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    [Daily Discussion] Sunday, December 23, 2018 Bitcoin Markets

    December 23, 2018

    [Daily Discussion] Sunday, December 23, 2018 Bitcoin Markets

    [Daily Discussion] Sunday, December 23, 2018

    Posted: 22 Dec 2018 08:05 PM PST

    Thread topics include, but are not limited to:

    • General discussion related to the day's events
    • Technical analysis, trading ideas & strategies
    • Quick questions that do not warrant a separate post

    Thread guidelines:

    • Be excellent to each other.
    • Do not make posts outside of the daily thread for the topics mentioned above.

    Other ways to interact:

    submitted by /u/AutoModerator
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    [Altcoin Discussion] Sunday, December 23, 2018

    Posted: 22 Dec 2018 08:05 PM PST

    Thread topics include, but are not limited to:

    • Discussion related to recent events
    • Technical analysis, trading ideas & strategies
    • General questions about altcoins

    Thread guidelines:

    • Be excellent to each other.
    • All regular rules for this subreddit apply, except for number 2. This, and only this, thread is exempt from the requirement that all discussion must relate to bitcoin trading.
    • This is for high quality discussion of altcoins. All shilling or obvious pumping/dumping behavior will result in an immediate one day ban. This is your only warning.
    • No discussion about specific ICOs. Established coins only.

    If you're not sure what kind of discussion belongs in this thread, here are some example posts. News, TA, and sentiment analysis are great, too.

    Other ways to interact:

    submitted by /u/AutoModerator
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    There is no manipulation creating a downward effect on BTC price

    Posted: 23 Dec 2018 03:29 AM PST

    The OP on the other thread missed a fundamental flaw when he/she blamed exchanges that allow you to trade futures settled in BTC for the decreasing price. At the end of the day, in order to begin trading in the first place, and for his proposed cycle to even start, you are forced to buy up BTC on the spot market using fiat.

    This offsets the manipulation a shorter may want to do by selling BTC into fiat and then loading up on shorts on future contracts. You cannot short anything in the first place without BTC and to start the process from scratch, you need to buy that same BTC through fiat, especially in the case of a losing trade. The sole manipulation possible is not just on the short side since it can be done on the long side as well by buying some BTC, using that to long BTC, and then using another part of your fiat stack to buy BTC on the spot market.

    The price of BTC has mainly been going down due to a lack of demand. Let's not invent theories without evidence to explain the obvious.

    submitted by /u/howtomakefriends8292
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    Demand for Bitcoin will Increase in a Global Recession

    Posted: 23 Dec 2018 08:57 AM PST

    Bitcoin is fueled by gamblers and drug businesses. Gambling and drugs are $600B+ and $300B+ annual revenue markets.

    When people lose their jobs, the demand for escaping reality with get-rich-quick fantasies will increase.

    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3501160/

    The author finds that lottery sales are sensitive to the state unemployment rate, increasing by about 0.17% for each 1% increase in that rate.

    The only gambling sector that appears to be recession proof is lottery consumption. This series is characterized by a vast and solid growth that appears to be independent of the business cycle and of temporary shocks to income. Casino expenditures appear to have significant positive growth during both expansion and recession.

    When people lose their jobs, more people will turn to using and dealing drugs.

    https://www.sciencedirect.com/science/article/pii/S0955395917300877

    We synthesized 28 studies published between 1990 and 2015. Most evidence (17 studies) was found for the counter-cyclical mechanism that recessions and unemployment increase psychological distress, which increases drug use. Mainly supportive evidence for this mechanism was found in several high quality studies, in different contexts, and in a diverse number of countries and samples. In contrast, decreased income did not seem to decrease drug use (10 studies).

    https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

    Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

    Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

    According to the United Nations World Drug Report, adoption of crypto for buying drugs has grown every year.

    https://www.unodc.org/wdr2018/

    Proportion of surveyed Global drug users who purchased drugs via the darknet:

    2014: 4.7%

    2015: 5.9%

    2016: 7.6%

    2017: 7.9%

    2018: 9.3%

    This March 2018 Bromium research report corroborates the growing adoption of crypto:

    https://www.bromium.com/press-release/up-to-200-billion-in-illegal-cybercrime-profits-is-laundered-each-year-comprehensive-research-study-reveals/

    According to the report, cybercriminal proceeds make up an estimated 8-10 percent of total illegal profits laundered globally; amounting to an estimated $80-$200 billion each year.

    Virtual currencies have become the primary tool used by cybercriminals for money laundering

    From the perspective of businesses that are worried about seizures, Bitcoin and Monero are lower-risk assets than cash and gold (if the coins are stored properly).

    submitted by /u/Reggie_Pharr
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    Why I think there will be a blockchain shitcoinpocalypse

    Posted: 22 Dec 2018 09:09 PM PST

    There are "use cases" for basically 2 or 3 blockchains:

    1. Limited supply immutable ledger for transfer of value;

    2. Smart contract environment;

    3. Larger scale uncensorable data storage/access that can't be accommodated under 2.

    That's it. If we get an efficient coin for each of those areas, there is no reason to have any others. If number 2 can reasonably allow for data storage without insane cost, then we only need 2.

