http://blogs.wsj.com/moneybeat/2014/04/29/bitbeat-for-bitcoin-miners-a-hot-problem-this-summe Spokane Review Article http://www.spokesman.com/stories/2014/ap26/northwests-cheap-power-drawing-bitcoin-miners/ US Energy Information Administration – Washington State Renewable Energy Report http://www.eia.gov/state/?sid=WA NT Times Iceland Bitcoin mining article http://dealbook.nytimes.com/2013/12/23/morning-agenda-the-bitcoin-mines-of-iceland/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1 CoinDesk mining equipment articles http://www.coindesk.com/coindesk-mining-roundup-hot-issues-lawsuits-eco-mining/ http://www.coindesk.com/problems-plague-kncminer-broken-super-jupiters-arrive-doorsteps/ http://www.coindesk.com/alpha-technology-initiates-scrypt-asic-tape/ Bitcoin MIT Project article that mentions MIT Kerberos & Internet Trust Consortium http://tech.mit.edu/V134/N22/bitcoin.html
Valuing Bitcoin: this got no love when I posted a year ago, but just re-read and I still think it provides a useful framework that I've not seen elsewhere (which is odd because it seems obvious)
Background: A lot of the discussion on bitcoin value is IMO lacking in a proper analytical grounding. People throw out random numbers, or say you should look at the market cap of visa etc, without providing any rationale. I'm not an academic, but I studied economics and spend my day valuing companies so I have a degree of expertise. I also did a bit of research to understand better the dynamics of other currencies to which I compare certain attributes, e.g., velocity. Note that this is over a year old so the numbers are a bit out of date but that shouldn't make much difference to the basic analysis. The link to the article on scribd is here... http://www.scribd.com/doc/217902157/Valuing-Bitcoin ... and I've inserted the full text here (I guess the formatting will not be great).. Valuing Bitcoin Summary: I use a very simple model of transaction value, bitcoin velocity and the number of bitcoins in use to derive a fair value for a bitcoin today. Rather than trying to analyse in detail the likelihood of and means by which bitcoin may become more widely adopted, I use a scenario analysis that allows us to take a ‘finger in the air’ approach to estimating the likelihood of Bitcoin’s success or failure. Taking this approach we can back-calculate to work out what is implied in the current valuation of bitcoins in terms of likelihood of adoption, or other key variables. This is primarily a simplified framework to help elucidate the fundamentals that drive the value of bitcoins. The assumptions herein are very ‘back of the envelope’ and are principally for exposition.
The value of a single bitcoin is related to the value and velocity of transactions made using bitcoin, and the volume of bitcoins in use. The value of transactions made with bitcoin. Let’s say we assume that bitcoin will succeed in becoming the payment choice for US$100bn of transactions per year. Let’s also first assume that this US$100bn takes the form of one single transaction – say to buy all of the outstanding stock of Facebook. In order for this to be possible, the entire market value of Bitcoin would need to be at least US$100bn. For argument’s sake, let’s say someone managed to accumulate all of the bitcoins in existence (ca.12.5 million today) and used them to make this transaction, then we can infer that the value of a single bitcoin, when this transaction happens, is $8,000. The velocity of transactions made with bitcoin. Let’s take the same example above, but this time let’s assume that rather than one transaction, it takes the form of two transactions – let’s say to buy ‘whataspp’ and ‘wechat’, for the equivalent of US$50bn each. Let’s further assume that the seller of whatsapp, uses the US$50bn of bitcoins he has received, to buy wechat. How much does Bitcoin need to be worth to facilitate this series of transactions? Hopefully one can see that at the very least, it needs to be worth $4,000, half of the example above, because the same bitcoins could be used twice. Therefore, the same ‘value’ of transactions has been facilitated, US$100bn, but depending on the number of times the same bitcoin can be used the implied value of bitcoin can differ. The volume of bitcoins in use. The previous two examples have assumed that the whole outstanding stock of bitcoins is being used to facilitate the transactions. This is unlikely to be true. It is very likely that a good number of bitcoins have been ‘lost’ – ie., stuck on hard drives thrown into landfills, etc. Let’s assume there are 2.5 million lost bitcoins – the value in our first example would then have to be US$10,000. Moreover, clearly a lot of people today hold bitcoins as a store of value, or perhaps more accurately, as a speculative investment. The number of bitcoins genuinely in circulation, therefore falls still further.
