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Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies[1]. Coinbase, the top bitcoin exch

by Meekro 9y ago

Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies[1]. Coinbase, the top bitcoin exchange, is the 5th largest personal finance site in the US[2] -- the only bigger ones are chase.com, paypal.com, wellsfargo.com, and bankofamerica.com -- and Coinbase is rapidly closing the gap and is on track to overtake all of them within 6 months [3]. This is nothing like the "sand coin" from your example. It's real, measurable economic activity on a massive scale. [1] https://coinmarketcap.com https://coinmarketcap.com (cryptocurrency 24 hour volume) [2] https://www.alexa.com/topsites/countries;1/US https://www.alexa.com/topsites/countries;1/US [3] http://www.alexa.com/siteinfo/coinbase.com#?sites=coinbase.com http://www.alexa.com/siteinfo/coinbase.com#?sites=coinbase.c...

spookthesunset 9y ago
Again. Circular logic of crypto shysters at work. > It's real, measurable economic activity on a massive scale. What economic activity? It is people speculating. Nobody is using bitcoin for buying coffee or sending micropayments to websites. Nobody is using it as a "store of value", despite what the shysters say. It is just people buying and selling a meaningless ticker symbol hoping to get rich and buy some island in the south pacific (using fiat, I might add). With bitcoin, you might as well just throw away the technology behind it and just trade on the BTC ticker instead. I mean, that is almost what is happening given all the trades on any given exchange are off-chain transactions happening in a centralized exchange-owned database. There is no rumbling of miners recording every trade. The only people doing cross-trade are people trying to arbitrage away the price difference between exchanges.
- AlexAltea 9y ago
  > Nobody is using bitcoin for buying coffee or sending micropayments to websites. I was, I've spent more Bitcoins than traditional currencies on buying actual products during last year (electronics, games, hotels, flight tickets, etc.). That ended, 1 months ago when fees rose to a point limit that made such relatively small operations inviable. That said, I still hope for new cryptocurrencies to provide a solution to scalability issues. Maybe https://failsafe.network/ https://failsafe.network/ or maybe something else.
  - riffraff 9y ago
    You paid flights with bitcoins? Who accepts them?
    - Mtinie 9y ago
      A fair number of vendors, actually. The first comment in this Reddit post has a list: https://www.reddit.com/r/Bitcoin/comments/6pgxb6/where_can_i_buy_plane_tickets_with_bitcoin/ https://www.reddit.com/r/Bitcoin/comments/6pgxb6/where_can_i...
    - AlexAltea 9y ago
      I used https://www.abitsky.com/ https://www.abitsky.com/ and if BTC fees decreased I would use them again without hesitation.
  - bsaul 9y ago
    "That said, I still hope for new cryptocurrencies to provide a solution to scalability issues" But, if this is indeed a new cryptocurrencie, it will drain value out of bitcoin, and bitcoin will then be worth nothing. The only scenario in which bitcoin isn't a bubble and has intrinsic value as a currency, is if the payment problems you mention, as well as liquidity issue, are solved by bitcoin itself.
    - LaikaF 9y ago
      Bitcoin Cash solved the issue by just increasing the block size. Its fees are pretty low.
- aqsheehy 9y ago
  Try buying drugs online with your credit card
  - bonesss 9y ago
    This comment is a little facetious, but perfectly captures the fundamental misunderstanding the general public has about crypto currencies. It's not just drugs: any point where regulatory or market conditions create enough suboptimal conditions (ie demand), there will be a possibility for arbitrage by taking the transaction outside of that market. Weapons, people, oil, real estate, and such will constantly create this possibility over time. The tinkerbell effect - ie money has value as long as everyone believes is has value - is combined with real economic value creation. BitCoin is a 'bubble', and is 'worthless', and is 'meaningless', but BitCoins or some BitCoin competitor will have value as long as that potential for arbitrage exists. Legalize drugs, weapons, fake passports, money laundering, unregulated international trade, and smuggling and BitCoin will have no value. As long as those things exist, and the tech exists, the global market will demand some kind of grey currency, and keep its value relatively high.
    - aqsheehy 9y ago
