I hate to break it to anyone here who owns bitcoin but it’s being manipulated. A handful of big players are selling bitcoins to themselves, artificially pumping up volume and demand numbers. By nature of the relatively anonymous transactions, it will take time to detect that this has been happening.
No one in Zimbabwe or Venezuela or wherever there is political turmoil and monetary strife are actually using bitcoin. The market manipulators make big moves to match the timing of these events, to get the news reports to show “Bitcoin took record highs as Zimbabwe something something today!”
You’d be hard pressed to find 1% of Americans who are technologically skilled to explain how bitcoin works. Do you think a large percentage of Zimbabwe understands it and has adopted it? It doesn’t work very well without 100% continuous internet. How good are the cell phone internet towers in Zimbabwe? There are ways to do offline transactions but they require greater skill and significant trust in the counter party selling you the bitcoins.
It’s also no where near as private or anonymous as people think it is. Within a few years we’ll have forensic auditing algorithms going through the blockchain and reverse identifying people. Perhaps the IRS will mandate all Coinbase (or other US-based companies) issue 1099s with the Coinbase wallet ID on them. And eventually that will get breached and leaked. Even if you “washed” the bitcoins through several services, with enough forensic auditing, we’ll be able to see everything you did.
I anticipate BTC will collapse and gold and silver will skyrocket and people pull their money out and buy precious metals, which have been really underperforming the last several years.
It would not surprise me, at all, if what you’re saying is true about some big players self-trading to drive up the price.
Could anybody clear up for me the aspect of this stuff related to how much it actually costs to do a transaction and the actual real world time required for a transaction to clear?
From what I’ve read recently it sounds stupidly expensive and time consuming versus almost any other option.
And that impression leads me to believe that the vast vast majority of bitcoin owners are just speculators, since it really doesn’t sound useful as a “currency” right now.
@arch8ngel I agree that it is purely specultaive. Transaction costs are related to how much you purchase and where it is purchased from. I would be commenting on something I only have partial knowledge of if I speculated on how much time is needed for the transaction to truly clear, since I have made transactions between my banks and the exchanges. I’m not trying to cover anything up. However, I will say that getting a 27% return on your original purchase within days or weeks is a great return.
@TripleB Not saying you are wrong in your assessment of the situation, but since you state as fact that bitcoin is being manipulated by handful of big players, and then in the next sentence refer to the relatively anonymous transactions, you lead me to believe that either 1) your comments are not based on any factual information, or 2) you are one of the “big players.”
Ignoring the supposed returns (since it could just as easily drop 50% in a day), what are the actual transaction costs, in real dollars, and how much time does it take for a transaction to process?
The method I use charges 1.49% for purchases using a bank account. You get the BTC at the current price when you purchase, but the BTC doesn’t hit your wallet for about 1 week, so you cannot do anything with it during that time. If you use a credit card, the BTC is immediately credited to your wallet, but the fee is 3.99%. Payout fees are the same.
“At the time of this writing, the median fee paid to process the median transaction – 226 bytes of information – was 171,760 satoshis, or 0.0017176 Bitcoin, or $11.38. If you just want to pay for a cup of coffee or order something relatively inexpensive on an e-commerce site without waiting many hours for the transaction to clear, this is uneconomical”
I haven’t used BTC since it was in the $1400 range, and at that time I thought the fee for a small ($500) transaction was unacceptable.
I feel like that side of the equation REALLY matters, though, since that is what makes the stuff viable to use, versus it just being a speculative digital commodity.
If it isn’t viable as an actual currency, then it really is just tulip bulbs, right?
Correct. I have serious doubts that it will ever be accepted as a legitimate global currency, but I could be wrong. I have always said that I’m waiting for the day that the bottom drops out of it. One day I will cash out the little bit of it that I have and hopefully have more than I started with.
Yup. I hope other crypto currencies keep going up at the same time. I put some money that I can afford to lose in two others on Nov 5, and their value has risen by 25.9%, after deducting transaction costs. Now, I wish I had bought more.
I bought a riser card that was FAR at newegg. If for no other reason I can sell to a miner. Just like the gold rush days. Few prospectors made money. Providers did though…
I’m pretty sure no standard PC hardware is going to be practical for mining at this point. You’ll just waste money on electricity. And its not free simply because your PC is on. Running mining software will exercise the processor/GPU more and use more electricity than idle mode.
I’m by no means an expert on mining, but I’ve read that it uses a lot of juice. Evidently, bitcoin mining worldwide is using more electricity than Ireland. They say that one transaction uses more electricity than an average home uses in one week.
Mining is all about the long term. You’re not going to get rich doing it unless you’re mining some microcap coin that returns 100x. I have one rig of my own plus four others that I share with friends. I’m mostly mining ETH/ZEC but will also alternate with NiceHash so I can get BTC as well. For people who are newer to mining, I would check out NiceHash which is a service where people can buy or sell hashing power and you get paid out in BTC. As a seller of hashing power, you are essentially mining some altcoin to a buyer who is bidding on it and paying out in BTC. For more information I would check out their website or r/NiceHash. There is much more info involved than this simple thread or I can provide.
I’ll tell you that if you don’t at least have some type of high end gaming graphics card that you will be mining mere pennies. To put it into perspective the rig that I have set up to mine ZEC/NiceHash has 6 GTX 1080 GPUs which cost $500 each. Total rig cost me $3500 to set up. The daily mining results vary a bit but average about $12/day not factoring the cost of electricity which eats up about 40% of the profits so I’m netting about $7/day for this rig. Daily profitability goes up as ZEC increases in value. NiceHash doesn’t work exactly the same because you’re mining X but receiving BTC instead. I do see a small uptick in daily profitability but it’s not a 1:1 ratio. Obviously if you have cheap/free electricity you’re going to be a lot more profitable which is why China has a lot of the big mining operations as well as Iceland.
It’s important to note that the “difficulty” of the mining increases over time and while you may receive fewer coins, the increased value can offset that.
If this is something that interests you, I would start reading dedicated blogs and forums on the subject. This is something that I’ve been doing for months now and I’m still learning. If you’re looking to make a quick buck, you’re better off day trading.
Direct bitcoin mining is all done by ASICs but plenty of other ways to indirectly “mine” bitcoin or directly mine some other currency with regular GPUs. There are even “proof-of-stake” coins which are meant to solve the power issue and mine by staking coins. No special equipment needed for these types of coins.