Arriving at a formula to determine the value of a bitcoin
Using the basic principles outlined above, we can generate a simple formula to describe the value of a bitcoin as such: 1 btc = T/V/U Where T = transaction value V = velocity U = no. of bitcoins in use This is obviously a simplification, so we need to explore each aspect in greater detail to understand how to use it properly. 2.1 Transaction value (T) How do we determine transaction value in the real economy? The obvious place to look is GDP, the most widely used measure of economic activity. It measures the value of all final goods and services consumed in an economy. Does this equate to the value of transactions in the economy? No – because before a good is finally consumed there are typically many other transactions going on to facilitate its transformation from raw material, to intermediate good, to finished good, to consumption by end consumer. The advantage of GDP, however, is that it is relatively easy to measure. Estimating the value of all transactions, on the other hand, is very hard and is a problem economist have recognized for a long time. That is not to say there aren’t estimates: a September 2013 white paper by Mastercard estimated the total value of transactions globally in 2011 as $592 trillion, compared to global consumer payments / GDP of $63 trillion. This may well be a good ballpark figure, however for our purposes we can probably just stick to measures of GDP. Why? Because, faced with this measurement issue, economists have worked around it to base their analyses on GDP, and therefore as we try to compare bitcoin value versus, say, the USD, it makes sense to use the framework most commonly used. It is important to understand, however, that because of this framework only bitcoin transactions that are used in the final consumption of goods and services count towards our measure of ‘T’. Trading of bitcoins, or international remittances, for instance, do not count. 2.2 Velocity (V) Given the difficulty in measuring the value and volume of transactions in an economy, it is quite difficult to measure velocity directly, in an accurate or meaningful way. To get round this problem economists take a different approach, which is quite useful for our purposes. Rather than measure velocity (V), we measure the ratio (k) of all cash balances in the economy (coins, notes, bank deposits – M1 money) to a measure of transaction volume, in this case GDP. By means of illustration, this ratio for the US today is about 14%. This means that to support the USA’s GDP of $16 trillion, roughly $2.3 trillion needs, at any one time, to be sat in bank accounts, in people’s wallets or under the mattress. Put simply this measures how much people and businesses like to keep on hand for everyday consumption. The rest of their savings can go into non-cash savings vehicles, like a house, or the stock market. The velocity of money V can be seen as the inverse of k – i.e, each dollar of that $2.3 trillion would need to be spent around 7 times in the year to generate the $16 trillion in GDP. This in reality is a simplification, but we can work with it to come up with comparable assumptions for bitcoin. 2.3 Bitcoins in Use / Money supply (U) In order to work out the velocity of money in the US economy, economists need to know the money supply. Figuring out the money supply in fiat currencies is more complex than for bitcoin – this is because there are different types of fiat money – it can be in the form of coins and notes, or in basic bank current accounts, savings accounts, fixed deposits, etc. In the example above we calculated the velocity of M1 money – that is coins, notes and demand deposit bank accounts. Bitcoin is just bitcoin, and we know there have been ca. 12.5m bitcoins mined. That being said, it is not so straightforward to determine bitcoins ‘in use’. For one, there are all the lost coins. In the analysis herein I have assumed 2.5m have been lost (or, more accurately, private keys lost). There is also the question of how to treat those bitcoins that are being held for investment purposes. M1 is sort of a measure of ‘ready cash’ – a description that does not really apply to most bitcoins. In reality, most bitcoin holders probably treat some portion of their stockpile as ‘ready cash’, and the rest as investment. It is this ‘ready cash’ proportion that is of interest in calculating U.