      It follows that if crypto is the most efficient way of buying drugs online, that it's probably also the most efficient way of doing other illegal stuff online. Of that we're both in agreement. Where we'd disagree is on bitcoin or any digital bearer assets being an efficiency for transactions that don't require censorship resistance. You'd better make sure you're sending that half a million in savings to buy your new house to the right address, because it's gone forever if you mess up a single character. Also, even if you did get the right address, you'd better hope you aren't being scammed (because in both scenarios, the traditional banking system and the government at large has your back). This is the point where you say: but multisig / smart contracts! For a start, if the 'smart' part of the contract is a human oracle, why use a blockchain in the first place (if you're both willing to rely on a third party). Additionally, point me to a single transaction where the legal ownership of a house was transmitted through a block chain transaction (with no human oracle). Let alone crypto being a terrible idea for smaller transactions. Last I saw bitcoin at ~$20 fees, Ethereum converts to a brick as soon as someone comes up with a popular contract, etc.
- ignoramous 9y ago
  I think you could think 'store of value' as stocks. As long as there are people willing to pay fiat for it, it is indeed a potential store of value. Given the trends, a lot of people are willing to exchange fiat to get hands on the coins. And so, in the current situation, it does look like coins, however speculative their worth may be, are in fact potential store of value. I don't see a circular logic here, tbh? I agree, though, unlike stock options of publicly/privately traded companies, there's no real value generated here; its... umm... 'ether' But the point I am trying to make is, at the cost of repeating my self here, as long as people are willing to pay fiat in exchange for the coins (and the trend is strong and investments continue to pour in), isn't it actually a potential store of value? For how long though, it is anyone's bet.
  - sumedh 9y ago
    > as long as people are willing to pay fiat in exchange for the coins Buffett's comment on gold is applicable for Bitcoin as well. https://www.businessinsider.com.au/buffett-on-gold-2012-2?r=US&IR=T https://www.businessinsider.com.au/buffett-on-gold-2012-2?r=...
  - stuaxo 9y ago
    The "store of value" thing is such bullshit. People only started saying that after the fees made it even more impractical than it was. Maybe it will end up as "digital gold", but until recently everyone was talking about how it would be a currency.
pjc50 9y ago
That can't be a netted-out figure?
RyanZAG 9y ago
If I buy and then sell $100 worth of BTC a hundred times a day, have I created $100 worth of cryptocurrency trade or $10,000? Note I've only actually used $100 here (excluding transaction fees). If it's the second, then $33 billion dollars isn't really a useful number if many of these trades are just arbitrage by a few individuals utilizing the same dollars over and over. I'd think a more useful statistic would be the amount of USD actually moved out of bitcoin exchanges rather than trades on the exchanges themselves.
- Meekro 9y ago
  I'll certainly concede that point. You and several other people have pointed out that the daily volume might be people doing high-frequency trading back and forth, and I'm sure that's happening to some extent. Grandparent's analogy was "I have a trillion widgets, and my friend paid $1 for 1 widget, so I'm a trillionaire!" All I'm saying is that the economic activity surrounding cryptocurrency is nothing like that.
  - chx 9y ago
    > All I'm saying is that the economic activity surrounding cryptocurrency is nothing like that. But , that is indeed all you are saying but that does not make it a fact.
nugget 9y ago
>Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies If I start with $20k on GDAX and day trade in and out of various currency pairs throughout the day, I could easily generate hundreds of thousands of dollars worth of market activity just by myself. There's a lot of volume but not quite as much as your comment implies.
throwaway5752 9y ago
To bring it back around: a conference devoted to bitcoin stopped accepting payments in bitcoin. People are speculating on bitcoin, but some or most of the value is based on its future liquidity and value as a medium of commerce. That seems doubtful. And are you basing the size of personal finance sites based on Alexa data?
Lazare 9y ago
> It's real, measurable economic activity on a massive scale. The phrase "economic activity" has a definition which this does not meet. The only word in that sentence I'd agree with is "measurable".
wbl 9y ago
The more you use a finance website the worse your investment decisions are. Vanguard dwarfs the above in Assets Under Management.

