Merged Bitcoin - Part 3

The_Animus said:
Only you find it foolproof because you ignore every time it's wrong. BTC has only gone up since you posted this. Over 30k now.
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At some point in time - it may be weeks, months or years - it's likely that the price will drop below 27831.

At that point in time Samson will claim that the algorithm worked :rolleyes:
 
The Don said:
IMO for retail investors it's a myth. Any model simple enough for an individual to construct (and run) will have already been considered, maybe used, and discarded my financial institutions who can afford the biggest brains and the most powerful computers.
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Yep.

For years now major C++ conferences have been sponsered by quant trading firms. And they hire a high percentage of newly minted math/stats PhDs. Combine historic movements with breaking news keyword correlations and you have TA from 50 years ago on steroids.
 
Let's see if I can make one of these posts...

At some time in the future Bitcoin will go up or down or stay the same, and this is because my technical analysis algorithm says: "Frammin at the jim-jam, frippin at the crotz."

How did I do?
 
How's that transition to Proof-of-Stake going for Bitcoin? Just checking in.
 
gnome said:
How's that transition to Proof-of-Stake going for Bitcoin? Just checking in.
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Was bitcoin doing that? I only recall Ethereum having any real effort to do that. They did switch and it lowered their energy consumption 99%
 
The Don said:
At some point in time - it may be weeks, months or years - it's likely that the price will drop below 27831.

At that point in time Samson will claim that the algorithm worked :rolleyes:
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You've reverse-engineered his entire system! You must have spies in his lab.
 
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The_Animus said:
Was bitcoin doing that? I only recall Ethereum having any real effort to do that. They did switch and it lowered their energy consumption 99%
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At one point I was told that the high energy cost of proof-of-work was not an ethical challenge to participating in the bitcoin market, because they might switch to proof of stake.
 
gnome said:
At one point I was told that the high energy cost of proof-of-work was not an ethical challenge to participating in the bitcoin market, because they might switch to proof of stake.
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Well both are ethical challenges. Proof of work is an ethical challenge because of the energy consumption. Proof of stake is an ethical challenge because the people with the most money (well, the most coins) effectively get to make the decisions.
 
jeremyp said:
Well both are ethical challenges. Proof of work is an ethical challenge because of the energy consumption. Proof of stake is an ethical challenge because the people with the most money (well, the most coins) effectively get to make the decisions.
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In the case of Bitcoin, my interest in contemplating the second problem is dwarfed by my aversion to the first problem.
 
Let's hope Michael Saylor enjoyed the two minutes his rat poison was in the money, wheeeee, here we go again.
 
John Oliver discusses cryptocurrency, three of the biggest crypto companies to collapse over the past year, and what to do when your office is giving off “crime vibes”.
Cryptocurrencies II: Last Week Tonight with John Oliver (HBO on YouTube, April 24, 2023)
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Proof of work is the thing that most clearly distinguishes bitcoin as a commodity and not an investment. At least in the classical sense. Just like gold and silver are commodities. Proof of stake, where potential rewards kick in only if you "stake" your coin is much closer to an investment. And, in the USA, the SEC regulations should come into play. And they are expensive. Will be interesting to see how ETH is handled by the SEC after the "merge."
 
marting said:
Proof of work is the thing that most clearly distinguishes bitcoin
as a commodity and not an investment. At least in the classical sense.
Just like gold and silver are commodities.
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I've got to quibble a bit over this.

I define a commodity as a useful or valuable thing, such as a raw material
or primary agricultural product that can be bought and sold, such as copper
or coffee. Heck I even consider water a commodity even though it falls from
the sky on a regular basis.

As I've said before you can only exchange bitcoins for other things
but you cannot turn a bitcoin into anything other than itself. It only
exists as information on a computer, hence ephemeral in nature.

I think of it as unique item, much like artwork produced by an artist.
Much like the Banksy Safe.

Hm.

The rich don't go some much for the cheese as much as they go for the rats.
 
Solitaire said:
I've got to quibble a bit over this.
I define a commodity as a useful or valuable thing, such as a raw material
or primary agricultural product that can be bought and sold, such as copper
or coffee. Heck I even consider water a commodity even though it falls from
the sky on a regular basis.
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Well, both the US SEC and CFTC define bitcoin as a commodity. The CFTC currently also includes other crypto coins as commodities while the SEC does not.

https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf

Is Bitcoin a commodity?
Yes, virtual currencies, such as Bitcoin, have been determined to be commodities under the Commodity Exchange Act (CEA)
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https://techcrunch.com/2023/03/28/are-cryptocurrencies-commodities-or-securities

The CFTC’s viewpoint diverges from another major U.S. government agency, the Securities and Exchange Commission (SEC), which views most crypto assets (aside from Bitcoin) as securities.
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Solitaire said:
I define a commodity as a useful or valuable thing, such as a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. Heck I even consider water a commodity even though it falls from the sky on a regular basis.
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If you want to get more technical then a more official definition of commodity would be:
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. A commodity thus usually refers to a raw material used to manufacture finished goods. A product, on the other hand, is the finished good sold to consumers.
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https://www.investopedia.com/terms/c/commodity.asp

Clearly, cryptos are not a "raw material" so commodity is not the most apt description of bitcoin.
 
marting said:
Well, both the US SEC and CFTC define bitcoin as a commodity. The CFTC currently also includes other crypto coins as commodities while the SEC does not.

https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf
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Officials tend to define something in a way that is most favourable to the tax man.

marting said:
The CFTC’s viewpoint diverges from another major U.S. government agency, the Securities and Exchange Commission (SEC), which views most crypto assets (aside from Bitcoin) as securities.
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https://techcrunch.com/2023/03/28/are-cryptocurrencies-commodities-or-securities
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Here, a more technical definition of a security would be as follows:
A security, in a financial context, is a certificate or other financial instrument that has monetary value and can be traded. *

Securities are generally classified as either equity securities, such as stocks and debt securities, such as bonds and debentures.
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https://www.techtarget.com/whatis/definition/security-finance

The key aspect of a security seems to be that it is guaranteed that you can exchange it for another class of asset or for debt reduction. Some cryptos may have such a "guarantee" but bitcoin doesn't.

I think that "digital asset" is the best way to describe cryptos.
 
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You can buy and sell Bitcoins from exchanges for dollars, which is enough to satisfy the exchange criteria for a security. Obviously the speculative "value" of most cryptocurrencies, including Bitcoin, is expressed as its exchange rate for dollars for exactly that reason.

Defining Bitcoin as a commodity makes far less sense. Every other commodity you can name is a resource - that is, it actually has use independent of its monetary value. You can either consume it directly in whatever way it is consumed, or use it to make other things. Corn is a commodity. Oil is a commodity. You can speculate on commodities or even use them like securities, like gold, but gold is still also consumed to make other things like computers and photography chemicals.

Bitcoin, on the other hand, has no use outside of what it can speculatively be exchanged for in dollars. You can't "make" Bitcoin into anything other than smaller fractions of Bitcoin, and you can't "consume" Bitcoin even some purely digital way, all you can do is trade it to someone else.
 
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