Estimating a value for bitcoin
With the above analysis in place, it is easy to start understanding the implications for the value of bitcoin. For example, if the US were to switch to a pure bitcoin economy today, and the velocity of bitcoin was the same as for the dollar, then we can say the value of a single bitcoin would need to be: Btc = T/V/U = 16 trillion / 7 / 12.5 million = $183,000 3.1 The value of bitcoin based on today’s usage Estimating T, V and U: T. It is quite hard to estimate what T is today. We know the total transaction value from the blockchain, but most of this is exchanging bitcoin for other currencies or transfers between accounts. This doesn’t count in our estimate of bitcoin ‘GDP’. We do know it must be quite low – the most well known retailer accepting bitcoin, Overstock.com, takes in about $1m in bitcoin sales per month, so $12m per year. Let’s estimate, finger in the air, that total real world goods and services transactions in bitcoin are $1bn per year – this may well still be high. V. It is very difficult to estimate velocity for those bitcoins that are in use as ‘currency’. It seems a fair assumption, however, that the velocity is slower than for USD, since there are simply not many bitcoiners out there buying and selling stuff. Again, with a finger in the air, let’s assume velocity of bitcoin today is 1 (compared to around 7 for the USD). U. we know there have been around 12.5 million bitcoins ever mined – but are they in use? Certainly, some have been lost, so we should definitely remove them from our calculation of U. What about coins that are being used for speculative investment? Are they in use, but just very slow moving? We could choose to look at it that way, but I would rather assume that people using bitcoin see some of their stockpile as being ‘for investment’, and some as for everyday spending. Those that are for investment are really more like houses or stocks and bonds, and therefore not really part of U. Over time, as bitcoin approaches its long term price we would expect that people would hold bitcoin less as an investment, and therefore bitcoins in use would rise. For now though it seems clear that most bitcoins are being held for investment. Again, it is impossible to say what proportion, but I think it is high – say at least 80%. If we assume that 2.5 million bitcoins are lost, and that 80% are for investment, that means that only 2 million are ‘in use’. These finger in the air assumptions give us the following as a minimum value required to support the value of btc transactions in the economy today: Btc = T/V/U = 1bn / 1/ 2mn = $500. Of course, we know the value of bitcoin today (ca $422 as of 12 April 2014), so we could back calculate the value of an individual variable. Since the average value of bitcoin over the last year or so is in the $500 range, these assumptions look plausible. The true, fair, value of bitcoin today, however, given that most people are holding it as an investment, is clearly based on future expectations of its adoption and usage. Below, therefore, I build up some basic assumptions about what that could look like, to derive a very rough, back of the envelope type calculation for the real value of one bitcoin. 3.2 Estimating a fair value for bitcoin Obviously, it is very unlikely that bitcoin will replace the US dollar, so we need to arrive at some sort of reasonable assumptions for what might happen. For the purposes of this exposition, I will focus on where bitcoin could be in 5 years time. This is a close enough time frame to feel comfortable making some sort of prediction. Of course, the full potential of bitcoin may not be realized for 10 or 20 years or more, however in order to be conservative and to keep the assumptions at a level where people can have a good gut feel for whether they are realistic or not, let’s stick to 5 years. I’m going to use three scenarios: 1. Crash and burn – where bitcoin is dead in 5 years – no one is using it at all – it just didn’t live up to the hype, there are a couple more gox like scandals and the original evangelists have moved onto new things 2. Nice but boring – bitcoin continues its slow but steady rise, but there is no exponential take off and usage remains confined to online payments by the relatively tech-savvy and libertarian 3. To the moon – bitcoin reaches critical mass, usage becomes easy, widely accepted and the wider population starts to understand it better. In developed markets it takes meaningful market share in online transactions and is beginning to make meaningful inroads in offline payments. In some emerging markets it is trusted more than the local currency, and adoption rates are soaring. Basic considerations on U I don’t know the answer to this, someone probably does, but let’s assume that in 2019 there have now been 15 million bitcoins mined. Let’s assume 2.5 million are still lost, so there are 12.5 million bitcoins, either being used as an investment or as currency. Scenario 1 – Crash and burn In our equation T = 0 (or very close to 0) therefore: 1 btc = 0/V/U = $0 Scenario 2 – Nice but boring Let’s say that bitcoin takes 1% of online spending, and basically zero offline spending. E-commerce in 2019 is expected to be valued at around $3 trillion. Therefore we assume T = $30bn. Remember we estimated that T today is around $1bn. Since there is a material amount of spending happening now, let’s assume that V has doubled to equal 2. In this scenario it is likely