    Eeeeeeverything else is bullshit and just pollutes the system.

    It's why we don't have 2000 email or DNS protocols. It would be a fucking joke. Like cryptocurrency currently is.

    A: Hey I want to send you an email.

    B: Oh sure, but you'll have to download this app from this shady website because I only use 3mail Cash (3CH). It's the real email.

    A: Didn't 3CH just fork? Are you using 3CHAlphabetSoup or 3CHShitOnMyChest?

    As soon as a coin appears to efficiently satisfy one of the 3 uses I describe, it will result in rapid mainstream adoption and clear the field for that use. First mover advantage instantly kills everything else off.

    If there is a crypto that allows for free and easy and legitimate exchange of value under my first use case, every other value coin dies instantly. If I can pay my taxes and utility bills and a cup of coffee and a multimillion dollar international financing transaction with one coin (which is the only adoption result other than total failure), then I don't need any other coin, or any other currency ever again.

    Likewise, if a coin 2 develops a robust and efficient architecture for smart contracts and it can interact smoothly with coin 1 to allow inroads and off roads for currency to move into the smart contact ecosystem, there's no need for any other smart contract system, and trying to have a minority ecosystem is totally fruitless. As soon as smart contracts can be utilized regularly for things like real estate transactions, mortgage funding, etc. as a regular operating procedure, it can become standardized and adopted everywhere.

    Trying to have a second smart contract ecosystem just means the system is broken and everyone can't be a part of it. If there are two, they will become interoperable and indistinguishable over time, or one will dominate the other, just like coin 1 did in its space.

    The general storage system in my third use case could be comprised of smaller competing chains, but in order to be secure (in the event it is being relied on for public land titles registries or medical records or citizenship documents), it will need to have the highest security. Small chains are of no value because they can't be secured against attack, so it will have to rely on the proof chain work of something at least mostly as big as chain 1 or 2. Whether it is actually a third chain, or whether it is a coordinated reference system built into chain 1/2 is still unclear.

    I certainly can't say that I know which of the 3 are going to be.

    The level of current adoption that any coin currently has is miniscule compared to what the endgame looks like. I hesitate to give it percentages, but let's just consider coin 1. What would adoption look like for it:

    • ability to natively pay municipal, state, and federal taxes in a supermajority of nations;
    • ability to quickly and easily accommodate 50%+ of global retail transactions as efficiently as current card systems;
    • acceptance at all major and minor businesses and retailers: Amazon, ebay, steam, gas stations, coffee shops, Lambo dealerships, etc.;
    • strong seamless user interface that hides all of the mechanical functions of the system;
    • reliable ability to quickly transfer significant wealth worldwide either as adopted internally by the global banking system, or as a legitimate competitor (threat?) to it.

    I would be very hesitant to say that we have reached a significant fraction of 1% on any of the above metrics. While BTC may be ahead of the other coins, the overall progress has been from 0% to very slightly more than 0%.

    The real first-mover advantage will be seen when a system moves to 10 or 15%. At that point, I expect adoption to snowball and quickly move to near 100% essentially overnight. Or, it won't happen at all.

    Same for Ethereum as a case 2 coin. It is currently the first-mover in the smart contract system, but it is nowhere near efficient or robust enough to satisfy global demand for the things it could be doing. Considering the most successful actual uses for ETH to date have betting apps, tokenized collectibles, and the DAI (which is basically another betting app...), it hasn't even staked out 0.1% of the possibility space.

    As for chain 3, as I said, it may end up being incorporated to chain 1 or 2 through reference look-ups and semi-decentralized storage. I honestly am not aware of a solid project in that space. If you have any suggestions, I would be glad to take a look at them. The ones I have seen have been ETH tokenized systems that certainly can't reasonably scale with ETH in its current (or even proposed) forms.

    Theoretically chains 1 and 2 could be a single chain, but I think the different efficiency incentives for 1 and 2 make that a lot less likely.

    submitted by /u/theSentryandtheVoid
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    Don't forget: If you are a HODLER and plan to take long term cap gains, consider buying before EOY

    Posted: 22 Dec 2018 11:07 PM PST

    Just a reminder about long-term capital gains and tax strategy. If BTC goes up in the next year, you will want to give yourself the choice of taking your long-term cap gains in 2019 or 2020 (or both) this time next year. If you buy after the new year, you can only take them in 2020. Depending on your tax bracket, this can make a big difference.

    ​

    Same with shorties.

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    submitted by /u/bitniyen
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    does bitcoin.tax support margin trading yet?

    Posted: 22 Dec 2018 07:41 PM PST

    i've used them for previous years. i haven't done any margin trading yet, but was about to. their faq doesnt' mention margin at all, and in a thread here from 8 months ago they said they didn't support it at that time. it would be annoying to have to switch to another site, but i could if i had to.

    submitted by /u/funk-it-all
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