by Meekro 9y ago

spookthesunset 9y ago

Again. Circular logic of crypto shysters at work. > It's real, measurable economic activity on a massive scale. What economic activity? It is people speculating. Nobody is using bitcoin for buying coffee or sending micropayments to websites. Nobody is using it as a "store of value", despite what the shysters say. It is just people buying and selling a meaningless ticker symbol hoping to get rich and buy some island in the south pacific (using fiat, I might add). With bitcoin, you might as well just throw away the technology behind it and just trade on the BTC ticker instead. I mean, that is almost what is happening given all the trades on any given exchange are off-chain transactions happening in a centralized exchange-owned database. There is no rumbling of miners recording every trade. The only people doing cross-trade are people trying to arbitrage away the price difference between exchanges.

AlexAltea 9y ago
> Nobody is using bitcoin for buying coffee or sending micropayments to websites. I was, I've spent more Bitcoins than traditional currencies on buying actual products during last year (electronics, games, hotels, flight tickets, etc.). That ended, 1 months ago when fees rose to a point limit that made such relatively small operations inviable. That said, I still hope for new cryptocurrencies to provide a solution to scalability issues. Maybe https://failsafe.network/ https://failsafe.network/ or maybe something else.
- riffraff 9y ago
  You paid flights with bitcoins? Who accepts them?
  - Mtinie 9y ago
    A fair number of vendors, actually. The first comment in this Reddit post has a list: https://www.reddit.com/r/Bitcoin/comments/6pgxb6/where_can_i_buy_plane_tickets_with_bitcoin/ https://www.reddit.com/r/Bitcoin/comments/6pgxb6/where_can_i...
  - AlexAltea 9y ago
    I used https://www.abitsky.com/ https://www.abitsky.com/ and if BTC fees decreased I would use them again without hesitation.
- bsaul 9y ago
  "That said, I still hope for new cryptocurrencies to provide a solution to scalability issues" But, if this is indeed a new cryptocurrencie, it will drain value out of bitcoin, and bitcoin will then be worth nothing. The only scenario in which bitcoin isn't a bubble and has intrinsic value as a currency, is if the payment problems you mention, as well as liquidity issue, are solved by bitcoin itself.
  - LaikaF 9y ago
    Bitcoin Cash solved the issue by just increasing the block size. Its fees are pretty low.
aqsheehy 9y ago
Try buying drugs online with your credit card
- bonesss 9y ago
  This comment is a little facetious, but perfectly captures the fundamental misunderstanding the general public has about crypto currencies. It's not just drugs: any point where regulatory or market conditions create enough suboptimal conditions (ie demand), there will be a possibility for arbitrage by taking the transaction outside of that market. Weapons, people, oil, real estate, and such will constantly create this possibility over time. The tinkerbell effect - ie money has value as long as everyone believes is has value - is combined with real economic value creation. BitCoin is a 'bubble', and is 'worthless', and is 'meaningless', but BitCoins or some BitCoin competitor will have value as long as that potential for arbitrage exists. Legalize drugs, weapons, fake passports, money laundering, unregulated international trade, and smuggling and BitCoin will have no value. As long as those things exist, and the tech exists, the global market will demand some kind of grey currency, and keep its value relatively high.
  - aqsheehy 9y ago
    It follows that if crypto is the most efficient way of buying drugs online, that it's probably also the most efficient way of doing other illegal stuff online. Of that we're both in agreement. Where we'd disagree is on bitcoin or any digital bearer assets being an efficiency for transactions that don't require censorship resistance. You'd better make sure you're sending that half a million in savings to buy your new house to the right address, because it's gone forever if you mess up a single character. Also, even if you did get the right address, you'd better hope you aren't being scammed (because in both scenarios, the traditional banking system and the government at large has your back). This is the point where you say: but multisig / smart contracts! For a start, if the 'smart' part of the contract is a human oracle, why use a blockchain in the first place (if you're both willing to rely on a third party). Additionally, point me to a single transaction where the legal ownership of a house was transmitted through a block chain transaction (with no human oracle). Let alone crypto being a terrible idea for smaller transactions. Last I saw bitcoin at ~$20 fees, Ethereum converts to a brick as soon as someone comes up with a popular contract, etc.
ignoramous 9y ago
I think you could think 'store of value' as stocks. As long as there are people willing to pay fiat for it, it is indeed a potential store of value. Given the trends, a lot of people are willing to exchange fiat to get hands on the coins. And so, in the current situation, it does look like coins, however speculative their worth may be, are in fact potential store of value. I don't see a circular logic here, tbh? I agree, though, unlike stock options of publicly/privately traded companies, there's no real value generated here; its... umm... 'ether' But the point I am trying to make is, at the cost of repeating my self here, as long as people are willing to pay fiat in exchange for the coins (and the trend is strong and investments continue to pour in), isn't it actually a potential store of value? For how long though, it is anyone's bet.
- sumedh 9y ago
  > as long as people are willing to pay fiat in exchange for the coins Buffett's comment on gold is applicable for Bitcoin as well. https://www.businessinsider.com.au/buffett-on-gold-2012-2?r=US&IR=T https://www.businessinsider.com.au/buffett-on-gold-2012-2?r=...
- stuaxo 9y ago
  The "store of value" thing is such bullshit. People only started saying that after the fees made it even more impractical than it was. Maybe it will end up as "digital gold", but until recently everyone was talking about how it would be a currency.