that most people are still holding bitcoin as an investment, hopeful of future price increases, however it has been almost 10 years since bitcoin was founded, bitcoin are a lot easier to spend and after holding for so long people are now more willing to spend them. There are probably a decent number of second stage adopters using bitcoin just as an online payment vehicle, not for investment. So let’s assume that just 70% of bitcoins are held as an investment, and therefore there are 3.75m being used for transactions. Therefore: 1btc = 30bn/2/3.75m = $4,000 Scenario 3 – To the moon! In this scenario bitcoin has really taken hold, particularly online, where 20% of transactions now use bitcoin. Offline uptake is slower, but gaining traction. Let’s say 1% of offline transactions in developed markets use bitcoin. In emerging markets, where currencies are volatile, and where a lot of people have been receiving remittances in bitcoin from relatives abroad, offline uptake is greater, let’s say 2%. Online transactions – 20% x $3 trn = $600bn Developed world offline – 1% x $45trn = $450bn Developing world offline – 2% x $30trn = $600bn T = $1,450bn In this scenario spending has really taken off, so let’s assume velocity (V) has now reached 5. Of the 12.5 million coins in existence now, a good chunk are actually being used for real world transactions, so let’s say only 50% now are being held for investment – i.e., U = 6.25m. 1 btc = $1450bn / 5 / 6.25m = $46,400 Probability of occurrence To estimate our bitcoin value, we take a weighted average of the values produced by each scenario, based on an assumption about the likelihood of each coming to pass. Scenario Btc value Likelihood Weighted value 1. Crash and burn $0 50% $0 2. Nice but boring $4,000 45% $1,800 3. To the moon $46,400 5% $2,320 100% $4,120 Therefore, if you accept the assumptions above, and the probability attributed to each scenario, the probability weighted value of a single bitcoin in 5 years time will need to be $4,120. Time value of money To reach a valuation for a bitcoin today, we need to discount backwards from the value in 5 years time. This is very simple, since we do not need to discount heavily as we have already considered the ‘risk’ within our scenario analysis. The only discounting we need to do is therefore at the risk free rate, which is usually taken to be the yield you would get if you held a US Treasury bond of similar duration. Let’s say this is 3%. Discounting $4,120 back to today we therefore arrive at our final ‘finger in the air’ value for one bitcoin today: 1 bitcoin = $3,554
Implications of the current btc value
As of April 12 2014, the value of one bitcoin is around $420. We can take this value and, holding other assumptions as they are, solve for a single variable to see what might be happening. For instance, perhaps I am being unfair in treating some bitcoins as out of use. If we solve for U, taking $422 as the value of one bitcoin, the implied number of bitcoins in use is 43 million – an impossible number. Let’s assume that in 2019 all 15 million bitcoins ever mined are ‘in use’, and that the velocity of transactions stays the same. If so, the value of 1 bitcoin today ought to be $1,222. If we solve for the probability of scenario 1 happening (keeping the ratio of the likelihood of scenario 2 and 3 the same), we discover that today’s $422 valuation implies a likelihood of bitcoin ‘crashing and burning’ of 94.06%.
The above chart shows CoinDesk's Bitcoin Price Index for Dec. 1, 2013 to Dec. 31, 2013. As of Thursday, bitcoin's value was just above $16,500, according to CoinDesk.Based on that value, one via CoindeskAccording to Glassnode, there are now just 103 addresses holding at least 10K Bitcoin (BTC-USD) - that's the lowest amount since May 2019, and down 8% over the last 2.5 months.At Disclaimer: Buy Bitcoin Worldwide is not offering, promoting, or encouraging the purchase, sale, or trade of any security or commodity. Buy Bitcoin Worldwide is for educational purposes only. Every visitor to Buy Bitcoin Worldwide should consult a professional financial advisor before engaging in such practices. Bitcoin really started to take off in 2013. The digital currency began the year trading at around $13.50 per bitcoin. The price rallied in early April 2013 to get to over $220 briefly before What if you had invested in Bitcoin earlier? Find out here! Bitcoin Profit Calculator. What if I had bought $ worth of Bitcoin. of ? C a l c u l a t i n g... Your holdings would be worth today. That's a crease of %. Tweet this Buy Bitcoin now. Unfortunately we are
Using my charting method & bitcoin technical analysis I show you the exact date and price bitcoin will peak in our next bull run, as well as the date and price when we will put in our next bottom ... Planilha Excel para trader Bitcoin 100% GRATUITA - Aumente seus lucros com trade! - Duration: 10:13. Felipe Azenha 25,451 views. 10:13. Steven Colbert talked us ALL out of Bitcoin back in 2013 on The Colbert Report. Let's take stock of just how far we've come. Is bitcoin still a good buy toda... This Guy Absolutely Nailed It Back In April 2013. Wow. - Duration: 10:32. Altcoin Daily 60,351 views. 10:32. ... HOW TO BUY BITCOIN 2019 - Easy Ways to Invest In Cryptocurrency For Beginners! - In April of 2013 it hit the new height of 266 dollars. In November of the same year 1 bitcoin went up to 1.242 dollars! - By the beginning of 2018, its price beat all the records going all the ...