pjc50 9y ago

That can't be a netted-out figure?

RyanZAG 9y ago

If I buy and then sell $100 worth of BTC a hundred times a day, have I created $100 worth of cryptocurrency trade or $10,000? Note I've only actually used $100 here (excluding transaction fees). If it's the second, then $33 billion dollars isn't really a useful number if many of these trades are just arbitrage by a few individuals utilizing the same dollars over and over. I'd think a more useful statistic would be the amount of USD actually moved out of bitcoin exchanges rather than trades on the exchanges themselves.

Meekro 9y ago
I'll certainly concede that point. You and several other people have pointed out that the daily volume might be people doing high-frequency trading back and forth, and I'm sure that's happening to some extent. Grandparent's analogy was "I have a trillion widgets, and my friend paid $1 for 1 widget, so I'm a trillionaire!" All I'm saying is that the economic activity surrounding cryptocurrency is nothing like that.
- chx 9y ago
  > All I'm saying is that the economic activity surrounding cryptocurrency is nothing like that. But , that is indeed all you are saying but that does not make it a fact.

nugget 9y ago

>Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies If I start with $20k on GDAX and day trade in and out of various currency pairs throughout the day, I could easily generate hundreds of thousands of dollars worth of market activity just by myself. There's a lot of volume but not quite as much as your comment implies.

throwaway5752 9y ago

To bring it back around: a conference devoted to bitcoin stopped accepting payments in bitcoin. People are speculating on bitcoin, but some or most of the value is based on its future liquidity and value as a medium of commerce. That seems doubtful. And are you basing the size of personal finance sites based on Alexa data?

Lazare 9y ago

> It's real, measurable economic activity on a massive scale. The phrase "economic activity" has a definition which this does not meet. The only word in that sentence I'd agree with is "measurable".

wbl 9y ago

The more you use a finance website the worse your investment decisions are. Vanguard dwarfs the above in Assets Under Management.